(1) Nothing in this chapter shall affect existing water rights, perfected riparian rights, federal Indian and non-Indian reserved rights, appropriative or otherwise existing on the effective date of this chapter, nor shall it affect existing rights relating to the operation of any navigation, hydroelectric, or water storage reservoir or related facilities.

(2) Single domestic surface water use, (including up to one-half acre lawn and garden irrigation and associated noncommercial stockwatering) shall be exempt from the provisions established in this chapter, except that Whatcom Creek is closed to any further appropriation, including otherwise exempted single domestic use. For all other streams, when the cumulative impact of single domestic diversions begins to significantly affect the quantity of water available for instream uses, then any water rights issued after that time shall be issued for in-house use only, if no alternative source is available.

(3) Nonconsumptive uses which are compatible with the intent of this chapter may be approved.

(4) New interruptible uses may be approved from streams regulated under WAC 173-501-040 if the department determines through the water right appropriation procedure under chapter 90.03 RCW that the proposed use is consistent with:

(a) The intent of chapter 90.94 RCW to offset potential impacts to instream flows associated with permit-exempt domestic water use; or

(b) Applicable laws and restores and enhances streamflows.