Legislation calls for repeal of Pinal-area groundwater credits reduction—‘a cloud hanging over’ property values

By Phil Riske, managing editor | Rose Law Group Reporter

The Arizona Department of Water Resouces (ADWR) has called for a gradual phase-out of agricultural extinguishment credits, also known as groundwater credits. The credits may be sold by farmers in full or in part when farmland is retired and used by buyers, usually developers, within the same water management area.

Under the rule, farmers may continue to pump groundwater as long as they can afford to do so, but their allocation of credits would have started a gradual decline next year and by 2053, they would be eliminated.

Farmers Against State Takings {FAST], an advocacy group formed to challenge the rule and represented by Rose Law Group has been working on alternatives to the rule change for the past several months.

Although the credit phase-out plan is aimed at protecting the aquifer after years of over-pumping, FAST believe it zaps the value out of farmland throughout the county.

Sens. Barbara McGuire, Steve Gallardo, Katie Hobbs and Lynne Pancrazi are sponsoring SB 1166, http://www.azleg.gov/legtext/51leg/2r/bills/sb1166p.pdf  which says the state may not take any action in the Pinal Active Management Area that would reduce the amount or quantity of the groundwater credits. The bill has yet to be heard by the Senate Government and Environment Committee.

With the potential for reduced credits, “There’s still a cloud hanging over our property values,” said Tiffany Shedd, spokeswoman for  FAST.

ADWR has filed a request with the Arizona secretary of state officially asking for a five-year delay on the implementation of the phase-out rule. The temporary delay will automatically be repealed next Sept. 15.