[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
 H.R. 2515, ``LOWER COLORADO RIVER MULTI-SPECIES CONSERVATION PROGRAM 
  ACT'' & H.R. 1970, ``NORTHWESTERN NEW MEXICO RURAL WATER PROJECTS 
                                 ACT''

=======================================================================

                          LEGISLATIVE HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                         Tuesday, July 24, 2007

                               __________

                           Serial No. 110-35

                               __________

       Printed for the use of the Committee on Natural Resources



  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
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         Committee address: http://resourcescommittee.house.gov


                                 ______

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                     COMMITTEE ON NATURAL RESOURCES

               NICK J. RAHALL II, West Virginia, Chairman
              DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan             Jim Saxton, New Jersey
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Wayne T. Gilchrest, Maryland
Solomon P. Ortiz, Texas              Chris Cannon, Utah
Frank Pallone, Jr., New Jersey       Thomas G. Tancredo, Colorado
Donna M. Christensen, Virgin         Jeff Flake, Arizona
    Islands                          Stevan Pearce, New Mexico
Grace F. Napolitano, California      Henry E. Brown, Jr., South 
Rush D. Holt, New Jersey                 Carolina
Raul M. Grijalva, Arizona            Luis G. Fortuno, Puerto Rico
Madeleine Z. Bordallo, Guam          Cathy McMorris Rodgers, Washington
Jim Costa, California                Bobby Jindal, Louisiana
Dan Boren, Oklahoma                  Louie Gohmert, Texas
John P. Sarbanes, Maryland           Tom Cole, Oklahoma
George Miller, California            Rob Bishop, Utah
Edward J. Markey, Massachusetts      Bill Shuster, Pennsylvania
Peter A. DeFazio, Oregon             Dean Heller, Nevada
Maurice D. Hinchey, New York         Bill Sali, Idaho
Patrick J. Kennedy, Rhode Island     Doug Lamborn, Colorado
Ron Kind, Wisconsin                  Mary Fallin, Oklahoma
Lois Capps, California               Kevin McCarthy, California
Jay Inslee, Washington
Mark Udall, Colorado
Joe Baca, California
Hilda L. Solis, California
Stephanie Herseth Sandlin, South 
    Dakota
Heath Shuler, North Carolina

                     James H. Zoia, Chief of Staff
                   Jeffrey P. Petrich, Chief Counsel
                 Lloyd Jones, Republican Staff Director
                 Lisa Pittman, Republican Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

              GRACE F. NAPOLITANO, California, Chairwoman
     CATHY McMORRIS RODGERS, Washington, Ranking Republican Member

Jim Costa, California                Ken Calvert, California
George Miller, California            Dean Heller, Nevada
Mark Udall, Colorado                 Doug Lamborn, Colorado
Joe Baca, California                 Mary Fallin, Oklahoma
Vacancy                              Don Young, Alaska, ex officio
Nick J. Rahall II, West Virginia, 
    ex officio


                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Tuesday, July 24, 2007...........................     1

Statement of Members:
    Heller, Hon. Dean, a Representative in Congress from the 
      State of Nevada............................................     4
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................     3
    Mitchell, Hon. Harry, a Representative in Congress from the 
      State of Arizona...........................................     5
        Prepared statement of....................................     5
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................     2
        Prepared statement of....................................     3
    Udall. Hon. Tom, a Representative in Congress from the State 
      of New Mexico..............................................     6

Statement of Witnesses:
    Bitter Smith, Susan, President, Board of Directors, Central 
      Arizona Water Conservation District, Phoenix, Arizona......    10
        Prepared statement on H.R. 1970..........................    13
        Prepared statement on H.R. 2515..........................    12
        Response to questions submitted for the record...........    14
    Caan, George M., Executive Director, Colorado River 
      Commission of Nevada, Las  Vegas, Nevada...................    16
        Prepared statement on H.R. 2515..........................    18
        Response to questions submitted for the record...........    19
    Dunlap, Jim, Chairman, New Mexico Interstate Stream 
      Commission, Santa Fe, New Mexico...........................    58
        Prepared statement on H.R. 1970..........................    59
        Response to questions submitted for the record...........    64
    Gillon, Kara, Senior Staff Attorney, Defenders of Wildlife, 
      Albuquerque, New Mexico....................................    20
        Prepared statement on H.R. 2515..........................    21
        Response to questions submitted for the record...........    26
    Houtz, Gregg, Deputy Counsel, Arizona Department of Water 
      Resources, Phoenix, Arizona, Oral statement on behalf of 
      Herbert R. Guenther on H.R. 1970...........................    71
        Response to questions submitted for the record...........    73
    Johnson, Robert, Commissioner, Bureau of Reclamation, U.S. 
      Department of the Interior, Washington, D.C., Oral 
      statement on H.R. 1970.....................................    44
        Prepared statement on H.R. 1970..........................    44
        Oral statement on H.R. 2515..............................     8
        Prepared statement on H.R. 2515..........................     9
    Lundstrom, Hon. Patricia A., Member, New Mexico House of 
      Representatives, and President, Northwest New Mexico 
      Council of Governments, Gallup, New Mexico.................    65
        Prepared statement on H.R. 1970..........................    67
    Shirley, Hon. Joe, Jr., President, Navajo Nation, Window 
      Rock, Arizona..............................................    48
        Prepared statement on H.R. 1970..........................    50
        Response to questions submitted for the record...........    54
    Zimmerman, Gerald R., Executive Director, Colorado River 
      Board of California, Glendale, California, Oral statement 
      on H.R. 1970...............................................    73
        Prepared statement on H.R. 1970..........................    75
        Response to questions on H.R. 1970.......................    77
        Oral statement on H.R. 2515..............................    27
        Prepared statement on H.R. 2515..........................    28
        Response to questions on H.R. 2515.......................    30

Additional materials supplied:
    Grubaugh, Elston, Acting General Manager, The Imperial 
      Irrigation District, Statement submitted for the record on 
      H.R. 2515..................................................    84
    Guenther, Herbert R., Director, Arizona Department of Water 
      Resources, Statement submitted for the record on H.R. 1970.    86
        Statement submitted for the record on H.R. 2515..........    89
    Jicarilla Apache Nation, Statement submitted for the record 
      on H.R. 1970...............................................    90
    Jones, Evan, Vice President, BHP Navajo Coal Company, 
      Statement submitted for the record on H.R. 1970............    93
    Kightlinger, Jeffrey, General Manager, The Metropolitan Water 
      District of Southern California, Statement submitted for 
      the record on H.R. 2515....................................    94
    List of documents retained in the Committee's official files.    95
    San Juan Agricultural Water Users Association, Mike Sullivan, 
      Chairman, Statement submitted for the record on H.R. 1970..    96




LEGISLATIVE HEARINGS ON H.R. 2515, TO AUTHORIZE APPROPRIATIONS FOR THE 
   BUREAU OF RECLAMATION TO CARRY OUT THE LOWER COLORADO RIVER MULTI-
SPECIES CONSERVATION PROGRAM IN THE STATES OF ARIZONA, CALIFORNIA, AND 
 NEVADA, AND FOR OTHER PURPOSES. ``LOWER COLORADO RIVER MULTI-SPECIES 
CONSERVATION PROGRAM ACT;'' AND H.R. 1970, TO AMEND THE COLORADO RIVER 
STORAGE PROJECT ACT AND PUBLIC LAW 87-483 TO AUTHORIZE THE CONSTRUCTION 
AND REHABILITATION OF WATER INFRASTRUCTURE IN NORTHWESTERN NEW MEXICO, 
 TO AUTHORIZE THE USE OF THE RECLAMATION FUND TO FUND THE RECLAMATION 
    WATER SETTLEMENTS FUND, TO AUTHORIZE THE CONVEYANCE OF CERTAIN 
 RECLAMATION LAND AND INFRASTRUCTURE, TO AUTHORIZE THE COMMISSIONER OF 
    RECLAMATION TO PROVIDE FOR THE DELIVERY OF WATER, AND FOR OTHER 
    PURPOSES. ``NORTHWESTERN NEW MEXICO RURAL WATER PROJECTS ACT.''

                              ----------                              


                         Tuesday, July 24, 2007

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:02 a.m. in 
Room 1334, Longworth House Office Building, Hon. Grace F. 
Napolitano [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Napolitano, Costa, Heller, 
Lamborn, and Udall.

STATEMENT OF THE HON. GRACE F. NAPOLITANO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Napolitano. Good morning ladies and gentlemen, and 
welcome to the hearing on two significantly different yet major 
issues of importance to the future of water in the western 
United States.
    We will hear testimony on H.R. 2515, a bill that would put 
in place a proactive approach to the preservation of habitat 
while ensuring continued water deliveries in the lower Colorado 
River Basin.
    And also on H.R. 1970, legislation that will implement the 
Water Settlement Agreement between the Navajo Nation and New 
Mexico and the United States.
    Both of these bills address critical water topics that can 
no longer be overlooked or ignored. Habitat restoration and 
preservation concerns now have a seat at the table, as they 
well should have, and Indian water rights, although created and 
vested as of the date of the reservation, were often left 
behind as major water deals to benefit non-Indians were 
developed in the decades past.
    I support the general premise of both bills but I do have a 
number of questions and concerns. With regard to H.R. 2515, I 
am concerned about the 50-year term of the agreement proposed 
in the legislation which many, including myself, feel is too 
long. Nobody can predict what the lower Colorado River might 
look like 50 years from now, and I am also concerned that some 
of the limitations in the bill effectively immunize water users 
from future changes to the Endangered Species Act.
    H.R. 1970, introduced by our colleague from New Mexico, 
Congressman Tom Udall, is certainly the most significant Indian 
water rights legislation to come before this subcommittee since 
2005 when we enacted the Arizona Water Rights Settlement Act. 
This legislation includes a number of provisions that have 
drawn criticism from the Administration, and we have tried to 
address some of those issues in today's hearing. I hope our 
questioning of the witnesses this morning will help to resolve 
some of these points.
    Commissioner Johnson, I am particularly concerned that the 
Bureau of Reclamation has been very closely involved in many of 
these projects contemplated, especially in H.R. 1970, but yet 
you step away from that in your statement including indicating 
that the Administration did not participate in the drafting of 
Water Rights Settlement embodied in H.R. 1970 and does not 
support a water settlement under these circumstances. What 
exactly is the role of the Administration when it comes to 
Indian water settlements?
    Let me welcome all the witnesses. First of all, our acting 
Ranking Member, Mr. Lamborn, and Representative Heller and, I 
believe, Representative Mitchell. I welcome our guests to the 
Subcommittee today. Congressman Tom Udall is not here yet. I do 
not see him. Congressman Harry Mitchell is here. Thank you, and 
Representative Raul Grijalva who will be joining us, and thank 
you for those that are here.
    I ask unanimous consent that Representatives Harry Mitchell 
and Tom Udall be allowed to sit on the dais with the 
Subcommittee this morning to participate in Subcommittee 
proceedings, and without objection so ordered. I will begin the 
meeting with a brief statement. I am sorry. My opening 
statement I have given, and I would now recognize the Ranking 
Member, Mr. Lamborn, for his statement.
    [The prepared statement of Mrs. Napolitano follows:]

      Statement of The Honorable Grace F. Napolitano, Chairwoman, 
                    Subcommittee on Water and Power

    Today's hearing will consider two significantly different, yet 
major issues of importance to the future of water in the Western United 
States. We will hear testimony on H.R. 2515, a bill that will put in 
place a proactive approach to the preservation of habitat while 
ensuring continued water deliveries in the lower Colorado River Basin; 
and also on H.R. 1970, legislation that will implement the water 
settlement agreement between the Navajo Nation in New Mexico and the 
United States.
    Both bills address critical water topics that can no longer be 
overlooked or ignored. Habitat restoration and preservation concerns 
now have a seat at the table, as they should. And Indian water rights, 
although created and vested as of the date of the reservation, were 
often left behind as major water deals to benefit non-Indians were 
developed in decades past.
    I support the general premise of both bills but I do have a number 
of questions. With regard to H.R. 2515, I am concerned that the 50 year 
term of the MSCP agreement proposed in this legislation may be too 
long. Nobody can predict what the Lower Colorado River might look like 
fifty years from now. I am also concerned that some of the limitations 
in the bill effectively immunize water users from future changes to the 
Endangered Species Act.
    H.R. 1970, introduced by our colleague from New Mexico, Congressman 
Tom Udall, is certainly the most significant Indian water rights 
legislation to come before this Subcommittee since 2005, when we 
enacted the Arizona Water Rights Settlement Act. This legislation 
includes a number of provisions that have drawn criticism from the 
Administration, and I hope our questioning of witnesses this morning 
will help to resolve some of these points. Commissioner Johnson, I am 
particularly concerned that the Bureau of Reclamation has been very 
closely involved in many of the projects contemplated in H.R. 1970, but 
you step away from that in your statement, indicating that the 
Administration did not participate in the drafting of the water rights 
settlement embodied in H.R. 1970, and does not support a water 
settlement under these circumstances. What exactly is the role of the 
Administration when it comes to Indian water settlements?
    We welcome our witnesses this morning and look forward to their 
testimony. I am pleased to now yield to my friend from Colorado 
Springs, the acting Ranking Minority Member of our Subcommittee, 
Congressman Doug Lamborn, for any statement he may have.
                                 ______
                                 

    STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Lamborn. Thank you, Madame Chairwoman, and it is good 
to be here for this subcommittee meeting this morning. I will 
be standing in for a short while for the Ranking Member, Cathy 
McMorris Rodgers of Washington State, and in a minute I am 
going to introduce the sponsor of the bill, and ask him to 
actually take over for this portion of the hearing because it 
is his bill that we will be considering, Dean Heller of Nevada.
    But these bills being considered today try to resolve water 
issues in the Colorado River Basin. Throughout the west water 
and power users have legitimately asked for certainty in their 
supplies. Certainty has been hard to find with an ongoing 
drought and with constant litigations surrounding the 
Endangered Species Act. However, Mr. Heller and Mr. Mitchell's 
bill provide for certainty and Endangered Species protection at 
the same time. It proves that environmental protection and the 
water needs for people can truly be met together outside of the 
courts.
    I also noticed that Mr. Udall's bill attempts to provide 
water for his constituents. I commend my colleague from New 
Mexico for introducing his bill. However, I am concerned that 
neighboring states are not completely on board with this 
effort, and that the Federal government was not party to the 
agreement referenced in the bill.
    But I look forward to hearing from my colleagues and 
today's witnesses about these important bills, and at this 
point I would like to turn, with the permission of the 
Chairwoman, things over from my perspective to the member from 
Nevada, Dean Heller.
    Mrs. Napolitano. Please.

  STATEMENT OF HON. DEAN HELLER, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF NEVADA

    Mr. Heller. Thank you. First of all, thank you, Madame 
Chairwoman, for holding this hearing. I thank acting Ranking 
Member--I will be the acting Ranking Member here in a few 
minutes--for the hearing today on the Lower Colorado Multi-
Species Conservation Act. I introduced this legislation to 
authorize the Department of Interior to manage and implement 
the Lower Colorado River Multi-Species Conservation Program and 
authorize sufficient funding to meet the program's obligations 
without creating any new Federal spending.
    The Colorado River water and power resources supplies more 
than 20 million people in the lower basin states of Nevada, 
Arizona and California. The Department of the Interior agencies 
as well as various non-Federal stakeholders and water and power 
agencies along the Colorado River formed a multi-regional 
partnership to develop the Lower Colorado River Multi-Species 
Conservation Program.
    The goal of this program is to protect sensitive, 
threatened and endangered fish and wildlife species and their 
habitat while providing sufficient environmental benefits and 
reliable water and power supply along the Colorado River. This 
legislation achieves several necessary steps to further codify 
the responsibilities of this program and the roles of the 
various stakeholders.
    The legislation provides a specific authorization of 
appropriations sufficient for the Secretary to meet specified 
obligations under the program documents. Obtaining specific 
authorization assures the long-term availability of the 
funding. The legislation provides continuity of the program by 
ensuring that it is fully implemented, enforceable, and that it 
remains viable for the next 50 years.
    Finally, this legislation enjoys the support from members 
of the Congress from Nevada, Arizona and California, 
demonstrating that this program is important to the long-term 
water supply needs of all three states. Again, Madame 
Chairwoman and Ranking Member, thank you for holding this 
important hearing. I look forward to the testimony from our 
witnesses. I want to welcome everybody that is here. Thank you 
very much for your hard work and effort so that we can be here 
today and those in the audience who also participated in the 
hearings to produce this program. So I will yield back the 
balance of my time. Thank you.
    Mrs. Napolitano. Thank you, sir, for your opening 
statement, and now I would like to recognize Mr. Mitchell for 
his opening statement.

   STATEMENT OF THE HON. HARRY MITCHELL, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Mitchell. Thank you, Madame Chair. I would like to 
thank you and members of this subcommittee for holding today's 
hearing on House Bill 2515, the Lower Colorado River Multi-
Species Conservation Program Act, and for allowing me to take 
part in it. I also would like to thank Representative Dean 
Heller, and I am grateful for his partnership on this important 
piece of legislation, and finally I want to thank a 
distinguished former member without whose help H.R. 2515 would 
not be before us today, and that is Congressman Jay Rhodes. He 
has been a tireless advocate, and I am grateful for his 
efforts.
    From the start, H.R. 2515 has been a bipartisan bill, and 
to me that is the best way to legislate. This bill has been 
more than a decade in the making, and I believe that it is a 
worth bipartisan compromise. The bill provides for a long-term, 
comprehensive, cooperative program to protect 26 endangered, 
threatened and sensitive species on the lower Colorado River, 
and to provide assurances to the affected water and power 
agencies of Arizona, California and Nevada, that their 
operations may continue upon compliance with the requirements 
of this program.
    The program will create over 8,100 acres of riparian, marsh 
and backwater habitat for protected species and include plans 
for the rearing and stocking of more than 1.2 million fish to 
augment populations of two endangered fish covered by this 
program. The program will operate on and around the Colorado 
River from Lake Mead to the U.S./Mexico border but like most 
water issues related to the Colorado, its effects will be felt 
throughout Arizona and across the southwest United States.
    The program's cost will be divided 50-50 between the 
Federal government and the non-Federal participants. California 
participants will pay 50 percent of the non-Federal share, and 
Arizona and Nevada will participate and will pay 25 percent of 
the non-Federal share. I look forward to today's hearing and to 
continue working with this committee on this important piece of 
legislation, and I yield back the balance of my time. Thank 
you.
    [The prepared statement of Mr. Mitchell follows:]

Statement of The Honorable Harry Mitchell, a Representative in Congress 
                from the State of Arizona, on H.R. 2515

    Thank you Madam Chairwoman.
    I would like to thank you and the members of this subcommittee for 
holding today's hearing on H.R. 2515, the Lower Colorado River Multi-
Species Conservation Program Act--and for allowing me to take part in 
it.
    I would also like to thank Rep. Dean Heller. I am grateful for his 
partnership on this important legislation.
    Finally, I want to thank a distinguished former Member--without 
whose help H.R. 2515 would not be before us today: Congressman Jay 
Rhodes. He has been a tireless advocate, and I am grateful for his 
efforts.
    From the start, H.R. 2515 has been a bipartisan bill, and to me 
that is the best way to legislate. This bill has been more than a 
decade in the making, and I believe it is a worthy, bipartisan 
compromise.
    The bill provides for a long-term, comprehensive, cooperative 
program to protect 26 endangered, threatened and sensitive species on 
the Lower Colorado River--and to provide assurances to affected water 
and power agencies of Arizona, California and Nevada that their 
operations may continue upon compliance with the requirements of this 
program.
    The program will create over 8100 acres of riparian, marsh and 
backwater habitat for protected species, and includes plans for the 
rearing and stocking of more than 1.2 million fish to augment 
populations of two endangered fish covered by the program.
    The program will operate on and around the Colorado River from Lake 
Mead to the U.S.-Mexico border, but like most water issues relating to 
the Colorado, its effects will be felt throughout Arizona, and across 
the southwestern United States.
    The program's cost will be divided 50-50 between the federal 
government and the non-federal participants. California participants 
will pay 50 percent of the non-federal share, and Arizona and Nevada 
participants will pay 25 percent of the non-federal share.
    I look forward to today's hearing, and to continuing to work with 
this committee on this important legislation.
                                 ______
                                 
    Mrs. Napolitano. Thank you, sir. Mr. Udall.

 STATEMENT OF THE HON. TOM UDALL, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF NEW MEXICO

    Mr. Udall. Thank you very much, Chairwoman Napolitano, and 
I guess Ranking Member McMorris Rodgers is going to be here at 
some point. Thank you for holding this hearing on H.R. 1970, 
the Northwestern New Mexico Rural Water Projects Act. This 
important legislation will have a lasting impact on my 
constituents in northwestern New Mexico, the Jicarilla Apache 
Nation and the Navajo Nation.
    The bill addresses the basic need for water and sanitation 
that I believe is the right of every individual and which are 
long overdue in this region of New Mexico. It also expressly 
ratifies the Navajo Nation's water rights and eliminates 
uncertainty over how those rights may impact others. I am 
pleased to have had the opportunity to participate in the 
careful negotiations that led to the introduction of this bill, 
and I am thankful for your interest in building on these 
efforts to make these projects a reality.
    Water tenure has long been a volatile issue in the arid 
southwest. As communities in the region have grown, the strain 
on water resources has increased. It is the responsibility of 
the basin states and the southwestern tribal nations to 
formulate working agreements on how this very precious resource 
is utilized. The Northwestern New Mexico Rural Water Projects 
Act will ratify one such accord, the San Juan River Settlement 
Agreement.
    This agreement was signed by the Navajo Nation and the 
State of New Mexico on April 19, 2005, and was the culmination 
of years of work. The settlement agreement seeks to provide for 
the development of a rural water system to address the water 
needs of numerous New Mexicans, many of them members of the 
Navajo Nation and the Jicarilla Apache Nation. H.R. 1970 would 
ratify this agreement, thereby resolving the water rights of 
the Navajo Nation, the largest Federally recognized tribe in 
the United States.
    It would also provide a water supply for Gallup, New 
Mexico, as well as recognize and authorize existing uses of the 
San Juan River Basin Water. In exchange for relinquishing some 
of their claims to water from the San Juan River Basin, the 
Navajo Nation will benefit from water development projects 
including the Navajo Gallup project and the Navajo Nation 
Municipal Pipeline.
    This much needed infrastructure will allow for efficient 
and reliable municipal and agricultural water deliveries. 
Additionally, the projects will be implemented in a manner 
consistent with environmental laws and existing agreements 
which ensure compliance with the ESA. Incredibly, even now in 
the 21st century more than 70,000 Navajos must still haul water 
daily for residential use. These water projects will go a long 
way toward rectifying this unacceptable situation.
    I understand that some have raised concerns regarding 
provisions in the bill relating to New Mexico's apportionment 
of the Colorado River. I am pleased that in the late spring of 
2006, the upper Colorado River Basin and Commission, which 
includes representatives from all upper basin states 
unanimously endorsed the Navajo Water Settlement. This river is 
of vital importance to populations throughout the southwest.
    I am well aware that stipulations in the bill relating to 
the Colorado River have the potential to impact all of the 
basin states. It is my hope that the testimony you will hear 
today from the distinguished panel will bring valuable insight 
on this issue and help allay those concerns. Please know I am 
committed to working with the Subcommittee and the Subcommittee 
Chairman to ensure that this legislation is in compliance with 
existing compacts among basin states.
    The Navajo Nation and the State of New Mexico and many 
other residents of northwestern New Mexico put a tremendous 
amount of effort into reaching an agreement that will provide a 
more secure future for many vulnerable communities. For years 
these groups have worked to finalize this agreement. The next 
step necessary is passing legislation to finalize the agreement 
and begin the implementation of long overdue water distribution 
projects.
    Senator Bingaman, Senator Domenici and I have introduced 
companion legislation to bring about this step, and I look 
forward to working with all of you to bring this hard work to 
fruition, and let me thank once again the Chairwoman. I know 
she is a real advocate of the Colorado River and California's 
water rights, and I know she very much understands these issues 
and I am very excited about her bringing her attention to these 
issues. Thank you, Madame Chair, and I yield back.
    Mrs. Napolitano. Thank you, sir. I appreciate the comments, 
and we will proceed to hear from our witnesses. We have two 
panels today. The first panel will testify on H.R. 2515, and 
the second panel will testify on H.R. 1970. Each one of the 
panelists will be introduced just before they testify. Once the 
testimony is concluded we will begin a question and answer 
period of those witnesses prior to proceeding to the next 
panel.
    All your prepared statements, witnesses, will be entered 
into the record, and you are asked to summarize your high 
points so as not to waste time because if you read sometimes it 
takes longer and you cannot get to the meat of what you are 
trying to bring to this committee, and please limit your 
remarks to five minutes, the little timer, and I do hold people 
to five.
    We will be using the timer of course. It applies to 
questions also. Five minutes of questions and answers from each 
of the members will be allowed. If there is time, we will have 
an additional second round or more as necessary. I would like 
to begin with our first panel to testify on H.R. 2515, the 
Lower Colorado River Multi-Species Conservation Act.
    First we have Robert Johnson, Commissioner of Bureau of 
Reclamation. Welcome again, Commissioner, and you know you are 
on the hot seat again. Two, Susan Bitter Smith, President of 
the Central Arizona Project Board of Phoenix. Welcome. George 
Caan, Chairman of the Lower Colorado River Multi-Species 
Conservation Program from Las Vegas, Nevada. Welcome.
    Gerald Zimmerman, Executive Director of the Colorado River 
Board of California in Glendale, California. Welcome. And 
finally, Kara Gillon, Senior Staff Attorney with Defenders of 
Wildlife in Albuquerque, New Mexico. If you will start, Mr. 
Johnson, we will begin with you.

          STATEMENT OF ROBERT JOHNSON, COMMISSIONER, 
            BUREAU OF RECLAMATION, WASHINGTON, D.C.

    Mr. Johnson. Thank you, Madame Chairwoman. It is a pleasure 
to be here to address you and members of the Subcommittee on 
this bill. While the Department of Interior has clear authority 
to administer this program under existing statutes we also 
understand the interests of our partners in seeking this 
legislation. The Department supports the Lower Colorado River 
Multi-Species Conservation Program as well as the intent of 
H.R. 2515 to further this program.
    There are, however, some concerns about language in 
sections 2, 4[b], 5[c] and 5[d] of the bill, and I will quickly 
summarize our concerns in that regard. Quickly I would just say 
that the MSCP program is a very important program for the three 
states that are delivered water supplies from the Colorado 
River. There are millions of people and hundreds of thousands 
of acres of irrigated farmland that are dependent on the river, 
and the multi-species plan provides certainty for the long-term 
use of those important water supplies.
    Quickly to summarize the concerns that we have. First, 
section 2 of the bill provides a definition of the lower 
Colorado River. That definition that is in the bill does not 
exactly coincide with the definition that is included in some 
of the program documents. We believe that the bill ought to be 
modified to be consistent with those documents. We think that 
this is a minor technical issue but nevertheless something that 
can cause confusion in the future if we have different 
definitions.
    Next the Administration cannot support language in section 
4[b] of this bill allowing the Secretary to invest appropriated 
monies that are not required to meet current program 
expenditures. In addition, we are concerned about section 5[c] 
which addresses judicial review of the program documents. We 
are advised that this provision could expand Federal litigation 
exposure in significant respects and set unacceptable 
precedents for the United States.
    Last, section 5[d] which seeks an explicit exemption from 
the Federal Advisory Committee Act is not necessary as the 
program was determined by the Director of the U.S. Fish and 
Wildlife Service to be an ecosystem recovery and implementation 
team pursuant to the ESA, and as a result is already exempt 
from that Act.
    We appreciate that there has been some progress in 
discussions with our partners on section 5[c] of the Act, and 
we look forward to continuing to try to work through these 
issues with our partners. The lower Colorado River is a 
critical resource to citizens of the west. Maintaining 
compliance with the ESA, and avoiding water supply conflicts 
that we have seen in other basins in the west is critical to 
the Department of Interior.
    Reclamation will continue to support the Lower Colorado 
Multi-Species Conservation Program and looks forward to working 
with the Subcommittee and the bill's sponsors on this issue. 
Madame Chairwoman, thank you again for allowing me to testify. 
This concludes my oral remarks.
    [The prepared statement of Mr. Johnson follows:]

Statement of Robert Johnson, Commissioner, U.S. Bureau of Reclamation, 
             U.S. Department of the Interior, on H.R. 2515

    Madam Chairwoman and members of the Subcommittee, my name is Robert 
Johnson and am here today to present the views of the Department of the 
Interior on H.R. 2515, a bill to authorize a habitat conservation 
program on the lower Colorado River in the States of Arizona, 
California, and Nevada.
    H.R. 2515 authorizes the Lower Colorado River Multi-Species 
Conservation Program (LCR MSCP) and addresses issues associated with 
implementation of the program, including Colorado River water use, 
investment of appropriated funds, and the enforceability of program 
documents. The Lower Colorado River is a critical resource to citizens 
of the southwest. Maintaining compliance with the Endangered Species 
Act and avoiding water supply conflicts that have been occurring in 
other areas of the West is critical to the Department. The Department 
supports the LCR MSCP as well as the intent of H.R. 2515 to further 
this program. However, the Department remains concerned about language 
in Section 2, 4(b), 5(c), and 5(d), which I will discuss below.
    The LCR MSCP was developed through a collaborative partnership with 
State leaders, local stakeholders and the Administration. This 
innovative program addresses the needs of threatened and endangered 
fish and wildlife on the lower Colorado River while assuring greater 
reliability of water deliveries and hydropower production. By meeting 
the needs of fish and wildlife listed under the Endangered Species Act, 
as well as preventing the need to list additional species, the plan 
provides greater certainty of continued water and power supplies from 
the river for Nevada, California and Arizona--and is designed to allow 
future water transfers within or among water users for a 50-year 
period.
    Reclamation began work to develop the LCR MSCP in 1997 and the 
program was formally approved and adopted by Secretary Norton in 2005. 
Under existing authorities, Reclamation has been implementing 
activities that are similar in nature to those described in this 
program since 1997 when the U.S. Fish and Wildlife Service issued a 
Biological Opinion for southwestern willow flycatcher, bony tail chub, 
Yuma clapper rail and razorback sucker fish. In 2001, Reclamation 
adopted interim Surplus Guidelines that define when water operations 
can provide surplus water to water users in the Lower Colorado River 
Basin, and the Biological Opinion for that action is being implemented 
through the LCR MSCP. With these and other actions, Reclamation has 
been meeting the requirements of the Endangered Species Act (ESA) for 
over a decade.
    Reclamation has spent a total of $9.5 million in FY2004 and FY2005, 
and spent $13 million in FY2006 from both Federal and non-Federal 
sources pursuant to the Program's Funding and Management Agreement with 
non-Federal entities. The LCR MSCP Steering Committee supports a budget 
of over $16 million for FY 2007. In addition to establishing over 270 
acres of new habitat along the Colorado River, Reclamation has stocked 
46,079 razorback suckers and 14,836 bony tail chub into the lower 
Colorado River since 2004. A significant amount of money has been spent 
on the research and monitoring needed to develop a sound scientific 
foundation for this 50-year program. Accomplishment reports for FY2004 
and FY2005 have been approved by the MSCP Steering Committee, reviewed 
by the U.S. Fish and Wildlife Service, and found to be in compliance 
with the LCR MSCP ESA Section 10 Permit. The FY2006 report has been 
approved by the Steering Committee and U.S. Fish and Wildlife Service. 
All reports can be found on Reclamation's website at www.lcrmscp.gov.
    In Reclamation's FY2008 budget, which is awaiting Congressional 
approval, $7 million has been identified from Federal funding for the 
program, with a $7 million match from non-Federal partners.
    Since presenting testimony on H.R. 5180 last year, the Department 
is pleased to report progress toward resolving issues surrounding 
section 3(b). As written, this Section would direct the Secretary to 
enter into an agreement with the States of Arizona, California and 
Nevada providing for the use of Colorado River water specifically for 
habitat creation and maintenance purposes. The Department believes that 
through existing contract terms, willing seller transactions, and 
current policies, Reclamation can utilize Colorado River (and non-
Colorado River) water to implement the program. However, Reclamation 
has made progress with our funding partners in the Lower Basin States 
to develop an agreement acceptable to all parties on the use of 
Colorado River water for program purposes. Such an agreement could 
facilitate program implementation, and we look forward to continuing 
productive efforts with our partners on this proposed agreement.
    We do have a couple of concerns with provisions contained in H.R. 
2515. The geographic definition of the Lower Colorado River in section 
2 should be clarified to match that contained in the MSCP Program 
Documents. The Administration cannot support the language in section 
4(b) of this bill allowing the Secretary to invest appropriated moneys 
that are not required to meet current program expenditures. Investing 
appropriations provides additional monies to finance a governmental 
purpose outside of the normal appropriations process.
    We are also concerned about section 5(c), which addresses judicial 
review of program documents. We note that this provision has been 
modified from the language introduced in the last session of Congress, 
and that language has been added clarifying that the United States 
would not be liable for claims for money damages. Nevertheless, we have 
been advised by the Department of Justice and we are concerned that 
this provision could expand Federal litigation exposure in significant 
respects and open the door for judicial intrusion into administrative 
decision making. We would appreciate the opportunity to continue to 
work with the committee to address our concerns regarding section 5(c).
    Section 5(d) seeks an explicit exemption from the Federal Advisory 
Committee Act. The Department believes that this exemption is not 
necessary as the program was determined by the Director of the U.S. 
Fish and Wildlife Service to be an Ecosystem Recovery and 
Implementation Team (ECRIT) pursuant to section 4(f)(2) of the ESA, 
thereby making the LCR MSCP Steering Committee exempt. Therefore, we 
believe section 5(d) is superfluous and we recommend deleting it.
    The Department already has clear authorities to administer this 
program under existing statutes, and Reclamation began actively 
implementing the full LCR MSCP program in 2005. Through implementation 
of this program, the likelihood of a water conflict on the lower 
Colorado River is reduced.
    The Department supports the LCR MSCP and will continue to work with 
interested stakeholders that seek to enhance the program. Thank you for 
the opportunity to comment on this legislation. We look forward to 
working with you on the various concerns we have. I am happy to take 
any questions.
                                 ______
                                 
    Mrs. Napolitano. Thank you, sir. Ms. Susan Bitter Smith.

          STATEMENT OF SUSAN BITTER SMITH, PRESIDENT, 
        CENTRAL ARIZONA PROJECT BOARD, PHOENIX, ARIZONA

    Ms. Bitter Smith. Madame Chairwoman, Congressman Heller, 
Congressman Mitchell, Congressman Udall, I too am pleased to be 
here on behalf of the Central Arizona Water Conservation 
District.
    Mrs. Napolitano. Can you pull the mic a little closer 
please?
    Ms. Bitter Smith. I will do that. Usually my children say 
they can hear me from any distance in the room. The CAP, as you 
know, is operated by the Central Arizona Water Conservation 
District, and we have an aqueduct system that stretches 330 
miles from Lake Havasu all the way along the Colorado River to 
central and southern Arizona.
    In 1994, users of water and power from the lower Colorado 
River began to become concerned about our ability to continue 
to rely on the river's resources in the face of growing 
concerns about the endangered species, and as a result we have 
now spent the last 10 plus years working together with Federal 
and non-Federal participants to complete the documents now to 
put the Lower Colorado River Multi-Species Conservation Program 
into place.
    The Secretary approved the program in April of 2005, and of 
course in August of that year the White House recognized the 
program as an exemplary environmental initiative. Fifty Federal 
and non-Federal entities have come together to craft and fund a 
program that protects 26 endangered, threatened and sensitive 
species, and provides for the acquisition, creation and 
maintenance of over 8,000 acres of high quality habitat and 
then provides for the rearing and stocking of hundreds of 
thousands of two species of endangered fish.
    Before the Federal government would approve the program, 
however, the non-Federal participants were required to agree 
unconditionally to fund half of the total program, which is a 
cost of about $626 million, indexed for inflation over 50 
years. The CAP of course is one of those funding mechanisms. In 
return for this commitment, non-Federal water and power users 
were granted a Federal permit under the ESA Act that allows for 
the essential functions as water and power providers to 
continue as long as we comply with the program requirements.
    The Federal government has agreed to fund the 50 percent of 
program costs, and we do appreciate that commitment but we 
believe it is absolutely necessary that appropriations for the 
Federal share be explicitly authorized by Congress, hence the 
reason for this Act, particularly since the program must 
continue to be carried on long after all of us are out of 
office.
    H.R. 2515 provides necessary authorization for the Federal 
share of program costs and brings certainty and stability to 
the program in other ways. First, it requires Congress to 
authorize the Secretary to manage and implement the program, 
and there are documents that all of the parties have prepared 
and signed evidencing a commitment to the program.
    Second, the bill directs and authorizes the Secretary to 
enter into an agreement with the lower basin states about how 
we will provide water for the MSCP. Without this explicit 
authorization, the law of the river may preclude us and other 
water providers from some of the water management activities we 
believe are very essential and need to be necessary.
    The provisions of the bill also help protect expectation of 
the parties. The CAP strongly supports H.R. 2515, and we very 
much appreciate the leadership by the Arizona, California, 
Nevada delegations in bringing the bill to this point in the 
process. We especially thank Mr. Heller for his sponsorship and 
you, Madame Chairwoman, for allowing this bill to come to 
committee. I especially want to commend the Arizona delegation 
and my own Member of Congress, Mr. Mitchell, for his leadership 
on this issue.
    H.R. 2515 is critical to our ability to continue to provide 
our water services to our customers. CAP is the lifeline for 
the State of Arizona, and we want to make sure that continues 
to be the case. We urge the Subcommittee to approve this bill.
    [The prepared statement of Ms. Bitter Smith follows:]

    Statement of Susan Bitter Smith, President, Board of Directors, 
       Central Arizona Water Conservation District, on H.R. 2515

    I am pleased to present testimony on behalf of the Central Arizona 
Water Conservation District (``CAWCD'') in support of H.R. 2515, the 
Lower Colorado River Multi-Species Conservation Program Act. H.R. 2515 
protects and implements the Lower Colorado River Multi-Species 
Conservation Program (``MSCP''). The MSCP is a comprehensive, 
cooperative effort among 50 federal and non-federal entities in 
Arizona, California and Nevada to protect 26 endangered, threatened and 
sensitive species along the Lower Colorado River and to provide 
assurances to the non-federal entities involved that their essential 
water and power operations on the River may continue if they comply 
with the Program's requirements. The participants in the Program 
include The Metropolitan Water District of Southern California, the 
Southern Nevada Water Authority and the Central Arizona Project.
    CAWCD is the Arizona political subdivision responsible for 
operating the Central Arizona Project (``CAP''), and is the underwriter 
of Arizona's share of the costs of the MSCP. The CAP is a massive water 
delivery project, constructed under the authority of the Colorado River 
Basin Project Act of 1968, to enable Arizona to make full use of its 
Colorado River entitlement. In a normal water supply year, the CAP will 
deliver about 1.5 million acre-feet of Colorado River water to the 
citizens of Arizona, at the rate of 3,000 cubic feet of water per 
second, almost two billion gallons per day. The CAP is the largest 
single source of renewable water supplies in the State of Arizona, 
serving 80 percent of the State's water users and taxpayers, including 
the Phoenix and Tucson metropolitan areas.
    CAWCD strongly supports H.R. 2515 because the bill assures 
continued compliance by the United States with the requirements of the 
MSCP. That, in turn, provides protection to the non-federal 
participants in the Program, who, like CAWCD, have agreed to provide 
substantial amounts of non-federal monies for the conservation of 
endangered species in return for receiving a permit under the 
Endangered Species Act for their water and power operations.
    The Secretary of the Interior approved this 50-year conservation 
initiative on April 2, 2005. The overall Program costs, $626 million, 
will be adjusted for inflation, with the three lower basin states 
paying 50 percent of the costs and the federal government paying 50 
percent. Of the states' share, Arizona and Nevada will each pay 25 
percent, while California will pay 50 percent. In return for their 
funding commitments, the non-federal participants have received a 50-
year permit, issued by the U.S. Fish and Wildlife Service under Section 
10 of the Endangered Species Act, which authorizes their existing and 
future water and power operations to continue. All of the Arizona 
participants have made a financial commitment to the MSCP, but CAWCD 
has agreed to guarantee payment of Arizona's share of the Program 
costs.
    Although the MSCP is already in effect, this bipartisan legislation 
has been introduced by Congressman Dean Heller of Nevada to protect the 
substantial financial commitments that the non-federal parties are 
making to species protection. The bill specifically authorizes federal 
appropriations to cover the federal share of the Program costs, directs 
the Interior Secretary to manage and implement the Program in 
accordance with the underlying Program Documents, and provides a waiver 
of sovereign immunity to allow the non-federal parties to enforce the 
agreements they have entered into with the federal agencies, should 
that become necessary. The bill does not allow money damages.
    The bill is co-sponsored by Congressmen Harry Mitchell, Trent 
Franks, John Shadegg and Rick Renzi of Arizona, Congressman Jon Porter 
and Congresswoman Shelley Berkley of Nevada, and Congressmen Ken 
Calvert and George Radanovich of California. A companion bill has been 
introduced in the Senate (S. 300) by Senators Jon Kyl of Arizona, 
Dianne Feinstein of California, and Harry Reid and John Ensign of 
Nevada. Since the time that similar legislation was introduced last 
year, two significant developments have occurred. First, subject to 
final review and approval within the Interior Department, the non-
federal parties have reached agreement with the United States on an 
agreement to provide Colorado River water for MSCP purposes, as 
authorized by Section 3(b) of the bill. Second, Section 5(b) of the 
bill, which relates to the impact of future legislative actions on the 
MSCP, has been modified and narrowed significantly to meet the concerns 
of some members.
    The MSCP is a worthy and important program for protection of 
endangered species. It provides for the creation of over 8,100 acres of 
riparian, marsh and backwater habitat for the species covered by the 
Program, and includes plans for the rearing and stocking of over 1.2 
million fish to augment populations of two endangered fish covered by 
the Program. The MSCP also provides for maintenance of existing, high-
quality habitat, and a research, monitoring and adaptive management 
effort to ensure that Program elements are effective in helping covered 
species. At the White House Conference on Cooperative Conservation in 
August 2005, the MSCP was recognized as an ``Exemplary Initiative.'' 
Implementation of the MSCP is critical to the long term needs of those 
of us in the southwest that depend on the Lower Colorado River for a 
major portion of their water and power. As the Secretary said in her 
Record of Decision approving the Program--
        ``The importance of the Colorado River to the southwestern 
        portion of the United States cannot be overstated: the Colorado 
        is the lifeblood of the southwest. The Colorado River provides 
        water and power to over 20 million people (in such cities as 
        Los Angeles, San Diego, Las Vegas, Phoenix and Tucson), 
        irrigates over 2 million acres, and generates up to 10 billion 
        kilowatt hours of electricity annually.''
    The MSCP represents a fifty-year commitment by all of the parties 
involved. It is essential that that commitment be fully and faithfully 
met. H.R. 2515 will help ensure that that occurs.
                                 ______
                                 

    Statement of Susan Bitter Smith, President, Board of Directors, 
       Central Arizona Water Conservation District, on H.R. 1970

    I am pleased to present this statement on behalf of the Central 
Arizona Water Conservation District (``CAWCD'') regarding H.R. 1970, 
the Northwestern New Mexico Rural Water Projects Act. CAWCD is the 
Arizona political subdivision responsible for operating the Central 
Arizona Project. The Central Arizona Project is a massive water 
delivery project, constructed under the authority of the Colorado River 
Basin Project Act of 1968, to enable Arizona to make full use of its 
Colorado River entitlement. In a normal water supply year, the Central 
Arizona Project will deliver about 1.5 million acre-feet of Colorado 
River water to the citizens of Arizona, at the rate of 3,000 cubic feet 
of water per second, almost two billion gallons per day. The Central 
Arizona Project is the largest single source of renewable water 
supplies in the State of Arizona, serving 80 percent of the State's 
water users and taxpayers, including the Phoenix and Tucson 
metropolitan areas.
    CAWCD cannot support this bill as introduced because (1) it fails 
to resolve the Navajo Nation's claims to the Lower Colorado River and 
Little Colorado River in Arizona and (2) it fails to resolve litigation 
filed by the Nation challenging Interior Department initiatives that 
are vital to the Central Arizona Project and other Colorado River water 
users in the Lower Basin. The legislation also fails to address 
critical issues related to its potential impact on the Law of the 
Colorado River. All of these matters must be addressed before the bill 
is permitted to move forward.
    This bill would authorize a settlement of the water rights claims 
of the Navajo Nation to the San Juan River in New Mexico and also 
provide funding for projects to deliver San Juan water to Window Rock 
and Gallup. The San Juan River is a tributary to the Colorado River, 
and the bill affects the accounting for Colorado River water required 
by the 1922 Colorado River Compact and the United States Supreme 
Court's 1964 Decree in Arizona v. California, the decision that 
confirmed that Arizona is entitled to 2.8 million acre feet of water 
each year from the Lower Colorado River. Most of that water is 
delivered to central and southern Arizona through the Central Arizona 
Project. While the New Mexico bill would affect Arizona's Colorado 
River entitlement, it fails to resolve the claims of the Navajo Nation 
to Arizona's water supplies or to require, as it should, that those 
claims be settled before the Nation receives the benefits of any water 
rights settlement.
    The Navajo Nation has asserted that it has rights to water from the 
Colorado River that are superior to the rights of the Central Arizona 
Project. The Nation has sued the United States in federal district 
court in Phoenix in an effort to compel the Secretary of the Interior 
to assert those rights on the Nation's behalf. Unless and until the 
Secretary takes steps to resolve the Nation's claims to the Colorado 
River, the Nation seeks to stop the Secretary from implementing 
important programs put in place to better manage the water supplies of 
the Lower Colorado River for the benefit of the Central Arizona Project 
and others.
    In a separate action, the Navajo Nation has also sought to prevent 
the required court approval of another Indian water rights settlement 
that is vital to the citizens of central Arizona, a comprehensive water 
rights settlement with the Gila River Indian Community. That 
settlement, which was decades in the making, was authorized by the 
Arizona Water Settlements Act of 2004, but if the Navajos succeed in 
their challenge, all of the Arizona water settlements authorized by 
that act, including the Gila River settlement, will fail. Since the 
water rights of the Navajo Nation are not affected by the Gila River 
settlement, as a lower court has already found, one can only conclude 
that the Navajo Nation is seeking to hold the Gila River settlement 
hostage until its own water rights claims are resolved.
    These actions by the Navajo Nation lead us to conclude that we 
could support authorization of a New Mexico settlement with the Navajo 
Nation only if an Arizona settlement with the Nation is also concluded 
and included in the authorizing legislation. While New Mexico may 
object to this, it shouldn't. After all, New Mexico demanded and 
received significant benefits, in the form of project authorizations 
and money for that state, in the Arizona Water Settlements Act of 2004.
    From a public policy perspective, an Arizona settlement of the 
Navajo Nation's water rights claims should proceed hand in glove with a 
New Mexico settlement. As it stands, the New Mexico bill fails to deal 
comprehensively with the Navajos' claims to the river systems that 
cross or border the Navajo Reservation. The Navajo Reservation is the 
largest Native American reservation in the United States. It occupies 
parts of three states, but by far the largest part of the Reservation, 
as well as the greatest share of the Reservation population, is 
situated in Arizona. Within Arizona, the northwestern portion of the 
Navajo Reservation is near the mainstream of the Lower Colorado River, 
and the Little Colorado River traverses the southern portion of the 
Reservation. If anything, priority should be given to settlement of the 
Nation's claims to the waters of these rivers. Including a settlement 
of the Nation's Arizona claims in the New Mexico bill would go a long 
way toward fixing the public policy problems associated with the 
current version of this legislation.
    CAWCD has long supported the comprehensive settlement of Indian 
water rights claims. Our organization has participated in a number of 
such settlements, including most recently, the settlement of the claims 
of the Gila River Indian Community, the largest Indian water rights 
settlement in Arizona's history. While successfully crafting a 
settlement agreement is never easy, we are fully committed to doing the 
hard work necessary to achieve an Arizona settlement with the Navajo 
Nation, and to accomplishing that in a timely way, so that 
congressional authorization of an Arizona settlement can be included in 
what is now a New Mexico only bill.
    We look forward to the opportunity to work with you, the State of 
New Mexico, and the Navajo Nation to settle the claims of the Navajo 
Nation to the San Juan and the Lower and Little Colorado River basins, 
and to prepare a comprehensive settlement act that addresses the needs 
of all affected parties.
                                 ______
                                 

