SENATE COMMITTEE ON WATER AND LAND USE

 

April 14, 2003                                                                                                         Hearing Room D

3:00 p.m.                                                                                                                       Tapes 47 - 48

 

MEMBERS PRESENT:         Sen. Ted Ferrioli, Chair

Sen. Charlie Ringo, Vice-Chair

Sen. Jason Atkinson

Sen. Rick Metsger

`

STAFF PRESENT:                 Judith Callens, Committee Administrator

Megan Jensen, Committee Assistant

 

MEASURE/ISSUES HEARD:           SB 418 Public Hearing

SB 590 Public Hearing

SB 836 Public Hearing

SB 838 Public Hearing

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 47, A

003

Chair Ferrioli

Calls meeting to order at 3:10 p.m. and opens public hearing on SB 418.

SB 418 – PUBLIC HEARING

008

Chair Ferrioli

Discusses memorandum from Department Land Conservation and Development (EXHIBIT A).

025

Ringo

Asks if amendments are still in draft.

026

Chair Ferrioli

Replies that Legislative Counsel has not yet drafted amendments. Closes public hearing on SB 418 and opens public hearing on SB 590.

SB 590 – PUBLIC HEARING

033

Judith Callens

Committee Administrator. Provides overview of SB 590 and -2 amendments dated 4/11/03 (EXHIBIT B).

042

Chair Ferrioli

Discusses actions that can trigger the potential cancellation of a water right.

056

Richard Kosesan

Water for Life. Explains how a claim of injury would move forward a cancellation of water right proceeding.

073

Adam Sussman

Water Resources Department (WRD). States that the bill remains ambiguous with the addition of -2 amendments:

  • The term “injury” is unclear
  • The trigger action or event is unclear
  • Adds additional processes to the Department to maintain mandatory timelines

098

Kosesan

Explains what problems SB 590 is attempting to rectify.

125

Sen. Ringo

Asks for his definition of “injury.”

127

Kosesan

Talks about junior and senior water right users.

138

Sen. Ringo

Asks if the definition of “injury,” could be resolved.

142

Sussman

Responds that it is possible to come up with an acceptable definition of “injury.”

150

Sen. Ringo

States it should not be difficult because of the specific application in SB 590.

158

Chair Ferrioli

Remarks that SB 590 includes a claim of injury, not a determination of injury.

162

Sussman

Responds that the -2 amendments address a water right holder who is injured.

166

Chair Ferrioli

Comments that on the issue that there is no trigger process to cancel a water right in a timely manner.

180

Sussman

States that WRD supports the intent of the legislation but believes there are problems with mandatory timelines which require additional resources.

186

Chair Ferrioli

Requests Mr. Sussman work with Mr. Kosesan to define a triggering mechanism.

215

Sen. Ringo

Asks for clarification on what event triggers the 60 days time limit.

223

Sussman

Talks about the process of evaluating a petition and assuring that the information is correct, which then triggers a formal legal proceeding.

233

Sen. Ringo

Suggests the real issue may be that 60 days is not enough time.

235

Sussman

Explains that regardless of the quality or accuracy of the information, SB 590 will require WRD to act within 60 days.

253

Chair Ferrioli

Clarifies that SB 590 does not require WRD to conclude the cancellation proceedings with 60 days.

260

Sussman

Conveys his understanding that SB 590 initiates a formal legal process within 60 days.

267

Sen. Ringo

Inquires what it means to initiate proceedings.

270

Sussman

Explains the process of initiating proceedings.

278

Sen. Ringo

Clarifies WRD’s concern is that in some instances, claim investigations might take more than 60 days.

284

Sussman

Explains that the investigation proceedings may take many months.

288

Sen. Ringo

Asks for suggested solutions.

290

Sussman

Responds that there is an informal process for the cancellation of water rights when it affects another water user negatively.

305

Chair Ferrioli

States that WRD works on a priority basis controlled solely by the agency and that SB 590 would enforce a process that WRD already is required to follow.

327

Sussman

Responds that there would be staffing impacts if required to make cancellation proceeding a priority.

337

Chair Ferrioli

Reiterates that SB 590 simply requires the cancellation process to begin by a certain time.

350

Sussman

Explains that investigations of claims consume WRD resources.

354

Chair Ferrioli

Inquires how many cancellation claims WRD receives.

356

Sussman

Responds that he has never received a claim.

359

Chair Ferrioli

Asks about a claim in Malheur County.

364

Sussman

Explains that the Malheur County case involved a transfer and no claim of injury.

397

Sen. Ringo

Asks about initiating proceedings when there were no grounds.

410

Sussman

Responds that he is not aware of any claims of that nature.

