A.R.S. tit. 48 ch. 27 — Arizona Revised Statutes Title 48 Chapter 27 — Groundwater Replenishment Districts

48-4401. Definitions In this chapter, unless the context otherwise requires: 1. "Active management area" means an active management area established under title 45, chapter 2, article 2. 2. "Actual central Arizona project water supply" means, for any calendar year, the total amount of central Arizona project water that is delivered to a district member during the year by a multi-county water conservation district pursuant to a subcontract for central Arizona project municipal and industrial water service by the United States secretary of the interior and a multi-county water conservation district. 3. "Actual surface water supply" means for any year the total amount of surface water, other than central Arizona project water, that is delivered to the district member for non-irrigation use during the year by irrigation districts and water users' associations. 4. "Adjusted groundwater" means the number computed by subtracting the excluded groundwater withdrawn in the district by a district member from all groundwater withdrawn in the district by the district member for non-irrigation use. 5. "Administrative costs" means the compensation and employment related expenses of the officers and administrative employees of the district, the compensation and reimbursements of members of the board of directors, operation and maintenance expenses and acquisition costs of property, equipment and other materials that the district acquires for administrative purposes. 6. "Board" means the board of directors of a groundwater replenishment district. 7. "Capacity costs" means the cost of acquiring, constructing or leasing replenishment facilities, including any necessary land, any facilities that are necessary to treat water and facilities that are required to transport water to a treatment facility or replenishment area that is operated, owned or leased by a district, including interest on any amount that was borrowed to acquire, lease or construct the facilities. 8. "CERCLA" means the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96-510; 94 Stat. 2767; 42 United States Code sections 9601 through 9657), commonly known as "superfund". 9. "Director" means the director of water resources. 10. "District" means a groundwater replenishment district established under this chapter. 11. "District member" or "member" means a municipality that contains a service area and petitions for the formation of the district or petitions for the expansion of the district pursuant to this title. 12. "District water" means water that a district acquires in a calendar year and that exceeds the amount that is necessary to fulfill its contracts for replenishment pursuant to section 48-4470, demand services pursuant to section 48-4472 and replenishment pursuant to section 48-4501. 13. "Drought replacement water" means groundwater that is withdrawn by a district member during a drought year and that the district determines was required to be withdrawn to replace unavailable surface water or unavailable central Arizona project water. 14. "Drought year" means: (a) A year in which the district member's actual central Arizona project water supply is less than eighty per cent of the district member's normal central Arizona project water supply, if the district member's actual central Arizona project water supply is also less than the amount of central Arizona project water ordered by the district member from a multi-county water conservation district. (b) A year in which the district member's actual surface water supply is less than eighty per cent of the district member's normal surface water supply. 15. "Excluded groundwater" means the amount of groundwater that is withdrawn in the district by a district member and that is excluded from the replenishment tax pursuant to section 48-4502, paragraph 1, subdivisions (b) through (e). 16. "Groundwater" has the definition prescribed by section 45-101. 17. "Historic annual net natural recharge" means the average annual net natural recharge of the groundwater basin beneath a groundwater replenishment district during a thirty year period, as established by the director in the most recent management plan for the active management area in which the district is located pursuant to title 45, chapter 2, article 9, or a proportionate share established by the director, if the groundwater basin is partially located beneath a district. 18. "Historic annual per acre surface water deliveries" means, for any year, the total amount of surface water, other than central Arizona project water, delivered by an irrigation district or water users' association during the thirty year period ending with the preceding calendar year for use on surface water right acres that are currently in a district divided by the product obtained by multiplying the number of such surface water right acres times thirty, as established by the district. 19. "Irrigation district" means a political subdivision, however designated, established pursuant to chapter 17 or 19 of this title. 20. "Multi-county water conservation district" means a political subdivision established pursuant to chapter 22 of this title. 21. "Municipality" means a city or town incorporated or chartered under the constitution and laws of this state. 22. "Net natural recharge" means the amount of water added to a groundwater basin during a definite period of time through natural underground inflow, natural infiltration through mountain fronts and natural infiltration through streambeds or other natural channels, except for water released into streambeds or other natural channels as effluent, less the amount of water that left the groundwater basin during the same period of time through natural outflow. 23. "Non-exempt well" means a well other than an exempt well, as defined by section 45-402. 24. "Non-irrigation use" means any use of water, other than on two or more acres of land to produce plants or parts of plants for sale or human consumption or for use as feed for livestock, range livestock or poultry, as those terms are defined in section 3-1201. 25. "Normal central Arizona project water supply" means, for any calendar year, the maximum amount of central Arizona project water that a multi-county water conservation district has agreed to deliver to a district member for municipal or industrial use during the calendar year pursuant to a municipal and industrial water service subcontract. 26. "Normal surface water supply" means for any year an amount of surface water that is measured by multiplying any surface water right acres for which the district member received surface water, other than central Arizona project water, for non-irrigation use during the year from an irrigation district or water users' association times the historic annual per acre surface water deliveries of the irrigation district or water users' association. 