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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
A-Engrossed
House Bill 3364
Ordered by the House April 10
Including House Amendments dated April 10
Sponsored by Representatives HELM, OWENS; Representative BOICE
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. The statement includes a measure digest written in compliance with applicable readability standards.
Digest: The Act makes changes related to a water supply grant program. The Act tells an
agency to report on certain programs related to water at least every eight years. (Flesch Readability
Score:60.8).
Makes changes related to a water supply grant program.
Directs the Water Resources Department to report to a committee or interim committee of the
Legislative Assembly related to water and to the Water Resources Commission on certain funding
programs at least every eight years.
Takes effect on the 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to water; creating new provisions; amending ORS 541.561, 541.566, 541.576, 541.656, 541.657,
541.659, 541.666, 541.669, 541.677 and 541.689; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 541.561 is amended to read:
541.561. (1) The Water Resources Department shall establish a grant program to pay the quali-
fying costs of [planning] studies performed to evaluate the feasibility of [developing a] projects re-
lated to:
(a) Water conservation[,].
(b) Water reuse.
(c) Aquifer recharge.
(d) Aquifer storage and recovery.
(e) Streamflow protection or restoration.
(f) Water [or] storage [project, as described in ORS 541.566].
(g) Other activities identified by rule by the Water Resources Commission.
(2) A grant under this section may be made to:
(a) [a local government as defined in ORS 174.116, to] A person, as defined in ORS 536.007.
(b) A public body, as defined in ORS 174.109.
(c) A federally recognized Indian tribe in Oregon that has members residing on a reservation
or tribal trust lands in Oregon [or to a person].
(d) A nonprofit organization.
[(2)] (3) In lieu of grants, the department may pay the cost of providing direct services, including
but not limited to technical [planning] services, for a [planning] study that is eligible for a grant
under this section.
[(3) A grant or the cost of direct services provided under this section may not exceed $500,000 per
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 3240 A-Eng. HB 3364
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project. A grant or payment for direct services may be provided only if the amount of the grant or the
cost of the direct services is matched by funding from another source that is not less than a dollar-
for-dollar match of the amount or cost.]
(4) A grant may be provided only if the amount of the grant is matched by an in-kind or
cash cost match of not less than 25 percent of the grant amount. The commission may es-
tablish a maximum per project amount of grant funding that a project may receive or may
increase the cost match for upcoming project cycles based on the availability of funds.
[(4)] (5) Grants and the cost of direct services provided under this section must be paid [for]
from moneys available in the Water [Conservation, Reuse and Storage] Project Feasibility [Invest-
ment] Fund.
[(5)(a)] (6) In evaluating above ground storage projects for awards of grants or payments for
direct services under this section, the department shall give priority to projects that include pro-
visions for using stored water to augment in-stream flows to conserve, maintain and enhance aquatic
life, fish life or other ecological values.
[(b) In evaluating all other eligible projects, the department shall give priority to projects identified
by the department in a statewide water assessment and inventory for the award of grants or provision
of payment for direct services under this section.]
SECTION 2. ORS 541.566 is amended to read:
541.566. (1) A [planning] study receiving a grant or payment for direct services under ORS
541.561 may include activities necessary to assess the type, location, design, cost or other
factors affecting the feasibility of a project described in ORS 541.561. Specific activities may
include, but [is] are not limited to:
(a) Analyses of hydrological refill capacity;
(b) Water needs analyses;
(c) Refined hydrological analyses;
(d) Engineering and financial feasibility studies;
(e) Geologic analyses;
(f) Water exchange studies;
(g) Analyses of by-pass, optimum peak, flushing and other ecological flows of the affected stream
and the impact of a proposed [water conservation, reuse or storage] project on those flows;
(h) Comparative analyses of alternative means of supplying water, including but not limited to
the costs and benefits of conservation and efficiency alternatives and the extent to which long-term
water supply needs may be met using those alternatives;
(i) Analyses of potential environmental, social, cultural or economic benefits, harm or im-
pacts from a proposed [water conservation, reuse or storage] project;
(j) Analyses of potential public benefits accruing from a proposed [water conservation, reuse or
storage] project;
(k) Fiscal analyses of a proposed [water conservation, reuse or storage] project, including esti-
mated project costs, financing for the project and projected financial returns from the project;
(L) Hydrological analyses of a proposed [water conservation, reuse or storage] project, including
the anticipated effects of climate change on hydrological refill capacity; [and]
(m) Analyses of potential water quality impacts of the project[.];
(n) The development of water management and conservation plans and associated ana-
lyses that assess alternatives to achieve water conservation;
(o) Data collection and analyses related to the preparation of seasonally varying flow as
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prescribed in rules of the Water Resources Commission;
(p) Analyses associated with evaluating the safety of existing dams and evaluating
actions to address safety deficiencies related to existing dams; and
(q) Analyses of impacts of a project on environmental justice or disproportionately im-
pacted communities and ways to minimize impacts on environmental justice or dispropor-
tionately impacted communities.
