(1) Water occurring in any stream, lake, groundwater, or other body of water in the Commonwealth which may be applied to any useful and beneficial purpose is hereby declared to be a natural resource and public water of the Commonwealth and subject to control or regulation for the public welfare as provided in KRS Chapters 146, 149, 151, 262 and 350.029 and 433.750 to 433.757.
(2) Diffused surface water which flows vagrantly over the surface of the ground shall not be regarded as public water, and the owner of land on which such water falls or flows shall have the right to its use. Water left standing in natural pools in a natural stream when the natural flow of the stream has ceased, shall not be regarded as public water and the owners of land contiguous to that water shall have the rights to its use.