When must licensees inform the Designated Director regarding land transfers related to water rights?

The correct answer is that licensees must inform the Designated Director when any land disposition occurs. This requirement is crucial because water rights are often tied to specific parcels of land, and any change in ownership or use of that land can significantly affect the water rights associated with it. By requiring notification for all land dispositions, the management and regulatory framework can ensure that all relevant changes are recorded and assessed for compliance with legal and environmental standards.

This proactive approach allows regulatory bodies to monitor water rights more effectively, making it easier to manage resources sustainably, comply with laws, and protect the rights of other stakeholders. It recognizes that changes in land ownership or usage can have broader implications for water availability and usage, which is critical in rural areas where water resources are limited and often subject to various claims.

In contrast, the other options suggest a more limited scope of notification that would fail to capture important transactions that could impact water rights. For instance, only informing upon the sale would exclude situations like leases or transfers of water rights without a formal sale, while annual updates may not adequately address ongoing changes in land or ownership. Limiting the requirement to only new water rights disregards the importance of maintaining an accurate and ongoing record of all land and associated rights.