February 11, 2016: Montana Water Policy Has Challenging Rapids Ahead
Nancy Zalutsky
Montana Water Policy Has Challenging Rapids Ahead

Here at Water Sage, we wade into all things water, especially in Montana, where water leaders meet policy challenges head on. Through our upcoming blog series on state legislative issues we’ll help you navigate Montana’s water policy changes, so you can participate in shaping that policy.

Montana’s Water Policy Interim Committee (WPIC) is a joint bipartisan legislative committee that conducts interim studies on water issues and oversees agencies involved in water quality and water quantity. The committee hears testimony on different issues from stakeholders, takes public comment and requests additional information from committee staff. The committee uses the information to propose new laws and changes to existing laws. You can participate in the process directly by attending meetings and testifying before the committee, follow it via web-stream or read these updates.

During the interim, the committee typically instructs staff to draft legislation by May.  The committee reviews the proposals in July and releases them for public review and comment in August. By the end of September, the committee gives final approval for any legislation to be pre-introduced as a committee bill. A two-thirds majority of WPIC is required to approve a committee bill for pre-introduction.

In addition to the subjects discussed in detail in the following section, WPIC heard reports on the subjects below during the two-day meeting held on January 11th and 12th:

  • The number of water leases or conversion to instream flow perfected by the Department of Fish, Wildlife and Parks during the biennium;
  • The progress of the U.S. Forest Service water reservations;
  • A review of the state Water Information System;
  • State assumption of federal Section 404 permitting program;
  • Department of Environmental Equality (DEQ) comprehensive hydrological impact assessment and Signal Peak Energy mine expansion;
  • A Program evaluation of the Water Quality Planning Bureau;
  • Update from the Montana Water Center;
  • Examination of canal seepage rates;
  • Reports on the progress of adjudication by DNRC Water Resources Division Administrator Tim Davis and Water Court Chief Judge McElyea;
  • An update on the process for adjudicating Turtle Mountain Band allotment water; and
  • A review of a proposed administrative rule adopting the East Valley Controlled Groundwater Area in and around East Helena.

Issues Update: Policy in the Making

Update on Confederated Salish and Kootenai Tribes (CSKT) Compact

The CSKT Compact is awaiting the outcome of a lawsuit and Congressional approval prior to being heard at the Montana Water Court. The state is projected to spend $1.5 million per year prior to implementation to increase efficiency of the system, measure water more accurately and increase the availability of stock water.

Study of Water Availability and Supply – Case Studies

WPIC asked for case studies from Montana’s four hydrologic basins on providing water to growing communities. These case studies were amended into the WPIC work plan and are part of the committee’s general study of water availability and supply. The committee was hoping to use the case studies to explore how the Legislature might support successes and address issues. The Department of Natural Resources and Conservation (DNRC) was the only respondent who submitted examples of three successful applications where water was used for growth: Mountain Water Co. (Missoula), Utility Solutions (Gallatin Valley), and Grass Valley French Ditch (west of Missoula). The rest of the submissions discussed the process of providing water to growing communities without providing specific cases.

The City of Bozeman recommended that WPIC evaluate recognition of the great and growing cities doctrine a water rights exception for reuse of captured stormwater; costs and benefits of nutrient trading at a watershed scale; legal barriers to creating viable groundwater mitigation banks; and the impact of the use of exempt irrigation wells within a municipal service area.

The committee requested more information from staff on water conservation and the effect of aging infrastructure on losing water from public water systems.

Study of Water Availability and Supply – Mitigation Banking

The Grass Valley Irrigation District (GVID) — the owner of Grass Valley French Ditch — is the first irrigation district in Western Montana to take advantage of a 2011 law allowing for the change of a water right’s beneficial use to marketing for mitigation. Carl Saunders, vice president of the district, told the committee why and how GVID made the change, which required amending its bylaws, creating two types of shares and spending four years getting the application through the DNRC process. No water has been sold yet and no prices have been negotiated. Each share represents one inch of water. Mr. Saunders recommended that a DNRC staff member assigned to complicated applications be allowed the time to work through these difficult applications without large time lapses.

