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'"' ...., ..-I C,"' GOVERNOR'S CENTRAL ARIZONA PROJECT ADVISORY COMMITTEE c. c.. . . i . . . I- I. I I . . . The Legislature should consider retaining the existing four cent temporary ad valorem tax beyond its expiration date, the expansion of its purposes for use by CAWCD and its applicability to Pinal County. . The state, CAWCD and M&I subcontractors should explore ways in which, within the existing legal framework of the subcontracts, M&I subcontractors would be required to pay their share of OM&R costs whether or not they take delivery of water. The Advisory Committee recognizes that this interpretation would almost certainly result in a financial hardship on small water subcontractors, so "take or pay" for M&I subcontractors should be combined with a policy that allows a subcontractor to join a replenishment district in lieu of "take or pay" obligations. The Advisory Committee recommends that any costs associated with any CAP "take or pay" provisions be considered a tax when applied to private water companies whose rates are regulated by the Arizona Corporation Commission. · The state should consider accelerated phase-in of assured water supply rules and move the date when cities and towns with CAP subcontracts are no longer "deemed" to have an assured water supply forward from 2001 to 1996. . The federal government should pay the fixed operation, maintenance and replacement (OM&R) costs associated with all CAP allocations for federal purposes. When CAP water is assigned a federal purpose, such water should also carry a "take or pay" obligation for fixed OM&R costs. . The federal government should restructure the agricultural irrigation districts' distribution system debt by recognizing the reduced payment capacity of those districts and offering deferment contracts for the full fifty year period of repayment commencing January 1, 1994. . FINAL REPORT AND RECOMMENDA TIONS 28