Bridge Creek Ranch v. Water Resources Dept. ( 2023 )

568 December 20, 2023 No. 663
IN THE COURT OF APPEALS OF THE
STATE OF OREGON
BRIDGE CREEK RANCH, LLC,
Relator-Respondent,
v.
OREGON WATER RESOURCES DEPARTMENT
and Doug Woodcock,
Director of Oregon Water Resources Department,
Defendants-Appellants.
Marion County Circuit Court
22CV05598; A180610
Audrey J. Broyles, Judge.
Argued and submitted September 13, 2023.
Denise Fjordbeck, Assistant Attorney General, argued
the cause and filed the brief for appellants. Also on the briefs
were Ellen Rosenblum, Attorney General, and Benjamin
Gutman, Solicitor General.
Sara Kobak argued the cause and filed the brief for
respondent. Also on the brief were Elizabeth E. Howard,
and Schwabe Williamson & Wyatt PC.
Steven L. Shropshire and Jordan Ramis PC filed brief
amicus curiae for Oregon Farm Bureau Federation and
Oregon Association of Nurseries.
Olivier Jamin and Davis Wright Tremaine LLP filed
the brief amicus curiae for Oregon Water Utility Counsel,
League of Oregon Cities, and Special Districts Association
of Oregon.
Andrew R. Missel and Brian Posewitz filed the brief
amicus curiae for WaterWatch of Oregon.
Before Tookey, Presiding Judge, and Egan, Judge, and
Kistler, Senior Judge.
TOOKEY, P. J.
Affirmed.
Cite as 329 Or App 568 (2023) 569
570 Bridge Creek Ranch v. Water Resources Dept.
TOOKEY, P. J.
The Oregon Water Resources Department (the
OWRD) and its director (defendants) appeal from a judg-
ment in this mandamus action under ORS 34.105 to 34.250
directing the OWRD to consider an application by relator
Bridge Creek Ranch, LLC (relator) for a change in the “point
of diversion” (POD) of water from a creek that serves as a
source of water for relator’s reservoir.1 We have jurisdiction
of the appeal pursuant to ORS 34.240.2 We affirm the trial
court’s judgment directing the OWRD to consider relator’s
application for a change in the POD, although based on
slightly different reasoning from that of the trial court.
The parties have stipulated to the relevant factual
background: Relator owns the Painted Hills Reservoir, an
“off-channel” reservoir,3 and agricultural lands in Wheeler
County, Oregon, irrigated with water stored in the reser-
voir. The water is diverted to fill the reservoir from Bear
Creek and Bridge Creek on Bureau of Land Management
(BLM) land.
Relator’s right to store water is pursuant to two
water storage right certificates granting relator the right
“to store and use” the authorized volumes of water as irriga-
tion storage water, Certificate 68551 and Certificate 68553.
The certificates state that they are restricted to that “ben-
eficial use” at the reservoir location.4 Relator also holds
Certificate 68552, a secondary water certificate granting it
the right to divert and apply water both from the reservoir
1
See OAR 690-385-0100(11) (Jan 2007) (defining “point of diversion” as “the
place at which surface water is diverted from a surface water source as specified
in the water right”).
2
ORS 34.240 provides:
“From the judgment of the circuit court or Oregon Tax Court, or judge
thereof, refusing to allow a mandamus, or directing a peremptory manda-
mus, an appeal may be taken in like manner and with like effect as in an
action.”
3
An “off-channel” reservoir is one that exists “outside a natural waterway,”
unlike an “on-channel” reservoir created by a dam or other impoundment within
the waterway. OAR 690-300-0010(31) (Feb 2012).
4
The certificates state that “[t]he right to store and use the water for the
above purpose is restricted to beneficial use at the place of use described” as the
reservoir location.
Cite as 329 Or App 568 (2023) 571
and from Bear Creek to irrigate specific lands described as
authorized places of use in the secondary certificate.
In 2016, relator began working with the OWRD and
the BLM to improve the reservoir and to store an additional
500 acre-feet of water for the purpose of supporting fish life.
Relator received grants and obtained new reservoir permits
and also obtained a separate secondary permit to release
that amount of stored water for that purpose.
Through negotiations, relator and the BLM agreed
that relator could have a temporary nonrenewable right-of-
way over federal land, which expires in December 2024, to
move the existing Bridge Creek POD from its current place-
ment on federal land to a new downstream location on rela-
tor’s own property.
In December 2021, relator submitted a permanent
water transfer application to the OWRD under ORS 540.510
to change the Bridge Creek POD for its storage water right
under Certificate 68553 and its permitted storage water
right. The OWRD accepted and processed the POD trans-
fer application for the permitted storage right under ORS
537.211(4) (addressing change of the point of diversion by
holder of a water right permit) but declined to process the
POD transfer application for the certificated storage water
right under Certificate 68553 without a loss of the priority
of the water right, stating that, under ORS 540.510(1), the
OWRD does not have the “authority to make POD changes
to R-rights for storage” established by water certificates.
