A. The authority may enter into a water banking services agreement under which the authority will loan long-term storage credits to a person or an Indian community in this state if all of the following apply:

1. 1. The person or Indian community could have legally obtained the water that was stored to accrue the long-term storage credits that will be loaned under the agreement, could have accrued, in accordance with chapter 3.1 of this title, the long-term storage credits that will be loaned and could otherwise legally store water in accordance with the laws of this state.
2. 2. The agreement requires the person or Indian community to pay the authority all costs incurred by the authority in accruing the long-term storage credits to be loaned under the agreement.
3. 3. The agreement requires that the costs prescribed by paragraph 2 of this subsection for each long-term storage credit to be loaned under the agreement are to be paid to the authority before the authority distributes the credits pursuant to the agreement.
4. 4. The agreement requires the person or Indian community to reimburse the authority for the costs of replacing each long-term storage credit loaned under the agreement, to the extent that cost exceeds the amount paid in accordance with paragraph 3 of this subsection.
5. 5. The agreement requires the authority to use good faith efforts to replace the long-term storage credits at a reasonable cost to the person or Indian community.
6. 6. The agreement requires that if the authority is unable to replace the long-term storage credits for any reason during the ten years following the distribution of the credits, the person or Indian community shall not be excused from reimbursing the costs specified in paragraph 4 of this subsection, and the person or Indian community shall pay to the authority at the end of that ten year period the approximate cost the authority will expend in replacing the credits distributed, less the amount paid pursuant to paragraph 2 of this subsection.
7. 7. The agreement may provide that, subject to approval by the authority, the other party to the agreement may assign to the authority the number of long-term storage credits loaned to the party in lieu of the party paying the costs required by paragraphs 4, 5 and 6 of this section.

B. The authority may enter into a water banking services agreement with a person or Indian community to store water on behalf of the person, Indian community or other beneficiary named in the agreement, if all of the following apply:

1. 1. The person, Indian community or named beneficiary could legally obtain the water that the authority will store under the agreement, could accrue long-term storage credits in accordance with chapter 3.1 of this title for the water to be stored and could otherwise legally store water in accordance with the laws of this state.
2. 2. The agreement requires the person or Indian community entering into the agreement to pay to the authority all costs that are or will be incurred by the authority in entering into and executing its obligations under a water banking services agreement.

C. In determining costs of performing water banking services pursuant to subsections A and B, the authority may include the following costs:

1. 1. The cost of acquiring water.
2. 2. The cost of delivering that water to a storage facility, including fees for the operation, maintenance, pumping energy and capital costs of the central Arizona project, as established by the CAWCD, and other aqueducts.
3. 3. The cost of storing water, including construction, operation and maintenance costs associated with using a storage facility.
4. 4. A fee equivalent to the approximate amount of administrative, legal and technical expenses incurred by the authority in entering into and executing its obligations under a water banking services agreement.
5. 5. Any additional costs the authority deems necessary to enter into and execute its obligations under a water banking services agreement.