Republican plan to exempt developers from water restrictions fails in Arizona House

Yahoo

13-03-2025

Photo via Getty Images
A Republicans plan to give a break to housing developers who they say were treated unfairly by updated groundwater supply modeling is dead in the lack of water.
The plan to exempt specific proposed housing developments in areas of Queen Creek and Buckeye from a moratorium on building failed to pass through the Arizona House of Representatives for the second time by a vote of 29-26 on Wednesday.
One Republican, Rep. Alexander Kolodin, of Scottsdale, voted against the bill, alongside House Democrats.
The second rejection means the bill cannot be revived.
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Supporters of House Bill 2299, sponsored by Rep. Gail Griffin, the chairwoman of the House Natural Resources, Energy and Water Committee, claimed that it was the right thing to do for developers who were blindsided by Democratic Gov. Katie Hobbs' moratorium on new housing construction in some parts of the Valley. Implemented in June 2023, the moratorium caused an uproar among developers with projects already in the works in those areas, and Republicans have been looking for a way to restart building since then.
The moratorium was implemented on parts of the Phoenix Active Management Area that rely solely on groundwater after updated modeling from the Arizona Department of Water Resources determined that it was running 4% short of its 100-year assured water supply requirement.
Arizona has several AMAs, created via the 1980 Groundwater Management Act, and the Phoenix AMA covers most of the metro area. Developers looking to subdivide land to build houses within an AMA 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.
Griffin's bill would have allowed developers within the Phoenix AMA who submitted an application for a certificate of assured water supply between early 2021 and May 31, 2023, to request reevaluation of their application by the Department of Water Resources. ADWR would be required to reevaluate within 15 days, and base its determinations on groundwater modeling that dates back to 2006-2009, not current models.
Barry Aarons, a lobbyist for the Arizona Municipal Water Users Association, told members of the House Natural Resources, Energy and Water Committee on Feb. 14 that relying on those outdated models that don't reflect current conditions could result in excessive groundwater pumping.
Aarons said he believes that it's 'an incontrovertible fact' that the updated 2024 groundwater model provides a more accurate basis for planning and development.
Republican Rep. Khyl Powell pointed out on the House floor Wednesday that Griffin's bill would have helped to address the state's housing supply shortage that has contributed to rising housing costs over the past several years.
'We're constantly hearing that we don't have enough housing,' he said.
But Kolodin, a member of the far-right Arizona Freedom Caucus, said that now is not the time to make cities in the Valley compete with new housing developments for water — especially with a 2026 deadline coming up for renegotiation of Colorado River water usage.
Arizona, which gets around 35% of its water from the Colorado River, shares the water source with several other states and Mexico and could lose a significant amount of that water in renegotiation. Most cities in the Phoenix metro area primarily use Colorado River water.
Home developments and the municipal water providers who serve them are required to replenish the groundwater they pump from the aquifer. Rep. Neal Carter, R-San Tan Valley, said that those replenishment requirements mean concerns about water availability are invalid.
But Kolodin pointed out that the water used for replenishment within the Phoenix AMA comes almost exclusively from the Colorado River, which is likely to face steep cuts in the near future.
Most of the communities within the Phoenix AMA, which rely on Central Arizona Groundwater Replenishment District to replenish their water, officially opposed Griffin's bill. They include: Phoenix, Mesa, Tempe, Scottsdale, Avondale, Glendale, Chandler, Goodyear, Surprise and Gilbert.
If Arizona's allotment of Colorado River water is significantly cut, and can no longer be used to replenish the aquifer, the state would have to find other replenishment resources or draw down the aquifer, which would put the region's water supply at risk.
Kolodin said that he thinks Arizona's groundwater regulations have 'artificially constricted' the system and should be overhauled to create a free market for water.
On Feb. 26, the first time House Bill 2299 failed to pass, Kolodin said it was time to work on comprehensive changes to groundwater law instead of creating carve-outs for specific groups.
'If there's to be reform, let's legislate a completely new model,' he said. 'Let's actually solve some of the structural problems. Let's not just hand a few businesses, a few people, a few landowners the right to build that is not given to anybody else.'
While he didn't advocate for a completely new model, Aarons on Feb. 14 also advised lawmakers that it was time to have a serious discussion about treating all water users the same when it comes to assured water supply and replenishment requirements. Currently, the requirements don't apply to commercial or industrial developments, unless they are served by a water provider that has an assured water supply designation.
Republican leaders in the Arizona Legislature, along with the Home Builders Association of Central Arizona, have filed a lawsuit challenging some of ADWR's assured water supply rules that they say were implemented without proper authority or using proper rulemaking procedures.
The lawsuit, filed March 10 in Maricopa County Superior Court, challenges the department's new Alternative Path to Designation of Assured Water Supply.
The alternative path would allow new building within the areas of moratorium, but only if housing developers procure renewable sources of water to offset 25% of their groundwater use. House Speaker Steve Montenegro, along with other Republicans, have described the rule as a 33% tax on water, while ADWR has said it isn't a tax.
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