Bill Text: OR SB839 | 2013 | Regular Session | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to water; appropriating money; and declaring an emergency.

Spectrum: Committee Bill

Status: (Passed) 2013-08-21 - Effective date, August 14, 2013. [SB839 Detail]

Download: Oregon-2013-SB839-Engrossed.html


     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 3890

                           A-Engrossed

                         Senate Bill 839
                 Ordered by the Senate April 22
           Including Senate Amendments dated April 22

Sponsored by COMMITTEE ON ENVIRONMENT AND NATURAL RESOURCES

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.

  Establishes Water Supply Development Account. Continuously
appropriates funds in account to Water Resources Department to
make loans and grants for qualifying projects and for
 { + providing funding support for studies and paying + } cost of
administering loan and grant program. Establishes criteria
 { + and conditions + } for projects to qualify for grants and
loans from account { +  and for selection of projects receiving
funding + }.
    { - Allows recipient of grant for critical ground water
storage project in Umatilla Basin to apply for change in grant
terms and conditions. - }
   { +  Establishes net environmental public benefit requirements
for critical ground water storage projects in Umatilla Basin.
  Creates work group to review loan and grant program. Sunsets
work group on date of convening of 2014 regular session. + }
  Declares emergency, effective on passage. 
                        A BILL FOR AN ACT
Relating to water; creating new provisions; amending section 17,
  chapter 907, Oregon Laws 2009; appropriating money; and
  declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + As used in sections 1 to 15 of this 2013 Act:
  (1) 'Newly developed water' means the new increment of water:
  (a) Stored for a project providing new or expanded storage;
  (b) Allocated to a new use under a secondary water right for a
project involving the allocation of water stored under an
existing water right; or
  (c) Conserved for a project to allocate conserved water under
the program described in ORS 537.455 to 537.500.
  (2) 'Seasonally varying flows' means the streamflows needed to
protect and maintain the following biological, ecological and
physical functions in a given basin:
  (a) Stream channel development and maintenance;
  (b) Longitudinal, lateral and vertical connectivity to
floodplains;
  (c) Sediment transport and deposition;

  (d) Migration triggers for upstream movement of adult fish and
downstream movement of fry and juveniles;
  (e) Fish spawning and incubation;
  (f) Juvenile fish rearing; and
  (g) Adult fish passage. + }
  SECTION 2.  { + (1) The Water Supply Development Account is
established in the State Treasury, separate and distinct from the
General Fund. Interest earned by the Water Supply Development
Account shall be credited to the account. Moneys in the account
are continuously appropriated to the Water Resources Department
for use in carrying out sections 1 to 15 of this 2013 Act.
  (2) The department may expend moneys from the account for:
  (a) Making loans and grants to evaluate, plan and develop
in-stream and out-of-stream water development projects approved
by the Water Resources Commission, including but not limited to
projects to:
  (A) Repair or replace infrastructure;
  (B) Provide new or expanded water storage;
  (C) Improve or alter operations of existing water storage
facilities;
  (D) Create new, expanded, improved or altered water
distribution, conveyance or delivery;
  (E) Allocate stored water;
  (F) Promote water reuse;
  (G) Promote water conservation;
  (H) Provide streamflow protection or restoration;
  (I) Provide for water management or measurement; and
  (J) Determine seasonally varying flow requirements.
  (b) Paying the related administrative costs of the department
in carrying out sections 1 to 15 of this 2013 Act.
  (3)(a) In addition to any other permissible uses of moneys in
the account, the department may expend moneys from the account to
support:
  (A) Ongoing studies conducted by the United States Army Corps
of Engineers to reallocate stored water; and
  (B) Comprehensive basin studies conducted by the United States
Bureau of Reclamation.
  (b) Expenditures described in this subsection are not subject
to any grant or loan procedures, public benefit scoring or
ranking or other requirements or restrictions for grants or loans
established under sections 1 to 15 of this 2013 Act. + }
  SECTION 3.  { + Loans and grants may be made from the Water
Supply Development Account to persons as defined in ORS 536.007,
Indian tribes as defined in ORS 391.802 and nonprofit
organizations. If an applicant is required to have a water
management and conservation plan, the plan must be submitted to
the Water Resources Department and receive approval prior to
department acceptance of an application for a loan or grant from
the account. + }
  SECTION 4.  { + (1) A potential applicant for a loan or grant
from the Water Supply Development Account may participate in a
preapplication conference with the Water Resources Department.
  (2) At the preapplication conference, the department shall
inform the potential applicant of the procedural and substantive
requirements of a loan or grant application and of the scoring
system used to evaluate loan and grant requests. The department
shall assist the potential applicant by identifying known issues
that may affect project eligibility for a loan or grant from the
account.
  (3) Not less than 14 days before the preapplication conference,
the applicant must provide the department with adequate project
information to prepare for the preapplication conference.
  (4) The applicant may request additional preapplication
consultation with the department. + }

