(1) Except for reservations for the purposes of maintaining a minimum flow, level, or quality of water or a reservation provided in 85-20-1401, MCA, the department shall review water reservations at least once every ten years to determine if the objectives of the reservation are being met.

(2) The department shall issue an order for the review, which includes the information that must be submitted by the reservant and the deadline for its submittal.

(3) All reservants shall submit a report reviewing the objectives of the reservation and how they are being met, including but not limited to the following:

(a) a summary of the amount granted, allocated to date, any change in the amount required to satisfy the purpose and need of the reservation, and any change in the methodology originally used to determine the amount;

(b) whether the purpose remains the same as identified in the application and order;

(c) whether the need still exists as identified in the application and order;

(d) whether the amount is still appropriate in accordance with the application and order; and

(e) whether the reservation remains in the public interest as identified in the application and order.

(4) All reservants shall provide information evidencing compliance with the order granting the reservation. The information shall include a list of all compliance documents such as general plans, detailed plans, annual and biennial reports and their submittal dates.

(5) If a diversionary reservation has not reached the development level projected, the reservant shall provide information explaining:

(a) what factors have deterred the progress towards perfecting the water reservation; and

(b) what actions will the reservant take to ensure perfection of the reservation.

(6) The department shall consider the following when determining whether the objectives are being met:

(a) all information above and as ordered, by the department;

(b) the period of time which has elapsed since the date of the order granting the reservations and whether the reservant's actions reflect reasonable diligence in the perfection of the water reservation;

(c) new or changed circumstances, information, or values; and

(d) any other considerations set out in the order granting the reservation.

(7) Reasonable diligence is demonstrated by actions of the reservant in investment of time and money in the perfection of the reservation, including but not limited to:

(a) partial development of water reservation; and

(b) completion of additional studies, project design plans, promotional efforts, or environmental assessments.

(i) Upon review of a water reservation, if the department determines the objectives of the reservation are not being met the department may:

(A) extend the time period to complete the appropriation of water;

(B) modify the reservation; or

(C) revoke the reservation.

(8) If the department determines the objectives of a reservation are not being met; or at the request of the entity holding the water reservation, it shall:

(a) set a date for hearing and require the reservant to show cause why the proposed department action should not be taken;

(b) provide notice of the proposed action by first class mail on persons who according to the records of the department may have an interest in the reservation; and

(c) publish such notice at least once in a newspaper of general circulation in each county within the basin 60 days prior to the hearing.

(9) Any person wishing to intervene in the hearing must file a notice with the department 30 days prior to the hearing date.

(10) The reservant shall pay for notice and publication of hearing and proposed action under this rule as required under ARM 36.16.114.

(11) Reasons a water reservation may be modified or revoked include but are not limited to:

(a) a reservant is unable to meet the objectives of the water reservation or show reasonable diligence in perfecting the water reservation as determined under ARM 36.16.120(8);

(b) a reservant relinquishes all or a portion of its water reservation; or

(c) failure of the reservant to comply with the order granting the reservation.

(12) A reservation term may be extended for a reasonable period of time to enable the reservant to meet the objectives of the reservation. An extension may be considered at the request of the reservant or on the department's own motion.