HB 2758 — McMullen Valley; eligible entities; groundwater

- 1 - H.B.

2758 C.

A release or waiver of a seller's liability arising out of any omission or misrepresentation contained in an affidavit of disclosure is not valid or binding on the buyer.

D.

The buyer has the right to rescind the sales transaction for a period of five days after the affidavit of disclosure is furnished to the buyer.

E.

The seller OR, ON THE REQUEST, DIRECTION OR INSTRUCTION OF THE SELLER, THE ESCROW AGENT FOR THE TRANSACTION WHO IS LICENSED PURSUANT TO TITLE 6, CHAPTER 7 shall record the executed affidavit of disclosure at the same time that the deed is recorded.

The county recorder is not required to verify the accuracy of any statement in the affidavit of disclosure.

A subsequently recorded affidavit supersedes any previous affidavit, AND THE SUBSEQUENT SELLER OR, ON THE REQUEST, DIRECTION OR INSTRUCTION OF THE SUBSEQUENT SELLER, THE ESCROW AGENT FOR THE SUBSEQUENT TRANSACTION WHO IS LICENSED PURSUANT TO TITLE 6, CHAPTER 7 SHALL RECORD THE SUBSEQUENTLY EXECUTED AFFIDAVIT PRESCRIBED BY THIS SECTION.

A LICENSED ESCROW AGENT WHO RECORDS AN AFFIDAVIT PURSUANT TO THIS SUBSECTION IS NOT LIABLE FOR ANY INACCURATE INFORMATION IN THE AFFIDAVIT, INCLUDING ANY OMISSIONS OF MATERIAL FACTS.

F.

The affidavit of disclosure shall contain all of the following disclosures, be completed by the seller, meet the requirements of section 11-480 and follow substantially the following form:

When recorded mail to:

__________________________ __________________________ __________________________ __________________________ Affidavit of Disclosure Pursuant to A.R.S.

§ 33-422 I, ______________________________________________ (seller(s)) being duly sworn, hereby make this affidavit of disclosure relating to the real property situated in the unincorporated area of:

_______________________, County, State of Arizona, located at:

______________________________________________________________ and legally described as:

(Legal description attached hereto as exhibit "A") (property).

1.

There ▯ is ▯ is not .

legal access to the property, as defined in A.R.S.

§ 11-831 .

▯ unknown Explain:

____________________________________________________ ______________________________________________________________ ______________________________________________________________ - 2 - H.B.

2758 2.

There ▯ is ▯ is not .

physical access to the property.

▯ unknown Explain:

____________________________________________________ ______________________________________________________________ ______________________________________________________________ 3.

There ▯ is ▯ is not .

a statement from a licensed surveyor or engineer available stating whether the property has physical access that is traversable by a two-wheel drive passenger motor vehicle.

4.

The legal and physical access to the property ▯ is ▯ is not .

the same....▯ unknown ▯ not applicable.

Explain:

____________________________________________________ ______________________________________________________________ ______________________________________________________________ If access to the parcel is not traversable by emergency vehicles, the county and emergency service providers may not be held liable for any damages resulting from the inability to traverse the access to provide needed services.

5.

The road(s) is/are ▯ publicly maintained ▯ privately maintained ▯ not maintained ▯ not applicable.

If applicable, there ▯ is ▯ is not .

a recorded road maintenance agreement.

If the roads are not publicly maintained, it is the responsibility of the property owner(s) to maintain the roads and roads that are not improved to county standards and accepted for maintenance are not the county's responsibility.

6.

A portion or all of the property ▯ is ▯ is not .

located in a FEMA designated regulatory floodplain.

If the property is in a floodplain, it may be subject to floodplain regulation.

7.

The property ▯ is ▯ is not subject to ▯ fissures or ▯ expansive soils.

▯ unknown Explain:

_____________________________________________________ ______________________________________________________________ ______________________________________________________________ 8.

The following services are currently provided to the property:

▯ water ▯ sewer ▯ electric ▯ natural gas ▯ single party telephone ▯ cable television services.

9.

The property ▯ is ▯ is not .

served by a water supply that requires the transportation of water to the property.

If the property is served by a water supply that requires the transportation of water to the property, the seller shall disclose the name and contact information of the water hauler or water hauling company that is currently providing the transportation services to the property and the name and - 3 - H.B.

2758 location of the water supply from which the water is currently being transported.

Water hauler name:

______________ Phone:__________ Water supply:

__________________ Location:_________ 10.

The property is served by ▯ a private water company ▯ a municipal water provider ▯ a private well ▯ a shared well ▯ no well.

If served by a shared well, the shared well ▯ is ▯ is not .

a public water system, as defined by the safe drinking water act (42 United States Code § 300f).

IF SERVED BY A PRIVATE WELL, THE PRIVATE WELL ☐ IS ☐ IS NOT REGISTERED WITH THE DEPARTMENT OF WATER RESOURCES.

☐ UNKNOWN.

