[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                        H.R. 2202 and H.R. 3223
=======================================================================

                          LEGISLATIVE HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              June 5, 2002

                               __________

                           Serial No. 107-121

                               __________

           Printed for the use of the Committee on Resources



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                         COMMITTEE ON RESOURCES

                    JAMES V. HANSEN, Utah, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,                   George Miller, California
  Vice Chairman                       Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana     Dale E. Kildee, Michigan
Jim Saxton, New Jersey               Peter A. DeFazio, Oregon
Elton Gallegly, California           Eni F.H. Faleomavaega, American 
John J. Duncan, Jr., Tennessee           Samoa
Joel Hefley, Colorado                Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland         Solomon P. Ortiz, Texas
Ken Calvert, California              Frank Pallone, Jr., New Jersey
Scott McInnis, Colorado              Calvin M. Dooley, California
Richard W. Pombo, California         Robert A. Underwood, Guam
Barbara Cubin, Wyoming               Adam Smith, Washington
George Radanovich, California        Donna M. Christensen, Virgin 
Walter B. Jones, Jr., North              Islands
    Carolina                         Ron Kind, Wisconsin
Mac Thornberry, Texas                Jay Inslee, Washington
Chris Cannon, Utah                   Grace F. Napolitano, California
John E. Peterson, Pennsylvania       Tom Udall, New Mexico
Bob Schaffer, Colorado               Mark Udall, Colorado
Jim Gibbons, Nevada                  Rush D. Holt, New Jersey
Mark E. Souder, Indiana              Anibal Acevedo-Vila, Puerto Rico
Greg Walden, Oregon                  Hilda L. Solis, California
Michael K. Simpson, Idaho            Brad Carson, Oklahoma
Thomas G. Tancredo, Colorado         Betty McCollum, Minnesota
J.D. Hayworth, Arizona
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana

                      Tim Stewart, Chief of Staff
           Lisa Pittman, Chief Counsel/Deputy Chief of Staff
                Steven T. Petersen, Deputy Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                 James H. Zoia, Democrat Staff Director
               Jeffrey P. Petrich, Democrat Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                   KEN CALVERT, California, Chairman
            ADAM SMITH, Washington, Ranking Democrat Member

 Richard W. Pombo, California        George Miller, California
George Radanovich, California        Peter A. DeFazio, Oregon
Greg Walden, Oregon,                 Calvin M. Dooley, California
  Vice Chairman                      Grace F. Napolitano, California
Michael K. Simpson, Idaho            Hilda L. Solis, California
J.D. Hayworth, Arizona               Brad Carson, Oklahoma
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
                                 

                           C O N T E N T S

                             ----------                              
                                                                   Page

Hearing held on June 5, 2002.....................................     1

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     1
        Prepared statement on H.R. 2202 and H.R. 3223............     2
    Rehberg, Hon. Dennis R., a Representative in Congress from 
      the State of Montana, Prepared statement on H.R. 2202......     3
    Udall, Hon. Tom, a Representative in Congress from the State 
      of New Mexico, Prepared statement on H.R. 3223.............     4

Statement of Witnesses:
    Birnbaum, S. Elizabeth, Director of Government Affairs, 
      American Rivers, Washington, DC............................    25
        Prepared statement on H.R. 2202..........................    26
    Keys, John W., Commissioner, Bureau of Reclamation, U.S. 
      Department of the Interior, Washington, DC.................     5
        Prepared statement on H.R. 2202..........................     6
        Prepared statement on H.R. 3223..........................    10
    Nypen, Jerry, Manager, Lower Yellowstone Irrigation Districts 
      No. 1 and No. 2, Savage Irrigation District, and Intake 
      Irrigation District, Sidney, Montana.......................    15
        Prepared statement on H.R. 2202..........................    17
    Vigil-Muniz, Claudia J., President, Jicarilla Apache Nation, 
      New Mexico.................................................    30
        Prepared statement on H.R. 3223..........................    32


   LEGISLATIVE HEARING ON H.R. 2202, TO CONVEY THE LOWER YELLOWSTONE 
 IRRIGATION PROJECT, THE SAVAGE UNIT OF THE PICK-SLOAN MISSOURI BASIN 
PROGRAM, AND THE INTAKE IRRIGATION PROJECT TO THE PERTINENT IRRIGATION 
 DISTRICTS; AND H.R. 3223, TO AUTHORIZE THE SECRETARY OF THE INTERIOR, 
 THROUGH THE BUREAU OF RECLAMATION, TO CONSTRUCT THE JICARILLA APACHE 
 NATION MUNICIPAL WATER DELIVERY AND WASTEWATER COLLECTION SYSTEMS IN 
            THE STATE OF NEW MEXICO, AND FOR OTHER PURPOSES.

                              ----------                              


                        Wednesday, June 5, 2002

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 2:06 p.m., in 
room 1334, Longworth House Office Building, Hon. Ken Calvert 
[Chairman of the Subcommittee] presiding.

STATEMENT OF THE HON. KEN CALVERT, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Calvert. The Subcommittee on Water and Power will come 
to order again. The Subcommittee meets today to hear testimony 
on two bills: H.R. 2202, to convey the Lower Yellowstone 
Irrigation Project, the Savage Unit of the Pick-Sloan Missouri 
Basin Program, and the Intake Irrigation Project of the 
pertinent irrigation districts; and H.R. 3223, to authorize the 
Secretary of Interior, through the Bureau of Reclamation, to 
construct the Jicarilla ApacheNation Municipal Water Delivery 
and Wastewater Collection Systems in the State of New Mexico, 
and for other purposes.
    Under Rule 4(b) of the Committee Rules, any oral opening 
statements at a hearing are limited to the Chairman and the 
Ranking Minority Member. If other members have statements, they 
can be included in the hearing record under unanimous consent.
    The subject of Federal facilities' title transfer has been 
of particular interest for this Committee and others throughout 
the West. Title transfer legislation not only represents a 
concerted effort to help shrink the Federal Government, but 
also transfer facilities into the hands of those who can more 
efficiently operate and maintain them.
    In early 1995, the Department of Interior announced that 
the Bureau of Reclamation would transfer title to a significant 
number of facilities to State and local Governments. Since that 
time, reclamation officials have been working through a self-
developed process to implement that concept. Over 10 title 
transfer bills have been signed into law since the commencement 
of this process. This program remains a high priority within 
the Subcommittee on Water and Power and something must be found 
to facilitate these transfers.
    H.R. 2202 directs the Secretary of Interior to convey the 
Lower Yellowstone Irrigation District Nos. 1 and 2 to Dawson 
and Richland Counties in the State of Montana. This legislation 
will also convey the Savage Unit and the Intake Irrigation 
Project to their respective irrigation districts upon payment 
of the district's share of construction costs for these 
projects. Although ownership of the project will change under 
this legislation, the bill still would require the Secretary to 
continue to provide power at a subsidized cost for the pumping 
operations.
    Although unrelated, the next bill we will hear today is 
very important, as it deals with delivering safe drinking water 
to people in need. While most of us take running water in our 
homes for granted, there are many areas in rural portions of 
the United States that do not have access to indoor plumbing or 
water supplies that meet safe drinking water standards.
    One example of this is found on the Jicarilla Apache 
Reservation in New Mexico. The existing piecemeal municipal 
water system on the Jicarilla Apache Reservation, which is 
owned by the Bureau of Indian Affairs, has deteriorated over 
the years due to a lack of capital improvements and 
maintenance.
    Mr. Calvert. H.R. 3223 will authorize the Secretary of 
Interior, through the Bureau of Reclamation, to work with 
Jicarilla ApacheNation to modernize the water delivery and 
wastewater collection infrastructures within the reservation. 
After construction of the project is finished, the Jicarilla 
ApacheNation will assume the annual operation, maintenance and 
replacement costs of this project.
    I certainly look forward to the witnesses that are here 
today.
    [The prepared statement of Mr. Calvert follows:]

 Statement of The Honorable Ken Calvert, a Representative in Congress 
                      from the State of California

    The subject of Federal facilities transfer has been of particular 
interest for this Committee and others throughout the west. Title 
transfer legislation not only represents a concerted effort to help 
shrink the Federal Government, but it also transfer's facilities into 
the hands of those who can more efficiently operate and maintain them. 
Although H.R. 2202 is the first bill of its kind in the 107th Congress, 
it is just one bill in a long line of title-transfer legislation that 
has been very successful in accomplishing it's goals.
    In early 1995, the Department of the Interior announced that 
Reclamation would transfer responsibility for a significant number of 
facilities to state and local government. Since that time, Reclamation 
officials have been working through a self-developed process to 
implement that concept. Over ten title transfer bills have been signed 
into law since the commencement of the Department of Interior's 
process. This program remains a high priority within Subcommittee on 
Water and Power and expeditious steps must be found to facilitate these 
transfers.
    Although unrelated, the next bill is very important as it deals 
with delivering safe drinking water to people in need. While most of us 
take running water in our homes for granted, there are many areas in 
rural portions of the U.S. that do not even have access to indoor 
plumbing or water supplies that meet safe drinking water standards. 
Large areas within the Jicarilla Apache reservation provide striking 
examples of these unsanitary conditions. The Federally-owned, piecemeal 
municipal water system on the Jicarilla Apache Reservation has 
deteriorated over the years due to lack of capital improvements and 
maintenance. This deterioration has led the wastewater system and 
sewage lagoons to operate at over 100% capacity during the summer 
months and over 500% capacity during the winter months releasing 
pollution into the groundwater and into the Amargo Creek.
    H.R. 3223 will authorize the Secretary of the Interior, through the 
Bureau of Reclamation, to work with the Jicarilla ApacheNation to 
modernize the water delivery and wastewater collection infrastructures 
within the Reservation. After the Bureau completes the project, the 
Jicarilla ApacheNation will assume the annual operation, maintenance, 
and replacement costs of this project.
    I look forward to hearing from the witnesses.
                                 ______
                                 
    Mr. Calvert. Now I would recognize the Ranking Minority 
Member or someone in his stead for their statement. We will 
have some other statements here shortly, so I will leave it at 
that.
    I would like to introduce the gentleman from Montana, Mr. 
Rehberg, the sponsor of H.R. 2202, and the gentleman, Mr. 
Udall, the sponsor of H.R. 3223.
    At this time, I would like to ask unanimous consent that 
Congressman Rehberg and Congressman Udall be permitted to sit 
at the dais. Without objection, so ordered.
    [The prepared statement of Mr. Rehberg follows:]

Statement of The Honorable Dennis Rehberg, a Representative in Congress 
                       from the State of Montana

    Thank you Chairman Calvert, for holding this hearing today. I am 
also grateful to the witnesses for joining us today to discuss the 
Lower Yellowstone Irrigation Project. I look forward to hearing your 
testimonies.
    As you will hear, the Lower Yellowstone Irrigation Projects' 
construction began in 1905; by 1946 over 50,000 acres of farmland were 
irrigated under the projects. Total construction cost was over $4 
million dollars, and by 1979 the water users had completed payments. 
Lower Yellowstone farms currently cover acreage exceeding 56,000 and 
yearly provide over $20 million dollars of stable revenue for the area.
    Over twenty years have passed since the last payment was made to 
the Bureau of Reclamation. Today environmental businesses streamlining 
is essential for success. This also holds true for irrigation projects. 
Currently, paperwork and overlapping bureaucracy are overwhelming the 
irrigation facilities. In spite of technical opposition, this title 
transfer has been encouraged by B.O.R.'s transfer mission statement, 
which reads, ``Transfer should occur for projects that are efficiently 
and effectively managed by non-Federal entities.''
    For the last six years over 500 Eastern Montana and Western North 
Dakota farms have been working with the Bureau of Reclamation toward 
this title transfer. The B.O.R.'s work is complete and we have the 
ability to reach an agreement that is mutually beneficial to all 
parties. The irrigation projects will still operate under state law, 
but will eliminate an unnecessary level of bureaucracy, while the 
Bureau of Reclamation will shed the oversight responsibility of an 
efficiently run project.
    Mr. Chairman, Jerry Nypen, Director of Lower Yellowstone, will also 
be submitting additional endorsements for the transfer of Lower 
Yellowstone Irrigation Projects. These include endorsements from: 
Montana Governor Judy Martz, Lower Yellowstone REA, Montana Water 
Resources Association, Richland County Commissioners, Richland Economic 
Development, Upper Missouri Water Association, and the Sidney Area 
Chamber of Commerce and Agriculture.
    Again, Mr. Chairman, I thank you for holding this hearing today.
                                 ______
                                 
    [The prepared statement of Mr. Tom Udall follows:]

Statement of The Honorable Tom Udall, a Representative in Congress from 
                        the State of New Mexico

    I appreciate the opportunity to speak to the Committee on my 
proposal that will improve the quality of safe and reliable municipal 
water and wastewater system to the Jicarilla ApacheNation.
    You will soon receive testimony from the President of the 
JicarillaNation who will discuss the importance of this project as well 
as the discussions she has had with the Bureau of Reclamation and other 
stakeholders involved in this very important project. I would like to 
thank all the members who are cosponsors and of this important 
legislation.
    Let me begin by saying that the passage of this legislation by our 
Committee and eventually the House of Representatives is paramount in 
addressing the critical public health issues for the tribe and north 
central New Mexico. For over two decades the current system, the Dulce 
municipal water system, has deteriorated due to a lack of funds and 
capital improvements made by the Federal trustee.
    Mr. Chairman, the Dulce municipal water system has not been in 
compliance with Federal safe drinking water standards. Nor compliance 
with theNational Pollutant Discharge standards. In fact BIA has been 
fined for its non-compliance several times. In addition, the EPA has 
also listed the water system on the reservation as the third worst 
system in EPA Region 6. The failure by the Federal government in its 
trust obligation over the years has led to these terrible conditions 
and is the reason we are here today.
    During the 106th Congress legislation was enacted (P.L. 106-243) 
authorizing the Bureau of Reclamation to conduct a feasibility study on 
rehabilitating the Federally owned water distribution and wastewater 
system on the Reservation. The legislation also directed the Secretary 
of Interior to report the findings and recommendations to the Congress 
within one year. President Vigil-Muniz will touch on those findings in 
a moment and you will see the need for action on the municipal water 
and wastewater systems. You will also see that the JicarillaNation has 
invested over $14.6 million in their efforts to improve the quality of 
its municipal water and wastewater system. The Jicarilla's investment 
of over $14.6 million is roughly 25% over the total project cost. Now 
is the time for the Federal government to participate.
    Let me be clear when I say that the lack of investment and 
rehabilitation in the municipal water system constructed by the BIA in 
the 1920's and expanded in the 1960's has led to the delivery of 
inadequate water to the residents of the reservation and surrounding 
communities. Until this legislation is approved and project is 
completed the future of tribal development including additional 
housing, schools, medical facilities, and elderly care facilities, 
cannot be built.
    We have a Federal obligation and responsibility to improve the 
deficient Federally owned water system. I appreciate your support Mr. 
Chairman in allowing this hearing to take place today. At the 
completion of today's hearing I look forward to working with you and 
the Committee staff to prepare this legislation for consideration by 
our Committee and approval by the House.
                                 ______
                                 
    With that, I would like to introduce our first panel of 
witnesses. Our first panel is the Honorable John W. Keys, 
Commissioner, Bureau of Reclamation, U.S. Department of 
Interior.
    Mr. Keys, if you would like to come forward.
    Let me remind the witnesses that we're under Committee 
Rules, and please limit your opening remarks to 5 minutes, and 
certainly your entire opening statement will be included in the 
record. It, certainly, will allow us to have some questions.
    Again, we welcome our Commissioner, and you are doing a 
fine job, and you are recognized for your opening statement.

STATEMENT OF JOHN W. KEYS, COMMISSIONER, BUREAU OF RECLAMATION, 
       U.S. DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.