Relator filed the instant petition for a peremptory
or alternative writ, seeking to compel the OWRD to consider
its application for a change in the POD. Relator also sought
a declaration clarifying the OWRD’s authority under ORS
540.510(1)(a) to allow changes in a POD and place of use in
a certificated water storage right under Certificate 68553
without loss of the existing priority of the right. On the par-
ties’ cross-motions for summary judgment, the trial court
granted relator’s motion, denied defendants’ motion, and
issued the peremptory writ. In granting relator’s motion for
summary judgment and denying defendants’ motion, the
trial court agreed with relator’s construction of the statutes:
572 Bridge Creek Ranch v. Water Resources Dept.
“The court finds that storage of water for different purposes
qualifies as ‘water use.’ As such, the right to store water
under a water certificate is a right to ‘water use established
by * * * a water certificate’ under ORS 540.505(4)(b). The
court also finds that OWRD has the authority to allow
transfers of point of diversion and point of use for certifi-
cated storage water rights under ORS 540.530.”
The peremptory writ of mandamus ordered the
OWRD to begin processing relator’s application for a trans-
fer of the POD on Certificate 68553 within seven days of
receiving a new and complete application. The OWRD has
tendered a certificate showing compliance with the writ, in
that it has begun to process relator’s application.
Defendants appeal.5 On appeal, defendants do not
ask us to stay the peremptory writ; they state that the OWRD
will process relator’s application in the ordinary course of
business. The parties agree, however, that this matter is not
moot, because, although the trial court’s judgment deter-
mined that the OWRD had authority to process relator’s
application, it did not direct that the application be granted.
Should the OWRD issue an order denying the application, it
is anticipated that relator will request a contested case hear-
ing. Should the OWRD issue an order granting the applica-
tion, it is anticipated that parties not currently involved in
this litigation will file protests and request a contested case
hearing, placing the OWRD’s authority to allow a transfer
of the POD for a certificated storage right directly at issue.
We agree with the parties that, for the reasons cited, the
matter is not moot, and we therefore undertake a review of
the petition.
In reviewing the trial court’s judgment, we con-
sider first the standard for issuance of a writ of mandamus
under ORS 34.110. A writ of mandamus may issue to an
agency “to compel the performance of an act which the law
specially enjoins.” ORS 34.110. The legal right to compel the
performance of the legal duty “must be plain and complete.”
5
WaterWatch of Oregon has filed an amicus brief is support of defendants’
appeal. The Oregon Water Utility Council, the League of Oregon Cities, the
Special Districts Association, the Oregon Farm Bureau Federation, and the
Oregon Association of Nurseries have filed amicus briefs in support of relator’s
response.
Cite as 329 Or App 568 (2023) 573
State ex rel Engweiler v. Felton, 350 Or 592, 628, 260 P3d
448 (2011) (quoting Florey v. Coleman, 114 Or 1, 2, 234 P
286 (1925)). See also United States of America v. Cohn, 201
Or 680, 684, 272 P2d 982 (1954) (“[N]o petitioner is enti-
tled to the remedy of mandamus unless he has a clear legal
right to the performance of the particular duty sought to be
enforced and unless there is a plain legal duty on the part
of the defendant to perform the act.”). Where, as here, the
trial court’s judgment as to the OWRD’s authority depends
on the construction of statutes, we review the judgment for
errors of law. See State ex rel Schrodt v. Jackson County, 262
Or App 437, 443, 324 P3d 615 (2014) (reviewing for legal
error trial court determination that mandamus procedure
was applicable).
The parties agree that the mandamus petition pre-
sented only a question of the statutory construction of the
water appropriation and water right transfer statutes, ORS
chapter 537; ORS 540.505 to 540.530, and whether those
statutes authorized the OWRD to consider an application to
allow the holder of a certificated water storage right to make
POD changes. The position of the OWRD is that, under ORS
540.510 and other relevant statutes, the OWRD is empow-
ered to entertain an application to transfer the POD for a
water right only from an applicant who holds a “water use
subject to transfer,” and that relator does not hold such a
water use. In the view of the OWRD, as defined in ORS
540.505,6 and based on statutory context, a certificated
water storage right is not a “water use subject to transfer.”
The OWRD postulates that a certificate for the storage of
water allows only appropriation and impoundment of water
for a subsequent use and is not in and of itself a “beneficial
use” or a water right that is established by a “water use.”
In relator’s view, the trial court correctly concluded
that the storage of water pursuant to Certificate 68553 is, in
and of itself, a water use that is subject to transfer, because
the issuance of the certificate depends on a showing of benefi-
cial use. Further, relator notes that the particular certificate
that it holds states that the water storage is a beneficial use.
