45-2244

45-2244. Acquisition and disposition of
initial quantity of water

A. The authority, acting through its board, shall apportion the rights to the
delivery of the first eighteen thousand five hundred acre-feet per year of Colorado river
water that it obtains as follows:

1. The right to the delivery of fifteen thousand acre-feet per year of Colorado
river water shall be apportioned by subcontract and made available to authority members
for municipal uses.

2. The right to the delivery of three thousand five hundred acre-feet per year of
Colorado river water shall be apportioned by subcontract and made available for
industrial uses.

3. Notwithstanding the apportionment to municipal and industrial uses as prescribed
by paragraphs 1 and 2 of this subsection, Colorado river water may be made available by
the authority for industrial, agricultural or miscellaneous uses as prescribed by
subsection F of this section until that water is needed for municipal or industrial uses.

B. The authority, acting through its board, shall make available Colorado river
water that is apportioned for municipal uses as prescribed by subsection A, paragraph 1
of this section to authority members through subcontracts between the authority and the
authority member for the sale and delivery of Colorado river water. The term of these
subcontracts may be coextensive with the term of the contract with the United States
pursuant to which the authority obtains the Colorado river water or the duration of the
subcontracts may be for a lesser term. The rate charged for the Colorado river water
made available to the authority members for municipal uses may be fixed for all or part
of the subcontract term but shall be established by subcontract to permit the authority
member to provide the water to its customers at a reasonable cost as determined by the
authority in the exercise of its discretion. Any subcontract may require the authority
member to pay water supply fees or to assess and share the cost of water supply fees with
the authority. Water supply fees include standby or holding charges, development impact
fees, connection fees, extraction fees, user fees, administrative fees, other fees or
charges that the subcontract requires and the member collects for new uses to be served
with the water made available pursuant to subcontract or any other fees that the
authority determines to be necessary or prudent to fund the acquisition of replacement
supplies of water. Any such fees assessed or collected by the authority member shall be
remitted to the authority and deposited in the funds of the authority as provided in this
chapter.

C. The Colorado river water apportioned for municipal uses under subsection B of
this section shall be served by the authority member within the service area established
for the authority member in any water service contract between the authority member and
the United States. The Colorado river water so apportioned may not be served to any
single industrial user for manufacturing purposes, processing purposes or thermoelectric
power generation, with a demand greater than two hundred fifty acre-feet per year until
the end of the seventh year after the authority is formed.

D. If Colorado river water that is made available to authority members for
municipal uses pursuant to subsection B of this section is not subcontracted for by
authority members within one year of the authority's formation pursuant to section
45-2202, subsection C, the Colorado river water may be made available by subcontract to
other municipal water providers in the county in which the authority is formed on terms
consistent with this section.

E. The authority shall make Colorado river water that is apportioned for industrial
uses as provided in subsection A, paragraph 2 of this section available to applicants
through subcontracts for the sale and delivery of that water. The term of the
subcontracts shall be set by the authority and may be coextensive with the term of the
contract with the United States pursuant to which the authority obtains the Colorado
river water. The rate charged for Colorado river water made available to applicants for
industrial uses may be established by subcontract or by tariff set by the authority. The
rate charged may vary or may be fixed for all or a part of the subcontract term. The
initial rate charged per acre-foot shall not be less than the rate charged per acre-foot
by a multi-county water conservation district, or its successors, for the capital and
fixed operation and maintenance charges associated with an acre-foot of central Arizona
project municipal and industrial water in the year in which the authority subcontracts
for the sale and delivery of the water.

F. Notwithstanding the apportionment to municipal and industrial uses as provided
in subsection A, paragraphs 1 and 2 of this section, the authority may subcontract for
the delivery of Colorado river water for industrial, agricultural or miscellaneous uses
for which subcontracts have not been executed as provided in subsections B and E of this
section or for which subcontracts have been executed as provided in subsections B and E
of this section if there is no current demand for the water by the subcontractors. A
subcontract for the delivery of Colorado river water for an industrial, agricultural or
miscellaneous use under this subsection shall not be for a term of more than five
years. A subcontract under this subsection may serve an existing use of Colorado river
water which was not supported by a contract for the delivery of Colorado river water on
January 1, 1994, or a new use of Colorado river water initiated after January 1, 1994. A
subcontract under this subsection shall be subject to the approval of subcontractors with
subcontracts entered into pursuant to subsection B of this section. Any subcontract
under this subsection shall impose the charge per acre-foot of Colorado river water
delivered that the authority in its discretion determines to be adequate. Any
subcontract under this subsection may be renewed or extended successively for the same or
a shorter period of time. For purposes of this subsection, "miscellaneous use" means a
use of water for recreational or fish and wildlife purposes.

G. The authority may accept transfers of the Colorado river water entitlements of
its members and may contract with the United States for the delivery to the authority of
the initial eighteen thousand five hundred acre-feet a year of Colorado river water
obtained by the authority. The authority may contract with the United States for the
delivery of any additional amounts of water obtained by the authority from its members
and may contract as provided in section 45-2245.

H. Any subcontract under this section shall require the Colorado river water
delivered pursuant to the subcontract to be used in the county in which the authority is
formed.