Natural flow water of any stream appropriated or diverted for municipal use is subject to downstream senior priority water rights. Any contest between water right owners shall be brought to the Water Management Board first for resolution. The board's ruling may be appealed to circuit court under the provisions of chapter 1-26.
No water permit to appropriate natural flow of a stream by a municipality may be issued unless the board determines, based upon the evidence presented at a hearing that questions on impairment of downstream senior priority water rights have been resolved.