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.