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SB 1611

physical availability exemption credit; groundwater

57th Legislature - First Regular Session Introduced by Warren Petersen and 1 co-sponsor

Arizona creates state income tax credits for property owners who voluntarily restrict groundwater extraction through conservation easements, incentivizing water conservation in an arid state facing aquifer depletion.

Signed by Governor
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Bill Summary · SB 1611

Legislative bill overview

SB 1611 creates a tax credit for Arizona property owners who voluntarily restrict groundwater use on their land through conservation easements or similar agreements. The credit allows taxpayers to offset state income tax liability based on the value of water rights they agree not to use, incentivizing long-term groundwater conservation commitments.

Why is this important

Arizona faces severe groundwater depletion, with aquifers being drained faster than they naturally recharge. This bill attempts to make voluntary water conservation financially attractive to private landowners, potentially reducing agricultural and residential water demand without mandatory restrictions. The mechanism could influence how much water is available for future growth in an arid state increasingly stressed by drought and population demands.

Potential points of contention

  • Tax revenue impact: Offering credits for foregone water use reduces state income tax collections; the fiscal cost to the state budget is unclear and depends on participation rates
  • Fairness concerns: Critics may argue the credit primarily benefits wealthy landowners who can afford to restrict productive uses of their property, while costs are distributed across all taxpayers
  • Verification challenges: Determining the actual economic value of water rights and ensuring compliance with long-term conservation commitments requires ongoing administrative oversight and potential disputes over valuation methods

Compiled from official sources — confirm details with the bill’s official record.

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