 Response to questions submitted for the record by Susan Bitter Smith, 
   President, Board of Directors, Central Arizona Water Conservation 
                         District, on H.R. 2515

 (State Representatives) Has there been any effort to work with 
        entities on the other side of the Mexican border to ensure 
        successful recovery for the river system, not just the U.S. 
        side?
    Answer: Yes.
    The United States is authorized by Section 8 of the Endangered 
Species Act to work cooperatively with other nations on species 
conservation efforts. The International Boundary and Water Commission 
1 has adopted Minute 306 to the 1944 Mexican Water Treaty in 
order to establish a framework for cooperation between the United 
States and Mexico in the preservation of the riparian and estuarine 
ecology of the Colorado River in Mexico. These efforts are on-going and 
will continue.
---------------------------------------------------------------------------
    \1\ The IBWC was established under the 1944 U.S.-Mexico Water 
Treaty between the United States and Mexico regarding the Colorado 
River and is made up of representatives of the Republic of Mexico and 
the U.S. State Department.
---------------------------------------------------------------------------
    Additionally, independent of these efforts, the Central Arizona 
Water Conservation District has been working with other stakeholders, 
including environmental groups, on a plan to operate the Yuma Desalting 
Plant (``YDP'') while protecting the area commonly known as the Mexican 
Delta. The group working on this matter issued a white paper in 2005 
that contains a blue print for operating the YDP while protecting the 
habitat contained in the Cienega de Santa Clara in Mexico.
    The MSCP is an effort to make the operations of the Lower Colorado 
River within the United States comply with the Endangered Species Act. 
The needs of endangered species in Mexico are being addressed by other 
programs outside of the MSCP.
 (State Representatives) Is it possible that neglect of habitat on the 
        Mexican side could wipe out attempts by the MSCP to stabilize 
        habitat and protect and recover species?
    Answer: No.
    The habitat needs of the species covered by the program were 
assessed independently of the number of individuals of the species or 
habitat that may exist in the Republic of Mexico and independently of 
actions that Mexico might or might not take to protect species or 
habitat located there. Sufficient habitat will be acquired and other 
conservation measures will be put into place in the United States under 
the MSCP to meet the needs of all of the species covered by the 
program. Thus, covered species will be protected and conserved whether 
or not any conservation actions are taken by the Republic of Mexico to 
protect members of the species or habitat that are located there.
    The Environmental Impact Statement (``EIS'') prepared in connection 
with the MSCP analyzed the impacts of the MSCP on environmental 
resources in Mexico as well as the obligations of the United States 
under the 1944 Treaty with Mexico regarding the Colorado River. The EIS 
concluded that no substantial adverse environmental impacts would occur 
in Mexico and that no reduction in deliveries of Colorado River water 
to Mexico would occur as a result of implementation of the MSCP. If 
anything, the MSCP should improve conditions for species that reside on 
both sides of the border by providing substantial amounts of new 
habitat for those species.
 (State Representatives) Can you please discuss the specifics of the 
        proposed federal-state water use agreement referenced in 
        section 3(b) of the bill?
    Answer: Section 3(b) provides the authorization and direction 
necessary for the Secretary of the Interior to enter into an agreement 
with the three Lower Basin States regarding how to provide water from 
the Lower Colorado River for MSCP purposes, but does not alter existing 
rights to use Colorado River water.
    Under the Boulder Canyon Project Act of 1928 and the United States 
Supreme Court's decision and decree in Arizona v. California, a 
contract with the Secretary of the Interior is required for the use of 
water from the Lower Colorado River. Reclamation's Lower Colorado 
Regional Director enters into water delivery contracts on behalf of the 
Secretary. The water delivery contract constitutes an authorization to 
use Colorado River water in the Lower Basin. These contracts define the 
type of water use permitted by the contract, either for domestic or 
agricultural purposes. The use of Colorado River water for 
environmental purposes has been called into question from time to time. 
Because of this, Section 3(b) of H.R. 2515 provides explicit 
authorization for the Secretary to enter into an agreement with the 
Lower Basin States to provide Colorado River water for implementation 
of the MSCP.
    The agreement does three important things. First, it permits the 
Secretary to apply Colorado River water to the purposes of the MSCP. 
Second, it specifies how the Secretary is to account for water that is 
used for MSCP purposes. Third, the agreement permits the Secretary to 
manage Colorado River water for other MSCP purposes, including 
providing marsh, backwater and other habitat.
    Reclamation accounts for the diversion and consumptive use of water 
from the Lower Colorado River. Reclamation does not report as a 
diversion or consumptive use the natural depletion of Colorado River 
water by non-irrigated phreatophyte vegetation. Under the MSCP, some of 
this vegetation will be replaced with higher quality, native 
vegetation. The new, native vegetation will be using water previously 
used by the non-native vegetation, and under the agreement, the water 
use will not be treated as a new diversion or consumptive use of Lower 
Colorado River water. If additional water is needed for MSCP purposes, 
it will be acquired by lease or purchase from willing sellers.
    Subject to final review and approval within the Interior 
Department, the non-federal parties have reached agreement with the 
United States on the agreement to provide Colorado River water for MSCP 
purposes, as authorized by Section 3(b) of the bill. However, 
representatives of the Interior Department have advised us that the 
United States will not be able to execute the agreement unless and 
until the Congress enacts H.R. 2515 or the companion Senate bill (S. 
300). Thus, passage of the bill is critical to the success of the MSCP.
 (State Representatives) Have the states reached agreement on how much 
        water will be dedicated to the program?
    Answer: Yes.
    The Habitat Conservation Plan for the MSCP estimates that a little 
over 39,000 acre-feet per year will be needed for MSCP purposes; 
however, no new consumptive use of Colorado River water will be 
permitted. Instead, the water needed for MSCP purposes will come from a 
reduction in water use by removal of existing non-native vegetation, 
the use of prior existing rights to water that run with the land 
acquired for MSCP purposes, or the acquisition of additional water 
rights, as necessary, from willing sellers. The MSCP participants have 
allocated $50,000,000 of the MSCP funding to the costs of water 
acquisition.
 (State Representatives) How does the MSCP address non-native species?
    Answer: The conservation measures in the Habitat Conservation Plan 
for the MSCP include several elements that address non-native species, 
including maintenance of existing habitat, creation of new habitat, and 
population enhancement measures.
    One of the goals of the MSCP will be to maintain and improve 
existing habitat for covered species. This could include protecting 
such habitat from invasive, non-native species, and removing 
undesirable species such as salt cedar and Arundo. A $25,000,000 fund 
will be established early in the program to maintain existing, high 
quality habitat.
    New habitat will also be created for covered species. This will 
include fuel load reduction (to reduce the risk of fires), removal of 
invasive, non-native flora and fauna, and replacement with high quality 
habitat types, such as cottonwood-willow. The Habitat Conservation Plan 
calls for the creation of 5,940 acres of cottonwood-willow habitat, 
1,320 acres of honey mesquite habitat, 512 acres of marsh habitat, and 
360 acres of backwater habitat. The participants in the MSCP have 
allocated over $143,000,000 to the creation of new habitat for covered 
species.
    Finally, population enhancement measures will be used to control 
non-native species and to improve the chances for survival and 
propagation of covered species. These activities would include 
controlling piscivorus fish and non-native amphibians in advance of 
releasing covered native fish into created backwaters. Other population 
enhancement activities could include controlling brown-headed cowbirds 
to reduce the adverse effects of nest parasitism on covered species.
                                 ______
                                 
    Mrs. Napolitano. Thank you very much, Ms. Smith. George 
Caan, Chairman of the Lower Colorado River Multi-Species 
Conservation Program, Las Vegas.

STATEMENT OF GEORGE CAAN, CHAIRMAN, LOWER COLORADO RIVER MULTI-
        SPECIES CONSERVATION PROGRAM, LAS VEGAS, NEVADA

    Mr. Caan. Madame Chairwoman Napolitano, Congressman Heller, 
Congressman Mitchell, members of the Subcommittee, good 
morning. My name is George Caan. I am the Executive Director of 
the Colorado River Commission in Nevada. I am also proud to be 
the Chairman of the Lower Colorado River Multi-Species 
Conservation Program. Quite a mouthful, and I will refer to it 
as the MSCP.
    This is a steering committee composed of the 40 plus 
agencies who have an interest in the health of the Colorado 
River system. I appreciate your invitation to speak to you 
today regarding H.R. 2515. I want to especially thank you, 
Madame Chairwoman, Congressman Heller, Congressman Mitchell, 
for your support and leadership on this bill.
    I speak today on behalf of the State of Nevada and also as 
the Chairman of the Committee. Like our sister states of 
California and Arizona, Nevada fully supports this bill. I have 
submitted my written testimony to the committee but would like 
to offer brief remarks on why this legislation is so necessary, 
and hopefully I can convince my friend, Bob Johnson, to move 
from understanding why we need this bill to agreeing that we do 
need this bill.
    The MSCP is critical to the states that enjoy the benefits 
of the water and power delivered by the Colorado River. As an 
example, southern Nevada receives 90 percent of its water 
supply from the Colorado River and Lake Mead. The need for 
future certainty on this supply and a supply that we plan on 
using for quite some time is what drove us to work for the last 
decade in developing this program.
    In order to comply with our responsibilities under the 
Endangered Species Act while continuing to use our water and 
power resources and develop them into the future, it was also 
the motivation for the non-Federal parties to contribute 50 
percent of the $626 million of program costs. This long-term 
program of 50 years needs the blessing of Congress through 
passage of this bill.
    We need this legislation. Let me explain why. The 
legislation is needed because it provides authorization for the 
50-year program. This provides the non-Federal parties the 
certainty to protect their substantial financial commitment for 
species protection over the 50-year period. The legislation is 
needed to uphold the Federal parties' end of the bargain by 
providing specific Federal appropriations to support the 
Federal parties' 50-year financial commitment.
    The legislation is needed to provide specific direction to 
the Federal parties to comply with their commitments under the 
program documents. It provides remedies to the non-Federal 
parties to enforce the provisions of the program documents. The 
legislation is needed so that future changes to the Endangered 
Species Act will not modify the program unless specifically 
called for.
    The term immunization was used I believe in your opening 
remarks. What we are looking for is that any future acts of 
Congress dealing with the Endangered Species Act specifically 
address the multi-species program so that there are no 
unintended consequences of future actions. Finally, the 
legislation gives specific authority to the Federal parties to 
use Colorado River water to sustain the various riparian 
habitats, fish rearing projects and related facilities provided 
under the program through an agreement with the non-Federal 
parties.
    This is an extremely important effort for all of us. With 
your help in passing this legislation, the program is destined 
for great success.
    In conclusion, Madame Chairwoman, members of the committee, 
I am extremely proud to be associated with a program of such 
quality. You can look at what we are doing today, the land and 
water we are acquiring, the habitat we are restoring, the 
fisheries we are rebuilding, the backwaters we are creating, 
the ecosystems that we are revitalizing. Look at the 
substantial financial commitments that we have made to this 
program.
    We are developing solid science programs and embracing an 
adaptive management program to adjust and improve more efforts 
over the 50-year period so that we know what works and what 
does not work. We have sufficient time to go ahead and replan 
and redo and see the fruits of our efforts. The states, the 
tribes, the local governments, water and power agencies, those 
who rely on this precious resource, all of us are doing our 
part in this important and unprecedented effort.
    The certainty of the success of this program and the 
populations who depend upon this important resource, the 
Colorado River, need this legislation passed by this Congress. 
Thank you, and I would be more than happy to answer any of your 
questions.
    [The prepared statement of Mr. Caan follows:]

           Statement of George M. Caan, Executive Director, 
           Colorado River Commission of Nevada, on H.R. 2515

    Good morning Madam Chairwoman Napolitano, Congresswoman McMorris-
Rodgers and Congressman Heller, members of the Subcommittee. My name is 
George Caan and I am the Executive Director of the Colorado River 
Commission of Nevada. I am also the Chairman of the Steering Committee 
charged with overseeing the Lower Colorado River Multi-Species 
Conservation Program. I appreciate your invitation today to speak to 
you regarding H.R. 2515. I want to especially thank you Madam 
Chairwoman and Congressman Heller for your efforts and leadership on 
this bill. This bill authorizes the Lower Colorado River Multi-Species 
Conservation Program. I speak today on behalf of the State of Nevada, 
one of the three lower basin states directly involved in the Program. 
Like its sister states of California and Arizona, Nevada fully supports 
this bill. I look forward to your comments and questions.
    The Lower Colorado River Multi-Species Conservation Program is an 
unprecedented, robust 50 year, cooperative effort among 50 federal and 
non-federal entities in Nevada, California and Arizona designed to 
protect 26 endangered, threatened and sensitive species on the Lower 
Colorado River. The Program provides for the creation of over 8,100 
acres of riparian, marsh and backwater habitat for the species covered 
by the Program, and includes plans for the rearing and stocking of over 
1.2 million fish to augment populations of two endangered fish covered 
by the Program. The Program also provides for the maintenance of 
existing, high-quality habitat, and a research, monitoring and adaptive 
management effort to ensure that Program elements are effective in 
helping covered species. In exchange for species and habitat 
protection, the affected water and power agencies of the three states 
are provided with assurances that their operations may continue upon 
compliance with Program requirements.
    This Program is particularly vital to the State of Nevada. The 
State, through the Colorado River Commission of Nevada, an agency of 
the State of Nevada, and the Southern Nevada Water Authority, a 
political subdivision of the State of Nevada, currently diverts its 
entire apportioned share of Colorado River water. This Colorado River 
water constitutes the overwhelming majority of the water supply for the 
Las Vegas Valley area, almost 90%, with the remaining water coming from 
a limited groundwater supply. There are currently more than one and a 
half million residents living in the Las Vegas area. Southern Nevada is 
the fastest growing urban area in the United States. In the last ten 
years alone the population increased by almost 70% and for the next 
ten-year period the population is projected to increase by an 
additional 50%.
    Southern Nevada also relies on the Colorado River for hydroelectric 
power. On behalf of the State and as principal in its own behalf, the 
Colorado River Commission receives electric power generated by various 
federal hydroelectric projects on the Colorado River through delivery 
contracts with the Western Area Power Administration of the U.S. 
Department of Energy. These projects include the Boulder Canyon 
Project, the Parker-Davis Project and Salt Lake City Area Integrated 
Projects. The Commission, in turn, contracts to deliver electric power 
from one or more of these federal projects to the several companies 
comprising the Basic Industries in Henderson, Nevada, the Southern 
Nevada Water Authority and to five power utilities that together serve 
southern Nevada.
    Consequently, the sustainability of the Colorado River System is 
absolutely critical to the vitality of southern Nevada's future. For 
this reason, the State of Nevada was a significant participant in the 
development of the Program and is now one of the primary non-federal 
party funding contributors to the Program. In short, the Program 
provides for a total of $626 million in funding, indexed for inflation 
over 50 years, for the species conservation efforts that will be 
implemented under the Program. These costs are divided 50-50 between 
the state and federal entities covered by the Program. Accordingly, 
H.R. 2515 provides an authorization of appropriations for the federal 
share of Program costs and directs the Secretary of the Interior to 
manage and implement the Program in accordance with the Program 
Documents. These documents include the agreements that the parties have 
signed embodying their commitment to carry out the Program. As former 
Secretary Norton declared in the Record of Decision for the Program:
        The importance of the Colorado River to the southwestern 
        portion of the United States cannot be overstated: the Colorado 
        is the lifeblood of the southwest. The Colorado River provides 
        water and power to over 20 million people (in such cities as 
        Los Angeles, San Diego, Las Vegas, Phoenix and Tucson), 
        irrigates over 2 million acres, and generates up to 10 billion 
        kilowatt hours of electricity annually.
    H.R. 2515 gives the necessary strength and integrity to this 
monumental federal and non-federal collaborative conservation Program 
and virtually assures its success over the next five decades. The State 
of Nevada supports this bill in its entirety and urges the Committee to 
approve the bill. Thank you again for the opportunity to speak with you 
today. I'd be happy now to answer any questions you may have.
                                 ______
                                 

           Response to questions submitted for the record by 
                      George M. Caan on H.R. 2515

 (State Representatives) Has there been any effort to work with 
        entities on the other side of the Mexican border to ensure 
        successful recovery for the river system, not just the U.S. 
        side? Is it possible that neglect of habitat on the Mexican 
        side could wipe out attempts by the MSCP to stabilize habitat 
        and protect and recover species?
    There is significant continuing effort between the United States 
and Mexico through the International Water and Boundary Commission 
(``IBWC'') 1 to deal with environmental issues along the 
Lower Colorado River (LCR) and the delta region in Mexico. In 
particular, the U.S. Bureau of Reclamation and United States Section of 
the IBWC are involved in ``Fourth Working Group'' activities that 
predominantly through the International Boundary and Water Commission 
(``IBWC'') coordinate environmental investigations and activities along 
the Limitrophe Section of the LCR (i.e., the section between the 
northerly international boundary with California and the southerly 
international boundary with Arizona), as well as below the border. 
These activities include the development of a hydraulic model for the 
riverine corridor in Mexico, impacts of water management on the Cienega 
de Santa Clara, status of endangered Southwestern willow flycatcher and 
Yuma clapper rail, and other endangered species.
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    \1\ The IBWC was established under the 1944 U.S.-Mexico Water 
Treaty between the United States and Mexico regarding the Colorado 
River and is made up of representatives of the Republic of Mexico and 
the U.S. State Department.
---------------------------------------------------------------------------
    Additionally, there are several cross-border initiatives involving 
the U.S. Fish and Wildlife Service, Arizona Game and Fish Department, 
Native American tribes, and other non-governmental organizations that 
focus on habitat restoration activities and endangered species 
conservation programs. These efforts are addressing portions of the 
Lower Colorado River in Mexico, the delta region, and the adjacent 
Sonoran Desert habitats. Finally, there is a ``working group'' of 
interested governmental and non-governmental entities in Arizona that 
are involved in evaluating the potential impacts of partial or full 
operation of the Yuma Desalting Plant and potential impacts to the 
Cienega de Santa Clara and water quality impacts associated with Treaty 
deliveries.
    These efforts are necessarily outside of the LCR MSCP since the 
Secretary of the Interior does not have the independent authority to 
alter river operations to provide more Colorado River water for the 
benefit of species or habitat in Mexico. 2 Furthermore, the 
Unites States alone has no ability to control water or land use in 
Mexico or be assured that its efforts would be supported or implemented 
by Mexican authorities. However, through the collaborative efforts 
described above progress may be made towards successful habitat 
restoration and species protection in Mexico.
---------------------------------------------------------------------------
    \2\ Defenders of Wildlife v. Norton, 257 F. Supp. 2d 53 (D.D.C. 
2003).
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    With respect to the second question, it is not likely any 
degradation of habitats in the Mexican portion of the Lower Colorado 
would negatively impact the success of LCR MSCP activities and 
programs. If anything, the benefits provided through the habitat 
created by LCR MSCP projects will help assure that endangered species 
will not go extinct due to any failure to protect their habitat by 
Mexico.
 (State Representatives) Can you please discuss the specifics of the 
        proposed federal-state water use agreement referenced in 
        section 3(b) of the bill? Have the states reached agreement on 
        how much water will be dedicated to the program?
    The LCR MSCP Conservation Plan includes an estimate that 
consumptive water use for program purposes will be 39,300 acre-feet per 
year. This water is expected to be provided through acquisition of 
lands for habitat creation that include water rights; although the 
program cost estimate includes $50 million to acquire any additional 
water rights that may be needed. However, there is legal question about 
the authority of Reclamation to make use of Colorado River water for 
fish and wildlife purposes. Section 3(b) is specifically intended to 
provide assurances for that authority so that the LCR MSCP may be fully 
implemented.
    The proposed water agreement will accomplish three major purposes. 
First, it will permit the Secretary to apply Colorado River water to 
the purposes of the LCR MSCP. Second, it will specify how the Secretary 
is to account for water that is applied to LCR MSCP purposes. For 
example, the Secretary does not report as a diversion or consumptive 
use the natural depletion of Colorado River water by non-irrigated 
phreatophyte vegetation. Under the LCR MSCP, some of this vegetation 
will be replaced with higher quality, native vegetation. The new, 
native vegetation will use water previously applied to the non-native 
vegetation and so will not be treated as a new diversion or consumptive 
use of Lower Colorado River water. If additional water is needed for 
MSCP purposes, it will be acquired from willing sellers. Third, the 
agreement will permit the Secretary to manage Colorado River water for 
other MSCP purposes, including providing marsh, backwater and other 
habitat.
 (State Representatives) How does the MSCP address non-native species?
    There are many programs and activities contained within the LCR 
MSCP conservation measures that address the management and control of 
non-native plant and animal species. For example, control and 
management of non-native salt cedar (tamarisk) is a major part of the 
re-establishment and maintenance of native cottonwood and willow 
habitats along the LCR. The salt cedar is low quality habitat for 
migratory birds, and its replacement with native vegetation will 
improve conditions for nesting and breeding for these species. Another 
program within the LCR MSCP to benefit migratory bird species is the 
control of nest parasitism by the Brown-headed cowbirds, which has 
negatively impacted many birds, such as the endangered Southwestern 
willow flycatcher. To counter the predation by non-native fish on 
juvenile native endangered fish, the LCR MSCP participants have agreed 
to the rearing, stocking and management of nearly 1.2 million razorback 
suckers and bonytail in aquatic habitats within the LCR MSCP planning 
area along the LCR.
                                 ______
                                 
    Mrs. Napolitano. Thank you, Mr. Caan. Next I would like to 
recognize Kara Gillon, Senior Staff Attorney, Defenders of 
Wildlife, Albuquerque, New Mexico. Welcome.

 STATEMENT OF KARA GILLON, SENIOR STAFF ATTORNEY, DEFENDERS OF 
               WILDLIFE, ALBUQUERQUE, NEW MEXICO

    Ms. Gillon. Thank you, Madame Chairwoman, and members of 
the Subcommittee and Committee. I am Kara Gillon, Senior Staff 
Attorney with Defenders of Wildlife. Defenders of Wildlife is a 
national nonprofit membership organization dedicated to the 
protection of native animals and plants in their natural 
communities. Headquartered in Washington, D.C., Defenders has 
field offices in Albuquerque, New Mexico and throughout the 
basin states in Tucson, Sacramento and Denver.
    Before summarizing our concerns with H.R. 2515, I will 
first touch on our concerns with the Multi-Species Conservation 
Program, or MSCP. Defenders appreciate the effort and resources 
put into the MSCP. At its inception, Defenders applauded the 
program for its long-term, large-scale habitat improvement and 
species recovery. In fact, Defenders was a member of the 
steering committee.
    However, the MSCP falls short of these early goals and will 
not sustainably address the environmental degradation suffered 
by the Colorado River and delta. The plight of the big river 
fish highlights the extreme ecological degradation of the lower 
river. All four fish are listed as endangered under the ESA. 
The Colorado Pike Minnow has been extirpated from the lower 
basin. The bony tail has been virtually extirpated from the 
wild, and the razorback sucker populations are not self-
sustaining.
    And just as native wildlife finds survival more difficult, 
we too face increasing challenges from a highly regulated river 
system, increasing water use over allocation, drought and 
climate change. The MSCP, however, does not address any of 
these pressures on the river. For this reason, habitat 
restoration and fish augmentation as proposed in the MSCP are 
much less likely to succeed.
    Years of river restoration efforts have shown us that 
successful restoration is critically dependent on understanding 
and addressing the causes of a river's decline. It is also for 
this reason that several of the provisions of H.R. 2515 could 
result in adverse, unintended consequences for decades to come 
and present yet more challenges to wildlife conservation. To 
lock in the MSCP and provide the certainty contemplated here 
can only come at the expense of another user, the environment.
    Instead, we suggest legislation that preserves the 
Secretary of the Interior's authority as water master and 
creates opportunities for flexibility and resiliency over the 
next 50 years. Simply put, there is no precedent for the 
constraints placed on the Secretary of the Interior in H.R. 
2515. Defenders is concerned about those provisions that exceed 
a straightforward authorization to promote Federal 
participation such as authorization of appropriations, 
authorization to accept grants or provide grants or 
authorization to implement program activities.
    Provisions that lock in the program documents, direct 
development of the water accounting agreement and require 
explicit reference to the MSCP in future laws if they are to 
apply exceed what is necessary. H.R. 2515 is far different from 
authorizing legislation for other endangered fish programs such 
as the one on the upper Colorado River. This is because key 
program documents were not made available for public review and 
comment.
    Given the authority possessed by the Secretary as water 
master, requiring an agreement for water use is premature, and 
use of the section 10 habitat conservation plan and no 
surprises is inappropriate in light of the Federal nexus on the 
lower Colorado River, and finally because the MSCP steering 
committee refused to endorse an agreement where the MSCP would 
give good faith consideration to conservation opportunities in 
the Colorado River delta for the benefit of listed species 
there.
    In conclusion, in its current form the MSCP program 
documents recognize the Secretary's role as water master. 
Defenders has long advocated for flexibility in river 
management in order to increase reliability and predictability 
of use of river resources. Such flexibility, however, should 
not come at the expense of the Secretary's environmental 
authorities.
    Providing for increased levels of predictability will be 
critical to meeting the demands of both human and environmental 
water use in the future. Thank you very much. That concludes my 
testimony, and I will be happy to answer any questions.
    [The prepared statement of Ms. Gillon follows:]

           Statement of Kara Gillon, Senior Staff Attorney, 
                  Defenders of Wildlife, on H.R. 2515

    Madam Chairwoman and Members of the Subcommittee, I am Kara Gillon, 
Senior Staff Attorney with Defenders of Wildlife. Thank you for this 
opportunity to speak with you today on H.R. 2515, a bill to authorize 
appropriations for the Bureau of Reclamation to carry out the Lower 
Colorado River Multi-Species Conservation Program.
    Defenders of Wildlife (``Defenders'') is a national, nonprofit 
membership organization dedicated to the protection of all native wild 
animals and plants in their natural communities. Headquartered in 
Washington, D.C., Defenders has field offices in Albuquerque, NM, where 
I am located, and throughout the Colorado River basin states, in 
Tucson, AZ, Sacramento, CA, and Denver, CO.
    I will ask leave to supplement this with some documents that I am 
relying on for some of my comments today. Before summarizing our 
concerns with the Multi-Species Conservation Program, also known as the 
``MSCP,'' and proposed authorizing legislation, I first want to address 
briefly the Lower Colorado River--how it has been managed over the last 
seventy years and why the MSCP could do a better job addressing the 
environmental degradation suffered by the Colorado River and Delta.
    We appreciate the effort and resources put into the MSCP. At its 
inception, Defenders seized on the opportunity presented--long-term, 
large-scale habitat improvement and species recovery where before there 
was very little. Unfortunately, the final MSCP provides lesser 
protections for fewer species over a smaller area.
    Ten years ago, the Bureau of Reclamation found in a biological 
assessment of its historic and ongoing operations that ``[H]uman-
induced change since the beginning of the century has resulted in an 
ecosystem having significantly different physical and biological 
characteristics. Such changes have taken place as a result of the 
introduction of exotic plants (such as salt cedar), the construction of 
dams, river channel modification, the clearing of native vegetation for 
agriculture and fuel, fires, increasing soil salinity, the cessation of 
seasonal flooding, and lowered water tables.'' 1 It is as if 
man created an entirely different river.
---------------------------------------------------------------------------
    \1\ Bureau of Reclamation, Description and Assessment of 
Operations, Maintenance, and Sensitive Species of the Lower Colorado 
River 83 (1996), available at http://www.usbr.gov/lc/region/g2000/
batoc.html.
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    Native wildlife is finding survival in an altered Colorado River 
basin more difficult. These changed processes no longer naturally 
sustain riparian forests and meadows, fail to provide young fish access 
to flooded lands and leave young fish more susceptible to predation by 
sight-feeding, non-native predators.
    The plight of the ``Big River Fishes'' highlights this extreme 
ecological degradation. All four fish are listed as endangered under 
the Endangered Species Act--the Colorado pikeminnow; bonytail; 
razorback sucker; and humpback chub. The Colorado pikeminnow has been 
extirpated from the lower basin and is not even considered by the MSCP. 
The bonytail also has been virtually extirpated from the wild. 
Razorback sucker populations have declined from 50,000 to 5,000 fish 
over the last ten years with very small wild populations; they are not 
self-sustaining. There is only one small population of the humpback 
chub in the lower basin.
    Habitat restoration and fish augmentation performed without regard 
to the well-known threats to listed species are likely to fail. Years 
of river restoration efforts have shown us that successful river 
restoration is critically dependent on understanding and addressing the 
causes of the river's decline (Palmer et al., 2006; Aronson & Le Floch, 
1996). The restored habitats and stocked fish will continue their 
decline because the MSCP does not address the root causes of habitat 
degradation and low fish survival--the impounding, storing, and 
diverting of the river's waters without regard to the natural 
hydrograph that naturally sustains the cottonwood-willow forest, 
mesquite bosque, and backwaters that harbor razorback suckers, 
bonytails, southwestern willow flycatchers and other fish and birds, 
compounded by the stocking of non-native predatory fish.
    Success of the conservation plan is also questionable because there 
are no goals or objectives for habitat restoration. Without goals or 
objectives, there are no metrics for measuring success. For example, we 
do not know if cottonwood-willow habitat is successful if we find one 
southwestern willow flycatcher, a flycatcher nest, or ten flycatchers. 
We also do not know that mitigation will occur prior to adverse impacts 
or if permanently lost habitat will be maintained in perpetuity. We 
also do not know how the MSCP will select habitat creation and 
restoration sites; thus we do not know if the MSCP will select sites 
that are off-channel or hydrologically connected to the river.
    Lastly, the MSCP purports to ensure the survival of imperiled fish 
and wildlife for the next fifty years yet fails to address perhaps the 
largest threat wildlife will face in this century--global warming. In 
2004, a report prepared for the Pew Center on Global Climate Change 
synthesized published global warming studies and concluded that there 
was ``convincing evidence'' that anthropogenic global warming had 
significantly affected natural systems and that ``[t]he addition of 
climate change to the mix of stressors already affecting valued 
habitats and endangered species will present a major challenge to 
future conservation of U.S. ecological resources'' (Parmesan & 
Galbraith, 2004).
    In fact, this year, Working Group II of the Intergovernmental Panel 
on Climate Change (``IPCC'') issued a Summary for Policy Makers which 
states with medium confidence that 20-30% of plant and animal species 
assessed in the report have an increased chance for extinction if the 
average global temperature increases by more than 1.5-2.5+ Celsius. 
According to the IPCC, an increase in temperatures above this range 
would drastically alter ecosystem structure and functions, species' 
ecological interactions, and species' geographic ranges (IPCC, 2007).
    Colorado River fish and wildlife are particularly susceptible to 
adverse effects because of their concentrated habitat and their 
location in the Southwest. Global warming is likely to cause 
temperatures in the American West to increase above levels which 
increase a species chances for extinction, according to the IPCC. 
Furthermore, the IPCC predicts with very high confidence that global 
warming will lead to decreased snow pack, more winter flooding, and 
reduced summer flows for the mountains of the American West. Global 
warming effects likely to affect the Colorado River fish include 
precipitation decreases in the lower-basin by mid-century, early 
snowmelt runoff in the upper-basin, decreased overall runoff, and 
increased evaporation rates (Garfin & Lenart, 2007). Therefore, global 
warming is likely to produce changes in stream flows, precipitation, 
water temperature, and ecosystem structure which could very well result 
in an increased probability of fish extinction in the Southwest, such 
as in the Colorado River (National Assessment Synthesis Team, 2001).
    The imperiled status of many of these fish leave them less equipped 
to adapt to habitat modifications presented by global warming, making 
the possible effects upon them even more severe and leaving them more 
vulnerable to extinction. The MSCP is a rare, but foregone, chance to 
assist wildlife through the looming bottleneck of complex effects of 
global warming.
    To institutionalize the MSCP, as called for in the proposed 
legislation, may instead present one more challenge to wildlife 
conservation in the lower Colorado River.
    We too face increasing challenges from a highly regulated river 
system, increasing water use, drought, and climate change. The National 
Research Council has recently synthesized several studies that tell us 
historical conditions are no longer a reliable indicator of future 
conditions, with future droughts exceeding those of recent experience. 
First, our streamflow record in the basin is only a small subset within 
a range of greater variability than previously thought. For example, we 
are learning that although up to 16.5 million acre-feet of water has 
been allocated to users in the United States and Mexico, the river 
naturally yields 12.5 million acre-feet to 14.7 million acre-feet of 
water. In addition, studies show a trend of increasing temperatures 
across the basin and a reduction in future streamflow (National 
Research Council, 2007). The MSCP, however, does not confront any of 
these challenges. For this reason, the success of proposed habitat 
restoration and fish augmentation is highly uncertain.
    In the face of growing challenges, the desire for certainty will 
increase. To provide the level of certainty contemplated here can only 
come at the expense of assurances for another--the environment. 
Instead, we suggest legislation that preserves the Secretary of the 
Interior's authority as ``water master.'' Think instead in terms of 
flexibility and resiliency, where mechanisms may be created that create 
opportunities for all--whether through new opportunities and creative 
ideas for storage, instream flow, water acquisition programs, or 
reservoir re-operation. Certainty, whether over water supply or other 
resources and gained only at the expense of others, will create an 
untenable and unsustainable condition.
    This legislation will have the effect of constraining the Secretary 
of the Interior at precisely the time we need more opportunities for 
the Colorado River system. Provisions that codify the Program Documents 
and No Surprises and direct the Secretary to perform certain functions 
are inappropriate.
There is no precedent for the constraints placed on the Secretary of 
        the Interior
    The legislation proposed here is far, far different from that for 
other endangered fish programs authorized by Congress. Nearby and oft-
cited examples are the Upper Colorado River Endangered Fish Recovery 
Program and the San Juan River Endangered Fish Recovery Program.
    Legislation for the MSCP should only do what may be necessary for 
federal participation in the program: authorize appropriations; 
authorize the federal party to acquire interests in land and/or water, 
accept or provide grants, and enter into contracts and cooperative 
agreements; and authorize the federal party to carry out aspects of the 
program. Rather than simply authorize the Secretary's participation, 
H.R. 2515 directs the Secretary to take a certain course of action. 
Doing so confines the Secretary's authority as ``water master'' for the 
next fifty years.
    Moreover, codifying the Program Documents would encourage other 
programs to emulate this legislative approach despite the fact that key 
documents--the Implementing Agreement and the Funding and Management 
Agreement--were not made available for public review and comment.
    HR 2515 also constrains future Congresses. The bill contains what 
is, in effect, a legislative no surprises policy requiring future 
Congresses to explicitly state if legislation applies to the MSCP, 
turning traditional legislative drafting and interpretation on its 
head.
An HCP and ``No Surprises'' are Inappropriate due to the level of 
        federal influence
    The MSCP is a combination of Endangered Species Act (``ESA'') 
sections 7 and 10, providing coverage for federal and non-federal 
participants. Use of a section 10 Habitat Conservation Plan, or HCP, is 
inappropriate in light of the federal nexus associated with nearly all 
lower Colorado River activities. Section 10 and use of the ``No 
Surprises'' policy are only appropriate where there is no federal 
nexus.
    The provision in the bill directing the Secretary to act in 
accordance with the Program Documents not only enacts No Surprises 
assurances for the non-federal participants but also for federal 
parties. Neither the Endangered Species Act nor its regulations 
authorize extension of No Surprises to federal agencies.
    The federal government is implicated in nearly every aspect of 
lower Colorado River operations, due to the Secretary of the Interior's 
role as ``water master''. The Bureau of Reclamation has been delegated 
responsibility for operating and maintaining the extensive network of 
dams, water diversions, levees, canals, and other water control and 
delivery systems on the River. Reclamation's authority and discretion 
are guided by a body of treaties, Congressional enactments, compacts, 
and other agreements known as the law of the river.
    In 1928, Congress passed the Boulder Canyon Project Act which 
authorized the construction of a dam system on the River. Importantly, 
the Act reserved for the federal government broad authority over the 
operation of the dam system. As the Supreme Court in Arizona v. 
California explained, it was the United States' undertaking of this 
ambitious project and its concomitant assumption of responsibility for 
its operation, that ``Congress put the Secretary of Interior in charge 
of these works and entrusted him with sufficient power...to direct, 
manage, and coordinate their operation.'' 2
---------------------------------------------------------------------------
    \2\ Arizona v. California, 373 U.S. 546, 589-90 (1963).
---------------------------------------------------------------------------
    Unlike biological opinions for federal agencies pursuant to section 
7, which could change in future consultations, section 10 HCPs include 
No Surprises assurances. In general, if the status of a species covered 
by an HCP worsens because of unforeseen circumstances, the Fish and 
Wildlife Service will not require conservation or mitigation measures 
in addition to those in the HCP without the consent of the permittee.
    To obtain these assurances available only to non-federal parties, 
the MSCP parties employed a section 7/10 hybrid that pooled federal and 
non-federal actions and effects as interrelated. If No Surprises 
prohibits the Fish and Wildlife Service from requiring additional 
mitigation measures from non-federal participants in terms of land, 
water or other resources, the Fish and Wildlife Service may be equally 
constrained in requesting changes to federal activities. 3
---------------------------------------------------------------------------
    \3\ See Lower Colorado River Multi-Species Conservation Program 
Implementing Agreement at Sec. 7.2 (recognizing that federal and non-
federal actions are so interconnected that a federal action could 
arguably be included in a section 10 permit), available at http://
www.usbr.gov/lc/lcrmscp/publications/FinalIA.pdf.
---------------------------------------------------------------------------
    In other words, there is a high degree of federal influence in 
lower basin operations. Section 10 of the ESA relates solely to 
authorizing take of listed species by non-federal entities. Use of 
section 10 and the No Surprises policy are therefore inappropriate.
The degree of federal influence renders direction to the Secretary 
        unnecessary
    Similarly, given the authority possessed by the Secretary as 
``water master,'' directing a water accounting agreement is unnecessary 
and unwise. The Secretary has ample authority to provide for the 
comprehensive management and control of the Lower Basin system. Indeed, 
the Secretary need not be authorized or directed to enter into a water 
agreement any more than he needs authority to enter into the Colorado 
River Water Delivery Agreement or to develop surplus or shortage 
guidelines. And again, to direct the Secretary to enter into this water 
agreement is problematic because the Program Documents do not mention 
the need for such an agreement, even after comment that the documents 
were vague as to the sources and use of water for the MSCP, and there 
will be no future opportunity to comment on such agreement.
The MSCP does not cover all listed species
    Defenders was a member of the MSCP Steering Committee during the 
mid-1990s, during which we sought opportunities for the MSCP to include 
the Colorado River Delta within its coverage and conservation areas. 
After extensive negotiations with other MSCP participants and after the 
Steering Committee voted not to endorse an agreement where the MSCP 
would give good faith consideration of conservation opportunities in 
Mexico, Defenders withdrew in late 1998.
    The Colorado River basin encompasses nine states: seven in the 
United States and two in Mexico. The MSCP planning area, however, only 
``comprises areas up to and including the full-pool elevations of Lakes 
Mead, Mohave, and Havasu and the historical floodplain of the Colorado 
River from Lake Mead to the Southern International Boundary.'' Although 
these fish naturally occurred in this area, the MSCP wrongly excludes 
the Colorado pikeminnow from consideration; it offers no conservation 
measures for the fish. Moreover, the MSCP ``Planning Area'' does not 
encompass the entire area that may be affected by the covered actions--
the Colorado River Delta. Several endangered species, including the 
razorback sucker, Yuma clapper rail, desert pupfish, and vaquita, find 
a home there, are affected by activities along the lower Colorado 
River, and deserve protection.
Conclusion
    In its current form, the Lower Colorado River MSCP preserves the 
Secretary's role as water master of the Colorado River. Defenders of 
Wildlife has long advocated for flexibility in Colorado River 
management in order to increase the reliability and predictability of 
use of river resources. Such flexibility, however, should not come at 
the expense of the Secretary's environmental authorities and 
obligations nor should the Secretary relinquish his role as water 
master in lower Colorado River management in an attempt to achieve such 
flexibility.
    Providing for increased levels of flexibility in river management 
will be critical to meeting the demands of both human and environmental 
water users in the future, particularly as Upper Basin use and the 
impacts of climate change decrease overall water availability in the 
Colorado River system. Defenders believes that H.R. 2515 goes beyond 
what is needed to authorize the MSCP and may limit our options to 
address future challenges.
    Thank you very much for the opportunity to provide testimony today. 
I will be glad to answer any questions.
References
Aronson, J. and E. Le Floch. 1996. Vital landscape attributes: missing 
        tools for restoration ecology, Restoration Ecology 4: 377-387.
Garfin, Gregg and M. Lenart. 2007. Climate Change: Effects on Southwest 
        Water Resources, 6 Southwest Hydrology 6:16-34 (2007).
IPCC, 2007. Climate change 2007: Mitigation. Contribution of Working 
        group III to the Fourth Assessment Report of the 
        Intergovernmental Panel on Climate Change [B. Metz, O. R. 
        Davidson, P. R. Bosch, R. Dave, L. A. Meyer (eds)], Cambridge 
        University Press, Cambridge, United Kingdom and New York, NY, 
        USA. Available at http://www.ipcc.ch/SPM040507.pdf (last 
        visited July 20, 2007).
McCarty, John P. 2001. Ecological Consequences of Recent Climate 
        Change, 15 Conservation Biology 15:320-331.
National Assessment Synthesis Team, Climate Change Impacts on the 
        United States: The Potential Consequences of Climate 
        Variability and Change, Report for the U.S. Global Change 
        Research Program, Cambridge University Press, Cambridge UK 
        (2001). Available at http://www.usgcrp.gov/usgcrp/Library/
        nationalassessment/foundation.htm (last visited July 20, 2007).
National Research Council, National Academies, Colorado River Basin 
        Water Management (2007).
Palmer, M.A. et al. 2005. Standards for ecologically successful river 
        restoration, J. of Applied Ecology 42:208-217.
Parmesan, Camille and H. Galbraith, Pew Center on Global Climate 
        Change, Observed Impacts of Global Climate Change in the U.S. 
        (2004), available at http://www.pewclimate.org/docUploads/
        final_ObsImpact.pdf (last visited July 20, 2007).
                                 ______
                                 

           Response to questions submitted for the record by 
                        Kara Gillon on H.R. 2515

1.  H.R. 2515 establishes a 50-year term for the Lower Colorado Multi-
        Species Conservation Program. Fifty years strikes me as a long 
        time, and it is certainly longer than is normally set for 
        natural resource programs. For example, the Upper Colorado 
        Recovery Implementation Program was authorized in 1988 and had 
        to be reauthorized in 2005--after only 17 years. Is a 50-year 
        term really appropriate for this program? Are you confident 
        that conditions affecting the program will be essentially 
        unchanged 50 years from now? What assurances are there?
    Response:
    The 50-year time frame for the Lower Colorado River Multi-Species 
Conservation Program (``MSCP'') is cause for concern. The MSCP does not 
address existing threats posed by non-native predatory species and a 
drastically altered river ecosystem. One cannot safely predict future 
ecosystem conditions given the failure to tackle known threats, not to 
mention additional threats not discussed by the MSCP, such as those 
posed by climate change. For these reasons, there is little assurance 
the MSCP is equipped to deal with the challenges of the next half-
century.
    For example, the Program Documents' hydrologic modeling of 
potential flows over the next fifty years is based on the assumption 
that future hydrology will resemble historic patterns. Defenders of 
Wildlife and others commented, therefore, that the model fails to 
account for the likelihood that climate change will affect the 
hydrology of, and demand within, the Colorado River basin. Climate 
change impacts could reduce inflows by as much as 20 percent, with 
resultant adverse impacts on habitat and listed species (Nash, L.L. and 
P. Gleick. 1991. The sensitivity of streamflow in the Colorado basin to 
climatic changes. Journal of Hydrology 125: 221-241; Nash, L.L. and P. 
Gleick. 1993. The Colorado River Basin and Climatic Change: The 
Sensitivity of Streamflow and Water Supply to Variations in Temperature 
and Precipitation. Report EPA 230-R-93-009. Washington, DC: 
Environmental Protection Agency).
    There has been and continues to be a great deal of research on the 
effects of climate change on water resources in the Colorado River 
basin (Garfin & Lenart, 2007; Christensen, N.S., A.W. Wood, N. Voisin, 
D.P. Lettenmaier, and R.N. Palmer. 2004. The Effects of Climate Change 
on the Hydrology and Water Resources of the Colorado River Basin. 
Climatic Change 62(1): 337-363). The studies predicted, and continue to 
predict, higher temperatures, decreases in streamflow, less snow and 
more precipitation, reduced storage, and less hydropower production. As 
the United States Geological Survey succinctly stated, ``We need to 
look at a large range of possible futures for water and [evaluate] how 
well will our designs, plans and allocations work under a whole range 
of climate scenarios--because we can't narrow it down.'' 1
---------------------------------------------------------------------------
    \1\ Lucy Kafanov, Water Managers Must Gird for Extreme Conditions, 
E&E News PM (April 27, 2007).
---------------------------------------------------------------------------
    After the Bureau of Reclamation rejected climate change as an 
important problem that merits analysis, the subsequent Program 
Documents failed to even mention the possibility of climate change over 
the next 50 years.
    Furthermore, the MSCP is not a recovery program, but a program to 
offset impacts from current and future activities. If the MSCP were 
geared toward recovery, rather than the status quo, the fish and 
wildlife of the Colorado River basin might possess long term assurances 
on par with those sought by the MSCP permittees.
    Due to concerns over the length of the MSCP and its focus on 
mitigation of impacts rather than recovery of species, Congress may 
wish to authorize the program without the additional provisions of H.R. 
2515 that would also direct the Secretary to implement the MSCP as 
written today, in Sections 3(a) and 5(b). Congress may also authorize 
the program in increments, as is proposed with the Platte River 
Recovery Implementation Program.
2.  This program was roughly modeled upon the Upper Colorado Recovery 
        Implementation Program; did water and power users and the 
        states in the Upper Colorado Basin receive the same assurances 
        that are being provided in the MSCP?
    Response:
    Defenders of Wildlife has not been a participant in the Upper 
Colorado River Recovery Implementation Program (``RIP''), but the 
following response is based on my understanding of the RIP's beginning 
and implementation.
    From its beginning in 1988, the RIP sought to do more than offset 
impacts of water development activities; the RIP instead developed a 
plan to implement a set of actions to address aspects of the recovery 
plans for listed species.
    The RIP serves as the ``reasonable and prudent alternative'' for 
projects undergoing Endangered Species Act section 7 consultation. In 
other words, the RIP avoids jeopardizing the existence of listed 
species and destroying or adversely modifying species' critical 
habitat. The Fish and Wildlife Service retains ongoing responsibility 
to determine whether the RIP is making sufficient progress toward 
recovery. The Fish and Wildlife Service also retains the ability to 
fashion a new reasonable and prudent alternative in the event 
sufficient progress is not being made or if the RIP cannot continue to 
serve as the reasonable and prudent alternative.
    In contrast to the MSCP, the Upper Colorado River RIP does not 
cover a period as long as 50 years. The RIP does not guarantee No 
Surprises assurances to the non-federal participants, nor does the RIP 
simply mitigate for the adverse impacts of current and future 
activities, in essence maintaining the status quo. Unlike MSCP parties, 
participants in the RIP do not have assurances that their Recovery 
Action Plan or obligations thereunder will never change. However, they 
do have assurance that although the Fish and Wildlife Service makes the 
final decision, the agency will work with them in measuring the 
progress of the RIP and, if necessary, in developing new reasonable and 
prudent alternatives.
                                 ______
                                 
    Mrs. Napolitano. Thank you very much, Madame. I appreciate 
your testimony and found it of great interest. Next would be 
Mr. Gerald Zimmerman, the Executive Director of the Colorado 
River Board of California in Glendale, California. Welcome.

