The 2009 Legislative Session passed House Bill 3369. Among other things, this Bill tasked Oregon Water Resources Department (OWRD) with developing Oregon’s Integrated Water Resources Strategy (IWRS). The IWRS goals are to build resources and tools to assist Oregon in looking at its future water needs in terms of water quantity, water quality, ecological needs, economic needs, social needs, and implications of climate change.

Issue papers were drafted addressing these areas and are found by following the link below. These issue papers are open for public comment. All comments received by the OWRD Project Team before October 31st will be available at the next Water Resources Commission meeting currently scheduled for November 19th and 20th in Salem.

According to the Project Team’s September 23, 2009 Briefing, the intent of the IWRS is to “develop a framework, consisting of a set of tools, data, and resources with statewide relevance that communities can use to develop their water resource needs.” We encourage everyone to become involved in this process as submit comments.

Integrated Water Resources Website: http://www.wrd.state.or.us/OWRD/LAW/Integrated_Water_Supply_Strategy.shtml

The 2009 Legislative Session was full of excitement for Oregon’s water users. Specifically, new laws face those looking to drill a new ground water well for an exempt use. Oregon’s exempt ground water uses are outlined in ORS 537.545. These exempt uses include drilling a well for single or group domestic purposes not exceeding 15,000 gallons a day.

This “exempt” ground water statute, as amended by 2009 legislation (Senate Bill 788), now requires those drilling a new well for an exempt use to: 1) file a map with Oregon Water Resources Department showing the location of the well, and 2) pay a one-time fee of $300.00 to record the exempt use. Both the map and the fee must be submitted to Oregon Water Resources Department within 30 days after the completion of well construction.

According to the Department, these fees will be used to evaluate ground water supplies, carry out ground water monitoring, conduct ground water studies, and process the data collected.

For additional information on the new exempt ground water requirements, please contact our office at (503)281-4100.

Link to Exempt Well Statute: ORS 537.545

The 2009 Oregon Legislative session is considering further amendments to ORS 118.140, in House Bill 3305. These amendments include an adjustment to the credit to consider inflation. The proposed amendments, if passed, will not be retroactive. House Bill 3305 can be viewed at http://www.leg.state.or.us/09reg/measures/hb3300.dir/hb3305.intro.html

Those who have inherited any natural resources property should check with their tax consultant and attorney to discuss their eligibility and options.

*More information on the Natural Resources Credit can be found at http://www.oregon.gov/DOR/BUS/inher-adv.shtml.
*The 2008 Natural Resources credit form is located at http://www.oregon.gov/DOR/BUS/forms-fiduciary.shtml#2007_Tax_Year, under the link to 2008 Tax Year forms.

TCID announced that water allocations in the District are being increased from 80% to 90%. The District made this decision after Lahontan Reservoir levels continued to rise. Water users can expect to see the adjustment reflected on their next water card.

TCID also announced that due to amendments in A.B. 226, the District now has greater taxing ability. A.B. 226 was signed by the Governor and will take effect on July 1, 2009. Under the new law, the District can now assess residents up to $5.00 per acre. The District decided to increase their assessments from $1.50 per acre or home lot to $3.00 beginning in 2010. This is a 100% increase! According to the District these funds will go towards canal rehabilitation and upgrade activities.

By Attorney Therese Ure & Law Clerk Nicole Widdis

This session, the Oregon Senate passed Senate Bill 311 legislation to amend the Oregon Tort Claims Act (OTCA). The OTCA limits the amount of money damages a plaintiff can receive from a state entity in a civil wrong (aka tort) case. OTCA passed originally in 1967 without limits on tort damages committed by state actors such as officers, employees and agents of the state entity. The 1991, OTCA amendments eliminated tort claims against public officers, employees or agents, when the tort arose from an omission occurring in the performance of a duty. These amendments additionally required the state entity or public body, in lieu of the individual, to be substituted in a lawsuit as the sole defendant.

After 1991, the OTCA effectively left many tort plaintiffs in the position of suing solely the public body. Additionally in section 30.270, the OTCA limited the recoverable damages to a range of $50,000.00 to $500,000.00 (depending on the number of plaintiffs and types of damages). Parties brought suits arguing these statutory limitations violate the Remedy Clause of the Oregon State Constitution, Article 1, Section 10. This section states that “…every man shall have remedy by due course of law for injury done him in his person, property or reputation.” However, in 2002 the Oregon Supreme Court found in Jensen v. Whitlow, that the OTCA on its face (in other words, as written), was not unconstitutional.

