Chapter 705 Oregon Laws 2003

AN ACT

SB 820

Relating to water; creating new provisions; amending ORS 536.050, 536.900, 537.211, 540.510, 540.531, 540.570 and 540.990 and section 14, chapter 788, Oregon Laws 2001; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 540.531 is amended to read:

540.531. (1) Notwithstanding ORS 537.515 and 537.535, an owner of a surface water use subject to transfer may apply for a transfer of the point of diversion to allow the appropriation of ground water if the proposed transfer complies with the requirements of subsection (2) or (3) of this section and with the requirements for a transfer in point of diversion specified in ORS 540.520 and 540.530.

(2) The Water Resources Department may allow a transfer of the point of diversion under subsection (1) of this section if [either]:

(a)(A) The new point of diversion appropriates ground water from an unconfined aquifer that is hydraulically connected to the authorized surface water source;

(B) The proposed change in point of diversion will not result in enlargement of the original water right or in injury to other water right holders;

(C) The use of the new point of diversion will affect the surface water source similarly to the authorized point of diversion specified in the water use subject to transfer; and

(D) The withdrawal of ground water at the new point of diversion is located within 500 feet of the surface water source and, when the surface water source is a stream, is also located within 1,000 feet upstream or downstream of the original point of diversion as specified in the water use subject to transfer; or

(b) The new point of diversion is not located within the distance requirements set forth in paragraph (a)(D) of this subsection, the holder of the water use subject to transfer submits to the department evidence prepared by a licensed geologist that demonstrates that the use of the ground water at the new point of diversion will meet the criteria set forth in paragraph (a)(A) to (C) of this subsection.

(3) Notwithstanding subsection (2) of this section, the department shall allow a transfer of the point of diversion under subsection (1) of this section in the Deschutes basin ground water study area if:

(a) The new point of diversion appropriates ground water from an aquifer that is hydraulically connected to the authorized surface water source;

(b) The proposed change in the point of diversion will not result in enlargement of the original water right or in injury to other water right holders; and

(c) The use of the new point of diversion will affect the surface water source hydraulically connected to the authorized point of diversion specified in the water use subject to transfer. The department may not require that the use of the new point of diversion affect the surface water source similarly to the authorized point of diversion specified in the water use subject to transfer under this subsection.

[(3)] (4) All applicable restrictions that existed at the original point of diversion shall apply at the new point of diversion allowed under this section.

[(4)] (5) The new point of diversion shall retain the original date of priority. However, if within five years after approving the transfer, the department finds that the transfer results in substantial interference with existing ground water rights that would not have occurred in the absence of the transfer, the new point of diversion shall be subordinate to any existing right injured by the transferred water right or permit.

[(5)] (6)(a) The department shall approve an application to return to the last authorized surface water point of diversion if a holder of a water use subject to transfer submits an application to the department within five years after the department approves a transfer under this section.

(b) The department shall approve an application to return to the last authorized surface water point of diversion after five years of the date the department allows a transfer under subsection (3) of this section if a holder of a water use subject to transfer submits an application to the department, and the return will not result in injury to an existing water right.

[(6)] (7) For [any transfer] transfers allowed under [subsection (1) of] this section, the department shall require mitigation measures to prevent depletion from any surface water source not specified in the permit or certificated or decreed water right, except that the department may not require mitigation measures if the transfer complies with subsection (3) of this section.

[(7)] (8) As used in this section:

(a) “Deschutes basin ground water study area” means the part of the Deschutes River Basin that is designated by the Water Resources Commission by rule.

[(a)] (b) “Similarly” means that the use of ground water at the new point of diversion affects the surface water source specified in the permit or certificated or decreed water right and would result in stream depletion of at least 50 percent of the rate of appropriation within 10 days of continuous pumping.

[(b)] (c) “Unconfined aquifer” means an aquifer in which the pressure at the upper surface of saturation is equal to atmospheric pressure.

SECTION 2. ORS 537.211 is amended to read:

537.211. (1) The approval of an application referred to in ORS 537.140 or 537.400 shall be set forth in a water right permit issued by the Water Resources Department. The permit shall specify the details of the authorized use and shall set forth any terms, limitations and conditions as the department considers appropriate including but not limited to any applicable condition required under ORS 537.289. A copy of the permit shall be filed as a public record in the department. The permit shall be mailed to the applicant, and upon receipt of the permit the permittee may proceed with the construction of the necessary works and may take all action required to apply the water to the designated beneficial use and to perfect the proposed appropriation.

(2) Except as provided in subsection (6) of this section, if an application under ORS 537.140 or 537.400 indicates that the applicant does not have written authorization or an easement permitting access to nonowned land crossed by the proposed ditch, canal or other work, the department may issue a final order approving the application if the approval includes a condition requiring the applicant to obtain such written authorization, or easement or ownership of such land and to provide the department with a copy of the written authorization, easement or evidence of ownership.

