Water to Play a Big Part in "Red Tape Relief" Initiative at Legislature

HELENA – The laws that regulate water, arguably Montana's most valuable natural resource, are complex and tied to nearly every industry in the state, so when lawmakers gather in Helena every two years for the legislative session, it's often at the top of the agenda.

In the 2023 Montana Legislature, the water debate is shaping up to focus on two pieces of legislation: one that would tackle the future of water courts and another that would update the water permitting process.

Both bills are connected to Gov. Greg Gianforte's "Red Tape Relief" initiative, which aims to reform "outdated" laws to grow the state economy and is sprinkled throughout legislation at the 68th Legislative Session.

"One of the priorities of this administration was to do a comprehensive overview of our water laws since 1973," Lt. Gov. Kristen Juras said. "I don't need to tell you what a valuable resource water is to Montana, and how essential it is, from everybody to our number one agricultural industry, to our developers."

House Majority Leader Rep. Sue Vinton, R-Billings, echoed Juras, saying updated water regulations are also a key part of infrastructure development in the state.

"As a home builder, and a member of the governor's Housing Task Force, I know that streamlining permitting does have a positive impact on home construction costs," Vinton said.

Vinton is carrying House Bill 114, which would update the Department of Natural Resources and Conversation's water permitting process, and give more exact deadlines to help with transparency and timeliness. The House Natural Resource committee passed the bill on a 15-0 vote on Wednesday, Jan. 11 and it now moves to the full House for debate.

But, the water bill that drew the most attention during the second week of the legislature is Senate Bill 72, sponsored by Senate Majority Leader Sen. Steve Fitzpatrick, R-Great Falls. It would move water cases from the jurisdiction of district courts to one water court and streamline decisions on water law fights.

"By moving the authority of these water court cases from district court to the water court we are going to be able to retain that subject matter expertise that you get with the water court," Fitzpatrick said at the bill's first hearing in the Senate Natural Resources Committee Jan. 9. "You're going to have a specialized court that can do these areas of law."

The water rights adjudication process was established in Montana in 1972 following the ratification of the state constitution and recognized all existing water rights at the time. In 1973, the Legislature passed the Montana Water Use Act, which forced district courts to make final orders over all previously recognized water rights.

The water court was created in 1979 to take on the adjudication process with this enormous amount of work, while district courts appointed water commissioners who handled more day-to-day allocation based on current water rights.

The water court's future is up in the air after 2028, when the adjudication of water rights is set to be completed under current Montana law.

"The adjudication process is coming to the end, and questions have started to be raised about the future of the water court: What's going to happen to the water court? What's the water court going to do?," Fitzpatrick said.

The bill adds two additional water judges making the total four, who would be appointed by the governor and approved by the Senate. They would have to be retained through an election after a six-year term.

The water judges would oversee four separate districts that deal with separate basins.

Fitzpatrick said water rights disputes would be handled in a more timely fashion with the additional specialized judges and that the bill would put all of Montanans' water rights issues under one roof for the future. Supporters of the bill said removing the district court aspect and unifying the water courts will lead to a quicker process and help solve adjudication faster.

"It shifts some of the jurisdiction from water issues that are now handled by the district court over to the water court," Fitzpatrick said. "Then it will have the ability to handle these post-adjudication issues that come up."

The witnesses were split down the "middle" of the aisle, literally, in the Old Supreme Court Chamber during the bill's first hearing. Two groups of chairs were split at the center by a speaker's podium that faced the committee, with supporters and opponents sitting on opposite sides. Thirteen individuals on each side gave testimony on the bill.

Opponents of SB 72 were skeptical, saying the process is being rushed, that a bill of this magnitude needs to be done right, and that it would create unnecessary bureaucracy.

"It's been called an imperfect solution, and it seems to me that it's a solution looking for a problem," Mark Larson, a farmer from Teton County, said. "The water court is going to be around until the adjudication is finished, and I doubt that's going to be by 2028, so why rush this?"

"Senate Bill 72 might look good on paper, but when it has to be implemented out in the field, that's when it will be a huge hardship for the water users on the ground," said Ross Salmond, an excavation contractor from Choteau and the chairman of the Teton County Conservation District. "It appears to me that it would be a bureaucratic nightmare."

During a presentation at the Capitol on Jan. 4, the Department of Natural Resources and Conservation showed four key issues identified by the department's Comprehensive Water Review Task Force: the role of the judiciary, final decrees, water distribution and disputes, and water complaints and enforcement.

According to Attorney Jon Metropoulos, a representative of a group of water-right holders called Alliance for Local Water Management, SB 72 would only touch on the first two, making it an imperfect solution.

Fitzgerald said the bill will be amended to clean up details and make sure that it is done right for the future of Montanan's water rights. Amendments on the 39-page bill were filed on Friday, and will be discussed by the committee before any action is taken.

House Bill 114

SB 72 may have been the most controversial legislation on water seen throughout the Legislature's second week, but Vinton's HB 114 on water permitting would also change the water process in a big way.

"Water stakeholders frequently remark that the water permit and change process through DNRC water resources division is not timely, transparent, streamlined, and that water rights applications can take several years to issue," Vinton said. "This is not a situation that allows Montana to meet our future water demands or growth pressures."

Under the bill, the timeline for processing water permit applications would drop from a maximum of 360 days to 105 days.

"The two main things that any permittee wants to get is consistency and predictability, and in the process that we have dealt with in the past has not been particularly consistent," said John Tietz, a private practice water law attorney in Helena.

According to Anna Pakenham-Stevenson, the administrator for the Water Resources Division at DNRC, there would also be a pre-application meeting at DNRC's eight regional offices to help people fill out their applications before submission.

The meetings will be available so residents don't fill out applications, wait a long time, and have them rejected because they were missing information in their applications.

"A constituent can ask to have the DNRC conduct its technical analyses," Pakenham-Stevenson said.

Applicants can get help with aquifer test reports, hydrogeologic assessments, or stream depletion reports, instead of them spending thousands of dollars to an outside source, Pakenham-Stevenson said.

The bill would also create a public comment period and update reminders for all water permit applications in a basin during the process to help with transparency.

There were no opponents at the bill's first hearing in the House Natural Resources Committee Jan. 11.

Supporters of the bill said it would make the whole process less strenuous for everyone, from builders to farmers.

In the current system, Pakenham-Stevenson said she's seen some water permit applications that have fallen into a "black hole" and haven't been completed for over a decade.

"We have had applications standing still for over 15 years," Pakenham-Stevenson said, "We were mildly horrified at this fact."

Caven Wade is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation. He can be reached at [email protected].