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Water Rights in Arizona

The history and future of water in Arizona and how the law governs this precious resource.

History of Water Law in the West

When this was the wild and wooly west, water was as precious as gold.  There were local wars over water rights that divided communities and created feuds that lasted for generations. You’ve all seen the old westerns where ranchers and farmers go to war over water.  As the years wore on and the southwestern territories achieved statehood, disputes arose among the states over river water rights.  In this article, we will talk about the history and development of Arizona water law, and about what the law is today.   We will talk about both surface water and groundwater.

Surface Water

Colorado River Water

The Colorado River and its many tributaries travel through seven western states on its path to the ocean.  This river system has been an important water source for the west since the native populations first migrated to North America.  By the beginning of the 20th century, the Colorado River states began arguing about water entitlements from the river system.  California, being the most populous of the western states, claimed that it was entitled to the lions’ share of the water. California argued that it was historically the first to appropriate large quantities of water for its residents’ use, and that “prior appropriation” gave it the right to most of the water.  The other states became really alarmed in 1922, when a U.S. Supreme Court decision gave credence to the argument.  The Court ruled that the concept of “prior appropriation” applied regardless of state lines.  The law of prior appropriation is the idea that the first guy to start using the water is the one who is entitled to it.  The other western states became even more alarmed when the Federal Government approved funding for the Boulder Dam.  The Boulder Dam would capture even more of the coveted water for California. 

At that point, Delph Carpenter, a Colorado attorney, proposed that all the Colorado River states get together and create an agreement on how to distribute the water.   The states sent delegates and created the Colorado River Compact.  The compact divided the states into upper basin states and lower basin states.  The upper basin states are Wyoming, Colorado, Utah, and New Mexico.  The lower basin states are California, Arizona, and Nevada.  The dividing line is at Lee’s Ferry in northern Arizona Canyon country.  Each basin was to receive 7.5 million acre-feet (maf).  All the Colorado River states ratified the compact except Arizona.  Arizona’s governor Hunt wanted the water allocated directly to the states, not allocated by basin.  Governor Hunt believed that California would still hog all the lower basin allocation, and Arizona would suffer. 

Arizona finally ratified the compact in 1944.  By then, state lawmakers realized that they could not sustain the rapid growth of the Phoenix and Tucson areas without Colorado River water, so they unconditionally ratified the agreement.  However, Arizona and California were still squabbling about how much lower basin water each would get. After a massive lawsuit lasting 11 years and costing 55 million dollars, the U.S. Supreme Court agreed to divide the lower basin water among the 3 states involved.  The Supreme Court decision in Arizona v. California allocated 4.4 maf to California, 2.8 maf to Arizona and 300,000 af (acre-feet) to Nevada.  Arizona ended up with the water it wanted. 

But, what about the rights of the Native American Tribes?  The 1922 drafters of the Compact didn’t concern themselves with Indian water rights, but the U.S. Supreme Court did.  It’s decision in Arizona v. California quantified the water rights of the five reservations along the lower basin of the Colorado River.  Still unquantified and known to be potentially huge is the water right of the Navajo Nation.  The Navajo reservation is bigger than many states.  Navajo water rights could cut into the allocations of the 4 states the reservation spans: Arizona, New Mexico, Utah and Colorado.

Other Surface Water Issues

The Colorado River is not the only watershed that has been the subject of disputes.  There has been litigation and legislation over the Bill Williams Watershed among the Hualapai Tribe, The U.S. Government, Arizona Game and Fish, and Freeport-McMoRan Minerals Corporation.  That case was settled by Federal legislation on June 26, 2015, and allocates water rights among the parties.  In central Arizona, Salt River Project filed lawsuits back in the 1970’s, asking the courts to determine water rights for the Gila River System, including the Verde River and its tributaries.  Those lawsuits are still ongoing and could potentially affect the water rights of land owners all over the central and southern parts of the state.

Arizona Public Water Code

Early in its history, Arizona adopted the doctrine of prior appropriation as the foundation of its water law for surface water.  Before 1919, a person could post a sign notifying others of his water appropriation, divert the water, and put it to a “beneficial use.”  Beneficial use would include things like farming, mining, and raising stock.  On June 12, 1919, The Arizona Surface Water Code was enacted.  This law requires that anyone wanting to appropriate surface water must obtain a permit.  The Arizona Department of Water Resources (ADWR) is the public agency that issues surface water permits. Permits allow (1) the appropriation of water to construct a dam or reservoir; (2) the appropriation of water for instream flow purposes (stocking a stream with fish); (3) for a stock pond to water stock or wildlife, and several other commercial uses. 

Let’s begin our discussion of issues in surface water law with a definition.  Surface water is defined by Arizona Revised Statutes, § 45-101 as “waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels whether perennial or intermittent, floodwaters, wastewaters, or surplus water, and of lakes, ponds and springs on the surface.”  As you can see, the definition of surface water includes well water that taps into an underground spring or stream.

The inclusion of underground water sources in the definition makes it very important for Arizona property owners to keep informed about surface water issues.  Back in the 1970’s, the Salt River Project (SRP) filed multiple lawsuits asking the courts to determine the water rights to the Gila River system, including the Verde River and all its tributaries.  SRP filed the suits in its capacity as one of the major power companies in central Arizona.  That litigation is still ongoing and will affect property owners in large areas of Arizona.  The Gila River and its tributaries, including the Salt, Verde, Agua Fria, Santa Cruz and San Pedro Rivers, drain most of central and southern Arizona, including the Verde Valley, Phoenix and Tucson.  Many families, businesses and Indian tribes in central and southern Arizona rely on wells for their water supply.   SRP wants to restrain water use to preserve the water supply for its customers in the Phoenix metropolitan area. 

