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Oregon Legislators Demonstrate Continued Interest in Water Resource Planning and Drinking Water Quality

February 1, 2019

Legislators in Oregon have introduced a number of water bills that could affect agricultural, municipal, and industrial water users, as well as water use in growing communities. Two bills would significantly impact specific industries: SB 103 would limit an exemption for groundwater use at industrial dairies and HB 2656 would prohibit the timber industry from conducting common logging operations that could impact drinking water supplies.

Water Right Exemptions

As a general rule, any private appropriation and use of Oregon’s water requires a water right issued by the state.[1] However, the legislature has identified a number of statutory exemptions to that general rule.[2] This session, two bills have been introduced to alter existing exemptions:

  • SB 103, specific to the dairy industry, would change how water use is regulated at some large dairies.[3] SB 103 arose out of public response to regulatory violations at Lost Valley Farm in Eastern Oregon, which relied on a statutory exemption for livestock watering, using almost 1 million gallons of groundwater per day without a water right.[4] The bill defines an “industrial dairy” as a confined animal feeding operation that has (a) 700 or more mature dairy cows not guaranteed to seasonal daily access to pasture land or (b) 2500 or more dairy cows. Industrial dairies could continue to take advantage of the existing statutory exemptions to use surface and groundwater for livestock watering without a water right, but SB 103 would limit that use to 5,000 gallons per day. The bill would also prohibit the Oregon Departments of Environmental Quality and Agriculture from issuing permits for an industrial dairy without proof of valid, final water rights with sufficient capacity to fully meet the facility’s needs.
  • SB 347 aims to exempt diffuse surface water—that is, rainwater runoff and snowmelt that has not yet met a stream—from the water right requirement.[5] Oregon statute already exempts collection and use of “precipitation water from an artificial impervious surface” like a building roof[6] to allow rainwater harvesting. SB 347 would more broadly authorize the “collection, storage or use of water that is diffused over the surface of the ground, derived from falling rain, melting snow or other precipitation, that has not joined with other waters in a well-defined channel.”[7] The bill tracks a bill that died in committee during the 2017 legislative session.[8] The bill’s sponsor, Senator Linthicum, represents District 28 in Southwest Oregon’s Klamath Basin, whose consumptive users have experienced ongoing water shortages.

Water Quality

HB 2656 would specifically impact the timber industry, as it would prohibit certain forestry operations near water supplies designated as public water system sources under the federal Safe Drinking Water Act.[9] The bill aims to regulate drinking water quality from nonpoint source discharges associated with logging activities. It would ban outright pesticide or fertilizer application, Type 3 Harvesting (commonly known as clearcutting), and certain construction activities for logging roads. The State Forester could approve limited exemptions for, among other things, watershed restoration projects and water quality improvement projects. The bill’s sponsors, Representatives Salinas and Power, represent the Portland metropolitan suburbs of Lake Oswego and Milwaukie, respectively. If HB 2656 were to gain traction, it could significantly impact current industrial practices on private forests across the state, including those on the coast. Given the breadth of this proposal, its passage is unlikely.

Related, HB 2493 would broadly prohibit aerial pesticide application in the McKenzie River and Santiam River watersheds, but create exceptions for pesticide application to eliminate infestations authorized by the State Department of Agriculture or State Forestry Department.[10] Recent sessions have seen similar bills specifically targeting the forestry industry. For example, SB 954 (2017) would have prohibited aerial pesticide applications for forestry operations within watersheds supplying drinking water to residences or schools.[11] The bills reflect an ongoing discussion about the drinking water quality impacts of private forestry operations in Oregon.[12]

Stored Water Transfers

In Oregon, storing water in a pond or reservoir requires a primary water right. Using stored water for another purpose (such as irrigation or industrial use) requires a separate, secondary water right.[13]

To alter any aspect of a water right, a water user must apply to the Oregon Water Resources Department (“OWRD”) for a “transfer.”[14] For example, if a water user has a right to use water for irrigation but wishes to instead use that water for industrial purposes, a transfer is required. Historically, OWRD allowed analogous changes to storage rights. For example, if a water user with a right to store water for irrigation desired to use that water for industrial purposes, the user could apply to OWRD for a transfer.