    Mr. Keys. Mr. Chairman, it is a pleasure to be here. Would 
you like me to do both statements at the same time or would you 
like to do one and then go to the other?
    Mr. Calvert. If there is no objection, let us do both at 
the same time to save some time.
    Thank you.
    Mr. Keys. Mr. Chairman, it is a pleasure to be here and 
give the Administration's views on H.R. 2202, first, the Lower 
Yellowstone Reclamation Project Conveyance Act. I would ask, 
certainly, that my full statement be made part of the record 
for this hearing.
    Mr. Calvert. Without objection, so ordered.
    Mr. Keys. Mr. Chairman, H.R. 2202 directs the Secretary of 
the Interior to transfer title of the Lower Yellowstone 
Irrigation Project, the Savage Unit of the Pick-Sloan Missouri 
Basin Program, and the Intake Irrigation Project to the 
respective irrigation districts.
    In October 1999 and March of 2000, Reclamation testified 
before Congress on proposals somewhat similar to H.R. 2202. In 
both cases, Reclamation strongly opposed the legislation 
because of issues with the delivery of Pick-Sloan Missouri 
Basin Power to a non-Federal project, and the fish and wildlife 
mitigation involved and a number of other unresolved issues.
    While some progress has been made on a few of these issues 
significant concerns remain. As presently drafted, the 
Department of Interior opposes passage of H.R. 2202. I would 
like to discuss a few of the more important issues with you at 
this time.
    Section 4(2) of H.R. 2202 requires that the Secretary 
continue to provide the districts Pick-Sloan Missouri Basin 
Project Use Power at rates established for districts with 
Federal contracts, even though the facilities would no longer 
be owned by the Federal Government after transfer.
    Reclamation is very concerned about the action and the 
precedent of providing non-Federal irrigation projects with 
subsidized electricity intended for the use by Federal 
projects. While the legislation proposes to eliminate the 
adjustment to the rate based upon ability to pay, the rate to 
be paid would still be subsidized by the preference power 
customers, since it is significantly less than wholesale Pick-
Sloan Missouri Basin Project preference customer rates.
    This discrepancy is amplified when you consider wheeled 
cost. The 1944 Flood Control Act requires that that power for 
project use be delivered directly to the major pumping plants. 
This project use power is delivered over non-Federal 
transmission lines, and the Federal Government currently has to 
pay the wheeling cost for the deliveries.
    For both the Lower Yellowstone and Savage Irrigation 
Districts, the cost of wheeling exceeds the cost of the energy. 
Payments for both of these deliveries are made by the Western 
Area Power Administration. The costs are then included in the 
Pick-Sloan Missouri Basin Project power rate which results in 
preference power customers subsidizing the wheeling costs. We 
are extremely concerned about this use of Federal power.
    There are significant fishery issues that must also be 
addressed in the Yellowstone River before title transfer can 
occur. The Lower Yellowstone River has been identified as a 
priority recovery area for pallid sturgeon, and the Intake 
Diversion Dam has been identified by the State of Montana as a 
barrier to the sturgeon's migration and spawning habitat. The 
State of Montana is also concerned about protection of the 
sauger, another native fish species.
    Section 5 of H.R. 2202 would require Interior to provide 
fish protection facilities or streams to prevent fish from 
entering the project's main canal. It would also require the 
Secretary to provide a monitoring program for a minimum of 2 
years after construction. We recommend that this continued 
Federal oversight and obligation be deleted from the 
legislation, since one of the benefits of title transfer is to 
relieve the United States of both liability and management 
responsibility of the facilities after the title is 
transferred.
    One other issue of concern is the price and valuation of 
withdrawn lands that would be transferred. The price tag 
proposed, which is the ``value of the remaining repayment 
obligation for the Savage Irrigation District,'' does not 
reflect a complete analysis of project facilities' valuation. 
The withdrawn lands are not included in the allocation of costs 
that are paid by the districts under the contracts.
    Mr. Chairman, there are several other technical issues that 
must be addressed on the bill, and we would certainly be glad 
to work with staff to make the necessary corrections for those 
technicalities.
    That concludes the statement on H.R. 2202.
    [The prepared statement of Mr. Keys on H.R. 2202 follows:]

 Statement of John W. Keys, III, Commissioner, Bureau of Reclamation, 
             U.S. Department of the Interior, on H.R. 2202

    Mr. Chairman, my name is John Keys. I am Commissioner of the U.S. 
Bureau of Reclamation. I am pleased to provide the Administration's 
views on H.R. 2202, the Lower Yellowstone Reclamation Project 
Conveyance Act.
Status and Update on Title Transfer Efforts
    Before I get to our comments on H.R. 2202, I would like to give the 
Subcommittee an update on Reclamation's title transfer activities.
    Since 1996, the Bureau of Reclamation has transferred title to 
twelve (12) projects or parts of projects--pursuant to various Acts of 
Congress. By the end of the 106th Congress, Reclamation was given 
authority to transfer title to ten (10) projects or parts of projects. 
Since each project is unique, each of the laws enacted by Congress has 
different terms and each requires that different actions--such as the 
completion of the process under theNational Environmental Policy Act 
(NEPA), or agreements with State and local agencies over recreation or 
cultural resources management--be taken prior to transfer. I am pleased 
to say that Reclamation has been moving very diligently to implement 
each of these laws. Since May 2001, Reclamation has transferred five 
(5) projects, or parts of projects, all of which were authorized by the 
end of the 106th Congress.
These are:
    1) LClear Creek Distribution System of the Central Valley Project 
(May 31, 2001)
    2) LPalmetto Bend Project in Texas (June 26, 2001)
    3) LGriffith Project in Nevada (July 3, 2001)
    4) LNampa Meridian facilities of the Boise Project in Idaho (July 
13, 2001)
    5) LCarlsbad Project lands and facilities in New Mexico (July 18, 
2001).
    It is important to note that each of these transfers were completed 
on time or ahead of schedule and all within the budgets that were 
estimated when we started. I am very pleased with the effort and 
priority that our staff has given to completing these transfers in a 
timely and cost effective way. I would also like to commend the hard 
work and cooperation we have received from the water districts and 
entities who have been the recipients of these facilities as well as 
the other stakeholders who have been involved.
    In each of these successful cases above, a great deal of the work 
necessary to complete the transfer was begun often by the receiving 
entities in cooperation with Reclamation prior to the legislation's 
enactment into law. This gave us an important head start and allowed us 
to recognize and address potential problems in the legislation. In 
other cases where title has not yet been transferred, limited work on 
environmental compliance and consultation began prior to enactment. In 
many of those situations, some difficult and sometimes unforeseen 
issues arose or existed and must be worked through. We are, however, 
committed to doing that in a timely fashion.
    While we have made a great deal of progress and have had much 
success with title transfer, I remain concerned that the process for 
completing title transfers takes too long. As such, we have begun a 
comprehensive review of the Framework the document that guides our 
title transfer efforts as well as the transfer process, to find ways to 
make it more efficient and cost effective. We plan to solicit the views 
and ideas of our own staff who have been involved in the various 
transfers, our water user customers and other stakeholders. We also 
plan to seek the views and ideas of the members and staff of this 
Committee and the Congress who have been involved. The goal of this 
effort is to help us to see what worked well, what should be changed 
and how things might be improved.
H.R. 2202--Lower Yellowstone Reclamation Project Conveyance Act
    At this point Mr. Chairman, I would like to turn to H.R. 2202, the 
Lower Yellowstone Reclamation Project Conveyance Act which directs the 
Secretary of the Interior to transfer title of the Lower Yellowstone 
Irrigation Project, the Savage Unit of the Pick-Sloan Missouri Basin 
Program (PSMBP), and the Intake Irrigation Project to the respective 
irrigation districts.
    In October 1999, and again in March 2000, Reclamation testified 
before Congress on proposals somewhat similar to H.R. 2202. In both 
cases, Reclamation strongly opposed the legislation as premature since 
significant issues related to the delivery of Pick Sloan Missouri Basin 
Program power, fish and wildlife mitigation and a number of other 
issues remained unresolved. Since that time, Reclamation has worked 
closely with the districts, the State of Montana and the U.S. Fish and 
Wildlife Service on a number of these issues. Some progress has been 
made and some changes have been incorporated into the legislation to 
reflect that progress. Unfortunately however, significant concerns 
remain. Therefore, as presently drafted, the Department of the Interior 
opposes H.R. 2202.
    I would like to address, for the Subcommittee, the issues and 
concerns that have been raised and to identify a number of technical 
issues for the Committee's consideration.
    Delivery of Project Use Power After Transfer: Section 4(c) of H.R. 
2202 requires that the Secretary continue to provide the districts with 
Pick Sloan Missouri Basin Project Use Power at rates established for 
entities with Federal contracts for irrigation pumping after transfer, 
even though the facilities are no longer owned by the Federal 
government. Reclamation, as well as many of the Pick Sloan system 
preference power customers are very concerned about the efficacy of 
this action as well as the precedent of providing non-Federal 
irrigation projects with subsidized electricity intended for use by the 
beneficiaries of Federal projects. While the legislation proposes to 
eliminate the adjustment to the rate based upon their ability-to-pay, 
as drafted the rate paid would still be subsidized by the preference 
power customers, as it is significantly less than the wholesale PSMBP 
preference customer rates. The discrepancy is amplified especially when 
wheeling costs are considered. The 1944 Flood Control Act requires that 
PSMBP deliver project use power directly to the major project pumping 
plants. This has been interpreted to mean that when Federal 
transmission lines are not available to the major pumping plants and 
the project use power is wheeled to the major pumping plants over non-
Federal transmission lines, the PSMBP, through the power repayment 
study is responsible for these ``in lieu``costs. The cost of this 
wheeling significantly increased with deregulation of the wholesale 
power market. Presently, the Federal Government is paying wheeling 
costs to the Lower Yellowstone Rural Electric Association, the rural 
electric cooperative serving the Lower Yellowstone and Savage 
Irrigation Districts. For both the Lower Yellowstone Irrigation 
District and Savage Irrigation District the cost of wheeling exceeds 
the cost of the energy. The minimum annual wheeling cost for Lower 
Yellowstone Irrigation District is $42,600 and the minimum annual 
wheeling cost for Savage Irrigation District is $76,600. Both of these 
payments are made by Western Area Power Administration and the costs 
are then incorporated into the PSMBP Power Repayment Study. This 
results in the preference power customers subsidizing most of the 
wheeling costs. While I appreciate the districts' efforts to move this 
forward, serious concerns remain.
    Yellowstone Fisheries Protection: There are significant fishery 
issues that need to be addressed in this basin before title transfer 
can occur. The lower Yellowstone River has been identified by the Fish 
and Wildlife Service's Recovery Plan as a priority recovery area for 
pallid sturgeon, and the Intake Diversion Dam has been identified as a 
barrier to pallid sturgeon migration and spawning habitat. In addition, 
the State of Montana is concerned about protection of the sauger, a 
native fish species.
    Section 5 of H.R. 2202 would require the Secretary to provide fish 
protection devices to prevent fish from entering the project's main 
canal. It would also require the Secretary to establish a monitoring 
plan for a minimum of two years following construction. We recommend 
that this continued Federal oversight and obligation be deleted from 
the legislation since one of the benefits of title transfer is to 
relieve the United States of both liability and management 
responsibility for the facilities.
    Price and Valuation: The Administration is concerned that the 
payment for the lands and facilities proposed in H.R. 2202 does not 
protect the financial interests of the taxpayers of the United States 
who made substantial investment in this project. The price tag 
proposed, which is the ``value of the remaining repayment obligation 
for the Savage Irrigation District,'' does not reflect a complete 
analysis of the valuation for the Lower Yellowstone Project. In 
particular, it must consider the value of the withdrawn lands, which 
would be transferred under H.R. 2202, but are not included in the 
allocation of costs that are paid by the districts in their contracts.
Technical Issues
    In addition to the items raised above, we have also identified 
several technical issues that should be addressed:
    Mineral Rights: It is unclear whether the legislation, as drafted, 
intends for any associated mineral rights to be transferred. If mineral 
rights are to be transferred, an analysis of the value of that mineral 
right would need to be prepared and paid to protect the financial 
interest of the taxpayers of the United States. In most cases, 
especially in those situations where the acquisition of mineral rights 
were not included when the project lands were acquired, the mineral 
rights remain in Federal ownership. If that is the intent, then we 
suggest the following addition to Section3(a):
        ``Conveyance of all lands herein described shall be subject to 
        a reservation by the United States reserving all minerals of 
        any nature whatsoever, excluding sand and gravel, and subject 
        to oil, gas, and other mineral rights heretofore reserved of 
        record by or in favor of third parties. Conveyance of the lands 
        herein described is also subject to permits, licenses, leases, 
        rights-of-use, or rights-of-way of record outstanding in third 
        parties on, over, or across said lands or facilities.''
    Clarify Existing Ownership in Section 3(a)(2): This sentence needs 
to be clarified to make clear that it is the Federally owned project 
lands that are being conveyed by this subsection. We suggest the 
following clarification:
        ``...convey to the respective irrigation districts by quitclaim 
        deed all fee ownership lands, easements, and rights-of-way the 
        United States possess which are used in connection with the 
        projects.''
    Documents: Section 3(c) requires that all original documents 
associated with the Project be provided to the districts. It is the 
longstanding policy of the United States that all original documents 
are the property of the United States and should remain so after title 
transfer. It is appropriate, however, that all relevant records be made 
available to the district to reproduce. As such, we suggest that 
Section 3(c) be modified to read as follows:
        ``The Secretary shall make available to the irrigation 
        districts all patents, land deeds, court proceedings, water 
        right abstracts, contracts, special use permits, licenses, 
        permits, and any other documents of the projects executed on 
        behalf of the Secretary. The irrigation districts may copy such 
        records at their sole time and expense, however, all original 
        project records will be retained by the United States.''
    Withdrawal Revocation Section 3(b)(3)(B): After the first 
semicolon, the word Section was omitted. The clause should read:
        ``and lot 7 of Sec. 28, T.152N., R.104W.;''
    Payment as Condition of Transfer: Sections 3(d)(1) and 3(d)(2) need 
to be made clear that payments by the Savage Irrigation District and 
the Pick Sloan Missouri Basin Program beneficiaries are a condition of 
transfer. As drafted, this section requires that the Secretary accept 
the payment, but there is no clear linkage between the receipt of 
payment and transfer of these facilities. In both 3(d)(1) and 3(d)(2), 
the legislation should be modified to read
        ``As a condition of transfer, the Secretary shall receive...``
    Payments To Be Made: Section 3(d)(1) and 3(d)(2) authorize that 
payments be made to fulfill the contractual obligations of the District 
and of the PSMBP power beneficiaries respectively. It is our 
understanding that they would repay the present value, rather than the 
current value, which have potentially different meanings. As such, we 
suggest that the term present value be substituted for the term current 
value in both instances.
    Power Assistance Payments: The dollar amounts of the aid-to-
irrigation payment obligation reflected in H.R. 2202 should be reduced 
from $667,702 to $615,693 to reflect the current amount of aid-to-
irrigation scheduled for the Savage Unit.
    Contract Citation: The contract identified in Section 3(d)(1) has 
expired and has not been renewed. Savage Irrigation District has been 
operating under an interim contracts. We suggest that Section 3(d)(1) 
be revised to read:
        ``As a condition of transfer, the Secretary shall receive an 
        amount from the Savage Irrigation District equal to the present 
        value of the remaining water supply repayment obligation of 
        $52,680 as full payment...''
    Power Customer Payment: It is our understanding that the Savage 
Irrigation District has not reached agreement with Western Area Power 
Administration's Firm Power customers on payment of aid-to-irrigation 
upon title transfer. That should probably be completed before this 
legislation is enacted and that agreement should be reflected in the 
legislation. We also suggest that H.R. 2202 be modified to more 
accurately reflect how the aid-to-irrigation would be repaid and that 
this payment reflects the full and complete aid-to-irrigation 
assistance for this unit. This will also make H.R. 2202 consistent with 
previously adopted title transfer legislation:
        ``Out of the receipts from the sale of power from the Pick-
        Sloan Missouri Basin Program collected by the Western Area 
        Power Administration and deposited into the Reclamation Fund of 
        the U.S. Treasury in the fiscal year in which this Act becomes 
        law, the amount established by this Act as payment for aid-to-
        irrigation shall be treated as full and complete payment by the 
        power customers of all aid to irrigation associated with the 
        facilities of the Savage Unit.''
    Conservation Easement: It is our understanding that there is 
agreement between the parties on the conservation easement referenced 
in Section 4(b). Therefore, we suggest inserting ``has been'' and 
deleting ``as``in the last paragraph as follows: has been mutually 
agreed upon by...``
    In closing, let me say that Reclamation continues to work with the 
districts and the states of Montana and North Dakota on this title 
transfer. The major issues of concern related to project power and fish 
screens are difficult ones. But, we are interested in continuing our 
work with this Committee, the districts, Congressman Rehberg and the 
Montana delegation to see if creative solutions can be identified.
    That concludes my statement, I would be happy to answer any 
questions.
                                 ______
                                 
