1.  Existing water rights to the use of underground water are hereby recognized. For the purpose of this chapter a vested right is a water right on underground water acquired from an artesian or definable aquifer prior to March 22, 1913, and an underground water right on percolating water, the course and boundaries of which are incapable of determination, acquired prior to March 25, 1939. The distinction as to whether water is in a definable aquifer or whether it is percolating water, the course and boundaries of which are incapable of determination, is a matter to be determined by the State Engineer.

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2.  Any claimant of a vested underground water right may petition the State Engineer to adjudicate such rights. If upon investigation the State Engineer finds the facts and conditions justify it, the State Engineer shall enter an order granting the petition and shall make proper arrangements to proceed with such determination. In the order the State Engineer shall designate the area within which such determination is to be made, but the size of such designated area may include other claimed underground vested water rights. Such designated area shall not extend into other drainage basins. Following the designation of such area the State Engineer shall proceed with adjudicating such rights as provided for in chapter 533 of NRS.