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OREGON WATERSHED ENHANCEMENT BOARD
OREGON WATERSHED ENHANCEMENT BOARD
OREGON WATERSHED ENHANCEMENT BOARD
OREGON WATERSHED ENHANCEMENT BOARD
OREGON WATERSHED ENHANCEMENT BOARD
DIVISION 46
WATER LEASE AND TRANSFER GRANTS
695-046-0010
Purpose
The Board is directed under Article XV, Section 4b of the Oregon Constitution and ORS 541.375(9) to allocate funding for water acquisition projects that further the goal of protecting and/or restoring wild salmonids, fish and wildlife habitat, watersheds, or water quality in Oregon. As funds are available, and at times set by the Board, the Board shall consider grant applications for water acquisition projects using the criteria described in this Division. These rules will guide the Board's consideration of water acquisition project grant applications based on the proposed project's ecological benefits, partners, the effect the proposed project will have on the local and regional community, and the financial and legal soundness of the proposed water right transaction. The Oregon Watershed Enhancement Board will not hold an interest in water rights under these rules.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0020
Definitions
(1) "Water Acquisition Project" is a project that proposes to acquire an interest in water from a willing seller for the purpose of increasing instream flow to:
(a) Address the conservation needs of priority habitat and species; and/or
(b) Improve water quality in a water quality limited area. Interests in water include short-term instream leases, including split season use instream leases, and permanent and time-limited instream transfers.
(2) "Partners" are persons or entities that have committed funding, expertise, materials, labor, or other assistance to a proposed water acquisition project.
(3) "Due Diligence Review" is a review conducted by OWEB staff and their agents of the legal and financial terms of the proposed acquisition of an interest in water. This review includes:
(a) An independent, third-party review of the fair market value water appraisal or other OWEB Board-approved valuation submitted by the applicant; and
(b) Review by OWEB's legal counsel of the:
(A) Ownership and lien report;
(B) Option, purchase, transfer or lease agreement;
(C) And any other portion of the transaction requested by OWEB staff.
(c) Review of the assessment of reliability of the water right submitted by the applicant by Oregon Water Resources Department staff.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0025
Eligible Expenses
Water acquisition project grant awards will only provide funding to assist with the purchase or lease price for an interest in water. Interests in water include short-term instream leases, including split season use instream leases, and permanent and time-limited instream transfers.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0030
Ineligible Expenses
Expenses other than the actual purchase or lease price of an interest in water are not eligible for reimbursement as part of an OWEB water acquisition project grant award.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0040
Evaluation Criteria
Water lease or transfer grant applications will be evaluated based on:
(1) The ecological benefits of the proposed project;
(2) The financial partners in the project and other support expressed for the project;
(3) The effect of the proposed project on the local and regional community; and
(4) The soundness of the legal and financial terms of the proposed water right transaction.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0050
Application Requirements: Ecological Benefits of a Proposed Acquisition Project
(1) The ecological value of a proposed instream water lease or transfer project will be evaluated based on a project's ability to increase instream flow to address the conservation needs of priority habitat and species, and/or to improve water quality in a water quality limited stream reach. Projects to address the conservation needs of priority habitat and species will be evaluated in part by reference to The Oregon Plan Streamflow Restoration Priorities (2001), incorporated in these administrative rules by reference. However, those projects that are not in a high priority area will still be considered based on their individual benefit to priority habitat and species as demonstrated by the applicant. The Oregon Plan Streamflow Restoration Priorities may be found on the Oregon Water Resources Department website at www.oregon.gov/OWRD, on OWEB's website at www.oregon.gov/OWEB, or at OWEB's Salem office.
(2) To enable the Board to fully evaluate the ecological benefits of a project, an applicant shall provide the following information as part of a grant application:
(a) A description of:
(A) the kind of water transaction proposed;
(B) the term of the transaction in months or years;
(C) the amount of water expressed as cubic feet per second proposed to be leased or transferred;
(D) the total volume of water to be secured in acre-feet;
(E) the reach on the instream water right in river miles; and
(F) the party that will maintain the water interest.
