(a) On July 15 of each year, effective January 1 of the following year, the director, subject to the approval of the authority, shall fix the rate provided for in subsection (a) of Kan. Stat. Ann. § 82a-1306, and amendments thereto. The rate fixed shall be equal to the sum of the following components computed as provided in this section:

(1) An amount necessary to repay the amortized capital costs associated with the state‘s conservation water supply capacity;

(2) an amount as interest computed at a rate per annum equal to the average of the monthly net earnings rate of the pooled money investment board for the preceding calendar year on the net amount of moneys advanced from the state general fund for payment of the amortized capital costs incurred and associated with the state’s conservation water supply capacity divided by the greater of: (A) Fifty percent of the total amount of water under each contract from the state’s conservation storage water supply capacity in the preceding year; or (B) the total amount of water withdrawn under each contract from the state’s conservation storage water supply capacity in the preceding year;

(3) the amount necessary to reimburse the state for the administration and enforcement of this act based on the actual costs of administration and enforcement in the preceding year divided by the greater of: (A) Fifty percent of the total amount of water under each contract from the state’s conservation storage water supply capacity in the preceding year; or (B) the total amount of water withdrawn under each contract from the state’s conservation storage water supply capacity in the preceding year; and

(4) the amount necessary to pay the operation, maintenance and repair costs associated with the state’s conservation water supply capacity based on the estimated costs for the upcoming year divided by the greater of: (A) Fifty percent of the total amount of water under each contract from the state’s conservation storage water supply capacity in the preceding year; or (B) the total amount of water withdrawn under each contract from the state’s conservation storage water supply capacity in the preceding year; and

(5) an amount as a depreciation reserve cost to be dedicated for the purposes provided for in Kan. Stat. Ann. § 82a-1315b, and amendments thereto, as follows: (A) For calendar years prior to 2007, an amount equal to $.025; and (B) for calendar year 2007 and subsequent years, an amount which is equal to the amount necessary to meet the needs of the water marketing program capital development and storage maintenance plan, as approved by the Kansas water authority.

(b) In computing such rates, the director shall consider the state’s conservation water supply capacity from all sources as though impounded in one single reservoir. No water supply capacity of a reservoir shall be considered to be in such capacity until the year in which the state incurs contract obligations for the project. The rate so fixed for each year shall be the same for each contract under Kan. Stat. Ann. § 82a-1305, and amendments thereto, for withdrawal from every reservoir. The rate fixed for each twelve-month period from January 1 to December 31 shall be the same for every contract under Kan. Stat. Ann. § 82a-1305, and amendments thereto.