75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2753
A-Engrossed
House Bill 3369
Ordered by the House May 8
Including House Amendments dated May 8
Sponsored by Representatives JENSON, J SMITH; Representatives
BOONE, BRUUN, CLEM, D EDWARDS, FREEMAN, GILLIAM, HANNA,
HUFFMAN, MAURER, OLSON, SCHAUFLER, SPRENGER, THOMPSON, WINGARD,
WITT
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Authorizes issuance of lottery bonds to finance grants
for water supply projects. Establishes program in Water Resources
Department to further economic development by reviewing and
approving applications for water supply projects and awarding
grants to pay costs of approved projects. - }
{ - Establishes Agriculture and Community Water Supply Grant
Fund. Continuously appropriates moneys in fund to Water Resources
Department for grant program. - }
{ + Creates process by which Water Resources Department may
loan or grant moneys to enable construction of water development
projects. Specifies applicants that qualify to receive certain
loans or grants. Specifies procedures for applying for loan or
grant. Specifies guidelines for evaluating applications.
Authorizes State Treasurer, for specified biennia, to issue
Article XI-I(1) bonds. Directs State Treasurer to credit net
proceeds of bonds to Water Development Fund. Authorizes
department to use moneys in fund to make loans to water
developers that propose projects that qualify to receive Article
XI-I(1) funds.
Establishes Water Resources Investment Fund and Water Resources
Grant Fund. Authorizes State Treasurer, for biennium beginning
July 1, 2009, to issue lottery bonds. Directs State Treasurer to
deposit specified amount of bond proceeds in each fund.
Continuously appropriates moneys in Water Resources Investment
Fund to department for purpose of making loans to persons other
than water developers or to water developers that propose
projects that do not qualify to receive Article XI-I(1) funds and
for purpose of funding integrated strategy for implementing state
water resources policy. Continuously appropriates moneys in Water
Resources Grant Fund to department for purpose of making grants.
Requires certain moneys to be deposited in Water Conservation,
Reuse and Storage Investment Fund. + }
Declares emergency, effective July 1, 2009.
A BILL FOR AN ACT
Relating to water supply management; 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; appropriating money; and declaring an emergency.
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,
Be It Enacted by the People of the State of Oregon:
{ +
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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