(1)    Dams heretofore or hereafter constructed; action for damages. All mills and milldams lawfully erected or constructed, on streams not navigable at the time, under chapter 48, territorial laws of 1840, chapter 62, laws of 1857, ch. 56, R.S. 1858, ch. 146, R.S. 1878, ch. 146, R.S. 1898, ch. 146, 1911 stats., ch. 146, 1913 stats., or ch. 146, 1915 stats., or any special, private or local act, or under any other act whatsoever, that are not now abandoned but are still in existence and use, and all dams heretofore or hereafter erected or constructed on streams not navigable in fact for any purpose, shall be subject to and regulated and controlled, so far as applicable, by ss. 31.02, 31.12, 31.18, 31.19, 31.25, 31.26 and 196.665, except that those sections do not prevent the owner of any land flooded or otherwise injured by any milldam from recovering by action at law, full compensation for all damages resulting to him or her in times past and that will result to him or her in the future in consequence of that flooding and injury but no damages suffered more than 3 years before the commencement of the action shall be recovered. The amount recovered constitutes a first lien upon the milldam and upon the mill, if any, and the lien may be enforced by execution sale of the property affected. In every such action the amount paid or secured to be paid under prior laws as damages shall be considered and proper allowance made therefor. The authority granted under this subsection to bring the action does not preclude the owner from proceeding under ch. 32. The owner may not exercise his or her option to bring the action after condemnation proceedings have been commenced against his or her property under ch. 32.

   (2)   License. A license is granted to each owner of any such milldam now in existence and use, and to each owner of any such milldam hereafter constructed, to maintain and use the same to operate mills or machinery, or for any other lawful private or public purpose, but subject, however, to the supervision of the department acting under ss. 31.02, 31.12, 31.18, 31.19, 31.25, 31.26 and 196.665. The right created by the license shall follow the title to the milldam and a conveyance of the latter shall transfer the right to the grantee.

   (3)   Interpretation. Whenever ss. 31.02, 31.12, 31.18, 31.19, 31.25, 31.26 and 196.665 are applied to mills or milldams specified in sub. (1) every reference in any of them to a “permit” or to a “grantee” of a permit shall be regarded as referring respectively to a license granted by this section and to the owner of such a mill or milldam.

   (4)   Height. The height to which water may be raised by any such milldam and the length or period of time for which it may be kept up each year, may be restricted and regulated by the orders of the department.

   (5)   Violation of orders, penalties. Every person, firm or corporation violating any of the orders respecting any such mill or milldam made by the department shall forfeit for each such violation a sum not exceeding $500 which may be recovered by civil action as provided by ch. 778.