27. "Person" means an individual, public or private corporation, company, partnership, firm, association, society, estate or trust, any other public organization or enterprise, the United States, any state, territory or country or a governmental entity, political subdivision or municipal corporation organized under or subject to the constitution and laws of this state. 28. "Replenish" means to increase the amount of groundwater in a district either incidentally or through water storage undertaken pursuant to title 45, chapter 3.1. 29. "Replenishment tax" means the taxes imposed by sections 48-4470, 48-4472 and 48-4501 on district members for the privilege of withdrawing groundwater. 30. "Service area" has the same meaning as prescribed by section 45-402. 31. "Surface water" has the definition prescribed by section 45-101. 32. "Surface water right acre" means an acre of land on which decreed or appropriative surface water, other than central Arizona project water, is legally entitled to be applied. 33. "Total water used" means all water that a district member uses or delivers to its customers for non-irrigation use. 34. "Unavailable central Arizona project water" means an amount of water that is measured by subtracting the district member's actual central Arizona project water supply in a drought year from eighty per cent of the district member's normal central Arizona project water supply for the year, up to the difference between the amount of central Arizona project water ordered by the district member from a multi-county water conservation district for municipal or industrial use during the year and the district member's actual central Arizona project water supply during the year. 35. "Unavailable surface water" means an amount of water computed by subtracting a district member's actual surface water supply in a drought year from eighty per cent of the district member's normal surface water supply for that year. 36. "Water acquisition costs" means the cost of acquiring water for use by the district in fulfilling its replenishment obligations pursuant to sections 48-4470, 48-4472 and 48-4501, including costs of purchase or lease of water, energy costs for transporting water, operation costs, maintenance costs, withdrawal or severance taxes paid in connection with the water, capital costs for headworks, well or transmission facilities constructed at a water source and interest on monies that are borrowed to acquire water. Water acquisition costs also include a portion of the capacity costs of the facility or facilities, allocated over the life of the facility or facilities, that are used to transport, treat or replenish the water. In determining the portion of capacity costs to be charged to a district member in connection with providing replenishment services, the district shall consider the use of the capacity by the district member and the amount of capacity that must be held in reserve to accomplish the replenishment service but shall not charge the member for capacity that is held in reserve for future growth or drought contingencies. Water acquisition costs do not include the cost of capacity that is acquired or constructed for purposes of title 45, chapter 3, article 2 or that is constructed with monies derived from selling demonstration project water. 37. "Water storage" has the same meaning as prescribed by section 45-802.01. 38. "Water users' association" has the same meaning as prescribed by section 10-140. 39. "Well" has the definition prescribed by section 45-402. 48-4402. Purposes The purposes of a groundwater replenishment district are to develop, store, augment, conserve, replenish or otherwise increase water supplies for the benefit of the district members consistent with achieving safe-yield, as defined by section 45-561. 48-4403. District as municipal corporation; exemption from taxation; judicial review A. A groundwater replenishment district is a public improvement district of this state and a municipal corporation to the extent of the powers, privileges and immunities conferred by this chapter or granted generally to municipal corporations by the constitution and statutes of this state, including the immunities and exemptions provided by article XIII, section 7, Constitution of Arizona, except as specifically limited by this chapter. B. The board is regarded as performing a governmental function in carrying out the purposes of this chapter and is not required to pay taxes or assessments on any of the property acquired or constructed, on the activities of the board in maintaining and caring for such real property or on the monies derived from the property. C. Decisions of the board of directors under title 45 or this chapter are subject to judicial review only to the same extent and in the same manner as decisions of other special taxing districts under this title. 48-4404. Effect on vested water rights This chapter shall not be construed to affect vested water rights. 48-4431. Establishment; petitions; notice; hearing; determination by county board of supervisors; boundaries; preliminary expenses A. A groundwater replenishment district may be established in an active management area with a management goal of safe-yield that, as of the date the petition is submitted, has at least three municipal water providers each having a service area population exceeding one hundred fifty thousand persons according to the most recent data compiled by the department of water resources. The district shall be established by the following procedures: 1. A municipality that desires to propose the establishment of the district shall prepare and submit a petition to the board of supervisors of the county in which the district is to be located. Any number of municipalities in an active management area satisfying the requirements of subsection A may collectively submit a petition. If a proposed district will be located in more than one county, the petition shall be submitted to the board of supervisors of the county in which the majority of the assessed valuation of the proposed district is located. The boards of supervisors of any other counties in which a portion of the district is located shall provide information and assistance to the responsible board of supervisors. The petition shall contain a statement including at least the following information: (a) A general description of the boundaries of the proposed district and a map of the area to be included in the district. The district boundaries shall be coterminous with the boundaries of the service areas of the municipalities petitioning for the formation of the district and within the boundaries of the active management area. (b) An estimate of the assessed valuation in the proposed district. (c) Certified copies of adopted resolutions approving the district's formation by the governing bodies of the municipalities petitioning for the formation of the district. (d) The name of the proposed district. (e) A request that the board of supervisors define and establish the boundaries of the proposed district and schedule a hearing. 