2007 Oregon Legislative Session
Executive Summary

The 2007 Oregon Legislative Session convened on January 8, 2007 and adjourned on June 28, 2007. It was the shortest regular session since 1995.

As anticipated, Democratic control of the House, Senate, and Governor’s Office resulted in the dynamics of the 2007 Session being substantially different than in years past. A variety of issues that had not received serious attention in recent years were suddenly the focal point of the legislature’s attention. Improving economic conditions and a corresponding increase in state revenues also contributed to a different session dynamic. In recent years, difficult economic times resulted in protracted legislative debates over appropriate levels of funding for education and human resources. The improving economy provided the 2007 Legislature with $2.5 billion dollars beyond what was available for the 2005-2007 biennium, making budgetary decisions much simpler and less divisive.

The legislative debate surrounding water related issues was dominated by an aggressive regulatory agenda championed primarily by Representative Jackie Dingfelder (D-Portland), who served as Chair of the House Committee on Energy and Environment. Throughout the session, Representative Dingfelder focused her efforts on advancing two priority legislative proposals. The first of these proposals, HB 2564, would have required all water rights in Oregon to be measured. The second, HB 2566, would have eliminated longstanding statutory provisions allowing landowners to appropriate ground water for domestic purposes without a permit from the Oregon Water Resources Department. Although Representative Dingfelder worked tenaciously to advance HB 2564 and HB 2566, both measures were ultimately defeated, largely because of Water for Life’s efforts.

While the defeat of HB 2564 and HB 2566 represents a substantial victory for Water for Life and agricultural water users across the state, Water for Life achieved success on a variety of other fronts as well. For example, Water for Life was able to secure amendments to HB 2294, which will ensure that Oregon’s fish screening cost-share program continues to make funds available for small water users. Water for Life’s amendments to HB 2294 will also prevent the Oregon Department of Fish and Wildlife from charging water users more than $150 for inspecting and repairing a fish screen the agency believes the landowner has failed to properly maintain. The original bill would have allowed ODFW to charge landowners for the actual costs of inspecting and maintaining the fish screen. Water for Life also succeeded in securing amendments to HB 2097 that will ensure Oregon’s experimental instream split-season leasing program sunsets in the year 2014, rather than continuing indefinitely with little or no additional oversight.

Water for Life was also successful in preventing the longstanding debate over water right ownership from resurfacing during the 2007 Session. Early in the session, the Oregon Water Resources Congress circulated a proposal around the halls of the State Capitol that would have granted irrigation districts ownership of water rights located within irrigation districts. Water for Life proactively informed legislators that landowners within irrigation districts own the water rights appurtenant to their land and encouraged legislators not to consider legislation that would interfere with the established property rights of private landowners. Ultimately, the Oregon Water Resources Congress decided there was not sufficient legislative support for its proposal and no bill was ever introduced.

Despite Water for Life’s success in preventing certain adverse water policy proposals from moving forward, Water for Life was unable to prevent the legislature from increasing fees across the board. As a result of HB 5051, the fees imposed by the Water Resources Department will increase by an average of 62%. Many agricultural organizations testified in support of these fee increases; however, Water for Life hoped the fee increases imposed on water users could be moderated in light of the state’s strong financial health and the fact the Water Resources Department’s budget bill (HB 5050) included an increase of approximately 20% in general fund dollars.

An interesting aspect of the 2007 Session was the amount of attention on water storage, conservation, and supply. Numerous proposals were introduced to study water storage options, conduct statewide water assessments, and withdraw water from the Colombia River (Oasis Project). Many of these proposals, the Oasis project in particular, received a high degree of legislative debate and attention. Nevertheless, the 2007 Session adjourned without any of these proposals moving forward.

Water for Life should be proud of its accomplishments during the 2007 Session. If not for Water for Life, many of the proposals that were defeated this session would have become law. Yet many challenges lie ahead. At this juncture, the Legislative Assembly is planning to hold a one-month special session in February of 2008 to “test” annual sessions and it is safe to assume that many of the proposals defeated this session will reemerge. As agricultural water users well know, Water for Life’s mission is an ongoing one and the outcome of future battles is far from certain.

