Arizona measure would speed conversion of thirsty farms to subdivisions

Arizona officials often boast that total water use statewide hasn’t grown since the late 1950s, partly because many farms have been gobbled up by developers to build less thirsty subdivisions.

Now, a hotly debated bill moving through the Legislature would accelerate the transfer of a farm’s water rights to new subdivisions. The bill would overturn the impact of existing state bans on using groundwater for new subdivisions in the Phoenix area and Pinal County — if they’re built on farmland.

The proposal is part of a broad package of water legislation that cleared the Senate on Wednesday and is headed to the House to consider in early June. It’s one of the most sweeping packages of water proposals before the Legislature in several decades.

Advocates say the farm-to-urban measure would be a “game-changer” to enhance Arizona’s water conservation practices, in line with the 1980 Groundwater Management Act. Critics say the promises of savings could well be illusory and that the bill would undercut that landmark law.

The bill's impact on farms, subdivisions and  water use is frife with uncertainties. How many acres of farmland would be converted and how much water would be saved are subjects of debate and conflicting estimates from various parties. Also unknown and possibly unknowable is how much of the farmland that would be sold and subdivided if this bill passes would be abandoned unde any circumstance if farmers decide on their own to stop farming.

Alexandra Arboleda, a private water lawyer who represents some developers and helped draft the bill, told the Arizona Daily Star it is “really a win-win for Arizona — good for agricultural communities, good for affordable housing, good for aquifers. It provides a voluntary basis for farmers to transition from high water use irrigation to lower water use municipal uses.”

Testifying early this year before a Senate subcommittee on the bill, she said, “It’s not going to solve our water problems; but this is a way we can immediately address some of these issues. It wouldn’t take a long time to implement it. People can take advantage of it quickly.”

One of her clients owns farmland that now can’t be developed due to current state restrictions but could be if the bill passes, she said. That land is now irrigated with seven acre-feet of water per acre, she said. That’s more than twice the amount of water per acre that would be allowed to be used under this bill if the land were developed.

But the Gila River Indian Community, an influential Central Arizona tribe, came out hard against the bill in a statement released Friday.

The tribe says that while farm-to-urban conversions can benefit the economy without harming the aquifer when done properly, “Our technical analysis shows that the current bill could easily lead to abuse and actually harm groundwater supplies, not restore them. ... If the Legislature moves forward on a partisan basis and passes it, the governor should veto it.”

The issue is "too important to the state overall to simply stand by and let powerful special interests jam it into law," the statement from  the office of  Tribal Governor Stephen Roe Lewis said.

The statement didn’t say if urban pumping allowed by the bill could hurt the tribe’s own groundwater supply in Pinal County, lying between Casa Grande, San Tan Village and Apache Junction.

But if aquifers in the Pinal County area end up suffering as a result of increased groundwater use enabled by the bill, given that “groundwater basins are likely connected, the Gila River Community is going to see levels dropping in their wells,” said Sen. Priya Sundareshan, a Tucson Democrat who opposes the bill.

Other proposals include turf limits

Other proposals would:

Provide more control over unregulated “wildcat” subdivisions containing five or fewer homes.

Free some cities and private water companies in the Phoenix area from having to replenish aquifers to compensate for new growth’s pumping for 10 years, leaving that duty to a three-county government agency. This would benefit cities and water companies that gain new state designations that they have assured 100-year water supplies.

Bar municipal water providers, in Tucson and other major urban areas, from applying drinking water to strictly ornamental grass that’s part of a new development or redevelopment project. Such cities also couldn’t impose minimum requirements for anything but functional turf used for civic or recreational purposes such as playgrounds, sports fields, cemeteries, schoolyards and stormwater management projects. The turf bans would take effect in January 2026.

Allow private water companies to buy and transfer water rights from a farming area west of Phoenix to fast-growing cities in Central and Southern Arizona — a right currently open only to local governments. The area is the Harquahala Groundwater Basin, one of three basins statewide where groundwater transfers to urban areas are allowed.

Big differences in savings estimates

Supporters say the entire package would, overall, bring significant reforms in groundwater management and represents a compromise among competing interest groups. A lobbyist, Barry Aarons, dubbed it a “Christmas tree bill.” He represents the Phoenix-based Arizona Municipal Water Users Association.

Republican Sen. Sine Kerr of Buckeye said the bill’s passage in the Senate followed a five-month discussion among various interests, including Senate Democrats. She chairs the Senate Natural Resources, Energy and Water Committee.

“Nobody got everything they wanted. It’s the way water legislation should be done. We try to work out compromises,” said Arboleda. She is a Central Arizona Project governing board member but said she has recused herself from board discussions of this legislation.

Sundareshan, ranking Democrat on Kerr’s committee, disputed what she saw as Kerr’s implication that Senate Democrats had been involved in the bill for the entire five months, although “we were invited to some sessions.

