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- 2025
69th Legislature 2025 SB 357
- 1 - Authorized Print Version – SB 357
ENROLLED BILL
AN ACT EXTENDING A DEADLINE FOR PERFECTION OF CERTAIN WATER RESERVATIONS ABOVE
FORT PECK DAM; PROVIDING RULEMAKING AUTHORITY; AMENDING SECTIONS 85-2-316 AND 85-2-
331, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.”
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 85-2-316, MCA, is amended to read:
"85-2-316. State reservation of waters. (1) The state, any political subdivision or agency of the
state, or the United States or any agency of the United States may apply to the department to acquire a state
water reservation for existing or future beneficial uses or to maintain a minimum flow, level, or quality of water
throughout the year or at periods or for a length of time that the department designates.
(2) (a) Water may be reserved for existing or future beneficial uses in the basin where it is
reserved, as described by the following basins:
(i) the Clark Fork River and its tributaries to its confluence with Lake Pend Oreille in Idaho;
(ii) the Kootenai River and its tributaries to its confluence with Kootenay Lake in British Columbia;
(iii) the St. Mary River and its tributaries to its confluence with the Oldman River in Alberta;
(iv) the Little Missouri River and its tributaries to its confluence with Lake Sakakawea in North
Dakota;
(v) the Missouri River and its tributaries to its confluence with the Yellowstone River in North
Dakota; and
(vi) the Yellowstone River and its tributaries to its confluence with the Missouri River in North
Dakota.
(b) A state water reservation may be made for an existing or future beneficial use outside the basin
where the diversion occurs only if stored water is not reasonably available for water leasing under 85-2-141 and
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the proposed use would occur in a basin designated in subsection (2)(a).
(3) (a) The department shall adopt rules that are necessary to determine whether or not an
application is correct and complete based on the provisions applicable to issuance of a state water reservation.
The rules must be adopted in compliance with Title 2, chapter 4.
(b) An applicant shall submit a correct and complete application. The determination of whether an
application is correct and complete must be based on rules adopted under this subsection (3) that are in effect
at the time the application is submitted. The department shall proceed in accordance with 85-2-302 with regard
to any defects in the application.
(c) The application must be made on a form prescribed by the department. The department shall
make the forms available through its offices.
(d) Upon receiving a correct and complete application, the department shall proceed in
accordance with 85-2-307 through 85-2-309. After the hearing provided for in 85-2-309, the department shall
decide whether to reserve the water for the applicant. The department's costs of giving notice, holding the
hearing, conducting investigations, and making records incurred in acting upon the application to reserve water,
except the cost of salaries of the department's personnel, must be paid by the applicant. In addition, a
reasonable proportion of the department's cost of preparing an environmental analysis must be paid by the
applicant unless waived by the department upon a showing of good cause by the applicant.
(4) (a) Except as provided in 85-20-1401, the department shall issue a state water reservation if
the applicant establishes to the department by a preponderance of evidence:
(i) the purpose of the reservation;
(ii) the need for the reservation;
(iii) the amount of water necessary for the purpose of the reservation;
(iv) that the reservation is in the public interest.
(b) In determining the public interest under subsection (4)(a)(iv), the department shall issue a
water reservation for withdrawal and transport for use outside the state if the applicant proves by clear and
convincing evidence that:
(i) the proposed out-of-state use of water is not contrary to water conservation in Montana; and
(ii) the proposed out-of-state use of water is not otherwise detrimental to the public welfare of the
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citizens of Montana.
(c) In determining whether the applicant has proved by clear and convincing evidence that the
requirements of subsections (4)(b)(i) and (4)(b)(ii) are met, the department shall consider the following factors:
(i) whether there are present or projected water shortages within the state of Montana;
(ii) whether the water that is the subject of the application could feasibly be transported to alleviate
water shortages within the state of Montana;
(iii) the supply and sources of water available to the applicant in the state where the applicant
intends to use the water; and
(iv) the demands placed on the applicant's supply in the state where the applicant intends to use
the water.
