(a) On receiving a petition for appointment of a watermaster or on its own motion, the commission shall call and hold a hearing to determine if a need exists for appointment of a watermaster for the river basin or segment of the river basin.
(b) At the hearing persons who hold water rights in the river basin or segment of the river basin may appear before the commission and submit testimony and evidence relating to the need for appointment of a watermaster.
(c) After the hearing, the commission shall make a written determination as to whether a threat exists to the rights of senior water rights holders in the river basin or segment of the river basin and shall issue an order either finding that a threat exists and directing appointment of a watermaster or denying appointment of a watermaster.