  SECTION 5.  { + Applications for a loan or grant from the Water
Supply Development Account must be in a form prescribed by the
Water Resources Department and must include the following:
  (1) A description of the need, purpose and nature of the
project, including what the applicant intends to complete and how
the applicant intends to proceed.
  (2) Sufficient information to allow evaluation of the
application based upon the public benefit scoring and ranking of
the project.
  (3) Current contact information for the principal contact,
fiscal officer and involved landowners.
  (4) For applications involving physical changes or monitoring
on private land, evidence that landowners are aware of and agree
to the proposal and are aware that monitoring information is a
public record.
  (5) The location of the proposed project, using public land
survey reference points, latitude and longitude, county,
watershed, river and stream mile, if appropriate.
  (6) An itemized budget for the project, including fiscal and
administrative costs.
  (7) A description of funds, services or materials available to
the project.
  (8) A project schedule, including beginning and completion
dates.
  (9) Any conditions that may affect the completion of the
project.
  (10) A completed feasibility analysis if appropriate.
  (11) Suggestions for interim and long-term project performance
benchmarks.
  (12) If the application is for a grant, demonstrated in-kind
and cash cost match of not less than 25 percent of the amount of
the grant sought from the account.
  (13) If the application is for a loan, evidence demonstrating
ability to repay the loan and provide collateral.
  (14) Letters of support for the proposed project.
  (15) If required by the department, a description of
consultations with affected Indian tribes regarding the project.
  (16) Any other information required by the department. + }
  SECTION 6.  { + (1) The Water Resources Commission shall adopt
rules establishing a system for scoring and ranking projects to
determine which projects are to be awarded loans and grants from
the Water Supply Development Account, including but not limited
to the application of minimum criteria designed to achieve the
outcomes described in section 8 of this 2013 Act. The system
shall be based on the public benefit categories described in
section 7 of this 2013 Act. The commission shall make the loan
and grant funding decisions once each year. Applications must be
filed with the Water Resources Department. The department shall
accept an application for a loan or grant at any time, but shall
establish a yearly deadline for the consideration of a pool of
applications.
  (2) The department shall conduct a preliminary review of
applications to check for completeness, eligibility and minimum
requirements upon receipt of each application. The department
shall return incomplete applications to the applicant. The
department shall provide public notice by posting new funding
applications on the department's website for a 60-day period
prior to reviewing the applications. The department shall provide
for the receipt of public comment on the applications during the
60-day period that applications are posted on the department's
website.
  (3) The department shall forward applications that have passed
preliminary review, along with any comments received from
applicants or the public, to a technical review team consisting
of representatives of the Water Resources Department, the
Department of Environmental Quality, the State Department of Fish
and Wildlife, the State Department of Agriculture, the Oregon
Business Development Department, affected Indian tribes, any
collaborative body established by the Governor to address
challenges, opportunities and priorities for the region affected
by the project and additional experts as determined by the Water
Resources Department. The technical review team shall conduct the
initial scoring and ranking for the projects described in the
applications, consider comments from applicants and the public
and make loan and grant funding recommendations to the
commission. The commission shall determine the final scoring and
ranking of projects and make the final decision regarding which
projects are awarded loans or grants from the account. Before the
commission makes a final decision on an application, the
commission shall offer one additional opportunity for public
comment.
  (4) The department is not required to obligate all available
account moneys during a funding cycle. Any available account
moneys that are not obligated during a funding cycle shall be
carried forward and be made available for projects in future
funding cycles.
  (5) The department shall document the ranking of all
applications and make the application ranking publicly available
