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First established in 1971 as a result of the Executive Reorganization Act of 1971, the DNRC provides leadership in managing the state's natural resources. It is presently responsible for promoting the stewardship of Montana's water, soil, forest, and rangeland resources; for regulating forest practices and oil and gas exploration and production. Nine boards and commissions are attached to the department. Six of them—the Board of Land Commissioners, Reserved Water Rights Compact Commission, Board of Oil and Gas Conservation, Board of Water Well Contractors, Flathead Basin Commission, and Montana Grass Conservation Commission—have decision-making authority. The other three—the Resource Conservation Advisory Council, Rangeland Resources Committee, and Drought Advisory Committee—act in an advisory capacity only.

As of 2024, the Department is made up of the following Divisions: Director’s Office, Conservation and Resource Development Division, Forestry-Trust Lands Division, and Water Resources Division. Each Division oversees a number of Bureaus, Offices, Programs, etc. The Energy Division’s responsibilities have been transferred to the Department of Environmental Quality.

The Montana Grass Conservation Commission Grazing Districts functions were previously under the responsibility of the Conservation District Bureau. The Conservation District Bureau and Montana’s Conservation Districts were organized in the 1930's as a response to the severe erosion problems of the "Dust Bowl" days. Montana's 58 conservation districts are political subdivisions of the state, governed by a board of five elected supervisors. The Conservation District Bureau also maintained responsibility of Montana’s Grazing Districts. The Montana Grass Conservation Commission (MGCC) is a governor-appointed board whose mission is to conserve, protect, restore, and facilitate the proper utilization of grass, forage, and range resources in the state of Montana. The Commission does this by organizing and administering the state grazing districts and by promoting cooperation between the Bureau of Land Managements, the U.S. Forest Service, Department of Natural Resources and Conservation, and the state districts.

Grazing districts are constructs of the Taylor Grazing Act which was adopted in 1934. These lands, highly valued by stock-growers for their grazing purposes, were vacant, un-appropriated and unreserved land from the public domain (the public domain does not include national forests, parks, monuments, Indian reservations, or railroad grant lands). Much of this land was used prior to the creation of grazing districts, but during the Dust Bowl of the 1930s controversy concerning sustainable grazing practices and rights to forage arose forcing the hand of government to act on these issues. The result was the creation of federally recognized boards that could manage the "preferences," or rights to use the resources of certain parcels of land, of their regional ranching communities.

After the act was put in place, locals in the livestock industry could petition the Secretary of the Interior to have a local district created. If accepted they would form a board that would meet and manage the permits that designated grazing preferences, finances to maintain leases and range improvements, and to generally maintain orderly grazing of the public lands within their district. Montana has seen the creation of many districts in their 70-plus years of operation. The state also has a long-standing history of partnerships with many federal organizations to provide the utmost care in regards to stewardship and the administration of public lands. The maintenance of the public lands in Montana is integral not only to the individual success of the members of the state grazing districts, whose livelihood hinges on a healthy relationship between the land and the livestock, but also on the economic success of Montana.

The 1999 Legislature created the Montana Grass Conservation Commission to assume the Conservation Districts Bureau’s grazing district responsibilities, and operate independently, effective July 1, 1999. The Commission is administratively attached to DNRC. Grazing districts are cooperative, nonprofit groups that set up permitting systems to aid in the management of grazing lands where land ownership is intermingled in order to conserve, protect, restore, and properly utilize grass, forage, and range resources.