Photo via Getty Images
For more than a year, Arizona’s elected leaders have been making big promises to address the state’s unclear water future. But with ample disagreement over what that should look like, scant legislative change has come to fruition.
However, many of the people with the power and influence to make changes to the state’s complicated groundwater code agree that “Ag-to-Urban” is a promising concept.
Republicans who control the state legislature and officials at the Arizona Department of Water Resources, overseen by Democratic Gov. Katie Hobbs, have created their own separate Ag-to-Urban plans. Both would retire rights to water used for crop irrigation in areas with water use restrictions and transfer some sort of water credit to facilitate urban developments that would use significantly less water.
“This is probably the single most consequential bill we can accomplish on water that has a clear pathway, and I want to see it through,” Sen. T.J. Shope said of Senate Bill 1611, which he sponsored.
GET THE MORNING HEADLINES.
Shope’s proposal and its mirror in the House of Representatives, House Bill 2298, sponsored by Rep. Gail Griffin, R-Hereford, were both approved along party line votes by their chambers’ natural resources committees last week and are next headed to the full House and Senate for consideration.
During a Feb. 20 House Natural Resources Committee meeting, Shope described the GOP-backed legislation as a win/win for both farmers who are being priced out of working the land in suburban areas of the Valley and prospective homebuyers.
The need to update the Grand Canyon State’s complex groundwater code is becoming more urgent every day with the possibility of steep cuts in access to the Colorado River water, which supplies about 35% of the state’s water, on the horizon.
The Arizona Groundwater Code, which dates back to 1980, was created to manage the state’s groundwater supply after decades of overuse. The Groundwater Code designated Active Management Areas, or AMAs, inside which groundwater use is restricted based on who is pumping it, what they’re using it for and from where
The Phoenix AMA’s primary management goal was to reach safe yield, or the “long-term balance between the annual amount of groundwater withdrawn in the AMA and the annual amount of natural and artificial recharge” by 2025. That hasn’t happened.
Developers looking to subdivide land for residential use in Arizona’s AMAs must obtain a certificate of 100-year assured water supply, or a commitment from a water provider that already has a certificate of assured water supply, to provide water to their subdivision before they can build. The Arizona Department of Water Resources uses complex hydrological modeling that takes into account current and projected future usage, as well as water recharge, to help determine whether a proposed development is eligible for a certificate of assured water supply.
In June 2023, an updated hydrological model for the Phoenix AMA — which covers most of the metro area — showed a projected 4% shortfall in its 100-year water supply. The announcement came alongside a moratorium Hobbs placed on residential developments in Queen Creek, Goodyear and Buckeye that relied only on groundwater, even as the state faced a severe housing shortage. This caused an uproar from developers who already had projects in the works.
Republicans and developers have pitched their Ag-to-Urban plan as a way to facilitate new residential development in those restricted areas, which they say will help to bring down steep housing costs in the Valley.
“I’ve received an outpour of support from Republicans and Democrats alike, and I’m calling on Governor Hobbs to join the movement by allowing ag-to-urban developments to take shape in Arizona to secure our water future and help hardworking Arizonans achieve their American dream of homeownership,” Shope wrote in a Feb. 18 statement. “After last year’s missed opportunity by the Governor when she vetoed this bill, I’m hopeful she will see the light and take the right action this time around.”
In last year’s veto letter, Hobbs wrote that the concept of converting agricultural land for urban development was one that her administration supports. But legislation doing so, she said, should “be carefully crafted to ensure that the water conservation savings and consumer protections are guaranteed.”
Christian Slater, a spokesman for Hobbs, told the Arizona Mirror in an emailed statement that the governor “has significant concerns” about SB1611, which he said didn’t contain enough of the concessions the governor asked for. Slater instead praised ADWR’s proposal, which he called a commonsense approach to Ag-to-Urban “that will generate significant water conservation savings and allow for continued housing construction.”
ADWR’s draft proposal, released Feb. 26, is the result of an informal rulemaking process, and is only in the beginning stages. It includes significantly more restrictions aimed at shoring up the state’s future water supply than the GOP-backed legislative proposal.
At this point, ADWR hasn’t determined whether it will move forward with a formal rulemaking process to create an Ag-to-Urban program, a decision that depends in part on whether the legislature’s proposal makes it through the finish line with a signature from Hobbs.
“While the legislation is not in an acceptable state at this time, we remain open to continued legislative discussions and hope to see alignment between the two proposals,” Slater said.
The legislative proposal would allow farmers within the Phoenix, Pinal and Tucson AMAs to trade in their grandfathered irrigation rights for credits of exemption from demonstrating “physical availability” of groundwater. This would allow those farmers to sell the land, along with the exemption credits, to developers who currently can’t prove that the water their development needs for 100 years is available. That demonstration is a requirement to receive a certificate of assured water supply within AMAs. Without one, developers can’t build. After using their credits to demonstrate physical availability, developers would still have to get approval from ADWR and satisfy other assured water supply requirements.
The physical availability credits would be tied to the land; owners within the Phoenix AMA could use tiered amounts up to 2 acre-feet of water per year, per acre, while owners within the Pinal AMA could use up to 1.5-acre-feet. An acre-foot is the amount of water that would cover an acre of land, not quite an entire football field, with a foot of water — roughly what three single-family homes use in a year.
