Whiskey Is For Drinking, Water Is For Fighting & This Session, We’re Going To Be Fighting

This week, the Senate Committee on Natural Resources and Wildfire held a public hearing and introduced new bills that drastically seek to change the right to transfer water rights. Forewarning: this is a longer than normal post, but we feel like it’s important to cover the details here, so people understand why these bills are concerning.

Before I begin explaining these bills, I am sure some of our more longstanding readers are thinking, “why the heck are Sam and Dave getting involved in water law?” The answer to that is simple – water rights are property rights.

Over the past year, OPOA has launched an effort to expand into more practice areas that impact private property owners and rural communities. As we continue to grow, we hope to be working on all issues that impact private property rights and natural resource users in the Northwest.

I can’t think of a more important issue for us to engage on than water rights issues. Mark Twain once said, “Whiskey’s for drinking, water’s for fighting.” Anyone who has stepped foot in a rural community knows that the right to use and manage water is one of the most pressing issues impacting property owners and their success. It only makes sense for OPOA to join the fight.

But before we begin, we need to establish a base understanding of water supply law, which is no easy feat. To quote another famous phrase, “One does not simply walk into Mordor,” when dealing with water law because it’s complicated, technical, and there are few practitioners who are true experts in this space. I am not one of them, but I hope to be close one day.

However, I do know enough to understand why these bills are really bad, especially for those who use water on their properties to earn a living. To help explain, we need to start with a high-level overview of western water law and the prior appropriation doctrine.  

Water Law 101: The Background

In Oregon, water rights are based on the “prior appropriation” doctrine, which is the same for every state west of the Mississippi. This is different from the riparian rights system you’ll find back East, where water rights depend on owning land next to a water source. Under prior appropriation, it’s all about “first come, first serve.” Whoever starts using the water first gets priority, and during shortages, they’re the last to lose access. This is what is called having a “senior” water right.

In 1909, Oregon declared that all surface water belongs to the public, and in 1955, they did the same for groundwater. Since then, anyone wanting to use water (unless there’s an exemption) has to apply through the Water Resources Department. Once you’ve got a “certificated” water right, it’s treated as a property right. It’s tied to the land where it was originally used—this is called being “appurtenant”—and it usually transfers with the land when it’s sold.

But owning a water right comes with responsibilities and limitations. Under Oregon law, you have to put it to “beneficial use” and avoid wasting it. If you stop using the water on all the land attached to your right, you could lose the right entirely.

To note, some uses of water don’t require water rights. In Oregon, these uses are known as exempt uses.  For example, for groundwater use, domestic well users can use a well for home use and water up to half an acre without a permit. You can read Dave’s blog post from this week to learn more about that issue: Good News – The Oregon Legislature is Not Trying to Make You Meter Your Domestic Well.

Water Law 101: Don’t Mess with Water Transfers!

Remember, all water in Oregon belongs to the public. So, obtaining a “water right” is not a right to own water, it is a right to use water. Under the prior appropriation doctrine, the right to use water is doled out on a “first come, first served” basis. Accordingly, if water is scarce and a water source is over-allocated, a prospective user might not be able to obtain a water right. Moreover, new users, called “junior” users, might have less water to use, or get shut off before “senior” users who obtained their right first when there was more to go around.

Whether it be from climate change, increasing pressure from new uses, or that fact that the government over-promised the right to something it didn’t fully understand, water in some parts of the west is scarce. Oregon has multiple critical groundwater areas and groundwater-limited areas where new rights are restricted or off-limits altogether. This means that prospective users are growing more and more dependent on getting water rights from existing, senior users—usually through “transfers” or sales.

The law around “water transfers” is complicated and very broad, as many actions are actually considered a “transfer” of a water right. Remember, any water right for any purpose is tied to the land where the water is used. This means if you want to move your water allocation to a new spot, use the water for a different purpose, sell your water right to someone else, or if selling land leads to a big change in water use, you’ll likely need to file a transfer application with the Oregon Department of Water Resources and go through the transfer review process.

Just like the rest of Oregon’s permitting systems, the State’s transfer review process slow, time consuming, and frequently held up by protests and appeals by activist organizations that seek to stop or limit any water right transfer. Just like in land use law, Oregon law requires public notice, the opportunity for public comment, and the opportunity to protest and appeal the approval of transfers. Environmental organizations and anti-development activists frequently protest water transfers, making this process slow, expensive, and controversial.