(d) When applying for a state water reservation to withdraw and transport water for use outside the
state, the applicant shall submit to and comply with the laws of the state of Montana governing the
appropriation, lease, use, and reservation of water.
(5) If the purpose of the state water reservation requires construction of a storage or diversion
facility, the applicant shall establish to the department by a preponderance of evidence that there will be
progress toward completion of the facility and accomplishment of the purpose with reasonable diligence in
accordance with an established plan.
(6) (a) Upon issuing a state water reservation for the purpose of maintaining a minimum flow, level,
or quality of water, the appropriation of water is complete.
(b) The department shall limit any state water reservations after May 9, 1979, for maintenance of
minimum flow, level, or quality of water that it awards at any point on a stream or river to a maximum of 50% of
the average annual flow of record on gauged streams. Ungauged streams are not subject to the limit under this
subsection (6)(b).
(7) A state water reservation issued under this section has a priority of appropriation dating from
the filing of a correct and complete application with the department.
(8) (a) A person desiring to use water reserved to a conservation district for agricultural purposes
shall make application for the use with the district, and the district, upon approval of the application, shall inform
the department of the approved use and issue the applicant an authorization for the use. The department shall
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maintain records of all uses of water reserved to conservation districts and be responsible, when requested by
the districts, for rendering technical and administrative assistance within the department's staffing and
budgeting limitations in the preparation and processing of the applications for the conservation districts. The
department shall, within its staffing and budgeting limitations, complete any feasibility study requested by the
districts within 12 months of the time that the request was made. The department shall extend the time allowed
to develop a plan identifying projects for using a district's reservation as long as the conservation district makes
a good faith effort, within its staffing and budget limitations, to develop a plan.
(b) Upon actual application of water to the proposed beneficial use, the authorized user shall notify
the conservation district. The notification must contain a certified statement by a person with experience in the
design, construction, or operation of project works for agricultural purposes describing how the reserved water
was put to use. The department or the district may then inspect the appropriation to determine if it has been
completed in substantial accordance with the authorization.
(9) A state water reservation issued under this section may not adversely affect any rights in
existence at that time. The department may issue a state water reservation subject to terms, conditions,
restrictions, and limitations it considers necessary to satisfy the criteria of this section.
(10) (a) Except for a reservation provided in subsection (6) or a reservation provided in 85-20-1401,
the department shall, at least once every 10 years, review existing state water reservations to ensure that the
objectives of the reservations are being met.
(b) The department shall provide the water policy interim committee a summary of the reviews
before September 15, 2026, in accordance with 5-11-210.
(c) Following a review pursuant to this subsection (10) and except as provided in 85-2-331, at the
request of the entity holding a water reservation or when the objectives of a state water reservation are not
being met, the department may:
(i) extend the time period to complete the appropriation of water;
(ii) modify the reservation; or
(iii) revoke the reservation.
(d) Any undeveloped water made available as a result of a revocation or modification under this
subsection (10) is available for appropriation by others pursuant to this part.
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(11) Except as provided in 85-20-1401, the department may modify an existing or future order
originally adopted to reserve water for the purpose of maintaining minimum flow, level, or quality of water, so as
to reallocate the state water reservation or portion of the reservation to an applicant who is a qualified reservant
under this section. Reallocation of water reserved pursuant to a state water reservation may be made by the
department following notice and hearing if the department finds that all or part of the reservation is not required
for its purpose and that the need for the reallocation has been shown by the applicant to outweigh the need
shown by the original reservant. Reallocation of reserved water may not adversely affect the priority date of the
reservation, and the reservation retains its priority date despite reallocation to a different entity for a different
use. The department may not reallocate water reserved under this section on any stream or river more
frequently than once every 5 years.
(12) A reservant may not make a change in a state water reservation under this section, except as
permitted under 85-2-402 and this subsection. If the department approves a change, the department shall give
notice and require the reservant to establish that the criteria in subsection (4) will be met under the approved
change.
