Today the Home Builders Association of Central Arizona (HBACA) filed a lawsuit against the Arizona Department of Water Resources (ADWR) and Director Tom Buschatzke over two aspects of the Department’s newly issued water rules, known as the Alternative Path to Designation of Assured Water Supply (ADAWS).

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Joining this lawsuit are both the Arizona Senate President and Speaker of the Arizona House of Representatives, who also argue that the actions taken by ADWR constitute a government overreach and an abuse of power. In December 2024, Arizona state legislatures passed a resolution targeting this executive branch rule change on water requirements for development, calling it “illegal, inconsistent with legislative intent, and beyond the Department’s statutory authority.”

The first aspect of the ADAWS rule requires water providers to secure a 33% water tax on “new alternative water supplies” in addition to the longstanding 100-year assured water supply requirement. Despite the requirement for Arizona home builders to replenish its own groundwater, the ADAWS rule places an undue and unfair burden on the industry by requiring future homeowners to potentially pay for water supplies to offset the water use of other land users, such as commercial and rental properties, which do not have a replenishing requirement. This water tax levied by ADWR is not authorized by statute and exceeds the Department’s statutory authority.  The water tax also represents an unconstitutional taking because it requires homebuilders to give up a constitutional right in exchange for a discretionary benefit conferred by the government.  

In addition to imposing an illegal tax, the Department failed to follow the rulemaking procedures outlined in the Administrative Procedures Act.

For these reasons, the ADAWS rule has no legal merit and should be found to be invalid and incapable of implementation by the court.

“Unelected bureaucrats at ADWR have no legal authority to write the laws – that’s the legislature’s job, and the reason why the leaders from both Chambers are joining us in this challenge to ensure these basic democratic principles are upheld,” said HBACA’s Chief Executive Officer Jackson Moll. “During the adoption of the ADAWS Rules, we notified the department of these legal concerns, but, sadly, they ignored us, and implemented this Rule without authorization from our elected lawmakers.”

“ADWR believes it is addressing a water crisis, when in fact it is instigating a housing affordability crisis,” said HBACA’s Vice President of Legislative Affairs Spencer Kamps. “Buckeye and Queen Creek represent some of the last remaining affordable housing communities in the greater Phoenix area, but the water policies driven by ADWR have halted home construction, making the dream of homeownership more difficult to attain for hard-working Arizonans. Our state already ranks as one of the least affordable places to buy a home, and these government policies only worsen this untenable situation.

“Investments, economic growth, development, jobs, and homeownership will dry up well before water in our state ever does.”