75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
HA to HB 3369
LC 2753/HB 3369-1
HOUSE AMENDMENTS TO
HOUSE BILL 3369
By COMMITTEE ON ENVIRONMENT AND WATER
May 8
On page 1 of the printed bill, line 2, after the first
semicolon insert 'creating new provisions; amending ORS 541.705,
541.710, 541.720, 541.755, 541.765, 541.780 and 541.830 and
section 3, chapter 13, Oregon Laws 2008;'.
Delete lines 3 through 12 and insert:
' Whereas the western United States is projected to experience
substantial population growth this century, including an
additional one million people in Oregon before 2030; and
' Whereas climate change is expected to alter the timing and
form of precipitation in Oregon; and
' Whereas surface water is almost completely allocated across
Oregon during summer months, ground water levels have declined
precipitously in several areas and the hydrological connection
between surface water and ground water levels is significant; and
' Whereas Oregon needs to develop an integrated statewide water
management plan to address existing and likely future demands on
Oregon's water supplies; and
' Whereas having coordinated plans and programs to address
water needs will make Oregon a more likely recipient of federal
investments and give Oregon stronger standing in interstate water
disputes; and
' Whereas water is a valuable economic commodity; and
' Whereas water development projects can be designed to
simultaneously benefit commercial development, the natural
environment and the fiscal responsibilities of the state; and
' Whereas it is the policy of the Water Resources Department to
directly address Oregon's water supply needs and to restore and
protect stream flows and watersheds; and
' Whereas it is desirable that the Water Resources Department
and the Water Resources Commission have greater authority to
issue loans and grants to public and private bodies, Indian
tribes and others for the purpose of developing projects that
will ensure the availability of a sufficient and sustainable
water supply to meet Oregon's current and future water needs; and
' Whereas loan and grant moneys for developing projects that
ensure a sufficient and sustainable water supply must be
administered in a prudent and fiscally sound manner and used
expeditiously; and
' Whereas all water within Oregon belongs to the public
pursuant to law; now, therefore,'.
Delete lines 14 through 27 and delete pages 2 through 4 and
insert:
'
{ + ADDING + }
' { + SECTION 1. + } { + (1) Section 2 of this 2009 Act is
added to and made a part of ORS 541.700 to 541.855.
' (2) Sections 4 to 6 and 10 to 21 of this 2009 Act are added
to and made a part of ORS chapter 541. + }
'
{ + WATER DEVELOPMENT FUND + }
' { + SECTION 2. + } { + The Water Resources Commission
shall adopt rules establishing standards for borrowers obtaining
loans issued from the Water Development Fund. 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 standards may include, but
need not be limited to, standards that give preference to
entities with ad valorem taxing authority. + }
' { + SECTION 3. + } { + (1) In addition to any other
issuance of bonds issued under Article XI-I(1) of the Oregon
Constitution authorized by law, the State Treasurer, with the
concurrence of the Director of the Oregon Department of
Administrative Services, may issue Article XI-I(1) bonds:
' (a) Subject to the bond limitations established for the
particular biennium pursuant to ORS 286A.035 and at the request
of the Water Resources Commission, for the purpose of funding
water development projects in an amount not to exceed net
proceeds in the amounts described in subsection (2) of this
section, plus an additional amount to be estimated by the State
Treasurer, for payment of bond-related costs.
' (b) To refund Article XI-I(1) bonds. The amount of the
Article XI-I(1) bonds issued under this paragraph may not exceed
the estimated costs of paying, redeeming or defeasing the
refunded bonds, plus an amount determined by the State Treasurer
to pay estimated bond-related costs.
' (2) The maximum net proceeds amounts authorized under this
section are:
' (a) For the biennium beginning July 1, 2009, $25 million.
' (b) For the biennium beginning July 1, 2011, $50 million.
' (c) For the biennium beginning July 1, 2013, $50 million.
' (d) For the biennium beginning July 1, 2015, $50 million.
' (3) The State Treasurer shall credit the net proceeds of
Article XI-I(1) bonds issued under this section as provided in
ORS 541.785. + }
'
{ + WATER RESOURCES INVESTMENT FUND + }
' { + SECTION 4. + } { + (1) The Water Resources Investment
Fund is established in the State Treasury, separate and distinct
from the General Fund. Interest earned by the Water Resources
Investment Fund shall be credited to the Water Resources
Investment Fund. Moneys in the Water Resources Investment Fund
are continuously appropriated to the Water Resources Department
to fund loans under section 18 of this 2009 Act and to pay the
administrative costs of the department in operating loan and
grant programs under sections 10 to 21 of this 2009 Act.
' (2) The Water Resources Investment Fund consists of the
following:
' (a) Moneys appropriated to the fund by the Legislative
Assembly.
' (b) Any moneys that may be transferred to the fund by the
federal government, a state agency or a local government.
' (c) Any fees charged to loan or grant applicants under
section 12 of this 2009 Act or established by the Water Resources
Commission under section 18 of this 2009 Act.
' (d) Principal and interest from repayments of loans issued
from the fund.
' (e) Proceeds from lottery bonds authorized for deposit to the
fund.