THE WELL ☐ DOES ☐ DOES NOT HAVE A PUMP COMPLETION REPORT ON FILE WITH THE DEPARTMENT OF WATER RESOURCES.

☐ UNKNOWN.

WELL REGISTRATION NUMBER:

_______ Notice to buyer:

If the property is served by a well, a private water company or a municipal water provider the Arizona department of water resources may not have made a water supply determination.

WELLS REQUIRE MAINTENANCE.

IT IS THE BUYER'S RESPONSIBILITY TO INSPECT A PRIVATE WELL.

DUE TO GEOLOGIC CONDITIONS, WATER DELIVERY SYSTEMS OR WATER HAULING MAY BE REQUIRED.

TRANSPORTING WATER BY WATER HAULING IS ACCEPTABLE.

For more information about water supply, contact the water provider.

11.

The property or the water used on the property ▯ is ▯ is not the subject of a statement of claimant for the use of water in a general adjudication of water rights.

▯ unknown.

This is a lawsuit to determine the use of and relative priority of water rights.

A map of adjudicated areas is available at the website of the department of water resources.

12.

THE PROPERTY ▯ IS ▯ IS NOT LOCATED IN A BASIN OR SUBBASIN FROM WHICH GROUNDWATER MAY BE TRANSPORTED AWAY PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 8.1, A.R.S.

IF THE PROPERTY IS LOCATED IN SUCH A BASIN OR SUBBASIN, THE SELLER SHALL DISCLOSE THE BASIN OR SUBBASIN THAT THE PROPERTY IS LOCATED IN:

▯ BUTLER VALLEY GROUNDWATER BASIN.

▯ MCMULLEN VALLEY GROUNDWATER BASIN.

▯ HARQUAHALA IRRIGATION NON-EXPANSION AREA.

▯ BIG CHINO GROUNDWATER SUBBASIN.

NOTICE TO BUYER:

PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 8.1, A.R.S., AN ELIGIBLE ENTITY LOCATED OUTSIDE OF A BASIN OR SUBBASIN LISTED ABOVE MAY LAWFULLY WITHDRAW AND TRANSPORT GROUNDWATER AWAY FROM SUCH A BASIN OR SUBBASIN TO THE LOCATIONS AND FOR THE PURPOSES ALLOWED BY THAT ARTICLE.

THE WITHDRAWAL AND TRANSPORTATION OF GROUNDWATER PURSUANT TO THAT ARTICLE MAY RESULT IN DAMAGE TO RESIDENTS OF SURROUNDING LANDS - 4 - H.B.

2758 AND OTHER WATER USERS, WHICH THE ELIGIBLE ENTITY MAY BE REQUIRED TO MITIGATE.

12.

13.

The property ▯ does have ▯ does not have .

an on-site wastewater treatment facility (i.e., standard septic or alternative system to treat and dispose of wastewater).

▯ unknown.

If applicable:

a) The property ▯ will ▯ will not .

require installation of an on-site wastewater treatment facility;

b) The on-site wastewater treatment facility ▯ has ▯ has not been inspected.

14.

THE DATE THE ON-SITE WASTEWATER TREATMENT FACILITY WAS LAST INSPECTED:

(DATE) .

□ UNKNOWN.

15.

IF THE ON-SITE WASTEWATER TREATMENT FACILITY IS A STANDARD SEPTIC SYSTEM, THE DATE THE SEPTIC TANK WAS LAST PUMPED:

(DATE) .

□ UNKNOWN.

NOTICE TO BUYER:

SEPTIC SYSTEMS ARE LAWFUL.

CESSPOOLS ARE UNLAWFUL.

A PERSON MAY NOT USE A CESSPOOL FOR SEWAGE DISPOSAL.

13.

16.

The property ▯ has been ▯ has not been .

subject to a percolation test.

▯ unknown.

14.

17.

The property ▯ does have ▯ does not have one or more solar energy devices that are ▯ leased ▯ owned.

If the solar energy devices are leased, the seller shall disclose the name and contact information of the leasing company.

Leasing company name:

_______________ Phone:

_______________ 15.

18.

The property ▯ does have ▯ does not have one or more battery energy storage devices that are ▯ leased ▯ owned.

If the battery energy storage devices are leased, the seller shall disclose the name and contact information of the leasing company.

Leasing company name:

_________________ Phone:

____________ 16.

19.

The property ▯ does ▯ does not .

meet the minimum applicable county zoning requirements of the applicable zoning designation.

17.

20.

The sale of the property ▯ does ▯ does not .

meet the requirements of A.R.S.

§ 11-831 and § 32-2181 regarding land divisions.

If those requirements are not met, the property owner may not be able to obtain a building permit.

It is unlawful pursuant to A.R.S.

§ 11-831, subsection F and A.R.S.

§ 32-2181, subsection D for a person or group of persons to attempt to avoid the subdivision laws of this state by acting in concert to divide a parcel of land into six or more lots or parcels.

The county where the land division occurred or the state real estate department may investigate and enforce the prohibition against acting in concert to unlawfully divide a parcel of land into six or more lots or parcels.