SB 427 & SB 1153 – Adding New Limitations & Opportunity to Protest Water Transfers

At this point, we’ve established a couple of things: (1) A water right is the right to “use” water, not own it; (2) Oregon gives out water rights on a first-come-first-serve basis; (3) It’s hard to obtain new rights, so users are becoming more dependent on “transfers”; (4) A “water transfer” is required in many situations; and (5) The water transfer process is slow, confusing, and controversial.

With all of that in mind, it is extremely concerning that the Oregon Senate is considering two bills that will make transferring water rights more difficult, if not impossible.

SB 427 – Prevents transfers that diminish streamflow.

On February 25, the Senate Committee on Wildfire and Natural Resources held a public hearing on SB 427, which would change the current law on water transfers to prevent the Oregon Water Resources Department (OWRD) from approving a transfer if it causes any “diminishment of streamflow.”

Right now, under Oregon law, OWRD can’t approve a transfer if it would expand an existing water right or cause “injury” to another water right in the system. This includes water rights that the state holds in trust to keep water in streams or lakes for public use like fish and wildlife, water quality, and recreation. The injury standard makes sure current water rights, including instream rights, are protected.

However, SB 427 goes way beyond this. It would deny any transfer that causes even the slightest “diminishment” of streamflow, even if the impact is tiny and doesn’t actually harm anyone else’s water rights. It also ignores an important reality— changing where water is legally diverted from its natural source almost always affects streamflow somewhere—maybe reducing it in one spot but improving it in another. Under SB 427, even transfers that improve streamflow or improve overall fish habitat could be denied if there’s any reduction in one area.

Most importantly, the bill would make an already slow and complicated process even worse. OWRD’s water transfer system is full of delays, and protests and appeals slow things down even more. SB 427 would give people more reasons to protest transfers, even when the actual impact on streamflow is minor or nonexistent. It would mean more reviews, more delays, and more headaches for everyone involved.

SB 1153 – Prevents transfers that will impact habitat or water quality & gives Tribes the right to review all transfer applications.

Much like the previously mentioned bill, SB 1153 also prevents OWRD from approving a transfer if it results in a loss of in-stream habitat for sensitive, threatened or endangered aquatic species not protected by an existing water right or contribute to water quality impairment in water quality limited streams. For all the reasons already mentioned, this is also a bad idea, but will require even more technical review by OWRD, and likely even more opportunity for protests and appeals.

Where SB 1153 is different is that it adds an even more troubling layer of review. This bill would grant any federally recognized tribe in the state the opportunity to review water rights transfer applications. This review would give the Tribes an exclusive right to comment on whether the application would cause injury to tribal water rights, enlarge water rights, impact tribal cultural resources, impact habitat, or impair water quality. The bill also gives the Tribe the right to confer with the applicant and requires the applicant to confer with the Tribe if they request it.

If passed, SB 1153 would make Oregon’s water transfer process even harder to navigate. By giving federally recognized tribes the power to review and comment on transfer applications, it adds a whole new layer of complexity and delay to an already slow system. Since tribes would weigh in on broad issues like cultural resources, habitat, and water quality, it could lead to unclear or inconsistent decisions. Plus, with no clear rules for how tribal input is evaluated, and the requirement for applicants to meet with tribes, we’re likely to see more protests, disputes, and even legal battles, which would drag things out even more.

These hurdles might make investors think twice about projects that rely on water transfers, especially in the housing industry. It also will make things more difficult for our farmers and ranchers, who are at risk of losing access to water altogether in certain areas. While it’s important to protect tribal rights and resources, this approach risks creating bigger delays, administrative headaches, and tensions between stakeholders, making the whole process even more challenging.

Long Story Short – These Bills Are Bad

Simply put, SB 437 and SB 1153 are very concerning for a state like Oregon, where water transfers are often the only legal way to get water rights. Also, water transfers are often required if property owners want to move water to a new location, change how they use it, sell their water rights, or sell their land for something like housing development. These bills would make completing these water transfers significantly  more complicated or even block them entirely.

The opinions expressed in this post are those of the author and do not represent the opinions or positions of any party represented by the OPOA Legal Center on any particular matter.