85-2-427. (Temporary) Temporary lease of appropriation right -- requirements -- rulemaking. (1) Applications to temporarily lease an appropriation right that comply with the requirements of this section are not subject to the provisions of 85-2-402, 85-2-407, 85-2-408, or 85-2-436. After obtaining department approval pursuant to this section, an appropriator may temporarily lease an appropriation right.
     (2) The amount of water leased may not exceed the total consumptive use of the appropriation right. For an irrigation right, the consumptive volume may not exceed 1 acre-foot per acre irrigated. The department shall determine the consumptive volume limits for other uses by rule.
     (3) (a) Each appropriation right leased pursuant to this section:
     (i) must have been used within 5 years prior to the application date;
     (ii) may be leased only during the period of diversion for the appropriation right; and
     (iii) may not be leased for more than 2 years one time during any consecutive 10-year period.
     (b) The volume of water leased may not exceed 180 acre-feet per year.
     (c) The point of diversion for the appropriation right may not be changed.
     (4) The use of any appropriation rights on the place of use associated with a leased appropriation right is forbidden during the term of the lease.
     (5) Storage may not be added to the leased appropriation right at the point of diversion or the original place of use.
     (6) This section does not apply to changes in an appropriation right that would result in leased water being transported outside Montana. Proposed out-of-state uses are subject to the provisions of 85-2-402.
     (7) Water leased pursuant to this section must be measured at the point of diversion by a meter approved by the department. The appropriator shall report the amount of water measured at the end of the year in which the lease occurred or upon request of the department.
     (8) An applicant proposing to lease an appropriation right pursuant to this section shall submit a correct and complete application on a form provided by the department and a fee as established by rule. The application must include:
     (a) the name and address of each lessee;
     (b) the name of all owners of each appropriation right;
     (c) the number of each appropriation right;
     (d) the proposed use and the place of use for the leased water;
     (e) the source of water to be appropriated;
     (f) the start and end dates of the proposed lease;
     (g) the proposed diversion flow rate and volume of water to be used during the lease;
     (h) evidence that the appropriation right has been used within the last 5 years;
     (i) a description of how the existing use of the appropriation rights would cease at the place of use during the lease period, including the number and location of acres to be removed from irrigation, if applicable; and
     (j) an analysis of potential adverse effects and a description of planned actions to mitigate potential adverse effects.
     (9) Within 30 days of receiving the application, the department shall approve or deny the application. An approved application must be correct and complete and meet the requirements of this section. The department may approve an application with conditions.
     (10) After approval, the department shall provide notice of the proposed lease that includes the information in subsections (8)(a) through (8)(g). The department shall:
     (a) mail individual notice to potentially affected appropriators identified by the department in the area of the point of diversion; and
     (b) post the notice on the department's website.
     (11) (a) For 60 days from the date that notice is mailed pursuant to subsection (10), the department shall accept correct and complete objections to the proposed lease from any person whose property, water rights, or interests would be adversely affected by the proposed appropriation. The objection must be made on a form provided by the department.
     (b) The department shall determine if an objection is valid. A valid objection contains facts indicating that the rights of other appropriators would be adversely affected by the lease of the appropriation right. If the department determines that an objection is valid, the approval for the use of the appropriation right under the lease is canceled and no water may be used pursuant to the lease.
     (c) The owner of an appropriation right whose approval is canceled under subsection (11)(b) may request a hearing on the objection pursuant to 2-4-604 within 15 days of notice of the cancellation. The department shall issue an order reinstating approval for the use of the appropriation right under the lease if the applicant proves by a preponderance of the evidence that the water rights of other appropriators will not be adversely affected by the lease.
     (12) Leased water may not be put to use until a final determination is made pursuant to subsection (11). The lessee shall provide the department with a copy of the executed lease agreement before the leased water is put to use.
     (13) Violations of this section are subject to the provisions of 85-2-114 and 85-2-122. This subsection does not limit the remedies available to an appropriator to enjoin or seek damages from the owner of an appropriation right who leased the water or from a lessee.
     (14) The department shall adopt rules to implement this section. The rules must include definitions of consumptive uses and criteria for determining if an appropriation right has been used in the 5 years prior to the temporary lease application.
     (15) The department shall report annually to the water policy interim committee provided for in 5-5-231. The report must include the number of leases, the amount of water leased, and the number of irrigated acres taken out of production. (Terminates July 1, 2019--sec. 4, Ch. 236, L. 2013.)

     History: En. Sec. 1, Ch. 236, L. 2013.