The seller or - 5 - H.B.

2758 property owner shall disclose each of the deficiencies to the buyer.

Explain:

____________________________________________________ ______________________________________________________________ ______________________________________________________________ 18.

21.

The property ▯ is ▯ is not located in the clear zone of a military airport or ancillary military facility, as defined in A.R.S.

§ 28-8461.

(Maps are available at the state real estate department's website.) 19.

22.

The property ▯ is ▯ is not located in the high noise or accident potential zone of a military airport or ancillary military facility, as defined in A.R.S.

§ 28-8461.

(Maps are available at the state real estate department's website.) 20.

23.

Notice:

If the property is located within the territory in the vicinity of a military airport or ancillary military facility, the property is required to comply with sound attenuation standards as prescribed by A.R.S.

§ 28-8482.

(Maps are available at the state real estate department's website.) 21.

24.

The property ▯ is ▯ is not located under military restricted airspace.

▯ unknown.

(Maps are available at the state real estate department's website.) 22.

25.

The property ▯ is ▯ is not located in a military electronics range as defined in A.R.S.

§ 9-500.28 and § 11-818.

▯ unknown.

(Maps are available at the state real estate department's website.) 23.

26.

The property ▯ is ▯ is not located within the influence area of a military installation or range or Arizona national guard site as defined in sections A.R.S.

§ 9-500.50 and § 11-818.01.

(Maps are available at the state real estate department website.) 24.

27.

Use of the property ▯ is ▯ is not limited in any way relating to an encumbrance of title due to a lis pendens, a court order or a state real estate department order or a pending legal action.

If the use of the property is limited due to an encumbrance of title, the seller or property owner shall disclose the limitations to the buyer.

Explain:

_____________________________________________________ ______________________________________________________________ ______________________________________________________________ 28.

IF THE PROPERTY WAS SOLD PURSUANT TO A TRUSTEE'S SALE, EXECUTION SALE OR MORTGAGE FORECLOSURE OR BY A PERSONAL REPRESENTATIVE OF AN ESTATE, THOSE SELLERS ARE EXEMPT FROM PROVIDING AN AFFIDAVIT.

THE BUYER SHOULD INVESTIGATE THESE UNKNOWN ITEMS.

This affidavit of disclosure supersedes any previously recorded affidavit of disclosure.

- 6 - H.B.

2758 I certify under penalty of perjury that the information contained in this affidavit is true, complete and correct according to my best belief and knowledge.

Dated this (date) day of (year) by:

Seller's name (print):

______________ Signature:

_____________ Seller's name (print):

______________ Signature:

_____________ State of Arizona ) ) ss.

County of _________) Subscribed and sworn before me this _ (date) __ day of (year) , by ________________________________________.

__________________________ Notary public My commission expires:

(date) Buyer(s) hereby acknowledges receipt of a copy of this affidavit of disclosure this (date) day of (year) Buyer's name (print):

_______________ Signature:

_____________ Buyer's name (print):

_______________ Signature:

_____________ G.

IF THE SELLER IS A TRUSTEE OF A SUBDIVISION TRUST AS DEFINED IN SECTION 6-801, THE BENEFICIARY OF THE SUBDIVISION TRUST SHALL PROVIDE THE DISCLOSURE AFFIDAVIT REQUIRED BY THIS SECTION.

G.

H.

For the purposes of this section, seller and subsequent seller do not include ANY OF THE FOLLOWING:

1.

A trustee of a deed of trust who is selling property by a trustee's sale pursuant to chapter 6.1 of this title.

or 2.

Any officer who is selling property by execution sale pursuant to title 12, chapter 9 and chapter 6 of this title.

If the seller is a trustee of a subdivision trust as defined in section 6-801, the disclosure affidavit required by this section shall be provided by the beneficiary of the subdivision trust.

3.

A PERSONAL REPRESENTATIVE ACTING ON BEHALF OF AN ESTATE THAT IS SELLING THE PROPERTY.

Sec.

3.

Repeal Section 45-552, Arizona Revised Statutes, is repealed.

Sec.

4.

1.- 7 - H.B.

2758 1.

(b) ESTABLISHED BY THE DIRECTOR, BUT ONLY IF THE DIRECTOR DETERMINES THAT WITHDRAWALS IN AN AMOUNT GREATER THAN THAT ALLOWED BY SUBDIVISION (a) OF THIS PARAGRAPH WILL NOT UNREASONABLY INCREASE DAMAGE TO HouseRESIDENTS AmendmentsOF toSURROUNDING H.B.LAND AND OTHER WATER USERS IN THE MCMULLEN VALLEY GROUNDWATER BASIN, OR THAT ONE OR MORE OF THE ENTITIES WITHDRAWING THE GROUNDWATER WILL MITIGATE THE DAMAGE TO THE RESIDENTS AND OTHER WATER USERS.