(3) If an application referred to in ORS 537.140 or 537.400 is rejected, the department shall enter a written order setting forth the reasons for the rejection. The applicant shall take no action towards construction of the works or use of the water. The department shall mail a copy of the order to the applicant.

(4) The holder of a water right permit may change the point of diversion, change the point of appropriation, change the point of diversion to allow the appropriation of ground water or use the water on land to which the right is not appurtenant if:

(a) The use of water on land to which the right is not appurtenant, the change of point of diversion or the change in point of appropriation does not result in injury to an existing water right;

(b) For a proposed change in the place of use of the water, the land on which the water is to be used is owned or controlled by the holder of the permit and is contiguous to the land to which the permit is appurtenant;

(c) All other terms of the permit remain the same, including but not limited to the beneficial use for which the water is used and the number of acres to which water is applied;

(d) Prior approval is obtained from the district if the water is transported or conveyed by an irrigation district organized under ORS chapter 545, a drainage district organized under ORS chapter 547, a water improvement district organized under ORS chapter 552, a water control district organized under ORS chapter 553 or a district improvement company or a corporation organized under ORS chapter 554;

(e) The holder of the permit provides written notice to the department at least 60 days before making any changes to the lands, point of diversion or point of appropriation described in the permit;

(f) The holder of the permit complies with the publication requirements of ORS 540.520 (5), if applicable;

(g) Diversion is provided with a proper fish screen, if requested by the State Department of Fish and Wildlife; and

(h) For a request to transfer the point of diversion to allow the appropriation of ground water, the proposed change meets the standards set forth in ORS 540.531 (2) or (3).

(5) Notwithstanding the requirements of subsection (4)(b) of this section, the holder of a water right permit may change the place of use of all or any portion of water under the permit to land that is not contiguous to the land to which the permit is appurtenant if:

(a) The change to noncontiguous land is in furtherance of mitigation or conservation efforts undertaken for the purposes of benefiting a species listed as sensitive, threatened or endangered under ORS 496.171 to 496.192 or the federal Endangered Species Act of 1973 (16 U.S.C. 1531 to 1544), as determined by the listing agency; and

(b) All other requirements of subsection (4) of this section are met.

(6) For an application made by or on behalf of a public corporation, the department may issue a permit approving the application without requiring the applicant to obtain prior written authorization or an easement permitting access to nonowned lands affected by the proposed project. However, nothing in this subsection shall be construed to allow any person to trespass on the lands of another person.

(7) When the department receives notice under subsection (4)(e) of this section, the department shall publish the notice in the department’s weekly public notice of water right applications.

(8) If the use of water under the permit is for operation of a chemical process mine as defined in ORS 517.953:

(a) Review of the application and approval or denial of the application shall be coordinated with the consolidated application process under ORS 517.952 to 517.989. However, such review and approval or denial shall take into consideration all policy considerations for the appropriation of water as set forth in this chapter and ORS chapter 536.

(b) The permit may be issued for exploration under ORS 517.702 to 517.740, but the permit shall be conditioned on the applicant’s compliance with the consolidated application process.

(c) The permit shall include a condition that additional conditions may be added to the use of water when a water right certificate is issued, or when the use of water is changed pursuant to ORS 540.520 and 540.530 to use for a chemical process mine operation.

(9) As used in this section, “contiguous” includes land separated from the land to which a water right is appurtenant by roads, utility corridors, irrigation ditches or publicly owned rights of way.

SECTION 3. The Water Resources Commission shall adopt rules that prescribe:

(1) The process for reviewing applications submitted under ORS 540.531;

(2) The persons to whom the department shall provide notice of the receipt of an application submitted under ORS 540.531; and

(3) The persons who may participate in the process of reviewing applications submitted under ORS 540.531.

SECTION 4. The Water Resources Commission shall adopt rules as required under section 3 of this 2003 Act no later than March 31, 2004.

SECTION 5. Section 6 of this 2003 Act is added to and made a part of ORS 540.505 to 540.580.

SECTION 6. (1) In accordance with the provisions of this section, a person may request that the Water Resources Department approve the temporary transfer of the place of use and type of use and temporarily change the point of diversion if necessary to convey water to the new temporary place of use, of all or a portion of a water right, for a period not to exceed 25 years if:

(a) The person holds a water use subject to transfer;

(b) The type of use specified in the original water use subject to transfer is irrigation;

(c) The person to whom the right is transferred is:

(A) Located within the Deschutes River Basin; and

(B) A city, a quasi-municipal corporation, a domestic water supply district formed under ORS chapter 264, a water supplier as defined in ORS 448.115 or a water authority formed under ORS chapter 450;

(d) The proposed use is municipal use; and

(e) The proposed temporary transfer will not result in injury to any existing water right.