STATEMENT OF GERALD R. ZIMMERMAN, EXECUTIVE DIRECTOR, COLORADO 
        RIVER BOARD OF CALIFORNIA, GLENDALE, CALIFORNIA

    Mr. Zimmerman. Thank you, Madame Chairperson or Chairwoman 
and members of the Subcommittee. I want to thank you for the 
opportunity to provide both written and oral testimony today on 
H.R. 2515. The Colorado River Board of California is the agency 
in California created by state statute to protect California's 
rights and interest in the resources provided by the Colorado 
River and to represent California in discussions and 
negotiations regarding the Colorado River and its management.
    California's rights and interest in the water and power 
resources of the Colorado River system are vital to the state's 
economy. Seven counties in southern California, more than half 
the state's population, are supported by the water and power 
resources from the Colorado River to support the economy in 
excess of $850 billion per year. The Colorado River Board of 
California supports passage of H.R. 2515 because if passed it 
assures continued compliance by the United States with the 
program documents and agreements that have been developed as 
part of the lower Colorado River Multi-Species Conservation 
Program.
    From California's perspective, H.R. 2515 as written 
provides several key elements that are important toward 
ensuring the long-term, effective implementation of this 
important program. First, H.R. 2515 provides an authorization 
of appropriation for the Federal share of the cost and directs 
the Secretary of Interior to manage the program in accordance 
with the program documents and agreements that have been 
developed.
    These documents and agreements that were executed by the 
Federal and non-Federal parties reflect a long-term commitment 
to implement this program through 2055. California believes 
that through this legislation it is important that Congress 
formally recognize the value of the program to the citizens of 
the United States and the overarching responsibilities of the 
Secretary of Interior and the Bureau of Reclamation and the 
responsibilities that they have toward long-term program 
implementation.
    Second, H.R. 2515 establishes a process for the Secretary 
of Interior and the Bureau of Reclamation to acquire and 
provide adequate water supplies associated with restoration and 
maintenance of habitats created pursuant to the program 
documents. In these times of limited water supplies in the 
lower basin, this process will allow for the creation and 
maintenance of 8,132 acres of aquatic wetland and riparian 
habitat within the program planning area along the lower 
Colorado River, while ensuring lawful entitlement holders in 
each of the three lower basin states can continue to manage and 
effectively utilize their important Colorado River 
apportionments throughout the 50-year period.
    Specifically there is language in H.R. 2515 ensuring that 
habitat water acquisition and water use policy established by 
the Secretary of Interior will not impair any rights to 
mainstream water established by any compact, treaty, law or 
decree in effect as of enactment of this act.
    Finally, H.R. 2515 acknowledges that a long-term, 
cooperative effort involving Federal and non-Federal 
participants will be required in order to successfully 
implement this program over the 50-year period. This will be 
accomplished through periodic meetings of the Lower Colorado 
River Multi-Species Conservation Program steering committee and 
Reclamation staff. These meetings, several of which have 
already occurred since the inception of the implementation 
program in April 2005, are the primary focal point for 
decision-making regarding preparation and adoption of the 
annual work plans, budgets and program implementation status 
reports.
    It is a steering committee where the consensus-based 
decisions are made based on the results of ongoing monitoring 
and research. Utilization of adaptive management in suggesting 
modifications that need to be made should be based on the best 
available science. I believe that this is a key element of the 
program, and we are already spending over 25 percent of the 
program cost to adapt to potential change that may occur.
    Madame Chair, I want to thank you for the opportunity to be 
here today. I want to indicate that California is fully 
committed to carrying out its responsibilities toward the long-
term implementation of this program. Thank you.
    [The prepared statement of Mr. Zimmerman follows:]

         Statement of Gerald R. Zimmerman, Executive Director, 
            Colorado River Board of California, on H.R. 2515

    Madam Chairwoman and Members of the Committee and Subcommittee, 
thank you for the opportunity to submit written testimony regarding 
H.R. 2515. As the subcommittee is aware, H.R. 2515 authorizes 
appropriations associated with long-term implementation the Lower 
Colorado River Multi-Species Conservation Program (``LCR MSCP''). The 
LCR MSCP is a comprehensive, cooperative effort among fifty federal and 
non-federal entities in Arizona, California and Nevada to protect 26 
endangered, threatened and sensitive species along the Lower Colorado 
River and to provide assurances to the non-federal entities involved 
that their essential water and power operations on the River may 
continue if they comply with the Program's requirements and agreements.
    As background, I am the Executive Director of the Colorado River 
Board of California (CRB); I served as the Chairman of the LCR MSCP 
Steering Committee throughout the program-development phase and the 
first two years of the implementation phase. The CRB is the agency in 
California created by State statute to protect California's rights and 
interests in the resources provided by the Colorado River and to 
represent California in discussions and negotiations regarding the 
Colorado River and its management. California's rights and interests in 
the water and power resources of the Colorado River System are vital to 
the State's economy. Seven counties in Southern California, with more 
than half of the state's population, nearly 20 million residents, 
receive water and hydroelectric energy from the Colorado River, in 
support of a service area economy in excess of $850 billion per year. 
All ten members on the Colorado River Board of California are appointed 
by the Governor.
    It should be pointed out that in a normal water year California is 
entitled to the use of up to 4.4 million acre-feet of water from the 
mainstream of the Colorado River. This valuable water supply is 
utilized by several large southern California agricultural districts, 
as well as The Metropolitan Water District of Southern California, the 
wholesale distributor of water supplies to municipal providers that 
meet the needs of nearly 18 million residents in Southern California.
    The CRB strongly supports H.R. 2515, because this legislation, if 
passed, assures continued compliance by the United States with the 
program documents and agreements that have been developed as part of 
the LCR MSCP. That, in turn, provides protection to the non-federal 
participants in the Program, who like the CRB, its member agencies, and 
all of the Colorado River water and hydroelectric power contractors, 
have agreed to provide substantial amounts of non-federal monies for 
the conservation of endangered species in order to receive an 
incidental take permit under the terms of the Endangered Species Act 
for their continued water and power operations.
    On April 2, 2005, Secretary of the Department of the Interior, Gale 
A. Norton, approved this major collaborative and innovative 50-year 
conservation initiative. The overall Program costs, $626 million, will 
be annually adjusted for inflation, and will be shared by the three 
lower basin states paying 50 percent of the costs and the federal 
government paying 50 percent. Of the states' share, Arizona and Nevada 
will each pay 25 percent, while California will pay the remaining 50 
percent. In return for their funding commitments, the non-federal 
participants have received a 50-year incidental take permit, issued by 
the U.S. Fish and Wildlife Service under Section 10 of the Endangered 
Species Act, which authorizes their existing and future water and power 
operations to continue. All of the California participants have made a 
significant long-term financial commitment toward the implementation of 
the LCR MSCP that has been memorialized in a California LCR MSCP 
Funding Agreement, executed on April 2, 2005.
    From California's perspective, H.R. 2515, as written, provides 
several key elements that are important toward ensuring the long-term 
effective implementation of this important Program. First H.R. 2515 
provides an authorization of appropriations for the federal share of 
Program costs and directs the Secretary of the Interior to manage and 
implement the Program in accordance with the executed Program Documents 
and Agreements. These documents and agreements, executed by all of the 
federal and non-federal parties reflect the long-term commitment to 
implement this important Program through 2055. California believes 
that, through this legislation, it is important that the Congress 
formally recognize the value of the Program to the citizens of the 
United States and the overarching responsibilities that the Secretary 
of the Interior and the Bureau of Reclamation (Reclamation) have toward 
long-term Program implementation.
    Second, H.R. 2515 establishes a process for the Secretary of the 
Interior and Reclamation to acquire and provide adequate water supplies 
associated with the restoration and maintenance of habitats created 
pursuant to the Program documents. In these times of limited water 
supplies in the Lower Basin States, this process will allow for the 
creation and maintenance of the 8,132 acres of aquatic, wetland, and 
riparian habitats within the Program planning area along the Lower 
Colorado River, and yet ensure that lawful entitlement holders in the 
three states can continue to manage and effectively utilize their 
important Colorado River apportionments over the fifty-year period. 
Specifically, there is language in H.R. 2515 ensuring that the habitat 
water acquisition and use policies established by the Secretary of the 
Interior will not impair any right to mainstream water established 
under any compact, treaty, law, decree, or contract in effect as of 
enactment of this Act.
    Third, H.R. 2515 acknowledges that a long-term cooperative effort, 
involving the federal and non-federal Program participants, will be 
required in order to successfully implement this Program over the 
fifty-year period. This will be accomplished through periodic meetings 
of the LCR MSCP Steering Committee and Reclamation's LCR MSCP Office 
staff. These meetings, several of which have occurred since inception 
of Program implementation in April 2005, are the primary focal point 
for decision-making regarding the preparation and adoption of annual 
work plans, budgets, and Program implementation status reports. It is 
in the Steering Committee where consensus-based decisions will be made 
associated with the results of ongoing monitoring and research 
activities and the utilization of adaptive management in suggesting 
modifications to implementation activities based upon the best 
available science.
    Finally, since the time that similar legislation was introduced 
last year (i.e., H.R. 5180), two significant developments have 
occurred. First, subject to final review and approval within the 
Department of the Interior, the parties have reached agreement with the 
United States on an agreement to provide Colorado River water for LCR 
MSCP habitat restoration and maintenance purposes, as authorized by 
Section 3(b) of the bill. Second, Section 5(b) of the bill, which 
relates to the impact of future legislative actions on the LCR MSCP, 
has been modified and narrowed significantly to meet the concerns of 
some members.
    California is fully committed to carrying out its responsibilities 
toward long-term implementation of the LCR MSCP over the fifty-year 
period, and looks forward to working with representatives and agencies 
within the States of Arizona and Nevada, as well as the participating 
federal agencies in carrying out those goals and meeting our collective 
obligations. Toward this end, California believes that H.R. 2515 is of 
vital importance to all of the LCR MSCP participants committed to the 
Program's success. California urges the Subcommittee and the Committee, 
as well as the full House to approve this important legislation.
    It is worth noting that at the White House Conference on 
Cooperative Conservation in August 2005, in St. Louis, Missouri, the 
LCR MSCP was recognized by the Administration as an ``Exemplary 
Initiative.'' Implementation of the LCR MSCP is critical to the long-
term needs of those in the southwest that depend on the Lower Colorado 
River for a major portion of their water and power resources. As 
Secretary Norton said in her April 2005 Record of Decision approving 
the Program:
        ``The importance of the Colorado River to the southwestern 
        portion of the United States cannot be overstated: the Colorado 
        is the lifeblood of the southwest. The Colorado River provides 
        water and power to over 20 million people (in such cities as 
        Los Angeles, San Diego, Las Vegas, Phoenix and Tucson), 
        irrigates over 2 million acres, and generates up to 10 billion 
        kilowatt hours of electricity annually.''
    The LCR MSCP represents a fifty-year commitment by all of the 
parties involved. It is essential that this commitment be fully and 
faithfully met. H.R. 2515 will help ensure that this occurs. Again, I 
would like to thank this Subcommittee and the Committee for the 
opportunity to provide this testimony regarding H.R. 2515, legislation 
considered by the CRB to be very important to California's long-term 
interests and rights in the water and power resources of the Colorado 
River System. Should the Subcommittee or Committee require any 
clarification of these comments, or additional information, you may 
reach me at (818) 500-1625, extension 308.
                                 ______
                                 

           Response to questions submitted for the record by 
                    Gerald R. Zimmerman on H.R. 2515

 (State Representatives) Has there been any effort to work with 
        entities on the other side of the Mexican border to ensure 
        successful recovery for the river system, not just the U.S. 
        side? Is it possible that neglect of habitat on the Mexican 
        side could wipe out attempts by the MSCP to stabilize habitat 
        and protect and recover species?
    There are several significant efforts underway involving federal, 
non-federal, and non-governmental agencies in both countries to address 
environmental issues along the Lower Colorado River (LCR) and the delta 
region in Mexico. The U.S. Bureau of Reclamation and United States 
Section of the International Boundary and Water Commission are involved 
in the International Boundary and Water Commission Minute 306 and the 
``Fourth Work Group'' activities that coordinate environmental 
investigations and activities along the Limitrophe Section of the LCR 
(i.e., the section between the northerly international boundary with 
California and the southerly international boundary with Arizona), as 
well as below the border. Specifically, the Minute 306 process provides 
a conceptual framework for cooperation by the United States and Mexico 
through the development of studies and recommendations concerning the 
riparian and estuarine ecology of the Colorado River in its Limitrophe 
Section and its associated Delta. These activities include the 
development of a hydraulic model for the riverine corridor in Mexico, 
impacts of water management on the Cienega de Santa Clara, status of 
endangered Southwestern willow flycatcher and Yuma clapper rail, and 
other endangered species. Additionally, there are several cross-border 
initiatives involving the U.S. Fish and Wildlife Service, Arizona Game 
and Fish Department, Native American tribes, and other non-governmental 
organizations that focus on habitat restoration activities and 
endangered species conservation programs. Collectively these efforts 
are addressing portions of the Lower Colorado River in Mexico, the 
delta region, and the adjacent Sonoran Desert habitats. Finally, there 
is a ``working group'' of interested governmental and non-governmental 
entities in Arizona that are involved in evaluating the potential 
impacts of partial or full operation of the U.S. Bureau of 
Reclamation's Yuma Desalting Plant and potential impacts to the Cienega 
de Santa Clara and water quality impacts associated with Mexican Water 
Treaty deliveries.
    With respect to the second question, it is not likely that any 
degradation of habitats in the Mexican portion of the Lower Colorado 
would negatively impact the success of LCR MSCP activities and 
programs. If anything, the benefits provided through the habitat 
created by LCR MSCP projects will help ensure that endangered species 
will not go extinct due to any failure to protect their habitat in 
Mexico.
 (State Representatives) Can you please discuss the specifics of the 
        proposed federal-state water use agreement referenced in 
        section 3(b) of the bill? Have the states reached agreement on 
        how much water will be dedicated to the program?
    The LCR MSCP Conservation Plan includes an estimate that 
consumptive water use for program purposes (i.e., habitat restoration 
and maintenance) will be 39,300 acre-feet per year. This water is 
expected to be provided through acquisition of lands for habitat 
creation that include water rights. Although the program cost estimate 
includes $50 million to acquire any additional water rights that may be 
needed, there is a legal question about the authority of Reclamation to 
make use of Colorado River water for fish and wildlife purposes. 
Section 3(b) of H.R. 2515 is specifically intended to provide 
assurances for that authority so that the LCR MSCP may be fully 
implemented.
    The proposed water agreement commits the Lower Division States and 
Reclamation to allow Colorado River water to be used for the LCR MSCP 
notwithstanding any contractual or other legal restrictions that may 
apply to the water used. Reclamation is further authorized to enter 
into voluntary agreements for the use or assignment of water for 
conservation purposes. In addition, the agreement encourages removal of 
non-native vegetation, like saltcedar, by providing that any water used 
by replacement native vegetation planted for program purposes will 
continue to be accounted as a system loss by Reclamation.
 (State Representatives) How does the MSCP address non-native species?
    There are many programs and activities contained within the LCR 
MSCP conservation measures that address the management and control of 
non-native plant and animal species. For example, control and 
management of non-native salt cedar (tamarisk) is a major part of the 
re-establishment and maintenance of native cottonwood and willow 
habitats along the LCR. The salt cedar is low quality habitat for 
migratory birds, and its replacement with native vegetation will 
improve conditions for nesting and breeding for these species. Another 
program within the LCR MSCP to benefit migratory bird species is the 
control of nest parasitism by the Brown-headed cowbirds, which has 
negatively impacted many birds, such as the endangered Southwestern 
willow flycatcher.
    With respect to non-native aquatic species, it should be pointed 
out that the three Lower Basin state wildlife resource agencies have 
not, for some time, stocked any non-native aquatic species in the 
waters of the Lower Colorado River. To counter the predation by non-
native fish on juvenile native endangered fish, the LCR MSCP 
participants have agreed to the rearing, stocking and management of 
nearly 1.2 million razorback suckers and bonytail in aquatic habitats 
within the LCR MSCP planning area along the LCR. Finally, as part of 
the LCR MSCP, the Program participants are in the process of creating 
``predator-free'' aquatic environments in order to facilitate rearing, 
management, and long-term conservation of stocks of native endangered 
fishes, including the razorback sucker and bonytail.
                                 ______
                                 
    Mrs. Napolitano. Thank you, Mr. Zimmerman. We will begin 
with the question and answer, and I will start off with anybody 
that wants to answer this particular question that I have. It 
deals with the 50-year term for the program. It strikes me--as 
it does others--that it is really excessive. I know there is 
precedent in some areas but it is kind of difficult for this 
type of an agreement as far as I am concerned because it will 
have to take in a lot of other issues such as temperature 
change, climate change, the low flows of the river, many of the 
things that we are beginning to see that have never in decades 
happened in our areas.
    It is certainly longer than normal set for natural 
resources programs. As an example, the upper Colorado Recovery 
Implementation Program authorized in 1988 had to be 
reauthorized 17 years later, in 2005. A 50-year term is somehow 
questionable as being appropriate. Are you confident that these 
conditions affecting the program will be essentially unchanged 
50 years from now, and what assurances can you give this 
subcommittee?
    Mr. Caan. Madame Chairwoman, let me begin attempting to 
answer your multifaceted question. This program is really 
unprecedented and unlike other programs that we have looked at, 
and let me quickly explain why. There are two parties 
essentially who have an interest in the Colorado River system 
with respect to Endangered Species Act issues. There are the 
Federal parties who require a section 7 consultation to deal 
with listed threatened and endangered species.
    There are also the private parties, the non-Federal 
parties, the ones who take the water and power, not the power 
so much but the water, who require a section 10 permit to 
continue operations. What we have done--and we started this 10 
years ago--we decided that instead of having a separate effort 
for the Federal parties and a separate effort for the non-
Federal parties, we would combine those efforts and try to do a 
comprehensive long-term program that would provide coverage for 
the currently listed and threatened species and future listed 
species by combining a section 7 and section 10 hybrid that the 
states, the non-Federal and Federal parties agree to contribute 
to and have one plan that addresses all of the habitat, the 
8,000 acres, the riparian habitat and fisheries for the 50 
years.
    So it is not unprecedented in terms of 50 years. It is 
unprecedented, I believe, in attempting to combine those two 
programs to provide for the long-term. With respect to the 
long-term, I think that is an advantage to the program.
    Mrs. Napolitano. Could you speed it up?
    Mr. Caan. I am sorry. Let me summarize very quickly. Where 
some may see constraints over the lack of flexibility or the 50 
years, we see the certainty of the program, the ability to 
provide adaptive management to look at change in the river 
conditions that will provide us the opportunity to continue to 
do what we believe is working and yet have 50 years so that if 
things are not working the way we think we can modify our 
program, implement new procedures, and then look at the success 
of the program over the 50 years. Thank you.
    Mrs. Napolitano. With whose oversight?
    Mr. Caan. The oversight of this program will be conducted 
by the Federal and non-Federal parties over a steering 
committee that will be in existence for 50 years. We will 
delegate that to our future generations to take care of what we 
built into this program. As Mr. Zimmerman said, 25 percent of 
the budget is devoted to monitoring, reviewing, improving and 
managing.
    Mrs. Napolitano. Thank you. Somebody else?
    Mr. Johnson. Madame Chair, it is the beginning of the 
program. We did look at a 75-year program life similar to the 
multi-species or the habitat conservation program for central 
Orange County looking at resources. In discussions with the 
Fish and Wildlife Service on the activities, species, and 
resources that were going to be covered, it was determined that 
a 50-year program would be more appropriate.
    I believe, Madame Chair, that you have compared this with 
the upper Colorado River Implementation Program. That is an 
implementation program, not a habitat conservation program. 
What they are trying to do with that is to move the species 
toward recovery. They are not developing a habitat based plan 
as we are within the MSCP. For the cottonwood willows, et 
cetera, they need a longer term in order to determine whether 
the habitat is being provided for the species, and so being 
habitat based I believe that the 50-year term is appropriate.
    Mrs. Napolitano. But are they not trying to move it to 
recovery?
    Mr. Johnson. Through the MSCP that is the objective is move 
each of the species toward recovery, yes.
    Ms. Bitter Smith. Madame Chair, if I just might briefly add 
on behalf of one of those entities which is a water user, my 
board is a financial contributor in a very large sense to this 
project; and one of the key elements in them reaching that 
decision was the sense of certainty in the 50-year term of the 
program. That was a very key component in the discussion that 
happened at the CAP board level.
    Mr. Johnson. Madame Chairwoman, I would just say that I 
think everybody has summarized quite well, and I think we agree 
with most of the comments that have already been made. We 
support the 50-year period. We think the adaptive management 
approach allows plenty of flexibility to address anything that 
may happen in the future.
    Mrs. Napolitano. Then I will have another question. What is 
the term of the Platte River Recovery Implementation Program, 
and was this program looked at as a possible model for the 
MSCP, and what of other HCPs?
    Mr. Johnson. Madame Chairwoman, I will take a shot at that. 
Actually I think the MSCP preceded the Platte River. I think 
the MSCP is probably a little bit ahead of the Platte River 
program in its development. I think the initial phase of the 
Platte River program is 13 years but I think it is anticipated 
that that will be modified over time, and in fact it has an 
expectation for a much longer life.
    Mrs. Napolitano. Anybody else want to address that? Ms. 
Gillon, I am just wondering how open or public was the process 
of developing the Lower Colorado Multi-Species Conservation, 
and did all the stakeholders have a chance to participate 
fully, and how confident are you that there will be adequate 
public and stakeholder involvement 45, 50 years from now?
    Ms. Gillon. Well, as I mentioned, Defenders had been a 
steering committee member initially and during the development, 
the MSCP steering committee in meetings have been fairly open 
to the public. I think one of the challenges presented by the 
MSCP and lots of programs like it is the sheer volume. I mean, 
a 10-year development period with a steering committee, several 
subcommittees, multiple meetings, it is quite a challenge for a 
nonprofit to keep up with and meaningfully participate in that 
sort of program.
    So while Defenders and other environmental groups made 
efforts to participate, I think in the past it was difficult 
but we did to the best of our ability. In the future, I do not 
know how that is going to look. I know that there have been 
attempts and the MSCP maintains a website where it puts out 
public documents. I think that there would be a fear that in 
about 20 or 25 years there will be less need for public 
participation. By that point, I believe they will be done with 
the planting and the stocking, and will be mainly monitoring. 
However, one of the challenges we have with a 50-year program 
is that recent history is not a very accurate indicator of what 
the future holds for us. So it is hard to say what will happen 
over the next 50 years in the MSCP.
    Mrs. Napolitano. Thank you. I will now yield to the acting 
Ranking Member, Mr. Heller.
    Mr. Heller. The acting, acting. Thank you, Madame 
Chairwoman. Again thank you for this hearing. I certainly do 
appreciate the opportunity to discuss these issues, and to 
Congressman Mitchell for his input and efforts on this bill 
also. George, I want to go back to the question that the 
Chairwoman brought up. Again getting back to this 50 years. Why 
not 25 years? Why not 100 years? Where did the 50 years come 
from?
    Mr. Caan. Thank you, Congressman Heller. I presume that if 
we could have 100-year program we probably would take it. We 
expect to be utilizing the resources of the Colorado River in 
perpetuity, far beyond my tenure as Chairman and Executive 
Director. Fifty years was what we believed was consistent with 
the direction that the steering committee wanted to have with 
respect to the longevity, the habitat restoration, what we 
needed in order to both begin the program, to evolve it, to 
acquire the land, acquire the water, see the fruits of our 
labor, develop for instance planting techniques and backwater 
restoration, see how it works.
    If it does not work, we will have to go back, revise our 
plans and move forward. Fifty years was the kind of certainty 
that in order for us to provide this level of investment for 
the $626 million where Nevada is paying roughly $78 million of 
that share that we wanted the long-term certainty frankly to 
see the fruits of our ability and to see the project be a 
success.
    Forty years from now, Congressman Heller, there will 
probably be people back at Congress asking for additional 
legislation to extend this program to let you know how well it 
succeeded and to get the Congress to endorse a program that 
will continue to restore the environment.
    Mr. Heller. Let me just raise one question. Was there any 
discussion during your deliberation on debt management or 
capital outlay from power companies and water companies as to 
part of the reason for the 50 years or any kind of time period?
    Mr. Caan. Congressman Heller, Madame Chairwoman, in 
Nevada--I will just speak for Nevada--the water and power 
customers who rely on this river system fully understand the 
challenges that the Endangered Species Act could pose without a 
level of certainty that we have done our best to comply with 
that. So those who receive an allocation of hydropower, those 
who receive an allocation of water are fully supporting the 
longevity and long-term program, which is why they are the ones 
who are contributing.
    In Nevada, two-thirds of the $78 million that Nevada is 
contributing is coming from water customers. One-third of the 
contributions are coming from those in southern Nevada who 
receive an allocation of Federal hydropower. It was initially a 
challenge for them to understand what the Endangered Species 
Act does. Once they understood what it could do if not planned 
for proactively, they were very willing to support contributing 
to this program and funding it. In fact, they are the members 
of the steering committee and plan to be there for the 50 years 
to monitor the success of this program.
    Mr. Heller. Very good. Thank you. I yield back.
    Mrs. Napolitano. Thank you, sir. Let us see. We have Mr. 
Costa.
    Mr. Costa. Thank you very much, Madame Chairperson, for 
holding this hearing this morning and the proposed legislation. 
I have several different questions, and let me begin I guess 
first of all with Mr. Johnson. If adopted into law, do you see 
any proposed, or any potential impact I guess is a better way 
to rephrase it, with regard to the Quantification Settlement 
Agreement that we reached several years ago on the Colorado 
River as it relates to water use impacting primarily California 
but other shared users as it relates to the record of decision?
    Mr. Johnson. This program actually supports the 
Quantification Settlement Agreement. Without ESA compliance, we 
would not be able to implement that. So I think that this 
program is very integral to that agreement and ensuring the 
long-term viability of that agreement.
    Mr. Costa. In the definition of again this proposed 
legislation while it looks toward protection of the Multi-
species Conservation Program, does it include--and I guess you 
would divide between the northern or the southern reaches of 
the Colorado River--the Grand Canyon area? By definition it is 
below Lee Ferry, is it not?
    Mr. Johnson. Right. The lower basin.
    Mr. Costa. The lower basin.
    Mr. Johnson. The lower basin river starts at Lee Ferry. 
This program only covers the river from the upper reaches of 
Lake Mead to the Mexican border and the flood plain. The Grand 
Canyon is covered under the adapted management program 
associated with Glen Canyon Dam, and there is lots of activity 
related to the Grand Canyon and how the river is operated 
through the canyon. It is a separate program, a separate 
process that addresses the ecosystem.
    Mr. Costa. Well that brings another question. As it relates 
to Glen Canyon and with great fanfare both Secretary Babbitt a 
number of years ago created the release program to improve the 
beaches and habitat and so forth. The report that was done on 
that seemed to indicate that notwithstanding the best 
intentions, it was less than successful. What have we learned 
about our ability to restore multi-species efforts with these 
types of various programs like the ones that are being proposed 
here?
    Mr. Johnson. Well I think it is an ongoing effort, and I 
think as we get information and as the science becomes more 
accurate and more complete we make adjustments to ensure that 
we are doing the right thing to protect and enhance the 
species, and to try to move them toward recovery. That has been 
an ongoing process in the Glen Canyon effort.
    We are embarking on a new EIS related to the operation of 
Glen Canyon Dam. That is scheduled to be completed in about a 
year and a half, and we are looking at options in the Grand 
Canyon on how we operate that system and how we protect 
species. We are looking at things like a temperature curtain at 
Glen Canyon Dam that could increase temperatures and in fact 
enhance the production of the native species in the canyon.
    Mr. Costa. But are there not limitations? I mean, we are in 
a conundrum, are we not, I mean, when you think about it as to 
what our abilities are to recreate habitat? We have two very 
important reservoirs with Lake Mead and Lake Powell as well. We 
now have extended periods, both on the upper basin and the 
lower basin, as it relates to drought conditions, and we know 
that the seven-party agreement as it relates to the river and 
the allocation of water is oversubscribed. So how do we pursue 
this effort?
    Mr. Johnson. Well I think that we have to manage the river 
system to accommodate.
    Mr. Costa. As best we can but realizing we cannot, unless 
you want to eliminate the two reservoirs, which some would 
argue. You cannot turn back the clock completely.
    Mr. Johnson. Absolutely not. Those two reservoirs are 
absolutely critical to meeting the water needs of the 
southwest, and certainly it does not make any sense to not 
continue to have those. At the same time, we have to comply 
with the Endangered Species Act, and quite frankly, this 
program and what we are doing in the Glen Canyon effort, what 
is being done in the Upper Colorado River Recovery Program are 
all activities that are enhancing species and improving the 
species and addressing the needs of the species.
    Mr. Costa. My time has expired.
    Mr. Johnson. We have to know how to manage the river system 
to meet human needs and to also meet the needs of the species. 
It is an ongoing effort, and we have to adapt our approach to 
doing that as necessary over time as we get new information.
    Mr. Costa. Thank you, Madame Chairman. My time has expired. 
I guess at the end of the day we will continue to have this 
discussion as to whether or not the glass is half full or half 
empty, no pun intended.
    Mrs. Napolitano. OK. Do you have a question?
    Mr. Heller. Thank you, Madame Chairwoman. Commissioner, in 
your opinion the MSCP agreement, has that been an open process?
    Mr. Johnson. Yes, I believe it has. I think we have worked 
hard to be inclusive and to invite the public to participate in 
the process. Absolutely.
    Mr. Heller. It has been raised in writing that some of the 
key documents such as the implementing agreement was not shared 
with the public. Can you respond to that?
    Mr. Johnson. I was not involved in the details of 
developing that agreement, and I would like to defer that to 
some of the other parties that were involved in that if I can.
    Mr. Heller. Sure.
    Mr. Caan. Thank you. Thank you for the question, 
Congressman Heller. I have been involved in the process since 
1996. It has been open. It has been available. Documents have 
been available for the public to look at. I could say that 
directly because our office initially operated the website that 
put all these documents for public review, public inspection.
    The Bureau of Reclamation now operates the website with our 
help. To address a previous question with respect to the public 
participation, the program documents--the documents that we are 
asking for in this legislation--provide for compliance and will 
provide assurance that for the 50 years of implementation this 
will be an open process. This will have a steering committee 
for the next 50 years that will look at monitoring plans and 
science plans and yearly budgets so that in the future, to the 
extent that we can agree that the program documents will be 
complied with, which is one of the reasons we are asking for 
this legislation, this process will have that kind of oversight 
in the future.
    Everything is made public. It is all in the website. Our 
meetings are open to the public. We have a huge stakeholder 
committee, and it is clearly the interest of the stakeholders 
to make sure that each and every step is open to the public 
frankly because we get a lot of good comments and suggestions 
by having it as open as it is.
    Mr. Heller. Thank you. Changing subjects just for a minute, 
Ms. Bitter Smith, on the 26 species, prior to this agreement 
how were they protected?
    Ms. Bitter Smith. Madame Chairwoman, Congressman, nothing 
was happening with any great regard, and we have had great 
humor in talking about those species at my board level, as you 
can imagine. Hence the concern about making sure that we have 
met the Federal mandate because it does require us to do that 
in order to continue our water deliveries. So this is key, as 
you are alluding to in your question, for us to continue our 
mission in providing water resources to Arizona because up 
until that point we had no ability to manage and deal with the 
Federal requirements.
    Mr. Heller. Thank you. I will yield back.
    Mrs. Napolitano. Thank you. Mr. Udall.
    Mr. Udall. I will pass. I do not have any questions. Thank 
you.
    Mrs. Napolitano. Mr. Costa, any more questions?
    Mr. Costa. Yes. I want to ask Mr. Zimmerman, and it is kind 
of a twist on--not a twist--but a follow up on the question I 
asked Mr. Johnson regarding the Quantification Settlement 
Agreement. Obviously that came with great pain and effort for 
California as a partner among the basin states, and I have 
heard part of your testimony but have not had a chance to read 
it. I wonder whether or not you believe that there will be any 
impacts, positive or negative, with regards to either pieces of 
legislation if they are implemented into law.
    Mr. Zimmerman. Related to H.R. 2515, the Multi-Species 
Conservation Program, all of the parties to the Quantification 
Settlement Agreement are parties to the MSCP. They are 
participants. All of the covered programs that are associated 
with the quantification settlement agreement are covered 
programs within the MSCP. So all of the California water and 
power contractors from the Colorado River are providing 
California's funding for the 50-year life of the MSCP, and so I 
believe that I can say without reservation the State of 
California, the administration as well as all the contractors 
within southern California fully support implementation of the 
MSCP and passage of this legislation.
    Mr. Costa. You and I know the folks in southern California 
say with great pride that you were able to achieve the 
milestones earlier than stated in the record of decision with 
regards to the Quantification Settlement Agreement.
    It is a little off track as it relates to these two pieces 
of legislation but I am wondering whether or not in working on 
the Colorado River Board there is a sense that with the current 
drought conditions impacting the Colorado River and again the 
point that I made earlier, the oversubscription of the river 
with regards to the contractors and the allocation of water, 
whether or not there is long-term consideration--you talk about 
the 50 years with these proposals and your other agreements--as 
to whether or not as we are continuing to gather more 
information with regards to climate change, whether or not we 
are moving into prolonged periods of droughts.
    There is some indication based on tree rings in the Sierra 
that the last 100 years have been particularly wet. If the next 
100 years are particularly dry, what does that mean to those of 
you on the Colorado River Board and your allocation of water 
and your ability to try to balance all of these issues?
    Mr. Zimmerman. We believe that the MSCP is a key element in 
addressing whatever may come about through climate change. We 
understand that through climate change, global warming, as you 
have further development on the Colorado River there will be 
more shortages to the water users within the lower basin. That 
is being provided for by the MSCP as far as providing the ESA 
compliance to continue operations, to continue some of the 
innovative programs that we have been able to implement within 
the lower basin to meet each of our critical water supply 
needs.
    So we believe that this legislation and this program is a 
key element to address that. We also have within the MSCP, as 
George Caan has indicated, the adaptive management aspects that 
we would be continuing to look at that so that we can maintain 
the compliance so that the water and power users can continue 
their operations.
    Mr. Costa. Mr. Caan, you are a big believer in adaptive 
management?
    Mr. Caan. Thank you for your question. I think adaptive 
management is absolutely critical to put together a 50-year 
program. There is no sense in moving forward and spending the 
money that we are spending without having sufficient resources 
devoted to understanding the effects of what we are doing. 
Those things that are working, let us continue, let us improve. 
Those things that are not working, let us agree that they are 
not working. Let us----
    Mr. Costa. It is in the agreements the difficulty 
oftentimes.
    Mr. Caan. I think that this program if you look at the 
participants--the scientists and biologists--and the work that 
is going on, that we have been provided throughout this 
process, I have a lot of faith that these scientists and 
biologists are committed to making what works work, and we have 
a sufficient amount of funding to be able to change in 
midstream. We are not looking at situations where someone is 
going to say this is not working, and we are all struggling to 
find dollars to try to fix it.
    Mr. Costa. My time has expired.
    Mr. Caan. We already indicated----
    Mr. Costa. And I think yours has too.
    Mr. Caan. OK. Thank you.
    Mr. Costa. Midstream. No pun intended. Thank you, Madame 
Chairperson.
    Mrs. Napolitano. You are very welcome. Representative 
Heller.
    Mr. Heller. Thank you, Madame Chairwoman. One more question 
here. Ms. Gillon, I was looking at your written testimony. I 
just want to quote a sentence here. It says, ''Lastly the MSCP 
purports to ensure the survival of imperiled fish and wildlife 
for the next 50 years yet fails to address perhaps the largest 
threat wildlife will face in this century is global warming.'' 
Do you consider this bill to be a global warming bill?
    Ms. Gillon. Congressman, no, I do not believe that this 
bill directly relates to global warming. The concern though is 
that because the MSCP as written assumes that past history is 
an indication of what will happen over the next 50 years and 
because this bill directs implementation of the program in 
accordance with those program documents as written two years 
ago to five years ago, that global warming will go unaddressed 
over the next 50 years and will continue to impact species in 
ways that we are not fully aware of what those impacts will be, 
and there is a concern that we do not know how the MSCP will 
address those impacts or whether the MSCP will address those 
impacts since they are not addressed at all in the program 
documents.
    Mr. Heller. Is that accurate, George?
    Mr. Caan. The effects of climate change are not addressed. 
However, we have established a priority use for water for 
environmental purposes. Forty to 50,000 acre feet of water are 
going to be either acquired through either changing vegetation 
or acquiring the water directly as a priority use for the 
environment, and that is because in order to obtain our Fish 
and Wildlife permit we as a group had to agree that this water 
would be made available.
    So if you look at 40,000 acre feet in the lower reaches out 
of 7.2 million acre feet and the one and a half million acre 
feet delivered, we expect that we will be able to ensure that 
we could provide that priority water use.
    Mr. Heller. Thank you. Yes, Commissioner?
    Mr. Johnson. Could I just add on that question? The MSCP 
has been formulated to consider a range of operations of the 
river, and that includes both dry periods as well as wet 
periods. On the Colorado River we are in the process of putting 
shortage guidelines in place that would define how shortages 
will be administered when there is not enough water to go 
around, and in fact the MSCP takes into consideration and 
actually covers that kind of an activity. So to that extent we 
have considered the range of potential conditions out there 
that may exist on the river system.
    Mr. Heller. Thank you. Thank you, Madame Chairwoman.
    Mrs. Napolitano. Commissioner Johnson, if you consider that 
it has been information that the last 100 years have been wet 
years, then we are heading into a continued drought pattern, 
was that taken into consideration?
    Mr. Johnson. Certainly it is being considered in our 
shortage analysis. We are doing a separate EIS on the shortage 
guidelines on the Colorado River, and we are looking at the 
long-term tree ring, a much longer period of record on the 
Colorado River system, and we are doing some evaluations that 
has been and will be displayed in our EIS process for that. I 
cannot say that explicitly the MSCP did that same kind of 
analysis but it certainly did consider a range of potential 
operations on the system including dry years, certainly within 
the range of what we are anticipating for our shortage 
guidelines on the Colorado River.
    Mrs. Napolitano. Well, all is well and good except in 50 
years it is well into the 100-year drought. So if we are 
assuming that we are going to still have wet years and we 
continue on the drought pattern that we have seen, that should 
affect what happens with some of the water delivery, would it 
not?
    Mr. Johnson. Certainly dry conditions on the Colorado River 
are expected. I think the Colorado River is over-allocated. I 
think we have always anticipated that the day would come when 
there is not enough Colorado River water to go around. That is 
why we are developing our shortage guidelines today as to put 
procedures in place to deal with that when it occurs.
    Again I think that there is enough adaptive management 
worked into the process that we can deal with over a 50-year 
period and make adjustment if in fact conditions become worse 
than we have anticipated.
    Mrs. Napolitano. But that really has not been specifically 
addressed in this project?
    Mr. Johnson. I do not believe that when we did all of the 
hydrologic analysis on the MSCP that we took that longer period 
of record into consideration. We certainly took dry cycles that 
have occurred in the last 100 years, and in fact we have had 
some pretty significant dry cycles on the Colorado River over 
that 100-year period, and we certainly considered the dry cycle 
that we are currently in but to say that we have done the same 
analysis that we have done in that shortage EIS, no, we did not 
get that explicit in the MSCP hydrology.
    Mrs. Napolitano. OK. I will stop for a moment. I see people 
taking photographs. You do have to get permission from the 
Subcommittee to be able to take photographs. So I will stop now 
and ask anybody who wants to take photographs do them now. You 
will get a couple of minutes, and then after that I will ban 
you from taking photographs because they are very distracting.
    When I see a light, it takes away from my focus, and if you 
want to go ahead and take photographs. I know there were a 
couple of people earlier who had asked. You do have to get 
permission for either camera or picture taking because this is 
a committee hearing, and it is not a problem asking. Just let 
us know ahead of time so that we are able to accommodate those 
individuals. Did you have a question, sir? You want to answer. 
OK.
    Mr. Zimmerman. If I might, Madame Chairwoman, I would 
further respond to Bob's comment on your latest question. I was 
the Chairman of the MSCP during the 10-year program development 
phase. As part of that, when the Bureau of Reclamation, as Bob 
has indicated, ran the models, they ran a couple different 
scenarios. One was looking at one set of shortage guidelines, 
another one at another level of shortage guidelines which would 
have greater impacts on the river, and so in part using the 
historic data and the past drought cycles there were two 
alternatives that were analyzed within the MSCP.
    One of the things I would like to point out is that the 
major water demands on the Colorado River are at the bottom of 
the system, our 1.5 million acre foot annual delivery to 
Mexico, as well as the delivery to the Imperial Valley, 
Coachella Valley, which is over 3 million acre feet plus the 
delivery on the opposite side of the river in Arizona, which is 
another million acre feet.
    So most of the demands on the Colorado River system are at 
the bottom of the river, and so the water that is available, 
whether it is in a good hydrology or bad hydrology will be 
flowing in the river. Most of the conservation areas that will 
be developed will be developed in that stretch of the river. So 
there will be water, as George has indicated, to provide the 40 
to 50,000 acre feet of water to develop the habitat and, 
second, to maintain the habitat.
    Mrs. Napolitano. Sir, I hope you are right. I hope you will 
be here in 50 years to back up that statement, and when you 
talk about Mexico, there are some issues there because of the 
Rio Grande that we also have great concerns about how that 
water is not being delivered to the Rio Grande Valley. Ms. 
Gillon and Mr. Caan, is there a precedent for the language in 
section 5[b] which says that future changes to the ESA will not 
affect the lower Colorado MSCP unless the changes are 
specifically made applicable to it. Now why should Congress 
agree to that?
    Ms. Gillon. Madame Chairwoman, as far as I know--and I 
cannot say that I have read every statute ever passed by 
Congress--there is no precedent that I can find for Congress 
limiting itself in that way, and I would imagine that if it 
were to become quite unwieldy over the next 50 years to ensure 
that if you want a law to apply to the MSCP you specifically 
say that though.
    Mr. Caan. Madame Chairwoman, in the development of the 
MSCP, one of the overriding principles we had was trying to 
provide certainty for the water and power users, the Federal 
and non-Federal parties. I do not know of language specifically 
like this in other bills. I do know issues like no surprises to 
provide a level of certainty has been part of policy.
    This language is and we debated this language 
considerably--should it be all acts of Congress? Should it be 
related specifically to the Endangered Species Act? And we 
agreed that when it comes to modifications to the Endangered 
Species Act what we want to make sure based on the investments 
that we made because a lot of these investments are being made 
up front to require land and water and other habitat is that if 
there are changes to the Endangered Species Act that those 
changes will not affect the MSCP unless Congress specifically 
addresses it so that way there can be a full vetting of the 
affects that a change might have to the $626 million effort.
    We are not saying there cannot be changes. We are just 
saying that if there are changes we want the opportunity to 
come before you and your Committee to express what concerns we 
may have with those changes and then let you make a decision. 
We do not want it to be an unintended consequence of 
legislation that is acted upon without addressing specifically 
the MSCP.
    Mrs. Napolitano. Thank you. Mr. Johnson, Ms. Gillon, if the 
Bureau of Reclamation is running this program since 2005, why 
is this legislation necessary?
    Mr. Johnson. We think that the legislation is helpful. It 
provides a long-term commitment to fund and carry out the 
program. We have authority to implement this program without 
further legislation. That is in my written testimony. It was 
also in my oral testimony. So we have that authority. We have 
to comply with ESA, and we will do that, and that is part of 
implementing this program.
    That said, we think that this legislation is helpful in 
that it puts the Congressional stamp of approval on the program 
and commits us for the long-term effort and Congress as to the 
long-term effort of trying to implement the program.
    Mrs. Napolitano. Thank you. To any of the representatives, 
has there been any effort to work with the entities on the 
other side of the Mexican border to ensure successful recovery 
for the river system, not just on the U.S. side, and is it 
possible that neglect of habitat on the Mexican side will wipe 
out attempts by the MSCP to stabilize habitat, and protect and 
recover species on the U.S. side?
    Mr. Johnson. I could take a shot at that, and I am sure 
these folks can add in. Mexico is another country. We have a 
separate process for dealing with the country of Mexico as it 
relates to the Colorado River. We have an international 
boundary and water commission that we work through under a 
treaty to address issues with Mexico. There is a provision that 
is a minute to the treaty, minute 406 that actually established 
a basis for cooperation between the two nations as it relates 
to the ecosystem and addressing the Colorado River delta and 
environmental issues in Mexico. So there is an ongoing process 
to work with Mexico to address those issues.
    We believe that that is separate. That is an international 
process. A separate process from the MSCP, and the MSCP 
addresses the needs in the United States. We have an 
international process to work with Mexico.
    Mrs. Napolitano. Would you not think it might have some 
affect?
    Mr. Johnson. Well I think we are concerned about dealing 
with environmental issues in Mexico as well. There is lots of 
habitat down there and lots of species and having cooperative 
programs with Mexico to address that certainly is a beneficial 
thing. But there are ongoing, separate programs on separate 
processes.
    Mrs. Napolitano. Was there not a suit filed against the 
U.S. by Mexican environmentalists and U.S. environmentalists 
over that water?
    Mr. Johnson. Yes, there was, and that suit has been 
dismissed.
    Mrs. Napolitano. OK. So there still is a concern.
    Mr. Johnson. Out of comity we work very hard with the 
country of Mexico to address their issues through the IBWC 
associated with water quality, water quantity and also 
environmental issues through this minute 406 that I was talking 
about, and so certainly we are concerned about the country of 
Mexico, and we want to work with them as best we can to address 
issues that they may have.
    Mrs. Napolitano. Thank you, Mr. Johnson, and with that we 
will conclude this panel. Thank you for your testimony. It was 
very--how would I say--insightful.
    Mr. Heller. I also want to thank you for this opportunity 
for this hearing. I want to let you know there is a companion 
bill on the other side with Senator Kyl that is supported by 
Senators Ensign and Reid, and also Senator Feinstein from 
California. Thank you so much for your time on this bill.
    Mrs. Napolitano. You are very welcome. Panel, you are 
dismissed. Again, thank you for your service. We will be 
submitting some questions to you. We would appreciate your 
response. The members may have some questions so we will keep 
the file open for 10 days to be able to have more input. So you 
are welcome to submit any comments that you wish. With that, 
thank you panel, and we will move to the second panel. Mr. 
Johnson, you may as well keep your seat. Mr. Joe Shirley, Mr. 
Jim Dunlap, Patricia Lundstrom, Gregg Houtz and Gerald 
Zimmerman.
    [Pause.]
    Mrs. Napolitano. While the panel is taking their seat, I 
will ask Mr. Johnson, you stated that the Bureau is not a 
participant in the Settlement Agreement, and I would like to 
include six letters for the record that verify the Bureau's 
involvement in the process. If you wish, we will give you a 
copy of them.
    Mr. Johnson. Thank you.
    Mrs. Napolitano. And these are for the record, Mr. Johnson.
    Mr. Johnson. Thank you.
    Mrs. Napolitano. OK. I think we will continue the 
Subcommittee hearing on H.R. 1970, the Northwestern New Mexico 
Rural Water Projects Act. We have Commissioner Robert Johnson 
still in the hot seat, accompanied by W. Patrick Ragsdale, 
Director of the Bureau of Indian Affairs. Second we have Joe 
Shirley, Jr. from Window Rock, Arizona. Welcome. President of 
the Navajo Nation.
    Third, we have Mr. Jim Dunlap, Chairman of the Interstate 
Stream Commission of the State of New Mexico in Santa Fe. 
Welcome. And fourth, Patricia Lundstrom, President of 
Northwestern New Mexico Council of Governments, based in 
Gallup, New Mexico. Welcome to you too. Number five is Gregg 
Houtz, Deputy Council for the Arizona Department of Water 
Resources in Phoenix, Arizona, and finally Mr. Gerald Zimmerman 
of Colorado River Board of California in Glendale, California, 
staying with us and again thank you. If you will start, Mr. 
Johnson.