' (f) Gifts, grants or donations to the fund. Notwithstanding
subsection (1) of this section, the department may use moneys
received under this paragraph according to any terms and
conditions of the gift, grant or donation. + }
' { + SECTION 5. + } { + (1) The Water Resources
Department may establish subaccounts within the Water Resources
Investment Fund for any purpose the department considers
reasonable for carrying out sections 4, 6 and 10 to 21 of this
2009 Act.
' (2) The department shall administer the fund and any
expenditures from, or transfers between, subaccounts of the fund
for the purpose of ensuring that the fund provides a continuing
source of financing for water development projects.
' (3) The department may commit moneys in the fund or reserve
future income to the fund for disbursement in future years. The
department shall commit or reserve moneys under this subsection
only after:
' (a) Allowing for defaults and other contingencies;
' (b) Finding that unobligated net income of the fund will be
sufficient to make future payments in a manner consistent with
the purpose described in subsection (2) of this section; and
' (c) Providing in any contract for the payment of moneys from
the fund that the liability of the state to make annual payments
is contingent on the availability of moneys in the fund. + }
' { + SECTION 6. + } { + (1) The Water Resources Department
may make a loan for a qualifying project from the Water Resources
Investment Fund to:
' (a) A public body as defined in ORS 174.109;
' (b) An Indian tribe as defined in ORS 391.802;
' (c) A person; or
' (d) A for-profit or nonprofit cooperative.
' (2) The Water Resources Commission shall adopt rules
establishing standards for borrowers obtaining loans issued from
the fund. 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
standards may include, but need not be limited to, standards that
give preference to entities with ad valorem taxing authority.
' (3) Pledged collateral, taxing authority, a contractual
property lien or other source for secured repayment is a
prerequisite to the advancement of loan moneys from the fund. + }
'
{ + WATER RESOURCES GRANT FUND + }
' { + SECTION 6a. + } { + (1) The Water Resources Grant Fund
is established in the State Treasury, separate and distinct from
the General Fund. Interest earned by the Water Resources Grant
Fund shall be credited to the Water Resources Grant Fund. Moneys
in the Water Resources Grant Fund are continuously appropriated
to the Water Resources Department to fund grants under section 18
of this 2009 Act and to pay the administrative costs of the
department in operating grant programs under sections 10 to 21 of
this 2009 Act.
' (2) The Water Resources Grant Fund consists of the following:
' (a) Moneys appropriated to the fund by the Legislative
Assembly.
' (b) Any moneys that may be transferred to the fund by the
federal government, a state agency or a local government.
' (c) Proceeds from lottery bonds authorized for deposit to the
fund.
' (d) Gifts, grants or donations to the fund. Notwithstanding
subsection (1) of this section, the department may use moneys
received under this paragraph according to any terms and
conditions of the gift, grant or donation.
' (3) The Water Resources Department may make a loan for a
qualifying project from the Water Resources Grant Fund to:
' (a) A public body as defined in ORS 174.109;
' (b) An Indian tribe as defined in ORS 391.802;
' (c) A person; or
' (d) A for-profit or nonprofit cooperative. + }
' { + SECTION 7. + } { + (1) For the biennium beginning July
1, 2009, at the request of the Oregon Department of
Administrative Services, after the department consults with the
Water Resources Commission, the State Treasurer is authorized to
issue lottery bonds pursuant to ORS 286A.560 to 286A.585 in an
amount not to exceed net proceeds of $10 million for the use
described in subsection (2) of this section, plus an additional
amount, to be estimated by the State Treasurer, for payment of
bond-related costs.
' (2) One-half of the proceeds of lottery bonds issued under
this section shall be deposited to the Water Resources Investment
Fund for use as provided under section 4 of this 2009 Act.
One-half of the proceeds shall be deposited to the Water
Resources Grant Fund for use as provided under section 6a of this
2009 Act.
' (3) The use of lottery bonds for the purposes described in
this section is justified by the following findings:
' (a) Development of future water supplies through water
conservation or reuse, stream flow restoration, in-stream flow
acquisition, water storage or other techniques is critical to
agriculture and maintaining the economy of Oregon and to the
restoration of watersheds, critical fish and wildlife habitat and
preserving the ecological condition of water habitats in a manner
that benefits recreational industries, industries related to fish
and wildlife and other industries within the state; and
' (b) Development of future water supplies will reduce the
negative effect of existing and future water shortages on the
agricultural, fishing and recreational industries in this
state. + }
'
{ + WATER CONSERVATION, REUSE AND STORAGE + }
{ +
INVESTMENT FUND + }
' { + SECTION 8. + } { + In addition to and not in lieu of
any other appropriation, there is appropriated to the State
Forestry Department, for the biennium beginning July 1, 2009, out
of the General Fund, the amount of $500,000 for deposit to the
Water Conservation, Reuse and Storage Investment Fund. + }
' { + SECTION 9. + } Section 3, chapter 13, Oregon Laws 2008,
is amended to read:
' { + Sec. 3. + } (1) The Water Conservation, Reuse and
Storage Investment Fund is established in the State Treasury,
separate and distinct from the General Fund. Interest earned by
the Water Conservation, Reuse and Storage Investment Fund shall
be credited to the General Fund. Moneys in the Water
Conservation, Reuse and Storage Investment Fund are continuously
appropriated to the Water Resources Department to award grants
and to pay the costs of direct services provided under section
1 { + , + } { - of this 2008 Act - } { + chapter 13, Oregon
Laws 2008 + }.
