Laura Lundquist

(Missoula Current) As Montana’s streams continue to dwindle in the continuing drought, a diverse group of organizations and individuals are once again challenging Montana’s rule on exempt wells, saying the state has repeatedly ignored court rulings.

On Wednesday, six Montana organizations and three individuals filed a complaint in Lewis and Clark County district court alleging that the Montana Department of Natural Resources Conservation has ignored court rulings and the rights of senior water-right owners by continuing to allow subdivision developers to exploit Montana’s exempt well law.

The plaintiffs include the Clark Fork Coalition, Montana League of Cities and Towns, Montana Farm Bureau Federation, Trout Unlimited, Montana Environmental Information Center, Association of Gallatin Agricultural Irrigators and Mark Runkle, a housing developer.

“From rapid growth to ongoing drought, Montana’s water resources and water users are facing unprecedented challenges,” said Andrew Gorder, Clark Fork Coalition legal director. “The cumulative impact of over 100,000 exempt groundwater wells can no longer be ignored. We’re asking the court to conserve our limited water resources and ensure that the constitutional protections afforded to senior water rights, including instream flow rights, are preserved.”

Over the years, especially since 2006, the Legislature has considered more than a dozen bills, most with the intent of enabling the proliferation of small wells – those that pump less than 35 gallons per minute – that the state has exempted from needing a water right or permit. The few bills proposed to keep exempt wells in check have usually failed in the Legislature while the DNRC has been reluctant to insist on regulation. So the incorporation of exempt wells in new subdivisions has exploded at a time when the state, particularly western Montana, is struggling with dwindling water supplies.

According to the complaint, census data show Montana’s population increased by almost 203,000 residents between 2000 and 2021. Over 87% of that growth occurred in six counties—Gallatin, Yellowstone, Flathead, Missoula, Lewis and Clark, and Ravalli – and those are also the counties where hundreds of new wells are pulling huge amounts of water out of their respective aquifers.

The complaint says Ravalli County is the most extreme example of population influx and exempt well development. Census data show 10,000 people moved to Ravalli County between 2000 and 2021, and 84% of the 6,000 new homes were built outside of incorporated areas. As a result, there are now more than 24,000 wells in the county and only 288 are for municipal or public water supply systems. So it’s not surprising that household wells, such as those south of Lolo, were running dry this summer in the Bitterroot Valley.

So many unregulated, unmetered wells together are using more water than agricultural producers who are required to have water rights before they can use water for irrigation or stockwater. If such water rights holders don’t receive their full amount of water, they are allowed to ask other users junior to them to stop using water. But that system doesn’t work when they try to make a call on a subdivision full of exempt wells. So, as courts have found, exempt wells violate Montana’s first-in-time, first-in-right system of water rights.

Over the decades, the number of water rights granted in each river basin account for more water than the basin holds, so starting in the 1990s, the state closed several basins to new water rights, including the Upper Clark Fork, Blackfoot and Bitterroot river basins. Eventually, groundwater rights were limited too when the courts ruled groundwater and surface water were linked. But that hasn’t stopped developers from drilling more household wells.

Back in the 1960s and ‘70s when Montana had only a half-million residents, exempt wells weren’t as much of a problem. But as the population surged and subdivisions multiplied in the 1980s, some Montanans could see danger, and a 1982 state conference recognized the threat to water supplies posed by an increasing number of unregulated wells.

In 1987, the DNRC developed a rule prohibiting the combined appropriation or use of exempt wells from a single aquifer without a water right, which should have stopped subdivisions from installing multiple exempt wells. But real estate and contracting lobbies were gaining strength. In 1993, the DNRC changed the definition of “combined appropriation” to require that the wells be physically joined before being required to get a water right, giving developers an out to use individual household wells.

A 2008 DNRC report, written for the newly created Legislative Water Policy Interim Committee, found that “exempt wells had become a major source of unregulated groundwater use in closed basins, areas with high population growth and increasing subdivision development.” The DNRC acknowledged that water rights owners could have their water use curtailed while subdivision exempt-well use continues unabated.

The Water Policy Interim Committee would conduct two additional studies of exempt wells in 2012 and 2018, which would find exempt wells problematic for water supplies and water law, but prompted no action.

Finally in 2009, a group of water rights holders, including the Clark Fork Coalition and rancher Katrin Chandler, petitioned the DNRC to rewrite the 1993 rule to protect senior water rights. When the DNRC refused, they went to court. In October 2014, a district judge ruled in their favor, saying the 1993 exempt well rule violated Montana’s Water Use Act. The state appealed, and meanwhile, the Legislature tried to pass laws to bolster the 1993 rule even though many legislators say they’re pro-agriculture.

In September 2016, the Montana Supreme Court upheld the district court finding that the 1993 rule on combined appropriation was inconsistent with the Water Use Act. DNRC went back to its 1987 definition of combined appropriation, and that should have put an end to the use of multiple exempt wells in subdivisions. But it didn’t.

In 2022, Upper Missouri Waterkeeper and others filed a court challenge to stop a 442-acre subdivision with exempt wells in Broadwater County that had gotten DNRC approval because it would be developed in four phases that were considered individually. The district court sided with Upper Missouri Waterkeeper, saying the DNRC’s “interpretation here would allow developers to circumvent exempt well limitations easily and unilaterally by simply slicing any project into phases each small enough to fall under the exempt-well ceiling for the aggregate acre-feet.”

District judge Michael F. McMahon said the DNRC ignored the 2016 Montana Supreme Court ruling and he expected that the department might do the same in future situations.

“The economic impetus to develop land is overwhelming and relentless. If there is going to be any check on uncontrolled development of Montana’s limited water resources, it will have to come from DNRC, which is statutorily charged with fulfilling Montanans’ constitutional right to ‘control, and regulation of water rights,’ a duty DNRC has manifestly avoided or undermined for over a decade to the detriment of our waters, environment, and senior water rights holders whose protection is the ‘core purpose’ of the Water Rights Act,” McMahon wrote.

The 2025 Legislature killed Senate Bill 358, which came out of recommendations from a DNRC working group, which included some of the plaintiffs. SB 358 would have significantly restricted the use of exempt wells in four aquifers where DNRC data and analysis shows that wells are affecting senior water rights owners: the Helena Valley, the Bitterroot Valley, the Missoula Valley, and the Gallatin Valley.

DNRC data show that between 74% and 94% of all groundwater use within these aquifers are from exempt wells, compared to 1% to 5% that are permitted wells, according to the complaint. In the Missoula and Bitterroot Valleys, more than 15,000 exempt wells serve rapidly growing residential areas, making up 74% of all groundwater rights in the Missoula Valley and 89% in the Bitterroot Valley. DNRC has recommended that the Legislature close both the Missoula and Bitterroot aquifers to additional exempt well development.

Because efforts to work with the DNRC and the Legislature have been stymied, the plaintiffs are turning to the courts and asking a judge to find the Exempt Well Law is unconstitutional by violating the property rights of water-right owners and by limiting their right to participate. They also want the DNRC to stop implementing the Exempt Well Law and rewrite it to conform with the water law of prior appropriation.

“Farmers and ranchers have followed the rules and invested generations of work based on secure access to water,” said Scott Kulbeck of the Montana Farm Bureau Federation. “Everyone has to play by the same rules. When some folks skip the permit process and pull from a water source that’s already spoken for, it hurts their neighbors. This case is about protecting the way Montanans have managed water responsibly for generations.”

Contact reporter Laura Lundquist at lundquist@missoulacurrent.com.