6
ORS 540.505(4)(b) defines “water use subject to transfer” as a “water use
established by * * * [a] water right certificate.”
574 Bridge Creek Ranch v. Water Resources Dept.
We address the statutory construction issue raised
on appeal pursuant to the methodology set forth in State
v. Gaines, 346 Or 160, 171, 206 P3d 1042 (2009), and PGE
v. Bureau of Labor and Industries, 317 Or 606, 610, 859
P2d 1143 (1993), beginning with the texts of the relevant
statutes.
“All water within the state from all sources of water
supply belongs to the public.” ORS 537.110. ORS 537.120
provides:
“Subject to existing rights, and except as otherwise pro-
vided in ORS chapter 538, all waters within the state may
be appropriated for beneficial use, as provided in the Water
Rights Act and not otherwise; but nothing contained in the
Water Rights Act shall be so construed as to take away or
impair the vested right of any person to any water or to the
use of any water.”
“Beneficial use” is “the basis, the measure and the limit
of all rights to use of water in this state.” ORS 540.610(1);
Alexander v. Central Ore. Irrig. Dist., 19 Or App 452, 457, 528
P2d 582 (1974) (“[A]ctual application of water to a beneficial
use is the basis for recognized rights” under Oregon’s water
law.); see ORS 537.120 (water may be appropriated for a ben-
eficial use and not otherwise); ORS 537.250(3) (“Rights to
the use of water acquired under the provisions of the Water
Rights Act, as set forth in a certificate issued under this sec-
tion, shall continue in the owner thereof so long as the water
shall be applied to a beneficial use under and in accordance
with the terms of the certificate.”). See also OAR 690-300-
0010(5) (defining “beneficial use” as “the reasonably efficient
use of water without waste for a purpose consistent with the
laws, rules and the best interests of the people of the state”).
The acquisition of a water right in Oregon occurs in
two phases. In the first phase, a person must seek a permit
for a water right. By application for a permit, the person
applies for authorization to develop the source and begin
making beneficial use of water. ORS 537.130 provides:
“[A]ny person intending to acquire the right to the bene-
ficial use of any of the surface waters of this state shall,
before beginning construction, enlargement or extension of
any ditch, canal or other distributing or controlling works,
Cite as 329 Or App 568 (2023) 575
or performing any work in connection with the construc-
tion, or proposed appropriation, make an application to
the Water Resources Department for a permit to make the
appropriation.”
An application for a permit to appropriate water for
a beneficial use is made pursuant to ORS 537.140:
“(1)(a) Each application for a permit to appropriate
water shall be made to the Water Resources Department
on a form prescribed by the department and shall set forth:
“* * * * *
“(C) The nature and amount of the proposed use;
“* * * * *
“(d) If for construction of a reservoir, the application
shall give the height of dam, the capacity of the reservoir,
and the uses to be made of the impounded waters.”
If the OWRD determines that the water is available for
the requested beneficial use, the OWRD may issue a per-
mit. The permit begins the time during which the applicant
must “perfect” the water right, i.e., must develop the benefi-
cial use authorized by the permit so as to acquire a certifi-
cate. A permit may be amended to change the conditions of
the permit or the point of diversion. ORS 537.211(4), (5). A
water right that is permitted is treated under the statutes as
personal property and is subject to cancellation if not prop-
erly developed or used. ORS 537.260.
In the second phase, the permittee applies for
a water right certificate to appropriate water, which is
issued only after the beneficial use identified in the permit
is fully developed. A certificate to appropriate water may
be acquired and maintained only by “perfecting” and con-
tinuing an appropriation of water for beneficial use. ORS
537.250 provides:
“(1) After the Water Resources Department has
received a request for issuance of a water right certificate
accompanied by the survey required under ORS 537.230
that shows, to the satisfaction of the department, that an
appropriation has been perfected in accordance with the
provisions of the Water Rights Act, except as provided in
subsection (4) of this section, the department shall issue
576 Bridge Creek Ranch v. Water Resources Dept.
to the applicant a certificate of the same character as that
described in ORS 539.140. The certificate shall be recorded
and transmitted to the applicant as provided in that
section.
“* * * * *
“(3) Rights to the use of water acquired under the pro-
visions of the Water Rights Act, as set forth in a certifi-
cate issued under this section, shall continue in the owner
thereof so long as the water shall be applied to a beneficial
use under and in accordance with the terms of the certifi-
cate, subject only to loss:
“(a) By nonuse as specified and provided in ORS
540.610; or
“(b) As provided in ORS 537.297.”
A certificated water right is “vested,” meaning that
it is treated as an interest in real property. Green v. Wheeler,
254 Or 424, 430, 458 P2d 938 (1969), cert den, 397 US 990(1970) (explaining that the appropriative right vests with the
issuance of certificate). A certificated water right can only
be lost upon a showing of one of the circumstances described
in ORS 537.250(3)(a) or (b).
