House Engrossed county water authority; post-2024 authority (now: county water authority; Harquahala INA) State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025 HOUSE BILL 2727 An Act amending sections 45-2201 and 45-2202, Arizona Revised Statutes; amending title 45, chapter 13, article 1, Arizona Revised Statutes, by adding section 45-2206; amending sections 45-2221, 45-2241, 45-2244, 45-2245 and 45-2281, Arizona Revised Statutes; relating to water. (TEXT OF BILL BEGINS ON NEXT PAGE)
House Engrossed county water authority; post-2024 authority (now: county water authority; Harquahala INA)
State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025
HOUSE BILL 2727
House Engrossed
county water authority; post-2024 authority
(now: county water authority; Harquahala INA)
State of Arizona
House of Representatives
Fifty-seventh Legislature
First Regular Session
2025
HOUSE BILL 2727
An Act
amending sections 45-2201 and 45-2202, Arizona Revised Statutes; amending title 45, chapter 13, article 1, Arizona Revised Statutes, by adding section 45-2206; amending sections 45-2221, 45-2241, 45-2244, 45-2245 and 45-2281, Arizona Revised Statutes; relating to water.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona: Section 1. Section 45-2201, Arizona Revised Statutes, is amended to read: START_STATUTE45-2201. Definitions In this chapter, unless the context otherwise requires: 1. "Agricultural use" means water used primarily in the commercial production of agricultural crops or livestock, including domestic uses incidental to those uses, and used on tracts of land operated in units of more than five acres. 2. "Authority" means a water authority established under this chapter. 3. "Board" means the board of directors of the authority. 4. "Central Arizona project" means the reclamation project and works authorized by section 301 (a) of the Colorado River basin project act and constructed by the United States pursuant to the provisions of the Colorado River basin project act and contract between the United States and central Arizona water conservation district for delivery of water and repayment of costs of the central Arizona project. 5. "Colorado River water" means water from the main stream of the Colorado River. 6. "Conservation" means the preservation and planned management of water resources to ensure the future availability of water resources. 7. "Effluent" means water that has been collected in a sanitary sewer for subsequent treatment in a facility that is regulated pursuant to title 49, chapter 2. Such water remains effluent until it acquires the characteristics of groundwater or surface water. 8. "Industrial use" means a nonagricultural use of water not supplied by a city, town or private water company, including animal industry use and expanded animal industry use as defined in section 45-402. 9. "Multi-county water conservation district" means a multi-county district that is established under title 48, chapter 22, which and that has contracted with the United States for the repayment of the cost and for the delivery of the water supply in accordance with P.L. public law 90-537. 10. "Municipal use" means all nonagricultural uses of water supplied by a city, town, private water company or irrigation district. 11. "Municipal water provider" means a city, town, private water company or irrigation district that supplies water for a nonagricultural use. 12. "Private water company" means any entity that distributes or sells groundwater, except a political subdivision or any entity that is established pursuant to title 48 and that is not regulated as a public service corporation by the Arizona corporation commission under a certificate of public convenience and necessity. 13. "Tentatively allocated" means water of the main stem of the Colorado River water that has been recommended by the director to the secretary of the interior for allocation, but for which a contract with the secretary for delivery has not been signed. 14. "United States" means the secretary of the interior, acting for the United States department of interior, or his duly authorized representative. END_STATUTE Sec. 2. Section 45-2202, Arizona Revised Statutes, is amended to read: START_STATUTE45-2202. Formation A. An authority may be formed in any county with a population of more than ninety thousand persons and less than one hundred twenty thousand persons according to the most recent United States decennial census or in a county that contains a portion of the HARQUAHALA irrigation non-expansion area and that does not CONTAIN any portion of an active management area. B. The members of the authority shall may include: 1. Municipal corporations in the county that: 1. (a) Had contracts with the United States for the delivery of Colorado River water as of January 1, 1993. 2. (b) Have adopted resolutions approving the formation of the authority as prescribed by subsection C, paragraph 1 of this section. 2. for an AUTHORITY in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, ELIGIBLE entities as prescribed in section 45-554, subsection D that: (a) own acres or have adopted plans to acquire acres that may be irrigated in the HARQUAHALA irrigation non-EXPANSION area PURSUANT to section 45-437, subsection B. (b) have adopted resolutions approving the formation of the authority as prescribed by subsection C, Paragraph 1 of this section. (c) are not the state. C. The authority shall be formed on the occurrence of the following events: 1. The adoption of resolutions approving the authority's formation by either of the following: (a) A majority of the municipal corporations in the county that had contracts with the United States for the delivery of Colorado River water as of January 1, 1993. A municipal corporation shall concurrently appoint the person who will represent the municipal corporation on the authority's board. (b) for an AUTHORITY in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, two or more ELIGIBLE entities as prescribed in section 45-554, subsection d. For the purposes of this subdivision, one of the eligible entities must be the board of supervisors of the county in which the authority is formed. 