The Gallatin Valley Groundwater Mitigation Bank (GVGMB) is the idea of several entities to develop a water exchange to facilitate the transfer of water from one use to another. The Gallatin Valley Water Exchange project is being developed by Montana Aquatic Resources Services (MARS) in collaboration with the City of Bozeman (Bozeman), Trout Unlimited, The Nature Conservancy and DMS Natural Resources. GVGMB plans to acquire or lease water from existing senior surface water right holders, typically agricultural irrigators, then change the irrigation rights to a mitigation purpose and sell mitigation credits to new groundwater users, such as developers or the City of Bozeman. To mitigate these new water uses, GVGMB will convey the acquired water to infiltration galleries or natural streambeds to recharge water into the aquifer.

Future of the Water Court

The agenda item entitled “Future of the Water Court” ranged beyond that topic to a discussion of the concerns about the present enforcement and administration of water rights. Water adjudication is expected to be completed and Water Court functions will mostly cease by 2028. WPIC has undertaken a study of the future of the Water Court to determine whether the court should be disbanded or take on other water-related matters after the adjudication is completed. Water Adjudication Advisory Committee members submitted comments to WPIC on the future of the Water Court.

Most commenters believe that the Court should concentrate on adjudication until it is completed. Once the adjudication is done, many committee members believe the Water Court should continue to exist in some form, although there is no consensus on what its future role should be. In addition to the written comments, WPIC members also heard from Water Court Chief Judge Russ McElyea, Upper Missouri River Basin Division Water Judge Loren Tucker; attorneys Abigail St. Lawrence, Renee Coppock, and Tom Sheehy; and water user Tim Schaff. The key issues they raised are listed below:

1. Water court decrees reflect the historical use of water rights in 1973, not how they are used today.

2. District court judges and water commissioners need more guidance from the law.

3. Water commissioners have no direction regarding whether Water Court decisions are immediately enforceable or stayed pending appeal.

4. When there are existing decrees or final decrees issued by the Water Court, there needs to be consistency in how those decrees are administered.

5. The lag time between a change in land ownership and water rights ownership is much too long and causes delays in adjudication and enforcement because it is hard to contact the owner of a water right if the ownership is outdated.

6. Until a basin is adjudicated by the Water Court, the district courts can only enforce water rights decreed in past district court decrees. District courts have no authority over water rights based on filed appropriations or use.

7. Several speakers expressed concerns about the general unwieldiness of a regulatory scheme that is administered by the Water Court, the District Court and DNRC performing different functions. This fragmentation leads to added expense, delay and frustration for water users.

8. Most district court judges are busy with matters of public safety and do not have the time or the expertise to promptly resolve water matters, further slowing down remedies for injured water users.

The committee requested more information from staff regarding potential solutions to processing time for ownership updates; issuing “living” decrees that take post-1973 water right changes into account; and the proper venue for water litigation and appeals.

Proposed Legislation

The DNRC plans to draft a bill to provide notice and set a deadline to file the formerly exempt stock and domestic claims. The bill will be based on SB 37, which was vetoed by Governor Bullock last session.

Senator Chas Vincent stated that the committee should pursue the “low-hanging fruit” by requesting legislation intended to fix a specific problem rather than an entire overhaul of the Montana Water Use Act. Upper Missouri River Basin Division Water Judge Tucker is the District Court Judge for Beaverhead, Madison and Jefferson Counties and an irrigator. In response to questioning from the committee, Judge Tucker stated that statutes clarifying the appointment and supervision of water commissioners are needed.

Judge McElyea will schedule a meeting of the Water Adjudication Advisory Committee to discuss when a Water Court decision becomes enforceable. Last summer, water commissioners on the Teton River enforced a Water Court decision that is currently on appeal to the Supreme Court. A question has arisen as to whether this decision is enforceable. Judge McElyea may bring WPIC a proposal for draft legislation based on the recommendations of the committee.

Stay Informed on Pending Legislation

In order to keep you informed about pending changes to Montana water laws, this post is the first of a series on WPIC activities. I will be attending WPIC meetings throughout the interim and reporting to you on draft legislation. I will also provide detailed information on the WPIC inquiries into water availability and supply and the future of the Water Court.

The next meeting is March 7 and 8, 2016. When draft committee legislation is presented to the public for review and comment in August, I will provide you with links to the legislation and summarize the expected effects of changes to existing water law, so you can be part of the process. Please be in touch with our team if you have questions about anything you read here – we love to help spur conversations about water resources!