Current through Register Vol. 30, No. 38, September 20, 2024
A. Except as
provided in subsection (D), the owner of a grandfathered right may extinguish
the right in exchange for extinguishment credits by submitting the following:
1. A notarized statement of extinguishment of
a grandfathered right on a form provided by the Director;
2. The grandfathered right number;
3. If the right being extinguished is a Type
1 non-irrigation grandfathered right or an irrigation grandfathered right,
evidence of ownership of the land to which the grandfathered right is
appurtenant;
4. If the
grandfathered right is located in the Prescott AMA, evidence that all of the
following conditions are met:
a. The land to
which the right is appurtenant has not been and will not be subdivided pursuant
to a preliminary plat or a final plat that was approved by a city, town, or
county before August 21, 1998; and
b. The land to which the right is appurtenant
is not and will not be the location of a subdivision for which a complete and
correct application for a certificate of assured water supply was submitted to
the Director before August 21, 1998;
5. If the right being extinguished is an
irrigation grandfathered right, evidence that the development of the land to
which the right is appurtenant is not completed; and
6. Any additional information the Director
may reasonably require to process the extinguishment.
B. The Director shall calculate the amount of
extinguishment credits pursuant to
R12-15-724(B),
R12-15-725(B),
R12-15-726(B)
or
R12-15-727(B).
The Director shall notify the owner of the amount of extinguishment credits in
writing. If the owner is extinguishing only a portion of the right, the
Director shall issue a new certificate of grandfathered right for the remainder
of the right.
C. A Type 1
non-irrigation grandfathered right or an irrigation grandfathered right may be
extinguished in whole or in part. A Type 2 non-irrigation grandfathered right
may be extinguished only in whole.
D. The following rights may not be
extinguished in exchange for extinguishment credits:
1. An irrigation grandfathered right that is
appurtenant to land that has been physically developed for a non-irrigation
use. The Director shall not consider the land to be physically developed until
the development is completed.
2. A
Type 1 non-irrigation grandfathered right, if the Director determines that the
holder is likely to continue to receive groundwater from an undesignated
municipal provider for the same use pursuant to the provider's service area
right or pursuant to a groundwater withdrawal permit.
3. A Type 2 non-irrigation grandfathered
right that was issued based on the withdrawal of groundwater for mineral
extraction or processing or for the generation of electrical energy.
4. On or after January 1, 2025, any
grandfathered right that is in the Phoenix, Prescott, or Tucson AMAs.
5. A
Type 1 non-irrigation grandfathered right that was requested to be included by
a city or town in the Tucson AMA in the determination made under A.R.S. §
45-463(F).
E. The owner of extinguishment
credits may pledge the credits to a certificate or to a designation before the
certificate or designation is issued by submitting with the application for the
certificate or designation a notice of intent to pledge extinguishment credits
on a form provided by the Director. The extinguishment credits shall be pledged
to the certificate or designation upon issuance of the certificate or
designation.
F. The owner of
extinguishment credits may pledge the credits to a certificate or to a
designation after the certificate or designation is issued by submitting a
notice of intent to pledge extinguishment credits on a form provided by the
Director. The Director shall notify the owner of the extinguishment credits and
the certificate holder or designated provider that the credits have been
pledged to the certificate or designation.
G. Extinguishment credits that have not been
pledged to a certificate or designation may be conveyed within the same AMA.
Extinguishment credits pledged to a certificate or designation shall not be
conveyed to another person, except that:
1. If
extinguishment credits are pledged to a certificate that is later assigned or
reissued, any unused credits are transferred, by operation of this subsection,
to the assigned or reissued certificate. If the certificate is partially
assigned or reissued, a pro rata share of the unused extinguishment credits is
transferred to each assigned or reissued certificate according to the estimated
water demand.
2. If extinguishment
credits are pledged to a certificate for a subdivision that is later served by
a designated provider or a municipal provider that is applying for a
designation, any unused extinguishment credits may be used to support the
municipal provider's designation as long as the municipal provider serves the
subdivision and remains designated. If the municipal provider is no longer
serving the subdivision or if the municipal provider loses its designated
status, any unused extinguishment credits shall revert, by operation of this
subsection, to the certificate to which they were originally pledged.
