Certificate of Assured Water Supply (CAWS) is a crucial component to Arizona’s water management strategy. Designed to ensure sustainable water use, the CAWS guarantees that new developments in Active Management Areas (AMAs) have a 100-year assured water supply.
What is a Certificate of Assured Water Supply?
A Certificate of Assured Water Supply is a designation issued by the Arizona Department of Water Resources (ADWR). It verifies that a subdivision located within an Active Management Area (AMA) has a water supply that is legally, physically, and continuously available for at least 100 years. Obtaining this certificate is essential for developers, as it is required before they can sell or lease subdivided land.
When is a CAWS Required?
In Arizona, a Certificate of Assured Water Supply (CAWS) is required by the Arizona Department of Water Resources (ADWR) under the following circumstances:
1. Subdivision Developments in Active Management Areas (AMAs): Before a developer can record plats or sell parcels within an AMA, they must demonstrate that the subdivision has a legally, physically, and continuously available water supply for at least 100 years. This is mandated to ensure long-term water sustainability in areas where groundwater resources are closely managed.
2. Plat Approval by Local Authorities: Cities, towns, or counties may approve a subdivision plat only if the subdivider has obtained a CAWS from the ADWR or has secured a written commitment of water service from a city, town, or private water company designated as having an assured water supply.
3. Issuance of Public Reports by the State Real Estate Commissioner: The State Real Estate Commissioner may issue a public report authorizing the sale or lease of subdivided lands only if the subdivider has obtained a CAWS from the ADWR or has a written commitment of water service from a designated provider.
Requirements for Obtaining a CAWS
1. Legal Availability of Water– Applicant must demonstrate they have the legal right to the water they plan to use. This can involve water rights, contracts, or other legal mechanisms. An applicant must demonstrate right to all water supplies included in the application. See R12-15-718.
2. Physical Availability of Water– The water supply must be physically accessible and sustainable. This requires hydrological studies and models to prove that the water source will remain reliable over the 100-year period. Sources of water have specific requirements for demonstration of physical availability. A list of those specific requirements can be found in the Arizona Administrative Code. (See: A.A.C. R12-15-716).
3. Continuous Availability– The water supply must be available without interruption. This often involves proving infrastructure capacity, such as wells and storage facilities. Water providers or developers must demonstrate that the water supply is uninterruptible for the 100-year period, or that sufficient backup supplies exist for any anticipated shortages. (See: A.A.C. R12-15-717).
4. Water Quality– The water must meet quality standards set by the Arizona Department of Environmental Quality (ADEQ). Proposed sources of water must satisfy existing state water quality standards and any other quality standards applicable to the proposed use after treatment. (See: A.A.C. R12-15-719).
5. Financial Capability– The applicant must demonstrate the financial capability to construct and maintain the necessary water infrastructure. Water providers or developers must demonstrate financial capability to construct the water delivery system and any storage or treatment facilities. Financial capability for developers is typically considered through the local government’s subdivision review process. A demonstration is also required that adequate delivery, storage and treatment works will be available to the applicant or the applicant’s customers for 100 years. (See: A.A.C. R12-15-720).
6. Consistency with the Management Goal-The proposed water use must align with the AMA’s goal, which typically focuses on sustainable water use and conservation. Each AMA’s Management Plan prescribes water conservation requirements for municipal water providers. Water demand associated with proposed subdivisions is evaluated in accordance with these conservation requirements. (See: A.A.C. R12-15-721).
Timeline for Obtaining a Certificate
The process of obtaining a Certificate of Assured Water Supply can be lengthy and so do not delay in beginning the application. Here’s a general timeline:
1. Pre-Application Consultation with the ADWR– Engaging with ADWR early can help clarify requirements and streamline the process.
2. Application Submission– Only once the application is 100% complete, including all necessary studies and documentation, should it be submitted to the ADWR.
3. ADWR Reviews the Application– The review process can take several months to a year, depending on the complexity of the application and the thoroughness of the initial submission.
4. Public Notice and Comment Period– There is a period for public notice and comments, which adds additional time to the application process. “The Director shall give public notice of an application for a certificate as provided in A.R.S. § 45-578.” Ariz. Admin. Code § 12-15-704.
5. Final Application and Determination– After considering all factors and public input, ADWR makes a final determination. If approved, the Certificate of Assured Water Supply is granted.
Costs to Obtain a Certificate
The costs associated with obtaining a CAWS can vary widely based on several factors, including the size of the development and the complexity of proving water availability. Here are some the potential costs:
1. Application Fees. The ADWR charges a fee for processing the CAWS application. As of 2025, the application fee is $1,000.
2. Hydrological Studies. Conducting the necessary hydrological studies can cost thousands of dollars but are essential for proving physical availability and sustainability.
3. Legal and Consulting Fees. Legal and consulting fees for preparing the application, conducting studies, and navigating the regulatory process can add significantly to the cost.
4. Infrastructure Costs. Costs for developing the necessary water infrastructure, such as wells, pipelines, and storage facilities, can be substantial. These are often borne by the developer and can run into millions of dollars for large projects.
5. Ongoing Compliance. Maintaining compliance with the CAWS requirements may incur additional ongoing costs, including monitoring, reporting, and potential upgrades to infrastructure.