' (2) The Water Conservation, Reuse and Storage Investment Fund
shall consist of:
' (a) Moneys appropriated to the fund by the Legislative
Assembly;
' (b) Any moneys that may be transferred to the fund by the
federal government, a state agency or a local government;
{ - and - }
' (c) Grant repayments, if any { + ; and
' (d) Moneys from shared savings fees paid under section 10 of
this 2009 Act and interest charged for an outstanding fee
balance + }.
' { + SECTION 10. + } { + (1) To the extent permitted under
the Internal Revenue Code, the recipient of a loan under section
18 of this 2009 Act shall pay the Water Resources Department a
shared savings fee in an amount determined as provided in
subsections (3) and (4) of this section. The department shall
deposit moneys from shared savings fees and interest charged
under subsection (5) of this section to the Water Conservation,
Reuse and Storage Investment Fund.
' (2) The department may charge one shared savings fee for each
loan issued under section 18 of this 2009 Act. The Water
Resources Commission shall determine the shared savings fee
amount after consultation with the State Treasurer.
' (3) If the project loan is funded from the Water Development
Fund, the department shall establish the shared savings fee to be
not less than one-eighth, and not more than one-half, of the
present value of the difference between the interest amount
scheduled to be paid during the term of the loan issued by the
department and the interest amount that would be paid over the
scheduled term of the loan at the average market rate being
charged for well-secured loans of a similar amount to borrowers
having bond ratings or credit scores equivalent to the bond
rating or credit score of the loan recipient.
' (4) If the project loan is funded from the Water Resources
Investment Fund, the department shall establish the shared
savings fee to be not less than one-tenth, and not more than
one-half, of the present value of the difference between the
interest amount scheduled to be paid over the term of the loan
issued by the department and the interest amount that would be
paid over the scheduled term of the loan at the average market
rate being charged for well-secured loans of a similar amount to
borrowers having bond ratings or credit scores equivalent to the
bond rating or credit score of the loan recipient.
' (5) A loan recipient may pay the shared savings fee at the
time the loan is executed or request that the fee amount be added
to the loan amount and paid at the time of loan issuance.
However, if the borrower may not lawfully have the fee amount
added to the loan amount the borrower may, instead of paying the
fee at the time the loan is executed, pay the fee in annual
installments equal to the total cost of the fee divided by the
number of years in the scheduled loan term, plus any interest on
the outstanding fee balance charged under this subsection. If the
fee is paid in annual installments, the department may charge
interest on the outstanding balance of the fee at a rate
determined by the department after consultation with the State
Treasurer. + }
'
{ + DEFINITIONS + }
' { + SECTION 11. + } { + As used in sections 10 to 21 of
this 2009 Act:
' (1) 'Economic public benefit' means:
' (a) Job creation;
' (b) Encouragement of economic investments;
' (c) Increases in state revenues;
' (d) Protection of public resource lands;
' (e) Increases in the efficiency of state spending; and
' (f) Other activities that enhance economic activity within
the state.
' (2) 'Environmental public benefit' means the maintenance or
improvement of ecological conditions that relate to one or more
of the following:
' (a) Water velocity, temperature and level and other stream
flow conditions during certain periods of the year that are
connected to the life stages and survival of the state or
federally listed sensitive, threatened or endangered fish
species.
' (b) Stream flow conditions that support the life stages of
native fish species or that will allow for the reintroduction of
native fish species.
' (c) The return of water to stream surface water from another
surface or ground water source.
' (d) Peak stream flows.
' (e) Ecological flows.
' (f) Water quality standards.
' (g) Fish passage.
' (h) The protection of ground water quality.
' (i) Recharging of ground water.
' (j) Aquatic or riparian protection, restoration or
enhancement.
' (k) Protection, restoration or enhancement of aquatic
habitat.
' (L) Eliminating nonpoint source pollutant transport.
' (3) 'Secondary use' has the meaning given that term in ORS
541.700.
' (4) 'Social and cultural public benefit' includes:
' (a) Promotion of the public health and welfare; and
' (b) Recreational use.
' (5) 'Water conservation' means an undertaking that results
in:
' (a) A decrease in the consumptive use of water;
' (b) An increase in water use efficiency; or
' (c) An increase in water available to meet in-stream needs.
' (6) 'Water development project' means:
' (a) A water development project as defined in ORS 541.700;
' (b) An undertaking, in whole or in part, in this state for
the purpose of:
' (A) Water management, measurement, conservation, efficiency,
reuse or storage; or
' (B) Benefitting multiple purposes such as agriculture and
municipal, domestic, industrial, commercial, recreational and
in-stream water use; or
' (c) Secondary uses in conjunction with projects described in
paragraph (b) of this subsection. + }
'
{ + LOANS AND GRANTS + }
' { + SECTION 12. + } { + (1) Any person or entity described
in section 6 (1) of this 2009 Act, and any water developer as
defined in ORS 471.700, may file with the Water Resources
Department an application to enable the construction of a water
development project using funding provided through the
department.
