Legal Alert: Ag-to-urban groundwater incentive a win for Arizona
Authored by Gammage & Burnham attorneys Alexandra Arboleda and Grady Gammage Jr.- June 6th, 2024
Gov. Katie Hobbs convened a Governor’s Water Policy Council in 2023 that
made several groundwater management recommendations, including
creating an alternative path to obtaining designations of Assured Water
Supply (ADAWS) in Active Management Areas (AMA). That policy is currently
being developed, with the Arizona Department of Water Resources (ADWR)
recently proposing draft ADAWS Rules. Another concept that was discussed
at the Governor’s Council is an incentive to convert high water uses for
irrigated agriculture in active management areas to lower water uses for
urban purposes.
This “Ag-to-Urban” incentive complements the Assured Water Supply
program, creating a bridge to a sustainable future.
The Arizona Legislature convened a bi-partisan stakeholder process in
January 2024 to negotiate an Ag-to-Urban incentive bill and considered
several other bills that facilitate the proposed ADAWS policy. These bills were
combined into a “water package” that was recently passed by the Senate as
HB2201. In addition to creating an Ag-to-Urban incentive, this water package
prohibits using potable water to irrigate ornamental grass or “non-functional
turf,” facilitates undesignated water providers becoming designated under the
Assured Water Supply program by phasing the transition of replenishment
costs from the homeowner to the water provider, allows portions of a city or
town to meet Assured Water Supply requirements if they are served by an
irrigation district with access to surface water, and expands the entities that
can import water into the Phoenix AMA. Although some of these bills seem
quite technical, they are critical components of the Governor’s ADAWS policy
and create a pathway for responsible growth.
While purely voluntary, the Ag-to-Urban incentive is designed so that
landowners can convert high-intensity irrigated agriculture to urban uses that
pump less groundwater and replenish aquifers with alternative water supplies
under existing Assured Water Supply program guidelines. The incentive will
result in new wastewater supplies, which can be reused or replenish aquifers,
and infrastructure to capture stormwater. Furthermore, the water package
contains Governor’s Council recommendations to limit developing “wildcat”
subdivisions that circumvent Assured Water Supply program
requirements. Together, this package reduces groundwater pumping and
bolsters the Assured Water Supply program.
Creating opportunities to build entry-level housing in communities where
demand for affordable housing is high, the Ag-to-Urban incentive meets
consumer demand in areas that are close to new jobs. Additionally, the
incentive adds value to actively irrigated farmland that cannot currently be
developed and limits where water can be used to retired irrigation acres and
adjacent lands. That prevents environmental harms and detrimental impacts
to farm communities stemming from the fallowing of farmland. In sum, the
Ag-to-Urban incentive steers growth where the water is, allowing for
responsible development while reducing overall groundwater use by replacing
existing farmland with municipal uses.
Arizona’s economy is booming with growth in the semiconductor, microchip,
technology, and renewable energy industries. President Biden recently visited
Arizona to announce an infusion of an $8.5 billion microchip grant to Intel.
Taiwan Semiconductor Manufacturing Company is investing $40 billion in
Arizona’s semiconductor industry. This development is fueling more
economic growth and highlighting the importance of Arizona’s economy to
our national security. Arizona’s growing economy demands smart policy
changes to reduce groundwater use and facilitate the transition to alternative
water supplies.
Now water policy experts and planners must figure out where the next bucket
of water will come from, so that the people who will work for those companies
will have an affordable place to live with a reliable water supply. Growth on
actively irrigated farmland is the most responsible way to meet the demand
for housing by replacing existing pumping to irrigate high water use crops
with low water use housing. This Ag-to-Urban incentive would fully replenish
groundwater pumping, capture stormwater, and allow for wastewater reuse. It
is a win-win for everyone.
Arizona has a history of innovative and forward-thinking water policy. We
must meet the moment again. The Ag-to-Urban incentive and the water
package can be implemented immediately to meet demand for housing in a
responsible way and create a bridge to a sustainable future with conservation,
water reuse, and renewable supplies.
Grady Gammage, Jr. and Alexandra Arboleda are attorneys with Gammage &
Burnham PLC, whose practice areas include water, land use, and government
affairs.
Have questions about how this may affect you or your business? Contact Alexandra Arboleda (602-256-4410) or Grady Gammage Jr. (602-256-4469).