H. The Director shall review a
statement of extinguishment of a grandfathered right and a notice of intent to
pledge extinguishment credits pursuant to the licensing time-frame provisions
in
R12-15-401.
I. A person may apply to the Director on or
before December 31, 2015 for the restoration of all or a portion of an
irrigation grandfathered right extinguished under this Section during calendar
year 2005, 2006 or 2007 if all of the following conditions are met:
1. The person owns the land to which the
right or portion of the right was appurtenant;
2. The land to which the right or portion of
the right was appurtenant is physically capable of being irrigated and the
infrastructure for delivering water to the land for irrigation purposes remains
intact and is operable;
3. The
person holds extinguishment credits that were issued for the extinguishment of
a grandfathered right in the AMA in which the land is located and that have not
been pledged to a certificate or designation under subsection (E) or (F) in the
following amount, as applicable:
a. If the
person seeks to restore the entire irrigation grandfathered right, an amount of
extinguishment credits equal to the amount of extinguishment credits issued by
the Director in exchange for extinguishment of the irrigation grandfathered
right; or
b. If the person seeks to
restore a portion of the irrigation grandfathered right, an amount of
extinguishment credits equal to the result obtained by multiplying the
percentage of the right sought to be restored by the amount of extinguishment
credits issued by the Director in exchange for the extinguishment of the
right.
J. An
application to restore all or a portion of an irrigation grandfathered right
under subsection (I) shall be on a form provided by the Director and include
all of the following:
1. A fee of
$250.00;
2. The irrigation
grandfathered right number of the right sought to be restored;
3. If a certificate of extinguishment credits
was issued by the Director for the extinguishment credits described in
subsection (I)(3), the original certificate or an affidavit stating that the
certificate is lost;
4. A copy of a
deed showing that the applicant owns the land to which the right or portion of
the right sought to be restored was appurtenant and, if the application seeks
to restore only a portion of the right, the legal description of the land to
which that portion of the right was appurtenant;
5. A certification by the applicant that the
conditions described in subsection (I) are met; and
6. An agreement in writing that if the right
or portion of the right is restored, the flexibility account for the land to
which the right or portion of the right is appurtenant shall have an account
balance of zero at the beginning of the calendar year in which the right or
portion of the right is restored and that any credits registered to the
flexibility account after the right is restored may not be conveyed or sold to
any person, including the applicant.
K. The Director shall approve an application
to restore all or a portion of an irrigation grandfathered right submitted
under subsection (I) if the application includes the fee and the information
required under subsection (J) and the Director determines that the information
is correct. If the Director approves an application to restore all or a portion
of an irrigation grandfathered right, all of the following apply:
1. The irrigation water duty for the land to
which the right or portion of the right is restored shall be the same as it was
when the right was extinguished, unless the irrigation water duty is changed in
a management plan adopted after the right was extinguished or is modified
pursuant to A.R.S. §
45-575;
2. The flexibility account for the land to
which the right or portion of the right is appurtenant shall have an account
balance of zero at the beginning of the calendar year in which the right or
portion of the right is restored and any credits registered to the flexibility
account after the right is restored may not be conveyed or sold to any person,
including the applicant.
3. The
applicant shall forfeit the extinguishment credits described in subsection
(I)(3); and
4. The restored
irrigation grandfathered right may be extinguished in exchange for
extinguishment credits under this Section. For purposes of calculating the
amount of extinguishment credits under
R12-15-724(B),
R12-15-725(B),
R12-15-726(B) or R12-15-727(B), the calendar year of extinguishment is the
calendar year in which the restored irrigation grandfathered right is
extinguished.
L. The
Director shall review an application to restore an irrigation grandfathered
right under subsection (I) pursuant to the licensing time-frame provisions in
R12-15-401. The application shall have an administrative completeness review
time-frame of 30 days, a substantive review time-frame of 90 days, and an
overall time-frame of 120 days.
