AZ HB2674

Authorizes the Arizona Game and Fish Commission to acquire and lease surface water rights for watershed health uses and instream uses.

Defines "watershed health uses" as water conserved in a natural watercourse that supports watershed health attributes as assessed in a triennial state report.

Requires the Director of Water Resources to issue a triennial report assessing the overall health of each Arizona watershed based on hydrology, landscape condition, habitat condition, geomorphology, water quality, biological condition, and identified threats.

Adds watershed health and instream flow uses as permitted water appropriation purposes for the state, including the Arizona Game and Fish Department, and allows transfer of existing water rights for these purposes.

Modifies instream flow application requirements to explicitly authorize the Arizona Game and Fish Department and political subdivisions to file applications for watershed health and instream flow uses.