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Water The State of Arizona Groundwater Management Act 1980 The 1980 groundwater law, the CAP canal and the 100-year rule

Arizona Water Law Explained: Groundwater Rules, the CAP and Why Scottsdale's Growth Starts at the State

Arizona water law runs on three systems. Surface water from the Salt and Verde rivers goes by seniority, and SRP delivers it. Groundwater in the Phoenix area is regulated under the 1980 Groundwater Management Act, which requires new subdivisions to prove a 100-year supply. Colorado River water arrives through the Central Arizona Project, which sits near the back of the line in a shortage. Scottsdale draws on all three.

Illustration for Arizona Water Law: the 1980 groundwater law, the cap canal and the 100-year rule, The State of Arizona

The 30-second version

  • Surface water follows prior appropriation, first in time, first in right; the Valley's Salt and Verde rights trace to farmers who formed the Salt River Valley Water Users' Association in 1903.
  • Governor Bruce Babbitt signed the Groundwater Management Act on June 12, 1980, creating the Department of Water Resources and Active Management Areas, including the Phoenix AMA that covers Scottsdale.
  • In an AMA, a new subdivision of six or more lots must show a 100-year assured water supply; lot splits of five or fewer escape that test.
  • The Central Arizona Project, authorized in 1968, reached the Phoenix area in 1985, but its Colorado River water is junior to California's and is cut first in a shortage.
  • On June 1, 2023 the state stopped approving new assured-supply determinations in the Phoenix AMA that rely on groundwater, after a model showed 4.86 million acre-feet of unmet demand over 100 years.

What it means in Scottsdale

Every Scottsdale water decision starts with a state rule. The city can add homes only because it has proven a 100-year water supply under the 1980 Groundwater Management Act; it drinks Colorado River water because the state fought for the Central Arizona Project and accepted a junior place in line to get it; and its southern neighborhoods sit on Salt River rights pledged in 1903. When the river came up short, Scottsdale's Drought Management Plan kicked in, and its sharpest edge fell on Rio Verde Foothills, a community built outside the state's 100-year rule entirely. Scottsdale Water runs the pipes, but the state wrote the map.

Established

Groundwater Management Act 1980

Who’s in charge

Arizona Department of Water Resources, under the governor

Where

ADWR, Phoenix

Topic

Water

Official source

azwater.gov ↗

The short version

Arizona has three kinds of water and a different set of rules for each.

Surface water, the Salt and Verde rivers above all, follows prior appropriation: first in time, first in right. Whoever put the water to use first holds the senior claim, and seniors are served before juniors in a dry year. In the Valley those rights trace to the farmers who formed the Salt River Valley Water Users’ Association on February 9, 1903 and to Roosevelt Dam, dedicated on March 18, 1911. Their association is today’s Salt River Project, which still delivers river water through canals like the one along the Arizona Canal Path.

Groundwater in the Phoenix area is governed by the Groundwater Management Act, which Governor Bruce Babbitt signed on June 12, 1980. It created the Arizona Department of Water Resources (ADWR) and Active Management Areas, including the Phoenix AMA that covers Scottsdale, and its most famous rule: a new subdivision must prove a 100-year assured water supply.

Colorado River water arrives through the Central Arizona Project (CAP), the 336-mile canal that reached the Phoenix area in 1985. Arizona’s share of the river is junior to California’s, so it is the first to be cut.

Why it matters in Scottsdale

Scottsdale draws on all three, plus recycled water, and each constrains the city differently. The CAP is why Scottsdale felt the Colorado River shortages that began in 2022 and why it wrote a Drought Management Plan in advance. The 100-year rule is why the city can approve new homes at all: Scottsdale holds a state designation of assured water supply that covers growth inside its service area. And the gaps in the state rules explain Rio Verde Foothills, the unincorporated community next door that grew without ever having to prove its water. The Scottsdale Water guide covers how the city manages its supplies day to day.

How the 100-year rule works

Inside an AMA, anyone creating a subdivision of six or more lots must show ADWR water that is physically, legally and continuously available for a century. A developer can get a certificate for one project, or build in the service area of a water provider, like Scottsdale, that holds a designation covering its whole territory. Without one, the county cannot approve the plat and the state real estate department won’t let the lots be sold.

The rule has a well-known gap. Splitting land into five or fewer lots is not a subdivision, so the test never applies. Repeat that across a desert valley and you get Rio Verde Foothills, hundreds of homes on “wildcat” lot splits in unincorporated Maricopa County, relying on wells or hauled water. When Scottsdale ended hauled-water sales on January 1, 2023, during David Ortega’s term, the fix came from the Legislature: a law signed June 19, 2023 created a standpipe district to buy water through Scottsdale’s system.

The 2023 model

On June 1, 2023, ADWR released a new groundwater model for the Phoenix AMA showing 4.86 million acre-feet of unmet demand over 100 years. The state stopped approving new assured-supply determinations based on groundwater. Scottsdale’s existing designation was unaffected; the pinch fell mainly on fast-growing edge cities that had counted on pumping.

