APPENDIX B. SUMMARY OF WATER LEASING 



PRESENTATIONS (3 PROGRAMS) TO EQC 



At their November 13, 1997, meeting in Missoula, the EQC heard from spokespersons for three 

 different water leasing programs in Montana; the FWP water leasing study, the private party water 

 leasing program, and the Clark Fork water leasing pilot program. These presentations are summarized 

 (from meeting minutes) below. Opinions expressed are those of the presenter. 



FWP Water Leasing Study > 



Mr. Liter Spence, a representative of FWP who has worked with instream flow programs for 25 years, 

 presented the FWP flow leasing study. He provided a history leading up to the Department's present 

 day program. He described the 1969 law which allowed the Department to appropriate the 

 unappropriated waters in twelve designated streams; the early 1970s Murphy rights which were 

 acquired by the Department under the old water law; the 1973 Water Use Act which allowed for water 

 reservations; and the three large quantification processes (which took place from the mid-1970s until 

 1994), used to acquire instream flows under the water reservation process. 



Mr. Spence explained that the purpose of the 1989 HB 707 was to return water to streams that had been 

 de-watered. This was not possible with the previous water reservation process since reservations had 

 little influence on de-watered streams whose users had more senior rights. As this was a very 

 controversial natural resource issue, the legislation was restrictive. It authorized a four-year study set 

 to expire in 1993, thereby limiting the number of streams which could be studied for leasing. 

 Moreover, it stated that any leases which were acquired during the four year period also expired with 

 the bill in 1993. This aspect of the program concerned ranchers who were interested in leasing water, 

 so, in 1991, the legislation was amended to allow any leases which were acquired during the four-year 

 time frame to continue past the expiration date of the statute. These amendments also expanded the 

 number of streams that could be studied from five to ten. Additional reporting requirements were 

 added in 1993, and the number of streams increased fix)m ten to twenty streams. This legislation will 

 expire in 1999. 



Mr. Spence described several aspects of the present water leasing program. One of these is the 

 relationship between water leasing and fish habitat in streams in the present program. He explained the 

 three components which provide for fish habitat: a suitable physical chaimel, suitable water quantity, 

 and suitable water quality. The program provides that, through a voluntary agreement with the water 

 right holder, the Department can acquire senior water rights, and use those rights to put water back into 

 the stream for fish habitat. 



Mr. Spence outlined the steps in the water leasing process. First an environmental assessment is 

 prepared and sent out for pubUc comment. When a lease agreement is completed, the Department files 

 a change application with DNRC which changes the purpose and place of use of the water right. It is 

 DNRC's responsibility to determine whether there will be any adverse affects on other water users, if 

 the water lease is initiated. This is accompUshed by sending notices to all water users in the area and 

 publishing the information in area newsp^ers. Should there be an adverse effect, the lease is not 

 granted. 



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