Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                               HB 924.1
                                                  HOUSE BILL NO. 924
                                   INTRODUCED BY M. REGIER, S. GUNDERSON
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  A BILL FOR AN ACT ENTITLED: “AN ACT PROHIBITING THE TRANSFER OR LEASE OF WATER RIGHTS
  OUT OF STATE UNTIL 2048; ESTABLISHING A FEE; AMENDING SECTIONS 85-1-101, 85-2-141, 85-2-301,
  85-2-311, 85-2-316, 85-2-402, AND 85-2-403, MCA; AND PROVIDING EFFECTIVE DATES, AN
  APPLICABILITY DATE, AND A TERMINATION DATE.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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            Section 1. Section 85-1-101, MCA, is amended to read:
            "85-1-101.   Policy considerations. It is hereby declared as follows:
            (1)    The general welfare of the people of Montana, in view of the state's population growth and
  expanding economy, requires that water resources of the state be put to optimum beneficial use and not
  wasted.
            (2)    The public policy of the state is to promote the conservation, development, and beneficial use
  of the state's water resources to secure maximum economic and social prosperity for its citizens.
            (3)    The state, in the exercise of its sovereign power, acting through the department of natural
  resources and conservation, shall coordinate the development and use of the water resources of the state so
  as to effect full utilization, conservation, and protection of its water resources.
            (4)    The development and utilization of water resources and the efficient, economic distribution
  thereof are vital to the people in order to protect existing uses and to assure adequate future supplies for
  domestic, industrial, agricultural, and other beneficial uses.
            (5)    The water resources of the state must be protected and conserved to assure adequate
  supplies for public recreational purposes and for the conservation of wildlife and aquatic life.
            (6)    The public interest requires the construction, operation, and maintenance of a system of works
  for the conservation, development, storage, distribution, and utilization of water, which construction, operation,
  and maintenance is a single object and is in all respects for the welfare and benefit of the people of the state.
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68th Legislature 2023                                                                                               HB 924.1
            (7)    It is necessary to coordinate local, state, and federal water resource development and
  utilization plans and projects through a single agency of state government, the department of natural resources
  and conservation.
            (8)    The greatest economic benefit to the people of Montana can be secured only by the sound
  coordination of development and utilization of water resources with the development and utilization of all other
  resources of the state.
            (9)    Any attempt to gain control of or speculate on large quantities of ground water of the state of
  Montana is not in the interest of the people and is to be restricted. The right to use water may not be sold,
  leased, or transferred out of state until January 1, 2048. After the expiration of this moratorium, the department
  shall promptly develop an administrative process to accept applications for proposals to transfer water out of
  state and evaluate the applicant's compliance with [this act].
            (10)   To achieve these objectives and to protect the waters of Montana from diversion to other areas
  of the nation, it is essential that a comprehensive, coordinated multiple-use water resource plan be
  progressively formulated, to be known as the "state water plan"."
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            Section 2. Section 85-1-101, MCA, is amended to read:
            "85-1-101.   Policy considerations. It is hereby declared as follows:
            (1)    The general welfare of the people of Montana, in view of the state's population growth and
  expanding economy, requires that water resources of the state be put to optimum beneficial use and not
  wasted.
            (2)    The public policy of the state is to promote the conservation, development, and beneficial use
  of the state's water resources to secure maximum economic and social prosperity for its citizens.
            (3)    The state, in the exercise of its sovereign power, acting through the department of natural
  resources and conservation, shall coordinate the development and use of the water resources of the state so
  as to effect full utilization, conservation, and protection of its water resources.
            (4)    The development and utilization of water resources and the efficient, economic distribution
  thereof are vital to the people in order to protect existing uses and to assure adequate future supplies for
  domestic, industrial, agricultural, and other beneficial uses.
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68th Legislature 2023                                                                                            HB 924.1
          (5)      The water resources of the state must be protected and conserved to assure adequate
  supplies for public recreational purposes and for the conservation of wildlife and aquatic life.
          (6)      The public interest requires the construction, operation, and maintenance of a system of works
  for the conservation, development, storage, distribution, and utilization of water, which construction, operation,
  and maintenance is a single object and is in all respects for the welfare and benefit of the people of the state.
