In the summer-time, with temperatures reaching topping 120 degrees, often people will need water, but may not have the money to pay for it (mainly applies to homeless). Hence, the law. It is very much in effect today, with businesses being reported (and heavily fined) who refuse to supply water to those who ask for it.
Convenience stores are the primary businesses who uphold this law.
Some folks say that this is a “blue law” from days gone by. Others say it could fall under “Reckless Endangerment” of the Arizona Revised Statutes.
13-1201. Endangerment; classification
A. A person commits endangerment by recklessly endangering another person with a substantial risk of imminent death or physical injury.
B. Endangerment involving a substantial risk of imminent death is a class 6 felony. In all other cases, it is a class 1 misdemeanor.