USA Statutes : oregon
Title : TITLE 44 FORESTRY AND FOREST PRODUCTS
Chapter : Chapter 543 Hydroelectric Projects
As used in ORS
543.010 to 543.610:

(1) “Actual original cost” includes the sum paid to the state at
the time the application was made for a preliminary permit; the sum paid
or secured to be paid to the state by the applicant for license at the
time such application was made; such sums as may be paid to the United
States or any department thereof; and such sums as shall have been
reasonably and prudently expended in preliminary investigations,
explorations and organization expenses, as determined by the Water
Resources Commission.

(2) “Project” means a complete unit, improvement or development. It
includes, among other things, power houses, water wheels, conduits or
pipes, dams and appurtenant works and structures, storage, diverting or
forebay reservoirs connected therewith, and primary lines transmitting
power to the point of junction with a distributing system, or with any
interconnected primary system, miscellaneous works and structures used in
connection with the unit or any part thereof, rights of way, lands,
flowage rights and all other properties, rights and structures necessary
or appropriate in the use, operation and maintenance of any such unit.
[Amended by 1985 c.673 §139; 1995 c.229 §1](1) Except for the provisions of ORS 543.300,
543.310, 543.430, 543.440, 543.610, 543.650 to 543.685, 543.710, 543.720,
543.730 and 543.990, nothing in this chapter shall apply to the
reauthorization of an existing project.

(2) All references in ORS 543.300, 543.310, 543.430, 543.440,
543.610, 543.650 to 543.685, 543.710, 543.720, 543.730 and 543.990 to a
license or a license issued under ORS 543.010 to 543.610 also shall be
considered a reference to a water right issued under ORS 468.065,
468B.040, 468B.045, 468B.046, 536.015, 536.050, 543.012 and 543.710 and
ORS chapter 543A. [1997 c.449 §42] The Legislative Assembly declares that it is the
policy of the State of Oregon:

(1) To protect the natural resources of this state from possible
adverse impacts caused by the use of the waters of this state for the
development of hydroelectric power.

(2) To permit siting of hydroelectric projects subject to strict
standards established to protect the natural resources of Oregon.

(3) To require the Water Resources Commission, the Energy Facility
Siting Council, the Department of Environmental Quality and other
affected state agencies to participate to the fullest extent in any
local, state or federal proceedings related to hydroelectric power
development in order to protect the natural resources of Oregon. [1985
c.569 §2](1) In order to carry out the
policy set forth in ORS 543.015, the following minimum standards shall
apply to any action of the Water Resources Commission relating to the
development of hydroelectric power in Oregon:

(a) The anadromous salmon and steelhead resources of Oregon shall
be preserved. The commission shall not approve activity that may result
in mortality or injury to anadromous salmon and steelhead resources or
loss of natural habitat of any anadromous salmon and steelhead resources
except when an applicant proposes to modify an existing facility or
project in such a manner that can be shown to restore, enhance or improve
anadromous fish populations within that river system.

(b) Any activity related to hydroelectric development shall be
consistent with the provisions of the Columbia River Basin Fish and
Wildlife Program providing for the protection, mitigation and enhancement
of the fish and wildlife resources of the region as adopted by the
Pacific Northwest Electric Power and Conservation Planning Council
pursuant to Public Law 96-501.

(c) Except as provided in this paragraph, no activity may be
approved that results in a net loss of wild game fish or recreational
opportunities. If a proposed activity may result in a net loss of any of
the above resources, the commission may allow mitigation if the
commission finds the proposed mitigation in the project vicinity is
acceptable. Proposed mitigation which may result in a wild game fish
population or the fishery the wild game fish population provides, being
converted to a hatchery dependent resource is not acceptable mitigation.
A water dependent recreational opportunity must be mitigated by another
water dependent recreational opportunity. Mitigation of water dependent
recreational opportunities which, in the judgment of the commission, are
of statewide significance with a recreational opportunity that is readily
available on other waters of this state is not acceptable mitigation. In
deciding whether mitigation is acceptable, the commission shall consult
with other local, state and federal agencies.

(d) Other natural resources in the project vicinity including water
quality, wildlife, scenic and aesthetic values, historic, cultural and
archaeological sites, shall be maintained or enhanced. No activity may be
approved which, in the judgment of the commission after balancing gains
and losses to all affected natural resources, may result in a net loss of
natural resources. In determining whether the proposed activity may
result in a net loss of natural resources, the commission may consider
mitigation if the commission determines the proposed mitigation in the
project vicinity is acceptable. Mitigation may include appropriate
measures considered necessary to meet the net loss standard. In
determining whether mitigation is acceptable the commission shall consult
with appropriate state, federal and local agencies.

(e) In determining whether it is in the public interest to allocate
water for a proposed hydroelectric development, the commission shall
consider present and future power needs and shall make a finding on the
need for the power. For a hydroelectric project with a nominal electric
generating capacity of 25 megawatts or more, the Water Resources
Commission shall consider any recommendation by the Energy Facility
Siting Council. The Energy Facility Siting Council’s recommendation shall
be based solely on information contained in the hearing record of the
Water Resources Commission. The commission’s order on the proposed
hydroelectric development shall describe the Energy Facility Siting
Council’s recommendations on the need for the power. If the commission’s
decision on the need for power is contrary to the Energy Facility Siting
Council’s recommendation, the commission’s order shall explain the
commission’s failure to follow the recommendation of the Energy Facility
Siting Council. The commission also shall consult with the Energy
Facility Siting Council on other matters within the expertise of the
Energy Facility Siting Council.

(2) The commission shall adopt all necessary rules to carry out the
policy set forth in ORS 543.015 and to implement the minimum standards
set forth in subsection (1) of this section. In the absence of
implementing rules, any action of the commission relating to
hydroelectric development shall comply with the standards as set forth in
this section.

(3) Nothing in this section limits the authority of any state
agency to make recommendations regarding appropriate license conditions
during the consideration of the issuance of a license or permit for an
existing hydroelectric project.

(4) The Water Resources Department and other state agencies shall
not apply subsections (1) and (2) of this section to existing water
rights or state licenses for existing hydroelectric facilities until
January 1, 1998. [1985 c.569 §3; 1993 c.544 §6; 1995 c.229 §2]The
Water Resources Commission may:

(1) Issue preliminary permits, as provided in ORS 543.210 to
543.250, to any person qualified to become a licensee.

(2) Issue licenses, as provided in ORS 543.260, to citizens of the
United States, associations of citizens, or private corporations
organized under the laws of the United States or any state of the United
States, to appropriate, initiate, perfect, acquire and hold the right to
the use of waters within the state, including waters over which the state
has concurrent jurisdiction, and to construct, operate and maintain dams,
reservoirs, power houses, conduits, transmission lines, and all other
works and structures necessary or convenient for the use of the waters in
the generation and utilization of electricity.

(3) Conduct investigations and collect information the commission
considers necessary or useful for the purposes of ORS 543.010 to 543.610
and cooperate with the federal government and adjoining states concerning
all such matters, particularly with reference to waters forming the
boundary between this state and another state.

(4) Prescribe the forms of all accounts, records and memoranda to
be kept by licensees under ORS 543.010 to 543.610.

(5) Examine at any time all accounts, books of account and
documents and data related to the business of a licensee under ORS
543.010 to 543.610; and require a licensee to submit, whenever required
by the commission, reports and statements under oath containing
information as to assets, liabilities, capitalization, gross receipts,
interest and dividend requirements, interest due and paid, amortization
and other reserves, net investment, cost of any project constructed,
maintained or operated, in whole or in part, cost of maintenance,
operation, renewals, replacements, cost of production, transmission,
distribution and sale of electricity, and other data as the commission
may require.

(6) Perform all acts, exercise all powers and issue all orders
which, in the judgment and discretion of the commission, are necessary to
effectuate the purposes of ORS 543.010 to 543.610. [Amended by 1955 c.673
§3; 1955 c.707 §39; 1961 c.224 §13; 1985 c.673 §140; 1995 c.229 §3] (1) The Water Resources Commission
may hold hearings and take testimony orally, by deposition or in such
other form as the commission considers satisfactory, either within or
without this state. The Water Resources Commission may require, by
subpoena, the attendance of witnesses and the production of documentary
evidence.

(2) An administrative law judge assigned from the Office of
Administrative Hearings established under ORS 183.605, shall conduct any
contested case hearing that the commission is required or permitted by
law to hold. The administrative law judge has the same powers with
respect to the conduct of the hearing as are granted by law to the
commission, including the taking of testimony, the signing and issuance
of subpoenas and the administering of oaths and affirmations to
witnesses. The administrative law judge shall keep a record of the
proceedings on the hearing and shall transmit such record to the
commission.

