The definitions in 85-1-102 , MCA, and the following definitions apply to this sub-chapter:

(1) "Irrigated agriculture" means the sector of the Montana economy that uses water to irrigate crops and to water stock.

(2) "Water marketing contract" means the agreement between a local water users' association and the department whereby the department agrees to sell to the water users' association available water from a project and the water users' association agrees to distribute the water to individual water users under a water purchase contract.

(3) "Water purchase contract" means the agreement among the water users' association, the water user, and the department whereby the water user agrees to purchase a definite amount of water subject to the terms and conditions of the water marketing contract and the water purchase contract. In the case of water for instream flow by a public agency, "water purchase contract" means the agreement between the department and a public agency whereby the department agrees to sell to the public agency available water from a project and the public agency agrees to maintain the water for purpose of instream flows.

(1) It is the policy of the department to negotiate a water marketing contract prior to the expiration of an existing water marketing contract with the water users' association and, in the case of a public agency, to negotiate a water purchase contract with the holder of a water purchase contract for instream flow, on a project pursuant to the mandates and provisions of 85-1-211 , MCA.

(2) It is the further policy of the department to recognize in its negotiations the historical importance of irrigated agriculture to the economy of Montana and the historical purposes of the project.

(3) In recognition of the policy established in (2) , it is the further policy of the department not to use competitive bidding in the negotiation of the water marketing contract or a water purchase contract.

(1) Prior to the termination of a water marketing contract, or in the case of a public agency prior to termination of a water purchase contract for instream flow, the department shall enter into negotiations with the water users' association and, if applicable, the public agency, for the creation of a new water marketing contract or instream flow water purchase contract.

(2) In establishing the prices, rates, and charges at which stored water will be marketed, the department shall implement the policies established in ARM 36.30.102.

(3) Prior to the termination of a water marketing contract or prior to termination of an instream flow water purchase contract held by a public agency and during negotiations for a water marketing contract with the water users' association or during negotiations for a water purchase contract with a public agency, the department may not:

(a) offer water for sale from a project using a competitive bidding process, or

(b) negotiate with any other person or entity for the sale of water from the project, except with the express written consent of the water users' association or the affected public agency.

(1) The department shall comply with the requirements of 85-2-402 , MCA, prior to marketing water for a beneficial use at a project if stored water was not put to the proposed beneficial use prior to the effective date of this rule, at that project.