    [Senate Hearing 110-678]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 110-678

                         S. 3128, S. 3355, AND S. 3381

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

                                    HEARING

                                   before the

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                           ONE HUNDRED TENTH CONGRESS

                                 SECOND SESSION

                                       ON

             S. 3128, THE WHITE MOUNTAIN APACHE TRIBE RURAL WATER
     SYSTEM LOAN AUTHORIZATION ACT, WHICH AUTHORIZES A LOAN TO CONSTRUCT A
                             COMMUNITY WATER SUPPLY

      S. 3355, THE CROW TRIBE WATER RIGHTS SETTLEMENT ACT OF 2008, WHICH
                     SETTLES THE TRIBE'S WATER RIGHTS AND
                   PROVIDES SUPPORT FOR ECONOMIC DEVELOPMENT

      S. 3381, A BILL TO AUTHORIZE THE SECRETARY OF THE INTERIOR, ACTING
                  THROUGH THE COMMISSIONER OF RECLAMATION, TO
     DEVELOP WATER INFRASTRUCTURE IN THE RIO GRANDE BASIN, AND TO APPROVE
      THE SETTLEMENT OF THE WATER RIGHTS CLAIMS OF THE PUEBLOS OF NAMBE,
                   POJOAQUE, SAN ILDEFONSO, TESUQUE, AND TAOS

                                   __________

                               SEPTEMBER 11, 2008

                                   __________

             Printed for the use of the Committee on Indian Affairs

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                          COMMITTEE ON INDIAN AFFAIRS

                    BYRON L. DORGAN, North Dakota, Chairman
                     LISA MURKOWSKI, Alaska, Vice Chairman
    DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
    KENT CONRAD, North Dakota            TOM COBURN, M.D., Oklahoma
    DANIEL K. AKAKA, Hawaii              JOHN BARRASSO, Wyoming
    TIM JOHNSON, South Dakota            PETE V. DOMENICI, New Mexico
    MARIA CANTWELL, Washington           GORDON H. SMITH, Oregon
    CLAIRE McCASKILL, Missouri           RICHARD BURR, North Carolina
    JON TESTER, Montana
          Allison C. Binney, Majority Staff Director and Chief Counsel
         David A. Mullon Jr., Minority Staff Director and Chief Counsel

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on September 11, 2008...............................     1
    Statement of Senator Barrasso....................................    11
    Statement of Senator Domenici....................................     4
        Prepared statement...........................................     5
    Statement of Senator Dorgan......................................     1
    Statement of Senator Murkowski...................................     3
    Statement of Senator Tester......................................     5

                                   Witnesses

    Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     6
        Prepared statement...........................................     6
    Black Eagle, Hon. Cedric, Vice Chairman, Crow Nation.............    43
        Prepared statement...........................................    45
    Bogert, Michael, Counselor to the Secretary, U.S. Department of
      the Interior...................................................    20
        Prepared statement...........................................    22
    Dorame, Hon. Charles J., Chairman, Northern Pueblos Tributary
      Water Rights Association.......................................    55
        Prepared statement...........................................    57
    Kyl, Hon. Jon, U.S. Senator from Arizona.........................     7
        Prepared statement...........................................     9
    Lupe, Hon. Ronnie, Chairman, White Mountain Apache Tribe.........    33
        Prepared statement...........................................    36
    Polly, Kris, Deputy Assistant Secretary for Water and Science,
      U.S. Department of the Interior................................    13
        Prepared statement...........................................    15
    Suazo, Sr., Hon. Gilbert, Councilman, Taos Pueblo Tribe..........    60
        Prepared statement...........................................    62
    Sullivan, John F., Associate General Manager, Water Group, Salt
      River Project..................................................    40
        Prepared statement...........................................    41
    Tweeten, Chris D., Chief Civil Counsel, Office of the Attorney
      General, State of Montana......................................    50
        Prepared statement...........................................    52

                                    Appendix

    Correspondence between Wyoming and Montana during the Crow
      Compact negotiations, submitted by Senator Barrasso............    75
    D'Antonio, Jr., John R., P.E., State Engineer, New Mexico,
      prepared statement.............................................   172
    Letters submitted by:
        Darren Cordova, Mayor Pro Tem, Town of Taos..................   179
        David Coss, Mayor, City of Santa Fe..........................   180
        Dave Freudenthal, Governor, State of Wyoming.................   184
        Telesfor R. Gonzales, Chairman, El Prado Water and Sanitation
          District...................................................   181
        Mark Humphrey, Attorney, 12 Taos Valley Mutual Domestic Water
          Consumer Associations......................................   187
        Keith B. Nelson, Principal Deputy Assistant Attorney General,
          Office of Legislative Affairs, U.S. Department of Justice..   188
        George Pettit, Manager, Town of Gilbert, AZ..................   183
        Ivan D. Posey, Chairman, Eastern Shoshone Business Council...   182
        Bill Richardson, Governor of New Mexico......................   178
        Susan Bitter Smith, President, Board of Directors, Central
          Arizona Water Conservation District........................   186
    Martinez, Palemon, President, Taos Valley Acequia Association,
      prepared statement.............................................   177
    Montoya, Harry B., County Commissioner, Santa Fe, prepared
      statement......................................................   170
    Response to written questions submitted by Hon. John Barrasso to
      Hon. Dirk Kempthorne...........................................   201
    Response to written questions submitted by Hon. Pete V. Domenici
      to Hon. Dirk Kempthorne........................................   203
    Response to written questions submitted by Hon. Byron L. Dorgan
      to:
        Hon. Charles J. Dorame.......................................   190
        Hon. Dirk Kempthorne.........................................   199
        Hon. Gilbert Suazo, Sr.......................................   197
        Chris D. Tweeten.............................................   192
        Hon. Carl E. Venne...........................................   195
    Response to written questions submitted by Hon. Jon Tester to:
        Hon. Dirk Kempthorne.........................................   201
        Chris D. Tweeten.............................................   193
        Hon. Carl E. Venne...........................................   196
    Rivera, George, Governor, Pueblo of Pojoaque, prepared statement.   166
    Roybal, Leon, Governor, Pueblo de San Ildefonso, prepared
      statement with attachment......................................   160
    Supplementary information submitted by:
        Hon. Charles J. Dorame.......................................   156
        Chris D. Tweeten.............................................    86

                         S. 3128, S. 3355, AND S. 3381

                                  ----------

                          THURSDAY, SEPTEMBER 11, 2008

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:30 a.m. in
    room 628, Dirksen Senate Office Building, Hon. Byron L. Dorgan,
    Chairman of the Committee, presiding.

              OPENING STATEMENT OF HON. BYRON L. DORGAN,
                     U.S. SENATOR FROM NORTH DAKOTA

        The Chairman. We are going to call the hearing to order
    today just a minute or two early. This is a hearing of the
    Indian Affairs Committee of the United States Senate. We
    welcome all of you.
        This Committee is holding a hearing in this room, SD-628,
    which has now been assigned to the Indian Affairs Committee.
    Previously, we were meeting in the Russell Building for a good
    many years. This Committee will now convene in this room and in
    future hearings.
        We have, as had been the case with the previous room over
    in Russell so many years ago when it was first used for the
    Indian Affairs room, we had a blessing for the room. We have
    today with us the Vice Chairman of the Crow Tribe, Cedric Black
    Eagle, who is with us today and is willing to give an opening
    blessing. The blessing has included an activity this morning in
    which Cedric Black Eagle has smudged the room with smoke from
    coal and cedar, which is a tradition of their tribe. We
    appreciate very much the Vice Chairman of the Crow Tribe being
    with us.
        If you will all stand with me, we will invite Cedric Black
    Eagle to give us the blessing.
        Mr. Black Eagle. Thank you, Chairman Dorgan. Thank you for
    giving me this honor to pray this morning. Just very briefly, I
    talked to the members that were present earlier that in the
    Crow mission, whenever we have a new home or new tipi as our
    traditional home, we say a prayer, and all our doorways are
    facing east as the new day and the new things that come into
    our homes, things that are good, things that are of goodwill in
    nature is how we believe.
        I did that because primarily over 500 tribes eventually at
    some point in time will walk through these doors and sit down
    and talk with you about their issues and the things that they
    are concerned about. I prayed about that, and prayed for you,
    as well as the members of this Committee, the staff, that you
    remain in good health and that you have strong minds and
    healthy bodies to fulfill the things that you were elected to
    do in terms of this Congress.
        With that, I will say an opening prayer.
        [Prayer in native tongue.]
        Mr. Black Eagle. Thank you.
        The Chairman. Mr. Chairman, thank you for being with us. We
    appreciate the blessing and respect the cultural significance
    of that blessing. I perhaps should have called on our
    colleague, Senator Tester from Montana, to give a proper
    introduction of a member of the Crow Tribe.
        Senator Tester. That is perfectly all right, Mr. Chairman.
    Cedric, I don't need to tell anybody that knows him this, but
    Cedric is a very fine man, very soft-spoken, but when he speaks
    people listen. I really appreciate not only his blessing of
    this room and the scent of sweetgrass that we can still smell,
    but also for your prayer, Cedric. We appreciate that,
    appreciate it very much. It is one of the keys for us to do
    good work. So thank you.
        The Chairman. Senator Tester, thank you very much.
        I had the pleasure and the honor of visiting the Crow
    Nation with our colleague, Senator Tester, and I appreciate
    very much your being here.
        The Committee, this morning, will have a hearing on S.
    3128, S. 3355 and S. 3381. I think at all hearings today, it is
    perhaps important to acknowledge this is a very important day,
    September 11, which today is the seventh anniversary of a
    tragic day in our Nation's history. We remember, as all
    committees I am sure will remember, the memory of those who
    lost their lives on that day.
        But the business of America continues, and this hearing is
    being called today to hear the views on three bills related to
    Indian water matters. The first, S. 3128, is the White Mountain
    Apache Tribal Rural Water System Loan Authorization Act, which
    authorizes a loan to construct a community water supply. The
    second is S. 3355, the Crow Tribe Water Rights Settlement Act
    of 2008, which settles the Tribe's water rights and provides
    support for economic development. And the final one is S. 3381,
    a bill authorizing the Secretary of the Interior to develop
    water infrastructure in the Rio Grande basin, and to approve
    the settlement of water rights claims of five Indian Pueblos.
        These bills are important to the tribes, to the States, and
    to non-Indian water users in the western United States. The
    bills will secure water supplies and settle claims against the
    United States for compromising tribal water rights.
        Furthermore, the bills try to rectify the failing Federal
    irrigation projects serving reservation residents. Water
    supplies must be secured to provide drinking water and to allow
    communities to develop their resources.
        The bills will provide certainty to Indian and non-Indian
    communities alike. I acknowledge today the efforts of these
    communities to come together and resolve very longstanding and
    difficult issues regarding water use.
        So today, we will hear from the sponsors of the bills,
    including Senators Bingaman and Kyl, who are joining us today.
    Welcome, Senators Kyl and Bingaman, and I know that Senator
    Domenici is a sponsor of one of the bills as well.
        We will also hear the views of the Department of the
    Interior, Indian tribes and others involved with the bills. I
    welcome the witnesses. I know that many of you have traveled
    long distances to be with us, and we appreciate your
    willingness to testify.
        We do have a full agenda, and I ask that you limit your
    oral testimony to five minutes and your full written testimony
    will be put in the record as submitted in its entirety. I
    encourage any other interested parties to join us with
    submitted written comments to the Committee which will be part
    of the hearing record. The hearing record will remain open for
    two weeks.
        Senator Murkowski?

                   STATEMENT OF HON. LISA MURKOWSKI,
                        U.S. SENATOR FROM ALASKA

        Senator Murkowski. Thank you, Mr. Chairman.
        I want to thank you, Chairman, for your words this morning,
    your blessings upon this room and those across this Nation that
    guide our Country, not only those of us here in the United
    States Senate, but all the tribal leaders and those that are
    making a difference across this Nation.
        I do want to commend you, Mr. Chairman. I think the room
    looks pretty great. We are out of the dungeon and into the
    light, and I think it is a fine job and a good place to be
    doing our business here. I think it is auspicious on this first
    Committee hearing that we are having in this room that we are
    joined by two of our colleagues from the West, Senator Kyl from
    Arizona, Senator Bingaman from New Mexico, both leaders and
    advocates on Indian issues, including the measures that we have
    before us today.
        I suspect that many of us probably more so those from east
    of the Mississippi, don't completely understand the critical
    importance of water to communities in the American west, where
    we know that the supply is inevitably outstripped by the
    competing demands. I doubt, though, that anyone understands
    this basic tenet of life better than the Indian people living
    on the reservation communities in the American west.
        Many of our Indian tribes have longstanding senior water
    rights that have never been developed or transformed from a
    right into a real or the wet water. I do appreciate the very
    significant efforts that have been undertaken to bring several
    of the parties together to resolve the water issues out in the
    West. When I was chairman of the Subcommittee on Water and
    Power in the Energy Committee, I had an opportunity to work
    with so many of my colleagues on these very thorny issues as
    they relate to water issues and water rights.
        We know that the litigation can span generations. The
    Aamodt case involved in one of these bills, we certainly see
    that. We recognize the cost, the cost to the parties, millions
    upon millions of dollars in attorneys and expert witness fees.
    So resolving these disputes by agreement rather than litigation
    brings not only certainty and finality, but provides an
    opportunity for creativity and solutions that the courts simply
    can't provide.
        I do hope that the Committee will expeditiously consider
    these matters, and I appreciate you, Mr. Chairman, bringing
    them forward today.
        The Chairman. Senator Murkowski, thank you very much.
        I would just observe that my small contribution to the
    resistance is to insist on opening the drapes in hearing rooms.
    Most politicians here walk around with a gray pallor, never
    having seen the sun or the sky because our hearing rooms are
    all clouded in deep-colored drapes that are shut.
        We are told we don't look as good on camera, apparently,
    because of the light, but we all feel better.
        [Laughter.]
        Senator Domenici. You have to get some people to wash the
    windows.
        The Chairman. That is right. We will wash the windows.
        Do other members of the Committee have comments? Senator
    Domenici?

                  STATEMENT OF HON. PETE V. DOMENICI,
                      U.S. SENATOR FROM NEW MEXICO

        Senator Domenici. Thank you very much, Mr. Chairman. It is
    good to have Senator Bingaman here testifying on the measures
    before the Committee. I thank you for holding the hearing.
        The two bills before us are very important to New Mexicans:
    S. 3381, the Aamodt and Taos Pueblo Indian Water Rights
    Settlement, and the Taos Indian Settlement Act of 2008. This
    legislation will resolve longstanding Indian water rights
    claims within New Mexico and authorize a Federal funding
    source.
        The Aamodt litigation in New Mexico was filed, believe it
    or not, Mr. Chairman, and I say this for the benefit of the
    distinguished Senator from Arizona also, in 1966, the longest-
    standing litigation in the Federal judiciary system. The
    resolution of these claims will not only improve the lives of
    many within the communities by providing a safe and reliable
    water supply, but will also improve the ability of New Mexico
    to effectively undertake water rights planning.
        The parties to this case were docketed back in 1966. They
    have made real agreements. They have sat down and discussed and
    changed their views over the years and have come to some real
    understandings that we can't let fall between the cracks now.
    Not only should we authorize it today, but this United States
    Congress has to find a way to pay for this. Aamodt is not a
    very elaborate settlement in terms of dollars, but nonetheless
    we don't have the resources and we ought to find out from the
    Federal agency why it is so difficult to get these funded when
    so many other Indian settlements have been funded by the United
    States Government.
        Mr. Chairman, as you might know, cases of this duration
    have many, many participants. I would like to just, with your
    permission, indicate who is present here. I am sure that
    Senator Bingaman would agree that we ought to recognize
    Governor Mora of Tesuque is here. Thank you, Governor. And
    Governor Roybal of San Ildefonso is here. Thank you, Governor.
        Governor Rivera, George Rivera of Pojoaque, and Lieutenant
    Governor Diaz of Pojoaque, and Governor Paul Martinez of Taos,
    and War Chief Luis Romero from Taos. Is the War Chief here?
    Frank Marcus from Taos and Nelson Cordova from Taos. Thank you
    for coming. Arthur Coca from Taos Valley Acequia Association.
    Thank you, sir, and Gael Minton of Taos Valley Acequia
    Association, thank you.
        Thank you, Mr. Chairman. I will have questions of the
    Federal witnesses, and I again thank you for this hearing.
        Senator Bingaman, thank you for all the work you have done
    in trying to get these cases resolved.
        [The prepared statement of Senator Domenici follows:]

      Prepared Statement of Hon. Pete V. Domenici, U.S. Senator from New
                                     Mexico
        Mr. Chairman, thank you for holding this hearing today. Over the
    last several years an enormous amount of time has been spent on these
    settlements and other New Mexico Indian water rights settlements. I am
    pleased to see many of the settlement parties from New Mexico with us
    here today. They deserve an enormous amount of credit for their years
    of hard work to make this legislation possible. Rather than spend
    countless hours in litigation, these groups have sat down and worked
    through these issues in a very productive manner.
        As a result, we have before us today, S. 3381--the Aamodt and Taos
    Pueblo Indian Water Rights Settlement Act of 2008. This legislation
    will resolve these long-standing Indian water rights claims within New
    Mexico and authorize a source of Federal funding to resolve them.
        The Aamodt litigation in New Mexico was filed in 1966, and is the
    longest standing litigation in the Federal judiciary system. The
    resolution of these claims will not only improve the lives of many
    within these communities by providing a safe and reliable water supply,
    but will also improve the ability of New Mexico to effectively
    undertake water rights planning in the near and long-term future.
        As I have stated before, the costs of not settling these claims in
    New Mexico are dire. The legislation before us will ensure that our
    obligations to these communities are met and that they will have safe
    and reliable water systems.
        I would like to welcome our witnesses here today and look forward
    to their testimony.
        Thank you Mr. Chairman.

        The Chairman. Senator Domenici, thank you.
        Senator Tester?

                     STATEMENT OF HON. JON TESTER,
                       U.S. SENATOR FROM MONTANA

        Senator Tester. Thank you, Mr. Chairman.
        I also want to echo Senator Domenici's comments on the
    hearing. I appreciate your holding these in such quick fashion.
        I am going to limit my talking to the Crow Water
    settlement. In 1999 when I was in my first year in the Montana
    State Senate, we voted on this water settlement. It is now
    nearly 10 years later and we have it in front of us now.
    Hopefully, we can get this acted upon and passed because water
    is critically important all over the West, as Senator Murkowski
    said, but also in areas that are economically challenged like
    Indian Country in the West. So if we can provide self-
    sufficiency to them through self-determination, I think it
    helps everybody.
        I, too, want to thank Cedric for being here absolutely, and
    Chris Tweeten for being here. They have done a lot of work for
    the last, goodness knows, decade and longer to try to get these
    Indian water settlements to come to fruition.
        So thank you, Mr. Chairman, once again, and I look forward
    to the hearing.
        The Chairman. Senator Tester, thank you very much.
        Senator Bingaman, welcome to our Committee. You may
    proceed.

     STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW MEXICO

        Senator Bingaman. Thank you very much, Mr. Chairman. I
    appreciate your having this hearing and considering
    particularly the bill that Senator Domenici and I have been
    most involved with, which is S. 3381. As he described, first he
    introduced all of our distinguished visitors who are the
    individuals that really did make this possible because of their
    willingness to negotiate a settlement of these two cases.
        One of the cases involves litigation that is over 40 years
    old, as Senator Domenici pointed out. It was a pending case
    when I was sworn into the bar in New Mexico, and it is still a
    pending case. The other case is not quite 40 years old, but it
    is getting close.
        So it is very important we get these settlements agreed to.
    The settlements have been agreed to, but get the legislation
    enacted to implement the settlements. That is what this
    legislation would try to do.
        We believe it is fair to all involved, not just the
    Pueblos, but the other water rights holders in these areas. We
    believe it is a good resolution of the issues. The State of New
    Mexico deserves special recognition for actively pursuing these
    settlements. Governor Richardson has made this a priority and
    deserves credit for that.
        I am disappointed that the Administration is not going to
    be testifying in support of the bill as introduced. However, I
    do not believe the Administration's position should impede this
    Committee from proceeding with the bill. I hope that there is a
    chance for the Committee to act favorably upon it so that some
    action can be completed by the full Senate before this year is
    out.
        Let me just say that if we can accomplish the enactment of
    this legislation, as Senator Domenici and I have proposed it
    here, I think it will put a lot of lawyers out of work in our
    State. Many of the lawyers that I know quite intimately in
    Santa Fe and other parts of the State have made a good living
    litigating these cases for a long time. It would be very good
    if we could urge them to pursue other litigation and get these
    resolved.
        So thank you for having the hearing. I hope your Committee
    is able to act favorably upon this bill before it concludes its
    work.
        [The prepared statement of Senator Bingaman follows:]

     Prepared Statement of Hon. Jeff Bingaman, U.S. Senator from New Mexico
        Chairman Dorgan and Vice-Chairman Murkowski--thank you for holding
    today's hearing. I appreciate the opportunity to address the Committee
    in support of S. 3381, a bill that I am sponsoring with Senator
    Domenici. This bill is the product of years of negotiation and is long
    overdue. If enacted, it will end contentious disputes over water rights
    claims in two separate stream adjudications in northern New Mexico.
    Before getting into the details, I'd like to take a moment to recognize
    the large number of New Mexicans who are here today in support of S.
    3381. Charlie Dorame of Tesuque Pueblo, will be representing the views
    of the four Pueblos involved the Rio Pojoaque adjudication, otherwise
    known as the Aamodt case. He is accompanied by Governor Mora of
    Tesuque; Governor Roybal of San Ildefonso Pueblo; and Governor Rivera
    and Lt. Governor Diaz of Pojoaque Pueblo. Councilman Gil Suazo of Taos
    Pueblo will address the benefits of the Taos settlement. Gil is
    accompanied by Governor Martinez and several other leaders of Taos
    Pueblo. Representatives of the Taos Valley Acequia Association have
    also traveled here to express support for S. 3381.
        As I noted, S. 3381 would authorize two Indian water rights
    settlements. The first is a settlement involving the claims of Nambe,
    Pojoaque, San Ildefonso, and Tesuque Pueblos in the Rio Pojoaque, which
    is north of Santa Fe. It's my understanding that the Aamodt case is the
    longest active Federal court proceeding in the country. The case began
    in 1966 and has been actively litigated before the district court in
    New Mexico and the Tenth Circuit Court of Appeals. Forty years of
    litigation resolved very little, certainly not what the parties
    accomplished by engaging directly with each other. The Aamodt
    Litigation Settlement Act represents an agreement by the parties that
    will (1) secure water to meet the present and future needs of the four
    Pueblos; (2) protect the interests and rights of long-standing water
    users; and (3) ensure that water is available for municipal and
    domestic needs for all residents in the Pojoaque basin. Negotiation of
    this agreement was a lengthy process and the parties had to renegotiate
    several issues to address local, state, and Federal policy concerns. In
    the end, however, their commitment to solving the water supply issues
    in the basin prevailed.
        The Rio Pueblo de Taos adjudication is a dispute that is almost 40
    years old. Similar to Aamodt, little has been resolved by the pending
    litigation. The parties have been in settlement discussions for well
    over a decade but it was not until the last five years that the
    discussions took on the sense of urgency needed to resolve the issues
    at hand. The settlement will fulfill the rights of the Pueblo
    consistent with the Federal trust responsibility, while continuing the
    practice of sharing the water necessary to protect our traditional
    agricultural communities. The Town of Taos and other local entities are
    also secure in their ability to access the water necessary to meet
    municipal and domestic needs. The Taos Pueblo Indian Water Rights
    Settlement Act represents a common-sense set of solutions that all
    parties to the adjudication have a stake in implementing.
        Both settlements are widely supported in their respective
    communities. The State of New Mexico, under Governor Richardson's
    leadership, deserves special recognition for actively pursuing
    settlements in both of these matters and committing significant
    resources so that the Federal government does not have to bear the
    entire cost of these settlements.
        I am disappointed that the Administration is not supporting our
    bill as introduced. However, I don't believe the Administration's
    position should impede the bill from proceeding, and I hope there is a
    chance for Committee approval before we adjourn. As set forth in the
    testimony provided by Chairman Dorame and Councilman Suazo, we believe
    the settlements are consistent with the Administration's Criteria and
    Procedures for Indian Water Rights Settlements. Moreover, the U.S.
    Supreme Court once characterized the Federal Government's
    responsibilities to Indian tribes as ``moral obligation of the highest
    responsibility and trust.'' This bill is an attempt to ensure that the
    government lives up to that standard, and does so in a manner that also
    addresses the needs of the Pueblos' neighbors.
        Thank you again for the opportunity to make these remarks. I am
    committed to working closely with the Committee to try and move S. 3381
    towards enactment.

        The Chairman. Senator Bingaman, thank you very much.
        I neglected to call on Senator Barrasso. That was my
    mistake.
        Senator Barrasso?
        Senator Barrasso. Oh, thank you very much, Mr. Chairman. I
    am happy to wait until after Senator Kyl.
        The Chairman. Let me call on Senator Kyl, after which I
    will call on Senator Barrasso.
        Senator Kyl, thank you for coming to the Committee. You may
    proceed.

          STATEMENT OF HON. JON KYL, U.S. SENATOR FROM ARIZONA

        Senator Kyl. Mr. Chairman, thank you. Thank you for holding
    this hearing. There is really kind of a little emergency out in
    Arizona, and your willingness to do this quickly is very, very
    much appreciated.
        This is a bill that will precede the full settlements bill
    which we are filing today to settle claims of the White
    Mountain Apache Tribe in Arizona, East Central Arizona. East
    Central Arizona has some mountains and it gets a lot of snow
    and rain on a portion of those mountains, but it has virtually
    no groundwater. Up to now, the White Mountain Apache Tribe has
    relied solely on groundwater for the supply of water for its
    people. We are not talking projects or irrigation or anything
    of that sort, just the needs of the communities of White River
    and Cibecue and the other communities in which the White
    Mountain Apaches live.
        That water is running out so quickly that in fact we won't
    have time to get this project built and in operation before it
    runs out. So there is a small interim project that actually is
    being put in place to tide them over. But as a result of an
    agreement by the tribe and all of the non-Indian parties in
    Arizona, and I believe the Federal Government agrees that this
    is the only solution to the municipal water needs of the White
    Mountain Apache Tribe, there is an agreed settlement of all of
    the claims which part of is for the Miner Flat Reservoir.
        The legislation that we are asking support for today is
    simply to provide a loan from the Federal Government to get the
    engineering and planning and design of the Miner Flat Reservoir
    started now. If we wait until the settlement is finally passed
    by Congress, perhaps next year, since the repayment of the loan
    can't start until the year 2013 under the Arizona Water
    Settlement Act that was passed a couple of years ago, and
    because of the lag time, it will cost about $5 million to $7
    million a year more if the project isn't started then. And
    there is uncertainty as to whether this interim supply of water
    is going to be adequate in any event.
        So the point here is to get a loan to start the planning,
    construction and design of the Miner Flat Reservoir, which will
    be the ultimate source of water for the White Mountain Apache
    Tribe. That loan will be repaid. We have an amendment on our
    bill which solves a pay-go problem, but when the settlement
    legislation is adopted, then the payment will come out of the
    Arizona Water Settlement Fund, which has already been
    legislated into law by the Congress.
        I want to thank the really enlightened leadership of the
    White Mountain Apache Tribe. Its tribal council, led by
    Chairman Ronnie Lupe, who is right behind me, has come to every
    one of the meetings. They have been very constructive in their
    approach. The non-Indian parties, represented here today by
    John Sullivan of the Salt River Project, have also been very
    cooperative.
        This has been one of the best water settlements for me to
    participate in because there is simply no disagreement.
    Everybody is cooperating. But I think one of the reasons is
    everybody knows that the clock is ticking, and the White
    Mountain Apache Tribe is simply going to run out of water for
    its people if we don't get this project going.
        So I really appreciate the Committee's acting on this
    quickly, in view of what is in effect an emergency that can be
    solved by this legislation.
        I thank the Committee.
        [The prepared statement of Senator Kyl follows:]

         Prepared Statement of Hon. Jon Kyl, U.S. Senator from Arizona

        The Chairman. Senator Kyl, thank you very much. We will see
    if there are questions in a moment.
        Senator Kyl, do you know the Administration's position on
    this? I know that they are testifying in opposition to the bill
    that Senator Bingaman described.
        Senator Kyl. Mr. Chairman, they will be testifying here. I
    don't want to characterize it, except to say that I think it is
    soft opposition, or not support for the moment, until the water
    settlement is finalized. The settlement has been finalized. It
    has been agreed to by all parties. It will be embodied in the
    legislation that we are introducing today.
        But the Interior Department naturally wanted to make sure
    that that was done because, as with most of these projects, the
    Interior Department correctly takes the position that they
    should all be part of a comprehensive settlement. This will be.
    But we didn't want to wait to file the legislation for this
    emergency loan, in effect, because we didn't know quite how
    long it would take to get the legislation done. It now,
    obviously, is done, but this will enable us to go forward with
    the loan and deal with this emergency, but it will be repaid
    out of the settlement which will be adopted later.
        The Chairman. Well, I understand how difficult it is to get
    all of the parties together and reach kind of a global
    settlement on these issues. I know you and so many others in
    Arizona have worked hard on these matters. I am sure you feel
    good about having reached a point where you can move forward.
        Any other questions? Any questions on the Committee?
        Senator Domenici. I only want to say I wish we had soft
    support from the Administration also. I have difficulty
    describing it.
        [Laughter.]
        Senator Bingaman. I was going to say that the support we
    have is every bit as soft as the support that he has.
        [Laughter.]
        Senator Kyl. Let me just say ``soft non-opposition,'' and
    let the Interior Department representative characterize their
    view. But it did primarily have to do with the fact that the
    settlement hadn't been completed when we introduced the
    legislation. It now has been. So I think most of that should go
    away.
        The Chairman. Well, I was going to say that most testimony
    on these kinds of projects before the Committee has not seen a
    lot of support from the Administration, so soft or medium or
    hard, whatever the case. I should also indicate that Senator
    Bingaman, you and Senator Domenici and a lot of folks in the
    State of New Mexico have similarly worked diligently for a long
    period of time to try to reach settlements. Having some of them
    in North Dakota, these are very wrenching, very difficult, and
    take a long, long time to get done. Some of them never get
    done, but we appreciate the work that both of you have done. We
    appreciate your coming to the Committee.
        Senator Barrasso?

                   STATEMENT OF HON. JOHN BARRASSO,
                       U.S. SENATOR FROM WYOMING

        Senator Barrasso. Thank you, Mr. Chairman.
        My comments have to do with S. 3355, which is commonly
    called the Crow Compact. It is a very important piece of
    legislation, Mr. Chairman. It recognizes the efforts being made
    by the Crow Nation to make a better future for their people.
        We in Wyoming want to support these efforts. We also want
    to make sure that there are no unintended consequences from
    this legislation. As written, this bill would have tangible
    impacts on Wyoming. This Committee must carefully consider all
    of those impacts.
        I know that Senator Tester and the Crow Tribe's leaders
    approach this issue just as I do. If we have a practical
    problem, we need a practical solution. So this hearing is a
    good opportunity to start working and flush out the issues
    related to water rights on the Bighorn River and its drainages.
    But I hope we all understand that there is still a lot of work
    that needs to be done.
        To give a background information, Mr. Chairman, for the
    benefit of our colleagues, the Bighorn River runs north from
    Wyoming into Montana, and there it joins the Yellowstone River
    and then proceeds into North Dakota. Montana's and Wyoming's
    water rights on the Bighorn are defined by the Yellowstone
    Compact. Montana is granted 20 percent of the water. Wyoming
    has rights to 80 percent of the water. We are blessed with a
    bounty of resources in this region, and they sometimes bring
    with them a bounty of issues. We are dealing with those now.
        The upstream water users in Wyoming include both the
    Northern Arapaho and the Eastern Shoshone Tribes. It includes
    irrigation districts at Buffalo Bill and Boysen Reservoir. It
    includes many communities in the Bighorn Basin of Wyoming. The
    Yellowtail Dam alters the flow of the Bighorn River immediately
    preceding the Crow Reservation.
        The dam in Montana created Bighorn Lake, which lies mostly
    south of the State border in Wyoming. Bighorn Lake is a central
    feature of Bighorn Canyon National Recreation Area. It is a
    breathtaking natural feature that offers unparalleled
    recreation opportunities for visitors to Wyoming and residents
    of Wyoming. I was there just last week.
        Multiple federal agencies, state agencies, tribes, local
    governments and individual water users have important interests
    here that may be impacted by this legislation. So my primary
    concern, Mr. Chairman, is how do we protect the upstream users
    in Wyoming from unintended consequences? And how do we maintain
    the fragile balance of interests at Yellowtail Dam?
        I think it is important that we clarify that Wyoming was
    not part of the compact. We are not a signatory party. We were
    allowed to comment on the negotiations, but many of our
    requests went unfulfilled. So I would like to include in the
    record correspondence between Wyoming and Montana during the
    Crow Compact negotiations. * These records make clear that
    significant concerns do remain. We will seek a protection
    clause for Wyoming water rights as explained in the documents.
    ---------------------------------------------------------------------------
        * The information referred to is printed in the Appendix.
    ---------------------------------------------------------------------------
        In addition, the compact includes a management plan for
    Yellowtail Dam that excludes everyone except for the Crow Tribe
    and the State of Montana. So this was done without the State of
    Wyoming as well. We want to maintain the fragile balance of
    uses of Bighorn Lake by amending the plan. We ask the Crow
    Tribe and Senator Tester's staff to consider these issues, and
    I am optimistic that we can work with you, Mr. Chairman, to
    bring all interests to the table to accomplish our goals.
        Thank you, Mr. Chairman.
        The Chairman. Senator Barrasso, thank you very much. Again,
    I apologize for not calling on you earlier. I appreciate your
    comments.
        We have eight witnesses to hear from today. I do want to
    emphasize that you have traveled a long ways, many of you, to
    be here. We want to hear you in full detail, but we hope you
    will summarize your prepared statement.
        We will hear from the Administration first. We will ask Mr.
    Kris Polly, Deputy Assistant Secretary for Water and Science
    from the U.S. Department of Interior to come forward, and Mr.
    Michael Bogert, the Counselor to the Secretary, U.S. Department
    of Interior.
        Mr. Polly and Mr. Bogert, thank you for being with us. Mr.
    Polly, are you to go first? Why don't you proceed, and then we
    will hear from Mr. Bogert.

     STATEMENT OF KRIS POLLY, DEPUTY ASSISTANT SECRETARY FOR WATER
                  AND SCIENCE, U.S. DEPARTMENT OF THE
                                INTERIOR

        Mr. Polly. Thank you, Mr. Chairman.
        The Chairman. I would note that the Committee has your
    prepared statement as well in its entirety.
        Mr. Polly. Thank you, sir.
        Per Senator Kyl's suggestion, I will see if we can come up
    with a different scale for describing our positions in the
    future.
        The Chairman. All right.
        Mr. Polly. That said, it is a personal honor to be here,
    sir, especially since you have dedicated so much of your
    professional life to solving western water problems. I
    appreciate it.
        Mr. Chairman and members of the Committee, my name is Kris
    Polly and I am Deputy Assistant Secretary for Water and
    Science. I am pleased to provide the Department of the
    Interior's views on S. 3128 and S. 3355. The Department's
    formal review of these bills has been submitted in writing, and
    my statement today will summarize these testimonies.
        The Administration does not support S. 3128, the White
    Mountain Apache Rural Water System Loan Authorization Act.
    Basically, the Department's concerns boil down to three
    distinct areas: Number one, financing for the loan authorized
    in the bill; two, the settlement process and the government's
    liability; and three, the technical review of the rural water
    system in the bill.
        I will summarize these concerns today, and if the Committee
    has detailed questions, we are happy to respond to those in
    writing for the record.
        S. 3128 requires the Federal Government to provide the
    Apache Tribe with funding of $9.8 million. As such, an up-front
    appropriation for the full amount of the proposed feasibility
    level study from Reclamation's budget would be needed. Although
    S. 3128 authorized $9.8 million for planning, engineering and
    design of the tribe's proposed project, it is the first step
    towards a settlement under the United States which would be
    asked to provide an additional $100 million in Federal funding.
        S. 3128 cannot be considered in a vacuum, and the future
    settlement that is intended to fund the tribe's proposed
    project must be taken into consideration.
        Since 2004, the Department of the Interior has been
    participating in negotiations with the tribe, the State of
    Arizona, Salt River Project, and other water users regarding
    the water rights of the tribe. The parties have made progress
    in resolving many disputed issues, including the total amount
    and source of water to be provided under a settlement, but a
    final settlement has not been agreed to by the United States.
        In negotiating Indian water rights settlements, the
    Administration follows a legal process called the criteria and
    procedures for the participation of the Federal Government in
    negotiations for the settlement of Indian water rights claims.
    Interior and the Department of Justice are in the process of
    analyzing the tribe's water rights claims and have requested
    the tribe to provide information on its views of potential
    liability the United States may have with respect to those
    claims and other water-related claims. Until that analysis is
    completed, it is not possible for the Administration to
    determine whether paying for some or all of the construction of
    the proposed project is an appropriate Federal settlement
    contribution. As such, the Administration believes S. 3128 is
    premature.
        Finally, the key component of the settlement being
    negotiated by the parties is the construction of the White
    Mountain Apache Tribe Rural Water System, which will provide a
    100-year water supply for the reservation through the
    construction of Miner Flat Dam on the north fork of the White
    River. The need for reliable and safe drinking water for the
    reservation is not in question, and it may be that the project
    proposed by the tribe is the best way to address the need.
    However, more analysis needs to be done.
        The tribe estimates the cost of the proposed project at
    approximately $128 million in today's dollars. This estimate
    has not been verified by the Bureau of Reclamation, nor has
    Reclamation completed a feasibility-level study for it.
    Therefore, we cannot provide assurance that the project can
    actually be constructed within this estimate.
        Within the next year, Reclamation intends to review the
    cost estimate prepared by the parties to provide a higher level
    of assurance. This review may provide some important
    information to the tribe to assist in the planning, engineering
    and design that they propose to undertake pursuant to S. 3128.
        In closing, the Administration cannot support this bill,
    but is committed to continuing work with the tribe and other
    settlement parties to reach a fair settlement of the tribe's
    water rights claims.
        The Department also cannot support S. 3355, the Crow Tribe
    Water Rights Settlement Act. The Crow Reservation was
    established by the Treaty of Fort Laramie in 1868 and it
    currently encompasses approximately 2.2 million acres, 66
    percent of which is held in trust for the tribe and individual
    Indians. Tribal enrollment is approximately 11,500 and the
    reservation economy is principally agricultural, farming and
    ranching and some coal-mining.
        In 1985, the United States, the tribe and the State of
    Montana entered into negotiations aimed at settling the tribe's
    water rights claims. In 1999, the Crow and the State reached an
    agreement on a compact providing for an allocation of water for
    the tribe. The Federal Government was not a signatory to this
    agreement.
        However, the Department of the Interior's support for
    negotiated settlements as an approach to resolving this and
    other Indian water rights claims is strong. The Administration
    has not agreed to the compact that S. 3355 would approve, and
    we have serious concerns about the settlement as introduced,
    especially about the high cost of the settlement and the lack
    of supporting analysis showing that the infrastructure projects
    mandated under the settlement are a cost-effective approach to
    accomplishing the goals of the settling parties.
        The Administration has concerns that the waivers and
    releases in the bill do not sufficiently protect the United
    States from future claims by the tribe.
        For these reasons and others described in my written
    statement, the Administration cannot support S. 3355 as
    introduced. We would like time to continue our ongoing work
    with all parties concerned in developing a settlement that the
    Administration can support.
        Thank you. This concludes my statement.
        [The prepared statement of Mr. Polly follows:]