     STATEMENT OF ROBERT JOHNSON, COMMISSIONER, BUREAU OF 
   RECLAMATION, WASHINGTON, D.C.; ACCOMPANIED BY W. PATRICK 
 RAGSDALE, DIRECTOR, BUREAU OF INDIAN AFFAIRS, WASHINGTON, D.C.

    Mr. Johnson. Madame Chairwoman, it is a pleasure to be here 
again and testify on H.R. 1970. I have got Bureau of Indian 
Affairs Director Pat Ragsdale with me, and he has just a few 
short comments as well. We have submitted written testimony for 
the record, and we will limit our oral comments to just a short 
summary.
    First, let me express my personal appreciation for the 
needs of the people of the Navajo Nation for water. Much of the 
Nation is without potable water supplies, except for what is 
literally hauled to many of the remote locations of the 
reservation. Reclamation has a long history of working with the 
Nation to provide technical assistance and some financial 
assistance in addressing water needs. I am proud of my personal 
involvement. Over the years as Regional Director of the Lower 
Colorado River Region, I visited the reservation and personally 
worked with them on many of these issues.
    Notwithstanding our understanding of the water needs of the 
Nation, the Administration cannot support the legislation as 
currently written. Our written testimony provides details of 
our concerns, and I will not reiterate those here. Suffice to 
say that the cost and funding mechanisms for the project are of 
concern. In addition, there are other provisions of the bill 
that are also cause of concern for Reclamation.
    I am, however, happy to report that the Indian Water Rights 
Office of the Department of Interior and Reclamation's staff 
are participating with the State of New Mexico and the Navajo 
Nation in discussions regarding our concerns.
    A meeting was held just yesterday here in Washington and 
another is scheduled for next week in Santa Fe. The state and 
the Nation have been very forthcoming in those discussions, and 
we appreciate their efforts to consider our concerns. We look 
forward to continued dialogue. That concludes my oral 
testimony, Madame Chairwoman, and I would be happy to answer 
questions.
    [The prepared statement of Mr. Johnson follows:]

 Statement of Robert Johnson, Commissioner, Bureau of Reclamation, and 
     W. Patrick Ragsdale, Director, Bureau of Indian Affairs, U.S. 
                Department of the Interior, on H.R. 1970

    Chairwoman Napolitano and members of the Subcommittee, we would 
like to thank you for the opportunity to appear today to present the 
Administration's views on H.R. 1970, the Northwestern New Mexico Rural 
Water Projects Act. The Department of the Interior's support for 
negotiated settlements as an approach to resolving Indian water rights 
remains strong. The Administration, however, has concerns that H.R. 
1970 would increase mandatory spending, delay the full cost of the 
legislation beyond the 10 year Congressional scorekeeping window, not 
provide for adequate cost sharing by non-Federal interests, and likely 
include costs that exceed the Federal government's underlying 
liability. The Administration did not participate in the drafting of 
the water rights settlement embodied in H.R. 1970, and does not support 
a water settlement under these circumstances. For these reasons, the 
Administration opposes the cost and cannot support the legislation as 
written. We would like to work with Congress and all parties concerned 
in developing a settlement that the Administration can support.
    H.R. 1970 would amend Federal statutes that relate to the Bureau of 
Reclamation and the use of water in the Colorado River basin. Major 
provisions include: (1) authorization for the Bureau of Reclamation to 
construct and operate a pipeline (formally titled the ``Northwestern 
New Mexico Rural Water Supply Project'', but generally known as the 
``Navajo-Gallup Pipeline Project'') to bring water from the San Juan 
River to the eastern portion of the Navajo Reservation, the Jicarilla 
Apache Reservation, and the City of Gallup, New Mexico; (2) creation of 
a Reclamation Water Settlements Fund in the Treasury that could be used 
to fund activities under this bill and future Indian water rights 
settlements, to be funded by the diversion of revenues from the 
existing Reclamation Fund; (3) authorization for the Secretary of the 
Interior to reserve up to 26 megawatts of power from existing 
reservations of Colorado River Storage Project power for Bureau of 
Reclamation projects for use by the Northwestern New Mexico Rural Water 
Supply Project; and (4) authorization for the Secretary to rehabilitate 
existing irrigation projects, develop groundwater wells, and establish 
other funds for the benefit of the Navajo Nation. The bill also 
includes provisions that would resolve the Navajo Nation's Federal 
Indian reserved water rights claims in the San Juan River in New 
Mexico, although the United States was not party to the final 
negotiations on this issue.
The Role of the Criteria and Procedures
    The Administration has been actively engaged in the New Mexico 
water settlements. Secretary Kempthorne committed during his 
confirmation before the Senate to bringing his energy and concern to 
the pending water settlements in New Mexico. Consistent with this 
pledge, we have made it a high priority to better understand the 
complex issues that must be resolved in each of the proposed New Mexico 
settlements. Our water rights team has made several trips to New Mexico 
to visit with the Pueblos, Tribes, the State, local communities, water 
users, and other constituencies to these proposed settlements. A few 
months ago, at the Secretary's request, key officials from the 
Departments of Justice and the Interior and the Office of Management 
and Budget traveled to Navajo country to observe first-hand the 
difficult issues related to water delivery on the Reservation.
    Madam Chairwoman and members, we are keenly aware of the needs in 
this area of the United States. On the Navajo Reservation, some people 
routinely haul water for 20-30 miles several times a week to provide 
for their basic household needs. Families must travel extended 
distances to do laundry because washing machines require water hookups 
which they do not have. There is no question that the Administration 
officials who traveled to the Reservation came away with powerful and 
indelible images as well as a better understanding of the needs of 
Reservation inhabitants seeking access to basic services that are taken 
for granted by all but a few Americans.
    Nonetheless, despite our understanding of the human needs on the 
Navajo Reservation, we firmly believe that the resolution of 
substantive and procedural problems raised by this bill will require 
the active involvement of all parties to the proposed settlement. It is 
important to have an open and full discussion on all aspects of the 
settlement, including the specific goals of the Navajo Nation and the 
State of New Mexico for the settlement of these claims and whether 
these goals can be met by alternative and potentially less expensive 
means. This settlement was developed largely without Federal 
involvement, and, consistent with Secretary Kempthorne's commitment to 
address these issues, we would welcome the opportunity to continue to 
engage with the Committee and proponents of this settlement to see if 
we can identify areas of common ground sufficient to move forward with 
the full support of the Administration.
    One of the first steps in this process, Madam Chairwoman, is for us 
to acknowledge the three New Mexico settlement proposals that are now 
being advocated to Congress. While the Navajo settlement in the San 
Juan River is the subject of today's hearing, there are other 
settlements proposed in New Mexico, as well as in other western states, 
that require active Federal participation in negotiations. If enacted, 
the cost of H.R. 1970, alone, is estimated to exceed 1 billion dollars. 
If the other two proposals from New Mexico, Aamodt (involving the 
Pueblos of Nambe, Pojoaque, San Ildefonso, and Tesuque) and Abeyta 
(involving the Pueblo of Taos), about which the Administration also has 
raised serious concerns, were to be enacted as currently envisioned by 
their proponents, total expenditures for Indian water rights 
settlements in New Mexico alone are likely to exceed $1.5 billion.
    The Administration believes that the policy guidance found in the 
Criteria and Procedures for the Participation of the Federal Government 
in Negotiations for the Settlement of Indian Water Rights Claims 
(``Criteria'') (55 Fed. Reg. 9223 (1990)) provides a flexible framework 
in which we can evaluate the merits of this bill. The Criteria provide 
guidance on the appropriate level of Federal contribution to the 
settlements, incorporating consideration of calculable legal exposure 
plus costs related to Federal trust or programmatic responsibilities. 
In addition, the Criteria call for settlements to contain non-Federal 
cost-share proportionate to the benefits received by the non-Federal 
parties, and specify that the total cost of a settlement to all parties 
should not exceed the value of the existing claims as calculated by the 
Federal Government. As we have testified previously, the Criteria is a 
tool that allows the Administration to evaluate each settlement in its 
unique context while also establishing a process that provides guidance 
upon which proponents of settlements can rely.
Provisions of Particular Concern in H.R. 1970
    We would like in the remainder of this statement to provide a 
synopsis of substantive concerns regarding H.R. 1970. We will start 
with the high cost of this settlement. The Administration has concerns 
about the costs associated with this legislation, and currently opposes 
the nearly $1 billion financial commitment embodied in this bill. We 
are also concerned about the large number of authorizations that the 
bill contains, including the indefinite amount authorized for 
construction of the Navajo-Gallup Pipeline. We have not yet been able 
to fully analyze the costs of this legislation. In 2005, the Bureau of 
Reclamation estimated that the price of the Navajo-Gallup pipeline 
would be approximately $716 million. Reclamation is in the process of 
updating this appraisal-level price estimate to better reflect current 
construction conditions, and expects an upward adjustment to nearly $1 
billion for this feature alone. In addition, H.R. 1970 would authorize 
Federal expenditures of $30 million for groundwater wells, $23 million 
for rehabilitation of Fruitland-Cambridge and Hogback-Cudei irrigation 
projects, $11 million for other irrigation projects, $5 million for 
hydrographic surveys, and $50 million to be placed in a Navajo Nation 
Water Resources Development Trust Fund to be used by the Navajo Nation 
for water facility construction and maintenance or implementation of 
water conservation measures.
    The Administration has serious concerns regarding the proposal 
contained in Title II of this bill to establish a ``Reclamation Water 
Settlements Fund'' within the United States Treasury. Title II provides 
that revenues of up to $100 million a year for Fiscal Years 2018 
through 2028, which is a time period outside the Congressional 
scorekeeping window, be diverted from the Reclamation Fund into the 
Water Settlements Fund. H.R. 1970 provides that moneys in the Water 
Settlements Fund would be available without further appropriation to 
fund water supply infrastructure authorized under this bill if there 
turns out to be insufficient funding available through the regular 
appropriations process to meet the funding and construction deadlines 
established in this bill. The second priority for the Water Settlements 
Fund would be to implement other Indian water rights settlements 
approved by Congress, including water supply infrastructure, 
rehabilitation of water delivery systems, fish and wildlife restoration 
or environmental improvement. The Reclamation Water Settlements Fund 
would terminate in 2030 and any remaining balance would be transferred 
to the General Fund of the Treasury.
    We believe the sponsors of this legislation are looking for stable 
mechanisms to ensure the availability of funding for Indian water 
rights settlements around the West. We are concerned, however, that 
this proposal would allow direct spending not subject to further 
appropriations for future settlements, preventing future Presidents and 
Congresses from setting their own priorities with regard to budgeting 
and appropriating Federal tax dollars. At the present time, use of 
monies from the Reclamation Fund are discretionary and subject to 
annual appropriations by Congress.
    While H.R. 1970 does require some cost-sharing in the form of a 
requirement for partial reimbursement of construction costs from the 
City of Gallup and the Jicarilla Apache Nation, it is limited. The City 
of Gallup and the Jicarilla Apache Nation would be required to repay 
the portion of the construction costs for the pipeline and associated 
facilities that the Secretary would allocate to them as their 
responsibility, but only to the extent of their ability to pay, or 
alternatively, a minimum of 25% of such allocated construction costs, 
within 50 years of project completion.
    Project proponents assert that the Navajo-Gallup Pipeline Project 
would qualify as a rural water project under the rural water program 
being established by the Bureau of Reclamation pursuant to the Rural 
Water Supply Act of 2006 (P.L. 109-451), legislation which was passed 
in December of 2006. However, the proposed pipelines envisioned by this 
bill have not received the level of scrutiny that this newly 
established program will provide. Under the rural water program, each 
project must be investigated prior to authorization, and the Secretary 
must consider whether the non-Federal project entity has the capability 
to pay 100 percent of the costs associated with the operations, 
maintenance, and replacement of the facilities constructed or developed 
as part of the rural water supply project. The Secretary must also 
recommend an appropriate non-Federal cost-share for the proposed rural 
water project based on the capability-to-pay of project sponsors, or at 
least 25% of total construction costs. The program allows the Secretary 
to consider deferring construction costs allocated to Indian tribes. 
Under this new program, the Secretary is to forward to Congress 
recommendations regarding whether or not the proposed rural water 
project should be authorized for construction based upon appraisal 
level and feasibility studies and the eligibility and prioritization 
criteria developed pursuant to the Rural Water Supply Act. The rural 
water program is intended to target communities of 50,000 inhabitants 
or fewer. The Secretary may require larger communities to pay a higher 
portion of project costs. Since Reclamation's rural water program is 
still under development, we have not evaluated the activities proposed 
in H.R. 1970 under the rural water project eligibility and 
prioritization criteria; these criteria are currently being developed 
by Reclamation. Upon development, we will actively evaluate whether 
this project would meet such criteria and could be recommended to 
Congress for authorization as a rural water project.
    We have identified a number of other concerns regarding this bill. 
These include potential interpretation conflicts concerning the Navajo 
Indian Irrigation Project; the timing of transfers of title to the 
Nation; the authorization of Federal grants to support the repair and 
rehabilitation of certain irrigation projects, and concern that this 
bill might give the State of New Mexico an inappropriate role in the 
operation of Federal facilities that are currently operated by the 
United States under the Colorado River Compact and Reclamation law. 
Also, the Department of Justice has concerns about the waivers and 
releases referred to in section 403. First, they are still reviewing 
these waivers and releases for adequacy. Second, waivers and releases 
should be stated in full in the legislation because they are critical 
to the finality of the agreements.
    We also note that the bill should require the Secretary of the 
Interior, rather than the Secretary of the Treasury, to invest amounts 
in the proposed Reclamation Water Settlements Fund, in order to make 
use of the investment expertise of Interior's Office of the Special 
Trustee for American Indians.
Comparing this Bill with Other Water Rights Settlements
    Much has been said about the position taken by the Administration 
on water rights and other settlements over the past few years, 
suggesting that not supporting H.R. 1970 as written would be 
inconsistent with the positions we have taken on previously introduced 
water settlement bills. We want to squarely address these issues.
    First, we emphasize that each proposed settlement is unique. The 
Administration evaluates each proposed settlement individually. Just as 
we did with each of the water settlements that have been proposed in 
recent years, notably the Arizona Water Rights Settlement Act (P.L. 
108-451), the Snake River Water Rights Settlement Act (P.L. 108-447), 
and the San Joaquin River settlement that is proposed in legislation 
pending in this Congress (S. 27 and H.R. 24), the Administration must 
evaluate this proposed settlement in its unique context to determine to 
what extent it is consistent with our programmatic objectives and our 
responsibility to American taxpayers as well as our responsibility to 
protect the interests of the Navajo Nation. All of these previous 
settlements encompassed multiple objectives, providing comprehensive 
solutions to multi-faceted problems.
    In the case of the Arizona Water Rights Settlement Act, the 
settlement resolved a dispute over the financial repayment obligation 
of Arizona water users for the Central Arizona Project (CAP), with 
significant amounts of money at stake. Federal representatives 
recognized that the CAP operational flexibility necessary to resolve 
the dispute could only be granted if sufficient legal and legislative 
protection was achieved to assure tribal access to, and use of, CAP 
project water. Enactment of the Indian water rights settlements in that 
Act was key to resolving larger legal issues involving CAP repayments 
by Arizona water users. Achieving final settlement of these larger 
issues made the legislation generally acceptable to the Administration, 
although our testimony did express concern about the cost of the 
settlement.
    The Snake River Settlement in Idaho entailed several complex 
Endangered Species Act components that allowed further water resources 
development to occur for the Nez Perce Tribe and other water users in a 
manner that also fulfilled the Department's obligation to protect and 
recover listed species.
    The other settlement that has been compared to this bill, the San 
Joaquin Restoration Program, is in fact not connected to any Indian 
water rights settlement. The San Joaquin Restoration Program implements 
a settlement of a lawsuit that had been ongoing for over eighteen 
years, where a Federal judge had concluded that Reclamation's 
operations violated a provision of California law. The San Joaquin 
restoration program also involves cost shares, authorizing up to $250 
million of new Federal appropriations but only as a match for non-
Federal funding of the restoration costs. This means that the State of 
California and Friant water users are funding a significant portion of 
the restoration costs. Approximately $200 million of State bond funds 
for projects that will directly contribute to restoration efforts have 
already been approved by California voters.
    We wish to reiterate however that the Administration is committed 
to ensuring consistency with the Criteria and Procedures. The 
settlement of the Navajo claims to the San Juan River proposed in this 
bill has a high Federal cost without appropriate safeguards that 
carrying out the authorized activities would accomplish the goals and 
objectives of the proposed settlement. These kinds of analyses should 
be completed prior to the passage of such a large settlement proposal. 
In light of the goal of finality, it is especially troubling that this 
bill does not address the distribution systems that must be constructed 
before any water will actually reach the homes of those who need it.
Conclusion
    The Administration and Secretary Kempthorne remain committed to 
supporting the Indian water right settlement process and ensuring that 
such settlements fulfill the Federal Government's responsibilities to 
Indian Tribes while also protecting the interests of the taxpaying 
public. The Bureau of Reclamation, the Secretary's Indian Water Rights 
Office, and many others in the Department are vigorously working to 
develop the information and documentation necessary to support a full 
and open discussion of this settlement. This includes already having 
developed a draft environmental impact statement on the proposed 
pipeline and completing the hydrologic determination on water 
availability in New Mexico. We expect to have an updated appraisal-
level estimate of the costs of constructing the pipeline completed in 
the near future.
    The Administration hopes that the entities proposing this 
legislation, including the Navajo Nation, the City of Gallup, the State 
of New Mexico, and the Jicarilla Apache Nation, will agree to work 
together with us towards the common goal: a settlement that will ensure 
that the Navajo obtain a secure, economically beneficial water supply 
consistent with our obligations to the taxpaying public. A clean, 
reliable water supply is of utmost importance to the members of the 
Navajo Nation, as it is to all Americans, and the United States is 
committed to working towards achieving it. While much work remains 
ahead, we are hopeful that this hearing will assist in advancing a 
process that results in a successful outcome.
    Madam Chairwoman, this completes our statement. We would be happy 
to answer any questions the Committee may have.
                                 ______
                                 
    Mrs. Napolitano. Thank you, Mr. Johnson, and next I would 
like to call upon Mr. Joe Shirley, Jr., President of Navajo 
Nation, Window Rock, Arizona.

           STATEMENT OF JOE SHIRLEY, JR., PRESIDENT, 
              NAVAJO NATION, WINDOW ROCK, ARIZONA

    Mr. Shirley. Thank you, Madame Chairwoman Napolitano, 
Committee members. Thank you for the opportunity to testify. As 
I speak to you now many of the 80,000 Navajo men, women and 
children who live within the proposed Navajo Gallup Water 
Supply Project service area are hauling water in the backs of 
their pickup trucks for drinking, cooking and washing. The 
centerpiece of H.R. 1970 would authorize the construction of 
the Navajo Gallup Water Supply Project which will supply water 
to thousands of Navajo people.
    While the project will not entirely eliminate water hauling 
on the Navajo Nation, it is a giant step toward that goal, and 
it is the foundation that is essential for economic 
development. Last month I spoke at an EIS hearing in support of 
the Navajo Gallup Water Supply Project. As I listened to the 
stories of the Navajo people who have spent their scarce 
economic resources hauling water for basic domestic use, it was 
impossible not to be moved. At the hearing a local community 
presented drawings by Navajo schoolchildren who have never 
known running water.
    Recently, representatives from the Administration witnessed 
firsthand the hardships endured by Navajo families who haul 
water from public watering points. While I believe these 
officials were moved by what they saw and heard, I understand 
that there are concerns that the project is too expensive. 
While the anticipated $714 million cost is a significant sum, 
the cost of the project and the settlement must be put into 
perspective. OMB's assertion that H.R. 1970 is too expensive 
may be based on an overly restrictive interpretation of the 
criteria and procedures for participating in Indian water 
rights settlements.
    This view is inconsistent with the three water rights 
settlements signed into law by President Bush in the Rural 
Water Supply Act of 2005. Further, the ramifications of not 
passing this legislation could force the Navajo Nation into 
litigation to determine its water rights. Such litigation could 
jeopardize the allocations made by interstate compacts 
concerning the Colorado River basin. Congress simply cannot 
afford to let this settlement fail.
    Finally we understand that the State of Arizona has 
concerns about both the settlement agreement and legislation 
and is advocating a comprehensive settlement to protect its 
interests including a resolution that the litigation in Navajo 
Nation v. United States. We strongly disagree. The settlement 
with New Mexico does not impair Arizona's ability to reach a 
settlement with the Navajo Nation concerning its lower basin 
claims.
    While the settlement envisions the delivery of water to the 
lower basin in Window Rock, Arizona, from the project, nothing 
diminishes the right of Arizona to negotiate all of the terms 
for water delivery to Window Rock as part of a separate 
agreement with the Navajo Nation. The Navajo Nation has 
attempted to quantify its lower basin claims with Arizona in 
the Navajo Nation v. United States litigation.
    Settlement discussions with Arizona are ongoing and will 
continue regardless of the outcome of the settlement with New 
Mexico. However, resolution of Navajo claims in Arizona will 
likely take several years. If such a settlement can be reached 
without delay or impairment of our settlement with New Mexico, 
we would not object to including an Arizona settlement in this 
bill. But to require an Arizona settlement in order for New 
Mexico to move forward, the Navajo Nation and the State of New 
Mexico will be punished for their good faith efforts that 
resulted in this concrete settlement.
    This settlement would keep the Navajo Nation rights with 
the New Mexico's compact apportionment. As such, this 
settlement benefits all seven Colorado River basin states, and 
we should not jeopardize this achievement by trying to settle 
unrelated issues with Arizona. The Navajo Nation and its people 
have respected their treaty obligations. In times of crisis, 
brave Navajo men and women have rushed to their country's aid 
and fought and died not only for the preservation of the 
American ideal but also to preserve our Navajo culture and to 
secure a Navajo homeland for our children.
    A homeland for the Navajo people is not merely a piece of 
land between our four sacred mountains but is a place where our 
culture, our language, our way of life and our people can live 
and grow. Without water, viable economic and social communities 
wither and die. So I ask you today to honor the treaty of 1868 
and to help bring water to the great Navajo Nation. Thank you 
very much.
    [The prepared statement of Mr. Shirley follows:]

               Statement of President Joe Shirley, Jr., 
                       Navajo Nation, on H.R.1970

    Thank you Chairwoman Napolitano and members of the Water and Power 
Subcommittee of the House Committee on Natural Resources. My name is 
Joe Shirley, Jr., and I am President of the Navajo Nation, a federally 
recognized Indian nation with the largest reservation in the United 
States. I appreciate this opportunity to share with you the Navajo 
Nation's strong support for House Bill 1970, the Northwestern New 
Mexico Rural Water Projects Act. I also wish to convey the gratitude of 
the Navajo Nation to Congressman Tom Udall for his commitment to 
improving the lives of the Navajo People and for his leadership in 
sponsoring this important legislation.
    The Northwestern New Mexico Rural Water Projects Act serves two 
important purposes. First, it would authorize the Secretary of the 
Interior to execute, on behalf of the United States, the Settlement 
Agreement to quantify the Navajo Nation's water rights in the San Juan 
River Basin in New Mexico. The Settlement Agreement was overwhelmingly 
approved by the Navajo Nation Council in December of 2004 and executed 
with the State of New Mexico in April of 2005. It reflects almost a 
decade of negotiations to carefully balance a variety of demands on a 
limited resource. Second, the Act authorizes construction of much 
needed water projects for the Navajo Nation. As such, this legislation 
represents an important step forward in moving the Navajo Nation 
towards self-sufficiency, and may represent the most significant act of 
Congress concerning the Navajo people since the ratification of our 
Treaty with the United States in 1868, 139 years ago this month.
    As witnesses to this important event, I am here with Mr. George 
Arthur, Chair of the Resources Committee of the Navajo Nation Council, 
Mr. Lorenzo Bates, Chair of the Budget and Finance Committee of the 
Navajo Nation Council, Ray Gilmore, Chair of the Navajo Nation Water 
Rights Commission, and Lena Fowler, Vice-Chair of the Navajo Nation 
Water Rights Commission. In the Treaty of 1868, the Navajo leaders 
pledged their honor to keep peace with the United States and, in 
return, the United States pledged to assist the Navajo People in 
creating a permanent homeland on their reservation lands. No lands can 
be a permanent homeland without an adequate supply of water, especially 
potable water.
The Settlement Agreement
    When New Mexico Governor Richardson and I signed the Settlement 
Agreement in April 2005, the State of New Mexico and the Navajo Nation 
set into motion the means to resolve a century-old controversy 
concerning water rights in the San Juan River basin, which could have 
persisted for decades to come through long, protracted litigation. The 
State of New Mexico and the Navajo Nation spent years crafting a 
settlement that would protect exiting uses from the San Juan River 
while ensuring that the Navajo Nation would receive a firm supply of 
drinking water to sustain the Navajo Reservation as a permanent 
homeland for the Navajo People. House Bill 1970 authorizes the 
Secretary of the Interior, on behalf of the United States, to join 
Governor Richardson and me in a Settlement Agreement that quantifies 
the Navajo Nation's water rights in the San Juan River Basin in New 
Mexico in a manner that represents a win-win outcome for all parties, 
including the Navajo Nation, the non-Navajo water users, the State of 
New Mexico and the United States.
    The San Juan River basin contains all the elements that have made 
Western water issues so contentious over the years: a limited supply of 
water, competition between Indian and non-Indian irrigators, the 
presence of federally protected endangered fish species, and not one, 
but four federal Reclamation projects. In other basins, that same 
mixture of interests has lead to contentious litigation and even 
violence. But in the San Juan River basin, the Navajo Nation has worked 
in cooperation with its neighbors on issues such as native fish 
recovery, shortage sharing during periods of drought, and water 
development for municipal and power interests. The history of this 
cooperation is reflected throughout the Settlement Agreement.
    For example, the Settlement Agreement contains provisions to 
protect the interests of the non-Navajo water users in the basin. The 
Navajo farmlands at the Hogback and Fruitland irrigation projects, 
downstream of the non-Indian water users on the river, possess the 
senior priority on the river. Thus, during the dry summer months, when 
there is insufficient water in the river to satisfy all water uses, the 
Navajo Nation could exercise its senior priority to make a ``call'' on 
the river and stop the upstream diversions. To minimize the likelihood 
of calls on the upstream diversions, under the Settlement Agreement, 
the Navajo Nation has committed to utilize a portion of its Navajo 
Reservoir supply at the Hogback and Fruitland projects to ensure that 
more ``run of the river'' water would be available for the non-Navajo 
water users. Without the settlement, a call would be necessary during 
the irrigation season almost every two years, but with the settlement, 
the risk that a call will be made is less than one year out of twenty 
(20).
    The Settlement Agreement also includes specific provisions to firm 
the water supply for existing federal Reclamation projects including 
the Animas-La Plata Project and the San Juan-Chama Project. The Animas-
La Plata Project is an important project for the basin, and is a 
necessary component of the settlement approved by Congress for the 
Colorado Ute Tribes. The San Juan-Chama Project provides drinking water 
for the cities of Albuquerque and Santa Fe. This transbasin diversion 
also helps New Mexico meet its compact obligations to the State of 
Texas and provides a supply of water that can be used for two separate 
water rights settlements involving the Pueblo of Taos and four northern 
Pueblos in the Aamodt litigation.
    In terms of protecting federal interests in New Mexico, including 
the San Juan-Chama Project, the importance of the Settlement Agreement 
to the United States cannot be overstated.
The Navajo-Gallup Water Supply Project
    The centerpiece of the Bill, however, is the authorization for 
construction of the Northwest New Mexico Rural Water Project, commonly 
known as the Navajo-Gallup Water Supply Project. This project will 
provide a firm, sustainable supply of municipal water for the Navajo 
Reservation, the City of Gallup and the Jicarilla Apache Nation. Many 
of the 80,000 Navajo men, women, and children who live within the 
project service area, including Navajo Code Talker Frank Chee Willeto, 
presently haul water for drinking and cooking. Although construction of 
the project will not necessarily eliminate all water hauling on the 
reservation, this project will allow the Indian Health Service to 
expand distribution systems to provide potable water delivery to more 
homes, and creates growth corridors within the Navajo Nation where 
future communities can be built with ready access to roads, electricity 
and potable water. As such, this project represents a critical 
component of the Navajo Nation's economic development strategy. While 
construction of the pipeline may not represent a condition sufficient 
to ensure economic prosperity for the Navajo People, surely such 
prosperity will never be possible in the absence of a sustainable 
potable water supply.
    In March of this year, the Department of the Interior released the 
Planning Report and Draft Environmental Impact Statement for this 
project. I thank Secretary Kempthorne and his Counselor Michael Bogert 
for their leadership in releasing this critical document, in addition 
to the release of the hydrologic determination that there is sufficient 
water for the project.
    Earlier this month, I spoke at the public hearing in Farmington, 
New Mexico, concerning the project in order to deliver the message that 
the Navajo Nation strongly supports the construction of the Navajo 
Gallup Water Supply Project. At the hearing, I was moved by the 
testimony of the Navajo people, most of them water haulers. I believe 
that the federal officials at the hearings were also moved by their 
testimonies. Mr. Frank Chee Willeto, a Navajo veteran and former Navajo 
Code Talker, who recently received the Congressional Silver Medal, 
eloquently testified that he and other veterans, despite financial 
assistance from the Veterans' Administration and the Navajo Nation, 
were unable to secure a loan for his home due to the absence of water 
in his community for fire protection. Ms. Gloria Skeet spoke eloquently 
about how Bread Springs Chapter, south of Gallup, needs the project 
because her community currently faces water shortages. Ms. Skeet, a 
former educator, sees that the construction of the project will allow 
our children to build productive and meaningful lives at home. I also 
viewed drawings by Navajo school children from Lake Valley Chapter 
depicting trucks hauling drinking water to their homes. These drawings 
will be submitted to the Committee in our supplemental statement. Based 
on these testimonies, I reiterate my message that the Navajo Nation 
strongly supports the construction of the Navajo-Gallup Water Supply 
Project.
OMB Concerns about Costs
    We recently invited representatives from the Administration, 
including the Department of the Interior and the Office of Management 
and Budget, to witness first-hand the hardships endured by Navajo 
families who must drive considerable distance to haul water from public 
watering points. They heard and saw everything I have just described to 
you. They also heard about the negative health effects that occur when 
they do not have access to potable water, including the story of Lucy 
Cayetano who suffers from various illnesses because she does not have 
easy access to potable water. Studies have shown empirically that the 
lack of potable water is a critical health issue for the Navajo people, 
but I also wonder what the psychological effects will be for our 
children who believe that water comes from trucks, rather than from 
drinking fountains or faucets.
    We believe the Administration representatives received a realistic, 
first-hand understanding of the enormity of the problem the lack of 
water brings. However, we also understand that the Office of Management 
and Budget believes the Navajo-Gallup Water Supply Project to be ``too 
expensive.'' Their belief is apparently based on the Planning Report 
for the project, in which the Bureau of Reclamation estimates that this 
project could cost as much as $714 million or more. While this is 
unquestionably a huge amount of money, the anticipated cost of the 
project and the other components of the Navajo Nation's water rights 
settlement must be put into perspective.
    As stated earlier, the Navajo Reservation is the largest Indian 
Reservation with the largest population of on-reservation members of 
any Indian tribe in the United States. Providing potable water for such 
a large reservation is indeed a costly venture, but studies conducted 
by the Bureau of Reclamation demonstrate that this project fares 
favorably when compared with other recently authorized water pipelines 
on a per/acre-foot and per capita basis. This information will be 
provided to the Committee in our supplemental statement.
    We understand that OMB seeks to impose on this settlement an overly 
restrictive interpretation of the Administration's criteria and 
procedures for participating in this settlement. In particular, OMB 
apparently seeks to limit the federal contribution for this water 
rights settlement to their assessment of the monetary liability of the 
United States if it is sued by the Navajo Nation. Such a policy is a 
radical departure from previous Administrations, and is not even 
consistent with the position taken by the Administration in the three 
settlements recently signed into law by President Bush--the Arizona 
Water Rights Settlement Act, the Snake River Water Rights Settlement 
and the Zuni Tribe Water Rights Settlement. This inconsistency was 
described in a recent joint letter to OMB from Chairman Bingaman and 
Senator Domenici. Once again, I thank the Senators for their dedication 
to this settlement by having pointed out to OMB these inconsistencies.
    Moreover, OMB's interpretation flies in the face of the 
Administration's past support for the Rural Water Supply Act of 2005 in 
which the federal government would assume up to 75% of the cost of 
rural water projects. The federal contribution for such projects is not 
limited by any calculus of liability to the project participants. OMB's 
policy is especially appalling considering the trust responsibility and 
treaty obligations owed by the United States to the Navajo Nation. The 
United States Supreme Court has characterized these responsibilities as 
``moral obligations of the highest responsibility and trust.'' Simply 
put, the federal government should not be allowed to shirk its trust 
responsibility or its treaty commitments with Indian nations by hiding 
behind a veil constructed of legalese that can be applied to the 
detriment of the poorest of the poor in America.
    Of particular concern to the Navajo Nation is that OMB is now 
objecting to the construction of infrastructure projects as a mechanism 
for settling Indian water rights, even though the Administration 
apparently supports the concept of encouraging Indian water rights 
settlements. In the desert Southwest, where the available water 
resources are largely exhausted, the only way for settlements to work 
is by infusing the limited natural resource pool with the financial 
resources to allow the existing water supplies be used more 
advantageously. As a general premise, these settlements do not 
reallocate water from existing non-Indian water users for the benefit 
of an Indian tribe. In the San Juan River basin, there is very little 
unused water for the purpose of settling the Navajo claims. Under the 
terms of the Settlement Agreement, the Navajo Nation is awarded only 
the water it has historically used, the water set aside for the 
Nation's use at the Navajo Indian Irrigation Project, and the water for 
the Navajo-Gallup Water Supply Project. The Settlement Agreement is 
premised on the Navajo Nation receiving a substantial amount of ``wet 
water'' development to forgo claims for additional water. In short, 
without the federal government contributing the monetary resources to 
make this settlement work, the settlement would not be possible.
    Although we do not believe OMB should apply the criteria and 
procedures for participating in settlements in such a restrictive way, 
we are confident that if OMB considers all of the ramifications of 
letting this settlement fail, the ultimate costs to the federal 
government could be staggering. Consider first, the claims of the 
Navajo Nation. The Navajo Nation's water rights claims are based on 
legal precedent established by the United States Supreme Court. The 
Navajo Nation's water rights claims could exceed the amount of water 
apportioned to New Mexico by the Upper Colorado River Basin Compact, 
which was ratified by Congress in 1949. These claims have been 
described by various legal scholars as ``hypothetical shocks to the 
Colorado River system.'' If this is true, there are only two outcomes, 
neither of which are favorable to the United States. If the courts 
ultimately rule that the Navajo claims are limited by the compact 
because of the ratification by the United States, the Navajo Nation has 
a substantial claim against the United States for the lost water 
rights. On the other hand, if the courts ultimately rule that the 
Navajo Nation is entitled to water in excess of New Mexico's 
apportionment, then the entire system of allocation of Colorado River 
water would be in jeopardy exposing the United States to incalculable 
liability to a multitude of water users in the seven Colorado River 
states. The beauty of the Settlement Agreement is that by keeping the 
Navajo Nation's water rights within the State of New Mexico's compact 
allocation, the ``hypothetical shocks to the Colorado River system'' 
are avoided. But without the substantial water development 
infrastructure authorized by House Bill 1970, such a settlement is not 
possible.
    If the settlement were to fail, and the Navajo Nation were forced 
to pursue the litigation of its claims, the United States would still 
be exposed to horrific liabilities even if the Navajo Nation were to 
obtain only modest water rights. The federal government historically 
promoted the utilization of waters from the San Juan River by non-
Navajos through such projects as the San Juan-Chama diversion, the 
Hammond Irrigation Project, the Jicarilla Apache Water Rights 
Settlement, and the Animas-La Plata Project. However, because the 
Navajo Nation is the senior water user in the basin, an award of even a 
modest amount of water to the Navajo Nation would disrupt the water 
supplies for each of these federal interests and leave the United 
States exposed to considerable liability. As I mentioned earlier, the 
San Juan-Chama Project serves a myriad of federal interests in addition 
to providing a water supply to the cities of Albuquerque and Santa Fe. 
While OMB may frame the issue in terms of whether we can afford this 
settlement, we believe the issue is whether we can afford not to have 
the settlement. Under any measure, the Congress simply cannot afford to 
let this settlement fail.
    Currently, forty percent (40%) of the families on the Navajo 
Reservation are forced to transport water from regional water pumping 
stations to their homes to ensure that their families have potable 
water. In the wake of Hurricane Katrina, Congress rightly recognized 
the emergency that existed when so many people were deprived of potable 
water and infrastructure. Congress moved to fix this emergency through 
the authorization of billions of dollars to restore the water 
infrastructure in New Orleans and various coastal communities. The 
tragic circumstance experienced by the residents of New Orleans 
deserved swift and decisive action on the part of the federal 
government. Unfortunately, on the Navajo Nation, the lack of potable 
water and infrastructure is a condition that has existed for a long 
time. It appears that OMB is again applying a double standard when it 
comes to funding water infrastructure to remedy acute water supply 
problems. OMB did not ask Congress to consider the limits of its 
liability to victims of Katrina or to consider whether a federal trust 
responsibility required such action in order to avoid spending the 
money necessary to fix the problem. In the case of Katrina, Congress 
did the right thing. We ask Congress to do the right thing again by 
enacting House Bill 1970.
Arizona Concerns
    Finally, we know that the State of Arizona has concerns about the 
language in H.R. 1970 that deals with delivery of water to Window Rock, 
Arizona. The Settlement Agreement and the provisions of H.R. 1970 
preserve all rights for the State of Arizona to negotiate all of the 
terms and conditions for water delivery to Window Rock as part of a 
separate agreement with the Navajo Nation. We do not believe, as 
Arizona does, that a ``comprehensive'' settlement of all of the Navajo 
Nation's water rights claims is necessary to protect Arizona's 
interests. In the first instance, a ``comprehensive'' settlement should 
include all of the Navajo Nation's interests in Utah as well as the 
Upper and Lower Colorado River Basins in Arizona. The Navajo Nation has 
been actively attempting to quantify its Lower Basin claims through 
negotiations with Arizona water interests, but no negotiations 
concerning Upper Basin claims have been attempted. We have advised the 
Arizona water interests that we are willing to pursue a negotiated 
settlement of the Lower Basin claims, but we are not willing to 
jeopardize the authorization of our settlement with the State of New 
Mexico to accommodate the Arizona interests. Moreover, we have serious 
doubts whether a settlement of the Arizona claims can be achieved. It 
appears that after passage of the Arizona Water Settlements Act, there 
is very little Colorado River water remaining for purposes of a 
settlement with the Navajo Nation.
    Frankly we believe that Arizona is simply attempting to leverage a 
settlement with the Navajo Nation that falls short of meeting the 
Navajo Nation's needs, by demanding that the New Mexico settlement 
include a partial settlement with Arizona. Nevertheless, we are 
committed to continued dialogue with the Arizona interests to determine 
if a settlement is possible and to resolve any remaining issues they 
may have concerning the settlement with the State of New Mexico.
Conclusion
    For more than one hundred and thirty nine years, the Navajo Nation 
and the Navajo People have taken their treaty obligations seriously. In 
times of crisis, brave Navajo men and women have rushed to the 
country's aide, and fought and died not only for the preservation of 
the American ideal, but also to preserve the Navajo culture and to 
secure a Navajo homeland. A homeland for the Navajo People is not 
merely a piece of land between our four sacred mountains but a place 
where our culture, our language, our people can grow and live. Without 
water, viable economic and social communities wither and die. I am 
asking you today to honor the Treaty of 1868 and help bring water to 
the Navajo Nation.
                                 ______
                                 

           Response to questions submitted for the record by 
                     Joe Shirley, Jr., on H.R. 1970

