Ag-to-urban groundwater incentive a win for Arizona

Gov. Katie Hobbs convened a Governor’s Water Policy Council in 2023 that made several groundwater management recommendations, including creating an alternative path to obtaining designations of Assured Water Supply (ADAWS) in Active Management Areas (AMA). That policy is currently being developed, with the Arizona Department of Water Resources (ADWR) recently proposing draft ADAWS Rules. Another concept that was discussed at the Governor’s Council is an incentive to convert high water uses for irrigated agriculture in active management areas to lower water uses for urban purposes.

This “Ag-to-Urban” incentive complements the Assured Water Supply program, creating a bridge to a sustainable future.

The Arizona Legislature convened a bi-partisan stakeholder process in January 2024 to negotiate an Ag-to-Urban incentive bill and considered several other bills that facilitate the proposed ADAWS policy. These bills were combined into a “water package” that was recently passed by the Senate as HB2201. In addition to creating an Ag-to-Urban incentive, this water package prohibits using potable water to irrigate ornamental grass or “non-functional turf,” facilitates undesignated water providers becoming designated under the Assured Water Supply program by phasing the transition of replenishment costs from the homeowner to the water provider, allows portions of a city or town to meet Assured Water Supply requirements if they are served by an irrigation district with access to surface water, and expands the entities that can import water into the Phoenix AMA. Although some of these bills seem quite technical, they are critical components of the Governor’s ADAWS policy and create a pathway for responsible growth.

While purely voluntary, the Ag-to-Urban incentive is designed so that landowners can convert high-intensity irrigated agriculture to urban uses that pump less groundwater and replenish aquifers with alternative water supplies under existing Assured Water Supply program guidelines. The incentive will result in new wastewater supplies, which can be reused or replenish aquifers, and infrastructure to capture stormwater. Furthermore, the water package contains Governor’s Council recommendations to limit developing “wildcat” subdivisions that circumvent Assured Water Supply program requirements. Together, this package reduces groundwater pumping and bolsters the Assured Water Supply program.



Creating opportunities to build entry-level housing in communities where demand for affordable housing is high, the Ag-to-Urban incentive meets consumer demand in areas that are close to new jobs. Additionally, the incentive adds value to actively irrigated farmland that cannot currently be developed and limits where water can be used to retired irrigation acres and adjacent lands. That prevents environmental harms and detrimental impacts to farm communities stemming from the fallowing of farmland. In sum, the Ag-to-Urban incentive steers growth where the water is, allowing for responsible development while reducing overall groundwater use by replacing existing farmland with municipal uses.

Arizona’s economy is booming with growth in the semiconductor, microchip, technology, and renewable energy industries. President Biden recently visited Arizona to announce an infusion of an $8.5 billion microchip grant to Intel. Taiwan Semiconductor Manufacturing Company is investing $40 billion in Arizona’s semiconductor industry. This development is fueling more economic growth and highlighting the importance of Arizona’s economy to our national security. Arizona’s growing economy demands smart policy changes to reduce groundwater use and facilitate the transition to alternative water supplies.

Now water policy experts and planners must figure out where the next bucket of water will come from, so that the people who will work for those companies will have an affordable place to live with a reliable water supply. Growth on actively irrigated farmland is the most responsible way to meet the demand for housing by replacing existing pumping to irrigate high water use crops with low water use housing. This Ag-to-Urban incentive would fully replenish groundwater pumping, capture stormwater, and allow for wastewater reuse. It is a win-win for everyone.

Arizona has a history of innovative and forward-thinking water policy. We must meet the moment again. The Ag-to-Urban incentive and the water package can be implemented immediately to meet demand for housing in a responsible way and create a bridge to a sustainable future with conservation, water reuse, and renewable supplies.

Grady Gammage, Jr. and are attorneys with Gammage & Burnham PLC, whose practice areas include water, land use, and government affairs.

 

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