The new bill helps address water abuse by creating an excise tax
PHOENIX (KYMA, KECY) - Rep. Ruben Gallego (D-Arizona) introduced The Domestic Water Protection Act of 2023 which would stop the abuse of water resources by foreign governments in Arizona and other drought-stricken states.
The bill would impose an excise tax on the sale and export of water-intensive crops grown by foreign companies or governments in areas experiencing prolonged drought, said the press release.
Rep. Gallego said The Domestic Water Protection Act of 2023 directly addresses water abuse by:
- Creating an excise tax on the sale and export of any water-intensive crop by any foreign company or government in areas experiencing prolonged drought;
- Imposing the excise tax at a 300% rate, reflecting the unjustifiable disparity in land lease rates between domestic and foreign producers in Arizona;
- Implementing the tax in a manner consistent with international trade agreements; and
- Using the proceeds from the tax for a Drought Trust Fund that will finance drought response and resilience efforts.
According to Rep. Gallego's press release, Arizona leases farmland to Fondomonte, a Saudi company that uses the state's groundwater to grow alfalfa that is exported to feed cows in the Middle East.
The company uses enough water annually to supply 54,000 homes at an estimated cost to the state of $3-3.9 million a year, stated Arizona's State Land Department.
"What we're hoping to do is actually make these companies realize this act is in the best benefit and not to farm these types of crops in these areas and keep as much Arizona's water here in Arizona," said Rep. Gallego.
The press release mentioned state leaders have recently signaled their intention to end the deal between the state and Fondomonte.
This new bill would ensure deals like the Fondomonte case would not be possible in any state.