Within one (1) year after any person, company, or persons, association or incorporated company authorized to construct irrigation works under the provisions of this chapter shall have notified the settlers under such works that they are prepared to furnish water for the full irrigation season under the terms of their contract with the state, which notice, however, must first have been served upon the director of the department of water resources, who must cause an investigation of said works to be made, which shall include a report thereon by an engineer of the department; the said settler shall cultivate and reclaim not less than one-sixteenth (1/16) part of the land filed upon, and within two (2) years after the said notice, the settler shall have actually irrigated and cultivated not less than one-eighth (1/8) of the land filed upon, and within three (3) years from the date of said notice, the settler, or if the settler be in the armed forces of the United States at such time, then any person designated by him, shall appear before the director of the department of water resources, a judge or clerk of any court of record within the state, and make final proof of reclamation, settlement and occupation, which proof shall embrace evidence that he is the owner of shares in the works which entitle him to a water right for his entire tract of land sufficient in volume for the complete irrigation and reclamation thereof; that he has been an actual settler thereon and has cultivated and irrigated not less than one-eighth (1/8) part of said tract; and such further proof, if any, as may be required by the regulations of the department of the interior and the department of water resources of the state of Idaho as promulgated by the director: provided, that any settler, after having made application for entry on such land, or acquired the entry by assignment before entering the service, enters the armed forces of the United States as defined as ex-service person in section 42-2014, Idaho Code, may deduct the actual time he was in such service from the time he would otherwise be required to be an actual settler thereon, and provided further, that it shall not be necessary for such ex-service person to show proof of having actually cultivated or irrigated any portion of such land or placed any improvements thereon if such settler has been in actual service in the armed forces as herein defined for one (1) year, or more, or (who) has been honorably discharged from the service, after having made application for entry, or acquired the assignment thereof before entering the service.