A. A conservation district may apply to the director pursuant to articles 2 and 3 of this chapter for project permits for one or more state demonstration projects to be funded by account A of the state water storage fund established by section 45-897.01 and one or more projects to be funded by account B of the fund. Each project shall be located in either of the following:
1. A county for the benefit of which the account that funds the project was established.
2. A county that is adjacent to the county for the benefit of which the account that funds the project was established if both of the following apply:
(a)The project is within the same active management area as the county for which the account that funds the project was established.
(b)Water stored at the project will provide h
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A. A conservation district may apply to the director pursuant to articles 2 and 3 of this chapter for project permits for one or more state demonstration projects to be funded by account A of the state water storage fund established by section 45-897.01 and one or more projects to be funded by account B of the fund. Each project shall be located in either of the following:
1. A county for the benefit of which the account that funds the project was established.
2. A county that is adjacent to the county for the benefit of which the account that funds the project was established if both of the following apply:
(a) The project is within the same active management area as the county for which the account that funds the project was established.
(b) Water stored at the project will provide hydrologic benefit to the county for which the account was established.
B. In addition to the information required by articles 2 and 3 of this chapter, the conservation district's permit application shall contain plans for the state demonstration project and projections of the capital, operation and maintenance costs of the project, exclusive of water recovery costs. The plans and projections shall contain information adequate to permit the director to determine whether sufficient monies will be available from the state water storage fund to cover the projected costs of the proposed state demonstration project, considering all other obligations of the fund.
C. If the director approves the conservation district's project permit applications, the director shall specify in the permit or in a written memorandum of understanding between the director, the conservation district and the state treasurer the conditions under which and the timing pursuant to which monies shall be disbursed by the state treasurer to the conservation district from the state water storage fund. The permit or the memorandum of understanding:
1. Shall provide for the advancement to the conservation district of the capital, operation and maintenance costs of the project, exclusive of water recovery costs, and the advancement of additional necessary monies to the conservation district, if the monies initially advanced are insufficient to cover those costs.
2. Shall provide for the continuing disbursement from the fund of monies for the purchase of excess central Arizona project water.
3. May provide for the use of monies in the fund to cover the conservation district's costs of recovering, transporting and delivering the stored water and the costs of dismantling the project.
D. If the director approves the conservation district's application for the project permits, the conservation district may contract for excess central Arizona project water for storage in the state demonstration project and may enter into agreements with the director for the disposition of such water as provided in section 45-895.01.