(2) An application for a temporary transfer under this section shall:

(a) Be submitted in writing to the Water Resources Department;

(b) Be accompanied by the appropriate fee for a change in the place of use and type of use as set forth in ORS 536.050;

(c) Include the information required under ORS 540.520 (2); and

(d) Include any other information the Water Resources Commission by rule may require.

(3)(a) Any portion of the use of a water right that is not temporarily transferred under this section may be used on the designated part of the lands described in the original water right permit, certificate or adjudication under ORS chapter 539 as evidenced by a court decree, if the use does not encompass more than the remaining portion of the lands, enlarge the water right or increase the rate, duty, total acreage benefited or season of use.

(b) The Water Resources Department shall designate the lands on which water may be applied under this subsection and shall prescribe mapping, measurement and recording requirements under this subsection.

(4) Upon expiration of a temporary transfer period, all uses of water for which a temporary transfer is allowed under this section shall revert automatically to the terms and conditions of the original water right permit, certificate or adjudication under ORS chapter 539 as evidenced by a court decree.

(5) The time during which water is used under an approved temporary transfer order does not apply toward a finding of forfeiture under ORS 540.610.

(6) The department may revoke a prior approval of a temporary transfer at any time if:

(a) The department finds that the transfer is causing injury to any existing water right; or

(b) The person fails to comply with the requirements prescribed by the department pursuant to subsection (3) of this section.

(7) The department shall provide notice, in the manner provided in ORS 540.520 (5), that the department received an application for a temporary transfer under this section.

(8) The department may:

(a) Prescribe the duration of the temporary transfer period allowed under this section, up to 25 years;

(b) Impose conditions in the terms of the temporary transfer, including revocation of the transfer for noncompliance with applicable state, local or federal laws; and

(c) Determine the parties that may participate in the review of applications submitted under this section.

SECTION 7. ORS 536.050, as amended by section 1, chapter

594, Oregon Laws 2003 (Enrolled House Bill 2268), is amended to read:

536.050. (1) The Water Resources Department may collect the following fees in advance:

(a) For examining an application for a permit:

(A) To appropriate water, except as provided under ORS 543.280 for an application for a hydroelectric project:

(i) A base fee of $300;

(ii) $200 for the first second-foot or fraction thereof;

(iii) $100 for each additional second-foot or fraction thereof; and

(iv) If appropriating stored water, $20 for the first acre-foot or fraction thereof up to 10 acre-feet, plus $1 for each additional acre-foot or fraction thereof.

(B) To store water under ORS 537.400 or 537.534 (4):

(i) A base fee of $300; and

(ii) $20 for the first acre-foot or fraction thereof up to 10 acre-feet, plus $1 for each additional acre-foot or fraction thereof.

(i) A base fee of $150; and

(ii) $15 for the first acre-foot or fraction thereof up to 10 acre-feet, plus $1 for each additional acre-foot or fraction thereof.

(b) For recording a permit to appropriate or store water, $250.

(d) For copying records in the department, $2 for the first page and 50 cents for each additional page.

(e) For certifying copies, documents, records or maps, $10 for each certificate.

(f) For a blueprint copy of any map or drawing, the actual cost of the work.

(g) For a computer-generated map, the actual cost of the work.

(h) For examining an application for approval of a change to an existing water right or permit:

(A) A base fee of $350;

(B) $350 for each additional type of change requested; and

(C) For a request for a change in place of use or type of use or for a water exchange under ORS 540.533, $175 for each second-foot or fraction thereof requested beyond the first second-foot.

[(i) For examining an application for a temporary change in place of use under ORS 540.523 or 540.570, a base fee of $175 and:]

(i) For examining an application for a temporary change in place of use under ORS 540.523, for a temporary transfer under section 6 of this 2003 Act or for a temporary change in place of use, a change in the point of diversion to allow for the appropriation of ground water or a change of a primary right to a supplemental right under ORS 540.570, a base fee of $175 and:

(A) For nonirrigation uses, $75 for each second-foot or fraction thereof requested beyond the first second-foot; or

(B) For irrigation uses, $1 per acre of land irrigated or, if the application and required map are submitted to the department in a department-approved digital format, 25 cents per acre of land irrigated.

(j) For submitting a protest to the department, $250.

(k) For filing an application for extension of time within which irrigation or other works shall be completed or a water right perfected, $250.

(L) For a limited license under ORS 537.143 or 537.534 (2), the fee established by rule by the Water Resources Commission.

(m) For filing, examining and certifying a petition under ORS 541.329, $250 plus 10 cents per acre of water involved in the application. For purposes of computing this fee, when any acreage within a quarter quarter of a section is involved, the 10 cents per acre shall apply to all acres in that quarter quarter of a section.