The acquisition of the right to store water is subject
to the same provisions as any other water right. See 46 Op
Atty Gen 290, 292-93 (1989) (“Since 1909, rights to appro-
priate water for storage have been acquired under the same
scheme as any other water right.”). ORS 537.4007 separately
7
ORS 537.400 provides, in relevant part:
“(1) All applications for reservoir permits shall be subject to the provi-
sions of ORS 537.130, 537.140, 537.142 and 537.145 to 537.240, except that an
enumeration of any lands proposed to be irrigated under the Water Rights
Act shall not be required in the primary permit. But the party proposing to
apply to a beneficial use the water stored in any such reservoir shall file an
application for permit, to be known as the secondary permit, in compliance
with the provisions of ORS 537.130, 537.140, 537.142 and 537.145 to 537.240.
The application [for the secondary permit] shall refer to the reservoir for
a supply of water and shall show by documentary evidence that an agree-
ment has been entered into with the owners of the reservoir for a sufficient
interest in the reservoir to impound enough water for the purposes set forth
in the application, that the applicant has provided notice of the application
to the operator of the reservoir and, if applicable, that an agreement has
been entered into with the entity delivering the stored water. When benefi-
cial use has been completed and perfected under the secondary permit, the
Water Resources Department shall take the proof of the water user under
Cite as 329 Or App 568 (2023) 577
addresses applications for reservoir permits, which are also
subject to the same provisions that govern other water right
permit applications. An applicant for a permit to store water
obtains a “primary water right,” which is defined as “the
water right designated by the Water Resources Commission
as the principal water supply for the authorized use, or if no
designation has been made, the water right designated by
the applicant as the principal water supply for the autho-
rized use.” ORS 540.505(2). A secondary permit must then be
sought for use of the water from the reservoir. ORS 537.400.8
The final certificate of appropriation issues only after the
beneficial use has been completed and perfected under the
secondary permit.
Thus, as OWRD states in its briefing to us,
“[t]he primary water right to store water is * * * inextri-
cably linked to the secondary permit to put the water to
beneficial use, with the reservoir right supplying the sup-
ply of water to be put to beneficial use under the secondary
permit. This is different from most permits to appropriate
water, which do not require a secondary permit to allow
beneficial use.
the permit. The final certificate of appropriation shall refer to both the ditch
described in the secondary permit and the reservoir described in the primary
permit.
“(2) Whenever application is made for permit to store water in a reservoir
or pond for any beneficial use which does not contemplate future diversion of
the stored water except by livestock drinking from stock water ponds, the
extent of utilization thereof may be included in the reservoir permit and no
secondary permit shall be required. However, in cases where water from a
stream is required to maintain a reservoir or pond by replacing evaporation
and seepage losses, or is required to maintain suitable fresh water conditions
for the proposed use and to prevent stagnation, the applicant for permit to
store water in such reservoir or pond shall also file an application for permit
to appropriate the waters of the stream.”
8
There are two circumstances in which a secondary permit is not required:
If the permit is sought “to store water in a reservoir or pond for any beneficial use
which does not contemplate future diversion of the stored water,” such as for use
as a scenic attraction, only a storage water permit is necessary. ORS 537.400(2).
Additionally, small reservoirs established before January 1, 1995, are presumed
to constitute a “beneficial use.” ORS 537.405(1) (“Reservoirs in existence on or
before January 1, 1995, that store less than 9.2 acre feet of water or with a dam
or impoundment structure less than 10 feet in height, are found to be a beneficial
use of the water resources of this state.”). But apart from those exceptions, the
diversion of water from storage must be pursuant to a separate application and
permit known as a “secondary permit.”
578 Bridge Creek Ranch v. Water Resources Dept.
“The permit allows the person intending to store
water to construct the necessary works but is not itself a
perfected water right. A water right is perfected when the
water is put to beneficial use, such as irrigation, as evi-
denced by a ‘final proof survey.’ OWRD then issues a water
right certificate. ORS 537.250.”
Here, the water is to be diverted from storage in the
reservoir for irrigation use. Thus, ORS 537.400(1) requires a
secondary permit for use of the water. The secondary permit
is also a prerequisite to the issuance of a certificate for the
reservoir:
“All applications for reservoir permits shall be subject to
the provisions of ORS 537.130, 537.140, 537.142 and 537.145
to 537.240, except that an enumeration of any lands pro-
posed to be irrigated under the Water Rights Act shall not
be required in the primary permit. But the party proposing
to apply to a beneficial use the water stored in any such res-
ervoir shall file an application for permit, to be known as
the secondary permit, in compliance with the provisions of
ORS 537.130, 537.140, 537.142 and 537.145 to 537.240. The
application shall refer to the reservoir for a supply of water
and shall show by documentary evidence that an agree-
ment has been entered into with the owners of the reservoir
for a sufficient interest in the reservoir to impound enough
water for the purposes set forth in the application, that the
applicant has provided notice of the application to the oper-
ator of the reservoir and, if applicable, that an agreement
has been entered into with the entity delivering the stored
water. When beneficial use has been completed and per-
fected under the secondary permit, the Water Resources
Department shall take the proof of the water user under
the permit. The final certificate of appropriation shall refer
to both the ditch described in the secondary permit and the
reservoir described in the primary permit.”