2. The transfer to the authority of the right to the delivery of eighteen thousand five hundred acre-feet per year of Colorado River water from a municipal corporation in the county where the authority is to be formed within seven hundred thirty days of after the adoption of resolutions as prescribed by paragraph 1 of this subsection. d. a municipal corporation and ELIGIBLE entity as prescribed in section 45-554, subsection D shall jointly appoint a person to represent the municipal corporation on the authority. D. e. On full compliance with subsection C of this section, the authority shall: 1. Notify the board of supervisors in the county in which the authority is formed of the authority's formation. 2. Publish a notice of the authority's formation once each week for two consecutive weeks in three newspapers a newspaper of general circulation in the county in which the authority is formed. 3. Notify each applicable authority member that the events prescribed by subsection C of this section have occurred. E. f. An authority member that in connection with the formation of the authority or after the formation of the authority transfers, or causes to be transferred, to the authority all or a portion of its contractual entitlement to the delivery of Colorado River water shall remain an authority member after the transfer. F. G. By vote of the directors, the membership of the authority may be expanded to include municipal corporations in the county that obtain obtains contracts for the delivery of Colorado River water from the United States after January 1, 1993 and that have adopted a resolution approving the inclusion. END_STATUTE Sec. 3. Title 45, chapter 13, article 1, Arizona Revised Statutes, is amended by adding section 45-2206, to read: START_STATUTE45-2206. Applicability Section 45-2202, subsection C, paragraph 2 and section 45-2244 do not apply to an AUTHORITY formed in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area. END_STATUTE Sec. 4. Section 45-2221, Arizona Revised Statutes, is amended to read: START_STATUTE45-2221. Board of directors; organization; compensation A. The authority shall have a board of directors. Each director WHO is appointed pursuant to this section shall have one vote. B. The board consists of persons who ARE appointed by the resolutions of the municipal corporations AND THE COUNTY that are authority members and, if appointed, the person WHO IS appointed pursuant to subsection C of this section. Each authority member shall appoint one director to the board. Each director who is appointed pursuant to this subsection shall serve at the pleasure of the authority member that appointed him. Each director WHO IS appointed pursuant to this subsection may be removed from the board by resolution of the authority member that appointed him. An authority member that removes a director from the board shall appoint another director to the board. C. The supervisors of the county in which the authority is formed may appoint a director to the board from among the members of the board of supervisors. A director who is appointed pursuant to this subsection shall serve a term of one year and shall be succeeded by another person who is a member of the board of supervisors according to the terms of this subsection. The term of the member who is appointed by the board of supervisors shall begin on January 1 of each year. D. The board shall select a chairperson, vice-chairperson and secretary-treasurer from among its appointed directors. Officers shall serve at the pleasure of the directors. For an authority that is in a county that contains a portion of the harquahala irrigation non-expansion area and that does not contain any portion of an active management area, the board shall select a chairperson and officers as needed from among the authority's appointed directors. E. Board members are not eligible to receive compensation but are eligible for reimbursement of actual and necessary expenses while engaged in official business under order of the board. F. The board members of the authority are public officers for purposes of title 38, chapter 3, article 8. The employees of the authority are employees for purposes of title 38, chapter 3, article 8. END_STATUTE Sec. 5. Section 45-2241, Arizona Revised Statutes, is amended to read: START_STATUTE45-2241. Cooperation with governmental entities A. The authority shall cooperate, coordinate and confer with the director of water resources, state agencies, municipal corporations, special districts, authorities, other political subdivisions of this state, private entities, Indian tribes and the United States on matters within their jurisdiction relating to the augmentation and conservation of the water supplies of the authority and its members. B. Consistent with the purposes and policies of this chapter, the authority shall cooperate with established and existing organizations in acquiring, constructing and operating projects for use of or interconnection with suitable diversion, withdrawal, transportation, delivery, treatment, storage or recharge facilities. C. Any authority member may request the authority to exercise its powers and privileges in making any project or proposed project, survey or investigation or for assistance in initiating or completing any works or projects authorized by this chapter. D. The authority may act as any of the following: 1. A bargaining and negotiating agency in transactions and dealings between various departments of the state or federal government at the request of an authority member. 