          (7)      It is necessary to coordinate local, state, and federal water resource development and
  utilization plans and projects through a single agency of state government, the department of natural resources
  and conservation.
          (8)      The greatest economic benefit to the people of Montana can be secured only by the sound
  coordination of development and utilization of water resources with the development and utilization of all other
  resources of the state.
          (9)      Any attempt to gain control of or speculate on large quantities of ground water of the state of
  Montana is not in the interest of the people and is to be restricted. Beginning January 1, 2048, the department
  shall promptly develop an administrative process to accept applications for proposals to transfer water out of
  state and evaluate the applicant's compliance with [this act].
          (10)     To achieve these objectives and to protect the waters of Montana from diversion to other areas
  of the nation, it is essential that a comprehensive, coordinated multiple-use water resource plan be
  progressively formulated, to be known as the "state water plan"."
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          Section 3. Section 85-2-141, MCA, is amended to read:
          "85-2-141.    Water leasing program. (1) There is a water leasing program administered by the
  department on behalf of the state of Montana.
          (2)      The department may acquire rights to water needed for leasing under this program:
          (a)      through appropriation of water in its own name;
          (b)      by agreement with or purchase from another holder of water rights; or
          (c)      by contract with the United States for water held in federal reservoirs as a means of protecting
  the state's interest in those waters.
          (3)      Water for leasing under the water leasing program must be obtained from the following
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68th Legislature 2023                                                                                             HB 924.1
  sources:
          (a)       any existing or future reservoir in a basin concerning which a temporary preliminary decree, a
  preliminary decree under 85-2-231, or a final decree under 85-2-234 has been entered;
          (b)       Fort Peck, Tiber, Canyon Ferry, Hungry Horse, Koocanusa, or Yellowtail reservoir if a contract
  between the department and the federal government concerning the acquisition of water is in effect; and
          (c)       any other existing or future federal reservoir:
          (i)       located in a basin concerning which a temporary preliminary decree, a preliminary decree
  under 85-2-231, or a final decree under 85-2-234 has been entered; and
          (ii)      for which and for so long as there is a contract between the department and the federal
  government concerning the acquisition of water.
          (4)       (a) Subject to subsections (4)(b) and (4)(c), the The department may lease up to 1 million
  acre-feet of water from the reservoirs identified in subsection (3)(b) to water users for beneficial uses in
  Montana.
          (b)    The department may lease up to 50,000 acre-feet of water from the reservoirs identified in
  subsection (3)(b) to water users for beneficial uses outside Montana.
          (c)    The total amount of water leased under this subsection (4) may not exceed 1 million acre-feet.
          (5)       The term of any lease may not exceed 50 years. A term may be extended up to another 50
  years if the department again determines the desirability of leasing by applying the considerations in subsection
  (7). In making a redetermination, the department may require the completion of an environmental impact
  statement in accordance with subsection (6).
          (6)       The department shall require the completion of an environmental impact statement under the
  provisions of Title 75, chapter 1, for lease applications that would result in the consumption of 4,000 acre-feet a
  year or more and 5.5 cubic feet per second or more of water and for any other application for which an
  environmental impact statement is required by law. The department shall require the completion of an
  environmental impact statement whenever the cumulative effect of more than one application for a lease would
  constitute a probable significant environmental impact.
          (7)       Upon application by a person to lease water, the department shall make an initial determination
  of whether it is desirable for the department to lease water to the applicant. The determination of desirability
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68th Legislature 2023                                                                                             HB 924.1
  must be made solely on the following considerations:
          (a)      the content of the environmental impact statement, if required;
          (b)      whether there is sufficient water available under the water leasing program; and
          (c)      whether the criteria, except as to legislative approval, set forth in 85-2-311 have been satisfied.
          (8)      The department shall for any lease agreement require commercially reasonable terms and
  conditions, which may include the requirement that up to 25% of the water to be leased be made available to a
  potential user for any beneficial use upon payment by the user of the costs of tapping into and removing water
  from the applicant's project. The department may differentiate in pricing, depending on the proposed beneficial
  use of the water.
          (9)      The lease of water or the use of water under a lease does not constitute a permit, as provided
  in 85-2-102, and does not establish a right to appropriate water within the meaning of Title 85, chapter 2, part 3.
