The House Committee on Agriculture, Land Use, Natural Resources, and Water convened on March 31, 2025, to discuss critical issues surrounding water rights fees and the operational challenges faced by the Department of Water Resources. The meeting focused on the proposed 135% increase in water rights transaction fees, a move that has sparked significant concern among stakeholders, particularly within the agricultural community.

The discussion began with an overview of the current fee structure, which has not kept pace with operational costs since a restructuring in 2009 aimed for a 50-50 funding split between fees and the general fund. Currently, the split stands at approximately 45% from fees and 55% from the general fund, indicating a reliance on general fund support that has grown over the years. The department's representative highlighted that past fee increases, including a 17% hike in 2021, were insufficient to maintain staffing levels, leading to a reduction of 6.3 full-time equivalents (FTE).

Several factors contributing to the proposed fee increase were outlined. These include inadequate past fee adjustments, rising labor costs due to collective bargaining agreements, a decrease in the number of water rights transactions, and the expiration of one-time funding from the American Rescue Plan Act (ARPA). The department emphasized that without the fee increase, they would face a significant staffing reduction of seven FTEs, which would exacerbate existing backlogs and extend processing times for water rights applications.

Committee members expressed mixed reactions to the proposed fee increase. Some, like Co-Chair Owens, questioned the rationale behind such a steep increase, noting that while fees have risen significantly over the years, the department still struggles to maintain adequate funding. Others, including Representative Levy, voiced strong opposition, arguing that the increase would place undue financial strain on farmers and potentially drive small family-owned farms out of business.

The meeting concluded with a call for further clarification on the necessity and scalability of the proposed fee increase, as committee members sought to balance the needs of the water rights program with the broader economic implications for the agricultural sector. The department committed to providing additional data to support its case for the fee increase, emphasizing the need for sustainable funding to ensure efficient processing of water rights applications and to address the ongoing backlog.

As the committee deliberates on this matter, the outcome will have significant implications for water management and agricultural practices in Oregon, highlighting the ongoing tension between funding needs and the economic realities faced by water users.