AZ HB2758

Adds "ecological water needs" to water law definitions, meaning water sufficient to sustain freshwater ecosystems, riparian areas, and dependent wildlife habitat and human livelihoods.

Creates "watershed health uses" as a new permitted water appropriation purpose, allowing water to be conserved in natural watercourses to support watershed health attributes.

Requires the Director of Water Resources to issue a biennial report (by December 31 of each even-numbered year) assessing watershed health based on hydrology, landscape condition, habitat, geomorphology, water quality, biological condition, and threats.

Mandates a preliminary survey of Arizona's water status by December 31, 2021, including watershed descriptions, assessment of ecological water needs, and recommended statutory changes, with public notice and comment periods.

Exempts watershed health use applications from the five-year streamflow data requirement that applies to other instream flow applications.