2. A connecting, intermediate or contracting medium for members when if for united or joint participation such a medium is convenient or essential to the receipt, acceptance or enjoyment of any financial proposals, grants or other benefits to authority members that are made available under any statute or by any entity. 3. A coordinating, clearing, administering or supervising instrumentality through which members may cooperate or unite through contracts or agreements in applying or pooling their resources, functional rights or privileges for common purposes contemplated under this chapter. 4. A supervising instrumentality through which authority members may request the development of conservation plans for the use of Colorado River water or other water. E. Nothing in this section or in this chapter shall be construed to alter alters any debt limitation of any authority member. END_STATUTE Sec. 6. Section 45-2244, Arizona Revised Statutes, is amended to read: START_STATUTE45-2244. Acquisition and disposition of initial quantity of water; applicability 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 allow 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 after 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 that 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 the 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. I. This section applies only to an authority that is not located in a county that contains a portion of the harquahala irrigation non-expansion area and that does not contain any portion of an active management area. END_STATUTE Sec. 7. Section 45-2245, Arizona Revised Statutes, is amended to read: START_STATUTE45-2245. Acquisition and disposition of water in excess of initial quantity A. The authority may contract with the United States for the delivery of Colorado River water in excess of the initial eighteen thousand five hundred acre-feet a year that the United States makes available to the authority. B. The authority may apportion Colorado River water, groundwater from the harquahala irrigation non-expansion area as otherwise authorized by the laws of this state, water credits or effluent that it obtains in excess of the initial eighteen thousand five hundred acre-feet a year between municipal and industrial uses in the manner that the authority determines to be appropriate after considering the water needs of the county in which the authority is formed. C. The authority may contract with a multi-county water conservation district or its successors or with subcontractors of a multi-county water conservation district or their successors for the delivery to the authority of Colorado River water available to the central Arizona project. D. The authority may purchase, lease, sever, transfer or retire water rights to the Colorado River in this state. E. The authority may lease Colorado River water apportioned to this state from Indian tribes that are entitled by decree to that water and whose reservations are located in the lower basin of the Colorado River system in this state. F. The authority may store, recharge and recover any water or effluent available to the authority to the extent allowed under any provision of chapter 3.1 of this title and may enter into exchanges of water or of water credits within or outside the county in which the authority is formed to the extent allowed under any provision of chapter 4 of this title. G. The authority may contract for: 1. The storage or recovery of effluent to the extent allowed under any provision of chapter 3.1 of this title and may contract for the delivery or purchase of effluent. 2. Eligible acres in or groundwater from the Harquahala irrigation non-expansion area. H. Under terms specified by the authority and subject to subsection B of this section, the authority may enter into subcontracts with authority members and other water providers in the county where the authority is formed for the sale, exchange or other disposition of Colorado River water, groundwater from the harquahala irrigation non-expansion area as otherwise authorized by the laws of this state, water credits or effluent acquired by the authority pursuant to this section. In connection with those subcontracts, the authority may charge or impose standby or holding charges, development impact fees, connection fees, extraction fees, user fees, administrative fees or any other fees or charges that the authority determines to be necessary to recover the authority's costs of making the water, water credits or effluent available under the subcontract. The authority may impose additional fees or charges as the authority determines to be necessary or prudent to fund the acquisition of replacement supplies of water for the authority. I. Any subcontract under this section shall require Colorado River water delivered pursuant to the subcontract to be used in the county in which the authority is formed. END_STATUTE Sec. 8. Section 45-2281, Arizona Revised Statutes, is amended to read: START_STATUTE45-2281. Establishment of funds; allocation of authority revenues; member dues; applicability A. On the authority's formation, a grant fund, a water acquisition fund and an operating fund are established. The authority's revenues shall be deposited in and disbursed from the funds as provided by this section. Revenues deposited in the grant fund may be used to make grants to authority members for water acquisition, water conservation and water reuse. Revenues deposited in the water acquisition fund may be used to acquire water pursuant to section 45-2245. Revenues deposited in the operating fund shall be used as provided in subsection E of this section. B. Except as provided in subsection D of this section and for an authority that is formed in a county that contains a portion of the harquahala irrigation non-expansion area and that does not contain any portion of an active management area, all revenues of the authority shall be deposited in the grant fund except the following: 1. Dues paid by authority members which shall be deposited in the operating fund. 2. Ten per cent percent of all amounts paid by municipal subcontractors under subcontracts entered into as provided in section 45-2244, subsection B which may be deposited in the operating fund or the water acquisition fund as determined by the board. 