DNRC proposes statutory clarifications to make mitigation more usable for permits and changes

Corey Hawkes of DNRC briefed the committee on a technical working‑group product aimed at improving Montana’s mitigation process for new permits and change authorizations. DNRC said uncertainty and high transaction costs have made mitigation unpredictable, particularly for applicants seeking to mitigate adverse effects in closed basins or where technical hydrogeologic analyses are costly.

DNRC’s near‑term recommendation is a statutory clarification package:

- Consolidate definitions so that mitigation is the overarching beneficial use for offsetting net depletions and aquifer recharge is the delivery mechanism used when appropriate. That removes ambiguity between separately defined terms in current statute.

- Require the mitigation‑plan elements currently codified for closed‑basin groundwater permits to apply consistently statewide (open and closed basins and changes), giving applicants a clearer roadmap through permit and change review.

DNRC also outlined medium‑term options for lowering transaction costs: aquifer storage/recovery (ASR), mitigation banking (using existing senior rights to create sellable mitigation credits), an exchange/marketplace to connect buyers and sellers, and state‑led hydrologic investigations in poorly characterized aquifers to reduce applicant costs.

DNRC said the first step is clarifying statute and the plan elements; stakeholders generally welcomed the clarification as a foundation for future tools. DNRC will refine a draft bill and circulate it to stakeholders before returning to the committee in July.

The committee and stakeholders asked DNRC to weigh in on how clarification will intersect with pending exempt‑well conversations and how mitigation credits and exchanges could be structured to protect senior water rights while enabling new uses.

(Reported from DNRC’s mitigation update and stakeholder responses.)