 (SHIRLEY) The Administration has referred to the C&P as the means to 
        determine the federal role and contribution to the settlement. 
        How do you see these criteria and procedures applying to this 
        settlement?
    The C&P require the federal government to look at numerous factors 
including, but not limited to, the liability of the United States. The 
Administration has never provided the Navajo Nation with its analysis 
of the C&P or how much the Administration is willing to support as a 
federal contribution to the settlement. We understand that the 
Administration may be interpreting the C&P in a manner that focuses 
solely on the liability of the United States while ignoring other 
aspects of the C&P. If this is true, such an interpretation by the 
Administration is overly restrictive and inconsistent with the 
positions taken by this administration with respect to other Indian 
water rights settlements signed into law by President Bush.
    Even if the sole criteria for evaluating the United States' 
contribution to an Indian water settlement were the theoretical 
liability of the United States, I believe that the ramifications of 
letting the settlement fail are so widespread and pervasive, that the 
real question for the United States is not whether it can afford the 
settlement, but whether it can afford not to have the settlement. The 
Navajo Nation is in the process of developing a detailed analysis 
outlining how the federal government would be subject to significant 
liabilities in the event this settlement fails. This analysis will be 
provided to the Administration and can be made available to the 
Subcommittee.
    We believe that the United States has substantial exposure for 
liabilities to the Navajo Nation for failing to protect our water 
rights, for failing to enjoin others from using water to the detriment 
of the Navajo Nation, and for encouraging non-Indian water development 
within the San Juan River basin. In addition to liability to the Navajo 
Nation, the United States faces potential liability not just to the 
Navajo Nation but to many other parties within and outside the San Juan 
River basin. Under almost any litigation outcome, the United States 
would be exposed to significant liability.
    In the event that the settlement fails, and the Navajo Nation were 
forced to litigate its water rights claims, the Navajo Nation would 
claim all of the water necessary to ensure a permanent homeland for the 
Navajo people. Such claims would include not only past and present 
water uses, but additional water for mining and energy development, 
domestic and municipal uses, commercial and industrial development, and 
additional irrigation. Experts working for the Navajo Nation and the 
United States have identified a number of water claim scenarios that 
range from modest to substantial claims. We believe that any litigation 
outcome would award the Navajo Nation more water than they would 
receive by way of the settlement. The water awarded to the Navajo 
Nation in this settlement is surely less than water that the Nation 
could obtain through litigation. (The water in the settlement is 
essentially: (1) water for existing Navajo irrigation projects at 
Hogback and Fruitland; (2) water for the Navajo Indian Irrigation 
Project promised by the 1962 Act of Congress; and (3) about 22,000 
acre-feet of ``new water'' for the Navajo-Gallup Water Supply Project.) 
Therefore, any litigation displaces existing water users and 
potentially creates federal liability with respect to those users.
    With the settlement the State of New Mexico will be extremely close 
to full water development under its compact apportionment. Therefore, 
any water the Navajo Nation would obtain over and above the water 
specified in the settlement threatens existing water users and 
jeopardizes the ability of New Mexico to stay within its compact 
apportionment. It does not take a significant claim by the Navajo 
Nation to achieve this result. For example, the settlement agreement 
limits Navajo acreage at the Hogback and Fruitland irrigation projects 
to 12,165 acres, but the Congressional record on Public Law 87-483 
makes reference to a possible 26,000 acres of irrigable land at just 
these two sites. See: Senate Report No. 2198. The water for this 
additional acreage would have to come either from existing water users 
or from water in excess of New Mexico's compact apportionment. In 
addition, experts for the Navajo Nation and the United States have 
identified additional irrigable acreage upon which substantial claims 
could be based. Even a modest award of additional acreage would cause 
disruption of existing water uses.
    Recent decisions in various water adjudications confirm that Indian 
tribes are entitled to all the water necessary to make their 
reservations livable as permanent homelands. Such water uses include 
water for municipal, commercial and industrial purposes. The Navajo 
Reservation has a substantial population and continued population 
growth can be expected if the Navajo Nation had sufficient water 
resources. The municipal water in the settlement agreement is based on 
a projected forty (40) year projection. If the Navajo Nation were to 
litigate its claims, it would seek a supply for a much longer period of 
time. In addition, the Navajo Nation possesses an abundance of natural 
resources including coal, oil and gas, and uranium. The Navajo Nation 
claims the waters necessary to develop these resources, including water 
for energy generation.
    Even a modest award of water to the Navajo Nation would prove 
disruptive to existing water users, including upstream irrigation uses, 
water diversions for two coal fired generating stations, and the water 
for the municipalities in the basin. In addition to impacts on these 
run-of-the river diverters, in order to meet additional downstream 
Navajo uses, water that would have otherwise been stored at Navajo 
Reservoir and in the Animas-La Plata Project would be bypassed creating 
potential shortages to the various federal interests that rely on this 
water including the Animas-La Plata Project, the Hammond Conservancy 
District, the Jicarilla Apache Nation, and the San Juan-Chama Project.
    With respect to the San Juan-Chama Project, the project provides a 
portion of the water supply for the cities of Albuquerque and Santa Fe, 
and project water is proposed as the supply necessary to settle the 
water rights claims of Taos Pueblo and the four Pueblos in the Aamodt 
litigation. The Navajo Nation's water rights claims threaten the water 
supply for the San Juan-Chama Project which diverts approximately 
110,000 acre-feet of water per year from the San Juan basin into the 
Rio Grande Basin. San Juan-Chama Project water currently leases for 
$100 per acre-foot per year. Perpetual water rights in the Rio Grande 
Basin have been selling for $10,000 to $20,000 per acre-foot. Thus, the 
value of 110,000 acre-feet as a permanent supply of water in the Rio 
Grande Basin is $1.1 to $2.2 billion. By any measure, the United States 
cannot afford to let the settlement fail, even if the Navajo Nation 
were only to receive a modest amount of additional water.
    The scenarios for even greater exposure could accrue if the Navajo 
Nation were successful in bringing a more substantial claim in the 
adjudication. Numerous law review articles have been brought concerning 
the potential Navajo claims. These articles suggest that were the 
Navajo Nation to prevail on its claims, the implications on the entire 
Colorado River water system could be devastating. For example, some 
commentators refer to the unquantified rights of the Navajo Nation as 
posing a ``hypothetical shock'' to the Colorado River. Allen V. Kneese 
and Gilbert Bonem, Hypothetical Shocks to Water Allocation Institutions 
in the Colorado Basin, New Courses for the Colorado River: Major Issues 
for the Next Century at 97 (Weatherford & Brown, eds. 1986). See also 
William Douglas Back & Jeffrey S. Taylor, Navajo Water Rights: Pulling 
the Plug on the Colorado River?, 20 Natural Resources Journal 71, 74 
(1980) (``If Navajo Winters rights ever are adjudicated, the potential 
award is staggering.'') Therefore, the proposed settlement not only 
benefits the Navajo Nation and the State of New Mexico, but the entire 
Colorado River system. If the settlement fails, the potential liability 
of the United States for disruption of water uses within the Colorado 
River system is too massive to calculate.
    Aside from the potential liability of the United States in the 
event that the settlement were to fail, the proposed settlement is 
consistent with other provisions in the C&P that the Administration has 
ignored. For example:
    First, the C&P require that the tribe receives equivalent benefits 
for rights which they, and the United States as trustee, may release as 
part of a settlement. There is very little unappropriated water within 
New Mexico's compact apportionment. In order for a settlement between 
the State of New Mexico and the Navajo Nation to succeed, it is 
necessary that the Navajo Nation relinquish substantial claims for 
future water uses based on well-established federal law set forth by 
the United States Supreme Court in its Winters v. United States and 
Arizona v. California decisions. We believe the value of these 
potential water rights claims may actually exceed the cost of the 
settlement.
    Second, the C&P require that the Indians obtain the ability as part 
of each settlement to realize value from the confirmed water rights 
resulting from the settlement. A confirmed ``paper'' water right has 
limited value for an Indian Nation where so many of its citizens lack 
the basic infrastructure to have running water in their homes. The 
centerpiece of the proposed settlement is the authorization and 
construction of the Navajo-Gallup Water Supply Project which would 
allow the Navajo People to realize true value from their confirmed 
water rights.
    Third, the C&P require that settlements be structured to promote 
economic efficiency on reservations and tribal self-sufficiency. A 
report entitled Water Resource Development Strategy for the Navajo 
Nation, July 17, 2000 concludes that ``the lack of a reliable and 
affordable potable water supply stifles economic growth throughout the 
reservation'' and that ``[t]he lack of infrastructure, the lack of 
economic development and the sustained poverty are closely connected.'' 
Without developed water infrastructure economic development 
infrastructure is impossible. The Project will provide a backbone of 
water infrastructure for the Eastern portion of the Navajo Reservation. 
Economists from the University of New Mexico evaluated the socio-
economic benefits from the proposed Navajo-Gallup Water Supply Project 
and concluded that the project would provide an ``economic stimulus to 
the region'' and in terms of the human need, the report states ``[i]n 
terms of where money can be spent to improve people's lives, you'd be 
hard-pressed to find another place in the country with greater need.'' 
See: Quantum 2007 at 15, http://research.unm.edu/quantum/
quantum2007.pdf, attached here as Attachment 1.
    Fourth, the settlement is consistent with the principles in the C&P 
that disfavor United State's ``participation in economically 
unjustified irrigation investment.'' The C&P affirmatively endorse 
``investments for delivery of water for households, gardens, or 
domestic livestock'' and go on to say that such investments in such 
water deliveries may be exempted from the strict application of the 
criterion. See: 55 Federal Register at 9224 (March 12, 1990).
    Finally, we note that the United States has spent considerable 
resources building rural water projects in the Western United States 
similar to the Navajo-Gallup Water Supply Project. The proposed project 
in our settlement compares favorably to these other water projects. The 
graph included here as Attachment 2 shows that the cost of the Navajo-
Gallup Water Supply Project has a more favorable cost per person served 
than many other rural water projects, most of which have been 
authorized and funded by the United States. Similarly, the graph 
included here as Attachment 3 provides the same comparison with other 
projects on a cost per acre-feet of capacity basis. Again, the Navajo-
Gallup Water Supply project compares favorably. If the United States 
can fund and build rural water supply projects throughout the West 
without requiring an Indian water settlement, surely a project that is 
included as part of an Indian water settlement should pass muster with 
the United States.
    Under any measure, this settlement is justified by a fair reading 
of the entire C&P.
 (SHIRLEY) For the record, could you please briefly state the Navajo 
        goals for the settlement?
    As we told the federal assessment team and the federal negotiation 
team, the Navajo Nation seeks a water rights settlement that provides:
      CERTAINTY. Certainty as to what our water rights are, 
including the water rights for the Navajo Indian Irrigation Project 
which were not fully described in the 1962 Act. To fully develop a 
permanent homeland for the Navajo People requires knowing the full 
extent of our water resources.
      WET WATER. A ``paper'' water right does not benefit 
people who must haul their drinking water. The Navajo Nation is 
forgoing a large paper water right in exchange for a smaller paper 
water right, conditioned on the wet water development outlined in the 
settlement legislation, including the Navajo-Gallup Water Supply 
Project.
      FAIRNESS. The United States pledged to provide a 
permanent homeland on the Navajo Reservation in the Treaty of 1868. The 
federal government has a trust obligation to provide the Navajo People 
with the basic necessities of life, including potable water. By this 
settlement, the Navajo Nation is giving up valuable water rights in 
exchange for a water supply project that the United States should have 
built for the Navajo People a long time ago. We expect to be treated 
fairly by our trustee.
      PEACE. We want a settlement that will reduce the 
possibilities of future conflicts with our neighbors. Our settlement is 
structured to create partnerships between the Navajo Nation and its 
neighbors--the City of Gallup, the Jicarilla Apache Nation, and the 
City of Farmington, which has passed a resolution in support of the 
settlement.
 (SHIRLEY) How has the Navajo Nation dealt with Arizona's objections to 
        moving H.R. 1970 until they negotiate and finalize their Indian 
        water rights claims?
    The Navajo Nation is committed to good faith water rights 
negotiations with the State of Arizona. In the late 1990's we engaged 
in serious settlement discussions with the Arizona water users 
concerning the Navajo Nation's water rights in the Little Colorado 
River basin. Those discussions broke down, but were revived only after 
the Navajo Nation filed its lawsuit in Navajo Nation v. United States 
concerning Navajo claims to the mainstream of the Colorado River in the 
Lower Colorado River Basin in Arizona.
    Although we are negotiating in good faith, we are not certain 
whether a negotiated settlement Arizona is even possible, let alone 
imminent. We have a settlement with the State of New Mexico because it 
is based on identifying and satisfying the needs of the Navajo people 
in New Mexico. We are disappointed that the Arizona testimony talks 
about the need to resolve litigation with the Navajo Nation, but no 
acknowledgment of the real needs of the Navajo Nation to obtain 
sufficient water rights to create a permanent homeland. And, continue 
to be frustrated in our settlement efforts with the Arizona parties 
because there is no real discussion of the needs of the Navajo Nation. 
Instead all discussions with Arizona focus only on the limited 
resources the Arizona parties are willing to offer. Frankly, we are 
unsure of whether a settlement is possible with Arizona given that the 
state parties insist that a Navajo settlement fits within the 
parameters of the Arizona Water Settlements Act which contains only a 
limited amount of water and money.
    If a settlement with Arizona can be achieved without compromising 
or delaying the New Mexico settlement, then we would be happy to have a 
more comprehensive settlement, but the New Mexico settlement is crafted 
in a manner that does not require resolution of the Navajo water rights 
issues with the State of Arizona, and Arizona's ability to reach a 
settlement with the Navajo Nation will not be impaired if a New Mexico 
settlement moves forward separately, Frankly we believe that Arizona is 
simply attempting to leverage a settlement with the Navajo Nation that 
fails short of meeting the Navajo Nation's needs, by demanding that the 
New Mexico settlement include a partial settlement with Arizona.
    Requiring a settlement with Arizona gives too many parties without 
an interest in New Mexico, including the Hopi Tribe, and various non-
New Mexico interests, veto power over our New Mexico settlement. In 
short, it is our view that linking the New Mexico settlement to the 
Arizona negotiations will only serve to slow the Arizona negotiations 
even further.
 (SHIRLEY) If the development of water resources improves the Navajo 
        Nation's economy, will they repay a portion of the costs of the 
        project?
    As noted in my answer to the first question, economists from the 
University of New Mexico believe that the project would provide an 
``economic stimulus to the region.'' Notwithstanding the potential for 
improvement of the Navajo Nation's economy, the Navajo Nation has given 
up valuable water rights in exchange for the benefits outlined in the 
settlement. Were the Navajo Nation to repay a portion of the costs of 
the project to the United States, the Navajo Nation would be forfeiting 
the benefit of the bargain it made. Thus, the Navajo Nation has already 
contributed to the costs of the project through the relinquishment of 
greater claims to water from the San Juan River.
    Moreover, the Navajo Nation will contribute additional value to the 
costs of the project. The Navajo Nation is already providing invaluable 
technical assistance to the Steering Committee for the project and it 
is anticipated that the Navajo Nation will waive rights-of-way 
consideration to almost 270 miles of pipeline.
 (SHIRLEY) Mr. Shirley, will the project water be used for other 
        industrial purposes?
    The design criteria used in the Draft EIS for the Navajo-Gallup 
Water Supply specifies capacity of 29,062 acre-feet per year for the 
Navajo Nation including, 6410 acre-feet in Window Rock, Arizona. These 
capacities are based on a projected forty (40) year demand for domestic 
and municipal water in the project service area. Certainly this 
capacity will not be sufficient to meet all the long-term needs 
domestic and municipal water needs in the service area. There is simply 
no capacity in this project for the water to be used for industrial 
purposes; however, in the early years following construction, it is 
conceivable that the pipeline could be used to convey water for short-
term industrial purposes until the domestic and municipal demands fully 
materialize. While the settlement agreement with the Navajo Nation 
allows project water to be used for a variety of purposes, it is highly 
unlikely that any industry would commit to using project water on a 
short-term temporary basis.
 (To WHOEVER) The Jicarilla Tribe is currently receiving funds for the 
        Jicarilla Apache Reservation Rural Water System rural water 
        project. How do the funds from this legislation relate to the 
        current project funds?
    My understanding is that the funding for the Jicarilla Apache 
Reservation Rural Water System is intended to build a water 
distribution system for the community of Dulce, the tribal 
headquarters, and surrounding areas. The Northwestern New Mexico Rural 
Water Supply Project (Navajo-Gallup Water Supply Project) will deliver 
water to Counselor, New Mexico, near the Jicarilla Apache Reservation 
for use in the southern portion of the reservation.
 (To WHOEVER) Who is responsible for the operation and maintenance 
        costs? Who will own the infrastructure once it is completed?
    Section 304 of H.R. 1970 provides that the three project 
beneficiaries, the Navajo Nation, the Jicarilla Apache Nation and the 
City of Gallup, will pay their respective allocable costs for 
operation, maintenance and replacement of the project. A limited waiver 
for up to ten years would be authorized for the Navajo Nation pursuant 
to subsection 304(f), if the Secretary of the Interior determines that 
the cost of OM&R allocable to the Navajo Nation exceeds its ability to 
pay. Subsection 302(f) authorizes the Secretary, upon completion of 
construction and execution of an operations agreement, to convey those 
portions of the project located within the Gallup city limits to the 
city and the rest of the project facilities to the Navajo Nation. No 
portion of the project will be located on Jicarilla lands. Paragraph 
304(b)(5) requires financial assurances satisfactory to the Secretary 
if title is transferred to the city prior to repayment.
                                 ______
                                 
    Mrs. Napolitano. Thank you, sir. I appreciate you being 
here. Mr. Jim Dunlap, Chairman, Interstate Stream Commission of 
the State of New Mexico, Santa Fe, New Mexico.

STATEMENT OF JIM DUNLAP, CHAIRMAN, INTERSTATE STREAM COMMISSION 
        OF THE STATE OF NEW MEXICO, SANTA FE, NEW MEXICO

    Mr. Dunlap. Thank you, Madame Chairwoman. I am Jim Dunlap, 
Chairman of the New Mexico Interstate Streams Commission. I 
appreciate the opportunity to appear before you today to 
provide comments on behalf of the State of New Mexico in 
support of the Northwest New Mexico Rural Water Projects Act. I 
want to say that I appreciate Representative Udall's efforts in 
proposing House Bill 1970, which will authorize construction of 
a very important rural drinking water system for northwest New 
Mexico and the Navajo Nation.
    This project is vital in solving the acute water supply 
conditions facing much of northwest New Mexico including a 
large portion of the Navajo Nation. The project will provide 
the backbone of a regional water supply that will enable Navajo 
families to receive safe drinking water, a basic right that 
virtually all other U.S. citizens take for granted.
    By 2040 this project is expected to serve approximately a 
quarter of a million people including the residents of Gallup, 
New Mexico, that currently rely on unsustainable groundwater 
supply. In 1868, the Federal government formed the reservation 
and placed the Navajo people on it with the promise of a water 
supply. Madame Chairwoman, it is a disgrace that the citizens 
of this Nation do not have access to safe drinking water and 
still have to haul their water.
    The Federal administration needs to acknowledge the human 
needs at issue in this settlement and the fact that the 
resolution of the Navajo Nation's claims is not going to get 
any cheaper by delaying an outcome. This is not a Third World 
country. We are not sending foreign aid. These are original 
occupants of this land.
    As representatives of all western states know, resolution 
of tribal water rights can be very difficult and litigation of 
those claims can be very expensive. New Mexico is proud to have 
reached a settlement with the Navajo Nation that will resolve 
the Nation's water rights in the San Juan Basin while 
protecting the existing water uses within the basin.
    As an agricultural water user from the San Juan Basin, I 
recognize the potential risk to existing water uses within the 
settlement, and I appreciate the protections negotiated to 
preserve this agricultural lifestyle. The settlement also 
protects the San Juan-Chama project that benefits some of New 
Mexico's largest cities. Title 2 of this act provides a funding 
mechanism that will tap into the existing surplus in the 
Reclamation fund and is supported by the 17 states represented 
by the Western States Water Council.
    New Mexico has already funded over $25 million toward the 
settlement related projects and our legislature has 
appropriated $10 million toward an Indian water rights 
settlement fund. While I cannot speak for the legislature of 
New Mexico, they have already shown support for the solution to 
a major problem. Both the state and Federal governments will 
have to work together to make this important project work.
    All western states appreciate the need to be able to 
develop the water they are entitled to. From an interstate 
water perspective, an important benefit of the water is that 
the water necessary for the settlement will fit within the New 
Mexico's upper Colorado River compact apportionment without 
displacing any existing water uses. Stability on the Colorado 
River is important to New Mexico, and we encourage the other 
Colorado River basin states to continue their cooperative 
efforts to support each other's right to fully develop our 
compact apportionment.
    Madame Chairwoman and Committee members, the State of New 
Mexico asks your support for H.R. 1970. Thank you.
    [The prepared statement of Mr. Dunlap follows:]

               Statement of Jim Dunlap, Chairman of the 
         New Mexico Interstate Stream Commission,, on H.R. 1970

    Madame Chairwoman and members of the committee, I am Jim Dunlap. I 
am the chairman of the New Mexico Interstate Stream Commission, and I 
am a resident of the San Juan Basin in New Mexico. I appreciate very 
much the opportunity to appear before you today and provide comments on 
behalf of the State of New Mexico in support of the Northwestern New 
Mexico Rural Water Projects Act, H.R. 1970.
    This legislation will authorize construction of an important rural 
water system for northwest New Mexico, including the Navajo Nation, the 
Jicarilla Apache Nation and the City of Gallup.
    It will also resolve long-standing water issues between the Navajo 
Nation and the State of New Mexico in the San Juan River Basin of New 
Mexico by authorizing a comprehensive settlement agreement that will 
protect existing water rights within the state. The legislation 
clarifies provisions of existing law and provides guidance regarding 
regulations that will be developed to implement the settlement 
provisions.
    The State of New Mexico and the Navajo Nation reached this 
settlement after decades of disagreement and many years of intensive 
settlement talks. It is no small matter that we appear before you 
today, together, urging you to pass this legislation. We believe this 
legislation has been carefully crafted to address water supply needs 
within New Mexico while protecting the long-standing Law of the 
Colorado River.
    I would like to discuss these issues in further detail.
The Project
    The legislation would authorize the Northwestern New Mexico Rural 
Water Supply Project. This project is vital to solving the acute water 
supply conditions facing much of northwestern New Mexico, including a 
large portion of the Navajo Nation. The project is described in detail 
in the final draft Environmental Impact Statement recently released by 
the Department of Interior that builds off a federal planning process 
that has been underway for over 30 years. This Colorado River Storage 
Project Act project utilizes an existing reservoir and will provide a 
safe, reliable drinking water supply to New Mexico residents that 
currently haul water or rely on unsustainable groundwater.
    Today more than half of rural Navajos in New Mexico must haul water 
for many miles to receive a basic domestic water supply. The reality of 
water hauling faced by those Navajo families is shocking considering 
the modern conveniences that most of us take for granted. By providing 
the backbone for a regional water supply system, the project will 
enable the Navajos to receive a clean, reliable supply of water.
    The project will enable the City of Gallup to acquire a renewable 
surface water supply. Currently, Gallup faces quickly declining 
groundwater supplies with the prospect of severe shortages within 20 
years. The project will also deliver water to the Jicarilla Apache 
Nation for use in the water scarce southern portion of the Apache 
reservation.
    By 2040 the project is expected to serve approximately 250,000 
people, including the residents of Gallup. The project would be the 
second biggest water utility in the state, smaller only than the 
Albuquerque Bernalillo County water utility.
    Because the project will serve a very large area and contain 
hundreds of miles of pipeline, the cost of the project is high. But, 
the project costs can be appropriated over several years, and the 
Reclamation Water Settlements Fund, to be created by Title II of H.R. 
1970, provides a reasonable means of funding project costs if 
sufficient appropriations have not been made by 2018.
    In recognition that the state will incur costs associated with its 
Indian water rights settlement projects, including the Navajo 
Settlement, the State of New Mexico has made an initial contribution of 
$10 million to the New Mexico Indian Water Rights Settlements Fund 
(NMSA 72-1-12). In addition, over the last 4 years, the state has 
invested approximately $9.7 million in a Gallup regional distribution 
system and, this year, the New Mexico legislature appropriated $15.3 
million to be used for construction of the ``Cutter Lateral'' pipeline 
on the eastern side of the project. New Mexico recognizes the 
importance of funding this project and expects the federal 
administration to contribute funding for this project commensurate with 
the federal government's trust and statutory responsibilities. New 
Mexico expects to be treated fairly and consistently vis-a-vis other 
settlements around the country.
Benefits of the Navajo Settlement
    In addition to authorizing a project that would provide a secure 
source of drinking water for Navajo and Apache communities and for the 
City of Gallup, the legislation would approve a comprehensive 
settlement of the Navajo Nation's water rights claims in the San Juan 
Basin in New Mexico. Navajo claims to the San Juan River have long-
threatened the security of water rights of all other water users within 
the basin. After years of difficult negotiations, the State of New 
Mexico and the Navajo Nation entered into a settlement agreement in 
2005.
    The State of New Mexico strongly believes that the settlement 
represents a fair and equitable resolution, and we respectfully ask 
this Committee to support it. The San Juan River, like most rivers in 
the southwest, does not produce enough water to meet all claims for 
current and future uses. Under the settlement, the Navajo Nation agrees 
to substantially reduce its claims in exchange for the wet water 
supplied by the proposed project.
    Before signing the settlement agreement, the State of New Mexico 
carefully considered the needs of non-Navajo water users in the San 
Juan Basin, and over the course of several years, the state met many 
times with water user groups, took formal public comments, analyzed 
alternatives and worked tirelessly to negotiate the agreement in order 
to resolve the concerns voiced. Some of the most difficult negotiations 
centered on numerous changes to the settlement agreement that provide 
additional protections for third parties. The State of New Mexico has 
reviewed the settlement agreement and proposed legislation from a 
perspective of protecting all water users within the state, including 
San Juan-Chama Project water users, and the state believes the 
settlement benefits and protects those water users.
    I firmly believe that we have come as close as possible to a 
resolution that provides maximum benefits and protections for all water 
users, given limitations of water supply and potential uncertainties of 
its allocation if the Navajo claims were litigated.
    To underscore this point, I want to outline some of the most 
important provisions built into the settlement to protect non-Navajo 
water users.
    Under the settlement, the Navajo Nation accepts compromises 
regarding both the quantity of its water rights and administration of 
its priority dates, with the result that Navajo claims fit within New 
Mexico's apportionment of the Upper Colorado Stream System and will not 
displace other existing uses and projects.
    Under the settlement, the quantity of Navajo water rights would be 
made up of essentially three components. First, the settlement 
recognizes the existing uses of the Navajo Nation, including its old 
irrigation projects Hogback and Fruitland diverting directly from the 
San Juan River for authorized irrigation of approximately 12,000 acres. 
Second, the settlement recognizes the Navajos' largest right, its right 
to irrigate over 110,000 acres that comprise the Navajo Indian 
Irrigation Project (NIIP), authorized by Congress in 1962 by Public Law 
87-483. Finally, the only ``new'' water the Navajos will receive is 
almost 21,000 acre-feet a year of water to supply domestic and 
commercial uses for the Navajo portion of the Northwestern New Mexico 
Rural Water Supply Project.
    Regarding the large Navajo Indian Irrigation Project right, in 
1962, Congress authorized an annual diversion of 508,000 acre-feet; 
however, the Navajos through conservation are agreeing to limit 
diversions to 353,000 acre-feet and could only exceed that amount by 
obtaining a State Engineer permit assuring that no other water users 
would be impaired by an increase. As a result, even with new diversions 
required by the proposed rural water supply project, the settlement's 
net effect is a decrease in annual diversion of over 130,000 acre-feet 
from the amount already authorized by federal law and state permits. In 
addition, depletion limits are included which provide additional 
benefits to other water users.
    With respect to priority dates, under the federal reserved water 
rights doctrine, the Navajos could claim an 1868 priority, the date of 
their reservation. Under the prior appropriation doctrine, the Navajo 
Nation, as most senior water right holder, could call for all its water 
before anyone else on the San Juan River. Even with reduced quantities 
as provided under the settlement, an 1868 priority would threaten 
frequent curtailment of other water users. Consequently, the Navajos 
are agreeing that NIIP and the proposed rural water supply project will 
be supplied under the Navajo Reservoir's 1955 priority, instead of a 
reserved priority date of 1868. This concession means that 10 percent 
of Navajo rights will have an 1868 priority and 90 percent will be 
administered with a 1955 or later priority.
    I have described two of the most important protections incorporated 
into the settlement, regarding quantity and priority, but there are 
several other protections conferred by the settlement I want to touch 
on.
    The settlement has valuable shortage sharing provisions that 
protect other federal projects. As you know, the federal government has 
invested a great deal of resources in the Animas-La Plata Project (ALP) 
and the San Juan-Chama Project. These projects are vital to the State 
of New Mexico, but they have relatively junior priority dates of 1956 
and 1955, respectively. In addition to the general protections I have 
already described, the Navajo Nation is agreeing to additional, 
specific protections for these two important federal projects.
    ALP's 1956 priority in New Mexico makes it vulnerable to priority 
calls within the San Juan Basin. Most of the 13,520 acre-feet per year 
of ALP water allocated for use in New Mexico will supply the future 
needs of the three municipalities of Farmington, Bloomfield and Aztec. 
In the event that curtailment of New Mexico's water uses is required by 
the Upper Colorado River Basin Compact, the Navajos agree to provide 
protection to New Mexico contractors up to their project contract 
amount. Under this protection, the Navajos agree to forgo their uses in 
order to make water available to ALP at the same percentage supply 
available to the rural water supply project authorized by H.R. 1970.
    Section 102 of H.R. 1970 would amend Public Law 87-483, which 
authorized the San Juan-Chama Project, to clarify that the normal 
annual diversion requirement for that project is 135,000 acre-feet for 
purposes of allocating annual water supply shortages between Navajo 
Reservoir contractors and the San Juan-Chama Project. That provision 
minimizes the potential for shortages to the San Juan-Chama Project, 
which on average diverts 105,000 acre-feet per year, or less, in dry 
years when less water is available for project diversions. This means 
that a large reduction in Navajo Reservoir's physical supply would have 
to occur before the San Juan-Chama Project would begin sharing 
administrative shortages.
    In addition, in order to protect federal project contractors, the 
state analyzed the risks associated with allowing additional water to 
be contracted from Navajo Reservoir to supply the proposed regional 
water project. The hydrologic determination recently signed by the 
Secretary of Interior confirms that additional water is available for 
the new contract uses without impairing existing uses. The additional 
risk of shortage to contractors from either the San Juan Chama-Project 
or Navajo Reservoir supply is minimal, and the State of New Mexico 
believes that other settlement and legislative benefits provided 
outweigh any additional risks of shortage.
    Another category of protections I want to mention consists of 
specific protections for non-Navajo water users who are not supplied by 
federal projects. These users are direct flow irrigators, 
municipalities and power plants. Many non-Indian and municipal state-
based rights were quantified in the 1948 Echo Ditch Decree, to which 
the United States and the Navajo Nation were not parties. Under the 
settlement, the Navajo Nation and the United States would agree not to 
challenge the elements of Echo Ditch Decree rights except on the basis 
of forfeiture, abandonment or illegal use occurring after entry of the 
Decree. This means that the U.S. and the Navajo Nation would not go 
behind this long-standing decree to challenge the water rights decreed 
at that time or challenge the validity of the decree. Similarly, in 
conjunction with the settlement, the Navajo Nation is agreeing to 
recognize water rights of the City of Farmington quantified by the Echo 
Ditch Decree.
    An important protection for direct flow diverters is the Navajos' 
agreement to call on an alternate water supply stored in Navajo 
Reservoir before making a priority call against direct flow. Although, 
as I mentioned above, the settlement provides that 90 percent of the 
Navajos' rights would be supplied under Navajo Reservoir's 1955 
priority, the Navajos' old direct flow irrigation projects Hogback and 
Fruitland would retain an 1868 priority. In many years the demand of 
those projects would cause junior diverters to be shut off absent the 
additional protection secured by the settlement requiring the Navajos 
to use their alternate water supply. Under the alternate water supply 
provisions, the Navajo Nation agrees the Hogback and Fruitland projects 
will refrain from priority calls against upstream junior appropriators 
and instead will deliver up to 12,000 acre-feet in any year of NIIP 
contract water in storage in Navajo Reservoir when the direct flow is 
insufficient to meet water demands. If this amount is exhausted in any 
year, priority calls may occur at that time in that year. Based on the 
hydrologic record, this provision would mean that instead of priority 
calls in one out of two years, Hogback and Fruitland would only be 
entitled to make priority calls in one out of every twenty years, on 
average.
    Another benefit of stored water for direct flow diverters is 
contained in paragraph 401(a)(4) of H.R. 1970. When there are at least 
a million acre-feet in Navajo Reservoir, this provision authorizes the 
State of New Mexico to administer water released from storage for use 
by direct flow diverters at a minimum of 225 cubic-feet-per-second, 
even when inflows to the reservoir are less than that amount. In other 
words, when the direct flow would otherwise drop below 225 cubic-feet-
per-second, water released from the reservoir may be used to keep 
direct flows at that minimum amount, thereby increasing and making more 
reliable the supply available to direct flow diverters.
    The settlement would also make the direct flow go farther by 
providing funding for ditch improvements. Under the settlement, the 
state will contribute $10 million for ditch improvements and water 
conservation projects to benefit the direct flow ditches. Section 
309(c) of H.R. 1970 authorizes over $23 million to rehabilitate the 
Hogback and Fruitland projects and Section 309(d) authorizes $11 
million of matching funds to rehabilitate non-Navajo ditches. These 
funds will mean that approximately $45 million will be appropriated to 
improve the efficiency and promote conservation of water of the direct 
flow diversions, as part of the Navajo settlement.
    The last category of protections I want to touch on includes 
administrative provisions to help assure that the San Juan River Basin 
is managed in an orderly fashion and within the supply available. Both 
the legislation and settlement confirm the State of New Mexico's 
authority to administer water. Under the settlement, the Navajo Nation 
agrees that the State Engineer has authority to serve as water master 
in the basin and to administer water rights in priority as necessary to 
comply with interstate compact obligations and other applicable law, 
thereby confirming authority in the state to comprehensively administer 
water usage in the basin. In addition, the State Engineer will have 
authority to make determinations of current beneficial uses for any 
changes in points of diversion and for any changes in purposes or 
places of use of Navajo water rights off of Navajo lands. The Navajo 
Nation also agrees to comply with state law regarding marketing of 
water rights.
    The Navajo Nation further agrees not to pump groundwater so as to 
deplete the flow of the San Juan River by more than 2,000 acre-feet per 
year, unless the State Engineer approves use of Navajo surface water to 
offset depletions in excess of that amount. Any Navajo groundwater uses 
beyond those quantified in the settlement agreement also would be 
subject to non-impairment of existing water rights.
    Outside the Navajo Reservation on lands allotted by the United 
States, there are numerous individual Navajos who could assert federal 
reserved claims in the pending San Juan River Adjudication. The Navajo 
Nation is agreeing to use its water rights decreed under the settlement 
to supply or offset any future uses that may be awarded in the 
adjudication to individual Navajos allottees in the San Juan Basin.
    The proposed settlement is detailed and comprehensive. Although it 
is a creature of negotiation and compromise, I strongly believe that is 
represents the best result attainable for all New Mexicans who rely on 
the San Juan River. Without a settlement, the Navajo Nation would 
assert a right to much larger quantities, with the potential to 
displace junior non-Navajo water users. Under the settlement, those 
same water users are afforded numerous and substantial protections.
    If the claims were litigated, the Navajos would seek large 
quantities of water under the Winters Doctrine or Federal Reserved 
Water Rights Doctrine. The Navajos would seek water for future use to 
make the Navajo reservation a permanent homeland, including by claiming 
enough water to irrigate all practicably irrigable acreage (PIA) on 
their lands in New Mexico. The quantity of water could be very large.
    Under the settlement by contrast, as I have mentioned the only 
``new'' water the Navajos will receive is almost 21,000 acre-feet a 
year of water to supply domestic and commercial uses for the Navajo 
portion of the proposed rural water supply project. The other major 
water components of the settlement consist of already existing or 
authorized irrigation, at the Hogback and Fruitland Projects and the 
Navajo Indian Irrigation Project.
    As we move forward, the State of New Mexico looks forward to 
working with other parties on proposed legislative language to assure 
the protections intended by the settlement are realized.
The Colorado River Basin
    New Mexico supports this legislation because it is good for New 
Mexico, the Navajo Nation, and the Colorado River Basin states.
    The States' Agreement Concerning Colorado River Management recently 
executed by California, Arizona, Nevada, Utah, Wyoming, Colorado and 
New Mexico provides extensive benefits to the lower basin states in 
terms of protecting and increasing the water available for use in those 
states. The primary benefit of the agreement to the upper basin states 
is a reaffirmation of each state's right to develop its Colorado River 
water entitlement. The Navajo Settlement resolves the Navajo Nation's 
water rights claims within the San Juan Basin in quantities that fit 
within New Mexico's apportionment under the Upper Colorado River 
Compact. Resolution of tribal water rights claims is important to 
states, tribes, and the federal government, and it is particularly 
beneficial when the claims can be resolved within a state's compact 
apportionment.
    The Secretary of Interior's recent hydrologic determination was 
developed by the Bureau of Reclamation in collaboration with engineers 
and hydrologists from the Upper Division states and was concurred with 
by the Upper Colorado River Commission (representing Colorado, Wyoming, 
Utah and New Mexico) through a resolution dated June 9, 2006. The 
Department of Interior consulted with all of the seven basin states, 
including Arizona, California and Nevada, regarding the final 
hydrologic determination. This hydrologic determination confirms that 
water is available for the Navajo Settlement within New Mexico's 
apportionment of water under the Upper Colorado River Basin Compact 
without displacing any existing water uses within New Mexico.
    H.R. 1970 authorizes the Secretary of Interior to sign the 
Settlement Agreement and design and construct a project to bring a 
necessary, safe and reliable water supply to many New Mexican families 
who currently rely on hauled water or unsustainable, poor quality 
groundwater to meet their domestic needs. The Upper Colorado River 
Commission has already expressed support for the settlement project and 
this legislation through resolutions dated June 19, 2003 and June 9, 
2006.
    The settlement and the water supply project contemplates a pipeline 
extension to the Navajo Nation's capital in Window Rock, Arizona, on 
the border with New Mexico. H.R. 1970 preserves Arizona's right to 
negotiate its own settlement with the Navajo Nation and water cannot be 
delivered to Arizona until an agreement is reached within Arizona 
regarding the water supply allocation and additional approvals are 
received as may be required under the law of the Colorado River. New 
Mexico has been able to accommodate some of Arizona's concerns, but 
many of Arizona's concerns go beyond the scope of our settlement, 
raising complicated issues that are objectionable to other basin 
states. New Mexico is willing to continue conferring with any of the 
Colorado River Basin states as necessary to explain the settlement 
agreement or discuss concerns about the settlement, but New Mexico 
believes that each state should be entitled to develop its compact 
entitlement in the manner that best meets the needs within that state. 
In New Mexico, have worked hard to resolve complicated Indian water 
rights claims through a settlement that will address basic human needs. 
We hope the other states will support us in this effort.
    Madame Chairwoman and Committee members, the State of New Mexico 
asks you to support H.R. 1970. The costs of the Northwestern New Mexico 
Rural Water Supply Project and of the Navajo settlement are high. But 
the costs of delay in not addressing the vital and human needs of the 
communities of Northwestern New Mexico are much higher. This 
legislation would settle protracted and divisive litigation, and in its 
place would provide a clear, safe drinking water supply for northwest 
New Mexico.
                                 ______
                                 

           Response to questions submitted for the record by 
                        Jim Dunlap on H.R. 1970

 (DUNLAP-NM) This legislation will enable a settlement between the New 
        Mexico Navajo Nation and the Federal Government. What do you 
        think of the Arizona's concerns regarding the implications of 
        certain provisions to the existing ``Law of the Colorado 
        River?''
    ANSWER: Arizona's objection relating to the ``Law of the River'' 
relates to New Mexico's use of a portion of its Upper Basin 
apportionment within the Lower Basin in New Mexico. Arizona's concern 
is unfounded because Section 303(g) of H.R. 1970 directly authorizes 
the use of a portion of the State of New Mexico's Upper Basin 
apportionment within the Lower Basin in New Mexico. The authorization 
in H.R. 1970 is consistent with the authorization in Section 303(d) of 
the 1968 Colorado River Basin Project Act of a project's use of a 
portion of the State of Arizona's Upper Basin apportionment within the 
Lower Basin in Arizona. In addition, the Upper Colorado River 
Commission, which administers the Upper Colorado River Basin Compact 
and has authority to determine uses of water from the Upper Basin, by 
unanimous resolution, approved New Mexico's proposed use of some of its 
Upper Basin water within the Lower Basin in New Mexico.
    H.R. 1970 preserves the State of Arizona's right to negotiate its 
own settlement with the Navajo Nation, and most of the issues raised by 
Arizona go beyond the scope of the State of New Mexico's settlement 
with the Navajo Nation. Some of the provisions that Arizona has 
requested have raised objections from other Colorado River Basin 
states.
 (DUNLAP-NM) Mr. Dunlap, the Bureau of Reclamation may categorize this 
        project as a ``rural water project'' under P.L. 109-451. Would 
        the State of New Mexico support that? Has the State ever 
        considered this project to be a ``rural water project?''
    ANSWER: The Bureau of Reclamation's written comments regarding H.R. 
1970 state it is confused about whether the Northwestern New Mexico 
Rural Water Supply Project is intended to be a rural water project. The 
project proposed by H.R. 1970 should not be categorized as a ``rural 
water project'' under the Reclamation Rural Water Supply Act of 2006, 
P.L. 109-451. As clearly stated in H.R. 1970, the project will be 
authorized as a Colorado River Storage Project Act participating 
project. But, H.R. 1970 is specifically tailored to the requirements of 
the Navajo settlement.
    As Commissioner Johnson described in his testimony to the bill, 
Reclamation's rural water program under the Rural Water Supply Act is 
still under development, and eligibility and prioritization criteria 
have still not been promulgated. New Mexico understands that a field 
hearing is scheduled later this month before the Senate Energy and 
Natural Resources Committee regarding the Bureau of Reclamation's 
implementation of P.L. 109-451.
 (DUNLAP) Mr. Dunlap, your testimony frequently refers to the 
        hydrologic report. Who verified the hydrologic report? Was this 
        report specific to this project, or for the entire State of New 
        Mexico?
    ANSWER: The Hydrologic Determination to which I refer is required 
by Section 11 of P.L. 87-483, and was finalized by the Bureau of 
Reclamation in April 2007 after consultation with all seven Colorado 
River Basin states, and signed by the Secretary of the Interior on May 
23, 2007. A copy of the determination is attached to these responses 
for the record. The Upper Colorado River Commission had previously 
concurred in the findings of the determination in June of 2005. The 
2007 Hydrologic Determination confirmed the finding of the 1988 
Hydrologic Determination that the annual water yield available to the 
Upper Basin under the Colorado River Compact is at least 6.0 million 
acre-feet, including evaporation from Colorado River Storage Project 
reservoirs, based on the critical period of record. The 2007 Hydrologic 
Determination also found that sufficient water is reasonably likely to 
be available within the State of New Mexico's share of the Upper Basin 
yield that is apportioned to it by Article III(a) of the Upper Colorado 
River Basin Compact, and within the physical water supply available 
from Navajo Reservoir to service water contracts from the Navajo 
Reservoir supply for the Navajo Nation's uses under both the Navajo 
Indian Irrigation Project and the proposed Northwestern New Mexico 
Rural Water Supply Project.
 (To WHOEVER) The Jicarilla Tribe is currently receiving funds for the 
        Jicarilla Apache Reservation Rural Water System rural water 
        project. How do the funds from this legislation relate to the 
        current project funds?
    ANSWER: The funds from H.R. 1970 do not relate to the Jicarilla 
Apache Reservation Rural Water System. The Jicarilla Apache Reservation 
Rural Water System project will provide a water distribution system to 
supply water to the northern portion of the Jicarilla reservation in 
the proximity of Dulce, New Mexico. The Northwestern New Mexico Rural 
Water Supply Project will deliver water to the Jicarilla Apache Nation 
near Counselor, New Mexico, for use in the southern portion of the 
reservation.
 (To WHOEVER) Who is responsible for the operation and maintenance 
        costs? Who will own the infrastructure once it is completed?
    ANSWER: Section 304 of H.R. 1970 provides that the three project 
beneficiaries, the Navajo Nation, the Jicarilla Apache Nation and the 
City of Gallup, will pay their respective allocable costs for 
operation, maintenance and replacement of the project. A limited waiver 
for up to ten years would be authorized for the Navajo Nation pursuant 
to subsection 304(f), if the Secretary of the Interior determines that 
the cost of OM&R allocable to the Navajo Nation exceeds its ability to 
pay. Subsection 302(f) authorizes the Secretary, upon completion of 
construction and execution of an operations agreement, to convey those 
portions of the project located within the Gallup city limits to the 
city and the rest of the project facilities to the Navajo Nation. No 
portion of the project will be located on Jicarilla lands. Paragraph 
304(b)(5) requires financial assurances satisfactory to the Secretary 
if title is transferred to the city prior to repayment.
                                 ______
                                 
    Mrs. Napolitano. Thank you, sir. We will move on to 
Patricia Lundstrom, President of the Northwestern New Mexico 
Council of Governments in Gallup, New Mexico.

