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Exempt wells undermining water rights and water resources

It is time to end Montana’s “don’t ask-don’t tell” groundwater development policy.

Broadwater County’s controversial Horse Creek Hills — HCH — major subdivision proposal is a prime example of a developer asserting their “right” to subdivide and develop with no regard to impacts on senior water rights or local water resources. The method employed at HCH (and many other projects) is well known: break the subdivision into phases and limit the size per lot to squeeze each “phase” underneath the 10 acre-foot exception. It’s time to address this regulatory loophole.

The Legislature began closing Montana’s river basins to new water use permits in 1981 for good reason: there remain more claims to water than water supply itself. Exceptions to basin closures were made for “small” groundwater developments. However, these exceptions to the Department of Natural Resources and Conservation’s water right permit process became the “go-to” approach to subdivide rural lands for two decades. Nearly every developed lot has its own exempt-from-review well. This is Montana’s longstanding “don’t ask-don’t tell” approach to groundwater management, where the exception has swallowed the rule.

In 2016, Montana’s Supreme Court ruled against DNRC’s administrative rules sanctioning groundwater well permitting exemptions. The Court’s decision forced DNRC to use the 1989 rules, limiting groundwater permit exceptions to an annual volume of 10 acre-feet — one acre-foot is equal to 326,000 gallons, sufficient for the indoor and outdoor annual water needs of an average household). Thousands of existing subdivided lots were grandfathered in by the Court’s Order and can still be developed using an exempt-from-review well, but new subdivisions were limited to a maximum annual volume of 10 acre-feet.  

However, the Court did not throw out the exception to the Water Use Act entirely.  The cynic might suggest “no matter how low you set the regulatory bar, someone will figure a way under it.” The HCH subdivision does just that.

The proposed HCH subdivision envisions 39 residential lots and two commercial lots divided from a 435-acre parcel adjacent to Confederate Gulch and overlooking Canyon Ferry Lake, requiring at least 40 acre-feet of new water to assure full build-out. By dividing the project into four, 10 acre-foot phases, HCH developers are attempting to avoid DNRC’s water use permitting review.  

Where does the 40 acre-feet of new water come from? No one knows. The impacts of these new wells on senior water rights and stream flows in adjacent Confederate Gulch are unknown because the HCH subdivision proposal would be exempt from hydrologic analysis.

Evading water rights analyses is not limited to the proposed HCH subdivision; it’s happening in every county in the state. In Montana’s closed and already over-appropriated basins, use of these exceptions to the rule seems to be the preferred approach.

Conversely, a fair and protective process for developing water supplies already exists in Montana law: the Water Use Act. Hold DNRC accountable for enforcement by striking the exceptions to the Act.

Requiring a DNRC permit or a permit change for all new water uses protects senior water rights. How? First, the developer must prepare a “hydrologic report.” This gives the developer, DNRC, senior water rights owners, and the public a scientific analysis of the water resource impacts of the proposed development. Armed with this information, the DNRC can make an informed preliminary determination to grant or deny the permit application. If DNRC’s preliminary determination is to grant the permit, existing water rights owners, neighbors, and the public are notified and given the opportunity to object to the new use. The process concludes with either DNRC granting or denying the application. All parties retain the right to appeal any DNRC decision to a Montana District Court.

The 2023 Legislature needs to show some leadership by fighting for Montana’s hundreds of thousands of water rights owners being negatively impacted by unchecked subdivision water exemptions, and eliminate DNRC’s water permit exemptions by requiring a water use permit, a water right change, or both, for all new water uses. Legislative failure to act will lead to continued litigation and harm to our shared water resources.

No quarter can be given when it comes to water. Legislate or litigate, it is time to end Montana’s groundwater permit exceptions.


John E. Tubbs is a board member of Upper Missouri Waterkeeper, former DNRC water resources administrator, former deputy assistant secretary for water and science of Department of the Interior, and former DNRC director.


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