AZ SB1558

Adds "ecological water needs" and "watershed health uses" to Arizona water law definitions, where ecological water needs means water sufficient to sustain freshwater ecosystems, riparian areas, wildlife habitat, and human livelihoods dependent on those ecosystems.

Permits appropriation of water for "watershed health uses" as a new beneficial use category alongside existing uses like domestic, municipal, irrigation, mining, and recreation.

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

Directs the Director to establish standard measures using best available science to define ecological water needs and publish a preliminary survey of state waters by December 31, 2024, including watershed health assessments, identification of subwatersheds with insufficient water for ecological needs, and recommendations for statutory changes.

Allows water rights for watershed health uses to be transferred and severed from land appurtenances; exempts watershed health use applications from the five-year streamflow data requirement that applies to instream flow applications.