3. Fifty per cent percent of all amounts paid by subcontractors of the authority pursuant to subcontracts entered into as provided in section 45-2244, subsection E or F. 4. That portion of the monies earned by the authority under subcontracts entered into pursuant to section 45-2245, subsection H that is equal to the cost to the authority of obtaining the water transferred under those subcontracts and, after payment of seven million five hundred thousand dollars $7,500,000 as adjusted pursuant to subsection C of this section, all of the monies earned from those subcontracts. C. Except as provided in subsection B of this section, all of the authority's revenues shall be deposited in the grant fund until the full amount of the initial grant and any additional amounts required in a grant agreement between the authority and the member that receives the grant have been disbursed from the grant fund as provided in this subsection. The initial grant from the grant fund shall be made to the authority member that transferred, or caused to be transferred, to the authority the right to the delivery of eighteen thousand five hundred acre-feet per year of Colorado River water in connection with the authority's formation. The amount of the grant to that member shall equal seven million five hundred thousand dollars $7,500,000 plus any additional monies that the authority and the member agree to in a grant agreement between the authority and the member, which amount shall be adjusted annually from the date of the authority's formation either for inflation or as may otherwise be provided in the subcontracts of the authority or in the grant agreement, until the amount of the initial grant required by this subsection and any additional amounts required by the grant agreement are paid in full. The initial grant may be disbursed in a lump sum or in partial payments in accordance with the request of the authority member that is entitled to receive the grant and as revenues become available to the authority and are deposited in the grant fund. The authority member that is entitled to receive the grant may request that disbursements be made whenever revenues have been deposited in the grant fund. Notwithstanding section 45-2282, the authority shall promptly disburse those revenues that are deposited in the fund on receipt of a request from that member. D. After the disbursement of the full amount of the initial grant and any additional amounts required in a grant agreement of the authority from the grant fund as provided in subsection C of this section, the authority's revenues, except dues paid by authority members, may be deposited in the grant fund, water acquisition fund or operating fund as determined by the board. E. The authority shall establish a schedule of dues that is sufficient, when aggregated with other monies available for the payment of administrative expenses, to pay the estimated administrative expenses of the authority. Dues shall be assessed and allocated equitably among authority members as determined by the board. All dues received by the authority shall be deposited in the operating fund. Expenditures may be made from the operating fund to pay: 1. The authority's administrative expenses. 2. The costs of the authority's formation including an equitable portion of the costs of the municipal corporation that transferred rights to the delivery of Colorado River water as provided in section 45-2202. 3. The costs associated with holding any entitlement to water acquired by the authority. 4. Subject to subsection C of this section, the costs incurred by the authority in the operation of any project undertaken by the authority pursuant to this chapter. 5. Amounts payable to the United States annually for the right to hold and use the eighteen thousand five hundred acre-feet per year of Colorado River water acquired by the authority pursuant to section 45-2202, subsection C which amounts may include any tax, fee or excise imposed upon on the sale or transfer of the water. F. Any authority member that is in arrears in the payment of its dues for more than sixty days shall lose the right of its appointed director to vote on all authority matters until all of the dues that are in arrears are fully paid. An authority member whose dues are in arrears does not lose membership in the authority because of the arrearage. G. All transportation fees paid to the authority pursuant to section 45-556 may be deposited in the grant fund, water acquisition fund or operating fund ESTABLISHED by this section as determined by the board. h. For an authority that is formed in a county with a population of less than ninety thousand persons, all revenues of the authority shall be deposited in the grant fund, water acquisition fund or operating fund ESTABLISHED by this section as determined by the board. END_STATUTE
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 45-2201, Arizona Revised Statutes, is amended to read:
START_STATUTE45-2201. Definitions
In this chapter, unless the context otherwise requires:
1. "Agricultural use" means water used primarily in the commercial production of agricultural crops or livestock, including domestic uses incidental to those uses, and used on tracts of land operated in units of more than five acres.