(Emphases added.) Relator’s predecessor happens to have
been the applicant for the secondary permit. The OWRD
issued to relator’s predecessor reservoir permit R-9896,
authorizing “the construction of Mitchell Ranch Reservoir
Enlargement and storage of water from Bear Creek and
Bridge Creek,” to be appropriated under a permit with a
priority date of October 17, 1983, which is not at issue in
this case. The OWRD subsequently issued two certificates
Cite as 329 Or App 568 (2023) 579
to relator’s predecessor for the storage of the water, confirm-
ing “the right to store the waters” of Bridge Creek and Bear
Creek, recorded as Certificates numbered 68551 and 68553.
The OWRD also issued a separate certificate to relator’s
predecessor confirming the right to use the water for irriga-
tion, recorded as Certificate number 68552.
Thus, three certificates were issued to relator’s pre-
decessor for the reservoir—two for water storage under the
primary permit and one for use of the stored water under
the secondary permit.
To change any element of a certificate, such as a
POD or type of use, the certificate holder must apply to the
OWRD under ORS 540.510(1). That statute provides that
“the holder of a water use subject to transfer may, upon com-
pliance with the provisions of ORS 540.520 and 540.530,
change the use and place of use, the point of diversion or
the use of the water without losing priority of the right.”
ORS 540.510(1)(a) (emphasis added); see ORS 540.520; OAR
690-380-3000 (Oct 6, 2006) (describing application require-
ments).9 An application submitted under ORS 540.510 “shall
be approved if [the OWRD] determines,” among other things,
that “[t]he water right affected by the proposed transfer is a
water use subject to transfer as defined in ORS 540.505(4)
and OAR 690-380-0100(14).” OAR 690-380-5000(1) (Oct 6,
2006);10 see id. (describing conditions for approval); ORS
540.530 (same).
9
We refer to the rules that were in effect when the application was filed.
10
OAR 690-380-5000 (Oct 6, 2006) provides:
“(1) A transfer application shall be approved if the Department deter-
mines that:
“(a) The water right affected by the proposed transfer is a water use sub-
ject to transfer as defined in ORS 540.505(4) and OAR 690-380-0100(14) and,
for a right described under 690-380-0100(14)(d), the proof of completion has
been approved under 690-380-6040;
“(b) The portion of the water right to be transferred is not cancelled pur-
suant to ORS 540.610;
“(c) The proposed transfer would not result in enlargement as defined in
OAR 690-380-0100(2);
“(d) Except as provided in OAR 690-380-5030, the proposed transfer
would not result in injury as defined in 690-380-0100(3); and
“(e) Any other requirements for water right transfers are met.”
580 Bridge Creek Ranch v. Water Resources Dept.
Here, as noted, relator submitted an application to
transfer the POD for Certificate 68553, which the OWRD
had issued to relator’s predecessor for storage at the res-
ervoir. And as noted, here, in response to relator’s appli-
cation to change a POD under ORS 540.510, the OWRD
returned the application without processing it, stating,
“The Department does not have the authority to make POD
changes to R-rights for storage.” The rationale provided by
the OWRD was that the water storage certificate was not a
water use subject to transfer.
The peremptory writ issued by the trial court directs
the OWRD to process relator’s application. The nub of the
dispute on appeal turns on whether relator has the right to
request (and OWRD has authority to process) a change in
the POD for Certificate 68553 under ORS 540.510(1), which
defines the process for seeking to change a water right cer-
tificate without losing priority of the right.11 ORS 540.510(1)
(a) provides in relevant part:
“(a) Except as provided in subsections (2) to (8) of this
section, all water used in this state for any purpose shall
remain appurtenant to the premises upon which it is used
and no change in use or place of use of any water for any
purpose may be made without compliance with the provi-
sions of ORS 540.520 and 540.530. However, the holder of
any water use subject to transfer may, upon compliance with
the provisions of ORS 540.520 and 540.530, change the use
and place of use, the point of diversion or the use of the water
without losing priority of the right.”
(Emphases added.) The holder of a “water use subject to
transfer” may change “the use and place of use, the point of
diversion or the use of the water” without a loss of priority.
ORS 540.510(1)(a).