2758 RESIDENTS OF SURROUNDING LAND AND OTHER WATER USERS IN THE MCMULLEN VALLEY GROUNDWATER BASIN, OR THAT ONE OR MORE OF THE ENTITIES WITHDRAWING THE GROUNDWATER WILL MITIGATE THE DAMAGE TO THE RESIDENTS AND OTHER WATER USERS.

(c)- THE8 END- USEH.B. OR DESTINATION OF GROUNDWATER THE ENTITY TRANSPORTED OUT OF THE MCMULLEN VALLEY GROUNDWATER BASIN IN THE PRECEDING MONTH.

2758 (c) THE END USE OR DESTINATION OF GROUNDWATER THE ENTITY TRANSPORTED OUT OF THE MCMULLEN VALLEY GROUNDWATER BASIN IN THE PRECEDING MONTH.

THERULES DIRECTORADOPTED SHALLPURSUANT ADOPTTO RULESSECTION TO45-554 IMPLEMENTSHALL APPLY TO THIS SECTION, INCLUDING FOR THE REPORTING OF GROUNDWATER TRANSPORTED FROM THE MCMULLEN VALLEY GROUNDWATER BASIN.

-2-2. House Amendments to H.B.

2758LA 2.PAZ COUNTY BY AN ELIGIBLE ENTITY IN A TOTAL CUMULATIVE VOLUME NOT TO EXCEED TEN PERCENT OF THE TOTAL ANNUAL VOLUME OF GROUNDWATER THE DEPARTMENT DETERMINES IS AVAILABLE FOR TRANSPORT OUT OF THE MCMULLEN VALLEY GROUNDWATER BASIN.

LA PAZ COUNTY BY AN ELIGIBLE ENTITY IN A TOTAL CUMULATIVE VOLUME NOT TO EXCEED [TEN] [FIFTY] PERCENT OF THE TOTAL ANNUAL VOLUME OF GROUNDWATER THE DEPARTMENT DETERMINES IS AVAILABLE FOR TRANSPORT OUT OF THE MCMULLEN VALLEY GROUNDWATER BASIN.

(b) SELL OR LEASE GROUNDWATER FROM HISTORICALLY IRRIGATED ACRES OWNED BY THE ELIGIBLE ENTITY THAT ARE LOCATED IN LA PAZ COUNTY TO A DESIGNATED PROVIDER IN THE PHOENIX, TUCSON OR PINAL ACTIVE MANAGEMENT AREA FOR THE DESIGNATED PROVIDER'S OWN USEUSE, [, IF THE TOTAL CUMULATIVE VOLUME OF GROUNDWATER SOLD OR LEASED PURSUANT TO THIS SUBDIVISION DOES NOT EXCEED NINETY PERCENT OF THE TOTAL CUMULATIVE VOLUME OF GROUNDWATER ALLOCATEDAVAILABLE TO LA PAZ COUNTY PURSUANT TO THIS PARAGRAPH].PARAGRAPH.

G.- 9 - H.B.

2758 G.

EnrollSec. and engross to conform Amend title to conform GAIL GRIFFIN 2758GRIFFIN.docx 01/22/2026 12:30 PM H:

CW/ls5. 130GCNHME -3-

Section 45-556, Arizona Revised Statutes, is amended to read:

45-556.

Groundwater transportation fee;

annual adjustment;

credits;

enforcement A.

Except as provided in subsection B of this section, a person who directly or indirectly transports groundwater, withdrawn in a groundwater basin or sub-basin SUBBASIN as provided by this article or in the Pinal active management area, away from the county in which it was withdrawn to an initial active management area shall pay annually to the county a groundwater transportation fee determined by the director for each acre-foot of groundwater transported directly or indirectly away from the county, less MINUS any amount of central Arizona project water actually used on the property from which the groundwater is transported.

THE FEES COLLECTED PURSUANT TO THIS SUBSECTION ARE CONSIDERED GENERAL COUNTY MONIES AND SHALL BE DEPOSITED IN THE COUNTY GENERAL FUND.

B.

A person is not required to pay a transportation fee under this section for stored water withdrawn pursuant to recovery well permits issued by the director pursuant to this title.

C.

Except as provided in subsection D of this section, the director shall set the fee as follows for the cumulative amount of groundwater transported away from the county, less MINUS any amount of central Arizona project water actually used on the property from which the groundwater is transported:

Net Groundwater Transported Fee Per Acre-Foot 0 - 1,000,000 acre-feet $ 3.00 1,000,001 - 2,000,000 acre-feet $ 5.00 2,000,001 - 3,000,000 acre-feet $ 7.50 3,000,001 - 4,000,000 acre-feet $10.00 4,000,001 - 5,000,000 acre-feet $15.00 Over 5,000,000 acre-feet $30.00 D.

The director shall:

1.

WITHIN SIXTY DAYS AFTER THE EFFECTIVE DATE OF THIS AMENDMENT TO THIS SECTION, POST ON THE DEPARTMENT'S WEBSITE THE TABLE OF FEES ESTABLISHED PURSUANT TO SUBSECTION C OF THIS SECTION AND ANNUALLY UPDATE THE TABLE WITH THE ANNUAL CHANGE IN THE GDP PRICE DEFLATOR AND FEE ADJUSTMENTS DETERMINED PURSUANT TO PARAGRAPH 2 OF THIS SUBSECTION.

