The board may exclude property from the district if the board, after notice and hearing, finds that exclusion of the property is in the best interest of the district and that:
(1) the property is not irrigable with water purchased from the district because:
(A) the district cannot deliver water by gravity flow to a high point on the property to irrigate the property;
(B) the property is subdivided into tracts of less than 10 acres; or
(C) the property is subdivided into town lots, town lots and blocks, or similar small parcels of any size that will not be used for agricultural purposes or are suitable for a residential, commercial, or other nonagricultural purpose; or
(2) the property has not been irrigated with water purchased from the district for a period of not less than three years before the date the notice for the hearing is mailed.