Introduction to Key Bills

The summaries provided below discuss Water for Life’s efforts on key water legislation during the 2007 Session. This summary does not comprehensively describe all of Water for Life’s activities or all of the issues on which Water for Life was engaged. However, the summary should provide some insight into Water for Life’s role during the 2007 Legislative Session.

HB 2564: Water Measurement

House Bill 2564 was introduced by the House Energy and Environment Committee and proved to be the most contentious water-related bill of the 2007 Oregon Legislative Session. As introduced, HB 2564 would have required all water users in Oregon to measure and report their water use to the Oregon Water Resources Department.

The introduction of HB 2564 generated tremendous opposition from Water for Life and other members of the agricultural community. At the initial public hearing before the House Energy and Environment Committee on February 21, 2007, farmers and ranchers filled the hearing room to testify in opposition. Following the initial public hearing, Representative Jackie Dingfelder, the committee chair, stated she would convene a work group to develop a compromise proposal that would be more acceptable to water users.

The first measurement work group meeting was held on March 1, 2007. The meeting was well attended by more than 20 individuals representing a broad spectrum of interests. Attendees were asked to describe their concerns with HB 2564 and to provide comments on how the proposal could be improved. Water for Life participated and explained that it did not make sense to move forward with legislation in the absence of an identified problem. Water for Life also explained the Oregon Water Resources Department already has authority to require measurement in circumstances where the Department believes it is necessary. Requiring all water users to measure and report their water use would be inefficient and impose a tremendous financial burden on both water users and the state, without providing any corresponding benefit.

At the March 13, 2007 meeting of the measurement work group, participants were provided a draft water measurement proposal and asked to provide written comments before the next meeting. The draft proposal essentially would have required mandatory measurement in certain “high priority” basins, instead of the entire state. The proposal continued to represent a mandatory approach and Water for Life provided detailed comments explaining why such an approach was unnecessary, exceedingly expensive, and otherwise unacceptable. Water for Life also provided committee members with copies of the existing statutory provisions granting the Water Resources Department the authority to require measurement when the Department determines measurement is warranted.

The series of work group meetings concluded with very little consensus being achieved and public hearings on HB 2564 were scheduled for April 20, 2007 and April 23, 2007. Due to a busy agenda, however, the House Energy and Environment Committee did not actually hold a hearing on HB 2564 until April 30, 2007.

At the April 30, 2007 hearing, the committee considered amendments prepared at the request of Representative Jackie Dingfelder. The amendments were less onerous and primarily directed the Water Resources Department to implement the Strategic Water Measurement Plan that is already being implemented by the Department. The amendments also imposed a number of onerous water reporting requirements on water users. In addition, the amendments purported to create a cost-share program for water users, but without providing a guaranteed source of funding for the cost-share program. The amendments also proposed to sunset the cost-share program on January 2, 2010.

Water for Life provided written and oral testimony in opposition to the amendments arguing that it was unnecessary to direct the Department to implement a program it is already implementing. Water for Life also objected to the water reporting requirements and argued against the sunset date for the cost-share program. Nevertheless, the committee incorporated the amendments and voted to send the measure directly to the floor of the House of Representatives, even though the measure was originally scheduled to go to the Committee on Ways and Means for a review of its financial impact. Representative Bob Jenson was the only Republican on the committee to vote in support of the measure.

The decision to send HB 2564 directly to the floor of the House, bypassing the Committee on Ways and Means, was not a surprise to Water for Life. Since the beginning of the session, Water for Life had expected the measure to reach the floor of the House and had been diligently contacting House members to provide them with information about the issue. Much of this effort was targeted toward members of the Democratic Party known to be moderate on environmental issues.

Water for Life’s work ultimately paid off. House Bill 2564 was scheduled for a vote of the full House of Representatives on May 15, 2007. When the day of the vote arrived, Representative Dingfelder and the proponents of HB 2564 realized they did not have enough votes to pass the measure. Consequently, Representative Bob Jenson made a procedural motion to send HB 2564 to the Committee on Ways and Means for consideration of its fiscal impact, in order to avoid a vote and keep the measure alive. Water for Life subsequently undertook efforts to ensure the measure did not return to the floor and the session adjourned without HB 2564 receiving any additional formal consideration.

