New water rights fee law at center of legal dispute

May 2005

U.S. Water News Online

HELENA -- The Legislature's plan for speeding up the 30-year-old process of resolving Montanans' water right claims may have hit a legal snag, lawmakers learned.

The Schweitzer administration and the chief legislative attorney disagree over the validity of a new law that imposes a fee on thousands of water right holders to pay for added staff to process claims more quickly.

The dispute prompted Gov. Brian Schweitzer to ask Attorney General Mike McGrath for a formal legal opinion.

The question, outlined for a legislative committee, centers on a provision of a bill the 2005 Legislature passed that allows the new fee to take effect only if lawmakers also provided at least $2 million a year from other sources to continue existing funding for the water rights adjudication process.

Greg Petesch, who heads the Legislature's legal staff, has concluded that money was not supplied as the new law requires so the law is void. He maintains the funding was not contained in a single appropriation for a single adjudication program.

Lawyers for the Departments of Natural Resources and Conservation and Fish, Wildlife and Parks believe the additional funding demanded by the bill is properly contained in the major spending measure for state government, so the law in House Bill 22 is valid.

Based on that conclusion, the natural resources agency has prepared to start hiring more employees to increase claims examinations, said Director Mary Sexton. They will go to work July 1, regardless of whether the legal cloud over the new fee has been resolved.

"We firmly believe that we have to continue forward," Sexton said. "If we don't put all the pieces in place, we won't be able meet all the benchmarks in House Bill 22."

After hearing of the dispute over the measure, the Legislative Council told Petesch to include the law it in the other legislation being added to Montana's law books.

The committee said that, should McGrath conclude the law is void, a special legislative session planned for December will be able to fix the problem and allow the water rights fee to be assessed.

Petesch believes that, because the added funding demanded by the bill is scattered among four agencies, it does not amount to a single appropriation item equal to $2 million annually.

Tim Hall and Bob Lane, attorneys for the natural resources and fish and game departments, contend the money all goes to various parts of the water rights adjudication process and totals $2.5 million a year so the requirement is satisfied.

The 1972 Montana Constitution required the state to create a system for adjudication all water right claims. After more than three decades, officials have yet to examine 57,000 of 220,000 filed claims, and estimates are that another 40-50 years will be needed to complete the task at the current pace.

The fees imposed by the new law would affect about 113,000 water right holders and range from $20 every two years to $2,000, varying according to the amount of water involved.

Most of the water rights are held by farmers, ranchers and others holding fewer than 20 water rights. They would pay about 58 percent of the money. Irrigation districts, cities, power generators, mining companies, industrial operations and businesses also would pay.


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