This story was originally published by the Arizona Mirror.
Caitlin Sievers
Arizona Mirror
Politicians from both sides of the aisle, housing developers and farmers in increasingly urban areas celebrated the signing of Arizona’s new “ag-to-urban” water program, which Gov. Katie Hobbs called a “huge water policy win.”
“Here in Arizona, we have grown to 7.5 million people,” said Senate President Warren Petersen during a June Senate hearing. “We’re using the same or less water as 1.5 million people. Because in Arizona, we are the gold standard for showing that we can grow and we can conserve water. But that has come through good policy that has been very deliberate.”
The Groundwater Management Act was implemented in 1980 when decades of overuse threatened the state’s future water supply.
But some of the left-leaning lawmakers who voted against the new law that paves the way for some agricultural water to be used instead to boost housing developments, environmental activists and farmers whose land is outside of the limited areas that it impacts say it doesn’t go far enough in protecting the state’s water future — or their livelihoods.
On the other hand, some far-right lawmakers who voted against the proposal argued that it went too far in protecting the state’s water future and the state would be better off throwing open the doors to developers.
The ag-to-urban program is set to give farmers who grow crops on land with water use restrictions the option to retire their grandfathered irrigation water rights and sell them as credits to facilitate urban developments that would use significantly less water.
Proponents of the program say it will help farmers in increasingly urban areas who want to retire their land as well as developers who’ve been iced out by Arizona’s 100-year water supply requirement. That requirement, for developers to prove they have enough water to sustain their development for 100 years, dates back to the state’s original 1980 Groundwater Management Act. It’s meant to protect Arizonans who purchase homes from running out of water.
In response to an updated hydrological model for the Phoenix metro area, which showed a 4 percent shortfall in its 100-year-water supply, Hobbs in June 2023 put a moratorium on new residential construction in Queen Creek, Goodyear and Buckeye that relied only on groundwater, even as the state faced a severe housing shortage. Ag-to-urban is meant to give developers a way around that moratorium.
The general idea of ag-to-urban is that farmers would stop using the large amounts of water they need for irrigation and sell their land and water rights to developers who would build residential structures. This would give developers a chance to build in areas that had been under the moratorium, easing the housing crisis and using significantly less water.
However, the process sidesteps the part of the state groundwater code that requires developers to prove physical availability of a 100-year supply of water. Environmentalists say that’s detrimental to the state’s water future.
Sen. Mitzi Epstein, D-Tempe, during a June hearing on Senate Bill 1611, praised significant stakeholder involvement in its creation, but still voted against it.
“I am still concerned that this is not going far enough to protect our aquifers,” she said. “If our water aquifer is not healthy, the people who depend on the aquifer are not going to be healthy for the long term.”
Hobbs, a Democrat, signed the bill into law on June 30, after it passed the Arizona Senate June 19 by a vote of 26-4 and the Arizona House of Representatives House 35-20 on June 23. In the Senate, only Democrats voted against it, but in the House a mix of lawmakers from both parties were in opposition.
The Republican-led Arizona legislature approved a different ag-to-urban plan last year, but Hobbs vetoed it, writing in her veto letter the concept needed further development to “ensure that the water conservation savings and consumer protections are guaranteed.”
The version she signed this year contained some key amendments that were vital to getting support from Democrats, the Arizona Department of Water Resources and the Central Arizona Groundwater Replenishment District.
The ag-to-urban plan introduced to the legislature in January by Sen. T.J. Shope applied to the Phoenix, Pinal and Tucson active management areas, three of the areas in the state where the state regulates water.
The Tucson Active Management Area was removed after critics pointed out that builders within that AMA could still prove a 100-year-water supply without it, making it unnecessary.
Senate Minority Leader Priya Sundareshan, D-Tucson, who worked with Shope to amend the plan, praised some of the last-minute changes to the bill which earned her support. They included a stipulation that the farmland had been irrigated in three of the past five years, instead of one of five, to ensure water savings.
She also lauded a change that would take some of the pressure off of the Central Arizona Groundwater Replenishment District, which will be tasked with replacing groundwater pumped from the impacted areas with water from other sources.
Generally, developments within active management areas that rely solely on groundwater must join the Central Arizona Groundwater Replenishment District, or CAGRD, and pay it to replenish groundwater it pumps beyond assured water supply limitations.
