Public interest considerations couldn’t weigh on water rights transfers under an Oregon House bill, clashing with Senate legislation that would strengthen environmental reviews of such transactions.

Proponents say House Bill 3501 would simply preserve the “status quo,” since state water regulators already don’t consider the public interest in deciding whether to approve water rights transfer requests.

“The bill is not about eliminating safeguards. It merely ensures farmers can respond to real-world conditions,” said Ryan Krabill, government affairs manager for the Oregon Farm Bureau, during a recent legislative hearing.

Most surface water is already appropriated and last year the state’s Water Resources Department shut down most new groundwater development, so transfers have become “the way we move water around in Oregon,” said Steve Shropshire, a water law attorney for the Oregon Association of Nurseries.

Proposals in the Senate that would increase environmental reviews of transfers could effectively “lock down” water rights and prevent many such transactions, Shropshire said.

“We’re not trying to strip anything out with this bill, we’re simply saying: Look at this thing in a coordinated fashion rather than taking it as a one-off and really take away the flexibility of the one way we have to manage water effectively in this state,” he said.

Now is not the time to impose a major new regulatory burden on transfers, as the state government already has a backlog of “contested cases” over water rights that’s slowed approvals, Shropshire said.

With the state’s Supreme Court still deliberating a prominent water rights case that was argued last year, state law regarding the “public interest” also remains unsettled, he said.

“It would be good for the Supreme Court to tell us how the public interest should be managed or how the state views the public interest in the water rights context,” Shropshire said.

Aside from barring transfer decisions from being affected by the public interest, HB 3501 would require OWRD to make a decision on transfers within 120 days, after which applications would be automatically approved.

The bill would also raise the fee for third-party protests of water rights transfers from $950 to $10,000, though the fee for applicants would be unchanged.

“Massive change”

Opponents of HB 3501 argue these provisions belie the argument that it’s only meant to preserve the status quo.

“We would say that’s a massive change to the current process,” said Caylin Barter, an attorney representing the Oregon Water Partnership, a coalition of conservation groups.

The prohibition on considering the public interest would “permanently harden an outdated standard” in Oregon’s water law, while eight other Western states allow the public interest to affect transfer decisions in some form, Barter said.

Requiring the OWRD to make transfer decisions within 120 days would rush a process that involves highly technical information, she said. “House Bill 3501’s default-to-yes review scheme prioritizes speed over accuracy and it disregards our increasingly complex water reality.”

Critics of the bill are urging lawmakers to instead support Senate Bill 427, which would ban transfers from diminishing stream flows, and Senate Bill 1153, which would require the consideration of transfer impacts on aquatic species and water quality.

These requirements are narrower than the consideration of the public interest, which HB 3501 would broadly prohibit, according to the bill’s opponents.

“It is expressly and under its own terms anti-public interest,” said James Fraser, state policy director for the Trout Unlimited nonprofit.

Critics also argue HB 3501’s “contorted fee scheme” would unfairly elevate transfer applicants over third-party protesters, pricing out communities and businesses that depend on rivers from important decisions.

“This goes against the principles of water equity and water fairness that Oregon has been working hard to address,” said Kimberley Priestley, senior policy analyst with the WaterWatch of Oregon nonprofit.