In December 2007, the Oregon Supreme Court determined the OTCA violated the Remedy Clause of the Oregon Constitution when applied to a medical malpractice case. In Clarke v. Oregon Health Sciences University, the plaintiff’s damages totaled over $17 million. However, OTCA party limitations required Oregon Health Sciences University (OHSU) to be substituted as the sole defendant. The damages recoverable by the plaintiff under these OTCA limitations capped the damages to $200,000. The Court determined that the statute as applied in this case clearly denied the plaintiff a constitutionally sufficient remedy. However, the Court went on to say the OTCA is constitutional as written. The Court ruled that while it was legal for the legislature to limit OTCA remedies, it was not permissible to eliminate the ability of the plaintiff to sue individual defendants (OHSU employees) whose negligence might have caused the injuries.

In 2009 the Oregon Legislature addressed this ruling in Senate Bill 311 which amends certain parts of OTCA, and repeals the previous statute setting damage limitations. New damage limits range in the millions rather than thousands of dollars. Furthermore, the new legislation widens the number of parties a plaintiff in these tort cases may sue, and sets the damages limits with respect to the state, officers, employees and agents acting within the scope of their employment or duties. The legislation will regulate liability limits for the state and other public bodies, and makes clear that OHSU, a state entity, is covered by the legislation. The OTCA legislation does not allow punitive damages.

Finally, the new legislation creates a legislative Task Force to study the impact of the new legislation and the operation of other laws governing tort liability of public bodies. The new laws will take effect July 1, 2009.

Sources: Oregon Senate Bill 311, 75th Oregon Legislative Assembly. Clarke v. Oregon Health Sciences University, 343 Or. 581, 175 P.3d 418 (2007). Jensen v. Whitlow, 334 Or. 412, 51 P.3d 599 (2002).

By Law Clerk Nicole Widdis

On May 6, 2009, Governor Gibbons signed into law Assembly Bill 226, changing the financial requirements of irrigation districts in Nevada. This law will go into effect July 1, 2009.

The existing law had limited the amount of money spent on a single purchase by a district on machinery or materials for constructing or repairing an irrigation system to no more than 5 cents per acre of land in the district. The new amendment will remove that cost limit. Also, the new law will allow irrigation districts to incur up to $500,000 in debt, rather than the $350,000 limit under the existing law.

Finally, under the existing law, assessments of $1.50 per acre could be collected and used for ordinary and current expenses of the district, for example salaries of officers. The new law will still allow for collection of such assessments. The new law will also allow for assessments by an irrigation district of not more than $5.00, per acre, for deposit into a capital fund for the construction, reconstruction or maintenance of the irrigation system.

However, the new law limits the total cumulative assessment for capital fund and ordinary expenses, at $5.00, per acre. Thus, the district will not be able to tax $6.50 per acre in order to contribute to a capital fund and pay ordinary expenses. The total assessments must not exceed $5.00 per acre.

Nevada Revised Statutes 539.255 and 539.480. Changes to become effective July 1, 2009.

As evidenced in the recent amendments to proposed HB 3369 concerning revisions to loan and grant funding for Oregon water projects, climate change issues are finding their way into Oregon statutes. One might ask if this is proper given the lack of science surrounding climate change issues.

The Environmental Protection Agency realizes that the science is not fully developed. Specifically, the EPA states: “Important scientific questions remain about how much warming will occur, how fast it will occur, and how the warming will affect the rest of the climate system including precipitation patterns and storms.” http://www.epa.gov/climatechange/science/stateofknowledge.html. To answer these questions with any degree of certainty will thus require advancements in scientific knowledge in many areas including “determining the relative contribution to climate change of human activities and natural causes.” Id.

With so many unknowns as to climate change analyses, it is likely an exercise in futility to put any climate change analysis into the requirement mix for a water project loan application. Oregon House Bill 3369 currently provides that anyone making a loan application include project impacts such as the “expected environmental public benefits including a plan describing possibilities for adaptation of the project in response to long term climate change.” Other proposals in this Bill require analyses as to “global” climate change. Can one even begin to outline possibilities to adapt a project to “long term” climate change when “questions remain” as to the affects of warming on the climate systems? Adding such provisions to a loan and grant application would be futile to the success of any water project funding program. Perhaps more importantly, Oregon and the west have a long history of considering water shortage implications to water projects and infusing climate change with a unique status is unnecessary.

