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<br />. <br /> <br />. <br /> <br />Chanl!e in Point of Diversion. In Arizona, as in most '!lestern states, <br />the point of diversion of a water right may be changed provided the source <br />of the water does not change and other wiers' rights are not adversely <br />affected. <br /> <br />: <br /> <br />Chanl!:e in Place of Use. .: Surface water rights may be transferred to a <br />new place of use only with the approval of the Director of the ADIIR. Prior <br />to approval, an application for severance and transfer is made, followed by <br />a hearing at which any interested person may contest the application. <br /> <br />Transfers of water rights within water service organizations such as <br />irrigation districts, agricultural improvement districts or water users <br />associations, are permitted only with the prior written consent of the or- <br />ganization. In the case of a transfer involving irrigation water from a <br />watershed or drainage area which supplies water to lands within a water <br />service organization, the transfer must be consented to by each organization <br />within the drainage basin. This provision prohibits the ADIIR from even <br />accepting an application for severance and transfer of a water right unless <br />the consent of downstream water service organizations is first obtained. <br /> <br />Chanl!e in Purnose of Use, Under Arizona statute, any changes in type <br />of use also must be approved by the Director of the ADIIR. Although the <br />statutes are silent regarding criteria for deciding on applications for <br />change of use, the case law clearly establishes that a lawful change of use <br />may not have any adverse effect on other vested water rights. <br /> <br />ARIZONA'S VATER TRANSFER ACTIVITY <br /> <br />Tens of thousands of acres, mostly irrigated farmland, have been <br />purchased throughout the state in recent years, presumably for the as- <br />sociated water. (See Table B) Municipalities, private developers, inves- <br />tors, and utilities are all purchasing water farms in Arizona. When urban <br />water providers shop for water farms they are rarely looking for "wet water" <br />to meet existing needs; more often they are seeking additional water <br />supplies to provide for the anticipated future demands of growing munici- <br />palities. Acquiring new water supplies through land swaps is an attractive <br />option for municipal water providers who wish to avoid the financial and <br />political costs of buying out farmers directly. <br /> <br />Private developers are buying water farms in rural areas to guarantee a <br />water supply for their development projects within AHAs. Eventually, <br />developers may transport the water for use within an AliA, or may instead <br />seek to trade water farm acreage to a municipal government in exchange for <br />guaranteed water service to property that could be developed within the AHA. <br />Private investment: companies recently have been actively acquiring water <br />rights, as a perception prevails in the West that the value of water will <br />rise as depletion of finite supplies leads to increased scarcity. Water- <br />intensive industries, particularly in the mining and energy development <br />sectors, also purchase water farms in Arizona a source of reliable water <br />available at reasonable cost. <br /> <br />Farmers and private developers are the most frequent sellers of water <br />farms in Arizona. However, owners of relatively small parcels of desert <br />land and even a major utility have sold land as water farms. In spite of <br /> <br />i <br />