Defendants point further to ORS 540.505(4), which
defines “water use subject to transfer,” as used in ORS
540.510(1):
11
The parties do not address, and we therefore do not consider, the issue of
OWRD’s “authority” to consider the application, as distinct from OWRD’s rejec-
tion of the application on its merits based on OWRD’s understanding that the
relevant statutes do not permit that type of change.
Cite as 329 Or App 568 (2023) 581
“ ‘Water use subject to transfer’ means a water use estab-
lished by:
“(a) An adjudication under ORS chapter 539 as evi-
denced by a court decree;
“(b) A water right certificate;
“(c) A water use permit for which a request for issuance
of a water right certificate under ORS 537.250 has been
received and approved by the Water Resources Commission
under ORS 537.250; or
“(d) A transfer application for which an order approv-
ing the change has been issued under ORS 540.530 and for
which proper proof of completion of the change has been
filed with the Water Resources Commission.”
(Emphasis added.) Defendants argue that storage is not a
use of water and that, therefore, taken together, the above
provisions demonstrate that holders of water storage certif-
icates do not, without a loss of priority, have the ability to
seek to transfer the place of use of storage or POD of water
and, further, that the OWRD does not have authority to con-
sider requests for such changes.
Relator responds that, as set forth in ORS 540.505(4)
(b), it holds a water use subject to transfer, because Certificate
68553 is a water right certificate. Defendants reply that
although Certificate 68553 is a water right certificate, it
does not constitute a water use subject to transfer, because,
under ORS 540.505(4), a “water use” is a reference to an
actual beneficial use of the water, and storage, with lim-
ited exceptions, does not constitute a beneficial use. See ORS
540.610(1) (all water rights in Oregon are based on beneficial
use of water); Teel Irrigation Dist. v. Water Resources Dept.,
323 Or 663, 667, 919 P3d 1172 (1996) (“The water right is
perfected when the water actually is put fully to a beneficial
use.”).12
12
The legislature has declared “certain important uses, including irriga-
tion,” to be beneficial. Hennings v. Water Res. Dept., 50 Or App 121, 125, 622 P2d
333 (1981) (citing ORS 536.300). Pursuant to OAR 690-300-0010(5), “beneficial
use” means “the reasonably efficient use of water without waste for a purpose
consistent with the laws, rules and the best interests of the people of the state.”
For example, for the purposes of statewide water policy, the OWRD defines “ben-
eficial use” as “an instream public use or a use of water for the benefit of an
appropriator for a purpose consistent with the laws and the economic and general
582 Bridge Creek Ranch v. Water Resources Dept.
The question whether water storage is, in and of
itself, a “use” of water was addressed many years ago by the
Supreme Court in Cookinham v. Lewis, 58 Or 484, 491-92,
114 P 88, reh’g denied, 58 Or 495, 115 P 342 (1911). There,
the court had before it a decision by the Oregon “Board of
Control” rejecting an application for a reservoir permit for
the purpose of reclamation of public desert land. In consid-
ering the statutory predecessor of ORS 537.400 in Oregon’s
Water Code, the court stated that the type of use that sup-
ports the issuance of a permit for water storage is not a “use
of water.” The court explained the distinction between a per-
mit for storage and one for the use of the stored water:
“The primary reservoir permit, provided for by [the Oregon
Water Code, Or Laws 1909 Section 58)], contemplates a
storage of the water in some locality where it can be uti-
lized for irrigation. The secondary permit contemplates
that users of the water shall acquire a permanent owner-
ship by agreement with the owner for a specified quantity
of the stored water for the needs of and use upon his land,
and when reclamation is contemplated the water becomes
appurtenant to his land. The Water Code makes a distinc-
tion between a permit for diversion of water and one to con-
struct a reservoir and store surplus water. The latter does
not include the right to divert and use such stored water,
which must be the subject of the secondary permit.”
58 Or at 491-92 (emphasis added). A permit for storage, in
and of itself, the court held, does not constitute or include
the right to use stored water; it is the secondary permit
that applies the water to beneficial use. Id. at 492; see also
welfare of the people of the state” that “includes, but is not limited to, domestic,
fish life, industrial, irrigation, mining, municipal, pollution abatement, power
development, recreation, stockwater and wildlife uses.” OAR 690-400-0010; see
also, e.g., ORS 537.142(2) (“The use of water for a salmon and trout enhancement
project * * * is a beneficial use[.]”); ORS 537.334(1) (“Public uses are beneficial
uses.”); see also ORS 536.300(1) (“The Water Resources Commission shall pro-
ceed as rapidly as possible to study: Existing water resources of this state; means
and methods of conserving and augmenting such water resources; existing and
contemplated needs and uses of water for domestic, municipal, irrigation, power
development, industrial, mining, recreation, wildlife, and fish life uses and for
pollution abatement, all of which are declared to be beneficial uses, and all other
related subjects, including drainage, reclamation, floodplains and reservoir
sites.”). See also Fort Vannoy Irrigation Dist. v. Water Resources Commission, 345
Or 56, 78, 188 P3d 277 (2008) (commenting that both ORS 540.520(8) and ORS
540.523(3) treat “beneficial use” and “water use [established by a water right
certificate]” as distinct).