HB 2566: Exempt Water Rights

House Bill 2566 was introduced by the House Energy and Environment Committee and joined HB 2564 in being one of the most contentious water-related bills of the 2007 Oregon Legislative Session. As originally introduced, the measure would have removed a longstanding statutory exemption that allows domestic wells and certain other ground water rights to be acquired without obtaining a permit from the Oregon Water Resources Department. Ardent supporters of the measure included Representative Jackie Dingfelder, WaterWatch, and the League of Oregon Cities. The measure also received tacit support from organizations such as the Oregon Farm Bureau and the Oregon Association of Nurseries.

Prior to holding a public hearing on HB 2566, the House Committee on Energy and Environment held an informational hearing on ground water management on March 13, 2007. As only invited testimony is allowed at informational hearings, the hearing provided an opportunity for proponents of restrictions on exempt water rights to make their case without being rebutted by opposing testimony. Speakers at this hearing included representatives of the Oregon Water Resources Department and Professor Todd Jarvis from Oregon State University. The informational meeting made it clear that HB 2566 was intended to restrict Measure 37 development by making it more difficult for Measure 37 claimants to access water for domestic purposes.

Following the informational hearing on ground water management, Representative Jackie Dingfelder commenced a work group to discuss alternatives to the initial proposal. Water for Life participated in the work group meetings along with a broad spectrum of other interested stakeholders. During the meetings, Water for Life provided extensive information concerning the history, hydrology, and laws pertaining to exempt water rights. The information provided by Water for Life clearly demonstrated that exempt water rights represent less than 1% of total water use in Oregon and are a property right that may be regulated by the Water Resources Department in the same manner as any other ground water right.

Although the work group on exempt water rights met several times and provided an opportunity for a broad spectrum of parties to express their views, the comments of those seeking to protect exempt water rights from governmental curtailment were not meaningfully taken into consideration. Instead, following the work group meetings, several amendments to HB 2566 and an initial public hearing was scheduled for April 27, 2007. The proposed amendments failed to address Water for Life’s concerns expressed at the work group meetings.

Prior to the initial public hearing, Water for Life provided committee members with packets of information and written comments on the proposed amendments. The effort to educate the committee on the impact of the amendments prior to the public hearing proved to be a very prudent course of action, because testimony at the public hearing was limited to two-minutes per person. Water for Life testified at the hearing but it was impossible to adequately address the issues presented by HB 2566 in the two minutes of time that was allotted by Chair Dingfelder.

No action on HB 2566 was taken at the initial public hearing, but a second public hearing and work session were scheduled for April 30, 2007. Before the hearing, Water for Life worked with Senator Doug Whitsett to have an amendment drafted that would delete the original bill and insert provisions creating a task force to study exempt ground water rights.

At the April 30, 2007 hearing, Representative Chuck Burley (R-Bend) made a motion to replace the original bill with Water for Life’s amendment to create a task force. However, Representative Jackie Dingfelder interjected and changed the motion so that Water for Life’s amendment would not replace HB 2566, but instead, be added to it. The committee also approved another amendment drafted at the request of Representative Jackie Dingfelder. As amended, HB 2566 was subsequently voted out of committee and sent to the Committee on Ways and Means for analysis of its financial implications. The key provisions of the measure, as approved by the House Committee on Energy and Natural Resources, were as follows:

Imposes 5,000-gallon/day limit on new, and some existing, exempt water rights that are used for single domestic purposes, which includes watering of lawns and noncommercial gardens on a specific one-half acre. Limits lawn and noncommercial garden watering associated with new, and some existing, group domestic water rights to a specific one-half acre total area per well or water system. Continues to allow 5,000 gallons/day for any new and existing single industrial or commercial purpose. Limits lawn or noncommercial garden watering to 5,000 gallons/day on a specific one-half acre total area per well or water system. Defines “water system” to mean multiple wells used to irrigate a single lot or parcel, whether or not the wells are physically connected. Imposes $250 fee for recording the use of ground water that is appropriated for single domestic, group domestic, industrial/commercial, or lawn and noncommercial garden watering purposes. Applies to new exempt water rights, as well as some existing exempt water rights. Allows Water Resources Commission to require any new or existing exempt water right holder within a critical ground water area or ground water limited area to apply for a permit to use ground water. Creates an interim task force on exempt uses.