    Mr. Keys. The other proposed legislation I would like to 
talk about today is H.R. 3223, the Jicarilla Apache Reservation 
Municipal Water System Act.
    The Department supports efforts to secure a safe and 
reliable water supply system for the Jicarilla ApacheNation. We 
recognize that the existing water systems on the reservation at 
Dulce, New Mexico, are old, in bad repair, inadequately sized 
for the current population and do not always meet Clean Water 
Act standards. The Jicarilla ApacheNation has an urgent and 
immediate need for additional housing, schools, elderly 
housing, medical and other facilities which cannot be built 
until adequate municipal water supply is available.
    I would emphasize, and emphasize heavily, that Reclamation 
wants to work with the Jicarilla ApacheNation to help solve the 
problem. However, we cannot support H.R. 3223, as it is 
currently written, for the following reasons:
    H.R. 3223, as introduced, would require 100-percent Federal 
funding for the estimated $45 million in remaining construction 
costs. We feel that a more equitable level of cost sharing with 
the benefiting entity is desirable. H.R. 3223 places 
unnecessary restraints on the Secretary of Interior's 
flexibility to manage the budget and would place enormous 
strain on the existing funding available to the Bureau of 
Reclamation.
    The ultimate responsibility for long-term operation, 
maintenance and replacement of project facilities is not clear, 
with potentially conflicting requirements presented in various 
sections of the bill. The Department believes that this 
responsibility and that of obtaining rights of way should be 
clearly and explicitly defined within this bill. We believe 
these responsibilities should be assigned to the Jicarilla 
ApacheNation. This recommendation would be consistent with the 
expressed desire by theNation to own, operate, and maintain the 
new facilities.
    Mr. Chairman, the report defined in Section 3(5) of H.R. 
3223 has not yet been approved by the Office of Management and 
Budget and should, therefore, be considered only as supporting 
documentation. We would be happy to work with the sponsor and 
the Committee to address these concerns.
    Mr. Chairman, that concludes my oral statement on both of 
these bills, and I would certainly respond to any questions 
that you or your panel may have.
    [The prepared statement of Mr. Keys on H.R. 3223 follows:]

 Statement of John W. Keys, III, Commissioner, Bureau of Reclamation, 
             U.S. Department of the Interior, on H.R. 3223

    Mr. Chairman and members of the Subcommittee, my name is John Keys. 
I am Commissioner of the Bureau of Reclamation. Thank you for the 
opportunity to appear today to present the Department of the Interior's 
views on H.R. 3223, the Jicarilla Apache Reservation Municipal Water 
System Act.
    The Department supports efforts to secure a safe and reliable water 
supply system for the Jicarilla ApacheNation. We recognize that the 
existing water systems on the reservation at Dulce, New Mexico, are 
old, in bad repair, inadequately sized for the current population, and 
do not always meet Clean Water Act standards. The Jicarilla 
ApacheNation has an urgent and immediate need for additional housing, 
schools, elderly housing, medical and other facilities, which cannot be 
built until adequate municipal water systems are available. However, we 
cannot support H.R. 3223 as it is currently written for the following 
reasons:
    H.R. 3223, as introduced, would require 100 percent Federal funding 
for the estimated $45 million in remaining construction costs. A more 
equitable level of cost sharing with the non-tribal beneficiaries is 
necessary, in accordance with current Reclamation policy. H.R. 3223 
places unnecessary restraints on the Secretary of the Interior's 
flexibility to manage the budget, and would place an enormous strain on 
the existing funding.
    H.R. 3223 is unclear regarding the roles and responsibilities for 
the planning, design, and construction of the Project. We recommend 
that the Secretary be authorized to design and construct the Project by 
entering into agreements and contracts as requested by theNation in 
accordance with the Indian Self-Determination Act (Public Law 93-638; 
25 USC 450).
    The ultimate responsibility for long-term operation, maintenance 
and replacement of project facilities is not clear, with potentially 
conflicting requirements presented in various sections of H.R. 3223. 
The Department believes that this responsibility, and that of obtaining 
rights-of-way, should be clearly and explicitly defined within this 
bill. We believe these responsibilities should be assigned to the 
Jicarilla ApacheNation. This recommendation would be consistent with 
the expressed desire by theNation to own, operate, and maintain the new 
facilities.
    The Administration is also concerned with language that authorizes 
Reclamation to participate in developing wastewater facilities, which 
is outside of Reclamation's normal mission and will divert resources 
from Reclamation's core programs.
    The Administration is currently completing its review of the Report 
defined in Sec 3(5) of H.R. 3223, and will forward it to the sponsor 
and the Committee as soon as the review is complete.
    Thank you again for the opportunity to comment on H.R. 3223. I 
would be happy to answer any questions the Subcommittee may have.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman. I think I will start 
with Mr. Rehberg.
    Mr. Rehberg, any questions?
    Mr. Rehberg. Thank you, Mr. Chairman.
    Did I mention I know John Thune, and he is a friend of 
mine. If I could get the same quick consideration of this bill 
as he got, I would move my legislation.
    [Laughter.]
    Mr. Rehberg. I am not going to wait for that. OK.
    Thank you, Mr. Chairman, for holding this hearing today. I 
am also grateful to the witnesses for joining us today to 
discuss the Lower Yellowstone Irrigation Project. I look 
forward to hearing their testimony.
    As you will hear, the Lower Yellowstone Irrigation 
Project's construction began in 1905. By 1946, over 50,000 
acres of farmland were irrigated under the project. Total 
construction cost was over $4 million and by 1979, the water 
users had completed payments. Lower Yellowstone farms currently 
cover acreage exceeding 56,000 acres and provide over $20 
million of stable revenue for the area.
    Over 20 years have passed since the last payment was made 
to the Bureau of Reclamation. In business today, environmental 
streamlining is essential for any success. This also holds true 
for irrigation projects. Currently, paperwork and overlapping 
bureaucracy are overwhelming the irrigation facilities. In 
spite of the apparent opposition to the Bureau of Reclamation, 
this title transfer has been encouraged by the Bureau of 
Reclamation to transfer mission statements, which reads, 
``Transfers should occur for projects that are efficiently and 
effectively managed by non-Federal entities.''
    For the last 6 years, over 500 Eastern Montana and Western 
North Dakota farms have been working with Bureau of Reclamation 
toward this title transfer. The Bureau of Reclamation's work is 
complete and they now have the ability to reach an agreement 
that is mutually beneficial to all parties. Irrigation projects 
will still operate under State law, but will eliminate an 
unnecessary level of bureaucracy, while the Bureau of 
Reclamation will shed the oversight responsibility of an 
efficiently run project.
    Mr. Chairman, Jerry Nypen, director of the Lower 
Yellowstone, will be submitting additional endorsements for the 
transfer of the Lower Yellowstone Irrigation Projects. These 
include endorsements from Governor Judy Martz, Lower 
Yellowstone REA, Montana Water Resources Association, the 
Richland County commissioners, Richland Economic Development, 
Upper Missouri River Water Association, and the Sidney Area 
Chamber of Commerce.
    Again, Mr. Chairman, I thank you for allowing this hearing, 
and I yield back the balance of my time.
    Mr. Calvert. Mr. Udall?
    Mr. Udall of New Mexico. Thank you very much, Mr. Chairman. 
I appreciate the opportunity to speak to the Committee on my 
proposal today that will improve the quality of safe and 
reliable municipal water and wastewater to the Jicarilla 
ApacheNation.
    You will soon receive testimony from the President of the 
Jicarilla ApacheNation, who will discuss the importance of this 
project, as well as the discussion she has had with the Bureau 
of Reclamation and other stakeholders involved in this very 
important project.
    I would like to thank all of the members of the Committee 
who are cosponsors of this important legislation. I know 
Congressman J.D. Hayworth is here and others are also 
cosponsors on this.
    Let me begin by saying that the passage of this legislation 
by our Committee and eventually the House of Representatives is 
paramount in terms of addressing the critical public health 
issues for the tribe and North Central New Mexico. For over two 
decades, the current system, the Dolce Municipal Water System, 
has deteriorated due to a lack of funds and capital 
improvements made by the Federal trustee.
    Mr. Chairman, the Dolce Municipal Water System has not been 
in compliance with Federal Safe Water Drinking Standards, nor 
in compliance with theNational Pollutant Discharge Standards. 
In fact, BIA has been fined for its noncompliance several 
times.
    In addition, the EPA has also listed the water system on 
the reservation as the third-worst system in EPA Region VI. The 
failure by the Federal Government in its trust obligation over 
the years has led to these terrible conditions and is the 
reason we are here today.
    During the 106th Congress, legislation was enacted, Public 
Law 106-243, authorizing the Bureau of Reclamation to conduct a 
feasibility study on rehabilitating the Federally owned water 
distribution and wastewater system on the reservation. The 
legislation also directed the Secretary of Interior to report 
the findings and recommendations to the Congress within 1 year.
    President Vigil-Muniz will touch on those findings in a 
moment, and you will see the need for action on the municipal 
water and wastewater systems. You also see that the Jicarilla 
ApacheNation has invested over $14.6 million I their efforts to 
improve the quality of its municipal water and wastewater 
treatment system.
    The Jicarilla's investment of over $14.6 million is over 25 
percent of the total project cost. Now is the time for the 
Federal Government to participate. Let me be clear when I say 
that the lack of investment and rehabilitation in the municipal 
water system constructed by the BIA in the 1920's and expanded 
in the 1960's has led to the delivery of inadequate water to 
the residents of the reservation and surrounding communities.
    Until this legislation is approved and the project is 
completed, the future of tribal development, including 
additional housing, schools, medical facilities and elderly 
care facilities cannot be built. We have a Federal obligation 
and responsibility to improve the deficient Federally owned 
water system.
    I appreciate your support, Mr. Chairman, in allowing this 
hearing to take place today. At the completion of today's 
hearing, I look forward to working with you, and the 
Committee's staff, and Mr. Keys, and the Administration to 
prepare this legislation for consideration by our Committee and 
approval by the House.
    Thank you very much, Mr. Chairman.
    Mr. Calvert. Thank the gentleman.
    Mr. Hayworth?
    Mr. Hayworth. Mr. Chairman, I thank you.
    I join with my colleague from New Mexico in wanting to work 
to solve this problem on the Jicarilla Apache Reservation. My 
friend from New Mexico outlined the reasons why we need to get 
this done. Sitting here in the comfort and prosperity of 
Washington, D.C., I think many of us lose sight of the 
crippling poverty and the lack of infrastructure that exists 
really across the width and breadth of Indian Country, from the 
Dakotas down through New Mexico, my own State of Arizona and 
beyond.
    I wanted to follow-up, and Commissioner Keys, I thank you 
for being here, and perhaps I misunderstood your testimony, but 
I just want to get this straight. As my colleague from New 
Mexico pointed out, and I am very happy to amplify, we 
understand the Jicarilla Tribe has already invested close to 25 
percent of the total cost of this project, some $14.6 million, 
and yet, if I am not mistaken, Commissioner Keys, in your 
testimony you make the statement that the project would be, the 
way the bill is written now, 100-percent Federal funding. That 
seems to be a discrepancy. Were you describing something else 
there?
    Mr. Keys. Mr. Chairman, Mr. Hayworth, as the bill is 
written, it says it is a $45-million project, and all of it 
comes from Federal funds. Perhaps if it was reworded to say 
that the total projects was $59 million, we could take credit 
for that $14 million that has already been spent as a cost 
share.
    Mr. Hayworth. Well, Commissioner, I think we point out that 
what we want to do here is to work this out. We welcome the 
fact that you support the efforts for safe drinking water and 
that you are willing to work here, and also in your testimony 
you talked about the urgency of getting something done. And if 
it is really more proofreading than policy at stake here, then 
I think that is very promising. And I don't want to leave this 
hearing with a misimpression. In my estimation, and in hearing 
my friend from New Mexico, and in visiting with my friends, the 
Jicarilla Apaches, this is not an insurmountable problem, and 
we welcome the help of the Bureau to get this ironed out so we 
can move forward with the legislation.
    Mr. Keys. Mr. Chairman, Mr. Hayworth, I would emphasize 
again one of the statements I made in the oral, and that is 
that we want to work with the tribe in doing this project. We 
think that we have the design and construction management 
people that can work with the tribe, either us doing it or 
under self-determination that allows the tribe to do it. We 
think that we can do that as well or better than anyone else.
    The issue of cost share on the capital cost is not as 
onerous as the one on the operation and maintenance cost. And 
certainly we can work with you on the capital cost. We would 
prefer not to have to pay operation and maintenance cost 
forever. In other words, we feel that the entity that is 
benefiting should pay the operation and maintenance cost.
    Mr. Calvert. Well, again, Commissioner, I appreciate your 
attendance today and your willingness to work with us in this 
matter, and I look forward to the testimony of the president of 
this sovereign--
    Mr. Udall of New Mexico. Would the gentleman yield?
    Mr. Calvert. I will be happy to yield, Mr. Udall, just I 
yield back to Mr. Hayworth who will yield to Mr. Udall.
    Mr. Hayworth. One quick question on this bill as we move 
forward, some flexibility here. I notice that Mr. Keys 
mentioned a couple of items. One of them was funding from 
Reclamation, and I am sure that one of the problems that we 
didn't get specific on is the amount of money that Reclamation 
has presently in their budget to spend on projects like this. 
We might work on some flexible language to look at other 
Federal funds possibly to help in construction of this project. 
So I just like of put that out, and we can work together to 
work on some ways we can get this done.
    Mr. Calvert. I thank the gentleman, and, again, I would 
yield to my friend from New Mexico.
    Mr. Udall of New Mexico. Thank you, Mr. Chairman, for your 
statement on that, and I appreciate very much the statement of 
the gentleman from Arizona and his interest in this important 
issue.
    I hope that what I hear Mr. Keys saying is that these are 
problems we can work through. On the issue--my understanding on 
the issue of the operation and maintenance, the tribe is 
prepared to pay operation and maintenance, and I think you will 
hear that from the president. So I think we should--if that is 
the case, then I think we should take that off the table. And 
then we need to sort out, as my able colleague from Arizona 
said, this issue of the tribe has already put $14.6 million 
into this project. So it is considered by them--and I think it 
is very legitimate to say this is a sharing project where a 
significant amount is made by the tribe and then the Federal 
Government is picking up a share of it also.
    Mr. Keys. Mr. Chairman, Mr. Udall, certainly we are going 
to work with you on the thing. There is some confusion in the 
bill. Section 4(c)(2) and 4(e) and 6(a)(2) that clouds the 
issue on operation and maintenance. If the tribe is willing to 
testify that they would pay that, certainly that makes our job 
a lot easier, and that is something that we would like to see.
    Mr. Udall of New Mexico. OK. But you don't see these as 
insurmountable problems?
    Mr. Keys. Mr. Chairman, Mr. Udall, I do not.
    Mr. Udall of New Mexico. OK. And you also mentioned about 
the study that has been done and you are going to complete your 
review of that and let us know how soon?
    Mr. Keys. The study itself is done. The report is in the 
review process. I would say we could have it to you in 30 to 60 
days.
    Mr. Udall of New Mexico. OK. Thank you.
    Thank you, Mr. Chairman, and I thank the gentleman for 
yielding.
    Mr. Calvert. I thank the gentleman.
    Any other questions for Mr. Keys?
    [No response.]
    Mr. Calvert. Thank you, Mr. Keys, once again. Have a 
pleasant day.
    Mr. Keys. Thank you.
    Mr. Calvert. You are excused.
    Mr. Calvert. Our second panel on H.R. 2202 is Jerry Nypen, 
manager of the Lower Yellowstone Irrigation Districts No. 1 and 
2 in Montana, and Liz Birnbaum, the Director of Government 
Affairs, American Rivers, Washington, D.C.
    Please take your seats, and, again, I would remind the 
witnesses we are under the 5-minute rule, and please limit your 
testimony to 5 minutes so we can have time for questions.
    Also, if Claudia Vigil-Muniz would like to come forward, 
too, we will just have all three of you come up to the front 
panel. She, of course, is the president of the ApacheNation and 
will be testifying in support of H.R. 3223.
    With that, first I will recognize Mr. Nypen to have your 
opening statement.

