ORS § 555.070
Upon withdrawal of the land by the Department of the Interior, the Water Resources Commission shall enter into a contract for the reclamation of such land with the person submitting the application, which contract shall contain plans and specifications of the proposed irrigation works; provided, that no contract shall be executed by the commission until after an examination by the commission concerning the feasibility of the proposed plan of reclamation, sufficiency and availability of the water supply, and reasonableness of the estimate of cost and the lien requested. The contract shall provide for the sale of the water right to settlers on the land in satisfaction of the reclamation lien allowed. This contract shall not be entered into on the part of the state until the withdrawal of the lands by the Department of the Interior and the filing of a satisfactory bond on the part of the proposed contractor, which bond shall be in a penal sum not less than two percent of the lien to be allowed, and shall be conditioned upon the faithful performance of the provisions of the contract with the state; provided, that in case the contractor is the irrigation district such bond need not be filed. The commission may, however, require the contractor to make a deposit at the time of application for entry of land by settlers to insure the transfer of the system in good condition and repair to the purchasers of water rights as herein provided, which deposit shall be returned by the commission at the time of such transfer.
ORS 555.070