(b) A map showing the location of the point(s) of diversion and place(s) of use of the water interest proposed for lease or transfer.
(c) If applicable, a description of the habitat and species the project proposes to protect and/or restore, the relative importance of the site's habitat and species values at the watershed and basin scale, and how the project relates to other watershed restoration and protection efforts in the watershed. Describe the specific species and life stages most likely benefited.
(d) If applicable, reference to current conservation plans that identify the habitat and species as protection priorities. Applicants will attach the relevant pages from these plans to the grant application.
(e) If applicable, a description of water quality parameters the project proposes to directly affect, and the current condition and trend of water quality in the project area.
(f) A proposal for periodic measurement of whether the instream lease or water right is being met, and for monitoring and evaluating the project's benefits over time.
(g) An explanation of why the applicant believes lease or transfer of a water interest is the best method to accomplish the proposed protection, restoration, or improvement in habitat or water quality.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0060
Application Requirements: Partners, Support for the Project, and the Effect of the Proposed Acquisition Project on the Local and Regional Community
To enable the Board to evaluate the effects of the proposed acquisition on the local and regional community, the applicant shall provide the following information as part of a grant application:
(1) A description of financial and in-kind partners in the project, and what they will contribute.
(2) A description of entities that support the proposed acquisition, and documentation of their support.
(3) A description of the current land uses on the property to which the water right is appurtenant, and the land uses adjacent to the property.
(4) A statement by the applicant regarding the proposed acquisition's effect on the property taxes paid on the property to which the water right is appurtenant, and on the local property tax base.
(5) A description of the economic and social effects the project may have on the local and regional economy and community.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0070
Application Requirements: Due Diligence Regarding the Terms of the Proposed Acquisition
(1) To enable the Board to review the legal and financial terms of the proposed transfer of a water interest, applicants shall submit the following information as part of a grant application:
(a) The names of and contact information for the grant applicant(s), and the current holder(s) of the portion of the water right proposed to be transferred or leased instream.
(b) A letter from the current water right holder(s) stating that they are in discussions with the grant applicant about transferring or leasing the water right interest.
(c) A fair market value appraisal or other OWEB Board-approved valuation of the water right interest to be acquired, completed within the year prior to submittal.
(d) The water right certificate or permit number issued by the Oregon Water Resources Department.
(e) A statement regarding whether the lands served are within an irrigation district or similar organization that conveys water to the subject water right(s).
(f) An ownership and lien report for the property to which the water right is appurtenant.
(g) A copy of the written option, purchase, or lease agreement for the subject acquisition, including the agreed-upon purchase or lease price for the water interest.
(h) A statement of whether the seller or lessor of the water interest is contractually required by the written option, purchase or lease agreement, or other related documents, to donate or transfer funds to the buyer, applicant, or a third party who has assisted with or facilitated the proposed lease or transfer.
(i) Disclosure of the amount of a contractually required donation or payment is required after an initial staff recommendation has been prepared on the grant application. Disclosure of the amount is required only if the donation or payment will exceed 15 percent of the purchase or lease price for the water interest. Disclosure of the amount of a contractually required donation or payment exceeding 15 percent of the purchase or lease price must be made to the Director of the Oregon Watershed Enhancement Board in writing, prior to the Board's consideration of the proposed funding request, or the grant application will not be considered for funding by the Board.
(j) An assessment of the reliability of the water right for providing instream benefits, including a description of which month(s) the water right has typically been used, and how often the water right has been met in the last ten years. This assessment should include a written statement from the Oregon Water Resources Department describing the extent to which the water right has historically been met, and whether regulation has been or may be required on the stream in question regarding the proposed right. The assessment should also include a signed statement from the current holder of the portion of the water right proposed to be transferred or leased instream or the landowner to which the water right is appurtenant stating that the water has been used over the past five years in accordance with the terms and conditions of the right or that the right is not subject to forfeiture under ORS 540.610.