(3) The commission may designate any person to take the testimony,
affidavit or deposition of a witness. The person so designated may
administer an oath or affirmation to any such witness and take the
testimony thereof in accordance with such rules as the commission may
prescribe.

(4) Witnesses appearing before the commission or any person
designated by the commission to take testimony shall be paid the fees and
mileage provided for witnesses in ORS 44.415 (2). [1955 c.673 §2; 1961
c.224 §14; 1985 c.673 §141; 1989 c.980 §15; 1999 c.849 §§112,113; 2003
c.75 §46]The Water Resources Commission, the Water Resources
Director or any employee of the Water Resources Department, at all
reasonable times, shall have free access to any project, addition or
betterment during or after construction or acquisition, and to all maps,
plans, profiles, estimates, engineers’ reports, books, accounts, records
and other data relating to the project. [1985 c.673 §142]HYDROELECTRIC PROJECT FEES As used in ORS
543.075 to 543.092:

(1) “1998 dollar” means a dollar amount that when adjusted for
inflation or deflation equals the value of a dollar in 1998.

(2) “Holder” means a person authorized to operate a hydroelectric
project under the authority of either a time-limited water right, a
certificated water right or a pre-1909 uncertificated claim. “Holder”
includes licensees, power claimants, uncertificated claimants and water
right certificants.

(3) “Licensee” means a person authorized to operate a hydroelectric
project through the means of a license containing a time-limited water
right.

(4) “Power claimant” means a person authorized to operate a
hydroelectric project through the means of a water right that does not
expire.

(5) “Reauthorize” means the process by which a hydroelectric
project holding a time-limited hydroelectric license acquires new
authorization to continue operating for an additional fixed amount of
time according to ORS chapter 543A.

(6) “Relicense” means the process by which the Federal Energy
Regulatory Commission issues a new license to allow a hydroelectric
project to continue operating past the expiration date of its current
license.

(7) “Team” means a Hydroelectric Application Review Team created
pursuant to ORS 543A.035, 543A.075 or 543A.300.

(8) “Uncertificated claimant” means a person authorized to operate
a hydroelectric project through the means of an uncertificated claim
established prior to 1909.

(9) “Water right certificant” means a person authorized to operate
a hydroelectric project through the means of a time-limited certificated
water right. [1999 c.873 §4] (1) On or before
January 1 of each year, each holder shall pay to the State of Oregon an
annual fee for each hydroelectric project that is subject to this
section. The annual fee required by this section shall be based on the
theoretical horsepower specified in the water right for each project.

(2) The amount of the annual fee required under subsection (1) of
this section shall be determined in the following manner:

(a) Subject to the schedule set forth in subsection (3) of this
section, each holder shall pay an amount, in 1998 dollars, equal to
$0.405 per theoretical horsepower covered by the water right for the
holder’s hydroelectric project. The annual fee may be set forth in the
water right or may be established by order of the Water Resources
Director and shall be adjusted annually for inflation according to rules
established by the Water Resources Commission. The annual fee also may be
adjusted through the periodic review process established in ORS 543.085.

(b) Each holder of a hydroelectric project that produces 123.5
theoretical horsepower or less shall pay an annual fee of $50 for that
project.

(3) The fee determined in subsection (2) of this section shall
apply to a project on the January 1 following the occurrence of an event
enumerated as follows:

(a) A licensee or water right certificant shall begin to pay the
annual fee after the final order for the reauthorized water right is
issued under ORS 543A.130.

(b) Notwithstanding paragraph (a) of this subsection, if a licensee
holds, on October 23, 1999, an original state hydroelectric license for
which the original expiration date was or is more than five years after
the expiration date of the original Federal Energy Regulatory Commission
license for the project, the licensee shall begin payment of the annual
fee established under this section after the expiration date of the
original state hydroelectric license.

(c) A power claimant, or uncertificated claimant, licensed by the
Federal Energy Regulatory Commission shall begin to pay the annual fee
after the Federal Energy Regulatory Commission issues a new license. A
power claimant or uncertificated claimant that received a new license
from the Federal Energy Regulatory Commission within 10 years prior to
October 23, 1999, shall begin to pay the annual fee on January 1, 2000.

(d) A power claimant, or uncertificated claimant, whose project is
exempted from licensure by the Federal Energy Regulatory Commission or
not licensed by the Federal Energy Regulatory Commission shall begin
paying the annual fee under this section on January 1, 2008, for that
project.

(4) No fee shall be assessed under ORS 543.710 for a project
subject to an annual fee under this section. [1999 c.873 §5](1) In addition to the annual fee set forth in ORS 543.078,
a holder may be required to pay project specific fees.

(2) Project specific fees are fees that compensate a state agency
for the agency’s reasonable and necessary oversight of a holder’s
implementation of the protection, mitigation and enhancement measures
included in a water right for the project, a certificate issued pursuant
to ORS 468B.040 or 468B.045 or a Federal Energy Regulatory Commission
license.

(3) Project specific fees shall be considered at the time of
reauthorization or relicensing of a hydroelectric project and, if needed,
shall be established before the proposed final order is issued under ORS
543A.115, and shall be included in the reauthorized water right or the
certificate issued pursuant to ORS 468B.040 or 468B.045. In the case of
power claims and uncertificated claims, project specific fees shall be
considered at the time of relicensing and, if needed, shall be included
in an order of the Water Resources Director amending the claim pursuant
to ORS 543.092 or in a certificate issued for the project pursuant to ORS
468B.040 or 468B.045.

(4) The need for, and amount of, a project specific fee shall be
based upon the following factors:

(a) Experimental or unproven nature of the proposed mitigation;

(b) Significance of the resource affected;

(c) Need for ongoing agency involvement in reviewing the
effectiveness of the proposed measure;

(d) Need for agency personnel to perform field work or research
efforts; and

(e) Overall nature of the protection, mitigation or enhancement
measures, including but not limited to consideration of whether the
measure is simple, complex, closed-ended or adaptive and whether the
measure is determined solely by the holder or by an agency or public
committee.

(5) A project specific fee may not be assessed for:

(a) Work on projects other than the project for which the fee is
established;

(b) Work that is paid for by the annual hydroelectric fee;

(c) Development of statewide hydroelectric policy;

(d) Coordination of statewide activities within an agency;

(e) Costs to the agency of Attorney General assistance associated
with ongoing litigation; or

(f) Routine monitoring of compliance with nonadaptive management
provisions of the water right, an uncertificated claim, a certificate
issued pursuant to ORS 468B.040 or 468B.045 or a Federal Energy
Regulatory Commission license.

(6) A project specific fee shall be time-limited. One year before
expiration of a project specific fee, the holder and any affected agency
shall review the need, if any, to modify, extend or terminate the project
specific fee. After such review, the agency shall propose a fee
modification, extension or termination. Any dispute regarding the
proposed fee action shall be referred to an independent fact finder
selected by mutual agreement, whose costs shall be borne one-half by the
holder and one-half by the agency. The fact finder shall review whether
the proposed fee action is appropriate under and consistent with the
criteria set forth in subsections (2), (4) and (5) of this section. The
fact finder shall not review the substance of the protection, mitigation
and enhancement measures contained in the water right, the uncertificated
claim, the certificate issued pursuant to ORS 468B.040 or 468B.045 or the
Federal Energy Regulatory Commission license. The fact finder shall
forward its determination in writing to the holder and agency. Upon
receipt and consideration of the fact finder’s determination, the agency
shall notify the holder whether the project specific fee is modified,
extended or terminated. If the holder is dissatisfied with the fee
action, the holder may request administrative or judicial review in
accordance with statutes or rules applicable to a particular agency’s fee
action. The written determination of the fact finder shall be admissible
in any such administrative or judicial hearing. Notwithstanding any other
law, a presumption shall exist in favor of the determination of the fact
finder and the burden shall be on the party seeking a fee action contrary
to the determination of the fact finder to demonstrate that a different
fee action is justified under this section.

(7) Subject to subsections (2) to (5) of this section, the amount
of a project specific fee shall be established based on an estimate of
the cost to the agency of the labor, supplies and overhead expended by
the agency in providing reasonable and necessary oversight of a holder’s
implementation of the protection, mitigation and enhancement measures
included in the water right, the uncertificated claim, the certificate
issued pursuant to ORS 468B.040 or 468B.045 or the Federal Energy
Regulatory Commission license. The estimate used to derive a project
specific fee amount shall be determined by using increments of not more
than 0.25 full-time equivalents.

