brackish groundwater recovery program, the official text

PREFILED    DEC 12 2025

REFERENCE TITLE: brackish groundwater recovery program

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2055

Introduced by

Representatives
Griffin: Lopez

AN
ACT

amending section 49-1303, Arizona
Revised Statutes; amending title 49, chapter 8, Arizona Revised Statutes, by
adding article 6; RELATING to the water infrastructure finance authority.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 49-1303, Arizona Revised
Statutes, is amended to read:

START_STATUTE49-1303. Long-term water augmentation fund; purposes; limit

A. Monies and other assets in the long-term water
augmentation fund may be used for the following purposes:

1. Funding water supply development projects that
import water from outside the boundaries of this state. At least
seventy-five percent of the monies in the fiscal years 2022-2023, 2023-2024
and 2024-2025 appropriations to the fund shall be reserved for one or
more projects with this purpose, and those monies shall be accounted for
separately.

2. Purchasing imported water or rights to imported
water.

3. Acquiring or constructing water-related
facilities in this state to convey or deliver imported water within the this state.

4. Conducting investigations, including performing
environmental or other reviews.

5. Contracting for water needs assessments.

6. Providing financial assistance to eligible
entities [for the purposes of financing or refinancing] to finance or refinance water supply development projects
within this state, including projects for conservation through reducing
existing water use or more efficient uses of existing water supplies.

7. Guaranteeing debt obligations of eligible
entities that are issued or incurred to finance or refinance water supply
development projects within this state or providing credit enhancements in
connection with these debt obligations.

8. Paying the costs to administer the fund.

9. Funding not more than ten full-time
equivalent positions of the authority.

10. Developing
one or more brackish groundwater recovery projects pursuant to article 6 of
this chapter that create new sources of potable water within the boundaries of
this state.

B. In providing financial assistance from the long-term water augmentation fund, the authority shall comply
with section 49-1304.

C. Monies in the long-term water
augmentation fund may not be used to purchase conservation or other
similar easements on real property.

D. If the monies pledged to secure long-term
water augmentation bonds issued pursuant to section 49-1309 become
insufficient to pay the principal and interest on the long-term water
augmentation bonds guaranteed by the long-term water
augmentation fund, the authority shall direct the state treasurer to
liquidate securities in the long-term water augmentation
fund as [may be] necessary and shall apply those proceeds to
make current all payments then due on the long-term water augmentation
bonds. The state treasurer shall immediately notify the attorney
general and auditor general of the insufficiency. The auditor
general shall audit the circumstances surrounding the depletion of the long-term water augmentation fund and report the findings to
the attorney general. The attorney general shall conduct an
investigation and report those findings to the governor and the legislature.

E. The authority shall take necessary actions to
obtain full repayment for monies or financial assistance provided from the long-term water augmentation fund by the recipients of the
funding or financial assistance or the recipients of any water supply
development project made available from monies from the long-term
water augmentation fund through water subcontracts, loan repayments,
rates, fees, charges or otherwise, as appropriate.  This subsection does not
apply to monies spent by the authority for investigations and studies or monies
spent in connection with loan guarantees or credit enhancement.

Sec. 2. Title 49, chapter 8, Arizona Revised
Statutes, is amended by adding article 6, to read:

ARTICLE 6. BRACKISH
GROUNDWATER RECOVERY PROGRAM

START_STATUTE49-1341. Brackish groundwater recovery program fund

A. The brackish groundwater recovery
program fund is established consisting of all of the following:

1. Monies appropriated by the
legislature.

2. Monies received from the united
states government for any allowable purpose of the brackish groundwater
recovery program.

3. Monies received as loan
repayments, interest, administrative fees and penalties.

4. Monies from any lawful activity of
the authority, including public-private partnership agreements relating to
water supply development projects.

5. Interest and other income received
from investing monies in the brackish groundwater recovery program fund.

6. Gifts, grants and donations
received from any public or private source for the purposes of the brackish
groundwater recovery program fund.

B. Monies in the fund are
continuously appropriated and are exempt from the provisions of section 35-190
relating to lapsing of appropriations.  On notice from the authority, the state
treasurer shall invest and divest monies in the fund as provided by sections
35-313 and 35-314.03, and monies earned from investment shall be credited to
the fund.

C. All monies shall be deposited,
pursuant to sections 35-146 and 35-147, in the fund and shall be held in
trust.  The monies in the fund may not be appropriated or transferred by the
legislature to fund the general operations of this state or to otherwise meet
the obligations of the state general fund unless approved by a three-fourths
vote of the members of each house of the legislature.

D. The authority shall administer the
fund. The authority shall establish as many other accounts and
subaccounts as required to administer the fund.

E. Not more than ten percent of the
monies in the fund may be used to cover staffing and administrative costs.

F. The authority shall use the monies
and other assets in the fund solely for the purposes authorized by this
article. END_STATUTE

START_STATUTE49-1342. Brackish groundwater recovery program fund; purposes; criteria;
rules

A. The authority shall use the monies
in the brackish groundwater recovery program fund established by section 49-1341
and the long-term water augmentation fund established by section 49-1302
to provide matching dollars for the development and construction of qualifying
brackish groundwater recovery and desalination projects within this
state. Not more than $1 shall be awarded per $3 of total capital
expenditures per qualifying project. Not more than one qualifying
project shall be awarded monies per request for proposals.

B. Within one hundred twenty days
after the effective date of this section, the authority shall issue a request
for proposals to develop and construct a qualifying brackish groundwater
recovery and desalination project within this state.

C. Within one year after the
effective date of this section, the authority shall evaluate proposals that are
submitted in response to the request for proposals and select a proposal for
ISSUING matching dollars.

D. The authority shall grant monies
pursuant to this section contingent on the execution of proposed projects and
expenditure of capital costs within a time frame the authority determines
following the award of monies.

E. Not later than ninety days after
the effective date of this section, the authority, in consultation with the
department of water resources, shall adopt rules to implement this article.
Rules adopted pursuant to this article shall establish all of the following:

1. the Minimum criteria that a
project must meet to qualify for matching monies.

2. the Minimum information that a
qualifying bidder must include with a proposed project to be considered for
evaluation, including all of the following:

(a) Design and
engineering studies or reports.

(b) Site
location, right-of-way and land ownership information.

(c) Depth-to-water,
salinity levels and other hydrological information.

(d) withdrawal
permit and groundwater rights and access information.

(e) the Method
of brackish groundwater recovery, treatment and desalination.

(f) the Method
of desalination brine disposal.

(g) the total
volume of brackish groundwater expected to be desalinated.

(h) the Total
project capacity and expected output.

(i) the
Proximity to likely offtakers and the proposed method of transportation or
delivery of treated brackish groundwater to the offtakers in the basin.

(j) the total
estimated capital cost for the project.

3. the Minimum criteria that the
authority will use to evaluate the feasibility and viability of qualifying
projects submitted in response to a request for proposals and to select a
winning project. the Criteria to select a winning project shall
include all of the following:

(a) the
cost-effectiveness of the project.

(b) the
reliability and long-term security of the water supply to be developed through
the project.

(c) the impact
to the regional aquifer and local water users from the project's brackish
groundwater withdrawals.

(d) the impacts
to the regional aquifer and local water users from the project's brine
disposal.

(e) comments
from water users, local residents and affected jurisdictions.

4. the Minimum criteria that a bidder
must satisfy to qualify for participation in the program and to submit
proposals in response to a request for proposals.

5. the Minimum criteria that the
authority will use to evaluate the technical, financial and managerial
capabilities of a qualifying bidder that submits a proposal in response to a
request for proposals.END_STATUTE