STATEMENT OF JERRY NYPEN, MANAGER, LOWER YELLOWSTONE IRRIGATION 
                   PROJECTS, SIDNEY, MONTANA

    Mr. Nypen. Thank you, Mr. Chairman and members of the 
Subcommittee. My name is Jerry Nypen, and I am the manager of 
four irrigation districts that are being considered for 
facility transfer in H.R. 2202. Thank you for this opportunity 
to testify.
    We appreciate the support that this Subcommittee has given 
for the transfer of Bureau of Reclamation facilities to local 
public irrigation districts. I would like my comments to 
accompany my written testimony for the record.The projects' 
facilities for transfer involve water rights and diversion and 
distribution facilities for providing irrigation water to about 
500 farms. But, more importantly, it provides a significant 
stable economy for parts of eastern Montana and western North 
Dakota. Our irrigation districts have successfully cared for 
the projects for decades, and it is important for us to 
emphasize the--
    Mr. Calvert. Let me interrupt the gentleman. Is your mike 
on? Or hold the mike closer to you. Pull it up closer to you.
    Mr. Nypen. I don't think it was on. Mr. Chairman, I can 
start over. Is that necessary?
    Mr. Calvert. No, that is not necessary. You go ahead.
    Mr. Nypen. I have a voice that doesn't carry at all, so I 
would--
    Mr. Calvert. The entire statement will be entered into the 
record without objection, so go ahead.
    Mr. Nypen. Our irrigation district has successfully cared 
for the projects for decades, and it is important for us to 
emphasize that the districts are very public in nature, 
organized and operated under strict statutes of State law. This 
facility transfer should not be interpreted as 
``privatization'' or as transfer to private hands.
    Why the facility transfer? To the irrigation districts, it 
is consistent with the Bureau's intent to transfer projects 
that are effectively managed by the Federal entities, the non-
Federal entities. It fulfills the original contracts between 
the Bureau and the districts that state that congressional 
approval is necessary for transfer of title. It allows for 
local control so that the stability and integrity of the 
projects will be preserved in the future. It alleviates a sense 
of nervousness that is created by an unnecessary layer of 
Government that can implement national policy for Federal works 
that can cripple projects such as ours.
    Finally, it will reduce costs for the Bureau of 
Reclamation, the irrigation districts, and, consequently, the 
U.S. taxpayer.
    There is concern that compliance with Federal laws will not 
be met. However, a memorandum of understanding was executed 
with the Bureau spelling out various principles and compliance 
procedures that are to be met, and the main features of this 
memorandum of understanding is the compliance with 
environmental laws, the Environmental Protection Act, the 
Historical Preservation Act, the Endangered Species Act, and 
the act of Congress that protects the safety from the 
standpoint of hazardous waste issue. We recognize these 
authorities and have worked closely with the various agencies 
to meet those requirements.
    The most involved compliance issue is a Section ESA 
consultation process. This process is ongoing and parallel with 
the facility transfer process. Plans for fish protection 
devices, including fish passage and the fish screen device, are 
near complete. The districts are willing to operate and 
maintain these features, and we are working very closely with 
the Corps of Engineers and the Bureau of Reclamation. In fact, 
next month we have a value engineering study that will be held 
in conjunction with these structures.
    There is concern for protection of species not listed or 
threatened at this time. It is interesting that the State and 
the Federal Government found healthy populations of many native 
species, 25 or more, as a matter of fact, in our irrigation 
area in spite of the fact that we have operated for 90 years. 
It would not be appropriate to deny the facility transfer 
because of the concern to protect these fish that are not 
endangered or not threatened.
    The continuation of Federal power necessary to lift water 
to the projects has created complications. The Lower 
Yellowstone irrigation projects were constructed and are 
maintained because of pumping power delivery from another 
project, another Federal project, the Pick-Sloan Missouri Basin 
program. Our irrigation districts are an integral part of the 
program. The way it works is that affordable power is delivered 
to the community irrigation development with financial 
assistance from the sale of power to preferred customers. There 
are no provisions in reclamation law allowing the power 
arrangements to continue in a facility transfer situation.
    The Bureau and preference customers argue that this bill 
sets a precedent, but Congress has already authorized two 
facility transfers where similar Federal power contracts were 
specifically extended. The Bureau and the power customers 
agreed more specifically that it is unfair to continue wielding 
of the power of local non-Federal power utilities. However, 
delivery to our community pumping plants is clearly the 
responsibility of the Federal power program.
    Reclamation's unique relationship between power projects 
and irrigation exists throughout the Western States, and it 
seems inappropriate to authorize the continuance of power 
contracts to irrigation districts on the Colorado and the Snake 
River systems and not on the Missouri River system. The 
continuation of Federal contracts is absolutely necessary to 
transfer Lower Yellowstone facilities. Without it the Savage 
Irrigation District water users have experienced an increase in 
their community irrigation fees from $30 an acre to $70 an 
acre, making the facility's transfer financially impossible for 
the water user.
    The customers are concerned that the bill will set another 
precedent that would allow a flood of irrigation in a non-
Federal manner to become eligible for Federal project use 
power. They contend that preference customer rates would go up. 
The irrigation component of the Pick-Sloan program is fixed. An 
established irrigation sub-allocation of 15 percent of the 
program's capacity is the limit. Also, Congress must authorize 
every application.
    Over-appropriated waters, especially in the western part of 
the basin instream-flow designations for fix and in general our 
country's social attitudes the Tribunal discourage large-scale 
irrigation development will certainly not allow any future 
runaway community-style irrigation development to take place.
    I have been in the business and working with irrigation 
districts for 30 years, and I know what it takes to develop a 
project. Getting Federal assistance and accomplishing the first 
lift of water to an arable area is only a small part of the 
process. We believe that the preference power rate of about 
one-half cent per kilowatt hour is based on the fact that the 
planned irrigation development of the Pick-Sloan program will 
take place. Therefore, additional fear of development will not 
be, in fact, an increase in the power rate. It is worthy to 
note that in regard to the power customer's concern that a 
significant benefit to the power customers by utilizing 
irrigation component of Pick-Sloan exists. The unused portion, 
about 360 megawatts, is an uncapitalized interest-free Federal 
investment.
    Mr. Calvert. Excuse me. Please summarize your statement.
    Mr. Nypen. It is important that the facility transfer--
excuse me. I will do that. Thank you. It is important that the 
Lower Yellowstone facility transfer be authorized at this time. 
We believe that the transfer activities to be well over 50 
percent complete and is now at a standstill except for the 
parallel activity.
    Mr. Chairman, transferring the facility of the Lower 
Yellowstone project is very beneficial to the United States and 
to the local communities. The Lower Yellowstone business 
communities, the producers, the laborers who depend on the 
welfare of the irrigation district, and others support the 
passage of H.R. 2202.
    Thank you for the opportunity to testify. I will do my best 
in answering any questions that you may have.
    [The prepared statement of Mr. Nypen follows:]

    Statement of Jerry Nypen, Manager, Lower Yellowstone Irrigation 
                       Projects, Sidney, Montana

    Mr. Chairman and members of the Subcommittee, my name is Jerry 
Nypen. I am the Manager of the Lower Yellowstone Irrigation Districts 
One and Two, the Savage Irrigation District, and the Intake Irrigation 
District. Thank you for the opportunity to provide testimony on H.R. 
2202, Lower Yellowstone Reclamation Projects Conveyance Act. We 
appreciate this Subcommittee's support for the transfer of Bureau of 
Reclamation features to local public entities.
    The three Federal irrigation projects involved in this legislation 
are located along a 72-mile section of the Yellowstone River near the 
borders of the states of North Dakota and Montana. The Projects' 
facilities for transfer involve public water rights and diversion and 
distribution facilities for providing irrigation water to about 500 
farms. There are about 56,000 acres being irrigated within the Projects 
resulting in crop values that exceed $20 million in most years. The 
Projects provide for a special economy within an area sparsely 
populated. In fact, the only industry providing stability in the area 
is irrigated agriculture.
    The Bureau of Reclamation constructed the Savage and Intake project 
features, 55 years ago, and the Lower Yellowstone Project about 90 
years ago. The operation and maintenance as well as replacements and 
repayment responsibilities were transferred to our locally formed 
Irrigation Districts following the construction. We have successfully 
cared for the Projects for decades. It is important to emphasize that 
the Districts are very public in nature, organized and operating under 
State laws. This transfer of title should not be construed as 
``privatization''.
    It is important to understand why the transfer of title is being 
pursued. This transfer is consistent with the Bureau of Reclamation's 
mission of transferring projects that are ``efficiently and effectively 
managed by non-Federal entities''. We have certainly fulfilled the 
terms of the original contracts that were executed with the Bureau of 
Reclamation. Since these contracts state that transfer of title will 
take place with Congressional approval, we expect that the Bureau will 
abide by these terms as well.
    Transfer is also being pursued to acquire and maintain local 
control. Local businesses and industry believe that acquiring title is 
important now to preserve the stability and integrity of the Projects. 
Without transfer, the community can only consider themselves caretakers 
or custodians of the Projects even though they have had almost 100% of 
the responsibility for decades. Transfer will alleviate a sense of 
nervousness that is created by implementing national policy for Federal 
works that can cripple projects of our nature.
    The transfer will reduce costs for the Bureau and the Districts. 
For example, the Bureau is required to renew a 50-year old Water Supply 
Contract for the Savage District. The Bureau's water supply is defined 
as a pumping plant that the Bureau constructed in 1949. The Savage 
Irrigation District has operated the pumps and long discharge lines for 
53 years and has replaced them at their cost. However, the Bureau is 
still required to renew a 20-year contract at an estimated cost to the 
District of $60,000. This irrigation development involves only 2,300 
acres. Routine review and reporting exercises and other compliances 
cost all the Districts an estimated $60,000 per year. We are not aware 
of the savings to the United States for administrating and maintaining 
their assets, but it is no doubt significant.
    It is important to understand that the Projects will operate the 
same as they have in the past. The Districts will carry out their work 
regardless of ownership of the physical features. The Districts have 
met their obligations, and it seems only fair that ownership is 
transferred to them at this time.
    Fiscal management will be the same. The irrigation works are paid 
for except $68,280 is to be paid by the Savage Irrigation District, and 
$667,702 is to be paid out of Pick-Sloan Program power sales. Both of 
these amounts are itemized in the Bill. There is no Federal money 
involved in the operation and maintenance of the Projects.
    The Districts have worked diligently with the Bureau of Reclamation 
for five years setting up the conditions for transfer. We have worked 
together in organizing public meetings, various fisheries studies, real 
estate reviews, recreational agreements with the State of Montana, 
cultural resources and hazardous waste surveys, and development of fish 
protection devices.
    A 'Memorandum of Understanding' was executed with the Bureau 
spelling out various principles and compliances that are to be met, the 
responsibilities for each phase of the process, and the division of 
cost. The main feature of this agreement is the compliances with 
environmental laws: NEPA, NHPA, ESA and CERCLA. We recognize these 
authorities and have worked closely with the various agencies to meet 
the requirements.
    The most involved compliance activity is a Section 7 ESA process 
for fish protection. Protection devices will include a fish passage 
structure and a fish screen that will be in place before transfer takes 
place. The Bureau will be responsible for the installation, and our 
Districts will be responsible for future operation and maintenance.
    There seems to be a misunderstanding by some over the continuation 
of the Federal power to lift water to the Projects' community water 
conveyance systems. Part of the Lower Yellowstone Irrigation Districts' 
lands, and all of the Savage and Intake Irrigation Districts' lands are 
at elevations requiring the pumping of water. These elevated areas were 
developed and are sustained only because affordable electrical power is 
delivered from the Pick-Sloan Missouri Basin Program's irrigation 
program.
    We are an integral part of the Pick-Sloan Program's ``ultimate 
development plan'', a unique plan whereby irrigation developments are 
created and maintained for public benefit within the Missouri River 
Basin. This Bill maintains the primary purpose of the Pick-Sloan 
Missouri Basin Program, which is to maintain a stable economy through 
irrigation development. That definitely does not change.
    The Pick-Sloan Program provides pumping power delivered to the 
Projects' pumps at a rate known as the ``project-use-rate''. This rate, 
now 1.1 cents per kWh, has been adjusted downward in the past by the 
Bureau of Reclamation to 0.25 cents per kWh to match the districts' 
ability-to-pay. This Bill provides for the continuation of project-use-
power under the existing contract conditions except that the ability-
to-pay adjustment will no longer be applicable. We are foregoing this 
condition because we recognize that title transfer savings can offset 
the adjustment. The Districts obligation to pay full value of the 
irrigation pumping rate should be recognized as a direct benefit to the 
U.S. taxpayer.
    Parties concerned about continuing the contracts for project-use-
power are the Bureau of Reclamation and the Pick-Sloan Program's power 
customers. The Bureau administers the irrigation component of Pick-
Sloan, and the power customers pay for the balance of costs not paid by 
the irrigation community. This is a unique program that has provided 
great economic benefits throughout the Western States.
    The Bureau and the power customers are concerned that the Bill will 
set a precedence that would allow a flood of non-Federal irrigation 
entities to become eligible for project-use-power causing power rates 
to go up. But the irrigation-pumping component of Pick-Sloan is fixed. 
An established irrigation suballocation of 15% of the Program's 
capacity is the limit. Also, Congress must approve every application.
    Over-appropriated water in the West, instream-flow designations, 
and in general our country's social attitudes that discourage large-
scale irrigation development will certainly not allow any future 
runaway community-style irrigation development to take place.
    The States recognize that the intended Pick-Sloan irrigation 
development will not happen. Congress passed legislation in the 106th 
Congress (Dakota Water Resources Act of 2000) that reduced North 
Dakota's potential irrigation to under 60,000 acres, a mere 5% of that 
state's allotment of project-use-power. Montana is intending to 
introduce legislation for irrigation programs for about 70,000 acres 
that will drastically deflate the use of Pick-Sloan pumping also. 
Federal development for non- Indian projects is no longer being 
considered in these states. Developments by Local or State Governments 
are possible avenues being pursued, but as you would expect, it would 
be on a very small scale.
    There is no credence to the objectors' precedence issue. The 
Bureau's latest requirement is that the Projects receiving Pick-Sloan 
project-use-power must be authorized as ``units'' of the P-SMBP and 
that the recipients sign a 25-year contract to pay an appropriate share 
of costs for construction of P-SMBP power facilities. But many projects 
receive project-use-power that does not fit this policy. In Montana and 
North Dakota; Buffalo Rapids, Buford Trenton, Dodson, Intake, Lower 
Yellowstone 1&2, Kinsey, Sidney Water Users, Haidle, and Hammond are 
all public irrigation entities that have been authorized by Congress to 
receive project-use-power. Various Acts of Congress including Acts of 
1939 and 1944 authorized them. They are not ``units'' of Pick-Sloan, 
nor do they participate in contracts to share costs for construction of 
power facilities. In fact four of them are non-Federal irrigation 
developments. All of these entities are enrolled in the Pick-Sloan 
Program only for receiving the project-use-power. They are all 
satisfying the purpose of the Pick-Sloan Program; they foster public 
benefit.
    More importantly, precedence has also been clearly set in previous 
title transfer processes to leave long-term power contracts alone. 
Congress recently authorized two facility transfers where Federal power 
contracts were specifically extended. They are Public Law 105-351, ``to 
convey certain facilities of the Minidoka Project to the Burley 
Irrigation District``: In Section 1. (d.) 'PROJECT RESERVED POWER. The 
Secretary shall continue to provide Burley (irrigation project) with 
project reserved power from the Minidoka Reclamation Power Plant, in 
accordance with terms of the existing contracts, including renewals 
thereof as provided in such contracts.'; and Public Law 106-221: the 
``Wellton-Mohawk Transfer Act'', in Section 3: 'WATER AND POWER 
CONTRACTS. Notwithstanding the transfer, the Secretary and the 
Secretary of Energy shall provide for and deliver Colorado River water 
and Parker-Davis Project Priority Use Power to the District in 
accordance with the terms of the existing contracts with the District, 
including any amendments or supplements thereto or extensions thereof 
and as provided under section 2 of the agreement'.
    There are numerous irrigation project/power project arrangements 
around the 17 Western States; however, whether it is the Parker Davis 
Project in Arizona or the Pick-Sloan Program in Montana, the intentions 
of the Reclamation Program are the same to provide project power to 
main pumping facilities for creating and sustaining irrigation 
development for public benefit.
    It is important to know that our Projects have had project-use-
power contracts for over 50 years, and have provided without fail the 
intended public benefits. This would not change with title transfer. It 
would seem very appropriate to consider title transfer as a condition 
that would allow the projects to continue to function as they have.
    The removal of the Projects from the irrigation component of the 
Pick-Sloan Missouri Basin Program will not allow the transfer of 
irrigation features to take place! The power rates would increase from 
0.25 cents to 8.0 cents per kilowatt-hour for 3 of the Irrigation 
Districts, and from 0.25 cents to 3.0 cents for the other District. The 
cost of operating and maintaining the public irrigation features to 
convey water to the irrigated area for the Savage Irrigation District 
would increase from $30 per acre to $70 per acre. Please understand 
that this is the cost of getting water from the river to the boundaries 
of the farms. The true cost of water to the farmers would be this 
community cost plus their costs of distribution on their property. This 
total cost far exceeds their capability.
    We hope that Reclamation's title transfer was never intended to 
tear apart the fabric of an irrigation development by denying access to 
historically utilized Federal project power.
    Mr. Chairman, transferring the title of Federal irrigation works of 
the Lower Yellowstone, Savage, and Intake Projects in Eastern Montana 
and Western North Dakota is very beneficial to the Untied States 
Government and to the local farms and businesses. The Government's work 
has clearly been completed and the irrigation districts are very 
capable of continuing the public benefits for which the Projects were 
built.
    The Lower Yellowstone business communities, the producers, the 
laborers who depend on the welfare of the irrigation system, and others 
support the passage of H.R. 2202.
    Thank you for the opportunity to testify. I would be pleased to 
answer any questions you may have.
                                 ______
                                 