(8) A project specific fee shall be payable after issuance of the
final order pursuant to ORS 543A.130, or in the case of power claimants
and uncertificated claimants, after the issuance of either the director’s
order or a certificate issued for the project pursuant to ORS 468B.040 or
468B.045. A project specific fee shall be paid in increments that are
reasonably related to the work to be performed and set forth in the final
order, certificate issued pursuant to ORS 468B.040 or 468B.045 or the
director’s order.

(9) Each agency receiving project specific fees shall, on a
biennial basis, provide the holder paying the fees with a summary of
project specific expenditures. [1999 c.873 §6]
(1) At least 45 days before the fees required under ORS 543.078 or
543.080 become due, the Water Resources Department shall issue invoices
to the holder for each fee.

(2) If any holder fails to pay the fees required under ORS 543.078
or 543.080 within 15 days after the date specified in the invoice, the
department shall notify the holder of the amount and nature of the
overdue fee. Any such notice shall be sent to the holder by certified
mail and shall include notification that the holder has 30 days from the
date of the certified delivery of the notice to pay the overdue fee or
the holder shall be subject to the late payment penalty provisions of
subsection (3) of this section.

(3) Any fee that is not paid within 30 days of the date a holder
receives certified delivery of the notice required under subsection (2)
of this section shall be considered delinquent and shall be increased by
25 percent. In addition, the state shall have a preference lien for any
such fee, together with interest at the rate of 10 percent per annum from
the date of delinquency, upon the property of the holder used, or
necessary for use, in the development of the water right, together with
any improvements erected on the property for such development. Upon
notice from the Water Resources Commission, the Attorney General shall
foreclose the lien and collect the amount due, as provided in this
section, in the same manner as other liens on real property are
foreclosed.

(4) The remedy set forth in subsection (3) of this section is in
addition to any other remedy provided by law for the collection of moneys
or for noncompliance with a condition of a water right order,
uncertificated claim or certification under ORS 468B.040 or 468B.045.
[1999 c.873 §7] (1) The Water Resources
Director shall appoint a review panel to review the amount of the annual
fee established under ORS 543.078 in 2003 and 2009 and every eight years
thereafter. The review panel shall consist of at least one representative
from the following and others at the director’s discretion:

(a) The Department of Environmental Quality;

(b) The State Department of Fish and Wildlife;

(c) The Public Utility Commission;

(d) The Water Resources Department;

(e) Investor owned utilities;

(f) Publicly owned utilities;

(g) Municipalities;

(h) Environmental organizations;

(i) Agricultural organizations; and

(j) Nonutility owners of hydroelectric projects.

(2) All holders paying annual fees under ORS 543.078 shall be
notified by the Water Resources Department at least 60 days in advance of
the meeting of the review panel established in subsection (1) of this
section, and provided the opportunity to submit comments to the panel.

(3) Any periodic review conducted under subsection (1) of this
section shall evaluate each agency’s hydroelectric program to determine
if current staffing levels, activities and funding are appropriate to
fulfill program objectives. There shall be a presumption that the fee
should not change. To overcome the presumption and alter the existing
fee, the panel must find compelling reasons for alteration and must reach
unanimous consent on the new fee. If the presumption is overcome, upon
completion of the review process the director shall either adjust the
annual fee as recommended by the panel or elect not to adjust the fee.
Any change in the annual fee as a result of this section shall become
effective on the January 1 following the director’s action. The director
shall notify all holders of any change in the annual fee and the
effective date of such change. [1999 c.873 §8](1) Notwithstanding ORS 543A.405 and 543A.410, during each
year of the interim period established in subsection (2) of this section,
any licensee or water right certificant seeking reauthorization of a
state water right to operate a federally licensed hydroelectric project
shall pay the greater of:

(a) The actual cost of the Hydroelectric Application Review Team’s
reauthorization activities for the year in question as established
pursuant to ORS 543A.405 and 543A.410; or

(b) 12.5 cents per theoretical horsepower as specified in the water
right for each project under consideration for reauthorization. This
amount shall be calculated in 1998 dollars.

(2) For any project, the interim period referred to in subsection
(1) of this section shall begin on the January 1 immediately following
submission to the Water Resources Department of a proposed final order
for reauthorization of the project under ORS 543A.115 (2). For any
project, the interim period referred to in subsection (1) of this section
shall end on December 31 of the year the department issues a final order
on reauthorization of the project pursuant to ORS 543A.130.

(3) Notwithstanding ORS 543.090, during each year of the interim
period established in subsection (4) of this section, any power claimant
or uncertificated claimant seeking to relicense a federally licensed
hydroelectric project shall pay the greater of:

(a) The actual cost of the team’s relicensing activities for the
year in question as established pursuant to ORS 543.090; or

(b) 12.5 cents per theoretical horsepower as specified in the water
right for each project under consideration for relicensing. This amount
shall be calculated in 1998 dollars.

(4) For any project, the interim period referred to in subsection
(3) of this section shall begin on the January 1 immediately following
issuance of an annual license for the project by the Federal Energy
Regulatory Commission. For any project, the interim period referred to in
subsection (3) of this section shall end on December 31 of the year the
Federal Energy Regulatory Commission issues a new license for the project.

(5) The Water Resources Department shall reimburse a participating
agency for costs incurred in the agency’s review of a project during the
year for which the fees are collected. Such costs shall not include
expenses of other state agencies for which a fee is otherwise collected
under state law. Any fees collected under subsection (1) or (3) of this
section in excess of the team’s actual cost of evaluation of the project
for the year shall be distributed according to ORS 536.015.

(6) No fee shall be charged under this section unless the project
is a federally licensed project.

(7) No fee shall be charged pursuant to subsection (1) of this
section unless the Hydroelectric Application Review Team proposes to
reauthorize the water right for the project in the proposed final order
submitted to the Water Resources Department under ORS 543A.115 (2).

(8) Water right certificants and licensees with water rights or
licenses that expire more than five years after the original federal
license for the project expires shall not begin paying fees assessed
under this section until after the expiration date of the original state
hydroelectric license or water right. [1999 c.873 §9](1) Any project operating under a hydroelectric
license issued by the Federal Energy Regulatory Commission and
concurrently operating under the authority of a power claim or
uncertificated claim shall pay all expenses related to the review and
decision of a Hydroelectric Application Review Team established under ORS
543A.075 that:

(a) Are incurred by the team and any agency participating as part
of the team in the federal relicensing process; and

(b) Are not otherwise covered by the reauthorization fee paid under
ORS 543A.415.

(2) Not later than six years before the expiration of a
hydroelectric license issued by the Federal Energy Regulatory Commission
to any project operating concurrently under the authority of a power
claim or uncertificated claim, the Water Resources Department shall
contact the holder to schedule a consultation meeting regarding expected
fees to be incurred by the Hydroelectric Application Review Team.

(3) Relicensing fees shall be calculated and assessed according to
the terms and conditions set forth in ORS 543A.405 and 543A.410 for
application fees. [1999 c.873 §10](1) Upon the request of the holder and the
approval of the Water Resources Department, a hydroelectric water right
or claim may be amended.

(2) The Water Resources Department shall develop rules governing
the process by which a hydroelectric water right or claim may be amended.
Any amendments under subsection (1) of this section shall:

(a) Be consistent with the final unified state position for the
project;

(b) Be consistent with the requirements of ORS chapter 543A;

(c) Cause no injury to other water rights; and

(d) Allow for public participation in the amendment process.

(3) The Water Resources Director may unilaterally amend a power
claim or uncertificated claim in order to assess project specific fees
under ORS 543.080. [1999 c.873 §11](1) As used in this section, “person” has the meaning given
that term in ORS 174.100.

(2) No person shall be estopped or precluded from challenging the
constitutionality or validity of any provision of chapter 449, Oregon
Laws 1997, or the provisions of chapter 873, Oregon Laws 1999, as a
result of having received or sought benefits under, complied with, paid
fees under or filed an application under those statutes, or as a result
of having participated in their drafting, enactment or implementation.

