(1) Except as provided in subsections (2) and (3), nothing in this chapter relieves an owner of a dam or reservoir of any legal duty, obligation, or liability incident to its ownership or operation, including any damages resulting from leakage or overflow of water or floods caused by the failure of the dam or reservoir.
(2) The owner of a dam or reservoir that has been permitted by the department in accordance with this chapter or that was designed and constructed under the supervision of an engineer and properly maintained is, in the absence of negligence, not liable for damages to persons or property resulting from flows of water from failure of the dam or reservoir.
(3) In addition, the owner of any dam or reservoir that has been permitted by the department in accordance with this chapter or that was designed and constructed under the supervision of an engineer and properly maintained may, without incurring liability, allow passage through the reservoir of inflows without diminution.