 STATEMENT OF PATRICIA LUNDSTROM, PRESIDENT, NORTHWESTERN NEW 
       MEXICO COUNCIL OF GOVERNMENTS, GALLUP, NEW MEXICO

    Ms. Lundstrom. Good morning, Madame Chair, and Congressman 
Udall. I am Patty Lundstrom. I am the Executive Director of the 
Northwest New Mexico Council of Governments since 1985, and a 
fourth term member of the New Mexico House of Representatives. 
With me today are Gallup mayor pro tem Bill Nachero, Gallup 
city councilor Elen Londabozo and the COG deputy director Jeff 
Kiley. We would like to thank you for inviting us to 
participate in this historic hearing today.
    I come before you to speak in favor of House Bill 1970. 
This legislation is an essential instrument for authorizing and 
financing the proposed rural water project we have been working 
on for decades. We have known it as the Navajo Gallup Water 
Supply Project, and in the context of this bill it is titled 
the Northwestern New Mexico Rural Water Supply Project. Since 
1991, I have served as chair of the steering committee for this 
project.
    The need for the project has been known to Congress and the 
Interior Department for 50 years, and scientific studies have 
made it clear that the only hope for a sustainable water supply 
for eastern Navajo land and Gallup lands is a surface water 
supply provided by the San Juan River. After years of work 
through a mine field of legal, technical, political, 
environmental and financial issues, we are finally at the point 
of bringing to you our plan for getting this water supply 
conveyed to this parched region.
    Through the involvement and support of the Congress, the 
Bureaus of Reclamation and Indian Affairs and the Fish and 
Wildlife Service, the Federal government has been an active and 
constructive part of this consensus plan. The opportunity for 
the government to shape, modify or otherwise advance this plan 
has been continuous and complete. The steering committee has 
been a unified working group with participation by state and 
Federal agencies, the Navajo and Jicarilla Nations, the city of 
Gallup and technical partners in the process.
    In my 22 years as COG director, this has been the most 
ambitious and complex project I have seen in the region. It has 
invoked the highest levels of cooperation, professionalism and 
commitment by the individuals and agencies involved. The needs 
for the project are clear. Many Navajo reservation households 
have never had a public water system. The Navajo economy 
already struggling well below poverty stands no chance of 
development without a sustainable public water supply for its 
communities.
    The Jicarilla Apache Nation has a water rights settlement 
but needs economic development in order to tap the fullness of 
these rights. The city of Gallup's water table is dropping 20 
feet a year, and the city will face peak use shortages within 
five years and chronic shortages within 15 years.
    Since I work closely with the city of Gallup in both my 
public service roles, I will briefly outline Gallup's role in 
the project. Gallup is a transportation hub for the southwest 
and a major commercial center for the Navajo reservation. 
Within a few decades Navajos will likely make up one-half of 
Gallup's population. The Gallup regional water system at the 
back end of the Navajo Gallup pipeline is now under development 
in full collaboration with the Navajo Nation and the State of 
New Mexico.
    Under this system city infrastructure will be used to help 
convey water to neighboring Navajo communities both now and in 
the future when the Rural Water Supply Project is complete. The 
state has already committed over $9 million to this regional 
system. Gallup also supported the state's commitment of over 
$15 million in funding for regional water infrastructure on the 
eastern side of the project area which will ultimately tie into 
the Cutter Reservoir.
    These regional system partnerships have generated broad 
commitments to the motto real water to real people in real 
time. Since shortages are likely in Gallup even before the 
project is completed, Gallup has proactively worked to secure 
its water future in both the short and long term and has 
adopted an aggressive water rate structure to spur conservation 
and to look at financing local water infrastructure and a new 
water supply. It has started developing a wastewater reuse 
system using reverse osmosis.
    It is working to develop new groundwater sources previously 
used by extractive industry. It has worked on cooperative 
agreements with the Navajo and Jicarilla to ensure a water 
source for the city's participation in the Rural Water Supply 
Project. The city of Gallup stands in support of this 
legislation. The city concurs in particular with the concept of 
a 75 percent Federal cost share for the city's portion of the 
project cost as reflected in House Bill 1970.
    Affordability for the city is affected by a number of 
unique factors, most predominantly its commercial hub status. 
We are a broad rural area and the existence of pockets of high 
poverty both within and outside the city. The city will need a 
water supply for its share of the project, and the city is 
dependent on the projects two Indian tribes or alternatively 
the Secretary of Interior for that supply. The city's purchase 
of its own water rights in the San Juan River would be high in 
cost, high in controversy and low in feasibility at this point.
    The city of Gallup is nevertheless committed to charting a 
strong financial course to meet the 25 percent threshold of its 
share of the project. We will be working closely with the 
offices of the Governor, the state engineer, as well as with 
the state legislature to design and implement a viable state 
and local financial strategy.
    Overall this legislation represents a perfect storm of 
opportunity for the Federal government to join forces with its 
state and local partners to meet the critical water needs in 
this region of New Mexico while settling the Navajo Nation 
water right claims.
    Mrs. Napolitano. You need to wrap it up please, Madame.
    Ms. Lundstrom. OK. The project is essential, and on behalf 
of the steering committee, the Council of Governments and the 
New Mexico state legislature, we urge your support for House 
Bill 1970, and again thank you very much for inviting us.
    [The prepared statement of Ms. Lundstrom follows:]

    Statement of Patricia A. Lundstrom, Member, New Mexico House of 
 Representatives, and Executive Director, Northwest New Mexico Council 
  of Governments, Serving as Steering Committee Chair, Navajo-Gallup 
                   Water Supply Project, on H.R. 1970

    Mr. Chairman and Members of the Subcommittee, I am Patricia 
Lundstrom, member of the New Mexico House of Representatives in my 
fourth term serving House District 9, and Executive Director of the 
Northwest New Mexico Council of Governments since 1985.
    State House District 9 encompasses about 3,000 square miles in 
northwestern New Mexico, including the western portion of the City of 
Gallup and 9 rural Navajo communities lying within McKinley and San 
Juan Counties. Navajos comprise about two-thirds of the population of 
this District.
    The Northwest New Mexico COG is the regional planning agency 
designated by the State of New Mexico and the Federal government to 
serve the State's three counties of the Four Corners region: Cibola, 
McKinley and San Juan Counties. This is about 15,000 square miles of 
high desert territory, including large reservation areas for four 
Indian tribes and a population of about 225,000 people residing in 6 
municipalities and 77 rural communities. About one-half of the land 
base and one-half of the population are Native American.
    I want to thank you for inviting me to participate in this historic 
hearing today.
    I come before you to speak in favor of the proposed Settlement of 
Navajo Nation water rights in the San Juan River and the other 
associated titles included in H.R. 1970. My primary interest in this 
bill and in the Settlement is that this legislation is an essential 
instrument for authorizing and financing the proposed rural water 
infrastructure project we have been working on for decades. We have 
known it as the Navajo-Gallup Water Supply Project, and in the context 
of this bill it is titled the Northwestern New Mexico Rural Water 
Supply Project.
    Since 1991, I have served as Chair of the Intergovernmental 
Steering Committee for the Navajo-Gallup Water Supply Project. This 
project is the flagship of the proposed water rights Settlement, as it 
plans to construct primary water pipelines to deliver water from the 
San Juan River to rural Navajo communities in northwestern New Mexico, 
to the southwestern portion of the Jicarilla Apache Nation, and to the 
City of Gallup.
    During these past 16 years, I have seen the Navajo-Gallup project 
revived from its prior stalemate condition and, with the consistent 
leadership and support of Senators Bingaman and Domenici, I have seen 
it sustained as a planning initiative to the present day through a 
minefield of legal, technical, bureaucratic, political, financial and 
environmental issues.
    The Steering Committee has been the primary nexus and forum in 
which these issues have been addressed and resolved by a persevering 
coalition of partners, including:
      The Navajo Nation, with representatives from the Nation's 
Natural Resources Division, Division of Justice, President's Office, 
and Water Rights Commission;
      The Jicarilla Apache Nation, with staff and policy 
representation from the Nation's Water Rights Commission and from the 
Office of the President;
      The City of Gallup, which serves as a project beneficiary 
(for 20% of the project's eventual capacity) and as a hub distribution 
system for the project's water supply at its southern end, to water 
users not only within the City limits but also in a number of 
neighboring Navajo communities;
      The State of New Mexico, primarily through its State 
Engineer's Office and the Interstate Stream Commission; the State is a 
party to the interstate compacts affecting the Colorado River and its 
tributaries, as well as to a negotiated settlement of the Navajo 
Nation's water rights in the San Juan River, and (through its 
Legislature) the State is a major contributor to infrastructure 
improvements in support of the overall Navajo-Gallup Water Supply 
Project;
      The Bureau of Reclamation, which serves as federal lead 
for the project out of its Western Colorado Area Office; and
      The Bureau of Indian Affairs, which is federal 
administrator of the Navajo Indian Irrigation Project, and which has a 
substantial role with regard to real properties and rights-of-way 
affected by the project;
      The Navajo Tribal Utility Authority, the Navajo Nation's 
utility enterprise that operates all of the public water systems on the 
Navajo Reservation;
      The Navajo Area Indian Health Service, a division of the 
Public Health Service in the U.S. Department of Health & Human 
Services, which is responsible for planning and constructing water 
facilities in service to Navajo communities; and
      The Northwest New Mexico Council of Governments, a 
federal- and state-designated regional planning agency which chairs the 
Steering Committee.
    In addition to these Steering Committee groups, we have enjoyed the 
professionalism and cooperation of two agencies in particular that have 
also contributed greatly to the success of our planning efforts thus 
far:
      The Upper Colorado River Commission has worked 
thoughtfully and cooperatively with the State of New Mexico and the 
Navajo Nation in accommodating the unique needs and configurations of 
this project. In particular, in 2003 the Commission resolved to support 
and consent to diverting water from the Upper to the Lower Basin of the 
Colorado River for the purposes of the Navajo-Gallup project, and it 
certified its support for ``such Congressional action as may be 
necessary to authorize the Navajo-Gallup Water Supply Project.''
      The United States Fish and Wildlife Service worked 
cooperatively with all parties to complete appropriate planning studies 
in the San Juan River that would identify the depletions from the river 
that could be made without negatively impacting the recovery of 
endangered species of fish in the river.
    This project is the most ambitious and complex of the many local 
and regional initiatives I have been a part of for over two decades. It 
has also evoked the highest levels of cooperation, professionalism and 
commitment by a group of agencies and individuals that I have ever 
seen. My Council of Governments staff and I have been working on this 
project continuously since the early 1990s, and there have been many 
other individuals from all the participating agencies who have worked 
with us on it for years at a time. For all of us, this is not just 
``any project''; it's personal. Getting it done makes so much sense, at 
so many levels, that we are all committed to it for the long-haul.
    Since the late 1950s, State and Federal officials have concurred 
with the Southwest region's top hydrologists that the only hope for 
long-term sustainable water supply for the eastern Navajo Reservation 
and for the City of Gallup lies in the surface water supply provided by 
the San Juan River. The San Juan is a tributary to the Colorado River, 
originating in the mountains of southwestern Colorado, flowing through 
a portion of northwestern New Mexico, and proceeding to join the 
Colorado River at Lake Powell in southern Utah and northern Arizona. 
Through allocations confirmed in the hydrologic determination recently 
approved by Interior Secretary Kempthorne, the San Juan River provides 
about 40% of New Mexico's surface water supply. The Navajo-Gallup 
project would divert nearly 38,000 acre-feet of water from the river, 
or about 5 1/2 percent of New Mexico's river allocation.
    The needs for the Navajo-Gallup Water Supply Project are clear and 
evident:
      For the Navajo Nation, there is a significant population 
of Navajo people in the northwestern New Mexico service area who do not 
have, and have never had, a public water system. To this day, nearly 
40% of Navajo families in the service area still haul water to meet 
basic household and livelihood needs. It is also clear that the Navajo 
economy, already struggling well below the poverty line, stands no 
chance of development without the provision of water as the most basic 
of all human needs.
      For the Jicarilla Apache Nation, there is already in 
place a settlement agreement under which this neighboring tribal 
community has secured water rights, but for which significant economic 
and infrastructure development is needed in order to tap the fullness 
of these rights.
      For the City of Gallup, the water table is dropping 200 
feet every ten years, and the City will be facing peak-use shortages 
within five years and chronic shortages within fifteen years.
    To focus further on the needs of the City of Gallup: Gallup serves 
as a multimodal transportation portal for the Southwest and a major 
commercial center for the Navajo Reservation. As such, it is as much a 
``home'' and integral part of Navajo life as most other places in the 
region. Within a few decades, we expect that Navajos will make up over 
50 percent of Gallup's population. Despite a checkered history of 
relationships between Gallup and the Navajo people, with some residue 
of tension and mistrust even today, the partnership that has been 
forged between Gallup and the Navajo Nation in the context of this 
project has been remarkable. I foresee only further progress in this 
relationship as this project moves forward.
    It is important to note that, in my 16 years with the Steering 
Committee, at no point has the City of Gallup attempted to insert its 
needs and priorities in front of those of the Navajo Nation. Rather, it 
has been a supporting partner, ensuring that its participation is 
mutually beneficial to the City and to its Navajo neighbors.
    As an example of this partnership, there has been a joint effort to 
provide municipal water supply to Navajo households bordering the City 
of Gallup on its east side. Past bureaucratic barriers to this service 
have been erased, and by this summer's end, those Navajo families will 
have running water for the first time.
    Another example is the multilateral partnership between the City, 
the State of the New Mexico, the Navajo Nation, the Indian Health 
Service and the Navajo Tribal Utility Authority to finance and build 
components of the Gallup regional water system, with the specific 
objective of moving water through the City's system to the neighboring 
Navajo communities adjacent to the City. The State has committed over 
$9 million to this initiative, which is being developed in accordance 
with the plans of the Northwestern New Mexico Rural Water Supply 
Project.
    The Navajo-Gallup partnership was further extended when the City 
concurred with the request by the Navajo Nation, the Governor's office 
and other agencies for State funding in support of urgently needed 
water infrastructure serving five rural communities in the northeastern 
sector of the Navajo-Gallup project service area. Over $15 million has 
now been committed by the State to what is referred to as the ``Cutter 
Lateral'' project, since this infrastructure will ultimately tie into 
and be served by the pipeline to be built under the Northwestern New 
Mexico Rural Water Supply Project.
    These regional system partnerships have generated broad commitment 
to the motto: ``Real water to real people in real time.''
    Realizing the shortages that are likely prior to the advent of 
surface water into the City's water supply, the City of Gallup has also 
risen to the challenge of the region's impending water crisis by 
exploring and implementing various initiatives to secure its water 
future--both leading up to and in conjunction with the completion of 
the Northwestern New Mexico Rural Water Supply Project.
      In 2003, the City sponsored a Town Hall on Water, co-
facilitated by the public policy group New Mexico First, at which 
participants adopted a consensus plan to establish Gallup as a model 
town in the American West in terms of its commitment to secure its 
water future and cooperate with its neighbors in the ``water commons'' 
shared by all residents in the region.
      Emerging from the Town Hall was the formation the Gallup 
Water Board, which assisted the City Council in the radical revision of 
the City's water rate structure in support of conservation and the 
generation of local financing for water infrastructure and future water 
supply.
      Another initiative was a partnership with the Bureau of 
Reclamation to study the feasibility of implementing a comprehensive 
wastewater recycling program utilizing reverse osmosis technology.
      Yet further, Gallup has pursued a permit to develop water 
supply in water fields east of the City formerly owned and developed by 
extractive industries.
      Finally, a Memorandum of Understanding is in its final 
draft stages between the City, the Navajo Nation and the Jicarilla 
Apache Nation, by which the parties will commit to ensure that the City 
is afforded legal access to a share of the water to be supplied by the 
Navajo-Gallup project.
    Within the overall scenario of the Navajo-Gallup project, the City 
of Gallup remains in full support of the project and of the water 
rights settlement which is its primary facilitating instrument. At the 
same time, the City is proactively developing a specific long-range 
financial plan to be able to afford its share of the cost of the 
project.
    The Economics analysis contained in the project's Planning Report 
and Draft Environment Impact Statement suggests that the City's ability 
to pay is fairly close to the threshold formula applied by the federal 
government in terms of median household income. The somewhat misleading 
conclusion that might be derived is that the City can readily afford to 
self-fund its share of the project.
    A number of factors mitigate against such a foregone conclusion:
      Gallup's status as a hub commercial center for a broad 
geographic area results in a unique pattern of impact on the City's 
infrastructure. Although the current municipal population is about 
22,000, the number of people moving around and doing business within 
the City may soar to between 70,000 and 100,000 people--especially on 
weekends and on ceremonial occasions. It is essential to understand 
that Gallup serves a broader service area than its municipal boundaries 
would indicate. Over 80 percent of the students in Gallup schools are 
Navajo. The Gallup Indian Medical Center serves the regional Native 
American population. Due to the lack of water service on the 
Reservation, area residents regularly use City laundry, car wash and 
other facilities that increase the demand for water. Higher rates 
resulting from the City's cost for participating in the new water 
supply project will be passed on to the low-income residents in the 
broader regional community, thus affecting the overall 
``affordability'' of the project.
      Although the influx of visitors generates a 
disproportionately high level of gross receipts tax revenues in the 
City, the City and surrounding County are severely limited in the 
development of property tax revenues, and the City is virtually land-
locked by public, non-taxable lands on all sides, for which 
compensation by such funds as Payment in Lieu of Taxes (PILT) is only a 
fraction of the revenue shortfalls actually occurring.
      Although Gallup's median household income is shown in the 
Economics report as only a shade or two below the ``affordability 
level'' of the project, yet this income figure is deceptive as well, 
since there is a large gap between the minority of well-to-do 
households and the majority of low and moderate-income households in 
the City. Not surprisingly, two-thirds of the City's residential water 
revenues come from the population group utilizing the lowest quantities 
of water, that is, fewer than 6,000 gallons per month. These lower 
water users are predominantly the City's lowest-income households. The 
City's inverted water rate structure provides some cost protections for 
these lower users, but these may be insufficient to keep rates within 
the affordable range for this population.
      The Economics analysis in the Final Report does not take 
into account the need for replacing aging infrastructure. Even with 
Gallup's new progressive water rate structure and at maximum bonding 
capacity, the City's funds are insufficient to meet even current 
operations, maintenance and replacement costs, much less to develop new 
infrastructure or participate in a new water supply initiative. Gallup 
presently has approximately 71 miles of water distribution piping 
installed prior to 1966, which will need to be replaced over the next 
40 years at an estimated cost of $42.4 million. In addition, a large 
portion of the remaining 157 miles of pipe currently in service will be 
40 to 60 years old at the time Gallup's cost share comes due.
      The City's stake with respect to the Settlement of the 
Navajo Nation's water rights in the San Juan River is clearly secondary 
to that of the Nation, the State of New Mexico and the Federal 
government. With respect to accessing a legal water supply, the City 
first course of action is to pursue a water source in consultation with 
the two Indian tribes involved in the project. The City's pursuit of 
the independent purchase of water rights in the San Juan River would be 
high in cost, high in controversy and low in feasibility at this point.
      It is the City's position, therefore, that it will need 
significant Federal funding support for its share of the project costs.
    The City is committed, nevertheless, to charting a strong financial 
course to meet the 25 percent threshold of its share of the project 
costs. One key piece of the strategy will undoubtedly be investment by 
the State of New Mexico in a portion of Gallup's share of the project 
costs. City, County, Tribal and Council of Governments representatives 
met recently with staff from the offices of the Governor and the State 
Engineer, and I was very encouraged by the spirit of collaboration in 
this regard. I will be working with the Governor's and State Engineer's 
Offices and with the State Legislature on a mechanism to specifically 
include financial commitments to Gallup over time.
    With regard to the City's won commitment to the project cost share, 
several options are currently under consideration with bond counsel, 
with a preliminary strategy report to be ready for review by mid-
August. However, until such factors as the cost of water, final 
operations, mai8ntenance and replacement (OM&R) and capital costs, and 
construction scheduling are determined, it will be difficult for Gallup 
to determine what its ultimate financial strategy will be. In any 
event, the approach being pursued is that, in partnership with the 
State of New Mexico and McKinley County, the city will design and 
implement a strategy to meet 25% of its project cost share.
    All in all, the Northwestern New Mexico Rural Water Supply Project 
represents a ``perfect storm'' of opportunity for the Federal 
government to meet the critical water needs of the people in this 
region of New Mexico, while settling the water rights claims of the 
Navajo Nation as an essential component of the overall initiative. The 
project's promise of ``real water to real people in real time'' forms a 
primary basis for the economic viability of the northwestern quadrant 
of New Mexico.
    The Steering Committee for this longstanding and critical project 
effort, along with the institutions I represent--the Northwest New 
Mexico Council of Governments and the New Mexico State Legislature--
urge your support for H.R. 1970, and by implication, for authorization 
of the Northwestern New Mexico Rural Water Supply Project. I 
acknowledge that the projected costs for this project are high, but we 
dare not delay any longer in meeting the human and economic needs 
represented in this initiative.
    For our Steering Committee, this worthy cause has been on our watch 
for a couple of decades, and we hope--now that it's on your watch as 
well--that you will not let this opportunity fail.
    Thank you for your most favorable and timely consideration of H.R. 
1970.
                                 ______
                                 
    Mrs. Napolitano. Thank you. Mr. Gregg Houtz, Deputy 
Council, Arizona Department of Water Resources in Phoenix, 
Arizona.

STATEMENT OF GREGG HOUTZ, DEPUTY COUNCIL, ARIZONA DEPARTMENT OF 
               WATER RESOURCES, PHOENIX, ARIZONA

    Mr. Houtz. Madame Chairwoman, members of the Subcommittee, 
thank you for the opportunity to present the views of the State 
of Arizona on H.R. 1970. H.R. 1970 is another step toward 
resolving the longstanding claims of Indian nations in this 
country. As the Chairwoman knows well, Arizona has tried to be 
a leader in resolving these through settlements. The concept of 
ending up with wet water versus a paper water right that you 
get in litigation is not acceptable either to Indian tribes nor 
to other water users. We want to see real projects.
    In this vein, we view this as a very important piece of 
legislation. The Navajo Nation is in three states and is the 
largest Indian tribe in the country. As a matter of fact, in 
Arizona it is the largest of all of our 21 tribes and is the 
largest in population and in land area. So we see this bill as 
both an opportunity as a great step in a national effort.
    We applaud the efforts of New Mexico and the Navajo Nation 
to come to settlement. We applaud the partnerships that they 
are forming very much like we have done in the past. However, 
in its present form H.R. 1970 has problems. We believe that it 
conflicts with certain provisions of the law of the Colorado 
River and the 1922 compact. We have outlined these in our 
submitted testimony, and we have offered legislative solutions, 
and we will work with committee staff here and in the other 
body to try and resolve these issues of the law of the river. 
These are very important to Arizona. We do not take it lightly.
    The compact, the Arizona v. California Supreme Court 
decree, the 1968 Act and other things in the law of the river 
protect Arizona water users. We do not take lightly ignoring 
those provisions. We have provided language that we think 
solves our issues in that regard.
    An opportunity exists here. The Navajo Nation sprawls three 
states. We have been in ongoing negotiations with the Navajo 
Nation for the claims in the little Colorado River and in the 
main stem of the lower Colorado River for over a decade. The 
main impediment to it has been money and a Federal commitment 
to provide money so that we can provide wet water to the Navajo 
Nation.
    We see this as an opportunity in that H.R. 1970 in title 2 
provides a unique funding mechanism that should be expanded and 
used to provide funding for other settlements across the west 
but more importantly maybe specifically for the Arizona 
portion. We are diligently working with representatives of the 
Navajo Nation to try and come to resolution of the issues and 
hope that we are part of this bill when it is finally passed.
    In the meantime though, should Congress choose not to wait, 
it is important that the issues raised in the Navajo Nation 
lawsuit against the Secretary on the operations of the Colorado 
River not be ignored. We find it hard to believe that Congress 
would approve this settlement yet leaving the states and the 
water users in the three lower basin states vulnerable to a 
lawsuit that would continue to go.
    We have just concluded over the last two years the historic 
agreement among the seven basin states on conjunctive use of 
the two main reservoirs and shortage sharing in the lower 
basin. If that lawsuit is still in existence when those 
programs go into existence next year, they will be included in 
the lawsuit. We do not see how it could not. So we implore 
Congress to consider requiring that the lawsuit be dropped 
before enactment of this legislation.
    In summary, we will continue to work with our friends in 
New Mexico to try and resolve these issues, and look forward to 
working with committee staff in this body and in the other body 
to come to a conclusion on dealing with the law of the river 
issue.
    [The response to questions submitted for the record by Mr. 
Houtz follows:]

           Response to questions submitted for the record by 
                        Gregg Houtz on H.R. 1970

 (HOUTZ) Mr. Houtz, Arizona is part of both the Lower and Upper 
        Colorado River Basin. Has water from the Upper Basin ever been 
        authorized to be transferred to the Lower Basin?
    ANSWER: The 1922 Colorado River Compact specifically states that 
the allocations made in Article III (a) and (b) to the Upper and Lower 
Basins were for exclusive use in each of those Basins. This is true for 
Arizona as well as the other states. Only once has Congress authorized 
an exception to Article III of the Compact to specifically grant a 
modification of this requirement (see 1968 Colorado River Project Act, 
43 U.S.C. 1523(d)). This provision would have accounted the water used 
for a power plant as part of the Central Arizona Project as Upper Basin 
water regardless of whether the location of the plant was in the Lower 
or the Upper Basin. This power plant is located near Page, Arizona, in 
the Upper Basin, and uses Upper Basin water. Because of this, the 
congressional exception was never exercised.
    It is true that the Upper Basin states transport water out of the 
Colorado River basin to users within their states that are located 
outside the Colorado River Basin, but there is no case where Colorado 
River water is transported between the Upper and Lower Basins. We 
believe the Compact prohibits transfers from the Upper Basin to the 
Lower Basin and that the water allocations were intended for the 
exclusive use within each basin. The Compact definition for the term 
``Upper Basin'' includes ``and also all parts of said States located 
without the drainage area of the Colorado River System which are now or 
shall hereafter be beneficially served by waters diverted from the 
System above Lee Ferry.'' The Compact negotiators recognized transfers 
out of basin such as the San Juan-Chama Project and others, which shows 
the negotiators' intent in using the ``exclusive use'' provision.
    Arizona fully supports the Upper Basin states' right to develop 
their allocations made under the Compact, but only insofar as they are 
consistent with the Law of River. Finding ways around the Compact that 
allow use of Upper Basin water in the Lower Basin, without first 
obtaining specific congressional recognition and authorization creates 
precedent for similar Compact violations in the future, thereby 
increasing the chance that Arizona will suffer the effects of a Lower 
Basin shortage. Under the 1968 Act the Central Arizona Project (CAP) 
and other post-1968 users are first to take shortages. CAP is a primary 
water source for the cities in the Phoenix and Tucson metropolitan 
areas. Congress should carefully weigh the equities before allowing 
such a change in the Compact. Arizona has offered language which would 
address our concerns, and allow the Northwestern New Mexico Project to 
go forward.
 (To WHOEVER) The Jicarilla Tribe is currently receiving funds for the 
        Jicarilla Apache Reservation Rural Water System rural water 
        project. How do the funds from this legislation relate to the 
        current project funds?
    ANSWER: Not applicable to Arizona.
 (To WHOEVER) Who is responsible for the operation and maintenance 
        costs? Who will own the infrastructure once it is completed?
    ANSWER: Not applicable to Arizona.
                                 ______
                                 
    Mrs. Napolitano. Thank you for your testimony. Mr. Gerald 
Zimmerman, Executive Director of the Colorado River Board of 
California, Glendale, California.

STATEMENT OF GERALD R. ZIMMERMAN, EXECUTIVE DIRECTOR, COLORADO 
        RIVER BOARD OF CALIFORNIA, GLENDALE, CALIFORNIA

    Mr. Zimmerman. Thank you, Madame Chairwoman, and members of 
the Subcommittee. I want to thank you for giving me the 
opportunity to provide testimony before this hearing on H.R. 
1970. I am going to confine my remarks to sections of the 
legislation that are of concern to the Board and its member 
agencies. First, I want the Subcommittee to know that from our 
initial review of H.R. 1970, the Board does not in any way 
oppose the Navajo Nation Gallup project, and it fully 
recognizes the value and importance of this project to the 
State of New Mexico and the Navajo Nation.
    However, the Board does want to ensure that legislation of 
this nature is consistent with the law of the river and is 
reflective of the broader concerns of the State of California. 
In this regard, the Board does have a number of comments on the 
proposed legislation. With respect to section 101, it is the 
position of the Colorado River Board of California that this 
legislation should be modified to provide that only water 
created through extraordinary conservation may be stored in the 
top water bank, and that this is the first water to be spilled.
    Regarding section 201[c][3], it provides that the 
completion of the Navajo Gallup project will be given priority 
for up to $500 million if the Federal share of the cost has not 
been otherwise provided by January 1, 2018. Since the 
Reclamation fund is made viable through the repayment of 
Reclamation projects from around the west, many of which are 
within California, the Board questions the fairness of 
providing to the Gallup Navajo project a priority position to 
receive up to half of all of the funds designated to be 
deposited in this new settlement's fund.
    Section 303 of H.R. 1970 essentially gets to the heart of 
the concerns of the Board regarding the law of the Colorado 
River and the need to be consistent with the 1922 Colorado 
River compact. One concern is the clear provision of authority 
to use water in the lower basin even though that water is 
diverted in the territory of the upper basin. That is above Lee 
Ferry.
    The Board believes that H.R. 1970 needs to specifically 
address first the diversion and use authority in the context of 
the 1922 Colorado River compact, and second the attributes of 
the water use in the lower basin, both within New Mexico and 
Arizona, need to be clearly defined. In the era of pipelines 
being proposed to transport water from the upper basin to the 
lower basin, it is imperative that precedent setting situations 
that will impact the law of the river in one form or another be 
appropriately addressed.
    In this regard, the transport of water from the upper basin 
into the lower basin within New Mexico is a rather significant 
matter but the further transport of that water into Arizona is 
an additional significant step. The Board suggests that 
legislation authorizing the transportation of water should be 
clear as to the attributes of the water to be used in such 
circumstances, and I will identify a couple examples.
    The source of the water including linkage to any other acts 
such as the Arizona Water Settlements Act, the priority 
position of that water supply, the U.S. Supreme Court decree 
accounting arrangement and any other important attributes such 
as the operation, maintenance and replacement costs that may be 
associated with that project such as you could use the central 
Arizona project if it is an attached diversion from that 
project.
    The Board recommends that section 303 of the bill be 
amended to provide this clear authorization and these points of 
clarification. In the alternative, authorization for the 
construction of facilities that would move water from the upper 
basin to the lower basin should be removed from H.R. 1970.
    In closing, Madame Chair and members of the Subcommittee, I 
want to reiterate that the Board does not oppose the Gallup 
Navajo project. However, it does want to ensure that this 
legislation is consistent with the law of the river and 
reflective of the broader concerns of California. Thank you.
    [The prepared statement of Mr. Zimmerman follows:]

         Statement of Gerald R. Zimmerman, Executive Director, 
            Colorado River Board of California, on H.R. 1970

    Madam Chairwoman, and Members of the Committee and Subcommittee, 
thank you for this opportunity to submit written testimony regarding 
H.R. 1970. Set forth below are initial comments regarding the 
provisions in H.R. 1970 from the perspective of the Colorado River 
Board of California.
    I am the Executive Director of the Colorado River Board of 
California (CRB), the agency in California created by State statute to 
protect California's rights and interests in the resources provided by 
the Colorado River and to represent California in discussions and 
negotiations regarding the Colorado River and its management. 
California's rights and interests in the water and power resources of 
the Colorado River System are vital to the State's economy. Seven 
counties in Southern California, with more than half of the state's 
population, receive water and hydroelectric energy from the Colorado 
River. All ten members on the CRB are appointed by the Governor.
    The CRB has reviewed H.R. 1970, and its companion bill S. 1171. 
From our initial review of the proposed legislation, CRB does not 
oppose the Navajo-Gallup Project; and it fully recognizes the value and 
importance of the Project to the State of New Mexico and to the 
residents of the Navajo Nation. However, the CRB does want to ensure 
that legislation of this nature is consistent with the law of the river 
and is reflective of broader concerns of the State of California. In 
that regard, the CRB has a number of comments on the proposed 
legislation, primarily from the perspective of the law of the Colorado 
River. These comments are listed in order of the topic's appearance in 
the legislation.
    1. Section 101--Top Water Bank--Arrangements of this nature are 
being utilized in various parts of the West where the reservoir 
circumstances facilitate this sort of interim water storage. However, 
in this situation the legislation does not clarify how the water to be 
stored in the top water bank must be developed. It is the position of 
the CRB that the legislation should be modified to provide that only 
water created through extraordinary conservation may be stored in the 
top water bank. In other words, water could only be stored if that 
water would have otherwise been beneficially used except for the 
implementation of extraordinary conservation measures and as provided 
in H.R. 1970, it should be the first water to spill.
    2. Section 102--Amendment of the 1963 Act--This section amends 43 
USC 615 jj, which was enacted in 1962 as a component of the Navajo 
Irrigation Project and San Juan-Chama Project authorizing legislation. 
Section 2 of the 1962 Act is eliminated and a much more detailed 
provision has been substituted. The CRB notes that the wording in 
Section 102, subpart (b), relating to priorities in times of shortages 
is not clear as to whether the first rights listed are to have priority 
over the others or are the first to be cut back. Clarification of this 
provision would be useful in obtaining a full understanding of the 
intention behind the proposed legislation.
    3. Section 201--Funding via the 1902 Act Reclamation Fund--This 
section of the proposed legislation provides a creative mechanism for 
funding implementation of settlement agreements and completion of the 
Navajo-Gallup Project. The CRB understands that Section 201 provides 
that $1.1 billion would be deposited into the treasury before it is set 
to terminate on September 30, 2030.
    Section 201 (c) (3) provides that completion of the Navajo-Gallup 
Project will be given a priority, for up to as much as $500 million, if 
the federal share of Project costs has not been otherwise provided by 
January 1, 2018. Since the Reclamation Fund is made viable through the 
repayment of reclamation projects from around the West, many of which 
are in the State of California, the CRB questions the fairness of 
providing to the Navajo-Gallup Project a priority position to receive 
up to one-half of all funds designated for deposit into the new 
settlements fund. Prior to taking a formal position on this section of 
the bill, the CRB will need to consider this matter further accounting 
for the likely needs of California projects that are linked to 
settlement agreements involving the United States. One approach may be 
to have the new fund be a source of revenue for the Navajo-Gallup 
Project should additional federal funding be necessary by 2018 on a 
basis of sharing with other deserving projects in the West, instead of 
with a priority as set forth in Section 201.
    4. Section 303--Delivery and Use of Water--This section of the bill 
gets to the heart of the concerns of the CRB regarding the law of the 
Colorado River and the need to be consistent with the Colorado River 
Compact of 1922. One concern is the clear provision of authority to use 
water in the lower basin even though that water will be diverted in the 
territory of the upper basin. H.R. 1970 needs to specifically address: 
1) the diversion and use authority in the context of the 1922 Colorado 
River Compact, and 2) the attributes of the water use in the lower 
basin both in New Mexico and Arizona.
    A related concern is with the use of such water in the territory of 
the lower basin within the State of Arizona so as to serve the 
community of Window Rock on the Navajo Reservation. The State of 
Arizona has asserted that such water will need to be viewed as a 
portion of Arizona's lower basin apportionment and should also come 
with certain attributes linked to the Central Arizona Project (CAP) 
such as priority date and repayment of project operations, maintenance, 
and replacement costs. Mr. D'Antonio for New Mexico has asserted that 
H.R. 1970 should ``leave open the determination of the source of water 
for use in Arizona'' and that accounting for the water as a diversion 
of CAP water would ``have to be agreed to by all basin states,'' which 
has not yet occurred. This issue needs to be resolved among the 
Colorado River Basin states and the agreed upon solution included in 
H.R. 1970.
    In the current era of pipelines being proposed to transport water 
from the upper basin to the lower basin, it is imperative that 
precedent-setting situations that will impact the law of the river in 
one form or another be appropriately addressed. In this regard, the 
transport of water from the upper basin into the lower basin within New 
Mexico is a rather significant matter, but the further transport of 
that water into Arizona is an additional significant step. The CRB 
suggests that legislation authorizing the transportation of water 
should be clear as to the attributes of the water to be used in such 
circumstances; for example, the source of water (including linkage to 
the Arizona Water Settlements Act if appropriate), the priority 
position of that supply, U.S. Supreme Court decree accounting 
arrangements, and any other important attributes such as project 
operations, maintenance, and replacement costs that may be associated, 
for example, with the CAP water supply. Thus, the CRB recommends that 
Section 303 of the bill be amended to provide these points of 
clarification. In the alternative, authorization for the construction 
of facilities that move water from the upper basin to the lower basin 
should be eliminated from H.R. 1970.
    If the Arizona position regarding the use of CAP-related water is 
adopted, the CRB also suggests that attention be given to what 
additional authority may be needed so as to clearly provide that CAP-
related water may be delivered by the Secretary to a portion of Arizona 
not contemplated as a part of the CAP service area at the time of its 
authorization in 1968.
    5. Section 306 (f) (3) and Section 302 (f) (3)--Application of the 
Endangered Species Act--These sections of the bill address the 
``application of the'' ESA, but it is unclear as to the intended effect 
of these provisions.
    6. The State of Arizona has taken the position that H.R. 1970 and 
S. 1171 should not be enacted without a parallel settlement of the 
rights of the Navajo Nation in Arizona, arguing that all Indian water 
rights settlements should be comprehensive, if possible. Although the 
CRB understands and appreciates the position of Arizona on this issue, 
the CRB is not prepared to advance a position on this specific issue at 
this time.
    Nevertheless, it is important to express our concern over the 
lawsuit filed by the Navajo Nation in 2003 in the United States 
District Court in Arizona. California agencies represented on the CRB 
have intervened in that litigation. That suit contains claims that 
challenge some very important lower basin water management programs. 
For example, the suit challenges a number of matters related to 
California's Quantification Settlement Agreement (QSA): 1) that the 
National Environmental Policy Act (NEPA) compliance process for the QSA 
was flawed; 2) that the Record of Decision associated with the 
Secretary's approval of the QSA and the Inadvertent Overrun and Payback 
Policy (IOPP) is flawed; 3) that the NEPA compliance process for the 
IOPP is flawed; and 4) that the NEPA compliance process for the Interim 
Surplus Guidelines was flawed.
    Similarly, the Navajo Nation has challenged the Arizona Water 
Banking Authority's interstate storage program and the federal 
regulations promulgated to facilitate that program. The Navajo Nation 
asserts these claims on the foundation that these kinds of water 
management actions have an impact on the Nation's claim to Colorado 
River water in Arizona and its eventual use of that water. However, in 
reality none of these actions or programs impacts the amount of water 
available to the Nation as a part of the Nation's federal reserved 
rights claims, as a practical matter (actual water supply) or in 
relation to the availability of Arizona's unused apportionment to 
satisfy the Nation's lower basin claims. This lawsuit presents a cloud 
over these important river management programs that are of benefit to 
the basin states. As a result, the CRB suggests that it be a high 
priority to obtain a dismissal of that suit whether in the context of 
the Arizona settlement, the New Mexico settlement, or both.
    In closing, I want to reiterate that the CRB does not oppose the 
Gallup-Navajo Project; however, it does want to ensure that 
legislation, such as H.R. 1970, is consistent with the Law of the River 
and is reflective of the broader concerns of the State of California. 
Additionally, the comments set forth above have been advanced on the 
basis of its initial review of the proposed legislation and the 
comments of others. As such, the CRB would like to reserve its 
opportunity to revise any of the positions advanced above and to add to 
its comments, if additional points of concern come out of this process.
    On behalf of the CRB, I want to thank the House Committee and 
Subcommittee for the opportunity to provide this testimony and for 
giving attention to the comments of the CRB. Should the subcommittee or 
committee require any clarification of these comments or additional 
information, you may reach me at (818) 500-1625, extension 308.
                                 ______
                                 

           Response to questions submitted for the record by 
                    Gerald R. Zimmerman on H.R. 1970

 (To Whoever) The Jicarilla Tribe is currently receiving funds for the 
        Jicarilla Apache Reservation Rural Water System rural water 
        project. How do the funds from this legislation relate to the 
        current project funds?
    Answer--Not applicable to the Colorado River Board
 (To Whoever) Who is responsible for the operation and maintenance 
        costs? Who will own the infrastructure once it is completed?
    Answer--Not applicable to the Colorado River Board
                                 ______
                                 
    Mrs. Napolitano. Thank you for the testimony, and now I 
move on to the question and answer. Before I start, there are a 
couple of little items that I wanted to touch base on. There 
are three renderings in the back of the room by children in 
regard to the water delivery, and I am going to enter into the 
record copies of those so that people will realize what it 
really means to those children. I think that is a very 
important point to make. So without objection I will order that 
to be.
    Then, Mr. Houtz, you mentioned you wanted Arizona to be 
part of the agreement. How close are you to being able to reach 
consensus so that it possibly could be added if that were the 
case?
    Mr. Houtz. I think it depends on whether the money is 
available. We have been meeting on a fairly regular basis. We 
have a meeting scheduled with the Navajo Nation in about three 
weeks, three and a half weeks, where they will submit another 
formal proposal to us. I cannot go into details because of the 
litigation.
    However, the funding is the key, and if funding is 
available I am sure that we can reach an agreement. It is very 
hard to come up with funding in this Congress with so many 
things going on, and we think that the approach that New Mexico 
and the New Mexico delegation has taken is a very creative one, 
and we want to be part of it.
    I cannot really put a timetable on it but if we can solve 
the funding issue I think we could be done quickly. We have 
been working on all the other issues over the years and can 
conclude quickly after that.
    Mrs. Napolitano. It is my understanding that the lower 
Colorado region is already over appropriated. Where will you 
get the water for Arizona?
    Mr. Houtz. As we point out in our testimony, Congress 
reserved a portion of the water that was transferred to the 
Secretary under the Arizona Water Settlements Act, and they 
reserved 6,411 acre feet of the CAP water to be reserved for an 
Arizona Navajo settlement for delivery to Window Rock. So we 
believe that at least the Window Rock portion has already been 
designated out of the Arizona Water Settlements Act, and we 
have offered up a portion of the other water reserved under 
that Act to the Navajo Nation for settlement of the rest of the 
claims in Arizona. There is a question of the firmness and the 
ability to deliver that, and we are negotiating with them on 
that.
    Mrs. Napolitano. Thank you.
    Mr. Houtz. But it would be out of existing sources and 
existing allocations.
    Mrs. Napolitano. If it were not for the fact that the 
Navajo Nation has been waiting for decades, I would tend to 
agree with many of the points that you have made but that would 
mean holding off for another decade probably, and that just 
does not seem quite the thing to do or the humane, how would I 
say, the legal thing to do.
    Mr. Houtz. Madame Chairwoman, if we do not come to at least 
great progress on an Arizona settlement, we will be in 
litigation in October. The stay that the Court has granted us 
is only until October 12 of this year. So I am not thinking 
that we are waiting a decade. I think we are waiting a number 
of months to see where we are, and if we are not negotiating we 
will be in Court litigating.
    Mrs. Napolitano. And you have been in contact with the 
Senate and the authors?
    Mr. Houtz. Yes. Last month the Senate Energy Committee had 
a hearing on this. We have been in close contact with their 
staff over there.
    Mrs. Napolitano. Mr. Shirley, comment?
    Mr. Shirley. Madame Chairwoman, I think the Navajo Nation 
and the State of New Mexico are ready to move forward at this 
point with H.R. 1970, and we would like to see it legislated 
and acted upon and monies put into it ASAP. Like you said, 
Madame Chairwoman, we have waited for a long time, and now that 
we are here we really need to be moving forward.
    I think the settlement that we are negotiating with Arizona 
is going to take--I agree with you--more years. I do not think 
it can be negotiated and settled in short order. So I would 
like to see as President of the Navajo Nation that we move 
forward with this legislation H.R. 1970. Thank you.
    Mrs. Napolitano. What about your members in Arizona? Are 
they in agreement?
    Mr. Shirley. Yes, I believe so. I have some legislators 
representing the Navajo Nation council here with me. The Navajo 
Nation council is in full agreement with what we are doing. 
They are in full support, yes.
    Mrs. Napolitano. And I understand that the Navajo Nation 
has waived nearly half of their water claims in the settlement 
in exchange for water infrastructure. What other options do you 
have if this legislation is not passed?
    Mr. Shirley. If it is not passed, I think litigation is the 
thing that looms, and of course as President I am not one to 
fight anybody. I think the goal of this is to settle it. We 
have with the State of New Mexico, the different users of the 
water, and these lawsuits, it takes millions of dollars, and 
rather than putting it in fighting we need to put it into 
infrastructure and serving the people. I think we have come a 
long ways toward settling this, and I think we need to get it 
on the books and get it behind us.
    Mrs. Napolitano. Thank you. Mr. Udall.
    Mr. Udall. Thank you, Madame Chair, and thank you for your 
interest in this. I just want to thank you once again for 
holding this hearing and your interest in it, and as you 
pointed out, I mean, the real issue here is children and 
children growing up like everybody else. Let me first thank all 
of the panelists for your testimony today. Patricia Lundstrom 
and President Joe Shirley and Jim Dunlap on the New Mexico side 
have done an awful lot to move this forward, and this piece of 
legislation had a large, large number of people that have 
worked and these three have been out there on the front, and I 
just thank you for your hard work and thank you for your 
leadership and also Mr. Houtz from Arizona and Mr. Zimmerman 
for your interest in trying to work things out here.
    These pieces of art work from the children of Lake Valley 
School I think really say it all. You know these young people 
want to have water like everybody else, and I think that is the 
point, Mr. Johnson, that we are trying to get across to this 
Administration. I am happy you did not read your statement 
today because it is just full of inconsistencies, and it would 
fly in the face of what I think is a very good, positive 
settlement, and I am very disappointed in the Administration's 
position.
    I cannot tell you that too strongly. If I expressed it as 
strongly as I felt, we might not have a chance to bring you 
around on this. So I just hope that you will take a look at 
this in terms of the big picture, and the first question I 
would like to ask you, Mr. Johnson, have you been to the Navajo 
reservation?
    Mr. Johnson. Yes, I have.
    Mr. Udall. Yes. And have you seen the situation out there? 
Have you lived in a hogan and done like 70, 80,000 Navajos are 
where you have had to haul water to cook and to wash and 
prepare your daily needs? Have you kind of imagined how that 
would be?
    Mr. Johnson. I have not lived on the reservation certainly 
but I have----
    Mr. Udall. Well we might like to host you out there for a 
day if you would like to come and get a real feel for the 
situation on the Navajo reservation. Do you think there is any 
other group of this magnitude that is in this water situation 
in the country? I mean, you look at the water situation for the 
whole country where you have kids that are living in a 
situation where they do not have water, where their families 
have to haul water, where there is probably a high level of 
unemployment, these kinds of things. Is there a water situation 
like this anyplace else in the country?
    Mr. Johnson. Let me go back to your previous question. 
While I have not actually lived on the reservation in any of 
the homes, I have visited there, and I have personally seen the 
water conditions on the Navajo Nation, and in my previous job 
the Navajo Nation was part of the region of the Bureau of 
Reclamation that I worked with, and so I am familiar with the 
issues of the Navajo Nation and the needs for water supplies, 
and I agree that certainly the needs are very great.
    There are lots of other tribes and Indian reservations 
across the west where water is an issue, and I do not know that 
there is one that is as big. The Navajo Nation is certainly the 
biggest Indian tribe I believe in the west. So I do not know 
that there are any as big as the Navajo Nation but there are 
certainly others that are in need of water supplies in a 
similar way.
    Mr. Udall. Do you think that there is an obligation on the 
part of the Federal government when you have the treaty that 
President Shirley talked about where we agreed to really help 
them build a permanent reservation? I do not see how you build 
a permanent reservation without some kind of water supply. I 
think you doom their economic development and their daily 
living if you do not have a water supply situation. Would you 
agree this would be something to fulfill the treaty obligations 
and that it is long overdue at this point?
    Mr. Johnson. I do not know that I am in a position to talk 
about what the formal obligations of the United States are. I 
am not familiar enough with that law and those provisions of 
the treaty to try to answer that.
    Mr. Udall. Well let me ask a little more specifically here 
because your objections seem to focus on--I noticed my time is 
up, Madame Chair.
    Mrs. Napolitano. That is OK.
    Mr. Udall. Let me focus here on your Administration's 
public support for what is called the Rural Water Supply Act of 
2005. You know you have publicly been out there. That is a law 
that says that in rural water supply systems the Federal 
government steps up to the plate and pays 75 percent which is 
what is in this piece of legislation. So I think with your 
position on the one hand which is very different than many 
other Administrations in terms of water settlements, and then 
your position on rural water supply in this particular act just 
do not fit with me. So, I mean, can you explain to us how you 
rationalize that with the enormous needs that are out there?
    Mr. Johnson. Well it is true that we have a Rural Water 
Supply Act that was passed. Was it last year? Yes, at the end 
of the last Congress that authorized Reclamation to work with 
rural areas in planning and assessing the needs for water 
supplies in the west. That legislation calls for us to develop 
criteria under which we would administer that program, and we 
have not yet developed that criteria.
    We anticipate that that would be developed by the end of 
2008, and so until we have got that criteria in place I do not 
think there is any basis for us to judge how this Act and how 
this settlement would fit under that criteria. I do not think 
we are saying that it would or it would not be viable under 
that criteria. I am just saying that we have not developed the 
criteria, and there is no basis for us to make that judgment at 
this time.
    Mr. Udall. If you are going to wait on the development of 
the criteria until the end of 2008, you all are going to be out 
of office. Your Administration is gone, and you have not made a 
step forward to try to help us get this legislation passed and 
in a position that we can start helping people with water, is 
that not right? If you are going to wait.
    It seems to me at a policy level in the department if you 
have made the decision that rural water situations it is OK for 
the Federal government to weigh in and pay 75 percent then I do 
not see why you cannot be given instruction or somebody in the 
department cannot say let us start working on the settlement 
and try to get these things worked out.
    Mr. Johnson. Well I think that you know I mentioned in my 
oral testimony that we met yesterday, and we have scheduled 
next week more discussions with the state and the Navajo 
Nation. I think that some of those things are part of what is 
being talked about in those discussions. So I think we are 
interested in working with the Navajo, and I do not know that 
the development of our regulations on rural water necessarily 
precludes what might happen in a settlement of the tribe's 
Indian claims.
    I mean, there are some difficult issues associated with 
this settlement. The cost and I think the funding mechanism are 
the primary ones that we have concerns about but there are 
others such as the reimbursement of the other parts of the 
project other than the tribal part, and those are part of what 
I think we are talking to the Nation and the state about in 
these discussions.
    Mr. Udall. Madame Chair, you have been very generous. I 
know you have other questions.
    Mrs. Napolitano. We have a vote pretty soon so you better 
wrap it up.
    Mr. Udall. OK. Let me ask about your understanding as far 
as other entities being involved because I know, Mr. Johnson, 
part of your testimony dealt with the idea that there were not 
adequate or significant contributions. Are you aware, as Mr. 
Dunlap said, that the State of New Mexico and Governor 
Richardson in past legislation, they have talked specific 
amounts? I mean, I have seen amounts from $75 million and up in 
terms of making contributions to this, and I am sure if it was 
a critical part that they would be willing to step up to the 
plate further.
    So I think it is really important for you to let us know in 
terms of numbers what is needed there in terms of moving this 
along. I mean, do you have any specific things you can tell us 
right now in terms of what you think is an adequate 
contribution in terms of the other parties to a settlement like 
this?
    Mr. Johnson. We are aware of New Mexico's proposal for 
contributions. I am not in a position today to be able to give 
you an answer on what will be required. I am just not in a 
position to answer that now. I think that will be something 
that would be talked about in the discussions.
    Mr. Udall. OK. Well Madame Chair, thank you. I want to 
thank you very much for holding the hearing, and I know about 
your sympathy for children in this kind of situation. Because 
we have the votes and all of that, I hoped to go into more 
detail with some of the other witnesses, but I hope that we can 
submit some of our questions for the record and have the 
witnesses answer them. I look forward to visiting and spending 
significant time out there in New Mexico to assure the Federal 
government that New Mexico is fully behind this, and we hope 
Arizona will also join us along the way, and thank once again 
Mr. Dunlap and President Joe Shirley and Patricia Lundstrom and 
all the panel.
    Mrs. Napolitano. Thank you, sir.
    Mr. Udall. Thank you.
    Mrs. Napolitano. Commissioner, do you think some of those 
questions might be answered in writing?
    Mr. Johnson. Certainly we will respond to any questions 
that you submit. I am not sure that we may be able to go 
because we are in discussions. I am not sure how far, how much 
detail we will be able to provide in writing but certainly to 
the extent that we have information we will respond as best we 
can.
    Mrs. Napolitano. Clarify at least some of the questions 
that some of the members may have.
    Mr. Johnson. Well I think particularly the question that 
Congressman Udall was asking about what is an acceptable cost 
share, I think I do not know what our timeframe is for 
establishing that. Certainly we will respond to that as best we 
can in writing, and I just do not want to commit to a lot of 
specifics as it relates to that.
    Mrs. Napolitano. You are the Commissioner.
    Mr. Johnson. Yes, I am, but I work with a lot of other 
people on these issues as well including Mr. Ragsdale, Director 
of the Bureau of Indian Affairs, and certainly others as well.
    Mrs. Napolitano. Understood, and I know how it runs. That 
is precisely why we want it for the record.
    Mr. Johnson. I understand.
    Mrs. Napolitano. In page 4 of your testimony you indicate 
that the CNP provide a flexible framework to evaluate the 
settlement but then you only focus on the underlying Federal 
liability in discussing the appropriate Federal contribution. 
The CNP, however, specifically talk about Federal and non-
Federal exposure plus Federal trust or programmatic 
responsibilities as a measure of a Federal contribution. The 
CNP also refers to the overall value of the tribal claims to 
water. Is the Administration trying to reinterpret or amend the 
CNP in an attempt to reduce the Federal contribution to Indian 
water rights settlements?
    Mr. Johnson. If I could, Madame Chairman, I would like to 
defer that question to Director Ragsdale.
    Mrs. Napolitano. Thank you. Mr. Ragsdale.
    Mr. Ragsdale. Thank you, Madame Chairwoman. I thought I was 
going to get off completely. The short answer to your question 
is no.
    Mrs. Napolitano. Explain please.
    Mr. Ragsdale. We are not trying to reinterpret the criteria 
and procedures that were published in the Federal Register in 
1990 and subsequent Administrations have endeavored to follow 
since with regards to all of the water rights negotiations with 
Indian tribes.
    Mrs. Napolitano. OK. Well that is interesting. I will take 
that into consideration. I guess partly my concern in hearing 
how long it has been before something of this nature has to be 
brought up to Congress for action--I am talking about water 
deliveries and I understand that there are many other tribes 
that might not have water delivery--is it possible that the 
Bureau of Indian Affairs may bring to the Congress other 
situations in the future so that we do not have to go through 
protracted discussions and be able to determine whether or not 
we can start setting aside funding to be able to provide 
potable water to people in the United States that should have 
had it a long time ago?
    Mr. Ragsdale. Well my understanding is that there are five 
specific negotiations ongoing in New Mexico right now with the 
Pueblo tribes. I think in Commissioner Johnson's and my 
statement we make reference to that, and that was one of the 
things that the Administration believes that should be taken 
into account in concern with this one.
    Mrs. Napolitano. Thank you. I will probably put one of the 
questions to your administration, sir. Mr. Houtz, could you 
please clarify a previous answer? Are you saying that in order 
to receive water under this settlement the Navajo Nation must 
give up some of its legal claims to water in Arizona?
    Mr. Houtz. Our reading of what Congress passed in the 
Arizona Water Settlements Act is that if the water is to be 
made available for Window Rock under that Act that they have to 
come to a settlement with the State of Arizona on the Arizona 
claims. That might not answer all of your question. I am not 
sure I understood all of your question. We believe that they 
need to waive and release their claims to the main stem 
Colorado River for us to enter into a settlement on the Arizona 
side of the lower Colorado River basin on the reservation.
    Mr. Shirley. Let me perhaps shed a little light on that. In 
this Settlement Act, I believe any water that is diverted 
across the Arizona state line has to be settled separately and 
completely with Arizona and the Navajo tribe. It has nothing to 
do with we are not going to deliver any water across the 
Arizona line until Arizona and Navajo Nation reach an agreement 
on that, and I would remind Arizona that the infrastructure 
that we are asking for in this project to put the pipeline down 
to deliver some of Arizona's entitlement water to the Navajo 
tribe is a great benefit for the State of Arizona, and while I 
listened to Arizona and California both in their concerns about 
the law of the river, certainly New Mexico will follow the law 
of the river, and we will negotiate with them in those things 
but we do not believe that, as they will not believe that we 
should have any hold on any negotiations of the use of their 
water within California or Arizona.
    That is their water. They are entitled to work that out as 
we are in New Mexico but we will work with them any way we can. 
Thank you.
    Mrs. Napolitano. Thank you. Just a last question. I think I 
might have to wrap this up but, Mr. Johnson, are Mr. Zimmerman 
and Mr. Houtz' concerns regarding the law of the river 
warranted, and what are your thoughts?
    Mr. Johnson. I think that there are pieces of the 
settlement that does require clarification under the law of the 
river. I think that as a practical matter nobody is harmed. I 
don't mean physically. I mean, there is nobody that is being 
harmed by what is being proposed. However, I think that there 
are some places where what is being done is inconsistent with 
the law of the river as it currently exists.
    I think that is something that can be worked out. I think I 
have heard the states say that there are ways to develop 
language that would go in the legislation that could satisfy 
folks' concern there, and I--like we usually do--encourage the 
states to get together and work that out. I think it is 
something that is solvable.
    Mrs. Napolitano. Well I would hope that they would sit and 
work with all the parties to be able to ensure that everybody 
is understanding why it was formulated and how it benefits 
everybody. With that, just a couple more comments I would like 
to tell Ms. Lundstrom, that I like your statement of real water 
to real people in real time, and real wet water since we do 
communicate that in terms of paper and water, real water. It is 
really the wet water that I found out and I am still learning 
so I was very interested in your motto.
    Ms. Lundstrom. Thank you, Madame Chair. We will make that 
correction on our testimony.
    Mrs. Napolitano. That is just a comment because I am 
hearing wet water versus water, and to me water is supposed to 
be this not just comments and not just paper. With that, I 
would like to be able to conclude the Subcommittee's 
legislative hearing on H.R. 2515, the Lower Colorado River 
Multi-Species Conservation Act, and H.R. 1970, the Northwestern 
New Mexico Rural Water Projects Act.
    I thank all of the witnesses for coming here today and 
offering their perspectives on both of these bills. Your 
comments, testimony and expertise has been very helpful. Under 
committee rule 4[h] additional material for the record should 
be submitted within 10 business days, business days, after the 
hearing, and I would appreciate the cooperation of all 
witnesses in prompt response and reply to any questions that 
have been put to you that were not answered.
    With that, I would like to thank you and all the people for 
being so kind and accommodating. The hearing is adjourned.
    [Whereupon, at 12:23 p.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

