AZ HB2774

Amends county zoning restrictions (A.R.S. § 11-812) to allow construction and operation of small modular nuclear reactors colocated with large industrial energy users in counties with populations under 500,000, provided the reactor received all applicable zoning entitlements.

Allows utilities to replace existing thermal electric generating units with small modular nuclear reactors or construct new small modular reactors on or adjacent to previously certified plant sites without obtaining a new certificate of environmental compatibility, subject to 30 days' written notice to the corporation commission (A.R.S. § 40-360.03).

Exempts small modular nuclear reactors colocated with large industrial energy users from the environmental compatibility certificate requirement if the utility provides 30 days' written notice to the corporation commission (A.R.S. § 40-360.14).

Requires the corporation commission to adopt rules defining "colocated with," "large industrial energy user," and "small modular nuclear reactor," with the maximum eligible nameplate rating set at no less than 100 megawatts per unit.

Applies exemptions only in counties with populations under 500,000 persons and requires all reactors to comply with applicable federal, state, and local laws.