Despite its previous practice, OWRD has recently decided that its existing statutory authority does not authorize transfers of storage rights.[15] That determination hinges on the statutory term “water use subject to transfer,”[16] which OWRD concluded does not encompass storage rights.

SB 51 would clarify that the department may transfer a “storage right subject to transfer.”[17] The definition of “storage right subject to transfer” parallels the definition of “water use subject to transfer” to mean water rights “evidenced by” an adjudication decree, a water right certificate, a water right permit, or an approved and completed transfer application.[18]

SB 51, as introduced, would specifically authorize changes to the “type of use” authorized in the storage right (e.g., irrigation or industrial purposes), and does not address changes to other aspects of storage rights, such as where water may be stored. OWRD has proposed to table those issues for further discussion with stakeholders.[19] The implications of this bill, if passed, would affect different users in various ways, and would be far-reaching.

Water Supply Planning

Several bills aim toward long-term water resource planning, particularly in the arid parts of the state east of the Cascades.

  • HB 2084, introduced at Governor Brown’s request, would extend the 2019 sunset date for OWRD’s place-based planning grant program until 2023.[20] The place-based integrated water resources planning program aims to encourage competing stakeholders to coordinate water resource management at the local watershed level, to reduce litigation and conflict. In 2015, the Oregon Legislature authorized OWRD to issue grants to implement place-based planning,[21] and four communities across the state have received grant funding to pilot the program. The bill is in committee, and stakeholders have generally been supportive.
  • SB 511 would earmark $5 million out of the general fund for OWRD to distribute to Harney County for a groundwater study and groundwater conservation measures.[22] Harney County, in Southeast Oregon, has experienced severely declining groundwater levels and extreme drought in recent years. Declining water supply threatens the local economy dependent on agriculture, ranching, and forestry. The bill’s sponsor, Senator Bentz, represents District 30—the largest district in Oregon—which encompasses most of Eastern and Central Oregon.
  • HB 2819 would appropriate $500,000 of the general fund for OWRD to establish a pilot program evaluating the feasibility of supplying surface water from the Columbia River to groundwater users in Critical Groundwater Areas of the Umatilla Basin.[23] A Critical Groundwater Area is an administratively regulated area where groundwater levels are declining or groundwater has been over-appropriated.[24] OWRD may regulate new groundwater uses and even curtail existing groundwater rights.
    The Umatilla Basin is in Northeastern Oregon, south-adjacent to the Columbia River.[25] HB 2819 would encourage water users with surface water rights from the Columbia River to implement water conservation projects and lease the conserved portion of their water rights to OWRD. The department could then trade that leased surface water to groundwater users, where feasible, in exchange for agreements to reduce groundwater use. This approach tracks Oregon’s Allocation of Conserved Water Program, which incentivizes consumptive water users to reduce their use without losing their water rights.[26]
  • HB 2581 would declare a state policy to enhance the supply of Columbia River Basin water for consumptive and instream uses in the state.[27] The bill directs OWRD to “aggressively pursue” Columbia River Basin resources, including increasing the amount of new water available for agricultural use by 100,000 acre-feet above 2018 levels.
  • SB 700 would authorize certain municipal water suppliers in Central Oregon’s Deschutes Basin to collect fees from customers and distribute those fees to a nonprofit.[28] The nonprofit would use those funds to increase stream flows and water quality in the Deschutes Basin, by purchasing mitigation credits or temporary water right transfers, or by implementing other restoration projects. The nonprofit would redistribute additional stream flows to the suppliers. The bill’s sponsor, Senator Knopp, represents communities in the Deschutes Basin, which continues to see competing demands for limited water.

