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HELENA — The old Western adage that “whiskey’s for drinking, water is for fighting over” is repeated so often it’s almost become a cliché.
But water is always a hot topic in the Treasure State, and a classic Western water fight is playing out in the Legislature over a bill that would address who can lay claim to water diverted from private lands for use on state lands.
When property owners with water rights lease land from the state, specifically school trust lands, they can build pipes from their private wells or springs and use the water to irrigate crops or raise livestock on that land. Montana’s Department of Natural Resources and Conservation claims it owns a stake in the water that’s used on state lands, however, even after the water right holder’s lease expires. That has some lessees concerned.
Rep. Alan Redfield, a Republican and rancher from Livingston, is carrying House Bill 286, which would bar the state from acquiring ownership of water channeled from private lands.
Lawmakers on the House Natural Resources Committee heard testimony on the bill earlier this month, and they’re expected to take action on it today during their 3 p.m. meeting in room 172 of the state capitol.
“We’re trying to keep these water rights where they belong, but we’re constantly bombarded,” Redfield during a Feb. 13 hearing. “It’s costing us thousands of dollars in attorney’s fees.”
Liv Stavick with the Montana Farm Bureau called the state’s claims a “usurping” of private water rights and said it could deter future use of state lands.
“Let’s say the state can now lay a claim to you water right. Let’s say they can do so without due process. Do you think that landowner will choose to put water on their state lease? I can tell you I certainly would not recommend it to my members,” Stavick said.
But Shawn Thomas, DNRC trust lands division administrator, pointed to a bedrock tenet of water law in the West, including in Montana: the beneficial use concept.
“Water rights are defined by the point of beneficial use, not the point of diversion,” Thomas said at the hearing.
In other words, a farmer can divert water from a river miles away and move it to her property with pipes or canals. The person who owns the land where the water is diverted doesn’t own the water. The farmer owns the water because she’s putting it to the beneficial use of growing crops or raising livestock.
The same concept applies to groundwater and wells, according to DNRC.
“Lots of folks have water rights where surface water is diverted far away from where it’s being used,” Thomas said. “Groundwater has not been distinguished differently from any surface right.”
The Trust Lands Management Division must maximize the value of its lands for the benefit of public education. Revenue that the division collects — whether from agricultural leases, timber harvesting or mining — is piped to Montana schools.
“We’re out here managing these lands and advocating for these beneficiaries, and holding to the fact that we have this mission and this mandate that’s clear and direct, to go out and do good things, to generate revenue for the kids,” Thomas said.
In 2018, agricultural and grazing leases generated more than $26 million for state schools. Losing the water that improves agricultural state lands could decrease the value of those lands.
The ripple effects of water on state lands
HB 286 creates a temporary water right that allows a water right holder to use his water on state lands, then reclaim the full water right after the lease ends.
The bill also specifies that the state can’t claim an ownership interest in water diverted from private land and used on leased state lands. That provision applies retroactively, which means the state could lose claim to hundreds of water rights it has already proved ownership of in court, according to Brian Bramblett, an attorney for DNRC.
“With the exception of [one] case, I’m not aware of any cases where the water court determined the state wasn’t the owner of a water right beneficially used on trust lands, regardless of where the point of diversion was,” Bramblett said.
That one case, 43A-A, is where things get muddy.
It involves an irrigator who occasionally used surplus water on leased state trust lands. In 2000, the Montana Water Court ruled that the state couldn’t claim a lessee’s water if it was only temporarily used on state lands. The decision also notes that, in 1991, an irrigator in the case attempted to transfer the same water rights to the Department of State Lands (the predecessor to DNRC’s Trust Lands Management Division), but the department declined since the point of diversion was not on state land.
The Water Court was created in 1979 to wade through hundreds of thousands of cases that flooded the state after the Legislature established Montana’s first formal water rights laws in 1973.
HB 286 supporters say the court’s ruling on 43A-A also proves that a water right holder gets to keep his water if he diverts it from private land to state land.
“It says that a water right owner can’t be divested of a property right except through constitutional power, such as eminent domain,” said Krista Lee Evans, executive director of the Senior Water Rights Association. “And at least in that instance, there would be a process and compensation for the loss of the property right.”
But opponents of HB 286 point to another case, from 1985, which ruled if water is diverted or developed on state lands, title to the water belongs to the state.
In Dept. of State Lands vs. Pettibone, the Montana Supreme Court found that lessees act on behalf of the state. The court further noted that if an irrigator lost her lease but retained all water rights, the irrigator could influence the way the state land is used, since “control of water means control of the land itself” in the arid West. That irrigator could meddle with the bidding process for future leases by refusing to provide water or selling it at an inflated price.
Not all lawmakers on the House Natural Resources Committee were persuaded by the state’s arguments, however.
“From what I’m hearing, if I lend you my roller skates, you get to keep my roller skates,” said Rep. Steve Gunderson, R-Libby. “I don’t see where the landowner or water right owner is being reimbursed for use of his water. I see a taking, and that’s all I see.”
The Montana Farm Bureau, the Senior Water Rights Coalition, the Montana Stockgrowers Association, the Montana Water Resources Association, the Montana Well Drillers Association, and the Montana Farmers Union also spoke in favor of HB 286. The committee closed the nearly two-hour hearing without taking a vote.