(3) Nothing in this section shall be construed to imply that a
person is estopped or precluded from challenging the validity or
constitutionality of any statute as a result of having participated in
the drafting, enactment or implementation of the legislation that
resulted in the enactment of such statute. [1999 c.873 §29]Note: Legislative Counsel has substituted “chapter 873, Oregon Laws
1999,” for the words “this 1999 Act” in section 29, chapter 873, Oregon
Laws 1999, compiled as 543.095. Specific ORS references have not been
substituted, pursuant to 173.160. The sections for which substitution
otherwise would be made may be determined by referring to the 1999
Comparative Section Table located in Volume 20 of ORS.Note: 543.095 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 543 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.APPROPRIATION OF WATER FOR POWER; APPLICATION OF LAWAfter February 26, 1931, no right to appropriate or to use
the waters of the lakes, rivers, streams or other bodies of water within
this state, including water over which this state has concurrent
jurisdiction, in connection with the development of any water power
project for the generation of electricity, shall be initiated, perfected,
acquired or held, except for and during the periods or extensions thereof
stated in ORS 543.010 to 543.610, and pursuant to the provisions thereof.
After February 26, 1931, no water power project involving the use of the
waters of lakes, rivers, streams or other bodies of water within this
state, including waters over which this state has concurrent
jurisdiction, for the generation of electricity, shall be begun or
constructed except in conformity with the provisions of ORS 543.010 to
543.610.The provisions of ORS 543.010 to 543.610 shall not
apply to any water power project or development constructed by the United
States.The provisions of ORS
543.010, 543.050, 543.210, 543.220, 543.250, 543.260 and 543.290 to
543.610 shall not apply to cities, towns or other municipal corporations
of this state, including utility districts organized under section 12,
Article XI, Oregon Constitution, and legislation enacted thereunder;
saving, however, to such cities, towns and other municipal corporations
the rights and preferences specified in ORS 543.260, 543.270 and 543.610.
The Water Resources Commission shall exercise the powers in relation to
utility districts as may be conferred upon the commission by any
legislation providing for the creation of such utility districts.
[Amended by 1985 c.673 §144; 1991 c.869 §7](1) No person shall construct or maintain, and no officer or
agency of the state shall issue any permit for the construction or
maintenance of any hydroelectric facility or structure on the North
Santiam River between river mile 27 and Big Cliff Dam.

(2) Nothing in subsection (1) of this section applies to any
hydroelectric facility or structure constructed on the North Santiam
River prior to October 15, 1983, to the historic uses of such a
hydroelectric facility or structure or to the repair or reconstruction of
such a hydroelectric facility or structure at the present site. [1983
c.418 §§1,2]Note: 543.160 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 543 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.No person, state agency, local government, district or
municipal corporation shall construct, and no officer or agency of the
state shall issue any permit for the construction of any hydroelectric
facility or structure on the Deschutes River between river mile 172 below
Lava Island Falls and river mile 227 below but not including Wickiup Dam.
[1985 c.560 §1]Note: 543.165 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 543 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation. No
person, state agency, local government, district or municipal corporation
shall construct or maintain, and no officer or agency of the state shall
issue any permit for the construction or maintenance of any hydroelectric
facility or structure on Squaw Creek. [1985 c.560 §2]Note: 543.170 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 543 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.(1) Except as provided in subsection (2) of
this section, no person, state agency, local government, district or
municipal corporation shall construct or maintain, and no officer or
agency of the state shall issue any permit for the construction or
maintenance of any hydroelectric facility or structure on that portion of
the Upper Deschutes River situated within the city limits of the City of
Bend except for a facility that meets all of the following criteria:

(a) The facility is located on an existing irrigation diversion
facility or structure constructed by persons.

(b) The operation of the facility would not require any water in
addition to water appropriated for irrigation purposes.

(c) Operation of the facility would be limited to the period of
time during which water is diverted for irrigation purposes and the
diversion would not be extended for the purpose of hydroelectric power
generation.

(2) Subsection (1) of this section shall not apply to the
construction and maintenance of or the issuance of a permit for a
hydroelectric facility or structure for which the hearing record is
closed on or before the July 12, 1985, whether or not the record is later
reopened by or at the direction of the Water Resources Commission for any
reason.

(3) As used in this section, “Upper Deschutes River” means that
portion of the mainstem Deschutes River between the North Canal Dam at
approximately river mile 165 and the head waters of the Deschutes River.
[1985 c.560 §3]Note: 543.175 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 543 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.PRELIMINARY PERMITS; LICENSES (1) Any
person who proposes to operate a hydroelectric project in Oregon shall
apply for a state preliminary permit. Any person who applies to the
Federal Energy Regulatory Commission for a preliminary permit to operate
a hydroelectric project shall, at the same time, apply for a state
preliminary permit. The Water Resources Commission may issue a
preliminary permit to any person possessing the qualifications of a
licensee as specified in ORS 543.010 to 543.610.

(2) The application for a preliminary permit shall set forth:

(a) The name and post-office address of the applicant;

(b) The approximate site of any proposed dam or diversion;

(c) The amount of water in cubic feet per second;

(d) The theoretical horsepower; and

(e) Any other data the commission may by rule require.

(3) Upon receipt of an application for a preliminary permit the
commission shall indorse on the application the date of receipt, and keep
a record of the receipt of the application. The date so indorsed shall
determine the priority of the use of water initiated under the provisions
of ORS 543.010 to 543.610.

(4) At the time of filing application for preliminary permit the
applicant shall pay to the state the portion of the total project fee
required in ORS 543.280, to cover costs of recording, publishing notices
and making investigations necessary to determine whether or not a
preliminary permit should be granted. [Amended by 1961 c.224 §15; 1985
c.673 §147; 1991 c.869 §8] (1)
Whenever an application is made for a preliminary permit and after said
application has been referred to hearing, the Water Resources Commission
shall give written notice of the filing of the application to:

(a) Any municipality or other person or corporation which, in the
judgment of the commission, is likely to be interested in or affected by
the proposed project; and

(b) The owner of any land that is:

(A) Adjacent to any portion of the stream in which the quantity of
water will be decreased by the project; or

(B) Adjacent to the site of the proposed project.

(2) The commission shall also publish notice of the application
once each week for at least four successive weeks and for such further
time, if any, as the commission shall determine, in a newspaper of
general circulation in each county in which the project covered by the
application is located.

(3) No application for the appropriation or use of water for the
development of 1,000 theoretical horsepower or more shall be granted
until at least six months after the application for a preliminary permit
has been filed. [Amended by 1961 c.224 §16; 1975 c.581 §27; 1985 c.569
§23] (1) The Water
Resources Commission shall conduct a public hearing on any application or
amended application for a preliminary permit or for a license for a major
project of more than 100 theoretical horsepower and an application for
preliminary permit or license for a minor project of less than 100
theoretical horsepower if the commission concludes it is in the public
interest to do so.

(2) The commission shall give proper notice of the public hearing
on an application under subsection (1) of this section, to the applicant
and to each protestant, if any. After the hearing, if the commission
determines that the proposed project does not comply with the standards
set forth in ORS 543.017 or rules adopted by the commission under ORS
543.017, or would otherwise impair or be detrimental to the public
interest so far as the coordinated, integrated state water resources
policy is concerned, it shall enter an order rejecting the application or
requiring its modification to conform to the public interest, to the end
that the highest public benefit may result from the proposed project. The
order may set forth any or all of the provisions or restrictions to be
included in a preliminary permit or license concerning the use, control
and management of the water to be appropriated for the project,
including, but not limited to, a specification of reservoir operation and
minimum releases to protect the public interest.

(3) In determining whether the proposed project would impair or be
detrimental to the public interest, the commission shall have due regard
for:

(a) Conserving the highest use of the water for all purposes,
including irrigation, domestic use, municipal water supply, power
development, public recreation, protection of commercial and game fishing
and wildlife, fire protection, mining, industrial purposes, navigation,
scenic attraction or any other beneficial use to which the water may be
applied for which it may have a special value to the public.

(b) The maximum economic development of the waters involved.

(c) The control of the waters of this state for all beneficial
purposes, including drainage, sanitation and flood control.

(d) The amount of waters available for appropriation for beneficial
use.

(e) The prevention of wasteful, uneconomic, impracticable or
unreasonable use of the waters involved.

(f) All vested and inchoate rights to the waters of this state or
to the use thereof, and the means necessary to protect such rights.

(g) The state water resources policy formulated under ORS 536.295
to 536.350 and 537.505 to 537.534.

(4) After the entry of the order specified in subsection (2) of
this section, the application for a preliminary permit or for a license
shall be referred to the Water Resources Director for further proceedings
consistent with the commission’s order. [1955 c.707 §42; 1961 c.224 §17;
1975 c.581 §28; 1985 c.569 §20; 1985 c.673 §148] (1) The Water
Resources Commission shall, by order or rule, provide for the time and
manner of hearings upon applications. However, upon request by any person
made within 30 days after the Water Resources Director issues an order
pertaining to cumulative impacts under ORS 543.255, the Water Resources
Commission shall conduct a contested case hearing in accordance with the
applicable provisions of ORS chapter 183 and any rules adopted by the
commission.

