Arizona’s 57th Legislature Water Law Update: The Vetoes Told the Story

Authored by Attorney Sean F. Krieg

What the 2026 Legislature Did (and Didn’t Do) on Water

If you want to know where Arizona water law is heading, don’t look at what passed this session.  Look at what didn’t make it.

Arizona’s 57th Legislature adjourned on June 13 after a water session defined by what didn’t get done.  Now, roughly a month after sine die, the dust has settled enough to take full stock—and the ledger is thin.  Governor Hobbs reached for her veto pen early (and often), the highest-profile water bill of the year died quietly in the Senate, and a months-long budget standoff sent most everything else to an early grave.  For developers, municipalities, and the lawyers who advise them, the practical headline is simple: Most of the rules you plan around came through this session unchanged.

Here’s what actually happened.

Moving Water

The session’s signature water bill, HB2758, would have let certain eligible entities pump groundwater from the rural McMullen Valley Basin in La Paz County and pipe it into Active Management Areas, including the Phoenix AMA.  The coalition supporting this bill was broad: homebuilders, Valley municipalities, and the Central Arizona Water Conservation District.  It was opposed by La Paz County officials and hundreds of rural residents.  Supporters argued that municipalities need new supplies as Colorado River cuts loom, whereas opponents denounced what they saw as a windfall to a New York hedge fund sitting on over 12,000 acres of McMullen Valley farmland.  The bill cleared the House in February (on a 32-24 vote) and squeaked through the Senate’s Natural Resources Committee (4-3) in March, but it never made it to the Senate floor.  For now, it’s dead.  But the water supply constraints that produced it aren’t going anywhere.

The Veto Wall

Governor Hobbs vetoed a stack of Republican water bills, many on a single day in April, and the theme was consistent.  She declined to sign bills she viewed as weakening groundwater protections.  Among the casualties:

• HB2026 would have instructed the Department of Water Resources to credit only the specific water source proposed for a subdivision when issuing a Certificate of Assured Water Supply—even if that water was commingled with other types of water in a shared delivery system. Hobbs called it “creative” water accounting that would lead to groundwater over-pumping.  She vetoed a similar bill last year.
• HB2031 would have given landowners in the recently designated Willcox Active Management Area more time to claim grandfathered water rights. In her veto letter, Hobbs accused the Legislature of trying to “obstruct real groundwater protections,” but the bill’s agricultural supporters suggested that additional time may have been warranted to navigate the Department of Water Resources’ application requirements.
• HB2167 was aimed at curbing Attorney General Mayes’ use of nuisance law against large-scale groundwater pumpers. Nuisance law is the legal theory tied to high-profile suits against a large foreign-owned alfalfa operation in La Paz County and a “mega-dairy” in Cochise County.

The Undercurrent to Watch

The quieter, recurring fight is between the Department of Water Resources and housing developers over how much water a subdivision really needs.  Bills like HB2100—which would have let counties fast-track small six- to ten-lot splits without an Assured-Water-Supply showing—keep resurfacing; this year it passed both chambers before being vetoed.  And the lot-split issue that put Rio Verde Foothills in the news after residents lost reliable access to water (informally referred to as “wildcat” development) is still unresolved.  It will be back.

The Colorado River

Layered on top of the intrastate water debate is the situation on the Colorado River.  With interim guidelines set to expire at the end of 2026 and the Bureau of Reclamation expected to issue a Record of Decision on post-2026 operations soon, Arizona will almost certainly need to act on the Colorado River before the next legislature convenes.  And this action may require the Legislature’s approval.  If so, Governor Hobbs would have to convene a special session, which could give legislators the opportunity to tie a Colorado River deal to other water-regulation issues.

The Bottom Line

So where does that leave us?  Mostly where we started the year.  The Assured-Water-Supply framework came through this session largely intact—at least from legislative changes.  And no major water transportation or augmentation bills made it to the Governor’s desk.  But these fights are not new and each one will likely return in 2027.  For the most part, the vetoes told the story this year.  With the Colorado River math looking increasingly worse, next year’s story may be whether anyone can broker a good compromise before cuts force a less favorable outcome.

This article was written by G&B Attorney Sean F. Krieg

You can reach Sean directly at 602-256-4499

SKrieg@GBLaw.com

Click Here for Sean’s Bio

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