The amendments to ag-to-urban introduced just before the legislature voted to pass it in June made significant reductions to CAGRD’s replenishment obligations. The replenishment district initially opposed ag-to-urban, which its staff estimated will increase its replenishment requirement by 15,000 to 20,000 acre feet of water per year by 2044.
But CAGRD ultimately ended up supporting the proposal after it was changed to significantly reduce its replenishment reserve target over the next 10 years from 1.8 million acre feet to around 400,000 acre feet, relieving some of the pressure on the district.
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.
Jeff Gray, CAGRD’s lobbyist, told the replenishment district’s board during an Aug. 21 meeting that the final version of the program included a “much more reasonable goal to achieve.”
An ongoing drought that impacts the Colorado River, which supplies around 35 percent of Arizona’s water, means an approximately 512,000 acre-foot reduction in Colorado River water to the state in 2025 alone. CAGRD relies on that water for replenishment, so a show of support from the Governor’s Office for the replenishment district to pursue other water sources was also vital in getting it on board with the ag-to-urban plan, Gray said.
However, Hobbs only has another year-and-a-half in office before the end of her term, and if she doesn’t win reelection, there’s no guarantee that whoever succeeds her will honor that.
In June, Shope called the passage of the bipartisan ag-to-urban program “probably the proudest moment” of his 13 years as a lawmaker. At the same time that Shope, Sundareshan and other lawmakers worked with stakeholders to create the legislature’s version of the ag-to-urban program, the Arizona Department of Water Resources began a rulemaking process to create its own version.
Ultimately, the plan that Hobbs signed into law was a compromise between the department’s plan, which focused more on water conservation, and Shope’s plan, which focused more on fostering new housing construction.
But lawmakers on both sides of the aisle still had problems with it.
Sen. Sally Ann Gonzales, D-Tucson, said that, while she appreciated all the work that went into it, and called it “a great bill,” looking 100 years ahead was not far enough.
“Indigenous people like to think of seven generations ahead and how do we protect, and what do we do for the seventh generation,” Gonzales, a member of the Pascua Yaqui tribe, said. “And 100 years is only about three generations. And, so, we’re a little bit short on that.”
Sen. Lauren Kuby, D-Tempe, said that she voted against the program because of a need for more stringent reforms to CAGRD replenishment requirements, to protect the aquifers.
And Phoenix Democratic Rep. Sarah Liguori said that she was still too concerned about the expansion of groundwater replenishment needed to support it.
“I have concerns that our Colorado River surface water is running dry, and that groundwater management has once again stalled in this body,” she said.
In contrast, Rep. Alexander Kolodin, R-Scottsdale, said that he supported all of the versions of the ag-to-urban program until the final one, which he said gave too many concessions to Democrats.
“After two years of getting beaten apart in the process, the very promising concept of ag-to-urban, in this bill, finds itself totally gutted,” he said, claiming that it gives too much discretion to the Arizona Department of Water Resources.
Kolodin said that all of the compromises doomed the once-promising concept to failure.
“There is not a lack of water in this state… but what there is is a lack of leadership on water,” Kolodin said, before voting against the bill in June. “Arizona deserves better than this milquetoast solution to our grave problem.”
Many of the lawmakers and groups that opposed the initial Republican ag-to-urban plan came around to support it after the numerous amendments that Kolodin opposed were adopted. But the Sierra Club was not one of them.
Sandy Bahr, a lobbyist for the Grand Canyon Chapter of the Sierra Club, told the Arizona Mirror that she believed many of those people and groups settled for the final version of the plan because it was comparatively better than the one introduced earlier this year, or the one that Hobbs vetoed last year.
“This is not promoting sustainable development,” Bahr said, describing it instead as supporting more urban sprawl that gives developers a way around assured water supply requirements.
She also criticized the loosened requirements for CAGRD reserves, which takes pressure off the replenishment district but makes the system “less sustainable for the future.”
Bahr also lamented that the legislature failed to take any action to protect the majority of the land area in Arizona that lies outside active management areas, which are mostly unregulated and where wells are running dry.
“As is the case with a lot of environmental problems, the people who have the least will be hurt the most,” Bahr said.
If developers can’t build in Arizona, they’ll move on to another state, she said, but regular people living in rural areas who can’t afford to move or drill a new well will be stuck with few options.
“I didn’t think it was something to celebrate,” Bahr said of the passage of the ag-to-urban bill. I understand they thought they got a good compromise. We don’t think it was a good compromise, it just continues more of the same, and that’s the last thing we need.”