415

Chair Ferrioli

Comments that SB 590 only changes the starting date for initiation of proceedings.

TAPE 48, A

010

Sussman

Responds that WRD is accountable for making sure processes are done in a timely manner.

018

Chair Ferrioli

Mentions concern that the informal process already in place has no time limit. Requests revised -2 amendments.

036

Sen. Ringo

Asks what happens if WRD does not initiate proceedings in 60 days under SB 590

041

Chair Ferrioli

Responds that SB 590 contains no penalty clause and elaborates.

049

Sen. Ringo

Inquires about the length of time for nonuse of water when someone has a claim of injury.

053

Kosesan

Replies that the period of nonuse is five years.

054

Sen. Ringo

Suggest that the 60 day time limit be increased to 90 or 180 days.

062

Kosesan

States that another time limit is acceptable.

074

Sen. Ringo

Asks how many people might file a claim under SB 590.

078

Kosesan

Believes very few would file under SB 590.

090

Sen. Ringo

Asks about including a clause that would allow a certain number of claimants to obtain results quickly.

094

Sussman

Responds that all claims are important  and that “injury” needs to be defined.

101

Chair Ferrioli

Summarizes issues surrounding SB 590. Closes public hearing on SB 590 and opens public hearing on SB 836.

SB 836 – PUBLIC HEARING

133

Callens

Provides overview of SB 836.

135

Chair Ferrioli

Talks about the background of SB 836 and reviews the goals of the potential work group on SB 836 (EXHIBIT C). Requests the work group convene and provide solutions before the end of the legislative session.

244

Sen. Ringo

Comments on the ambiguity of the impact on schools.

246

Chair Ferrioli

Agrees and talks about properties that are inside the public trust.

252

Sen. Ringo

Believes SB 836 has no financial impact on the Common School Fund but that the issue should be researched.

260

Chair Ferrioli

Comments on non-trust lands that are under state management.

270

Jay McCaulley

Salmon Restoration and Enhancement Coalition. States support of SB 836.

295

Chair Ferrioli

Closes public hearing on SB 836 and opens public hearing on SB 838.

SB 838 – PUBLIC HEARING

300

Callens

Provides overview of SB 838.

315

Chair Ferrioli

Summarizes the issues surrounding SB 838. Requests Mr. Purchase discusses the circumstance under which a wharf or pier owner operates on state owned lands.

340

Steve Purchase

Division of State Lands (DSL). Provides testimony against SB 838 (EXHIBIT D). Talks about wharf provisions in navigable channels and provides an example of the Port of Portland.

366

Chair Ferrioli

Inquires if the state charges a lease for the use of wharves and piers in navigable waterways.

368

Purchase

Responds that the state does not charge lease fees. Continues explanation of wharf exemption definition and states that if the wharf structure exists outside of an incorporated city or a port district, there must be a lease with the state.

390

Sen. Ringo

Asks for clarification on what happens when the use of the wharf ceases.

394

Purchase

Explains that if the wharf is not being used for loading or unloading goods or merchandise, the wharf exemption does not apply.

TAPE 47, B

005

Purchase

Believes the problem SB 838 addresses is unclear. Discusses concerns with preference rights and contractual issues.

038

Jay McCaulley

Salmon Restoration and Enhancement Coalition. Provides testimony in support of SB 838 (EXHIBIT E):

  • Provides consistency for the waterway leasing program with existing statutory requirements for grazing property, also administered by DSL, and provides reasonable certainty to current lease holders in aid of recouping investment in costly leasehold structures and improvements to state owned lands, while providing minimal requirements for bank financing such improvements
  • Requires DSL to offer a lease rather than require removal of wharf structures if the lessee no longer qualifies for the wharf exemption, which would provide financial benefit to DSL, the state, and the Common School Fund

133

Sen. Ringo

Asks if the wharf must be removed if the use changes.

136

Purchase

Explains that DSL’s practice on wharf removal requirements.

147

Sen. Ringo

Asks if Mr. McCaulley’s main concern is the Port of Portland.

148

McCaulley

Responds that the Port of Portland is one example of many throughout the state.

154

Sen. Ringo

Asks about Mr. McCaulley’s specific interest in SB 838.

156

McCaulley

States his interest in establishing consistency with DSL leases.

174

Sen. Ringo

Reiterates that DSL can request wharf removal but it is not standard practice.

178

McCaulley

Advocates that all structures come under DSL in some manner.

190

Sen. Ringo

Asks if Mr. McCaulley agrees that DSL does not insist on removal of structures.

196

McCaulley

Disagrees.

200

Sen. Ringo

Asks for an example of DSL requiring removal of a wharf.

201

McCaulley

States that he does not have a specific example.