If the State of Oregon is going to have a successful funding program for water projects, having mandatory provisions to consider “the likely impact of global climate change in regard to the project,” is simply unnecessary, bad law.

The Oregon Ground Water Association (OGWA) is holding their Spring Technical Conference on March 6-7, 2009 at the Oregon Garden Resort in Silverton Oregon.

Schroeder Law Offices’ Therese Ure will join the panel discussion on Government Affairs which will discuss and consider the 2009 Legislation’s proposed bills relating to the ground water industry.

For more information, you can contact Therese Ure or view the OGWA’s website at www.ogwa.org.

In Senate Bill 424, Oregon considers changes to the water right forfeiture law. Currently a water right in Oregon is subject to forfeiture if the water has not been applied to beneficial use under the certificate once in every five year period. As proposed, this bill sponsored by Senator Girod and Representative Gilliam would allow certificated water right holders to file affidavits for exemptions to the forfeiture clock in certain very limited instances. These limited instances include crop rotation or tiling. The responsibility of filing the affidavit is placed on the water user and must be done in the same calendar year as the crop rotation or tiling was done in lieu of irrigation under the water right certificate.

We suggest that an exemption via affidavit should be made available for any reason, not just crop rotation and tilling. This would allow certificated water right holders to make environmentally sound decisions to use less water and not simply to waste it for purposes of “holding” onto the right.

Oregon might look to the broader Nevada law found at NRS 534.090 that allows the certificated water right hold to submit an affidavit in the 5th year of non-use and accepts reasons such as good cause, unavailability of water, economic conditions or natural disasters, prolonged period of precipitation wherein appropriated water use is not needed, and efficiency of irrigation and water use practices to excuse the non-use. In addition, Nevada’s law provides consequences, in that a certificated holder must file a proof of beneficial use once he has filed a non-use affidavit. This would provide the “checks and balances” to assure that use continues as required.

The Oregon bill as proposed requires the water user to be overly cautious in filing an affidavit in the same year as the non-use, however that same user might be able to apply water to beneficial use in the following year or two years, thus creating the need to simultaneously file an extra burden, and quite frankly not needed to meet the 5 year burden in many instances. In this regard, the Oregon law as proposed would also increase in administrative burden to the Water Resources Department unnecessarily.

The concept is environmentally sound; however, we would encourage the Senators to look at NRS 534.090 for further guidance.

For the Oregon Water Coalition’s 2009 Annual Membership Meeting and Water Conference, Laura A. Schroeder, Cortney D. Duke, and Therese A. Ure will present a two hour seminar covering two main topics including:

1) Ground Water
a) Critical Ground Water
b) Division 33 Rules
c) Peak Flows

2) New Legislation
a) SB 1069
b) Long Term Planning
c) Columbia River Mitigation

The conference will be on Tuesday, January 27, 2009, from 8:30 AM to 1:15 PM at the Hermiston Conference Center. 415 S. Highway 395, Hermiston Oregon.

For registration and more information contact 541-567-6151

By Lynn Steyaert and Laura Schroeder

As a result of concerns relating to failures of unpermitted dams, the Department of Ecology issued notice that owners of small reservoirs built without permits must report their dams for safety inspections by September 1, 2008 or face possible fines.  Following an inspection, owners may be required to hire an engineer to provide recommendations on how to bring facilities up to safety standards.

To reduce the possibility of dam breaches that create hazards for people and property downstream, the department has been scanning aerial photographs statewide to locate existing un-permitted reservoirs that are two acres or more that may hold 10 acre-feet of water or more.  Under RCW 90.03.350, the Department is responsible for regulating water reservoirs capable of storing 10 acre-feet or more above ground level for any use. As of August 4, 2008, the Department reported having spotted 594 un-permitted dams of two acres or more, with 244 of those appearing to be high hazard dams.

Owners, who fail to report their reservoirs, obtain needed state permits, and correct deficiencies, may face fines of up to $5,000 per day.  The Department may also order dangerous reservoirs be drained and dams removed.  The Department further recommends that even those reservoirs not requiring a permit, should be designed by licensed engineers and inspected periodically, as the owner may be liable for property damage if their dam were to fail.