- 10 - H.B.

2758 2.

Annually adjust the dollar amount of the fee according to the annual changes in the GDP price deflator, as defined in section 41-563, using the 1993 calendar year as the base year.

The director shall immediately notify all concerned parties of the fee adjustments under this subsection PARAGRAPH.

E.

Credits are allowed against the fees imposed by this section as described and in the amounts provided under this subsection.

If the amount of the credit exceeds the amount of the fee imposed for any year, the unused portion of the credit may be carried forward and applied to subsequent years' fees until the amount of the credit is exhausted.

The allowable credits are as follows:

1.

The amount of any increase in property tax revenues, including contributions in lieu of property taxes under title 9, chapter 4, article 3, derived from remote municipal property, as defined in section 42-15251, from which the groundwater is withdrawn.

The credit shall account for increased revenues due to improvements to the property and increased revenues due to higher property tax valuations and assessment ratios resulting from changes in use of the property.

The credit shall not account for increased revenues due to normal market or economic factors.

The amount of the credit for any year is the sum of the amounts computed under subdivisions (a) and (b) OF THIS PARAGRAPH as follows:

(a) Delete from consideration under this subdivision any property with respect to which an amount is computed under subdivision (b) OF THIS PARAGRAPH.

Subtract the amount of property tax or in lieu revenues that would have been derived from the remaining property during the immediately preceding tax year if the use of and improvements to the property had remained unchanged since the date the city or town acquired the property from the amount of property tax or in lieu revenues actually derived from that property during the immediately preceding tax year.

If a city or town conveys all or part of its interest in remote municipal property to another political subdivision, the political subdivision succeeds to the credit allowed under this section.

The amount of credit computed under this subdivision shall be computed each year, beginning in the year groundwater is first transported, and, if not used to offset the fee under this section, shall be cumulated from year to year.

(b) This subdivision applies with respect to any portion of the remote municipal property that, before January 1, 1992, was classified at that time as class four property for purposes of property taxation under title 42 but was developed or improved at any time after December 31, 1991 and is not currently classified as class two property.

Subtract the amount of property tax or in lieu revenues that would have been derived from that developed or improved portion of the remote municipal property during the immediately preceding tax year if the use of and improvements to the property had remained unchanged since the date the city or town acquired the property from the amount of property tax or in lieu revenues - 11 - H.B.

2758 actually derived from that portion of the property during the immediately preceding tax year.

If a city or town conveys all or part of its interest in remote municipal property to another political subdivision, the political subdivision succeeds to the credit allowed under this section.

The amount of credit computed under this subdivision shall be computed each year, beginning in the year that the property is developed or improved and reclassified for tax purposes, and, if not used to offset the fee under this section, shall be cumulated from year to year.

2.

An amount equal to the market value of land donated to the county if the county agrees in writing to prohibit or limit the withdrawal of groundwater from the land.

The amount of the credit shall account for the reduced value of the land due to the groundwater withdrawal limitations.

3.

An amount agreed to by intergovernmental agreement between the county in which the groundwater is withdrawn and the city, town or other person transporting the groundwater.

F.

The board of supervisors of a county to which fees are due and payable under this section may request the county attorney to commence and prosecute any action or proceeding to enforce the collection of the fees.

G.

NOTWITHSTANDING SUBSECTION A OF THIS SECTION, A COUNTY THAT ESTABLISHES A WATER IMPROVEMENTS PROGRAM PURSUANT TO SECTION 11-254.09 MAY DESIGNATE AN AMOUNT OR PERCENTAGE OF THE TOTAL GROUNDWATER TRANSPORTATION FEES RECEIVED TO BE USED UNDER THE WATER IMPROVEMENTS PROGRAM ONLY FOR QUALIFIED OWNERS OF RESIDENTIAL PROPERTY WHO RESIDE WITHIN THE GROUNDWATER BASIN OR SUBBASIN FROM WHICH THE GROUNDWATER WAS WITHDRAWN AND TRANSPORTED AWAY.

THE COUNTY SHALL SEPARATELY ACCOUNT FOR MONIES RECEIVED FROM THE FEES IMPOSED PURSUANT TO SUBSECTION A OF THIS SECTION, AND ANY MONIES IN EXCESS OF THE AMOUNT OR PERCENTAGE DESIGNATED BY THE COUNTY SHALL BE DEPOSITED IN THE COUNTY GENERAL FUND.

Sec.

6.

Section 45-2281, Arizona Revised Statutes, is amended to read:

45-2281.

Establishment of funds;

allocation of authority revenues;

member dues;

applicability A.

On the authority's formation, a grant fund, a water acquisition fund and an operating fund are established.

The authority's revenues shall be deposited in and disbursed from the funds as provided by this section.

