Generally revise state land and water laws

- 2025
69th Legislature 2025 HB 676
- 1 - Authorized Print Version – HB 676
ENROLLED BILL
AN ACT REVISING LAWS RELATED TO STATE LANDS AND WATER RIGHTS; PROHIBITING THE BOARD
OF LAND COMMISSIONERS FROM OBTAINING OWNERSHIP OF A PRIVATE WATER RIGHT USED ON
STATE LANDS; AMENDING SECTIONS 77-6-301 AND 77-6-302, MCA; AND PROVIDING AN IMMEDIATE
EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 77-6-301, MCA, is amended to read:
"77-6-301. Improvements authorized. A lessee of state lands may place upon the lands a
reasonable amount of improvements directly related to conservation of the land or necessary for proper
utilization of it. These improvements may consist of fences, cultivation, improvement of the land itself, irrigation
ditches, sheds, wells, reservoirs, water rights, and similar improvements."
Section 2. Section 77-6-302, MCA, is amended to read:
"77-6-302. Compensation for improvements -- actual costs. (1) Except for the improvements
described in 77-1-134, prior to renewal of a lease, the department shall request from the lessee a listing of
improvements on the land associated with the lease, including the reasonable value of the improvements. This
information must be provided to any party requesting to bid on the lease a lessee of state lands may register all
improvements that were made on state lands prior to October 1, 2025. Improvements registered under this
section may include improvements authorized in 77-6-301. Registrations must be made no later than
September 30, 2026.
(2) Owners of improvements registered under this section are entitled to compensation pursuant to
77-6-303. Except for the improvements described in 77-1-134, when another person becomes the lessee of the
land, the person shall pay to the former lessee the reasonable value of the registered improvements. The
- 2025
69th Legislature 2025 HB 676
- 2 - Authorized Print Version – HB 676
ENROLLED BILL
reasonable value may not be less than the full market value of the improvements.
(2)(3) If the former lessee is unable to produce records establishing the reasonable value or if the
former lessee and the new lessee are unable to agree on the reasonable value of the improvements, the value
must be ascertained and fixed as provided in 77-6-306. The former lessee shall initiate this process within 60
days of notification from the department that there is a new lessee. The department notification must include an
explanation of the requirements of 77-6-306. Failure to initiate the process within this time period results in all
improvements, except those described in 77-1-134, becoming the property of the state.
(3)(4) Upon On the termination of a lease, the department may grant a license to the former lessee to
remove the movable improvements from the land. Upon On authorization, the movable improvements must be
removed within 60 days or they become the property of the state unless the department for good cause grants
additional time for the removal. The department shall charge the former lessee for the period of time that the
improvements remain on the land after the termination of the lease."
Section 3. State ownership of water rights. (1) The board may obtain an ownership interest in a
water right appurtenant to state lands only if that right has:
(a) a place of use on state lands; and
(b) a place of diversion on state lands.
(2) A lessee retains a water right not meeting the characteristics in subsection (1).
Section 4. Codification instruction. [Section 3] is intended to be codified as an integral part of Title
77, chapter 6, part 3, and the provisions of Title 77, chapter 6, part 3, apply to [section 3].
Section 5. Effective date. [This act] is effective on passage and approval.
- END -
I hereby certify that the within bill,
HB 676, originated in the House.
___________________________________________
Chief Clerk of the House
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025.
HOUSE BILL NO. 676
INTRODUCED BY B. LER, W. GALT, R. GREGG
AN ACT REVISING LAWS RELATED TO STATE LANDS AND WATER RIGHTS; PROHIBITING THE BOARD
OF LAND COMMISSIONERS FROM OBTAINING OWNERSHIP OF A PRIVATE WATER RIGHT USED ON
STATE LANDS; AMENDING SECTIONS 77-6-301 AND 77-6-302, MCA; AND PROVIDING AN IMMEDIATE
EFFECTIVE DATE.