HB2077 - Multifamily developments; assured water supply

PREFILED DEC 18 2025 REFERENCE TITLE: multifamily developments; assured water supply State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 HB 2077 Introduced by Representative Bliss AN ACT amending title 9, chapter 4, article 6, arizona revised statutes, by adding section 9-461.21; amending title 11, chapter 6, article 1, arizona revised statutes, by adding section 11-810.02; amending section 45-576, Arizona Revised Statutes; relating to local planning. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Title 9, chapter 4, article 6, Arizona Revised Statutes, is amended by adding section 9-461.21, to read: START_STATUTE 9-461.21. Multifamily residential development; building permits; Prescott active management area; assured water supply; exception; definitions A. A municipality may not approve a building permit for a multifamily residential property that is located in the prescott active management area unless one of the following applies: 1. The building permit applicant has obtained a written commitment of water service for the multifamily residential property from a city, town or private water company that is designated as having an assured water supply pursuant to section 45-576 and has provided that commitment with the applicant's building permit application. 2. The building permit applicant has obtained a certificate of assured water supply for the multifamily residential property from the director of the department of water resources and has provided that certificate with the applicant's building permit application. B. This section does not apply to a building permit applicant that has applied for or received zoning entitlements for a multifamily residential property on or before the effective date of this section. C. The municipality shall note on the face of any approved building permit for a multifamily residential property that is located in the Prescott active management area that the applicant is in compliance with this section or is exempt from this section pursuant to subsection B of this section. D. For the purposes of this section: 1. "Multifamily residential property": ( a ) has the same meaning prescribed in section 49-746. ( b ) includes a residential lease community. 2. "residential lease community": ( a ) Means six or more detached residential dwelling units on one or more lots, parcels or fractional interests, without regard to the zoning classification of the lots, parcels or fractional interests, that are intended to be offered for lease, whether immediate or future, without regard to the lease term, under a common promotional plan as defined in section 32-2101. ( b ) Does not include the construction, provision or leasing of residential structures that are located on agricultural property, that are exempt from title 11, chapter 6, article 5 pursuant to section 11-865, subsection A, paragraph 1 and that are offered for the purpose of housing persons who are agricultural workers. END_STATUTE Sec. 2. Title 11, chapter 6, article 1, Arizona Revised Statutes, is amended by adding section 11-810.02, to read: START_STATUTE 11-810.02. Multifamily residential development; building permits; Prescott active management area; assured water supply; exception; definitions A. A county may not approve a building permit for a multifamily residential property that is located in the Prescott active management area unless one of the following applies: 1. The building permit applicant has obtained a written commitment of water service for the multifamily residential property from a city, town or private water company that is designated as having an assured water supply pursuant to section 45-576 and has provided that commitment with the applicant's building permit application. 2. The building permit applicant has obtained a certificate of assured water supply for the multifamily residential property from the director of the department of water resources and has provided that certificate with the applicant's building permit application. B. This section does not apply to a building permit applicant that applied for or received zoning entitlements for a multifamily residential property on or before the effective date of this section. C. The county shall note on the face of any approved building permit for a multifamily residential property that is located in the Prescott active management area that the applicant is in compliance with this section or is exempt from this section pursuant to subsection B of this section. D. For the purposes of this section: 1. "Multifamily residential property": ( a ) Has the same meaning prescribed in section 49-746. ( b ) Includes a residential lease community. 2. "Residential lease community": ( a ) Means six or more detached residential dwelling units on one or more lots, parcels or fractional interests, without regard to the zoning classification of the lots, parcels or fractional interests, that are intended to be offered for lease, whether immediate or future, without regard to the lease term, under a common promotional plan as defined in section 32-2101. ( b ) Does not include the construction, provision or leasing of residential structures that are located on agricultural property, that are exempt from title 11, chapter 6, article 5 pursuant to section 11-865, subsection a, paragraph 1 and that are offered for the purpose of housing persons who are agricultural workers. END_STATUTE Sec. 3. Section 45-576, Arizona Revised Statutes, is amended to read: START_STATUTE 45-576. Certificates of assured water supply; designated cities, towns and private water companies; exemptions; rules; definition A. Except as provided in subsections G and J of this section, a person who proposes to offer subdivided lands, as defined in section 32-2101, for sale or lease in an active management area shall apply for and obtain a certificate of assured water supply from the director before presenting the plat for approval to the city, town or county in which the land is located, where such is required, and before filing with the state real estate commissioner a notice of intention to offer such lands for sale or lease, pursuant to section 32-2181, unless the subdivider has obtained a written commitment of water service for the subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section. Except as provided in subsections G and J of this section, a person who proposes to offer for lease one or more residential dwelling units in a multifamily residential property, as defined in section 49-746, that is located in the Prescott active management area shall apply for and obtain a certificate of assured water supply from the director before applying for a building permit from the city, town or county in which the multifamily residential property is located, unless the applicant has obtained a written commitment of water service for the multifamily residential property from a city, town or private water company designated as having an assured water supply pursuant to this section. B. Except as provided in subsections G and J of this section, a city, town or county may approve a subdivision plat only if the subdivider has obtained a certificate of assured water supply from the director or the subdivider has obtained a written commitment of water service for the subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section. The city, town or county shall note on the face of the approved plat that a certificate of assured water supply has been submitted with the plat or that the subdivider has obtained a written commitment of water service for the proposed subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section. Except as provided in subsections G and J of this section, a city, town or county may approve a building permit for a multifamily residential property, as defined in section 49-746, that is located in the Prescott active management area if the applicant has obtained a certificate of assured water supply from the director or the applicant has obtained a written commitment of water service for the multifamily residential property from a city, town or private water company designated as having an assured water supply pursuant to this section. the city, town or county shall note on the face of the approved building permit that a certificate of assured water supply has been submitted with the multifamily residential property building permit application or that the person has obtained a written commitment of water service for the proposed multifamily residential property from a city, town or private water company designated as having an assured water supply pursuant to this section. C. Except as provided in subsections G and J of this section, the state real estate commissioner may issue a public report authorizing the sale or lease of subdivided lands only on compliance with either of the following: 1. The subdivider, owner or agent has paid any activation fee required under section 48-3772, subsection A, paragraph 7 and any replenishment reserve fee required under section 48-3774.01, subsection A, paragraph 2 and has obtained a certificate of assured water supply from the director. 2. The subdivider has obtained a written commitment of water service for the lands from a city, town or private water company designated as having an assured water supply pursuant to this section and the subdivider, owner or agent has paid any activation fee required under section 48-3772, subsection A, paragraph 7. D. The director shall designate private water companies in active management areas that have an assured water supply. If a city or town acquires a private water company that has contracted for central Arizona project water, the city or town shall assume the private water company's contract for central Arizona project water. E. The director shall designate cities and towns in active management areas where an assured water supply exists. If a city or town has entered into a contract for central Arizona project water, the city or town is deemed to continue to have an assured water supply until December 31, 1997. Commencing on January 1, 1998, the determination that the city or town has an assured water supply is subject to review by the director and the director may determine that a city or town does not have an assured water supply. F. The director shall notify the mayors of all cities and towns in active management areas and the chairmen of the boards of supervisors of counties in which active management areas are located of the cities, towns and private water companies designated as having an assured water supply and any modification of that designation within thirty days after the designation or modification. If the service area of the city, town or private water company has qualified as a member service area pursuant to title 48, chapter 22, article 4, the director shall also notify the conservation district of the designation or modification and shall report the projected average annual replenishment obligation for the member service area based on the projected and committed average annual demand for water within the service area during the effective term of the designation or modification subject to any limitation in an agreement between the conservation district and the city, town or private water company. For each city, town or private water company that qualified as a member service area under title 48, chapter 22 and that was designated as having an assured water supply before January 1, 2004, the director shall report to the conservation district on or before January 1, 2005 the projected average annual replenishment obligation based on the projected and committed average annual demand for water within the service area during the effective term of the designation subject to any limitation in an agreement between the conservation district and the city, town or private water company. Persons proposing to offer subdivided lands served by those designated cities, towns and private water companies for sale or lease are exempt from applying for and obtaining a certificate of assured water supply. G. This section does not apply in the case of the sale of lands for developments that are subject to a mineral extraction and metallurgical processing permit or an industrial use permit pursuant to sections 45-514 and 45-515. H. The director shall adopt rules to carry out the purposes of this section. The rules shall provide for a reduction in water demand for an application for a designation of assured water supply or a certificate of assured water supply if a gray water reuse system will be installed that meets the requirements of the rules adopted by the department of environmental quality for gray water systems and if the application is for a certificate of assured water supply, the land for which the certificate is sought must qualify as a member land in a conservation district pursuant to title 48, chapter 22, article 4. For the purposes of this subsection, "gray water" has the same meaning prescribed in section 49-201. I. If the director designates a municipal provider as having an assured water supply under this section and the designation lapses or otherwise terminates while the municipal provider's service area is a member service area of a conservation district, the municipal provider or its successor shall continue to comply with the consistency with management goal requirements in the rules adopted by the director under subsection H of this section as if the designation was still in effect with respect to the municipal provider's designation uses. When determining compliance by the municipal provider or its successor with the consistency with management goal requirements in the rules, the director shall consider only water delivered by the municipal provider or its successor to the municipal provider's designation uses. A person is the successor of a municipal provider if the person commences water service to uses that were previously designation uses of the municipal provider. Any groundwater delivered by the municipal provider or its successor to the municipal provider's designation uses in excess of the amount allowed under the consistency with management goal requirements in the rules shall be considered excess groundwater for purposes of title 48, chapter 22. For the purposes of this subsection, "designation uses" means all water uses served by a municipal provider on the date the municipal provider's designation of assured water supply lapses or otherwise terminates and all recorded lots within the municipal provider's service area that were not being ser [Text truncated for display. Full text available on LegiScan.]