(a) At the conclusion of the hearing, the commission shall cancel the water right in whole or in part to the extent that it finds that:
  (1) the water or any portion of the water under the water right has not been put to an authorized beneficial use during the ten-year period; and
  (2) the water right holder has not used reasonable diligence in applying the water or the unused portion of the water to an authorized beneficial use or is otherwise unjustified in the nonuse as provided by subsection (b) of this section.
(b) In determining what constitutes reasonable diligence or a justified nonuse as provided in subsection (a) (2) of this section, the commission shall give consideration to:
  (1) whether sufficient water is available in the source of supply to meet all or part of the appropriation during the ten-year period of nonuse;
  (2) whether the nonuse is justified by the water right holder's participation in the federal Conservation Reserve Program or a similar governmental program as provided by §297.71 of this title (relating to Cancellation in Whole or In Part);
  (3) whether the existing or proposed authorized purpose and place of use are consistent with an approved regional water plan as provided by Texas Water Code (TWC), §16.053;
  (4) whether the water right has been deposited into the Texas Water Bank or Water Trust as provided by TWC, §15.7031 and §15.704 or whether it can be shown by the water right holder that the water right or water is currently being made available for purchase through private marketing efforts at fair market value and under reasonable terms and conditions; or
  (5) whether the water right has been reserved for instream uses or beneficial inflows for bays and estuaries.
(c) Regardless of the other provisions of this subchapter, no portion of a water right held by a city, town, village, or municipal water district authorizing the use of water for municipal purposes shall be canceled if the water has been put to beneficial use under the water right at any time during the ten-year period immediately preceding the initiation of cancellation proceedings.
(d) Failure to initiate cancellation proceedings under this subchapter does not validate or improve the status of any water right in whole or in part.
(e) Once cancellation proceedings have been initiated against a particular water right and a hearing has been held, further cancellation proceedings shall not be initiated against the same water right within the five-year period immediately following the date of the hearing.

Source Note: The provisions of this §297.73 adopted to be effective February 24, 1999, 24 TexReg 1162; amended to be effective August 15, 2002, 27 TexReg 7152