45-2457

45-2457. Accounting; rules of
operation

A. The authority shall develop an accounting system for the long-term storage
credits accrued by the authority. The accounting system shall be designed to allow the
authority to determine which funding source of the banking fund paid for each long-term
storage credit accrued by the authority.

B. The authority shall operate in accordance with all of the following rules of
operation:

1. The authority shall reserve a reasonable number of long-term storage credits
accrued with general fund appropriations, other than general fund appropriations for
replenishment under chapter 15, article 3 of this title, for the benefit of municipal and
industrial users of Colorado river water in this state that are outside of the service
area of CAWCD.

2. The authority may distribute long-term storage credits accrued with general fund
appropriations, other than general fund appropriations for replenishment under chapter
15, article 3 of this title, for both of the following:

(a) To make water available to a municipal and industrial user of Colorado river
water in this state that is outside of the service area of CAWCD, if both of the
following apply:

(i) The municipal and industrial user would otherwise suffer a water shortage. The
authority may distribute long-term credits to the extent reasonably necessary to offset
the water shortage.

(ii) The authority collects reimbursement for the cost to the authority of
replacing the long-term storage credits distributed. The authority may replace the
long-term storage credits in any year it deems appropriate but shall use good faith
efforts to replace the long-term storage credits at a reasonable cost to the person who
is responsible for reimbursing the authority for the credits distributed.

(b) To make water available to CAWCD to the extent necessary for CAWCD to meet the
demands of its municipal and industrial subcontractors, if all of the following apply:

(i) CAWCD's normal diversions from the Colorado river have been or will be
disrupted by shortages on the river or by disruptions in the operation of the central
Arizona project.

(ii) The authority does not distribute for this purpose the long-term storage
credits reserved in accordance with paragraph 1.

(iii) The authority collects reimbursement from CAWCD for the cost to the authority
of replacing the long-term storage credits distributed. The authority may replace the
long-term storage credits in any year it deems appropriate but shall use good faith
efforts to replace the long-term storage credits at a reasonable cost to CAWCD.

3. The authority may distribute or extinguish long-term storage credits accrued
with general fund appropriations, other than general fund appropriations for
replenishment under chapter 15, article 3 of this title, to implement the settlement of
water right claims by Indian communities in this state.

4. On request from the director, the authority may extinguish long-term storage
credits accrued with general fund appropriations, other than general fund appropriations
for replenishment under chapter 15, article 3 of this title, to fulfill the water
management objectives set forth in chapter 2 of this title.

5. The authority may exchange long-term storage credits accrued with general fund
appropriations for long-term storage credits held by other persons if the long-term
storage credits received by the authority were stored in a location that better enables
the authority to fulfill the purposes and policies of this chapter than were the
long-term storage credits exchanged by the authority. For the purposes of this paragraph,
the authority may make exchanges of long-term storage credits stored in one active
management area for long-term storage credits stored in a different active management
area or of long-term storage credits stored in one groundwater basin for long-term
storage credits stored in a different groundwater basin.

6. The authority shall distribute or extinguish long-term storage credits accrued
with monies collected in accordance with section 45-611, subsection C, paragraph 3 only
for the benefit of the active management area in which the monies were collected. The
authority may distribute or extinguish these long-term storage credits to the extent
necessary to meet the demands of CAWCD's municipal and industrial subcontractors during
times in which CAWCD's diversions from the Colorado river have been or will be disrupted
by shortages on the Colorado river or by disruptions in operation of the central Arizona
project, to implement the settlement of water right claims by Indian communities in this
state or, on request from the director, to meet the other water management objectives set
forth in chapter 2 of this title. The authority may use the monies collected in the Pinal
active management area under section 45-611, subsection C, paragraph 3 to acquire
long-term storage credits for replenishment purposes under chapter 15, article 3 of this
title.

7. The authority shall distribute long-term storage credits accrued with monies
deposited in the fund in accordance with section 48-3715.03, subsection B only for the
benefit of the county in which the monies were collected. The authority shall distribute
these long-term storage credits to CAWCD to the extent necessary to meet the demands of
CAWCD's municipal and industrial subcontractors during times in which CAWCD's diversions
from the Colorado river have been or will be disrupted by shortages on the Colorado river
or by disruptions in operation of the central Arizona project.

8. For each county within the CAWCD service area, on a determination by the
authority that the number of long-term storage credits accrued with monies deposited in
the fund in accordance with section 48-3715.03, subsection B exceeds the needs specified
in paragraph 7 for that county, the authority shall distribute those excess long-term
storage credits to municipal water providers within that county that are at the time of
distribution experiencing surface water supply shortages not associated with the central
Arizona project. The authority shall distribute to each such municipal water provider
the lesser of the following number of long-term storage credits:

(a) The total number of credits determined to be available by the authority under
this paragraph multiplied by the percentage produced by dividing a numerator equaling the
amount of revenues paid pursuant to section 48-3715.02, subsections B and C by taxpayers
that are within both the boundaries of the municipal provider that is experiencing the
shortage and the boundaries of the surface water supply system that is experiencing the
shortage by a denominator equaling the total revenues paid pursuant to section
48-3715.02, subsections B and C by all taxpayers that are located within both the
boundaries of a municipal water provider and the boundaries of a surface water supply
system in the county. In making these computations, the authority shall use the amounts
of revenue paid by taxpayers during the most recent tax year for which this information
is available.

(b) Twenty per cent of the total surface water shortage that the municipal and
industrial water provider is experiencing.

9. The authority shall distribute or replace long-term storage credits accrued with
monies collected pursuant to water banking services agreements in accordance with the
terms of those agreements.

10. The authority shall acquire sufficient water supplies to perform its
replenishment responsibilities under chapter 15, article 3 of this title. The authority
shall acquire those water supplies with monies appropriated from the state general fund
by the legislature for replenishment under chapter 15, article 3 of this title and to the
extent that monies appropriated by the legislature for that purpose are not available,
with monies collected in the Pinal active management area under section 45-611,
subsection C, paragraph 3. The authority shall use the water supplies acquired pursuant
to this paragraph for any replenishment activity authorized by section 45-2623 and for
implementation of the southside replenishment bank established by section 45-2624,
including delivering water directly to the Gila river Indian community for those
purposes.

C. Any other long-term storage credits accrued by the authority may be distributed
or extinguished by the authority in accordance with the policy and purposes of this
chapter.

D. Except as provided by subsection B, paragraph 7 of this section and except as
provided by agreements entered into by the authority, the decision to distribute or
extinguish any long-term storage credit accrued by the authority is at the complete
discretion of the authority.