    [A statement submitted for the record by Elston Grubaugh, 
Acting General Manager, The Imperial Irrigation District, on 
H.R. 2515 follows:]

 Statement submitted for the record by Elston Grubaugh, Acting General 
        Manager, The Imperial Irrigation District, on H.R. 2515

    Madam Chairwoman and members of the committee and subcommittee, 
thank you for the opportunity to submit written testimony regarding 
H.R. 2515, concerning the Colorado River Multi-Species Conservation 
Program (MSCP). The MSCP is an exceedingly important program to water 
and power users in southern California and therefore we urge you to 
strongly support H.R. 2515 as it moves through the Congress.
    I am the acting general manager of the Imperial Irrigation District 
(IID). IID is the largest irrigation district in the United States in 
terms of water volume used. IID holds a right to almost three-fourths 
of California's 4.4 million acre-feet (maf) apportionment to the 
Colorado River. Growers within IID produce crops worth more than a $1 
billion a year, including much of the winter vegetables consumed 
throughout the United States. Because of its dependence on the Colorado 
River as its sole source of water supply, IID is very concerned about 
the MSCP and this effort to obtain congressional approval of this 
vitally important program.
    I want to emphasize that the Colorado River is very important to 
the citizens of California as a whole. As you know, Colorado River 
water is used to supply water to about 20 million people in southern 
California and supplies water to hundreds of thousands of acres of 
fertile farm land in that region. Although California is blessed with 
more abundant water supplies in the northern part of the state, 
providing water to the arid southern part of California has been a 
challenge throughout its history. Now that southern California is 
clearly dependent on the Colorado River as a source of supply, it is 
essential to see the MSCP as an important insurance policy that will 
hopefully protect California's Colorado River water and power users for 
decades into the future.
    Stated differently, part of the effort behind the MSCP is to avoid 
the kinds of Endangered Species Act (ESA) disasters that have unfolded 
in the Klamath region of California and Oregon, on the Snake River 
system in the northwest and on the Rio Grande system in New Mexico. In 
this context, it is important for the Congress to recognize that 
California and the water and power agencies in our state have chosen in 
this situation to work within the structure of the ESA, as opposed to 
attempting to avoid its often burdensome regulatory requirements.
    With the goal of protecting California's water and power supplies 
in mind, it is critical to take into account recent events occurring 
within California that have caused what some are calling a water 
crisis. With population growth and global warming as a backdrop, the 
Bay Delta region now faces a host of problems that are also tied to the 
ESA and the California Endangered Species Act (CESA). Facing the loss 
of a substantial supply of water from northern California via the 
California aqueduct, urban southern California must now brace for a 
very serious circumstance in 2008 and beyond. The significance of this 
water crisis for California cannot be overstated. It is therefore 
fundamental, in our view, to pay special attention to those areas in 
which we can bring security to the water supplies that feed southern 
California. In simple terms--that is the main purpose of the MSCP. In 
essence the MSCP is an insurance policy that protects southern 
California's use of Colorado River water, in the context of the ESA, 
for a period of 50 years. In light of recent ESA developments around 
the West, this form of protection for southern California should be 
viewed as an absolutely essential action based on sound public policy.
    We recognize that some have suggested federal legislation to 
support the MSCP is not needed. In our view this is a mistaken 
perspective. It is the position of IID that federal legislation is 
indispensable. Here is a brief summary of the more important reasons 
for this legislation.
    1. Authorization for appropriations--IID is familiar with the 
federal legislative process and with the annual difficulty of 
developing an approved federal budget. In this situation the MSCP 
agreements provide for 50 percent of the program funding to come from 
the federal government, via the Bureau of Reclamation. Even if 
Reclamation has been successful in obtaining appropriations for these 
purposes in recent years, MSCP participants like IID want the security 
of an authorization of appropriations for this program. Given the long-
term contractual financial commitment of the non-federal agencies and 
states, requesting a parallel commitment from the federal government is 
not unreasonable. This is a significant long-term federal program--
eventually costing more than $1 billion--that deserves the security of 
an authorization for appropriations.
    2. Cost sharing--the MSCP agreements provide for a 50/50 cost-
sharing arrangement between the federal and non-federal parties. IID 
sees this as a fair arrangement, but to date that arrangement is only 
supported by the commitment of federal executive branch officials. 
Again, this is a long-term, expensive program that is of critical 
importance to the non-federal parties like IID. Something as important 
as the 50/50 cost-share arrangement should be blessed by the Congress.
    3. Authorized program for the Bureau of Reclamation--the MSCP is to 
be implemented and managed on a day-to-day basis by the Bureau of 
Reclamation. IID is comfortable with that arrangement and, indeed, IID 
has confidence that Reclamation will do an excellent job in 
implementing the MSCP. Nevertheless, IID is aware of questions that 
have been asked about Reclamation ``mission creep.'' In other words, in 
the light of evolving times the mission of the Bureau of Reclamation is 
also evolving. But some Members of Congress have suggested that 
substantial changes in the mission of Reclamation should be approved 
and sanctioned by Congress. IID agrees. The MSCP is a species and 
habitat restoration program. It is not the construction of a dam or 
canal or other such water supply feature--which is viewed as the 
original mission of the Bureau of Reclamation. In order to avoid any 
confusion over the 50-year period of this important ESA program, it 
will be very helpful for the Congress to expressly empower Reclamation 
to carry out this program and to implement the MSCP in accordance with 
the program documents.
    4. MSCP water uses--the MSCP legislation provides authority for the 
Secretary of the Interior to enter into an agreement with the three 
lower basin states of California, Arizona and Nevada in order to 
legally support the kinds of water uses that will be essential for its 
implementation. Under the authority of the Boulder Canyon Project Act 
(43 USC 617 et. seq.) the secretary has issued contracts for the use of 
water in the lower basin states. Those contracts routinely provide that 
the use of water will be for domestic or irrigation uses, or both. But 
here the use of water will be for the maintenance of protected species 
and for the maintenance of habitat. The result is that there could be 
tension between the underlying legal underpinnings of water acquired 
for MSCP program purposes and the unique nature of the MSCP water uses. 
In other words, without this provision in the MSCP legislation, a 
critical component of the MSCP program--application of water for the 
needs of species and habitats--could be on questionable legal ground. 
IID has personal experience with this issue in the context of the 
Quantification Settlement Agreement (QSA) and differing views as to 
what water uses might be allowed under certain water delivery 
contracts. IID strongly urges that reasonable action be taken to avoid 
that problem in this situation.
    5. Waiver of sovereign immunity--the MSCP legislation provides for 
a narrow waiver of sovereign immunity to enforce program agreements. As 
you know, the MSCP is a combination of compliance under Sections 7 and 
10 of the ESA. Section 10 is that part of the ESA that applies to non-
federal parties and provides for the development of long-term habitat 
conservation plans (HCPs). The MSCP is in essence an HCP under Section 
10 of the ESA. Part of the Section 10 HCP process is the execution of 
an implementation agreement between the U.S. Fish and Wildlife Service 
and the non-federal parties helping to fund the HCP. That agreement is, 
of course, a binding contract between the parties and in this case 
involves a great deal of money and lasts for a period of 50 years. The 
implementation agreement also specifically provides that the remedy of 
money damages is unavailable to any of the parties. Under these 
circumstances IID believes that it is reasonable to request the 
enactment of a waiver of sovereign immunity so that the non-federal 
parties have a clear opportunity for judicial enforcement against the 
Fish and Wildlife Service should this be necessary within the 50-year 
program term.
    Along with its non-federal MSCP partners, IID has devoted more than 
10 years and considerable resources to the development of the MSCP. Now 
IID faces substantial annual financial payments to help fund the MSCP. 
Even with that burden IID sees the MSCP as a very beneficial and well-
structured program that is critical to its long-term plans to provide 
security for its water and power resources under the federal ESA and 
CESA. IID remains committed to its support of the MSCP, but the 
district would like to see that commitment matched by the congressional 
approval of H.R. 2515.
    The reasons outlined above clearly demonstrate that there is a 
strong need for federal legislation in this regard. IID therefore urges 
the committee and the full House to enact this important legislation. 
Should the subcommittee or the committee require any clarification of 
these comments or additional information, please contact Mr. Brad 
Luckey at (760) 339-9785. Thank you again for the opportunity to submit 
this testimony.
                                 ______
                                 
    [A statement submitted for the record by Herbert R. 
Guenther, Director, Arizona Department of Water Resources, on 
H.R. 1970, follows:]

Statement of Herbert R. Guenther, Director, Arizona Department of Water 
       Resources, Representing the State of Arizona, on H.R. 1970

    Madam Chairwoman and Members of the Subcommittee,
    Good morning and thank you for the opportunity to present the views 
of the State of Arizona on H.R. 1970, the ``Northwestern New Mexico 
Rural Water Projects Act of 2007''.
    H.R. 1970 represents another important step toward the settlement 
of long standing water rights claims held by the United States 
government on behalf of American Indian Tribes. The Navajo Nation is 
the largest Tribe in Arizona measured both in terms of population and 
land area. The Navajo Reservation lies within the boundaries of three 
states: Arizona, New Mexico and Utah. It also lies within one of the 
most arid regions of the United States and the lack of water 
development and infrastructure has created a great hardship on the 
Navajo Nation's residents, both in terms of economic opportunity and 
general lifestyle. The geography of the Reservation is also complicated 
in a hydrologic sense because it encompasses land which is located in 
both the Upper and Lower Colorado River Basins.
    H.R. 1970 contains provisions that will greatly aid the portion of 
the Navajo Reservation within New Mexico and, potentially, within a 
portion of Arizona. Arizona is supportive of the efforts of the State 
of New Mexico and the Navajo Nation in completing a water rights 
settlement agreement. We are supportive of the provisions of H.R. 1970 
that create a funding mechanism to ensure that necessary water 
development projects will be constructed in a timely manner. We are 
supportive of the creative efforts of the New Mexico congressional 
delegation to ensure that there will also be non-Indian beneficiaries 
who will receive water from the rural water projects, and we are 
generally supportive of the opportunity for the State of New Mexico to 
make full use of its Upper Colorado River Compact entitlement. The 
Committee should remember that the San Juan River is part of the 
Colorado River system as defined in the 1922 Colorado River Compact 
(1922 Compact) approved by all seven Colorado River Basin States. In 
this regard, programs and settlements in the San Juan Basin affect the 
Colorado River as a whole, and vice versa.
    While generally supportive of this settlement, we cannot support 
H.R. 1970 as it has been introduced because we have several concerns 
about the implications of certain provisions to the existing ``Law of 
the Colorado River,'' and about the provisions that relate to uses of 
water from the Northwestern New Mexico Rural Water Supply Project 
(Navajo-Gallup Pipeline Project) within Arizona and in portions of New 
Mexico located in the Lower Colorado River Basin. Specifically, as 
introduced, H.R. 1970 would violate provisions of the 1922 Compact 
related to the use of Colorado River water allocated ``exclusively'' to 
the Upper Basin to be used in the Lower Basin. The bill does not make 
provisions for the proper accounting of water deliveries under the 
Compact at Lee Ferry. H.R. 1970 does not specify how the accounting and 
delivery of water for tribal use in Window Rock, Arizona would be 
handled. H.R. 1970 would also set a precedent in that it would 
subordinate Arizona's share of water in the Lower Basin of the Colorado 
River to allow new uses in the Lower Basin.
    Arizona and Arizona water users believe there is an opportunity to 
provide even more certainty for the Navajo Nation and the Hopi Tribe by 
including additional Titles which will settle water rights claims 
within the Lower Mainstem Colorado River and Little Colorado River 
basins within Arizona. The two Tribes are actively participating in 
ongoing negotiations with governmental and non-governmental interests 
in those basins. We are optimistic that the parties will complete a 
water rights settlement agreement in a timely manner so that H.R. 1970 
can be amended to become a more comprehensive solution. Therefore, we 
believe Congress should not take final action on H.R. 1970 until we 
have a chance to see if Arizona tribal and non-Indian parties can 
achieve this Arizona settlement goal.
    Additionally, an impetus for Arizona (as well as governmental and 
non-governmental entities in California and Nevada) to negotiate with 
the Navajo Nation is a direct response to the Navajo Nation lawsuit 
against the Secretary of the Interior about operation of programs on 
the Colorado River, including interim surplus guidelines, interstate 
water banking, overrun and payback provisions, certain Colorado River 
allocations, and protections of Lakes Mead and Powell. This 2003 U.S. 
District Court lawsuit has been stayed pending negotiations among the 
parties over Navajo Nation Colorado River claims. The lawsuit is a 
cloud over the programs to conserve and deliver Colorado River water to 
all the Basin States; threatening operations that benefit all seven 
Basin States. It is a logical conclusion that the recent historic 
agreement of the Seven Basin States of the Colorado River on shortage 
guidelines and the coordinated operations of Lakes Mead and Powell 
would also be challenged. Failure of that new agreement could mean 
years of dispute among the States. Of course a successful Arizona water 
rights settlement would remove this cloud. Therefore, we believe that 
Congress should not take final action on H.R. 1970 without a resolution 
and dismissal of the Navajo Nation lawsuit concerning the Colorado 
River.
    Title II of H.R. 1970 creates the Reclamation Water Settlements 
Fund. This Fund will be used to construct project features that are 
required to implement a congressionally authorized settlement 
agreement. The State of Arizona is supportive of the concept for 
funding that is described in Title II. However, we believe that the 
funding need is worthy of even greater consideration. Indian water 
rights settlements are being actively negotiated throughout the United 
States. Funding of these settlement agreements is the single greatest 
impediment to their successful completion. We believe it is time for 
Congress to address the funding issue on a more comprehensive basis.
    Many of the water rights being contested throughout the West are 
rights that were ``reserved'' by the United States at the time of the 
creation of the Indian reservations. In many instances, the United 
States has failed to fulfill its intent in reserving that water for the 
Reservations and has left the Tribes without the means to create a true 
tribal homeland. In Arizona and other Western states, many of the 
Tribes have recognized that they will have a better chance to obtain 
the necessary funding which will lead to on-Reservation development by 
entering into a water rights settlement rather than pursuing their 
claimed rights through lengthy and expensive litigation. In most 
instances the Tribes have settled for less water than they had claimed 
in Court, but they were provided with the funding mechanism to actually 
put that water to near-term beneficial use. This trade-off is essential 
for a Tribe to make such a major concession regarding their valuable 
water rights claims.
    Having a dedicated water rights settlement fund with a dedicated 
funding source will allow not only the Northwestern New Mexico Rural 
Water Supply Project to be built but also many other worthy projects in 
other states. The Committee should look at expanding Title II so that 
the Reclamation Water Settlements Fund can have even greater potential 
for dedicated revenues. The time frame for those deposits should be at 
least fifty years. Withdrawals from the Settlements Fund for projects 
other than the Northwestern New Mexico Rural Water Supply Project will 
still be subject to the conditions placed upon them by Congress when 
future settlements and projects are authorized. We urge the Committee 
to explore opportunities to build on the Settlement Fund concept by 
contacting the Western Governor's Association and the Western States 
Water Council. At a minimum, H.R. 1970 should contain provisions for 
the funding of a Navajo Nation/Hopi Tribe settlement in the Lower Basin 
of the Colorado River if a settlement is authorized by Congress. It 
would greatly benefit the Navajo Nation and Hopi Tribe in their water 
development plans.
    In addition to the need to first resolve the Navajo lawsuit and 
water rights claims in Arizona, Arizona is concerned that H.R. 1970, as 
currently drafted, conflicts with the Law of the River. H.R. 1970 
contains several provisions related to deliveries of water through the 
Northwestern New Mexico Rural Water Supply Project to locations in the 
Lower Colorado River Basin, including the Window Rock area of the 
Navajo Reservation within Arizona. In an attempt to be non-committal 
about the source of water to be used for the Arizona component, the 
bill's drafters have created confusing and potentially troubling 
language. The problem arises because Window Rock, Arizona and Gallup, 
New Mexico are located in the Lower Basin of the Colorado River as 
defined in the 1922 Compact, but the point of diversion of the water 
from the San Juan River is in the Upper Basin portion of the Colorado 
River. Arizona believes that the terms of the Colorado River Compact 
prohibit the use of an Upper Basin water allocation in the Lower Basin, 
and vice versa. However, the State of Arizona can accept an explicit 
exception to this prohibition as long as it is clear that the use of 
water across the basin boundary is for a specific project and that the 
project is within the same state that holds the allocation. Arizona 
does not believe that the language of paragraph 303(g), which describes 
consistency with the Upper Colorado River Basin Compact adequately 
addresses the issue or meets the requirements of the Colorado River 
Compact. We believe that an explicit congressional exception to the 
provisions of the 1922 Colorado River Compact is required.
    The Arizona Water Settlements Act (AWSA) of 2004 (P.L. 108-451) 
contains a provision reserving for allocation 6,411 acre-feet per year 
of Central Arizona Project (CAP) water supply for use in the Window 
Rock area of the Navajo Nation pursuant to a future congressionally 
authorized settlement. This provision was agreed to by Arizona at the 
insistence of New Mexico. The terms and conditions for making this 
allocation are enumerated in Sec. 104(a)(1)(B)(ii) of the AWSA. This is 
the only water supply source that Arizona will agree may be utilized 
for delivery through the Northwestern New Mexico Rural Water Supply 
Project to the Window Rock area. The CAP water is a Lower Basin 
Colorado River entitlement and the water will be used in the Lower 
Basin. We believe this comports with the provisions of the Colorado 
River Compact.
    However, Arizona is concerned that this source of water for Window 
Rock may be at risk. As the Committee may know, the Navajo Nation 
opposed the AWSA, and they continue to oppose approval of the Gila 
River Indian Community Settlement which is a requirement for bringing 
the AWSA to a full enforceability stage. If AWSA does not become fully 
enforceable, all the benefits of the AWSA will become null and void, 
including the source of water for Window Rock and those benefits 
accruing to Gila River water users in New Mexico. Therefore, we believe 
Congress should not take final action on H.R. 1970 without the 
withdrawal of the Navajo Nation's opposition to the implementation of 
the provisions of the AWSA.
    Assuming the CAP water source does prove to be available for Window 
Rock, the diversion of water from an Upper Basin location for use in 
the Lower Basin is unprecedented. Therefore, H.R. 1970 needs to include 
specific provisions authorizing and clarifying accounting methods and 
providing the Secretary of the Interior the authority to contract for 
delivery of CAP water from a new diversion point in the Upper Basin. 
Under current law, the Secretary has no authority to contract for 
delivery of Lower Basin Colorado River water at points of diversion 
above Lake Mead. Attached to this testimony, as part of a letter from 
the Director of the Department of Water Resources to the New Mexico 
State Engineer, are proposed amendments which will correct this and 
other ``Law of the Colorado River'' problems Arizona finds with the 
bill as introduced.
    In 1968, Arizona's rights to develop in the Lower Colorado River 
Basin were subordinated to pre-1968 rights in the Lower Basin States. 
H.R. 1970 sets a precedent that New Mexico and Utah can increase 
development in the Lower Basin and further jeopardize Arizona rights. 
While Arizona does not challenge the right of any Upper Basin state to 
develop their apportioned Upper Basin water for use in the Upper Basin, 
we do want to be treated equitably for use of Upper Basin water in 
Lower Basin development. H.R. 1970 does not address this concern and it 
sets a precedent that is inequitable to the State of Arizona. 
Specifically, the bill, subordinates Arizona's Central Arizona Project 
(CAP) water to new Lower Basin uses developed with an Upper Basin water 
allocation. This also subordinates the rights of Arizona Indian Tribes 
that utilize CAP allocations.
    Staff from the Arizona Department of Water Resources has had an 
ongoing dialogue with the New Mexico State Engineer's staff for over a 
year on these issues, including those outlined in this testimony. I 
sent a letter to State Engineer John D'Antonio several months ago about 
these issues. Mr. D'Antonio recently responded about Arizona's 
suggested bill changes. I have attached copies of both of these letters 
for the record. I do not agree with Mr. D'Antonio's response but we 
continue to be open to discussions with our friends in New Mexico to 
resolve these important Law of the River issues.
    The Law of the River has been under attack for decades. For 
example, in the early 1980s, a private group made what is known as the 
Galloway Proposal. It would have allowed the transfer of Upper Basin 
water rights to a California entity without regard to the prohibitions 
of the 1922 Compact. The Seven Basin States were united in fighting the 
proposal and rejecting this notion that the 1922 Compact was 
irrelevant. It now appears that New Mexico is not as concerned about 
the precedent that would be set if Congress does not address each 1922 
Compact issue explicitly. Arizona remains very concerned and will 
utilize all means available and necessary to protect its rights under 
the Compact and the Law of the River.
    Again, Arizona is willing to meet with Committee staff and the 
representatives of the other six Colorado River Basin States to further 
discuss our suggested changes, and to try to make sure that any 
proposed amendments are acceptable to all affected parties and 
consistent with the Law of the River.
    In summary, the State of Arizona is supportive of the purposes of 
H.R. 1970 in settling tribal claims and will work collaboratively with 
the bill's sponsors and New Mexico's interested parties. We believe 
that the bill should be expanded to include additional water rights 
settlements in Arizona that are actively being negotiated with the 
Navajo Nation and the Hopi Tribe. We urge the Committee to explore 
opportunities to expand upon the concepts contained in Title II dealing 
with the Reclamation Water Settlements Fund so that it can become the 
mechanism for not only the proposed New Mexico Navajo settlement, but 
potentially many other western tribal settlements as well. Before final 
enactment of H.R. 1970, the Navajo Nation's challenge to the operation 
of the Colorado River must be resolved, and the Navajo Nation's 
opposition to the AWSA withdrawn. Finally, we cannot support the bill 
as currently drafted as it relates to the source of the water supply 
for the Window Rock area within Arizona, and certain provisions dealing 
with the Law of the River. Ambiguity about the water source and the Law 
of the River implications related to both Window Rock water delivery 
and Gallup water delivery must be clarified.
    Thank you for the opportunity to present the views of the State of 
Arizona.

Attachments:
    Director Guenther Letter w/attachments
    State Engineer D'Antonio Letter
    [NOTE: Attachments have been retained in the Committee's official 
files.]
                                 ______
                                 
    [A statement submitted for the record by Herbert R. 
Guenther, Director, Arizona Department of Water Resources, on 
H.R. 2515, follows:]

Statement of Herbert R. Guenther, Director of the Arizona Department of 
    Water Resources, Representing the State of Arizona, on H.R. 2515

    Madam Chairwoman and Members of the Subcommittee:
    Thank you for the opportunity to provide the following comments in 
support of H.R. 2515, ``The Lower Colorado River Multi-Species 
Conservation Program (LCR MSCP) Act''. In April 2005, the Secretary 
signed the Record of Decision (ROD) and Program Documents that 
implemented this comprehensive program to address the needs of 
threatened and endangered species that rely on the Colorado River and 
adjacent habitat for their continued existence. I, along with 
representatives of California and Nevada, joined the Secretary in 
signing the agreement that became the ROD. I hope that you will support 
this important legislation that protects the substantial financial 
commitment of the non-federal parties to the protection of these 
species.
    There have been other programs and individual efforts to improve 
the status of Lower Colorado River species and habitats. But the LCR 
MSCP differs from these other efforts in some significant ways. First, 
the Program includes most of the major water and power users on the 
Lower Colorado River. Second, the LCR MSCP is a coordinated, large-
scale Program covering approximately 100 miles of the Colorado River. 
The opportunity to improve the status of these species to the point of 
down or delisting is greatly enhanced by the geographic scope, 
stakeholder participation and coordinated implementation of the 
Program.
    Although Program implementation has already begun, federal 
authorizing legislation remains a final, very important goal. All of 
the LCR MSCP parties fully support implementation of the Program, but 
federal funding priorities change over time. The LCR MSCP is a long-
term, 50-year program. Program costs are high in the early years when 
land and water acquisition and costly habitat restoration and 
enhancement work are underway. The value of this early investment is 
only secure if the federal contribution is assured for the full term of 
the Program.
    The federal and state parties have agreed to share Program 
implementation costs totaling $626 million, indexed for inflation over 
the 50-year term of the Program. Costs are split 50 percent federal/50 
percent non-federal. H.R. 2515 will affirm this funding agreement by 
providing that the federal share of Program costs will be non-
reimbursable, and cap the non-federal costs at the agreed upon amount. 
The State of Arizona has provided legislative authority to collect user 
fees to meet the Arizona portion of state parties funding obligation.
    In addition to securing the Program financial agreements, this 
legislation includes several provisions that affirm the agreements of 
the federal and non-federal participants. H.R. 2515 provides that 
subsequent Congressional action will not modify the party's 
obligations, unless specific to the LCR MSCP. H.R. 2515 will secure the 
``no surprises'' and permit revocation policies contained in the 
Program documents. It provides for a limited waiver of sovereign 
immunity to the extent that the non-federal parties would need to 
enforce their agreements with the federal government. H.R. 2515 also 
authorizes the Secretary to enter into an agreement with the Lower 
Division States to provide water for implementation of the LCR MSCP.
    The LCR MSCP development and implementation has been an open and 
public process. The Draft Habitat Conservation Plan underwent 
independent scientific peer review, and the final Plan was modified to 
incorporate recommendations from the review panel. Steering Committee 
meetings are noticed and open to the public, and Program documents are 
available for review. Given the open and public nature of the Program, 
the legislation would exempt the LCR MSCP Steering Committee from 
Federal Advisory Committee Act requirements.
    The important objectives of this Program can only be accomplished 
if Reclamation obtains adequate, long-term funding to implement the 
Habitat Conservation Plan. The LCR MSCP is the best program to address 
endangered species needs while preserving cities, farms, Indian tribes 
and power production uses of the Colorado River. Arizona supports H.R. 
2515, the Lower Colorado River Multi-Species Conservation Program Act, 
and asks for its enactment by Congress.
    Thank you for the opportunity to present Arizona's view on this 
important piece of legislation.
                                 ______
                                 
    [A statement submitted for the record by the Jicarilla 
Apache Nation, on H.R. 1970 follows:]

               Statement submitted for the record by the 
                  Jicarilla Apache Nation on H.R. 1970

I. Introduction
    The Jicarilla Apache Nation (``Nation'') is pleased to submit this 
testimony supporting and commenting on H.R. 1970, the Northwestern New 
Mexico Rural Water Projects Act. The Jicarilla Apache Nation is a co-
sponsor in the
    planning process for the Navajo Gallup Water Supply Project 
(``Project''), a vital piece of this legislation and the Navajo Nation 
Water rights settlement package. The Nation is a member of the Steering 
Committee for the Project, and we have devoted substantial staff time 
and resources over the last several years to the planning and 
environmental compliance process for the Project.
II. 1992 Jicarilla Apache Tribe Water Rights Settlement Act, the 
        Nation's Contributions in the San Juan River Basin and Role in 
        the Northwest New Mexico Rural Water Projects Act
    The Nation's water rights in the San Juan River Basin are the 
subject of a 1992 settlement agreement and the Jicarilla Apache Tribe 
Water Rights Settlement Act, Public Law 102-441, 106 Stat. 2237. We 
traveled a long road to successfully negotiate our settlement, and we 
find ourselves on an equally long road to secure the implementation of 
the settlement in order to fully realize its benefits for our people. 
When faced with obstacles to the use of our settled water rights, we 
have consistently shown leadership in finding solutions that benefit 
not only our people, but also our neighbors in the San Juan River 
Basin. We have, for example, provided leased water supplies to large 
and small water users, ranging from individual farmers and the Elks 
Lodge to BHP Billiton and PNM. We have also served as a founding member 
of the San Juan River Recovery Implementation Program to protect 
endangered species while water development is pursued.
    Most recently, we have stepped up to the plate to offer to 
negotiate a water lease, or subcontract, to the City of Gallup to 
provide their water supply for the Navajo-Gallup Water Supply Project 
that would otherwise be unavailable. The water rights that would be the 
subject of a subcontract to be negotiated between the Jicarilla Apache 
Nation and the City of Gallup are already adjudicated to the Nation. 
Consequently, these water rights are already within the recognized 
Upper Basin supply in New Mexico. It is important for the Subcommittee 
to understand the Nation's pivotal role in the creative solutions that 
make the Project, and ultimately the Navajo Nation settlement, 
achievable.
    We share with the Navajo Nation a common interest in bringing 
clean, reliable water service to grossly underserved areas of our 
Reservations. The Jicarilla Apache people desire to pursue our way of 
life by making their homes on our reservation lands throughout the 
basin, and not being crowded into increasingly limited space in Dulce, 
New Mexico because of the lack of potable water. To meet this need, we 
have worked with the United States Bureau of Reclamation and the other 
Project Participants to provide for the connection of a water line at 
Counselor, New Mexico from the Cutter Lateral portion of the Project. 
We are also separately planning construction of the approximately 
eight-mile portion of the additional water line that will be needed 
from Counselor to our lands at TeePees on New Mexico State Highway 550 
in order to deliver this water to our people, without the assistance of 
appropriations authorized under this bill. The water that would be 
delivered to us through the Project is water already adjudicated to us 
under the 1992 settlement and related Partial Final Decree. We will 
receive no additional water rights under this bill.
    For these reasons, the Jicarilla Apache Nation has a demonstrated 
commitment to and interest in a successful outcome to this legislation 
and the associated Navajo-Gallup Water Supply Project. It is imperative 
that the legislation recognize and support the Nation's role in the 
Project.
    In addition to the attached detailed comments that we are providing 
to the Subcommittee staff, we share the following thoughts in the 
interest of ensuring that key provisions of the legislation are 
clarified. We look forward to continuing to work with members of the 
Subcommittee and Congress, the State of New Mexico, the Navajo Nation, 
the City of Gallup, and the Administration to refine and implement the 
legislation.
III. Infrastructure Development on the Jicarilla Apache Reservation--
        The Jicarilla Apache Reservation Rural Water System Act, Title 
        VIII of Public Law 107-331
    In addition to the Nation's participation and role in The 
Northwestern New Mexico Rural Water Projects Act, we believe it is 
relevant and imperative that Congress and the Administration also meet 
existing federal statutory obligations in replacing the deficient water 
delivery and wastewater system serving the Jicarilla Apache 
Reservation. As background, in the 1920's the Federal Government, 
through the Bureau of Indian Affairs (BIA), initiated construction of a 
public drinking water and wastewater system on the Jicarilla Apache 
Reservation. Throughout the years, the BIA haphazardly extended the 
system and failed to maintain it, creating severe public health threats 
and community development barriers. Based on generations of federal 
neglect, the water system infrastructure serving the Jicarilla people 
is in severe disrepair and is the source of public health threats to 
tribal members.
    In 2000, recognizing this looming crisis, Congressman Udall 
introduced a bill that Congress passed which directed the Secretary of 
the Interior, through the Bureau of Reclamation (BOR), to complete a 
feasibility study on this problem. The study recommended extensive 
repairs and replacement of the infrastructure. In 2002, Congressman 
Udall introduced another bill, which Congress ultimately passed and 
President Bush signed into law, entitled The Jicarilla Apache 
Reservation Rural Water System Act, Title VIII of Public Law 107-331, 
which directed the Secretary to repair and replace the water system 
infrastructure on the Jicarilla Reservation, and authorized the 
expenditure of $45 Million to do so. Since the law's passage nearly 
five years ago, Congress has appropriated $250,000 to fund this 
project. During this timeframe, the Administration has not requested 
any funds for our project in the President's annual budget submission 
to Congress.
    The urgency to address the infrastructure needs on our Reservation 
has continued so we have been forced to incur substantial debt to 
expend more than $20 million in repairs. Completion of this project is 
relevant to the legislation at issue now because the continued 
operation of the defunct infrastructure on our Reservation presents a 
harmful public health threat not only for our people but for downstream 
users. In addition, the deficiencies in the current infrastructure are 
causing waste of the water resources as there are leakage, seepage and 
breakdown problems through the system. Congress has a responsibility to 
correct this problem so that the water resources throughout the basin 
are secured and managed in a safe and efficient manner for the benefit 
of all of the stakeholders, including the project beneficiaries and 
partners in H.R. 1970.
IV. Specific Comments on H.R. 1970
    With that backdrop, the Jicarilla Apache Nation does not object to 
the concept of a top water bank, provided that its implementation does 
not adversely affect the Nation's water rights, storage for the Nation, 
or costs under our contract for water from the Navajo Reservoir Supply, 
and provided also that the beneficiaries of the top water bank pay 
their fair share of construction and operation and maintenance costs 
associated with Navajo Reservoir.
    The provisions concerning shortages should be carefully 
reconsidered and redrafted in consultation with us to protect the 
Jicarilla Apache Nation's water rights, including entitlement to 
delivery in times of shortage, under the Jicarilla Apache Tribe Water 
Rights Settlement Act. We believe and expect that it is not Congress' 
intent to adversely modify the Nation's rights under our existing 
settlement. Indeed, the bill appropriately states that unless expressly 
provided, nothing in it modifies, conflicts with, preempts, or 
otherwise affects the Jicarilla Apache Tribe Water Rights Settlement 
Act (Section 103(1)), page 18 lines 2-4 and page 19 lines 1-2). The 
legislation must be crafted to protect the Nation from suffering a 
lower priority in time of shortage.
    We wish to share a few concerns the Nation has regarding what we 
view as unclear language referring to cost share provisions in the 
Bill. The Secretary is directed to determine the share ``based on the 
ability of the Jicarilla Apache Nation to pay the construction costs of 
the Project facilities that are allocable to the Jicarilla Apache 
Nation,'' and this share is specified to be at least 25 percent of the 
costs so allocable.
    We have some concerns with how the portion ``allocable'' to the 
Nation will be determined. The Nation's staff have reviewed the items 
allocated to us as reflected in the March 2007 Draft Planning Report 
and Environmental Impact Statement for the Project (``PR-DEIS''), and 
if our understanding is correct, the allocation reflected in that 
document is appropriate. The legislation should make clear that a 
different allocation will not be imposed on us. While we are not 
concerned with the items contemplated to be allocated to us, we are 
concerned that the Bureau of Reclamation's cost estimates for these 
items are substantially greater than they should be. Notably, the PR-
DEIS states that Reclamation is re-estimating costs and anticipates 
providing updated cost estimates through errata sheets to be made 
available during the public comment period on the PRDEIS.
    To our knowledge, however, no such errata sheets have been made 
available and the public comment period ends on June 28, 2007. We are 
therefore reserving for further comment the issue of cost estimates in 
our comments on the PR-DEIS. To protect the continuing voice of the 
Project Participants in all cost determinations associated with the 
Project, the legislation should clarify that the construction costs 
reimbursable by the Jicarilla Apache Nation shall be reduced by the 
amounts that the Nation expends from its own funds or non-federal 
sources on pre-construction activities for the Project. The draft 
legislation does not effectively define the ``ability to pay'' 
determination. This provision should specify that ``ability to pay'' 
will be determined on the basis of the per capita income, median 
household income, and poverty rate of the population on the Jicarilla 
Apache Reservation. This specificity will ensure that the determination 
of ``ability to pay'' reflects the true ability of our people to pay 
for the water supply.
    The requirement that the Nation should pay a minimum percentage of 
25 percent of the construction costs allocable to the Nation is 
inappropriate. A proper ability to pay determination based on the 
ability of our population will result in a cost share percentage below 
25 percent. Indeed, this minimum leaves the Nation unacceptably exposed 
to the burden of a cost share far greater than 25 percent that has no 
relationship to ability to pay. Notably, the April 2006 study by 
Dornbusch Associates entitled ``Social Impacts from the Navajo-Gallup 
Water Supply Project'' (Appendix D-IV, page 12, to the PR-DEIS) found 
that the Jicarilla Apache people earn median incomes far below the New 
Mexico state average.
    This requirement casts a shadow over the negotiating process in 
providing a leased water supply for the City of Gallup. Without fully 
understanding the entire exposure the Nation has in paying for its 
portion of the Project, it is extremely difficult to proceed with 
substantive negotiations with Gallup and the Navajo Nation in 
finalizing a secure water supply for the City. We would like to see in 
the bill a provision for establishment of a committee, including a seat 
for the Jicarilla Apache Nation, to set and review Project construction 
and operation, maintenance and replacement budgets and extraordinary 
expenditures.
V. Conclusion
    The Jicarilla Apache Nation is pleased to support this historic 
legislation and to have a role as a participant in order to help 
provide solutions to the pressing water challenges in the region, and 
our participation will provide an avenue to provide water to the 
Southern part of our Reservation which abuts the Navajo lands and 
project area. The Nation has proven time and again to be a responsible 
steward of our lands and resources, and we have a strong track record 
as a reliable partner when working to address the critical water needs 
in the arid Southwest. Therefore, the Nation respectfully requests that 
the Subcommittee favorably consider our comments and recommendations as 
set forth herein, and further requests support from Congress provide 
funding for the Jicarilla Apache Reservation Rural Water System Act, as 
completion of this project will enhance and benefit the overall 
viability and success of the purposes and projects set forth in H.R. 
1970.
    [NOTE: ``Detailed Comments on H.R. 1970'' and drawing by Navajo 
children on the need for clean water submitted for the record have been 
retained in the Committee's official files.]
                                 ______
                                 
    [A statement submitted for the record by Evan Jones, Vice 
President, BHP Navajo Coal Company, on H.R. 1970 follows:]

           Statement submitted for the record by Evan Jones, 
         Vice President, BHP Navajo Coal Company, on H.R. 1970

    Mr. Chairman and Members of the Committee:
    My name is Evan Jones. I am Vice President of BHP Navajo Coal 
Company (``BNCC''). BNCC and its affiliate, San Juan Coal Company, own 
and operate significant coal mines in the San Juan Basin, New Mexico 
adjacent to the San Juan River. One of the mines is located on Navajo 
Nation lands to the south of the river (``Navajo Mine'') pursuant to a 
federal lease and the other is located on the north side on state land 
(``San Juan Mine''). Navajo Mine supports the generation of power at 
Four Corners Power Plant (``Four Corners'') which is owned by Arizona 
Public Service Company (``APS''), Public Service Company of New Mexico 
(``PNM''), the Salt River Project, El Paso Energy, Southern California 
Edison and Tucson Electric Power, and operated by APS. The San Juan 
Mine supports the generation of power at the San Juan Generating 
Station (``SJGS'') owned by PNM, Tucson Electric Power, TriState 
Generation and Transmission, Southern California Public Power 
Authority, Los Alamos County, Utah Associated Municipal Power Systems, 
the City of Anaheim, MSR Public Power Agency, and the City of 
Farmington, and operated by PNM. Collectively, Four Corners and SJGS 
generate approximately 3700 megawatts of power, supplying power to New 
Mexico, Arizona, Colorado and California.
    BNCC is the owner of a significant water right from the San Juan 
River and related groundwater rights pursuant to New Mexico State 
Engineer Permit 2838 (``Permit 2838''). Based on its rights under 
Permit 2838, BNCC provides water to its mining operations, supplies the 
sole source of water to Four Corners (approximately 25,000 acre-feet 
per annum) and approximately one third of the water supply to SJGS 
(approximately 8,000 acre-feet per annum).
    BNCC supports the efforts of the State, the Navajo Nation and the 
federal government to settle the claims of the Nation to the waters of 
the San Juan Basin. Settlement of the Navajo Nation's claims in an 
equitable manner will provide a great benefit to all water users in the 
Basin. In particular settlement of Indian claims, particularly of the 
magnitude of the Nation's claims provides the certainty necessary to 
enable continued economic development and investment in the San Juan 
Basin.
    BNCC believes that H.R. 1970 provides an opportunity to settle the 
Nation's claims in an equitable fashion that will provide the requisite 
certainty and opportunities to encourage and stimulate further economic 
development and support existing investment. The legislation as 
proposed protects, to a large extent, existing uses in the Basin. The 
legislation includes provisions requiring, under certain conditions, 
use by the Nation of Navajo Reservoir contract water in times of 
shortage to support otherwise senior mainstem irrigation rights, 
subordination of the majority of the Navajo's claims to senior rights 
on the mainstem to a more junior Navajo Reservoir contract right, and 
the creation of a ``top water bank'' in Navajo Reservoir available to 
direct flow users such as BNCC. All of these mechanisms are important 
pieces of the legislation to allow protection of essential existing 
uses such as BNCC's supply of water to its mines and to the power 
plants.
    Most significantly the settlement allows for marketing of the 
Nation's water rights as proposed to be quantified by the legislation. 
The availability of the Nation's rights for marketing in the fully 
appropriated San Juan Basin will allow for supplemental supplies of 
water to BNCC and others in times of shortage, as well as to allow 
expansion of existing operations and investments in new endeavors 
within the Basin. This opportunity also provides great economic benefit 
to the Nation. All of these factors contribute to a fair and equitable 
settlement of the Nation's claims, provide certainty to important 
existing economic concerns and encourage new investment.
    Additionally, the settlement of the Nation's claims provides a 
multitude of benefits to the Nation itself including provision of 
drinking water to more remote parts of the Navajo Nation through the 
Navajo-Gallup Water Supply Project, economic benefit and the certainty 
regarding the settlement of its longstanding claims.
    In summary, BNCC supports the settlement of the Nation's claims as 
generally proposed in H.R. 1970. All water users in the Basin, not just 
the Nation, will benefit from the settlement of these claims.
    Thank you for the opportunity to present the views of BHP Navajo 
Coal Company on this important matter.
                                 ______
                                 