(2) Every application for the appropriation of water for the
generation of electricity subject to the terms of ORS 543.010 to 543.610
shall be subject to protest or remonstrance on behalf of the public, or
any district organized for public purposes, or any interested private
person, on the ground that the proposed construction, development or
improvement would damage or destroy the use or utility of the stream or
other body of water involved for other beneficial purposes, including
propagation of fish, scenic, aesthetic, recreational, park, highway or
other beneficial use. All protests and remonstrances under this
subsection must be filed with the commission within the time specified in
the notice and must be in writing and verified by the parties protesting,
and a certified copy thereof shall be served upon the applicant for the
permit. However, in the discretion of the administrative law judge, at
the time of the hearing any interested party may make an oral protest if
there exists any good reason therefor, and the administrative law judge
shall allow the applicant to be heard in opposition thereto. Every
protest or remonstrance under this subsection which is not filed and
served as required in this subsection shall be deemed waived. [Amended by
1955 c.673 §4; 1955 c.707 §40; 1961 c.224 §18; 1993 c.544 §7; 1995 c.416
§41; 1999 c.849 §115; 2003 c.75 §98]A preliminary permit may be issued for a period
not exceeding a total of three years. It shall not be transferable except
upon written approval of the Water Resources Commission, and may be
canceled by order of the commission at any time upon proof to the
commission’s satisfaction, after hearing, that the holder is not in good
faith complying with the provisions of the permit. The holder of a
preliminary permit which has not been canceled shall have priority of
right to make application for a license covering the project for which
the preliminary permit was issued, within the term of the permit or any
lawful extension thereof. Except as otherwise specified in ORS 543.010 to
543.610, the commission may fix the terms and conditions of any
preliminary permit issued thereunder, and each preliminary permit issued
shall set forth all the terms and conditions. The commission may decline
to grant any application for a preliminary permit. [Amended by 1985 c.673
§149; 1993 c.63 §1](1)
Whenever the Water Resources Department receives an application to
appropriate water for a new hydroelectric project under ORS 537.140 to
537.320 or for a hydroelectric permit or license under ORS 543.010 to
543.610, the department shall determine whether the impacts of the
project would be cumulative with:

(a) Impacts of other proposed hydroelectric projects for which an
application is pending before the department; or

(b) Existing hydroelectric projects in the same river basin.

(2) If the department determines that there is no possibility that
the hydroelectric projects proposed in pending applications or existing
projects may have cumulative effects, the Water Resources Director shall
issue an order setting forth the department’s determination that there
are no cumulative effects and the department’s decision that consolidated
review is not required.

(3) If the department determines that pending applications or
existing projects may have cumulative effects, the Water Resources
Commission shall conduct a consolidated review before approving any
application in the affected river basin. A consolidated review process
shall be conducted as a contested case hearing under the applicable
provisions of ORS chapter 183 and shall include a study of the individual
and cumulative effects of proposed hydroelectric projects for which
applications are pending before the department and existing hydroelectric
projects. In its final order on an application, the commission or the
department shall include its findings on cumulative impacts. The findings
of the commission or department under this section must be sufficient to
support the department’s decision to approve or deny an application.

(4) Any application for a project in the same river basin filed
after the commission begins a consolidated review contested case hearing
shall not be reviewed until the commission has issued final findings on
cumulative effects for all projects included in the consolidated review
proceeding.

(5) At the request of an applicant for a permit to appropriate
water for a new hydroelectric project under ORS 537.140 to 537.320 or for
a permit or license under ORS 543.010 to 543.610, the commission may
immediately upon receiving such application begin the consolidated review
proceeding under subsection (3) of this section. [1985 c.569 §10; 1985
c.673 §193; 1993 c.544 §8; 1995 c.229 §4; 1995 c.416 §39] The
Water Resources Commission shall immediately initiate rulemaking
proceedings according to the applicable provisions of ORS chapter 183 to
implement the consolidated review process under ORS 543.255. Before
adoption of the rules, the commission shall submit the rules to the Joint
Legislative Committee on Water Policy for review and recommendation.
[1985 c.569 §11; 1985 c.673 §194](1) A license may be issued by the Water Resources Commission to any
qualified person for a period not exceeding 50 years. If the project is
subject to regulation by the Federal Energy Regulatory Commission, the
term shall be concurrent with and expire upon expiration of the federal
license for the project. Each license shall be conditioned upon
acceptance by the licensee of all the terms and conditions of ORS 543.010
to 543.610, and such further terms and conditions as the commission may
prescribe, not inconsistent with those sections. All such terms and
conditions, and their acceptance by the licensee, shall be expressed in
the license. A license may be terminated for the reasons and in the
manner provided in ORS 543.010 to 543.610. The form of license containing
all the terms and conditions may be set forth in the preliminary permit.

(2) The commission may deny any application for a license if it
appears that the applicant has failed to comply substantially with the
terms and conditions of the preliminary permit or, notwithstanding the
commission has issued a preliminary permit, if in the judgment of the
commission the project is unfeasible or the public interest requires the
denial thereof.

(3) A municipal corporation or people’s utility district shall be
given preference on any project in the issuance of a license, upon
condition that the municipal corporation or people’s utility district
exercising such preference right shall be required to reimburse the
holder of a preliminary permit for all reasonable actual expenditures
made by the holder upon the project described or referred to therein.
[Amended by 1983 c.740 §214b; 1985 c.673 §150; 1995 c.229 §5]The Water
Resources Department shall impose as a condition to any water right
permit to appropriate water for hydroelectric purposes granted under ORS
537.211 or any license granted under ORS 543.260 that the person
operating the hydroelectric project shall, during the operational
lifetime of the project, perform or allow the State Department of Fish
and Wildlife to perform, any tests or studies required by the department
to evaluate the effectiveness of measures for the protection of fish. The
scope and cost of these studies will be negotiated between the State
Department of Fish and Wildlife and the operator. [1985 c.674 §6; 1987
c.158 §116; 1995 c.416 §40]Note: 543.265 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 543 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation. In
issuing preliminary permits, and in issuing licenses where no preliminary
permit is held by an applicant for a license, preference shall be given
to the application which appears to the Water Resources Commission to be
best adapted to conserve and utilize the water power involved. However,
any application for the use of water made by any municipal corporation of
this state under any law of the state, before a preliminary permit is
issued, or before a license is issued when no preliminary permit upon the
proposed project has been issued, shall always have preference. [Amended
by 1985 c.673 §151] (1) Any person who applies to the
Federal Energy Regulatory Commission for a preliminary permit to operate
a hydroelectric project shall, at the same time, apply for a state
preliminary permit. An applicant for a state preliminary permit for a new
hydroelectric project shall submit to the Water Resources Commission a
complete copy of any application for the project filed with the Federal
Energy Regulatory Commission or other federal agency. For preliminary
permits, if the copy of the federal application is filed with the
commission at the same time it is filed with the federal agency, at the
commission’s discretion, such copy may fulfill the requirements of ORS
543.210, except for the fee requirement in ORS 543.210 (4).

(2) An applicant for a preliminary permit or license for a project
or for a permit to appropriate water for power purposes shall pay to the
state a project fee based on the capacity of the project to cover costs
of recording, publishing notices, conducting the hearing required by ORS
543.225 and making investigations necessary to determine whether a permit
should be granted.

(3) The amount of the total project fee required under subsection
(2) of this section shall be:

(a) For a project of less than 100 theoretical horsepower, $1,000.

(b) For any project of 100 theoretical horsepower or more, an
amount equal to $5,000 plus $1,000 per megawatt for each megawatt of
capacity in excess of five megawatts, up to a maximum of $100,000.

(4) Except for projects of less than 100 theoretical horsepower,
the project fee required under subsection (2) of this section shall be
payable in advance before each of four stages of project review as
established by rule by the Water Resources Commission. The payment
schedule shall not require the applicant to pay more than $2,500 of the
project fee at the first stage of project review or more than 50 percent
of the total project fee in the first two stages of the project review.
For a project of less than 100 theoretical horsepower, the applicant
shall pay 50 percent of the fee at the time of filing the application for
a preliminary permit or application for a permit to appropriate water for
power purposes and the remaining 50 percent before the commission issues
a license or a water right permit. A person may withdraw an application
for a hydroelectric project after any stage of project review without
further payment of fees under this section.

(5) In addition to the project fee required under subsection (2) of
this section, any applicant for a project to be sited at a location where
anadromous fish or threatened or endangered species are present shall pay
a surcharge of 30 percent of the total project fee. The surcharge shall
be collected in conjunction with the project fee at each stage of the
project review.