2. On receiving the petition: (a) The board of supervisors shall set a day, at least sixty but not more than ninety days after that date, for a hearing on the petition. (b) The clerk of the board of supervisors shall publish a notice stating the purpose of the petition, the description of the area of the proposed district and the day, hour and place of the hearing twice in a daily newspaper of general circulation in the area of the proposed district at least twenty days before the hearing. 3. Before the date of the hearing, any person who wishes to object to the establishment of the district may file the objections in writing with the clerk of the board of supervisors. 4. At the hearing the board of supervisors shall: (a) Hear those who appear for and against the proposed district and shall determine whether the petition conforms to the requirements of this section. If the board of supervisors determines that the petition conforms to the requirements of this section, and that the water supply available to the land in the district will be improved, it shall order the establishment of the district. The district boundaries shall be coterminous with the boundaries of the service areas of the municipalities petitioning for the formation of the district and within the boundaries of the active management area. The board of supervisors of each county in which the district is located shall define and establish the actual boundaries of the district based on the existing service area boundaries according to maps and surveys adopted by the department of water resources. The board of supervisors may conduct additional surveys and studies to ascertain and determine the boundaries of the district. (b) Enter in the minutes of the meeting its order stating its determination. 5. Not later than ten days after the day of the hearing, a copy of the order of the board of supervisors under paragraph 4, subdivision (b) of this section shall be filed in the county recorder's office. Not later than thirty days after recording the order, the board of supervisors of any other county in which a portion of the district is located shall enter a conforming order acknowledging the formation of the district. The order of the board of supervisors of the county in which the majority of the assessed valuation of the district is located is final, and the proposed district is established thirty days after the board of supervisors votes to establish the district. B. All preliminary expenses incurred in organizing the district, including necessary engineering and legal expenses, and all necessary and reasonable services rendered before the district is authorized to contract for such services, materials or valuable things are lawful obligations of the district. After the board of directors is organized and qualified, the district shall pay all such amounts as the board allows. C. The district's boundaries shall expand as follows: 1. If a district member expands its service area, the district's boundaries shall automatically expand in order to remain coterminous with the boundaries of the service area of its members subject to the following: (a) The district's boundaries shall not expand outside the active management area in which the district is located. (b) If the expanded service area includes land in a county in which the district has not previously been located, the district's boundaries shall not expand to include that service area, unless the municipality petitions for expansion under paragraph 2 of this subsection. 2. Any municipality located in an active management area in which a district is located that did not petition to form the district may join the district after it is formed by submitting a petition for expansion of the district to the board of supervisors of the county in which the service area of the municipality is located. The petition shall contain a statement including at least the following information: (a) A general description of the boundaries of the proposed expansion and a map of the service area to be included in the district. The expanded district boundaries shall be coterminous with the boundaries of the service areas of the district's current members and of the municipalities petitioning for the expansion of the district. The expanded district boundaries shall remain within the boundaries of the active management area. (b) Certified copies of adopted resolutions approving the inclusion within the district of the municipalities filing the petition for expansion of the district adopted by the governing bodies of the municipalities petitioning for the expansion of the district. (c) A request that the board of supervisors define and establish the expanded boundaries of the district and schedule a hearing. 3. On receiving the petition: (a) The board of supervisors shall set a day, at least sixty but not more than ninety days after that date, for a hearing on the petition. (b) The clerk of the board of supervisors shall publish a notice stating the purpose of the petition, the description of the area of the proposed expansion of the district and the day, hour and place of the hearing twice in a daily newspaper of general circulation in the area of the proposed expansion of the district at least twenty days before the hearing. 4. Before the date of the hearing, any person who wishes to object to the expansion of the district may file the objections in writing with the clerk of the board of supervisors. 5. At the hearing the board of supervisors shall: (a) Hear those who appear for and against the proposed expansion of the district and shall determine whether the petition conforms to the requirements of this section. If the board of supervisors determines that the petition conforms to the requirements of this section and that the water supply available to the land in the district will be improved, it shall order the expansion of the district. The district boundaries shall be expanded to be coterminous with the boundaries of the service area of the municipality petitioning for the expansion of the district and within the boundaries of the active management area. The board of supervisors shall define and establish the expanded boundaries of the district based on the existing service area boundaries according to maps and surveys adopted by the department of water resources. The board of supervisors may conduct additional surveys and studies to ascertain and determine the boundaries of the district. (b) Enter in the minutes of the meeting its order stating its determination. 