' (2) An application filed under this section must be in a form
prescribed by the Water Resources Commission and include the
following:
' (a) A description of the nature and the primary and secondary
purposes of the project.
' (b) An analysis of the need for the project and for the water
that the project is intended to deliver.
' (c) Identification and description of the project components
sufficient to meet the conditions for project approval under
sections 15 and 16 of this 2009 Act.
' (d) A description of the economic feasibility of the project,
including but not limited to:
' (A) The costs of the project; and
' (B) Information about the financial and other aspects of the
operation and maintenance plans for the project.
' (e) Suggestions for interim and long-term project performance
benchmarks.
' (f) An analysis of the project impacts including, but not
limited to, the:
' (A) Expected economic public benefits.
' (B) Expected social and cultural public benefits.
' (C) Expected environmental harm or impacts.
' (D) Expected environmental public benefits, including a plan
describing possibilities for adaptation of the project in
response to long-term climate change.
' (g) An evaluation of potential impact to water quality
standards.
' (h) Proof that the applicant has acquired at least a final
order for necessary water permits from the department.
' (i) Letters of support for the proposed water resource
development project.
' (j) A statement regarding whether other moneys are available
or have been sought for the implementation of the water resource
development project.
' (k) If the application is for a loan, a description of a loan
repayment plan.
' (L) If the application is for a grant, information sufficient
to demonstrate that the amount of the requested funding will be
matched by the funding from another source that is not less than
a dollar-for-dollar match.
' (m) Any other information required by the department.
' (3) If the applicant is a water developer as defined in ORS
541.700 and wishes that a loan application be eligible for
funding from the Water Development Fund, the applicant must:
' (a) Affirmatively indicate on the application that the
applicant wishes the application to be eligible for funding from
the Water Development Fund; and
' (b) In addition to the other information required under this
section, include in the application any information required
under ORS 541.705.
' (4) If the application is for funding all or part of a
storage project that would impound surface water on a perennial
stream, divert water from a stream that supports sensitive,
threatened or endangered fish, or divert more than 500 acre-feet
of surface water annually, in addition to the other information
required under this section the application shall include the
following completed studies:
' (a) An analysis of by-pass, optimum peak, flushing and other
ecological flows of the affected stream and of the impact of the
storage project on those flows, that conforms to standards set by
the department in consultation with the State Department of Fish
and Wildlife and other relevant agencies;
' (b) An independent comparative analysis of alternative means
of supplying the water intended to be generated by the project,
including but not limited to the costs and benefits of
conservation, reuse and alternatives and the extent to which
long-term water supply needs may be met using those alternatives;
' (c) Evaluation of the need for and feasibility of using
stored water to augment in-stream flows to conserve, maintain and
enhance aquatic life, fish life and any other ecological values;
and
' (d) If the storage project is for municipal use, analysis of
local and regional water demand and of the relationship between
the proposed storage project and existing and planned water
supply projects.
' (5) If the applicant is a municipal water user, the applicant
must have an approved water management and conservation plan,
have submitted a completed water management and conservation plan
proposal to the Water Resources Department for approval or be in
the process of completing or updating a water management and
conservation plan.
' (6) If the applicant is an agricultural water user, the
applicant must have an approved agriculture water management and
conservation plan, have submitted a completed agricultural water
management and conservation plan to the Water Resources
Department for approval or be in the process of completing or
updating a water management and conservation plan.
' (7) Except as provided in this subsection, the commission may
establish fees for filing applications under this section.
Moneys from the application fees established by the commission
shall be deposited to the Water Resources Investment Fund.
However, if the application contains an affirmative indication as
provided in subsection (3)(a) of this section, the applicant
shall instead pay the application fee described in ORS
541.710. + }
' { + SECTION 13. + } { + (1) If an application filed under
section 12 of this 2009 Act lacks any required information, the
Water Resources Department may accept the application, reject the
application or require the applicant to submit additional
information.
' (2) Upon acceptance by the department of a completed
application filed under section 12 of this 2009 Act, the
department shall provide public notice by posting the application
on the department's website for at least 45 days prior to issuing
a loan or grant to the applicant.
' (3) The department will provide reasonable notice of the
receipt of an application to the State Department of Fish and
Wildlife, the State Parks and Recreation Department and the
Department of Environmental Quality.
' (4) The Water Resources Department shall provide for the
receipt of public comment on the application, as specified by the
Water Resources Commission by rule, prior to issuing a loan or
grant to the applicant. + }
' { + SECTION 14. + } { + (1) The Water Resources Commission
shall adopt rules establishing guidelines for the Water Resources
Department's evaluation of applications filed under section 12 of
this 2009 Act that the department considers for funding from the
Water Resources Investment Fund or from the Water Resources Grant
Fund. The guidelines shall include:
' (a) Evaluation of the awarding of loans and grants as a
financial incentive to accomplish the goals of the grant and loan
programs;
' (b) Consideration of the financial needs of applicants and
other special circumstances; and
' (c) Consideration of the economic public benefit, social and
cultural public benefit and environmental public benefit of the
project.