Revenues deposited in the grant fund may be used to make grants to authority members for water acquisition, water conservation and water reuse.

Revenues deposited in the water acquisition fund may be used to acquire water pursuant to section 45-2245.

Revenues deposited in the operating fund shall be used as provided in subsection E of this section.

B.

Except as provided in subsection D of this section and for an authority that is formed in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any - 12 - H.B.

2758 portion of an active management area, all revenues of the authority shall be deposited in the grant fund except the following:

1.

Dues paid by authority members which shall be deposited in the operating fund.

2.

Ten percent of all amounts paid by municipal subcontractors under subcontracts entered into as provided in section 45-2244, subsection B which may be deposited in the operating fund or the water acquisition fund as determined by the board.

3.

Fifty percent of all amounts paid by subcontractors of the authority pursuant to subcontracts entered into as provided in section 45-2244, subsection E or F.

4.

That portion of the monies earned by the authority under subcontracts entered into pursuant to section 45-2245, subsection H that is equal to the cost to the authority of obtaining the water transferred under those subcontracts and, after payment of $7,500,000 as adjusted pursuant to subsection C of this section, all of the monies earned from those subcontracts.

C.

Except as provided in subsection B of this section, all of the authority's revenues shall be deposited in the grant fund until the full amount of the initial grant and any additional amounts required in a grant agreement between the authority and the member that receives the grant have been disbursed from the grant fund as provided in this subsection.

The initial grant from the grant fund shall be made to the authority member that transferred, or caused to be transferred, to the authority the right to the delivery of eighteen thousand five hundred acre-feet per year of Colorado River water in connection with the authority's formation.

The amount of the grant to that member shall equal $7,500,000 plus any additional monies that the authority and the member agree to in a grant agreement between the authority and the member, which amount shall be adjusted annually from the date of the authority's formation either for inflation or as may otherwise be provided in the subcontracts of the authority or in the grant agreement, until the amount of the initial grant required by this subsection and any additional amounts required by the grant agreement are paid in full.

The initial grant may be disbursed in a lump sum or in partial payments in accordance with the request of the authority member that is entitled to receive the grant and as revenues become available to the authority and are deposited in the grant fund.

The authority member that is entitled to receive the grant may request that disbursements be made whenever revenues have been deposited in the grant fund.

Notwithstanding section 45-2282, the authority shall promptly disburse those revenues that are deposited in the fund on receipt of a request from that member.

D.

After the disbursement of the full amount of the initial grant and any additional amounts required in a grant agreement of the authority from the grant fund as provided in subsection C of this section, the - 13 - H.B.

2758 authority's revenues, except dues paid by authority members, may be deposited in the grant fund, water acquisition fund or operating fund as determined by the board.

E.

The authority shall establish a schedule of dues that is sufficient, when aggregated with other monies available for the payment of administrative expenses, to pay the estimated administrative expenses of the authority.

Dues shall be assessed and allocated equitably among authority members as determined by the board.

All dues received by the authority shall be deposited in the operating fund.

Expenditures may be made from the operating fund to pay:

1.

The authority's administrative expenses.

2.

The costs of the authority's formation including an equitable portion of the costs of the municipal corporation that transferred rights to the delivery of Colorado River water as provided in section 45-2202.

3.

The costs associated with holding any entitlement to water acquired by the authority.

4.

Subject to subsection C of this section, the costs incurred by the authority in the operation of any project undertaken by the authority pursuant to this chapter.

5.

Amounts payable to the United States annually for the right to hold and use the eighteen thousand five hundred acre-feet per year of Colorado River water acquired by the authority pursuant to section 45-2202, subsection C which amounts may include any tax, fee or excise imposed on the sale or transfer of the water.

F.

Any authority member that is in arrears in the payment of its dues for more than sixty days shall lose the right of its appointed director to vote on all authority matters until all of the dues that are in arrears are fully paid.

An authority member whose dues are in arrears does not lose membership in the authority because of the arrearage.

G.

EXCEPT AS PROVIDED IN SECTION 45-556, SUBSECTION G, all transportation fees paid to the authority pursuant to section 45-556 may be deposited in the grant fund, water acquisition fund or operating fund established by PURSUANT TO this section as determined by the board.

H.

For an authority that is formed in a county with a population of less than ninety thousand persons, all revenues of the authority shall be deposited in the grant fund, water acquisition fund or operating fund established by PURSUANT TO this section as determined by the board.

Sec.

7.

Section 48-901, Arizona Revised Statutes, is amended to read:

48-901.

Definitions In this article, unless the context otherwise requires:

1.

"Assessment" or "assessment roll" means a special assessment made under this article.

2.

"Block" means a parcel of ground, regular or irregular, bounded by streets or by streets and district boundary lines.

- 14 - H.B.

2758 3.

"Chairman of the board" means the person designated to preside over meetings of the board of directors.

4.

"Clerk" or "district clerk" means the clerk of the board of supervisors, who shall be the clerk under this article and in whose office shall be filed all papers directed or required to be filed with the clerk.

5.