    Prepared Statement of Kris Polly, Deputy Assistant Secretary for Water
                  and Science, U.S. Department of the Interior
    S. 3128, the White Mountain Apache Tribe Rural Water System Loan
            Authorization Act
        Mr. Chairman and members of the Committee, my name is Kris Polly,
    Deputy Assistant Secretary for Water and Science. I am pleased to
    provide the Department of the Interior's views on S. 3128, the White
    Mountain Apache Tribe Rural Water System Loan Authorization Act. The
    Administration does not support S. 3128.
        S. 3128 would require the Secretary of Interior, within 90 days of
    the legislation's enactment, to provide funding in the amount of $9.8
    million to the White Mountain Apache Tribe (Tribe) to initiate the
    planning, engineering, and design of a rural water system (known as the
    ``Minor Flat Project'') that is intended to be the centerpiece of a
    future settlement of the Tribe's water rights claims in Arizona. Until
    a final settlement of the Tribe's claims has been reached and enacted
    by Congress, we do not support the Federal government providing
    consideration for, or a contribution to a possible future litigation
    settlement. S. 3128 requires the Federal government to provide the
    Apache Tribe with $9.8 million, but does not require the Tribe to
    reimburse the Federal government. As such, an upfront appropriation for
    the full amount of the proposed feasibility-level study from the Bureau
    of Reclamation's budget would be needed. In addition, this would
    essentially authorize loan forgiveness as no non-Federal contributions
    would be repaid to the United States Treasury.
        The White Mountain Apache Reservation lies within the Salt River
    sub basin which provides the Phoenix metropolitan area with much of its
    water supply. Since 2004, the Department of Interior has been
    participating in negotiations with the White Mountain Apache Tribe
    (Tribe), the State of Arizona, the Salt River Project, various Arizona
    cities and irrigation districts, Freeport McMoran Copper & Gold, Inc,
    the Central Arizona Water Conservation District, and other water users
    in the Salt River basin regarding the water rights of the Tribe. The
    parties have made significant progress in resolving numerous disputed
    issues, including the total amount and source of settlement water to be
    provided under a settlement, but a final settlement has not been agreed
    to by all of the settlement parties. As the Administration has stated
    in previous Indian water right settlements, water rights settlements
    must be designed to ensure finality and protect the interest of the
    Tribes and all American taxpayers.
        The key component of the settlement being negotiated by the parties
    is the construction of the ``White Mountain Apache Tribe Rural Water
    System,'' which would provide a 100-year water supply for the
    Reservation through the construction of Miner Flat Dam on the North
    Fork of the White River and related water delivery infrastructure. This
    project would provide replace and expand the current water delivery
    system on the Reservation, which relies on a diminishing groundwater
    source and is quickly becoming insufficient to meet the needs of the
    Reservation population. The need for reliable and safe drinking water
    on the Reservation is not in question and it may be that the project
    proposed by the Tribe is the best way to address the need. However,
    more analysis needs to be done to determine the best course of action.
    As such, the Administration believes S. 3128 is premature.
        Although S. 3128 authorizes only $9.8 million for planning,
    engineering, and design of the Tribe's proposed project, it is the
    first step toward a settlement under which the settling parties are
    likely to request that the United States provide at least another $100
    million in federal funding. S. 3128 cannot be considered in a vacuum
    and the settlement that is intended to fund the Tribe's proposed
    project must be taken into consideration. The Tribe estimates the cost
    of the proposed project at approximately $128 million in today's
    dollars. This estimate has not been verified by the Bureau of
    Reclamation nor has it completed a feasibility level study which would
    be typical before Reclamation would request funding and authority to
    construct such a project. Therefore, Reclamation cannot provide
    assurance that the project can actually be constructed within this
    estimate. Within the next year, Reclamation intends to initiate its own
    review of the cost estimate prepared by the parties to provide a higher
    level of assurance. This review would not involve the engineering work
    proposed under S. 3128, but may provide some important information to
    the Tribe to assist in the planning, engineering and design that they
    propose to undertake pursuant to S. 3128.
        In negotiating Indian water rights settlements, the Administration
    follows a process contained 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)). Among other things, the Criteria provide policy guidance
    on the appropriate level of Federal contribution to 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.
        Equally important, the Criteria address some bigger-picture issues,
    such as the need to structure settlements to promote economic
    efficiency on reservations and tribal self-sufficiency, and the goal of
    seeking long-term harmony and cooperation among all interested parties.
    The Criteria also set forth consultation procedures within the
    Executive Branch to ensure that all interested Federal agencies have an
    opportunity to collaborate throughout the settlement process. 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.
        The Administration is in the process of analyzing the factors set
    forth in the Criteria in order to determine the appropriate federal
    financial contribution that could be recommended to Congress as
    consideration for settling the Tribe's water rights claims. The
    Department of the Interior and the Department of Justice are in the
    process of analyzing the Tribe's water rights claims and have requested
    the Tribe to provide information on its views on potential liability
    the United States may have with respect to those claims and other water
    related claims. Until that analysis is completed, it is not possible
    for the Administration to determine whether paying for some or all of
    the construction of the proposed project is an appropriate Federal
    settlement contribution. Until those decisions are made, it is
    premature to begin design and engineering of the proposed project. The
    legislation is ambiguous as to whether the Department is required to
    carry out a feasibility study for the planning, engineering, and design
    of the Miner Flat Project.
        As currently drafted S. 3128 provides that funding made available
    to the Tribe will not be repaid by the Tribe, but will be repaid out of
    a subaccount created by Section 107(a) of the Arizona Water Rights
    Settlements Act ``for use for Indian water rights settlements in
    Arizona approved by Congress after the date of enactment of [the
    Arizona Water Rights Settlements Act]. . . .'' We understand that the
    bill is likely to be amended to delete repayment from this source. We
    recommend such an amendment to S. 3128 because the use of this
    subaccount to fund an activity absent a water rights settlement enacted
    by Congress is not consistent with the authorized uses of the
    subaccount created by Section 107(a) of the Arizona Water Rights
    Settlements Act.
        The Administration is concerned about the potential budgetary
    impact the $9.8 million loan, as authorized under S. 3128, would have
    on the Bureau of Reclamation's existing programs and commitments, and
    has concerns with the mechanisms and sources of funding. Although the
    repayment is provided from Federal Funding in Section 3, budget
    authority for the full $9.8 million would be required up front. Section
    5 of S. 3128 authorizes appropriations, but Section 3 provides that the
    funds to repay the loan would be made available from the Colorado Lower
    River Development Fund starting in 2013. The Administration also
    remains concerned that, as S. 3128 provides for no reimbursement by
    non-Federal parties, the Federal government would be the primary source
    of funding for this feasibility (planning, engineering, and design)
    study.
        The Administration does not support this bill but is committed to
    working with the Tribe and other settlement parties to reach a final
    and fair settlement of the Tribe's water rights claims.
    S. 3355--The Crow Tribe Water Rights Settlement Act of 2008
        I appreciate the opportunity to appear today to present the
    Administration's views on S. 3355, the ``Crow Tribe Water Rights
    Settlement Act of 2008.'' The Department of the Interior's support for
    negotiated settlements as an approach to resolving Indian water rights
    remains strong. The Administration, however, has not agreed to the
    compact that S. 3355 would approve. Moreover, the Administration has
    serious concerns about the settlement as introduced, especially about
    the high cost of this settlement and the lack of supporting analysis
    showing that the infrastructure projects mandated under this settlement
    are a cost effective approach to accomplishing the goals of the
    settling parties. Further, the Administration has concerns that the
    waivers and releases in the bill do not sufficiently protect the United
    States from future claims by the Tribe. For these reasons and others
    described in this statement, the Administration opposes S. 3355 as
    introduced. We would like to work with Congress and all parties
    concerned in developing a settlement that the Administration can
    support.
        The Crow Reservation located in south central and southeastern
    Montana is home to the Crow Tribe. The Reservation was established by
    the Treaty of Fort Laramie in 1868 and it currently encompasses
    approximately 2,282,000 acres, 66 percent of which is held in trust for
    the Tribe and individual Indians. Tribal enrollment is approximately
    11,500. Unemployment is roughly 54 percent and the Reservation economy
    is principally agricultural: farming and ranching. Coal mining and
    timber production also contribute to the Tribal economy.
        Litigation concerning water rights on the Reservation began in
    1975. In 1985, the United States, the Tribe and the State of Montana
    entered into negotiations aimed at settling the Tribe's water rights
    claims. In 1999, the Crow and the State reached an agreement on a
    Compact providing for an allocation of water for the Tribe,
    subordination of that right to existing state based water uses, water
    rights administration, water marketing, and dispute resolution
    mechanisms. The Federal government was not a signatory to this
    agreement.
        S. 3355 would approve the Compact contained in section 85-20-901 of
    the Montana Code Annotated (2007) (including any exhibit or part of or
    amendment to the Compact) and authorize appropriations for a number of
    settlement benefits. It would settle all of the Crow Tribe's claims to
    water in the State of Montana and recognize a tribal water right to
    500,000 acre-feet per year of water from the flow of the Bighorn River,
    as well as up to 300,000 acre-feet of water from Bighorn Lake (150,000
    acre-feet in all years and an additional 150,000 acre-feet in dry years
    when natural flow is short). The Tribe's natural flow right will be
    subject to shortage sharing with non-Indians, which is a major
    concession by the Crow Tribe, who would otherwise have a senior
    priority water right. This bill also requires the Bureau of Reclamation
    to design and construct two major infrastructure projects: (1) to
    restore and improve the Crow Irrigation Project to deliver water to
    farmland on the Crow Reservation; and (2) a municipal water system to
    deliver clean water to communities and businesses in most parts of the
    Crow Reservation. Finally, S. 3355 would establish the Crow Settlement
    Fund to hold Federal funding authorized under this bill, which includes
    funding for a number of trust funds that will benefit the Tribe. Two of
    these trust funds are designated to offset the costs to the Crow Tribe
    for the operation, maintenance, and repair of Yellowtail Dam (the dam
    that created Bighorn Lake) and the Crow Irrigation Project.
        The Department has been working constructively with the Crow Tribe
    in negotiations to quantify their water right and settle claims for
    many years, and Department officials have visited the Reservation and
    met with negotiators in an effort to craft a settlement that we could
    support. This process has involved the Crow Tribe, the State of
    Montana, local water users and other affected parties. The parties have
    made significant progress in resolving many issues, but the
    Administration believes that there are more issues that need to be
    comprehensively addressed. Primary concerns of the Administration are
    the very high costs of the infrastructure projects mandated in the bill
    and the inadequate local and State cost share given the benefits that
    the State and its water users would receive under the proposed
    settlement, as well as the waivers in the bill, which do not protect
    the United States adequately from future claims by the Tribe.
        We also have a number of other concerns outlined below.
        My statement will begin with some background on the Department's
    settlements process, and then move on to a more specific discussion of
    the concerns that the Administration has about S. 3355.
    The Role of the Criteria and Procedures
        In negotiating Indian water rights settlements, the Administration
    follows a process contained 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)). Among other things, the Criteria provide policy guidance
    on the appropriate level of Federal contribution to 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.
        Equally important, the Criteria address some bigger-picture issues,
    such as the need to structure settlements to promote economic
    efficiency on reservations and tribal self-sufficiency, and the goal of
    seeking long-term harmony and cooperation among all interested parties.
    The Criteria also set forth consultation procedures within the
    Executive Branch to ensure that all interested Federal agencies have an
    opportunity to collaborate throughout the settlement process. 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.
    Monetary Concerns Regarding S. 3355
        S. 3355 as introduced would cost the Federal Government more than
    one half billion dollars in federal appropriations ($527.2 million).
    Under this legislation, the Crow Tribe would also benefit from not
    being required to repay the capital costs associated with its storage
    allocation from Bighorn Lake and from being granted the right to
    develop power at Yellowtail Afterbay Dam, an authority that is
    currently held by the Bureau of Reclamation. The Administration is in
    the process of analyzing the factors set forth in the Criteria in order
    to determine the appropriate federal financial contribution that could
    be recommended to Congress. While this analysis is not yet complete,
    the review accomplished to date does not indicate that a Federal
    contribution even approaching one half of a billion dollars provided
    for under this Act is justified. We are also unclear on how this bill
    interfaces with S. 3213, Title X, Subtitle B, Part II, which proposes
    the establishment of a Reclamation Water Settlement Fund.
        Adding to our concern, the two major infrastructure projects
    required by this bill are both mandated to essentially conform to
    studies prepared by a private consulting engineering firm hired by the
    Crow Tribe. Both of these studies were not prepared in final form until
    July 2008. Given that these studies were not completed until July 2008,
    the Department has not had sufficient time to analyze them to determine
    whether the work that they propose is a cost effective and feasible
    approach to providing the services that the Crow Tribe is seeking. It
    is possible that there are alternate and more efficient means to
    satisfy the needs of the Tribe than those set forth in the Tribal
    consultant's study. More time is needed to examine the proposed work
    and consider whether other approaches could be utilized to obtain most
    or all of the goals of this settlement, as well assess as the adequacy
    of the engineering work and cost estimates.
        Moreover, the breadth of the many benefits that would flow to the
    Crow Tribe under the settlement at almost exclusive federal cost, such
    as the rehabilitation and improvement of the Crow Irrigation Project,
    the design and construction of water diversion and delivery systems to
    serve vast geographic areas of the Crow Reservation, and significant
    funding for unspecified and open-ended water and economic development
    projects, raise serious concerns because of the precedent that such
    settlement benefits could set for future Indian water rights
    settlements. Rising tribal and State expectations about the magnitude
    of federal contributions to Indian water rights settlements are already
    impairing the Administration's ability to negotiate Indian water rights
    settlements on the basis of common goals and acceptance of the need for
    cost-sharing among all settlement beneficiaries. Enactment of this bill
    will make it very difficult in the future for Federal negotiators
    participating in settlement negotiations to set realistic expectations
    and convincingly hold the line on settlement costs. There are many
    needs in Indian country and Indian water rights settlements cannot and
    should not be the major vehicle to address those needs. In this
    instance, a Federal contribution of this order of magnitude is not
    appropriate. As the Administration has stated in previous Indian water
    right settlements water rights settlements must be designed to ensure
    finality and protect the interest of the Tribes and all American
    taxpayers. The Administration was not included in or a signatory to
    this proposed settlement. Numerous changes would be required before we
    could recommend that the Federal government enter into this Agreement.
        Also, consistent with the Criteria and Procedures, the non-Federal
    cost-share should be proportionate to benefits received. This
    settlement lacks adequate cost-sharing, leaving the Federal government
    as the primary source of funding for one of the largest Indian water
    rights settlements to date. In addition, the Criteria and Procedures
    provide that settlements should promote economic efficiency. The
    Administration is concerned that the projects that would be authorized
    under this proposed settlement do not meet this criterion. The Criteria
    and Procedures also provide that the Federal government shall not
    participate in economically unjustified irrigation investment.
    Non-Monetary Concerns Regarding S. 3355
        Overall cost is not the only concern that the Administration has
    with the bill. There are a number of provisions and issues that we
    stand ready to work and resolve with the settlement parties and
    sponsors of S. 3355. We would like to draw the Committee's attention to
    the following major issues.
        First, as currently drafted, the provisions of the bill dealing
    with allottee water rights do not adequately protect the rights to
    which allottees are entitled under federal law. The Crow Reservation is
    heavily allotted and 46 percent of the Reservation land base is held in
    trust by the United States for individual Indians. The bill, however,
    fails to safeguard allottees' water rights. The United States owes a
    trust obligation directly to these individuals in addition to the
    obligations owed to the Tribe. The Department of the Interior and the
    Department of Justice have confronted this important issue in several
    recent Indian water rights settlement in an effort to avoid any claims
    of unconstitutional takings of property interests. We would like to
    work with the Tribe and the sponsors of the bill to rectify
    shortcomings in the language of the bill as drafted.
        Second, the waiver provisions of this bill are also of serious
    concern to the Administration. We note that the Department of Justice
    does not believe that the bill's waiver provisions are correctly
    drafted. The waivers set forth do not adequately protect the United
    States from future liability and do not provide the measure of
    certainty and finality that a federal contribution of more than one
    half a billion dollars should afford. Again, we stand ready to work
    with the Tribe and sponsors on this issue.
        Third, we would like to work with Congress and the settlement
    proponents on developing more specific language that delineates
    precisely the extent of United States responsibility for delivering the
    300,000 acre-foot allocation from Bighorn Lake provided for under
    section 8. The legislation as introduced provides that this water will
    be held in trust by the United States. Congress should establish clear
    parameters for Federal responsibility to avoid future litigation over
    this issue.
        Also, related to the Bighorn Lake allocation is the issue of
    capital cost reimbursability. The bill as drafted relieves the Tribe of
    these costs, but is silent about whether the costs will be spread among
    other project beneficiaries, such as power users.
        Fourth, we note that this legislation sets up a trust fund to
    partially cover Operation, Maintenance, and Replacement costs for the
    Crow Irrigation Project and Yellowtail Dam that would otherwise be
    charged to the Crow Tribe. Although the Administration understands that
    the settlement framers were trying to ensure the viability of the
    facilities to be renovated and built under this settlement by providing
    for these trust funds, the Criteria provide that operation and
    maintenance costs of infrastructure should not be funded using
    settlement dollars.
        Fifth, there is potential inconsistency between the processes
    outlined in section 11(d)(4) under which the Crow Tribe is able to
    withdraw money from the Crow Settlement Fund and the requirements for
    the Secretary to disburse funds from the Crow Settlement Fund under
    section 11(d)(3). It is not clear whether the Secretary is able to make
    the expenditures as provided under section 11(d)(3) without the Tribe
    having submitted either a tribal management plan or an expenditure plan
    under section 11(d)(4). The processes described in section 11(d)(4) are
    consistent with the Trust Fund Reform Act, and it would make sense in
    S. 3355 to amend subsection 11(d)(3) to clarify that these processes
    apply.
        Sixth, there is some ambiguity surrounding the right granted to the
    Crow Tribe in section 12(b) of S. 3355 to ``develop and market power
    generation as a water development project on the Yellowtail Afterbay
    Dam.'' It is unclear if this language is intended to preclude the
    United States from developing power in its own right or if it is
    intended to give the Tribe an exclusive right to enter into the sort of
    contract (Lease of Power Privilege (LOPP)) that can be issued to a non-
    Federal entity to utilize water power head and storage from Reclamation
    projects.
        Seventh, and of extraordinary concern to the Administration, is the
    fact that the appendices that are referenced in the Crow Tribe-Montana
    Compact have not yet been prepared. Of particular concern is the fact
    that Appendices 1 and 3 of the Crow Tribe-Montana Compact are not
    available for review. In the words of the Compact (Article III A.6.b),
    Appendix 3 is supposed to be a ``list of existing water rights as
    currently claimed and permits and reservations issued'' in the Bighorn
    River Basin. This list is of utmost importance to the water rights of
    the Crow Tribe that are recognized under the Compact and would be
    recognized by S. 3355 because the Compact provides (in Article
    III.A.6.a(1) and (2)) that the Tribal Water Right shall be exercised as
    junior in priority to any water rights listed in Appendix 3 to the
    Compact. Appendix 1 is supposed to be a proposed decree to be issued by
    the Montana Water Court. According to section 4 of S. 3355, this
    legislation would ratify the Crow Tribe-Montana Compact, and the term
    Compact is defined in section 3 of S. 3355 as including any exhibit or
    part of or amendment to the Compact. Therefore, this bill seeks
    Congressional approval of the Compact as a whole, including the
    Appendices, which are critical to the terms of the settlement, and
    future amendments to the Compact, that the United States has not
    reviewed and that may not even have been drafted. The Administration
    strongly urges against the enactment of legislation that would provide
    United States approval of documents when the United States has not
    received these documents for review.
        This list is not comprehensive. We would appreciate the opportunity
    to work with the Committee and the Montana delegation to revise the
    bill to address these and other issues that could prevent this bill
    from achieving its intended purpose of achieving a final settlement of
    the water rights claims of the Crow Tribe in Montana.
    Conclusion
        For the aforementioned reasons we have mentioned in this testimony,
    we oppose S. 3355.
        The settlement is the product of a great deal of effort by many
    parties and reflects a desire by the people of Montana, Indian and non-
    Indian, to settle their differences through negotiation rather than
    litigation. However, as I stated at the outset of this testimony, the
    Administration does not have adequate information at this time to
    determine that the projects called for in this bill are consistent with
    our programmatic objectives and our responsibility to American
    taxpayers as well as our responsibility to protect the Crow Tribe. The
    Administration believes that it is necessary for there to be a full
    discussion on all aspects of the settlement, including the specific
    goals of the Crow Tribe and the State of Montana for the settlement of
    these claims and whether these goals can be met by alternative, less
    expensive means.
        The Administration is committed to working with the Tribe and other
    settlement parties to reach a final and fair settlement of the Tribe's
    water rights claims. A clean, reliable water supply is of utmost
    importance to the members of the Crow Tribe, as it is to all Americans,
    and the United States is committed to working towards achieving it. If
    the parties continue to negotiate with the same good faith they have
    shown thus far, we are hopeful that an appropriate and fair settlement
    can be concluded in the next year.
        Mr. Chairman, this concludes my written statement.

        The Chairman. Mr. Polly, thank you very much for your
    testimony.
        Next, we will hear from Mr. Michael Bogert.

     STATEMENT OF MICHAEL BOGERT, COUNSELOR TO THE SECRETARY, U.S.
                       DEPARTMENT OF THE INTERIOR

        Mr. Bogert. Mr. Chairman, thank you for the opportunity to
    appear before you today.
        A few observations from the Secretary's Indian Water Rights
    Office on process. Senator Domenici, when the Secretary was
    confirmed, you and Senator Bingaman asked him to actively
    engage in the New Mexico water settlements. You challenged the
    Secretary to dedicate the level of energy and engagement that
    we had in Idaho with our settlement.
        Senator, I can assure you that I have had moments in this
    job where I believe Albuquerque and New Mexico have become our
    second home in terms of our level of engagement and the active
    participation by the Secretary in moving along and energizing
    with great enthusiasm the progress of these settlements.
        We are very mindful at the Department that today marks a
    process, a milestone and a process. While the members of the
    Committee can describe our level of support, soft support, I
    can tell you, Senator, that we strongly support the process
    that got us to this point.
        To the degree that the New Mexico settlements that my
    testimony will cover involve a process that began in the mid-
    1960s, we have heard from your constituents. We have heard from
    Indian Country how long these cases have languished and the
    issues that are attempting to be solved by these settlements.
    Mr. Chairman, Senator Domenici, I can assure you that the
    Secretary has brought the energy that you have asked of him and
    asked of all of us. He has directed all of us to thoroughly
    engage in moving these settlements along.
        With that having said, Mr. Chairman and other members of
    the Committee, we bring before you the views of the
    Administration, which of course includes not only the
    Department of the Interior, but the Office of Management and
    Budget, as well as the Justice Department. Mr. Polly spoke
    about some legal issues that revolve around these settlements.
        Before discussing the Administration's significant concerns
    with S. 3381, I would like to acknowledge that the Department
    has been working constructively with all of the parties to both
    the Aamodt and Taos settlements for many years.
        Mr. Chairman, for me personally, I cannot describe with the
    amount of respect and affection that I have for Governor Suazo
    and Governor Dorame and other tribal leaders that have been so
    much a part of our lives over the last couple of years since we
    have been engaged with them. I can tell you that the
    opportunity to work with this great leadership in Indian
    Country has been a professional opportunity that I know we on
    our team will never forget.
        But this process has also included the State of New Mexico,
    Santa Fe County, the City of Santa Fe, the Town of Taos and
    numerous local water users, in addition to the Pueblos of
    Tesuque, Nambe, Pojoaque, San Ildefonso, and Taos. While there
    remain significant issues on which we disagree and have yet to
    achieve alignment, especially the question of whether there is
    an appropriate Federal contribution and whether the waiver is
    adequate to protect the United States from future claims, our
    working relationship with the parties has been constructive.
    Mr. Chairman and members, we know that that will continue after
    this hearing.
        Mr. Polly has discussed a little bit about the criteria and
    procedures. We know that members of this Committee understand
    that there has been a controversy about how the Administration
    uses the criteria and procedures by which to judge the Federal
    contribution and its calibration of support for these
    settlements.
        To the extent that this bill has followed the process set
    forth in the criteria and procedures and analyzed the Aamodt
    settlement and has concluded that the calculable legal exposure
    plus costs related to Federal trust or programmatic
    responsibilities--at this point, Mr. Chairman and members--we
    don't believe that it justifies the Federal contribution of
    $162.3 million for the Aamodt settlement. This amount is not
    consistent with the criteria and procedures and is
    substantially above the appropriate Federal contribution, and
    it is not proportionate to the benefits received.
        As the Administration has stated in previous Indian water
    rights settlements, water rights settlements must be designed
    to ensure finality and protect the interests of all the tribes
    and the American taxpayers.
        With respect to the Aamodt settlement, the waiver
    provisions of this bill are of significant concern to the
    Administration. The Department of Justice has concerns that the
    waivers set forth in the bill do not adequately protect the
    United States from future liability and do not provide the
    measure of certainty and finality that the proposed Federal
    contributions should afford.
        Again, we stand ready to work with the settlement parties
    and the Committee and the sponsors to resolve this issue.
    Indeed, I believe we have significant productive conversations
    with the parties on this.
        With respect to the Taos settlement, the Administration
    again has followed the process set forth in the criteria and
    procedures in analyzing the Taos settlement and has concluded
    that the calculable legal exposure plus costs related to the
    Federal trust or programmatic responsibilities do not justify a
    Federal financial contribution of $113 million.
        The number in the bill is not consistent with the criteria
    and procedures. In addition to costs, again our testimony
    describes some concerns we have with the waivers, the finality
    of the settlement with respect to the ending of the claims, and
    the exposure by the United States.
        Mr. Chairman and members, let me conclude my remarks by
    saying we look forward to working with all of the settlement
    parties, as we have since being directed by the Secretary to do
    so, and we look forward to questions that the Committee may
    have.
        [The prepared statement of Mr. Bogert follows:]

    Prepared Statement of Michael Bogert, Counselor to the Secretary, U.S.
                           Department of the Interior
        Mr. Chairman and members of the Committee, I appreciate the
    opportunity to appear today to present the Administration's views on S.
    3381, containing two titles, the ``Aamodt Litigation Settlement Act''
    and the ``Taos Pueblo Indian Water Rights Settlement Act.'' The
    Department of the Interior's support for negotiated settlements as an
    approach to resolving Indian water rights remains strong. The
    Administration, however, does not support S. 3381 as introduced and has
    serious concerns with the costs of these proposed settlements. We would
    like to work with Congress and all parties concerned in developing
    settlements that the Administration can support.
        Before discussing the Administration's significant concerns with S.
    3381, I would like to acknowledge that the Department has been working
    constructively with the all of the parties to both the Aamodt and Taos
    settlements for many years. This process has included the State of New
    Mexico, Santa Fe County, the City of Santa Fe, the Town of Taos and
    numerous local water users in addition to the Pueblos of Tesuque,
    Nambe, Pojoaque, San Ildefonso, and Taos. While there remain
    significant issues on which we disagree, especially the questions of
    the appropriate federal financial contribution and whether the waivers
    adequately protect the United States from future claims, our working
    relationship with the parties has been constructive.
        My statement will begin with some background on the Department's
    Indian water rights settlement process and then move on to a more
    specific discussion of the concerns that the Administration has about
    S. 3381.
    The Role of the Criteria and Procedures
        In negotiating Indian water rights settlements, the Administration
    follows a process contained in the Criteria and Procedures for the
    Participation of the Federal Government in Negotiations for the
    Settlement of Indian Water Rights Claims (``Criteria and Procedures'')
    (55 Fed. Reg. 9223 (1990)). Among other things, the Criteria and
    Procedures provide policy guidance on the appropriate level of Federal
    contribution to settlements, incorporating consideration of calculable
    legal exposure plus costs related to Federal trust or programmatic
    responsibilities. In addition, the Criteria and Procedures 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.
        Equally important, the Criteria and Procedures address some bigger-
    picture issues, such as the need to structure settlements to promote
    economic efficiency on reservations and tribal self-sufficiency, and
    the goal of seeking long-term harmony and cooperation among all
    interested parties. The Criteria and Procedures also set forth
    consultation procedures within the Executive Branch to ensure that all
    interested Federal agencies have an opportunity to collaborate
    throughout the settlement process. As we have testified previously, the
    Criteria and Procedures 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.
    The Aamodt Litigation Settlement Act
        The Aamodt litigation (titled State of New Mexico, ex rel. State
    Engineer and United States of America, Pueblo de Nambe, Pueblo de
    Pojoaque, Pueblo de San Ildefonso, and Pueblo de Tesuque v. R. Lee
    Aamodt) has been on-going since 1966 and is often described as one of
    the longest running cases in the federal court system. It involves the
    water rights of four Pueblos (Pojoaque, Tesuque, San Ildefonso, and
    Nambe) and involves over 2,500 defendants. The case seeks to adjudicate
    and quantify water rights in the Rio Pojoaque basin, immediately north
    of Santa Fe, New Mexico, which is the homeland of the Pueblos of
    Tesuque, Nambe, Pojoaque and San Ildefonso. The basin is water short.
    The average annual surface water yield of the watershed is
    approximately 12,000 acre-feet per year, but claimed irrigated acreage
    call for the diversion of 16,200 acre-feet per year. Deficits have been
    addressed by using groundwater with the result that those resources are
    now threatened.
        Negotiations to resolve the Pueblos' water rights in the basin have
    a long history but in recent years, the parties intensified their
    efforts to settle. The Department of the Interior and the Department of
    Justice have participated in these settlement efforts. The United
    States did not execute the Agreement and does not support it in its
    current form, as we continue to disagree with the nonfederal parties on
    several issues. The goal of the parties has been to prevent impacts on
    surface water flows from excessive groundwater development as well as
    controlling groundwater extractions. In order to allow junior state
    based water right holders to continue to use water while still allowing
    the Pueblos the right to use and further develop their senior water
    rights, the nonfederal parties agreed on a settlement centered on a
    regional water system that will utilize water imported from the Rio
    Grande to serve needs of the Pueblos and other water users in the
    basin. In May 2006, the Pueblos and many other settlement parties
    executed a Settlement Agreement which requires the construction of the
    regional water system to deliver treated water to Pueblos and non-
    Pueblo water users. It also requires the United States to provide 2,500
    acre feet per year of imported water for Pueblo use through the
    regional water system.
        S. 3381 approves the settlement, authorizes the planning, design
    and construction of the regional system, and provides the Pueblos with
    a trust fund to subsidize the operations, maintenance, and replacement
    (OM&R) costs of the system and to rehabilitate, improve, operate and
    maintain water related infrastructure other than the regional system
    facilities. The bill also requires the United States to acquire water
    for Pueblo use in the regional water system by allocating to the
    Pueblos remaining available Bureau of Reclamation San Juan Chama water
    and purchasing other water. The total cost of the settlement is
    estimated to be at least $279.2 million, with a Federal contribution of
    $162.3 million, and State and local contributions of $116.9 million.
        The Administration has followed the process set forth in the
    Criteria and Procedures in analyzing the Aamodt settlement and has
    concluded that calculable legal exposure plus costs related to Federal
    trust or programmatic responsibilities do not justify a federal
    financial contribution of $162.3 million. This amount is not consistent
    with the Criteria and Procedures; is substantially above the
    appropriate Federal contribution; and is not proportionate to the
    benefits received. As the Administration has stated in previous Indian
    water right settlements, water rights settlements must be designed to
    ensure finality and protect the interest of the Tribes and all American
    taxpayers.
        In addition, the Administration was not a signatory to this
    proposed settlement. Numerous changes would be required before we could
    recommend that the Federal Government enter into this Agreement. The
    Criteria and Procedures provide that settlements should promote
    economic efficiency. The Administration is concerned that the projects
    that would be authorized under this proposed settlement do not meet
    this criterion.
        Moreover, the Administration is concerned about the validity of the
    cost estimates that the settlement parties are relying on for the
    regional water system. The parties rely on an engineering report dated
    June 2007 that has not been verified by the level of study that the
    Bureau of Reclamation would recommend in order to assure reliability.
    Much of the cost information contained in the engineering report was
    arrived at three years ago, none of the costs have been indexed, and
    the total project cost cannot be relied upon. These additional costs
    would become the responsibility of the United States under S. 3381.
    Also, multiple site-specific cost issues remain that can not be
    resolved until final project design is completed, not the least of
    which is access limitations at the diversion point for the system on
    the Rio Grande. The costs associated with NEPA and EIS compliance along
    with the costs to acquire unspecified easements (including possible
    condemnation expenses) have not been adequately studied. This
    uncertainty may serve to drive the overall settlement's costs and the
    corresponding Federal commitment much higher than anticipated.
        Overall cost is not the only concern that the Administration has
    with the bill. There are a number of other provisions and issues that
    need to be addressed and resolved. We stand ready to address these with
    the settlement parties and sponsors of S. 3381. We would like to draw
    the Committee's attention to the following major issues.
        First, the waiver provisions of this bill are of significant
    concern to the Administration. The Department of Justice has concerns
    that the waivers set forth in the bill do not adequately protect the
    United States from future liability and do not provide the measure of
    certainty and finality that the proposed federal contribution should
    afford. Again, we stand ready to work with the settlement parties and
    sponsors on this issue.
        Second, we would like to work with Congress and the settlement
    proponents on developing more specific language that delineates
    precisely the extent of United States responsibility for delivering the
    San Juan Chama project allocation provided for under section 113. The
    legislation as introduced provides that this water supply will be held
    in trust by the United States. Congress should establish clear
    parameters for Federal responsibility in order to avoid future
    litigation over this issue.
        Third, although the Administration understands that the settlement
    framers were trying to ensure the viability of the facilities provided
    for under this settlement by establishing a trust fund to subsidize
    OM&R, the Criteria provide that operation and maintenance costs of
    infrastructure should not be funded using settlement dollars.
        This list is not comprehensive. We would like to work with Congress
    and all parties concerned in developing a settlement that the
    Administration can support.
    The Taos Pueblo Indian Water Rights Settlement Act
        Taos Pueblo is located in north-central New Mexico, approximately
    70 miles north of Santa Fe. It is the northernmost of 19 New Mexico
    Pueblos and its village is recognized as being one of the longest
    continuously occupied locations in the United States. The Pueblo
    consists of approximately 95,341 acres of land and includes the
    headwaters of the Rio Pueblo de Taos and the Rio Lucero.
        In 1969 the general stream adjudication of the Rio Pueblo de Taos
    and Rio Hondo stream systems and the interrelated groundwater and
    tributaries was filed, entitled State of New Mexico ex rel. State
    Engineer, et al. v. Abeyta and State of New Mexico ex rel. State
    Engineer v. Arellano et al. (consolidated).
        In 1989 Taos Pueblo began settlement negotiations with the local
    water users. The Federal Team was established in 1990 to represent the
    United States in the negotiation. Negotiations were not productive
    until a technical understanding of the hydrology of Taos Valley,
    including preparation of surface and groundwater models, was completed
    in the late 1990s. Negotiations intensified in 2003 when a mediator was
    retained and an aggressive settlement meeting schedule was established.
    The parties' dedicated efforts resulted in a Settlement Agreement that
    was signed in May of 2006 by all of the major non-federal parties,
    including the State of New Mexico, Taos Pueblo, the Town of Taos, the
    Taos Valley Acequia Association (representing 55 community ditch
    associations) and several water districts. The United States did not
    sign the Settlement Agreement and does not support it in its current
    form.
        Under the terms of the Settlement Agreement, the Taos Pueblo has a
    recognized right to 12,152.71 acre-feet per year (AFY) of depletion, of
    which 7,474.05 AFY of depletion would be available for immediate use.
    The Pueblo has agreed to forebear from using 4,678.66 AFY in order to
    allow non-Indian water uses to continue. The Pueblo would, over time,
    reacquire the forborne water rights through purchase from willing
    sellers with surface water rights. There is no guarantee that the
    Pueblo will be able to reacquire the forborne water rights.
        A central feature of the settlement is funding for the protection
    and restoration of the Pueblo's Buffalo Pasture, a culturally sensitive
    and sacred wetland that is being impacted by non-Indian groundwater
    production. Under the settlement, the non-Indian municipal water
    suppliers have agreed to limit their use of existing wells in the
    vicinity of the Buffalo Pasture in exchange for new wells located
    further away from the Buffalo Pasture.
        Title II of S. 3381 approves the Settlement Agreement reached by
    the settlement parties and authorizes a Federal contribution of
    $113,000,000. Of this total, $80,000,000 is authorized to be deposited
    into two trust accounts for the Pueblo's use. An additional $33,000,000
    is authorized to fund 75 percent of the construction cost of various
    projects that have been identified as mutually beneficial to Pueblo and
    non-pueblo parties. The State and local share of the settlement is a 25
    percent cost-share for construction of the mutual benefit projects
    ($11,000,000). The Settlement Agreement provides that the State will
    contribute additional funds for the acquisition of water rights for the
    non-Indians and payment of operation, maintenance and replacement costs
    associated with the mutual benefits projects. The Administration
    believes that this cost-share is disproportionate to the settlement
    benefits received by the State and local parties. A Federal
    contribution of this order of magnitude is not appropriate. As the
    Administration has stated in previous Indian water right settlements,
    water rights settlements must be designed to ensure finality and
    protect the interest of the Tribes and all American taxpayers.
        The Administration was not a signatory to this proposed settlement.
    Numerous changes would be required before we could recommend that the
    Federal government enter into this Agreement. Also, consistent with the
    Criteria and Procedures, the non-Federal cost-share should be
    proportionate to benefits received. This settlement lacks adequate
    cost-sharing. In addition, the Criteria and Procedures provide that
    settlements should promote economic efficiency. The Administration is
    concerned that the projects that would be authorized do not meet this
    criterion.
        Under this legislation, the Pueblo would receive an allocation of
    2,215 acre-feet per annum of San Juan-Chama Project water which it will
    be allowed to use or market. The Pueblo would also benefit from not
    being required to repay the capital costs associated with this
    allocation of water.
        An unusual provision of the legislation would allow the Pueblo to
    expend $25 million for the protection and restoration of the Buffalo
    Pasture and acquisition of water rights before the settlement is final
    and fully enforceable. Indian water rights settlement funds are not
    usually made available to a tribe until the settlement is final and
    enforceable so that all settlement benefits flow at the same time and
    no entity benefits if the settlement fails. We question whether such a
    departure from settlement protocol would be appropriate. Although the
    Administration understands the Pueblo's need for immediate access to
    funds, we remain concerned about the precedent that settlement money
    could be spent without a settlement becoming final.
        The Administration has followed the process set for in the Criteria
    and Procedures in analyzing the Taos settlement and has concluded that
    calculable legal exposure plus costs related to Federal trust or
    programmatic responsibilities do not justify a federal financial
    contribution of $113 million. This is not consistent with the Criteria
    and Procedures; is substantially above the appropriate Federal
    contribution; and is not proportionate to the benefits received.
        Cost is not the only concern that the Administration has with the
    bill. There are several other provisions that raise concerns. We stand
    ready to work to address these concerns with the settlement parties and
    sponsors of S. 3381. We would like to draw the Committee's attention to
    the following issues.
        First, the waiver provisions of this bill are of serious concern to
    the Administration. We note that the Department of Justice has concerns
    that the waivers set forth in the bill do not adequately protect the
    United States from future liability and do not provide the measure of
    certainty and finality that the Federal contribution contained in the
    bill should afford.
        In addition, Title II of S. 3381 fails to provide finality on the
    issue of how the settlement is to be enforced. The bill leaves
    unresolved the question of which court retains jurisdiction over an
    action brought to enforce the Settlement Agreement. This ambiguity may
    result in needless litigation. The Department of Justice and the
    Department of the Interior believe that the decree court must have
    continuing and exclusive jurisdiction to interpret and enforce its own
    decree.
        This list is not comprehensive. We would like to work with Congress
    and all parties concerned in developing a settlement that the
    Administration can support.
    Conclusion
        This settlement is the product of a great deal of effort by many
    parties and reflects a desire by the people of State of New Mexico,
    Indian and non-Indian, to settle their differences through negotiation
    rather than litigation.
        The Administration is committed to working with the settlement
    parties to reach final and fair settlements of Pueblo water rights
    claims.
        Mr. Chairman, this concludes my statement. I would be pleased to
    answer any questions the Committee may have.

