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Exempt Use Wells: Windfalls and Pitfalls of a Well-Worn Permitting Shortcut (Part One of Two)
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This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

By Caylin J. Barter, Attorney

This article originally appeared in the August 23 edition of the DJC Oregon. 

Exempt use wells can be a great option to get water where it’s needed without a permit, especially when other supplies aren’t readily available. An exempt use well might be a viable solution to provide household water for the summer cottage, stockwater for the tank on the back forty, or irrigation to keep the front lawn green. But these wells come with risks and benefits that a user would be well-served (pardon the pun) to understand before booking the local well driller. Over the next two months’ columns, we’ll explain the context and history of exempt use wells, identify where they are authorized and restricted, and explore current problems that may drive statutory changes in the future.
 
  1. Exempt use wells and Oregon’s Water Code

Under Oregon law, “all water within the state from all sources of water supply belongs to the public,” ORS 537.110, and “all waters within the state may be appropriated for beneficial use,” ORS 537.120. In order to establish a legal right to access this public supply for a “beneficial use” (municipal, irrigation, domestic, industrial, mining, etc.), all new water uses must comply with the Water Code, enacted in 1909, which requires users to apply for and fulfill the conditions of a permit in order to receive an authorized water right from the Oregon Water Resources Department (OWRD). Notably, groundwater was not subject to the permit system until the passage of the Groundwater Act of 1955, but even now, most new wells drilled in this state can pump without a permit. How? Because they qualify as “exempt use wells” (or “exempt wells,” as they are frequently and inaccurately called since it’s the water use that’s exempt from the permit system rather than the well itself).

Any exemption from the rigorous permitting system is noteworthy. Not only are water rights expensive to obtain and burdensome to maintain, but in many parts of the state where water supplies are overappropriated (meaning cumulative authorized water use exceeds available supply), no new water rights can be issued without retiring existing rights. So to be able to drill a well, pay a one-time $300 registration fee, mark the location on a map for OWRD’s records, and start pumping, is a significant and invaluable deviation from the usual constraints on new water use.
 
  1. Authorized exempt uses

Exempt use wells bypass the permit system that governs all other water use in the state. The policy basis is that these wells were originally intended to provide water for basic uses in areas where developed water infrastructure didn’t exist. In such cases, exempt use wells would be considered de minimis—trivial or insignificant—and therefore it would be unreasonable to subject them to the multi-step permitting process that could otherwise prevent their existence.

Exempt uses of groundwater are defined by statute at ORS 537.545 and include stockwatering; watering a lawn or noncommercial garden of 0.5 acres or less; domestic use not exceeding 15,000 gallons per day, and industrial or commercial purposes not exceeding 5,000 gallons per day. Most exempt use wells provide water for domestic purposes, usually in areas that don’t have easy access to municipal or surface water supplies.

Interestingly, while exempt use wells do not require users to apply to OWRD for a permit, exempt uses are treated just like permitted water rights when OWRD allocates water during times of shortage. Therefore, if water supply can’t meet full demand, newer exempt use wells can be regulated off in favor of older wells with water rights, and vice versa. This is the familiar “first in time, first in right” aspect of the prior appropriation doctrine in place throughout the western United States.
 
  1. Restrictions

Exempt uses are considered on a per-property basis (or per-development, in the case of group domestic use for more than one household), so while a single property can have more than one exempt use well on it, the total exempt use on the property cannot exceed the statutory limits. For example, a property might have three exempt use wells, but the total domestic use across all three cannot exceed 15,000 gallons per day. Consider the domestic restriction in context, though: if average household water use in Oregon is 113 gallons per day, an exempt use well could hypothetically supply as many as 132 homes.

Exempt use wells aren’t allowed everywhere. Minimum regulatory setbacks from septic systems, sewer lines, permanent structures, and underground storage tanks will preclude new wells in some areas. And in parts of the state designated as a Critical Groundwater Area (CGWA) due to persistent groundwater problems, new exempt use wells can be restricted or prohibited. For instance, in the Cooper-Bull Mountain CGWA in northern Washington County, exempt use wells that draw water from a basalt aquifer are limited to existing wells, and no new exempt use wells are permitted unless: (1) the tract served is at least 10 acres and the use is single-family domestic or stockwatering; or (2) an existing exempt well in the CGWA is abandoned. There are seven CGWAs scattered throughout Oregon, and more are likely in the future. Landowners should vet plans for a new exempt use well in advance, rather than investing in drilling a well that can’t legally be used.

Exempt use wells aren’t immune from other regulations that govern construction and operation standards. Well drillers must comply with a host of technical, legal, and health and safety regulations that are outside the scope of this article, so landowners are strongly discouraged from attempting to drill their own well. In addition, any exempt use well that supplies water for domestic use must be tested for water quality anytime the property is sold or transferred, and any well that supplies water to more than three households is considered a public water system and is subject to water quality regulations administered by the Oregon Health Authority.

Check back next month to learn about problems that are linked to the use—some would say, the overuse—of exempt use wells, as well as possible statutory changes that could change how the exemption works in the future.

Caylin J. Barter is a water and natural resources lawyer in the environmental practice group at Jordan Ramis PC. Contact her at caylin.barter@jordanramis.com or (503)598-7070.

The information contained in this article is for general interest and should not be regarded as legal advice. If you have questions, or to obtain more information on this topic, please contact an attorney in our environmental and natural resources practice group.