2. "Authority" means a water authority established under this chapter.
3. "Board" means the board of directors of the authority.
4. "Central Arizona project" means the reclamation project and works authorized by section 301 (a) of the Colorado River basin project act and constructed by the United States pursuant to the provisions of the Colorado River basin project act and contract between the United States and central Arizona water conservation district for delivery of water and repayment of costs of the central Arizona project.
5. "Colorado River water" means water from the main stream of the Colorado River.
6. "Conservation" means the preservation and planned management of water resources to ensure the future availability of water resources.
7. "Effluent" means water that has been collected in a sanitary sewer for subsequent treatment in a facility that is regulated pursuant to title 49, chapter 2. Such water remains effluent until it acquires the characteristics of groundwater or surface water.
8. "Industrial use" means a nonagricultural use of water not supplied by a city, town or private water company, including animal industry use and expanded animal industry use as defined in section 45-402.
9. "Multi-county water conservation district" means a multi-county district that is established under title 48, chapter 22, which and that has contracted with the United States for the repayment of the cost and for the delivery of the water supply in accordance with P.L. public law 90-537.
10. "Municipal use" means all nonagricultural uses of water supplied by a city, town, private water company or irrigation district.
11. "Municipal water provider" means a city, town, private water company or irrigation district that supplies water for a nonagricultural use.
12. "Private water company" means any entity that distributes or sells groundwater, except a political subdivision or any entity that is established pursuant to title 48 and that is not regulated as a public service corporation by the Arizona corporation commission under a certificate of public convenience and necessity.
13. "Tentatively allocated" means water of the main stem of the Colorado River water that has been recommended by the director to the secretary of the interior for allocation, but for which a contract with the secretary for delivery has not been signed.
14. "United States" means the secretary of the interior, acting for the United States department of interior, or his duly authorized representative. END_STATUTE
Sec. 2. Section 45-2202, Arizona Revised Statutes, is amended to read:
START_STATUTE45-2202. Formation
A. An authority may be formed in any county with a population of more than ninety thousand persons and less than one hundred twenty thousand persons according to the most recent United States decennial census or in a county that contains a portion of the HARQUAHALA irrigation non-expansion area and that does not CONTAIN any portion of an active management area.
B. The members of the authority shall may include:
1. Municipal corporations in the county that:
1. (a) Had contracts with the United States for the delivery of Colorado River water as of January 1, 1993.
2. (b) Have adopted resolutions approving the formation of the authority as prescribed by subsection C, paragraph 1 of this section.
2. for an AUTHORITY in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, ELIGIBLE entities as prescribed in section 45-554, subsection D that:
(a) own acres or have adopted plans to acquire acres that may be irrigated in the HARQUAHALA irrigation non-EXPANSION area PURSUANT to section 45-437, subsection B.
(b) have adopted resolutions approving the formation of the authority as prescribed by subsection C, Paragraph 1 of this section.
(c) are not the state.
C. The authority shall be formed on the occurrence of the following events:
1. The adoption of resolutions approving the authority's formation by either of the following:
(a) A majority of the municipal corporations in the county that had contracts with the United States for the delivery of Colorado River water as of January 1, 1993. A municipal corporation shall concurrently appoint the person who will represent the municipal corporation on the authority's board.