The litigation makes permitting and documenting wells vitally important for property owners in central and southern Arizona.  Many people in rural areas have wells that are either undocumented or improperly documented.  Wells are recorded with a number that starts with a 55-XXXXX.  You need three different forms to be sure your well is properly documented:  55-XXXXX, 39-XXXXX, and 36-XXXXX.  The 36 form is your claim for ownership of the water in the well.  The 39 form registers you as part of a class action suit to retain your water rights.  Without properly recorded and documented well papers, you are at risk to lose your water rights in the Gila River Water Adjudication lawsuit.

Groundwater Law

In 1980, Arizona enacted its Groundwater Management Act.  Prior to that date, a series of lawsuits and court decisions created a confusing web of groundwater law.  The principal parts of the Act were codified into the Arizona Groundwater Code, Title 45, Article 2 of the Arizona Revised Statutes.  The code set up 4 “active management areas” or AMAs.  These were the 4 areas of the state with the most significant groundwater use.  They were Phoenix AMA, Prescott AMA, Tucson AMA, and Pinal AMA. (Pinal AMA covered all the agricultural areas between Phoenix and Tucson.)  Later, in 1994, the legislature added a 5th AMA, the Santa Cruz AMA, by splitting off the southern part of the Tucson AMA. 

Grandfathered Groundwater Rights in AMAs

Generally, within the AMAs, water rights are determined by historic use.  These groundwater rights are called “grandfathered rights.”  There are 3 basic types of grandfathered groundwater rights: Irrigation rights, non-irrigation Type 1, and non-irrigation Type 2.  Grandfathered irrigation rights are created pursuant to A.R.S. § 45-465.  To qualify, the water must be pumped from the land that is under irrigation and may not be transported for use on other lands.  The statute also requires that the irrigation land must have been used for irrigation for at least 5 years before the creation of the AMA.

Type 1 non-irrigation groundwater rights involve land that has been retired from irrigation and is now being developed.  Pursuant to A.R.S. § 45-463, the owner can apply for approval of a development plan by the Arizona Department of Water Resources (ADWR).  If approved, the groundwater is converted to non-irrigation use at a quantity of 3 acre-feet per retired irrigation acre.  Type 2 non-irrigation groundwater rights are established based on historic use of groundwater for non-irrigation purposes. Power plants, mining operations, dairy farms and golf courses are examples of this category.

Non-Grandfathered Groundwater Rights in AMAs

There are 3 main exceptions to the general rule that groundwater rights in AMAs must be grandfathered.  The first exception allows cities, towns, private water companies and irrigation districts to pump groundwater to serve their customers.  The second exception allows ADWR to issue new groundwater pumping permits under certain circumstances for things like mining operations, road construction, and general industrial use.  The third exception allows water to be pumped from “exempt wells.”  These wells must have a pumping capacity of 35 gallons per minute or less.  The land owner must apply to ADWR and submit an intention to drill.  The water can then be used to water stock, for domestic purposes, and small commercial or industrial use.

Groundwater Management Outside the AMAs

Outside of the 5 AMAs, there is only limited regulation of groundwater withdrawal.  The Code allows groundwater to be pumped and put to beneficial use.  It also permits groundwater to be pumped and transported away from the lands holding the water.  Articles 8 and 8.1 of the Code regulate how and when groundwater outside AMAs may be transported.  These articles liberalized the ability to transport groundwater away from the land where it was pumped and to use it in other areas.

Outside the AMAs, the only significant regulatory device is the Adequate Water Supply Program.  The Adequate Water Supply Program is mandated by statute, A.R.S. §45-108.  It is enforced through regulations administered by ADWR.  The Program requires developers to submit a water adequacy report for their proposed developments.  They may rely entirely on groundwater for the water supply.  (That differs from the requirements in AMAs).  If the developer cannot demonstrate an adequate water supply, it can still sell the lots or houses, but it must disclose the lack of adequate water. 

Conclusion

Arizona water law is very complicated.  A history of competing interests squabbling over the limited supply of water in our desert state led to a series of court decisions woven into law.  However, pending court cases still may create changes in allocation rights and permit procedures.  California’s burgeoning population and its longstanding drought have created new tensions over water supplies.  California needs more water, as do the growing populations in Nevada and Arizona. Groundwater sources are quickly being depleted.  All this means we can expect more water rights litigation in the future between the states and between industrial and residential users. People in metropolitan areas with city water will look to their city or water company to campaign for their interests.  However, if you live in a more rural area and rely on well water for your supply, you may want to investigate your water rights and stay abreast of current developments in Arizona water law.

Resources for Further Inquiry

Arizona Department of Water Resources www.azwater.gov/azdwr

Arizona State Legislature (Arizona Revised Statutes are located there under the heading Legislative Council: Title 45)  www.azleg.gov/arsDetail/?title=45

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This website has been prepared for general information purposes only. The information on this website is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. Also, the law may vary from state-to-state or county-to-county, so that some information in this website may not be correct for your situation. Finally, the information contained on this website is not guaranteed to be up to date. Therefore, the information contained in this website cannot replace the advice of competent legal counsel licensed in your jurisdiction.

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