(2) If a [planning] study concerns a proposed 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, a grant or direct services payment
may be provided only if the study contains:
(a) Analyses of by-pass, optimum peak, flushing and other ecological flows of the affected stream
and the impact of the storage project on those flows;
(b) Comparative analyses of alternative means of supplying water, including but not limited to
the costs and benefits of conservation and efficiency alternatives and the extent to which long-term
water supply needs may be met using those alternatives;
(c) Analyses of environmental harm or impacts from the proposed storage project;
(d) 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
(e) For a proposed storage project that is for municipal use, analysis of local and regional water
demand and the proposed storage project’s relationship to existing and planned water supply
projects.
SECTION 3. ORS 541.576 is amended to read:
541.576. (1) The Water [Conservation, Reuse and Storage Investment] Project Feasibility Fund
is established in the State Treasury, separate and distinct from the General Fund. Interest earned
by the Water [Conservation, Reuse and Storage Investment] Project Feasibility Fund shall be cred-
ited to the General Fund. Moneys in the Water [Conservation, Reuse and Storage Investment]
Project Feasibility Fund are continuously appropriated to the Water Resources Department to
award grants and to pay the cost of direct services provided under ORS 541.561.
(2) The Water [Conservation, Reuse and Storage Investment] Project Feasibility Fund shall
consistof:
(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.
SECTION 4. ORS 541.656 is amended to read:
541.656. (1) The Water Supply Development Account is established in the State Treasury, sepa-
rate and distinct from the General Fund. Interest earned by the Water Supply Development Account
shall be credited to the account. Moneys in the account are continuously appropriated to the Water
Resources Department for use in carrying out ORS 541.651 to 541.696.
(2) The department may expend moneys from the account for:
(a) Subject to subsection (4) of this section, making loans and grants to evaluate, plan and de-
velop in-stream and out-of-stream water development projects approved by the Water Resources
Commission, including but not limited to projects that:
(A) Repair or replace infrastructure to increase the efficiency of water use;
(B) Provide new or expanded water storage;
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(C) Improve or alter operations of existing water storage facilities in connection with newly
developedwater;
(D) Create new, expanded, improved or altered water distribution, conveyance or delivery sys-
tems in connection with newly developed water;
(E) Allocate federally stored water;
(F) Promote water reuse;
(G) Promote water conservation;
(H) Provide streamflow protection or restoration;
(I) Provide for water management or measurement in connection with newly developed water;
and
(J) Determine seasonally varying flows in connection with newly developed water.
(b) Paying the necessary administrative and technical costs of the department in carrying out
ORS 541.651 to 541.696.
(c) In connection with a water development project funded under paragraph (a) of this
subsection, providing equipment for long-term monitoring of project outcomes, including but
not limited to monitoring compliance with established seasonally varying flows in connection
with newly developed water.
(3)(a) In addition to any other permissible uses of moneys in the account, the department may
expend moneys from the account to support:
(A) Ongoing studies conducted by the United States Army Corps of Engineers to allocate stored
water; and
(B) Comprehensive basin studies conducted by the United States Bureau of Reclamation.
(b) Expenditures described in this subsection are not subject to any grant or loan procedures,
public benefit scoring or ranking or other requirements or restrictions for grants or loans estab-
lished under ORS 541.651 to 541.696.
