(1) For the board to adopt an order reserving water, it must find that:

(a) the applicant is qualified to reserve water, pursuant to 85-2-316, MCA; and

(b) the purpose of the reservation is a beneficial use as defined in ARM 36.16.102(4) .

(2) For the board to adopt an order reserving water, it must establish that the reservation is needed, as required in 85-2-316(4) (a) (ii) , MCA, by finding that:

(a) the applicant has demonstrated that there is a reasonable likelihood that future instate or out-of-state competing water uses would consume, degrade, or otherwise affect the water available for the purpose of the reservation; or

(b) where information regarding the effect of future water uses on a proposed reservation is not available, or where the applicant may not be eligible to apply for a water use permit, the applicant has demonstrated that water resource values warrant reserving water for the requested purpose; or

(c) where the applicant could otherwise seek a water right permit, there are constraints that would restrict the applicant from perfecting a water permit for the intended purpose of the reservation.

(3) For the board to adopt an order reserving water, it must determine the amount needed to fulfill the purpose of the reservation, as required in 85-2-316(4) (a) (iii) , MCA, on the basis of a finding:

(a) that the methodologies and assumptions used to determine the requested amount are accurate and suitable; and

(b) that water-use efficiencies associated with diversionary uses are reasonable, and that there are no other reasonable cost-effective measures that could be taken within the reservation term to increase the use efficiency and lessen

the amount of water required for the purpose of the reservation; and

(c) for instream flow purposes on gaged streams, that the amount does not exceed the limit provided by 85-2-316(6) , MCA.

(4) For the board to adopt an order reserving water, it must find, in its judgment and discretion, that the reservation is in the public interest, as required in 85-2-316(4) (a) (iv) , MCA, based on a weighing and balancing of the following factors, after making a specific finding for each factor:

(a) whether the expected benefits of water to beneficial use are reasonably likely to exceed the costs where:

(i) benefits include all direct and indirect benefits where any non-market benefits are quantified and valued to the extent reasonably possible;

(ii) costs include all direct and indirect costs where any non-market costs are quantified and valued to the extent reasonably possible; and

(iii) benefits and costs that may not be reasonably quantified are considered.

(b) whether the net benefits associated with granting a reservation exceed the net benefits of not granting the reservation;

(c) whether there are no reasonable alternatives to the proposed reservation that have greater net benefits;

(d) whether failure to reserve the water will or is likely to result in an irretrievable loss of a natural resource or an irretrievable loss of a resource development opportunity;

(e) whether there are no significant adverse impacts to public health, welfare, and safety; and

(f) any other factors the board finds relevant, based on the record.

(5) For the board to adopt an order reserving water where the purpose of the reservation requires the diversion of water from one of the basins designated in 85-2-316(2) (a) , MCA for use in another of the designated basins, it must find that stored water for leasing is not reasonably available for the proposed use because the applicant or the applicant's project does not meet the statutory terms, conditions, or requirements of a lease under 85-2-141, MCA.

(6) Where the purpose of the reservation requires the withdrawal and transport of water for use outside the state, the board must find by clear and convincing evidence, in consideration of the factors described in 85-2-316(4) (c) , MCA, that:

(a) the proposed out-of-state use of water is not contrary to water conservation in Montana; and

(b) the proposed out-of-state use of water is not detrimental to the citizens of Montana.

(7) For the board to adopt an order reserving water, it must find that the applicant has shown its capability to exercise reasonable diligence toward feasibly financing projects contemplated in the application and applying the reserved water to beneficial use in accordance with a management plan as required in ARM 36.16.106(1) ; or toward measuring, quantifying, protecting, and reporting instream uses in accordance with a management plan as required in ARM 36.16.106(2) .

(8) For the board to adopt an order reserving water, it must find that the reservation, as proposed for adoption, will not adversely affect existing water rights, including other reservations.