    [Attachments to Mr. Nypen's statement follow:]
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    Mr. Calvert. I thank the gentleman.
    Ms. Birnbaum, you are recognized for 5 minutes.

  STATEMENT OF S. ELIZABETH BIRNBAUM, DIRECTOR OF GOVERNMENT 
           AFFAIRS, AMERICAN RIVERS, WASHINGTON, D.C.

    Ms. Birnbaum. Good afternoon, Mr. Chairman and members of 
the Subcommittee. My name is Liz Birnbaum. I am the Director of 
Government Affairs for American Rivers. I want to thank you for 
the opportunity to testify today. American Rivers is a national 
river conservation organization with over 30,000 members and 
field offices across the country, including one in Great Falls, 
Montana.
    We strongly oppose H.R. 2202 as currently drafted. I will 
confine my comments to the language found in Section 5.
    Unfortunately, Section 5 is wholly inadequate for the 
stated purpose of protecting the native fishes of the 
Yellowstone River. As currently written, this section virtually 
assures that no meaningful process will be made on fish passage 
and entrainment issues at Intake Diversion Dam. Specifically, 
the provision fails to identify a time horizon for completing 
the much needed fish protection and passage devices or to 
designate responsibility with regard to funding and 
construction of the devices.
    Addressing the effects of the operation of the Lower 
Yellowstone Reclamation Projects on endangered species and 
other native species in the Basin is the linchpin in recovering 
and maintaining these native fishes. Failure to deal with the 
projects' impacts at this time will only result in further 
species listing and more onerous burdens for irrigators in 
these districts and throughout the basis. Allowing this 
legislation to move forward with these omissions would be a 
disservice to the people of Montana, the irrigation districts 
involved, State and Federal agencies, and all those who care 
about the native fishers and the Yellowstone River.
    Intake Diversion Dam was constructed by the Reclamation 
Service around 1908 and supplies the water for the four 
irrigation districts previously discussed. The dam is the 
lowermost of six low-head irrigation diversion dams on the 
Yellowstone River between Billings, Montana, and its confluence 
with the Missouri River near the North Dakota border.
    Fish passage and protection is a concern of all of the 
dams, but it is especially important at Intake. As discussed 
previously by Commissioner Keys, the lower reaches of the 
Yellowstone contain the best remaining habitat for species like 
the Federally endangered pallid sturgeon, the sicklefine chub 
and sturgeon chub, which are both candidates for listing, and 
several species of concern for the State of Montana, such as 
the paddlefish and sauger. This dam's impediment to spawning 
migrations for these and other native species is pushing the 
pallid sturgeon toward extirpation and will likely lead to the 
listing of other species.
    Fish passage at Intake would reopen nearly 140 miles of 
historic spawning areas for the pallid sturgeon. That 
improvement, combined with efforts underway at upstream dams on 
the Yellowstone and important tributaries, could allow this 
ancient species to access nearly all of its historic range in 
the Yellowstone Basin.
    In addition to fish passage facilities, installation of 
fish screens to prevent entrainment of adult and juvenile fish 
is equally important to the recovery of pallids and stopping 
the decline of the other native fishes. Again, as discussed by 
Commissioner Keys, studies by the Bureau of Reclamation 
estimate that 70,000 sturgeon chub per year are killed by 
entrainment in the main canal, and 100,000 sauger were 
destroyed in the canal in 1998. In total, their studies show 
that be 500,000 and 1 million fish per year are pulled into the 
irrigation canal under current conditions, affecting 
recruitment of many native species in addition to those already 
listed.
    Section 5 of H.R. 2202 requires that the Secretary of the 
Interior ``shall provide'' fish protection devices, with the 
proviso that the ``The Secretary and irrigation districts shall 
work cooperatively in planning, engineering, and construction 
the fish protection devices.'' The provision does not state 
when the devices should be constructed or whether fish passage 
must precede project transfer. In addition, this language does 
not specify a funding source for the necessary devices, 
authorize appropriations, or address the question of 
reimbursability. One might infer from this language that 
funding for the projects will be the responsibility of the 
Federal Government, yet the question of reimbursability has 
been a key issue in the failed negotiations over this project 
transfer. If the issue is not resolved in this legislation, 
this problem, combined with the bill's failure to state a 
deadline or divide responsibilities between the Secretary and 
the districts, may well lead to an indefinite delay in 
construction.
    This issue is too important to be left to the vagaries of 
future appropriations processes after the facilities have been 
transferred into private hands. After transfer, Reclamation 
would have little incentive to fund this $5 to $10 million 
obligation out of its declining budgets. Other Federally owned 
projects would likely receive priority and the problems at 
Lower Yellowstone might well go unaddressed.
    The importance of these matters to the economic and 
ecologic well-being of the Yellowstone Basin can't be 
overemphasized. It is imperative that fish passage and 
protection devices be installed and proven to work, and an 
accepted plan for operation, maintenance and necessary future 
modifications of the devices be in place before transferring 
these facilities. Although this would be consistent with the 
testimony of Commissioner Keys, we suggest that the Reclamation 
should not have continuing responsibility after transfer. In 
fact, this is an issue that should be dealt with before 
transfer. To do anything less is to set up the citizens of the 
basin for increased future conflict and diminished natural 
values. The problem will only get worse if it is not resolved 
now.
    We urge the Subcommittee to amend H.R. 2202 to ensure that 
fish passage devices be constructed amendment tested before the 
projects are transferred to the local beneficiaries. Without 
such assurances, we will continue to oppose the bill.
    Thank you.
    [The prepared statement of Ms. Birnbaum follows:]

  Statement of S. Elizabeth Birnbaum, Director of Government Affairs, 
                            American Rivers

    Good afternoon Mr. Chairman and Members of the Subcommittee, my 
name is Liz Birnbaum. I am the Director of Government Affairs for 
American Rivers. I want to thank you for the opportunity to testify 
here today. American Rivers, a national river conservation organization 
with over 30,000 members, strongly opposes H.R. 2202, the Lower 
Yellowstone Reclamation Projects Conveyance Act, as currently drafted.
    Our organization has concerns about several aspects of this and 
other Reclamation title transfer initiatives, a concern dating from at 
least 1996, when we endorsed the statement of principles for 
Reclamation project transfers developed by several environmental 
organizations, which is attached to my testimony. Today I will confine 
my comments to language found under the heading Yellowstone River 
Fisheries Protection, Section 5 of H.R. 2202.
    Unfortunately, Section 5 is wholly inadequate for the stated 
purpose of protecting the native fishes of the Yellowstone River. As 
currently written, this section virtually assures that no meaningful 
progress will be made on fish passage and entrainment issues at Intake 
Diversion Dam. Specifically, the failure to identify a time horizon for 
completing the much needed fish protection and passage devices, and the 
lack of clearly delineated responsibilities with regard to funding and 
construction of the devices render the provision toothless and futile.
    Addressing the effects of the operation of the Lower Yellowstone 
Reclamation Projects on endangered species other native species in the 
basin is the linchpin in recovering and maintaining these species. 
Failure to deal with the projects' impacts at this time will only 
result in further species listings and more onerous burdens for 
irrigators in these districts and throughout the Yellowstone Basin. 
Allowing this legislation to move forward with these omissions would be 
an egregious disservice to the people of Montana, the irrigation 
districts involved, State and Federal agencies and all those who care 
about native fishes and the Yellowstone River.
Geographic and Ecologic Background
    Intake Diversion Dam, constructed by the Reclamation Service around 
1908, supplies the water for the four irrigation districts involved in 
this transfer. The dam is the lowermost of six low-head irrigation 
diversion dams on the Yellowstone River between Billings, Montana and 
its confluence with the Missouri River near the North Dakota border.
    Fish passage and protection is a concern at all of the dams, but it 
is especially important at Intake. The lower reaches of the Yellowstone 
contain the best remaining habitat for species such as the Federally 
endangered pallid sturgeon, sicklefin chub and sturgeon chub, both 
candidates for listing, and several species of concern for the State of 
Montana such as the paddlefish and sauger. The impediment this dam 
presents to spawning migrations for these and other native species is 
inexorably pushing the pallid sturgeon toward extirpation and will 
likely lead to the listing of other species.
    Fish passage at Intake would reopen nearly 140 miles of historic 
spawning areas for the pallid sturgeon. That improvement, combined with 
efforts underway at upstream dams on the Yellowstone and important 
tributaries, could allow this ancient species to access nearly all of 
its historic range in the Yellowstone.
    In addition to fish passage facilities, installation of fish 
screens to prevent entrainment of adult and juvenile fish is equally 
important to the recovery of pallids and stopping the decline of other 
native fishes. Studies by the Bureau of Reclamation estimate that 
70,000 sturgeon chub per year are killed by entrainment in the main 
canal, and 100,000 sauger were destroyed in the canal in 1998. In 
total, their studies show that between 500,000 and 1,000,000 fish per 
year are pulled into the irrigation canal under current conditions, 
affecting recruitment of many native species in addition to those 
already listed.
    Improvements at Intake Diversion Dam, in concert with other fish 
passage and protection initiatives in the basin, are by far the best 
chance we have to recover listed species and preclude the listing of 
more species.
Problems with H.R. 2202
    Section 5 requires that the Secretary of the Interior ``shall 
provide'' fish protection devices, with the proviso that ``The 
Secretary and irrigation districts shall work cooperatively in 
planning, engineering, and constructing the fish protection devices.'' 
The provision does not state when the devices should be constructed, or 
whether fish passage must precede project transfer. In addition, this 
language does not specify a funding source for the necessary devices, 
authorize appropriations, or address the question of reimbursability. 
One might infer from this language that funding for the projects will 
be the responsibility of the Federal Government, yet the question of 
reimbursability has been a key issue in the failed negotiations over 
this project transfer. If the issue is not resolved in this 
legislation, this problem, combined with the bill's failure to state a 
deadline or divide responsibilities between the Secretary and the 
districts, may well lead to an indefinite delay in construction of the 
necessary facilities.
    This issue is too important to be left to the vagaries of future 
appropriations processes after the facilities have been transferred 
into private hands. After transfer, Reclamation would have little 
incentive to fund this $5-10 million obligation out of its declining 
budgets. Other Federally owned projects would likely receive priority 
and the problems at Lower Yellowstone would go unaddressed.
    The importance of these matters to the economic and ecologic well 
being of the Yellowstone Basin cannot be overemphasized. It is 
imperative that fish passage and protection devices be installed and 
proven to work, and an accepted plan for operation, maintenance and 
necessary future modifications of the devices be in place before 
transferring these facilities. To do anything less is to set up the 
citizens of the basin for increased future conflict and diminished 
natural values. The problem will only get worse if it is not resolved 
now.
Conclusion
    We urge that the Subcommittee amend H.R. 2202 to ensure that fish 
passage devices be constructed and tested before the projects are 
transferred to the local beneficiaries. Without such assurances, we 
will continue to oppose this legislation.
                                 ______
                                 