(n) For requesting standing under ORS 537.153, 537.621 or 543A.120, $50.

(o) For participating in a contested case proceeding under ORS 537.170, 537.622 or 543A.130, $200.

(p) Except for an applicant, for obtaining a copy of both a proposed final order and a final order for a water right application under ORS 537.140 to 537.252, 537.505 to 537.795 or 543A.005 to 543A.300, $10.

(q) For examining an application to store water under ORS 537.409:

(A) A base fee of $40; and

(B) $10 for each acre-foot or fraction thereof, not to exceed a total of $250.

(r) For submitting a notice of intent under ORS 543A.030 or 543A.075, the amount established by the Water Resources Director under ORS 543A.410.

(s) For examining an application for a substitution made under ORS 540.524, $250.

(t) For examining an application for an allocation of conserved water under ORS 537.455 to 537.500, $700.

(u) For submitting a water management and conservation plan pursuant to rules of the Water Resources Commission:

(A) $250, if the plan is submitted by an agricultural water supplier;

(B) $500, if the plan is submitted by a municipal water supplier serving a population of 1,000 or fewer persons; or

(v) For examining a new application for an in-stream water right lease under ORS 537.348:

(A) $200 for an application for a lease with four or more landowners or four or more water rights; or

(B) $100 for all other applications.

(w) For examining an application for an in-stream water right lease renewal, $50.

(2) Notwithstanding the fees established under subsection (1) of this section, the Water Resources Commission may establish lower examination and permit fees by rule for:

(a) The right to appropriate water for a storage project of five acre-feet or less; or

(b) The right to appropriate water for the purpose of allowing the applicant to water livestock outside of a riparian area, as that term is defined in ORS 541.351.

(3) The Water Resources Director may refund all or part of a fee paid to the department under this section if the director determines that a refund of the fee is appropriate in the interests of fairness to the public or necessary to correct an error of the department.

(4) The director may waive all or part of a fee for a change to a water right permit under ORS 537.211 (4), a change to a water right subject to transfer under ORS 540.520 or 540.523 or an allocation of conserved water under ORS 537.470, if the change or allocation of conserved water is:

(a) Made pursuant to ORS 537.348;

(b) Necessary to complete a project funded under ORS 541.375; or

(c) Approved by the State Department of Fish and Wildlife as a change or allocation of conserved water that will result in a net benefit to fish and wildlife habitat.

(5) All moneys received under this section, less any amounts refunded under subsection (3) of this section, shall be deposited in the Water Resources Department Water Right Operating Fund.

(6) Notwithstanding subsection (5) of this section, all fees received by the department for power purposes under ORS 543.280 shall be deposited in the Water Resources Department Hydroelectric Fund established by ORS 536.015.

SECTION 8. ORS 540.510 is amended to read:

540.510. (1) Except as provided in subsections (2) to (8) of this section, all water used in this state for any purpose shall remain appurtenant to the premises upon which it is used and no change in use or place of use of any water for any purpose may be made without compliance with the provisions of ORS 540.520 and 540.530. However, the holder of any water use subject to transfer may, upon compliance with the provisions of ORS 540.520 and 540.530, change the use and place of use, the point of diversion or the use theretofore made of the water in all cases without losing priority of the right theretofore established. A district may change the place of use in the manner provided in ORS 540.572 to 540.580 in lieu of the method provided in ORS 540.520 and 540.530. When an application for change of the use or place of use for a primary water right is submitted in accordance with this section, the applicant also shall indicate whether the land described in the application has an appurtenant supplemental water right or permit. If the applicant also intends to transfer the supplemental water right or permit, the applicant also shall include the information required under ORS 540.520 (2) for the supplemental water right or permit. If the applicant does not include the supplemental water right or permit in the transfer application, the Water Resources Department shall notify the applicant that the supplemental water right or permit will be canceled before the department issues the order approving the transfer of the primary water right, unless within 30 days the applicant modifies the application to include the supplemental water right or permit or withdraws the application. The department may approve the transfer of the supplemental water right or permit in accordance with the provisions of ORS 540.520 and 540.530. The department shall not approve the transfer of a supplemental water right or permit if the transfer would result in enlargement of the original water right or injury to an existing water right. If the department approves the transfer of the primary water right but does not approve the transfer of the supplemental water right or permit, the department shall notify the applicant of the department’s intent to cancel that portion of the supplemental water right or permit described in the transfer application before the department issues the primary water right transfer order, unless the applicant withdraws the transfer application within 90 days.

(2) Subject to the limitations in ORS 537.490, any right to the use of conserved water allocated by the Water Resources Commission under ORS 537.470 may be severed from the land and transferred or sold after notice to the commission as required under ORS 537.490.