(4)The department may expend account moneys under subsection (2) of this section for loans
and grants to develop in-stream and out-of-stream water development projects only if the department
determines under ORS 540.530 that any transfer of water rights for the project will not injure ex-
isting water rights.
SECTION 5. ORS 541.657 is amended to read:
541.657. (1) Unless otherwise specified in an Act referencing this section, an expenditure
of moneys from the Water Supply Development Account is not subject to [any application process
or public benefit scoring or ranking under] ORS 541.663, 541.666, 541.669, 541.673 or 541.677if the
expenditure is for a [purpose] project specifically named in an Act as subject to this section
and the Act:
[(1) Specifically identified in an appropriation to the account from the General Fund for carrying
out the purpose; or]
[(2) Specifically identified in legislation that authorizes a transfer of lottery bond proceeds to the
account for carrying out the purpose.]
(a) Appropriates moneys to the account from the General Fund; or
(b) Authorizes a transfer of lottery bond proceeds to the account.
(2) A recipient of funding for a project described in subsection (1) of this section shall
provide information requested by the Water Resources Department to comply with the pro-
visions of ORS 541.651 to 541.696 unless ORS 541.651 to 541.696 are excluded in the Act ref-
erenced in subsection (1) of this section, and shall enter into a grant or loan agreement prior
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to the department disbursing funds to the recipient.
SECTION 6. ORS 541.659 is amended to read:
541.659. (1) Loans and grants may be made from the Water Supply Development Account to
persons as defined in ORS 536.007, to a federally recognized Indian tribe in Oregon that has mem-
bers residing on a reservation or tribal trust lands in Oregon and nonprofit organizations.
(2) If an applicant is required to have a water management and conservation plan, the plan must
be:
(a) Submitted to the Water Resources Department [and receive approval] prior to department
acceptance of an application for a loan or grant from the account.
(b) Approved by the department before the project is awarded a loan or grant.
SECTION 7. ORS 541.666 is amended to read:
541.666. (1) Applications for a loan or grant from the Water Supply Development Account
must:
(a) Be in a form prescribed by the Water Resources Department.
(b) Include any information required by the department.
(c) Be filed with the department.
(2) The department may require an application to [and must] include the following:
[(1)] (a) A description of the need, purpose and nature of the project, including what the appli-
cant intends to complete and how the applicant intends to proceed.
[(2)] (b) Sufficient information to allow evaluation of the application based upon the public
benefit scoring and ranking of the project.
[(3)] (c) Current contact information for the principal contact, fiscal officer and involved land-
owners.
[(4)] (d) For applications involving physical changes or monitoring on private land, evidence that
landowners are aware of and agree to the proposal and are aware that monitoring information is a
public record.
[(5)] (e) The location of the proposed project, using public land survey reference points, latitude
and longitude, county, watershed, river and stream mile, if appropriate.
[(6)] (f) An itemized budget for the project, including fiscal and administrative costs.
[(7)] (g) A description of funds, services or materials available to the project.
[(8)] (h) A project schedule, including beginning and completion dates.
[(9)] (i) Any conditions that may affect the completion of the project.
[(10)] (j) A completed feasibility analysis if appropriate.
[(11)] (k) Suggestions for interim and long-term project performance benchmarks.
[(12)] (L) If the application is for a grant, demonstrated in-kind and cash cost match of not less
than 25 percent of the amount of the grant sought from the account.
[(13)] (m) If the application is for a loan, evidence demonstrating ability to repay the loan and
provide collateral.
[(14)] (n) Letters of support for the proposed project.
[(15)] (o) If required by the department, a description of consultations with affected Indian tribes
regarding the project.
[(16)] (p) Any other information required by the department.
SECTION 8. ORS 541.669 is amended to read:
541.669. (1) The Water Resources Commission shall adopt rules establishing a system for scoring
and ranking projects to determine which projects are to be awarded loans and grants from the
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Water Supply Development Account, including but not limited to the application of minimum criteria
designed to achieve the outcomes described in ORS 541.677.
(2) The criteria for evaluating projects [shall] must be based on the public benefit categories
described in ORS 541.673 and preferences described in ORS 541.677.