Other

Other bills with potentially significant impacts to a variety of industries and state and local government operations include:

  • HB 5043, the biennial appropriation bill for OWRD, which would include approximately $108 million in total funds,[29] including funding to establish a new statewide groundwater basin study team, additional field staff, the creation of dam safety task force, and “funding to develop a business case analysis for investment in water infrastructure;”[30]
  • SB 27, which would authorize the Oregon Health Authority to adopt a schedule of fees for municipal water suppliers, to fund the agency’s costs of assessing drinking water system safety.[31] The fee schedule would be graduated, based upon the water supplier’s size, and the bill would authorize the agency to increase fees up to three percent per year. The bill does not provide other guidelines as to the amount of fees. Reactions from municipal users have been mixed, with some suppliers supporting the bill as drafted and others expressing concerns about increased operation costs that will be passed on to consumers. SB 27 reflects increased regulatory concern related to public drinking water systems, arising in part out of the recent discovery of cyanotoxins in the City of Salem’s water supply.[32]
  • HB 2085, relating to dam safety and dam removal standards;[33]
  • SB 431[34] and HB 2008,[35] which would create an urban flood safety and water quality district for northern Multnomah County, north of Portland; and
  • HB 2331, which would set a statute of limitations for the Oregon Water Resources Commission to enforce well-construction standards.[36]

This session’s plethora of water bills reflect Oregon’s intensifying interest in long-term water planning, as Oregon’s water resources have become fully appropriated and the state experiences the effects of climate change. The bills also reflect recent heightened public concerns over drinking water quality in the state, and willingness to regulate industries and utilities to address those concerns. However, the governor’s carbon cap and trade bill[37] will be the legislature’s foremost environmental focus this session; it remains to be seen whether the remainder will go anywhere this session, or will be repackaged and reconsidered during the next. Marten Law will continue to provide relevant updates on this and other relevant legislation that could potentially affect its clients across the Pacific Northwest.

For more information, please contact Jessica K. Ferrell or any other member of Marten Law’s Water Resources and Water Quality practice groups.

[1] ORS 537.130.

[2] ORS 537.141.

[3] SB 103 (introduced) § 1.

[4] Tracy Loew, State officials let mega-dairy use loophole to tap endangered Oregon aquifer, Statesman Journal (March 22, 2018).

[5] SB 347 (introduced).

[6] ORS 537.141(1)(h).

[7] This definition tracks the legal definition of diffuse surface water. See, e.g., Wellman v. Kelley, 197 Or. 553, 560, 252 P.2d 816 (1953).

[8] SB 428 (2017).

[9] HB 2656 (introduced).

[10] HB 2493 (introduced).

[11] SB 954 (2017).

[12] See, e.g., Tony Schick, Oregon Environmental Groups, Lawmakers Target Logging Rules, Oregon Public Broadcasting (Feb. 22, 2017).

[13] ORS 537.400.

[14] ORS 540.520.

[15] See Oregon Water Resources Department, LC 509: Transfers in the Type of Stored Water.

[16] See ORS 540.505 (defining “water use subject to transfer”); ORS 540.505-.589 (regarding OWRD’s authority to issue transfers).

[17] SB 51 (introduced).

[18] Compare ORS 540.505 with SB 51.

[19] Testimony, Senate Committee on Energy and Environment, HB 51, Jan. 24, 2019 (statement of Tom Byler and Racquel Rancier).

[20] HB 2084 (introduced).

[21] Or Laws 2015, ch. 780.

[22] SB 511 (introduced).

[23] HB 2819 (introduced).

[24] ORS 537.730.

[25] Oregon Water Resources Department, Groundwater Restricted Areas (map).

[26] See OAR 690-018-0010 to 0090.

[27] HB 2581 (introduced).

[28] SB 700 (introduced).

[29] HB 5043 (introduced).

[30] Oregon Department of Administrative Services, 2019-2021 Governor’s Budget State of Oregon 174-75.

[31] SB 27 (introduced).

[32] See, e.g., David Emme, Salem cyanotoxin crisis: Lessons learned, The Pipeline: Oregon Drinking Water News (Oct. 2018).

[33] HB 2085 (introduced).

[34] SB 431 (introduced).

[35] HB 2008 (introduced).

[36] HB 2331 (introduced).

[37] LC 894 (Jan. 31, 2019) (draft).

 

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