"Commercial farming" means the intensive cultivation of arable land by the raising of agricultural or horticultural products as a principal source of the owner's livelihood.

6.

"Commercial stock raising" means the breeding, raising and care of domestic animals as a principal source of the owner's livelihood.

7.

"Contractor" includes personal representatives or assignee of the contractor.

8.

"Delinquency" means delinquency in the payment of an assessment.

9.

"Engineer" or "district engineer" means a person designated or employed by the board of directors of a district to perform any or all of the engineering work authorized to be done by the district under this article.

10.

"Improvement bond" means a bond issued under this article.

11.

"Lighting plants" includes electric light plants, electric power plants, gas plants, distribution systems, poles, parts, pipes, conduits, wires, tanks, reservoirs, generators for gas or electricity, transmission lines, towers, lamps, transformers of every character, machinery, apparatus, equipment and all appliances and structures necessary or incidental to the construction, installation or operation of a complete electric light, power and gas plant and distribution system placed on the streets improved, though extended beyond.

12.

"Lot":

(a) Includes any portion, piece, parcel or subdivision of land.

, but (b) DOES not INCLUDE property owned or controlled by any person as a railroad right of way RIGHT-OF-WAY.

13.

"Owner" means the person in whom legal title appears by recorded deed, or the person in possession under claim or title, or the person exercising acts of ownership for himself THE PERSON or as the personal representative of the owner, including the boards of trustees of school districts and the boards of education of high school districts owning property within the proposed improvement district.

14.

"Sewers" includes wastewater treatment facilities, tunnels, excavations, ditches, drains, conduits, channels, outlets, outfalls, cesspools, manholes, catch basins, flush tanks, septic tanks, connecting sewers of every character, machinery, apparatus, equipment and all appliances and structures necessary or incidental to the construction, installation or operation of a complete sewer system for either sanitary or drainage purposes.

- 15 - H.B.

2758 15.

"Street" includes avenues, alleys, highways, lanes, crossings, intersections, courts, places and grounds opened or dedicated to public use and public ways.

16.

"Street superintendent" or "superintendent" means a county employee designated by the board of supervisors to perform the duties of street superintendent for all the districts organized under this article in any county.

17.

"Time of delinquency" means the time when assessments become delinquent.

18.

17.

"Treasurer" or "district treasurer" means the treasurer of the county in which a district is situated, who shall be the treasurer of the district.

19.

18.

"Unincorporated area" means any portion of a county not within the limits of an incorporated city or town, so situated that any of the improvements provided for in this article might reasonably or properly be made or constructed for the benefit of the inhabitants of the area under existing special assessment statutes if the area were situated within an incorporated city or town.

20.

19.

"Wastewater systems" means sewers and other wastewater treatment facilities.

21.

20.

"Waterworks":

(a) Means works for the storage or development of water for domestic uses.

, including (b) INCLUDES drinking water treatment facilities, wells, pumping machinery, power plants, STANDPIPES, pipelines and all equipment necessary for those purposes.

22.

21.

"Work" or "improvement" includes any of the improvements mentioned and authorized to be made in this article, the construction, reconstruction and repair of all or any portion of any such improvement, and labor, services, expenses and material necessary or incidental thereto.

Sec.

8.

Section 48-902, Arizona Revised Statutes, is amended to read:

48-902.

Authorization for improvement district;

areas and lands excluded A.

An improvement district may be established in any unincorporated area, whether or not contiguous, by the board of supervisors of the county in which the proposed district is located, for the purpose of constructing and operating a wastewater treatment facility OR A DOMESTIC WATER DELIVERY SYSTEM THAT IS LOCATED IN A SUBSEQUENT ACTIVE MANAGEMENT AREA ESTABLISHED PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 2 OR THAT IS LOCATED IN A BASIN OR SUBBASIN FROM WHICH GROUNDWATER MAY BE TRANSPORTED PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 8.1, FOR THE PURPOSE OF DELIVERING WATER THROUGH WATER HAULING and making other local improvements or acquisitions in the district or for the benefit of the district that are permitted ALLOWED by - 16 - H.B.

2758 this article, and may contract for or in any other manner provide transportation services within the district through special assessments in such districts, or the issuing of bonds or making other contractual arrangements for improvements, and levying taxes for the operation and maintenance of improvements and streets within the district or for the benefit of the district.

B.

With written consent of the state land commissioner, an improvement district may include state lands or state trust lands within its boundaries, but those lands shall not be included for purposes of forming or objecting to the formation or expansion of a district.

C.

Notwithstanding subsection A of this section, an improvement district established for the purposes described in section 48-909, subsection A, paragraph 1, 6, 7 or 10 may include areas in an incorporated city or town with the consent of the city's or town's governing body.

D.

At the time of the establishment of an improvement district, none of the following shall NOT be included in the improvement district:

1.

Territory lying within an incorporated city or town except as provided in subsection C of this section.

2.

Lands owned or held by any common carrier for use in connection with interstate or intrastate commerce.

3.

Unpatented mining claims.