(3) The commission shall make the loan and grant funding decisions at least twice each year
so long as funds are available to award. Applications must be filed with the Water Resources
Department. The department shall accept an application for a loan or grant at any time, but shall
establish a separate deadline for the filing of applications before each time the commission makes
loan and grant funding decisions.
[(2)] (4) The department shall conduct a preliminary review of applications to check for com-
pleteness, eligibility and minimum requirements upon receipt of each application.
(5) The department shall return incomplete applications to the applicant.
(6) The department shall provide public notice by posting new funding applications on the
department’s website for a [60-day] 30-day period prior to reviewing the applications.
(7) The department shall provide for the receipt of public comment on the applications during
the [60-day] 30-day period that applications are posted on the department’s website.
[(3)] (8) The department shall forward applications that have passed preliminary review, along
with any comments received from applicants or the public, to a technical review team consisting of
representatives of the Water Resources Department, the Department of Environmental Quality, the
State Department of Fish and Wildlife, the State Department of Agriculture, the Oregon Business
Development Department, affected Indian tribes, any collaborative body established by the Governor
to address challenges, opportunities and priorities for the region affected by the project and addi-
tional experts as determined by the Water Resources Department.
(9) The technical review team shall conduct the initial scoring and ranking for the projects de-
scribed in the applications using the system described in subsection (1) of this section, consider
comments from applicants and the public and make loan and grant funding recommendations to the
[commission] department.
(10) The department shall make the technical review team’s project score and ranking
available for public comment prior to a funding decision by the commission.
(11) The department shall make funding recommendations to the commission based on
the scoring and ranking by the technical review team, consideration of comments from ap-
plicants and the public, and the availability of funds.
(12) The commission shall determine the final scoring and ranking of projects and make the final
decision regarding which projects are awarded loans or grants from the account. Before the com-
mission makes a final decision on an application, the commission shall offer one additional oppor-
tunity for public comment.
[(4)] (13) The commission is not required to obligate all available account moneys during a
fundingcycle.
(14) Any available account moneys that are not obligated during a funding cycle shall be carried
forward and be made available for projects in future funding cycles.
[(5)] (15) The department shall document the ranking of all applications and make the applica-
tion ranking publicly available after the funding decisions by the commission have been published.
SECTION 9. ORS 541.677 is amended to read:
541.677. (1) The Water Resources Commission shall design the minimum criteria for the project
scoring and ranking system described in ORS 541.669 to achieve the following outcomes:
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(a) [The issuance of] Issuing grants or loans only to projects that provide benefits in each of the
three categories of public benefit described in ORS 541.673.
(b) [Preference for] Preferring partnerships and collaborative projects.
(c) [The funding of] Funding projects of diverse sizes, types and geographic locations.
(d) If a project proposes to divert water, [preference for] preferring projects that provide a
measurable improvement in protected streamflows.
(e) If a project proposes to increase efficiency, [preference for] preferring projects that provide
a measurable increased efficiency of water use.
(2) The [Water Resources Department] commission shall periodically review the loan and grant
program [on a biennial basis] to assess to what extent the [outcomes described in subsection (1) of this
section are being achieved, and shall report the review findings to the Water Resources Commission]
loan and grant program is achieving desired outcomes and providing public benefits .
(3) The commission shall modify the project selection process as necessary to better achieve the
desired outcomes described in subsection (1) of this section.
SECTION 10. ORS 541.689 is amended to read:
541.689. (1) The Water Resources Department shall make a determination as provided under
subsection (2) of this section if an application for a loan or grant from the Water Supply Develop-
ment Account is for a project that requires a limited license, water [storage] right certificate or
water right permit that enables the storage of water, either in above-ground storage or in
aquifer recharge, [or aquifer recharge permit or limited license for the storage of water] outside of
the official irrigation season and:
(a) Impounds surface water on a perennial stream;
(b) Diverts water from a stream that supports state or federally listed sensitive, threatened or
endangered fish species; or
(c) Diverts more than 500 acre-feet of surface water annually.
(2) The department shall review a completed application for a project described in subsection
(1) of this section to determine whether the applicable seasonally varying flows have been estab-
lished under this section for the stream of interest. If the department determines that the applicable
seasonally varying flows have not previously been established, the department shall establish the
seasonally varying flows before [issuing] disbursing funds for a loan or grant from the account.