    [A statement submitted for the record by Jeffrey 
Kightlinger, General Manager, The Metropolitan Water District 
of Southern California, on H.R. 2515 follows:]

  Statement submitted for the record by Jeffrey Kightlinger, General 
  Manager, The Metropolitan Water District of Southern California, on 
                               H.R. 2515

    Thank you for the opportunity to submit written testimony regarding 
H.R. 2515, the Lower Colorado River Multi-Species Conservation Program 
Act. I serve as the General Manager of The Metropolitan Water District 
of Southern California (Metropolitan), a cooperative of 26 cities and 
agencies serving water to 18 million people in six southern California 
counties. Metropolitan imports water from the Colorado River and 
northern California to supplement local supplies, and helps its members 
to develop increased water conservation, recycling, storage, and other 
resource-management programs. As one of the California agencies that 
use Colorado River water, Metropolitan is a participant in the Lower 
Colorado River Multi-Species Conservation Program (LCR MSCP) and a 
supporter of H.R. 2515 to authorize this program.
    The LCR MSCP was developed through the cooperation of over fifty 
federal and non-federal agencies in Arizona, California and Nevada to 
protect endangered and threatened sensitive species, and improve 
environmental conditions for numerous other species. The environmental 
benefits of the program include creating of over 8,100 acres of 
riparian, marsh and backwater habitat, rearing and stocking over 1.2 
million endangered fish to bolster local populations, and protecting 
existing habitat in the floodplain from destruction. The program 
provides scientific research to expand our knowledge of the aquatic and 
riparian environment on the Lower Colorado River. The information 
gained will be used through adaptive management to ensure that the 
program is effective in benefiting species and their habitat.
    The LCR MSCP will cost a total of $626 million (in 2003 dollars), 
and be implemented over the course of fifty years. To ensure the 
flexibility to address changes in conditions on the Lower Colorado 
River, 25% of the funding (nearly $175 million) will be used for 
scientific research, adaptive management, and remedial measures. 
Through careful negotiations over ten years, all the participants have 
agreed that the LCR MSCP will be implemented by the Bureau of 
Reclamation, with equal matching funds provided by agencies from 
Arizona, California, and Nevada.
    H.R. 2515 provides authorization of appropriations for the federal 
share of LCR MSCP costs and directs the Secretary of the Interior to 
manage and implement the program in accordance with the conservation 
plan, biological assessment, and biological opinion adopted in 
accordance with the Endangered Species Act. In addition, the bill 
provides express authority for the Secretary to utilize Colorado River 
water for LCR MSCP purposes, which might otherwise be open to legal 
challenge.
    Metropolitan and the other non-federal participants are committed 
to funding one-half of the LCR MSCP by the terms of the Endangered 
Species Act (ESA) Section 10 incidental take permits issued for the LCR 
MSCP and the program implementing agreements entered into with the 
Bureau of Reclamation. The Section 10 permit provides regulatory 
assurances to anyone with an approved conservation plan that, as long 
as they remain in compliance with the permit terms, they will not be 
asked to commit additional funds, or other resources, to remedy 
unforeseen circumstances. To ensure that the Section 10 permit 
provisions and the non-federal funding commitments are preserved during 
the term of the LCR MSCP, H.R. 2515 includes provisions in Section 5 
that protect against unintended changes in the legal status of the 
program.
    H.R. 2515 provides the commitment of Congress to support the 
efforts of all the LCR MSCP participants, both federal and non-federal 
agencies. The program is important for the unique environment that the 
Colorado River creates in the southwestern United States, and for the 
economies of the States of Arizona, California, and Nevada. 
Metropolitan urges the Subcommittee to approve the bill.
                                 ______
                                 
    [A list of documents retained in the Committee's official 
files follows:]
      Bureau of Reclamation to Senator Jeff Bingaman, 
Letter submitted for the record by The Honorable Grace 
Napolitano
      Citizens Progressive Alliance, Statement 
submitted for the record on H.R. 1970
      Department of the Interior to Senator Jeff 
Bingaman, Letter submitted for the record by The Honorable 
Grace Napolitano
      Secretary of the Interior Dirk Kempthorne to 
Governor Huntsman of Utah, Letter submitted for the record by 
The Honorable Grace Napolitano
      Drawings by Navajo children on the need for fresh 
water submitted for the record
      Senator Jeff Bingaman to Secretary of the 
Interior, Dirk Kempthorne, Letter submitted for the record by 
The Honorable Grace Napolitano
      Senator Jeff Bingaman to Secretary of the 
Interior, Gale Norton, Letter submitted for the record by The 
Honorable Grace Napolitano
      Southwestern Water Conservation District, Letter 
to Chairwoman Napolitano submitted for the record by The 
Honorable John T. Salazar
                                ------                                

    [A statement submitted for the record by the San Juan 
Agricultural Water Users Association, Mike Sullivan, Chairman, 
on H.R. 1970 follows:]

 Statement submitted for the record by the San Juan Agricultural Water 
     Users Association, Mike Sullivan, Chairman, on House Bill 1970

    Thank you for giving us the opportunity to testify about the 
proposed legislation entitled ``Northwestern New Mexico Rural Water 
Projects Act.'' If carried out, this legislation would draw water from 
the San Juan River (one of the largest tributaries of the Colorado 
River) for a pipeline to be built to the Gallup area at a cost of more 
than $1 billion in public funds. The legislation would also affect 
water rights throughout New Mexico and the entire Colorado River 
system.
    The San Juan Agricultural Water Users Association represents 36 of 
the 38 irrigation ditches in the San Juan river system. Our members 
consist of about 15,000 landowners and their families. The members of 
our association have water rights from the Echo Ditch Decree (1948) and 
appropriations for approximately 35,000 acres of irrigated land with a 
farm delivery of over 110,000 acre-feet of water. We are also entitled 
to divert approximately 1,000 cfs from the rivers of the Basin. Our 
members also have water rights for household, livestock, and other 
uses, which have not yet been quantified by the court. The members of 
the association have been putting the waters of the San Juan to 
beneficial use for more than 100 years. Our ancestors, Anglo, Hispanic, 
and Navajo, were the first ones to divert water from the river, long 
before New Mexico became a state. Since then, our members have 
maintained our community ditches with their own labor and their own 
money, through ditch assessments, without government subsidies.
    Unfortunately our group cannot afford to send someone to Washington 
to testify on this bill. So we are submitting testimony in writing. 
Although we are unable to be present with you, we ask that you give 
careful attention to the facts which we are outlining, because you will 
not hear these facts from anyone else. In our absence, our opponents 
will pooh-pooh these facts and our position, but we respectfully 
request that you and your staffers conduct an independent investigation 
of the points we outline here. Any objective inquiry will demonstrate 
that there are serious questions about this bill, which the proponents 
are trying to gloss over.
    If this legislation is passed in its present form, it will hurt us 
and many other people in New Mexico. With all due respect, the proposed 
legislation is so fundamentally flawed that it should not be enacted in 
its present form. This legislation has been pushed by certain special 
interests as a solution to the problems all along the San Juan and 
Colorado Rivers, but in reality it will only make those problems worse. 
And this legislation as presently written will create new problems for 
the entire State of New Mexico, which increasingly depends on the San 
Juan River to supply its water.
1.  THE LEGISLATION ATTEMPTS TO GIVE ONE-THIRD OF NEW MEXICO'S RIVER 
        WATER TO A VERY SMALL GROUP--LESS THAN 40,000 PEOPLE--AT THE 
        EXPENSE OF THE OTHER 1,800,000 CITIZENS WHO LIVE IN NEW MEXICO.
    The San Juan River provides 60% of all the surface water in New 
Mexico. As a water source for New Mexico, the San Juan River is twice 
as big as all the other rivers in the state, combined--the Rio Grande, 
Pecos, the Gila, etc. Cities and tribes on the Rio Grande are 
increasingly depending on water supplied from the San Juan via the San 
Juan-Chama Project, which carries water across the Continental Divide.
    Albuquerque is finishing a $275 million project to use San Juan 
water, while Santa Fe is spending $145 million. Taos, Espanola, Los 
Alamos, San Juan Pueblo, and Belen are also counting on water from the 
San Juan River. The proposed settlements of Indian water rights for 
Taos Pueblo and Nambe-Pojoaque (the Aamodt case) also are demanding a 
share of water from the San Juan-Chama Project. But these communities 
may be disappointed, because there is a crisis on the San Juan that 
will soon affect the entire state.
    This legislation is based on the false assumption that there is 
enough water in the Colorado to satisfy the claims of the Navajo tribe 
and the other tribes and communities that are competing for water from 
the San Juan. This proposed settlement, just like the proposals for 
Taos and Aamodt (and the unfulfilled settlement with the Jicarilla 
tribe), is based upon wishful thinking, which we can no longer afford 
in an era of global warming. The latest estimate by the Bureau of 
Reclamation is just another in a long series of unrealistic 
hydrological estimates of the amount of water that will be available 
for all uses in New Mexico. The sheer size of this proposed water deal 
makes it a threat to the rest of the state. If enacted in its present 
form, the statute would give a grossly unfair share to a very small 
group of people.
    The ostensible purpose of this legislation is to settle a water 
rights claim for the portion of the Navajo reservation that lies within 
New Mexico. According to the 2000 census, there are only 44,636 persons 
who live on the reservation in New Mexico. U.S. Census Bureau, New 
Mexico--American Indian Area, GCT-PH1, Population, Housing Units, Area, 
and Density, http//factfinder.census.gov. The census figure includes 
non-Indians as well as tribal members, so it is almost certain that 
there are fewer than 40,000 tribal members living on reservation land 
in New Mexico. These are the only persons who would have claims under 
the so-called ``Winters Doctrine.'' This group amounts to only 2.5% of 
the total population of New Mexico, which is 1,819,046 according to the 
2000 census.
    The proposed legislation would give one-third of all the surface 
water in New Mexico to this very small group. The settlement proposes 
to give the tribe rights to 56% of the water in the San Juan River, 
which accounts for 60% of the state's stream water. So the settlement 
would allocate 33.6% of the state's entire supply to satisfy the claims 
of less than 2.5% of the population.
    The legislation would give each tribal member much more river 
water, per person, than the other citizens of New Mexico. If this draft 
legislation were passed and fully implemented, the Navajo tribe would 
be entitled to a depletion of 348,550 acre-feet annually from the San 
Juan River for the 44,636 tribal members who live on the reservation in 
New Mexico. This works out to a depletion of 7.8 acre-feet per capita 
for a tribal member living on the reservation in New Mexico. On a per 
person basis, this is far more river water than would be left for the 
rest of the people who live in New Mexico.
    According to the best estimates, which are admittedly imperfect, 
New Mexico has about 2.1 million acre-feet annually in stream flow, 
after meeting its commitments to other states. New Mexico Water Quality 
Control Commission, 2006-2008 State of New Mexico Integrated Clean 
Water Act Sec. 303(d)/Sec. 305(b) Report at 4. This means that there is 
about 1 acre-foot of river flow available for each person in this 
state, on average. To keep some flow in the rivers, the amount of 
allowable depletion per person would be considerably less than 1 acre-
foot. Yet the proposed legislation would allocate 7.8 acre-feet of 
depletion to each Navajo tribal member on the reservation in New 
Mexico. This is completely unfair to all the rest of the citizens of 
New Mexico. The legislation advances the special interests of a very 
small group, while it damages the long-term future of the entire state.
    We request that your staff and the OSE prepare estimates of the per 
capita water amounts that would be allocated by the proposed 
settlements in New Mexico, and compare them to the per person amounts 
that would be left to the rest of the population in this state. These 
analyses will show that this settlement gives an unfair amount of water 
to one very small segment of the state's population, at the expense of 
the rest of the population.
    As a matter of sound public policy and water planning, New Mexico's 
scarce river water should be shared equitably by all of the citizens in 
the state, so that all citizens have a roughly equal per capita share, 
whether they are tribal members or not. We support a fair share for 
everyone, but this legislation does not do this.
2.  THIS LEGISLATION WILL IMPAIR THE WATER SUPPLIES OF LOCAL RESIDENTS 
        WHO ALREADY DEPEND ON THE SAN JUAN RIVER.
    To make room for the proposed Navajo settlement, this legislation 
squeezes the non-Indian users of the San Juan River. It would leave 
only 16% of the river to the local people who have actually used the 
river for more than a century. Under New Mexico's Constitution and 
water laws, those who have actually put the water to beneficial use 
have priority, but the settlement tries to push these rights aside. 
Here is the allocation proposed by the supporters of this bill:
[GRAPHIC] [TIFF OMITTED] T7012.001

    .epsThe situation for local residents is even worse than these 
figures show. First, the tribal claims would be given a retroactive 
higher priority than many local users, even though local people put the 
water to actual beneficial use, in accordance with New Mexico law, 
while the tribes have never used most of the water allocated to them. 
Second, this legislation gives the Navajo Nation control of the entire 
river, from Navajo Lake at the top, to Shiprock at the bottom.
    Third, to make this settlement fit, the OSE is trying to reduce our 
members' water rights under the 1948 Echo Ditch Decree. In the ongoing 
San Juan adjudication, the OSE is falsely claiming that our members 
have abandoned large parts of their water rights under the Echo Ditch 
Decree. To make this legislation look feasible, the projections by the 
OSE wrongly assume that non-Indians are only using about half of their 
Echo Ditch rights, so that non-Indian uses will be reduced from 16% to 
about 8%. To accomplish this, the OSE, the tribes, the United States, 
and the power plants are all litigating against our members, to cut 
back on our vested water rights.
    According to one set of projections by the State Engineer's staff, 
the result will be a reduction of 40% in water use on the Upper San 
Juan River, a 36% reduction to ditches on the Animas River, and a 
reduction of 58% to ditches on the La Plata River. (The OSE now claims 
that these projections are no longer operative, because the OSE and the 
BOR keep changing their numbers to make them fit.) These reductions 
would ruin many water users who have depended on this water, and 
actually used it for more than a century, in order to give the water to 
new users in the Gallup-Window Rock area, who have never depended upon 
or used water from the San Juan.
    The legislation does not solve the problems associated with the 
Hogback-Cudei Project and the Fruitland-Cambridge Project. These 
projects draw water at the downstream end of the San Juan River in New 
Mexico, so they provide no return flow which can be used in the state. 
The legislation authorizes the diversion of more water than will be in 
the river on many occasions.
    The Richardson settlement provides for the release of up to 12,000 
acre-feet per year from Navajo Dam for use by the tribe for irrigation 
in the Hogback-Shiprock area. This provision is inadequate and 
ineffective: the maximum amount is 12,000 acre-feet in any one year, 
but this amount could be depleted in two or three weeks under really 
dry conditions. If the shortage in the river is 500 cfs, the water will 
be gone in about 3 weeks. To have an adequate buffer, there needs to be 
at least a 65-day supply for both Indian and non-Indian users. As 
proposed in this legislation, the 12,000 acre-feet is only for tribal 
users, so it does not increase the water that can be used by non-
Indians. And in dry conditions it may still be necessary to place calls 
on upstream users in order to get this water to the Hogback-Shiprock 
area at the low end of the river. Under this legislation the tribe will 
effectively control both ends of the river--Navajo Dam at one end and 
Shiprock at the other.
3.  THIS LEGISLATION CONTINUES A PATTERN OF UNREALISTIC PIECEMEAL 
        SETTLEMENTS WITH INDIAN TRIBES, WHICH WILL MAKE IT IMPOSSIBLE 
        FOR NEW MEXICO TO FORMULATE A COHERENT WATER POLICY.
    Unfortunately, New Mexico does not yet have a coherent and 
comprehensive master plan for the state's water resources. For example, 
the major rivers have not been fully adjudicated by the courts. 
Furthermore, there are 19 Indian pueblos, 3 tribes, and 3 Navajo bands 
in New Mexico. Tribal Map, New Mexico Indian Affairs Department, 
www.iad.state.nm.us. Most of their water rights have not been settled 
or adjudicated. Passage of this legislation would make it virtually 
impossible for the state to develop a realistic long-term plan.
    Throughout this process, we have asked some very basic questions, 
but no one has been able (or willing) to answer them. Some of the basic 
questions are:
    (a)  How much stream water does New Mexico have?
    (b)  After allowing for interstate obligations, rainfall 
variations, and climate trends, how much river water can be diverted 
for use within New Mexico?
    (c)  How much water can New Mexico consume, while still leaving an 
adequate flow in our rivers?
    Obviously, one cannot devise a water plan for New Mexico without 
some idea of the overall water resources available in the state. But 
the OSE and the ISC say they have no idea of the aggregate water supply 
and demand.
    At the request of Senator Bingaman, the OSE and the ISC met with us 
on March 28, 2007, in Farmington. The purpose of this meeting was to 
give the state's technical experts an opportunity to answer these very 
basic questions. When we asked these questions, the OSE and ISC 
representatives said that they had absolutely no idea of the amount of 
water that might be available for use in New Mexico, not even a 
ballpark estimate. We repeatedly asked them to give us some idea of the 
water resources that might be available to the state, recognizing that 
such estimates are quite imperfect. The OSE/ISC said, repeatedly, that 
it had no idea whatsoever. The ISC representatives said that New Mexico 
was currently in compliance with its compact obligations, but the ISC 
had no idea of how much water would be left after those obligations 
were met, not even a range of figures from dry years to wet years.
    We find this hard to believe. If the OSE and the ISC have no idea 
of the aggregate water resources of the state, then they are not doing 
their job. The first step in any long-term water plan is to use the 
best available and most current data to estimate future water flows, so 
the state can learn to live within them. Neither the state nor the 
federal government should make any long-term commitments until these 
rudimentary questions have been addressed and answered. 1
---------------------------------------------------------------------------
    \1\ In our dealings with the OSE and the ISC, we have observed that 
they are reluctant to provide data and offer their best professional 
estimates about the proposed Indian settlements, because those 
purported settlements have been widely touted by Governor Richardson. 
Governor Richardson is running for president, and we believe that the 
OSE and ISC personnel understand that they must stick closely to the 
script for the Richardson presidential campaign, for fear that their 
best information and estimates might undermine the campaign. Of course, 
the personnel at OSE and ISC will deny this, but we have observed first 
hand that they are operating under political orders from candidate 
Richardson.
---------------------------------------------------------------------------
    The legislation conflicts with other proposed water settlements 
that depend on water from the San Juan River, such as the proposed 
Aamodt and Taos settlements, and the incomplete Jicarilla settlement. 
There simply is not enough money, or water, to carry out all of these 
settlements proposed by Governor Richardson's administration. For 
example, both Aamodt and Taos are conditioned upon the supply of more 
water from the San Juan River via the San Juan-Chama project. And both 
settlements demand unrealistic amounts of funding by the federal 
government.
    Under the Jicarilla settlement, the federal government is obligated 
to buy back 11,000 acre-feet of private water rights beginning in 2000, 
if requested by the State of New Mexico. For unexplained reasons, the 
state has not yet made this request 2 but this is likely to 
occur as pressure on the river increases. In short, the federal 
government already has outstanding commitments for the Jicarilla 
settlement, and it should fulfill its existing commitments first.
---------------------------------------------------------------------------
    \2\ We believe that the OSE and the ISC are under political 
pressure from the Richardson administration not to make this request, 
because it would puncture the pretense that there is enough water for 
all the settlements that Governor Richardson has proposed.
---------------------------------------------------------------------------
    The Jicarilla settlement allots 32,000 acre-feet of depletion to 
the Jicarilla Apache Tribe. Jicarilla Apache Tribe Water Rights 
Settlement Act of 1992, Pub. L. No. 102-441. According to the 2000 
Census, there are 2,755 persons (tribal and non-tribal) living on the 
Jicarilla reservation. So the Jicarilla settlement allocates an average 
of roughly 11.6 acre-feet to each resident on the reservation, which is 
more than 10 times the average amount available to each resident in the 
rest of the state. Also, the Jicarilla reservation has substantial 
water sources on the reservation itself. This settlement is grossly 
unfair and inequitable to the rest of the state. It illustrates the 
damage that can be done by water settlements that are negotiated in 
secret by special interests and lobbyists, without public scrutiny and 
without regard to the interests of the entire state as a whole.
    When the Jicarilla allocation is added to the 33.6% share proposed 
by this legislation, the Jicarillas and the Navajos would control more 
than 40% of New Mexico's entire stream flow. New Mexico is already 
short on water, and passage of this legislation would allow these two 
tribes to corner the market of New Mexico's water. Once these two 
tribes control all this water, they will try to lease it to non-Indian 
users in the downstream states in the Lower Basin. To do this, the 
tribes merely have to let the water flow down the San Juan River to 
Lake Meade, which is right next to Las Vegas. 3
---------------------------------------------------------------------------
    \3\ Candidate Richardson is campaigning hard for the Nevada 
caucuses in January 2008. As part of his campaign, Richardson has 
pledged to find ways to get Nevada more water from the Colorado River. 
Richardson's settlement is one way to get more water to Nevada--at New 
Mexico's expense.
---------------------------------------------------------------------------
    To cover up the fact that the tribe will export New Mexico's water 
to other states, Governor Richardson and the tribe have agreed to 
mislead the public. In their settlement agreement, Richardson and the 
tribe added a provision that the tribe must apply to the New Mexico 
State Engineer for a permit to export water for use in other states. 
This provision is carefully calculated to create the false impression 
that New Mexico can prevent the Navajo tribe from selling New Mexico 
water to other states. Pointing to this provision, Richardson and his 
appointees have been quick to claim that they have protected New 
Mexico's interests by preventing the water from being exported. For 
example, in an Op-Ed article in The Albuquerque Journal on April 8, 
2007, New Mexico State Engineer John D'Antonio claimed that the tribe 
has agreed not to export water without the approval of the OSE and the 
ISC. See attached Exhibit 7. The supporters of this bill repeated this 
deception in The Albuquerque Journal on June 24, 2007.
    These assertions are false, and the Richardson administration knows 
that they are false. The Navajo tribe has not agreed that it needs 
permission from the State of New Mexico in order to export water. At 
our meeting on March 28, 2007, we asked the OSE and the ISC about this 
provision. We asked them what would happen if the tribe applies for 
permission to export water, and the OSE denies them a permit. They 
admitted that, under existing case law, New Mexico cannot prevent the 
tribe from exporting water to another state. And the tribe also takes 
the position that, once the tribe gets the water, the state cannot 
prohibit the tribe from selling or leasing the water to other states.
    In the proposed partial final decree, there is a provision that 
purports to deal with the export of water, but the provision is 
unintelligible and self-contradictory: it allows the tribe to litigate 
its right to export water from New Mexico. Furthermore, the partial 
final decree will never be entered, because the pre-conditions laid 
down by the tribe will never be met.
    In other words, Richardson and the tribe have tried to create the 
illusion that the tribe will not export water, but this is legal 
double-talk. Perhaps the tribe has agreed to apply for a permit to 
export water, but if it does not get one, it will still export the 
water. So the Richardson administration is just blowing smoke to cover 
up the tribe's plans to sell New Mexico's water to Lower Basin states--
like Nevada. If the tribe is allowed to get all this water, it will 
export most of it.
    Therefore, this bill is not just another public works project. This 
legislation poses a broad question of public policy that must be 
addressed to the collective wisdom of Congress: Is it the policy of 
Congress to give 40% of a state's entire water supply to a very small 
group of Native Americans, so that they can sell the water to other 
states?
4.  THE PROPOSED LEGISLATION DAMAGES THE ENVIRONMENT BY DRAWING MORE 
        WATER OUT OF THE COLORADO RIVER SYSTEM, WHICH IS ALREADY 
        OVERDRAWN.
    This legislation will inflict severe environmental damage on the 
Colorado River, because the projects will draw down the river to pump 
water far away, where there is no return flow to the river, and no 
recharge to the soils in the river bed. When our members irrigate their 
lands along the river, a lot of the water is returned to the river by 
return flows and recharge. This is not the case with NAPI, or with the 
proposed pipelines.
    The San Juan is one of the biggest tributaries of the Colorado 
River, which is already overdrawn. When New Mexico signed the Colorado 
River Compact in 1922, it was assumed that the water flow in the 
Colorado was 16.4 million acre-feet annually. But in 2007, a report 
from the National Academy of Sciences indicates the flow may be only 13 
million acre-feet and dropping, due to global warming. Colorado River 
Basin Water Management: Evaluating and Adjusting to Hydroclimatic 
Variability, Executive Summary, www.nap.edu, attached as Exhibit 1. 
When the BOR and the OSE offer their opinions that there is enough 
water, their opinions are not based on the best and most current 
scientific data from independent studies.
    From an environmental point of view, this legislation simply 
repeats the mistakes of the Animas - La Plata project. The government 
told our members that we would benefit from that project, but the 
project has been a disaster.
5.  THE PROPOSED LEGISLATION WILL GENERATE MORE LITIGATION.
    This legislation will not accomplish its objectives, which is to 
settle the competing claims to the San Juan River. Instead, passage of 
this legislation in its present form will simply produce more 
litigation. The legislation is not a comprehensive settlement, because 
it has not been agreed to by most of the people who have water rights 
in the San Juan.
    These water rights are now being adjudicated in the San Juan 
Adjudication lawsuit, which is more than 30 years old. San Juan River 
Basin Adjudication, State of New Mexico, ex rel. The State Engineer v. 
The United States of America, et al. v. The Jicarilla Apache Tribe and 
the Navajo Nation, Eleventh J.D. Dist., No. D-1116-CV-1975-184 (Mar. 
12, 1975). If this bill passes, it will just prolong the lawsuit for 
many more years.
    For example, the proposed settlement does not resolve the other 
claims of the federal government, or of the Ute Mountain tribe.
    It is also our understanding that the legislation does not even 
settle all of the Navajo water claims in New Mexico, such as the claims 
for the Rajah Band, south of Gallup, in the basin of the Little 
Colorado River. We do not know whether it settles the claim of the 
To'hajiilee Band, near Albuquerque, in the Rio Grande Basin.
    Moreover, this legislation will not even settle the claims of the 
Navajo tribe because the purported settlement is a ``conditional 
settlement.'' The settlement is not effective until future conditions 
are performed, but it is unlikely that these conditions will be met. 
Congress has not fully funded the projects that must be completed 
before the settlement becomes final and binding. Nor has the State of 
New Mexico. It is highly unlikely that the federal and state 
governments will provide the money to complete these projects, so the 
purported settlement will never become final and binding on the Navajo 
tribe. However, in the meantime, the tribe will claim huge amounts of 
water for projects which will never be completed. Then the tribe will 
attempt to lease this water to non-Indian users off the reservation, a 
use that is contrary to the Winters line of cases. So this legislation 
will create a whole new set of legal controversies that will have to be 
litigated, on top of all of the difficult legal questions which already 
exist.
6.  THE PROPOSED SETTLEMENT LEAVES NO WATER RIGHTS FOR THE LANDS OF THE 
        NEW MEXICO STATE LAND OFFICE, WHICH CONGRESS RESERVED AS AN 
        ENDOWMENT FOR NEW MEXICO'S PUBLIC SCHOOLS AND COLLEGES.
    This unsettled issue is currently being litigated in the San Juan 
River Basin Adjudication. The District Court has ruled against the New 
Mexico State Land Office, and the case is currently being appealed to 
the New Mexico Court of Appeals. It is likely that the case will 
ultimately wind up in the New Mexico Supreme Court, and quite possibly 
in the United States Supreme Court, because it presents a question of 
overriding importance to New Mexico, Arizona, and the other Western 
states. The question is this: When Congress reserved sections of land 
as a permanent endowment for New Mexico's schools and colleges, did it 
impliedly reserve the water necessary to develop those lands?
    The San Juan Agricultural Water Users Association does not take any 
position on this question. However, it seems inconsistent for the 
Richardson administration and Congress to say that the federal 
government impliedly reserved water for Indian tribes but not for 
public schools.
7.  THE PROJECTIONS BY BOR AND OSE ARE FAULTY, BECAUSE THEY DO NOT 
        ALLOW FOR ANY OTHER RESERVED WATER RIGHTS THAT THE UNITED 
        STATES MIGHT CLAIM.
    The projections by the BOR and the OSE are incomplete, because they 
do not make any allowance for any other federal reserved rights. It is 
certain that the United States will assert claims for other reserved 
water rights for Indian tribes besides the Navajos. It is also possible 
that the United States will assert reserve rights for national forests, 
especially as global warming increases and the national forests dry up. 
The United States might also claim reserved water rights for other 
purposes.
    Before this legislation proceeds any further, we request this 
committee to ask the following questions: Is the United States going to 
claim any other reserved rights against the Colorado River system? Is 
the United States going to claim any reserved rights for national 
forests, or national parks, or national monuments, or for any other 
purposes? How much is the United States claiming, or going to claim, on 
behalf of other Indian tribes in the Colorado basin?
    If the answer to any of these questions is ``yes,'' then these 
demands against the Colorado River need to be quantified and factored 
into the projections by the BOR and the OSE. These projections do not 
make adequate allowance for these claims. In finding that water 
supplies are likely to be adequate, the projections incorrectly assume 
that there will be no other claims for reserved water rights.
    This question needs to be asked and answered for the entire 
Colorado River basin, not merely for New Mexico, because a federal 
reservation of water anywhere along the river will affect every other 
state. A federal reservation of water, when used, reduces the amount of 
flow in the river, so it creates shortages that must be adjusted in 
some fashion. However, the Colorado River compacts are silent on the 
issue of Indian water rights.
    It makes no sense for one agency of the federal government--the 
BOR--to opine that water supplies will be adequate, without making any 
allowance for the reserved water rights that will be claimed by other 
federal agencies.
8.  THE PROPOSED SETTLEMENT IS NOT SUPPORTED BY A PIA STUDY.
    This legislation creates a dangerous precedent, because it does not 
require a study of practicably irrigable acreage (PIA) to substantiate 
the Navajo water claims. Under the Winters line of cases, and as a 
matter of sound public policy, a tribe cannot be awarded water for 
irrigation of reservation lands unless it can demonstrate that the 
acreage can be practicably irrigated, that is that irrigation is 
economically viable.
    This legislation sidesteps this requirement, because there has been 
no study analyzing the amount of acreage on the Navajo reservation in 
New Mexico that is viable for irrigation, and no analysis of the amount 
of water that would be necessary to irrigate those acres. Before this 
legislation precedes any further, an independent PIA must be conducted.
    The New Mexico OSE has stated that the Navajo tribe insisted in its 
negotiations that no PIA would be performed. In fact, the Navajo tribe 
is trying to avoid a PIA because it will show that the reservation 
includes very little practicably irrigable acreage--acreage down in the 
river bottom around Shiprock.
    From decades of personal experience, the San Juan Agricultural 
Water Users Association can testify that irrigation is a very hard way 
to make a living, even on the sheltered land down in the river valley. 
Up on the mesa lands, almost 1,000 feet above the river, irrigation is 
completely uneconomic, due to high winds, high evaporation rates, and 
short growing seasons. The experience of Navajo Agricultural Products 
Industries proves that irrigation is not economically viable. NAPI has 
been attempting to grow viable crops by irrigation on the mesa top, 
using pivot sprinklers and water supplied by the Navajo Indian 
Irrigation Project. Unfortunately, NAPI has been a complete financial 
failure, even though it is supplied with water at no cost from Navajo 
Dam, and even though NAPI is heavily subsidized by the federal 
government and the Navajo tribe. NAPI loses large amounts of money 
every year. The revenues from NAPI do not even cover its annual 
operating costs, much less all of the cost of water and the huge 
capital costs for Navajo Dam and the Navajo irrigation canal.
9.  THE NAVAJO TRIBE HAS ALREADY RECEIVED MORE WATER THAN IT IS 
        ENTITLED TO UNDER THE WINTERS LINE OF CASES.
    This legislation proposes to grant an additional 20,780 acre feet 
of water to the Navajo tribe in settlement of their claims under the 
so-called ``Winters Doctrine.'' However, the Navajo tribe is not 
entitled to any more water from the San Juan River, because it 
relinquished its claims as part of the creation of the Navajo Indian 
Irrigation Project.
    On May 20, 1960, Paul Jones, the chairman of the Navajo Tribal 
Council appeared before Congress, accompanied by his Washington 
attorney. The Navajo chairman testified in favor of the Navajo Indian 
Irrigation Project, which was ultimately enacted in 1962 as part of 
Public Law 87-483. In his prepared testimony, he described the Navajo 
Indian Irrigation Project and made the following statement:
        All water uses from Navajo Dam would have equal priority. The 
        Navajo Tribe has consented to this, and relinquished its right 
        under the Winters doctrine for the water necessary to irrigate 
        the Navajo Indian irrigation project, in order to provide a 
        practicable plan for comprehensive development of the resources 
        and industrial potential of the San Juan Basin.
San Juan Reclamation Project and Navajo Indian Irrigation Project: 
Hearing on H.R. 2352, H.R. 2494, and S. 72 Before the House 
Subcommittee on Irrigation and Reclamation of the Committee on Interior 
and Insular Affairs, 86th Cong. 64 (1960) (statement of Paul Jones, 
Chairman, Navajo Tribal Council), attached as Exhibit 2.
    The next year, the executive secretary of the tribe reiterated to 
Congress that the tribe was accepting the Navajo Indian Irrigation 
Project in satisfaction of its claims for water under the ``Winters 
Doctrine.'' San Juan Reclamation Project and Navajo Indian Irrigation 
Project: Hearing on H.R. 2552, H.R. 6541, and S. 107 Before the House 
Subcommittee on Irrigation and Reclamation of the Committee on Interior 
and Insular Affairs, 87th Cong. 33 (1961) (statement of J. Maurice 
McCabe, Executive Secretary, Navajo Tribal Council), attached as 
Exhibit 3.
    Therefore, the tribe's claim for additional water under the 
``Winters Doctrine'' is without merit. The tribe accepted an allocation 
of water for NIIP in satisfaction of its water claims, as part of the 
compromises that were necessary to pass the 1962 legislation. The 
tribe's current claims for water are inconsistent with its agreement 
almost 50 years ago. Instead of demanding more water, the tribe should 
honor the agreement it made to get water from NIIP.
    Furthermore, the Navajo tribe has already received far more water 
than it would be entitled to under the Winters line of cases. The cases 
hold that tribes are entitled to water for irrigation only for 
practicable irrigated acreage within the boundaries of the reservation, 
that is, for irrigation that is economically viable. The cases also 
hold that tribes are not entitled to water for projects that are 
economically wasteful.
    In every instance, an analysis of Winters claims necessarily 
depends upon the specific facts for each reservation, including its 
geography, its climate, and economic factors such as distance from 
major markets. In the case of the Navajo reservation, there is very 
little practicably irrigatable acreage in New Mexico. The original 
Navajo reservation was established by Congress as a reservation for a 
pastoral tribe, predominantly dependent on sheep herding. Congress did 
not impliedly reserve water from the San Juan River for irrigation of 
the original Navajo reservation, because anyone familiar with the 
terrain knows almost none of the reservation's acreage could have been 
viably irrigated from the San Juan River. Most of the land is too far 
from the river, too high, too dry, too hot, too cold, and too windy. 
Within the boundaries of the original reservation, there may be a few 
small plots that are suitable for irrigation from local water sources, 
but otherwise irrigation there is not even close to meeting any 
standards for economic viability.
    Some of the later additions to the reservation included land along 
the San Juan River, and some of this land is economically viable for 
irrigation. The rest of the reservation in New Mexico is not 
economically viable for irrigation, because it is too high and too dry. 
This fact is demonstrated by the complete failure of the Navajo 
Agricultural Products Industries. The Navajo Indian Irrigation Project 
was supposed to provide ``1,120 family farms for Navajo Indians. It 
will give a livelihood in related service activities to another 2,240 
families, thus providing a decent living for at least 12,000 Navajo 
Indians. These figures have been supplied by the Bureau of Indian 
Affairs. Actually, I feel they are excessively conservative.'' 
Testimony of Navajo Tribal Chairman Paul Jones on May 20, 1960, Exhibit 
2, at 65.
    The federal government built Navajo Dam in the 1950s and 1960s, 
during the happy days when everybody thought that the Colorado River 
would never run out of water. Navajo Dam supplies huge amounts of water 
to the Navajo Agricultural Products Industry (NAPI), which grows crops 
with sprinkler irrigation on the windy high desert, almost 1,000 feet 
above the river. Much of this water is wasted, because NAPI ``has been 
a huge financial failure,'' as the Albuquerque Journal reported in a 
1999 news article. This ``Navajo farm project struggles financially 
despite millions of dollars in government funding.'' Even though NAPI 
loses money almost every year, the Journal also reported that the 
Navajo tribe wants to expand this money-losing operation in order to 
protect its water claims. ``When more acreage is farmed, the project 
uses more water. If the tribe doesn't use the water, it is in danger of 
losing its right to it.'' Since this article was written, NAPI 
continues to lose money for the tribe and taxpayers. And despite all 
the money and water that has been showered on the project, NAPI employs 
only a few tribal members.
    This is an absurd situation, where the tribe feels it must waste 
water to protect its rights. We believe that the present problem can be 
solved if the tribe is allowed to make better use of the water it now 
wastes on NAPI. The San Juan Agricultural Water Users Association is 
willing to work with the tribe, the OSE, and Members of Congress to 
come up with a solution that allows the tribe to put this water to 
better use than trying to grow crops on the high mesa. The Navajo 
Gallup Pipeline might be one of these uses.
    Proponents of this legislation contend that this legislation is a 
fair compromise because they claim that the so-called ``Winters 
Doctrine'' would otherwise entitle New Mexico's Indian tribes to 
virtually all of New Mexico's river water in the San Juan River, with a 
priority over all non-Indian uses. This is a gross misconception and 
exaggeration of the Winters line of cases.
    In 1907, the Supreme Court ruled that when Congress established the 
Fort Belknap Reservation on the Milk River in Montana, Congress 
impliedly reserved some water to fulfill the basic purposes of the 
reservation, even though Congress said nothing about water rights in 
the act which created the reservation. The Winters decision might be a 
reasonable judicial extrapolation of congressional intent, for a 
particular reservation, but not for others.
    The proponents of this legislation are asserting an exaggerated and 
self-serving version of the ``Winters Doctrine.'' The legislation 
tacitly and wrongly assumes that the ``Winters Doctrine'' would give 
Indian tribes a priority over almost all non-Indian uses for whatever 
water the tribes could use for any purpose at any time after the 
reservation was established. The logic of this ``pseudo-Winters'' 
doctrine runs as follows:
    When Congress established Indian reservations in this area in the 
19th century, they impliedly reserved all the water that might be used, 
even though the Indians were using little, if any, river water at the 
time. Even though the water would not be used until indefinite times in 
the future, the priority of all those future uses would date back to 
the establishment of the reservation.
    The problem with this ``pseudo-Winters'' doctrine is that it gives 
tribes a retroactive priority over all non-Indian settlers, taking 
water away from the settlers that have actually used and relied upon 
water from these rivers for more than a century. This is a bizarre 
misinterpretation of the Winters line of cases. This pseudo-Winters 
doctrine is the creation of a small group of lawyers, not Congress. 
Congress never intended such a result. When Congress opened the West to 
settlement, it intended the settlers to have permanent water rights, 
protected like other property rights. When Congress encouraged settlers 
to move West and develop the land, Congress certainly did not intend to 
confiscate the settlers' water, without compensation, after the 
settlers had toiled on the land for a century and a half. Yet this is 
the result of the pseudo-Winters doctrine that has been invented by a 
small group of water lawyers acting as advocates for tribal interests. 
If Congress accepts this misinterpretation of the Winters line of cases 
by passing this legislation, it would be ratifying the concept that 
Indian tribes have priority rights to all the waters in the Colorado 
River system, the Rio Grande, and most other major river systems in the 
West. In short, this misinterpretation of Winters takes away the waters 
that our Anglo and Hispanic predecessors have relied upon since they 
settled in this region.
10.  THE WATER WHICH THE FEDERAL GOVERNMENT PROVIDES TO THE NAVAJO 
        TRIBE CANNOT BE CHARGED TO NEW MEXICO'S SHARE UNDER THE 
        COLORADO RIVER COMPACTS.
    The State of New Mexico has no legal obligation to provide water to 
Indian tribes, so it cannot be charged with the water that is supplied 
to the Navajos. That water is the responsibility of the federal 
government, not the state. So the water provided to the tribe in 
settlement of their water claims must be charged to the federal 
government, not to New Mexico's share of the Colorado River under the 
various compacts.
    The compacts do not deal with Indian water rights, except to say 
that they are the responsibility of the federal government. Article VII 
of the Colorado River compact states that ``Nothing in this compact 
shall be construed as affecting the obligations of the United States of 
America to Indian tribes.'' Article XIX of the Upper Colorado River 
Basin Compact states that ``Nothing in this compact shall be construed 
as: (a) affecting the obligations of the United States of America to 
Indian tribes.'' NMSA 1978, Sec. 72-15-26.
    Furthermore, it is not clear how this legislation relates to the 
settlement of Navajo water claims in Arizona and Utah. Although this 
legislation is touted as a settlement, it appears that it does not 
settle the tribe's claims for Colorado River water in Arizona, where 
the majority of tribal members live, or in Utah. Under the Colorado 
River Compact, Arizona is a lower basin state, while Utah and New 
Mexico are upper basin states. If there is to be a settlement of Navajo 
water claims, it should be a comprehensive settlement of all Navajo 
claims at once. And any settlement must specify how these claims will 
be treated under the various compacts affecting the Colorado River 
system. Any comprehensive settlement must also specify how the federal 
government is going to obtain the water it needs to settle its 
obligations (if any) to Indian tribes.
11.  THE GOVERNOR DOES NOT HAVE THE AUTHORITY TO SIGN AWAY WATER THAT 
        BELONGS TO THE PUBLIC, NOT THE STATE.
    Although Governor Richardson has signed a proposed settlement with 
the Navajo tribe, it is doubtful that he has unilateral authority to 
sign away water that belongs to the public, not the State of New 
Mexico. Article XVI, Sec. 2 of the New Mexico Constitution provides 
that ``the unappropriated water of every natural stream, perennial or 
torrential, within the state of New Mexico, is hereby declared to 
belong to the public and to be subject to appropriation for beneficial 
use, in accordance with the laws of the state. Priority of 
appropriation shall give the better right.'' Congress approved this and 
the other articles of the New Mexico Constitution as part of the 
process by which New Mexico was admitted to the Union in 1912.
    NMSA 1978, Sec. 72-1-1 says that ``All natural waters flowing in 
streams...within the limits of the state of New Mexico, belong to the 
public and are subject to appropriation for beneficial use.'' 
Therefore, the water in the San Juan belongs to the citizens who use 
it, not to the State of New Mexico. So how could the Governor have the 
authority to sign a binding deal that purports to commit water which 
the state does not own? Governor Richardson's unilateral attempt to 
sign away this water to the Navajo tribe poses serious questions under 
the New Mexico Constitution, its statutes, and the takings clause of 
the Fifth Amendment.
12.  THE PROPOSED PIPELINE WILL NOT SOLVE THE WATER PROBLEMS ON THE 
        NAVAJO RESERVATION.
    The Gallup pipeline would cost more than $1.5 billion to complete, 
in current dollars without cost overruns, which are inevitable. As a 
preliminary step, Congress and the State of New Mexico should 
commission an independent engineering and cost study by experts who 
have no vested interest in the project, so that the federal and state 
governments do not start a project which they cannot finish at a 
reasonable cost. Without an independent analysis, this project 
resembles a typical military procurement project: the project boosters 
are trying to get Congress to buy into the project by using low-ball 
cost estimates.
    Even if the Gallup pipeline is built, it will not supply drinking 
water to homes on the Navajo reservation. The legislation authorizes, 
but does not fund, a main trunk pipeline to Gallup and Window Rock. The 
legislation does not include the distribution pipelines that are 
necessary to supply water to homes on the reservation, so many tribal 
members will still be forced to haul water to their homes even if the 
main pipeline is built. A network of pipes to distribute water from the 
trunk line is likely to be more expensive than the main pipeline 
itself. For the amount of money that would be spent building the main 
trunk line, Congress could deliver water to more households and 
communities across the reservation by funding local projects to supply 
and conserve water. These smaller scale projects would be based on the 
development of local ground and surface water, with strict conservation 
measures. This alternative approach has several major advantages:
    A.  It actually delivers water to the households and communities 
that need it most.
    B.  It is cheaper and much more cost-effective.
    C.  It avoids drawing down the Colorado River.
    D.  It encourages conservation rather than consumption.
    The San Juan Agricultural Water Users Association could support 
legislation that provides an adequate supply of drinking water to the 
reservation and to the Gallup area, so long as it does not draw more 
water from the San Juan, which is already over-committed. This can be 
accomplished by a combination of local projects, conservation measures, 
and perhaps a pipeline that uses some of the water that currently goes 
to NAPI, where it is wasted.
CONCLUSION
    In the 1950s, many of our families were removed from their homes 
and ranches to make way for Navajo Dam and Navajo Lake. All of us were 
told that the project would protect us from floods, and this has turned 
out to be true.
    But we were also told that the dam would provide us with water in 
dry times. This has turned out to be untrue.
    We were told that there was plenty of water in the Colorado for 
everyone. This has turned out to be untrue.
    We were told that the project would satisfy the tribe's water 
claims. This has turned out to be untrue.
    [NOTE: The attachments referenced above have been retained in the 
Committee's official files.]

                                 
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