6. Not later than ten days after the day of the hearing, a copy of the order of the board of supervisors under paragraph 5, subdivision (b) of this subsection shall be filed in the county recorder's office. The order of the board of supervisors is final, and the proposed expansion of the district is effective thirty days after the board of supervisors votes to expand the district. 48-4432. Board; members; term; compensation A. The district shall be administered by a board of directors of nine persons consisting of six division directors, representing divisions established under section 48-4461, paragraph 4, and three at large directors. A division director shall be a qualified elector of a county located in whole or in part in the district, a resident of the division that the division director represents and a customer of a district member. An at large director shall be a qualified elector of a county located in whole or in part in the district and a resident of the district. B. The governor shall appoint the initial members of the board of directors of a district, no more than two of whom may reside in the same county board of supervisors district, who shall serve until the board members elected under subsection C of this section take office. C. At the first statewide general election after the district is established, the division directors from divisions one, two and three shall be elected to serve a term of four years and the division directors from divisions four, five and six shall be elected to serve a term of two years. On the third Tuesday of November in that year, the three at large directors shall be elected by district members pursuant to section 48-4433, subsection E. The three at large directors shall be elected to serve a term of four years. Thereafter, all board members shall be elected to serve a term of four years. Board members shall take office on January 1 of the year following their election. Board members may be reelected. D. A vacancy on the board shall be filled by appointment by the governor. If a vacancy occurs among the division directors, the governor shall appoint a replacement from the division in which the vacancy occurs. E. Each board member is eligible to receive compensation pursuant to section 38-611 and is eligible for reimbursement for travel and subsistence expenses while engaged in the business of the district. F. Members of the board are public officers and are subject to all provisions of law applicable to such officers. The provisions of title 38, chapter 3, article 8, relating to conflict of interest, apply to all board members, officers and employees of the district. Board members are local public officers for purposes of title 38, chapter 3.1. 48-4433. District elections; nominating petitions A. A candidate for election to the board as a division director shall be nominated by a petition that is signed by at least five hundred qualified electors of the division in which the candidate resides and that is filed as prescribed by title 16, chapter 3. B. If a division is located wholly in one county, the nominating petition shall be filed with the clerk of the board of supervisors or the elections officer of that county as prescribed by title 16, chapter 3. C. If a division is located in two or more counties, the nominating petition shall be filed as prescribed by title 16, chapter 3, with the county election officer of the county with the highest number of registered voters in the district. The county election officer shall immediately notify the boards of supervisors of each county included in the division. The board of supervisors so notified shall provide for the manner of voting and conduct of the election as provided for in subsection D of this section. D. The names of the candidates for election to the board as division directors shall be included on the general election ballot of the division in which the candidate resides, without party designation. The manner of voting and conducting the election for the division directors shall conform to the provisions of law relating to the general election of county officers. E. The procedures for nomination and election of at large directors shall be established by the board by rule adopted within sixty days after the appointment of the initial board subject to the following: 1. Only district members are eligible to vote for at large directors. 2. Each district member is entitled to cast three votes for each acre-foot of replenishment obligation as computed for that district member pursuant to section 48-4463 during the four years preceding the election. In the initial election of at large directors, each district member is entitled to cast three votes for each acre-foot of the replenishment obligation that would have been computed if the district had existed for the entire period between January 1 of the fourth year preceding the calendar year in which the district is established and December 31 of the year preceding the year in which the election takes place. 3. Each district member may cast its votes as computed under paragraph 2 for three different candidates, may cumulate its votes for one candidate or may distribute its votes in any combination among three or fewer candidates. 4. The three candidates who receive the most votes shall serve as at large directors for the district for the prescribed term of office. F. Title 16, chapter 2, article 3 does not apply to any election held pursuant to this chapter. G. All expenses for the election of division directors incurred pursuant to this section are the responsibility of the county or counties involved. If a division is located in two or more counties, election expenses for that division shall be shared proportionally based on the number of qualified electors of each county that are residents of the division. All expenses for the election of at large directors are the responsibility of the district. H. Candidates for election to the board and their campaign committees shall register with and report to the secretary of state and otherwise comply with the requirements of title 16, chapter 6 regarding elections under this section. 48-4434. Board; organization; oath; bond A. Not later than thirty days after appointment of the initial board by the governor, and after each election for members of the board, the board shall meet and select a president, vice-president and secretary from its membership. B. Each board member shall qualify by taking and subscribing an official oath of office as prescribed by title 38 and executing a bond to this state in an amount of ten thousand dollars conditioned on the faithful performance of the duties of office. 48-4435. Meetings of the board The board shall hold its regular annual meeting in the district at such time and place as may be fixed by the board and shall hold additional meetings as necessary to transact business on the call of the president of the board or on the request of two or more board members. No business may be transacted at any meeting of the board in the absence of a quorum that consists of a majority of the board members. 