Owners in both AMAs would have the option to choose between three tiers of water usage, each with a corresponding requirement to replenish a percentage of the water they use. Smaller amounts would have smaller replenishment requirements, with larger replenishment requirements for bigger amounts.
Farmers within AMAs are not currently required to replenish back into the aquifer any of the groundwater they use for irrigation.
“That conversion saves water,” Bas Aja, a lobbyist for the Arizona Cattle Feeders Association, which supports the bill, pointed out during a Feb. 20 House Natural Resources Committee meeting. He also accused those in other industries of “hoarding water” instead of using it like farmers do.
The City of Buckeye and the Town of Queen Creek, two communities impacted by the moratorium on building, are both ardent supporters of Shope’s proposal.
“The Ag-to-Urban concept is an extremely important water resource tool for the city,” Buckeye lobbyist John Raeder told lawmakers during a Feb. 18. Senate Natural Resources Committee meeting.
There are around 33,000 acres of farm land in Buckeye that could be converted for development, he said, with the potential to save an estimated 100,000 acre-feet of water per year in the Phoenix AMA. Overall, the proposal could apply to 400,000 acres of farmland, Shope has said.
“We believe this approach offers significant benefits to the aquifer, offers a fair incentive to agricultural users and serves as a vital tool for supporting much needed housing growth in the city, which will benefit the entire region and state,” Raeder said.
Over the past year, Shope and other advocates for the Ag-to-Urban concept have held four stakeholder meetings to gain input from various sources, but not all of them agree that all of the claimed benefits of the proposals will come to pass, including the claim that it will save millions of acre-feet of water.
“The bill undermines the intent of the Groundwater Management Act by allowing what is effectively an exception to the 100-year assured supply rule by counting water that does not exist,” Tom Prezelski, lobbyist for Rural Arizona Action, told lawmakers on Feb. 18.
Prezelski said that the Groundwater Management Act was intended, at least in part, to assure homebuyers that sufficient water existed for their future needs.
He explained that both the Phoenix and Tucson AMAs have been banking water as the future supply from the Colorado River remains uncertain, and this proposal could put that savings in jeopardy.
“This was made possible by the 100-year assured supply requirement in particular, and making an exception for water which exists only on paper or might somehow manifest in the future, makes a mockery of the protections offered by the existing program,” he said.
And Prezelski argued that SB1611 would not address Arizona’s housing shortage and correspondingly high housing costs in the way its advocates said it would, since the housing shortage is a statewide problem and the bills would only apply to limited areas within the Phoenix, Pinal and Tucson AMAs.
In addition, he said that the proposals don’t address water management concerns for most rural Arizonans, whose water is unprotected by the Groundwater Management Act.
Many of the bill’s detractors favor the more comprehensive and conservation-minded ideas outlined in ADWR’s draft proposal. The department did not include the Tucson AMA in its proposal, because developers have been able to demonstrate physical availability of water without exemption credits.
Meghaen Dell’Artino, a lobbyist for the Gila River Indian Community, told lawmakers on Feb. 18 that the GOP bills trade protection of dwindling groundwater supplies for new development.
“We must balance the protection of those individuals and entities who have relied on the assured water supply promise of 100 years of water being available to support our current homeowners with the need for additional development,” she said.
Several opponents, including Dell’Artino, raised concerns that SB1611 doesn’t include strong enough stipulations to ensure that the agricultural land is currently being used for irrigated crops. If those lands aren’t in active irrigated use, converting them for urban development could actually result in increased water use.
Shope’s bill requires agricultural land to have been used for irrigated crops for just one of the last five years, while ADWR’s requires irrigation for three out the last five years.
In the Gila River Indian Community’s view, the Republican bill would also confer too generous of a water allowance to the new developers, which would deplete groundwater too quickly, Dell’Artino said.
ADWR instead proposed water use and replenishment rates consistent with existing water management goals within the AMAs, with an eye toward ensuring that in the future Arizona isn’t drawing more water from its aquifers than it is replacing.
Ben Alteneder, a lobbyist for the Arizona Department of Water Resources, said the department shared many of the same concerns as the Arizona Municipal Water Users Association, which opposes the bill. (ADWR is officially neutral on the bills.) Those concerns include a provision that would allow physical availability credits to be transferred to land within one mile of the farmland with grandfathered irrigation rights.
“The one-mile portability could expand development far beyond the irrigated lands,” Barry Aarons, a lobbyist for AMWUA, told lawmakers Feb. 18.
Aarons added that AMWUA would rather see physical availability credits bestowed only to designated water providers — water companies and municipalities — instead of individual owners. ADWR also thinks that’s the best policy, since designated providers must always ensure they have a 100-year assured water supply, taking into account all uses, water supplies and recharge within their areas.
Some individual owners, like industrial developers, don’t have to meet the same replenishment requirements.
On Feb. 20 Shope acknowledged that more amendments to his bill were likely to come before the chambers — which both have a Republican majority — vote on it. He encouraged Hobbs and other Democrats to participate in the amendment process.
YOU MAKE OUR WORK POSSIBLE.