WATER LAW

Leasing Protects Against Abandonment

Use It or Lose It:
Another rule within the prior appropriation doctrine relates to abandonment of water rights. The “use it or lose it rule” requires appropriators to use their entire water right or risk abandoning it. Once a water right is deemed by the state to be abandoned, the water is available for appropriation by other water users. This rule was intended to encourage reasonable water use and discourage speculation; however, it oftentimes encourages waste. Indeed, water right holders commonly use water even when it is not necessary, simply to ensure they do not lose it through abandonment.

With respect to abandonment, if the Department of Natural Resources and Conservation (DNRC) believes that an appropriator has abandoned a water right, the DNRC may initiate a court action to declare the right abandoned. Abandonment is the consequence of:

• Ceasing to appropriate all or a part of a right with the intention of abandonment;
• Ceasing to appropriate a right according to its terms or conditions; or
• Ceasing to appropriate all or part of a right for a period of ten years when water was available for use. MCA § 85-2-406.

If any of these conditions exist, the DNRC may petition the appropriate district court to declare the rights abandoned. The district court conducts a hearing and the department bears the burden of proving abandonment.

Since enactment of the private leasing law in 1995, water right holders can now transfer all or a portion of their water rights to MWT through a water lease and the amount left instream is protected against abandonment under Montana law. Indeed, MCA § 85-2-404(4) provides:

“The lease of an existing right pursuant to 85-2-436, the use of water pursuant to 85-2-439, or a temporary change pursuant to 85-2-407 does not constitute abandonment or serve as evidence that could be used to establish an abandonment of any part of the right.”

Thus, if water right holders are interested in preserving their water rights, but may not need to use the entire right each year (e.g., upgraded irrigation system conserves water) they can protect their entire water right by leasing the water to MWT for instream use to benefit fisheries. In over-appropriated streams, such a lease will ensure that the conserved water is not used by junior users, but will remain instream to benefit fisheries.