' (2) The guidelines shall give priority to projects that:
' (a) Recharge aquifers in limited and critical ground water
areas;
' (b) Are designed to deliver the greatest environmental public
benefit;
' (c) Include in-stream flow restoration components;
' (d) Conserve water; or
' (e) Are ground storage projects that provide for stored water
to be used for augmenting in-stream flows in a manner that
conserves, maintains and enhances water quality, aquatic life,
fish life or other ecological values.
' (3) The guidelines shall require that the department consider
the following:
' (a) Local support for the project;
' (b) The likely impact of global climate change in regard to
the project;
' (c) The projected impact of the project on small family
farms;
' (d) The project's potential to facilitate economic
development; and
' (e) The projected impact of the project on public health
matters relating to water. + }
' { + SECTION 15. + } { + (1) The Water Resources
Department shall review the application information filed under
section 12 of this 2009 Act. In considering applications, the
department shall give preference to loans and grants that will
promote program participation by a large number of applicants.
' (2) The department shall assess each project in consultation
with the State Department of Fish and Wildlife, the State Parks
and Recreation Department, the Department of Environmental
Quality and affected tribal governments, and with other
interested parties as appropriate.
' (3) Subject to any additional qualifications or restrictions
under Article XI-I(1) of the Oregon Constitution, sections 4 to 6
and 10 to 21 of this 2009 Act, Water Resources Commission rules
or bondholder agreements, the Water Resources Department may
approve a loan or grant application if the department finds that:
' (a) The plan for the construction of the proposed project
complies with all applicable provisions related to water well
constructors under ORS 537.747 to 537.765, reservoirs and
diversion dams under ORS 540.340 and dams, dikes and hydraulic
structures or works in ORS 540.350.
' (b) Planned diversions of surface water include provision for
fish screens and, if applicable, volitional fish passage.
' (c) Planned diversions of surface water or ground water
provide for the measurement and reporting of the diversions.
' (d) The applicant or beneficiaries of water from the project
measure and report, or have scheduled and financed the
measurement of, all existing water use at the point of diversion.
' (e) There is a reasonable certainty that the project will
deliver a clear and measurable net environmental public benefit
as compared to a preproject baseline.
' (f) The project, if a storage project, is designed to deliver
in-stream benefits.
' (4) The commission shall adopt rules for use by the Water
Resources Department in evaluating the net public benefit of a
project. The commission must obtain concurrence of the State
Department of Fish and Wildlife and the Department of
Environmental Quality before the commission adopts a rule
described in this subsection.
' (5) In evaluating the net environmental public benefit of a
project, the Water Resources Department may consult with the
State Department of Fish and Wildlife, the State Parks and
Recreation Department, the Department of Environmental Quality,
affected tribal governments and other interested parties. The
Water Resources Department shall assess the project for net
environmental public benefit by weighing the project's various
environmental impacts on, and enhancements to, all of the forms
of benefit described in section 11 (2) of this 2009 Act, giving
special consideration to peak and ecological flows. + }
' { + SECTION 16. + } { + If an application filed under
section 12 of this 2009 Act is for a grant, the Water Resources
Department may approve the application only if the project
qualifies under section 15 of this 2009 Act and the department
determines that the project to which the applicant is applying
the grant, considered in total, provides a significant and
measurable net environmental public benefit as compared to a
preproject baseline. The department may provide a grant only for
those portions of the project that will provide direct
environmental public benefits. If the grant is to be applied to a
storage project that will divert more than 500 acre-feet
annually, at least one-third of any increased amount of stored
water resulting from the portion of the project to which the
grant moneys are to be applied must be dedicated to in-stream
purposes. + }
' { + SECTION 17. + } { + (1) Notwithstanding sections 12
and 15 of this 2009 Act, an agricultural water user that fails to
demonstrate water measurement is eligible for a loan or grant
under section 18 of this 2009 Act if the Water Resources
Department finds that:
' (a) The applicant is seeking the loan or grant for the
purpose of implementing water measurement and the department has
approved an implementation plan to ensure that the water
measurement requirement is met; or
' (b) The applicant has secured funding from a source other
than the state that will ensure implementation of water
measurement.
' (2) The Water Resources Commission, by rule, may allow the
department to waive any requirement under section 15 or 16 of
this 2009 Act for a loan from the Water Resources Investment Fund
or a grant from the Water Resources Grant Fund, if the project
will provide a measurable net environmental public benefit as
compared to a preproject baseline and:
' (a) The loan or grant application requests less than $20,000;
or
' (b) The application is for a conservation, efficiency,
restoration or reuse project that can be shown to the
satisfaction of the Water Resources Department to cause no harm
to the source, any receiving stream, fish or wildlife. + }
' { + SECTION 18. + } { + (1) Upon the Water Resources
Department approving a loan or grant application filed under
section 12 of this 2009 Act:
' (a) If the application is for a loan to a water developer as
defined in ORS 541.700, and the water development project
qualifies under Article XI-I(1) of the Oregon Constitution and
ORS 541.700 to 541.855, the department may fund the project from
the Water Development Fund or from the Water Resources Investment
Fund.
' (b) If the application is for a loan to a person other than a
water developer as defined in ORS 541.700, or if the water
development project does not qualify under Article XI-I(1) of the
Oregon Constitution and ORS 541.700 to 541.855, the department
may fund the project from the Water Resources Investment Fund.
