§ 537.348. Purchase, lease or gift of water right for conversion to in-stream water right; priority dates; split use (future operative version)

Note: The amendments to 537.348 by section 36, chapter 282, Oregon Laws 2025, become operative April 1, 2026. See section 48, chapter 282, Oregon Laws 2025, as amended by section 21c, chapter 575, Oregon Laws 2025. The text that is operative until April 1, 2026, is set forth for the user’s convenience.

1. (1) Any person may purchase or lease all or a portion of an existing water right or accept a gift of all or a portion of an existing water right for conversion to an in-stream water right. Any water right converted to an in-stream water right under this section shall retain the priority date of the water right purchased, leased or received as a gift. At the request of the person the Water Resources Commission shall issue a new certificate for the in-stream water right showing the original priority date of the purchased, gifted or leased water right. Except as provided in subsections (2) to (6) of this section, a person who transfers a water right by purchase, lease or gift under this subsection shall comply with the requirements for the transfer of a water right under ORS 540.505 to 540.586.
2. (2) Subject to subsections (3) to (6) of this section, any person who has an existing water right may lease all or a portion of the existing water right for use as an in-stream water right for a specified period without the loss of the original priority date. During the term of the lease, the use of the water right as an in-stream water right shall be considered a beneficial use. The term of the lease may not exceed five years. The term of the lease may be renewed. There is no limitation on the number of times that the lease may be renewed.

3. (3) A lease of all or a portion of an existing water right for use as an in-stream water right under subsection (2) of this section may allow the split use of the water between the existing water right and the in-stream water right during the same calendar year, provided:

   1. (a) The uses of the existing water right and the in-stream water right are not concurrent; and
   2. (b) The holders of the water rights measure and report to the Water Resources Department the use of the existing water right and the in-stream water right.
4. (4) A person who has an existing water right and wishes to lease the water right as described in subsection (2) of this section must file a request and obtain department approval of the lease. Upon receipt of the request, the department shall provide notice of the request by inclusion in the weekly notice published by the department. Any allegation of injury must be delivered to the department no later than 21 days after publication of the request in the weekly notice.
5. (5) After publishing notice of a request made under subsection (2) of this section and allowing time for the delivery of allegations of injury, the department shall issue an order approving the request if the department finds that the leasing of the water right for in-stream use can be effected without injury to other existing water rights or can be conditioned to prevent injury to other existing water rights. If the lease is for the split use of water between the existing water right and the in-stream water right during the same calendar year, the conditions imposed in the order approving the request must include, but need not be limited to, compliance with subsection (3) of this section.
6. (6) The department at any time may revoke or modify an order issued for a lease under subsection (2) of this section if the department determines that the use of the water right for in-stream use under the lease has resulted in or may result in injury to an existing water right.

Note: Sections 1 and 2, chapter 227, Oregon Laws 2025, provide:

Sec. 1. Temporary conversion to in-stream water right in Walla Walla basin; conditions for approval. (1) As used in this section:

(a) “District” has the meaning given that term in ORS 540.505.

(b) “Water use subject to transfer” has the meaning given that term in ORS 540.505.

(2) Notwithstanding ORS 537.348, the Water Resources Department may approve an application by a district that is wholly or partly within the Walla Walla basin to lease all or a portion of an existing water right for temporary conversion to an in-stream water right, by splitting the rate and duty of the water right between an existing use and in-stream use, if:

(a) The application demonstrates that:

(A) The water right is held in the name of the district;

(B) The water use is a water use subject to transfer;

(C) The existing use of the water under the water right is for irrigation; and

(D) The district has diverted the full rate of water allowed in the water right, and the full duty of water allowed in the water right, if applicable, beneficially and without waste at least once in the five years preceding the application; and

(b) The department determines that:

(A) Granting the lease will not cause injury to an existing water right;

(B) The district is in compliance with any applicable water use measurement or reporting requirements;

(C) The department has water use measurements for the water right for the five years preceding the application;

(D) The district has assisted the department with evaluating the acres within the district, using satellite imagery, and has provided relevant input and information to the department; and

(E) The district has filed affidavits to voluntarily cancel any acres that are subject to forfeiture under ORS 540.610.

(3) In reviewing an application under subsection (2) of this section, the department:

(a) Shall publish notice of the application in the weekly public notice published by the department and accept any allegations of injury for at least 21 days after publication of the notice.

(b) May not consider whether the lease will enlarge an existing water right.

(4) The terms of a lease under this section must provide that, during the term of the lease, the district:

(a) May not increase the number of acres that are irrigated within the district;

(b) May not increase the district’s consumptive use of water under all water rights held in the name of the district and the water right that is subject to the lease;

(c) May not increase the district’s use of supplemental water rights or storage water rights;

(d) Shall comply with a duty for the water right that the department assigns, if no duty otherwise applies to the water right; and

(e) Shall measure the district’s water use, above, below and at the point of diversion or points of rediversion and provide the measurements to the department in real time, to the satisfaction of the watermaster.

(5) At any point, if the department finds that a lease under this section causes injury to an existing water right:

(a) The department may terminate the lease; and

(b) If the lease is terminated pursuant to this subsection, the water use for the water right will revert to the terms of the original water right.

(6) The Water Resources Commission may adopt rules as needed to implement this section. [2025 c.227 §1]

Sec. 2. Section 1 of this 2025 Act is repealed on January 2, 2030. [2025 c.227 §2]