after the funding decisions by the commission have been
published. + }
  SECTION 7.  { + (1) Projects applying under section 6 of this
2013 Act for funding from the Water Supply Development Account
shall be evaluated based upon the public benefits of the project.
The evaluation must consider both positive and negative effects
of a project. The three categories of public benefit to be
considered in the project evaluation are economic benefits,
environmental benefits and social or cultural benefits. Each
category of benefits shall be given equal importance in the
evaluation of a project. The technical review team described in
section 6 of this 2013 Act shall use the evaluation system to
assign initial scores and rankings to projects. The Water
Resources Commission shall use the evaluation system to assign
final scorings and rankings to the projects. The commission shall
award loan and grant funding from the account to the projects
that have the greatest public benefit and will best achieve the
outcomes described in section 8 of this 2013 Act.
  (2) The evaluation of economic benefits for a project shall be
based on the changes in economic conditions expected to result
from the project, including but not limited to conditions related
to:
  (a) Job creation or retention;
  (b) Increases in state, local or tribal government revenues;
  (c) Increases in efficiency or innovation;
  (d) Enhancement of infrastructure, farmland, public resource
lands, industrial lands, commercial lands or lands having other
key uses; and
  (e) Enhanced economic value associated with tourism or
recreational or commercial fishing, with fisheries involving
native fish of importance to Indian tribes or with other economic
values resulting from restoring or protecting water in-stream.
  (3) The evaluation of environmental benefits for a project
shall be based on the changes in environmental conditions
expected to result from the project, including but not limited to
conditions related to:
  (a) A measurable improvement in protected streamflows that:
  (A) Restores the natural hydrograph;
  (B) Restores floodplain function; or
  (C) Supports fish species that are state or federally listed as
sensitive, threatened or endangered species;
  (b) A measurable improvement in ground water levels that
enhances environmental conditions in ground water restricted
areas or other areas;
  (c) A measurable improvement in the quality of surface water or
ground water;
  (d) Water conservation;
  (e) Increased ecosystem resiliency to climate change impacts;
and
  (f) Improvements that address one or more limiting ecological
factors in the project watershed.
  (4) The evaluation of the social or cultural benefits for a
project shall be based on the changes in social or cultural
conditions expected to result from the project, including but not
limited to conditions related to:
  (a) The promotion of public health and safety and of local food
systems;
  (b) A measurable improvement in conditions for members of
minority or low-income communities, tribal communities or other
communities traditionally underrepresented in public processes;
  (c) The promotion of recreation and scenic values;
  (d) Contribution to the body of scientific data publicly
available in this state;
  (e) The promotion of state or local priorities, including but
not limited to the restoration and protection of native fish
species of cultural significance to Indian tribes; and
  (f) The promotion of collaborative basin planning efforts by
the use of a place-based integrated water resource planning
approach under the state integrated water resources strategy. + }
  SECTION 8.  { + (1) The Water Resources Commission shall design
the minimum criteria for the project scoring and ranking system
described in section 6 of this 2013 Act to achieve the following
outcomes:
  (a) The issuance of grants or loans only to projects that
provide benefits in each of the three categories of public
benefit described in section 7 of this 2013 Act.
  (b) Preference for partnerships and collaborative projects.
  (c) The funding of projects of diverse sizes, types and
geographic locations.
  (d) If a project proposes to divert water, preference for
projects that provide a measurable improvement in protected
streamflows.
  (2) The Water Resources Department shall review the loan and
grant program on a biennial basis to assess to what extent the
outcomes described in subsection (1) of this section are being
achieved, and shall report the review findings to the Water
Resources Commission. The commission shall modify the project
selection process as necessary to better achieve the outcomes
described in subsection (1) of this section. + }
  SECTION 9.  { + (1) The recipient of a grant from the Water