Why 1980

By the 1970s the Valley was pumping far more groundwater than nature replaced, and the federal government was losing patience. Arizona needed the CAP finished, and federal officials pressed the state to control its overdraft before the canal was built. A state study commission and months of hard bargaining among farmers, mines and cities, brokered by Babbitt, produced an act that gave the state something it had never had: authority over who could pump, how much, and for what. The Phoenix AMA was given a goal of safe yield by 2025, a long-term balance between pumping and recharge, and ADWR has issued a series of management plans since to push toward it.

A junior place in line

The CAP was the price of Arizona’s long fight with California. The Colorado River Basin Project Act, signed on September 30, 1968, authorized the canal but made its water junior to California’s 4.4 million acre-feet. Construction began in 1973, the first water flowed in May 1985 and it reached the Phoenix area that November. Scottsdale’s CAP treatment plant came online in 1987, and the city built its later growth in the north, from the Airpark to North Scottsdale, largely on that supply.

The junior priority came due in the 2020s. The Bureau of Reclamation declared the first-ever Tier 1 shortage for 2022, a deeper Tier 2a for 2023, and Tier 1 again for 2024, 2025 and 2026. Cuts fell hardest on Pinal County farms that had relied on the lowest-priority CAP water; cities such as Scottsdale, with higher-priority municipal contracts, have seen their deliveries largely protected so far. The federal guidelines that set those tiers expire at the end of 2026, and the seven basin states have been negotiating what comes next.

Adjusting the rules

The state keeps tuning the system rather than replacing it. After the 2023 model, lawmakers and Governor Katie Hobbs agreed on the Ag-to-Urban law, signed June 30, 2025, which lets developers in the Phoenix and Pinal AMAs earn assured-supply credit by retiring farmland pumping rights. The long-running argument is the same one Scottsdale has with itself: how much growth a desert can responsibly carry, and who decides.

Connected guides on this site

The other layers of government, the people and the places this story runs through.

Organizations in the story

The institutions whose profiles run through this page.

Arizona Water Law by the numbers

1980

Groundwater law

100 years

Assured supply

1985

CAP reaches Valley

2022

First shortage year

The timeline

  1. 1903

    Valley landowners incorporate the Salt River Valley Water Users' Association, pledging their land to repay a federal dam; it survives as the Salt River Project.

  2. 1911

    Theodore Roosevelt dedicates Roosevelt Dam on the Salt River on March 18, giving the Valley stored water.

  3. 1968

    President Lyndon Johnson signs the Colorado River Basin Project Act on September 30, authorizing the Central Arizona Project on condition it stand behind California in a shortage.

  4. 1980

    Governor Bruce Babbitt signs the Groundwater Management Act on June 12, creating ADWR, the Active Management Areas and the assured water supply program.

  5. 1985

    CAP makes its first deliveries in May and reaches the Phoenix area in November; Scottsdale's CAP treatment plant follows in 1987.

  6. 2022

    The first-ever Tier 1 Colorado River shortage takes effect, cutting Arizona's CAP supply; Scottsdale activates its Drought Management Plan.

  7. 2023

    Scottsdale ends hauled-water sales to Rio Verde Foothills on January 1; on June 1 the state halts new groundwater-based assured-supply approvals in the Phoenix AMA.

  8. 2025

    Governor Katie Hobbs signs the Ag-to-Urban law on June 30, letting retired farm pumping rights support new housing in the Phoenix and Pinal AMAs.

Questions people actually ask

Where does Scottsdale get its water?

From three main sources: Colorado River water delivered by the Central Arizona Project, Salt and Verde river water delivered by SRP to lands within its service area, and groundwater, supplemented by recycled water. State law governs each one differently; the Scottsdale Water guide covers how the city blends them.

What is the 100-year assured water supply rule?

Under Arizona's 1980 Groundwater Management Act, anyone creating a subdivision of six or more lots in an Active Management Area must show the state enough water, physically, legally and continuously available, to serve it for 100 years, either through its own certificate or by being served by a water provider with a designation of assured supply.

Why is Arizona's Colorado River water cut first?

To win congressional approval of the Central Arizona Project in 1968, Arizona agreed that CAP water would be junior in priority to California's 4.4 million acre-feet. When Lake Mead drops into shortage, CAP supplies are reduced before California's.

Did Arizona stop new home building because of water?

Not across the board. On June 1, 2023 the state stopped approving new assured-supply determinations in the Phoenix AMA that rely on groundwater. Cities with existing designations, including Scottsdale, can keep adding homes within them, and developers elsewhere must find other sources such as surface water, recycled water or the credits created by the 2025 Ag-to-Urban law.

Why did Rio Verde Foothills lose its water?

The unincorporated community grew through lot splits of five or fewer parcels, which the state does not treat as subdivisions, so no one had to prove a 100-year supply. Many homes relied on water hauled from a Scottsdale standpipe. Citing its Drought Management Plan, Scottsdale stopped those sales on January 1, 2023; a state law signed that June created a standpipe district to restore supply.

Vernacular & LexiconThe Groundwater Management ActThe CAPThe Water Users' AssociationAcre-footThe Colorado River shortage (Tier 1, Tier 2)The Verde RiverSRP vs. APSThe Reclamation Act and Roosevelt Dam

Facts checked: September 22, 2026 • Curated by the Scottsdale.tips editors • Plain-English explainer, not legal advice. Figures follow the city charter, Arizona statutes and official records; office holders change with each election. Corrections are welcome.