(3)(a) Any water used under a permit or certificate issued to a municipality, or under rights conferred by ORS 538.410 to 538.450, or under the registration system set forth in ORS 537.132, may be applied to beneficial use on lands to which the right is not appurtenant if:

(A) The water is applied to lands which are acquired by annexation or through merger, consolidation or formation of a water authority, so long as the rate and use of water allowed in the original certificate is not exceeded;

(B) The use continues to be for municipal purposes and would not interfere with or impair prior vested water rights; or

(C) The use is authorized under a permit granted under ORS 468B.050 or 468B.053 and for which a reclaimed water registration form has been filed under ORS 537.132.

(b) As used in this subsection, “municipality” means a city, a port formed under ORS 777.005 to 777.725, 777.915 to 777.953 and 778.010, a domestic water supply district formed under ORS chapter 264, a water supplier as defined in ORS 448.115 or a water authority formed under ORS chapter 450.

(4) Pursuant to the provisions of ORS 540.570 or section 6 of this 2003 Act, any water used under a permit or certificate issued to a district may be applied to beneficial use on lands within the district to which the right is not appurtenant.

(5) The relocation of a point of diversion as necessary to follow the movements of a naturally changing stream channel does not constitute a change in point of diversion for purposes of ORS 540.520 if:

(a) The diversion point stays within 500 feet of the point of diversion on record with the Water Resources Department;

(b) The change does not move the diversion point upstream or downstream beyond the diversion point of another appropriator; and

(6) In the event that government action results in or creates a reasonable expectation of a change in the surface level of a surface water source that impairs or threatens to impair access to a point of diversion authorized by a water right permit, certificate or decree, the owner of the water right may change the point of diversion or add an additional point of diversion in accordance with the provisions of this section in lieu of complying with the requirements of ORS 540.520 and 540.530. Before changing the point of diversion, the water right owner shall provide written notice of the proposed change to the Water Resources Department. Within 15 days after receipt of such notice, the department shall provide notice by publication in the department’s public notice of water right applications. Within 60 days after the department receives notice from the owner, the Water Resources Director, by order, shall approve the change unless the director finds the changes will result in injury to other existing water rights. All other terms and conditions of the water right shall remain in effect.

(7) The sale or lease of the right to the use of conserved water under ORS 537.490 does not constitute a change of use or a change in the place of use of water for purposes of ORS 540.520.

(8) Ground water applied to an exempt use as set forth in ORS 537.141 or 537.545 may be subsequently applied to land for irrigation purposes under ORS 537.141 (1)(i) or 537.545 (1)(g) without application for a change in use or place of use under this section.

SECTION 9. The Water Resources Commission shall adopt rules regarding mapping, measurement and recording requirements under section 6 (3)(b) of this 2003 Act no later than March 31, 2004.

SECTION 10. The Water Resources Department shall submit a report, in the manner provided in ORS 192.245, that shall include a summary of the features of the process employed by the Water Resources Commission to implement section 6 of this 2003 Act. The report shall be submitted no later than January 31 of each year to the Legislative Assembly or to an interim committee related to natural resources, as appropriate.

SECTION 11. The Water Resources Department shall submit a report, in the manner provided in ORS 192.245, that shall include a detailed description of the features of the process employed by the Water Resources Commission to implement section 6 of this 2003 Act, including any recommendation for further legislation. The report shall be submitted to the Legislative Assembly no later than January 31, 2009.

SECTION 12. Notwithstanding the requirement in section 10 of this 2003 Act that the Water Resources Department submit a report by January 31 of each year, the first report required by section 10 of this 2003 Act shall be submitted by January 31, 2005.

SECTION 13. Section 6 of this 2003 Act and the amendments to ORS 536.050 and 540.510 by sections 7 and 8 of this 2003 Act apply to applications submitted on or after April 1, 2004.

SECTION 14. The amendments to ORS 537.211 and 540.531 by sections 1 and 2 of this 2003 Act apply to applications submitted to the Water Resources Department on or after April 1, 2004.

SECTION 15. ORS 540.570 is amended to read:

540.570. (1) Provided that the proposed transfer complies with all of the provisions of this subsection and will not result in injury to any existing water right, a district with a manager may, for one irrigation season, temporarily transfer the place of use of water appurtenant to any land within the legal boundaries of the district to an equal acreage elsewhere within the legal boundaries of that district or temporarily transfer the type of use identified in a right to store water. A temporary transfer of the place of use may occur if:

(a) The rate and duty, and the total number of acres to which water will be applied under the transfer, do not exceed existing limits on the water use subject to transfer;

(b) The type of use authorized under the water use subject to transfer remains the same; and

(c) The land from which the water use is being transferred does not receive any water under the right being transferred during the irrigation season in which the change is made.