The department may use account moneys to pay the cost of establishing a seasonally varying flow,
to fund long-term monitoring of compliance with established seasonally varying flows and to
pay other costs directly related to project development.
(3) The Water Resources Department shall establish any seasonally varying flows under sub-
section (2) of this section in consultation with the State Department of Fish and Wildlife and any
affected Indian tribes. The Water Resources Department may rely upon existing scientific data and
analysis or may fund new data and analysis. The Water Resources Department shall establish sea-
sonally varying flows using a methodology established by Water Resources Commission rules.
(4) Notwithstanding ORS 537.270, if the department establishes applicable seasonally varying
flows for the stream of interest, the department shall make the seasonally varying flows a condition
of:
(a) The new or existing limited license, water [storage] right certificate or water right per-
mit that enables the storage of water, either in above-ground storage or in [or] aquifer re-
charge, [permit or limited license for the storage of water] outside of the official irrigation season
and that is issued for any project described in subsection (1) of this section that receives a loan
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or grant from the account; and
(b) The new or existing limited license, water [storage] right certificate or water right per-
mit [or aquifer recharge permit or limited license for the storage of water] issued for any subsequent
project that:
(A) Receives a loan or grant from the account;
(B) Is for [the storage of water] either above-ground storage or aquifer recharge outside of
the official irrigation season; and
(C) Has a diversion point that is subject to seasonally varying flows.
(5) The applicant for or holder of a certificate, permit or license described in subsection (4)(b)
of this section may request that the applicable seasonally varying flows established under subsection
(2) of this section for the stream of interest be altered based upon new information. There is, how-
ever, a rebuttable presumption that existing applicable seasonally varying flows protect and main-
tain the biological, ecological and physical functions of the stream to the extent required by
commissionrules.
(6) The department shall condition a water [storage] permit and resulting certificate, aquifer
recharge permit and resulting certificate or limited license for a project that receives a grant or
loan from the account and meets the other conditions described in subsection (4) of this section to
protect the seasonally varying flow in effect at the time, before disbursing funds for the loan or
grant [is issued] for the project.
(7) For purposes of any project that receives a loan or grant from the account and meets the
other conditions described in subsection (4) of this section, the department shall use a seasonally
varying flow methodology provided by commission rules in lieu of any other methodologies for de-
termining seasonally varying flows or any methodologies for determining peak and ecological flows
outside of the official irrigation season.
(8) Subsections (1) to (7) of this section do not eliminate or alter any applicable standard for
department review of an application to determine whether water is available for purposes of re-
viewing an application for a new [water storage or aquifer recharge permit or a limited license for the
storage of water] limited license, water right certificate or water right permit that enables the
storage of water, either in above-ground storage or in aquifer recharge, outside of the official
irrigationseason.
(9) When conditioning an existing limited license, water right certificate or water right
permit for aquifer recharge, the department shall only condition the use of water associated
with a funded project.
SECTION 11. (1) At least every eight years, the Water Resources Department shall re-
port, in the manner provided by ORS 192.245, to a committee or interim committee of the
Legislative Assembly related to water, and to the Water Resources Commission, on the
funding programs described in ORS 537.766, 537.767, 537.872, 537.873, 541.561 to 541.581 and
541.651 to 541.696.
(2) The report must:
(a) Evaluate the funding programs.
(b) Identify any improvements to statute and rule that are needed to better implement
the purposes of the funding programs.
SECTION 12. The Water Resources Department shall submit the first report required by
section 11 of this 2025 Act no later than eight years after the effective date of this 2025 Act.
SECTION 13.(1) The amendments to ORS 541.576 by section 3 of this 2025 Act are in-
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tended to change the name of the “Water Conservation, Reuse and Storage Investment
Fund” to the “Water Project Feasibility Fund.”
(2) For the purpose of harmonizing and clarifying statutory law, the Legislative Counsel
may substitute for words designating the “Water Conservation, Reuse and Storage Invest-
ment Fund,” wherever they occur in statutory law, other words designating the “Water
Project Feasibility Fund.”
SECTION 14. This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
[9]