    Mr. Calvert. I thank the gentle lady.
    Mr. Rehberg?
    Mr. Rehberg. Thank you, Mr. Chairman.
    Mr. Nypen, I'm going to ask you an essentially two-pronged 
question to address both Mr. Keys and Ms. Birnbaum. As far as 
the costs, under the transfer of title to this project, what 
conceivably would change in the management of the project that 
you could foresee changing who pays for what? Why shouldn't the 
irrigator still get the preferred price because there's nothing 
that anyone is being asked to do in addition to what they're 
already doing? The rest of the ratepayers are not going to be 
doing anything any differently, and the project doesn't change, 
the consumption of power doesn't change, so why should the 
charge be any other cost? And then the second part of my 
questions is: Again, under the transfer of the title, what 
would change environmentally? You are still going to be 
responsible for endangered species under the Endangered Species 
Act. You are still going to be responsible for NEPA. You still 
have to fulfill all those requirements of the Federal 
Government.
    So I guess I don't understand the opposition to this bill. 
What changed in your mind that wouldn't dictate or necessitate 
just going ahead and moving this bill forward, because you are 
still going to have the same energy cost and you are still 
going to have the same requirement to fulfill environmental 
policy in this country?
    Mr. Nypen. Mr. Chairman, Mr. Rehberg, nothing changes. Our 
irrigation districts have been operating for--some as long as 
70 years. There is no change in the operations at all. The real 
issue is such that the costs are the same, except this bill 
does, in fact, for the cost of power exclude the ability-to-pay 
clause, which actually raises our payment to the United States 
for the power. That is for the power itself.
    The ruling is now part of the Pick-Sloan program. That is 
the intent of the Federal Pick-Sloan program, is to move power 
to irrigation districts, move it in such a way as to promote 
the public benefit that this program fulfills.
    The Endangered Species Act question that you have, we fully 
intend to see that this consultation process is carried out. At 
the present time we have fish protection devices that are being 
designed, and we have no objection at all to installing--having 
these facilities installed for the protection of fish. We know 
these facilities are needed and that they will be done prior to 
the signing of the transfer.
    It is not fully understood, I guess, why we want to extend 
beyond that.
    Mr. Rehberg. Mr. Chairman, if I could have a follow-up 
question. What do you anticipate the Federal Government's 
financial obligation if this bill does not pass will be on an 
annual basis? What does this cost the Department or the Bureau 
of Reclamation annually?
    Mr. Nypen. I am not certain what it costs, and they are 
incurring the funds that are common to take care of their 
assets. And they don't supply any funds to our project. They 
review our operations periodically at our cost. They certainly 
have a lot of accountability to do and associated moneys that 
they spend to, like I say, take care of their assets. And I--
    Mr. Rehberg. Is it safe to say, then, that the savings of 
the title transfer will be equivalent or more than what they 
are spending; that the title transfer would, in fact, be, even 
if the unit costs would be at the level that they are unless 
they are indirect savings? Would the title transfer, in fact, 
be a net gain for them to oppose this legislation rather than 
the fact as opposed to a net cost?
    Mr. Nypen. Mr. Chairman, Mr. Rehberg, yes. I believe that 
would be that, at least that analysis would be correct.
    Mr. Rehberg. So there would be no reason for the Bureau of 
Rec. to oppose this legislation, other than the fact that I 
haven't, since I have been in Congress, found a bill they 
support yet.
    Mr. Nypen. Not with that point, no.
    Mr. Rehberg. Thank you.
    Mr. Calvert. Any additional questions for these two 
witnesses? Mrs. Napolitano?
    Mrs. Napolitano. Yes.
    Mr. Calvert. Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    There are a couple of questions, and I am sure you may have 
covered part in some of them, but I am concerned about the 
water rights, and being able to just transfer the lands and the 
water rights, and is there any provision to make sure that 
those water rights are not sold to somebody else in the future?
    Mr. Nypen. Mr. Chairman, Mrs. Napolitano, the water rights 
in the State of Montana are handled through the prior 
Appropriations. They are state water rights. The United States 
appropriated water through the State of Montana 90 some years 
ago to get the project going, because that right is held in the 
name of the United States and preserved for the constituents of 
the project. They cannot be sold or changed in any way without 
going to the State and applying for change authorization. They 
are definite for irrigation purposes and for the domestic water 
purposes of the project.
    Mrs. Napolitano. Who pays for reeling cost?
    Mr. Nypen. The reeling cost providing the power to the 
irrigation projects is paid for by the United States. It is 
part of the Pick-Sloan Program. The Pick-Sloan Program, when 
the thing was initiated in 1994, the irrigation development was 
the major part of the program. That program, it took top 
priority, and of course the irrigation didn't develop, and we 
have additional power that has been generated twice or two-and-
a-half times what was intended. The plan is that the reeling 
was always meant to be or intended to be a part of the program, 
and it has just recently been reconfirmed by the Bureau, that 
it is the Bureau of Reclamation's responsibility. The repairs 
are the power customers of the Pick-Sloan Program. The program, 
of course, is administered by the Bureau of Reclamation.
    Mrs. Napolitano. And the mitigation of the cost for 
endangered species or the cost of the mitigation rather. Who 
pays for it now, and who would pay for it if H.R. 2202 goes 
through?
    Mr. Nypen. We anticipate that the costs of putting new 
structures in, which may be 5 to 6 million dollars, would be 
the cost of the United States. This is a venture mainly to 
recover an endangered species on a river system where there is 
no complete evidence that the endangered species, the pallid 
sturgeon, existed in numbers in the first place, and we 
anticipate that to be an obligation to the Federal Government. 
Once they are installed, the irrigation district has vowed to 
take the responsibility to operate and maintain those futures, 
so that they work in the way that they were installed.
    Mrs. Napolitano. You indicated there was precedence. If 
there was such a thing done before, will the districts be 
willing to consider facing these costs?
    Mr. Nypen. Mr. Chairman, Mrs. Napolitano. The districts 
can't participate in any of the costs from a financial 
standpoint. We have a limit as far as what we are capable of 
paying for the community to use for irrigation, to get water to 
the farms, and we are to that limit. Plus, you are referring to 
the reeling cost, and going from a $30 an acre operation and 
maintenance fee to get public water to the borders of a farm, 
from having that go from $30 an acre to $70 an acre is not 
financially possible to keep--and also about $20,000 for a 400-
acre farm, and it is something that is financially infeasible, 
and if that was done the irrigation project there would 
collapse.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Mr. Calvert. Any other questions?
    [No response.]
    Mr. Calvert. If not, the two witnesses in regards to 2022 
are excused, and we will move to our next witness.
    Mr. Calvert. Next I would like to introduce President 
Vigil-Muniz, the President of the Jicarilla ApacheNation. You 
are recognized for your opening statement.

   STATEMENT OF CLAUDIA J. VIGIL-MUNIZ, PRESIDENT, JICARILLA 
 APACHE NATION; ON BEHALF OF THE JICARILLA APACHE RESERVATION 
                     RURAL WATER SYSTEM ACT

    Ms. Vigil-Muniz. Thank you. Good afternoon Chairman 
Calvert, Ranking Member Smith and distinguished members of the 
Committee. My name is Claudia Vigil-Muniz, President of the 
Jicarilla ApacheNation.
    Right now we have a picture of our community, that is an 
area photo that we brought to help along with a visual to give 
you an idea of what we are talking about. My cameraman is our 
water administrator, so he will be pointing out certain things 
as it go through this.
    Thank you for holding this hearing today on H.R. 3223, a 
bill to authorize the Bureau of Reclamation to modernize the 
Federally owned and managed public water system on the 
Jicarilla Apache Reservation. This hearing and this bill are 
extremely important to the health and welfare of the Jicarilla 
ApacheNation because we are facing a health crisis.
    The Department of Interior, acting through the Bureau of 
Indian Affairs, initially built the system with materials that 
we now know to be hazardous, such as asbestos and lead. Over 
the years the BIA expanded the public water system in an ad hoc 
and haphazard way, and have never adequately been maintained or 
upgraded.
    In the area served by the original main water line clusters 
of our people have suffered from different forms of cancer. My 
own father lived in that area and he succumbed to cancer in 
1994. Many others have suffered similar deaths, including three 
other people who lived on the same street. The wastewater 
system is a relic of the past consisting of open sewage 
lagoons. These unlined ponds are well over capacity, causing 
seepage into the ground and spilling raw sewage into waterways 
that ultimately leave the reservation. The sewage ponds are 
located on the west part of town. When the winds blow the 
stench is unbearable.
    In addition to the public health and safety hazards the 
inadequate infrastructure has created a host of other problems 
on the reservation. There is an increased use of individual 
septic systems which are now failing due to incompatible soil 
conditions. 200 of these must be pumped out monthly to prevent 
standing waste where our children play. The lack of adequate 
housing results in overcrowding with many extended families 
living under one roof. The existing infrastructure cannot 
support new housing. The infrastructure problem threatens the 
completion of many projects such as a new public school system 
or new public school, a school dormitory and a new judicial 
complex, which all have been authorized and funded.
    In 1996 BIA asked us to take ownership and assume operation 
and maintenance responsibilities. The Tribal Council 
commissioned studies to determine the viability of this request 
and ultimately decided against it, given the extent of the 
deterioration. The problems escalated in October 1998 when the 
division system on the Navajo River failed, leaving the entire 
community of Dulce without drinking water for 6 days. We had to 
spend $5 million on an emergency basis to restore water to the 
community and to begin making other needed improvements. We 
quickly found out that the BIA could not deal with this 
problem. We were also turned away by other Federal agencies. 
They told us that they could not use their funds on another 
Federal Agency.
    We turned to Congress for help, and in July of 2000, Public 
Law 106-243 was enacted, authorizing a feasibility report to 
determine how to address these problems. The completed report 
makes the following conclusions. We have a reliable and 
sufficient source of high-quality water. The water distribution 
delivery and wastewater collection components must be replaced. 
The wastewater sewage lagoons must be replaced with a modern 
facility that can meet Federal standards. Construction of these 
new facilities will have no significant impact on affected 
environment and in fact will be environmentally beneficial on 
all levels. No action is not an option.
    H.R. 3223 would implement the recommendations of the report 
and authorize a project amount of 45 million. The bill also 
provides that theNation would only operate and maintain the 
facilities upon the completion of the project, which will save 
the Department of Interior money in the long run. We also have 
a second diagram that gives you an idea of where we are 
located. We are right on the Colorado border.
    To date we have spent nearly $8 million on improvements and 
have committed an additional 6 million to begin work on a new 
wastewater plant as this is a very urgent matter that cannot be 
delayed. Last year Senator Domenici was successful in securing 
2.5 million for final design work and to prepare for 
constructions. We are in the process of putting this money to 
use as well.
    In closing the Jicarilla ApacheNation calls upon this 
Committee and Congress as a whole to put a stop to the health 
hazards caused by the Federal Government's irresponsibility and 
neglect of its water system. We have done everything that has 
been asked of us in pursuit of this project, and we have 
invested a significant amount of tribal funds to correct a 
Federal responsibility. For my tribe to be self sufficient the 
Federal Government must own up to its responsibilities and make 
sure that the Jicarilla Apache people have safe drinking water 
and adequate wastewater facilities. Please help us move forward 
with economic development, improved health conditions and safe 
housing for our people. We urge immediate and favorable action 
on H.R. 3223.
    That concludes my remarks. I will be happy to respond to 
any questions, and my staff is available to work with the 
Committee staff to move this project forward. Thank you.
    [The prepared statement of Ms. Vigil-Muniz follows:]

