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Subdivision 1.Preexisting water rights recognized.

The rights of private or corporate landowners to use the waters of the watershed district for any purpose continue as the rights existed at the time of the organization of the watershed district.

Subd. 2.Watershed district possesses improved rights.

All preexisting rights must be recognized by the managers, but if projects constructed by the watershed district make possible a greater, better, or more convenient use of or benefit from the waters of the watershed district for any purpose, the right to the greater use or benefit is the property of the watershed district.

Subd. 3.Compensation for improved rights.

The watershed district may lease or assign the rights in return for reasonable compensation, as provided in this section.

Subd. 4.Approval of rights transfer.

Leases, assignments, permits, or contracts for the use of water shall be entered into only after the managers have reported to the board the terms and conditions of the lease, permit, or contract relative to the use of any watershed district property. The board shall give notice of the contract to all parties interested, by mail, and shall have notice of the application published. The notice must state the purpose of the application and the time and place of hearing on it. At the time of hearing the board shall hear all interested persons for or against the proposed contract and make an order accordingly on conditions and restrictions necessary to protect the interest of the watershed district and of the public.