(1) Prior to the termination of a water marketing contract, or in the case of a public agency prior to termination of a water purchase contract for instream flow, the department shall enter into negotiations with the water users' association and, if applicable, the public agency, for the creation of a new water marketing contract or instream flow water purchase contract.

(2) In establishing the prices, rates, and charges at which stored water will be marketed, the department shall implement the policies established in ARM 36.30.102.

(3) Prior to the termination of a water marketing contract or prior to termination of an instream flow water purchase contract held by a public agency and during negotiations for a water marketing contract with the water users' association or during negotiations for a water purchase contract with a public agency, the department may not:

(a) offer water for sale from a project using a competitive bidding process, or

(b) negotiate with any other person or entity for the sale of water from the project, except with the express written consent of the water users' association or the affected public agency.