Any district may enter into a contract with any public agency which provides in effect as follows:

1. The public agency shall:

a. Collect for the district assessments levied by the district against all or part of the lands within the district and shall collect such assessments and pay the amount thereof over to the district at such times and in the manner agreed upon between the district and the public agency; or, in the alternative,

b. Pay to the district in lieu of assessments by the district upon all or any part of the lands within the district a sum of money which shall not be less than the total amount of assessments which would have been levied by the district against those lands in the absence of such contract calculated upon the same basis as assessments made upon an acreage basis against other land in the district receiving gravity water service. Such payment shall be made at such time and in the manner agreed upon between the district and the public agency.

2. If the contract provides for the payment of a water charge in addition to the assessment upon district lands, then in determining the sum of money which may be paid to the district in lieu of assessments by the district under paragraph b of subdivision 1, the district may determine that a lesser rate of assessment or no assessment would be appropriate upon lands covered by the contract and, if such determination is made, may so provide in the contract and adjust or eliminate the assessment.

3. The district shall make available to the public agency each year for distribution and use upon the lands within the district covered by the contract, such a quantity of water as may be agreed upon by the district and the public agency.

4. The owner of lands within the district covered by such a contract shall each year be entitled to receive and use from the water so made available by the district to the public agency, or from other water available to the public agency, an amount of water sufficient to supply his reasonable and beneficial needs, limited however to his proportionate share of such water made available by the district based upon the ratio which the number of acres owned by him bears to the total number of acres within the district receiving a surface supply of water from the district and the public agency.

5. The public agency may charge such rates as it may determine for the service of water to any lands covered by the contract unless such rates are limited by agreement between the district and the public agency.

(Amended by Stats. 1978, Ch. 559.)