AZ SB1329

Adds "ecological water needs" and "watershed health uses" to state water law definitions, defining ecological water needs as water sufficient to sustain freshwater ecosystems and riparian areas that support wildlife habitat and human livelihoods.

Allows persons, the state, or political subdivisions to appropriate unappropriated water for "watershed health uses" as a permitted beneficial use under Arizona water law.

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

Directs the director to establish standard measures for defining ecological water needs and publish a preliminary survey of Arizona's waters by December 31, 2024, including watershed health assessments, identification of subwatersheds with insufficient water, and recommendations for ecosystem monitoring and statutory changes.

Permits transfer of water rights for watershed health purposes and exempts applications for watershed health water appropriations from the five-year streamflow data requirement applicable to other instream flow applications.