202

Sen. Ringo

Inquires if he is concerned DSL could request wharf removal at some future point.

203

McCaulley

Affirms.

204

Chair Ferrioli

Clarifies that SB 838 would make the lease 20 years with a preference right to renew and would change the policy of requiring removals

215

McCaulley

Affirms.

218

Chair Ferrioli

Asks for DSL’s objections to changing from a 15 year lease to a 20 year lease.

220

Purchase

Explains the background of the 15 year lease and believes the 20 year requirement would require DSL to renegotiate old leases.

248

Chair Ferrioli

Asks when DSL’s administrative rules were adopted by the work group.

250

Purchase.

Replies that the rules were adopted July 1, 1999 by the State Land Board.

252

Chair Ferrioli

Asks who decided to limit the leases to 15 years.

255

Purchase

Explains that a consensus was reached upon the recommendation that DSL made to the Land Board.

266

Chair Ferrioli

Asks if the Waterway Leasing Task Force had a recommendation for lease length.

267

Purchase

Offers to research the issue.

269

Chair Ferrioli

Clarifies that the 15 year lease decision was a DSL recommendation to the Land Board.

271

Purchase

Affirms.

272

Chair Ferrioli

Inquires if Purchase participated in the work group.

273

Purchase

Affirms.

275

Chair Ferrioli

Wonders if the work group and DSL had differing recommendations.

282

Purchase

Offers to research the recommendations from the Waterway Leasing Task Force.

284

Chair Ferrioli

Asks if there was a formal set of recommendations made by the work group.

287

Purchase

Offers to provide the recommendations.

290

Chair Ferrioli

Asks if there were recommendations from the work group and whether they differed from DSL’s recommendations.

291

McCaulley

States there were several recommendations DSL did not follow.

320

Chair Ferrioli

Asks about preferential treatment of current lessees in lease renewals.

331

Purchase

Talks about preference rights with current lessees.

348

Chair Ferrioli

Clarifies that the current lessee would have preference under SB 838.

349

Purchase

Explains that the current preference right is to upland riparian owners.

352

Chair Ferrioli

States that if an upland riparian landowner sold the land to a third party, it would create a renewal preference for the third party.

353

Purchase

Affirms.

354

Chair Ferrioli

Asks if that process causes disruptions.

355

Purchase

Explains DSL leasing contracts and preference rights.

360

Chair Ferrioli

Suggests the conflict comes when the new upland land owner extends his or her preference right to take over the lessee’s facilities.

363

Purchase

Believes the conflict is more widespread and explains.

368

Chair Ferrioli

States that the preference would stay with the pier operator if the amendments are adopted.

371

Purchase

Responds that there might be two preference landowners and explains.

378

Chair Ferrioli

Remarks that DSL offers the preference to the land onto which the pier or wharf facilities are pertinent.

380

Purchase

Affirms.

381

Chair Ferrioli

Believes there is some confliction within DSL policies regarding wharves and piers.

TAPE 48, B

014

McCaulley

Talks about the severability of riparian rights.

035

Chair Ferrioli

Comments on the right of first refusal.

036

McCaulley

Says that SB 838 does not preclude the state from deciding who is issued a lease and elaborates.

056

Chair Ferrioli

Asks about leases over $100,000.

063

Purchase

Explains policies surrounding leases worth $100,000 or more.

070

Chair Ferrioli

Asks about applying SB 838 policies only to new leases.

073

Purchase

Explains DSL would still have concerns over preference rights.

085

Chair Ferrioli

Inquires if DSL leases were originally 30 years.

087

Purchase

States that historic leases were between 5 years to 100 years.

090

Chair Ferrioli

Asks about the DSL director offering to personally negotiate with banks.

093

Purchase

Explains that there was a concern over whether banks would sign a 15 years lease.

105

Chair Ferrioli

Asks about consent agreements.

108

Purchase

Clarifies consent agreements.

114

Chair Ferrioli

Asks about the DSL director personally committing to work with banks.

116

Purchase

Responds that he is unsure.

124

Purchase

Believes DSL is cautious with the lease transactions.

132

Chair Ferrioli

Summarizes issues surrounding SB 838. Closes public hearing on SB 838 and adjourns meeting at 4:54 p.m.

 

 

EXHIBIT SUMMARY

 

A – SB 418, memorandum dated 4/4/03, Ronald Eber, 3 pp.

B – SB 590, SB 590-2 amendments dated 4/11/03, staff, 1 p.

C – SB 836, memorandum dated 4/14/03, Sen. Ted Ferrioli, 3 pp.

D – SB 838, written testimony, Steve Purchase, 2 pp.

E – SB 838, written testimony, Jay McCaulley, 1 p.