          (10)     For purposes of the water leasing program established in this section, it is the intent of the
  legislature that the state act as a proprietor."
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          Section 4. Section 85-2-141, MCA, is amended to read:
          "85-2-141.    Water leasing program. (1) There is a water leasing program administered by the
  department on behalf of the state of Montana.
          (2)      The department may acquire rights to water needed for leasing under this program:
          (a)      through appropriation of water in its own name;
          (b)      by agreement with or purchase from another holder of water rights; or
          (c)      by contract with the United States for water held in federal reservoirs as a means of protecting
  the state's interest in those waters.
          (3)      Water for leasing under the water leasing program must be obtained from the following
  sources:
          (a)      any existing or future reservoir in a basin concerning which a temporary preliminary decree, a
  preliminary decree under 85-2-231, or a final decree under 85-2-234 has been entered;
          (b)      Fort Peck, Tiber, Canyon Ferry, Hungry Horse, Koocanusa, or Yellowtail reservoir if a contract
  between the department and the federal government concerning the acquisition of water is in effect; and
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68th Legislature 2023                                                                                            HB 924.1
          (c)      any other existing or future federal reservoir:
          (i)      located in a basin concerning which a temporary preliminary decree, a preliminary decree
  under 85-2-231, or a final decree under 85-2-234 has been entered; and
          (ii)     for which and for so long as there is a contract between the department and the federal
  government concerning the acquisition of water.
          (4)      (a) Subject to subsections (4)(b) and (4)(c), the department may lease up to 1 million acre-feet
  of water from the reservoirs identified in subsection (3)(b) to water users for beneficial uses in Montana.
          (b)      The department may lease up to 50,000 acre-feet of water from the reservoirs identified in
  subsection (3)(b) to water users for beneficial uses outside Montana. A water user outside the state shall pay a
  fee of $100,000 an acre foot for water approved for lease out of state.
          (c)      The total amount of water leased under this subsection (4) may not exceed 1 million acre-feet.
          (5)      The term of any lease may not exceed 50 years. A term may be extended up to another 50
  years if the department again determines the desirability of leasing by applying the considerations in subsection
  (7). In making a redetermination, the department may require the completion of an environmental impact
  statement in accordance with subsection (6).
          (6)      The department shall require the completion of an environmental impact statement under the
  provisions of Title 75, chapter 1, for lease applications that would result in the consumption of 4,000 acre-feet a
  year or more and 5.5 cubic feet per second or more of water and for any other application for which an
  environmental impact statement is required by law. The department shall require the completion of an
  environmental impact statement whenever the cumulative effect of more than one application for a lease would
  constitute a probable significant environmental impact.
          (7)      Upon application by a person to lease water, the department shall make an initial determination
  of whether it is desirable for the department to lease water to the applicant. The determination of desirability
  must be made solely on the following considerations:
          (a)      the content of the environmental impact statement, if required;
          (b)      whether there is sufficient water available under the water leasing program; and
          (c)      whether the criteria, except as to legislative approval, set forth in 85-2-311 have been satisfied.
          (8)      The department shall for any lease agreement require commercially reasonable terms and
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68th Legislature 2023                                                                                                 HB 924.1
  conditions, which may include the requirement that up to 25% of the water to be leased be made available to a
  potential user for any beneficial use upon payment by the user of the costs of tapping into and removing water
  from the applicant's project. The department may differentiate in pricing, depending on the proposed beneficial
  use of the water.
            (9)        The lease of water or the use of water under a lease does not constitute a permit, as provided
  in 85-2-102, and does not establish a right to appropriate water within the meaning of Title 85, chapter 2, part 3.
            (10)       For purposes of the water leasing program established in this section, it is the intent of the
  legislature that the state act as a proprietor."
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            Section 5. Section 85-2-301, MCA, is amended to read:
            "85-2-301.     Right to appropriate -- recognition and confirmation of permits issued after July 1,
  1973. (1) After July 1, 1973, a person may not appropriate water except as provided in this chapter. A person
  may appropriate water only for a beneficial use.
            (2)    (a) Only the department may appropriate water by permit for transport outside the following river
  basins:
            (i)    the Clark Fork River and its tributaries to its confluence with Lake Pend Oreille in Idaho;
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