' (c) If the application is for a grant, the department may
fund the water development project from the Water Resources Grant
Fund.
' (2) The department shall determine the amount of a loan from
the Water Development Fund or Water Resources Investment Fund, or
of a grant from the Water Resources Grant Fund, on a case-by-case
basis. The department shall determine the maximum amount of a
loan based in part upon a reasonable and prudent expectation of
the ability of the borrower to repay the loan. A loan term may
not exceed the usable life of the water development project or 30
years from the year of project completion, whichever is less. If
the loan is funded from the Water Development Fund, the
department shall also consider whether the applicant can meet the
repayment plan requirements of ORS 541.730.
' (3) The department may issue a loan or grant only if the
applicant agrees to periodic review of the project by a loan or
grant review panel, including but not limited to:
' (a) Review of interim and long-term performance benchmarks
set by the department;
' (b) Program and fiscal audits to assure that performance
benchmarks are achieved on project development, project benefits
and return on investment; and
' (c) Studying the project's impact within the context of
global climate change.
' (4) The department shall ensure that any necessary federal
and state environmental impact approval processes have been
completed and relevant permits issued before the advancement of
any grant or loan moneys by the department.
' (5) The department may not issue a loan or grant under this
section to provide assistance for operational or maintenance
expenses of a water development project other than project
startup costs.
' (6) The Water Resources Commission may establish reasonable
fees for management, oversight or review services that the
department provides for a water development project.
' (7) The commission shall establish interest rates for loans
issued from the Water Resources Investment Fund after
consultation with the State Treasurer. All repayments of
principal and interest on loans issued from the Water Resources
Investment Fund shall be deposited to the fund. + }
' { + SECTION 19. + } { + (1) If the borrower for a loan
issued from the Water Resources Investment Fund fails to comply
with the terms or conditions of the project for which the loan
was granted, the Water Resources Department may seek appropriate
legal remedies to secure any repayment due, including canceling
any unused water rights of the borrower. If a borrower defaults
on payments due under the terms of the loan, the state may
withhold any moneys otherwise due to the borrower and apply the
withheld moneys to the indebtedness. The department may waive the
right to withhold moneys.
' (2) Moneys withheld under this section shall be deposited to
the Water Resources Investment Fund.
' (3) The Water Resources Commission shall adopt rules to
provide remedies that the department may assert against a
defaulting borrower. The remedies may include, but need not be
limited to, lien foreclosure and contract acquisition. + }
'
{ + INTEGRATED WATER RESOURCES STRATEGY FUNDING + }
' { + SECTION 20. + } { + (1) For the biennium beginning
July 1, 2009, at the request of the Oregon Department of
Administrative Services, after the department consults with the
Water Resources Commission, the State Treasurer is authorized to
issue lottery bonds pursuant to ORS 286A.560 to 286A.585 in an
amount not to exceed net proceeds of $5 million for the use
described in subsection (2) of this section, plus an additional
amount, to be estimated by the State Treasurer, for payment of
bond-related costs.
' (2) Proceeds of lottery bonds issued under this section shall
be deposited to the Water Resources Investment Fund and
notwithstanding section 4 of this 2009 Act are appropriated to
the Water Resources Department for the purpose of funding an
integrated strategy for implementing the state water resources
policy.
' (3) The use of lottery bonds for the purposes described in
this section is justified because the development and
administration of an integrated strategy for implementing the
state water resources policy is necessary to ensure the use of
techniques that will develop an adequate water supply for:
' (a) Maintaining the economy of Oregon by meeting the future
needs of agriculture and other industries;
' (b) Preserving the ecological condition of water habitats in
a manner that benefits recreational industries, industries
related to fish and wildlife and other industries within the
state; and
' (c) Reducing the negative effect of existing water shortages
on the agricultural, fishing and recreational industries in this
state. + }
' { + SECTION 21. + } { + The Water Resources Commission may
adopt rules the commission considers reasonable for the
administration and enforcement of sections 4 to 6 and 10 to 21 of
this 2009 Act. + }
' { + SECTION 22. + } { + The Water Resources Department
shall report to the Seventy-sixth Legislative Assembly in the
manner provided by ORS 192.245 no later than October 1, 2012,
regarding the operation of the loan and grant programs described
under sections 10 to 21 of this 2009 Act, including but not
limited to:
' (1) The number and types of jobs created by water development
projects receiving loans or grants from the department;
' (2) Any studies conducted by the department or loan or grant
recipients during the 2009-2011 biennium regarding peak and
ecological flows in streams; and
' (3) Any recommendations by the department for legislative
changes to improve the operation of the loan and grant
programs. + }
'
{ + AMENDMENTS TO OREGON REVISED STATUTES + }
' { + SECTION 23. + } ORS 541.705 is amended to read:
' 541.705. { - (1) Any water developer may file with the
Water Resources Commission an application to enable the
construction of a water development project as provided in ORS
541.700 to 541.855. The application shall be filed in the
manner, be in the form and contain or be accompanied by any
information prescribed by the commission. The commission, in
considering applications, shall encourage the largest number of
users of the Water Development Fund and shall consider the impact
on the family farm units of the state. - } { + In addition to
any information required under section 12 of this 2009 Act, if a
water developer wishes for a loan application to be considered
for funding under ORS 541.700 to 541.855, the application must
include the following: + }
' { - (2) In addition to other requirements prescribed by the
commission, an application filed under subsection (1) of this
section shall: - }
' { - (a) Describe the nature and purposes of the proposed
water development project, including the need for the project and
reason why the project would be in the public interest. - }
' { - (b) State whether any purposes other than improvement of
a drinking water system, irrigation, drainage, fish protection,
watershed enhancement or municipal use, but consistent therewith,
will be served by the proposed water development project, and the
nature of the other purposes, if any. - }
' { - (c) Set forth or be accompanied by a feasibility study
for the construction, operation and maintenance of the proposed
water development project, an estimate of the costs of
construction and - }
' { + (1) + } If the project includes as a primary purpose
irrigation or drainage, an evaluation of the agricultural
potential of the land from any competent public agency.
