This bill is intended to add coordination, efficiency, and consumer protection to the subdivision review process. The primary change for water users will be the requirement to file a Notice of Intent with the DNRC prior to using water from an exempt well under 85-2-306(3)(a)(iii) or (3)(a)(iv), MCA. The DNRC must authorize or deny Notices of Intent within 10 business days, ensuring that projects will not be unduly delayed by this review. This requirement begins on January 1, 2026. Benefits of this bill include:

• DNRC will have the authority to evaluate permit exception eligibility, including whether multiple groundwater developments in the same area constitute a combined appropriation, as part of authorizing the Notice of Intent. Completing this work up front allows applicants to receive a decision from DNRC on whether their project qualifies for a permit exception before making major infrastructure investments.
• Applicants going through subdivision review will be able to concurrently, rather than sequentially, move through processes under the Subdivision and Platting Act and Water Use Act.
• DNRC’s water right information can be relied on where appropriate by DEQ and local governments in the subdivision review process. For example, information from DNRC’s technical analyses of a permit or change application can be used to inform some of the environmental assessment requirements set forth in section 76-3-603, MCA.
• Authorized Notices of Intent will be viewable via the Water Rights Query System so that potential buyers can easily ascertain whether a given parcel is eligible for an exempt groundwater development.

HB 681 Bill Text

What’s Next? DNRC is preparing guidance for water users to understand how this bill may impact their home or development project, and how to navigate upcoming changes. DNRC is also preparing to engage in rulemaking, create new forms, and hire new staff to ensure compliance with the 10-business day timeline to authorize or deny Notices of Intent. Check back soon for more information.

The Comprehensive Water Review Stakeholder Working Group was unanimous in its recommendation that the State should substantially invest in existing and new water storage. Similarly, the State Water Plan and Montana Drought Management Plan both recommend exploring novel strategies to slow down and capture water as ways of building management flexibility and drought resilience. The DNRC is grateful for the Legislature’s discussions this session around investing in the state’s storage infrastructure.

The bill would establish a new Montana Water Development State Special Revenue Account to be invested by the Board of Investments and provides for ongoing annual appropriations into the account. Interest earnings would be divided into two existing accounts and distributed to:

• meet critical water storage needs for state-owned storage infrastructure,
• support high-quality inspections of high-hazard dams and
• fund innovative water storage pilot projects.

HB 924 Bill Text

What’s Next? As of the time of drafting this recap, the bill has not yet reached the Governor’s desk. If signed, the DNRC would develop eligibility and application criteria for accessing dam inspection and storage pilot project funding grants. The DNRC would also utilize these dollars to rehabilitate the 22 state owned reservoirs that provide water for irrigation, municipalities and fisheries across the state.

House Bill 932 allows money collected in the Marijuana State Special Revenue Account to be used toward state-owned water storage infrastructure in the amount of up to $4 million annually.

HB 932 Bill Text

This bill provides certainty, finality, and due process for both adjudicated water rights holders and provisional permit holders after the conclusion of the statewide water adjudication. The bill:

• Defines a clear process for pre-1973 adjudicated water right holders to petition DNRC to reduce, modify, or revoke a provisional permit based on the final decree, if necessary to protect an adjudicated water right.
• Ensures that DNRC checks for consistency with the final decree when verifying changes.
• Creates a process for issuing certificates of water right for provisional permits and change authorizations. This process will remove the “provisional” status of these permits and change authorizations so that they transform into certificates of water right holding the same weight as an adjudicated water right.

HB 441 Bill Text

What’s Next? The DNRC is preparing to engage in rulemaking to account for the bill’s changes in DNRC’s verification processes. The bill provides that adjudication basins that currently have a final decree in place (or receive a final decree prior to January 1, 2026) will begin their petition process by the end of 2026. For the remaining basins, the DNRC will provide notice of the petition process within 60 days of issuance of the final decree.   

Senate Bill 190 reinstates a provision that sunset in 2023 allowing water permit and change applicants to seek a waiver of adverse effect from owner(s) of a water right(s) identified by DNRC as potentially impacted by the new or changed use. The Stakeholder Working Group unanimously voted to reinstate the provision because it can simplify the water rights permitting or change process in certain situations and creates flexibility for water users.

SB 190 Bill Text 

What’s Next?  This bill will go into effect on October 1, 2025.

The members of the Stakeholder Working Group came to the table two years ago with a wide variety of opinions about exempt wells. Some wanted to abolish them altogether due to concerns about cumulative impacts. Others wanted to expand the exemption to promote efficient development. One thing everyone could agree on was that the status quo is not working for anyone.

Over dozens of meetings and hundreds of hours, a majority of the group arrived at a compromise solution that included robust scientific and legal criteria and took into consideration that Montana is a diverse state where “one-size-fits-all” solutions may not work.

The bill proposed adopting scientific and legal criteria to guide the appropriate use of exempt wells.

• In four high-growth areas of the state, this bill would have created exempt well closure areas based on scientific and legal criteria that demonstrate the cumulative impacts of exempt well use. New well development would go through the standard application process rather than the exempt well process.

• • Grandfathering provisions would have protected certain appropriations that had received a Certificate of Subdivision Approval and a DNRC subdivision review letter prior to the closure, which also would have protected many planned water uses that may be impacted by the February 14, 2024 Order in Upper Missouri Waterkeeper, et al v. Broadwater County and DNRC, Montana First Judicial District Court, Cause No. BDV-2022-38.

• In the rest of the state, the working group found that exempt wells remain an appropriate water supply option with minimal impacts to physical and legal supply. In these areas, the bill would have simplified administration to increase certainty and predictability around the use of exempt wells for subdivisions.

The bill also included metering and reporting requirements for new wells in certain areas to ensure adaptable regulation and decision-making into the future.

SB 358 Bill Text

What’s Next?  

• DNRC will continue to evaluate combined appropriations on a case-by-case basis, consistent with rule, statute, and case law. In the absence of a legislative solution for water users impacted by Upper Missouri Waterkeeper, et al v. Broadwater County and DNRC, DNRC will be conducting outreach to Montana water users on how their proposed projects may be impacted. Check back soon for more information. 
• The DNRC is committed to continuing the conversation by working to understand and implement the tools needed to make permitted water rights a more achievable alternative to exempt wells, particularly in closed basins. 

The Water Court is issuing final decrees in Montana’s statewide water adjudication at an increasing pace. Final decrees have already been issued in 12 basins, and more are imminent. A majority of the Stakeholder Working Group coalesced around the concept of providing a one-stop-shop by extending the Montana Water Court’s jurisdiction to include post-adjudication water right administration.

House Bill 886 would have retained the technical and institutional expertise of the current water adjudication court by continuing the existing statutory water divisions as the “Water Division Court” responsible for adjudicating, administering, and enforcing final decrees; maintaining court records and documents; reviewing DNRC permitting decisions; appointing and supervising water commissioners; and hearing distribution disputes and abandonment claims.

HB 886 Bill Text

What’s Next? The statewide adjudication will continue into the near future, as will the need for the current water adjudication court. Without future action by the Legislature, litigation of claims related to the adjudication, administration, and distribution of water rights will likely fall to the District Courts.