(2) Provided that the proposed transfer complies with all the provisions of this subsection and will not result in injury to or enlargement of an existing water right, a district with a manager may, for one irrigation season, temporarily change the point of diversion or appropriation combined with a change in place of use, change the point of diversion to allow for the appropriation of ground water or change a primary right to a supplemental right if:

(a) The land on which the water is to be used is within the district’s legal boundaries established pursuant to ORS chapter 545, 547, 552, 553 or 554;

(b) The other terms of the permit or certificate remain the same, including the beneficial use for which the water is used and the number of acres to which water is applied;

(c) The diversion is provided with a proper fish screen, if required by the Water Resources Department; and

(d) For a proposal to transfer the point of diversion to allow for the appropriation of ground water, the proposed change meets the standards set forth in ORS 540.531 (2).

(a) Include the information required under ORS 540.574 (3);

(b) Be accompanied by a map in a form satisfactory to the department and certified by the district. If the water right is on a tract of land of five acres or less, the assessor’s tax map with a notation of the acres of water right shall be sufficient for identification of the tract and place of use;

(c) Include a statement that a written authorization for the transfer from each landowner affected by the particular temporary transfer is on file with the district;

(d) Include any other information required by rules of the Water Resources Commission; and

(e) Include a fee in the amount required under ORS 536.050 (1)(i).

[(3)] (4) The district shall notify each affected landowner that the department may reject the transfer or may require mitigation to avoid injury to other water rights. Upon receipt of a completed petition under subsection [(2)] (3) of this section, the department shall place a summary of the petition in the weekly notice published by the department. The department shall accept written public comments on the petition for 30 days following publication of the weekly notice. The department shall consider comments that pertain to the potential for injury to an existing water right or to the enlargement of the water use subject to transfer in determining whether to condition, reject or revoke a temporary transfer.

[(4)] (5) Use of water on lands from which the right is transferred and in the new temporary location during the same irrigation season or calendar year is prohibited and may subject the district and the landowner to civil penalties.

[(5)] (6) The department may condition, reject or revoke a temporary transfer at any time to the extent necessary to avoid injury if the department finds the transfer is causing injury to an existing water right.

[(6)] (7) Upon expiration of the temporary transfer period, all uses of water for which a temporary transfer is allowed under this section shall revert automatically to the terms and conditions of the original water right permit, certificate or adjudication under ORS chapter 539 as evidenced by a court decree.

[(7)] (8) The time during which water is used under an approved temporary transfer order does not apply toward a finding of forfeiture under ORS 540.610.

SECTION 16. ORS 540.570, as amended by section 10, chapter 788, Oregon Laws 2001, is amended to read:

540.570. (1) [Upon compliance with subsection (2) of this section,] Provided that the proposed transfer complies with all of the provisions of this subsection and will not result in injury to any existing water right, a district with a manager may, for one irrigation season, temporarily transfer the place of use of water appurtenant to any land within the legal boundaries of the district[,] to an equal acreage elsewhere within the legal boundaries of that district or temporarily transfer the type of use identified in a right to store water. A temporary transfer of the place of use may occur if:

(a) The rate and duty, and the total number of acres to which water will be applied under the transfer, do not exceed existing limits on the water use subject to transfer;

(b) The type of use authorized under the water use subject to transfer remains the same; and

(c) The land from which the water use is being transferred does not receive any water under the right being transferred during the irrigation season in which the change is made.

(a) The land on which the water is to be used is within the district’s legal boundaries established pursuant to ORS chapter 545, 547, 552, 553 or 554;

(b) The other terms of the permit or certificate remain the same, including the beneficial use for which the water is used and the number of acres to which water is applied;

(c) The diversion is provided with a proper fish screen, if required by the Water Resources Department; and

(d) For a proposal to transfer the point of diversion to allow for the appropriation of ground water, the proposed change meets the standards set forth in ORS 540.531 (2).

[(2)] (3) When a district or an owner or an owner’s agent within a district who is subject to the charges or assessments of the district wishes to use water on alternate acreage within the district, if the district has approved the owner’s request, the district shall [notify the Water Resources Department of that intent at least 60 days before the beginning of irrigation deliveries for the season or March 1, whichever is earlier. The notice shall contain a statement that each landowner affected by a temporary transfer has authorized the transfer in a writing on file with the district.] submit to the department a petition seeking a temporary transfer under this section. The district shall submit the petition prior to making the proposed change. The petition may contain changes to one or more tax lots within the district and shall:

(a) Include the information required under ORS 540.574 (3);

(c) Include a statement that a written authorization for the transfer from each landowner affected by the particular temporary transfer is on file with the district;

(d) Include any other information required by rules of the Water Resources Commission; and

(e) Include a fee in the amount required under ORS 536.050 (1)(i).