        The Chairman. Mr. Bogert, Mr. Polly, thank you very much
    for your testimony. I have had a chance to review it before the
    hearing. I don't have any questions. I appreciate your laying
    out for the Committee the views of the Administration, Interior
    and OMB, which is always in the dark background of these
    statements.
        Do other members of the Committee have questions?
        Senator Murkowski. Mr. Chairman?
        The Chairman. Senator Murkowski?
        Senator Murkowski. Thank you, Mr. Chairman.
        Just a question about the criteria for evaluating water
    settlements in general, not any one of the specifics here. You
    have kind of spoken to that. I understand that these criteria
    for evaluation of the settlements are guidelines. They address
    a number of factors, including the appropriate level of the
    non-Federal cost-sharing, among other things. But we have heard
    complaints from various non-Federal parties that these
    guidelines allow for a great deal of variability, if you will,
    swings in the evaluation results depending on who is applying
    them. Do you think that this is a fair criticism? If so, is
    there a need to reevaluate these criteria or these guidelines?
        Mr. Bogert. Mr. Chairman, Madam Vice Chair, we have been
    under great discussion at the Department as to whether or not
    the criteria and procedures reflect the modern era of Indian
    water rights settlements. To the degree that our direction
    within the Administration is that we will--and I think you
    rightly identify the criteria and procedures as guidelines. We
    have never said and our position has never been that they are
    inflexible, carved in stone, and incapable of reasoned
    discussion and flexibility.
        To the degree that we have had conversations with the
    settlement parties and our partners in Indian Country about
    using that as a model for advocacy, we have had some productive
    discussions with them. We have asked them to help us think
    through the components that we know OMB and the Justice
    Department will ask of us at Interior to adequately provide our
    views on the viability of these settlements.
        Senator, the short answer to your question is we think we
    can always evaluate these settlements better. To the extent
    that that is the direction for the remainder of this
    Administration, we look forward to having a conversation about
    whether or not they need to be update, whether or not they
    reflect the modern era, as I said, of the negotiations, and
    whether or not they are reflective of ultimately all of our
    joint goals and objectives, which is self-sufficiency in Indian
    Country. We think that is a reasonable conversation.
        Senator Murkowski. Thank you, Mr. Chairman. I will let my
    colleagues speak who have more direct questions on these bills.
        The Chairman. Senator Tester?
        Senator Tester. Yes, thank you, Mr. Chairman.
        I want to thank the witnesses.
        Senator Barrasso, I fully intend to work with your
    colleague and Senator Baucus who is a cosponsor of this bill,
    and we will try to get the concerns ironed out, as we have in
    the past. So thank you for your comments.
        I have a few questions for Mr. Polly. I appreciate you guys
    being here. You stated in your testimony that the waivers
    weren't strong enough. Can you tell me, have you offered any
    language to strengthen those waivers?
        Mr. Polly. Senator, thank you for that question. It is my
    understanding we have not offered any language to strengthen
    those waivers. However, we are very happy to work with you and
    your office, and we can provide those.
        Senator Tester. How about working directly with the Crow?
    Are you happy to do that, too?
        Mr. Polly. Absolutely.
        Senator Tester. Because that could be an opportunity, since
    Cedric Black Eagle is here, it may be an opportunity to get
    down to brass tacks without us. I mean, I like to be part of
    the process--make no mistake about it, and we will be--but you
    can meet one-on-one and try to get that squared away.
        You said ``lack of supporting infrastructure.'' I assume
    what you are saying is that you don't agree with how the money
    is to be spent on infrastructure projects? I don't want to put
    words in your mouth, but maybe explain what you are saying.
        Mr. Polly. Reclamation has not come up with the estimates,
    so we would have to get back to you and the tribe as far as
    what we would believe an accurate estimate would be.
        Senator Tester. As far as the amount of money invested in
    the infrastructure, or what kind of projects the money should
    be going for, or what are we talking about more specifically?
        Mr. Polly. Well, specifically, both things, sir.
        Senator Tester. Okay. You talked about the cost being too
    high. Did you guys have a figure in mind?
        Mr. Polly. No, sir, we do not have a figure in mind, but
    again the figures are not Reclamation figures. So we would have
    to do our own studies and so forth to come up with the figures
    that we would present.
        Senator Tester. Okay. As I said in my opening statement, we
    have been at this for 10 years. I mean, I have been at this for
    10 years. Chris Tweeten has been at it a lot longer than that,
    and so has Cedric, and so are the people in the tribe. How long
    does it take to come up with a figure? And by the way, from my
    perspective, the value of water is never going to be any
    cheaper than it is today.
        Mr. Polly. That is correct.
        Senator Tester. So how long is it going to take to come up
    with a number?
        Mr. Polly. Well, as you said, the price of water only
    increases with time, sir. To give you an accurate answer, we
    would have to do a feasibility study. I am told feasibility
    studies generally they can range from six months to five years.
    I know that is not the amount of time that you were looking
    for.
        Senator Tester. You know, I have only been here for a year
    and a half, but I can tell you in the last six months, and this
    isn't your particular watch, I have watched the Administration
    drop $27 billion on Bear Stearns in two days. Here about a
    month ago, I watched them drop $1 billion on Georgia, and it is
    not the Georgia in the southeastern corner of this Country. It
    is the Georgia in Eastern Europe, drop $1 billion in less than
    a week. And we are talking something that has been going on for
    10 years, and you are telling me potentially it could take
    another 15 years, and then we could start negotiations?
        Mr. Polly. No, sir, six months to five years.
        Senator Tester. Okay. Yes, but five years, the way it tends
    to work, it is usually longer, rather than shorter. Is there
    any way that we can speed this process up to get folks to come
    up with--five years from now, this is going to be a $1 billion
    settlement. No doubt in my mind. It is going to be double. Is
    there any way we can speed this process up?
        Mr. Polly. Well, Senator, as Commissioner Johnson often
    says, and I firmly believe, we are happy to work with you and
    all the parties involved to speed this up as quickly as
    possible. So we will go back. We will take a hard look at this
    and we will get back to all the parties.
        Senator Tester. Hopefully, we can approach it with the same
    sort of urgency that we have approached other projects and
    dropped a hell of a lot more money.
        Mr. Polly. Yes, sir.
        Senator Tester. Thank you.
        Mr. Bogert. Senator Tester, we have had several discussions
    with representatives of the tribe, and we have committed to
    several follow-up meetings on the issue of waivers. We have
    some language that we are willing to provide the
    representatives of the nation. We are absolutely committed to
    follow-up meetings as soon as next week.
        Senator Tester. Good. Just one final thing. Because of a
    previous employment, I have worked with who we are going to
    hear from next for 10 years. There is no doubt in my mind that
    these guys want to get this done. We will talk to Chris Tweeten
    about what the ramifications are if we don't get it done soon.
    But the impacts to the State of Montana, as well as the Federal
    Government, I think they are going to be disastrous if we don't
    get this done. And it can't be a situation, well, we are going
    to have to do another study, or we are going to have to do
    this, or we are going to have to do that. Let's figure out a
    way to streamline the process to get it done.
        Because quite honestly, if you walk onto the Crow
    Reservation--and maybe you have--it is in dire need of economic
    development. The only way we can get sustainability so we don't
    have to keep cutting these guys a check from this end of the
    deal, and Chairman Venne will tell you the same thing, the
    chairman of the Crow Tribe, until we get to a point where these
    guys can become economically stable, we are going to be
    continuing to cut checks from the general fund, and they don't
    want them. I want them to be independent. Okay?
        The Chairman. Senator Domenici?
        Senator Domenici. Thank you very much, Mr. Chairman.
        Well, let me say, Mr. Bogert, I am very happy that the
    meeting that we had on confirmation hearing yielded the results
    that you have just described to us. However, I am not very
    happy that after all the negotiations and all of the giving and
    taking that occurred--and this is one where when you read all
    of the different entities that participated, they really made
    some changes and decided they would do things different to
    arrive at a settlement. In other words, there was some real
    give and take in the settlement that has been agreed to. And
    you agree that there has been?
        Mr. Bogert. Senator, I couldn't agree further. We were
    actively involved in the negotiations that ultimately achieved
    the legislation that is before the Committee this morning.
        Senator Domenici. And frankly, I want to say publicly, I
    was absolutely amazed in a positive sense when I met two times
    with a group representing these different parties. They came to
    be with me in Santa Fe. I was absolutely amazed. No Espanol,
    excuse me.
        The Indian leaders themselves, while they have lawyers,
    they participated and there are a few of them that could get a
    law degree in water law without going to school. They have
    already been at it for so long, they talk better water law than
    I do.
        Now, having put forth all the accolades that sound like I
    am happy, I want to tell you that I am not very happy at all.
    It seems to me we got all this work done. You have described
    it, all these settlements, all this give and take, and what we
    have essentially is testimony that this it too much money. The
    settlement will cost the government too much money.
        Now, I don't believe that is your decision. I don't ask you
    to comment. I believe you ought to carry--next time we ask you
    to participate and you do it, we ought to tell the President of
    the United States to send OMB along to ride on your back and go
    through the process so they can understand what you have done.
    Because this is not your desire that this settlement not be
    arrived at. It is somebody else in the Executive Branch that is
    looking at money. They look at our money for Indian settlements
    with far more scrutiny than they look at a lot of other money
    that is being spent, in my opinion.
        I am not one that doesn't understand the Federal budget. I
    did that work, as my Senator will attest to, for 20-some years.
    Frankly, I think that this Indian settlement is being dealt
    with improperly by the Federal Government in terms of concern.
    Any settlement requires that some parties don't get everything,
    and parties give and take. The government doesn't want to pay
    for the solutions the way we are solving them. But the cost-
    share in this case is 40 percent local, and they are going to
    pay that. That is a very high cost-share, is it not, as these
    cases go?
        Mr. Bogert. Senator, that is a significant non-Federal
    contribution to the settlement.
        Senator Domenici. It's $116 million.
        I want to ask you just a couple of questions. Have our New
    Mexico settlements been evaluated differently than other water
    settlements? In that regard, I am asking you to comment on the
    way Snake River and the Colorado Project was evaluated for
    settlement purposes.
        Mr. Bogert. Senator, I can speak to that in two ways. I can
    candidly tell you before the Committee that while we were
    working back home on our settlement in Idaho, we were never
    asked to justify the Snake River settlement in terms of
    alignment with the criteria and procedures. But that having
    been said, Senator, the Secretary got here as soon as we could
    to engage in your settlements in the direction that we received
    across the Administration. We talked to both the Aamodt and the
    Taos parties about the criteria and procedures to gain their
    advice and counsel on how to align their settlements under the
    criteria and procedures.
        Senator Domenici, that is the position of the
    Administration that we will evaluate these settlements under
    the guidelines.
        Senator Domenici. Did the Administration support these
    settlements in Arizona and Idaho without reference to a
    criteria and procedure? Didn't you just say that?
        Mr. Bogert. I can't speak to Arizona, Senator. I can follow
    up with you and your staff to get you a response to that.
        Senator Domenici. All right. How about Snake River?
        Mr. Bogert. I don't know. I will look back on the Snake
    River Act and the Committee report and the means by which the
    United States looked at the framework of that settlement as
    well, and I would be happy to follow up with you and your staff
    and the Committee.
        Senator Domenici. In terms of cost, were these settlements
    in Arizona and Idaho more expensive than the New Mexico
    settlements?
        Mr. Bogert. Point of clarification, Senator. Would you
    include the Navajo-Gallup bill in this? Or shall we just talk
    about both Aamodt and Taos?
        Senator Domenici. Leave out Navajo.
        Mr. Bogert. Okay. I think, Senator, that at least--and
    again, I can speak only to the Snake River Act, our settlement
    from Idaho--I believe our settlement was ultimately less
    expensive, I believe. I will double-check on that, Senator. If
    I am incorrect, I will follow up with you.
        Senator Domenici. Have the waivers such as those contained
    in this settlement bill been previously enacted in other
    settlements with the support of the Administration? Well, I
    guess you are not going to know the answer.
        Mr. Bogert. Well, Senator, I can tell you that the policy
    justification for, if you will, some recent thinking around the
    waiver issues is, again to be candid, the waiver issues prior
    to, if you will, the explosion of all of the Indian water
    rights settlements that are now up here on Capitol Hill, I
    believe the custom and practice was to deal with the waivers
    almost on an individual basis. We have no abandoned that.
        The advice and counsel that we are receiving from the
    Justice Department with so many settlements that are now ripe
    for review and ripe for ultimate blessing by the Administration
    and by Capitol Hill are such that the interest of seeking
    finality amongst all of the settlements at relatively the same
    time through, means, Senator, that no one tribe will receive
    any different benefit in terms of their waivers. This is the
    policy that we are trying to advance. We think we are in good,
    vibrant, healthy conversations with our tribal partners on this
    issue and with the Justice Department.
        Again, Senator, I don't believe we are inflexible. We are
    willing to have a good, healthy conversation about this.
        Senator Domenici. Well, let me say, and let me say this
    especially to our Chairman, I say this to you and to our
    Chairman. Mr. Chairman, I believe these settlements ought to be
    approved by our Committee. I am going to ask that we do it in
    spite of the opposition of the Administration. I don't believe
    we are going to be able to negotiate anything for a lesser
    amount of money. It is a very reasonable resolution. You don't
    have all the latitude in the world to settle. You have
    parameters, of substituting something for what is going on now,
    and that substitution costs X amount of money, and you go on up
    and down and solve it.
        So I want to thank them for helping put together the
    language that has brought the compromise, but I do believe the
    position of the Federal Government that they will not comment
    positively about the settlement costs is wrong in this case,
    and it is not going to get any better. More cases are coming,
    and nobody up here is going to sit around and take OMB's
    evaluation of these things, when they know less about what is
    going on than most of us.
        I can tell you, you can't say it, but I can, and I have had
    to go to the President on items of significance for this
    Country when OMB didn't care what the situation was, and it
    didn't take the President five minutes to decide they were
    wrong. I can't go running up there on every Indian settlement,
    but I tell you, they are making some bad mistakes of judgment
    in terms of their recommendations, and this is one of them.
        I thank you, Mr. Chairman.
        The Chairman. Senator Domenici, I assume that message will
    get to OMB from this hearing.
        Senator Barrasso?
        Senator Barrasso. Thank you very much, Mr. Chairman.
        I want to thank Senator Tester for his kind comments on how
    we can work together to solve these issues.
        Mr. Polly, the Bureau of Reclamation has really I think
    done a great job of working to cultivate a stakeholder working
    group for the Yellowtail Dam. There are many users of this dam,
    is that correct?
        Mr. Polly. Yes, sir, and we can get you a list.
        Senator Barrasso. A list of all the different users, so the
    stakeholder team really has more than just the two members who
    are part of the compact that has been developed between the
    Crow Nation and the State of Montana?
        Mr. Polly. That is correct.
        Senator Barrasso. Looking at this and the Bureau's efforts,
    is it possible that perhaps some of the others should be
    included in making these decisions as we take a look at this
    whole process?
        Mr. Polly. Well, sir, this is a very complex issue. We will
    have to get back to you as to what our official policy has been
    on similar things. But there are a number of stakeholders
    involved, yes.
        Senator Barrasso. The Department's testimony implies that
    there is a problem with the water allocation included in the
    compact and the legislation. Can you elaborate on that? And
    maybe Mr. Bogert, you may want to jump in as well.
        Mr. Polly. With regard to the legislation, sir?
        Senator Barrasso. Yes.
        Mr. Polly. Well, I believe the Administration's position is
    we are concerned about possible litigation. But when you talk
    about water in the West, it is impossible to not talk about
    litigation as well.
        Senator Barrasso. Your testimony also expresses concern
    that the standard criteria and the procedures for this kind of
    agreement have not been completed. Would you comment a little
    bit more about that and what the shortcomings there may be?
        Mr. Bogert. Mr. Chairman, Senator Barrasso, part of the
    evaluation that the Administration undertakes with respect to
    water rights settlements involves an assessment by the
    Department of Justice as to the exposure of the United States
    if the claims were to ultimately be litigated.
        My understanding is the Justice Department is, if it hasn't
    already, it is going to be shortly finishing up its litigation
    analysis and will be providing that to all of the Federal
    agencies that are involved in trying to put together what the
    Administration's position is. A fundamental component of the
    criteria and procedures is the exposure of the United States in
    the a settlement environment. To the extent that that is sort
    of plugged in as a part of the formula under the criteria and
    procedures, I believe, Senator, that is being finished up by
    the Justice Department.
        Senator Barrasso. Because your testimony expresses some
    concern over the ambiguity in the Bureau of Reclamation's
    responsibility for water delivery. Is that part of the
    litigation issue?
        Mr. Bogert. It also goes to the policy issues. To the
    extent that the United States takes its trust obligations very
    seriously, and views these settlements as a means by which we
    fully discharge our obligations, to the extent that precision
    in the settlement environment as to the Bureau of Reclamations
    obligations to discharge the trust obligations, in terms of
    delivery, it is important that we want to continue to work
    through and discuss some of the potential issues that could
    arise so that we can seek a little bit more precision in terms
    of the direction.
        Senator Barrasso. Well, I want see how all the stakeholders
    can be made part of establishing the bureau's responsibility.
    That is my vision of how we can include all of the stakeholders
    in establishing the bureau's responsibilities.
        Mr. Bogert. I think, Senator, that this is part and parcel
    of the collaborative process that exists in these settlements.
    If there are those, and certainly our obligations are to the
    tribes first and foremost to ensure that--while we are at arms
    length and working with their leadership on what their view
    should be of their settlement, so too we have a facilitation
    role. If there are those, Senator, that you and others believe
    are not at the table, that is part of the role that we play at
    the Department of the Interior with the Secretary's Indian
    Water Rights Office.
        Senator Barrasso. Thank you, Mr. Chairman.
        The Chairman. Senator Barrasso, thank you very much.
        I thank both of our witnesses. We may be submitting
    additional questions for you and we appreciate very much your
    testimony today.
        Mr. Bogert. Thank you, Mr. Chairman.
        Mr. Polly. Thank you.
        The Chairman. We have six additional witnesses. We have
    about an hour remaining before other matters and events will
    intervene in our schedule. Many of you have come from a long,
    long distance. We want to hear fully from you and have you
    participate fully in this Committee hearing. We thank you very
    much for your willingness to be a part of it.
        I want to call forward to the witness table the Honorable
    Ronnie Lupe, the Chairman of the White Mountain Apache Tribe in
    Whiteriver, Arizona; Mr. John Sullivan, Associate General
    Manager of the Salt River Project in Phoenix, Arizona; the
    Honorable Cedric Black Eagle, Vice Chairman of the Crow Tribe
    of Montana, the Crow Agency in Montana; Mr. Chris Tweeten, the
    Chief Civil Counsel, Legal Services Division, Office of the
    Attorney General, State of Montana; the Honorable Charles
    Dorame, Chairman of the Northern Pueblos Tributary Water Rights
    Association in Albuquerque; and the Honorable Gilbert Suazo,
    Senior, Councilman, Taos Pueblo in Taos, New Mexico.
        I thank all of you for traveling to Washington, D.C. Those
    who aren't testifying also have traveled here. We appreciate
    very much your attendance.
        Senator Tester?
        Senator Tester. Yes, Mr. Chairman. Thank you. I am going to
    have to go preside here shortly, so I am not going to be able
    to ask questions to particularly Chris and Cedric. Just in your
    testimony, if you could talk about what the impacts are if we
    do nothing again. That is all my few questions are going to
    revolve around anyway.
        I appreciate your good work. Thank you both.
        The Chairman. Senator Tester, thank you. I thank you for
    your participation in this Committee and in a very aggressive
    way, and the same to my colleagues.
        Let me say to the witnesses that your entire prepared
    statements will be part of the record. We would ask that you
    summarize in no more than five minutes.
        Let us begin first with the Honorable Ronnie Lupe, the
    Chairman of the White Mountain Apache Tribe, Whiteriver,
    Arizona. Mr. Chairman?

    STATEMENT OF HON. RONNIE LUPE, CHAIRMAN, WHITE MOUNTAIN APACHE
                                 TRIBE

        Mr. Lupe. Thank you, Mr. Chairman, members of the
    Committee, and the Vice Chair also. Thank you for inviting us
    as White Mountain Apache Tribe to testify in support of S.
    3128.
        I have been coming before this Committee here in
    Washington, D.C. testifying before various committees, and I
    consider this as our strongest link to the United States
    Congress and the sort of government-to-government relationship
    we have with the United States. I appreciate coming here again
    on behalf of our tribe.
        For centuries, we have fought for our land, first from the
    Spanish, then the Mexicans and the Americans. We as Apaches, of
    course, and today we are proud to be Americans. We defend our
    sacred land and the people in the land of this great Country
    against terrorism and other enemies, joining the United States
    armed forces in high numbers. We have lived here in the United
    States on our land for many centuries. It is now known as Fort
    Apache Indian Reservation.
        For almost 100 years, we have fought to keep our reserve
    water rights. Hostility used to be the tone of our relationship
    with the downstream water users. Now, it is a peaceful
    relationship we have with the Phoenix downstream water users.
    About four years ago, after not talking for more than 50 years,
    we invited the SRP and the Phoenix Valley citizens to our land
    to visit our secret springs. I told them that our springs have
    built many skyscrapers below in the Phoenix Valley, some 200
    miles downstream from us.
        They came. They listened. We listened to them. We are
    important to the downstream water users. My reservation is 1.66
    million acres of the most beautiful land you will ever see,
    highlighted by the high rise of mountain ranges from east to
    west, north to south, pine trees, meadows, cienegas, with many
    types of animals on our reservations. We have many streams come
    together forming Whiteriver and Blackriver. They merge and
    become Salt River and flow down to Phoenix Valley cities. They
    depend on the water downstream as much as we depend on the
    streams on our land.
        After the SRP and the valley cities came to our land, we
    sat down at the table and talked. Of course, we talked
    peacefully. We talked respectfully about the dignified,
    honorable and equitable settlement of my tribe's reserve water
    rights. A lot of horse-trading took place. It went on, hundreds
    and hundreds of pages of exhibits, water studies, et cetera, et
    cetera, and with all the people from the Phoenix Valley and
    different organizations and companies, and even the northern
    boundary in the Little Colorado River Basin.
        After three years of horse-trading, we have reached a water
    rights quantification and a settlement agreement with the
    downstream parties. The final touches are being put to the
    quantification settlement agreement as I speak. The cornerstone
    of our water rights settlement agreement, if you will, and the
    White Mountain Apache Water Quantification Act of 2008, is a
    rural water drinking system from our reservation. Almost the
    entire population of 15,000 tribal members and residents on our
    reservation are served by a well field. This well field is
    failing by over 50 percent in five years. There is no real
    groundwater on our land. All of the water is our springs and
    streams.
        We call the Miner Flat Reservoir Project the only needed
    project that we need to survive on our reservation. There are
    many rivers, North Fork, Bonito Creek and all the others, Black
    River, Salt River, that runs all the way down to the Phoenix
    area. We rely upon these water supplies, water reservoirs. We
    cannot grow economically or develop our land if we do not have
    this water. Our culture would die out.
        The White Mountain Apache Water Right Consultation of 2008
    will provide funding to construct the drinking water system on
    our reservation. Without a drinking water storage reservoir,
    there can be no settlement of our reserve water rights. This is
    a deal we made with the valley water users downstream.
        S. 3128 will provide a Federal loan to my tribe for
    planning, design, engineering, environmental compliance for the
    Miner Flat Storage Reservoir and reservation water drinking
    water system. This system of development will serve us for the
    next 100 years to live. Without it, we cannot. We cannot
    survive.
        We have been in discussion of these water rights with many
    of our people from Phoenix down in the valley. We have become
    friends. We have talked for so many years now, the last four
    years, and we have finally arrived at an understanding that we
    have finally approved and have nearly succeeded in an
    equitable, honorable water settlement with our friends down in
    the Phoenix area.
        We have still more to go yet after the development of our
    water rights with S. 3128. There are many projects that need to
    be done. A lot of work has to be done--a stretch of a pipeline
    all the way down to Cibecue, which is 50 miles away from
    Whiteriver and the North Fork drainage, and then on beyond into
    all the other areas on our reservation. We cannot survive
    without the completion of the S. 3128. We need it so bad.
        That is the reason why I brought four members of the
    government body here with me. They are sitting in the audience
    right now. And the other members of the government body are
    also busy elsewhere on our reservation. One is in New York City
    for another area. We represent our people as best as we can,
    knowing that the heart of the manner of where we live and what
    we do on our reservation depends on the Federal Government in
    most cases, with our objective of the survival of our people.
        This is where we end up in all respect to the United States
    Government, to this Committee. We hope and pray that we will be
    successfully finally after so many years, so many years
    struggling on our reservation, to somehow develop our waters on
    our land. We very much depend on S. 3128 to be it.
        Otherwise, if we do not secure this, S. 3128, the costs
    again would go up on our reservation. And then we go on into
    years and years of negotiation again. We think in the area of
    human respect for the people down in the valley also, and also
    the other people on our reservation who come to visit us, that
    we do need water. We do have housing project programs going on
    on our reservation. We cannot build any more houses because our
    water just isn't there. We cannot even progress anymore. We
    can't even build more houses in Whiteriver, Arizona, the
    headquarters of the White Mountain Apache Tribe, because of
    this water. We don't have it. We don't have groundwater.
        The only way that we will survive for the next 100 years is
    for this project to continue as is, as are requested. And we
    have all agreed with the downstream water users. This will be a
    quantification. This will be the final quantification of our
    water rights with the downstream water users. We hope that it
    will happen very soon. We hope that it will be here with us
    today, and we respectfully request the Committee to see it as
    it is.
        We need your help.
        [The prepared statement of Mr. Lupe follows:]

    Prepared Statement of Hon. Ronnie Lupe, Chairman, White Mountain Apache
                                     Tribe
    Introduction
        The White Mountain Apache Tribe and its Tribal Council thank
    Senator Dorgan for the invitation to appear and testify today before
    the Senate Committee on Indian Affairs in support of S. 3128, the White
    Mountain Apache Tribe Rural Water System Loan Authorization Act.
    Tribe's Winters Doctrine Water Rights
        The White Mountain Apache Tribe has beneficial title to 1.66
    million acres of land in the east central highlands of the State of
    Arizona. The Tribe's Fort Apache Indian Reservation was established by
    Executive Order in 1871, from the aboriginal lands of our ancestors. We
    have retained actual, exclusive, use and occupancy of our aboriginal
    lands, within the boundaries designated by the Executive Orders dated
    November 9, 1871 and December 14, 1872, without exception, reservation,
    or limitation since time immemorial. The Tribe's vested property
    rights, including its aboriginal and other federal reserved rights to
    the use of water, often referred to as Winters Doctrine Water Rights,
    that underlie, border and traverse its lands, have never been
    extinguished by the United States and are prior and paramount to all
    rights to the use of water in the Gila River drainage, of which the
    Salt River is a major source.
    The Tribe's Reservation--Source of Salt River and its Tributaries
        Except for a small portion of the Reservation that drains to the
    Little Colorado River Basin, virtually the entire Reservation drains to
    the Salt River. The headwaters and tributaries of the Salt River arise
    on the Tribe's Reservation. See attached General Overview Map. The Salt
    River tributaries that arise on our reservation are the principal
    sources of water for the Tribe, the downstream Cities of Avondale,
    Chandler, Gilbert, Glendale, Mesa, Peoria, Phoenix, Scottsdale and
    Tempe; the Salt River Project and the Roosevelt Water Conservation
    District, among other parties to the Gila River and Little Colorado
    Adjudication Proceedings.
    Gila River and Little Colorado River Adjudication Proceedings
        The United States in its capacity as the Tribe's Trustee, filed a
    claim in 1985, in the name of the White Mountain Apache Tribe for
    approximately 175,000 acre feet of Salt River water in the Gila River
    Adjudication Proceedings now pending in the Maricopa County Superior
    Court, State of Arizona. It also filed claims for the Tribe in its
    capacity as trustee in the Little Colorado River Adjudication
    Proceedings now pending in the Apache County Superior Court, State of
    Arizona.
        The United States amended its water rights filings for the Tribe in
    the Little Colorado River and the Gila River General Stream
    Adjudications in September 2000, to assert the Tribe's aboriginal and
    priority federal reserved rights to the transbasin aquifer sources
    necessary to sustain the base flow of the springs and streams on the
    Tribe's Reservation.
        The claims filed by the United States as Trustee specifically
    recognize the Tribe's unbroken chain of aboriginal title and time
    immemorial priority rights to the base flow of the springs and streams
    as well as surface water contributed by rainfall and snowfall runoff on
    the Tribe's Reservation.
    Quantification and Settlement Agreement
        For decades, the White Mountain Apache Tribe has asserted its
    rights to preserve, protect, and develop its aboriginal and federally
    reserved water rights. As late as the 1950s, a physical confrontation
    became imminent when the Tribe began to develop outdoor recreation
    lakes on its Reservation trust lands by utilizing water from streams on
    the Reservation. This activity was considered a threat to water
    supplies in the Salt River system by downstream water users in the
    Phoenix Valley and was vigorously opposed. This is just one example of
    a litany of water right controversies involving the White Mountain
    Apache Tribe and the Salt River Valley water users from 1898 throughout
    the 20th century, but that is all the past.
        More recently, with the appointment of a Federal Negotiating Team
    by the Secretary of the Interior in 2004, we have met and negotiated in
    good faith with the downstream water users and claimants in both the
    Gila River and Little Colorado River Adjudication Proceedings to reach
    an honorable and equitable quantification and settlement of our Tribe's
    reserved water rights.
        I am pleased to report to the Senate Committee on Indian Affairs
    that a water rights quantification agreement, which was respectfully
    negotiated amongst all parties, has been virtually concluded and is
    only awaiting formal approval by the parties' respective governing
    bodies.
    Quantification of Water Rights Establishes Certainty
        The Tribe's sizable and senior water rights claims in the pending
    Gila River and Little Colorado River Adjudication Proceedings have
    generated considerable uncertainty regarding the availability of Salt
    River water supplies currently used by the downstream Salt River
    Project, which serves the Phoenix Valley Communities. As many as 3.5
    million people depend in large part upon the water sources that arise
    on the Fort Apache Indian Reservation to which the White Mountain
    Apache Tribe claims sufficient water to meet present and future needs.
    The WMAT Water Quantification Act and Settlement Agreement will resolve
    uncertainties among all of the parties and claimants in both the Gila
    River and Little Colorado River Basins.
    Drinking Water Shortages Threaten Health, Safety and Welfare of
            Reservation Residents
        The Tribe and Reservation residents are in great need of a long-
    term solution to meet drinking water requirements. Currently the Tribe
    is served by the Miner Flat Well Field. Well production has fallen
    sharply and is in irreversible decline. Over the last 8 years, well
    production has fallen by 50 percent, and replacement wells draw from
    the same source aquifer that is being exhausted. The Tribe experiences
    chronic summer drinking water shortages. There is no prospect for
    groundwater recovery. The quality of the existing sources threatens the
    health of our membership and other Reservation residents, including the
    IHS Regional Hospital and State and BIA schools. The only viable
    solution is replacement of failing groundwater with surface water from
    the North Fork of the White River and implementation of the WMAT Rural
    Water System.
    Cornerstone of WMAT Quantification Act and Settlement Agreement
        The WMAT Rural Water System, including the Miner Flat Dam Storage
    Facility, water treatment plant, and pipeline to our principal
    communities is the cornerstone of the WMAT Water Rights Quantification
    Act and Settlement Agreement. The Quantification Act and Settlement
    Agreement will confirm the Tribe's and other settling parties' water
    rights without prolonged, protracted and expensive litigation that
    could last for decades. The Miner Flat Project will replace the failing
    well system and enable the Tribe to construct a secure, safe and
    dependable drinking water supply for the current 15,000 White Mountain
    Apache Tribal members and residents living on our Reservation and will
    meet our drinking water needs for decades to come. See attached Miner
    Flat Reservoir and Pipeline Location Map.
    S. 3128--An Important Step Forward
        The White Mountain Apache Tribe Rural Water System Loan
    Authorization Act (S. 3128), conceived and sponsored by Senator Kyl, is
    an important and essential step. The introduction and implementation of
    the WMAT Water Rights Quantification Act and the Settlement Agreement
    between the White Mountain Apache Tribe and downstream parties will
    soon follow.
        S. 3128 provides for a $9.8 million federal loan to the Tribe for
    preconstruction planning, design and engineering, and environmental
    compliance for the White Mountain Apache Rural Water System, including
    regulation of water supplies on the North Fork of the White River. As
    provided in S. 3128, the loan is to be repaid by the Tribe.
        Funding for planning, design and engineering now will save millions
    of dollars in construction inflation costs by allowing the Tribe to
    commence construction following ratification by Congress of the larger
    WMAT Water Rights Quantification Act and Settlement Agreement. The
    Quantification Act will authorize the construction funding and the
    means to repay our loan. It will permit a construction start as many as
    two years ahead of any timetable that does not provide for advance
    planning and design.
        The White Mountain Apache Tribe appreciates this Hearing and
    support by this Committee of S. 3128, and the commitment of Senator Kyl
    to advance this bill and the Quantification Act to the Congress in its
    current session.

        The Chairman. Mr. Chairman, thank you very much for your
    testimony and your passion, and the substantial amount of work
    that you have done. We appreciate your traveling here for that
    purpose today.
        Next, we will hear from Mr. John Sullivan. Mr. John
    Sullivan is Associate General Manager of the Salt River Project
    in Phoenix, Arizona.
        Mr. Sullivan, you may proceed.

    STATEMENT OF JOHN F. SULLIVAN, ASSOCIATE GENERAL MANAGER, WATER
                       GROUP, SALT RIVER PROJECT

        Mr. Sullivan. Thank you, Chairman Dorgan, Vice Chairman
    Murkowski, other members of the Committee. I want to thank you
    for the opportunity to testify in support of S. 3128, the White
    Mountain Apache Tribe Rural Water System Loan Authorization
    Act.
        I am responsible for all things water at the Salt River
    Project, including negotiating with various Indian tribes over
    the years' settlements. We operate seven dams and reservoirs,
    along with numerous electrical generating facilities and
    deliver water and electricity to customers and shareholders in
    the Phoenix metropolitan area.
        SRP has a history of negotiating and settling Indian water
    rights disputes in Arizona. Over the past four decades, we have
    worked with numerous tribes and stakeholders to resolve
    conflicts in a manner that benefits both the Indian communities
    and their non-Indian neighbors. Among the multiple benefits of
    settling water disputes are water supply certainty for all of
    the settling parties and the level of trust that allows for
    more improved water management.
        Over the past several years, as you have heard, SRP and
    other interested stakeholders have engaged in water rights
    settlement negotiations with the White Mountain Apache Tribe,
    which is located on the Fort Apache Reservation in Eastern
    Arizona, and encompasses the headwaters of the Salt River.
    About 42 percent of the water delivered by SRP originates on
    the Fort Apache Reservation, and is stored in four reservoirs
    on the Salt River downstream.
        The United States, acting on behalf of the tribe, asserted
    claims on water from the Salt River Basin. Today, these claims
    represent the largest remaining unsettled water dispute on
    SRP's watershed. We have reached a point where the settlement
    agreement is near final, and the negotiating parties are
    seeking approvals from their various governing bodies.
        A critical component, as the Chairman just mentioned, of
    this settlement is the Miner Flat Dam and pipeline project,
    which will provide reliable water to the tribe and its members.
    The tribe's existing system relies on an aquifer that is very
    limited and insufficient to meet the needs today of the tribe,
    nonetheless future needs.
        As an interim measure, the tribe is constructing a small
    temporary diversion system on the White River, but that is only
    short term. The Miner Flat project is a desperately needed,
    long-term solution that will meet the water needs of the
    reservation for the next 100 years.
        S. 3128 provides a $9.8 million loan to the White Mountain
    Apache Tribe to conduct planning, design and engineering work
    for the Miner Flat Dam project. Beginning on the planning,
    design and engineering for the Miner Flat project is important
    so that construction can begin immediately upon completion of a
    full settlement, including approval by the Congress.
        This loan is critical to ensuring the tribe's water
    supplies are provided in a timely and cost-effective manner,
    and as Senator Kyl mentioned, actually provides an opportunity
    to save money in the overall costs of the project. This bill
    has wide support among the settling parties, and I believe many
    have sent letters of support to this Committee.
        Although it is not our intention to continue pursuing the
    funding absent a settlement, I think you heard today from
    Senator Kyl that he has introduced a bill for the full
    settlement at this point. We do believe we are very close to
    being at that point. It is important to give the tribe the
    ability to begin preliminary work on this project.
        Chairman Dorgan, Vice Chairman Murkowski, we look forward
    to working with the Committee on the White Mountain Apache
    Tribe Rural Water System Loan Authorization Act, and soon, very
    soon, we hope, a full settlement bill. Thank you once again for
    this opportunity to testify before you today, and I would be
    happy to answer questions at the appropriate time.
        [The prepared statement of Mr. Sullivan follows:]

      Prepared Statement of John F. Sullivan, Associate General Manager,
                        Water Group, Salt River Project
        Chairman Dorgan, Vice Chairman Murkowski and members of the
    Committee,
        Thank you for the opportunity to testify in support of S. 3128, the
    White Mountain Apache Tribe Rural Water System Loan Authorization Act.
    My name is John F. Sullivan. I am the Associate General Manager, Water
    Group, of the Salt River Project (``SRP''), a large multi-purpose
    federal reclamation project embracing the Phoenix, Arizona metropolitan
    area. SRP has a history of negotiating and settling Indian water rights
    disputes in Arizona. Over the past four decades, SRP has worked with
    numerous tribes and stakeholders to resolve Indian water rights
    disputes in a manner that benefits both Indian communities and their
    non-Indian neighbors. Most important among the benefits is water supply
    certainty, which is a fundamental outcome of any water rights
    settlement.
        SRP is composed of the Salt River Valley Water Users' Association
    (``Association'') and the Salt River Project Agricultural Improvement
    and Power District (``District''). Under contract with the Federal
    Government, the Association, a private corporation authorized under the
    laws of the Territory of Arizona, and the District, a political
    subdivision of the State of Arizona, provide water from the Salt and
    Verde Rivers to approximately 250,000 acres of land in the greater
    Phoenix area. Over the past century, most of these lands have been
    converted from agricultural to urban uses and now comprise the core of
    metropolitan Phoenix.
        The Association was organized in 1903 by landowners in the Salt
    River Valley to contract with the Federal Government for the building
    of Theodore Roosevelt Dam, located some 80 miles northeast of Phoenix,
    and other components of the Salt River Federal Reclamation Project. SRP
    was the first multipurpose project approved under the Reclamation Act
    of 1902. In exchange for pledging their land as collateral for the
    federal loans to construct Roosevelt Dam, loans which have long since
    been fully repaid, landowners in the Salt River Valley received the
    right to water stored behind the dam.
        In 1905, in connection with the formation of the Association, a
    lawsuit entitled Hurley v. Abbott, et al., was filed in the District
    Court of the Territory of Arizona. The purpose of this lawsuit was to
    determine the priority and ownership of water rights in the Salt River
    Valley and to provide for their orderly administration. The decree
    entered by Judge Edward Kent in 1910 adjudicated those water rights
    and, in addition, paved the way for the construction of additional
    water storage reservoirs by SRP on the Salt and Verde Rivers in Central
    Arizona.
        Today, SRP operates six dams and reservoirs on the Salt and Verde
    Rivers in the Gila River Basin, one dam and reservoir on East Clear
    Creek in the Little Colorado River Basin, and 1,300 miles of canals,
    laterals, ditches and pipelines, groundwater wells, as well as numerous
    electrical generating, transmission and distribution facilities. The
    seven SRP reservoirs impound runoff from multiple watersheds, which is
    delivered via SRP canals, laterals and pipelines to municipal,
    industrial and agricultural water users in the Phoenix metropolitan
    area. SRP also operates approximately 250 deep well pumps to supplement
    surface water supplies available to the Phoenix area during times of
    drought. In addition, SRP provides power to nearly 900,000 consumers in
    the Phoenix area, as well as other rural areas of the State.
        SRP holds the rights to water stored in these reservoirs, and for
    the downstream uses they supply, pursuant to the state law doctrine of
    prior appropriation, as well as federal law. Much of the water used in
    the Phoenix metropolitan area is supplied by these reservoirs.
        The White Mountain Apache Tribe is located on the Fort Apache
    Reservation in eastern Arizona, established by Executive Order in 1871.
    The headwaters of the Salt River originate on the Fort Apache
    Reservation. Four of the seven reservoirs operated by SRP are located
    on the Salt River downstream of the Fort Apache Reservation, and
    approximately 42 percent of the water delivered by SRP to Phoenix
    metropolitan area customers originates on the Reservation. The United
    States, acting on behalf of the Tribe, has asserted claims in the
    pending Gila River Adjudication to the depletion of 179,000 acre-feet
    of water from these headwaters. These claims are based on the federal
    reservation of rights doctrine and largely encompass potential future
    uses of water by the Tribe on its Reservation.
        Over the past several years, SRP and other interested stakeholders
    have engaged in water rights settlement negotiations with the White
    Mountain Apache Tribe. These negotiations are almost completed, and we
    anticipate that an agreement among the parties will be finalized in the
    next few weeks. Once agreement is reached, the settling parties will
    pursue Congressional approval through a larger settlement bill, but the
    White Mountain Apache Tribe Rural Water System Loan Authorization Act
    is a crucial initial step that will help implement the final agreement.
        A critical component of the parties' efforts to settle the White
    Mountain Apache Tribe's water rights is the provision of an adequate
    water storage and distribution system for the Tribe and its members.
    The Tribe's existing system is supported by a wellfield, but the
    aquifer's supply is limited and insufficient to serve the reservation's
    needs. As an interim measure, the Tribe is constructing a small
    temporary water diversion system along the White River. However, this
    is only a short-term solution. The Tribe has determined that
    construction and operation of the Miner Flat Dam Project would best
    address the Tribe's growing municipal, rural and industrial water
    diversion, storage and delivery demands. The Project will comply with
    Federal environmental laws, and is estimated to cost approximately $128
    million in today's dollars. Project features include a dam and pipeline
    for water distribution within the Reservation's boundaries including to
    the growing communities of White River, Cedar Creek, Carrizo, and
    Cibecue.
        S. 3128, the White Mountain Apache Tribe Rural Water System Loan
    Authorization Act, provides $9.8 million in the form of a loan to the
    White Mountain Apache Tribe to be repaid beginning in 2013. This
    legislation would allow the Tribe to conduct planning, design, and
    engineering work for the Miner Flat Dam Project once the Tribe and the
    Secretary execute a cooperative agreement. Without this legislation,
    funds would not be available to the Tribe to begin the design and
    engineering, which would likely delay construction and increase project
    costs by an estimated $15 million or more due to inflation. This loan
    is critical to ensuring the Tribe's water supplies are provided in a
    timely and cost effective manner.
        Although it was not the parties' intention to pursue this funding
    absent a settlement, we believe that we are very close to agreeing upon
    a comprehensive settlement with the White Mountain Apache Tribe and
    intend to introduce comprehensive settlement legislation in the near
    future. S. 3128 would lay the groundwork to begin project construction
    once full settlement is complete and passed. As a result of this
    legislation, millions of dollars could be saved and a secure water
    supply for the Tribe can be online more quickly.
        As is evident from the numerous letters to Chairman Dorgan and Vice
    Chairman Murkowski, included in this hearing record, S. 3128 has the
    strong support of the settlement parties, including the Arizona
    Department of Water Resources, the Cities of Phoenix and Tempe and
    numerous water users in the Little Colorado River Basin. We look
    forward to working with the Committee on this bill and, soon, a full
    settlement bill. We urge you to bring the settlement one step closer by
    approving S. 3128, the White Mountain Apache Tribe Rural Water System
    Loan Authorization Act.
        Chairman Dorgan, Vice Chairman Murkowski and members of the
    Committee, thank you for the opportunity to testify before you today
    and for considering our views. I would be happy to answer any questions
    you may have for me.

        The Chairman. Mr. Sullivan, thank you very much for your
    testimony. We appreciate your being here.
        Next, we will hear from the Honorable Cedric Black Eagle,
    Vice Chairman of the Crow Tribe of Montana.
        Mr. Black Eagle, you may proceed.

       STATEMENT OF HON. CEDRIC BLACK EAGLE, VICE CHAIRMAN, CROW
                                 NATION

        Mr. Black Eagle. Good morning, Chairman Dorgan, Vice Chair
    Murkowski, Senator Barrasso. Thank you for your continued good
    work for Indian people, and thank you for holding this hearing
    on S. 3355, the Federal legislation ratifying the Crow/Montana
    water compact.
        At the outset, I would like to take this opportunity to say
    that we will take Mr. Bogert's offer to meet next week, from
    the Department of Interior.
        Also for the record, my name is Cedric Black Eagle. I am
    Vice Chairman of the Crow Nation. The Crow Nation (Apsaalooke)
    has the largest, or is the largest of Montana's seven
    reservations. It is approximately 2.3 million acres. It is
    located in south-central Montana. We have a membership of
    approximately 12,000 members, of whom 7,900 reside on the Crow
    Indian Reservation. I am delighted to be here on behalf of
    Chairman Venne and the Crow Tribe of Indians.
        Since 1998, I have been involved in the negotiations at
    Crow as a member or lead negotiator of the Crow, so I am quite
    familiar with the history and the terms of the agreement, the
    compact between the Crow and Montana. I have a few brief
    remarks, then I am also submitting extensive written comments
    as well.
        I would like to thank the many people that have worked to
    bring this historic agreement to this stage, including all of
    those who have negotiated on behalf of the tribe, the State,
    and the United States over the years. In particular, I would
    like to thank Senator Tester for his hard work on behalf of,
    and for sponsoring the Federal legislation, along with Senator
    Baucus.
        Water has been profoundly important to the Crow people. It
    is vital to our health and a central part of our culture and
    traditions. As most Native American people, we hold water
    sacred and the traditions that we follow from time immemorial,
    we have followed those traditions and kept the great respect of
    nature, particularly the resources in water.
        The Montana Reserve Water Right Compact Commission has
    worked since the 1970s to settle tribal and Federal claims to
    water within the geographical area of Montana. As Senator
    Tester knows, because he was serving there in 1999, the Montana
    legislature ratified the compact we negotiated with the State
    of Montana. By entering into a compact, we settled our claims
    and avoided costly lengthy litigation. In addition, the compact
    settled our coal severance tax with Montana. The compact
    strikes a good balance, we believe, between the Indian and non-
    Indian users in our area.
        Details of the compact are included in my written
    testimony, but the basic features of the Montana/Crow compact
    establish a tribal priority date and set aside 500,000 acre
    feet yearly from the natural flow of the Bighorn River for
    tribal uses, and 300,000 acre feet of storage in the Bighorn
    Lake for the tribe, of which 150,000 acre feet may be put to
    use, while the remaining 150,000 is primarily for supplementing
    the natural flow in times of shortage.
        The compact fulfills the goals of agreed-upon usages and
    certainly for all users. It protects both Indian and non-Indian
    users and will allow the tribe to use its waters appropriately.
    The Montana Reserve Water Rights Commission is scheduled to
    sunset in June of 2009. If it sunsets before our compact is
    approved by Congress and signed into law, all existing State
    claims will go back to court. As such, we are under the gun to
    get the Congressional action before this expiration date.
        S. 3355 provides Federal ratification for the Crow/Montana
    water compact, and authorizes Federal contributions for overall
    settlement of $527 million. It will go primarily towards
    remediating the Crow irrigation project and constructing a
    municipal rural water industrial water system throughout the
    reservation. This system will provide clean, potable water for
    the Crow people. In my written testimony, I included a complete
    explanation of this project.
        While this is a significant sum, the tribe, in turn, waives
    its water right claims against the United States and other
    claims it has related to the United States, failure to
    establish an appropriate water system, as it was charged to do
    by Federal law. Most of the bill's text deals with these
    waivers. Please note that the Federal litigation appropriately
    contends with other key concerns as well.
        The settlement will allow us to complete the water
    infrastructure needed on our reservation to fulfill the purpose
    of the homeland of our people. It will support other economic
    development to be sure that even something as basic as housing,
    our chronic reservation housing shortage cannot be cured
    without water infrastructure, and those houses that we will
    need.
        A settlement will put the Crow irrigation project in good
    repair for the first time in history, which will benefit the
    project users and provide the tribe with some economic and
    other benefits in which to contend. After this bill is
    ratified, it returns to the tribe for a vote of the Crow
    people.
        In closing, I would like to say that in all aspects of what
    this will provide the tribe, the tribal membership or the tribe
    has 12 billion tons of coal that we want to utilize, and water
    plays a big part in that. We will become economically self-
    sufficient if this comes to fruition and if our water rights
    claims through Congress is passed, we would no longer be here
    to request or ask the Federal Government for money to help us
    for all the lands that we have given up for the creation of a
    portion of Wyoming and a portion of Montana.
        In closing, this will be very economically self-sufficient
    for our tribe as a whole.
        Thank you.
        [The prepared statement of Mr. Black Eagle follows:]

      Prepared Statement of Cedric Black Eagle, Vice Chairman, Crow Nation
        Good Morning Chairman Dorgan, Vice Chair Murkowski, and members of
    the Committee. Thank you for the good work you continue to do for
    Indian people. Also, thank you for holding a hearing on Senate Bill
    3355--the federal legislation that ratifies the Crow/Montana water
    compact and authorizes the federal contribution to the overall
    settlement.
        My name is Cedric Black Eagle. I am Vice Chairman of the Crow
    Nation. The Crow Nation (Aps alooke), the largest of Montana's seven
    reservations, is approximately 2.3 million acres. It is located in
    south-central Montana. We have a membership of approximately 11,000, of
    whom 7,900 reside on the Crow Indian Reservation. I am delighted to be
    here on behalf of Chairman Venne and the Crow Tribe of Indians.
        Since 1998, I have been involved in water negotiations at Crow as a
    member of or the lead negotiator for the Crow, so I am quite familiar
    with the history and terms of this agreement.
        I would like to thank the many people who have worked to bring this
    historic agreement to this stage, including all of those who have
    negotiated on behalf of the Tribe, the State, and the United States
    over the years. In particular, I would like to thank Senator Tester for
    his hard work on our behalf and for sponsoring this federal
    legislation, along with Senator Baucus.
    1. Water is Critical to Crow People
        Water is profoundly important to the Crow people. It is vital to
    our health and a central part of our culture and traditions. As one of
    our teachers wrote in her book on Crow Indian recipes and medicines,
    ``Water has always been the main drink of the Crow people. Elders tell
    us that rivers are like the veins of the world. They teach us to
    respect the waterways and to be thankful to the Creator every time we
    take a drink.'' \1\ Those who are ill are invited to drink pure water
    to thin their blood and restore their health. Tribal ceremonies such as
    those of the sweat lodge depend upon particular uses of waters in
    places that are sacred to the Crow people.
    ---------------------------------------------------------------------------
        \1\ Alma Hogan Snell, A Taste of Heritage: Crow Indian Recipes &
    Herbal Medicines, Ed. Lisa Castle; Foreword Kelly Kindscher; University
    of Nebraska Press; Lincoln & London, at 59 (2006).
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        According to Dale Old Horn, an ex officio member of the tribe's
    culture committee and the Tribal Historic Preservation Officer, water
    is one of the primary elements through which the Creator gives us the
    ability to sustain our lives. When Crows have anything spiritual and
    become disenfranchised from it, it causes great injury. But the Crow
    will say, even grass once downtrodden will revive and rejuvenate when
    water touches it. Today we are asking you to help us to rejuvenate our
    culture.
        The Crow people respect the beings that live in the rivers and pay
    appropriate tribute to the waters. In our creation story, the land is
    brought up from the water and in many of our other traditional stories
    water is central as well. We believe that all things of tangible
    substance, all things that we can touch, feel, smell, see and hear come
    from water. In the Tobacco Dance, a central ceremony of our tribe, we
    repeat this central truth that all things come from water and with
    water it goes.
    2. Crow Tribe and Montana Entered Into a Compact
        The Montana Reserved Water Rights Compact Commission was
    established by the Montana legislature in 1979 for purposes of
    concluding compacts for the equitable division and apportionment of
    waters between the State and its peoples and the Indian Tribes claiming
    reserved water rights within the state. As Senator Tester knows--
    because he was serving there--in 1999, Montana's state legislature
    ratified a Compact we negotiated with the State of Montana. \2\ By
    entering into a compact, we settled our claims and avoided costly and
    lengthy litigation. In addition, the compact settled our coal severance
    tax dispute with Montana. This Compact strikes a good balance between
    Indian and non-Indian users.
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        \2\ Tribal State Compact, MCA 85-20-201 (1999).
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        The basic features of the Montana/Crow Compact include the
    following:

       500,000 AFY from the natural flow of the Bighorn River for
            tribal use.