“Last week, we were told, ‘This is the bill and we are voting on it, and these are the terms.’ We didn’t see this package of legislation until last week,” Sundareshan said.

Its supporters say the bill would revive homebuilding in areas of Phoenix and Pinal County.

In June 2023, the Arizona Department of Water Resources halted issuance of new 100-year water supply certificates allowing new subdivisions on far-flung Phoenix-area lands served only by groundwater. The decision stemmed from an ADWR groundwater model, projecting a 4% shortfall in the area's available groundwater supplies in 100 years if all planned development were to occur.

The new bill would not clear the way for a large percentage of those homes slated for raw desert land — but would allow development on groundwater on farmland.

The bill would also trigger lesser but still substantial groundwater savings in the Tucson area if homebuilders were to take advantage of the opportunity to buy and subdivide farmland, its supporters say. An opponent disagreed, saying the bill isn’t needed to encourage such water transfers here.

“It gives another pathway for homebuilders to buy the land and convert it to housing. It gives more options. We need homes. Everyone wants homes. We’re short on homes,” said Rep. Tim Dunn, a Yuma Republican and a bill sponsor.

Three sharply different estimates have been produced of how much water it would save from various parties. For the Phoenix area, estimates are of savings of 50,000, up to 260,000 and 583,000 acre-feet a year if all farmland is converted to homes.

The only one of the three estimates that looked at potential Tucson-area savings projected them at 139,000 acre-feet a year — almost as much as what the city of Tucson gets each year from CAP. The estimate was done by the Gammage and Burnham law firm, which Arboleda works for.

‘Permanent pumping’

But in the long run, the ag-to-housing conversion could, in some cases, end up sucking more groundwater from the aquifer, some critics say.

While farmland could be abandoned a lot sooner than in 100 years in any case, replacing it with homes now “substitutes permanent subdivisions for crops, resulting in permanent pumping of finite groundwater supplies,” said Kathleen Ferris, a former state water director who is now a private water lawyer and an Arizona State University water researcher.

While it’s often said retiring farmland frees up groundwater for no-farm uses, “creation of a new, permanent groundwater pumping right for municipal uses is potentially more harmful for long-term aquifer management,” Ferris said.

One helpful thing would be an actual study of the conserved water that would result from the bill, said Gila River Indian Community governor’s office: “All (estimates) that have been circulated thus far are very general.”

Overall, the bill is “a major give for developers to be able to continue building on groundwater,” Sundareshan said. “The carrot for me should be that the conservation benefit is clear.”

Groups that support, oppose

The broader legislative package cleared the Republican-led Senate Wednesday by a party-line vote of 16-12, with two Democrats not voting.

The proposal is supported by homebuilders and developers, some private water companies, the town of Queen Creek, the city of Buckeye, several Phoenix-area chambers of commerce and other business-related groups such as Valley Partnership and interest groups representing farmers, ranchers and mining companies.

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Some Phoenix and Pinal County irrigation districts and farmers, the city of Casa Grande, Pinal County government, three private water companies and the Salt River Project also support the bill. Farmers Investment Co., the Sahuarita-based pecan growers, wrote the Governor’s Office in support of the bill in February.

Opponents besides Ferris and the Gilas include the Sierra Club’s Grand Canyon chapter and the Intertribal Association of Arizona. It represents 21 tribes, including the Gilas based in Sacaton and the Tohono O’odham and Pascua-Yaqui tribes in and near Tucson. Other opponents include Chispa Arizona, Rural Arizona Action and the Environmental Defense Action Fund.

The Arizona Municipal Water Users Association, which represents 10 major Maricopa County cities, including Phoenix, is neutral on the bill. Its governing board voted 8-1 Thursday to change its previous stance in opposition.

The change came despite strong objections to the bill raised by Ferris, an attorney for the group and its former director.

The group cited several recent changes in the bill aimed at easing concerns. Warren Tenney, the group’s director, said pressure on the state from developers to back off on the ADWR development limit has been building for months, and if some legislation isn’t passed now, worse legislation could be coming in the future.

The Sierra Club’s Sandy Bahr took issue with that comment, saying, “If a worse bill comes along, the governor can veto that one.”

Participants think Hobbs supports bill

In the middle of this dispute is Democratic Gov. Katie Hobbs. As it often does with pending legislation, her office declined to take a position in response to a request from the Star.

Ferris and Bahr said they’d been told by the governor’s staff that Hobbs supports the bill. Paul Gardner, Queen Creek’s water resources director, who endorses the bill, said he got support from the governor’s office.

All Hobbs’ press secretary Christian Slater offered to the Star was a very general statement, saying:

“Governor Hobbs is committed to securing our water future for generations to come so Arizona can continue to thrive. That’s why she called for comprehensive reforms that will stop the unchecked pumping of Arizona’s groundwater by big corporations and allow cities to continue growing responsibly by expanding options to find sustainable water resources

“She will continue working with everyone interested in protecting Arizona’s water to deliver on the recommendations given by her bipartisan Water Policy Council.”

