48-3780. Qualification as a member service area; termination

A. The service area of a municipal provider qualifies as a member service area only if all of the following apply:

1. The service area is located in an active management area in which a part of the central Arizona project aqueduct is located.

2. The municipal provider is not a member of a groundwater replenishment district established pursuant to chapter 27 of this title.

3. The service area of the municipal provider is not a water district member service area under chapter 28 of this title.

4. If the municipal provider or its predecessor previously terminated member service area status pursuant to subsection B of this section, the service area or any portion of the service area has not been a member service area for at least ten years.  The district may waive this requirement if the district and the director of water resources determine that previously unforeseen circumstances necessitate requalification of the service area.

5. If the municipal provider or its predecessor previously terminated member service area status pursuant to subsection B of this section, the municipal provider agrees to pay to the district all charges that would have otherwise been imposed by the district had the member service area status remained in effect during the period since termination became effective.

6. If all or a portion of the service area has previously qualified as a member service area, the municipal provider agrees to pay an amount equal to the amount of the replenishment taxes assessed against its predecessor that were not paid, plus interest calculated in accordance with section 48-3782, subsection A.

7. The conditions stated in section 45-576.01, subsection B, paragraphs 2 and 3 are satisfied with respect to the district at the time of the qualification.

8. The municipal provider publishes a resolution once each week for two consecutive weeks in a newspaper of general circulation in the county or counties where the service area is located that:

(a) Has attached to it a current map of the municipal provider's service area.

(b) Declares the intent of the municipal provider that the service area qualify as a member service area under this chapter.

(c) Declares that, for the privilege of withdrawing and delivering excess groundwater within its service area and to ensure the continued exercise of that privilege, the municipal provider shall pay an annual replenishment tax to be determined by the district.

(d) Contains a covenant, binding against the municipal provider, to pay to the district an annual replenishment tax based on the service area replenishment obligation in an amount determined by the district as necessary to allow the district to perform the groundwater replenishment obligations.

(e) Authorizes the municipal provider to enter into a written commitment with the district in the form and substance satisfactory to the district regarding payment of the annual replenishment tax.

(f) Declares that the resolution applies to the service area of the municipal provider as it currently exists and to all additions to and extensions of the service area.

(g) Declares that the resolution is irrevocable for as long as the district is obligated to perform the groundwater replenishment obligations.

B. A service area previously accepted as a member service area pursuant to subsection A of this section terminates its member service area status only if all of the following apply:

1. The municipal provider for the member service area has submitted an application to the district requesting termination of member service area status.

2. The municipal provider for the member service area has submitted an application to the director of water resources requesting modification of the municipal provider's assured water supply designation under section 45-576 that eliminates the municipal provider’s reliance on member service area status.

3. The applications provide evidence satisfactory to the director of water resources that the municipal provider has obtained a substitute supply of water, other than groundwater, that is determined by the director of water resources to be consistent with assured water supply requirements pursuant to section 45-576 and that is sufficient to eliminate the municipal provider’s reliance on member service area status.

4. The director of water resources has approved the municipal provider’s application to modify its assured water supply designation based on the addition of the substitute water supply.

5. The municipal provider publishes a resolution once each week for two consecutive weeks in a newspaper of general circulation in the county or counties where the service area is located that:

(a) Has attached to it a current map of the municipal provider's service area.

(b) Declares the intent of the municipal provider to terminate the service area’s member service area status.

(c) Declares that the district is no longer obligated to perform the groundwater replenishment obligations on behalf of the service area.

(d) Revokes the resolution for the member service area provided for in subsection A, paragraph 7 of this section.

6. All amounts owed by the water provider on behalf of the member service area to the district have been paid.

7. The municipal provider has paid or made arrangements suitable to the district for repayment of any capital costs incurred by the district specifically on behalf of the member service area.