A. An authority may be established in any active management area in which all of the following conditions exist on the date the authority is organized:

1. 1. Over fifty per cent of the area of the active management area lies within a single county.
2. 2. The population of the county is less than one hundred fifty thousand persons according to the most recent United States decennial census.
3. 3. A political subdivision of this state within the active management area directly receives Colorado river water pursuant to contracts with a multi-county water conservation district and the United States secretary of the interior through facilities of the central Arizona project.

C. An authority shall be established in the following manner:

1. 1. A person who desires to propose establishment of an authority shall prepare and submit a petition to the board of supervisors of the county in which the authority is to be established. The petition shall contain, at least:

   1. (a) The name of the proposed authority.
   2. (b) Certified copies of adopted resolutions approving the authority's formation by the governing bodies of a majority of the incorporated cities and towns located entirely within the boundaries of the proposed authority on January 1, 1993, and the irrigation districts located entirely or in part within the boundaries of the proposed authority on January 1, 1993.
   3. (c) A request that the board of supervisors schedule a hearing.
2. 2. On receipt of the petition, the board of supervisors shall set a day, at least sixty but not more than ninety days from that date, for a hearing on the petition.
3. 3. The clerk of the board of supervisors shall publish in a newspaper or newspapers of general circulation in the area of the proposed authority, at least twenty days before the scheduled hearing, a notice setting forth the date, hour and place of the hearing and the purpose of the hearing. The clerk shall also notify the governing body of each city, town, irrigation district and water company located within the boundaries of the proposed authority of the date, hour and place of the hearing and the purpose of the hearing.
4. 4. At the hearing, the board of supervisors shall hear those who appear for and against the proposed authority and shall determine whether the petition conforms to the requirements of this section. At the hearing all interested persons residing within the boundaries of the proposed authority may appear and may be heard on any matter relating to the establishment of the proposed authority. Before the date set for the hearing, any person wishing to support or oppose the establishment of the authority may file a statement of support or opposition with the clerk of the board of supervisors.
5. 5. At or before the time for a hearing, any city, town or irrigation district may file a statement requesting to be excluded from the authority, together with a description of any portion of its territory to be excluded from the authority.
6. 6. If the board of supervisors determines that the petition conforms to the requirements of this section and that the public convenience and welfare will be served by the establishment of the authority, it shall order the establishment of the authority. The order shall exclude from the authority those cities, towns and irrigation districts that filed statements to exclude pursuant to paragraph 5 of this subsection and shall specify the territory to be excluded. The powers and duties of the authority that are conferred in this chapter do not extend to or otherwise include the entities and territories that are excluded.
7. 7. Any entity excluded pursuant to paragraphs 5 and 6 of this subsection may petition the board of supervisors to be included in the authority. The board of supervisors shall comply with paragraphs 2, 3, 4 and 6 of this subsection to determine whether to include the entity and its territory within the authority. An order of inclusion extends the powers and duties of the authority over the entity and territory that are included and entitles the entity to representation on the board of the authority as prescribed by section 45-1921.