Supply Development Account must agree to the conditions set forth
in subsection (2) of this section if the grant is for the
development of a new or expanded above-ground storage facility
that:
  (a) Impounds surface water on a perennial stream;
  (b) Diverts water from a stream that supports state or
federally listed sensitive, threatened or endangered fish
species; or
  (c) Diverts more than 500 acre-feet of water annually.
  (2) Twenty-five percent of the newly developed water from a
project described in subsection (1) of this section must be
dedicated to in-stream use. + }
  SECTION 10. { +  (1) A project that receives a loan or grant
from the Water Supply Development Account must:
  (a) Demonstrate social or cultural benefits and economic
benefits sufficient to qualify the project under the scoring and
ranking system described in section 6 of this 2013 Act; and
  (b) Demonstrate environmental benefits:
  (A) By dedicating 25 percent of conserved water or newly
developed water to in-stream use; or
  (B) If the project is not subject to section 9 of this 2013
Act, that are sufficient to qualify the project under the scoring
and ranking system described in section 6 of this 2013 Act.
  (2) As used in this section, 'conserved water' has the meaning
given that term in ORS 537.455. + }
  SECTION 11.  { + If a project dedicates water to in-stream use
under the requirements described in section 9 of this 2013 Act or
as allowed under section 10 of this 2013 Act, the Water Resources
Department shall protect the dedicated water in-stream. Dedicated
water may come from newly developed water or from other sources
and may be put in-stream at other locations in the watershed if
the Water Resources Department, in consultation with the State
Department of Fish and Wildlife, determines that the alternate
location would provide greater or equal environmental benefit.
The Water Resources Department, in consultation with the State
Department of Fish and Wildlife, shall determine the timing of
the flows to maximize in-stream benefits in a manner consistent
with public health and safety. + }
  SECTION 12.  { + (1) The Water Resources Department shall make
a determination as provided under subsection (2) of this section
if an application for a loan or grant from the Water Supply
Development Account is for a project that requires the issuance
of a new water storage or aquifer recharge permit or limited
license outside of the official irrigation season and:
  (a) Impounds surface water on a perennial stream;
  (b) Diverts water from a stream that supports state or
federally listed sensitive, threatened or endangered fish
species; or
  (c) Diverts more than 500 acre-feet of surface water annually.
  (2) The department shall review a completed application for a
project described in subsection (1) of this section to determine
whether seasonally varying flow requirements have been
established under this section for the stream of interest. If the
department determines that the requirements have not been
established, the department shall establish seasonally varying
flow requirements before issuing a loan or grant from the
account. For purposes of establishing the requirements, the
department may rely upon existing scientific data and analysis or
may fund new data and analysis. The department may use account
moneys to pay the cost of establishing seasonally varying flow
requirements and to pay other costs directly related to project
development.
  (3) The department shall develop methods and standards for
establishing seasonally varying flows in consultation with the
State Department of Fish and Wildlife and affected Indian tribes.
Once a seasonally varying flow requirement is established for a
stream of interest, there is a rebuttable presumption that the
flow requirement is accurate.
  (4) The Water Resources Department shall condition the loan or
grant applicant's new water storage permit and resulting
certificate, new aquifer recharge permit and resulting
certificate or new limited license associated with a project
receiving a grant or loan from the account to protect the
seasonally varying flow requirement in effect at the time the
loan or grant is issued for the project.
  (5) If the department receives an application for a water
permit or limited license after a seasonally varying flow
requirement has been established for the identified source stream
under this section, the department shall condition any water
permit and resulting certificate or any limited license issued as
a result of the application as necessary to protect the
seasonally varying flow requirement.
  (6) Prior to applying conditions to a permit described in
subsection (4) or (5) of this section, the department must
complete a determination of water availability and verify that