Critics counter that only one of the proposals in the current bill — affecting wildcat subdivisions — was on the list of recommendations the Water Policy Council sent to the Governor’s Office late last year.

Bahr said she can’t understand why Hobbs would sign such a bill at a time when the 1980 groundwater law is finally carrying out its 100-year assured water supply provision as it was meant to be used “to focus development in a more sustainable way.”

In her comment to the Star, Kerr said, “We expect Governor Hobbs to sign this bill; her technical experts understand it will reduce groundwater demands, improve housing supply, and greatly strengthen our 100-year assured water supply program.”

On Wednesday the bill was amended to include agreements reached through negotiations with the Hobbs administration, Kerr said.

“Every element of the package reduces demand on our groundwater supplies — shifting farmland to housing that uses less water and replenishes 100% of its use, providing a pathway for assured water supply designation, augmenting future supplies, and protecting consumers against illegal lot splits,” Kerr said.

Rep. Dunn, however, said he believes that for Hobbs to sign it, the bill will need Democratic votes in the House.

Overall, “this is a bipartisan package,” and provisions covering lot splits and turf restrictions “are things that you don’t see in a Republican bill,” Dunn said.

Changes made for critics

As state law stands, developers and homebuilders are free to buy and retire farmland and convert it to subdivisions. But advocates for this bill say they currently can’t apply the groundwater savings reaped from that conversion to meet their requirements to have an assured 100-year water supply. So the incentive to convert farmland to housing is limited.

Under the pending bill, developers converting farmland could for 10 years use 2 acre-feet of water per acre of farms’ “grandfathered water rights” towards assured supply requirements. After that, they could apply 1.5 acre-feet per acre. One acre-foot serves four Tucson-area homes for a year.

Ferris, however, said there was no need for such an incentive before ADWR stopped issuing assured water supply certificates based on groundwater to developers in the Phoenix area and Pinal County. Until then, proving “physical availability’ of water under a developer’s land was all that was needed to get a certificate, she said.

The bill isn’t needed for Tucson because its groundwater is still available for new development here, she added.

“Under this bill, retiring grandfathered water rights just results in pretend physical availability,” Ferris said.

Changes made to mollify the bill’s critics include:

Originally, the measure didn’t require developers who convert farmland to replenish an aquifer with renewable supplies to compensate for their pumping. That requirement currently exists for all other new urban subdivisions relying on groundwater. Now, it’s in the bill.

The bill now requires developers of farmland to prove to the Arizona Department of Water Resources that the aquifer underneath their projects has enough water “physically available” for 100 years. That requirement didn’t exist earlier.

The bill originally gave developers 3 acre-feet per acre of water on subdivided farmland — compared to 1.5 to 2 acre-feet now in the bill.

‘Take the time to get it right’

Critics, including Ferris, Bahr and the Gilas, however, raised the following concerns, joining Sundareshan and Rep. Chris Mathis of Tucson, the ranking Democrat on the House Natural Resources, Energy and Water Committee:

The 1.5 acre-feet per acre is more than the 1.3 acre-feet per acre normally used annually on Phoenix-area subdivisions, noted Ferris, citing research by ASU’s Kyl Center for Water Policy, where she works.

The bill would allow developers converting farmland to homes to transfer the right to use the irrigation water no farther than a mile from the former farmland. But critics say that because it would allow that water to be transferred on any part of a large parcel where part of it is more than a mile away, it opens the door for water rights to be transferred much farther.

The bill would allow farmers to sell water rights to subdividers if they had used the water for irrigation for one of the past five years. The same requirement has always applied under the 1980 groundwater law when farmland was converted to subdivisions in the past, Arboleda said. But if farmers retire land from irrigation after just one of those five years, that would mean a windfall for developers, critics said.

The requirement to replenish groundwater pumped for these subdivisions would further weigh on an already overburdened Central Arizona Groundwater Replenishment District, Ferris said. It’s now required to recharge renewable supplies such as CAP to compensate for pumped groundwater in subdivisions. One estimate of groundwater use allowed under this legislation would increase the district’s annual replenishment obligation by nearly 240,000 acre-feet in the Phoenix are alone — “a staggering amount of water,” Ferris said.

In its statement to the Star, the Gila River Indian Community governor’s office said, “I know that many others in the state agree with us privately on this but are afraid to speak up. For the Community, good water policy is too important not to take the time to get it right and we must and will speak up.”

Provisions dealing with the history of farms’ water use and water rights transfers “are all very problematic and should be fixed before this bill is enacted into law,” the tribe’s statement said.

Arboleda said, however, “All the solutions in the water omnibus bill, they work with the assured water supply program. They insure a 100-year water supply.

“I believe we are the only state in the country with that high a bar to build new homes. ... These bills work with that program and make some changes that will help us create a bridge to the future.”