by Michael Howell
Karen Alley, Associate General Counsel for the Montana Association of Counties (MACO), was in the valley recently to give the Ravalli County Planning Board members an update on 2025 legislation affecting counties, and guidance concerning public participation on land use and the subdivision process itself including findings of fact, judicial review, decision making, determining adverse impacts, analyzing facts, mitigation and best practices.
There was lengthy discussion about House Bill 681 which Alley said was, to an extent, a response to the Broadwater County case over the process involving exempt wells in the approval of a subdivision. She said, prior to the Broadwater County case, the Department of Natural Resources and Conservation would issue what were called pre-determination letters to the Department of Environmental Quality to use in their review of water availability.
“After the Broadwater Case, DNRC quit issuing those letters and DEQ changed their rules to no longer require them and we’ve been left in sort of this odd space that we’ve been in since Feb. 14, 2024,” said Alley.
She said DNRC went back and rescinded some letters, especially over phased subdivisions, because of the judge’s ruling in that case. So in order to do a fix, after January 1, 2026, there will be what’s called a Notice of Intent to Appropriate that will be an analysis of legally available water.
“Essentially this will be a combined appropriation analysis for an exempt well,” said Alley. She said the subdivision applicant will have to apply to DNRC by filling out a Notice of Intent (NOI) to Appropriate, “and then DNRC turns around, I don’t know how, that’s why there is a delayed implementation date, and analyzes the combined appropriations and gives a legally designated amount of legally available water up to the 10 acre limit.” She said the NOI to Appropriate will be required as part of a “complete and sufficient” subdivision application. She said the DNRC anticipates a 10 day turn around in issuing the NOIs.
She told Planning Board members that an application will not even reach them until they have this. “An application cannot be deemed sufficient until they have this paper work,” she said, “So if the DNRC lags, that will be on the DNRC.”
The new law is effective January 1, 2026 and applies to applications AFTER January 1, 2026.
According to Alley, four legislative subcommittees are considering the exempt well issue. Local government, water policy, environmental quality and the financial modelling committees are all looking at the exempt well from slightly different angles.
“It’s been a decades-long struggle,” said Alley. “My point is that when you see subdivision applications after January 1, 2026, there will be this documentation called the NOI for Appropriation. It expires after five years. It can be renewed for another five years,” said Alley. She said she didn’t know how this would work out with DEQ’s Certificate of Subdivision Approval for sanitation that never expires. “But that’s a state agency problem from the perspective of counties,” she said.
She said If an application has been deemed sufficient before the January 1, 2026 effective date, it may still go through review without this new law applying, but if it has not met sufficiency by then, the new law applies.
“The Court ruled that DNRC was abdicating its authority,” said Alley. “This is what happens when you abdicate your authority, you get told that you have to do your job.”
According to Alley, the NOI to Appropriate only addresses the issue of legal availability of water and doesn’t address the question of physical availability. She said that, under the NOI to Appropriate process, there will actually be an allocation of water that the applicant can depend on.
“It will have more weight than the pre-determination letter did,” said Alley.
“Everyone involved in this recognizes that this is not a perfect fix,” said Alley, “this is a step. This is legal availability. This is a paper right. There are two kinds of availability, there is paper right and there is physical availability. So, there is still hydrology that will have to be done by the developer. They are still going to have to do a hydrological analysis as part of a complete and sufficient application. That hasn’t changed. Physical availability is not being covered by HB 681.”
She said the developer would have to cover the cost of the hydrological analysis and make it available to the Planning Board.
Ravalli County Planner Rob Livesay said, “There is no requirement in Ravalli County to have a hydrological study. That’s a misconception. The developers are doing it because they understand that we have some language in our Environmental Analysis that talks about depletion, so we have been asking for documentable, thorough responses which some people have taken to mean doing a hydrological study.” He said DEQ has required it as part of their water availability but for the county it’s not part of the county’s Preliminary Plat application. You still have to show DEQ that you have adequate water to meet your sanitation requirement.
Livesay said that it was his understanding that DEQ currently is really looking at water availability for the subdivision itself, but they are not looking at the impact to the overall aquifer health.
“That is where it seems to be falling to the county and that is where we are getting these planning board meetings where you have a neighbor commenting that they are having their well going dry,” said Livesay. “It’s my understanding that the DEQ is not looking at that, so this has kind of been exposed now. So, I guess it’s our responsibility to look at that and mitigate it. And it’s a really challenging question. It’s really hard.”
“We’ve been seeing hydrology reports coming in with all of our major subdivision applications,” said Livesay. “Even on minor ones there’s been a hydrologist coming in to testify. It seems like the county is looking for someone who is qualified to make some kind of statement that the impact is negligible. Some qualified professional, supported by data, that can make some solid conclusions, that seems to be what the Commissioners are looking for.”
Alley said there are no solutions but there have been steps with portions being codified in the Subdivision and Platting Act, portions being codified in the Sanitation in Subdivisions Act, and portions codified in the Water Use Act.
“It’s an emotional issue,” said Alley. “But HB 681 was never meant to fix the problem of the counties having to make a legal determination about physically available water.” She said HB 358 was an effort to address all these issues, but it died on the floor.
In other legislation:
HB 714 requires the Attorney General to prepare a form affidavit to be used across the state for the Family Transfer Exemption. Alley said the goal was to create uniformity across the state. She said we have 56 counties and 56 different applications. The bill also increased the penalty for evasion of the law and defines documented evidence. It was effective May 8, 2025.
HB 233 allows transfer of title of open space into a Home Owners Association (HOA) after the Plat has been granted and includes a specific definition of HOA. It applies to open spaces, parks, or similar common-use areas on Final Plats recorded on or after October 1, 1973.
She said within the subdivision process there is a requirement to satisfy open space or park land within a subdivision unless a “payment-in-lieu” is made instead of setting aside that land. By statute the land becomes county property. It is not actually transferred into county ownership in some cases, but it is county property, so the county is responsible for maintenance.
“As you all know, as counties are funded, dollars don’t go as far as they used to and maintaining all those properties becomes quite a problem,” said Alley. “This is a way for HOAs to take possession of those and maintain them. So, it’s kind of a cool tool that can be used state-wide.”
SB 174 moves review of mobile home lots and RV Parks from the Montana Subdivision and Platting Act and puts it into the Buildings for Lease and Rent Regulations and requires that the BLR regulations comply with County Growth Policies. It is effective October 1, 2025.