Proponents of the amended HB 2566 asserted that it was an improvement upon the original bill and represented a “compromise” because it did not completely eliminate the exemption for domestic wells and certain other ground water rights. However, a close review of the amended bill proved otherwise. In addition to imposing significant restrictions and fees on new exempt water rights, the amended HB 2566 was poorly drafted and would have impaired existing water rights. Under the amended measure, individuals with longstanding exempt water rights would be required to obtain permits to continue utilizing their rights. The amended HB 2566 would also have imposed significant restrictions on the quantity of water that could be appropriated from certain exempt water rights established prior to 1955.

Fortunately, Water for Life was able to provide members of the Committee on Ways and Means with a significant amount of information concerning the negative implications of HB 2566. Despite persistent efforts by Representative Jackie Dingfelder, WaterWatch, and many others, HB 2566 remained in the Committee on Ways and Means at the end of the session without any further formal action having been taken.

SB 1057: Proof of 100-Year Water Supply

Senate Bill 1057 was introduced on June 22, 2007 by several legislators at the request of an organization called Project Oregon Water Resources. The measure represented an end-of-session maneuver aimed at addressing the percolating ground water issues associated with HB 2566.

While SB 1057 was aimed at many of the same issues as HB 2566, it proposed to go much further. Under SB 1057, anyone seeking to develop, enlarge, transfer, or otherwise alter any ground water right within a critical ground water area or ground water limited area would be required to prove by “substantial evidence” that there was sufficient water available to supply the proposed use of water for 100 years, without injuring other water users. However, water users unable to make this showing could only proceed with the development, enlargement, transfer, or other modification of their water right by developing an appropriate mitigation plan. Under the measure, a water user’s mitigation plan would have to demonstrate by substantial evidence that:

The water user has the financial capability to fulfill the mitigation plan; The water user will utilize best management practices; and The water user is able to supply water to an adversely affected owner of an existing water right.

In addition to the foregoing, SB 1057 proposed to impose a host of fees on Oregon water users. For example, Section 5 of the measure would have required a person submitting a required water supply study to the Water Resources Department to pay a $15,000 examination fee. A person submitting a required mitigation plan would be required to pay a fee of as much as $5,000. The measure provided for numerous other additional fees.

Water for Life learned of SB 1057 several weeks prior to its formal introduction and responded by preparing a memorandum for members of the Rules Committee, which was the committee where SB 1057 was assigned. Water for Life also made key contacts with members of the committee to discuss the legislation. Although SB 1057 was briefly scheduled for a hearing in the waning days of the session, the measure was pulled from the committee agenda due to Water for Life’s efforts.

HB 2098: Irrigation Season Extensions

House Bill 2098 was introduced by Governor Kulongoski at the request of the Water Resources Commission to authorize the Commission to extend irrigation seasons by administrative rule instead of administrative order. The measure represented a technical modification to existing law and easily won approval from both houses of the Legislative Assembly. Governor Kulongoski signed the measure into law on May 31, 2007.

Prior to passage of HB 2098, the Commission could only extend an irrigation season by administrative order. Under Oregon’s Administrative Procedures Act (APA), an administrative order is not effective as to any person or party unless it is served upon the person or party either personally or by mail. Historically, the Commission has served irrigation season extension orders on the Director of the Oregon Department of Agriculture. In recent years, questions had arisen in regard to whether such notice satisfied the requirements of the APA, since the notice was not personally served on everyone affected by the order. Under HB 2098, the Commission will still be required to provide the public with notice in accordance with Oregon’s rulemaking procedures, but will not be required to personally serve notice on every individual or organization affected by an irrigation season extension.