(6) The commission shall provide an applicant a statement itemizing
the staff time, resources and costs expended to review the application at
each project stage. The statement shall include the costs expended by the
State Department of Fish and Wildlife and the Water Resources Department
specific to the project. [Amended by 1957 c.581 §1; 1985 c.673 §152; 1991
c.869 §9]The applicant for a license shall submit to and file with the Water
Resources Commission:

(1) All maps, plans, specifications and cost estimates as may be
required by the commission for a full understanding of the proposed
project. The maps, plans and specifications, when approved by the
commission, shall become a part of the license, if one is issued upon the
application, and thereafter no change shall be made in any such maps,
plans and specifications until the proposed change has been approved by
the commission. When a proposed change is approved by the commission, the
changes shall become a part of the license.

(2) Any further statements and data as may be required by the
commission concerning the proposed project, the market to be served, the
financial responsibility of the applicant, the plan of financing and any
other matters deemed material by the commission. [Amended by 1985 c.673
§153]
Any license issued under ORS 543.010 to 543.610 shall take into
consideration, and shall be on, the following conditions:

(1) That the proposed project shall be such as, in the judgment of
the Water Resources Commission, is well adapted to the development and
utilization of the water power involved.

(2) That the licensee shall construct and build the project
according to the maps, plans and specifications filed with and approved
by the commission, and within the time fixed by the license or by any
lawful extension thereof.

(3) The operations of the licensee so far as they affect the use,
storage and discharge from storage of waters affected by the license,
shall at all times be controlled by such reasonable rules as the
commission may prescribe for the protection of life, health and property,
and in the interest of the fullest practicable conservation and
utilization of such waters for power purposes and for other beneficial
public uses, including recreational purposes. The licensee shall release
water from the project reservoir at such rate in cubic feet per second,
or such volume in acre-feet per specified period of time, as the
commission may prescribe.

(4) That the licensee will maintain the project, and each part
thereof, in good order and repair and in efficient operation, for the
development and transmission of electricity to its reasonable capacity;
shall make all necessary renewals and replacements as required; and shall
maintain and operate the project, and all parts thereof, conformably to
the rules of the commission not inconsistent with ORS 543.010 to 543.610.

(5) That the licensee will pay to the state annually not more than
$1 for each horsepower covered by the license. This sum shall constitute
a first lien upon the project, which lien may be enforced by suit in
equity or other appropriate proceeding, or payment thereof may be
enforced by the state in an action for debt. Payment of such license fees
may be waived by the commission during all or any part of the period of
construction. The fees need not be uniform throughout the entire period
of the license, but may be for different amounts for different periods.
The amount of the license fees, within the minimum and maximum limits
herein specified, shall be determined by the commission and expressed in
the license.

(6) Other and further conditions not inconsistent with ORS 543.010
to 543.610 as the commission may require in the public interest.

(7) In issuing a license for a minor project of not more than 100
horsepower the commission may waive all or any of the conditions and
requirements of ORS 543.010 to 543.610 except the period for which a
license may be issued, and the annual charge as determined by the
commission under subsection (5) of this section. In issuing licenses for
projects in excess of 100 horsepower for which the applicants are
required to secure permits and licenses from the United States as a
condition precedent to the construction of the projects, the commission
may waive and modify such of the terms, conditions and requirements of
ORS 543.010 to 543.610, except the period for which a license may be
issued and the annual charge as determined by the commission under
subsection (5) of this section, as the commission, by order, after full
investigation and public hearing, shall find to make impracticable the
construction of such projects. During the time that a licensee is not a
public utility and does not sell electric energy, and does not sell bonds
or other evidences of debt against the licensee’s plant, the commission
may waive the accounting and amortization requirements of ORS 543.010 to
543.610, even where the project involved exceeds 100 horsepower.

(8) Subsection (5) of this section does not apply to a water right
reauthorized pursuant to ORS chapter 543A. [Amended by 1959 c.560 §1;
1961 c.224 §19; 1985 c.673 §154; 1999 c.873 §23] Except as provided in ORS
536.015, all moneys collected under the provisions of ORS 543.010 to
543.610 shall forthwith be paid to the State Treasurer and become a part
of the General Fund. [Amended by 1985 c.674 §10; 1991 c.869 §10] The right to alter,
amend or repeal ORS 543.010 to 543.610, or any part thereof, hereby is
expressly reserved; but no such alteration, amendment or repeal shall
affect any license theretofore issued under the provisions of ORS 543.010
to 543.610, or the rights of any licensee thereunder, unless expressly
assented to by the licensee.TIME FOR CONSTRUCTION; TERMINATION, REVOCATION OR TRANSFER OF LICENSE(1) The licensee shall commence the construction
of the project works within the time fixed in the license, which shall
not be more than two years from the date thereof, shall thereafter in
good faith and with due diligence prosecute such construction, and shall,
within the time fixed in the license, complete and put into operation
such part of the ultimate development as the Water Resources Commission
considers necessary to supply the reasonable needs of the then available
market, and shall, from time to time thereafter construct such portion of
the balance of the development as the commission directs, so as to supply
adequately the reasonable market demands until development is completed.

(2) The period for commencement of construction may be extended
once but not longer than two additional years, and the period for the
completion of construction carried on in good faith and with reasonable
diligence may be extended by the commission when not incompatible with
the public interests.

(3) If the licensee does not commence actual construction of the
project works or of any specified part of the project works, within the
time prescribed in the license or as extended by the commission, then,
after due notice given, the license shall, as to the project works or
part of the project works, be terminated upon written order of the
commission. [Amended by 1985 c.673 §155]If construction of a project under license has been begun
but has not been completed within the time prescribed in the license or
in any lawful extension thereof, then the Attorney General, upon request
of the Water Resources Commission, shall institute proceedings in the
circuit court for the county in which some part of the project is
situated, for termination of the rights of the licensee under the
license, the sale of the property embraced in the project, and for such
other relief as the case may demand. Any judgment or decree entered in
the proceeding shall provide for distribution of the proceeds of the sale
to the parties equitably entitled thereto. The purchaser at any such sale
shall take the property subject to all the terms and conditions of the
license under which construction was begun, except insofar as they may be
modified by the commission. [Amended by 1985 c.673 §156]The Attorney General
shall, upon request of the Water Resources Commission, institute
proceedings in the circuit court for the county in which any project, or
the major part of a project is situated, after the project has been
completed, for the purpose of revoking for violation of its terms any
license issued under ORS 543.010 to 543.610, or for the purpose of
correcting or remedying by injunction, mandamus or other appropriate writ
or decree, any act by the licensee in violation of the terms of those
sections, or of any rule or order of the commission. The court shall have
jurisdiction of the proceedings and may issue and execute all necessary
process to compel compliance with the terms of any license, the terms of
ORS 543.010 to 543.610, the lawful orders and rules of the commission. If
a decree revoking a license is entered, the court may sell the whole, or
any part, of a project under the license; wind up the business of the
licensee conducted in connection with the project; distribute the
proceeds to the parties equitably entitled thereto; and make and enforce
such further orders and decrees as equity and justice may require. At any
such sale the purchaser shall take the rights and privileges belonging to
the licensee and shall perform all the duties of the licensee under the
license. The remedies provided by this section are in addition to the
remedies otherwise provided by ORS 543.010 to 543.610. [Amended by 1985
c.673 §157] No
voluntary transfer of any license or any rights under a license or of any
property acquired, constructed or operated pursuant to license issued
under ORS 543.010 to 543.610 shall be made without written approval of
the Water Resources Commission. Any successor or assignee of any licensee
under any project acquired, constructed or operated by licensee, whether
by voluntary transfer approved by the commission or sale upon
foreclosure, execution or otherwise, shall be subject to all the terms
and conditions of the license and of the provisions of ORS 543.010 to
543.610 to the same extent as though the successor or assignee was the
original licensee thereunder. Any mortgage, deed of trust, or other lien
suffered or created upon any such project shall be subject and
subordinate to all the terms and conditions of ORS 543.010 to 543.610.
However, the provisions of this section shall not apply to any transfer,
voluntary or involuntary, to the state or any municipal corporation
thereof, and upon such transfer the license shall terminate. [Amended by
1985 c.673 §158]FINANCING OF PROJECTS; LIENS; BOND OF LICENSEE(1) No
licensee shall issue any share of corporate stock, or any bond, or other
evidence of interest in or indebtedness of the licensee, or assume any
obligation or liability as lessor, lessee, guarantor, indorser, surety or
otherwise, in respect of the corporate shares, bonds or other evidence of
indebtedness of any person in connection with the financing, acquisition,
construction, maintenance or operation of any project, unless and until,
and then only to the extent that, upon application by the licensee, and
after investigation by the Water Resources Commission of the purposes and
uses of the proposed issue and the proceeds thereof, or of the proposed
assumption of obligation or liability, the commission, by order,
authorizes the issue or assumption. The commission shall make the order
only if the commission finds that the issue or assumption:

(a) Is for some lawful object of the licensee, compatible with the
public interest, and is necessary to, or appropriate for, the proper
performance by the licensee of the terms and conditions of the license
and will not impair the licensee’s ability to perform the terms and
conditions; and

(b) Is reasonably necessary and appropriate for such purposes.