48-4461. Duties of the board A. The board of directors shall: 1. Manage and conduct the business and affairs of the district. 2. Make and execute all necessary contracts and other instruments that shall be signed by the president or by another board member or an employee of the district designated for that purpose. 3. Establish and enforce bylaws, resolutions, ordinances and policies for governing the board and the organization and management of the business and affairs of the district. 4. Determine the boundaries of the divisions in the district that shall be numbered respectively divisions one, two, three, four, five and six. After each United States decennial census the board shall define the boundaries and limits of each division and shall: (a) Make the divisions equal or as nearly equal in population as is practicable, based on the census. (b) Make the configuration of each division as compact as practicable consistent with equal population. (c) Preserve existing communities of interest within the same division to the extent practicable. (d) If possible, align the divisions over identified groundwater sub-basins and the division boundaries along existing voting precinct boundaries, survey lines or political or administrative boundaries. 5. Adopt a name for the district that includes the words "groundwater replenishment district". 6. Adopt a seal for the district and alter it at its pleasure. 7. Employ a general manager, who shall serve at its pleasure, and define and fix his or her duties and compensation. 8. Require that all monies received on behalf of the district be deposited in such funds as may be established by the district to be spent at the direction of the board as provided by this chapter. Monies that are not required immediately may be invested for periods of not more than five years in any of the following, unless otherwise provided: (a) Certificates of deposit. (b) Repurchase agreements with public depositories. (c) Obligations issued or guaranteed by the United States or any of the senior debt of its agencies, sponsored agencies, corporations, sponsored corporations or instrumentalities. (d) Securities issued by this state or an agency or instrumentality of this state. (e) An investment pool established under section 35-326. 9. Appoint a seven member technical advisory committee from individuals nominated by district members. 10. Perform all acts necessary to carry out the purposes of this chapter. B. Immediately on organization, the initial board of directors shall initiate proceedings to determine the application of federal voting laws to the district and shall take any necessary action to comply with the applicable federal laws. 48-4462. Powers of the district The district, acting through its board, may: 1. Develop, plan, design, finance, construct, acquire, own, lease, operate, maintain, replace and dispose of by gift, sale or exchange any of the works, facilities, machinery, equipment, canals, conduits, pipelines, land, property or rights needed to develop, store, augment, conserve, transport, treat or replenish water for the benefit of the district members or to otherwise carry out the purposes of this chapter, except that a district may not: (a) Undertake any activities related to collecting, transporting or treating untreated sewage. (b) Withdraw any groundwater in the district for sale or resale to any person. (c) Permanently store water on or above the surface of the ground. (d) Treat water before sale or resale to any person, except as provided in paragraph 3 of this section. (e) Fund watershed management or weather modification programs in this state. (f) Sell, resell, deliver or distribute electricity to others, including district members. 2. Apply for or hold a permit issued by the director of water resources pursuant to title 45, chapter 3.1. 3. Acquire and treat outflow from a sanitary wastewater treatment plant to: (a) Add water to an aquifer pursuant to title 45, chapter 3.1 if the treated water is a cost efficient water supply in comparison to other available water sources. (b) Deliver water directly to district members pursuant to section 48-4469. (c) Exchange the treated water for another source of water. 4. Acquire electricity or other forms of energy that are necessary to transport water or otherwise carry out the purposes of this chapter, except that a district may not acquire electrical power or energy sold, offered for sale or otherwise disposed of pursuant to title 30, chapter 1 or title 45, chapter 10. 5. Cogenerate electricity that is necessary to transport water or otherwise carry out the purposes of this chapter as a qualified facility under the public utility regulatory policies act of 1978, as amended (P.L. 95-617), and sell any energy and capacity that are made available from the qualifying facility only to an electric utility pursuant to 18 Code of Federal Regulations section 292.303 and only for resale by the purchasing electric utility. The district shall not sell, resell, deliver or distribute electricity to others, including district members. 6. Raise capital, borrow money, invest monies, create debt, assume debt, refinance debt and accept grants, gifts or donations of money or other property that may be expended to carry out the purposes of this chapter. 7. Sue and be sued. 8. Employ those persons necessary to exercise its powers. 9. Acquire, lease, exchange and dispose of real property and exercise the power of eminent domain to carry out the purposes of this chapter, but the district shall not exercise the power of eminent domain to condemn: (a) Water, water use, water rights, water contracts, water storage contracts or existing projects or facilities owned by a governmental entity to produce, transport, deliver, use or store water. (b) Electrical facilities, electrical contracts or the means to produce electricity. (c) The use of state trust lands, whether leased or unleased. 10. Levy and collect fees, charges, taxes and such other revenues as provided for in this chapter. 11. Determine the amount of groundwater that may be withdrawn in the district by district members without payment as provided for in this chapter and require payment from district members that withdraw more groundwater than that amount. 12. Acquire, transport, hold, exchange, own, lease, replenish or deliver water, except groundwater withdrawn in the district, for the benefit of the district members. 13. Acquire, hold, exchange, own, lease, retire or dispose of water rights located outside the district for the benefit of district members. 14. Require district members to provide such information, in such form and within the time limits prescribed by the district, as may be necessary to carry out the purposes of this chapter. 15. Act jointly or cooperate with the United States, an agency of the United States, an Indian community, an agency of an Indian community, this state, an agency of this state or any other person to carry out the purposes of this chapter. 