HB 2099: Forfeiture Protest Fee Refund

House Bill 2099 was introduced by Governor Kulongoski at the request the Water Resources Department. The measure proposed to allow the Oregon Water Resources Department to refund all or part of a landowner’s protest fee when a landowner protests the Department’s decision to cancel a water right and successfully defends the validity of their water right in a contested case proceeding. The measure received broad support from Oregon’s agricultural community and easily received approval from both the House and Senate. The measure was signed into law by Governor Kulongoski on May 31, 2007.

HB 3467: Alternate Reservoir Permitting Process

Oregon’s alternative reservoir permitting process was established in 1995 pursuant to HB 2376 and provides an expedited application process for permitting of small ponds and reservoirs. The process is currently available to the owner of any reservoir that has “a storage capacity of less than 9.2 acre-feet or a dam impoundment structure less than 10 feet high.” The use of the term or in the existing statute means that a pond with an impoundment structure less than 10 feet high will qualify for the expedited permit process even if it holds more than 9.2 acre-feet of water. Water for Life played an integral role in the development of the alternative reservoir permitting process and the language of the existing statute is the product of long negotiations between Water for Life and other stakeholders.

House Bill 3467 was introduced by Representative Jackie Dingfelder and strongly supported by WaterWatch. The measure proposed to modify the existing statute so that only reservoirs with “a storage capacity of less than 9.2 acre-feet and a dam impoundment structure less than 10 feet high” would qualify for the expedited permit process.

House Bill 3467 was assigned to the House Committee on Energy and the Environment and an initial public hearing was held March 28, 2007. At the hearing, Waterwatch testified that HB 3467 was necessary to close a “loophole” which has allowed large ponds holding as much as 149,288 acre-feet of water to utilize the expedited permit process. The Oregon Water Resources Department testified and stated that it would support an amendment setting a cap on the size of pond eligible for the expedited permit process. Water for Life testified in opposition to the measure and provided the committee with historical information concerning the development of the existing statute, the public interest review associated with the expedited permit process, and argued that making it more difficult to permit ponds was contrary to the state’s interest in increasing water storage. Following the hearing, Water for Life provided committee members with information showing that the 149,288 acre-feet application cited by WaterWatch was never approved through the expedited permit process and that the number of large ponds actually permitted through the expedited process was less than WaterWatch had indicated in its testimony. Ultimately, HB 3467 died in committee without receiving a second hearing.

HB 2294: Fish Screening

House Bill 2294 was introduced by Governor Kulongoski at the request of the Oregon Department of Fish and Wildlife (ODFW). The measure, as originally introduced, proposed to modify Oregon’s fish screening program in a manner that was of substantial concern to Water for Life. Problematic aspects of the bill, included:

Provisions expanding the availability of cost-share funds to diversions of more than 30 cfs with no assurance that funds would be made available for projects of less than 30 cfs.

Provisions denying cost-share funds for screening projects associated with water rights established after July 1, 1991

Provisions stating that if a landowner failed to conduct appropriate inspection and maintenance, ODFW would be permitted to conduct the inspection and maintenance and charge the landowner for the actual costs of traveling to the site, performing the work, and/or conducting the inspection. The existing statute only allowed ODFW to charge a $25 fee for conducting these activities.

House Bill 2294 was assigned to the House Committee on Energy and Environment and received an initial public hearing on February 12, 2007. Water for Life articulated its concerns to committee members and was directed to work with ODFW to develop a compromise amendment. For several weeks, Water for Life worked with Roy Elicker and other representatives of ODFW to develop a proposal that would adequately address Water for Life’s concerns. On March 7, 2007, a work session on HB 2294 was held, but no action was taken because Water for Life and ODFW had not yet been able to reach complete agreement on an amendment.

Following the hearing, additional negotiations took place and compromise amendments that were acceptable to ODFW and Water for Life were finally agreed upon. Key provisions of the compromise amendment included:

Provisions ensuring ODFW must give preference to small diversions of 30 cfs or less when making cost-share funds available.

Provisions allowing anyone with a water right established prior to January 1, 1996 to obtain cost-share funding.

Provisions allowing the Fish Screening Task Force to make cost-share funds available for projects associated with water rights established after January 1, 1996 if there is “good cause.”