       Agreements to protect the stream flow in the Bighorn for the
            benefit of the fishery there.

       Tribal priority date of May 7, 1868.

       Protection of state and tribal existing uses as of 1999.

       No new state claims after 1999.

       Exempt claims for both state and tribal users of small wells
            and stock uses.

       300,000 AFY of storage in Bighorn Lake for the Tribe, of
            which 150,000 AFY may be put to use and 150,000 AFY is
            primarily to supplement the natural flow right in times of
            shortage.

       In the accompanying Streamflow and Lake Level Management
            Plan, Optimum, Standard, and Minimum Instream Flow targets for
            the Bighorn.

       Tribe has rights to all surface flow, groundwater and
            storage in other basins on the Reservation, still protecting
            existing users.

       Tribe waives other water rights claims within Montana.

       $15 million contributed by Montana to settle the coal
            severance tax dispute between Crow and Montana and provide a
            state cost share for the settlement.

       50,000 AFY of the Tribal Water Right may be marketed off-
            reservation. In addition, 47,000 AFY may be used on the Ceded
            Strip.

       Disputes between tribal and state users will be heard by a
            joint commission, while disputes between tribal users or
            between state users will be heard by the tribe or the state.

        It is important to note the Compact is an agreement born of
    compromise, but is fair. Also, by entering into this Compact we avoid a
    chaos of litigation that will harm all users, and in particular,
    preclude the Tribe from developing its domestic, agricultural, and
    industrial uses.
    3. Crow Tribe and State of Montana Seek Federal Ratification and
            Settlement of Federal Issues
        On July 29, 2008, Senators Tester and Baucus introduced Senate Bill
    S. 3355, a bill to provide federal ratification for the Crow/Montana
    Water Compact and to provide the federal contribution to the overall
    settlement. Major features of this bill are:

       S. 3355 provides for federal ratification and returns the
            Compact to the Tribe for approval or disapproval in a vote of
            the Crow people.

       The bill protects allottee rights to a just and equitable
            allocation of water for irrigation purposes and provides for
            the pursuit of allottee relief through tribal law, section 7 of
            the Act of February 8, 1887 (25 U.S.C. 381), or other
            applicable law.

       Appropriations (approximately $527 million) are authorized,
            primarily to remediate the Crow Irrigation Project and to
            construct a Municipal, Rural, and Industrial Water System
            throughout the Reservation: other funds are to be used for
            trust funds to fund future OM&R for these systems and to
            provide for an economic development fund.

       The Tribe shall have the right to develop and market power
            generation as a water development project on the Yellowtail
            Afterbay Dam.

       The Tribe waives water rights claims against the United
            States but retains the right to assert claims for Compact
            enforcement, enforcement of water rights acquired after the
            enactment of the Act, water quality, objections under State law
            proceedings, and other claims not specifically waived and
            released.

       The Tribe will implement its Tribal Water Code and
            administer its own water rights.

        The United States has many obligations to provide resources for
    this settlement. For example, the United States has liabilities related
    to unlawful condemnation of Crow lands and its failure to adequately
    complete and maintain the Crow Irrigation Project that was first
    authorized by Congress in 1890 including breach of its fiduciary duty
    to the Tribe to protect and develop the Tribe's water rights. In
    consideration of the federal contribution, which finally fulfills the
    United States trust obligation to the Tribe, section ten of S. 3355
    waives significant claims against the United States.
    Description of the Costs
        The Crow Tribe Water Rights Settlement Act costs are broken down
    into eight (8) sections, which include the following: (1)
    Rehabilitation and Improvement of Crow Irrigation Project; (2) Design
    and Construction of MR&I System; (3) Tribal Compact Administration; (4)
    Economic Development Projects; (5) Water Development Projects; (6) MR&I
    System OM&R; (7) Yellowtail Dam OM&R; and (8) CIP OM&R.
        The Crow Tribe retained HKM Engineering Inc. to prepare an
    engineering report for a Municipal, Rural and Industrial (MR&I) water
    system that would meet the current and future domestic, commercial,
    institutional water needs on the Crow Indian Reservation. The Tribe
    also retained HKM Engineering Inc. to prepare the Crow Irrigation
    Project Betterment Evaluation Report, which depicts the existing
    conditions of the Crow Irrigation Project and estimated costs
    associated with rehabilitating the Crow Irrigation Project. Together,
    these two reports provide the basis for the costs included in S. 3355.
    i. Rehabilitation and Improvement of Crow Irrigation Project
        The Crow Irrigation Project is located in south-central Montana, on
    the Crow Indian Reservation. The first general authorization for the
    construction of the irrigation project on the Crow Reservation was
    contained in an agreement between the Crow Tribe and the United States,
    entered into on December 8, 1890, and ratified by Section 31 of the
    Indian Appropriation Act of March 3, 1891. Subsequent Acts provided for
    continued construction and development to date. Designs, surveys, and
    construction for the Project were performed by the United States
    Reclamation Service, now the United States Bureau of Reclamation, for
    the BIA Affairs until 1922. Construction continued intermittently on
    various aspects of the Project into the 1920's. Further construction
    was performed by the BIA after 1922. Nearly all of the irrigation
    facilities were completed before 1940.
        The Crow Irrigation Project consists of eleven units with a total
    area of 63,365 acres. There are nine diversion dams, one storage dam,
    nine canal systems and five drainage systems.
        The Crow Irrigation Project has been operated and maintained by the
    BIA, with a majority of the O&M budget weighted towards personnel costs
    and deferred maintenance. As a result, there are extensive deficiencies
    within the Project. HKM evaluated the Crow Irrigation Project and
    identified the nature and extent of the existing deficiencies within
    the Project and provided cost estimates for rehabilitating the system
    such that it can function as originally designed. \3\ Lack of adequate
    water measurement was identified as a key operational deficiency of the
    Crow Irrigation Project. Additionally, automated gate controls at key
    diversion points would allow for more efficient water management
    throughout the Project.
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        \3\ The HKM report initially recommended replacement of significant
    portions of the Crow Irrigation Project. In an effort to contain costs
    associated with this settlement, the Tribe requested that HKM use a
    rehabilitation approach to the fulfillment of the federal obligation to
    the Tribe with respect to the Crow Irrigation Project. This resulted in
    a very significant reduction in the overall federal contribution to
    this settlement.
    ---------------------------------------------------------------------------
        Based on the deficiencies within the Project, the total costs
    involved with rehabilitating and improving the Crow Irrigation Project
    equal $160,653,000.
    ii. Design and Construction of MR&I System
        There are numerous compelling needs for the Crow MR&I System. There
    are multiple documented deficiencies with the existing water systems
    serving communities on the Crow Indian Reservation. These deficiencies
    have been documented in at least one previous study (HKM 1999) and by
    the Indian Health Service's Sanitation Deficiency System (SDS).
    Additionally, there are large areas of the Reservation that are
    uninhabitable without a reliable source of high quality water due to
    the low quality or quantity of groundwater. HKM examined several
    options for providing a comprehensive water system to service the
    population of the Crow Indian Reservation. The selected system would
    provide a reliable supply of safe drinking water to the majority of the
    population of the Crow Indian Reservation and would include capacity
    for existing and future economic development.
        To determine the volume of water that is needed on an average day
    the reasonable rates of use were multiplied by the population
    projections for the year 2050 to determine what a reasonable range of
    capacities may be. Additional water needs for livestock and future
    economic development were also included. This resulted in a peak day
    system with a diversion capacity of 12.7 cubic feet per second (cfs)
    capable of treating 7.43 million gallons per day and delivering 3.3331
    acre-feet per year to the service area.
        The system has been planned using design criteria appropriate for
    the area and type of system. Some of the more important design criteria
    include a peak day factor of 2.5 times the average day rate of flow in
    gallons per minute (gpm) and a peak hour factor of three times the
    average day rate of flow. A ``fire flow'' of 1000 gpm for two hours is
    also provided for the towns of Pryor, Crow Agency, and Lodge Grass.
        An estimate of the probable cost to plan, design, and construct the
    system was based on a variety of data including bid tabs and
    manufacturers' quotes. Costs were estimated for major items (i.e.
    intake, treatment plant, etc.) and a series of multipliers, including a
    contingency, were applied to establish the field cost and project cost.
    The major cost items include the following system components: surface
    water diversion and raw water pump station, water treatment plant,
    pipelines, pump stations, storage tanks, pressure reducing/control
    valves, service connections, livestock connections, and the SCADA
    System. The estimated cost of the system is $200,840,000.
    iii. Tribal Compact Administration
        As required by the Compact between Montana and the Crow Tribe, the
    Crow Tribal Water Resources Department (TWRD) must be established two
    years after the Effective Date (U.S. Congress, State of Montana, and
    Crow Tribal Council ratification) of the Compact. The TWRD will
    administer and enforce the Tribal Water Right pursuant to a Tribal
    Water Code. The TWRD will also provide Montana Department Natural
    Resource and Conservation with an annual report listing all current
    uses and new development of the Tribal Water Right.
        The estimated cost to establish the TWRD Office totals $4,000,000
    over a 10-year period. At a 3 percent inflation rate, the annual cost
    of the TWRD Office would be about $470,000. This annual funding level
    would provide a TWRD staff of four consisting of an Office Head and
    three Water Rights Specialists. The TWRD Office annual funding also
    includes office rent, office supplies and equipment, employee benefits
    and salaries, utilities, and general overhead costs.
    iv. Economic Development Projects
        The Tribe has considered a number of economic development projects
    that would involve water on the Reservation. The Tribe envisions that
    S. 3355 will play a central role in any and all energy development
    within the Reservation. The Tribe desires to develop its mineral
    resources in an economically sound, environmentally responsible manner
    that is consistent with Crow culture and beliefs. One of the major
    economic development projects that would assist the Tribe with these
    efforts is a proposed coal-to-liquids project. For any large scale
    energy development, the Tribe anticipates that its energy partners will
    need certainty and predictability to be able to use water for
    development without fear of litigation or uncertainties. With that in
    mind, the costs involved with Economic Development Projects total
    $40,000,000.
    v. Water Development Projects
        In addition to rehabilitating the Crow Irrigation Project and
    designing/constructing the MR&I System, the Tribe anticipates that it
    will have additional water development projects to undertake. Namely,
    the Tribe may choose to extend the MR&I System to the Pryor Creek
    drainage. Thus, the costs involved with Water Development Projects
    total $37,594,000.
    vi. MR&I System OM&R
        All water systems require operation and maintenance in order to
    deliver a reliable supply of water. Even though the facilities proposed
    for the Crow MR&I System would involve a high level of automation
    through the SCADA system, human effort and adequate funding are still
    essential for successful operation and maintenance. For instance,
    operation and maintenance costs for the pump stations and pipelines are
    primarily included within labor and equipment cost. Excluding labor and
    equipment however, there is still a materials element necessary to keep
    these components functional.
        The useful life for each of the MR&I System components was
    estimated and the replacement costs included for those components with
    useful lives less than 50 years. The replacement costs for these
    components were included to ensure an efficient and operational system
    through the 50-year life of the project. The life-cycle analysis was
    undertaken to estimate the cost of operation, maintenance and
    replacement over the course of 50 years. The costs involved with MR&I
    System OM&R total $40,513,000.
    vii. Yellowtail Dam OM&R
        The Crow Irrigation Project could utilize 150,000 acre-feet/year of
    irrigation storage water from the Yellowtail Dam/Bighorn Reservoir for
    irrigation purposes under average precipitation conditions and another
    150,000 acre-feet/year of irrigation storage water under drought
    conditions. If the Crow Tribe were to utilize 150,000 acre-feet/year of
    irrigation storage from Yellowtail Dam/Bighorn Reservoir, then the
    average cost would approximate $8.00/acre-foot through a Water Service
    Contract with the Bureau of Reclamation. The total annual cost would be
    $1,200,000 for 150,000 acre-feet/year irrigation use. If 100 percent of
    the annual cost of the 150,000 acre-feet of irrigation storage water
    from Yellowtail Dam/Bighorn Reservoir were subsidized through a trust
    fund to the Crow Tribe, then the amount required at a 3 percent
    inflation rate for 50 years would cost $30,876,000. This would produce
    an annual subsidy of about $1,200,000 for the 150,000 acre-feet of
    irrigation storage water from Yellowtail Dam/Bighorn Reservoir to the
    Crow Tribe.
    viii. CIP OM&R
        As discussed above, the rehabilitation costs for the Crow
    Irrigation Project will cost $23, 365,647. This amount is a significant
    reduction in the irrigation infrastructure full replacement value for
    the Crow Irrigation Project which would cost $45,638,497. The Tribe
    plans to subsidize the Indian-owned land (55 percent trust land) at 100
    percent of the current irrigation assessment of $20.50/acre, which
    results in the Indian trust land portion of the annual OM&R assessment
    rate decreasing to $0.00/acre. A trust fund for the Crow Irrigation
    Project for replacement of irrigation structures for Indian-owned land
    benefits only would be set at $495,000/year at a 3 percent inflation
    rate for 50 years. Thus, the total trust fund for the Crow Irrigation
    Project OM&R would total $12,736,000. The irrigation assessment rate
    would stay at $20.50/acre during the construction period of the Crow
    Irrigation Project Rehabilitation and Betterment. After the Crow
    Irrigation Project Rehabilitation and Betterment is completed, then the
    irrigation assessment rate to all water users should decrease to near
    the Montana OM&R average assessment of $15/acre in 2008 dollars.
    Conclusion
        The Montana Reserved Water Rights Compact Commission is scheduled
    to sunset in June, 2009. If it sunsets before our compact is approved
    by Congress and signed into law, all existing state claims will go back
    to court. As such, we are ``under the gun'' to get congressional action
    before this expiration date.
        This settlement will allow us to complete the water infrastructure
    needed for our reservation to fulfill its purpose as a homeland for our
    people. One vital need on our reservation is infrastructure to support
    housing construction. The settlement will put the Crow Irrigation
    Project into good repair for the first time in its history, which will
    benefit all Project users and provide the Tribe with some of the
    economic and other benefits for which it was intended.
        We have worked hard to resolve all remaining issues with the
    federal team and continue to have fruitful dialogue with it. We ask you
    to help us pass this piece of legislation and return our compact to the
    Crow people for their ratification. We look forward to your questions
    and suggestions and remain grateful for your attention to this issue
    critical to the Crow Nation and all the people who inhabit our
    reservation. We also want to thank your staff for their attention to S.
    3355.
    CROW IRRIGATION PROJECT: CURRENT CONDITION

        The Chairman. Thank you very much, Mr. Chairman. We
    appreciate your being here.
        Next, we will hear from Mr. Chris Tweeten, Chief Civil
    Counsel, Legal Services Division, the Office of the Attorney
    General in the State of Montana.
        Mr. Tweeten?

     STATEMENT OF CHRIS D. TWEETEN, CHIEF CIVIL COUNSEL, OFFICE OF
                 THE ATTORNEY GENERAL, STATE OF MONTANA

        Mr. Tweeten. Thank you, Mr. Chairman and members of the
    Committee.
        For the record, my name is Chris Tweeten. I am the Chairman
    of the Montana Reserve Water Rights Compact Commission. I also
    serve as the Chief Civil Deputy in the office of the Montana
    Attorney General.
        I am very pleased to be here today on behalf of Governor
    Brian Schweitzer and the State of Montana to testify in strong
    support of S. 3355, the Crow Water Rights Settlement bill. I
    consider it, in addition to being a great privilege for me to
    sit at this table with Mr. Sullivan and the distinguished
    tribal leaders here who share my professional interest and
    personal passion over the idea of settling these claims,
    getting them over with, and getting water onto our reservations
    for use for the benefit of our tribal people in Montana.
        The other witnesses before me have talked about the
    benefits that come from settling these water issues between
    State and tribal water users. I don't feel the need to
    reiterate those benefits. I do want to talk briefly about the
    process that we follow in Montana, and then I want to respond
    to Senator Tester's concerns regarding the risks that we run if
    these settlements don't ultimately come to fruition.
        Our legislature created the Compact Commission to negotiate
    government-to-government with the tribal governments in Montana
    in an effort to settle all of our tribal reserve water rights
    claims so they wouldn't have to go to court and be the subject
    of lengthy and expensive litigation. Our process is
    extraordinarily open. I suspect more open than any other water
    negotiations that take place anywhere else in the West.
        Montana has one of the strongest open meeting and public
    participation laws in the United States. Pursuant to those
    laws, all of our negotiating sessions, and it goes without
    saying the public meetings, have been open to the public. They
    have been the subject of extensive notice both up- and
    downstream from the Crow Reservation. We extended a specific
    invitation to the State Engineer of Wyoming to participate in
    our discussions, which he did.
        I would emphasize that since our discussions, government-
    to-government, we talked at the table with the representatives
    of the tribe in the United States, but all of the interested
    water users, and those include water users within the State of
    Wyoming, are welcome to come to our meetings, express their
    concerns, make suggestions as to how our compacts can be
    improved. In fact, the Water Engineer in Wyoming did exactly
    that and we made substantial changes in our compact in response
    to the State Engineer office's suggestions.
        I want to spend the rest of my time discussing the
    responses to Senator Tester's concerns regarding the need to
    get these issues settled and the risks we run if we don't
    accomplish that. The history of litigating over Federal reserve
    water rights claims for Indian tribes in the West doesn't paint
    a very pretty picture. Those litigation processes are
    tremendously expensive. They go on for decades. Probably most
    seriously, even after all of that expenditure of time and
    effort, those litigation processes result in a declaration of
    the amount of water that the tribe is entitled to and what the
    priority date of that water is. They provide no opportunity to
    put in place any sort of a settlement or discussion about how
    that water is to be put to use. These are the classic
    attributes of a paper water right.
        Our negotiations, on the other hand, seek to provide wet
    water for the tribes. In order to do that, it is necessary not
    only to talk about amounts of water and dates, but also to talk
    about the way in which the tribe's water right is to be
    administered and how that administration is going to interlock
    with the administration system that exists in the State outside
    the reservation.
        We, I think with the help of the United States and with the
    tremendous engagement of the Crow Tribal Council and the
    attorneys for the tribe, worked very hard to come up with an
    administration scheme that dovetails well with Montana and
    provides a superior opportunity for the tribe to put their
    water to use for the economic benefit of their people.
        In the process of doing that, in response to concerns
    expressed by the Wyoming State Engineer's office, we made
    provisions in the compact that provide substantial guarantees
    to the irrigators upstream in the Bighorn Basin, that their
    water rights and the water rights of the Crow Tribe and the
    downstream users are not going to conflict. Again, I want to
    emphasize the Wyoming State Engineer's office was extensively
    involved in those discussions and provided suggestions to us
    which we adopted to satisfy those problems.
        Mr. Chairman, I appreciate the opportunity to be here to
    testify this morning. I look forward to answering your
    questions.
        [The prepared statement of Mr. Tweeten follows:]

    Prepared Statement of Chris D. Tweeten, Chief Civil Counsel, Office of
                     the Attorney General, State of Montana
        Chairman Dorgan and distinguished members of the Senate Indian
    Affairs Committee, I thank you for the opportunity to provide written
    testimony on this important matter. My name is Chris D. Tweeten, and I
    am the Chief Civil Counsel to the Montana Attorney General and Chairman
    of the Montana Reserved Water Rights Compact Commission. I am here to
    testify on behalf of the State of Montana and Governor Brian Schweitzer
    in support of Senate Bill 3355, the Crow Tribe Water Rights Settlement
    Act of 2008, and to urge your approval of the Act.
        The Montana Reserved Water Rights Compact Commission was created by
    the Montana legislature in 1979 to negotiate, on behalf of the
    Governor, settlements with Indian Tribes and federal agencies claiming
    federal reserved water rights in the state of Montana. The Compact
    Commission was established as an alternative to litigation as part of
    the state wide water adjudication and is charged with concluding
    compacts ``for the equitable division and apportionment of waters
    between the state and its people and the several Indian tribes'' and
    the Federal Government. (Mont. Code Ann. Sec. 85-2-702 (2007).)
        Montana has been remarkably successful in resolving both Indian and
    federal reserved water right claims through settlement negotiations. To
    date, we have concluded and implemented water rights Compacts with the
    tribes of the Fort Peck, Northern Cheyenne and Rocky Boy's
    Reservations, as well as with the United States Forest Service,
    National Park Service, Agricultural Research Service, Bureau of Land
    Management, and several units of the Fish and Wildlife Service. The
    Congress has previously ratified the Northern Cheyenne and the Rocky
    Boy's Compacts, and both tribes have seen substantial economic and
    social benefits from the completed settlements. In addition, we have
    reached Compact agreements with the tribes of the Crow, Blackfeet, and
    Fort Belknap Reservations that are in the process of approval. The Crow
    Tribe-Montana Compact has already been approved by the Montana
    legislature (Mont. Code Ann. Sec. 85-20-901 (2007)), and is now before
    Congress for ratification pursuant to Senate Bill 3355.
        The Crow Indian Reservation is the largest of the 7 Indian
    reservations located in Montana. The Reservation encompasses 2.28
    million acres (roughly twice the size of Delaware), making the Crow
    Indian Reservation one of the largest in the United States. The
    Reservation has three mountain ranges, rolling upland plains and
    fertile valleys. Rainfall averages 12 inches per year and agriculture
    consists mostly of small grains and hay for livestock. Expansive
    grasslands support herds of cattle, horses and buffalo as well as
    abundant elk, deer and other wildlife.
        The Crow Indian Reservation is home to approximately 8,000 of the
    11,000 enrolled Tribal members. Close to 40 percent of the enrolled
    Tribal members are below the age of 18. Providing safe drinking water
    supplies to support existing populations and future growth is a major
    concern on the Crow Indian Reservation. One of the nation's richest
    deposits of strippable low sulfur coal lies within the Reservation as
    well as several oil and gas fields. Despite the presence of significant
    natural resources within the Crow Indian Reservation, unemployment is
    over 50 percent. Development of these natural resources requires
    adequate and dependable sources of water.
        The provisions in this Act will recognize and quantify water rights
    and on-Reservation storage allocations that will allow the Crow Tribe
    to provide for its growing population and develop its natural
    resources. The State of Montana and the Crow Tribal Administration
    agree that this is a fair and equitable settlement that will enhance
    the ability of the Tribe to develop a productive and sustainable home
    for the Crow People. We appreciate the efforts of the Tribe and the
    Federal Government to work with the State to forge this agreement, and,
    in doing so, to listen to and address the concerns of non-Indian water
    users both on and off the Reservation. The State of Montana would also
    like to express appreciation for the effort of the State of Wyoming and
    the Office of the Wyoming State Engineer in consulting with the Compact
    Commission and providing comments and testimony during the negotiation
    and State approval process to make sure Wyoming's concerns were
    addressed. A representative from the State Engineer's Office attended
    every negotiating session and most public meetings. Continued concerns
    express by the Wyoming State Engineer with language in the Compact
    resulted in language clarification in S. 3355. This was a huge
    commitment of time and effort by the State of Wyoming and we believe
    that the rights of both states are protected to the extent possible
    under this agreement while also meeting the rights of the Crow Tribe.
        The Crow Indian Reservation is located in south central Montana
    along the Montana-Wyoming border. The primary sources of water on the
    Reservation are the Bighorn River, the Little Bighorn River, Pryor
    Creek and several smaller streams. The Bighorn and Little Bighorn
    Rivers originate in Wyoming and flow north onto the Reservation. The
    Little Bighorn enters the Bighorn River just off the Reservation near
    the town of Hardin, Montana. The Bighorn River is a tributary of the
    Yellowstone River. All of the Reservation water sources are within the
    Yellowstone River system that is governed the Yellowstone River Compact
    among Wyoming, Montana and North Dakota. The Yellowstone River Compact
    was ratified by the Congress and approved by all the states by 1951.
    The Yellowstone River Compact expressly states that it does not
    adversely affect any Indian Tribe's rights in the Yellowstone River
    system. (Article VI, Yellowstone River Compact.) Yellowtail Dam,
    located on the Crow Indian Reservation, was authorized by Congress in
    1944 and construction began in 1961. Yellowtail Dam and Bighorn Lake
    (the associated reservoir of 1,328,360 acre-feet total capacity) are
    operated and managed by the United States Bureau of Reclamation (BOR).
    The Bureau of Indian Affairs (BIA) also manages irrigation projects
    within the Reservation.
        On May 7, 1868, the United States entered into a treaty with the
    Crow Tribe establishing the Crow Indian Reservation. This is the most
    senior water right priority date in the entire Yellowstone River
    drainage basin. The original Crow Indian Reservation was much larger
    than the present day Reservation. A 1904 Congressional statute confirms
    the cession of one portion of the Crow Indian Reservation to the
    Federal Government. The land involved in this particular cession is
    what is referred to as the ``Ceded Strip.'' The size of the Ceded Strip
    is approximately 1.1 million acres. In 1958 Congress restored 15,553
    acres of surface ownership and 80,423 acres of subsurface mineral
    ownership to the Tribe. The 9th Circuit Federal Court of Appeals has
    ruled that the land and minerals associated with the ownership
    interests of the Tribe in the Ceded Strip are components of the
    Reservation. Therefore, the Compact recognizes a separate water right
    for the use of land and minerals owned by the Crow Tribe in the Ceded
    Strip off the Reservation.
        Concurrent with the initiation of the Montana general stream
    adjudication in 1979, the United States filed suit in federal court to
    quantify the rights of tribes within the State, including the Crow
    Tribe. Those federal cases have been stayed pending the adjudication of
    tribal water rights in state court. Should the negotiated settlement of
    the Crow Tribe's water right claims fail to be approved, then the
    claims of the Crow Tribe will be litigated before the Montana Water
    Court. The Crow Tribe has always had the senior water right in these
    basins--this Compact does not create that right, it simply quantifies
    it.
        In the fall of 1998, the Crow Tribe approached the Governor and the
    Attorney General with a proposal to settle the Crow Tribe's claims to
    water as well as a lawsuit between the Crow Tribe and the State of
    Montana concerning a coal severance tax previously collected by the
    State on coal mined in the Ceded Strip. The Crow Tribe, by separate
    legislation, also seeks to settle land issues by repurchasing land it
    contends was illegally transferred out of trust. The stated goal of the
    Crow Tribe's package proposal was to reconsolidate the land within the
    Reservation, to insure sufficient, reliable water to serve those lands
    and the people who live on them, and to foster economic development by
    the Tribe on the Reservation and the Ceded Strip. What followed the
    Tribal proposal was a period of intense negotiations and public
    involvement. The State of Montana convened a special session of the
    Montana legislature to ratify the Compact that is now before you.
        The Crow Tribal Water Right is quantified separately for each
    drainage basin within the Reservation. The Bighorn River enters the
    Crow Indian Reservation from Wyoming. The Tribal Water Right for the
    Bighorn drainage within the Reservation is 500,000 acre-feet per year
    (AFY) of the natural flow of the River including groundwater for all
    existing and future Tribal uses. The Yellowstone River Compact
    specifically addresses the Bighorn River by recognizing all pre-1950
    water rights and allocating future uses from unappropriated and unused
    waters, 80 percent to Wyoming and 20 percent to Montana. Because the
    Crow Indian Reservation has an 1868 priority date, Montana's position
    is that the Tribal Water Rights is a pre-1950 right. Wyoming has stated
    that since portions of the Tribal Water Right were not developed prior
    to 1950, exercising this right is a post-1950 development that must
    come out of Montana's share under the Yellowstone River Compact. While
    how the tribes fit within the Yellowstone River Compact is an unsettled
    legal issue, Montana chose to work with Wyoming, without conceding the
    legal point, to negotiate a quantification that met the needs of the
    Tribe and avoided a dispute with Wyoming. The Bighorn quantification of
    the Tribal Water Right is within Wyoming's definition of Montana's 20
    percent post-1950 allocation under the Yellowstone River Compact (even
    though a substantial portion of the Tribal Water Right was developed
    prior to 1950) and the Bighorn River both on the Reservation and off
    the Reservation is closed to new appropriation under Montana law. For
    any land reacquired by the Tribe that has water rights associated with
    it, the water rights will become part of the 500,000 AFY and will not
    be added to that cap.
        Under S. 3355 the United States will allocate 300,000 AFY of water
    stored in Bighorn Lake. The 300,000 AFY storage allocation is split
    into two 150,000 AFY components. The first 150,000 AFY is available to
    the Tribe for new development on the Reservation. A portion of this
    allocation, up to 50,000 AFY, may be marketed off the Reservation if
    the Tribe so chooses. The second 150,000 AFY may only be used to
    supplement the natural flow of the Bighorn River in times of natural
    flow shortage. Supplemental water is used to replace the natural flow
    if the natural flow water supply of the Bighorn River is inadequate to
    fully satisfy the Tribal Water Right. Any deficit in the natural flow
    coming into Bighorn Lake would be made up from release of stored water
    at Yellowtail Dam to meet the full volume of 500,000 AFY under the
    Compact. The supplemental storage component was structured to address
    concerns expressed by Wyoming that the Tribe would place a call on
    upstream water users if natural flow was unavailable to the Tribe.
    Supplemental storage water will ensure that the natural flow volume of
    water is available to the Tribe in all but the most extreme years and
    will virtually eliminate complicated enforcement and administration
    issues. No additional contracts for stored water from Bighorn Lake will
    be issued.
        The presence of Yellowtail Dam also creates recreational
    opportunities and economic benefits. Bighorn Lake is a lovely flatwater
    lake in the Bighorn Canyon and is bordered by a National Recreation
    Area. The stretch of the Bighorn River below Yellowtail Dam is a world-
    class trout fishery. The Tribe, the State and the United States have
    entered into a Streamflow and Lake Level Management Plan that is part
    of the Compact. This Plan acknowledges the BOR's continued authority to
    manage Yellowtail Dam and Bighorn Lake, and sets up specific goals for
    water releases to maintain a healthy fishery. The Plan does require
    consultation with the Tribe and the State concerning management and it
    structures the Tribe's use of the natural flow right in the Bighorn
    River to protect the fishery.
        The Little Bighorn River flows from Wyoming onto the Reservation.
    Allocation for future uses from unappropriated and unused waters of the
    Little Bighorn River are not included in the Yellowstone River Compact.
    The Crow Tribal Water Right in the Little Bighorn River is quantified
    as the entire flow of the River (including groundwater and storage)
    with protection for existing water rights under state law and a shared
    shortage, if necessary, between non-Indian water right holders and
    Tribal uses actually using water as of the date of the Compact. The
    basin is closed to new appropriation under Montana law. Water rights
    under state law will become part of the Tribal Water Right if the Tribe
    reacquires the land and the water right. This structure will allow the
    Tribe to reconsolidate both land and water resources within the
    Reservation.
        The Crow Tribal Water Right in Pryor Creek is quantified in the
    same fashion as the Little Bighorn and the entire Pryor Creek drainage
    on and off the Reservation is closed to new appropriations under
    Montana law. The other smaller drainages use this same structure, with
    new appropriations under Montana law prohibited on the Reservation.
    Certain provisions apply to Rosebud Creek to protect aspects of the
    Northern Cheyenne Compact. In all cases, both under Tribal Code and
    State law, small domestic and stock uses are not precluded by the basin
    closures.
        The Tribal Water Right for lands and interest held in trust in the
    Ceded Strip is recognized as 47,000 AFY from any source, including the
    Yellowstone River and groundwater. If water is taken out of the Bighorn
    River drainage, then the amount of water used must be deducted from the
    500,000 AFY total quantification from the Bighorn River. No more than
    7,000 AFY can be used in one month.
        The Tribe will administer the Tribal Water Right. The State will
    administer water rights recognized under state law. The BIA projects
    will use part of the Tribal Water Rights and will continue to be
    administered by the BIA under applicable federal law. The Crow Tribe
    will enact a Tribal Water Code to provide for administration of the
    Tribal Water Right in conformance with the Compact, this Act, and
    applicable federal law. In the event a dispute arises, the Compact
    provides for an initial effort between the water resource departments
    of the State and the Tribe to resolve the dispute. Should the informal
    process fail to reach resolution, the Compact establishes a Compact
    Board to hear disputes. Decisions of the Compact Board may be appealed
    to a court of competent jurisdiction.
        The State of Montana has established an escrow account to pay 15
    million dollars as State contribution to this settlement. This
    contribution, along with an agreement to pass-through certain state
    taxes on the extraction of Crow coal, covers both the state cost-share
    for the water rights agreement and settlement of the coal severance tax
    lawsuit. The escrow account has been fully funded and is currently
    worth approximately 18 million dollars. The principle and interest in
    the escrow account will be paid to the Crow Tribe for economic
    development and water and sewer infrastructure at the completion of the
    ratification and court approval process. The Tribal testimony covers
    the federal contribution to settlement and the essential projects that
    those monies will fund.
        The Compact will recognize and protect the Crow Tribe's water
    rights and provides for the development of municipal and agricultural
    water systems. The Compact promotes development for the benefit of the
    Crow People while protecting other water uses. The Compact is the full
    and final settlement of all water right within the State of Montana and
    the Tribe waives any claims to water rights not contained in the
    Compact. We urge your support in ratifying the Compact by passage of
    this Act.

        The Chairman. Mr. Tweeten, thank you very much for being
    here.
        Next, we will hear from the Honorable Charles Dorame,
    Chairman of the Northern Pueblos Tributary Water Rights
    Association in Albuquerque, New Mexico.
        Mr. Dorame, you may proceed. Did I pronounce your name
    correctly?
        Mr. Dorame. I wasn't paying attention. I was wondering
    which button to press.
        [Laughter.]
        The Chairman. Well, then let's assume I have.
        Mr. Dorame. Okay.
        [Laughter.]
        Mr. Dorame. And you will forgive me if I don't pronounce
    your name correctly?
        [Laughter.]
        The Chairman. You may proceed.

      STATEMENT OF CHARLES J. DORAME, CHAIRMAN, NORTHERN PUEBLOS
                   TRIBUTARY WATER RIGHTS ASSOCIATION

        Mr. Dorame. Mr. Chairman Dorgan and Committee members,
    Senator Barrasso, thank you very much for having this hearing
    today. We were looking forward to coming here before your next
    recess to get our thoughts on paper here. We do have written
    testimony that has been provided to the Committee.
        I am here to kind of show-and-tell, but before I do that,
    out of respect for my leadership, I have to reintroduce our
    governors because, well, I am not fearful anymore that they
    will throw me in the river because there is no water in the
    river right now. But I will go ahead and introduce them: My
    governor, Governor Robert Mora from the Pueblo of Tesuque;
    Governor George Rivera from the Pueblo of Pojoaque; Governor
    Leon Roybal from the Pueblo of San Ildefonso; Lieutenant
    Governor Linda Diaz from the Pueblo of Pojoaque. And also
    joining us here today is our commissioner from Santa Fe County,
    Santa Fe County Commissioner Mr. Harry Montoya. I just wanted
    to thank him for making the effort to be here to show support
    for the Pueblos and also his testimony is in the report.
        The Chairman. Let me indicate that we weren't able to have
    all of the witnesses that wished to be witnesses at the table
    today, but Commissioner Montoya I know has done a lot of work
    on this and has submitted testimony, and we deeply appreciate
    that.
        Commissioner, welcome.
        Mr. Dorame, you may proceed.
        Mr. Dorame. Yes. My name is Charlie Dorame. I am a former
    Governor from the Pueblo of Tusuque. I am also the Chairman of
    the Northern Pueblos Tributary Water Rights Association,
    NPTWRA. I had to practice that before I came.
        But I would like to have a little bit of show-and-tell
    here. To the right of me, I do have some props that show the
    area where our villages are located. They are located within a
    15-mile radius of the City of Santa Fe, if you are familiar
    with the area that I am referring to. It also shows the water
    basin that we are going to be discussing today, the Pojoaque
    Water Basin, where the problems have been addressed.
        Again, I am here today to support on behalf of the Pueblos,
    S. 3381. I would urge the Committee that they do their utmost
    to try to get it passed and get it back to us as soon as
    possible. We still have a lot of work to do on it, and we would
    like to continue the work.
        It was mentioned earlier that this suit began in 1966, but
    I have proof that it happened even before that. I am talking
    about probably around 1924, when the Pueblo Lands Act was
    passed. My tribe has been fighting that long, along with the
    other tribes in New Mexico, probably because it involved my
    grandfather, who was the Chairman of the All-Indian Pueblo
    Council.
        When this suit was filed in 1966, just to give you an
    example, I was 17 years old. I was a junior in high school, but
    I remember the many meetings that he used to have at home, not
    only with our tribal members, but other tribes, because they
    came to visit. They didn't have too many offices at the time.
        Also, I have some other props here that show a young man
    who happens to be the Governor's brother, trying to get across
    the arroyo. That was 40 years ago, so there was some water that
    was in the arroyo. The next prop that I have shows the same
    riverbed where he was trying to get across, and that was taken
    just this past Monday. So there is very little water there
    right now. We have had an abundance of snow, and I believe it
    is raining as we speak, but that is because of the Ike-effect
    that we are having in that area.
        We also have a third prop that shows the Pojoaque riverbed
    from their highway. Pojoaque is our neighbor and they are about
    three miles away from us downriver. So as you can see, their
    sand is a lot nicer than ours. It has more kind of a beach-look
    to it, but it would be great if they had water in there also.
        So I do have, again, I don't want to read from my
    testimony. You already have that. But I do want to say that the
    city of Santa Fe, through Mayor Coss, has been very helpful.
    Again, I want to mention Commissioner Montoya for his efforts
    in trying to get us here today. Also, Governor Richardson has
    provided a letter to this Committee showing support for S.
    3381. I just want to thank all of them for helping us out here
    today.
        The settlement addresses a number of things for tribes in
    that area, namely economic uses, and of course ceremonial uses.
    We had a situation where when we have our ceremonies, we
    require that the river be flowing. During this particular time,
    the river was not flowing. We had to go to our upstream non-
    Pueblo users to ask them for permission to let the water flow
    through so that we had water during our ceremony. That took
    about a week, but because of their kindness toward us, they
    went ahead and allowed that water to flow through, which we
    really appreciate. These are the circumstances that we Pueblos
    have to deal with on a daily basis.
        I don't really have anything else to say other than I want
    to thank Mr. Michael Bogert also for his hard work, and Senator
    Domenici and Senator Bingaman for their hard work in getting
    this bill done, along with all their staff. I do see some staff
    members behind you, Mr. Chairman, that I want to thank also,
    for showing their commitment to this effort also.
        The concerns that Mr. Bogert had, you know, he has a hard
    job, I must admit. But we also have some engineering reports
    that were provided to him that we feel that their objective
    analysis of the costs of this project, so that we are
    justifying that effort. Also, the criteria and procedures that
    we had to deal with are really, it is the closest fit. I want
    to take some language out of my excerpt here. It says that the
    criteria and procedures of the Aamodt settlement agreement is
    as close to a neat fit as it likely to come before Congress. I
    just wanted to pull those excerpts out.
        Mr. Chairman, thank you for giving me this opportunity
    today.
        [The prepared statement of Mr. Dorame follows:]

       Prepared Statement of Hon. Charles J. Dorame, Chairman, Northern
                   Pueblos Tributary Water Rights Association
    Introduction
        Good morning Chairman Dorgan, Vice Chairman Murkowski, and Members
    of the Committee. First, I want to thank you for convening this
    important hearing on S. 3381, legislation to ratify the settlement in
    State of New Mexico v. Aamodt.
        I also want to thank Senators Domenici and Bingaman for the
    outstanding leadership they have shown in working with all the
    settlement parties and in introducing the legislation before the
    Committee today.
        I would be remiss if I failed to thank the Committee staff and the
    staff of the New Mexico delegation for their work in getting the bill
    introduced and organizing this hearing.
        Last, I would like to commend our settlement partners: the State of
    New Mexico, the City of Santa Fe, the County of Santa Fe, and others
    for the many years of hard work and good faith negotiation that
    ultimately lead to this settlement and the accompanying legislation.
        My name is Charlie Dorame. I am the former Governor of the Pueblo
    of Tesuque and am now the Chairman of the Northern Pueblos Tributary
    Water Rights Association (NPTWRA). The NPTWRA is comprised of the
    Pueblos of Nambe, Pojoaque, San Ildefonso, and Tesuque. At stake in
    this settlement are the water rights of these four distinct Pueblos,
    each with its own land base, economy, community, and vision of the
    future.
        Filed in 1966, the Aamodt litigation is one of the longest-running
    Indian water rights case in the history of the United States. I was 17
    years old when the case was filed and in the years since then I have
    watched as the case went on and on, seemingly without end.
        Of course, water is essential to our People for basic needs and our
    survival, but also for its sacred role in Pueblo culture. For example,
    at Tesuque Pueblo, we require that water from the Rio Tesuque be used
    during traditional ceremonies. Our ability to maintain and practice our
    traditional ways is dependent on a quantity of water flowing through
    our lands. The sensitivity and nature of our traditions prevents me
    from openly discussing how we use these water resources in ceremonial
    settings.
        About seven years ago, we were faced with a crisis when the creek
    went dry. We were forced to ask the upstream non-Indian users to
    refrain from using the water for at least a week so that we could have
    enough water flowing through our land during our ceremonies.
    Fortunately, they were kind enough to agree to our request. In some
    cases we do not have the luxury of giving advance notice because the
    need for water may happen in an instant.
        I have lived on my reservation all my life and I have seen the Rio
    Tesuque go dry many times either before it reaches our village or
    immediately after it passed our village.
        Water is also essential to our livelihood and our traditional
    methods of farming, which we have practiced for thousands of years. As
    we have done for generations, we have annual ditch cleanings performed
    by the men of our village so that water can be channeled from the creek
    to farm lands close to the village. This requires that enough water is
    flowing and gravity feed forces the water to these farm lands. We also
    have a few artesian wells that supplement water flow for traditional
    activities and farming. I have seen these wells go dry with obvious
    consequences for the farmers and their families.
        As children growing up on our lands we knew where wells were
    located and in those days the wells had enough water to nourish us when
    we went exploring. Now we have to tell our children to carry water and
    not venture too far from home without an adequate supply to drink.
    Background on the Settlement and Its Terms
        In the Pojoaque River Basin (the Basin), a tributary of the Rio
    Grande in northern New Mexico, conflicts over scarce water resources
    have resulted in four decades of litigation. The Aamodt case was filed
    in 1966 by the State of New Mexico against all water right claimants in
    the Basin to determine the nature and extent of their water rights.
    Forty years later, in January 2006, a comprehensive Settlement
    Agreement was reached between the following parties:

       The Pueblos of Nambe, Pojoaque, San Ildefonso, and Tesuque;
            and

       The State of New Mexico, Santa Fe County, and the City of
            Santa Fe.

