AZ HB2480

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

Allows appropriation of water for "watershed health uses" as a permitted beneficial use alongside existing uses like domestic, municipal, irrigation, and recreation purposes.

Requires the director of water resources to issue a comprehensive watershed health report every three years assessing each watershed's overall health based on hydrology, landscape condition, habitat condition, geomorphology, water quality, biological condition, and identified 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 waters status by December 31, 2027, including watershed assessments, subwatersheds with insufficient water, and recommendations for monitoring and restoring ecosystems.

Exempts watershed health use applications from the five-year streamflow data requirement applicable to other instream flow applications, and allows transfer of water rights for watershed health purposes with director approval.