(2) The commission may grant or deny the application to authorize
the issue or assumption, or grant the same in part and deny in part, and
may modify the provisions of any previous order and prescribe such terms
and conditions as the commission considers necessary or appropriate in
the premises. Every such application shall be made in such form and
contain such data as the commission by rule may prescribe.

(3) No licensee or any director, officer, attorney or agent thereof
shall knowingly assent to or concur in any issue or assumption contrary
to the provisions of this section, or the orders of the commission made
pursuant to this section or ORS 543.540. [Amended by 1953 c.271 §1; 1985
c.673 §159]No bonds, notes or other obligations or securities or
corporate stock shall be issued in connection with the financing,
construction or acquisition of any project or part of a project, under a
license issued pursuant to ORS 543.010 to 543.610, except for cash or
property. If issued for property, the price or value at which the
property is to be acquired by the licensee and made a part of any such
project must be submitted to and approved by the Water Resources
Commission before it is purchased or acquired. All corporate shares
issued in connection with any such project shall have a nominal or par
value. All bonds, notes or other obligations or securities, and all
shares of corporate stock issued or sold by any licensee in connection
with the acquisition, construction or financing of any project, or part
of a project, shall be issued or sold or used in the purchase or
acquisition of property at the full face or nominal value thereof, unless
the commission consents to and approves the sale for cash, or the use of
cash in the purchase or acquisition of property at a discount from the
face or nominal value of the property. Any discount so approved and
consented to shall be considered a part of the cost of financing.
[Amended by 1985 c.673 §160]No lien for labor, services, materials, machinery or
equipment shall exist or be acquired or enforced upon any property
acquired, constructed or made a part of any project under license issued
pursuant to ORS 543.010 to 543.610. No property shall be put into or made
part of any such project unless owned by the licensee free and clear of
all liens and claims whatsoever, except a lien created by the licensee
upon the whole property embraced in the project by mortgage or deed of
trust, to the end that the entire property embraced in the project be
kept and maintained as an indivisible whole. The mortgage or deed of
trust may include other property. Any voluntary sale or any sale upon a
judgment of foreclosure, execution or otherwise, shall be of the whole
property embraced in the project unless the Water Resources Commission,
by an order in writing, consents to and approves of a sale of a part of
the property. If less than the whole of any property embraced in a
project is sold with the consent and approval of the commission, the
commission shall determine at the time of the sale the actual net
investment in the part sold, as well as the actual net investment in the
part remaining unsold. [Amended by 1985 c.673 §161; 2003 c.576 §496]Before entering upon the work of construction
or acquisition of any project, the licensee shall execute to the state a
bond, with good and sufficient sureties or an irrevocable letter of
credit issued by an insured institution, as defined in ORS 706.008, in
either case, to be approved by the Water Resources Commission, to the
effect that the licensee shall promptly make payment to all persons
supplying labor, services, material, machinery or equipment for the
prosecution of the work, and all amounts due the State Industrial
Accident Fund from the licensee. Any person supplying the licensee with
any labor, services, material, machinery or equipment for prosecution of
the work who has not been paid therefor within 60 days after the same has
been supplied, or when payment is due according to any special agreement,
may, within one year after any payment has become due, bring an action
against the licensee, and the sureties upon the bond, or the letter of
credit issuer for payment of the amount due to the person, and prosecute
the same to final judgment and execution. The action shall be brought in
the name of the state upon the relation of the person to whom payment is
due. The state, at the request of the State Accident Insurance Fund
Corporation may prosecute an action to judgment and execution against the
licensee and the sureties upon the bond or letter of credit for all sums
due the State Industrial Accident Fund. [Amended by 1985 c.673 §162; 1991
c.331 §80; 1997 c.631 §487]ACQUISITION OF PROJECT BY STATE OR MUNICIPALITY (1) Upon
not less than two years’ notice in writing the state, or any municipality
thereof, shall have the right at any time to take over and thereafter to
maintain and operate any project constructed under a license pursuant to
ORS 543.010 to 543.610, upon payment of just compensation, including such
reasonable damages, if any, to valuable, serviceable and dependent
property of the holder of the license, not taken over, as may be caused
by the severance therefrom of the property taken, and shall assume all
contracts entered into by the licensee which are required to have and do
have the express approval of the Water Resources Commission. If the sum
to be paid cannot be agreed upon by the holder of the license and the
municipality or the state, as the case may be, it shall be determined in
a proceeding in equity instituted by the state or municipality, as the
case may be, in the circuit court of the county in which the major part
of the project is located.

(2) There is also expressly reserved to the state, and any
municipality thereof, the right to take over all or any part of any
project by condemnation proceedings as may be provided by the laws of
Oregon or the charter of any such municipality. [Amended by 1983 c.799 §8]POWER GENERATION BY DISTRICTS The Legislative Assembly finds that a significant
potential exists for the development of the hydroelectric generation
capabilities of water systems serving domestic water supply districts,
irrigation districts, drainage districts, water improvement districts and
water control districts. The Legislative Assembly also finds that the
development of such hydroelectric generation capabilities is desirable
for meeting the electrical energy needs of the citizens of the State of
Oregon. It is the intent of the Legislative Assembly to provide domestic
water supply districts, irrigation districts, drainage districts, water
improvement districts and water control districts with the authority and
the right to exercise municipal preference in the development of
hydroelectric generation capabilities in connection with their water
systems. Further, it is the intent of the Legislative Assembly that the
development of hydroelectric generation capabilities under ORS 543.650 to
543.685 does not become the primary function of domestic water supply
districts, irrigation districts, drainage districts, water improvement
districts and water control districts. [1981 c.420 §1] As used in ORS
543.650 to 543.685, unless the context requires otherwise:

(1) “District” means any one of the following:

(a) A domestic water supply district organized under ORS chapter
264.

(b) An irrigation district organized under ORS chapter 545.

(c) A drainage district organized under ORS chapter 547.

(d) A water improvement district organized under ORS chapter 552.

(e) A water control district organized under ORS chapter 553.

(2) “Principal Act” means the statutes, other than ORS 543.650 to
543.685, which describe the powers of a district, including, but not
limited to, the statutes under which a district is proposed or is
operating.

(3) “Water system” means any structure or facility constructed by
persons and used by a district to achieve the district’s purpose under
the district’s principal Act whether or not such structure or facility is
owned by the district. [1981 c.420 §2; 1985 c.561 §4](1) A district, alone or jointly with other
districts, electric cooperatives, as defined in ORS 261.010, people’s
utility districts, a cooperative as defined in ORS 62.015, municipal
corporations authorized to engage in generating and distributing
electricity or public utilities, as defined in ORS 757.005, engaged in
the business of generating and distributing electricity, may enlarge or
modify its water system for the purpose of generating electricity and may
operate and maintain such facilities, notwithstanding any provision of
paragraph (a) of this subsection. If a district already has hydroelectric
generating capability, the district may enlarge or modify the district’s
facilities used for generation of hydroelectric power. Two or more
districts may, as a joint venture, generate electricity under ORS 543.650
to 543.685 as long as the structure or facility that is enlarged or
modified to produce the electricity is part of the water system of at
least one of the districts participating in the joint venture. However, a
district may not:

(a) Construct, acquire, operate or maintain any facility or
structure that is not an enlargement or modification of the district’s
water system solely or primarily for the purpose of generating
electricity; or

(b) Be created solely or primarily for the purpose of constructing,
acquiring, operating or maintaining hydroelectric facilities.

(2) A district shall sell the excess electric energy generated at
such hydroelectric facilities to the Bonneville Power Administration, a
public utility as defined in ORS 757.005, an electric cooperative as
defined in ORS 261.010, a people’s utility district, a cooperative as
defined in ORS 62.015, a municipal corporation or a municipally owned
utility. Any sale of excess electric energy shall be made in accordance
with terms and conditions of the Federal Power Act, as amended by the
Public Utility Regulatory Policies Act of 1978. As used in this
subsection, “excess electric energy” means electric energy not used by
the district to meet its own electric pumping requirements.

(3) The board of directors of the district shall establish
regulations governing electric energy generation and sale under this
section.

