48-4470. Contracts for replenishment services

A. A district may contract with water suppliers to acquire water to replenish the groundwater in the district on behalf of district members. If a district contracts with a water supplier or anticipates contracting with a water supplier, it shall notify all district members of the amount of water under the contract that the district will make available for replenishment services. The notice shall include:

1. The source and amount of the water to be acquired.

2. The term of the contract, the amount of water available for replenishment and the amounts to be charged pursuant to subsection F of this section.

B. After notifying the district members, the district shall contract for replenishment services with those district members that request the services up to the amount of water acquired pursuant to subsection A of this section that the district elects to make available for replenishment services.

C. A district that has a source of water may contract, on a nondiscriminatory basis, to provide replenishment services but only if the district has a water supply available for the term of the contract.

D. If the district receives requests for replenishment services for a specific water acquisition contract that are greater than the amount of water the district elects to make available under the acquisition contract, the district shall apportion the available water based on policies established by the board taking into account the following priorities:

1. First priority shall be assigned to those district members that request services based on the average net groundwater withdrawn in the preceding five year period that is not already covered by a contract for replenishment services.

2. Second priority shall be assigned to those district members that request services based on the increase in the net groundwater that is projected to be withdrawn annually in the next five year period and that is not already covered by a contract for replenishment services.

3. Third priority shall be assigned to the district based on the amount of water the district estimates it is necessary to reserve to provide replenishment services pursuant to sections 48-4472 and 48-4501.

4. Fourth priority shall be assigned to those district members that request services that are not within the scope of paragraphs 1 and 2 of this subsection.

E. No more water may be apportioned to a district member under subsection D of this section than the member specifically requests.

F. A district member that enters into a contract under this section shall pay the district, as a replenishment tax, the water acquisition costs associated with the contract. When the district receives the district member's payment, the district shall credit the member's replenishment account established under section 48-4464 with an amount of groundwater equal to the amount of replenishment services the member purchased.

G. The district may agree with a district member to accept an assignment, for a term to be agreed on by the district and the district member, of the district member's municipal and industrial water service subcontract with the United States and a multi-county water conservation district. If the district accepts such an assignment, the district shall pay to the multi-county water conservation district, to the extent of the assignment, any amounts otherwise payable by the district member during the term in which the contract is assigned and shall accept delivery of the district member's allocated central Arizona project water supply during the term of the assignment. In connection with the acceptance of such an assignment, the district may agree to reduce the district member's replenishment tax obligation pursuant to this section and section 48-4472 or 48-4501 in an amount agreed to by the district and the district member for the term of the assignment. The amount of any tax reduction pursuant to this section shall be added to the water acquisition cost of the central Arizona project water acquired by the district pursuant to the assignment.

H. The board shall adopt policies to implement this section.