Southwest Montana Heritage and Recreation Area Act of 1996

Southwest Montana Heritage and Recreation Area Act of 1996 - Designates the Southwest Montana Heritage and Recreation Area in Montana. Conditions such designation on the Secretary of the Interior's approval of a compact (which shall relate to the objectives and management of the proposed Heritage Area) and a management plan (which shall present comprehensive recommendations for the conservation, funding, management, and development of such Area).

Authorizes the management entity named in the approved compact for the Area to receive Federal funds in support of cooperative partnerships to prepare and implement the management plan regarding the Area. Conditions eligibility for Federal funds on submission of such plan and limits the duration of eligibility to ten years after the Area is designated (with a five-year extension authorized).

Directs the management entity to publish procedures to ensure that the rights of owners of private property are protected, including a process to provide information to such owners with respect to obtaining just compensation due as a result of taking of private property under the Fifth Amendment to the Constitution.

Authorizes the Secretary to: (1) advise State and local governments, nonprofit organizations, and other appropriate entities as to suitable methods of recognizing and preserving thematically and geographically linked natural, historic, and cultural resources and recreational opportunities; and (2) consider the Area for nomination to the World Heritage List if it meets the nomination qualifications.

Sets forth provisions regarding: (1) Federal matching grants and technical assistance to governmental units and private nonprofit organizations regarding compacts and management plans; (2) specified criteria for such assistance; (3) spending Federal funds on non-federally owned property; (4) reporting requirements; (5) duties of Federal entities conducting Area activities; and (6) the lack of effect of this Act on other land use regulation.

Authorizes appropriations. Specifies funding limitations.