The Oregon Water Resources Department recently announced that the Department has $1.6 million available for funding under the Water Conservation, Reuse and Storage Grant Program.  Under the Program, OWRD will match up to $500,000 in funding from another source for each project.  The intent of the Program is to encourage feasibility studies and environmental analysis to investigate “innovative water conservation and reuse programs and environmentally sound storage projects.”  Applications are due September 1, 2008, and to be eligible applicants must have funding from a source other than the Program secured or in the process of being secured.  The Oregon Legislature established the Program in SB 1069 during the 2008 Session.

The final topic of discussion on the OWRC conference call addressed changing start card fees for constructing wells.

Start card fees, fees paid along with the notification of new well construction, partially fund the OWRD staff payroll. The fee is currently $125.00. OWRD is concerned that the fee is no longer sufficient to sustain the well inspection program and would like to establish a schedule to raise the fees moderately and frequently (as opposed to large increases every 5 or more years).

Once again, this topic generated a number of comments. The WaterWatch representative suggested that OWRD’s current cost recovery of roughly 30% through fees was not high enough and that a goal of nearly 100% recovery would be preferable. She called attention to increasing fees for issuing limited licenses and adding an additional fee for water right permit applicants who protest an OWRD order.

The Committee members expressed some agreement with the idea that OWRD should move towards a more comprehensive fee based structure with a goal of 50% cost recovery. Other attendees believed that water users would support increased fees because added revenue could allow OWRD to augment staff and work through application backlogs.

The next topic in the OWRD legislative concepts discussion is the creation of a water development fund.

OWRD discussed updating statutory language found in ORS 541.700-541.855 addressing financial aid to communities constructing water supply projects. OWRC members expressed some concern with this item because it involved project funding. Director Ward suggested that discussion of monitory issues could be postponed until the OWRC meeting taking place in Burns, OR on May 29 and 30 because there will be a more defined draft budget in place at that time.

There should be more lengthy discussions on this topic in the near future.

Good morning! The third part in my series of posts addresses some proposed changes to irrigation district transfer rules.

Currently, when an individual transfers the place of use of a water right any supplemental rights must be transferred with it or canceled. However, the statutes controlling irrigation districts do not explicitly allow for transfer of supplemental rights when primary rights are transferred. OWRD would like to update the irrigation district statutes, specifically ORS 540.570 and 540.580 to bring them in line with other transfer statutes.

The attendees had few substantive comments and generally agreed that a change in statutory language would be appropriate.

The second topic addressed during the OWRC teleconference was modifying language pertaining to statewide mitigation banks.

OWRD wants to modify statutory language to give itself explicit authority to create statewide mitigation banks. These mitigation banks can be used to offset effects of new water supply projects.

This proposed statutory change drew a few comments from attendees. A representative from WaterWatch expressed her organization’s concern that new statutory language must be precise so as to avoid creating loopholes that allow users to access water without adhering to the monthly rate limitations placed on the source permits. However, a representative from Special Districts Association of Oregon expressed a need for greater flexibility across regions so as to allow different water needs to come together.

The Oregon Water Resources Commission (“OWRC”) had its monthly conference call on Monday. In attendance were a majority of the OWRC members including: Ray Williams, Jay Rasmussen, Susie L. Smith, Dan Thorndike and Charles Barlow. Oregon Water Resources Department (“OWRD”) Director, Phil Ward, and a handful of his staff members were in attendance. Those attending the call at the OWRD offices in Salem included Kimberley Priestley (WaterWatch), Anita Winkler (Oregon Water Resources Congress), Katie Fast (Oregon Farm Bureau Federation) and Amanda Rich (Special Districts Association of Oregon).

The agenda covered legislative concepts that OWRD will be developing during the 2009 and 2011 sessions. I will post short summaries on each concept over the course of the next week. Today I’m going to talk about the first topic that OWRC addressed: instream leasing.

Currently instream leasing is not an option for a holder of a water right claim involved in an adjudication. A final decree must be issued before instream leases can occur. OWRD would like to open instream leasing to claims in an adjudication as soon as a final order is issued so water right holders can lease water and show beneficial use during seasons when the user does not need the water.

There wasn’t significant discussion on this topic. Tomorrow I’ll be talking about statewide mitigation banks.