' { - (d) State whether any moneys other than those in the
Water Development Fund are proposed to be used for the
construction of the proposed water development project, and
whether any other moneys are available or have been sought for
the construction. - }
' { - (e) - } { + (2) + } { - Show - } { + Information
showing + } that the applicant holds or can acquire all lands,
other than public lands, and interests therein { - and water
rights - } necessary for the construction, operation and
maintenance of the proposed water development project.
' (3) { + + }If the application is for a safe drinking water
project, { - the applicant also shall demonstrate - } { +
information demonstrating + } that:
' (a) The applicant is a city, county, district, water
authority or other political subdivision of the state or an
organization operated on a not-for-profit basis that makes
drinking water available to members of the general public;
' (b) The primary use of the loan will be to improve a drinking
water system for the purpose of complying with applicable state
or federal drinking water quality regulations; and
' (c) The applicant has:
' (A) Developed a water system master plan; and
' (B) Either has a coordination agreement in place as defined
in ORS 195.020, 195.025 and 197.712 or can demonstrate that
options to find a coordinated solution to the system's drinking
water problems have been fully explored.
' { + SECTION 24. + } ORS 541.710 is amended to read:
' 541.710. { - (1) Upon receipt of an application filed as
provided in ORS 541.705, the Water Resources Commission shall
determine whether the feasibility study described in ORS 541.705
for the water development project set forth in or accompanying
the application is satisfactory and if the commission determines
that it is not satisfactory, the commission may: - }
' { - (a) Reject the application; - }
' { - (b) Require the applicant to submit additional
information and revision of the feasibility study as may be
necessary; or - }
' { - (c) Make such revisions of the feasibility study as the
commission considers necessary to make the plan satisfactory. - }
' { - (2) - } { + (1) + } Except as provided in subsection
{ - (3) - } { + (2) + } of this section, the { + Water
Resources + } Commission shall charge and collect from the
applicant at the time the application is filed, a fee of $100. In
addition, the commission shall charge the applicant the amount
required to reimburse the commission for costs that exceed the
application fee incurred in connection with the application.
Moneys referred to in this subsection shall be paid into the
Water Development Administration and Bond Sinking Fund.
' { - (3) - } { + (2) + } The commission may establish by
rule an application fee of less than $100 for a water development
project that is for fish protection or for watershed enhancement.
' { + SECTION 25. + } ORS 541.720 is amended to read:
' 541.720. The Water Resources Commission may approve the
financing for the construction of a water development project
described in an application filed as provided in ORS 541.705
using moneys in the Water Development Fund, secured by a first,
parity or second lien in the manner provided in ORS 541.740 if,
after investigation the commission finds that:
' (1) The proposed water development project is feasible and a
reasonable risk from practical and economic standpoints;
' (2) The plan for the construction, operation and maintenance
of the proposed water development project is satisfactory and, if
the primary purposes of the project include irrigation or
drainage, the agricultural potential is confirmed;
' (3) The plan for construction and operation will provide
multipurpose facilities, to the extent practicable;
' (4) The applicant is a qualified, credit-worthy and
responsible water developer { + that meets the standards
established by commission rule + } and is willing and able to
enter into a contract with the commission for construction and
repayment as provided in ORS 541.730 { + and for periodic review
as described in section 18 of this 2009 Act + };
' (5) Moneys in the Water Development Fund are or will be
available for the construction of the proposed water development
project;
' (6) There is a need for the proposed water development
project, the proposed project is in the public interest and the
applicant's financial resources are adequate to provide the
working capital needed to operate and maintain the project; and
' (7) The construction cost associated with any secondary use
does not exceed the construction cost of the primary use of the
water development project.
' { + SECTION 26. + } ORS 541.755 is amended to read:
' 541.755. Except as provided in ORS 541.760:
' (1) If any water development project investigated under ORS
541.700 to 541.855, other than a safe drinking water project
financed in whole or in part from moneys in the Special Public
Works Fund created by ORS 285B.455 or the Water Fund created by
ORS 285B.563, is constructed with funds other than those loaned
under ORS 541.700 to 541.855 { + or sections 10 to 21 of this
2009 Act + }, the amount expended by the state shall immediately
become due and payable, together with interest at the rate
provided in ORS 541.730 (2) from the date of notification of the
amount due.