16. Enter into contracts with a multi-county water conservation district to transport water through central Arizona project facilities if that district determines that sufficient capacity in the facilities is available and under such terms and conditions as that district establishes. 17. Perform all other acts necessary to carry out the purposes of this chapter. 48-4463. District member's replenishment obligation; accounting rules A. On or before March 31 of each year beginning in the fifth calendar year following the year in which the district is established, each district member shall file a report with the district and the director containing the following information for the preceding year, which is the reporting year: 1. The amount of incidental replenishment. 2. The amount of groundwater withdrawals made and the amount claimed pursuant to each of the exemptions listed under section 48-4502, paragraph 1. 3. The total water used by the member. 4. The actual central Arizona project water supply. 5. The total amount of central Arizona project water allocated to the district member for municipal and industrial use by the United States secretary of the interior. 6. The total amount of surface water, other than central Arizona project water, delivered to the district member for non-irrigation use in the district by irrigation districts and water users' associations. 7. The number of surface water right acres in the district for which the district member was delivered surface water, other than central Arizona project water, for non-irrigation use by irrigation districts and water users' associations. 8. The normal central Arizona project water supply. 9. The amount of central Arizona project water ordered by the district member from a multi-county water conservation district for municipal or industrial use. 10. Such other information as the district or director may reasonably require. B. The district shall compute each member's replenishment obligation as follows: 1. Compute the member's adjusted groundwater for the reporting year. 2. Compute the member's incidental replenishment for the reporting year by subtracting excluded groundwater from total water used by the member and multiplying the difference by the incidental replenishment factor determined by the director for purposes of section 45-857.01. 3. Compute net groundwater by subtracting the member's incidental replenishment from the adjusted groundwater. C. For the reporting years beginning the fourth calendar year through the seventeenth calendar year following the year in which the district is established, to compute the district member's replenishment obligation, multiply net groundwater by: 1. One-fifteenth for the fourth calendar year following the establishment of the district. 2. Two-fifteenths for the fifth calendar year following the establishment of the district. 3. One-fifth for the sixth calendar year following the establishment of the district. 4. Four-fifteenths for the seventh calendar year following the establishment of the district. 5. One-third for the eighth calendar year following the establishment of the district. 6. Two-fifths for the ninth calendar year following the establishment of the district. 7. Seven-fifteenths for the tenth calendar year following the establishment of the district. 8. Eight-fifteenths for the eleventh calendar year following the establishment of the district. 9. Three-fifths for the twelfth calendar year following the establishment of the district. 10. Two-thirds for the thirteenth calendar year following the establishment of the district. 11. Eleven-fifteenths for the fourteenth calendar year following the establishment of the district. 12. Four-fifths for the fifteenth calendar year following the establishment of the district. 13. Thirteen-fifteenths for the sixteenth calendar year following the establishment of the district. 14. Fourteen-fifteenths for the seventeenth calendar year following the establishment of the district. D. The following rules apply for accounting for water for purposes of this section: 1. A district member that receives groundwater for non-irrigation use that was withdrawn for treatment pursuant to CERCLA or pursuant to title 49, chapter 2, article 5 shall account for the water as if that district member had withdrawn the groundwater. 2. A district member that receives groundwater or surface water from an irrigation district or water users' association shall account for the water as if the district member had withdrawn the groundwater or had delivered the surface water. 3. If a district member that is entitled to receive water from or delivered by an agricultural improvement district established under chapter 17 of this title withdraws groundwater in the district in lieu of receiving the water, the groundwater shall be accounted for as having been withdrawn by the agricultural improvement district if the surface water that would have been delivered to the district member is of such a quality that the district member cannot treat it in an expeditious manner and at a reasonable cost to meet primary or secondary drinking water maximum contaminant levels established by the director of environmental quality and the failure to meet secondary drinking water maximum contaminant levels makes the water unusable for the intended purposes to the extent the agricultural improvement district would have delivered water that it accounts for as surface water. 48-4464. District member's replenishment account; statements; credits A. The district shall establish and maintain a replenishment account for each district member. After the district computes each member's replenishment obligation, the district shall adjust the existing balance in the member's replenishment account as follows: 1. Debit the member's replenishment account in the amount of the member's replenishment obligation as computed under section 48-4463. 2. Credit the member's replenishment account in an amount equal to any replenishment services pursuant to sections 48-4470, 48-4472 and 48-4501 that the member purchased during the reporting year. B. On or before May 15 of each year, the district shall issue to each member: 1. An account statement of the balance in the member's account as of December 31 of the reporting year. 2. A credit certificate to each member that has a net credit balance in its account. The certificate shall state the net credit in the member's account. 