By Staff Reporter |

The Arizona Department of Water Resources (ADWR) exceeded its authority under state law, the Maricopa County Superior Court ruled Monday. 

The court determined in an under advisement ruling in this ongoing case that, again, ADWR lacked authority under state law to impose a new obligation on home developers to secure additional water supply. 

The Home Builders Association of Central Arizona and Arizona Senate President Warren Petersen (R-LD14) have challenged this and other ADWR policies initiated at the behest of Gov. Katie Hobbs.

Maricopa County Superior Court Judge Scott Blaney said this additional requirement by ADWR went beyond what state law required. Per Blaney, the law only requires developers to show 100 years of continuous availability of water sufficient to satisfy water needs for the use proposed by the developer. 

State law limited ADWR to two pathways: either developers could obtain a certificate of assured water supply from ADWR or they could obtain a commitment of service from a municipal provider such as a city, town, or private company with an ADWR assurance of water supply designation.

However, under a new rule pushed by the Hobbs administration, R12-15-710(H), ADWR limited developers to a third, new pathway for assured water supply designation. This pathway involved a newly created category of water availability ADWR called “New Alternative Water Supplies,” and required developers to secure an additional 25% of this new category beyond their proposed usage needs. 

The ADWR changes under Hobbs resulted in what effectively became a housing moratorium. New building progress in the Valley ground to a halt.

Blaney ruled ADWR lacked the authority to create this third, new pathway. He declared that the plain language of the statute only requires a 100-year guarantee of water needs satisfaction.

“The Legislature created two paths to establish an assured water supply to develop a subdivision: obtain a certificate; or obtain a designation,” said Blaney. “Through the implementation of its moratorium and its nearly simultaneous promulgation of a rule that demands more water than the statute requires, ADWR has in effect attempted to rewrite the governing statute at the agency level.” 

Blaney also rejected ADWR’s argument that this third pathway was a voluntary, alternative path out of several for developers. He sided with the developer’s assessment that ADWR had unlawfully restricted developers to a single pathway.

The court ruling on Monday blocked ADWR from enforcing the rule. 

In April, the Maricopa County Superior Court struck down ADWR’s housing moratorium articulated in several rules pertaining to unmet water demand and depth-to-water limits. 

Similar to this most recent ruling, Blaney found that ADWR sought to break necessary limitations on administrative agency powers and had unlawfully implemented two agency rules without following the Administrative Procedures Act. 

AZ Free News reported last month that the ADWR-spurred housing moratorium may put taxpayers on the hook for more than $1 billion, due to ongoing and potential future builder compensation claims. 

ADWR plans to appeal pending the final ruling. 

When Hobbs took office, she formed a Water Policy Council to overhaul the state’s approach to groundwater management. Two committees were formed, one of which addressed assured water supply.

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