(4) The district shall notify each affected landowner that the department may reject the transfer or may require mitigation to avoid injury to other water rights. Upon receipt of a completed petition under subsection (3) of this section, the department shall place a summary of the petition in the weekly notice published by the department. The department shall accept written public comments on the petition for 30 days following publication of the weekly notice. The department shall consider comments that pertain to the potential for injury to an existing water right or to the enlargement of the water use subject to transfer in determining whether to condition, reject or revoke a temporary transfer.

(5) Use of water on lands from which the right is transferred and in the new temporary location during the same irrigation season or calendar year is prohibited and may subject the district and the landowner to civil penalties.

[(3) The department may deny the request to use water on the alternate acreage if such use would interfere with existing water rights or result in enlargement of the water right. If the department fails to deny the request to use water on alternate acreage within 60 days after receipt of the request, the department’s approval shall be considered to have been granted.]

[(4) The Water Resources Commission by rule may require that a district maintain or submit documentary evidence, including maps, of the lands from which and to which water is to be applied temporarily under this section.]

[(5) A temporary transfer may be approved under this section for a period not to exceed five years.]

(6) The department may condition, reject or revoke a temporary transfer at any time to the extent necessary to avoid injury if the department finds the transfer is causing injury to an existing water right.

(7) Upon expiration of the temporary transfer period, all uses of water for which a temporary transfer is allowed under this section shall revert automatically to the terms and conditions of the original water right permit, certificate or [an] adjudication [proceeding] under ORS chapter 539 as evidenced by a court decree.

(8) The time during which water is used under an approved temporary transfer order does not apply toward a finding of forfeiture under ORS 540.610.

SECTION 17. ORS 536.900 is amended to read:

536.900. (1) In addition to any other liability or penalty provided by law, the Water Resources Commission may impose a civil penalty on a person for any of the following:

(a) Violation of any of the terms or conditions of a permit, certificate or license issued under ORS chapters 536 to 543A.

(b) Violation of ORS 537.130 or 537.535.

(d) Violation of ORS 540.045, 540.145, 540.210, 540.310, 540.320, 540.330, 540.340, 540.435, 540.440, 540.570 [(4)] (5), 540.580 (3), 540.710, 540.720 and 540.730 or rules adopted under ORS 540.145.

(2) A civil penalty may be imposed under this section for each day of violation of ORS 537.130, 537.535, 540.045, 540.310, 540.330, 540.570 [(4)] (5), 540.710, 540.720 or 540.730.

(3) In the event the petitioner knowingly misrepresents the map and petition required in ORS 541.329, the commission may assess a penalty of up to $1,000 based upon guidelines to be established by the commission. In addition, the petition and map shall be amended to correct the error at the petitioner’s cost. Affected users shall be given notice as provided in ORS 541.329 (5).

(4) A civil penalty may not be imposed until the commission prescribes a reasonable time to eliminate the violation. The commission shall notify the violator of the time allowed to correct a violation within five days after the commission first becomes aware of the violation.

(5) Notwithstanding any term or condition of a permit, certificate or license, the rotation of the use of water under ORS 540.150 may not be considered a violation under subsection (1) of this section.

SECTION 18. ORS 536.900, as amended by section 12, chapter 788, Oregon Laws 2001, is amended to read:

536.900. (1) In addition to any other liability or penalty provided by law, the Water Resources Commission may impose a civil penalty on a person for any of the following:

(a) Violation of any of the terms or conditions of a permit, certificate or license issued under ORS chapters 536 to 543A.

(b) Violation of ORS 537.130 or 537.535.

(d) Violation of ORS 540.045, 540.145, 540.210, 540.310, 540.320, 540.330, 540.340, 540.435, 540.440, 540.570 (5), 540.710, 540.720 and 540.730 or rules adopted under ORS 540.145.

(2) A civil penalty may be imposed under this section for each day of violation of ORS 537.130, 537.535, 540.045, 540.310, 540.330, 540.570 (5), 540.710, 540.720 or 540.730.

SECTION 19. ORS 540.990 is amended to read:

540.990. (1) Violation of any provision of ORS 540.440 is punishable, upon conviction, by a fine of not less than $25 nor more than $150, together with the costs and disbursements of the action, and in default of the payment of the fine and costs, by confinement in the county jail one day for each $2 thereof. Justice courts shall have concurrent jurisdiction with the circuit courts in the trial of all proceedings under this subsection.

(2) Violation of any provision of ORS 540.570 [(4)] (5), 540.710, 540.720 or 540.730, or 540.370 (2), is punishable, upon conviction, by a fine of not less than $10 nor more than $250, or by imprisonment in the county jail for not more than six months, or both. Justice courts shall have concurrent jurisdiction with the circuit courts in the trial of all violations under this subsection.

