a water right is or has been developed on state land by the lessee or licensee
for use on the leased or licensed land, such water right shall belong to the
state. The lessee or licensee shall be entitled to compensation for the
reasonable value of the improvements associated with the water right by any new
lessee, licensee, or purchaser if such improvements are sold to a new lessee or
licensee or purchaser as provided in ARM 36.25.125. This shall not be construed
to make the state liable for the value of any water right. Any water rights
hereafter secured by the lessee and licensee on state lands shall be secured in
the name of the state of Montana.
lessee or licensee of state-owned land may not sell or otherwise dispose
of a state-owned water right for any purpose. Such practices may
constitute sufficient grounds for cancellation of the lease or license.