the permit applicant has complied with any requirements imposed
by statute, rule or department policies. + }
  SECTION 13.  { + (1) Before loan or grant moneys are expended
from the Water Supply Development Account for any construction
project, the recipient must obtain all applicable local, state,
tribal and federal permits and show that the project complies
with local land use laws. Project materials must include a
notation indicating that Water Resources Department funding was
used for the project.
  (2) Project completion and operation must comply with
applicable local, state, tribal and federal laws and permitting
requirements.
  (3) Loan or grant recipients must complete and operate the
funded project as described in the loan or grant application.
Before commencing implementation of a project funded with account
moneys, the recipient must demonstrate to the satisfaction of the
department that the public benefits identified for the project,
including any environmental benefits proposed at a location other
than the project site, will be realized in a timely fashion.
  (4) At regular intervals, and upon completion of the project,
the loan or grant recipient must submit updates to the department
that describe the completed work, the public benefits achieved
and project expenditures. The recipient must regularly measure
and report the water diverted and used from the project. The
recipient must monitor, evaluate and maintain the project for the
life of the loan, or for a specified number of years for a grant,
and provide annual progress reports to the department. The
department may impose other project-specific conditions by noting
the conditions during project evaluation and including the
condition in the funding agreement for the project.
  (5) The department may terminate, reduce or delay funding for a
project if the loan or grant recipient fails to comply with any
provision of subsections (1) to (4) of this section. + }
  SECTION 14.  { + (1) The Water Resources Commission shall adopt
rules establishing standards for borrowers obtaining loans issued
from the Water Supply Development Account. The commission shall
design the standards to ensure that all loans have a high
probability of repayment and that all loans are adequately
secured in the event of a default. The commission shall solicit
comments from the Oregon Department of Administrative Services
and the State Treasurer when designing the standards. The
standards may include, but need not be limited to, standards that
give preference to entities with ad valorem taxing authority.
  (2) If the Water Resources Department approves the financing
for the implementation of a water development project, the
department and the applicant may enter into a loan contract,
secured by a first lien or by other good and sufficient
collateral in the manner provided in ORS 541.740. + }
  SECTION 15.  { + The Water Resources Department may enter into
water service contracts to recover all or a portion of moneys
expended from the Water Supply Development Account. Moneys
received through the water service contracts, or as repayment of
account loans, must be deposited in the account. + }
  SECTION 16. Section 17, chapter 907, Oregon Laws 2009, is
amended to read:
   { +  Sec. 17. + } (1) As used in this section, 'critical
ground water storage project' means an underground or
below-ground storage of river water in a critical ground water
area designated under ORS 537.730 for use in:
  (a) Aquifer storage and recovery as described in ORS 537.534
and streamflow augmentation and restoration; or
  (b) Recharging ground water basins and reservoirs as described
in ORS 537.135 and streamflow augmentation and restoration.
  (2) The Water Resources Department may issue a grant under this
section only for a critical ground water storage project that is

