AZ HB2357

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, and dependent wildlife and human well-being.

Authorizes appropriation of water for "watershed health uses" as a permitted beneficial use under Arizona law, allowing water to be conserved in natural watercourses to support watershed attributes.

Requires the Director of Water Resources to issue a watershed health assessment report every three years evaluating each watershed's overall health based on hydrology, landscape condition, habitat condition, geomorphology, water quality, biological condition, and vulnerabilities.

Exempts applications for watershed health use water appropriations from the five-year streamflow measurement data requirement that applies to instream flow applications.

Requires the Director to establish standard measures for ecological water needs and publish a preliminary survey of Arizona's water status by December 31, 2026, including watershed assessments and recommendations for statutory changes, with this survey requirement repealing September 30, 2027.