48-4465. Transfer of credits A. Any district member that holds a credit certificate may transfer all or any part of its credits to the district or to any other district member. B. The district member that transfers any credit shall report the transfer to the district within ten days after the date of the transfer. C. The district shall maintain a register of the ownership of all credits. The register shall be open to inspection by district members during the district's normal business hours. D. A district member that purchases credits in good faith and without notice of any defect or any defense that the district has with respect to the credits may transfer the credits pursuant to this section or surrender credits pursuant to section 48-4466, subsection A, paragraph 3 and the district may not raise any defense it may have against the transferor as a defense against the transferee. The district is not liable to any person for any action it takes in reliance on a report of a credit transfer, including accepting and cancelling surrendered credits under section 48-4466, subsection A or issuing a new credit certificate to a transferee. 48-4466. Settlement of replenishment accounts A. On or before June 30 of each year, a district member whose replenishment account reflects a net debit balance shall: 1. Enter into a contract with the district for replenishment services pursuant to section 48-4470 in an amount sufficient to offset the debit balance or allocate an amount of services under an existing contract to the reporting year in an amount sufficient to offset the debit balance. 2. Purchase replenishment services pursuant to section 48-4472 in an amount sufficient to offset the debit balance, designating the replenishment services to be used for that purpose. 3. Surrender credits to the district pursuant to section 48-4465 in an amount sufficient to offset the debit balance. B. On or before August 15 of each year, the district shall prepare a revised account statement for each district member that reflects any purchase of replenishment services or surrender of credits by the district member pursuant to subsection A of this section. 48-4467. Drought relief account A. The district shall establish and maintain a drought relief account for the district beginning January 1 of the third calendar year following the year in which the district is established with a balance of zero on that date. B. At the end of each calendar year, beginning with the third calendar year following the year in which the district is established, the district shall register a credit to the account in the amount of the district's historic annual net natural recharge. C. Beginning with the fifth calendar year following the year in which the district is established, the district shall register a debit to the account not later than May 15 of a calendar year if the preceding calendar year was a drought year for any district member and the district member withdrew drought replacement groundwater during that preceding calendar year. The amount of the debit shall equal the total amount of drought replacement groundwater withdrawn by all district members during that preceding calendar year, up to the amount of any credits in the account. A district member's share of the debit shall be computed by dividing the amount of drought replacement groundwater withdrawn by the district member during that preceding calendar year by the total amount of drought replacement groundwater withdrawn by all district members during that preceding calendar year and multiplying the quotient by the amount of the debit. 48-4468. Measuring requirements A district shall require district members to install and pay for water measuring devices and periodically test the devices as may be necessary to ensure the accurate measurement of the amount of water produced. 48-4469. Direct delivery of water A. The district may contract with a district member, in one year increments, to deliver water directly to the district member to replace groundwater that the district member would have otherwise withdrawn in the district if the water delivered to the district member would have otherwise been used by the district to replenish groundwater in the district. B. The district may contract with a district member, for a term of more than one year, to deliver water directly to the district member to replace groundwater that the district member would have otherwise withdrawn in the district if the water delivered to the district member would have otherwise been used by the district to replenish groundwater in the district if the district determines that the contract will not adversely affect its ability to fulfill the purposes of this chapter and will not increase costs payable by other district members. 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. 48-4471. Acquiring water from district members A. The district shall accept delivery, either directly or through exchange, from a district member of any of the following water that the district member is legally entitled to use for a non-irrigation purpose unless the district lacks sufficient capacity to accept delivery of the water or to replenish the water to the aquifer: 1. Central Arizona project water. 2. Colorado River water. 3. Effluent. 4. Groundwater withdrawn outside of the district. 5. Surface water pursuant to decreed or appropriative rights. B. The district member shall pay any costs of acquiring the water delivered to the district under this section, including any amount due pursuant to its municipal and industrial water service subcontract with the United States and a multi-county water conservation district. The district member shall pay to the district any water acquisition costs incurred by the district in accepting delivery of the water and replenishing the water into the aquifer. C. For each year in which the district accepts delivery of a portion of a district member's water pursuant to this section, the district shall issue credits to the member pursuant to section 48-4465 in an amount equal to the amount of the district member's water delivered to the district that will reach the aquifer pursuant to water storage undertaken pursuant to title 45, chapter 3.1. 48-4471.01. Aquifer replenishment projects in Phoenix active management area If a district is established in the Phoenix active management area, within five years after being established the district shall apply for at least two water storage permits under title 45, chapter 3.1. At least one water storage permit shall be associated with a storage facility located in the east salt river valley sub-basin and at least one water storage permit shall be associated with a storage facility located in the west salt river valley sub-basin, as identified on the map described in section 45-404. The district shall use its best efforts to obtain the required permits for water storage in both sub-basins and shall replenish water in both sub-basins consistent with the requirements of title 45, chapter 3.1. 