Oregon is preparing another update to its exempt groundwater rules. In fall 2026, OWRD is beginning rulemaking for OAR Chapter 690, Divisions 300 and 340. The process is expected to address recent statutory changes, clarify how several common groundwater exemptions work, and better define expectations for water use that does not require a traditional water-right permit. Importantly, this rulemaking is still underway. Landowners should distinguish between laws that are already in effect and administrative rules that may still change during the process.
HB 3372 Has Already Changed Small-Garden Exemptions
One major change is already law. Beginning January 1, 2026, qualifying exempt groundwater use may include up to 3,000 gallons per day for watering a lawn, personal garden, or commercial garden of no more than one-half acre. When commercial-garden use is combined with another exempt industrial or commercial use, the total is capped at 5,000 gallons per day.
The exemption does not create a general agricultural irrigation right. The total garden or lawn irrigation area cannot exceed one-half acre under this exemption. Commercial crop irrigation beyond those limits generally requires another lawful water source or water-right authorization.
HB 3372 also contains additional restrictions involving cannabis and the Lower Umatilla Basin Groundwater Management Area. The commercial-garden exemption does not apply in that groundwater management area until January 2, 2028.
OWRD Plans to Clarify Domestic and Stockwater Exemptions
The upcoming Division 300 and 340 rulemaking is broader than small commercial gardens. OWRD says the anticipated scope includes clarification of the groundwater exemption for domestic purposes and the exemption for stockwater.
The Department also plans to align the rules with SB 85, which placed a 12,000 gallon-per-day limit on exempt stockwater use for certain new or expanding confined animal feeding operations. These issues can matter to farms and rural properties that rely on several exempt uses from the same groundwater source.
Exempt Water Use Is Still Subject to Beneficial Use Without Waste
Another issue specifically identified by OWRD is clarification that exempt groundwater use remains subject to the standard of beneficial use without waste. An exemption generally means a permit or certificate is not required for that specific use. It does not mean groundwater may be used without limitation or outside the conditions established by Oregon law.
This distinction is important for property owners who hear the phrase “exempt well” and assume the well itself is exempt from water regulation. In reality, Oregon law identifies specific uses that qualify for an exemption. The purpose, quantity, and circumstances of use still matter.
The Rulemaking Could Affect How Landowners Evaluate Existing Uses
OWRD held public open houses in May and June 2026 before deciding to separate exempt-use rulemaking from the broader water-distribution and enforcement rulemaking. The Department is now moving forward with Divisions 300 and 340 separately, with Rules Advisory Committee meetings anticipated during fall 2026.
Because the process is not complete, landowners should be cautious about treating preliminary discussions as final requirements. Proposed rules must still move through Oregon’s rulemaking process before becoming effective.
Review Exempt Uses Before Expanding a Property or Business
The current rulemaking makes this a good time for rural property owners, small farms, and businesses to review how groundwater is actually being used. A property may have domestic use, garden irrigation, stockwater, and commercial activities occurring from the same well, each with different limits or conditions.
Water Rights Pro can help evaluate whether an existing or proposed use fits an exemption, whether combined uses create a problem, and whether a permit, transfer, or other water-right approach should be considered instead. Reviewing the water demand before expanding a garden, farm, or business can be much simpler than addressing an unauthorized-use question afterward.