        Once approved by Congress, the Settlement Agreement will:

            (1) Secure water to meet the current and future needs of the
            four Pueblos;

            (2) Protect the long-standing water uses and resources that
            make the Basin unique;

            (3) Preserve the centuries-old non-Pueblo irrigation in the
            Basin; and

            (4) Provide water for current and future uses by all of the
            Basin's residents.

    Regional Water System is Foundation of the Settlement
        The foundation of the Settlement Agreement is a proposed Regional
    Water System (RWS) for the Basin. The RWS will have the capacity to
    deliver 2,500 acre feet per year of water from the Rio Grande to the
    four Pueblos.
        The RWS will also have the capacity to deliver 1,500 acre feet per
    year to the Santa Fe County Water Utility to serve future water users
    in the Basin, as well as to present domestic well owners who connect to
    the system. The source of the water has been identified with the
    assistance of the State of New Mexico, the County, the U.S. Department
    of the Interior, and the settling parties. The RWS's provision of water
    to non-Pueblo water users is important to the Pueblos because it will
    reduce stress on the groundwater resources of the Basin. Without the
    construction of the RWS and related systems, the litigation cannot be
    settled and scarce water resources will continue to dwindle for all of
    the Basin users.
    Settlement Agreement Terms and Project Costs
        The Settlement Agreement resolves all outstanding water rights
    claims and achieves finality with regard to the claims of the four
    Pueblos in the Basin.
        The Settlement Agreement also establishes a process whereby Pueblo
    and non-Pueblo water rights will be administered post-settlement in a
    way that is conducive to long-term regional harmony and cooperation or
    what Department of Interior Counselor Michael Bogert has in the past
    referred to as ``Peace in the Valley''.
        The RWS will allow for (1) An additional water supply for the
    Pueblos from outside the water-short basin; and (2) Non-Pueblo Water
    Users to be served by a renewable surface supply in lieu of use of
    individual wells whose proliferation has impaired, and would continue
    to impair, the exercise of Pueblo rights. The RWS will also promote
    cooperative conservation between all parties.
        The total project cost of the settlement is $309 million, which
    would be used to construct the Pueblo and County combined water system
    and the county connections, to create the Pueblo Water Acquisition Fund
    and the Pueblo Conservation Fund, and to create the Pueblo O.M.&R.
    Fund.
        The Federal investment in the Settlement Agreement is $170 million
    which will forestall continued Federal involvement in water rights
    litigation, ensure finality, provide certainty with regard to all
    claims, and promote tribal economic development and self-sufficiency.
        The State of New Mexico, Santa Fe County and the City of Santa Fe
    are prepared to contribute in excess of $130 million to the proposed
    settlement.
        As the Committee knows, the Administration evaluates this and all
    Indian land and water settlements based on the ``Criteria and
    Procedures'' that were first issued in 1990. While no proposed
    settlement is perfect in terms of meeting every aspect of the Criteria
    and Procedures, the Aamodt Settlement Agreement is as close to a neat
    fit as is likely to come before the Congress.
        The settlement satisfies the material conditions of the Criteria
    and Procedures because:

            1. It will resolve the Pueblo claims with finality after 42
            years, and will prevent another 40 years of litigation;

            2. It ensures efficient conservation of scarce water resources;

            3. It promotes long-term cooperation between the Pueblo and
            non-Pueblo governments and communities;

            4. The total cost of the settlement to all parties does not
            exceed the value of the existing claims;

            5. The non-Federal cost share--at 38 percent--is significant;
            and

            6. It promotes economic efficiency and tribal self-sufficiency.

        The United States' historic failure to protect the Pueblos' lands
    and water rights adequately for more than 150 years lead directly to
    today's conflict over scarce water resources. Once enacted, this
    legislation will conserve the shared resource responsibly and bring the
    all-important ``Peace in the Valley''--to all the parties.
        Most important to the Pueblos of Nambe, Pojoaque, San Ildefonso,
    and Tesuque, this legislation will fulfill the United States trust
    responsibility and ensure that our children, and their children, can
    continue our traditions for generations to come.
    Conclusion
        Mr. Chairman and Madam Vice-Chairman, this concludes my statement
    and I would be happy to answer any questions you might have at this
    time.

        The Chairman. Mr. Dorame, thank you very much. We
    appreciate your testimony.
        Finally, we will hear from the Honorable Gilbert Suazo,
    Sr., a Councilman at the Taos Pueblo Tribe in Taos, New Mexico.
        Mr. Suazo, thank you for being with us.

     STATEMENT OF HON. GILBERT SUAZO, SR., COUNCILMAN, TAOS PUEBLO
                                 TRIBE

        Mr. Suazo. Thank you.
        Good morning. My name is Gilbert Suazo, Sr. I am here on
    behalf of Taos Pueblo to testify on S. 3381, Title II. My Taos
    Pueblo Indian Name, Kalquina, translates to ``Standing Wolf.''
    I am a tribal Councilman and served as Governor for Taos Pueblo
    in 2007.
        For the past 20 years, tribal Councilman and former
    Governor Nelson Cordova, who is here, and I have served as co-
    spokesmen for the Pueblo's water rights adjudication and
    settlement negotiation. I am here with my tribal leadership,
    2008 Governor Paul Martinez, Council Secretary Frank Marcus,
    and Councilman Cordova. Also with me are water rights attorney
    Susan Jordan of the Nordhaus Law Firm, and Ron Billstein of
    DOWL-HKM Engineering, one of our technical consultants.
        I would also like to recognize the other local parties to
    the Taos Pueblo water rights settlement. These are the Taos
    Valley Acequia Association, representing 55 community ditch
    associations; the Town of Taos; El Prado Water and Sanitation
    District; 12 Taos-area mutual domestic water consumers'
    associations; and the State of New Mexico.
        Because of the short notice, some of the party
    representatives could not arrange to travel in time. We do have
    here two acequia commissioners: Arthur Coca and Gael Minton.
    They are seated back here, and are members of the TVAA Board of
    Directors.
        We also have letters supporting this settlement from TVAA,
    El Prado Water and Sanitation District, and the Mutual Domestic
    Associations. We also have a letter from New Mexico Governor
    Bill Richardson provided today by Tony Martinez, Director of
    the New Mexico Washington, D.C. office. Let me also recognize
    Counselor Michael Bogert with whom we have forged good work
    relations, while confronting difficult policy issues over this
    settlement.
        Thirty-eight years ago, I had the privilege to testify as a
    representative of the younger generation of Taos Pueblo in this
    same Committee for legislation to return Blue Lake to Taos
    Pueblo, a land of great cultural importance. Today, my
    testimony for Title II of S. 3381, the Taos Pueblo Indian Water
    Rights Settlement Act, is about water--the life-blood of the
    Pueblo is spiritual, physical, and cultural sustenance. I
    dedicate this testimony to the memory of our elders who have
    passed on without seeing completion of this settlement.
        I also had the privilege as Governor in February of 2007 to
    testify before you, Chairman Dorgan, at this Committee's
    listening conference in Albuquerque, where I spoke about our
    water rights settlement.
        Because of time limitations, I will summarize what is in
    our written testimony that we have submitted to the Committee.
        This legislation will authorize settlement of an
    adjudication pending in U.S. District Court since 1969 that
    involves three tributaries of the Rio Grande: the Rio Pueblo,
    Rio Lucero, and Rio Hondo. In our Tiwa language, these are
    Tuatah Bah-ah-nah, Bah bah til Bah ah nah, and Too-hoo Bah ah
    Nah. We have used these waters from time immemorial.
        Taos Pueblo, Tau-Tah, the place of the Red Willows, is
    located in northern New Mexico. It is a National Historic
    Landmark and a World Heritage Site. I call your attention to a
    photograph of Taos Pueblo on page two of our submitted
    testimony. Our people, Tauh tah Dainah, have occupied the Taos
    Valley since time immemorial. Our farmlands have been irrigated
    in prehistoric and historic times through a complex ditch
    irrigation system. I call your attention to a current-day
    photograph of our enduring agricultural heritage on page three.
        When the first Spanish explorers arrived in the valley in
    the 1500s, they called it the breadbasket of the region. As the
    non-Indian population grew, the demand for water increased,
    resulting in hundreds of years of conflict between Taos Pueblo
    and its non-Indian neighbors. After 18 years of negotiations
    that were very difficult over the Abeyta adjudication, we were
    able to reach agreement in 2006 that provides the basis for
    management of the Pueblo's water resources into the future.
        This settlement will secure to the Pueblo specific
    quantities of water for irrigation, stock ponds, and for
    municipal, industrial and domestic uses, including San Juan-
    Chama Project water under a contract. The town of Taos and El
    Prado will also receive contracts for San Juan-Chama water.
    These contracts will ensure that the Pueblo will have water to
    serve its present and future needs, and allow for sustainable
    and less-disrupted growth in the Taos Valley.
        By comparison with other Indian water settlements, the
    total Federal funding of $113 million for this settlement is
    modest. There are no huge expensive projects, but removing any
    single component in this settlement could unravel the
    settlement. Our $80 million figure is a compromise from the
    $100 million Pueblo fund in the draft settlement agreement that
    we signed in 2006. In exchange for this funding, we will waive
    our right to bring certain enormous damage claims against the
    U.S. on vast portions of our water rights claims. We will
    forbear on the exercise of about half of our senior water
    rights for historically irrigated acreage.
        In the interest of time, let me jump ahead and explain how
    this settlement meets the United States' policy goals for
    settlement of Indian water rights cases as embodied in the
    criteria and procedures.
        First, this settlement avoids the direct and indirect costs
    of continued litigation because it resolves the claims of Taos
    Pueblo and the United States in its trustee capacity as set
    forth more specifically in the waivers and releases of claims.
    The direct cost of continued litigation of this nearly 40-year-
    old adjudication will be avoided, and precious resources such
    as the Pueblo's Buffalo Pasture will be protected. There is a
    photo of the Buffalo Pasture on page nine.
        Second, this settlement meets the goal of resolving
    potential damage claims the tribe may bring against the U.S.
    for failure to protect trust resources and against private
    parties for interference with the use of these resources. It
    resolves our claims against the U.S. as set forth in these
    waivers and releases of claims, and minimizes the potential for
    future conflict between the Pueblo and our neighbors.
        Third, this settlement is consistent with the Federal trust
    responsibility because it addresses the trust responsibility
    not only by protecting our exercise of our rights, but by
    providing funding for the Pueblo to accomplish water-related
    infrastructure improvements and enable the Pueblo to implement
    its settlement responsibilities, including the management and
    administration of its water resources.
        And then finally, this settlement avoids the costs
    associated with senior Indian water rights displacing non-
    Indian water users. At the core of the settlement is our
    forbearance in the exercise of approximately half of our senior
    water rights for historically irrigated acreage and the
    mechanism for us to increase our exercise of these rights over
    time.
        This creative approach avoids displacing non-Indian
    irrigators and does so in a manner that respects local
    traditions. I call your attention to a photo on page 12. We
    took great care in crafting innovative solutions to bring peace
    in the valley with this settlement after long years of hard
    work. This settlement will benefit Taos Pueblo and the Taos
    Valley, and the State of New Mexico and the United States. I
    strongly urge this Committee to take favorable action on this
    settlement act. Its passage and appropriation of necessary
    funds will pay off many-fold in cooperative use of water
    resources in the Taos Valley, including for future generations
    to come.
        I thank you, Chairman Dorgan, members of the Senate Indian
    Affairs Committee, and our New Mexico Senators Pete Domenici
    and Jeff Bingaman, for the honor and privilege to provide this
    testimony. I would also like to thank Counselor Michael Bogert
    for his personal support for this settlement, and for the work
    by his colleagues, particularly Pam Williams and John Peterson,
    and members of the Federal negotiation team.
        I also give thanks for the spiritual guidance that I
    received in preparation for this testimony, and the support and
    advice of our tribal leadership present here today, and those
    that are at home waiting to hear about this Committee's action.
    We ask that you be spiritually guided to make the right
    decision on this bill and others that affect the lives and
    future of our people and our neighbors.
        With that, I thank you very much, Mr. Chairman and members
    of the Committee.
        [The prepared statement of Mr. Suazo follows:]

    Prepared Statement of Hon. Gilbert Suazo, Sr., Councilman, Taos Pueblo
                                     Tribe
        Mr. Chairman and Honorable Members of the Committee:
        Good morning. My name is Gilbert Suazo, Sr. My Taos Pueblo Indian
    name translates to ``Standing Wolf.'' I am a Tribal Councilman and
    served as Governor for Taos Pueblo in 2007. For the past 20 years,
    Tribal Councilman and former Governor Nelson J. Cordova and I have
    served as co-spokesmen for the Pueblo's water rights adjudication and
    settlement negotiation, and we presently serve as Water Rights
    Coordinator and Water Resources Specialist, respectively.
        I am here with my tribal leadership, Governor Paul Martinez, War
    Chief Luis Romero, Tribal Council Secretary Frank Marcus, and
    Councilman Cordova. Also with me are our water rights attorney Susan
    Jordan of the Nordhaus Law Firm and Ronald Billstein of DOWL-HKM
    Engineering, one of our technical consultants. I would also like to
    recognize the other local parties to the Taos Pueblo Water Rights
    Settlement: the Taos Valley Acequia Association representing 55
    community ditch associations (``TVAA''), the Town of Taos, El Prado
    Water and Sanitation District (``EPWSD''), 12 Taos-area Mutual Domestic
    Water Consumers' Associations, and the State of New Mexico.
        Thirty-eight years ago, I had the privilege to testify as a
    representative of the younger generation of Taos Pueblo in this same
    committee for legislation to return to Taos Pueblo what is now known as
    the Blue Lake Wilderness Area (Public Law 91-550). The Blue Lake
    settlement in 1970 was about land of cultural and traditional
    importance to Taos Pueblo. Today my testimony as a tribal leader and
    elder for Title II of S. 3381, the Taos Pueblo Indian Water Rights
    Settlement Act, is about water, the lifeblood for the Pueblo's
    spiritual, physical and cultural sustenance. Many of our elders have
    passed on without seeing completion of this settlement. I dedicate this
    testimony to their memory.
    The Waters Involved in this Adjudication
        The passage of this legislation will authorize a settlement of the
    general adjudication of the waters of the Taos Valley, entitled State
    of New Mexico ex rel. State Engineer v. Abeyta and State of New Mexico
    ex rel State Engineer v. Arrellano, which was consolidated with Abeyta.
    This adjudication has been pending in the United States District Court
    for the District of New Mexico since 1969. The adjudication includes
    three tributaries of the Rio Grande in northern New Mexico, namely the
    Rio Pueblo, Rio Lucero and Rio Hondo, or in our Tiwa language, the
    Tuatah Bah-ah-nah, Bah bah til Bah ah nah, and Too-hoo Bah ah nah.
    These stream systems together produce average annual flows before
    diversions in excess of 90,000 acre-feet per year (``afy''). This is
    not much water when compared with streams elsewhere in the United
    States, so you can appreciate the stress on this resource and the
    conflicts that arise in the face of its limitations.
    Taos Pueblo's Use of These Waters from Time Immemorial
        Taos Pueblo, Tau-Tah, the place of the Red Willows, is located in
    North-Central New Mexico. The total enrollment for Taos Pueblo is 2,458
    members. Taos Pueblo's land base is roughly 100,000 acres, including
    semi-arid lands bordering the Rio Grande, irrigated farmlands, and
    mountain lands with peaks reaching up to nearly 13,000 feet. The Blue
    Lake Wilderness Area is a major part of the watershed for the streams
    under adjudication that feed the Taos Valley. At the foot of the
    mountains are thousands of acres of Taos Pueblo farmlands that have
    been irrigated in pre-historic and historic times through a complex
    ditch irrigation system. Taos Pueblo itself is a National Historic
    Landmark and a World Heritage Site in recognition of its enduring
    living culture.

        Prehistorically, the culture for Taos Pueblo has been, and is
    still, based on agriculture with the raising of corn, squash and beans,
    supplemented by abundant wild food crops and meat from deer, elk,
    buffalo and other game hunted in the mountains and Great Plains. In
    historic times, Taos Pueblo adapted well to growing introduced crops
    such as wheat, oats, barley and alfalfa for its own use and as barter
    for other needed items and implements. Our people, Tauh tah Dainah,
    have occupied the Taos Valley since time immemorial and as the first
    user of the Valley's water resources, constructed irrigation systems
    that are still in use today.

    Centuries of Conflict
        When the first Spanish explorers arrived in the valley in the
    1500s, they found a thriving agricultural community with an abundance
    of food crops. They called it the bread basket of the region. The
    Spanish people colonized the region and began their own agricultural
    tradition in the Valley. As the non-Indian population grew, the demand
    for water increased, resulting in hundreds of years of conflict between
    Taos Pueblo and its non-Indian neighbors.
        One of the oldest disputes over water in the Valley heard in a
    formal legal proceeding resulted in the Mexican-era ayuntamiento of
    1823 recognizing Taos Pueblo's time immemorial rights to waters of the
    Rio de Lucero. However, the ruling did not end conflicts over the right
    to use the Rio Lucero, and non-Pueblo settlers obtained a decree in
    1893 that ordered a new division of the stream flow. In the Abeyta
    adjudication, the Pueblo and the United States have disputed this
    territorial era decision. Thus, the Abeyta settlement will resolve a
    dispute under litigation in three centuries.
    Nearly Two Decades of Negotiations
        You can imagine how these longstanding, bitter water conflicts have
    bred generations of distrust and hindered the ability of the Pueblo and
    its neighbors to live together and prosper. Against this background of
    conflicts going back several hundred years, a groundbreaking moment
    came in 1989 when the Pueblo and the Taos Valley Acequia Association
    decided to try negotiation. The negotiations grew to include each of
    the major water rights owning parties in the Taos Valley, the State of
    New Mexico, and the United States. Over time, each of the local parties
    came to recognize and respect our mutual need for water resources for
    the survival of our agricultural traditions and for the future growth
    of our communities.
        Through 18 years of difficult negotiations, the parties were able
    to reach an agreement in 2006 that we could all live with. The
    settlement agreement allocates water resources amongst the parties,
    protects existing supplies, protects the Pueblo's cultural resources
    and provides the basis for management of the Valley's water resources
    in the future.
        After we reached local agreement, the parties came to Washington
    seeking legislation in unity, to the amazement of our congressional
    delegation and administration officials who usually do not see this
    kind of cooperation between Indian tribes and non-Indians. The Taos
    News in an editorial on April 6, 2006, heralded the settlement as a
    ``gift of understanding'' by all involved in its negotiation.
    Water Rights Secured by This Settlement
        The settlement authorized by this legislation will secure to the
    Pueblo the right to deplete 11,927.51 afy of water. This quantity
    includes 7,883,44 afy for Historically Irrigated Acreage (``HIA''),
    114.35 afy for stock ponds, 14.72 afy for stock wells, 300 afy for
    municipal, industrial and domestic use (representing current
    diversions), 1,300 afy of additional groundwater, 100 afy in Rio Grande
    depletion credit, and 2,215 afy of San Juan-Chama Project (``SJCP'')
    water under a contract.
        A total of 2,621 afy of SJCP water will be contracted under this
    settlement. In addition to the contract to the Pueblo, the Town of Taos
    and EPWSD will receive contracts for 366 afy and 40 afy, respectively.
    These contracts are essential to the settlement to ensure that the
    Pueblo will have water to serve its present and future needs and to
    allow for more sustainable and less disruptive growth in the Taos
    Valley.
    Funding Necessary for This Settlement
        The bill includes authorization of $50 million in appropriations to
    the Taos Pueblo Water Development Fund, $30 million in appropriations
    to the Taos Pueblo Infrastructure and Watershed Fund through the
    Secretary of Interior, and $33 million in appropriations for projects
    that will mutually benefit the Pueblo and non-Indian parties, for a
    total of $113 million in federal funding. The State of New Mexico will
    contribute additional settlement funding toward the mutual benefit
    projects and for certain water rights acquisitions by non-Indian
    parties under the settlement agreement.
        By comparison with other Indian water settlements, this total
    funding is modest. There are no huge expensive projects in this
    settlement. Rather, there are small projects designed to mitigate the
    impacts of competing water uses; funding for Pueblo infrastructure
    improvements; funding for a mechanism to accommodate junior irrigation
    uses and decrease the Pueblo's forbearance of its senior irrigation
    rights over time; and funding for the Pueblo's settlement
    administration responsibilities. All of these elements are necessary to
    make this unique, cooperation-based settlement work and are tied
    together as a result of compromise. Removing any single component would
    unravel the settlement.
    Modest Funding for Vast Claims Compromised and Further Conflict Avoided
        Why is there $80 million in funding for Taos Pueblo, and $33
    million for mutual benefit projects? What are we going to do with that
    funding? Before I describe the purposes for this funding, let me say
    right off that the Pueblo's $80 million figure is a compromise from the
    $100 million Pueblo fund in the Draft Settlement Agreement that we
    signed in 2006. Importantly, the Pueblo is accepting this funding
    amount in exchange for waiving its right to bring certain enormous
    damage claims against the United States, waiving vast portions of
    senior water rights claims, and forbearing on the exercise of about
    half of its senior water rights for historically irrigated acreage.
        Our potential damages claim against the United States for breach of
    its trust duty relating to the Pueblo's senior water rights involved in
    this adjudication greatly exceeds the funding amount called for in the
    settlement. From the beginning of the American period, the United
    States failed to pursue legal action to protect the Pueblo's enjoyment
    of its rights in the Rio Pueblo de Taos, the Rio Lucero and the Rio
    Hondo. This approach by the Federal Government has injured the Pueblo
    and prolonged conflict in the Taos Valley.

        Likewise, the Federal Government has failed to take the necessary
    steps to manage the Pueblo's water rights and facilitate water use. The
    Federal Government did, finally, expend some funds to construct new
    head gates and to rehabilitate certain ditch works at the Pueblo.
    However, that limited assistance came late in the period of American
    sovereignty and guardianship, in the midst of the pre-World War II
    economic depression, and the funding remained insufficient. Worse yet,
    the non-traditional construction materials and practices introduced by
    the Federal Government made it difficult for the Pueblo to maintain and
    repair the infrastructure with traditional techniques. In 2000, a joint
    investigation report by the Bureau of Indian Affairs and the Bureau of
    Reclamation identified a serious need for the rehabilitation and repair
    of Pueblo irrigation infrastructure, based heavily on investigation of
    infrastructure on Taos Pueblo.
        Although the problems have long been known and documented, repairs
    and rehabilitation under the Bureau of Indian Affairs Northern Pueblos
    Agency responsibility were not being done due to funding cutbacks.
    Funding in small amounts has been secured from the Bureau of
    Reclamation in recent years for drought relief projects, such as a well
    for stock water, and head gate fabrication. However, these funds have
    been grossly insufficient.

        The foregoing is a small slice of the history of federal neglect
    and mismanagement, but illustrates how our relevant damage claims
    against the Federal Government greatly exceed the settlement funding.
    Likewise, Taos Pueblo's claims for aboriginal irrigation water rights
    in the litigation are substantially greater than the water quantities
    we will receive in settlement. We also agree to forbear exercising
    substantial amounts of our senior historically irrigated acreage
    rights, and I will discuss that more in a moment.
        It was extremely difficult for Taos Pueblo to put a monetary value
    on the claims we are conceding. So instead of evaluating the funding
    purely in terms of compensation that would never be enough, we focused
    on the amount of funding that will enable us, with careful management,
    to correct years of neglect of our water-related infrastructure by the
    United States and to implement each of the other settlement mechanisms
    designed to protect our water rights while enabling our neighbors to
    enjoy theirs.
        Water Rights Forbearance Requires Funding to Acquire and Retire
    Junior Rights: Under the settlement, the non-Indian parties agreed to
    recognize the Pueblo's right to deplete 7,883.44 afy for its
    Historically Irrigated Acreage or HIA totaling 5,712.78 acres. In turn,
    the Pueblo agreed to initially forbear exercising its right to irrigate
    3,390.33 acres of this total HIA. This forbearance will decrease over
    time as junior irrigation rights are acquired on a willing seller basis
    and retired by the Pueblo, or are abandoned or forfeited under state
    law, or (with certain exceptions) are transferred to a non-irrigation
    use or out of the Taos Valley and curtailed through the exercise and
    enforcement of the Pueblo's aboriginal priority date. This mechanism is
    necessary because the Pueblo's full exercise of its HIA would otherwise
    disrupt non-Indian irrigation. The initial forbearance is a major
    concession made by Taos Pueblo to make the settlement work. Funding
    sufficient to acquire and retire junior rights in a quantity over time
    that will allow full exercise of the Pueblo's senior HIA rights is a
    linchpin of the settlement.
        Address Federal Neglect of Pueblo Irrigation Infrastructure: As I
    have explained, our centuries-old irrigation infrastructure and the
    Twentieth Century federal improvements are in grave disrepair. As a
    result, only 2,322.45 acres are currently irrigated, and much more farm
    lands are laying idle because there is no way to get water to them
    without extensive repair and rehabilitation to our infrastructure. BIA
    has not done any repairs of significance in decades. Settlement funding
    will allow the Pueblo to rehabilitate and replace the dilapidated
    system and construct improvements. This will enable the Pueblo to
    recover from the long history of federal neglect of Pueblo irrigation
    systems and to revitalize its agricultural heritage.
        Address Lack of Running Water and Wastewater System Access: Many of
    our people do not have the convenience of running water in their homes
    and connection to a wastewater system because the existing system does
    not extend to their homes. Some of our people still get their water for
    domestic use directly from the streams and irrigation ditches and from
    springs. This may sound quaint and appealing, but in freezing winter
    weather it creates a hardship that should not be acceptable in this day
    and age. A recent fire in the watershed contaminated the surface water
    supply and our people who rely on that water supply had to haul water
    from an alternative source. Settlement funding will help us to improve
    and expand our community water and wastewater system to better serve
    our people.

        Watershed Protection, Support of Agriculture and Water-Related
    Pueblo Community Welfare and Economic Development. While our need for
    irrigation infrastructure repair is critical, support of agriculture
    requires more than ditch rehabilitation. The Pueblo needs to enhance
    its ability to support the efforts of farmers and engage in tribal
    agriculture efforts to maintain our traditional way of life. At the
    same time, water infrastructure to support economic development will
    enable the Pueblo to become more self-sufficient. As I have noted, a
    large portion of water involved in the settlement originates within the
    watersheds on Taos Pueblo land, and establishing a Pueblo watershed
    protection program will protect this resource.

        Protection of the Pueblo's Sacred Buffalo Pasture from Groundwater
    Pumping: The Buffalo Pasture is a culturally important wetland for the
    Pueblo that supports herbs, plants, clays, wildlife and waterfowl that
    are of essential ceremonial use to the Pueblo. This wetland is also a
    reliable source of irrigation water for both the Pueblo and non-
    Indians, and it is the start of a unique greenbelt that extends through
    the Valley. In the past 50 to 60 years, significant deterioration of
    the wetland has occurred. The Pueblo and neighboring municipal and
    sanitation district water providers whose wells are close to the
    Buffalo Pasture fought to the point of gridlock over the impacts of the
    groundwater pumping on the Buffalo Pasture. All of the settlement
    parties agreed early in the negotiations that the protection and
    preservation of this unique resource was crucial. The Buffalo Pasture
    Recharge Project to be constructed under the settlement will be
    designed to restore water levels to this sacred wetland.

        Water Management, Administration and Costs related to the
    Negotiation, Authorization and Implementation of the Settlement: This
    settlement is necessarily complex and places substantial policy and
    administrative responsibilities on Taos Pueblo. The Pueblo will be
    required to manage and administer its water rights to carry out the
    provisions of the settlement. An important task will be to upgrade and
    expand the Pueblo's Water Code to ensure consistent implementation and
    monitoring of the settlement provisions as required. Professional
    management of water resources, in a manner that incorporates
    traditional and contemporary water management practices, will be
    necessary. The settlement authorizes the Pueblo to lease its water, and
    we will need to establish a system to administer water leases.
    Financial assistance from the Federal Government for the Pueblo's
    participation in the negotiation process has never been sufficient, and
    the Pueblo has therefore incurred expenses far beyond its financial
    resources. The settlement will provide funding for these purposes.
        Funding Available on Appropriation: The bill provides for the
    Pueblo to receive $15 million of the Taos Pueblo Water Development Fund
    upon appropriation for the acquisition and retirement of junior water
    rights in an amount sufficient to enable the Pueblo to irrigate an
    additional 700 acres of our historically-irrigated acreage as of the
    settlement enforcement date, to begin the Buffalo Pasture Recharge
    Project, to begin design work on other eligible infrastructure
    projects, to put in place our water management and administration
    system for implementation of the settlement, or to pay costs related to
    the negotiation, authorization and implementation of the settlement. In
    addition, $10 million of the Pueblo Water Infrastructure and Watershed
    Enhancement Fund will be made available early through the Secretary for
    specific eligible settlement projects. This early funding will allow
    the Pueblo to begin important watershed protection work and to commence
    the most urgently needed water infrastructure projects.
        Mutual Benefit Projects: The settlement parties devised a series of
    small mutual benefits projects that are tailored to resolve complicated
    disputes over specific water use issues. A Mitigation Well System will
    pump groundwater from deep aquifers to offset surface water depletion
    effects resulting from the parties' future groundwater development,
    thereby alleviating competition among the parties for the acquisition
    of acequia water rights. The Arroyo Seco Arriba storage project will
    enable an acequia community to store non-irrigation season flows for
    retrieval when needed as part of the resolution of the centuries-old
    Pueblo-Acequia dispute over allocation of the Rio Lucero, and funding
    of the Acequia Madre del Prado stream gage will facilitate
    implementation and enforcement of surface water sharing provisions. The
    Town of Taos' present water supply wellfield is largely located in the
    immediate vicinity of the Pueblo's sacred Buffalo Pasture. As part of
    the settlement, the Town will discontinue use of those wells in closest
    proximity to the Buffalo Pasture, limit use from the wellfield overall,
    and develop water for its growing needs from a new well field located
    farther away from the Pueblo and its resources. EPWSD has also agreed
    to limit or cease production from its wells located in closest
    proximity to the Pueblo's sacred Buffalo Pasture and to locate its new
    production wells farther away from the Pueblo and its resources. These
    wells funded under the settlement are designed to replace production
    capacity lost or restricted by the limits that the settlement imposes
    on existing wells.
    Criteria and Procedures for Indian Water Rights Settlements
        It should be abundantly clear from my testimony so far that the
    Taos Pueblo Water Rights Settlement meets the United States policy for
    settlement of Indian water rights cases as embodied in the Criteria and
    Procedures for Indian Water Rights Settlements published by the
    Department of the Interior on March 12, 1990 (55 Fed. Reg. 9223). These
    criteria often stated in terms of the four policy goals set out below.
    Under each, I briefly recap how this settlement meets the goal.
        (1) Avoid the direct and indirect costs of continued litigation:
    This settlement resolves the claims of Taos Pueblo, and the United
    States in its trustee capacity, as set forth more specifically in the
    waivers and releases of claims. As a result, the direct costs of
    continued litigation of this nearly forty-year old adjudication will be
    avoided. Importantly, indirect costs to the United States, the Pueblo,
    and other parties associated with conflicts over surface water use and
    groundwater withdrawals will also be avoided through the settlement's
    interconnected mechanisms for enabling the major water owning parties
    in the Taos Valley to move forward with water diversions in a manner
    that respects one another's water uses and other precious resources,
    such as the Pueblo's sacred Buffalo Pasture.
        (2) Resolve potential damage claims the tribes may bring against
    the United States for failure to protect trust resources, or against
    private parties for interference with the use of those resources: This
    settlement resolves the claims of Taos Pueblo against the United States
    as set forth more specifically in the waivers and releases of claims.
    The settlement also minimizes the potential for future conflicts
    between the Pueblo and our neighbors over their groundwater withdrawals
    and surface water diversions. The parties carefully tailored the set of
    modest mutual benefit projects and other necessary settlement
    components, such as the Pueblo's forbearance combined with acquisition
    of junior rights, to accomplish this purpose cost effectively. The
    State's contributions to these mutual benefit projects are
    proportionate to the benefits received by the local parties.
        (3) Act consistently with the federal trust responsibility to
    tribes: The settlement addresses the trust responsibility not only by
    protecting the Pueblo's exercise of its rights, but also by providing
    funding for the Pueblo to accomplish water-related infrastructure
    improvements necessitated by years of federal neglect and by providing
    funding to enable the Pueblo to implement its responsibilities under
    the settlement, including the management and administration of its
    water resources program. These items are not being funded through the
    normal federal budget process. The settlement structure, by providing
    the mechanisms for the tribe to develop and manage its water itself and
    in harmony with its neighbors, ensures that the federal funding will
    meet the federal criteria to promote economic efficiency on
    reservations and tribal self-sufficiency.
        (4) Avoid the costs associated with senior Indian water rights
    displacing non-Indian water users: At the core of the settlement is
    Taos Pueblo's forbearance on the exercise of approximately half of its
    senior water rights for historically irrigated acreage and the
    mechanism for the Pueblo to increase its exercise of these rights over
    time. This creative approach avoids displacing non-Indian irrigators,
    and does so in a manner that respects local traditions. Thus, the
    settlement meets the federal criteria to be conducive to long-term
    harmony and cooperation among all interested parties through respect
    for the sovereignty of the states and tribes in their respective
    jurisdictions.
    Peace in the Valley
        As you can see, the parties took great care in crafting innovative
    solutions to bring ``peace in the Valley'' with this settlement. In
    view of the long years of hard work and expense by Taos Pueblo and its
    neighbors to negotiate this settlement, and in recognition of its
    benefits to the residents of Taos Pueblo, the Taos Valley, the State of
    New Mexico and the United States Government, I strongly urge the
    Committee to take favorable action on the Taos Pueblo Indian Water
    Rights Settlement Act. Passage of this legislation and appropriation of
    the necessary funds will pay off manyfold in cooperative use of water
    resources in the Taos Valley by the parties and future generations to
    come.

        I thank Chairman Dorgan, members of the Senate Indian Affairs
    Committee, and our New Mexico Senators Pete Domenici and Jeff Bingaman,
    for the honor and privilege to provide this testimony. I also give
    thanks for the spiritual guidance I have received, and the support and
    advice of our tribal leadership present here today and those at home
    who await this Committee's action. We ask that you be spiritually
    guided to make the right decisions on this bill and others that affect
    the lives and future of our people and our neighbors.

        The Chairman. Chairman Suazo, thank you very much.
        We don't often have colored photographs embedded in the
    testimony, and we appreciate that. I think the photograph on
    page 72 is probably reflective of a lot of work. I was thinking
    as you described that photograph of the success of the
    negotiations. I think at least two of the witnesses have
    described circumstances where their grandfather began this
    process and the grandson is providing testimony. That in
    itself, while interesting, I think describes failure of our
    government to come to grips with and address these issues.
        Water rights issues are very important. Water is the life-
    blood of the economy and opportunities for many of the tribes
    that are here today and across the Country.
        You have noticed that some of my colleagues have left. We
    have an Energy Committee markup that started at 12 o'clock and
    they are members of the Energy Committee, as am I. We will be
    voting in the Energy Committee downstairs on the third floor, I
    am sure about now. I am going to have to go to that markup in a
    few moments.
        We have a good number of questions that we wish to submit
    to the witnesses. Senators Tester, Barrasso and Domenici have
    indicated they have questions they would like to submit to the
    witnesses. I would like to ask if we could get a reasonably
    quick turnaround. The question is, what will we now do? We have
    had this hearing. We will have a discussion with our staffs and
    with members of the Committee to decide how to proceed.
        I know many of you have expressed impatience that this has
    gone on for a long, long period in many cases, and most anxious
    to get some resolution of these issues. We appreciate the fact
    that you traveled to Washington, D.C. to present testimony
    today in support and in furtherance of trying to get these
    issues finally resolved.
        With that, I am going to adjourn the Committee. We will,
    again as I indicated, submit the questions, and I ask you to
    respond to them. I do also want to say that we will keep the
    hearing record open for two weeks and ask others who wish to
    submit supplemental or additional testimony on these issues to
    do so within that two-week period.
        Thank you for being here.
        This hearing is adjourned.
        [Whereupon, at 12:20 p.m., the Committee was adjourned, to
    reconvene at the call of the Chair.]
                                A P P E N D I X

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     Supplementary Information Submitted by Chris D. Tweeten, Chief Civil
           Counsel, Office of the Attorney General, State of Montana
        Chairman Dorgan and distinguished members of the Senate Indian
    Affairs Committee, I thank you for the opportunity to provide
    supplemental written testimony on Senate Bill 3355, the Crow Tribe
    Water Rights Settlement Act of 2008. Again, my name is Chris D.
    Tweeten, and I am the Chief Civil Counsel to the Montana Attorney
    General and Chairman of the Montana Reserved Water Rights Compact
    Commission. I testified before the Committee on behalf of the State of
    Montana and Governor Brian Schweitzer in support of Senate Bill 3355,
    the Crow Tribe Water Rights Settlement Act of 2008 and continue to urge
    your approval of the Act. I would like to respond to some of the issues
    raised by the Federal government and concerns expressed by Senator
    Barrasso from Wyoming.
    Administration
        First, we want to respond to the written testimony submitted by
    Kris Polly, Deputy Assistant Secretary for Water and Science, United
    States Department of the Interior. The Crow Tribe may also be
    submitting supplemental testimony to cover many of the points raised by
    the Federal government especially those dealing with certain aspects of
    funding and funding structure, so we will limit our response to those
    points primarily relevant to the State of Montana.
        The Crow Tribe-Montana Compact was passed in 1999 by the Montana
    legislature. As part of the negotiating process that led to the
    Compact, the Federal Government appointed a formal Federal Negotiating
    Team composed of members of various agencies including the Solicitor's
    Office of the Department of the Interior and the Department of Justice.
    The Montana process for negotiations is set out in statute and is a
    government-to-government negotiation. As such, the State, the Tribe,
    and the United States each had a negotiating team and represented their
    respective governments in the negotiation of the Crow Tribe-Montana
    Compact. The Federal Team was fully engaged and ``at the table'' as a
    party in these negotiations. The Federal Team participated in every
    negotiation session, every legal and technical meeting, every joint
    public meeting, put forth proposals, prepared technical work,
    participated in marathon drafting sessions, and in every sense helped
    craft this agreement as trustee for the Crow Tribe. The Federal
    Negotiating Team devoted extraordinary time and effort to the
    negotiations. The United States was actively involved in every single
    phase of the process, including drafting and/or reviewing S. 3355.
    Thus, the characterization in the Federal testimony that the
    Administration's representatives ``met with the negotiators'' during
    this intensive and extensive process misleadingly understates the
    extent of federal participation in the development of the Compact and
    S. 3355.
        As indicated during the hearing, the Indian Affairs Committee is
    quite familiar with the inadequacies of the ``Criteria and Procedures''
    used by the Administration as guidelines in evaluating Indian water
    right settlements. The State of Montana will not belabor the points
    raised by multitudes of others. However, it is hard to comprehend why
    supplying potable drinking water to Tribal members and repairing a
    century-old BIA irrigation project is not related to trust or
    programmatic responsibilities of the Federal Government.
        The Administration testimony as to the monetary concerns relates
    generally to the cost of the projects that are authorized under S. 3355
    and the State's cost-share of the settlement. The Administration
    indicated it has not yet completed its analysis of what an appropriate
    federal financial contribution should be under the ``Criteria and
    Procedures.'' They have had 10 years to do it. The Administration
    stated at the hearing that feasibility studies would need to be
    conducted to evaluate the cost of the projects and that it would take
    up to five years to do the studies. These projects address water needs
    that have been on the table since day one. They have had 10 years to do
    them. In the absence of Administration support, the Tribe took it upon
    itself to have plans and cost estimates developed by a well-respected
    engineering firm in Montana. Based on our experiences with Bureau of
    Reclamation feasibility studies funded by Congress for the Milk River,
    the State of Montana believes that the Tribe's reports listed in S.
    3355 give more accurate and detailed information and lower and more
    realistic calculated costs than one that would be done by Bureau of
    Reclamation.
        In the Administration's written testimony, Mr. Polly states that:
    ``There are many needs in Indian country and Indian water rights
    settlement cannot and should not be the major vehicle to address those
    needs.'' The Crow Tribe Water Rights Settlement Act of 2008 seeks to
    quantify the Tribal Water Right and to provide funding to put those
    water rights to beneficial use. The proposed projects would provide
    potable drinking water and repair of dilapidated irrigation projects on
    a Reservation primarily supported by agriculture. These are appropriate
    ``wet water'' needs. They certainly do not address every need on the
    Crow Indian Reservation.
        The State of Montana's cost-share was also raised as an issue in
    the Administration's testimony. The cost-share of the State of Montana
    under the Crow Tribe-Montana Compact has two components (1) a payment
    to the Crow Tribe of $15,000,000 plus interest, and (2) authorization
    for a pass-through agreement where certain taxes are collected by the
    State on the extraction and production of Crow coal. The first
    component of the States' cost-share is cash money currently totaling
    $18,000,000, which is being held in an escrow fund for delivery to the
    Tribe when the Compact becomes effective. The cost-share money is not
    for a project that benefits both Indians and non-Indians as most cost-
    share agreements provide. This is money paid directly to the Tribe to
    use for economic development or infrastructure needs. Montana is aware
    of no other Indian water rights settlement in which a state cost-share
    has included such a funded state cash contribution.
        The second component of the State cost-share is authorization for a
    pass-through agreement, where the proceeds of any production taxes
    levied by the State on severance or production of coal owned by the
    United States in trust for the Crow Tribe will be paid to the Tribe.
    Given the vast coal resources underlying the Crow Indian Reservation
    and the ceded strip, this tax pass-through could be worth millions and
    millions of dollars. In addition to the sizable monetary contribution,
    this pass-through agreement will also provide taxing certainty to
    developers making production of Crow coal more marketable.
        The United States' ``Criteria & Procedures'' call for state cost-
    share to be proportional to the benefits received by non-Federal
    parties. This is not a comparison of the federal dollars and the state
    dollars, but a federal contribution to meet its obligations as trustee
    to the Tribe and a state contribution to off-set impacts to the Tribe
    from the agreement. Montana has a population of less than one million
    people. This is a rural area, huge distances away from any major
    metropolitan center. The value of land and water reflects those facts.
    Water rights settlements are always a combination of concessions made
    and benefits received by all parties, and the Crow Tribe-Montana
    Compact is no different. The Administration blanketly states that the
    State cost-share is inadequate to cover the benefits Montana receives
    under the Compact without providing any rationale or factual
    information to support this statement. We do not agree. An evaluation
    of the net benefits to the State and water users under state law would
    reveal that the state-cost share is more than adequate.
        The Administration raised several non-monetary issues regarding S.
    3355. The first one that the Administration raises concerning allottees
    is the most alarming to the State of Montana. Specifically, the
    Administration testimony states:

            First, as currently drafted, the provisions of the bill dealing
            with allottee water rights do not adequately protect the rights
            to which allottees are entitled under federal law. The Crow
            Reservation is heavily allotted and 46 percent of the
            Reservation land base is held in trust by the United States for
            individual Indians. The bill, however, fails to safeguard
            allottees' water rights. The United States owes a trust
            obligation directly to these individuals in addition to the
            obligations owed to the Tribe. The Department of the Interior
            and the Department of Justice have confronted this important
            issue in several recent Indian water rights settlement[sic] in
            an effort to avoid any claims of unconstitutional takings of
            property interests. We would like to work with the Tribe and
            the sponsors of the bill to rectify shortcomings in the
            language of the bill as drafted.

