Any entryman on an unpatented farm unit on a Federal irrigation project which shall be found by the Secretary of the Interior, pursuant to a land classification, to be insufficient to support a family shall be entitled, upon timely application to the Secretary to exchange his farm unit for another farm unit of unentered public land within the same or any other such project, or, upon terms and conditions satisfactory to the Secretary, for any other available farm unit on the same or any other such project. He shall be given credit under the homestead laws for residence, improvement, and cultivation made or performed upon the original entry, and if satisfactory final proof of residence, improvement, and cultivation has been made on the original entry it shall not be necessary to submit such proof upon the lieu entry. Rights under this subchapter shall not be assignable.

The benefits of section 451 of this title shall, and those of sections 451b to 451k of this title may, be extended by the Secretary to (a) any lawful assignee of an unpatented farm unit on a Federal irrigation project who took the assignment in good faith not knowing and not having reason to believe the farm unit to be insufficient to support a family; and (b) any resident owner of private lands on any such project whose lands shall be found to be insufficient to support a family and (i) who, apart from his ownership of the lands to be conveyed pursuant to clause (iii) hereof and apart from his having previously exhausted his homestead right, if such be the case, is eligible to enter unappropriated public lands under section 161 1

Within ninety days after receipt of notice of the approval by the Secretary of the application for exchange of entry and subject to the rights and interests of other parties, the entryman may dispose of, and he or his transferee or vendee may remove, any and all improvements placed on the relinquished unit. Upon the making of an exchange under this subchapter, any water right appurtenant to the original lands under the Federal reclamation laws shall cease and the water supply theretofore used or required to satisfy such right shall be available for disposition under those laws. Any land relinquished or conveyed to the United States under this subchapter shall revert to or become a part of the public domain and be subject to disposition by the Secretary under any of the provisions of the Federal reclamation laws.

Upon timely application by an entryman on an unpatented farm unit on a Federal irrigation project, which shall be found by the Secretary, pursuant to a land classification, to be insufficient to support a family, the Secretary may, upon terms and conditions satisfactory to him, amend the farm unit of said entryman, combine all or a part of the lands of said farm unit with other contiguous or noncontiguous lands on the same project which are declared by the Secretary to be open to entry or purchase, and thereby form and designate an amended farm unit for said entryman, which in no event shall exceed three hundred and twenty acres of land containing not more than one hundred and sixty irrigable acres designated by the Secretary. The acceptance of the amended farm unit by the applicant shall be deemed an exchange within the meaning of this subchapter. In extending the benefits of this section to a resident owner of private lands as provided in section 451a of this title, the Secretary may waive, in whole or in part, the provisions of clause (iii) of subsection (b) of section 451a of this title.

Any exchange pursuant to this subchapter of land that is subject to a mortgage contract with the Secretary of Agriculture under sections 1006a and 1006b of title 7, and any disposition pursuant to this subchapter of property that is subject to such a mortgage contract, shall be effected only in such form and manner and upon such terms and conditions as are consistent with the authority of the Secretary of Agriculture over such mortgage contract and such property under the Bankhead-Jones Farm Tenant Act, as amended [7 U.S.C. 1000 et seq.], as supplemented by sections 1006a and 1006b of title 7.

Where there are two or more timely applicants for a farm unit on a particular project or division thereof under the provisions of this subchapter, one or more of whom is an ex-serviceman who would be entitled under the applicable statutes to a preference in making entry of farm units on such project or division, the ex-serviceman, or one of them, shall have a preference in making such exchange. Any timely applicant for an exchange under the provisions of this subchapter shall be entitled to preference over any other applicant for a farm unit on the same project or division thereof.

In administering sections 434, 448, and 544 of this title, the Secretary may, to the extent found necessary as shown by a land classification to provide farm units sufficient in size to support a family, establish such units of not more than three hundred and twenty acres containing not more than one hundred and sixty irrigable acres designated by him and may permit entry and assignment under the homestead laws, and retention and assignment under the desert land laws, of such units. The lands included in farm units established pursuant to the authority of this section and entered under the homestead laws may be contiguous or noncontiguous.

As used in this subchapter, the term “Federal irrigation project” means any irrigation project subject to the Federal reclamation laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory thereof or supplementary thereto), to which laws this subchapter itself shall be deemed a supplement.

The Secretary may perform any and all acts and make all rules and regulations necessary and proper for carrying out the purposes of this subchapter.

Appropriations heretofore or hereafter made for carrying on the functions of the Bureau of Reclamation shall be available for credits, expenses, charges, and costs provided by or incurred under this subchapter. Expenses incurred in carrying out the provisions of sections 451 to 451f of this title, shall be nonreimbursable and nonreturnable under the Federal reclamation laws.