(2) The Director has the discretion to waive one or more of the submission requirements in this subsection if a functional equivalent that provides the same information for the Board's consideration as the document or information required by the rule is submitted.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0080
Required Matching Funds
All applicants shall demonstrate at least 25 percent in secured matching funds for a project prior to the disbursement of Board funds. If a grantee has not demonstrated 25 percent in secured matching funds within 12 months after Board approval of grant funds, or a different time period specified by the Board, the grant award will be rescinded without further action by the Board. Match may include:
(1) A commitment of cash by the grantee for the proposed purchase or lease of the interest in water.
(2) Secured funding commitments from other sources for the proposed purchase or lease of a water interest. These commitments must be supported by documentation.
(3) If the proposed purchase of an interest in water will be for less than the appraised or OWEB Board-approved valuation of fair market value, the difference between the appraised or valued fair market value and the actual purchase price of the water interest.
(4) The following reasonable costs incurred prior to Board approval may also be included as part, or all, of the matching funds for the project:
(a) The cost of an option to purchase or lease an interest in water, if it is credited toward the purchase or lease price.
(b) The cost of the fair market value appraisal or other OWEB Board-approved valuation of the water interest submitted to OWEB, including reasonable consulting fees necessary to complete the appraisal or other OWEB Board-approved valuation.
(c) The cost of an ownership and lien report.
(d) Funds raised for monitoring the ecological benefits of the project. Secured pledges must have supporting documentation.
(5) The Director shall retain the discretion to determine that an amount identified as match in (d) above exceeds that which is reasonable and exclude the unreasonable amount from counting as match under this section.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0090
Application Review Process: Overview
(1) Water acquisition grant applications will be considered by the Board and evaluated according to the rules in this division if all application materials listed in OAR 695-046-0050 through 0080 are submitted prior to the grant application deadline established by the Director.
(2) The processing of all water acquisition project grant applications by the Board will involve the following steps:
(a) Review by the appropriate Regional Review Team, as defined in OAR 695-005-0020(4), of the ecological value of the proposed acquisition project.
(b) A due diligence review as defined in OAR 695-046-0020(3) using the materials identified in OAR 695-045-0070.
(c) After a due diligence review of a proposed water acquisition project is complete, the Director of OWEB will synthesize the following into a staff funding recommendation to the Board:
(A) The ecological benefits of a proposed project;
(B) Financial partners in and other support for the project;
(C) The effect of the proposed project on the local and regional community;
(D) The due diligence review of a proposed project;
(E) The evaluation of the Regional Review Team; and
(F) Information about available funding resources and competing projects.
(d) The Board will make a funding decision on a water lease or transfer project grant application based on the ecological benefits of a proposed project, financial partners in and other support for the project, the effect of the project on the local and regional community, and the financial and legal soundness of the proposed transaction. The Board will take all information provided by the applicant, reviewers, and staff, as well as competing projects and available funding into consideration when making its funding decision.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0100
Application Review Process: Regional Review Team Evaluation
(1) The geographically appropriate Regional Review Team will evaluate the ecological value of every proposed water acquisition project.
(2) In its evaluation of the ecological value of a proposed water acquisition, the Regional Review Team will make explicit findings about a proposed project's ability to increase instream flow to:
(a) Address the conservation needs of priority habitat and species; and/or
(b) Improve water quality in a water quality limited stream reach. Projects to address the conservation needs of priority habitat and species will be evaluated in part by reference to The Oregon Plan Streamflow Restoration Priorities (2001), incorporated in these administrative rules by reference. However, those projects that are not in a high priority area will still be considered based on their individual benefit to priority habitat and species as demonstrated by the applicant.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0110
Application Review Process: Due Diligence Review
The Director shall undertake a due diligence review in preparation for making a funding recommendation to the full Board. The due diligence review will include:
(1) An independent, third-party review of the fair market value water appraisal or other OWEB Board-approved valuation submitted by the applicant; and
(2) Review by OWEB's legal counsel of the:
(a) Ownership and lien report;
(b) Option, purchase, or lease agreement; and
(c) Any other portion of the transaction requested by OWEB staff.
