Can Groundwater be Used for Subdivisions?

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In recent weeks there have been multiple media outlets covering the decision from the Montana First Judicial District Court regarding exempt wells for a subdivision in Broadwater County. The question that is being posed in the press is if the recent district court decision restricted the use of groundwater? In short, the answer is no. The issue for senior water right holders is bigger and relates directly to whether or not all large uses of water should be required to apply for a water right permit.  The Montana Senior Water Rights Coalition, of which the Montana Stockgrowers Association (MSGA) is a member of, has put together this summary to help break down the background of the case and what the decision means.

In August 2022, Western Water Watersheds, in partnership with neighboring landowners, filed suit against Broadwater County and the Montana Department of Natural Resources and Conservation (DNRC) regarding the approval of a multi-phase subdivision utilizing exempt wells. Later, 71 Ranch was added to the case as an intervenor. 

The case concerned 71 Ranch’s proposed subdivision located on the east side of Canyon Ferry Reservoir, inside the administratively closed Upper Missouri River Basin. The proposal was to subdivide 442 acres over four phases of development into 39 residential, 2 commercial, and 1 open space lot with each lot having its own exempt well, septic and stormwater system. The important note on this case is that 71 Ranch broke up the subdivision into phases, and argued that each phase should be able to obtain its own “exempt” groundwater right, and thus evade any water rights permitting process.

Here’s what you should know…

  • Exempt wells are limited to 35 gpm/10 ac ft per year and do not require a permit. Exempt wells cannot be used as a combined appropriation.
  • The Court ruled against the county, DNRC and 71 Ranch stating that DNRC ignored its own rule, which precludes these exempt groundwater rights, as they are a “combined appropriation” (e.g. using multiple exemptions for a single development). 
  • The decision acknowledged that the county, in its MEPA analysis, made no attempt to address the impacts on agricultural water use near the proposed development, but instead only focused on the impacts to agriculture water use on the specific parcel being developed.
  • The Court summarized how DNRC’s decades-long failure to properly enforce Montana’s water laws has resulted in uncontrolled exempt well development; with an estimated 128,000-191,000 exempt wells in Montana, entitled to withdraw 417-622 billion gallons of water per year – without any permitting.any analysis of injury to other water users, and no opportunity for senior water right holders to object. 
  • It is yet to be determined if Broadwater County, DNRC or 71 Ranch will appeal this decision.
  • This decision impacted the use of exempt wells through a combined appropriation.  Stock wells and other de minimis uses of water are not impacted by the decision.

This decision is a significant decision regarding exempt wells and their uses. For senior water right holders, acknowledgement of the legacy issues around exempt wells have now been highlighted. DNRC is currently in the process of conducting a comprehensive water review for the state, of which this topic has been acknowledged as one of the top issues to discuss this legislative interim. Multiple members of the Montana Senior Water Rights Coalition are serving on the comprehensive water review working group and are diligently working to protect your property rights. In the coming months, solutions to address the misuse of exempt wells will be discussed. To learn more or to provide public comment visit:

The Montana Stockgrowers Association is a grassroots membership organization and is the trusted voice of cattle ranchers. With 140-years of history, MSGA advocates and ensures cattle ranching remains relevant, safe and a sustainable way of life for generations to come.


Keni Reese

Director of Marketing & Communications


[email protected]

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