Opinion ID: 867316
Heading Depth: 2
Heading Rank: 1

Heading: Arizona Groundwater Law

Text: ¶ 9 The 1981 and 1984 deeds for the CF Ranch purport to reserve to the grantor, and thus to sever from the surface estate, all commercial water rights. The parties agree that there has not been any historical use of such water rights on the CF Ranch and that there is no issue before the Court regarding appropriable waters. This case instead involves the potential future use of groundwater that has never been captured and put to reasonable use. ¶ 10 Arizona law distinguishes groundwater from surface water, even though such waters may be hydrologically connected. John D. Leshy & James Belanger, Arizona Law Where Ground and Surface Water Meet, 20 Ariz. St. L.J. 657, 659 (1988). Surface water is subject to the doctrine of prior appropriation. In re the Gen. Adjudication of All Rights to Use Water in the Gila River Sys. & Source (Gila River IV), 198 Ariz. 330, 334 ¶ 3, 9 P.3d 1069, 1073 (2000). In contrast, under Arizona's common law, groundwater is not appropriable and may be pumped by the overlying landowner, subject to the doctrine of reasonable use. Id. ¶ 11 Because others have detailed the history of Arizona groundwater law, see Cherry v. Steiner, 543 F.Supp. 1270, 1273-76 (D.Ariz. 1982), aff'd, 716 F.2d 687 (9th Cir.1983); Leshy & Belanger, supra, at 666-700, we present only a brief overview here. Arizona's common law evolved from the territorial-day view that a landowner has a property interest in groundwater underlying the surface estate. E.g., Howard v. Perrin, 8 Ariz. 347, 353, 76 P. 460, 462 (1904) (Throughout the Pacific Coast, where the doctrine of appropriation obtains, the decisions are uniform to the effect that waters percolating generally through the soil beneath the surface are the property of the owner of the soil . . . .). Later decisions clarified that land ownership does not include ownership of the groundwater itself, but instead may afford a qualified right to extract and use the groundwater for the benefit of the land. Chino Valley II, 131 Ariz. at 82, 638 P.2d at 1328. ¶ 12 Recognizing that groundwater is vital to our state, Arizona's legislature in 1980 established a comprehensive regulatory framework by enacting the Groundwater Management Act (the GMA). 1980 Ariz. Sess. Laws, ch. 1, § 86 (4th Spec. Sess.) (codified as amended at A.R.S. §§ 45-401 to -704 (2003 & Supp.2008)). With the goal of reducing the state's overdraft of groundwater, the GMA created a system of groundwater rights and conservation requirements. Id. § 45-401. ¶ 13 The GMA divided the state into three categories: Active Management Areas (AMAs), id. § 45-411, Irrigation Non-Expansion Areas (INAs), id. § 45-431, and areas outside a designated AMA, id. § 45-453. AMAs are geographical areas where groundwater supplies are imperiled. Chino Valley II, 131 Ariz. at 79 n., 638 P.2d at 1325 n. . In such areas, a person may withdraw and use groundwater only in accordance with the GMA's detailed regulations. A.R.S. § 45-451(A)(1). ¶ 14 The CF Ranch, located within the Big Chino sub-basin, is not within an AMA and thus is not subject to the extraction and use limits applicable to AMAs. The GMA, however, does govern the withdrawal of groundwater on land outside an AMA if the water is to be transported to an established AMA. Id. § 45-551. ¶ 15 The Prescott Active Management Area includes the City of Prescott. Id. § 45-411(A)(3). The GMA thus regulates any withdrawal and transportation of groundwater from the CF Ranch to the City of Prescott. In general, the GMA provides that [i]n areas outside of active management areas, a person may: 1. Withdraw and use groundwater for reasonable and beneficial use, except as provided in article 8.1 of this chapter. 2. Transport groundwater pursuant to articles 8 and 8.1 of this chapter. Id. § 45-453. Article 8.1 further provides that in the case of the Big Chino sub-basin, [a] city or town that owns land consisting of historically irrigated acres in the Big Chino sub-basin of the Verde River groundwater basin, as designated by order of the director dated June 21, 1984, or a city or town with the consent of the landowner, may withdraw from the land for transportation to an adjacent initial active management area an amount of groundwater determined pursuant to this section. Id. § 45-555(A). The GMA limits the annual transportation allotment based on the historically irrigated acres retired from irrigation. Id. § 45-555(B). ¶ 16 Although the Agua Sierra parties claim they own the commercial water rights reserved by the prior owners of the CF Ranch, the GMA does not recognize the existence of anything called a commercial water right to groundwater.