(3) Review of the assessment of reliability of the water right submitted by the applicant by Oregon Water Resources Department staff.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0120
Application Review Process: Staff Funding Recommendation
The Director will develop a staff funding recommendation to the Board based on the evaluation criteria listed in OAR 695-046-0040. This decision will be based on the information provided by the grant applicant, reviewers, and OWEB staff. The staff funding recommendation will be to fund or partially fund an application, fund an application with conditions, defer action, or deny funding for an application.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0130
Application Review Process: Board Funding Decision
The Board will make a funding decision on a water lease or transfer project grant application based on the evaluation criteria listed in OAR 695-046-0040. This decision will be based on the information provided by the grant applicant, reviewers, and OWEB staff. The Board's decision will be made in the context of program budget and priority considerations.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0140
Lease or Transfer Prior to Application
Applicants, as a general rule, may only submit an application for funding for a water lease or transfer prior to the lease or transfer. However, applicants may submit an application for a lease or transfer that occurred prior to Board review if the lease or transfer occurred after the preceding grant application deadline. In such cases, applicants must submit the following with their application:
(1) An explanation of the circumstances requiring lease or transfer prior to Board review of the application; and
(2) A statement acknowledging that the applicant proceeded with the lease or transfer with the understanding that the Board might not approve funding for the project, and that the prior lease or transfer and any financial consequences to the applicant will not be a factor in the Board's funding decision.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0150
Application Review Process: Alternate Review Processes
The Board may designate alternate grant cycles and review processes for water lease or transfer grant applications.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0160
Grant Conditions
(1) Prior to the disbursement of any grant funds, the grantee must sign a grant agreement with the Board containing such terms and conditions as may be deemed necessary by the Director to ensure that the expected benefits of the project are realized, and that applicable legal requirements and any special conditions of the Board with regard to the particular grant are met.
(2) Prior to the disbursement of any grant funds for the lease or purchase of an instream lease or transfer, evidence of final approval by the Oregon Water Resources Department of the instream lease or transfer must be provided to OWEB by the grantee. Grant funds may be adjusted to reflect the quantity and timing of water protected instream as specified in the approved instream lease or transfer.
(3) Grant agreements will include, but are not limited to, provisions ensuring that:
(a) The use of the water interest will be consistent with the purposes specified in Section 4(b), Article XV of the Oregon Constitution.
(b) In the event that a water interest acquired with Board funding is used in a manner that is not consistent with the purposes specified in Section 4(b), Article XV of the Oregon Constitution, Board funds will be repaid with interest due and payable from the effective date of the grant agreement at the rate provided for in ORS 82.010.
(c) The Board's approval will be required to terminate a water right lease or time-limited transfer funded in part with Board funds prior to the end of its term.
(d) Grantees that receive Board funding for water right transfers or leases will be required to submit monitoring reports, for a time period specified by the Board, which shall evaluate the benefits of the instream lease or transfer, and certify that the water interest is being used and managed in a manner consistent with Section 4(b), Article XV of the Oregon Constitution.
(4) The Board and/or Director may require other grant conditions in grant agreements as appropriate to ensure the project results in expected outcomes or otherwise complies with applicable law.
(5) Grant agreements are subject to legal sufficiency review by the Oregon Department of Justice, which may include a requirement to review all agreements relating to a proposed water lease or transfer, including applicable options, purchase, or lease agreements, even if not earlier submitted to the Board.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
695-046-0170
Conveyance of Water Interest Acquired with Assistance of OWEB Funds
An interest in water acquired with the assistance of a grant from OWEB shall not be conveyed to another party without prior OWEB Board approval of the conveyance. The Board shall use the following criteria when determining whether to approve a conveyance:
(1) Whether the ecological benefits, effect on the local and regional community, and terms of the original acquisition supporting the Board grant award also support approval of the proposed conveyance.
(2) Whether the proposed recipient of the lease or time-limited transfer has demonstrated its ability to hold and manage the interest consistent with the provisions of the original grant agreement and current OWEB rules; and
(3) Whether the proposed recipient agrees to the material terms of the original grant agreement, and any new conditions reasonably set by the Board.
Stat. Auth.: ORS 541.906
Stats. Implemented: ORS 541.932(9)
Hist.: OWEB 2-2005, f. & cert. ef. 2-1-05
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