[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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \2\ Tribal State Compact, MCA 85-20-201 (1999).
---------------------------------------------------------------------------
    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.
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    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.
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    * The information referred to has been retained in Committee files.
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    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.






















































































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  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.
        
        
        
        
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  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.
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    * The information referred to has been retained in Committee files.
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    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.
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  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.

                                  
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