AZ SB1474

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

Establishes "watershed health uses" as a new permitted water use category, allowing water to be appropriated and conserved in natural watercourses to support watershed health attributes.

Requires the director of water resources to issue a comprehensive watershed health report every three years assessing each watershed based on hydrology, landscape condition, habitat condition, geomorphology, water quality, biological condition, and threats/vulnerabilities.

Directs the director to conduct a preliminary survey of Arizona's water status by December 31, 2023, including watershed descriptions, identification of subwatersheds with insufficient ecological water, and recommendations for statutory changes to support ecological water needs.

Exempts applications for watershed health use appropriations from the requirement to submit five years of streamflow measurement data that applies to other instream flow applications.