37-704. Contract; contents; bond of contractor

A. Upon approval of the application and withdrawal of the land by the department of the interior, the state land department shall enter into a contract with the applicant containing complete maps and specifications of the proposed project. The contract shall state:

1. The maximum price per acre at which perpetual water rights shall be sold to settlers.

2. The maximum cost per annum for maintenance charges.

3. The price and terms upon which the state is to dispose of the land to settlers.

B. The contract shall provide that the sale to a settler of a tract of land with a permanent water right shall include an interest in the project and any power plants that may be built equal to the proportion that the tract of land purchased by him bears to the entire tract to be reclaimed by the irrigation project, and that upon full payment of the purchase price of the land, capital stock of the corporation, representing the interest, shall be issued and delivered to the settler by the person constructing the project. The price and terms of water rights, maintenance charges, and land, shall be reasonable.

C. The contracting party may provide in the contract with the applicant for the land and permanent water right the amount of the annual water supply, and may provide rules and regulations for the use and distribution of the water, to be approved by the department.

D. The contractor shall make and deliver to the state a bond in a penal sum equal to five per cent of the estimated cost of the project but not exceeding fifty thousand dollars for the faithful performance of the contract.