Statement of Claudia J. Vigil-Muniz, President, Jicarilla Apache Nation

    Chairman Calvert, Ranking Member Smith and distinguished members of 
the House Resources Subcommittee on Water and Power, I am pleased to 
submit this statement in support of H.R. 3223, the Jicarilla Apache 
Reservation Rural Water System Act.
    I would first like to thank Chairman Calvert for scheduling this 
hearing and thank the members of the Committee for attending today to 
learn more about the Jicarilla ApacheNation and this very important 
project. I also want to commend our Congressman, Tom Udall for 
introducing the bill along with our other New Mexico representatives: 
Congressman Joe Skeen and Congresswoman Heather Wilson. The Jicarilla 
ApacheNation is honored to have the support of additional cosponsors: 
Congressman J.D. Hayworth, Congressman Dale Kildee, Congressman George 
Miller, Congressman Patrick Kennedy, Congressman Dave Camp, Congressman 
Bob Ney, Congressman Scott McInnis, Congressman Mike Thompson, and 
Congressman Robert Ehrlich. I want to especially thank another 
cosponsor, a long time friend of the Jicarilla ApacheNation, 
Congressman Don Young who for many years has provided tremendous 
understanding and support on this project and other matters affecting 
our Tribe.
    This hearing is vitally important to the health and welfare of the 
Jicarilla ApacheNation. Our people are facing a crisis: the U.S. 
Department of the Interior owns and operates the public water system on 
our Reservation and the water system is a shambles. When the Department 
of the Interior's Bureau of Indian Affairs built the water system, it 
was built in a linear fashion so a single break in the line causes 
systemic failure. The Department of the Interior never adequately 
maintained or upgraded the water system, so it is simply inadequate to 
support modern residential life and is a negative barrier to our 
community growth and economic development. The Department of the 
Interior also constructed the public water system with materials which 
constitute health hazards, such as asbestos. As a result, our people 
suffer with no safe drinking water. In community areas served by 
original water system equipment, we have clusters of deaths from 
stomach cancer. Even as we speak, tribal members are forced to drink 
from this unsafe system. As a tribal government, we have planned a new 
school for our children, and though the location for the new facility 
lacks water infrastructure, we were forced to break ground to meet 
funding requirements of the mill bond. Our complex of government 
services is at a standstill. Housing and economic development are on 
hold because you cannot start new business activity without drinking 
water.
    H.R. 3223 would provide the necessary authorization for the 
Jicarilla ApacheNation to work in cooperation with our trustee, the 
United States Department of the Interior, acting through the Bureau of 
Reclamation, to replace the existing, Federally-owned water delivery 
and wastewater systems on the Jicarilla Apache Reservation. The current 
infrastructure is deficient, inadequately sized, and out of compliance 
with Federal standards thereby subjecting the people both on and off 
the Reservation to serious health and public safety risks. Constructing 
new water delivery and wastewater infrastructure will provide a safe 
and adequate supply of drinking water to our Reservation. Authorization 
of this project is consistent with the United States Federal trust 
responsibility owed to the Jicarilla ApacheNation, the mission of the 
Bureau of Reclamation, and will allow us to move forward with 
desperately needed housing, health care, law enforcement, education and 
other facilities to meet our governmental responsibilities to our 
citizens. The passage of this bill is the top priority of the Jicarilla 
ApacheNation and will be the cornerstone for building a future for my 
Tribe. I urge the Committee to act favorably on this bill.
    This statement provides a history of the Jicarilla Apache people 
and background on the governance of the Jicarilla ApacheNation, 
including a general overview of our relationship with the United 
States. The statement provides a discussion of the Federal Government's 
development of the water delivery and wastewater infrastructure on the 
Jicarilla Apache Reservation as well as the deterioration of these 
systems and the corrective measures that have been undertaken to 
address these problems.
    This statement addresses the relevant sequence of events and 
discussion of issues relating to the enactment of Public Law 106-243 on 
July 10, 2000, which authorized the Secretary of the Interior to 
conduct a feasibility study to determine the most feasible method of 
developing a safe and adequate municipal, rural, and industrial water 
supply for the Jicarilla Apache Reservation. This study, entitled 
``Municipal Water and Wastewater Systems Improvement, Jicarilla 
ApacheNation, Dulce, New Mexico, Planning Report/Environmental 
Assessment'' was conducted by the Bureau of Reclamation in cooperation 
with the Jicarilla ApacheNation, and was completed in September 2001. 
This statement discusses this report, the Jicarilla ApacheNation's 
objective to implement the recommendations of the report, and the 
current progress of the work now being conducted by theNation to 
improve these systems.
HISTORY OF THE JICARILLA APACHE
    For five centuries or more, the mountains and high desert of 
northern New Mexico have been home to the Jicarilla Apache people, one 
of six Athapascan groups which migrated from the North sometime between 
1300 and 1500 A.D. The traditional homeland of the Jicarilla Apache 
people covered more than 50 million acres bound by four major rivers 
across what is now the central and eastern region of northern New 
Mexico, and adjacent portions of southern Colorado and western 
Oklahoma. The variety of terrain and ecosystems provided game, 
agricultural lands, water, fish, wildlife and opportunities for 
intertribal trade. Our traditional lifestyle included a wide variety of 
hunting, gathering plants for food and medicine and raising corn and 
other crops. Jicarilla people lived in clusters of extended family 
groups and maintained semi-permanent living areas at preferred 
locations for hunting and gathering moving from site to site with the 
seasons. Undoubtedly, our people lived through both dry and wet years 
in this region known for its large-scale climatic changes, and mastered 
wise use and management of the land and resources in harmony with the 
demanding environment. Our resilience and resourcefulness proved to be 
the key to our survival and preservation of our culture during the 
subsequent tumultuous years following the arrival of European settlers 
and the American westward expansion.
    Beginning in the late 1600's, the Jicarilla aboriginal land base 
shifted in location and was reduced in geographic spread as the 
Comanches migrated out of the Great Basin toward the Texas Gulf Coast 
and other Apache people were pushed out of southwest Kansas merging 
with the Jicarilla. Trade and French exploration of the region enabled 
the Comanches to obtain guns though the Apaches were blocked from 
obtaining guns. The lack of access to weapons required the Apaches to 
remain close to the foothills year round thus making them more 
vulnerable and further disrupting traditional patterns of subsistence. 
After European contact, lands and resources of the Jicarilla people 
were appropriated by others but we maintained our core areas.
    In the 1800's, the Mexican government awarded numerous land grants 
to Americans and occasionally to Indians to recognize our prior rights. 
By 1841, the Jicarilla people were acknowledged to have the ownership 
and right to use of the largest land grant, consisting of 1.7 million 
acres east of the Taos Pueblo in northern New Mexico. Following the 
1846 annexation of this territory by the United States, this land grant 
was purchased by an American in 1847 without our consent. Pressure for 
lands and resources among settlers and the Jicarilla people caused 
increasingly strained relations and the Jicarilla people were further 
dispossessed from traditional, sacred homelands.
    By 1850, most of the Jicarilla Apache people were located in New 
Mexico practicing small scale agriculture and grazing, In 1851, a 
treaty was signed between the United States and the Jicarilla Apache 
and plans were developed to move the Jicarillas away from the non-
Indian settlement in northern New Mexico. Our treaty, however, was not 
ratified. The Jicarillas made many attempts to establish small farms on 
the newly-reserved tribal territory though these efforts were 
continuously hampered by non-Indian settlement pressures. These 
settlers not only forcibly appropriated the Tribe's fertile lands, 
including extensive forest reserves, and water resources, but also 
pressured local governing officials to ignore efforts to secure a firm 
tribal land base for the Jicarilla Apache people.
    To address these problems, a number of Executive Orders reservation 
were issued to establish a reservation land base for the Jicarilla 
Apache people. Executive Orders of President Ulysses S. Grant in 1874 
and Rutherford B. Hayes in 1880 were issued establishing a reservation 
land base for the Jicarilla Apache people. However, primarily due to 
pressure from non-Indian settlers, these orders were rescinded and 
around 1883, and the Federal Government relocated the Jicarilla Apache 
people to the south to live with the Mescalero Apaches. This move 
proved unwise because the land at Mescalero was being irrigated by the 
Mescaleros or non-Indian settlers, and the Jicarilla people returned 
home to northern New Mexico and continued efforts to secure a permanent 
homeland of its own.
    Finally on February 11, 1887, President Grover Cleveland issued an 
Executive Order which established the Jicarilla Apache Reservation on 
part of our original homeland in north-central New Mexico bordering 
Colorado. In 1907, President Theodore Roosevelt issued another 
Executive Order establishing the southern portion of the Reservation. 
These Executive Order reservation orders were ratified by Congress in 
1919. These laws finally ended the forced dispossession and removal 
that our people endured for nearly 200 years. With adequate water, 
timber, wildlife and agricultural lands coupled with a seemingly more 
supportive Federal Government trustee, our Tribe was poised to 
undertake sustained development of the Reservation lands and resources 
as our permanent home.
    The Jicarilla Apaches began the 20th Century fighting epidemic 
outbreaks of Tuberculosis, trachoma, measles, and influenza. These 
epidemics resulted in a devastating loss of our population. Over 90% of 
the Jicarilla children were infected with Tuberculosis. Our people 
persevered and steadily continued to develop our resources and planned 
to use the revenue from our timber harvesting to purchase sheep and 
cattle for grazing. However, the United States controlled and managed 
our timber resources, but failed to properly manage revenue derived 
from the sale of our timber. By 1912, 130 million board feet of timber 
were sold but funds were not delivered threatening the Tribe's wealth 
and economic security at a critical time of our development. In 1917, 
Congress recognized that the Department of the Interior's mismanagement 
was causing the Tribe unnecessary suffering while our funds were 
encumbered. The Department of the Interior also failed to develop our 
water resources causing overgrazing and extensive damage to the 
Reservation resources. In 1919, livestock was finally delivered to the 
Reservation which diversified the Jicarilla Apache way of life from 
bare subsistence to a ranching economy. Yet, tribal revenue derived 
from resources uses and sales, primarily timber, continued to be 
mismanaged by the Federal Government as documented in several Senate 
field hearing which confirmed that the Tribe was not receiving the 
benefits from tribal resources development.
    On August 3, 1937, our Tribe accepted the provisions of the Indian 
Reorganization Act (IRA), and adopted a Constitution, bylaws and 
corporate charter enabling quick and efficient governmental 
organization. The Constitution vested authority in the Tribal Council 
to regulate use of land in conformity with land and resources 
protection. The Tribe made ``sustained yield'' the guiding principal 
governing resources development. Acceptance of the IRA reinforced 
specific duties of the Department of the Interior to protect and 
enhance our land and resources.
    During the middle part of the century, our livestock and resources 
management continued to grow. At this time, the prevailing Federal 
Policy of terminating the legal status of Indian tribes did not affect 
our Tribe as we were deemed traditional and not ``eligible for 
termination.'' In the 1950's, mineral exploration started on the 
southern part of the Reservation, and soon development of our oil and 
gas began to generate revenue for the Tribe. At the same time, our 
livestock economy began to decline due to the lack of water development 
and drought conditions.
    By 1960, 90% of the tribal population resided in or near the 
community of Dulce demonstrating another major shift in our economy. 
Both the Tribe and the Federal Government, acting through the 
Department of the Interior's Bureau of Indian Affairs, had to 
reconstruct the tribal economy based on centralized governmental 
services, natural resources management, and commercial enterprise 
development. In particular, timber and oil and gas development provided 
a steady and reliable source of revenue and employment opportunities. 
Increased major infrastructure, including schools, public health 
facilities, tribal offices, and housing accompanied the Tribe's 
increased economic development. Tribal government revenue from natural 
resources extraction and revenue from the settlement of the land claims 
settlement coupled with a good relationship with and infrastructure 
support from the Congress and the Department of the Interior provided a 
strong framework for the economic growth of the tribe.
    The modern era also represented another major development as the 
Tribe became more active in its exercise of tribal government authority 
and which often required the Tribe to challenge the Department of the 
Interior's policy decision-making. In 1976, the Tribal Council enacted 
a tribal severance tax ordinance on oil and gas tax to raise additional 
governmental revenue. The Tribe successfully defended its authority in 
the landmark 1982 Supreme Court decision Merrion v. Jicarilla Apache 
Tribe, which upheld the right of the Tribe to impose these taxes to 
fund tribal government services. Our Tribe continued to assert its 
rights and move forward with protecting our water resources.
    During the 1970's, the Tribe asserted its authority to protect its 
water resources because the Department of the Interior failed to do so 
when erecting major Federal water projects diverting our water 
resources to serve communities off the Reservation. The Tribe sued the 
Department of the Interior and the Federal Government to defend our 
water resources and our efforts ultimately resulted in the 
congressional enactment of P.L. 102-441, the Jicarilla Apache Tribe 
Water Rights Settlement Act in 1992. This settlement statutorily 
guaranteed our Tribe perpetual water rights for commercial, municipal 
and domestic use as well as the ability to market or lease water to 
third parties for use off the Reservation.
    During this period, the Tribe similarly prevailed in suing the 
Department of the Interior for its failure to properly value tribal oil 
and gas and account for royalties as required by the applicable leases, 
statutes and regulations. In 1989, however, the Supreme Court issued an 
unfavorable decision in Cotton Petroleum v. New Mexico allowing the 
state to impose severance taxes on non-Indian producers who worked with 
the tribal government to develop tribal trust resources on the 
Jicarilla Apache Reservation. We strongly disagree with the Court's 
rationale for this decision because it places discriminatory and unfair 
impediments on our economy with no requirement that the state return 
any revenue or services back to the Reservation. The resulting dual 
taxation burden caused by this decision continues to plague Indian 
economies nationwide and is a matter that we have been working to 
address through Federal legislation. With the exception of the case, 
the Jicarilla ApacheNation has been extremely successful in asserting 
its rights and holding the Federal Government accountable for its 
responsibilities owed to the Tribe.
    In the 21st Century, the Jicarilla ApacheNation continues to assert 
its rights, protect its resources and hold the Department of the 
Interior and the United States accountable for obligations guaranteed 
by Federal law and for its failure to uphold these obligations. When 
the Department of the Interior, acting through the BIA, allowed the 
Federally-owned water delivery and wastewater systems to deteriorate to 
the point of threatening the public safety and welfare of our people 
and nearby residents, the Jicarilla ApacheNation, in keeping with our 
long tradition of resilience and resourcefulness, immediately undertook 
action to address this problem.
PROFILE OF THE JICARILLA APACHE NATION
    The Jicarilla ApacheNation is a Federally recognized Indian tribe 
organized under the Indian Reorganization Act of 193455, 25 U.S.C. 
Sec. 461 et seq. In addition land set aside by the 1887 and 1907 
Executive Orders that established the Jicarilla Apache Reservation, the 
Jicarilla ApacheNation reacquired approximately 137,150 acres of 
additional land taken into trust by the United States, resulting in a 
total Reservation land base of 879,917 acres. The Jicarilla Apache 
Reservation is geographically located in the resource-rich San Juan 
Basin, a geologic basin containing large amounts of oil, gas, coal, 
uranium, and geothermal reserves.
    The Jicarilla ApacheNation has approximately 4,000 members with 
nearly 85% of our members (3,300) living on the Reservation. The town 
of Dulce in the northeastern part of the Reservation serves as the 
headquarters and tribal government seat and is the location of most of 
the social and economic activity of the Reservation. Most of the 
residents are concentrated in Dulce.
    In accordance with the Jicarilla Apache Revised Constitution, the 
Jicarilla Apache Legislative Council, an eight member body elected by 
members living on the Reservation, is the governing body of the 
Jicarilla ApacheNation. A President and Vice President are elected by 
the on-Reservation tribal membership establishing the head executive 
branch of government which directs all of the various tribal 
departments. The Constitution provides for a third branch of 
government, the Jicarilla Apache Tribal Court.
    The Jicarilla ApacheNation is the largest employer in the region 
with employing about 750 people, and provides law enforcement and 
detention, fire protection and rescue, health care, education, natural 
resources development and management, elderly care, road maintenance, 
environmental protection, fitness and wellness services to the citizens 
on the Reservation. The Jicarilla ApacheNation raises governmental 
revenue through development and regulation of our oil and natural gas 
to fund over 90% of its operating budget. TheNation also formed the 
Jicarilla Energy Company (JECO) to develop, produce and market our oil 
and gas reserves. TheNation offers world class big game hunting and 
fishing that attracts visitors worldwide.
    We have also instituted a land acquisition program to purchase and 
recover some of our original homelands in order to expand our 
agricultural resource base and create additional opportunities for 
tribal social and economic growth. The high elevation and mountainous 
terrain of the Reservation has proven to be inadequate to accommodate 
theNation's increasing agricultural and ranching activities. In 
addition, 99% of theNation's population is located in the town of Dulce 
on the extreme northeastern edge of the Reservation. These 
circumstances have necessitated the purchase of land east of Dulce, 
known as the Mundo Ranch recently reacquired and taken into trust 
status, to provide for additional housing and governmental services 
facilities.
DEVELOPMENT OF WATER INFRASTRUCTURE
    The existing water and wastewater facilities that use the Tribe's 
water rights are held in trust by the United States Department of the 
Interior and operated by the Bureau of Indian Affairs (BIA) Jicarilla 
Agency (Agency) staff. The initial water supply system was erected in 
the early 1900's in the community of Dulce primarily to serve the BIA 
operations and facilities. The source of the community's water supply 
is the Navajo River located about a mile from Dulce. Water is diverted 
from the Navajo River and pumped up hill to the water treatment plant 
before being released into the community for public consumption.
    Upon settlement by tribal members into the town of Dulce, the BIA 
provided a couple of outdoor spigots or faucets along the main water 
line from which member could draw water. In the early 1960's the Tribal 
Council requested the BIA to extend its water delivery services to 
tribal members with homes located along the main water line. The BIA 
granted this request, and for the first time, some of the tribal 
members began to experience the convenience and health benefits of 
indoor plumbing.
    As the needs of the community expanded over the years, the Dulce 
water system also grew from a small BIA-contained system to one that 
provides water delivery and wastewater services to the entire town of 
Dulce. However, with no overall comprehensive planning for capacity, 
public health and safety considerations, the water system developed on 
an ad hoc basis whereby water line extensions branched out from the 
original main line to serve tribal buildings, individual commercial 
development, housing subdivisions, additional BIA facilities, and other 
public facilities. Because the Dulce water system developed in a linear 
fashion with only one source of water to the point of delivery, a 
single water main break results in water delivery failure to a 
significant number of people. The linear nature of the system also 
creates stagnant zones which causes water to become stale thereby 
creating a serious health threat to the community.
    During the late 1980s and the 1990s the BIA-operated water 
treatment plant had several drinking water quality citations as the 
existing plant was under sized and outdated unable to meet new drinking 
water standards. Public health officials suspected that the water 
supply could be contributing to a marked rise in stomach and intestinal 
related diseases in the community.
    The unlined sewage treatment lagoons were constructed with BIA and 
Indian Health Service funding. This outdated wastewater disposal system 
is not only obsolete but is also overcapacity, spilling poorly treated 
effluent into Amargo Creek that is tributary to the San Juan River. 
This system is on the verge of failure, and is currently operating 
without the properNational Pollutant Discharge Elimination System 
permit, which expired in 1995. This system cannot qualify for a permit 
renewal under present circumstances, and under Federal law, exposes the 
BIA to fines of up to $25,000 per day. The sewage lagoons are operating 
at 100% over capacity during the summer and at 500% over capacity in 
the winter as a result of lower evaporation rates. This overcapacity as 
well as seepage from the unlined lagoons has resulted in wastewater 
spilling into the Amargo Creek, which feeds back into the Navajo River, 
and eventually into the Colorado River. The community also suffers from 
unbearable odors from the sewage lagoons. Given the density of the 
local housing, the current system not only threatens the Dulce 
community but also poses significant public health, welfare and safety 
threats to communities off the Reservation.
    The inadequacy of the existing facilities has also given rise to an 
additional public health and safety concern. The demand for and 
proliferation of additional housing has occurred without access to 
community water and wastewater facilities, and have resulted in 
increased private wells and septic tanks. More than 200 septic systems 
have been identified and are not functioning properly because the 
marine shale-derived soils in the area have limited absorptive 
characteristics and are unsuitable for drain field application. There 
are documented cases of standing septic waste in open areas and near 
children playing in the streets.
    All of these documented deficiencies and public health dangers 
demand that the only solution is to completely replace and rehabilitate 
both the water delivery an wastewater collection and treatment systems. 
Yet, for more than twenty years, these systems have been steadily 
deteriorating due to inadequate Federal funding for regular maintenance 
and improvements. However, the Jicarilla BIA Agency has continued to 
exercise Federal responsibility and control over these systems by 
allocating funds from its budget to cover salaries for the operators, 
electrical power and chemicals to operate the treatment plant. In 
addition, the Agency has submitted budget information for a number of 
years documenting the shortfall in funding to operate and maintain the 
existing systems.
    Despite these efforts, the Federal Government has consistently 
under funded the operations, maintenance and replacement program for 
the systems and has reluctantly continued to manage the town's drinking 
water and wastewater systems. This has lead to significant degradation 
of existing systems and replacement in conformance with new standards 
is virtually non-existent.
    In 1996, the BIA inquired whether the Jicarilla ApacheNation would 
assume ownership and operation of the systems. To evaluate the 
feasibility of this request, theNation commissioned studies in 1997 
with PNM, the largest public utility in the state of New Mexico, to 
assess the condition of the water and wastewater facilities in Dulce. A 
field investigation and engineering analyses were performed by PNM 
Water Services and the findings indicated serious degradation of 
existing water and wastewater pipelines and related facilities. It also 
indicated that there was a substantial capacity problem for this size 
of community with little opportunity for expansion given the condition 
and capacity of existing systems. The most serious findings were the 
poor condition and capacities of the existing water treatment plant and 
sewage treatment system, a series of evaporative lagoons. The study 
illustrated that both systems were operating at of above design 
capacity and were not meeting Federal standards for public health and 
stream discharge standards. Discharge of poorly treated effluent into a 
tributary of the Navajo River in the San Juan basin was occurring 
routinely under an expiredNational Pollutant Discharge Elimination 
System (NPDES) permit. The findings indicated that for the systems to 
be brought up to current operating standards and meet Federal water 
quality standards it would cost in excess of $25 million. This 
investment would not, however, provide for long-term community 
expansion.
    These dire conditions escalated in October of 1998, when the 
drinking water diversion system on the Navajo River failed leaving the 
community without water for 6 days. This required emergency funding 
from the Tribe to repair the diversion illustrating the vulnerability 
of the Tribe's diversion and pumping plant system. TheNation, unable to 
get necessary funding from BIA or other Federal programs, was compelled 
to expend $5 million on an emergency basis to replace the water 
treatment plant and associated facilities in 1999.
    The magnitude of the infrastructure issues couple with the BIA's 
inability to comprehensively address the scope of the problems 
associated with their systems left the tribal leadership with no 
alternative but to take the lead to resolve these issues. With the PNM 
information in hand, theNation approached a number of agencies, in 
addition to the BIA, such as the Indian Health Service, EPA and USDA to 
see if any programmatic funding existed to assist theNation with this 
serious set of problems. Given that the these systems are titled with 
the BIA, most Federal programs had limited resources to deal with these 
problems. To deal with this magnitude of funding needs, theNation was 
advised to seek specific legislation to have appropriations designated 
for a specific agency to manage in cooperation with theNation.
    TheNation then approached the Bureau of Reclamation to see if their 
agency would be willing to work on this issue. TheNation was advised to 
seek authorization for a Feasibility Study so a report to Congress 
concerning the problem could be prepared to assist in developing 
authorizing legislation for this project. TheNation worked closely with 
the New Mexico Congressional delegation to develop legislation that 
would authorize the Bureau of Reclamation to prepare the Feasibility 
Report to determine the most feasible method of developing a safe and 
adequate municipal, rural, and industrial water supply for the 
Jicarilla Apache Reservation. P.L. 106-243 was signed into law on July 
10, 2000 and directed the Secretary of the Interior to work in 
cooperation with the Jicarilla ApacheNation in conducting this study. 
The statute also authorized $200,000 for the completion of the study 
and required the Secretary to report back to Congress on the status of 
the work within one year from the time funding was appropriated.
FEASIBILITY STUDY AND REPORT AUTHORIZED BY PUBLIC LAW 106-243
    In September 2001, the Bureau of Reclamation, in cooperation with 
the Jicarilla ApacheNation completed the feasibility study and report 
authorized by P.L. 106-243, entitled ``Municipal Water and Wastewater 
Systems Improvement, Jicarilla ApacheNation, Dulce, New Mexico, 
Planning Report/Environmental Assessment.'' The findings of this report 
were similar to the PNM report regarding the condition and capacity of 
existing systems but suggested that none of the older existing 
pipelines be salvaged due to age and size. This resulted in a $35 
million estimate to adequately replace existing deteriorated facilities 
and to build a new conventional wastewater treatment plant to treat 
water to Federal discharge standards, eliminate the serious odor 
problem permeating the community, and have a new water supply source 
for stream enhancement, construction and irrigation purposes that was 
previously being evaporated.
    The report goes on to say that to adequately solve both immediate 
environmental and public health concerns and meet long-term growth and 
economic development needs of the Jicarilla ApacheNation, an additional 
$10 million will be needed resulting in a recommendation to Congress to 
authorize construction of water and wastewater facilities at a cost of 
$45 million.
THE NATION'S CONTRIBUTIONS TO THE SYSTEMS
    After discovering the Federal programs and funding sources were 
limited to solve even the immediate capacity problems and public health 
concerns, theNation was compelled to fund several projects beginning in 
1998.
[GRAPHIC] [TIFF OMITTED] T0010.001