Provisions prohibiting ODFW from charging a fee in excess of $150 for inspecting or conducting maintenance on a fish screen that has not been properly maintained by the landowner.

The compromise amendments were incorporated into HB 2294 on March 12, 2007 and the measure was passed out of committee and sent to the House Committee on Revenue for further review of the measure’s tax credit provisions. The Revenue Committee added an amendment extending the sunset date on the tax credit to January 2, 2014 and sent the measure to the full House with a do pass recommendation on May 8, 2007. The House approved the measure 55-0 on May 25, 2007.

HB 2294 was subsequently moved to the Senate and assigned to the Senate Committee on Finance and Revenue. After a very perfunctory review, HB 2294 was passed out of Senate Finance and Revenue without amendment on June 7th, approved by the full Senate on June 14, 2007, and signed into law by the Governor on June 27, 2007.

HB 2097: Split-Season Instream Leasing

Oregon’s split-season leasing program allows a landowner to transfer their water right instream for a part of the year, while maintaining the ability to utilize the same right for its original authorized use during a different part of the year. The program was established in 2001 pursuant to HB 2712. The enacting legislation included a January 2, 2008 sunset date. The purpose of including a sunset date in the original legislation was to provide an opportunity to test the program before making it a permanent fixture of Oregon law. The concern was that widespread use of the program could result in numerous senior water rights being leased instream, causing injury to junior waters users whose rights are predicated on the return flows of more senior water right holders.

House Bill 2097 was introduced by Governor Kulongoski at the request of the Oregon Water Resources Department for the singular purpose of removing the January 2, 2008 sunset date on the split-season instream leasing program. The measure was assigned to the House Committee on Energy and Environment. Water for Life provided the committee with written and oral testimony suggesting the sunset date should be extended, but not removed altogether. The rational behind Water for Life’s position was that the program has been utilized only eight times since it was established in 2001 and had not been adequately tested on a broad scale. The Oregon Water Resources Department, Oregon Water Trust, and WaterWatch testified the program had been adequately tested. The bill moved out of committee over Water for Life’s objections and was approved by the full House of Representatives by a 58-0 vote on February 20th.

HB 2097 was subsequently assigned to the Senate Committee on Environment and Natural Resources. An initial public hearing was held May 3, 2007. Water for Life submitted amendments to incorporate a January 2, 2014 sunset date into the bill. The amendments were approved over the objection of the Oregon Water Resources Department and HB 2097 pass out of committee with a do pass recommendation. The full Senate subsequently approved the measure on a 26-0 vote. On May 18, 2007, the House concurred in the Senate amendments by a margin of 46-1, and re-passed the bill. Governor Kulongoski signed HB 2097 into law on June 12, 2007.

HB 2121: Agency Rulemaking Procedures

House Bill 2121 was introduced at the request of the Oregon Department of Justice. The measure proposed certain minor alterations to Oregon rulemaking procedures and also would have deleted existing statutory provisions allowing interested parties to delay the effective date of a proposed rule for 90 days, to allow time to provide additional information to the agency. Water for Life opposed this change in existing law because it reduced the opportunity for citizen input in the agency rulemaking process.

An initial hearing on HB 2121 was held in the House Judiciary Committee on January 22, 2007. Water for Life briefed members of the committee on Water for Life’s concerns prior to the hearing. At the hearing, the Oregon Law Center submitted amendments that addressed Water for Life’s concerns. The Oregon Realtors Association and Oregon Cattleman’s Association testified in support of supported the amendments. The bill was subsequently amended in a manner that alleviated Water for Life’s concerns and was sent to the floor with a do pass recommendation. The House of Representatives approved the measure by a 58-1 vote on February 8, 2007.

Upon moving to the Senate, HB 2121 was assigned to the Judiciary Committee. Minor amendments were incorporated providing for how interested parties can receive notices by electronic transmission. The measure was approved by the Senate Judiciary Committee and given a do pass recommendation on March 21st. The full Senate approved HB 212 on April 4, 2007. The House concurred with the Senate amendments on April 9th and Governor Kulongoski signed HB 2121 into law on May 9, 2007. The law will take effect on January 1, 2008.