HB 4159

House Engrossed
environment;
  2026-2027
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 131
HOUSE BILL 4159
AN
ACT
amending sections 45-611 and 45-615.01,
Arizona Revised Statutes; amending laws 2019, chapter 1, sections 2 and 8;
appropriating monies; RELATING to the ENVIRONMENT.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 45-611, Arizona Revised
Statutes, is amended to read:
START_STATUTE45-611. Groundwater withdrawal fee; amounts and purposes of fee;
exception
A. Except as provided in subsection B of this
section, the director shall levy and collect an annual groundwater withdrawal
fee from each person withdrawing groundwater in the Prescott active management
area or the person who owns the right to withdraw the groundwater, in an amount
not to exceed $5 per acre-foot of groundwater withdrawn and beneficially
used. The director shall levy and collect an annual withdrawal fee
from each person withdrawing water, other than stored water, from a well in the
Santa Cruz active management area or the person who owns the right to withdraw
the water, in an amount not to exceed $5 per acre-foot of water, other than
stored water, that is withdrawn and beneficially used.� For the purposes of
this article, the annual withdrawal fee levied and collected in the Santa Cruz
active management area shall be considered a groundwater withdrawal fee. The
actual amount of the fee levied and collected by the director pursuant to this
subsection shall be set by the director as follows:
1. For administration and enforcement of this
chapter, an amount not less than $.50 and not greater than $1 per acre-foot per
year. The initial fee for administration and enforcement shall be levied as
soon as practicable after the active management area is established.
2. For augmentation of the water supply of the
active management area, conservation assistance to water users within the
active management area and monitoring and assessing water availability within
the active management area, an amount not greater than $2 per acre-foot per
year.
3. For purchasing and retiring grandfathered rights,
an amount not greater than $2 per acre-foot per year.� The initial fee for
purchasing and retiring grandfathered rights shall be levied in the first year
in which the director develops and implements a program for the purchase and
retirement of grandfathered rights as part of the management plan for the
active management area, but not earlier than January 1, 2006.� The director may
not levy a fee under this paragraph on a district member of a groundwater
replenishment district that withdraws groundwater in the district for a non-irrigation
use in the district.
B. A person, other than an irrigation district, who
withdraws groundwater in an active management area from a non-exempt well for
use pursuant to an irrigation grandfathered right that is appurtenant to ten or
fewer irrigation acres and the person who owns the right to withdraw the
groundwater are exempt from the groundwater withdrawal fee requirements of
subsections A and C of this section for those withdrawals unless the irrigation
acres are part of an integrated farming operation.
C. Except as provided in section 45-411.01,
subsection C and subsection B of this section, the director shall levy and
collect an annual groundwater withdrawal fee from each person who withdraws
groundwater in the Tucson, Phoenix and Pinal active management areas or the
person who owns the right to withdraw the groundwater, in an amount of not more
than $5 per acre-foot of groundwater withdrawn and beneficially used.� The
director shall set the actual amount of the fee as follows:
1. In the Tucson and Phoenix active management
areas, beginning in 2017, for administration and enforcement of this chapter,
an amount of at least $.50 but not more than $1 per acre-foot per
year. In the Pinal active management area, beginning in 2017, for
administration and enforcement of this chapter, an amount of not more than $1
per acre-foot per year.
2. For augmentation of the water supply of the
active management area, conservation assistance to water users within the
active management area and monitoring and assessing water availability within
the active management area, an amount of not more than $2 per acre-foot
per year.� If a permanent board of directors of an active management area water
district assumes office under section 48-4831, the fee for augmentation
under this paragraph shall not be levied in that active management area.
3. In the Tucson and Phoenix active management
areas, for Arizona water banking purposes, the amount of $2.50 per acre-foot
per year.� In the Pinal active management area, for Arizona water banking
purposes, including replenishment under chapter 15, article 3 of this title, the director shall set the fee in an amount of not more than
$2.50 per acre-foot per year, except that no fee shall be levied in the
Pinal active management area for this purpose during calendar years 2020
through 2026 2030.
4. For purchasing and retiring grandfathered rights,
an amount of not more than $2 per acre-foot per year. The initial
fee for purchasing and retiring grandfathered rights shall be levied in the
first year in which the director develops and implements a program for the
purchase and retirement of grandfathered rights as part of the management plan
for the active management area, but not earlier than January 1, 2006.� The
director may not levy a fee pursuant to this paragraph on a district member of
a groundwater replenishment district that withdraws groundwater in the district
for non-irrigation use in the district.
5. In the Pinal active management area, beginning
from and after December 31, 2019 through December 31, 2026
2030, an amount of not more than $2.50 per acre-foot per
year for groundwater and irrigation efficiency projects. END_STATUTE
Sec. 2. Section 45-615.01, Arizona Revised Statutes, is amended to read:
START_STATUTE45-615.01. Temporary groundwater and irrigation efficiency projects fund;
purpose; report; definition
A. The temporary
groundwater and irrigation efficiency projects fund is established for the
purpose of funding projects for the construction and rehabilitation of wells
and related infrastructure for the withdrawal and efficient delivery of groundwater
by qualified irrigation districts in the Phoenix active management area, the
Pinal active management area and the Harquahala irrigation non-expansion area.
The fund consists of legislative appropriations, groundwater withdrawal fees
collected in the Pinal active management area pursuant to section 45-611,
subsection C, paragraph 5, grants from federal agencies and monies deposited in
the fund by qualified irrigation districts in the Phoenix active management
area, the Pinal active management area and the Harquahala irrigation non-expansion
area. Groundwater withdrawal fees deposited in the fund shall be
accounted for separately from other monies in the fund and shall be used only
for constructing and rehabilitating wells and related infrastructure in the
Pinal active management area.� Monies in the fund are continuously appropriated
for the purposes of this section.