        From the language changes suggested by the Administration, their
    concerns are drafting clarifications with the allottee language in S.
    3355 and not that the structure of the Crow Tribe-Montana Compact
    ratified by S. 3355 is at issue. The testimony submitted by the
    Administration should be specific to only those clarifications needed.
        By way of background, the Tribe stated at the onset of the
    negotiations that a major goal of the Tribe was reconsolidation of both
    land and water resources within the Reservation. The State sought
    subordination of the Tribal Water Right for non-Indian water users
    until such time as the land was reacquired. Under the Compact, as land
    is reacquired, any appurtenant water rights will transfer to the Tribe
    and become part of the Tribal Water Right with a May 7, 1868 priority
    date. Issues with this approach were raised by the few off-project
    Indian irrigators contending that this structure would impact their
    current operation. The Compact Commission went out to the field to meet
    with the irrigators and found that if there is a year that water is
    short there is already an informal practice in place (for most areas)
    to share water between irrigators both Indian and non-Indian alike.
    Thus, the Compact is structured to preserve the status quo as of 1999
    with flexibility to allow the Tribe to move into the future through
    reacquisition. Water users, both Indian and non-Indian, actually using
    water in 1999 will share shortages based on the portion of Tribal water
    uses and non-Tribal water uses.
        The current Indian uses (not historic uses or assessments but
    actual current uses) are included in a Listing of Current Uses of the
    Tribal Water Right which is part of and an exhibit to the Compact. Non-
    Indian water uses recognized under state law will be as adjudicated by
    the Montana Water Court. New uses of the Tribal Water Right will be
    exercised in a manner that protects these uses. Over time, as non-
    Indian land and any appurtenant water right are acquired, that water
    will be available to the Tribe and the impacts to non-tribal users from
    the proportional shared shortage will become more pronounced. This
    structure certainly does not offer the protection for state water users
    on the Reservation that subordination would have, but as a policy
    decision the State supported the protection of both Tribal and non-
    Tribal water users working the land in 1999 and agreed to the shared
    shortage. This was obviously a finely-tuned balance of interests
    negotiated by the parties, including the United States.
        The specific language that addresses allottee rights is a federal-
    tribal issue as long as it is not inconsistent with the structure of
    the Compact. The Administration's concerns should be discarded until
    their testimony accurately reflects the specific language concerns of
    the Administration.
        Waiver language in S. 3355 was taken straight from recent water
    right settlements passed by Congress. This again is a federal-tribal
    issue as long as it does not affect the State. But comments on the
    waiver language seem unnecessary and untimely.
        The Administration testimony raises an issue about the federal
    responsibility for delivery of the 300,000 AFY allocation in Bighorn
    Lake to the Crow Tribe. This is not new storage, but an allocation of
    available water from an existing Bureau of Reclamation facility. The
    storage allocation to the Tribe has the same priority date as the
    Bureau of Reclamation's water right, so water should be stored in
    priority within the basin. We worked with the Bureau of Reclamation to
    arrive at storage volumes from active storage not yet contracted or
    allocated. S. 3355 provides that no new contracts from Bighorn Lake
    will be issued.
        At the request of the Administration we added language to S. 3355
    to provide that if facilities at Yellowtail Dam are significantly
    reduced or anticipated to be significantly reduced, the Tribe will have
    the same storage rights as other storage contractors. S. 3355 also
    provides that the Tribe and the Secretary of the Interior enter into an
    allocation agreement to establish terms and conditions of the
    allocation. It is difficult to respond to vague concerns that this
    allocation somehow would trigger future litigation. Storage allocations
    from Federal facilities have been a component of most of our compacts.
    Concerns that an allocation would result in litigation has never been
    raised by the Administration during the Congressional approval process
    of those Compacts and no litigation concerning the allocations has
    resulted. Yellowtail Dam is located on the Crow Indian Reservation,
    with 40 miles of the reservoir (Bighorn Lake) within or bordering the
    Reservation. It is only fair that the Crow Tribe should benefit from
    this federal storage facility.
        The Administration testimony stated that the Administration had
    ``extraordinary'' concerns that the Appendices to the Compact were not
    prepared. There are five Appendices to the Compact, all of which are
    now before the Committee.
        Appendix 1 is a proposed decree of the Tribal Water Right to be
    submitted to the Montana Water Court as part of judicial approval of
    the Compact and incorporation of the Tribal Water Right into decrees as
    part of our general stream adjudication. A proposed decree had not been
    prepared in advance of the Court proceeding for our other compacts
    ratified by Congress or approved by the Secretary of the Interior. A
    proposed decree is a straightforward document usually drafted by the
    Department of Justice. However, since this is such a concern to the
    Administration, Appendix 1 has been drafted and submitted by the Tribe
    to the Committee.
        Appendix 2 is a map showing the Water Court hydrologic basins used
    in the general stream adjudication. It was prepared and submitted to
    the Montana legislature in 1999. Appendix 2 was attached to my previous
    written testimony.
        Appendix 3 is a listing of existing rights, permits and state
    reservations for all basins that have a portion of land within the Crow
    Indian Reservation, whether the water uses are affected by the Compact
    or not. To address the Administration's concerns, the Tribe has
    submitted Appendix 3 to the Committee. At this time, Appendix 3 is a
    list of existing water rights as currently claimed and permits and
    reservations issued under state law as of September 15, 2008. The list
    is from the data base maintained by the Department of Natural Resources
    and Conservation (and available on the internet). * We need to point
    out that the existing water rights as currently claimed are pre-1973
    water right claims that are being adjudicated by the Montana Water
    Court. To date, none of the pre-1973 claims listed have gone through
    the adjudication. The adjudication process will include a factual
    examination of each claim, a notice, objection and hearing process, and
    a final appealable decree will be issued. The Tribe and the United
    States retain the right to object to claims in the adjudication
    process. Under the Compact, Appendix 3 shall be modified by decrees
    resolving claims for each affected basin. Therefore, we anticipate that
    once the adjudication process is complete, Appendix 3 will be very
    different than the list submitted to the Committee. Appendix 3, as
    modified, will be the basis for implementing the Compact.
    ---------------------------------------------------------------------------
        * The information referred to has been retained in Committee files.
    ---------------------------------------------------------------------------
        Appendix 4 is a map showing the Crow Indian Reservation. It was
    prepared and submitted to the Montana legislature in 1999. Appendix 4
    was attached to my previous written testimony.
        Appendix 5 is a map showing the ceded strip. It was prepared and
    submitted to the Montana legislature in 1999. Appendix 5 was attached
    to my previous written testimony.
        The Administration testimony states that the Administration may
    have other issues concerning this bill. What are these issues? To date,
    the State and the Tribe have addressed each and every issue the
    Administration raised both before and after the Compact was passed by
    the Montana legislature in 1999. Federal issues were addressed by
    incorporating the proposed language, crafting language to address
    verbal concerns raised, or by specifically explaining why a change was
    not warranted. After a decade of working with the Administration, we
    now see testimony that suggests that they have ``other issues'' that
    must be addressed before they can support legislation. The
    Administration states that it supports negotiated settlements. Their
    testimony--that after ten years of participation in the negotiations
    the Administration still cannot articulate all of its concerns--
    indicates that is simply not the case.
        The Administration's opposition boils down to spending money. This
    is an issue for Congress to decide, and more time will not change that
    fact.
    Wyoming
        The State of Montana appreciates the comments made by Senator
    Barrasso from the State of Wyoming. We would like to supplement our
    written testimony to provide additional facts and additional
    information to address some of the issues the Senator alluded to.
        The Bighorn River basin is a shared resource between Wyoming and
    Montana. We were ever mindful of that fact in negotiating the Crow
    Tribe-Montana Compact.
        The adjudication of the Crow Tribe's water right is a
    quantification of rights established by treaty in 1868. These are not
    newly established rights. The Crow Tribe's water rights will be
    quantified either by settlement or by litigation. One way or another,
    the Crow Tribe's water rights will be recognized and quantified. One
    way or another, the Crow Tribe will have a very substantial water right
    with a very senior priority date to serve the land and interests held
    in trust for the Tribe by the United States.
        Settlement allows the flexibility to address issues such as
    mitigating impacts of tribal development and administration which is an
    advantage over litigation. While Wyoming could not be a party in the
    negotiations since this is a settlement of water right claims in
    Montana, we worked closely with Wyoming because we share the water
    resources of the Bighorn River. The Crow Tribe-Montana Compact and S.
    3355 incorporated many of suggested changes by Wyoming, either from
    suggested language or language developed based on discussions with
    Wyoming.
        The definitions in the Compact include definitions of the various
    drainage basins used by the Montana Water Court in conducting the
    adjudication. Wyoming commented that some of the drainage basin
    descriptions were confusing and made the drainages seem as if they
    included lands in Wyoming. The State of Montana contacted the Montana
    Water Court, and the Water Court agreed that the description of those
    drainages should be changed to clarify that only drainages or portions
    of drainages within Montana are included in the Compact.
        Wyoming had raised concerns about whether funding for the federal
    contribution to settlement would come from revenue based on hydropower
    production at Yellowtail Dam (as discussed at one point by the
    parties), and if such a funding mechanism was established how it would
    impact power costs under the Pick-Sloan program. The Tribe agreed to
    drop this proposal prior to introduction of S. 3355.
        The State of Wyoming asked the parties repeatedly, both before and
    after the passage of the Compact by the Montana legislature, to fix
    language that it found confusing concerning the Tribe's storage
    allocation in Bighorn Lake. As a result, the Tribe agreed to clarify
    the language in S. 3355. The Tribe has agreed to remove the storage
    allocation for excess flow, in order to address Wyoming's concerns. The
    storage language is now very clear and more restrictive than the
    language in the Compact and more restrictive than the language proposed
    by Wyoming.
        Disclaimer language was added to the Compact at the request of
    Wyoming stating that nothing in the Compact amends or alters any
    provision of the Yellowstone River Compact. Similar language has been
    added to S. 3355.
        The Yellowstone River Compact addresses only rights granted under
    the authority of the respective states. Under the terms of the
    Yellowstone River Compact, the Yellowstone River Compact cannot be
    construed or interpreted as to affect adversely the rights of any
    Indian tribe. However, Wyoming made it clear that it had no problem
    with Montana settling with the Crow Tribe so long as it did so using
    only water Montana is entitled to under the Yellowstone River Compact
    (pursuant to Wyoming's interpretation).
        We disagree with Wyoming's interpretation of the treatment of
    tribal rights under the Yellowstone River Compact, but we took a
    practical approach and sought to work within Wyoming's interpretation
    for the purposes of settlement only. The Tribal quantification under
    the agreement is within the parameters of what could be recognized by
    the Water Court if we went to litigation. Since this amount and the
    relatively few post-1950 water rights claimed in Montana fell well
    within Montana's 20 percent post-1950 allocation under Wyoming's
    interpretation of the Yellowstone River Compact, it was possible to
    meet all concerns.
        The Bighorn River basin in Montana is now closed to new non-
    excepted appropriations under State law in an agreement ratified by
    Congress. Testimony submitted to the Montana legislature by the Wyoming
    State Engineer confirms that that Wyoming was satisfied that the
    quantification of the Crow Tribe's water right fell within Wyoming's
    interpretation of the Yellowstone River Compact. This appropriately
    leaves final resolution of any issues between Montana and Wyoming as to
    interpretation of the Yellowstone River Compact for resolution in
    another forum. It is important to note that this was a concession made
    by the State of Montana based on Wyoming's concerns, and not a
    concession made by the Crow Tribe.
        Over 95 percent of the Bighorn River basin off the Crow Indian
    Reservation is located in Wyoming. Off-Reservation protections to
    state-based water users in Montana under the Compact have little
    practical impact for our water right holders on the Bighorn River since
    water demands downstream from the Reservation are met by return flows,
    and this is likely to be the case in the future. Obviously, the factual
    situation is much different upstream where development can continue.
    During meetings with the Wyoming State Engineer, there were general
    concerns raised about meeting the Tribe's 500,000 AFY natural flow
    right in periods of natural flow shortage. To address the concerns
    raised by Wyoming, the Compact was structured to provide a block of
    storage in Bighorn Lake to supplement (be released from the reservoir)
    in periods of water shortage where Tribal water demands exceed the
    natural flow in the Bighorn River. Wyoming was part of the discussion
    in how to fashion this upstream mitigation, even though they were not a
    party to the agreement and did not provide any consideration for this
    protection.
        Water users on the Crow Indian Reservation currently divert an
    estimated 150,000 AFY from the Bighorn River. These uses were in place
    many years before 1950 and are pre-1950 uses under the Yellowstone
    River Compact under either state's interpretation. The natural flow
    right of 500,000 AFY recognized in the settlement includes all existing
    uses. Therefore, approximately 350,000 AFY of the natural flow right is
    not currently developed.
        Of the 350,000 AFY for development, 150,000 AFY is allocated from
    storage to supplement the natural flow to meet Tribal demands if water
    is short. That leaves 200,000 AFY of new demand from a River that
    currently provides an average of more than 10 times that amount. Risk
    to Wyoming is low. But the Tribe should not be the one to bear that
    risk. The Crow Tribe has the number one priority date in the Bighorn
    River basin. If this settlement is rejected and this issue goes to
    litigation it is certainly possible that the Crow Tribe's water right
    will be quantified as more than 200,000 AFY for future use. Wyoming
    need only examine the quantification for Indian reserved water rights
    in its own state to evaluate this assertion. Without the settlement the
    Bighorn River basin in Montana will also be reopened to new
    appropriations under State law. Undeniably, the water users in Wyoming
    are better protected with this agreement than without it.
        The Streamflow and Lake Level Management Plan (``Management Plan'')
    is part of the Compact and an exhibit to the Compact. The State of
    Montana, the Crow Tribe, and the United States are the only signators
    to the Management Plan as they are the parties to the Compact.
        The Management Plan recognizes that the objectives of management of
    Yellowtail Dam and Bighorn Lake are to provide adequate and reliable
    instream flows in the Bighorn River for the river fisheries and to
    maintain lake levels for recreation and lake fisheries, consistent with
    the need to provide water to meet existing and future needs of the Crow
    Tribe. Nothing in the Management Plan limits or directs the Bureau of
    Reclamation's discretion under Federal law to manage Yellowtail Dam or
    Bighorn Lake. Nothing in the Management Plan requires releases of water
    from Yellowtail Dam.
        The Management Plan sets out operating criteria for water releases
    for optimum, standard and minimum instream flows for the stretch of
    River downstream from the Yellowtail Afterbay Dam. The numbers for
    instream flow needs in the Management Plan are not hard targets that
    the Bureau of Reclamation must meet, but identified needs of the river
    fishery resource and management goals. The Bureau of Reclamation has
    used these necessary fishery flows in past decision-making. It was
    important to Montana that these needs be documented in the Management
    Plan and be publicly available.
        Criteria for similar fishery and recreation needs for Bighorn Lake
    are also specified as operating criteria. Flood control is another
    operating criteria. Nothing in the Management Plan changes Federal law
    or the federal activities pursuant to federal law, as the Management
    Plan and S. 3355 both specify. Nor does the Management Plan or S. 3355
    change any federal requirements for consulting with interested persons,
    including the state of Wyoming and any user groups. The Management Plan
    does not give any greater rights to Montana in comparison to the rights
    of Wyoming in the operations of Yellowtail Dam.
        The Management Plan describes how and where the Tribe can divert
    the Tribal Water Right. Under the Management Plan the Tribe dedicates
    250,000 AFY of water to instream flow. The instream flow stretch as
    defined by the Management Plan is the blue-ribbon trout fishery stretch
    of the Bighorn River. The fishery is of significant interest to Montana
    and others interested in this nationally renowned trout stream. The
    Tribe presently seeks greater economic benefit from this fishery. After
    the downstream measuring point of the instream flow stretch, the Tribe
    may use this water for development. The area below the blue-ribbon
    stretch is the most logical point for withdrawals for development based
    on topography. The Tribe can develop its remaining water right upstream
    from the downstream measuring point, with some provisions for
    mitigating the impacts of construction. Instream flow is a beneficial
    use in Montana. A litigated quantification of the Tribe's water right
    will not change this result.
        The ability to mitigate impacts on water uses in the Little Bighorn
    River in Wyoming was not possible in the context of a water rights
    agreement in Montana. The Crow Tribe's representatives met with the
    Wyoming State Engineer's Office to discuss protection of current uses
    under Wyoming law, which is a better protection than Montana water
    users received. The issue at that time was a permit application that
    the Crow Tribe was unwilling to recognize. We understand that the
    objectionable application has since been withdrawn. As far as we know,
    the Crow Tribe's offer to meet with Wyoming concerning the Little
    Bighorn remains on the table.

                                     ______

                                     ______

      Crow Tribe-Montana Water Rights Settlement--Montana Code Annotated--
                              Sec. 85-2-901 (2007)
    Background of the Settlement
        In the fall of 1998, officials from the Crow Tribe approached the
    Montana Governor and Attorney General with a proposal for a settlement
    of three important issues that had gone unresolved for decades: tribal
    water rights, coal severance tax litigation, and ``Section 2'' land
    ownership.
        The Montana Reserved Water Rights Compact Commission and the Crow
    worked closely with the negotiating team for the United States and
    engaged in intensive negotiations and public involvement on the water
    rights issues. In April, 1999, the Tribe and Compact Commission
    finalized a compact which recognizes a significant water right for the
    Tribe while protecting the rights of existing water users. At the same
    time, the Governor and Attorney General negotiated a final settlement
    of the contentious coal tax litigation. These two agreements were
    ratified by the Montana Legislature in special session on June 16,
    1999. The remaining approval process for the Crow Tribe water rights
    settlement includes Congressional ratification, a Crow Tribal vote and
    approval by the Montana Water Court. The ``Section 2'' issue is
    addressed by the Tribe and the United States in separate Congressional
    legislation.
    Crow Water Rights Compact
        In general, the Crow water rights compact:

       provides water from surface flow, groundwater and storage
            for the Crow Tribe for existing and future Tribal water needs
            (Article III)

       provides protection for all state and Tribal current water
            uses in the affected water basins from the Tribe's future
            exercise of its water rights; also protects the local
            conservation districts' right to future water use. (Article
            III)

       ``closes'' certain basins and sub-basins to new water
            appropriations under State law; small domestic and stock uses,
            as well as changes and transfers of water rights, can continue.
            (Article III)

       creates an administrative process for resolution of any
            future disputes between Tribal and non-Tribal water users.
            (Article IV)

       Authorizes the State to pay the Tribe the $15 million plus
            interest in escrow in consideration for the Tribe's dismissal
            of the coal severance lawsuit and for the State's ``cost-
            share'' for the water rights settlement and also authorizes the
            Governor and Attorney General to agree that any future State
            production taxes on the Tribe's coal will be paid to the Tribe.
            (Article VI)

    Crow Tribal Water Right
    Bighorn River
       500,000 AFY of natural flow of the River including
            groundwater for existing and future Tribal uses.

       The United States will allocate 300,000 AFY of storage in
            Bighorn Lake to the Tribe.

          150,000 AFY of the 300,000 AFY used for Tribal
            development,

            not more than 50,000 AFY from this 150,000 AFY for use
            off-Reservation.

          150,000 AFY of the 300,000 used only to supplement the
            natural flow right.

       All of the rights listed for future Tribal development can
            be developed only if there is no adverse effect on current
            Tribal and non-Tribal water uses.

       The State will not issue any new appropriations on this
            River, down to the confluence of the Yellowstone River,
            however, new small domestic and stock uses as well as changes
            and transfers can continue. Local conservation districts can
            also develop their water reservations.

       A management plan was developed by the Tribe, State and
            United States for instream flows and lake levels.

    Little Bighorn River and Pryor Creek

       The Tribe may use all available surface and groundwater on
            the Reservation not needed to satisfy current water uses.

       In both basins the State will not issue any new
            appropriations, however, new small domestic and stock uses as
            well as changes and transfers can continue.

    Rosebud Creek

       The Tribe may use all available surface and groundwater on
            the Reservation not needed to satisfy all current downstream
            uses provided for in the Northern Cheyenne Compact and certain
            portions of the Northern Cheyenne Tribal Water Right are
            protected.

       The basin is closed to new appropriations under State law on
            the Reservation, however, new small domestic and stock uses as
            well as changes and transfers can continue.

    Bitter Creek, Blue Creek, Bluewater Creek, Cottonwood Creek, Dry Creeks
            (Tongue River Basin and Yellowstone Basin) Five Mile Creek, Fly
            Creek, Sage Creek, Sarpy Creek, Squirrel Creek, Tanner Creek
            and Young's Creek

       The Tribe may use all available surface and groundwater on
            the Reservation not needed to satisfy current water users.

       The portion of these drainages on the Crow Reservation is
            closed to new appropriations under State law, however, new
            small domestic and stock uses as well as changes and transfers
            can continue.

    Ceded Strip

       The Crow Tribe will have the right to use 47,000 AFY from
            any water source on lands or interests on the Ceded Strip which
            the Congress restored to the Tribe or on any lands acquired and
            held in trust for the Tribe. If the water source is the Bighorn
            River, the amount developed shall be deducted from the on-
            Reservation water allocated to the Tribe from the Bighorn
            River. No more than 7,000 AFY can be diverted in any one month.

    Administration/Dispute Resolution

       The Tribe will administer the Tribal water right. The State
            will administer water rights recognized under State law. The
            BIA Project will use part of the Tribal water right and will
            continue to be administered by the BIA under applicable federal
            law.

       All Tribal development, either on the Reservation or the
            Ceded Strip, will be reviewed by the Tribe and the Montana
            Department of Natural Resources and Conservation to determine
            if it will impact any current water users. Any unresolved
            disputes will be referred to the Crow-Montana Compact Board.

                                     ______

      Supplementary Information Submitted by Charles J. Dorame, Chairman,
              Northern Pueblos Tributary Water Rights Association
        Following the Committee hearing on S. 3381 held September 11, 2008,
    Chairman Dorgan left the record open for two weeks in order to receive
    supplemental statements to include in the written record. The following
    statement is intended to supplement testimony both written and oral
    previously provided as well as issues raised in the written statement
    by Michael Bogert, Chairman of the Working Group on Indian Water
    Settlements and Counselor to the Secretary of the Interior, presented
    on behalf of the Administration.
        The Administration raised several points of concern in its spoken
    testimony: cost of this settlement and the waiver provisions of this
    bill. We will address them, and clarify other points in this
    supplemental statement.
        1. The Role of the Criteria and Procedures. Mr. Bogert told Senator
    Domenici, the Criteria and Procedures are ``guidelines.'' He testified
    ``the Criteria and Procedures address some bigger-picture issues, such
    as the need to structure settlements to promote economic efficiency on
    reservations and tribal self-sufficiency, and the goal of seeking long-
    term harmony and cooperation among all interested parties.'' The Aamodt
    Litigation Settlement Act satisfies all of these goals.
        The settlement of the water rights claims of the Pueblos of Nambe,
    Pojoaque, San Ildefonso and Tesuque as reflected in S. 3381 satisfies
    the primary requirements and intent of the Criteria and Procedures for
    the Participation of the Federal Government in Negotiations for the
    Settlement of Indian Water Rights Claims, 55 F.R. 9223 (Mar. 12, 1990).
    The settlement as codified in S. 3381 is a necessary and worthy federal
    investment. It will halt escalating federal costs that result from
    inadequate, economically inefficient and outdated water infrastructure
    at the Pueblos. The settlement also will address long-term water
    planning and water administration needs in a desert environment where
    continued, uncontrolled groundwater mining by the non-Indian population
    would run counter to federal interests. Solving these problems, as
    proposed in S. 3381, while finally and fully quantifying the water
    rights of the four Pueblos and resolving one of the oldest pending
    federal court cases in the country is a sound and essential federal
    investment. It will promote economic efficiency and tribal self-
    sufficiency going forward by establishing a Regional Water System which
    will supply much-needed water into a water short basin. The Regional
    Water System will honor the individual governmental authority of the
    five participating entities, the four Pueblos and Santa Fe County,
    while providing for a unified and economically efficient approach to
    water supply.
        2. Unified System. The settlement and attendant Regional Water
    System promotes economic efficiency because the Regional Water System
    will be a unified system operated jointly by the four Pueblos and Santa
    Fe County through an Operating Agreement required by S. 3381. Rather
    than request the Bureau of Indian Affairs to operate the project for
    the Pueblos, the Pueblos are willing to assume significant risk and
    substantial burden by participating in the Regional Water Authority as
    independent governments. The settlement therefore embodies not only
    economic efficiency, but also tribal self-sufficiency and self-
    determination, consistent with longstanding Department of Interior
    policy. Local control of the project will also ensure economic
    efficiency.
        Without explanation, the Administration expressed the concern that
    the Aamodt Litigation Settlement Act would not ``promote economic
    efficiency.'' The settlement requires a Regional Water System as an
    essential element of this settlement to serve the four Pueblos and non-
    Indians residing in Santa Fe County, New Mexico. With the encouragement
    of the Administration and the New Mexico congressional delegation, all
    five governments agreed that the Regional Water System would be
    administered through a Regional Water Authority (``RWA'') as a unified
    system both as to infrastructure and operation. Our Cost-Sharing and
    System Integration Agreement starts with a unified operation of the
    Regional Water System including all distribution lines. While an
    individual government could ``opt-out'' and operate its distribution
    system pursuant to contract with the RWA, there will be economic
    consequences to be specified in the Operating Agreement for the RWA,
    and the system itself remains an integrated system. The majority of the
    system will be operated by the RWA in any event.
        Our engineering consultants confirm that the unified approach is
    more economically efficient than having separate smaller community
    water systems for each of the four Pueblos, and one serving the many
    non-Indians living in and around the Pueblos. The Pueblo Lands Act
    history submitted by the Pueblos of San Ildefonso and Pojoaque explain
    how hundreds of non-Indian land owners came to own property within
    Pueblo grant boundaries. Given the crowded nature of the Pojoaque River
    Basin, the unified system both in the infrastructure and operational
    dimensions is certainly more economically efficient than several
    smaller ones.
        3. Validity of Cost Estimates. Mr. Bogert notes that we rely on an
    Engineering Report dated June 2007 ``that has not been verified by the
    level of study that the Bureau of Reclamation would recommend in order
    to ensure reliability.'' The Bureau of Reclamation (``BoR'') provided
    funding to the NPTWRA through a Pub.L. 93-638 contract in order to have
    significant amounts of engineering work done in connection with the
    settlement study regarding the regional water system for this
    settlement that BoR published in 2004. After our congressional
    delegation asked for more detailed cost estimates, the BoR provided
    additional funding through the 638 contract to the NPTWRA which
    resulted in the Engineering Report dated June 2007 prepared by HKM
    Engineering, Inc. * The costs in that report are best estimates as of
    October 2006. The legislation calls for those costs to be indexed. See
    Section 117(a)(3) ADJUSTMENT. This section calls for annual adjustment
    to the construction costs for the regional water system ``to account
    for increases in construction costs since October 1, 2006, as
    determined using applicable engineering cost indices.'' The Bureau of
    Reclamation maintains such indices.
    ---------------------------------------------------------------------------
        * The information referred to has been retained in Committee files.
    ---------------------------------------------------------------------------
        HKM Engineering has experience in planning, designing, cost
    estimating, and constructing regional water systems planned or under
    construction at federal expense in several states. The HKM cost summary
    at Table 5-1 for the regional water system includes line items for
    ``unlisted items (variable), contract add-ons at 17.5 percent,
    contingency at 20 percent, and non-contract costs at 29.5 percent-31
    percent''. These contingencies are reasonable at this stage of
    planning. We are not at the final design stage yet. This legislation
    needs to become law in order for that final design to occur.
        The Aamodt settlement parties, and especially the four Pueblos in
    the NPTWRA think we have done the best we can at this point by having a
    reputable engineering firm give its best estimate for constructing the
    regional water system, including significant contingencies in the
    budget.
        As Senator Domenici pointed out, the cost for the settlements in S.
    3381 can only be expected to increase in the future. The six months to
    five years which Mr. Bogert said might be required for a Bureau of
    Reclamation Feasibility Study would not necessarily produce a more
    accurate estimate, but it certainly would produce a more expensive one.
        Mr. Bogert expressed the Administration's concerns about ``access
    limitations at the diversion point for the system on the Rio Grande.''
    We are not certain what this refers to specifically. However, the
    surface water point of diversion, and the raw water pumping station
    will be located within San Ildefonso Pueblo where the Rio Grande
    narrows, near a highway bridge. The federal concern has been
    specifically addressed with HKM staff, who assure us that they are
    aware of the various rights of way, pipelines, roadways, and drainage
    patterns in that area and that the project as planned can be built
    there in harmony with them. As Mr. Bogert notes, final project design
    is the time to resolve such issues. We ask the Committee and the
    Congress to approve this legislation so that we can move on to the
    final design stage where this issue can be more properly addressed. It
    is not a reason to hold up action on the bill now.
        4. Operation Maintenance and Replacement. The bill includes a
    limited amount of federal funding to supplement the payment of
    operation, maintenance and replacement costs (``OM&R'') for the Pueblo
    portion of the Regional Water System in the early years of the project.
    The Regional Water System would serve the Pueblo and non-Pueblo
    communities in the basin and is the engine that drives this settlement.
    The project is necessary to meet the long term needs of the basin
    residents and to preserve the long term health of the underlying
    aquifer. But while it is clear that the projects and the provision of a
    reliable water infrastructure will further tribal economic development
    and self-sufficiency, the financial benefits from the project will not
    be felt for some time by the Pueblos. As a result, it is necessary to
    provide assistance to the Pueblos in paying the OM&R costs for the
    project to ensure the successful implementation of the settlement.
        The limited authorization of OM&R funding provided in the bill is
    focused on the issues associated with the unique circumstances of
    constructing a federal water supply project as a vital component of a
    tribal water rights settlement. The first category of funds would
    provide for the replacement costs during the first fifty years of the
    project. Given the role of the project in the settlement and the
    permanent nature of the settlement, the Pueblos believe that it is
    appropriate for the United States to pay the tribal replacement costs
    for this time period. Second, funding is provided to assist with the
    Pueblo transition from their existing systems to the new water system.
    Third, funding is supplied to pay the operating costs of the hybrid
    well system to ensure that these features provide the intended benefit
    in the early years of the project. Fourth, funding is made available
    for the payment of OM&R during construction. Finally, funding is
    provided to pay for the ``unused Pueblo capacity'' before the full
    Pueblo demand is in place. This category of funds addresses the fact
    that the use of the project would increase over time. This settlement
    project was designed to meet the long term needs of the Pueblos with
    the result that the full demand for the project water supply will take
    time to develop. Thus, in the short term, there will be fewer users of
    the projects to bear the OM&R. While that will result in a reduction in
    the variable costs, the fixed costs for the project will not reflect
    the reduced usage in the early years.
        5. Waivers. The Aamodt Litigation Settlement Act (S. 3381) provides
    for comprehensive waivers and releases with regards to claims against
    the Federal Government as to any future liability relating to water
    rights claims by the Pueblos of Nambe, Pojoaque, San Ildefonso and
    Tesuque in the Pojoaque Basin. The waivers and releases contained in
    the settlement legislation stem from waivers negotiated in the context
    of court ordered mediations over the course of six years. The United
    States through the Department of Justice participated fully in those
    negotiations. The waivers and releases contained in the settlement
    legislation are consistent with waivers and releases contained in other
    New Mexico Indian water rights settlement and are designed to provide
    finality and certainty for all parties as to future liability.
    Nevertheless, as we have been in the past, the Pueblos continue to
    engage the Administration on the issue of waivers.
        6. San Juan-Chama Project and Water Supply/San Juan Chama Project
    Contract. The Aamodt Litigation Settlement Act (S. 3381) requires the
    United States to acquire a firm and reliable supply of water for the
    Pueblos of Nambe, Pojoaque, San Ildefonso and Tesuque for purposes of
    supplying water through the Regional Water System. The water will
    provide a basis for important economic development and future domestic
    supplies for the Pueblos. The water supply required by the settlement
    has been identified and secured and the settlement legislation provides
    the necessary funding for this essential water supply.
        Part of the water supply required under the Settlement Agreement
    will be comprised of water from the San Juan-Chama Project. The
    remainder will be provided pursuant to a combination of 302 acre-feet
    of Nambe Pueblo reserved water rights, plus State law water rights
    acquired by the United States from Santa Fe County. A portion (1,079
    acre-feet per annum) of the water supply required under the Settlement
    Agreement will be made available to the Pueblos through a contract with
    the Department of Interior for water rights held by the Secretary
    pursuant to the San Juan-Chama Project. The San Juan-Chama Project was
    authorized by Congress pursuant to the Act of June 13, 1962 (76 Stat.
    96, 97) and pursuant to Section 11 of the Act, the Department of
    Interior through the Secretary, is authorized to contract for water
    made available under the Project.
        The 1,079 acre-feet per annum of San Juan-Chama Project water which
    will be made available to the Pueblos pursuant to contract with the
    Secretary is from two sources of uncontracted San Juan-Chama Project
    water; 369 acre-feet per annum will be made available from the 2,990
    acre-feet per annum remaining unallocated from the firm yield supply of
    the Project; 710 acre-feet per annum will be made available from San
    Juan-Project water historically allocated by the Department of Interior
    to offset evaporative losses in the U.S. Army Corps of Engineers
    Cochiti Reservoir pursuant to Pub. L. 88-293, 78 Stat. 171 (Mar. 26,
    1964). Public Law 88-293 authorizes the use of San Juan-Chama Project
    water for purposes of offsetting evaporative losses at Cochiti
    Reservoir but does not allocate or require any specific amount of water
    for such purpose. Rather, the legislation provides only that the
    Secretary is authorized to provide ``sufficient water annually to
    offset the evaporation. . . .'' The Secretary is given exclusive
    authority and discretion regarding the allocation of San Juan-Chama
    Project water vis-a-vis Cochiti Reservoir and the Secretary's
    obligations under Public Law 88-293 with regard to providing sufficient
    water to offset evaporative losses.
        Historically, the Secretary has allocated (but not contracted)
    5,000 acre-feet per annum of San Juan-Chama Project water to offset any
    evaporative losses in Cochiti Reservoir. Recent analyses by the
    Department of Interior through the Bureau of Reclamation have
    demonstrated that 5,000 acre-feet per annum is not necessary for
    purposes of satisfying evaporative losses in Cochiti Reservoir on an
    annual basis. Through these analyses the Department of Interior has
    determined that at least 710 acre-feet per annum of the 5,000 acre-feet
    per annum historically allocated to Cochiti Reservoir is available for
    purposes of the settlement. The remainder of the San Juan-Chama Project
    water the Secretary will make available to the Pueblos pursuant to S.
    3381, 369 acre-feet per annum, will come from the remaining 2,990 acre-
    feet per annum of uncontracted, unallocated water from the firm yield
    San Juan-Chama Project supply.
        The parameters of the United States obligations and responsibility
    to the Pueblos with regard to the San Juan-Chama Project supply will be
    addressed in the context of the contract required by the settlement
    legislation and as required by Section 11 of the San Juan-Chama Project
    Act.
        7. Summary and Conclusion. Once again on behalf of the Pueblo of
    Tesuque, San Ildefonso, Pojoaque and Nambe, We thank the Senate
    Committee on Indian Affairs for convening the hearing on S. 3381 as
    promptly as it did. We hope this supplemental Statement assists the
    Committee and Congress in putting the Administration's concerns in
    perspective. We urge mark up on S. 3381 and action by the full Congress
    as soon as possible.
                                     ______