Cite as 329 Or App 568 (2023) 583
Nevada Ditch Co v. Bennett, 30 Or 59, 89, 45 P 472 (1896)
(“An appropriation proper is not made until there has been
an actual application of the water claimed, to some benefi-
cial purpose, or some useful industry. All rights acquired
prior to this time, at whatsoever step in the process, amount
simply to a claim of an appropriation[.]”); 25 Op Atty Gen
206 (1951) (“Storage in and of itself is not a use. Storage
must be for a future purpose.”).
Relying on Cookinham, defendants contend that,
although there may be reservoir permits and certificates
that establish both a right to store and to use water, see ORS
537.400(2) (describing storage that does not “contemplate
future diversion of the stored water”), as a general rule, a
certificate for water storage does not itself constitute “water
use,” as that term is used in ORS 540.510. Because, in defen-
dants’ view, storage is not a “use,” nor is it, in defendants’
view, a “beneficial use;” thus, in defendant’s view, it cannot
be subject to a right to transfer.
We agree with defendants that a use subject to
transfer must be a beneficial use and that, with limited
exceptions, a beneficial use of stored water is established
not through the primary permit for storage but through the
secondary permit.
We nonetheless conclude that relator’s Certificate
68553 represents a water use subject to transfer under ORS
540.510. That is because whether Certificate 68553 rep-
resents a water use subject to transfer must be viewed in
the context of Certificate 68552, which, as required by ORS
540.400(1), was a prerequisite to the issuance of Certificate
68553 and which authorizes the use of water. As provided
in ORS 537.400, a certificate for storage is issued only when
beneficial use has been completed and perfected under the
secondary permit. And, as OWRD acknowledges, the two
are “inextricably linked.” “The final certificate of appropria-
tion shall refer to both the ditch described in the secondary
permit and the reservoir described in the primary permit.”
ORS 537.400. The holder of the storage certificate and the
holder of the certificate for use of the water together create
the appropriation and the beneficial use. See also Nevada
Ditch Co., 30 Or at 98 (addressing the relationship between
584 Bridge Creek Ranch v. Water Resources Dept.
the appropriator of water and the persons who put the
water to beneficial use and observing, “in whatever capacity
the parties to the appropriation may be considered,” both
were necessary to appropriate the water). In Fort Vannoy
Irrigation v. Water Resources Comm., 345 Or 56, 78, 188 P3d
277 (2008), the court said that the “terms and conditions”
of the certificate will dictate the use of the water. The use
permitted by Certificate 68553 can only be determined with
reference to Certificate 68552, which, conversely, depends
on Certificate 68553. Together, the two certificates refer to a
beneficial use of the water and, hence, to a water use subject
to transfer.
Defendants note that ORS 540.510(1)(b) provides
that the holder of a water right certificate authorizing stor-
age may change “the type of use” identified in the certificate
without losing priority:
“A holder of a water right certificate that authorizes the
storage of water may change the type of use identified in the
water right certificate, as described in subsection (1)(a) of
this section, without losing priority of the right.”
(Emphases added.) Defendants contend that ORS 540.510(1)(b)
demonstrates a legislative intention to limit the change that
can be made by the holder of a water right certificate for
storage to “type of use,” excluding the other types of changes
listed in ORS 540.510(1)(a), including the POD. In defen-
dants’ view, understanding a “water use subject to transfer”
to be capable of including a water right for storage would
render ORS 540.510(1)(b) superfluous, because the change
in “type of use” that it explicitly allows would already be
encompassed within ORS 540.510(1)(a).
Although the OWRD’s construction is a plausible
one, we reject it for several reasons. First, ORS 540.510(1)(b)
does not state that the holder of a water storage certificate
may change only the type of use. Additionally, a change to the
“type of use” permitted by ORS 540.510(1)(b), is not explic-
itly among the changes listed in ORS 540.510(1)(a). Thus,
textually, it is possible to understand ORS 540.510(1)(b)
to supplement the changes permitted in ORS 540.510(1)(a)
rather than to limit the rights of a holder of a water storage
certificate, as defendants contend. Under that construction,
Cite as 329 Or App 568 (2023) 585
ORS 540.510(1)(b) is not duplicative of ORS 540.510(1)(a) or
superfluous.