B. The director may accept and deposit into the fund
monies, grants, gifts, contributions and devises to assist in carrying out the
purposes of this section.
C. The director shall administer the fund.� On
notice from the director, the state treasurer shall invest and divest monies in
the fund as provided by section 35-313, and monies earned from investment
shall be credited to the fund.
D. The director may grant monies from the fund to
qualified irrigation districts established pursuant to title 48, chapter 19 in
the Phoenix active management area, the Pinal active management area and the
Harquahala irrigation non-expansion area for the purposes described in
subsection A of this section. In granting monies from the fund, the
director may give preference to wells and related infrastructure that would be
used to recover stored water. Grants made to qualified irrigation
districts are exempt from title 41, chapter 24.
E. Before December 31 of each year, the director
shall submit to the speaker of the house of representatives and the president
of the senate a written report describing the activities of the department for
the preceding fiscal year related to expenditures from the fund. The
report shall include an accounting for expenditures from the fund and how the
monies were used to finance projects for the construction and rehabilitation of
wells and related infrastructure for the withdrawal and efficient delivery of
groundwater by qualified irrigation districts in the Phoenix active management
area, the Pinal active management area and the Harquahala irrigation non-expansion
area.
F. Except as provided in subsection G of this
section, monies in the fund are exempt from the provisions of section 35-190
relating to lapsing of appropriations.
G. On June 30, 2027 2032, any unencumbered monies in the fund shall be
proportionally distributed to the fund's contributors by December 31, 2027 2032 according to the total amount of
monies deposited in the fund by each contributor.� The proportion of the
unencumbered monies attributable to groundwater withdrawal fees levied under
section 45-611, subsection C, paragraph 5 shall be deposited in the
Arizona water banking fund established by section 45-2425 and shall be
used only in the Pinal active management area in the same manner as groundwater
withdrawal fees collected in the Pinal active management area pursuant to
section 45-611, subsection C, paragraph 3.
H. All monies deposited in the temporary groundwater
and irrigation efficiency projects fund shall be held in trust.� The monies in
the fund may be used only for the purposes prescribed in this section and may
not be appropriated or transferred by the legislature to fund the general
operations of this state or to otherwise meet the obligations of the state
general fund.� This subsection does not apply to any taxes or other levies that
are imposed pursuant to title 42 or 43.
I. For the purposes of this section, "qualified
irrigation district" means an irrigation district that meets all of the
following requirements:
1. The irrigation district received central Arizona
project water in any year after calendar year 2014 other than through a
groundwater savings facility permit issued under chapter 3.1 of this title.
2. There are at least nine thousand acres that may
be lawfully irrigated within the boundaries of the irrigation district.
3. For an irrigation district located in the Phoenix
active management area only, the district did not deliver surface water other
than central Arizona project water in calendar year 2017.
4. The irrigation district submitted an application
to the department for monies from the fund established by this section to
construct an irrigation efficiency project in the Phoenix active management
area, the Pinal active management area or the Harquahala irrigation
non-expansion area. END_STATUTE
Sec. 3. Laws 2019, chapter 1, section 2 is
amended to read:
Sec. 2. Delayed repeal
Section 45-118, Arizona Revised Statutes, as added by this act Laws 2019, chapter 1, section 1,
is repealed from and after March 31, 2027
2031.
Sec. 4. Laws 2019, chapter 1, section 8 is amended to
read:
Sec. 8. Delayed Repeal
Section 45-615.01, Arizona
Revised Statutes, as added by this act Laws
2019, chapter 1, section 7, is repealed from and after March 31, 2028 2033.
Sec. 5. Underground
storage tank revolving fund; use of monies
Notwithstanding any other law, in
fiscal year 2026-2027, the department of environmental quality may use up to
$6,531,000 from the underground storage tank revolving fund established by
section 49-1015, Arizona Revised Statutes, in fiscal year 2026-2027 for:
1. Administrative costs of
the department.
2. Remediating sewage
discharge issues in Naco, Arizona and other border areas of this state.
Sec. 6. Arizona water
banking fund; use of monies
In addition to the purposes provided
in section 45-2425, Arizona Revised Statutes, monies appropriated to the
Arizona navigable stream adjudication commission from the Arizona water banking
fund established by section 45-2425, Arizona Revised Statutes, may be
used in fiscal year 2026-2027 to pay legal fees.
Sec. 7. Arizona water protection fund; use of monies
Notwithstanding section 45-2114,
Arizona Revised Statutes, in fiscal year 2026-2027, the Arizona water
protection fund commission may grant to the department of water resources up to
$336,000 of the unobligated balance in the Arizona water protection fund
established by section 45-2111, Arizona Revised Statutes, to pay for
administrative costs of the department in fiscal year 2026-2027.
Sec. 8. Department of
environmental quality; vehicle emissions testing fees; definition
A. Notwithstanding any
other law, in fiscal year 2026-2027, the director of the department of
environmental quality shall maintain fees for tests conducted in area A at the
area A emission fee level as of June 30, 2025.
B. For the purposes of this
subsection, "area A" has the same meaning prescribed in section
49-541, Arizona Revised Statutes.
Sec. 9. Appropriation
limit; water quality assurance revolving fund
Notwithstanding section 49-282,
Arizona Revised Statutes, the appropriation from the state general fund to the
water quality assurance revolving fund established by section 49-282,
Arizona Revised Statutes, for fiscal year 2026-2027 may not exceed
$15,000,000.
APPROVED BY THE GOVERNOR JUNE 13, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 13, 2026.