The Overview

If you own farmland in the Phoenix or Pinal active management areas, you can now permanently give up your irrigation water rights in exchange for groundwater savings credits that developers and water providers can use to prove they have enough water for new homes and businesses. Arizona's water banking bill, SB 1335, became law when Gov. Katie Hobbs (D) signed it June 22. ​

Arizona has faced worsening water supply conditions as Colorado River shortages deepen, and the state's Water Banking Authority has been preparing to shift from storing surplus water to drawing it down, according to E&E News. Credits may be pledged to assured water supply applications submitted through Dec. 31, 2030, but not after Jan. 1, 2031.

What the Law Does

The law amends the section of Arizona law governing permanent relinquishment of irrigation grandfathered rights. A landowner in the Phoenix or Pinal active management area can apply to the state director to give up all of an irrigation grandfathered right in exchange for groundwater savings credits. Credits are calculated by multiplying the relinquished acres by 150 in the Phoenix area or 100 in the Pinal area, subject to a volume cap.

Credit holders may keep irrigating the relinquished land for up to two years after the credits are issued. Water from the program may not be used on non-recreational turf, water parks, or decorative water features such as lakes, ponds, or lagoons.

The director was required to adopt rules through expedited rulemaking by June 30, 2026, eight days after the signing date. That tight turnaround was built into the law to ensure the credit system was ready before developers could begin pledging credits to water supply applications.

Legislative Status

Sen. Tim Dunn is a Republican senator from Arizona. The Senate passed it 26-1 on Feb. 26. The House passed it 32-25 on June 11. The upper chamber passed it 23 to 6 on June 12. The bill went from its first action to the governor's signature in about 147 days.

---

AllCiv makes it easy to stay politically informed and involved.

---

Spot something wrong? Report an issue with this article