A. No sale, lease, assignment, permit or other right in the waters of the district shall be made or granted which shall infringe upon or interfere with the water rights of lands in the district, or with water provided for irrigation purposes on the lands within the district for which benefits have been appraised and assessments levied under this act.

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B. All the rights and property of the district in the waters and watercourses thereof, and in their use, shall be exercised in such a manner as to promote the welfare of the district and of all the inhabitants thereof; to promote the safest, most economical and most reasonable use of such waters; to protect the water rights of the lands and landowners of the district; to encourage and promote agriculture and industry and to pay the cost of constructing, maintaining and operating the improvements.

C. The rights of persons or public corporations and of other users of water, to the waters in and of the district for irrigation, water supply, industrial purposes, water power or for any other purposes, shall extend only to such rights as were owned by them or their predecessors prior to their inclusion in the district; and to such use as could be made of such waters if the improvements of the districts had not been made.

D. At the time of the general appraisal of benefits and damages of the district, or at any subsequent time, the board may cause a determination to be made of the conditions and extent of the water rights, and water supply and of the watercourses within the district as they were before the improvements of the district were made, or as they existed at any subsequent time, and they may make a determination of all rights, property, easements or other interests in the waters, or the watercourses, such determination being based upon records of greatest and least flow, upon the evidence of use, or evidence of legal rights, and upon any other evidence and records which may be available.

E. Upon the completion of such determination, the board shall make its report thereon to the court. Thereupon a hearing shall be had, notice shall be given of the pendency of said report and of the hearing, which notice and hearing shall conform as nearly as possible to the notice and hearing on appraisals of benefits and of land to be taken; and the right of appeal shall exist. Such final determination shall be the basis of any future use of the waters in the district; provided that in case any party shall thereafter establish in court any right or property in the waters in the district or the use thereof, which has not been adjudicated, the existence of such right, or the failure to adjudicate it, shall not affect the operation of this provision nor the findings of the court thereon in any other particular.

F. Where the district acquires by purchase, condemnation or otherwise, water or water rights, or where it conserves, develops or reclaims water, it shall have the rights which go with the appropriation and beneficial use thereof; save and except such use for which benefits have been appraised and assessments levied by the district upon property for irrigation purposes; and the development, conservation or reclamation of water by the district is hereby declared to be an appropriation thereof by the district, and the disposition thereof under the terms of this act is hereby declared to be a beneficial use thereof by said district and by the lands included therein.

G. The expression “greater, better or more convenient use of the waters of the district, or benefit therefrom” as hereafter used, refers to use or benefit which is made greater, better or more convenient by the organization, administration and works of the district, as compared with use or benefit which could be had under the conditions existing before the district was organized.

H. The appraisals of benefits made by the appraisers may include benefits appraised for the greater, better or more convenient use of the waters of the district, or benefit therefrom; but if such benefits are not assessed, as in case of high lying lands for which water supply is at first uncertain, but afterwards is found to be available, the district may provide by contract or other agreement as hereafter provided, for such greater, better or more convenient use, and receive compensation therefor in accordance with the following provisions.

I. Persons, public corporations or others desiring to secure such use of the waters or watercourses of the district, or of the district rights therein, may make application to the board for permission to lease, or purchase for such use. Such application shall state the purposes and character of such use, the period and degree of continuity of such use, the amount of water desired and the place of use. In case any party makes greater, better or more convenient use of the waters of the district without formal application, the fact of such use shall serve all purposes of an application, and the board may proceed to determine a reasonable rate of compensation the same as though formal application has been made. Where it is not possible or reasonable to grant all applications, preference shall be given to the greatest need and to the most reasonable use, as may be determined by the board, subject to the approval of the court. Preference shall be given, first, to domestic and municipal water supply, and no charge shall be made for the use of water taken by private persons for home and farmyard use, or for watering farm stock; second, to supplying water used in irrigation, processes of manufacture, for the production of steam, for refrigerating, cooling and condensing and for maintaining sanitary conditions of stream flow; third, for power development, recreation, fisheries and for other uses. All sales, leases, assignments or other acts of the board affecting the use, sale or lease of the waters of the district under this section, shall be subject to the approval of the court.

J. The board shall not permanently sell, lease, assign, permit or otherwise part with the control by the district of the use of the waters thereof; provided, however, that upon the recommendation of the chief engineer the board may contract to furnish a permanent water supply for lands susceptible of irrigation, at rates to be established as hereinafter provided. Rates for light, power or other services charged by vendees, assignees, lessees or licensees of such board shall be subject at all times to revision and control by state law. Assignments, leases, sales or permissions, except as to contracts hereinbefore authorized, may be made for periods of not greater than ten (10) years, except that with the approval of the court, such assignments, permissions, leases or sales, when necessary to justify investments for constructing and establishing, manufacturing power and industrial plants or works, may be made for longer terms, but not to exceed fifty years. At the termination of the period of such permission, assignments, leases or sales, they shall be renewable for a reasonable period not longer than is provided by this section, on the condition that a new determination be made of a reasonable charge therefor, as herein provided; unless there are other applications on file, the granting of which would result in filling a greater need or a more reasonable use. In case such applications are on file, they shall have preference.

K. The board may make regulations for the determination and measurement of the greater, or better or more convenient use of, or benefit from the water supply of the district, for the purpose of determining rates of compensation, and for the purpose of securing to all parties interested the greatest and best use of the waters thereof. The board shall have power to determine the rates of compensation for such greater, better or more convenient use of, or benefit from the water supply of the district, which rates shall be reasonable, and may require bond to be given to secure the payment for such use.

Upon the determination of any rate, or rates, the board shall make a report of its determination to the court. The court shall thereupon cause personal notice by summons to be given to the parties interested, stating that such a determination of rates has been made, that a hearing before the court will be had thereon on a certain day and that objection may be made at such time to such determination of rates. The hearing may be had before the court, and objection may be made, in the same manner as in case of the appraisal of benefits. Upon the final determination of the matter by the court, the determination of such rates of compensation shall be conclusive and binding for the period set forth in the order of the court; and in the event the said matter is before the court upon an agreement to lease, assign or sell, it shall be binding for the term and under the conditions specified in the lease or other agreement as approved by the court.

L. The court may approve general rates for the use of water under this section, as applying to all cases of the same class, and in cases of such class separate hearings shall not be required.

M. The compensation for greater, better or more convenient use of, or benefit from the waters of the district, may be made by payment according to a unit price per cubic foot of water used, or by a unit price for theoretical horse power developed or in any other reasonable measurement of value received by reason of the greater, better or more convenient use of, or benefit from the waters of the district. All money received as compensation under the provisions of this section shall be added to the general fund of the district and used for defraying the expenses thereof.