But beyond the text, the legislative history of ORS
540.510(1)(b) leads us to conclude that ORS 540.510(1)(b)
does not have strong bearing on the legislature’s intention
with respect to ORS 540.510(1)(a). The Supreme Court dis-
cussed the history of ORS 540.510 in Fort Vannoy Irrigation,
345 Or at 74-78. The court explained that a provision for the
change of the use, place of use, and point of diversion has
been a part of the Water Code since 1927. Id. at 75. The court
explained that, in 1991, the statute was amended to make
the right of transfer available only to the “owner of any cer-
tificated water right.” Id. (citing Or Laws 1991, ch 957, § 7(1))
(emphasis added). Then, in 1995, the legislature amended
ORS 540.510(1)(a) by deleting the phrase “owner of any cer-
tificated water right” and substituting the phrase “holder of
any water use subject to transfer.” Fort Vannoy Irrigation,
345 Or at 75; Or Laws 1995, ch 274, § 2. The legislature
also enacted a four-part definition of the phrase “water use
subject to transfer,” codified at ORS 540.505. Fort Vannoy
Irrigation, 345 Or at 76; Or Laws 1995, ch 274, § 1. The par-
ties agree that the amendments were intended to expand
the availability of changes beyond only the owner of a cer-
tificated water right, and that water storage certificates
were not expressly addressed. See Fort Vannoy Irrigation.,
345 Or at 75-77 (“[T]he legislature abandoned the exclusive
focus on certificated water rights in the 1991 version of ORS
540.510(1) by deleting the phrase ‘owner of any certificated
water right,’ substituting the phrase ‘holder of any water use
subject to transfer,’ and enacting a four-part definition of the
phrase ‘water use subject to transfer’ that extended beyond
certificated water rights.” The effect of the amendments was
to extend the transfer provision to “inchoate water rights”—
water rights that are not yet “vested,” because a certificate
has not yet been issued.).
The 1995 amendments made no specific mention
of water storage rights or certificates. But the amendments
led the OWRD to reevaluate the extent to which water stor-
age certificates could be changed without a loss in priority.
In 2018, the Oregon Department of Justice (DOJ) advised
586 Bridge Creek Ranch v. Water Resources Dept.
the OWRD that the storage of water is not a “use subject to
transfer,” as defined in ORS 540.505(4)(b), because it is not a
“use” of water. Thus, the DOJ advised the OWRD that water
storage is not a use that is eligible to be changed without a
loss of priority under ORS 540.510(1), and that the holder of
a water storage certificate could not make changes without
a loss of priority.
Then, in 2021, the Legislative Assembly enacted
ORS 540.510(1)(b), directly in response to DOJ’s opinion
and OWRD’s change in policy, to make explicit the right
of a water storage certificate holder to change the “type of
use,” the most commonly requested change. Or Laws 2021,
ch 633, § 1. Defendants contend that that amendment sup-
ports their conclusion that a water storage certificate holder
can change only the type of use without a loss of priority.
Of course, we recognize that various subsections
of a statute should be construed together. See Wetherell
v. Douglas County, 342 Or 666, 678, 160 P3d 614 (2007)
(explaining that the court should not look at one subsection
of a statute in a vacuum but should construe “each part
together with the other parts in an attempt to produce a
harmonious whole”). But, as the Supreme Court has said,
with the exception of statutory amendments that materially
change the text of an earlier statute, either explicitly or by
implication, State v. Ofodrinwa, 353 Or 507, 529-30, 300 P3d
154 (2013), a later legislature’s understanding of the mean-
ing of a previously enacted statute does not have bearing
on what that earlier statute means. See DeFazio v. WPPSS,
296 Or 550, 561, 679 P2d 1316 (1984) (explaining that “[t]
he views legislators have of existing law may shed light on
a new enactment, but it is of no weight in interpreting a
law enacted by their predecessors”). The legislature did not
amend subsection (1)(a) when it enacted subsection (1)(b) in
2021, and there is no necessary implication or indication in
the legislative history that the intention in the adoption of
subsection (1)(b) was to alter the meaning of subsection (1)(a).
We conclude that the enactment of subsection (1)(b) cannot
be viewed as expressing an intention to modify subsection
(1)(a). Thus, the legislature’s view that, in light of the DOJ’s
2018 construction of ORS 540.510(1)(a), it was necessary to
Cite as 329 Or App 568 (2023) 587
enact ORS 540.510(1)(b) to explicitly authorize changes in
the type of use of a water reservoir certificate does not weigh
in our construction of ORS 540.510(1)(a).
We conclude that, although, as the court held in
Cookinham, with certain exceptions not applicable here, the
storage of water in and of itself is not a “use” of water, when
considered in the context of the secondary permit, it can rep-
resent a water use subject to transfer. When the storage of
water under Certificate 68553 is considered, as it must be,
in the context of the use of water under Certificate 68552,
we agree with the trial court that relator’s Certificate 68553
establishes a “water use subject to transfer” in the sense con-
templated by ORS 540.510. We therefore conclude that the
trial court correctly determined that relator’s application for
a change in POD should be considered by the OWRD.
Affirmed.