(b) for an AUTHORITY in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, two or more ELIGIBLE entities as prescribed in section 45-554, subsection d. For the purposes of this subdivision, one of the eligible entities must be the board of supervisors of the county in which the authority is formed.
2. The transfer to the authority of the right to the delivery of eighteen thousand five hundred acre-feet per year of Colorado River water from a municipal corporation in the county where the authority is to be formed within seven hundred thirty days of after the adoption of resolutions as prescribed by paragraph 1 of this subsection.
d. a municipal corporation and ELIGIBLE entity as prescribed in section 45-554, subsection D shall jointly appoint a person to represent the municipal corporation on the authority.
D. e. On full compliance with subsection C of this section, the authority shall:
1. Notify the board of supervisors in the county in which the authority is formed of the authority's formation.
2. Publish a notice of the authority's formation once each week for two consecutive weeks in three newspapers a newspaper of general circulation in the county in which the authority is formed.
3. Notify each applicable authority member that the events prescribed by subsection C of this section have occurred.
E. f. An authority member that in connection with the formation of the authority or after the formation of the authority transfers, or causes to be transferred, to the authority all or a portion of its contractual entitlement to the delivery of Colorado River water shall remain an authority member after the transfer.
F. G. By vote of the directors, the membership of the authority may be expanded to include municipal corporations in the county that obtain obtains contracts for the delivery of Colorado River water from the United States after January 1, 1993 and that have adopted a resolution approving the inclusion. END_STATUTE
Sec. 3. Title 45, chapter 13, article 1, Arizona Revised Statutes, is amended by adding section 45-2206, to read:
START_STATUTE45-2206. Applicability
Section 45-2202, subsection C, paragraph 2 and section 45-2244 do not apply to an AUTHORITY formed in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area. END_STATUTE
Sec. 4. Section 45-2221, Arizona Revised Statutes, is amended to read:
START_STATUTE45-2221. Board of directors; organization; compensation
A. The authority shall have a board of directors. Each director WHO is appointed pursuant to this section shall have one vote.
B. The board consists of persons who ARE appointed by the resolutions of the municipal corporations AND THE COUNTY that are authority members and, if appointed, the person WHO IS appointed pursuant to subsection C of this section. Each authority member shall appoint one director to the board. Each director who is appointed pursuant to this subsection shall serve at the pleasure of the authority member that appointed him. Each director WHO IS appointed pursuant to this subsection may be removed from the board by resolution of the authority member that appointed him. An authority member that removes a director from the board shall appoint another director to the board.
C. The supervisors of the county in which the authority is formed may appoint a director to the board from among the members of the board of supervisors. A director who is appointed pursuant to this subsection shall serve a term of one year and shall be succeeded by another person who is a member of the board of supervisors according to the terms of this subsection. The term of the member who is appointed by the board of supervisors shall begin on January 1 of each year.
D. The board shall select a chairperson, vice-chairperson and secretary-treasurer from among its appointed directors. Officers shall serve at the pleasure of the directors. For an authority that is in a county that contains a portion of the harquahala irrigation non-expansion area and that does not contain any portion of an active management area, the board shall select a chairperson and officers as needed from among the authority's appointed directors.
E. Board members are not eligible to receive compensation but are eligible for reimbursement of actual and necessary expenses while engaged in official business under order of the board.
F. The board members of the authority are public officers for purposes of title 38, chapter 3, article 8. The employees of the authority are employees for purposes of title 38, chapter 3, article 8. END_STATUTE
Sec. 5. Section 45-2241, Arizona Revised Statutes, is amended to read:
START_STATUTE45-2241. Cooperation with governmental entities
A. The authority shall cooperate, coordinate and confer with the director of water resources, state agencies, municipal corporations, special districts, authorities, other political subdivisions of this state, private entities, Indian tribes and the United States on matters within their jurisdiction relating to the augmentation and conservation of the water supplies of the authority and its members.
B. Consistent with the purposes and policies of this chapter, the authority shall cooperate with established and existing organizations in acquiring, constructing and operating projects for use of or interconnection with suitable diversion, withdrawal, transportation, delivery, treatment, storage or recharge facilities.
C. Any authority member may request the authority to exercise its powers and privileges in making any project or proposed project, survey or investigation or for assistance in initiating or completing any works or projects authorized by this chapter.
