41-3-106. Procedure to exchange water; delivery of water under exchanges; approval of state engineer; enforcement of exchanges.

(a) Any appropriator owning a valid water right in and to the use of the ground, surface or reservoir waters of the state, where the source of the appropriation is at times insufficient to fully satisfy such appropriation, or better conservation and utilization of the state's water can be accomplished, or the appropriator can develop appropriable water but cannot economically convey it to its point of use, may petition the state engineer for an order allowing an exchange and the use of stored, direct flow, or ground water from another source. If such an appropriator arranges by agreement with another appropriator for the delivery and use of either stored, direct flow, or ground water from another source, the exchange agreement shall accompany the petition.

(b) Exchanges may be allowed among any combination of direct flow, storage, and groundwater rights. Petitions for exchanges shall be accompanied by such maps, plans or other information as may be required by the state engineer. The proper filing and recording fees shall accompany the petition.

(c) No exchange shall be allowed until the state engineer has entered an order granting the exchange. Documents drawn in connection with exchanges may be recorded in one (1) or more counties where any part of the land involved is situated. No exchange may be terminated without the issuance of an order approving termination, unless the order allowing the exchange provides for termination on a specified date.

(d) It is the policy of the state to encourage exchanges. The state engineer shall not issue an exchange order if it appears that the proposed exchange would adversely affect other appropriators, or if the proposed exchange would, in the opinion of the state engineer, be too difficult to administer or would be adverse to the public interest. All exchanges are subject to the requirements of beneficial use and equality of water exchanged, and no exchange will be allowed unless a sufficient quantity of makeup water is introduced to replace the water diverted and withdrawn under the exchange. In making the determination of equality and sufficiency of the makeup water introduced, the state engineer may consider relative consumptive uses and transmission losses.

(e) Any water made available to an appropriator by reason of any exchange agreement shall be delivered for the use of the appropriator in accordance with the order allowing the exchange, and its use is without prejudice to, but in enjoyment of, the rights of all appropriators under their original appropriations.

(f) Performances of each exchange shall be enforced by the water administration officials of the state in accordance with the terms and conditions of the order allowing the exchange. The state engineer may adopt such rules and regulations as are necessary to enable him to efficiently administer this section.

(g) The state engineer shall assess a fee not to exceed fifty dollars ($50.00) for his review, and approval of exchange petitions. This fee shall accompany an exchange petition and shall be retained and deposited whether the petition or request is approved or denied.