E.

Unless the improvement district is formed for the purposes described in section 48-909, subsection A, paragraph 7, at the time of establishment of an improvement district, none of the following shall NOT be included in the improvement district if the owner objects to such inclusion as provided in subsection F of this section:

1.

Lands owned or held for mining or metallurgical purposes.

2.

Any tract of land of twenty or more acres in area actually used for commercial farming or commercial stock raising, or any subdivided lands of which lots or blocks have not been offered generally for sale since the lands were subdivided.

F.

The owner of any property included in the classifications listed in subsection E of this section may have the property excluded from the proposed improvement district if the owner files a verified statement with the board of supervisors prior to BEFORE the adoption of the resolution ordering the formation of the district, stating that the person executing the statement is one of the owners of the respective lot or parcel, the respective classification, that the lot or parcel is within such classification on the date of the statement, the legal description of the lot or parcel and that the signer requests that the lot or parcel be excluded from the improvement district.

Any property owner may contest the statement at the hearing on formation of the improvement district.

The board of supervisors shall rule on all such objections.

G.

A domestic water improvement district may be formed or expanded in noncontiguous areas.

If the proposed boundaries of a noncontiguous - 17 - H.B.

2758 district are located within six miles of an incorporated city or town, the district shall obtain the consent of the governing body of the city or town prior to BEFORE the formation or expansion of the district.

Sec.

9.

Section 48-909, Arizona Revised Statutes, is amended to read:

48-909.

Purposes for which public improvements may be undertaken;

powers incidental to public improvements A.

When the public interest or convenience requires, the board of directors of an improvement district may order:

1.

ORDER the whole or any portion, either in length or width, of one or more of the streets of the district graded or regraded, paved or repaved, landscaped or otherwise maintained, improved or reimproved.

2.

ORDER the acquisition, construction, reconstruction or repair of any street, tunnel, subway, viaduct or conduit in, on, under or over which the district may have an easement or right-of-way therefor.

3.

ORDER the construction or reconstruction of sidewalks, crosswalks, curbs, gutters, culverts, bridges, tunnels, siphons, manholes, steps, parkings and parkways.

4.

ORDER the placement, replacement or repair of pipes, hydrants and appliances for fire protection.

5.

ORDER the acquisition, construction, reconstruction, maintenance or repair of wastewater treatment facilities, sewers, ditches, drains, conduits, pipelines and channels for sanitary and drainage purposes, with outlets, cesspools, manholes, catch basins, flush tanks, septic tanks, connecting sewers, ditches, drains, conduits, channels and other appurtenances in, under, over or through any street or any land of the district or any right-of-way granted or obtained for such a purpose, either within or without the district limits.

6.

ORDER the acquisition, construction, reconstruction, maintenance or repair of waterworks, including WELLS, STANDPIPES AND drinking water treatment facilities, for the delivery of water for domestic purposes, INCLUDING FOR THE DELIVERY OF WATER IN A SUBSEQUENT ACTIVE MANAGEMENT AREA ESTABLISHED PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 2 OR IN A BASIN OR SUBBASIN FROM WHICH GROUNDWATER MAY BE TRANSPORTED PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 8.1 THROUGH WATER HAULING, and of wells, ditches, canals, channels, conduits, pipelines and siphons, together with the necessary or usual appurtenances for carrying storm water STORMWATER or water from irrigation ditches, watercourses, streams or springs into, through or out of the district in, under, over or through any street, or any land of the district or any right-of-way granted or obtained for such a purpose, either within or without the district limits.

This section does not prohibit the board of directors of an improvement district from purchasing an existing domestic water delivery system within the district - 18 - H.B.

2758 or outside the district or constructing an initial or improving an existing domestic water delivery system inside or outside the district.

7.

ORDER the construction, reconstruction or repair of breakwater levees or walls, riverbank protection or replacement of riverbanks and supporting land.

A district established for this purpose shall cooperate and coordinate its plans and activities with the county flood control district established in the county and any incorporated city or town in which the district is established.

8.

ORDER the acquisition, construction, reconstruction or repair of lighting plants and poles, wire conduits, lamps, standards and other appliances for the purpose of lighting and beautifying streets or other public lands.

9.

ORDER the construction, reconstruction or repair of any work incidental to or connected with any improvement.

10.

ORDER the acquisition, in the name of the district, by gift, purchase or otherwise and the maintenance, repair, improvement or disposal of any real or personal property necessary or convenient for district operation for a community center, park or recreational area.

11.

Pursuant to section 48-902, the board of directors of an improvement district may contract for or in any other manner provide transportation services within the district.

B.

In addition to the powers specifically granted by or reasonably inferred from this article, an improvement district through its board of directors may:

1.

EXCEPT AS PRESCRIBED BY SUBSECTION F OF THIS SECTION, acquire by gift, purchase, condemnation or otherwise in the name of the district and own, control, manage and dispose of any real or personal property or interest in the property necessary or convenient for the construction, operation and maintenance of any of the improvements provided for by this article.