Montana’s 2025 Legislature modified Montana’s Water Use Act via HB 681 and HB 441, both of which took effect January 2026:
HB 681: New Procedures for Acquiring Previously “Exempt” Ground Water Rights and Subdivision Applications
HB 681 was passed in response to litigation arising from certain policies of the Montana Department of Natural Resources and Conservation (DNRC) that allow subdivision developers to rely on multiple “exempt” groundwater wells for their developments. However, it provides for a new procedure for acquiring groundwater certificates which will impact all new users of water, not just developers.
1. New or previously unpermitted uses of groundwater that are less than 35 GPM or 10 AFY must first submit a Form 602I - Notice of Intent to Appropriate Groundwater (either before or after the development has been dug or completed with the DNRC. DNRC will then evaluate the proposed groundwater use to determine if it qualifies as being “exempt” from DNRC’s permitting process.
If the proposed use qualifies, DNRC will “authorize” the Notice of Intent. This is not a water right. The water user must complete the development within five years and file a Form 602 - Notice of Completion of Groundwater Development. If the completed development is in substantial accordance with the authorization, a water right will be issued.
If the proposed use does not qualify, the user must apply for a Beneficial Use Permit which requires proof of statutory criteria, public notice and the possibility of an administrative hearing pertaining to the application. DNRC’s Application Forms are available here: Water Right Forms and Resources.
2. Additionally, applicants for a proposed subdivision that will not be relying on hauled water, municipal water or a water and sewer district, must demonstrate to the local governing body evaluating the subdivision at the beginning of the review process that each lot in the subdivision has one of the following:
- An existing water right that would serve the subdivision;
- A completed technical analysis for a permit or change application from DNRC; or
- A “Notice of Intent” to appropriate groundwater authorized by the DNRC.
HB 441: Reconciling Provisional Water Rights with Final Decrees
HB 441 brings finality and consistency to all historical (meaning, pre-1973) water rights, by essentially “marrying” or “reconciling” pre-1973 water rights in final decrees issued by the Water Court with post-1973 changes to the water rights authorized through the DNRC’s change authorization or provisional permit processes.
What does this mean to Montana water rights holders? This is your final opportunity to make modifications to your provisional permits before the DNRC issues certificates of water rights. By Jan. 31, 2026, the DNRC will automatically send notices of opportunity to petition to all owners of historical water rights and provisional permits for those basins that have been fully adjudicated by the Water Court and have final decrees. For those basins still completing the adjudication process, notice will be sent within 60 days once a final decree is issued. Mont. Code Ann. § 85-2-313. Within 180 days of receiving notice, water right owners may file a Form 658: Petition for Reduction, Modification, or Revocation of a Provisional Permit. This petition process has commenced in the following basins with final decrees (the 180-day clock has started):
- Basin 38H—Belle Fourche River, Above Cheyenne River
- Basin 39E—Boxelder Creek
- Basin 39FJ—Little Beaver Creek
- Basin 39G—Beaver Creek, Tributary to Little Missouri River
- Basin 39H—Little Missouri, Below Little Beaver Creek
- Basin 40G—Sage Creek
- Basin 40H—Big Sandy Creek
- Basin 40P—Redwater River
- Basin 40T—St. Mary River
- Basin 42I—Little Powder River
- Basin 43E—Pryor Creek
You can monitor the status of the reconciliation petition process on the DNRC’s Basin Status and Information page. If you are not an owner of pre-1973 water rights and provisional permits, but would like to still receive notices of opportunity to petition in a particular basin(s), you can sign up using the form at the bottom of the DNRC’s Permit and Change Reconciliation Process page.
Once the reconciliation process is complete, then the DNRC will begin its final verification process to confirm that provisional permits are in “substantial accordance” with its terms and conditions, final decrees, and/or change applications before issuing a final certificate of water right. Mont. Code Ann. §§ 85-2-315, 402.
The permit and change reconciliation process with final decrees is a new and evolving process. You can learn more about this entire process on the DNRC’s Permit and Change Reconciliation Process page.
Please reach out to the Montana Parsons Water Team to learn more about the implementation of HB 681/441 and to discuss any questions/concerns.