    On a percentage basis, this investment would amount to more than 
20% of total project costs if what the nation has already funded is 
added to the Federal portion being requested. TheNation recently 
committed an addition $6 million to begin construction on the new 
wastewater treatment plant because the current situation is so extreme 
and required immediate action. The total project cost is broken listed 
below:
[GRAPHIC] [TIFF OMITTED] T0010.002


    In addition, theNation is making the commitment to assume title to 
the facilities and to operate these facilities in perpetuity once 
constructed to Federal standards. This is a significant Federal benefit 
as it alleviates the Federal liability in the operation of a 
substandard system and shifts the costs of operations, maintenance and 
replacement of these facilities to theNation. It is estimated by the 
O,M & R portion of the report, that it will cost approximately $750,000 
per year to adequately operate and maintain these facilities. The 
Federal investment would be protected under tribal management as BIA 
funding for this purpose has been significantly cut over the years 
resulting in the current conditions that exist today. The present value 
of this cost over a 50-year project life at a 6% financing rate is $ 12 
million.
    By authorizing this project, Congress will provide for the United 
States to meet its trust responsibility to theNation by providing 
adequate water and wastewater infrastructure to protect and advance the 
health, safety and welfare of the Jicarilla people. TheNation has 
fulfilled all that was asked of us to demonstrate the extensive need 
our people have for adequate infrastructure that a majority of 
Americans currently enjoy. TheNation, in cooperation with Reclamation 
and with the assistance of Congress, has demonstrated the poor 
condition that these facilities are in and have exposed the risk facing 
the Bureau of Indian Affairs as it continues to operate these 
facilities in their current condition. TheNation has also demonstrated 
its resolve in improving conditions for our people by investing nearly 
$14 million in infrastructure of its own financial resources even 
though we believe strongly that the United States has failed in 
providing these services as part of its trust responsibility to 
theNation.
CONGRESSIONAL LEGISLATION
    This discussion provides a section-by-section analysis of H.R. 
3223.
    Section 1. Short Title--Jicarilla Apache Reservation Rural Water 
System Act.
    Section 2. Purposes of the Act
     Lto ensure a safe and adequate rural, municipal, and water 
supply and wastewater system on the Jicarilla Apache Reservation;
     Lto authorize BOR to plan, design, and construct the water 
supply, delivery, and wastewater collection systems on the Jicarilla 
Apache Reservation;
     Lto require, at the election of the Jicarilla 
ApacheNation, that BOR contract with theNation under the Indian Self-
Determination Act for the planning, design, and construction of the 
project; and
     Lto establish a process for theNation to eventually assume 
ownership and responsibility for the system upon the completion of the 
project.
    Section 3. Definitions. Self-explanatory.
    Section 4. Jicarilla Apache Reservation Rural Water System.
    (a) & (b) authorizes construction and scope of the project to 
rehabilitate and replace the water delivery and wastewater collection 
systems on the Jicarilla Apache Reservation.
    (c) construction cost of the project will be borne by the Federal 
Government, and the existing amount of operation and maintenance 
funding currently incurred by the Federal Government shall continue to 
be available to theNation through contracting under the Indian Self-
Determination Act.
    (d) theNation is given recognition of the fact that it has expended 
$7.3 million on the Federal systems and that this amount shall be 
deemed to have satisfied any project beneficiary share that the 
authorizing committees may require.
    (e) after the project is completed and the water system is 
rehabilitated, theNation will assume responsibility and liability under 
the relevant plans.
    Section 5. General Authority authorizes the Secretary to enter into 
agreements and to promulgate regulations relevant to the project.
    Section 6. Project Requirements -
    (a) Secretary has to prepare a project plan within 60 days of 
enactment of the statute;
    (b) Secretary shall designate a project manager;
    (c) Secretary and Tribe shall commit to a transition plan regarding 
operation and maintenance of the system during and after construction;
    (d) Secretary shall have oversight responsibility and shall 
incorporate ``value engineering analysis'' an engineering term of art;
    (f) Service area shall be within the boundaries of the Reservation;
    (g) Nation shall develop an operation, maintenance and replacement 
plan;
    (h) Project shall be subject the Indian Self-Determination Act;
    (i) Secretary shall issue an annual report on the progress of the 
project; and
    (j) Title shall be held in trust by the United States and will be 
transferred only by another act of Congress.
    Section 7. Authorization of Appropriations -
    (a) $45 million, subject to necessary price and cost adjustments, 
is authorized to be expended on the project;
    (b) Funds may only be appropriated after an appraisal and 
feasibility study have been completed, and an operation, maintenance 
replacement has been completed by theNation.
    (c) NEPA requirements must be satisfied.
    (d) Amounts authorized and appropriated to be expended may not be 
subject to agency financing reductions.
    Section 8. Prohibition on use of funds for irrigation purposes.
    Section 9. Water Rights theNation has sufficient water rights in 
the basin for this project and the project will have no adverse 
Endangered Species Act related issues.
CONCLUSION
    In sum, the Jicarilla ApacheNation is suffering premature deaths, 
community members are subject to continuing health hazards, and 
community development is blocked by the Department of the Interior's 
failure to maintain and modernize the public water system that it 
established and undertook to operate on the Reservation. Interior has 
asked the Jicarilla ApacheNation to take over the operation of the 
public water system, and as a tribal government we are willing to take 
over the operation of a safe and sound public water system. But before 
we will take over the operation, Interior must fix the health hazard 
that it has created.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Mr. Hayworth.
    Mr. Hayworth. Thank you, Mr. Chairman.
    Madam President, again, thank you for coming, and we thank 
you for your testimony and also the explanation of just what 
your community faces. And I am pleased to join my colleague 
from New Mexico to move this legislation. I believe we received 
some encouraging signs from the Bureau of Reclamation, and I am 
just interested in your evaluation as you sat and listened to 
the preceding testimony. Do you feel comfortable that we can 
move forward in a constructive fashion, in a bipartisan way, 
and with the Bureau as well as with your tribe to solve this 
problem, using this bill as a starting point and understanding 
that we have some things to iron out here?
    Ms. Vigil-Muniz. I believe so.
    Mr. Hayworth. Well, again, I think that those who join us 
here today, when they hear what you are confronting, the health 
hazards, the environmental hazards and the frustration and 
indignity of trying to solve a problem and trying to reach out 
and get this done is something that underscores the urgency of 
the action.
    And, Mr. Chairman, I again thank you for having his hearing 
and then moving forward in this direction.
    And, Madam President, again, as we visited earlier today 
before coming in the hearing room, I stand ready to work with 
you and your tribe, and my colleague from New Mexico and other 
colleagues on the Committee, to find a legislative solution of 
this, and I thank you for your attendance.
    I yield back.
    Mr. Calvert. I thank the gentleman.
    Mr. Udall.
    Mr. Udall of New Mexico. Thank you, Mr. Chairman, and I 
yield to the gentlelady from California, Ms. Solis.
    Ms. Solis. Thank you, Mr. Udall.
    I also want to associate my comments with Mr. Hayworth's, 
surprisingly. On this one we agree. This in fact I view as an 
environmental justice issue. This community has done as much as 
they can feasibly do through their own efforts and creative 
uses, by putting money together to begin a project to address 
these egregious issues that face your particular reservation. I 
commend you and hope that we can work with you. This Committee 
will work with you to see how we can look at any other 
mitigation issues that were raised during the year, but I had 
an opportunity to meet with some of the members and was very 
interested in hearing of some of the challenges that they have, 
not only the fact that they are faced with many water cleanup, 
contaminated water cleanup challenges, but also the fact that 
this also where I believe nuclear testing occurred in prior 
years, so that also has some definite impacts in the 
surrounding area that I know at this time we can't begin to 
address. But we can certainly start looking at something that 
adds more of a challenge to what it is you all are trying to 
do.
    So I just wanted to associate myself with support of this 
bill, bipartisan effort here. And thank you for coming here and 
testifying this afternoon before our Committee. Thank you.
    Mr. Udall of New Mexico. Yield.
    Ms. Solis. Yield back the balance of my time.
    Mr. Udall of New Mexico. Thank you very much for those 
eloquent words on this issue.
    Madam President, let me first of all thank you for your 
leadership on this issue. I think you have shown a great deal 
of initiative since you have been president. I think you have 
pulled together a good team to work on this, and I think we are 
making significant progress, and on my part, I just want to 
commit to you that I will work with the rest of the Committee 
members and the Chairman to do whatever we can to expedite 
this.
    I think you brought one of your counselors with you also 
today, if you would like to introduce him to the Committee, 
Carson Vicente; is that correct?
    Ms. Vigil-Muniz. Yes, that's correct.
    Mr. Chairman, may I introduce him?
    Mr. Calvert. Yes. Certainly, you go ahead an introduce your 
guest.
    Ms. Vigil-Muniz. Carson Vicente, the legislative counsel; 
also have Mike Hammond, who is our water administrator; and 
Shana Nancity who is our lobbyist here in D.C.
    Mr. Udall of New Mexico. Thank you. Good to have you here.
    You heard the testimony of Commissioner Keys. On the issue 
of operation and maintenance after the project is complete, 
could you tell us what the position of the JicarillaNation is 
on that?
    Ms. Vigil-Muniz. Mr. Chairman, Mr. Udall, we plan to take 
over the title at that point in time when the project is 
completed, and we will take over the responsibility of the 
operation and maintenance at our cost.
    Mr. Udall of New Mexico. That was my understanding all 
along, and I think that the three sections of the bill that the 
Commissioner mentioned, those sections specifically referred to 
in the language, ``The tribe shall assume responsibility for 
and liability related to the annual operation, maintenance and 
replacement cost of the project in accordance with this act.'' 
That was one of the sections, and I believe that was very 
clear. I think you referred also to Section 4(c) here, 4(c)(2). 
In the purposes it talks about ``To establish in which the 
ApacheNation shall assume title and responsibility for 
ownership, operation, maintenance and replacement of the 
system.'' So we are once again in the legislation being clear 
there.
    And in 4(c)(2), which is one that the Commissioner 
mentioned, it says, ``The Federal share of cost of operation 
and maintenance of the rural water supply project shall 
continue to be available for operation and maintenance in 
according with the Indian Self-Determination Act.'' So that may 
be the area where we need to work a little bit with the 
Commissioner on, but he, I think, showed his support and 
willingness to work with us. And I don't know if you have any 
other comments based on what he said in terms of stating the 
position of theNation.
    Ms. Vigil-Muniz. Mr. Chairman, Mr. Udall, if I understand 
correctly on the 638 issues, they are referring to BIA dollars 
that are currently being applied to the operation and 
maintenance, which is approximately 100,000, and those dollars 
are what we plan to take over and use toward contributing 
toward the operation and maintenance cost.
    But, yes, we can work with Commissioner Keys and try to 
resolve the language issue and try to get that much clearer so 
that they understand where we are coming from.
    Mr. Udall of New Mexico. And what you talk about 638 
dollars, you are talking about the program that if a tribe 
takes over a function and operates it itself, they are then 
entitled to have money to do that, and that is the $100,000 you 
are referring to?
    Ms. Vigil-Muniz. That is correct.
    Mr. Udall of New Mexico. Yes, OK.
    Thank you very much, Mr. Chairman.
    Mr. Calvert. I thank the gentleman.
    I think that we can work out the differences with the 
Commissioner, the three of us, Mr. Hayworth, Mr. Udall and 
myself and our Committee staff, and try to, one work out the 
operations maintenance language in the bill, and also I think 
we need to get some flexibility in the bill for additional 
funding from different Federal agencies potentially, and I 
think we can do that, and hopefully we can get together a bill 
that we can bring up here and mark up and send out.
    And so with that positive news, unless there are any other 
comments from the Committee, we stand adjourned.
    I thank Madam President for your attendance today, and we 
appreciate your flying all the way out here. With that, we are 
adjourned.
    [Whereupon, at 3:09 p.m., the Subcommittee was adjourned.]

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