D. The authority may act as any of the following:
1. A bargaining and negotiating agency in transactions and dealings between various departments of the state or federal government at the request of an authority member.
2. A connecting, intermediate or contracting medium for members when if for united or joint participation such a medium is convenient or essential to the receipt, acceptance or enjoyment of any financial proposals, grants or other benefits to authority members that are made available under any statute or by any entity.
3. A coordinating, clearing, administering or supervising instrumentality through which members may cooperate or unite through contracts or agreements in applying or pooling their resources, functional rights or privileges for common purposes contemplated under this chapter.
4. A supervising instrumentality through which authority members may request the development of conservation plans for the use of Colorado River water or other water.
E. Nothing in this section or in this chapter shall be construed to alter alters any debt limitation of any authority member. END_STATUTE
Sec. 6. Section 45-2244, Arizona Revised Statutes, is amended to read:
START_STATUTE45-2244. Acquisition and disposition of initial quantity of water; applicability
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 allow 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 after 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 that 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 the 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.
I. This section applies only to an authority that is not located in a county that contains a portion of the harquahala irrigation non-expansion area and that does not contain any portion of an active management area. END_STATUTE
Sec. 7. Section 45-2245, Arizona Revised Statutes, is amended to read:
START_STATUTE45-2245. Acquisition and disposition of water in excess of initial quantity
A. The authority may contract with the United States for the delivery of Colorado River water in excess of the initial eighteen thousand five hundred acre-feet a year that the United States makes available to the authority.
B. The authority may apportion Colorado River water, groundwater from the harquahala irrigation non-expansion area as otherwise authorized by the laws of this state, water credits or effluent that it obtains in excess of the initial eighteen thousand five hundred acre-feet a year between municipal and industrial uses in the manner that the authority determines to be appropriate after considering the water needs of the county in which the authority is formed.
C. The authority may contract with a multi-county water conservation district or its successors or with subcontractors of a multi-county water conservation district or their successors for the delivery to the authority of Colorado River water available to the central Arizona project.
D. The authority may purchase, lease, sever, transfer or retire water rights to the Colorado River in this state.
E. The authority may lease Colorado River water apportioned to this state from Indian tribes that are entitled by decree to that water and whose reservations are located in the lower basin of the Colorado River system in this state.
F. The authority may store, recharge and recover any water or effluent available to the authority to the extent allowed under any provision of chapter 3.1 of this title and may enter into exchanges of water or of water credits within or outside the county in which the authority is formed to the extent allowed under any provision of chapter 4 of this title.
G. The authority may contract for:
1. The storage or recovery of effluent to the extent allowed under any provision of chapter 3.1 of this title and may contract for the delivery or purchase of effluent.
2. Eligible acres in or groundwater from the Harquahala irrigation non-expansion area.
H. Under terms specified by the authority and subject to subsection B of this section, the authority may enter into subcontracts with authority members and other water providers in the county where the authority is formed for the sale, exchange or other disposition of Colorado River water, groundwater from the harquahala irrigation non-expansion area as otherwise authorized by the laws of this state, water credits or effluent acquired by the authority pursuant to this section. In connection with those subcontracts, the authority may charge or impose standby or holding charges, development impact fees, connection fees, extraction fees, user fees, administrative fees or any other fees or charges that the authority determines to be necessary to recover the authority's costs of making the water, water credits or effluent available under the subcontract. The authority may impose additional fees or charges as the authority determines to be necessary or prudent to fund the acquisition of replacement supplies of water for the authority.
I. Any subcontract under this section shall require Colorado River water delivered pursuant to the subcontract to be used in the county in which the authority is formed. END_STATUTE
Sec. 8. Section 45-2281, Arizona Revised Statutes, is amended to read:
START_STATUTE45-2281. Establishment of funds; allocation of authority revenues; member dues; applicability
A. On the authority's formation, a grant fund, a water acquisition fund and an operating fund are established. The authority's revenues shall be deposited in and disbursed from the funds as provided by this section. Revenues deposited in the grant fund may be used to make grants to authority members for water acquisition, water conservation and water reuse. Revenues deposited in the water acquisition fund may be used to acquire water pursuant to section 45-2245. Revenues deposited in the operating fund shall be used as provided in subsection E of this section.