48-4472. Demand replenishment services A. The district may offer replenishment services to its members on an on-demand basis if the district has water available to provide replenishment services in excess of the total replenishment services to be provided during the year pursuant to contracts entered into under section 48-4470. B. The district shall announce the availability of demand replenishment services under this section to the district members by a method established by the board taking into account the cost of providing notice and the need to provide timely notice to all members considering the schedule on which the water for the demand replenishment services will become available. C. The board shall establish standards to apportion demand replenishment services among members that request such services. D. A district member that receives replenishment services under this section shall pay the district, as a replenishment tax, the water acquisition costs associated with the water used by the district in providing replenishment services. On receipt of payment, the district shall credit the member's replenishment account under section 48-4464 with an amount of groundwater equal to the amount of replenishment services the member purchased. 48-4473. Water storage for district members; accounting; fees and charges A. If the board determines that water may be obtained in any year in excess of the amount of replenishment services pursuant to sections 48-4470, 48-4472 and 48-4501, the district may offer to store any portion of that excess water for any of the district members pursuant to title 45, chapter 3. B. Water stored on behalf of a district member shall be credited to a long-term storage account maintained in the district member's name by the department pursuant to section 45-852.01. C. The district shall apply to the director for the water storage permits as agent on behalf of each of its members pursuant to section 45-831.01 and shall file all reports, maintain all records and take any other action necessary to secure and maintain the water storage. D. A district member shall pay the district such fees as the board determines are reasonable and necessary to establish and maintain the water storage for the district member. In addition, the district shall charge each district member that elects to have excess water stored on its behalf the water acquisition costs of water stored during the year in which the district stores the water for the district member. E. If more than one district member elects to have excess water stored pursuant to this section, the district shall apportion the water available for storage among those district members in proportion to each member's total water demand in the past year, except that no more water may be stored for an individual member than that member specifically requests and pays for in that year. 48-4474. Storage and recovery outside of district A. In order to efficiently manage sources of replenishment water, the district may store and recover water outside of the district's boundaries pursuant to title 45, chapter 3. B. The costs of operating storage and recovery facilities outside of the district shall be included as part of the water acquisition costs incurred by the district. 48-4475. Using public rights-of-way; definition A. To the extent practicable, a district shall use a public right-of-way as provided by this section to transport water instead of seeking to use other properties. B. The district, at no cost to this state or another governmental entity that exercises control over the right-of-way, may construct, reconstruct and maintain transmission pipes, canals and necessary appurtenant fixtures on, along or in any any public right-of-way that is dedicated to public use and across any public water or bridge to transport water. The district shall negotiate its use of the public right-of-way with the controlling governmental entity before it exercises the power of eminent domain pursuant to section 48-4462, paragraph 9. C. If the district uses a public right-of-way, it shall: 1. Provide reasonable notice to the governmental entity that exercises control over the right-of-way of the district's intent to use the right-of-way and the nature, scope and duration of the use. 2. Obtain all permits and pay any applicable fees to use the right-of-way, but the amount of any fee shall not exceed the amount that is normally charged to other public entities for using public rights-of-way for similar purposes. 3. Restore or adjust, to the extent practicable, the facilities, properties and roads in the right-of-way to their preexisting condition to the satisfaction of the governmental entity that exercises control over the right-of-way and any other user of the right-of-way, considering the type of facilities that are located in the right-of-way. 4. Reimburse or pay reasonable costs to any governmental entity that relocates or modifies its facilities, properties or use of the right-of-way in order to allow the district to use the right-of-way. 5. Use the right-of-way in a manner that does not unreasonably disrupt or impair existing uses or prevent future uses of the right-of-way by the governmental entity that exercises control over the right-of-way. 6. Relocate district facilities on reasonable demand of the governmental entity that exercises control over the right-of-way. The district is responsible for any costs associated with the relocation. D. If applicable, the use of a public right-of-way under this section is conditioned on the payment in full of all voluntary contributions that are due and payable under title 9, chapter 4, article 3. E. For purposes of this section "public right-of-way" or "right-of-way" means any highway, street, road, alley or other right-of-way of a governmental entity. 48-4501. Annual replenishment tax; amount A. The board shall levy an annual replenishment tax for the privilege of withdrawing groundwater in the district. The tax shall be levied against each district member whose replenishment account under section 48-4464 contains a debit balance as of June 30 each year. The tax shall be levied at a rate that will be sufficient to produce the amount of money estimated to pay the water acquisition costs of an amount of water necessary to offset the debit balances of all members' replenishment accounts as reported pursuant to section 48-4466, subsection B. B. On or before August 15 of each year, the district shall transmit a statement to each district member that is subject to the replenishment tax stating the amount of replenishment tax. C. On or before October 15 of each year, each district member shall pay to the district an amount equal to the replenishment tax multiplied by the net debit balance in the member's replenishment account as computed pursuant to section 48-4464. D. The district shall credit all revenues it collects under this section to the water acquisition fund. E. The district shall replenish water in an amount that is sufficient to offset the debit balances of all members' replenishment accounts computed pursuant to subsection A of this section. 48-4502. Exclusions from replenishment tax; exemption from groundwater withdrawal fee A district member is not