August 31, 2023 — Aiming to curb water abuse by foreign entities in drought-stricken states, Rep. Ruben Gallego (AZ-03), a member of the House Natural Resources Committee, and cosponsor Rep. Raúl Grijalva unveiled The Domestic Water Protection Act of 2023 on Tuesday this week. The legislation aims to prevent the exploitation of Arizona’s water resources by foreign governments and companies.

“Arizona’s Water Belongs in Arizona.”

“Arizona’s water and crops belong in Arizona–not Saudi Arabia,” Rep. Gallego declared, explaining, “This legislation puts an end to the unfavorable deals that foreign entities have been receiving, which ultimately leave Arizona citizens worse off.”

The bill proposes an excise tax on the sale and export of water-intensive crops cultivated by foreign entities in areas suffering from prolonged drought. “As our communities in Arizona grapple with the severe consequences of the climate crisis, we can no longer afford to have our water resources exploited by foreign companies,” said Rep. Grijalva.

Specifics of the Bill.

The Domestic Water Protection Act of 2023 aims to:

• Establish an excise tax on the sale and export of water-intensive crops by any foreign company or government in drought-stricken areas.
• Set the tax rate at 300% to counter the imbalance in land lease rates between domestic and foreign producers in Arizona.
• Implement the tax in a way that complies with international trade agreements.
• Direct the revenue generated from the tax into a Drought Trust Fund designed to finance drought response and resilience measures.

The Case of Fondomonte.

Currently, Arizona leases farmland to Fondomonte, a Saudi company, which uses the state’s groundwater to cultivate alfalfa that is then exported to feed cows in the Middle East. Reports from Arizona’s State Land Department reveal that Fondomonte’s operations consume enough water annually to supply around 54,000 homes, costing the state an estimated $3 million to $3.9 million per year, according to Gallego’s press release.

State officials have recently indicated a willingness to terminate this deal. The legislation introduced by Rep. Gallego aims to prevent such “sweetheart deals” from happening in the future, not just in Arizona but in all states.

Building on Previous Efforts.

This bill is a continuation of Rep. Gallego’s ongoing efforts to protect Arizona’s water supply. Earlier this year, in May, he introduced the Drought Related Overpricing Prevention (DROP) Act. This prior act was aimed at stopping external investors from purchasing scarce water in the West and reselling it at exorbitant prices.

La Paz County Supervisor Holly Irwin lauded Rep. Gallego’s dedication, saying, “His efforts in championing water protection initiatives resonate deeply with La Paz County. We appreciate his leadership and are optimistic about a sustainable water future for our county and the entire state.”

The new legislation stands as a concerted effort to secure water resources in Arizona and other drought-affected states, safeguarding them for generations to come.