AZ SB1227

Establishes Arizona System Conservation Fund to contract with Colorado River water users to forgo water deliveries and create system conservation in Lake Mead, with $30 million appropriated for fiscal year 2019-2020.

Creates Temporary Groundwater and Irrigation Efficiency Projects Fund (expires March 31, 2028) to finance construction and rehabilitation of wells and related infrastructure for qualified irrigation districts in the Phoenix, Pinal, and Harquahala areas, with $7 million appropriated for fiscal year 2018-2019.

Imposes temporary groundwater withdrawal fee of up to $2.50 per acre-foot in Pinal Active Management Area for calendar years 2020-2026 to fund groundwater and irrigation efficiency projects.

Modifies water storage provisions to allow effluent storage at existing facilities to earn 95 percent of recoverable water as long-term storage credits instead of 50 percent, and authorizes exchange of long-term storage credits between active management areas through December 31, 2026.

Amends mineral extraction permit requirements to establish separate subaccounts for long-term storage credits and debit accounts annually based on groundwater pumped by the permit holder.