New Proposed Perpetual Tax
on 85,000 Oregon Water Rights Holders
And Potential Significant
Senator Doug Whitsett, Oregon District 28 - Klamath
Hundreds of legislative proposals are drafted (LC Draft) for
Oregon State Agencies by the attorneys at Legislative Counsel
each legislative session. This year, the Oregon Water Resources
Department (Department) has asked for LC drafts on six or more
legislative proposals. At least three of the concepts should be
of significant interest to all those who use the waters of the
LC 657 proposes to establish Department authority to change the
name on a water right certificate and to establish a fee to
fully pay for that service.
The name on a water right certificate is usually the name of the
person, or entity, that first claimed the water right, and that
originally made the improvements required to receive the
permanent certificate. It has long been understood that water
rights appurtenant to the land are transferred to the new land
owner when the land is sold. However, the name on the
certificate is usually not changed when the land irrigated by
that water right is purchased.
A recent Oregon Supreme Court decision suggests that the owner
of the water right is the name of the person or entity on the
certificate, rather than the owner of the land to which the
water right is appurtenant.
The proposed change would allow current landowners to pay to
secure the water right certificate appurtenant to their land in
their own name. The LC draft is not entirely clear whether the
Department would have authority to change the name on a
certificate without being requested to do so, or what course the
Department would take if the requested name change is contested.
The change would also better enable the Department to
communicate with water right holders, to improve compliance with
water measurement requirements, and to clarify where to send the
bill for the Departmentís proposed new tax on the use of water.
LC 659 would establish a water right management tax to be
charged to each of Oregonís 85,000 holders of Oregon water
rights. The tax would apply to all agricultural, industrial,
municipal and in stream water rights.
The Department expects that a significant number of privately
owned water rights will be abandon by their holders rather than
pay the new annual tax on water. The draft is not clear on who
would pay the fee for Oregonís myriad in-stream water rights.
This tax would extract about $12 million per biennium from
Oregon water users. The revenue is to be used to generally
support the Departmentís activities.
The concept assumes that anyone holding a permit, certificate or
decree would be subject to an annual fee of $100 per water
right, with a cap of $1,000 for all but municipal customers.
Apparently the tax cap would not apply to municipal water rights
because municipal systems have a base of rate payers that allows
them to pass the cost of the water tax on to their customers.
LC 661 would expand the current water right transaction
fee-schedule and then make it permanent.
The draft language increases the current fee schedules by about
13 percent across the board. It also adds a couple of additional
new fees ďto bring consistencyĒ to the overall fee schedule. The
Department alleges that the double digit fee increase is needed
to account for increased Department costs.
In the event that this bill does not pass, a sunset clause in
the current fee schedule authorization would automatically cause
the fees to revert back to the amounts charged by the Department
The recent adoption of Oregonís Integrated Water Resources
Strategy has the potential to significantly increase the
regulatory activities of the Water Resources Department. Many
irrigators and legislators have wondered how the Department
planned to fund those activities. The answer appears to be
double-digit fee increases and a new perpetual tax on the use of
the waters of the state.
Please remember, if we do not stand up for rural Oregon, no one
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