' (2) If any water development project is refinanced or
financial assistance is obtained from other sources, other than a
safe drinking water project financed in whole or in part from
moneys in the Special Public Works Fund created by ORS 285B.455
or the Water Fund created by ORS 285B.563, after the execution of
the loan from the state, all such funds shall be first used to
repay the state.
' { + SECTION 27. + } ORS 541.765 is amended to read:
' 541.765. In addition to those uses of moneys in the Water
Development Fund otherwise provided in ORS 541.700 to 541.855,
the Water Resources Commission may authorize loans of such moneys
to those persons to whom approval has been granted by the federal
government or any agency or instrumentality of the United States
for the funding and construction of federal water development
projects. Any such person shall apply for a loan to the
commission, in such form as the commission prescribes, and shall
furnish such proof of federal approval for funding and
construction as the commission considers appropriate. { + An
application or loan described in this section is not subject to
sections 10 to 21 of this 2009 Act. + }
' { + SECTION 28. + } ORS 541.780 is amended to read:
' 541.780. In order to provide funds for the purposes specified
in Article XI-I (1) of the Oregon Constitution, the Water
Resources Commission may request the State Treasurer to issue
bonds { + , or the Oregon Department of Administrative Services
to issue bonds with the State Treasurer's approval, + }in
accordance with the provisions of ORS chapter 286A.
' { + SECTION 29. + } ORS 541.830 is amended to read:
' 541.830. (1) There hereby is created the Water Development
Administration and Bond Sinking Fund, separate and distinct from
the General Fund, to provide for payment of:
' (a) Administrative expenses of the Water Resources
Commission { + , + } { - and - } the Water Resources
Department { + and the Oregon Department of Administrative
Services + } in processing applications, investigating proposed
water development projects and federal water development projects
under ORS 541.700 to 541.855 { + , ensuring compliance with state
and federal laws + } and servicing and collecting outstanding
loans made under ORS 541.700 to 541.855, if the expense is not
paid directly by the applicant, including principal and interest
due on bonds outstanding. These administrative expenses also may
include all costs associated with the issuance of bonds and the
funding of any credit enhancements or reserves determined to be
necessary or advantageous in connection with the bonds.
' (b) Administrative expenses of the State Treasurer in
carrying out the duties, functions and powers imposed upon the
State Treasurer by ORS 541.700 to 541.855.
' (c) Principal and interest of all bonds issued pursuant to
the provisions of ORS 541.780 to 541.815.
' (2) The fund created by subsection (1) of this section shall
consist of:
' (a) Application fees required by ORS 541.710.
' (b) Repayments of moneys loaned to water developers from the
Water Development Fund, including interest on such moneys.
' (c) Repayments of moneys loaned for the acquisition of
easements and rights of way for federal water development
projects, including interest on such moneys.
' (d) Such moneys as may be appropriated to the fund by the
Legislative Assembly, including appropriations dedicated to the
partial payment for or repayment of projects affording public
benefits.
' (e) Moneys obtained from the sale of refunding bonds and any
accrued interest on such bonds.
' (f) Moneys received from ad valorem taxes levied pursuant to
Article XI-I(1), Oregon Constitution, and all moneys that the
Legislative Assembly may provide in lieu of such taxes.
' (g) Interest earned on cash balances invested by the State
Treasurer.
' (h) Any revenues received by the commission under the
provisions of ORS 541.745.
' (i) Moneys transferred from the Water Development Fund.
' (3) The moneys referred to in subsection (2) of this section
are continuously appropriated to the commission for the purposes
provided in subsection (1) of this section.
' (4) The commission, with the approval of the Governor, may
identify those projects financed under the provisions of ORS
541.700 to 541.855 which offer significant public benefit, and
recommend to the Legislative Assembly funding of those projects
in proportion to the public benefits offered.
' (5) The commission, with the approval of the State Treasurer,
may transfer moneys from the fund created under subsection (1) of
this section to the Water Development Fund if:
' (a) A cash flow projection shows that the transfer will not
have any negative impact on the commission's ability to pay bond
principal, interest and administration costs;
' (b) The transfer will not create the need for issuance of any
bonds; and
' (c) The transfer, together with loans outstanding from prior
transfers and not refinanced by funds derived directly from a
bond sale, shall not exceed $1.
' (6) The transfer amount authorized by subsection (5) of this
section may be increased by the Emergency Board.
'
{ + APPLICABILITY + }
' { + SECTION 30. + } { + Sections 10 to 21 of this 2009 Act
and the amendments to ORS 541.705, 541.710, 541.720, 541.755,
541.765, 541.780 and 541.830 by sections 23 to 29 of this 2009
Act apply to loans from the Water Development Fund for which an
application is filed on or after the effective date of this 2009
Act. + }
'
{ + CAPTIONS + }
' { + SECTION 31. + } { + The unit captions used in this
2009 Act are provided only for the convenience of the reader and
do not become part of the statutory law of this state or express
any legislative intent in the enactment of this 2009 Act. + }
'
{ + EMERGENCY + }
' { + SECTION 32. + } { + This 2009 Act being necessary for
the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2009 Act
takes effect July 1, 2009. + } ' .
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