Transferability of a Certificate
A Certificate of Assured Water is tied to the property owner, and the plat. As such, if a developer wants to sell or assign the certificate, they must apply for permission through the Arizona Department of Water Resources.
1. Assignment of CAWS: If certain conditions are met, an existing CAWS can be assigned to a new property owner using an Assignment Application. These applications have specific requirements that need to be fulfilled for the assignment to be successful. 45-579(A) “A holder of a certificate of assured water supply issued pursuant to section 45-576 may assign the certificate, in whole or in part, to another person if the holder applies to the director for approval within 10 years after the original certificate was issued and the director approves the application.” If more than 10 years have passed since the certificate was originally issued then, “An application may be filed under this section more than ten years after the original certificate was issued if a minimum of five hundred lots within the subdivision covered by the certificate have been sold to individual home buyers by the holder of the certificate and any previous holders of the certificate.”
2. Re-Issuance of CAWS: If the ownership has changed and the plat remains unchanged, a new CAWS can be issued to the new owner under certain conditions.
3. Material Plat Change Review: If changes have been made to the plat after the CAWS was issued, a Material Plat Change Review may be required to determine if the changes are substantial enough to necessitate a new CAWS application.
The Arizona Department of Water Resources (ADWR) handles the applications for the assignment or re-issuance of CAWS.
Type A Certificates and Type B Certificates
In Arizona, the Department of Water Resources (ADWR) issues Certificates of Assured Water Supply (CAWS) to ensure that new subdivisions within Active Management Areas (AMAs) have a legally, physically, and continuously available water supply for at least 100 years. There are two classifications of these certificates: Type A and Type B.
Type A Certificates:
- Applicability: Type A certificates are typically issued for subdivisions where the conditions have remained consistent since the original certificate was granted.
- Assignment: Type A certificates can be assigned to new owners without extensive review, provided there have been no material changes to the subdivision’s plat, water provider, or water supply conditions.
Type B Certificates:
- Applicability: Type B certificates are issued in situations where there may be changes or uncertainties regarding the subdivision’s conditions.
- Assignment: Assigning a Type B certificate requires a more detailed review by the ADWR to ensure that all criteria for an assured water supply are still met under the current conditions.
- “The Director shall classify all certificates that do not meet the requirements of subsection (H)(1) of this Section as Type B certificates.” Ariz. Admin. Code § 12-15-704.
Reclassification of Certification:
Type B classification can be amended by submitting a Reclassification of Type B to Type A Application.
Exemptions. A developer can apply for an exemption under R12-15-704(K), which states: R12-15-704(K)– “A new owner of all or a portion of a subdivision for which a plat has been recorded is not required to obtain a certificate if all of the following apply:
1. The Director previously issued a Type A certificate for the subdivision pursuant to subsection (H)(1) of this Section or R12-15-707;
2. Water service is currently available to each lot; and
3. There are no material changes to the plat for which the certificate was issued, according to the criteria in R12-15-708.
Assignment Pursuant to A.A.C. R12-15-706. It is possible to assign a Certificate of Assured Water Supply pursuant to A.A.C. R12-15-706.
Exemptions From Obtaining a CAWS
A Certificate of Assured Water Supply is not required in certain situations, even for developments within an Active Management Areas:
1. When the Development is NOT a “subdivision”. Under Arizona law, a “subdivision” is defined as land divided for sale or lease into six or more lots (less than 36 acres each).
2. When the Development is OUTSIDE an Active Management Area (AMA). CAWS requirements apply only within AMAs (e.g., Phoenix, Tucson, Pinal, Prescott, Santa Cruz, and part of the Verde Valley). Projects outside of an AMA are instead subject to the Adequate Water Supply Program, which is generally less restrictive.
A developer can apply for an exemption by completing an application with the Arizona Department of Water Resources.
Alternative Designation of Assured Water Supply
In 2019, the Arizona Department of Water Resources (ADWR) published a groundwater model that projects groundwater demands in the Pinal AMA would result in 10% of those demands being unmet during the 100-year period. Similarly, in 2023, ADWR published another groundwater model that projects demands in the Phoenix AMA could also not be met.
This resulted in ADWR declaring that no new assured water supply determinations could be issued in those groundwater basins until a solution is developed.
Subsequently, the Governor’s Water Augmentation Council and stakeholders from water sectors worked with ADWR to prepare a third method for securing an assured water supply called the Alternative Designation of Assured Water Supply, “ADAWS“. This method, a hybrid of the two existing methods, will allow water providers to secure an assured water supply designation through the ADAWS. This means developers and builders will bring a sustainable water supply to meet the demands of the subdivisions, and water providers will bring an additional amount of sustainable water supplies to meet the groundwater demands of existing customers who have been using unreplenished groundwater for decades.
Obtaining an assured water supply is a complex and costly process, but it is mandatory when constructing new residential developments in Arizona. Since 1995, more than 1,200 new subdivisions dependent on groundwater have been approved and 20 water providers have been designated as having an assured water supply in both the Phoenix and Pinal Active Management Areas. As water becomes an increasingly valuable resource, the CAWS plays a vital role in balancing growth with sustainability.
For more detailed and specific guidance then contact the Dunaway Law Group at 480-702-1608 or message us.
The Dunaway Law Group provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers. The Firm limits its practice to the states of Arizona and New York.