located in the Umatilla Basin and that meets the conditions
described in this section.
  (3) { + (a) + }   { - Except as provided in subsection (4) of
this section, notwithstanding ORS 537.534, - }  If the project
uses artificial recharge to recharge an alluvial aquifer that is
not confined, the project must be designed:
    { - (a) - }  { +  (A) + } To provide   { - for no more than
75 percent of new stored water to be withdrawn and for not less
than 25 percent of the new water to be dedicated for the purpose
of providing - }  net environmental public benefits   { - or
in-stream benefits - }   { + in an amount equal to at least 25
percent of the water stored by the project + }; and
    { - (b) - }  { +  (B) + } To the extent practicable, to
 { - return dedicated new stored water for stream - }
 { + deliver any net environmental public benefit water to be
provided in the form of in-stream flow + } augmentation at a time
of year that the Water Resources Department, in consultation with
the State Department of Fish and Wildlife and relevant tribal
governments, determines will provide the maximum net
environmental public benefit or in-stream benefit.
   { +  (b) For purposes of determining whether a project
described in this subsection produces the required net
environmental public benefit, the project shall be considered to
be for the development of not more than 25,000 acre-feet of
aquifer recharge as described in a final grant report submitted
by the grantee to the department. + }
  (4) If more than 25 percent of the funding for an aquifer
storage and recovery project is from grants of state moneys and
is not subject to repayment, the project must be designed to
  { - dedicate for the purpose of providing - }   { + provide + }
net environmental public benefit   { - or in-stream benefit a
percentage of the new stored water created by the project - }
 { + in an amount + } that equals or exceeds the percentage of
funding for the project that is from grants of state moneys. The
Water Resources Department shall manage the   { - dedicated
increment of new stored water - }   { + amount of water
provided + } for net environmental public benefit   { - and
in-stream benefit - }  { +  in the form of in-stream flow + }.
  (5) On or before the earlier of six years after the issuance of
the ground water recharge permit or the date the water right
certificate is issued, the department shall quantify and legally
protect in-stream the increment of new water returned in stream
from a project described in this section.
  (6) The department shall require as a contractual condition for
issuing the grant, and as a condition of any new ground water
recharge permit or water right certificate issued for the
project, that if the project receives grants or loans from state
moneys other than a grant issued under this section { +  or other
state moneys used to complete the feasibility design and pilot
phase of project development funded by a grant under this
section + }, the project must be operated in a manner that
actually dedicates the percentage of new stored water for net
environmental public benefit or in-stream benefit that the
project was designed to dedicate for those purposes.
  (7) This section does not limit the authority granted the
Environmental Quality Commission or the Department of
Environmental Quality under ORS chapter 468B.
  (8) This section is repealed January 2, 2030.
  SECTION 17.  { + At the request of the grantee, the terms and
conditions of a grant approved by the department under section
17, chapter 907, Oregon Laws 2009, prior to the effective date of
this 2013 Act shall be amended to replace the terms and
conditions originally imposed for the grant with terms and
conditions similar to the terms and conditions imposed for grants
issued under section 17, chapter 907, Oregon Laws 2009, as
amended by section 16 of this 2013 Act. + }
  SECTION 18.  { + (1) The Governor, or a designee of the
Governor, shall convene a work group composed of members the
Governor or designee deems to be appropriate and to be
sufficiently representative of agricultural, municipal,
conservation and tribal interests and of other groups having an
interest in water resources development.
  (2) The work group shall review the structure established for
water development project loans and grants under sections 1 to 15
of this 2013 Act and develop any proposals for changing the
structure. The review may include but need not be limited to
possible changes in the long-term structure of the
decision-making process regarding:
  (a) The appropriate role of the state in providing loan and
grant funding for multipurpose water resource development under
sections 1 to 15 of this 2013 Act; and
  (b) The decision-making process for the allocation of newly
developed water from projects for which the uses of the water
were not specified in the funding application.
  (3) The work group shall meet at times and places specified by
the Governor or the designee of the Governor.
  (4) The work group shall submit a report in the manner provided
in ORS 192.245, including any recommendations for legislation, to
the Governor and to an interim committee of the Legislative
Assembly related to natural resources no later than October 1,
2013.
  (5) The Water Resources Department shall provide staff support
to the work group.
  (6) Members of the work group are not entitled to compensation,
but may be reimbursed for actual and necessary travel and other
expenses incurred by them in the performance of their official
duties in the manner and amounts provided for in ORS 292.495.
Claims for expenses shall be paid out of funds appropriated to
the department for purposes of the work group. + }
  SECTION 19.  { + Section 18 of this 2013 Act is repealed on the
date of the convening of the 2014 regular session of the
Legislative Assembly as specified in ORS 171.010. + }
  SECTION 20.  { + Section 12 of this 2013 Act applies to
projects for which a new water storage or aquifer recharge permit
or new limited license is issued on or after the effective date
of this 2013 Act. + }
  SECTION 21.  { + This 2013 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2013 Act takes effect on
its passage. + }
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