(13) A state water reservation may be transferred to another entity qualified to hold a reservation
under subsection (1). Only the entity holding the reservation may initiate a transfer. The transfer occurs upon
the filing of a water right ownership update form with the department, together with an affidavit from the entity
receiving the reservation establishing that the entity is a qualified reservant under subsection (1), that the entity
agrees to comply with the requirements of this section and the conditions of the reservation, and that the entity
can meet the objectives of the reservation as granted. If the transfer of a state water reservation involves a
change in an appropriation right, the necessary approvals must be acquired pursuant to subsection (12).
(14) This section does not vest the department with the authority to alter a water right that is not a
state water reservation.
(15) The department shall undertake a program to educate the public, other state agencies, and
political subdivisions of the state as to the benefits of the state water reservation process and the procedures to
be followed to secure the reservation of water. The department shall provide technical assistance to other state
agencies and political subdivisions in applying for reservations under this section.
(16) Water reserved under this section is not subject to the state water leasing program established
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under 85-2-141."
Section 2. Section 85-2-331, MCA, is amended to read:
"85-2-331. Reservations within Missouri River basin and Little Missouri River basin. (1) Except
as provided in 85-20-1401, the state, an agency or political subdivision of the state, or the United States or an
agency of the United States that desires to apply for a state water reservation in the Missouri River basin or in
the Little Missouri River basin shall file an application pursuant to 85-2-316 no later than:
(a) July 1, 1989, for reservation of water above Fort Peck dam; or
(b) July 1, 1991, for reservation of water below Fort Peck dam and in the Little Missouri River
basin.
(2) Subject to legislative appropriation, the department shall provide technical and financial
assistance to other state agencies and political subdivisions in applying for state water reservations within the
Missouri River basin and the Little Missouri River basin.
(3) Except as provided in 85-20-1401 and subsection (5), the department shall:
(a) make a final determination in accordance with 85-2-316 on all applications filed before July 1,
1989, for state water reservations in the Missouri River basin above Fort Peck dam.
(b) make a final determination in accordance with 85-2-316 on all applications filed before July 1,
1991, for state water reservations in the Missouri River basin below Fort Peck dam and in the Little Missouri
River basin.
(c) determine which applications or portions of applications are considered to be above or below
Fort Peck dam.
(4) Except as provided in 85-20-1401, state water reservations approved by the department under
this section have a priority date of July 1, 1985, in the Missouri River basin and a priority date of July 1, 1989, in
the Little Missouri River basin. If the department issued a permit under Title 85, chapter 2, part 3, prior to the
granting of a state water reservation under this section, the department may subordinate the state water
reservation to the permit if it finds that the subordination does not interfere substantially with the purpose of any
state water reservation. If the department issued a certificate for ground water development under Title 85,
chapter 2, part 3, prior to the granting of a reservation under this section, the department may subordinate the
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reservation to the certificate if it finds that the subordination does not interfere substantially with the purpose of
any reservation and the reservant consents to the subordination. The department shall by order establish the
relative priority of applications approved under this section.
(5) The duration of the reservations granted to the municipalities and conservation districts
established by the final order of the board of natural resources and conservation establishing water
reservations above Fort Peck dam issued July 1, 1992, is extended until those reservations are perfected or
until those reservations are revoked pursuant to 85-2-316."
Section 3. Notification to tribal governments. The secretary of state shall send a copy of [this act]
to each federally recognized tribal government in Montana.
Section 4. Effective date. [This act] is effective on passage and approval.
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I hereby certify that the within bill,
SB 357, originated in the Senate.
___________________________________________
Secretary of the Senate
___________________________________________
President of the Senate
Signed this _______________________________day
of____________________________________, 2025.
___________________________________________
Speaker of the House
Signed this _______________________________day
of____________________________________, 2025.
SENATE BILL NO. 357
INTRODUCED BY W. GALT, J. SECKINGER, K. WALSH, R. MINER, J. COHENOUR
AN ACT EXTENDING A DEADLINE FOR PERFECTION OF CERTAIN WATER RESERVATIONS ABOVE FORT
PECK DAM; PROVIDING RULEMAKING AUTHORITY; AMENDING SECTIONS 85-2-316 AND 85-2-331, MCA;
AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.