      Prepared Statement of Leon Roybal, Governor, Pueblo de San Ildefonso
        My name is Leon Roybal, and I serve as Governor of the Pueblo de
    San Ildefonso. This is my first year as Governor. I follow the
    footsteps of previous governors and tribal councils, as well as
    direction of our community which resulted in our Pueblo joining the
    Water Right Settlement for the Rio Grande Tributary which enters that
    river at San Ildefonso. Some call it the Pojoaque River Basin which is
    the area affected by the Aamodt Litigation settlement Act, Title I of
    S. 3381, when enacted, approves that settlement, directs the United
    States to join the settlement, and authorizes the federal funding
    needed to implement the settlement.
        First, we want to thank Senator Bingaman and Senator Domenici for
    introducing S. 3381, especially Title I, the Aamodt Litigation
    Settlement Act. On behalf of our Pueblo, we thank the committee for
    scheduling S. 3381 for today's hearing. We appreciate the committee and
    the Congress for its history of supporting negotiated Indian water
    rights settlements, and urge approval of S. 3381 as soon as possible to
    extend that commitment and support for the 5 pueblos appearing before
    the committee today. The Pueblo de San Ildefonso is one of 4 Pueblos
    that have been cooperating together since 1974 through the Northern
    Pueblos Tributary Water Rights Association (``NPTWRA'' or
    ``Association''). In the interest of time, our NPTWRA Chairman speaks
    to the committee on behalf of the 4 Pueblos affected by the Aamodt
    Litigation Settlement Act. Attached to my statement is the Pueblo de
    San Ildefonso historical summary of water rights in the Pojoaque River
    Basin, New Mexico which are being protected by the Aamodt Litigation
    Settlement Act. The Pueblos want Congress to be aware of prior federal
    actions which give rise to the need for this federal legislation to
    protect Pueblo Indian Water Rights east of the Rio Grande in the
    Pojoaque River Basin.
        Passage of the Aamodt Litigation Settlement Act and federal funding
    for the U.S. to (a) acquire water for the Pueblos, and (b) build the
    portion of the regional water system required by the settlement to
    serve the Pueblos, and the (c) provide funds contained in the act, are
    needed to accomplish complete settlement of the Pueblo Indian Water
    Rights involved in this case.
        The Pueblos made significant compromises to achieve this
    settlement. However, the benefits to our Pueblos justify the support
    provided by our past leaders and our community. The settlement which
    will be approved by this legislation achieves several vital goals for
    our Pueblo.
        1. Water Rights Secured. The settlement quantifies water rights to
    meet present and future needs for each of the 4 Pueblos, including our
    first priority rights.
        2. New Community Water System. Our Pueblo has an aging water system
    that was mostly constructed by the Indian Health Service many years
    ago. Funds provided by this settlement will give us a unified community
    water system, while delivering safe drinking water for our community
    and its future growth. The settlement requires the U.S. to provide
    2,500 acre-feet yearly (afy) for Pueblo use through a Regional Water
    System. The bill authorizes the U.S to fund the portion of that System
    to serve each of the Four Pueblos.
        3. Strengthen Irrigation. Pueblo Indians have been farming since
    time and immemorial. Part of the work authorized by S. 3381 will allow
    our Pueblo to take better advantage of limited surface water supplies
    which are needed to allow our Pueblo people to continue irrigation in
    the future.
        4. Regional Water System and Water Supply. The settlement calls for
    the United States through the Bureau of Reclamation to construct a
    Regional Water System (``RWS'') to serve the 4 Pueblos and many non-
    Indians and the Pojoaque River Basin. This will be administered by an
    entity established by the 4 Pueblos and Santa Fe County. The Water
    Administration provisions in this settlement respect tribal sovereignty
    while providing a means for the seven non-Federal Governments involved
    in the settlement to work cooperatively to meet the needs of our
    respective communities.
        The settlement requires the U.S. to provide 2,500 afy for Pueblo
    use. Those rights have been identified by the Department of Interior,
    but will need to be secured by contract and transferred to the RWS
    point of diversion at San Ildefonso Pueblo.
        5. Economic Value Increased. With the quantification of Pueblo
    Indian Water Rights, securing and transferring 2,550 afy of the water
    rights, construction of a Regional Water System and provision of the
    funds in the bill, our Pueblo will have infrastructure to support
    future economic development. It will allow us to better utilize our
    water rights, and obtain significantly more economic value from them
    than we have been able to until now.
        Federal Funding Required. The bill has written authorized the
    Bureau of Reclamation to construct the Regional water system with
    federal funding covering the portion needed to rebuild the safe
    drinking water systems at each of the 4 Pueblos. It also authorizes
    support for Operation, Maintenance, and Replacement (``OM&R'') for a
    transition from our current situation until we are able to utilize the
    full amount of our pipe line water.
        The Settlement Agreement calls for the U.S. to work with the State
    to develop a new administrative model for the area affecting the
    Pojoaque River Basin--The U.S. must also work on a historic water
    supply study. It must also negotiate contracts with the 4 Pueblos and
    transfer those 2,550 afy of water rights to the diversion at San
    Ildefonso Pueblo.
        Amendment Requested. After S. 3381 the department of Interior staff
    informed the Aamodt Litigation Settlement parties that the federal
    funding commitment by the Bureau of Indian Affairs (``BIA'') maintained
    continuously since 1974 to provide independent technical and legal
    services and tribal consultation needed for independent Pueblo
    representation in the Aamodt case may dry up very soon. Since the
    settlement agreement will not be complete until 2016, and may take
    until 2021, we request that congress authorize and direct continue
    federal funding for independent Pueblo participation in the process.
        The computer modeling historic supply study, and transfer of 2,550
    afy of water rights, including negotiating a contract for San Juan
    Chama water project will be costly. Please amend S. 3381 in mark-up to
    require the Bureau of Reclamation to make funds available for those
    purposes, and to continue funding independent Pueblo involvement to
    make sure the settlement is well done.
        The NPTWRA provided proposed language to our congressional sponsors
    that will accomplish this, and ask the committee to address this need
    at mark-up. Additional funds for the technical work needed to implement
    the water supply and administration of the settlement will be costly.
    Independent Pueblo technical support, representation, and oversight to
    assure successful implementation of the settlement is a small fraction
    of the total federal funds needed to implement the Aamodt Litigation
    Settlement Act, however, it is very important to our small Pueblos. San
    Ildefonso currently has very limited economic resources. Continuing the
    federal funding commitment until the settlement is complete is needed
    to accomplish the goals approved by the 10th Circuit Court of Appeals
    in 1976, and confirmed by the comptroller general later that year.
        Conclusion. Passage of the Aamodt Litigation Settlement Act,
    including provision of a relatively small additional amount of federal
    funding to accomplish complete implementation of this settlement will
    give San Ildefonso and the 4 Pueblos, as well as our non-Indian
    neighbors in the Pojoaque River Basin, infrastructure that will help
    protect our environment, conserve scarce water resources provide safe
    drinking water and secure the Pueblo's federally protected and
    quantified water rights. With that infrastructure and protection, the
    Pueblos will be able to develop our Tribal economies in peaceful
    cooperation with our neighbors in the Pojoaque River Basin.
        On behalf of the Pueblo de San Ildefonso, we urge this committee,
    as well as the Congress as a whole, to approve the Aamodt Litigation
    Settlement Act as soon as possible. Additional appropriations will be
    need in future years to accomplish the purpose of this Act. However,
    enacting the Aamodt Litigation Settlement Act now provides the
    foundation for the Federal Government to fulfill its trust
    responsibility to protect the ability of San Ildefonso and each of the
    4 Pueblos to use water to meet our present and future needs.
        Thank you for the opportunity to provide this statement on S. 3381.
    Attachment
     The Pueblo de San Ildefonso Historical Summary of Water Rights in the
       Pojoaque River Basin, New Mexico which are being protected by the
              Aamodt Litigation Settlement Act--September 8, 2008
    I. Purpose
        The purpose of this bill is to approve the settlement, State ex re.
    State Engineer v. Aamodt (D.N.M. No. 66cv6639), an adjudication of the
    federally recognized water rights of the Pueblos of Nambe, Tesuque,
    Pojoaque and San Ildefonso. When the United States succeeded Mexico as
    sovereign over the territory of New Mexico, the Pueblos' water rights
    were extensive. In 1985 these rights were described by a federal court
    as ``a prior and paramount right to a sufficient quantity to meet their
    present and future needs.'' 618 F.Supp. 993, 998 (D.N.M. 1985). The
    Court stated those rights are based on unextinguished aboriginal
    rights, except as modified by the Pueblo Lands Act of 1924. Id. at
    1009-1010. Articles 8 and 9 of the Treaty of Guadalupe- Hidalgo
    (ratified May 30, 1848) proclaimed July 4, 1848, required the United
    States to recognize and protect these rights recognized under both
    Spanish and Mexican law. 9 Stat. 922, 929-930. The United States did
    not protect the Pueblos' water rights from encroachment, and the effect
    was to destroy the economic base of the Pueblos' previously prosperous
    agricultural economy. Enacting this bill is an essential milestone that
    will commit the Federal Government to building infrastructure for our
    21st century Pueblo economy.
    II. Pueblo Land and Water Tenure Under U.S. Sovereignty
    A. The Pueblo Lands Act
        The Pueblos of New Mexico look to the Pueblo Lands Act of 1924 as
    amended and the 1933 Pueblo Compensation Act to define their rights to
    lands and water within the exterior boundaries of the area recognized
    as each Pueblo's Spanish land grant. As some of the oldest communities
    in the United States, Pueblo land tenure and water rights are grounded
    in its aboriginal title, as modified by the Spanish and Mexican
    governments prior to U.S. sovereignty in 1848. The purpose of the
    Pueblo Lands Act of 1924, as amended, was (1) to provide redress to the
    Pueblos for damages due to the negligence of the United States in
    protecting the land and water resources of the Pueblos; and (2) to
    clear up land title problems attributable to that negligence.
        As the oldest communities in the Southwest, the Pueblos held the
    best agricultural lands in New Mexico. Also, as desert
    agriculturalists, the Pueblos had access to the best water supplies for
    agriculture. With the nearby Spanish capital at Santa Fe, the Four
    Pueblos in Aamodt were surrounded by Spanish colonists not long after
    the Spanish entrada. Spanish and Mexican law provided protection for
    Pueblo lands and waters, preventing encroachment, and initially the
    United States took the same position, applying the Non-Intercourse Act
    to the Pueblos in 1851. This was not enough to protect the Pueblos'
    lands and water. The best agricultural lands served by ditches were
    taken from the Pueblos between 1848 to the enactment of the Pueblo
    Lands Act in 1924 through all kinds of actions, from squatting on the
    land to outright fraud.
        Despite the fact that the territory of New Mexico deemed the Pueblo
    Indians to be incapable of voting in one of the first territorial laws,
    Act of February 16, 1854, Section 70, the New Mexico territorial courts
    ruled that the Non-Intercourse Act did not apply to the Pueblo Indians,
    primarily because they appeared to be too civilized. This decision was
    affirmed by the U.S. Supreme Court in United States v. Joseph, 94 U.S.
    614 (1876). (``They are Indians only in feature, complexion, and a few
    of their habits; in all other respects superior to all but a few of the
    civilized Indian tribes of the country, and the equal of the most
    civilized thereof.''). It took almost four decades for the U.S. Supreme
    Court to overrule the Joseph decision in United States v. Sandoval, 231
    U.S. 28, 48 (1913). For that period from the end of Mexican rule until
    the Sandoval decision, there was no protection for the Pueblos from
    encroachment on their lands and waters.
        The actions of the United States' Courts and the failure of
    Congress to address the matter had the effect of taking the land and
    water necessary for the Pueblos' agricultural economy. After the
    Sandoval decision, the United States attempted to stop the taking of
    Pueblo land and water. In 1920 Special Attorney for the Pueblo Indians
    Richard H. Hanna filed five ejectment suits in federal court against
    all non-Indians on Pueblo lands. One of the five suits United States v.
    Pedro Garcia, Cause no. 604, proceeded to trial but no decision was
    issued because the lawsuits were withdrawn at the request of the
    Attorney General. The Department of the Interior had decided to
    introduce legislation to resolve the question of non-Indian title to
    Pueblo lands.
        In 1921 Senator Holm O. Bursum of New Mexico introduced two bills
    to settle the Pueblo land issue. These bills evoked substantial
    opposition due to the extreme favoritism shown non-Indian claimants and
    were withdrawn. Ralph Twitchell was appointed Special Assistant to the
    Attorney General to investigate title problems on Pueblo lands and to
    make recommendations on possible legislation. Twitchell drafted his own
    bill in 1922 and met with attorneys for non-Indian claimants to attempt
    a compromise. The resulting draft was called the Bursum Bill. In
    general, the bill confirmed non-Indian possession in accordance with
    New Mexico territorial and state law without any compensation to the
    Pueblos. It also contained a very controversial provision that
    attempted to subject the Pueblos' water rights to state law. This bill
    did not succeed as supporters of the Pueblos generated a public outcry
    that the bill was confiscating Pueblo land. An alternative measure was
    introduced that included a three-person court to adjudicate titles. The
    bill included an authorization of Nine Hundred Five Thousand dollars
    ($905,000) for irrigation and drainage projects on the Pueblos.
    Ultimately Chairman Lenroot of the Senate Committee sponsored
    compromise legislation known as the ``Lenroot Substitute.'' It was
    approved by the Senate in 1923 but failed to get the approval of the
    U.S. House of Representatives.
        Unable to justify further delay, in July of 1923, the Attorney
    General and Special Assistant Twitchell filed a lawsuit to determine
    the water rights of the four Pueblos and non-Indians in the Pojoaque-
    Tesuque watershed known as the ``Exon suit.'' In support of that
    litigation, a report from the Indian Irrigation Service described the
    extent of lands taken from Pueblo control. It reported for the Four
    Pueblos: ``It appears that approximately five thousand (5,000) acres of
    land in the area under discussion was [in 1920s] under ditch, about
    four thousand one hundred and fifty (4,150) acres of which was non-
    Indian and nine hundred (900) acres Indian land.'' See, Report No. 2 of
    the Pueblo Lands Board for San Ildefonso Pueblo: Report Concerning
    Pueblo Titles Extinguished, p. 12. The loss was 83 percent of the
    irrigated lands of the Pueblos of Nambe, Tesuque, Pojoaque and San
    Ildefonso. San Ildefonso Pueblo is the farthest downstream in the
    watershed. The situation there was worse; over 90 percent of the
    Pueblo's irrigable lands were taken and on the remaining lands, there
    was only sufficient water available for from 100 to 150 acres. Id., at
    p. 24. If the United States could not recover some of the water supply
    of the river for San Ildefonso, ``the only way out'' was to move most
    of the Pueblo across the Rio Grande, thereby giving up the use of all
    their irrigated lands in the watershed. Id. at p. 25.
        The Exon lawsuit brought pressure to bear on the situation in
    Congress. A final compromise bill was introduced in March of 1924 and
    it became law on June 7, 1924. The Pueblo Lands Act was a legislative
    means of addressing the issue that prevented wholesale eviction of the
    non-Indians by the United States' Attorney. It was ``an act of grace''
    for non-Indians, who otherwise had no rights to Pueblo lands. Garcia v.
    United States, 43 F.2d 873, 878 (10th Cir. 1930); United States v.
    Herrerra, No. 1720 Equity (D.N.M. May 25, 1928), cited favorably in
    United States v. Wooten, 40 F.2d 882, 886 (10th Cir. 1930), and printed
    at Survey of Conditions of the Indians of the United States, Part 20:
    Hearing Before a Subcommittee of the Senate Committee on Indian
    Affairs, 71st Congress, 2nd Session at 10772 (1932).
        The basic plan of the Act was that a specially created Board was
    empowered to hold hearings and make findings on a variety of subjects.
    Where a non-Indian claimant established title by adverse possession for
    long periods of time as defined in the Act, the Board recommended that
    the non-Indian's title be recognized even if located within the
    exterior boundaries of a Pueblo's federally recognized Grant. The
    Pueblo was supposed to be paid damages for the loss of the land and
    water rights. The monies paid as damages were to be used by the United
    States and the Pueblo to replace the Pueblos' economic base--the lands
    and water lost to the Pueblos. In a perfect world each Pueblo would be
    made whole with the replacement of all that was taken. This elegant,
    simple plan was never fulfilled. Hearings were held, titles to land
    were quieted in the non-Indians who met the requirements of the Act
    through related suits in federal court, but nothing was done to replace
    all the lost lands or to get water to the Pueblos.
    B. Actions of the Pueblo Lands Board
    1. Introduction
        The Pueblo Lands Act established the Pueblo Lands Board. It was
    given the duty of determining (1) the exterior boundaries of lands
    granted or confirmed to each Pueblo; (2) the status of the lands within
    the exterior boundaries; (3) the fair market value of lands and
    improvements. Non-Indian claimants who were not successful in their
    land claims under the act were paid for improvements. The fair market
    value of the lands where non-Indian claimants were successful made up
    the damages payable to the Pueblos.
    2. Pueblo Water Rights
        Many New Mexicans hoped that the Pueblo Lands Board would resolve
    all issues about the extent of Pueblo water rights vis-a-vis other
    water users in a watershed. The Exon lawsuit was dismissed in 1926
    based upon that view of the Act. Section 6 of the Act gave the Pueblo
    Lands Board the duty to report on the extent, source and character of
    the water rights of the non-Indians. The Board tried to do this and
    could not, believing that under any application of the prior
    appropriation doctrine, the Pueblos should have the first, or senior-
    most right. No non-Indian right should be satisfied until the Pueblos'
    needs were met, and the United States had a duty to enforce the
    Pueblos' senior rights. The Board set out its position in a list of
    principles:

            First: That the Indians are the earliest appropriators of all
            the water in the Pojoaque-Tesuque-Nambe water-shed, and that
            they still have a prior right to the water from the Tesuque and
            Pojoaque streams, and their tributaries, including all flood
            waters flowing into these streams, and to all springs or seeps
            which feed them.

            Second: That no non-Indian users have any right to these waters
            until the needs of the Indians' lands on this watershed are
            provided for.

            Third: That the Indian use of the waters has been continuous
            and beneficial from a time long ante-dating the advent into the
            country of any Spanish, Mexican or American settlers.

            Fourth: That the award of lands by the Lands Board to non-
            Indians under the provisions of the Act of June 7, 1924 does
            not imply the allocation to such lands so awarded of any water
            at all; but, on the contrary, that these non-Indian lands so
            awarded are entitled to only so much water as is not needed by
            the Indians for their needs when put to beneficial use. The
            matter of priorities as between non-Indians is quite a
            different matter from that of priorities between Indians and
            non-Indians.

            Fifth: That it is the duty of the United States as guardian of
            these Pueblo Indians, to assert and define these principles and
            to take such action, legal or otherwise, as will prevent the
            use of the waters of these streams by others than the Indians
            to any greater extent than is consistent with such principles
            so announced.

            Sixth: That the temporary or permanent development of water by
            or for the Indians by the opening up or development of springs
            or under-surface accumulations in or near the beds of the
            streams, in no way prejudices the priority rights of the
            Indians to the whole surface flow of these streams, but is
            merely a method of recovering a part of the water to which they
            are entitled until the Government may or does recover all of
            the water needed by the Indians.

            Seventh: That no action should be taken or approved by the
            Government for the purchase of water or of lands with alleged
            water rights from non-Indians within or without the outside
            boundaries of the Pueblo Grants which could, in any way, be
            interpreted to mean that the United States has abandoned any of
            the priorities of the Indians or conceded any specific or
            associated rights for water to any non-Indians tracts on the
            watershed.

        The Board's approach to the Pueblos' water rights was not raised in
    any subsequent court proceedings required by the Act. The issue was
    raised when Congress acted to increase the compensation paid to the
    Pueblos, Act of May 31, 1933, 48 Stat. 108, but only in the inclusion
    of Section 9 which states:

            Nothing herein contained shall in any manner be construed to
            deprive any of the Pueblo Indians of a prior right to the use
            of water from streams running through or bordering on their
            respective Pueblos for domestic, stockwater and irrigation
            purposes for the lands remaining in Indian ownership, and such
            water rights shall not be subject to loss by nonuse or
            abandonment thereof as long as title to said lands remain in
            the Indians.

        48 Stat. 111. On paper, the Pueblos' senior water rights to the
    water they needed were protected. In reality, though, the Pueblo Lands
    Act has yet to increase the actual water available for Pueblo use.
    Prior to the filing of the Aamodt lawsuit in 1966, the United States
    did not act to assert, define or protect the Aamodt Pueblos' senior
    priority rights, even as junior uses increased in the watershed.
    3. Land
        As a result of the Pueblo Lands Act, each of the Pueblos lost large
    amounts of acreage and most of this was irrigable land. While the Board
    may have concluded that their senior priority water rights were not
    affected in theory, in reality there was not any more water in the
    system to be used by the Pueblos without enforcement of that senior
    right, and the non-Indians remaining on the lands continued to use the
    water to the detriment of the Pueblos.
    C. The United States' Failure to Follow Through on the Replacement
            Purposes of the Pueblo Lands Act
        Congress did provide in the 1924 Act that the Pueblos were to
    receive compensation for their damages as a result of the United
    States' failure to seasonably protect Pueblo lands and water. Money
    damages, though, was not the ultimate goal. Section 19 of the 1924 Act
    states:

            That all sums of money which may hereafter be appropriated by
            the Congress of the United States for the purpose of paying in
            whole or in part any liability found or decreed under this Act
            from the United States to any pueblo or to any of the Indians
            of any pueblo, shall be paid over to the Bureau of Indian
            Affairs, which Bureau, under the direction of the Secretary of
            the Interior, shall use such moneys at such times and in such
            amounts as may seem wise and proper for the purpose of the
            purchase of lands and water rights to replace those which have
            been lost to said pueblo or to said Indians, or for purchase or
            construction of reservoirs, irrigation works, or the making of
            other permanent improvements upon, or for the benefit of lands
            held by said pueblo or said Indians.

        43 Stat. 636, 642 (emphasis added). Section 1 of the Act of May 31,
    1933 is almost identical. Congress did appropriate funds to pay the
    damages awarded to the Pueblos; Nambe Pueblo received a total of
    $85,784.53; Pojoaque received a total of $125,086.82; San Ildefonso
    Pueblo received $67,646.45 and Tesuque Pueblo received $29,301.20.
    These amounts, however, were totally insufficient to replace what the
    Pueblos had lost, much less any damages for the denial of water for
    several decades. San Ildefonso Pueblo is a good example of how
    ineffective the plan for replacement of water rights was for the
    Pueblo. 90 percent of the agricultural land of San Ildefonso Pueblo had
    been taken over by non-Indian squatters, approximately 1,505 acres
    which is roughly equivalent to the loss of 1,850 acre feet of water
    yearly (afy). With additional upstream diversions, the Pueblo was only
    able to cultivate 8 acres of farm land in 1899. The next year the
    harvest consisted of only 20 bushels of corn and 20 bushels of wheat.
    With the award to the Pueblo, the United States was only able to
    reacquire for the Pueblo's uses 263 acres of irrigated farmland,
    roughly equivalent to regaining 485 acre feet of water per year. State
    ex rel. State Engineer v. Aamodt, D.N.M. No. 66cv6639, Memorandum to
    the Special Master on Replacement Rights of the Pueblos After Court's
    Order of April 14, 2000, p. 8, filed by the Pueblos and the United
    States July 31, 2000.
    D. Conclusion
        While it cannot be disputed that Congress intended to provide
    actual usable water to the Pueblos through operation of the 1924 Act,
    to this day, the losses of the Pueblos have not been replaced. With the
    Aamodt Litigation Settlement Act, the Pueblos are promised not only
    enough water to meet present and future needs, but also a Regional
    Water System to provide essential infrastructure so that water can be
    used. For the first time since before 1900 the Pueblos of Nambe,
    Pojoaque, San Ildefonso and Tesuque will have Congressional approval of
    a Settlement Agreement which quantifies the water rights of each
    Pueblo, and authorizes a regional water system designed to deliver
    sufficient water to meet Pueblo needs, now and into the future. Passage
    of the Aamodt Litigation Settlement Act is an essential requirement for
    implementation of the Settlement Agreement signed by the Four Pueblos,
    the State of New Mexico, the County and City of Santa Fe. Additionally,
    federal legislation appropriating funding authorized by this Act will
    be needed, after Congress in this Act directs the United States to join
    the Settlement and build the Regional Water System it requires. After
    that, the Federal Government will have fulfilled its trust
    responsibility to protect the ability of the Four Pueblos to use water
    in the Pojoaque River Basin to meet present and future needs.
                                     ______

       Prepared Statement of George Rivera, Governor, Pueblo of Pojoaque

                                     ______

     Prepared Statement of Harry B. Montoya, County Commissioner, Santa Fe
        Mr. Chairman and committee members, I am Harry B. Montoya. I am in
    my second term on the Board of County Commissioners of Santa Fe County
    and I am pleased to offer this testimony on behalf of Santa Fe County.
    The Pojoaque stream system is located within my district and it is also
    where I grew up and have spent most of my life. When the Aamodt
    litigation was filed I was six years old. Forty-two years later, I am
    very gratified the parties have reached a settlement of this divisive
    litigation, which is the oldest running lawsuit in the federal court
    system. With your help, the settlement will provide a reliable water
    supply to the four Pueblos, as well as to other county residents in the
    Pojoaque basin.
        I appreciate very much the opportunity to provide testimony in
    support of the Aamodt Litigation Settlement Act, Title I of S. 3381. I
    especially want to thank the New Mexico congressional delegation for
    enabling us to achieve this settlement. After years of what appeared to
    be intractable and interminable litigation involving thousands of water
    users, Senator Domenici, Senator Bingaman and Congressman Udall have
    provided the leadership and the guidance that will allow the fighting
    to end and will pave the way to a better future for the Pojoaque basin.
    Overview of Settlement
        The parties reached this settlement after six years of intensive
    settlement talks ordered by the federal court. In 2006, along with
    other settling parties, the County, the four Pueblos, the City of Santa
    Fe and the State of New Mexico signed the Aamodt settlement agreement.
    The settlement will resolve longstanding water issues between the
    Pueblos, the State of New Mexico and numerous water rights claimants to
    the limited supplies of the Pojoaque basin. Now the settling parties,
    including the seven governmental entities, urge the United States to
    join us as signatories to the settlement agreement.
        This legislation will authorize the Secretary of the Interior to
    execute the settlement agreement. And it will authorize construction of
    an important regional water system for the benefit of Pueblo members
    and other County residents.
        Although Santa Fe County does not have water rights at issue in the
    main Aamodt case, the County agreed to become a party to the settlement
    and is willing to make a substantial local contribution to help
    implement it. The County believes the settlement is highly desirable
    for two reasons. First, the settlement achieves a fair and equitable
    resolution of the competing claims to water in one of the most water-
    short areas of the west. Second, the centerpiece of the settlement is a
    regional water system that will greatly alleviate water shortages and
    water quality problems in the basin.
        I would like to briefly discuss both of these settlement benefits.
    Fair and Equitable Resolution
        For the last 150 years the Pojoaque basin has been plagued by land
    and water disputes, pitting neighbor against neighbor and Pueblo member
    versus non-Pueblo people. Two U.S. Supreme Court cases and an Act of
    Congress failed to settle the issues, and the Aamodt water rights
    adjudication has done no better. The settlement is the only hope for
    ending the divisions and allowing for harmony in the basin.
        The settlement is a compromise. Rather than defining winners and
    losers, the settlement protects existing uses and allows for future
    growth by careful management of available water resources. At the same
    time, it recognizes and safeguards time immemorial and senior use
    priorities of Pueblos and early Spanish acequias. The settlement also
    creates a reliable supply to more recent domestic and commercial uses,
    and is flexible enough to account for changing uses in the future.
        The agreement contains provisions that protect the basin from
    groundwater pumping in the adjoining and much more populous Santa Fe
    basin. Both the County and the City of Santa Fe have agreed in the
    proposed settlement to mechanisms to offset effects on basin surface
    waters from County and City groundwater withdrawals in the neighboring
    basin. In order to preserve groundwater supplies, the County and the
    City have also agreed to meet their demands from surface water sources
    to the maximum extent feasible in order to minimize the effects on
    ground and surface supplies of the Pojoaque basin.
    Regional Water System
        A vital component of the settlement is a regional water system
    serving the Pojoaque basin. Because the basin is chronically short of
    water, the foundation of our agreement is construction and operation of
    a joint water utility that will divert up to 4,000 acre-feet of water
    per year from the Rio Grande. Of that amount, the regional water system
    will treat and deliver 2,500 acre-feet to the four Pueblos and the
    remaining 1,500 acre-feet to non-Pueblo customers of the County water
    utility.
        The regional water system bestows many benefits. Most obvious is
    its importance in delivering a substantial amount of water to meet the
    future needs of the Pueblos. Less obvious, but perhaps as important to
    the Pueblos, the water system provides water to non-Pueblo water users
    who otherwise would continue to divert basin groundwater and deplete
    surface flows needed for traditional irrigation and other uses. The
    settlement contains incentives and provisions for settling non-Pueblo
    parties to connect to the system and requires new users in the future
    to connect. Finally, the system directly benefits connecting non-Pueblo
    customers by providing a clean and reliable water supply.
        The regional water system will be governed by a board made up of
    the Pueblos and the County. By cooperating basin-wide, these five
    governmental partners will reduce tensions over water distribution and
    will gain greater efficiencies in system operation and maintenance. I
    strongly believe our agreement for regional cooperation will be a model
    for other communities that find themselves needing to band together to
    secure water beyond their individual jurisdictions.
        The County believes that the regional water system is not only a
    good deal for the Federal Government and the Pueblos but is also a good
    deal for the County. And that is why the County will invest substantial
    local funds in the system. Including its share of construction costs
    and its responsibility for operational costs, the County is
    contributing over $60 million. When combined with financial
    contributions from the State and City, the non-federal contribution is
    approximately $117 million or 42 percent of the total settlement costs.
    This is noteworthy, especially when the percentage of water allocated
    from the regional water system to non-Pueblo customers is
    proportionately less.
        In conclusion, I want to thank the Chairman and the committee
    members for hearing this matter. S. 3381 has been carefully crafted to
    address the difficult water supply needs within the Pojoaque basin. We
    have waited a long time to get to this point. We are hopeful, with your
    help, our time is now.
                                     ______

    Prepared Statement of John R. D'Antonio Jr., P.E., State Engineer, New
                                     Mexico

                                     ______

    Prepared Statement of Palemon Martinez, President, Taos Valley Acequia
                                  Association
        Chairman Dorgan and Honorable Committee Members:
        I am writing to you on behalf of the Taos Valley Acequia
    Association (TVAA) and its 55 member Acequias. The TVAA and Acequias
    are parties to the settlement agreement with Taos Pueblo. Acequias are
    also known as community ditch associations. They have existed in the
    Taos Valley of north-central New Mexico since the area was settled by
    Spanish settlers over 400 years ago. Acequias have diverted surface and
    spring water from seven tributaries of the Rio Grande, which are the
    Rio Hondo, Rio Lucero, Rio Arroyo Seco, Rio Pueblo, Rio Fernando, Rio
    Chiquito, and Rio Grande del Rancho. These Acequias continue to provide
    water for domestic uses, livestock watering, and the irrigation of over
    12,000 acres. Today our acequias have over 7,600 individual members,
    many of whom irrigate small fields, to raise a few head of livestock,
    and gardens, in order to feed their families. In the Taos Valley the
    Acequias are truly the lifeblood of the community. Our traditional
    rural lifestyle and culture are sustained by the acequias.
        Many of the acequias flow through Taos Pueblo land. Non-Indian
    Acequia members and Taos Pueblo members interact on a daily basis. They
    are neighbors who have been sharing the water resources of the Taos
    Valley for centuries. Of course during that long history, there have
    been disputes over the water, especially during droughts and periodic
    water shortages.
        This settlement addresses not only the water rights of Taos Pueblo
    but the resolution of competing claims of the Acequias' water rights
    which were established under the laws and customs of Spain and Mexico
    and are protected by the United States under the 1848 Treaty of
    Guadalupe Hidalgo. The United States owes not only a federal trust
    obligation to Taos Pueblo, but an obligation under the Treaty and
    established constitutional and international legal principles to
    protect the water rights of the Acequias and their members.
        The Taos Pueblo Indian Water Rights Settlement Act, S. 3381, Title
    II, is an opportunity to finally resolve all water sharing disputes
    between the Acequias and Taos Pueblo. Because water is so vital to the
    survival and prosperity of all parties in the Taos Valley, we have been
    involved in negotiations since 1989. This Settlement Act represents a
    compromise and a guarantee of future allocations that costly litigation
    could never achieve.
        Most importantly the settlement secures future centuries of mutual
    existence and sharing of water for the Acequias and Taos Pueblo. The
    settlement of course defines and secures the nature and extent of Taos
    Pueblo's water rights. It also secures the rights of acequia members
    and protects them from challenges to their water rights by other
    parties. The settlement provides for the continuance of specific water
    sharing customs and traditions rather than the imposition of priority
    administration of water. It allows for the sustenance of the
    traditional and rural lifestyle and culture of Acequia members. The
    settlement balances the needs of all parties in the Taos Valley, now
    and in the future. This includes municipal water providers and
    thousands of domestic well owners.
        The financial obligations of the United States are not only to Taos
    Pueblo, which certainly has substantial claims against the United
    States. This settlement will also resolve Acequias long-standing claims
    against the United States with the construction of the Arroyo Seco
    Arriba storage project and Acequia Madre del Prado stream gage.
        The benefits of the Settlement Act far outweigh any financial
    analysis however. You cannot put a price of the social benefits of
    peace and harmony between neighbors. Long-simmering disputes over water
    will finally be put to rest. This settlement will avoid contentious
    litigation that could only cause future mistrust and conflict
    throughout the Taos area.
        The TVAA urges Congress to take this rare opportunity to support a
    local solution to past, present, and future water allocation
    challenges. We urge passage of the Taos Pueblo Indian Water Rights
    Settlement Act, S. 3881, Title II. The TVAA thanks Chairman Dorgan and
    members of the Senate Indian Affairs Committee, for your time and
    consideration of this vitally important matter of water for our future.
    We also thank New Mexico Senators Pete Domenici and Jeff Bingaman for
    their unwavering support of our settlement.
                                     ______

                                     ______

      Response to Written Questions Submitted by Hon. Byron L. Dorgan to
                             Hon. Charles J. Dorame
        Question 1. The Aamodt Pueblos [Nambe Pueblo, Pojoaque Pueblo, San
    Ildefonso Pueblo, and Tesuque Pueblo] and Taos Pueblo make a strong
    case that the settlements are consistent with the federal criteria and
    procedures governing water settlements. How does the Administration
    differ with your analysis?
        Answer. The Criteria and Procedures policy (``C and P'') was first
    published on March 12, 1990 (See 55 Federal Register 9223) and
    identifies 16 factors to be used by the United States in its evaluation
    and analysis of Indian water rights settlements. At the request of
    Michael Bogert, counselor to the Secretary and Chairman of the
    Department's Working Group on Indian Water Settlements, the four
    Pueblos submitted two memoranda, one in February 2008 and the other
    several months later, which analyze the C and P and demonstrate
    specifically how the Aamodt settlement satisfies the 16 factors. These
    memoranda have been provided to the Committee as part of my
    supplemental written testimony. Until the Department of the Interior
    testified at the September 11, 2008, hearing, it had not responded in
    writing to our C and P analysis.
        When questioned by Senator Pete V. Domenici at the September 11,
    2008, hearing Mr. Bogert testified that the C and P are ``guidelines,''
    and are to be employed flexibly by the Department given that Indian
    water settlements vary widely in terms of their history, circumstances,
    and terms. Mr. Bogert's testimony is consistent with the fact that,
    since the C and P policy was issued in 1990, no Indian water rights
    settlement passed by the United States Congress has satisfied all or
    even most of its requirements. The four Pueblos have demonstrated that
    the Aamodt Litigation Settlement Act legislation substantially
    satisfies the C and P ``guidelines.''
        The United States differs with our analysis on two points. Its
    first objection is that the cost of the settlement is not proportionate
    to the liability of the United States. It also questions whether the
    settlement promotes economic efficiency.
        On the first score, the Pueblos have provided substantial
    documentation that assesses the liability of the United States and we
    obviously differ with the United States' evaluation of our claims based
    on that documentation. We are unable to address specific details of the
    United States' assessment, however, because the United States has not
    shared it with us. The Committee has also been deprived of the United
    States' analysis because Mr. Bogert's testimony failed to provide
    specific facts, analysis, or arguments as to what the Federal
    Government's assessment is, how it was reached, and the gap between
    assessment of Federal liability and our own.
        On the second issue, the economic efficiency concern is also
    addressed in my supplemental statement previously provided to the
    Committee. Though Mr. Bogert's written testimony stated that the
    Administration was concerned about this issue, it failed to give
    specific factual or policy analysis to support the statement.
        In conclusion, the Aamodt Litigation Settlement Act, S. 3381, Title
    1, substantially satisfies the C and P guidelines. As always, we stand
    ready to work with the Department of the Interior on the objections it
    has raised on the basis of the C and P guidelines, but we respectfully
    request that it provide specific factual and policy analysis to support
    their objections in order to maximize the productivity of our
    discussions.

        Question 2. Are the four Pueblos willing to negotiate with the
    Administration on revising language in the bill that waives claims
    against the United States from future liability?
        Answer. Yes.
        The four Pueblos and the other Aamodt litigation settlement parties
    have negotiated with the United States for years regarding waiver
    language. The Settlement Agreement signed in 2006 was negotiated with
    the United States in the room. The United States voiced no objections
    regarding the scope of the waiver at that time. In the 2006 Settlement
    Agreement, claims that the Pueblos were waiving against the other
    parties were also waived by those parties against the Pueblos. The
    United States appears to no longer be concerned with such symmetry.
        The four Pueblos believe the waiver issue to be a ``moving target''
    created by the Administration. We have had numerous negotiating
    sessions with them in the context of the Aamodt settlement negotiations
    earlier this year, as well as separate conversations between the
    Pueblos and the United States. On July 7, 2008, the United States
    Department of Justice sent draft language for us to review. We
    discussed this together with our settlement judge and the other
    settlement parties on July 8, 2008. After those discussions, our focus
    understandably shifted to working with congressional staff on waiver
    language in S.3381, Title 1 so that the bill could be introduced. We
    understood that the sponsors wanted uniformity across the New Mexico
    Indian water settlements. We think the language in the bill as
    introduced achieve that goal. The United States sent the settlement
    judge another draft on September 18, 2008. The four Pueblos responded
    to the United States on this draft on September 22, 2008. To-date, the
    four Pueblos have not received a response.
        We heard recently that the Administration prefers to have
    ``uniform'' or ``model'' waivers across the spectrum of Indian water
    rights settlements. We have reviewed the proposed ``model'' language,
    which in our judgment requires the four Pueblos to waive their claims
    that are far outside the scope, geographically and substantively, of
    the claims the Pueblos are seeking to settle through the ratification
    of the 2006 Settlement Agreement. In contrast, the existing waiver
    language in the 2006 Settlement Agreement and S. 3381, Title 1 clearly
    waives all the claims against the United States pertaining to water
    rights within the Pojoaque River Basin, which is the subject and scope
    of the lawsuit being settled.
        Nevertheless, the Pueblos continue to work in good faith with our
    settlement judge to have the four Pueblos meet with the United States
    and the settlement judge on October 7, 2008 to once again seek common
    ground on the waiver issue. We will be glad to inform the committee of
    the outcome of those discussions.
        Mr. Chairman, thank you for the opportunity to appear before the
    Committee and to provide this supplemental information to assist you in
    swiftly enacting S. 3381. Please do not hesitate to contact me if you
    have further questions.
                                     ______

      Response to Written Questions Submitted by Hon. Byron L. Dorgan to
                                Chris D. Tweeten
        Question 1. Please describe the process by which the State of
    Wyoming, Indian tribes, other governmental entities, and members of the
    public can participate in planning and decisions related to the stream
    flow, management, and operation of Yellowtail Dam.
        Answer. The Bureau of Reclamation has an Annual Operating Plan that
    guides operations for Yellowtail Dam and Bighorn Lake each year. Prior
    to issuing the Annual Operating Plan the Bureau of Reclamation conducts
    detailed water availability forecasts and meets with interested persons
    to discuss operations issues. The operations issues include such topics
    as: legal requirements for senior water rights; contractual commitments
    for stored water; power generation at Yellowtail Dam; Bighorn Lake
    recreation; releases for river fisheries; waterfowl needs; and, flood
    control. Typically, the annual meeting has included participants from
    the State of Wyoming, the State of Montana, National Park Service,
    Western Area Power Administration, the Army Corps of Engineers, the
    Crow Tribe and others.
        Wyoming has the same opportunity for consultation as Montana does.
    Input from the states, tribes, and members of the public are taken into
    consideration by the Bureau of Reclamation. Ultimately, however, it is
    the Bureau of Reclamation that makes the management decisions for
    Yellowtail Dam and Bighorn Lake.
        Nothing in the Compact, the Streamflow and Lake Level Management
    Plan, or S. 3355 alters the Bureau of Reclamation's decision-making
    authority; to the contrary, any action taken under the Management Plan
    is subject to the planning and decision-making authority of the Bureau
    of Reclamation. Wyoming has the same opportunity as does Montana to
    participate in and influence the Bureau's planning and management for
    Bighorn Lake.

        Question 2. What happens if S. 3355 does not pass?
        Answer. In 1979, the State of Montana initiated a state-wide water
    rights adjudication. This is a lawsuit commenced by the State of
    Montana to adjudicate all existing rights to the use of water within
    the State of Montana, including federal Indian reserved water rights
    and federal non-Indian reserved water rights, as contemplated by
    federal law. 43 U.S.C. Sec. 666 (The McCarran Amendment). The Montana
    legislature created the Montana Water Court to adjudicate claims of
    existing rights. The Montana legislature suspended the requirement for
    the United States to file claims for federal Indian reserved water
    rights and federal non-Indian reserved water rights while negotiations
    with tribes and federal agencies through the Montana Reserved Water
    Right Compact Commission were conducted. By statute, if the Crow Tribe
    has not approved the negotiated Compact by July 1, 2009, the suspension
    of the requirement to file its claims for federal Indian reserved water
    rights is lifted and the United States has six months to file the
    claims on behalf of the Crow Tribe. Mont. Code Ann. Sec. 85-2-217
    (2007). The litigation to quantify the Crow Tribe's federal Indian
    reserved water rights will then proceed. Before the Crow Tribe votes to
    approve the negotiated Compact, Congress needs to ratify the Compact
    through passage of S. 3355.
        The adjudication of the Crow Tribe's water right is a
    quantification of rights established by treaty in 1868. These are not
    newly established rights. As part of the general state-wide water
    adjudication, the Crow Tribe's water rights must be quantified either
    by settlement or by litigation. In litigation, we can reasonably expect
    the United States to put forward substantial claims for federal Indian
    reserved water rights for the Crow Tribe, for both the Crow Indian
    Reservation and the ceded strip. Claims for the Crow Tribe will
    encompass all of the Bighorn River basin that lies within Montana. The
    Crow Tribe will have a very substantial water right with a very senior
    priority date to serve the land and interests held in trust for the
    Tribe by the United States.
        Judging from Wyoming's experience litigating the federal reserved
    rights associated with the Wind River Reservation, this litigation will
    be costly for the United States, the Tribe, the State of Montana, and
    individual water users. It is doubtful that the State of Wyoming or any
    Wyoming water user would have standing to participate as a party in the
    litigation. At the end of the adjudication phase of the Wyoming
    litigation, the Court decreed a large water right for the Tribes with a
    priority date senior to any other Wyoming uses on the Bighorn River.
    Litigation and settlement talks continue regarding administration of
    the Tribe's right, a matter which, of course, would have been resolved
    had Wyoming chosen to compact with the tribes.
        Under the situation described in this question, all elements of the
    Crow Tribe's federal Indian reserved water right would be decided by
    the Court. No agreements as to mitigation of the exercise of the
    Tribe's water right would be in place for either the State of Montana
    or the State of Wyoming. No administration procedures or alternative
    dispute resolution would be agreed to. The Bighorn River basin in
    Montana would be reopened to new appropriations under Montana law. The
    State contribution to settlement would return to the State treasury.
    The lawyers and expert witnesses would make a lot of money. But it is
    the Tribe that would truly pay the price, through loss of potable
    drinking water for its members and foregone economic development.

        Question 3. Please describe how other Indian water rights
    settlements in Montana have benefited the citizens and tribes located
    within the state.
        Answer. The presence of unquantified Tribal reserved water rights
    claims creates tremendous uncertainty for all interested parties,
    Indian and non-Indian alike. It also creates needless friction between
    Tribes and their non-Indian neighbors. Montana initiated its state-wide
    water adjudication process to reduce the uncertainty created by rights
    that have not been decreed, both Tribal and non-Tribal. The response to
    Question 2 details the financial and less tangible social costs that
    follow quantification of these rights through litigation.
        As the Committee is aware, Tribes and their non-Indian neighbors
    frequently have difficulty communicating with one another, due in large
    part to misunderstandings and mistrust between the parties. We have
    found that in every case in which the Compact Commission and Tribe have
    successfully negotiated a water compact, the process of working
    together to achieve a common goal has strengthened that relationship.
        Our compacts have also produced tangible benefits for Tribes and
    their non-Indian neighbors. Tribes have seen substantial economic
    development as a result of the infrastructure projects that have
    followed our compacts. The Montana-Rocky Boy's Compact, for example,
    provided for the enlargement and rehabilitation of two reservoirs on
    the Reservation. These projects have created needed employment
    opportunities for tribal members on a Reservation that, like most
    reservations, has been plagued by extraordinarily high unemployment and
    other associated social ills.
        Both the Rocky Boy's and Fort Peck Compacts have included storage
    of water in federal reservoirs. In both cases, Tribes are using this
    stored water to create regional water treatment and delivery systems to
    deliver clean water to Tribal and non-Indian communities. The Rocky
    Boy's Reservation in particular suffers from the lack of clean drinking
    water. In many tribal communities potable water is trucked onto the
    reservation at substantial cost. Similarly, many communities in the
    arid Montana plains rely on untreated ground or surface water for their
    domestic needs. The regional water treatment and delivery systems made
    possible through our water compacts provide the means to solve these
    problems. They also will provide employment opportunities for tribal
    members and important revenue streams that will contribute to making
    the Tribes economically self-sufficient.
        To take another example, the Montana-Northern Cheyenne Compact
    provided a joint federal-state partnership for the enlargement and
    improvement of the Tongue River Dam, an unsafe dam located just
    upstream from the Reservation. This project provided employment
    opportunities for Tribal members, alleviated a substantial safety issue
    for Indians and non-Indians alike, and provided the Tribe with a large
    block of stored water for use in advancing the Tribal economy.
        These examples are by no means exhaustive of the benefits Tribes
    and non-Indians have enjoyed as a result of the amicable settlement of
    Tribal reserved right claims. In each settlement, specific management
    and allocation approaches provide benefits that are tailored to the
    needs of Tribes and provide benefits for the State and all of its
    citizens.
                                     ______

         Response to Written Questions Submitted by Hon. Jon Tester to
                                Chris D. Tweeten
        Question 1. In my experience (Rocky Boy's, Northern Cheyenne, Ft.
    Peck), these water settlements are vital to both the on- and off-
    reservation communities they serve. Do you agree? Examples?
        Answer. Please see the answer to Senator Dorgan's question number
    3.

        Question 2. What will happen if Congress does not pass this
    legislation?
        Answer. The Crow Tribe's federal Indian reserved water rights will
    adjudicated in the Montana Water Court. Please see the answer to
    Senator Dorgan's question number 2.

        Question 3. How will Wyoming be affected if the parties are forced
    to litigate their rights?
        Answer. The adjudication of the Crow Tribe's water right is a
    quantification of rights established by treaty on May 7, 1868. The Crow
    Tribe's water rights are federal Indian reserved water rights. As such,
    it is the purpose of the federal reserve-lands held in trust by the
    United States for the Crow Tribe and its members and allottees-that
    define the quantity of water. Tribes are not required to have developed
    the land in order to have water reserved to serve that land and these
    water rights cannot be lost through abandonment.
        Wyoming is the upstream neighbor to a substantial federal Indian
    reserved water right. The Crow Tribe's water right is the most senior
    water right in the entire Bighorn River basin. The Crow Tribe's water
    right is likely to be very sizable. Once quantified, the Crow Tribe
    will likely be able to use the water for any reasonable purpose.
        The State of Montana cannot accurately predict what unmitigated
    impacts there would be in Wyoming if the parties are forced to litigate
    the Tribe's federal Indian reserved water rights, but Wyoming is right
    to be concerned. The Compact to be ratified in S. 3355 contains
    important protections added at Wyoming's request to mitigate the
    effects of the Tribe's rights on upstream Wyoming water users. Without
    the Compact, none of these mitigation measures will be assured.
        As noted above, it is unclear whether Wyoming or its water users
    would have standing to participate as a party in the Montana
    adjudication. The Compact may therefore be the only opportunity Wyoming
    will have had to secure any mitigation for its interest with respect to
    the Tribe's large early priority rights.

