Oregon’s First Tax on Water

Oregon Senator Doug Whitsett

April 26, 2009

Municipal water users pay a monthly fee to have pressurized water delivered to their home. Irrigators located in irrigation districts pay the district to deliver water to their property. All of these fees and charges are for the delivery of water rather than for its use. Other fees charged by the Oregon Water Resources Department (OWRD) are for specific purposes such as recording a water right, transferring the place of use of a water right, or changing the type of use allowed in a water right.

Senate Bill 740 creates a tax on water use. It provides for the OWRD to collect an annual $100 charge from the holder of each surface water or ground water right permit, certificate or limited license. In stream water rights are exempt from the tax. It provides OWRD authority to cancel or revoke any water right permit, certificate, or limited license for failure to pay the water tax. The bill provides that the tax money will be placed in a newly established Water Resources Department Water Right Operating Fund to provide for the payment of the program and administrative expenses of the Water Resources Commission and the Water Resources Department.

Legislative Counsel has opined that SB 740 creates a fee because the money derived is to be used only to operate the newly created Water Right Operating Fund. Using similar logic we could conclude that the gas tax is actually only a fee. The importance of the distinction is that a fee can be passed by a simple majority of both legislative chambers while a tax requires a three fifths majority vote. In my opinion, not withstanding legislative machinations, if it sounds like a tax on water, and if it looks like a tax on water, it most likely is a tax on the use of water.

SB 740 passed out of the Senate Committee on the Environment and Natural Resources chaired by Senator Dingfelder last Thursday on a party line vote. It has been referred to the Ways and Means subcommittee on Natural Resources for further consideration. That subcommittee is co-chaired by Senator Vicki Walker (D-Eugene) and Representative Bob Jenson (R-Pendleton). Do not hesitate to contact either of the Co-Chairs because both are thoughtful legislators who will listen to your concerns. Remember, if we don’t stand up for rural Oregon, no one will!

Senator Vicki Walker
(503) 986-1707
sen.vickiwalker@state.or.us

Representative Bob Jenson
(503) 986-1458
rep.bobjenson@state.or.us

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