AZ HB2550

Establishes the Rural Watershed Sustainability Initiative Fund within the Arizona Department of Water Resources to provide grants to local watershed groups in rural areas for administrative and operational needs including staff training, technology, salaries, and grant writing services.

Appropriates $500,000 from the state general fund in fiscal year 2026-2027 to the newly created fund, with monies exempt from standard appropriation lapsing provisions.

Allows the department to use up to 15% of fund monies annually for administration, including hiring additional staff as needed.

Requires the department to give grant preference to applicants with clearly defined water conservation goals and those located in high-risk or critically depleted groundwater basins.

Mandates the department submit an annual report on fund activities to the governor and legislature beginning December 1, 2027, with reports posted publicly on the department's website.