SECTION 20. Section 14, chapter 788, Oregon Laws 2001, is amended to read:

Sec. 14. The amendments to ORS 536.900, 540.523[, 540.570,] and 540.580 [and 540.990] by sections 9, 11 and 12, chapter 788, Oregon Laws 2001, [to 13 of this 2001 Act] become operative July 1, 2005.

SECTION 21. ORS 540.990, as amended by section 13, chapter 788, Oregon Laws 2001, is amended to read:

(2) Violation of any provision of ORS 540.570 (5), 540.710, 540.720 or 540.730, or 540.370 (2), is punishable, upon conviction, by a fine of not less than $10 nor more than $250, or by imprisonment in the county jail for not more than six months, or both. Justice courts shall have concurrent jurisdiction with the circuit courts in the trial of all violations under this subsection.

SECTION 22. Section 23 of this 2003 Act is added to and made a part of ORS 540.505 to 540.580.

SECTION 23. (1) In order to increase district water management flexibility, the Water Resources Department shall establish a pilot project in which districts may temporarily allow, for water uses subject to transfer, the use of water on any land within the legal boundaries of the district established pursuant to ORS chapter 545, 547, 552, 553 or 554.

(2) The use of water on any land within the legal boundaries of the district may be allowed if:

(a) The rate and duty, and the total number of acres to which water will be applied under the transfer, do not exceed existing limits on the water use subject to transfer;

(b) The type of use authorized under the water use subject to transfer remains the same; and

(c) The land from which the water use is being transferred does not receive any water under the right being transferred during the irrigation season in which the change is made.

(3) The department shall allow the pilot project to be implemented in the Talent Irrigation District, the Owyhee Irrigation District and the Tualatin Valley Irrigation District or their successor irrigation districts. However, any district participating in the project must:

(a) Have defined state irrigation district boundaries;

(b) Have a management structure that can ensure that water is applied only where the water use is authorized;

(c) Not irrigate an area in any one irrigation season that exceeds the maximum number of acres allowed to be irrigated under the original water right;

(d) Have a full and accurate measurement of the water appropriated;

(e) Have an accurate map identifying the location of authorized use, by priority date, for watermaster review upon request; and

(f) Have on file statements by any landowner affected by the water use change indicating that the landowner agrees to the change.

(4) If any of the specified irrigation districts are unable to participate in the project, the department may identify another district for the project.

(5) The department may require that use of water under the pilot project cease and that the use revert to the use allowed under the water right of record if the department determines that:

(a) The district does not meet the qualifications established in subsection (3) of this section;

(b) The water is being used in a manner that violates the requirements in subsection (2) of this section; or

(c) The changes made to the use of water would result in injury to existing water rights or an enlargement of the original water right.

(6) Use of water under the pilot project constitutes a beneficial use of water and does not constitute nonuse for purposes of forfeiture under ORS 540.610.

SECTION 24. The Water Resources Department shall report to the Seventy-fourth Legislative Assembly, no later than January 31, 2007, on the operation of the pilot project established under section 23 of this 2003 Act.

SECTION 25. Sections 22 and 23 of this 2003 Act are repealed on June 30, 2008.

SECTION 26. The amendments to 540.570 by section 15 of this 2003 Act apply to applications submitted to the Water Resources Department on or after the effective date of this 2003 Act.

SECTION 27. (1) The Department of Environmental Quality shall foster and encourage wastewater reuse in urban areas as a means of conserving potable water.

(2) The Department of Environmental Quality shall work in consultation with interested parties and state agencies to examine the opportunities and barriers associated with wastewater reuse in urban areas and shall submit a report to an interim committee related to natural resources as appropriate, in the manner provided by ORS 192.245, no later than December 31, 2004. The report shall include:

(a) An inventory of regulatory mechanisms that govern wastewater issues at local, state and federal levels;

(b) A list of issues, including regulatory barriers, scientific concerns, issues of public perception and economic issues, that could restrict wastewater reuse;

(c) Readily available information on the current number, types and locations of wastewater reuse activities in urban areas;

(d) A list of existing and potential incentives for wastewater reuse; and

(e) Recommendations for legislative or other regulatory changes that may be needed to implement wastewater reuse.

(3) The Department of Environmental Quality may seek federal funding to be used for one or more wastewater reuse demonstration projects within urban areas in the Willamette River Basin that seek to illustrate the economic, environmental and other values of wastewater reuse.

(4) As used in this section, “wastewater reuse” means the recycling of treated wastewater derived from domestic sources, including municipal and individual systems, and industrial sources.

SECTION 28. Section 27 of this 2003 Act is repealed on January 2, 2005.

SECTION 29. This 2003 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2003 Act takes effect on its passage.

Approved by the Governor August 22, 2003

Filed in the office of Secretary of State August 22, 2003

Effective date August 22, 2003

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