Exempt Wells Loophole - Clark Fork Coalition

Despite court rulings and policy changes, the number of unmonitored and permit-exempt groundwater wells just keeps climbing to the detriment of senior water users and our rivers and streams.

In 1973, the Montana Legislature passed the Water Use Act, which created a process for permitting new water rights. To reduce permitting burdens on small, individual users, it exempted groundwater use for “domestic, agricultural, or livestock purposes.” This meant applicants did not have to prove that the water was physically and legally available. Nor were they required to prove that the new use would not adversely affect those with senior water rights. Fast-forward to the late 1990s and developers started exploiting that exemption to drill permit-exempt wells for each “individual” home they built. Where in the past a new subdivision might be denied a water use permit because it would have negative impacts on local water supplies, with the loophole developers have built hundreds of thousands of homes without a water
impact study or any notice to existing water users. Exempt wells are depleting local water tables, reducing flow in nearby creeks, and reducing water available for senior water rights holders.

CFC has worked for more than a decade to close the so-called “exempt well loophole” to stop unfettered depletion of groundwater resources. We won a Montana Supreme Court decision in 2016 that ordered the state to close this loophole to protect water supplies and water rights. Since then we’ve defeated numerous attempts to re-open the loophole or codify it into Montana law. In 2022, we successfully stopped another abuse of the exempt well statute by developers. We sent a legal policy memo to the Montana Department of Resource and Conservation (DNRC) (who issues water permits) urging immediate course correction. We were pleased to see that DNRC partially updated its permitting guidance in response. However, problems remain with DNRC’s continued allowance of numerous exempt wells for some subdivision developments without any analysis of cumulative impacts.

CFC and our partners—including conservation groups, farmers, ranchers, municipalities and other water users—continue to fight proposed legislation that would open the exempt well loophole yet again.