(4) Electricity shall be sold under this section only at wholesale.
[1981 c.420 §3; 1985 c.561 §5; 1995 c.195 §44; 2003 c.802 §80; 2005 c.22
§381]A district may contract with a private person to
enlarge or modify the district’s water system for the purpose of
generating hydroelectric power. The district shall retain sufficient
benefit and interest in, and control of a joint project as necessary for
the project to be considered a district project. A district and a private
person developing a joint project under ORS 543.650 to 543.685 must
comply with the rules adopted by the Water Resources Commission under ORS
543.664. [1985 c.561 §2]The Water Resources Commission shall establish rules necessary
to carry out the provisions of ORS 543.662. The rules shall include the
amount of control over and interest in a joint project a district must
retain in order to receive the benefit of the municipal preference and
proceed under the municipal application process set forth in ORS chapter
537. [1985 c.561 §3](1) In addition to any other authority under its principal
Act to issue bonds, a district, when authorized at any properly called
election, shall have the power to sell and dispose of revenue bonds to
construct or acquire hydroelectric facilities in conformance with ORS
543.650 to 543.685 to develop the hydroelectric generation capabilities
of the water system, and to pledge as security therefor all or any part
of the unobligated net revenue of the district or system.

(2) Revenue bonds may be issued by a district to construct or
acquire hydroelectric facilities in connection with its water system in
conformance with ORS 543.650 to 543.685, including, but not limited to,
dams, canals, generating plants, transmission lines, other power
equipment and acquire the necessary property and rights therefor, for the
purpose of generating hydroelectric energy.

(3) The revenue bonds authorized by this section shall be issued in
the same manner and form as are general obligation bonds of the district,
but they shall be payable, both as to principal and interest, from
revenues only, as specified by this section. The revenue bonds shall not
be subject to the percentage limitation applicable to general obligation
bonds and shall not be a lien upon any of the taxable property within the
corporate limits of such district, but shall be payable solely from such
part of the revenues of the district as remain after payment of
obligations having a priority and of all expenses of operation and
maintenance of the district, including any taxes levied against it. All
revenue bonds shall contain a clause reciting that both the principal and
interest are payable solely from operating revenues of the district
remaining after paying such obligations and expenses. [1981 c.420 §4;
1985 c.561 §6] Except as provided in
ORS 287.028, all revenue bonds issued under ORS 543.665 shall be
advertised and sold in the manner prescribed in ORS 287.014 to 287.022
for the sale of bonds of cities of this state. [1981 c.420 §5; 1983 c.557
§12]Notwithstanding any powers of eminent domain
and condemnation given to a district under its principal Act, a district
shall not exercise any power of condemnation or eminent domain to
condemn, appropriate or acquire real property for the purpose of
constructing, acquiring, operating or maintaining hydroelectric
facilities. [1981 c.420 §6] A
district shall comply with all applicable provisions of ORS chapter 537
before enlarging or modifying the district’s water system for the purpose
of generating hydroelectric energy. [1981 c.420 §7; 1985 c.561 §7](1) If the board of directors of a district has not
adopted an ordinance, resolution or administrative rule requiring the
weatherization of the buildings of the district, the district shall
deposit 10 percent of any revenues derived from the sale of excess
electric energy under ORS 543.660 with the officer serving as the
treasurer of the district to be credited to a special fund designated its
Weatherization Fund. Moneys in the fund shall be expended upon written
order of the board of directors for the sole purpose of accomplishing
weatherization of buildings owned by the district.

(2) As used in this section, “weatherization” means the
installation of materials, equipment or fixtures designed primarily to
improve the efficiency of space heating and energy utilization of a
building. [1981 c.420 §8]POWER DEVELOPMENT FEES As used in ORS
543.710 to 543.730, “claimant” means any person claiming the right to the
use of water for power development. [1957 c.333 §1]
Every claimant other than a licensee under ORS 543.010 to 543.610 shall
on or before January 1 of each year pay to the state in advance an annual
fee based upon the theoretical water horsepower claimed under each
separate claim to water, graduated as follows: Thirty cents for each
theoretical water horsepower or fraction thereof up to and including 50
and 28 cents for each theoretical water horsepower or fraction thereof in
excess of 50. However, upon filing the statement provided in ORS 543.720,
the United States or the state, claiming the right to the use of water to
any extent for the generation of power, or any other claimant to the
right to use water for the generation of 10 theoretical water horsepower
or less, shall be exempted from the payment of all fees provided for in
this section. Four cents of each 28 cents collected as an annual fee
under this section shall be deposited to the Water Resources Department
Hydroelectric Fund and disbursed to the Department of Environmental
Quality. [Amended by 1957 c.333 §2; 1965 c.185 §1; 1973 c.163 §5; 1997
c.449 §38; 1999 c.873 §24; 2001 c.104 §229](1) The fees provided for in
ORS 543.710 shall be paid to the Water Resources Commission in advance,
and shall be accompanied by a written statement showing the extent of the
claim. The statement shall set forth the name and address of the
claimant; the name of the stream from which the water is appropriated or
claimed for power development; a description of the 40 acres, or smallest
legal subdivision in which the point of diversion and point of return are
located; the date of the right as claimed; the maximum amount of water
claimed expressed in cubic feet per second of time; the total average
fall utilized under such claim; the manner of developing power; and the
use to which the power is applied. If the regular flow is supplemented by
water stored in a reservoir, the location of the reservoir, its capacity
in acre-feet and the stream from which it is filled and fed, should be
given, also the date of the right as claimed, for storage purposes.

(2) If any claimant fails or neglects to file the statement or to
pay the fees within the time specified, the fees due and payable shall be
the amount specified in ORS 543.710 increased 25 percent. The state shall
have a preference lien for the fees due, together with interest at the
rate of 10 percent per annum from date of delinquency, upon the property
of the claimant used, or necessary for use, in the development of the
right or claim, together with any improvements erected on the property
for such development. Upon notice from the commission, the Attorney
General shall foreclose the lien and collect the amount due, as provided
in this section, in the same manner as other liens on real property are
foreclosed.

(3) The filing of a claim to water in excess of the amount to which
the claimant is legally entitled shall not operate to vest in the
claimant any right to the use of such excess water, nor shall the payment
of the annual license fee provided for in ORS 543.710 operate to vest in
any claimant any right to the use of such water beyond the amount to
which claimant is legally entitled. The filing of any such claim to water
shall be conclusive evidence as to the abandonment by the claimant of all
rights to water for power purposes in excess of the claim as filed.

(4) The amount of theoretical water horsepower upon which fees
shall be paid under the provisions of ORS 543.710 and 543.720 shall be
computed by multiplying the maximum amount of water claimed, expressed in
cubic feet per second, by the average total fall utilized, expressed in
feet, and dividing the product by 8.8. [Amended by 1985 c.673 §163](1) Failure of any claimant for a period of five successive
years ending after August 20, 1957, to file the written statement showing
the extent of the claim as required by ORS 543.720, or failure of any
claimant for a period of five successive years ending after August 20,
1957, to pay the annual license fee as required by ORS 543.710, shall be
conclusive evidence of the abandonment by the claimant of the claim and
of all right to water for power purposes in connection with such claim.

(2) When a claim is abandoned under the provisions of subsection
(1) of this section, or whenever a claimant has voluntarily authorized,
in writing, the cancellation of a claim or the water right in connection
therewith, the Water Resources Commission shall:

(a) Cancel the claim on the records of the Water Resources
Department.

(b) Cancel any permit to appropriate water or any water right
certificate issued in connection with such claim. [1957 c.333 §3; 1979
c.67 §7; 1985 c.673 §164]PENALTIES(1) Violation of ORS 543.530 (3) is punishable,
upon conviction, by a fine of not more than $5,000, or by imprisonment
for not more than one year, or both.

(2) Violation of any of the provisions of ORS 543.010 to 543.610,
or any of the conditions made a part of any license issued under ORS
543.010 to 543.610, or any subpoena of the Water Resources Commission or
of an administrative law judge or any person designated by the commission
to take testimony, any lawful order or rule of the commission is a Class
B misdemeanor.

(3) Any person who willfully and knowingly gives false testimony
concerning a material matter in any hearing before the commission, an
administrative law judge or any person designated by the commission to
take testimony, or in any deposition or affidavit to be used in a matter
pending before the commission or administrative law judge, or willfully
and knowingly verifies a false statement or report filed with the
commission, shall be guilty of perjury and may be prosecuted and punished
as otherwise provided by law for the prosecution and punishment of
perjury. [Amended by 1955 c.673 §5; 1985 c.673 §165; 1999 c.849 §117;
2003 c.75 §99]

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