        Question 4. What is the primary use for the water Wyoming wants in
    Bighorn Reservoir? Recreation alone? Irrigation?
        Answer. Like every state, Wyoming has several uses for water.
    Sometimes the demands for water are complementary and sometimes they
    are in competition. Wyoming must be the one to respond to what is the
    ``primary use'' of water in Wyoming. However, based on comments and
    discussions we have had with representatives from Wyoming, it is clear
    that Wyoming has an interest in both recreation in Bighorn Lake and
    present and future irrigation in Wyoming. In order to meet its
    obligations to Montana and the Crow Tribe, the dual interests in lake
    levels and irrigation in Wyoming are competing interests.
        About 40 percent of the length of Bighorn Lake (the reservoir
    created by the Yellowtail Dam) lies in Wyoming. The other 60 percent
    lies in Montana, and it either borders or is within the Crow Indian
    Reservation. Yellowtail Dam is on the Crow Indian Reservation. Bighorn
    Lake is a popular boating destination that can be accessed in both
    Wyoming and Montana.
        Yellowtail Dam and Bighorn Lake are Bureau of Reclamation
    facilities with a May 5, 1961 claimed priority date governed by State
    law. The Bureau of Reclamation also operates the upstream storage
    facilities of Buffalo Bill Dam and Boysen Dam (as well as other
    facilities). The storage facilities operated by the Bureau of
    Reclamation are part of a basin-wide system that should fill with
    available water in order of priority and should supply water to the
    authorized irrigation projects associated with them. The storage
    facilities operated by the Bureau of Reclamation are multiple use
    storage facilities. If storage is not filled in order of priority and
    Wyoming uses water for irrigation that is not released from the
    associated storage facilities, then the lake levels for recreation in
    Bighorn Lake within Wyoming (and Montana) will suffer. The Bureau of
    Reclamation and Wyoming can work together to mitigate reductions of
    lake levels in Bighorn Lake, without adversely affecting water rights
    of the Crow Tribe. Wyoming also participated in a state/federal cost
    share construction of additional storage on Buffalo Bill Dam. Completed
    in 1993, the project now contains a state water account of 189,965 acre
    feet of water from which Wyoming water needs in the basin can be
    satisfied.

        Question 5. To what extent was Wyoming involved in compact
    negotiations?
        Answer. The State of Wyoming and the Office of the Wyoming State
    Engineer consulted with the Compact Commission and provided comments
    and testimony during the negotiation of the Compact, and the subsequent
    State approval process, to make sure Wyoming's concerns were addressed.
    A representative from the State Engineer's Office attended every
    negotiating session and general public meeting. The parties addressed
    concerns expressed by the Wyoming State Engineer with language in the
    Compact that resulted in language clarifications in S. 3355. The State
    of Wyoming committed substantial time and effort to the negotiations.
    The State of Montana went to great lengths to ensure Wyoming's
    involvement and that Wyoming's concerns were addressed in this
    agreement to the extent possible while also meeting the rights of the
    Crow Tribe.

        Question 6. Do you feel that the compact adequately addressed
    Wyoming's concerns?
        Answer. Yes. Despite our disagreement about the issue, we have
    negotiated an agreement that, as a practical matter, met Wyoming's
    fundamental concern-that the Crow Tribe-Montana Compact be consistent
    with Wyoming's interpretation of the Yellowstone River Compact. The
    Tribe's natural flow rights for new development and its storage rights
    for new development under the Crow Tribe-Montana Compact fit within
    Wyoming's interpretation of the percentage allocated to Montana for
    post-1950 uses under the Yellowstone River Compact. Again, Montana has
    vigorously contested and continues to vigorously contest Wyoming's
    interpretation of the Yellowstone River Compact. The Crow-Montana
    Compact's approach to the issue preserves the position of both parties
    with respect to predicted future water availability.
        To accomplish this, Montana closed the Bighorn River basin within
    Montana to new non-excepted appropriations under Montana law. This
    agreement is at the expense of Montana's future development. No state
    can be asked to do more.
        The State of Montana and the State of Wyoming cannot agree to
    affect adversely a federal Indian reserved water right created under
    Federal law. The states cannot agree to do away with the most senior
    water right on the River system.
        The most any state can do is to mitigate the impacts from
    development of the federal Indian reserved water right through
    agreement. This Compact mitigates possible impacts to upstream water
    users in Wyoming on the Bighorn River by restricting new development
    and providing supplemental storage in Bighorn Lake to meet the Tribe's
    natural flow water right in all but the most extreme years.
        Montana has made more than a good faith effort to address Wyoming's
    concerns and provide reasonable levels of protection for Wyoming's
    interests.

        Question 7. Is there anything in current law that includes Wyoming
    in management decisions?
        Answer. Please see the answer to Senator Dorgan's question number
    1.
                                     ______

      Response to Written Questions Submitted by Hon. Byron L. Dorgan to
                               Hon. Carl E. Venne
        Question 1. This bill authorizes $527 million as the federal share.
    Can you provide the Committee a brief explanation of how you determined
    the federal costs?
        Answer. The figures in the bill represent, for the most part, the
    estimated actual costs of rehabilitating the Crow Irrigation Project
    and building other water infra-structure in compliance with federal
    duties. These are federal duties derived from the federal trust
    responsibility including specific claims related to the Federal
    Government's failure to adequately provide and maintain the irrigation
    system authorized by Congress and the failure to provide clean
    drinkable water for our people.
        To assist us in assessing costs, we hired an engineering firm.
    We've worked hard to get a conservative but equitable number, including
    moving from a replacement to a rehabilitative model for the irrigation
    project. Also, we are waiving numerous actual and potential claims
    against the Federal Government. This significantly reduces the federal
    liability. For example, the Federal Government condemned Crow land and
    created the Yellowtail Dam almost 50 years ago. Despite federal laws
    requiring power revenue to be shared with the Crow Tribe, we have not
    received any of the $600 million dollars generated by this Dam over
    this period of time within our reservation and with our water. As such,
    we strongly believe the federal costs are commensurate with, or even
    less than, the liability owed by the Federal Government.

        Question 2. You testified that you are engaged in an ongoing
    fruitful dialogue with the Department of the Interior, however, the
    Department's testimony indicates that it opposes nearly every aspect of
    the water settlement to date. Can you elaborate on this dialogue? Are
    full negotiations are still needed?
        Answer. Our dialogue with the Federal government has been very
    good. There have been times when we disagreed and times we wished the
    federal team moved more quickly. Since the hearing date, we have
    progressed significantly in responding to outstanding concerns of the
    administration. Of all the concerns articulated by the Federal
    government, we only now disagree on waiver language and the appropriate
    cost of the projects. We are working on finalizing waiver language and
    may never agree on a final number related to cost.

        Question 3. The Bighorn River has many users and originates in
    Wyoming. Have you been or are you willing to sit down with Wyoming and
    Wyoming Tribes to discuss upstream concerns?
        Answer. Yes, it is true what you say--the Big Horn originates in
    the state of Wyoming, which is actually part of Crow's original
    reservation under the 1851 Fort Laramie Treaty.
        As the State of Montana can also attest to, we have a long history
    of meeting with the State of Wyoming, many Big Horn water users from
    both states, and the Tribes of Wyoming. We had ongoing discussions with
    these players during the time the Montana Crow Compact was negotiated.
    In fact, we recently went to the Wind River Reservation for a meeting
    involving the Wyoming state legislators and the Wyoming Tribes'
    concerns related to the Big Horn. As you know, our attorneys continue a
    dialogue with Senator Barrasso's staff regarding his concerns. We are
    happy to sit down with Wyoming and Wyoming Tribes to continue to
    discuss our shared concerns.
        That being said, it is important to note today that the Crow Nation
    has the senior priority date on the Big Horn River. Our priority date
    is May 7, 1868, based upon our agreement with the second Fort Laramie
    Treaty. The Shoshone and Arapaho Tribes, in the Wind River Reservation,
    signed a treaty one week later and therefore have a later priority
    date. The States of Montana and Wyoming have the latest priority dates
    on the Big Horn River consistent with the dates in which they became
    states--1889 and 1890, respectively. It is also important to note that
    the compact being ratified by this federal legislation is between the
    Crow Nation and the State of Montana.
                                     ______

         Response to Written Questions Submitted by Hon. Jon Tester to
                               Hon. Carl E. Venne
        Question 1. What is the process for tribal ratification?
        Answer. As described in the bill, after federal ratification the
    Compact will be returned for a vote by the Crow people. On such a
    critical issue, everyone deserves a chance to be heard. The plan to
    conduct Tribal ratification through a simple vote of the people has
    been in place since the 1999 Crow / Montana Compact was finalized.

        Question 2. I received correspondence from the Speaker of the Crow
    legislature suggesting that the federal process is flawed. What is your
    view of this process, and where do things stand now?
        Answer. We have initiated a series of public meetings to update the
    Crow tribal membership on the terms and details of the settlement prior
    to a tribal vote. Seeking federal legislation is the ``middle part'' of
    this entire settlement process. We have significant support but some
    opposition at home and the correspondence you have received is
    reflective of our local politics in play (3 legislators are running for
    Chairman of the Executive Branch and 2 of them have sent written
    letters to your office expressing their concerns, without total Crow
    legislative agreement). Again, it's important to know that the Crow
    people have the final say with this legislation.

        Question 3. Have you had public meetings or hearings? Do you plan
    any in the future?
        Answer. Vice Chairman Black Eagle and his team frequently give
    public presentations on the Compact and the federal legislation
    ratifying it, both locally and at such forums as the Indian Water
    Working Group meeting in Billings, Montana, and a Wyoming meeting for
    state legislators at Fort Washakie. Recently, there have been several
    district meetings on the Crow Reservation as well as presentations at
    the public sessions of the Crow Legislature. Vice Chairman Black Eagle
    and his water team will continue to visit the Crow districts to make
    information available to the people. We will also continue to publish
    stories about the Compact in the Crow Tribal newspaper and elsewhere
    (we have published several page summaries in 2 previous editions).

        Question 4. We want to make sure that anything we do in Congress
    truly benefits the Crow people. We don't want to hear 5, 10 or 50 years
    down the road that something we did today did not help the tribe and
    wasted taxpayer dollars. Is there anything that can assure us that we
    are doing what is right for the Crow Nation?
        Answer. This settlement will allow us to complete the water
    infrastructure needed for our reservation to fulfill its purpose as a
    homeland for our people. The settlement will put the Crow Irrigation
    Project into good repair for the first time in its history, which will
    benefit all Project users and provide the Tribe with some of the
    economic and other benefits for which it was intended. Also, of
    critical importance, it will aid in providing safe and potable drinking
    water to all parts of our Reservation.
        It is also worth noting that if the compact does not get ratified
    before the Montana Reserved Water Rights Commission expires, we will be
    forced to litigate these claims, costing tens of millions of dollars
    for each government that is part of this legislation. Water rights
    litigation is very time consuming (decades) and expensive. All parties
    are better off if the Settlement moves forward.

        Question 5. How will this settlement work with the Crow Lands
    Restoration Act, currently before this Congress?
        Answer. The Crow Lands Restoration Act authorizes a loan program of
    up to 380 million dollars to enable the Tribe to buy back fractionated
    lands and ``Section Two Lands,'' large parcels that were transferred
    away from the Tribe in violation of a federal statute meant to protect
    the Tribe's land base. The appurtenant water rights of fee lands
    repurchased by the Tribe will become part of the Tribal Water Right.
    Any such water rights in the Bighorn Basin do not add to the total
    quantified amounts of Tribal Water there. Two amendments were added to
    the bill on Senator Barrasso's request that help ensure that there will
    be no unintended or undue effects on the legal rights of Wyoming users
    from these transfers. In most cases, these transferred water rights
    would already be claiming an early priority date, so there would be no
    effect from the transfer.
                                     ______

      Response to Written Questions Submitted by Hon. Byron L. Dorgan to
                            Hon. Gilbert Suazo, Sr.
        Question 1. Both the Aamodt Pueblos and Taos Pueblo make a strong
    case that the settlements are consistent with the criteria and
    procedures. How does the Administration differ with your analysis?
        Answer. The Administration contends in its testimony that Abeyta
    does not meet the federal criteria and procedures for Indian water
    rights settlements on the grounds that the State cost share is
    disproportionate to the benefits received by the State and local
    parties, a federal contribution of the order of magnitude provided in S
    3381 is not appropriate because ``calculable legal exposure plus costs
    related to Federal trust or programmatic responsibilities do not
    justify a federal financial contribution of $113 million,'' and that
    the projects authorized do not promote economic efficiency.
        The Administration's analysis differs from ours in that the
    Administration seems not to have considered all of the relevant factors
    under the criteria and procedures. For instance, the Administration
    does not acknowledge that the criteria and procedures require
    consideration of the indirect costs of continued litigation. As
    explained in my testimony, the settlement mechanisms avoid the indirect
    costs to the United States, the Pueblo and other parties associated
    with conflicts over surface water use and groundwater withdrawals. In
    addition, although the Administration mentions costs related to Federal
    trust responsibilities, it appears not to have considered the liability
    for breach of trust that will be avoided for the claims against the
    United States to be waived by the Pueblo. Similarly, the Administration
    mentions consideration of programmatic responsibilities, but we believe
    it has likely overlooked the fact that appropriations for programmatic
    responsibilities associated with Pueblo water rights and water
    infrastructure have been woefully inadequate to meet the United States
    responsibility, and thus those past appropriation levels are not a
    proper basis for comparison to the federal financial contribution to
    the settlement.
        The Administration does not explain how it believes the State
    contribution is disproportionate to the benefits received locally, so
    it is difficult to address how their analysis differs from ours. The
    explanation for the Administration's conclusion may be that it is
    incorrectly treating the Mutual Benefit Projects as a 100 percent local
    non-Pueblo benefit, when in fact those projects were designed to
    mutually benefit both the Pueblo and other local parties. It bears
    emphasis that the Abeyta mutual benefit projects are very modest in
    scale and cost.
        The Administration's comment on economic efficiency similarly does
    not explain how the Administration believes this criterion is not met.
    The criterion referenced actually requires that a settlement promote
    economic efficiency on reservations and tribal self-sufficiency. By
    simply referring to ``economic efficiency'' in objecting to the
    magnitude of the cost and the cost sharing, the Administration appears
    to be misconstruing this criterion as a requirement to reduce the costs
    to the Federal Government. In fact, this criterion goes to the benefits
    to the tribe from settlement funding that promotes on-reservation
    economic efficiency and makes the tribe more self-sufficient. Here, as
    detailed in my testimony, the projects funded by the settlement will
    largely be designed, managed and constructed by the Pueblo and will
    provide improved water infrastructure to support the Pueblo's
    agricultural, community and economic development, thereby promoting and
    enhancing the Pueblo's self-sufficiency and on-reservation economic
    efficiency.
        The Administration also questions in its testimony whether it is
    appropriate to make funding available for initial water rights
    acquisition, for instance, to facilitate the settlement before all of
    the conditions to the enforcement of the settlement are met. The
    Administration does not cite to the criteria and procedures for its
    analysis of this early funding. Instead, this concern is based on the
    Administration's mistaken belief that making funding available upon
    appropriation is unprecedented. In fact, there are precedents for early
    funding. For example, the Zuni Indian Tribe Water Rights Settlement Act
    of 2003 makes funds available for acquisition of water rights and other
    activities carried out by the Zuni Tribe to facilitate the
    enforceability of its settlement agreement, including the acquisition
    of at least 2,350 acre-feet per year of water rights before the
    deadline for the settlement to become enforceable. See Zuni Indian
    Tribe Water Rights Settlement Act of 2003, Pub. L. No. 108-34,
    Sec. Sec. 4(b)(1) and 6(f)(1), 117 Stat. 782, 786, 789 (2003). The
    Chippewa Cree Tribe of the Rocky Boy's Reservation Indian Reserved
    Water Rights Settlement and Water Supply Enhancement Act of 1999 makes
    funds available upon appropriation for certain administration
    responsibilities assumed by the Tribe. See Chippewa Cree Tribe of The
    Rocky Boy's Reservation Indian Reserved Water Rights Settlement and
    Water Supply Enhancement Act of 1999, Pub. L. No. 106-163,
    105(a), (d)(3), 113 Stat. 1778, 1786, 1788 (1999).
        As explained in my testimony, this early funding will allow the
    Pueblo to acquire and retire an increment of water rights to partially
    decrease its forbearance, support Pueblo water administration, and
    enable the Pueblo to commence the most urgently needed restoration and
    small water infrastructure improvements on the Pueblo necessitated by
    federal neglect. In fact, the Administration's testimony acknowledged
    Taos Pueblo's immediate need for this funding. In the unlikely event
    that the settlement does not become enforceable, S. 3381 provides the
    United States the right to set off any of these early funds expended or
    withdrawn against claims asserted by the Pueblo against the United
    States relating to water rights in the Taos Valley. Consequently, we do
    not believe that the Administration's concern on the early money
    provision is based on a different analysis from the Pueblo under the
    criteria and procedures, but rather reflects a concern for creating a
    precedent, which we have addressed.
        The Administration raised only two nonmonetary concerns with our
    settlement. The first is whether the waivers and releases of claims
    meet the federal criteria of finality and protection of the United
    States from future liability. In fact, S. 3381 ensures that the goal of
    finality is met because the waivers authorized by the bill resolve the
    pending claims of Taos Pueblo, and of the United States in its trustee
    capacity for the Pueblo, in the adjudication. In addition, S. 3381
    adequately protects the United States from future liability through
    waivers of a range of claims for injuries to water rights that accrued
    through the settlement Enforcement Date, as detailed in the
    legislation. The waivers of Pueblo claims against the United States are
    appropriately scoped to the water rights claims at issue and claims for
    damages arising from failure to protect or develop water rights that
    accrued through the Enforcement Date.
        We believe that the Administration's primary concern regarding
    waivers is to avoid any possibility of litigating the meaning of
    variations in wording of waiver provisions from one settlement to
    another. The Administration acknowledges that such variation in waivers
    has been the practice to date. Consequently, changing our waivers
    language would not accomplish the Administration's desire to eliminate
    the possibility of litigation over the meaning of wording variations
    because the variation in wording of waivers in existing legislation
    authorizing other Indian water settlements will remain. Further, we do
    not believe that this Administration concern is an issue of whether our
    settlement meets the criteria of finality because numerous other
    settlements with varying wording of waivers have passed muster for
    authorization.
        The other nonmonetary concern identified in the Administration's
    testimony was whether unnecessary litigation over the jurisdiction of a
    court other than the decree court over actions to enforce the
    settlement might occur. Here again, we do not believe that this
    Administration concern is an issue of whether our settlement meets the
    criteria of finality, or other aspects of the criteria and procedures,
    because numerous other settlements with varying approaches to post
    decree enforcement have passed muster for authorization.

        Question 2. Are you willing to negotiate with the Administration on
    waiver language?
        Answer. Yes. In fact, the Pueblo and the other local parties have
    actively engaged in negotiation with the Administration in a
    cooperative spirit. Upon receiving the Administration's proposed waiver
    language specifically for Abeyta on September 19, 2008, Taos Pueblo and
    the other settlement parties immediately reviewed it and spent many
    hours on the phone with the Administration the next business day,
    Monday, September 22, in an effort to work out mutually agreeable
    language. The Pueblo traveled to Washington, D.C. the following day and
    met with the Department of the Interior to continue discussion of the
    waivers language all day on September 24, with other local parties
    participating in a portion of the discussion by phone. Following the
    hearing on our settlement legislation in the House Subcommittee on
    Water and Power on September 25, we returned to Counselor Bogert's
    office to continue these discussions for the rest of the day, with the
    Department of Justice participating by phone. Since our return to New
    Mexico, we have had two formal conference calls with the Administration
    and all parties.
                                     ______

      Response to Written Questions Submitted by Hon. Byron L. Dorgan to
                              Hon. Dirk Kempthorne
    S. 3128
        Question 1. The Administration's written testimony states that the
    bill would ``essentially authorize loan forgiveness'' and that the bill
    does not require the Tribe to reimburse the government. At the hearing
    Senator Kyl stated that he intended to amend the bill to state that the
    loan will be repaid over a term of 25 years, beginning on January 1,
    2013. Would you still refer to this as authorizing a loan forgiveness?
        Answer. Our testimony was based on provisions in S. 3128 as
    introduced that the loan authorized pursuant to S. 3128 be repaid out
    of funds from the Lower Colorado River Basin Development Fund. As
    amended, S. 3128 does not include these provisions. We note, however,
    that S. 3473, the ``White Mountain Apache Tribe Water Rights
    Quantification Act of 2008,'' provides that in lieu of direct repayment
    by the Tribe, the loan as provided for in S. 3128 is to be repaid out
    of the funds in the Lower Colorado River Basin Development Fund. This
    is the same as the requirement in S. 3128 as introduced which provides
    that the Tribe would not be required to repay the funds.

        Question 2. In your written testimony, the Administration states
    that it does not support the bill, in part, because the Administration
    is still in the process of determining the federal contribution for the
    upcoming settlement. Yet, this bill only concerns a $9.8 million loan.
    Does the Administration think that the federal share may be less than
    $9.8 million? When will you have a recommendation for Congress
    regarding the Administration's estimate of the federal share?
        Answer. S. 3128 authorizes $9.8 million for planning, engineering,
    and design ofa water supply project that is one element of a proposed
    settlement of the Tribe's water rights claims. Approval of that water
    rights settlement is contained in S. 3473. The total federal costs
    proposed in S. 3473 exceed even the costs of the water supply project
    that the Tribe estimates at approximately $128 million in today's
    dollars. The Administration views the planning, engineering and design
    ofthe facilities described in S. 3128 as merely part of the overall
    settlement cost of a White Mountain Apache Tribe water rights
    settlement. We believe the cost of the settlement should be considered
    in entirety.
        As we testified, the process under which the Administration
    evaluates Indian water rights settlement is set forth 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)). We are in the process of
    analyzing the factors set forth in the Criteria in order to determine
    the appropriate federal financial contribution that could be
    recommended to Congress as consideration for settling the Tribe's water
    rights claims. We do not expect the analysis to be completed before
    this Administration leaves office.

        Question 3. In your written testimony, the Administration states
    that S. 3128 cannot be considered in a vacuum and must be done in the
    context of the larger water rights settlement agreement. Senator Kyl
    introduced S. 3473, A bill to resolve water rights claims of the White
    Mountain Apache Tribe in the State of Arizona, and for other purposes,
    on September 11,2008. Does this change the Administration's view of S.
    3128? When will the Administration be able to provide a revised view on
    S. 3128?
        Answer. Please see the answer to question 2.
    S. 3355
        Question 4. The Administration's written testimony states that more
    time is needed to evaluate the two major infrastructure projects
    required by the settlement legislation. The Administration states that
    it did not receive the proposals until July 2008. How much time does
    the Administration need to examine the two major infrastructure
    projects required by the settlement legislation? When will you provide
    a recommendation to Congress regarding these proposed projects?
        Answer. In July 2008, the Federal negotiation team was informed of
    the existence of the reports describing at least two of the major
    projects proposed in S. 3355. The Federal Team received the reports on
    October 29, 2008. The Department is in the process of analyzing the
    reports to determine whether the work that they propose is a cost
    effective and feasible approach to providing the services that the Crow
    Tribe is seeking. While we are proceeding as quickly as possible, it
    generally takes many months to complete this kind of analysis.
    Moreover, the Administration must also determine if the number and
    scope of the proposed settlement benefits can be justified under the
    Criteria. The proposed benefits include the rehabilitation and
    improvement of the Crow Irrigation Project, the design and construction
    of water diversion and delivery systems to serve vast geographic areas
    of the Crow Reservation, and significant funding for unspecified and
    open-ended water and economic development projects. The number and cost
    of these benefits is unprecedented in comparison to existing Indian
    water rights settlements and, if approved, arguably would make the Crow
    settlement the most expensive settlement to date with in excess of $500
    million authorized for tribal projects.

        Question 5. The Administration's written testimony states that it
    was not included in the proposed settlement. Why wasn't the
    Administration included in the settlement agreement? Did the Tribe or
    the State request participation of a federal water rights settlement
    team? If a team has not yet been committed, when will the Department be
    ready to commit a federal water rights settlement team? After a team is
    appointed how long do you anticipate needing to appropriately revise
    the settlement and reach agreement?
        Answer. A Federal negotiation team was appointed in 1991 to work
    with the Crow Tribe and the State of Montana in resolving the Tribe's
    water rights claims. The team has diligently worked with the State and
    the Tribe for many years and was involved in the negotiation of the
    Compact between the Tribe and the State. The Compact was ratified by
    the State in 1999 despite concerns expressed by the team. It should be
    noted that the Compact primarily contains provisions regarding water
    supply, management and administration. The projects and funding in S.
    3355 were not addressed in the Compact and the discussions between the
    Tribe and the State on these issues have largely moved without
    consideration of the concerns of the settlement team. The Federal team
    is continuing to complete the reports required by the Criteria and we
    expect the required reports to be completed early in 2010 for
    consideration by the next Administration.

        Question 6. The Administration's written testimony asserts without
    specificity that the settlement legislation does not safeguard allottee
    rights. Please explain specifically how the bill does not safeguard
    allottee rights.
        Answer. The language currently in the bill fails to recognize the
    property interests held by allottees and authorizes Tribal control over
    such rights that may result in uncompensated and unconstitutional
    takings of property rights. The Departments of the Interior and Justice
    have been working with the Tribe on language that would address these
    concerns and we are hopeful that we can come to agreement.

        Question 7. The Administration's written testimony states that the
    waivers and releases in the bill do not sufficiently protect the United
    States from future claims by the Tribe. What changes would you make to
    the waivers and releases to satisfy the Administration's concerns?
        Answer. After the hearing on the bill, the Departments of Interior
    and Justice discussed proposed waiver language with the Crow Tribe and
    the State of Montana. The parties accepted some of the proposed waiver
    language and we are hopeful that we can come to agreement on remaining
    issues early in 2009.
    S. 3381
        Question 8. In the written testimony of Chairman Dorame of the
    Northern Pueblo Tributary Water Rights Association Counselor to the
    Secretary, Michael Bogert, is quoted as referring to the long-term
    regional harmony and cooperation associated with the settlement in
    Title I of S. 3381 as ``Peace in the Valley.'' Yet, Mr. Bogert
    testified in opposition to the settlement. Please explain these
    differing views.
        Answer. As explained in the Department's testimony, in negotiating
    Indian water rights settlements, the Administration follows a process
    contained in the Criteria and Procedures for the Participation of the
    Federal Government in Negotiationsfor the Settlement of Indian Water
    Rights Claims (``Criteria and Procedures'') (55 Fed. Reg. 9223 (1990)).
    Among other things, the Criteria and Procedures provide policy guidance
    on the appropriate level of Federal contribution to settlements,
    incorporating consideration of calculable legal exposure plus costs
    related to Federal trust or programmatic responsibilities. The Criteria
    and Procedures also address other goals, such as the need to structure
    settlements to promote economic efficiency on reservations and tribal
    self-sufficiency, and the goal of seeking long-term harmony and
    cooperation among all interested parties. The ``Peace in the Valley''
    concept, as attributed to Counselor Bogert, is a part of the Criteria
    and Procedures and as such was taken into consideration when the
    Administration determined the appropriate federal contribution to the
    Aamodt and Taos settlements.

        Question 9. Your testimony states that a federal contribution of
    $162.3 million is substantially above an appropriate federal
    contribution to the settlement and is not proportionate to the benefits
    received. What is the basis for these determinations? What amount would
    the Administration recommend for the federal share?
        Answer. Please see the answer to question 1. The Administration
    made a federal financial contribution offer of $45 million which was
    rejected by the parties.
                                     ______

         Response to Written Questions Submitted by Hon. Jon Tester to
                              Hon. Dirk Kempthorne
        Question 1. Do you recognize the government's trust responsibility
    and resulting liability to provide adequate water to the Crow Nation?
        Answer. The United States has a trust responsibility to protect the
    Crow Tribe's reserved water rights. In the pending Montana general
    stream adjudication involving the water rights of the Tribe, the United
    States has filed appropriate claims for the Tribe in order to protect
    and confirm its federal Indian reserved water rights. The Federal Team
    participated in negotiating the water rights quantified in the Crow/
    Montana Compact and believes the measure of water recognized in the
    Compact reflects the water rights that the United States would expect
    to secure in litigation. However, the United States' trust
    responsibility does not extend to the funding and the construction of
    water projects on reservations. Such infrastructure development is a
    discretionary function, dependant on Administration policy and
    Congressional authorization and funding.

        Question 2. Your testimony mentions that the cost of the Crow
    settlement bill is too high and the waivers not strong enough. Are you
    suggesting we pay the tribe less and, at the same time, make the
    waivers stronger? Isn't that backwards? Doesn't the government usually
    pay more for stronger waivers?
        Answer. As the Administration has stated in testimony on numerous
    proposed Indian water rights settlements, water rights settlements must
    be designed to ensure finality and protect the interest of the Tribes
    and all American taxpayers.

        Question 3. You listed at least 7 reasons to oppose my bill. Has
    the Department been active in negotiating this compact? If yes, what do
    you mean by the Department not having time to analyze the projects
    authorized in this bill? How much time will it take?
        Answer. Please see the answers to Dorgan's questions 1 and 2.

        Question 4. If $527 million is too high, what number do you
    suggest, in detail please?
        Answer. Please see the answers to Dorgan's questions 1 and 2.

        Question 5. Are there any off-reservation, off-ceded strip,
    allotments associated with the Crow settlement? If so, where are they
    located?
        Answer. The Bureau of Indian Affairs has preliminarily identified
    that there are at least three allotments outside the exterior
    boundaries of the Crow Reservation and the Ceded Strip. Water rights
    for these allotments were not negotiated as part of the Crow-Montana
    Compact. The three allotments that have been identified thus far are
    located near the cities of Red Lodge and Big Timber, Montana.

        Question 5a. If not, why is there no statewide waiver of water
    claims on behalf of the Crow?
        Answer. Section 10 of S. 3355 contemplates a statewide waiver of
    water claims on behalf of the Crow Tribe.
       Response to Written Questions Submitted by Hon. John Barrasso to
                              Hon. Dirk Kempthorne
    S. 3355
        Question 1. Please explain the work of the Bureau of Reclamation to
    form and maintain the stakeholder working group for Yellowtail Dam.
    Please include a complete list of the working group's members.
        Answer. The Bighorn River System Issues Group was formed by
    Reclamation in March 2007 to identify, explore, and recommend courses
    of action to local, Tribal, State, and Federal entities responsible for
    managing the Bighorn River system resources for their consideration as
    part of a long-term management strategy.
        The group's challenge is to re-examine the uses and needs of the
    Bighorn River system to find an appropriate balance of public benefits,
    while recognizing the respective agencies' commitments to authorized
    project purposes, legal obligations, contemporary needs and public
    expectations.

        Question 2. Please explain how managers of Yellowtail Dam balance
    the needs of each of the facilities' stakeholders. Please include
    discussion of what would result if the Bureau favored anyone particular
    group's interests over the others.
        Answer. Operating criteria, part of Reclamation's Standing
    Operating Procedures for Yellowtail Dam, form the framework for
    Reclamation's Strategies to balance resource needs and public benefits.
    Meetings are held annually with Federal, Tribal and State agencies and
    the public each spring to discuss water supply conditions, resource
    needs and operation plans for the coming season. Since January 2008,
    the Bighorn River System Issue Group (formed in March 2007) has been
    engaged in the task of revisiting fish and wildlife needs of Bighorn
    Lake and the Bighorn River and the recreation needs identified by the
    National Park Service. These revised resource needs will be taken into
    account as Reclamation continues to operate the facility to best
    balance resource needs and public benefits this coming fall/winter and
    into the future.
        Yellowtail Dam is operated to provide hydropower, irrigation,
    municipal and industrial, flood control, sediment control, fish,
    wildlife and recreation benefits. Disproportionate consideration of one
    benefit would likely have a negative impact on other benefits and the
    overall goals of the project.

        Question 3. The Department's testimony implies that there is a
    problem with the water allocation included in the Compact and
    legislation. Please elaborate.
        Answer. The United States does not disagree with the water
    allocations defined in the Crow water rights Compact of 1999 or as
    stated in S. 3355. The issue raised in the Administration's testimony
    was how capital costs associated with the 300,000 acre-feet of storage
    allocated to the Tribe will be paid. We believe that, unless Congress
    specifies other wise, these costs would be borne by other project
    beneficiaries such as power users.

        Question 4. The Department's testimony expresses concern that the
    standard criteria and procedures for this kind of agreement have not
    been completed. What is the effect of that shortcoming? Is it fair to
    say this bill is premature?
        Answer. As we stated in our testimony, the Criteria and Procedures
    provide policy guidance on the appropriate level of Federal
    contribution to settlements. After completing the process outlined in
    the Criteria, the Administration is able to take a position on the
    overall cost of a settlement and on what level of non-Federal cost
    sharing would be proportionate to the benefits received by the non-
    Federal parties. This bill is premature in the sense that the
    Administration has not completed the analysis necessary to support any
    specific level of Federal contribution.

        Question 5. The Department's testimony expresses concern over
    ambiguity in the Bureau of Reclamation's responsibility for water
    delivery. Please elaborate.
        Answer. Please see the answer to Domenici's question 5.

        Question 5a. How can all stakeholders be made a part of
    establishing the Bureau's responsibility?
        Answer. Reclamation's authority and responsibility are derived from
    Federal laws enacted by Congress and implemented in accordance with the
    water laws of Wyoming and Montana. Reclamation solicits input from
    stakeholders throughout the year at the annual agency meeting held each
    spring, at meetings of the Bighorn River System Issues Group, and
    through telephone conference calls held at times mutually agreed to by
    the stakeholders. Reclamation posts monthly operations plans on an
    Internet website designed to inform the public of water supply
    conditions and anticipated operations.

        Question 6. This bill provides benefits of water storage to the
    Crow Tribe while relieving them of responsibility for reimbursement.
    Could this require you to pass cost on to other customers?
        Answer. Yes. Under the Pick-Sloan Missouri Basin Program, new water
    users are required to enter into a contract with the Bureau of
    Reclamation that includes a requirement for proportional repayment
    ofthe capital (development), operation, maintenance and replacement
    costs of the particular PSMBP unit. However, under the Leavitt Act, the
    capital component allocable to Indian irrigation would be deferred as
    long as reservation lands remain in trust. Also see answer to question
    3.

        Question 7. Does Section 12B of S. 3355 represent potential
    foregone power generation revenue to the United States?
        Answer. As currently drafted, Section 12B could prevent the United
    States from developing power or leasing power sites to third parties.
    Under Section 12(b), the legislation specifies that the Crow Tribe
    would be able to use or market all the hydroelectric power generated at
    the dam and it would retain any revenues produced. It appears that
    potential revenue could be foregone since the United States would no
    longer have the authority to develop a Federal power facility at the
    Yellowtail Afterbay Dam, or to enter into a Lease of Power Privilege
    with a non-federal party which would provide for a revenue stream to
    the United States for repayment of the Yellowtail Unit's capital,
    operation, maintenance, and replacement costs.

        Question 8. The Department's testimony mentions additional concerns
    with the legislation and accompanying documents. Please explain those
    concerns.
        Answer. The Departments of the Interior and Justice are in the
    process of reviewing the appendices to the Montana-Crow Compact that
    are referenced in our testimony. Once that review is complete, we will
    be able to identify any specific concerns.
                                     ______

      Response to Written Questions Submitted by Hon. Pete V. Domenici to
                              Hon. Dirk Kempthorne
    S. 3381
        Question 1. Please describe on what basis the Administration has
    evaluated the New Mexico settlements in comparison to the enacted, and
    Administration supported settlements, in Central Arizona and the Snake
    River in Idaho.
        Answer. Each proposed settlement is different, and the
    Administration evaluates each proposed settlement in its unique context
    to determine to what extent it is consistent with our programmatic
    objectives and our responsibility not only to Indian Tribes but also to
    the American taxpayers. Both of the approved settlements referenced in
    this question encompassed multiple objectives, providing comprehensive
    solutions to multi-faceted problems.
        In the case of the Arizona Water Rights Settlement Act, which the
    Administration did not object to, 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.
        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.

        Question 1a. Have these New Mexico settlements been evaluated
    differently than these other settlements?
        Answer. No. As stated above, each proposed settlement is different.

        Question 1b. Did the Administration support these settlements in
    Arizona and Idaho without reference to the criteria and procedures?
        Answer. Review of these settlements was subject to the Criteria and
    Procedures. With respect to the Arizona settlement, in our testimony
    and during negotiations with the parties, we raised numerous concerns
    about various provisions of that settlement.

        Question 1c. In terms of costs, were these settlements in Arizona
    and Idaho more expensive than the New Mexico settlements?
        Answer. The Arizona settlement was more expensive than the
    settlements contained in S. 3381. The estimated Federal cost of the
    Idaho settlement, stated at $193 million in our testimony, was similar
    to the costs of the New Mexico settlements taken individually, but less
    than the costs currently set forth in S. 3381 as a whole.

        Question 2. You have expressed concerns about the waivers in the
    bill. Have waivers such as those contained in this settlement bill been
    previously enacted in other settlements with the support of the
    Administration?
        Answer. Many of the provisions proposed by the Administration have
    been included in past enacted Indian water rights settlements. Other
    provisions have been proposed to address problems that have arisen with
    incomplete or ambiguous waivers used in the past.

        Question 2a. Do you have acceptable waiver language that you can
    provide to the Committee immediately?
        Answer. As currently drafted, the waivers set forth in the bill do
    not adequately protect the United States from future liability, do not
    provide the measure of certainty and finality that the proposed federal
    contribution should afford, and could engender additional litigation
    that can and should be avoided by careful drafting. Ambiguous language
    regarding the nature of claims waived has created problems for the
    United States in the past. Specificity and clarity in statutory
    language can minimize potential future conflicts, including litigation
    over the scope and meaning of the waivers that would defeat the goal of
    finality.
        The Departments of Interior and Justice have proposed waiver
    language that has been shared with the parties to the Aamodt and Taos
    settlements. The Departments attempted to negotiate waivers adapted to
    each settlement with the respective settlement parties but the
    discussions broke down when S. 3381 was introduced. When the hearing on
    the bill was scheduled, the Departments provided the Aamodt and Taos
    parties with waiver language tailored to each settlement. We have
    engaged in productive negotiations with the parties in the Taos
    settlement (Title II) and have come to agreement on waiver language. We
    have also engaged in numerous discussions with the Aamodt parties but
    those parties have rejected key concepts that the Departments of
    Justice and Interior believe are necessary to adequately protect the
    United States from future liability and provide the measure of
    certainty and finality that a settlement should provide.

        Question 2b. What specifically do you mean in your testimony when
    you state that the waivers do not provide an appropriate level of
    certainty and finality?
        Answer. There are several elements in the waivers language
    introduced in S. 3381 that do not provide adequate finality. For
    example, under the waiver language as introduced, the Pueblos of
    Tesuque, Nambe, and Pojoaque do not waive claims to off-reservation
    water sources, such as the Rio Grande. Lack of such waivers means that
    litigation over potential Pueblo claims may well be included in future
    adjudications despite the large federal contribution to the Aamodt
    settlement. In addition, to avoid future litigation based on alleged
    damages due to loss of water, the Administration believes that both the
    Aamodt and Taos settlements should include waivers and releases of
    claims for damages, losses or injuries to hunting, fishing, gathering
    or cultural rights due to loss of water or water rights. With respect
    to the Taos settlement, the waiver language in S. 3381 only covers
    signatory parties to the settlement, rather than all water users in the
    Taos basin. This likely will result in continued litigation concerning
    the respective rights of those users and the Pueblo of Taos. As stated
    above answer 2, the Departments of Interior and Justice have engaged in
    productive negotiations with the parties to the Taos settlement and
    have come to agreement on waiver language. We have also engaged in
    numerous discussions with the Aamodt parties but those parties have
    rejected key concepts that the Departments of Justice and Interior
    believe are necessary to adequately protect the United States from
    future liability and provide the measure of certainty and finality that
    a settlement should provide.

        Question 2c. What remaining water rights-related claims are not
    addressed?
        Answer. Please see the answer to 2b.

        Question 3. You state that the criteria and procedures do not allow
    O&M costs to be paid for with settlement dollars. Please describe the
    difference in how the settlement in central Arizona and the Snake River
    in Idaho differ with respect to O&M?
        Answer. The Snake River Water Rights Act of 2004 did not provide
    for settlement money to pay for O&M costs. The Arizona Water
    Settlements Act of 2004 did include a provision allowing expenditure of
    money from the settlement on fixed OM&R costs for Indian tribes,
    including O&M costs for the Gila River Indian Community.

        Question 4. Your testimony correctly states that the overall costs
    of the settlements include a 42% state and local cost share. Are you
    aware of any other enacted, and supported by the Administration,
    settlements with this large of a state and local cost share?
        Answer. The State and local cost share to the Aamodt settlement is
    significant. The cost share in the Taos settlement is far more
    disproportionate. The recently enacted Soboba settlement in California
    contained a local cost share that exceeded the federal contribution.
    Although Congress has enacted many Indian water rights settlements
    under which the federal government has borne the lion's share of the
    costs, the Administration has stated in testimony on numerous proposed
    Indian water rights settlements, that water rights settlements must be
    designed to ensure finality and protect the interest of the Tribes and
    all American taxpayers. One of the advantages of the cost sharing
    requirement under the Criteria is that the willingness of settling
    parties to cost share for a project is a good indicator of how truly
    invested they are in the proposed solution. It is all too easy to be in
    favor of a plan that comes at the sole expense of the Federal
    government and all taxpayers.

        Question 5. The United States has long held Indian property rights
    in trust. Your testimony, however, states that Congress should now
    establish clear parameters for Federal responsibility over the Tribes'
    San Juan-Chama project allocations. What clear parameters does the
    Administration suggest?
        Answer. Projects like the San-Juan Chama project are built with
    limited expected usable lives. At some time in the future, these
    facilities will either require expensive rehabilitation or will fail as
    a result of silting up or the inevitable effects of aging on
    infrastructure. Federal storage reservoirs also confront shifting
    public demands for the protection of various public resources, which
    might include endangered species, fisheries, or recreational access.
        In certain situations, delivery of project water could be costly or
    at odds with other important policy goals. To avoid conflict over the
    extent of the Secretary's responsibility for these project rights, the
    Administration suggests clarifying statutory language establishing
    clear parameters on federal responsibility in the project water rights
    context. Settlements that include project water allocations, but do not
    anticipate future threats to project water availability, risk conflict
    and increased litigation in the future. We would like to work with
    Congress to develop language that will provide answers about what would
    happen to project allocations that are described as being held in trust
    under future conditions.