B. Except as provided in subsection D of this section and for an authority that is formed in a county that contains a portion of the harquahala irrigation non-expansion area and that does not contain any portion of an active management area, all revenues of the authority shall be deposited in the grant fund except the following:
1. Dues paid by authority members which shall be deposited in the operating fund.
2. Ten per cent percent of all amounts paid by municipal subcontractors under subcontracts entered into as provided in section 45-2244, subsection B which may be deposited in the operating fund or the water acquisition fund as determined by the board.
3. Fifty per cent percent of all amounts paid by subcontractors of the authority pursuant to subcontracts entered into as provided in section 45-2244, subsection E or F.
4. That portion of the monies earned by the authority under subcontracts entered into pursuant to section 45-2245, subsection H that is equal to the cost to the authority of obtaining the water transferred under those subcontracts and, after payment of seven million five hundred thousand dollars $7,500,000 as adjusted pursuant to subsection C of this section, all of the monies earned from those subcontracts.
C. Except as provided in subsection B of this section, all of the authority's revenues shall be deposited in the grant fund until the full amount of the initial grant and any additional amounts required in a grant agreement between the authority and the member that receives the grant have been disbursed from the grant fund as provided in this subsection. The initial grant from the grant fund shall be made to the authority member that transferred, or caused to be transferred, to the authority the right to the delivery of eighteen thousand five hundred acre-feet per year of Colorado River water in connection with the authority's formation. The amount of the grant to that member shall equal seven million five hundred thousand dollars $7,500,000 plus any additional monies that the authority and the member agree to in a grant agreement between the authority and the member, which amount shall be adjusted annually from the date of the authority's formation either for inflation or as may otherwise be provided in the subcontracts of the authority or in the grant agreement, until the amount of the initial grant required by this subsection and any additional amounts required by the grant agreement are paid in full. The initial grant may be disbursed in a lump sum or in partial payments in accordance with the request of the authority member that is entitled to receive the grant and as revenues become available to the authority and are deposited in the grant fund. The authority member that is entitled to receive the grant may request that disbursements be made whenever revenues have been deposited in the grant fund. Notwithstanding section 45-2282, the authority shall promptly disburse those revenues that are deposited in the fund on receipt of a request from that member.
D. After the disbursement of the full amount of the initial grant and any additional amounts required in a grant agreement of the authority from the grant fund as provided in subsection C of this section, the authority's revenues, except dues paid by authority members, may be deposited in the grant fund, water acquisition fund or operating fund as determined by the board.
E. The authority shall establish a schedule of dues that is sufficient, when aggregated with other monies available for the payment of administrative expenses, to pay the estimated administrative expenses of the authority. Dues shall be assessed and allocated equitably among authority members as determined by the board. All dues received by the authority shall be deposited in the operating fund. Expenditures may be made from the operating fund to pay:
1. The authority's administrative expenses.
2. The costs of the authority's formation including an equitable portion of the costs of the municipal corporation that transferred rights to the delivery of Colorado River water as provided in section 45-2202.
3. The costs associated with holding any entitlement to water acquired by the authority.
4. Subject to subsection C of this section, the costs incurred by the authority in the operation of any project undertaken by the authority pursuant to this chapter.
5. Amounts payable to the United States annually for the right to hold and use the eighteen thousand five hundred acre-feet per year of Colorado River water acquired by the authority pursuant to section 45-2202, subsection C which amounts may include any tax, fee or excise imposed upon on the sale or transfer of the water.
F. Any authority member that is in arrears in the payment of its dues for more than sixty days shall lose the right of its appointed director to vote on all authority matters until all of the dues that are in arrears are fully paid. An authority member whose dues are in arrears does not lose membership in the authority because of the arrearage.
G. All transportation fees paid to the authority pursuant to section 45-556 may be deposited in the grant fund, water acquisition fund or operating fund ESTABLISHED by this section as determined by the board.
h. For an authority that is formed in a county with a population of less than ninety thousand persons, all revenues of the authority shall be deposited in the grant fund, water acquisition fund or operating fund ESTABLISHED by this section as determined by the board. END_STATUTE