Water Rights in Oregon
WATER RIGHTS IN OREGON
Despite Oregon's rainy reputation, water is a limited resource in many areas of the state. This fact is significant for vineyards and wineries because they need water to irrigate newly planted vineyards and for use in the winery to clean tanks and for drinking water. Cleaning and drinking water for use in the winery is often obtained from a so-called "exempt well" pumping fewer than 5,000 gallons per day. In order to irrigate young grapevines, however, a water right must be obtained. In Oregon, the access to and use of almost all water for irrigation is regulated by the Water Resources Department ("WRD"). A vested state water right thus is a valuable asset to any parcel of real property. Awareness of the water rights system can help a winery or vineyard owner both to secure and protect a sufficient supply of water and to accurately value winery or vineyard property prior to purchase or sale.
WHAT IS A WATER RIGHT?
Oregon law provides that "all water from all sources of supply belongs to the public." Waters of the State may be appropriated for private use only by following the procedures provided for under state law. A person who follows these procedures through to a successful completion acquires a water right. The right is memorialized in a Water Right Certificate, a copy of which is kept on file at WRD.
WHY DO I NEED A WATER RIGHT?
With limited exceptions, a water right is required in order to use non-municipal surface or groundwater on your property. In times of water shortage a water right gives you priority over persons with rights obtained later in time, even if they are upstream.
WHAT DOES A WATER RIGHT SECURE?
A water right authorizes you to take a specified amount of surface or groundwater and apply it to a specified beneficial use. Beneficial uses recognized by statute include domestic, municipal, irrigation, commercial, power development, wildlife and fish, and pollution abatement.
WHERE CAN I USE MY WATER RIGHT?
A water right is connected, or "appurtenant," to a specified parcel of land. Water use on other property, even if owned by the holder of the water right, is not permitted. There are, however, formal procedures for transferring a water right to a different piece of property. Absent such transfers, a water right remains with the land if the parcel is sold.
CAN I LOSE MY WATER RIGHTS?
Yes. A water right remains valid only if it is used at least once every five years. After five consecutive years of non-use, the right is considered forfeited. This presents a problem for winery owners since they typically need to use water for vineyard irrigation only for a few years to establish the vines. In practice this makes "phased" development of a vineyard over 10 or 20 years quite risky. One solution is to preserve a right for future use by leasing surface water rights to WRD for in-stream flows until needed to establish additional new vineyards. Vineyard owners also should consider the applicability of Senate Bill 869, enacted in 1997, which provides that no forfeiture will occur if a water right holder "uses less water" to accomplish the purpose for which the right was originally granted, so long as the person maintains an irrigation system that is capable of handling the full amount of water and is otherwise "ready, willing and able to make full use of the right."
In the event a water right is lost, a winery owner has several options to obtain water for irrigation. The primary options are: (a) apply for a new surface water right; (b) apply for a new groundwater right; (c) buy or lease an existing water right and transfer it to the winery property; (d) lease water from another user if the property is located in an irrigation district; and (e) purchase water from a nearby municipality if such service is available. In many parts of the state, no new water rights to divert water for irrigation during the summer and fall are available. A water right may often be obtained by acquiring storage rights for water during the winter, and using the stored water in the summer.
HOW DO I ACQUIRE A WATER RIGHT?
A water right is acquired by filing an application with WRD. If the application is granted, WRD will issue you a permit to appropriate water. The permittee may then begin constructing diversion works, pumps, pipelines and irrigation systems. Construction must be completed and the water applied to the entire acreage described in the application within the time period specified in the permit (generally three years). This often presents significant problems for new vineyards because the time from securing the initial financing to maturation of young vines is longer than three years. Under current regulations, WRD has some discretion in deciding whether or not to grant extensions of time for completing construction. When construction is complete the permittee must submit to WRD evidence that the permitted amount of water has been diverted and applied to the specified use. If WRD is satisfied with this proof, it issues a water right "certificate," which is conclusive, lasting proof of the water right.
DO I NEED A WATER RIGHT TO DRAW WATER FROM MY WELL?
Generally, yes. A water right permit or certificate is required in order to appropriate any water of the state, including groundwater. However, there are a number of uses of groundwater which are exempt from permitting requirements. Three are particularly relevant to vineyard and winery owners:
Domestic Use. Up to 15,000 gallons per day may be drawn for purposes related to the residential use of property, such as human consumption, household uses and domestic animal watering.
Industrial or Commercial Use. Up to 5,000 gallons per day may be drawn for industrial or commercial uses. Such uses would include water for cleaning of winery equipment, or drinking and sanitary water for a tasting room.
Stock, Lawn and Garden Watering. Water may be used for watering stock and for irrigation of up to one-half acre of lawn or noncommercial garden.
These groundwater exemptions, if applicable, mean that the water may be used without going through state permitting, or even registration, processes. However, groundwater may not be pumped from an "exempt" well for irrigation of vineyards.
IS MY VINEYARD OR WINERY IN A SPECIAL GROUNDWATER AREA?
Certain parts of the state have been designated critical groundwater areas ("CGAs") and groundwater withdrawal areas ("GWAs"). If you are in a CGA or GWA, you may not be able to secure a right to use groundwater if you do not already have one, and you may not be entitled to the exemptions discussed above. You may also be subject to additional restrictions such as seasonal limitations and monitoring requirements.
DO PONDS NEED WATER RIGHTS?
Man-made ponds, reservoirs and other impoundments of water generally require two types of water right permit: a permit to construct an impoundment, and a permit for the quantity of water to be impounded. However, reservoirs that are used as holding spots or mere "bulges" in an existing, permitted irrigation system do not require a separate permit. In addition, reservoirs with dams less than 10 feet in height, or which impound less than 9.2 acre-feet of water, are exempt from most permitting requirements if they were registered with WRD by January 31, 1997.
WHAT ABOUT MY NEIGHBOR'S USE OF WATER?
Water is a scarce and valuable resource, and one person's use of it often impacts other users in the same area. Thus, it is often good business practice to be aware of the water rights of one's neighbors. If open discussion is not an option, WRD has two information tools that can help you with this project. First, WRD publishes a weekly notice containing all water right applications, transfer applications, and WRD administrative actions. The notices are available on the WRD's Web site. Second, WRD's computer filing system may be accessed at its Salem office, or online at "www.wrd.state.or.us" (select "water rights," then "water rights information system"). This filing system can be searched for a particular parcel of land of for the name of particular party.
WHEN SHOULD I THINK ABOUT WATER RIGHTS?
Probably the most important time to take water rights seriously are (a) prior to the purchase or sale of a winery or vineyard, (b) after a vineyard has been established and irrigation is no longer necessary, or (c) when the owner of an existing vineyard plans to plant and irrigate a new vineyard. Whether or not you think you will use water for irrigation or for domestic or commercial use, water rights are valuable assets to a parcel of real property, and it is important to understand the rights appurtenant to a parcel before buying or selling it. The most important questions include:
- What is the priority date of the water right? The earlier the priority date, the more secure the source of water, even during a drought.
- What lands are covered by the right? Water may be used only on land covered by the water right.
- Has the right in fact been used? If no water has been used for beneficial purposes during the past five years, the right probably no longer exists.
Often, these questions can be answered by a brief check of records found at the WRD's main office in Salem.