A. In an initial active management area, except as provided in subsections B, H, I and J of this section and sections 45-172, 45-465.01 and 45-465.02, only acres of land which were legally irrigated at any time from January 1, 1975 through January 1, 1980, which are capable of being irrigated, which have not been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 and for which the irrigation grandfathered right has not been conveyed for a non-irrigation use, may be irrigated with any groundwater, effluent, diffused water on the surface or surface water, except that this does not prohibit irrigation with surface water used pursuant to decreed or appropriative rights established before June 12, 1980. In an initial active management area, land which was not irrigated at any time from January 1, 1975 through January 1, 1980 is deemed to have been in irrigation if the director finds that either of the following applies:

1. 1. In areas of an initial active management area not designated as critical groundwater areas under prior statutory law prior to the date of the designation of the active management area, land is deemed to have been in irrigation if substantial capital investment has been made for the subjugation of such land for an irrigation use including on-site irrigation distribution facilities and a well or wells the drilling and construction of which were substantially commenced prior to the date of the designation of the active management area.
2. 2. In areas of an initial active management area which were designated as critical groundwater areas under prior statutory law, land is deemed to have been in irrigation if substantial capital investment has been made in the twelve months before June 12, 1980 for the improvement of the land and on-site irrigation distribution facilities, including the drilling of wells, for an irrigation use. This paragraph does not allow irrigation of land which could not have been legally irrigated under prior statutory law.

B. In an initial active management area, a person who owns acres of land which may be irrigated pursuant to subsection A of this section may apply to the director to permanently retire all or a portion of such acres from irrigation and to irrigate conjunctively with central Arizona project water the same number of substitute acres. The director may approve the substitution of acres if the director determines that all of the following exist:

1. 1. The substitute acres were legally irrigated during the period of September 30, 1958 to September 30, 1968, or such other period as the United States secretary of the interior may designate.
2. 2. The acres to be retired from irrigation and the substitute acres are located outside of the exterior boundaries of the service area of a city, town or private water company and such acres are located within the same irrigation district and the same sub-basin.
3. 3. The substitution of acres is necessary to enable the irrigation district within which the acres are located to more efficiently deliver central Arizona project water.
4. 4. Central Arizona project water available to the irrigation district within which the acres are located will be adequate to supply the substitute acres.
5. 5. The substitution of acres will benefit the management of the active management area in which the acres are located.

F. The director may reverse the substitution of irrigated acres as provided by subsections B through E of this section under the following conditions and procedures:

1. 1. Title to the retired acres and substitute acres has reverted involuntarily, or voluntarily in lieu of foreclosure or forfeiture, to a previous owner or owners of the retired and substitute acres.

2. 2. The current owner of the retired acres must apply to the director in writing stating:

   1. (a) The history of the original substitution of acres under subsections B through E of this section.
   2. (b) The circumstances regarding the reversion of title to the current owner or owners.
   3. (c) Why reversal of the substitution of acres is necessary.

3. 3. The director must find that reversing the substitution of acres:

   1. (a) Will benefit the management of the active management area.
   2. (b) Is necessary to prevent unreasonable hardship to the current owner of the retired acres.
   3. (c) Will not cause unreasonable hardship to the current owner of the substitute acres, if owned separately from the retired acres.

4. 4. If the director decides to reverse the substitution of acres:

   1. (a) The originally retired irrigation acres regain their original irrigation grandfathered rights, but groundwater withdrawn or received for the irrigation of those acres pursuant to an irrigation grandfathered right shall be reduced by any amount of central Arizona project water received for such acres.
   2. (b) The substitute acres relinquish all irrigation grandfathered rights that were transferred to them under the original substitution of acres.
   3. (c) The service area of the irrigation district in which the acres are located shall be modified to delete the substitute acres and include the originally retired irrigation acres.
   4. (d) Groundwater may not thereafter be withdrawn from the substitute acres for any purpose unless pursuant to a groundwater withdrawal permit or unless withdrawn by a city, town or private water company within its service area.

G. In a subsequent active management area, except as provided in subsections H, I and J of this section or section 45-172, only acres of land which were legally irrigated at any time during the five years preceding the date of the notice of the initiation of designation procedures or the call for the election, which are capable of being irrigated, which have not been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 and for which the irrigation grandfathered right has not been conveyed for a non-irrigation use, may be irrigated with groundwater, effluent, diffused water on the surface or surface water, except that this does not prohibit irrigation with surface water used pursuant to decreed or appropriative rights established before the date of the notice or the call. In a subsequent active management area, land is deemed to have been in irrigation if the director finds that either of the following applies:

1. 1. In areas of a subsequent active management area which were not irrigation non-expansion areas, land is deemed to have been in irrigation if substantial capital investment has been made for the subjugation of such land for an irrigation use including on-site irrigation distribution facilities and a well or wells the drilling and construction of which were substantially commenced before the date of the notice of the initiation of designation procedures or the call for the election.
2. 2. In areas of a subsequent active management area which were irrigation non-expansion areas, land is deemed to have been in irrigation if the director finds that substantial capital investment has been made in the twelve months before the date of the notice of the initiation of designation procedures or the call for the election, for the improvement of the land and on-site irrigation distribution facilities, including the drilling of wells, for an irrigation use. This paragraph does not allow irrigation of land which could not have been legally irrigated under section 45-437.

J. During the second management period, acres of land in an active management area which have been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 or for which the irrigation grandfathered right has been conveyed for a non-irrigation use pursuant to section 45-472 may be irrigated with effluent, other than effluent recovered pursuant to a recovery well permit issued under chapter 3.1 of this title or effluent given or received pursuant to a water exchange under chapter 4 of this title, and shall retain its appurtenant type 1 non-irrigation grandfathered right where the following conditions are met:

1. 1. The land to be irrigated lies within the boundaries of an incorporated city or town.
2. 2. The governing body or manager of the city or town has consented in writing to the irrigation of the land with effluent.
3. 3. The effluent proposed for irrigation of the land cannot be reasonably beneficially used otherwise.
4. 4. The owner of the land gives written notice to the director of intention to irrigate the land with effluent and receives written approval from the director before commencing irrigation. The notice shall set forth the legal description of the land to be irrigated, the certificate number of the type 1 non-irrigation grandfathered right appurtenant to the land, the source of effluent and the reasons the effluent cannot be reasonably beneficially used otherwise, and shall be accompanied by a copy of the written consent of the city or town in which the land to be irrigated is located.