(1) The division may designate as a planning and service area:

(a) any unit of general purpose local government;

(b) any district or combination of districts; or

(c) any Indian reservation.

(2) The designation of planning and service areas by the division will be governed by the following criteria:

(a) Planning and service areas will be designated every 4 years beginning October 1, 1987.

(b) There will be no more than 12 planning and service areas designated in each 4 year period.

(c) There will be no less than 7 planning and service areas designated in each 4 year period.

(d) The 11 or 12 planning and service areas that were designated prior to October 1, 1983 will continue to be designated as planning and service areas until October 1, 1987.

(e) The division will accept requests from planning and service areas that the area will be divided into two new planning and service areas.

(f) Before October 1, 1983, only one request will be approved by the division creating two planning and service areas out of one.