    [Senate Hearing 111-741]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 111-741

      S. 2956, THE PECHANGA BAND OF LUISENO MISSION INDIANS WATER RIGHTS
    SETTLEMENT ACT, AND S. 3290, THE BLACKFEET WATER RIGHTS SETTLEMENT ACT
                                    OF 2010

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

                                    HEARING

                                   before the

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 22, 2010

                                   __________

             Printed for the use of the Committee on Indian Affairs

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                          COMMITTEE ON INDIAN AFFAIRS

                    BYRON L. DORGAN, North Dakota, Chairman
                     JOHN BARRASSO, Wyoming, Vice Chairman
    DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
    KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
    DANIEL K. AKAKA, Hawaii              TOM COBURN, M.D., Oklahoma
    TIM JOHNSON, South Dakota            MIKE CRAPO, Idaho
    MARIA CANTWELL, Washington           MIKE JOHANNS, Nebraska
    JON TESTER, Montana
    TOM UDALL, New Mexico
    AL FRANKEN, Minnesota
          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 July 22, 2010....................................     1
    Statement of Senator Dorgan......................................     1
    Statement of Senator Tester......................................    71

                                   Witnesses

    Augare, Hon. Shannon, Member, Blackfeet Tribal Business Council..    74
        Prepared statement...........................................    76
    Baucus, Hon. Max, U.S. Senator from Montana......................   114
    Bloomquist, John E., Attorney, Pondera County Canal and Reservoir
      Company........................................................   103
        Prepared statement...........................................   105
    Macarro, Hon. Mark, Chairman, Pechanga Band of Luiseno Indians...     3
        Prepared statement...........................................     6
    Stone, Matthew G., General Manager, Rancho California Water
      District.......................................................    64
        Prepared statement...........................................    66
    Weiner, Jay, Assistant Attorney General, State of Montana; Legal
      Counsel, Montana Reserved Water Rights Compact Commission......    83
        Prepared statement...........................................    85

                                    Appendix

    Blackfeet Tribe, prepared statement..............................   122
    King, Tracy, President, Fort Belknap Community Council, prepared
      statement......................................................   117
    Letters regarding:
        S. 2956......................................................   130
        S. 3290......................................................   135
    Main, William ``Snuffy'', Chairman, Gros Ventre Treaty Committee,
      prepared statement.............................................   128

      S. 2956, THE PECHANGA BAND OF LUISENO MISSION INDIANS WATER RIGHTS
                       SETTLEMENT ACT, AND S. 3290, THE
                 BLACKFEET WATER RIGHTS SETTLEMENT ACT OF 2010

                                  ----------

                            THURSDAY, JULY 22, 2010

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:30 p.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.
    This is a hearing of the Senate Indian Affairs Committee. It is
    a legislative hearing on S. 2956, the Pechanga Band of Luiseno
    Mission Indians Water Rights Settlement Act. And S. 3290, the
    Blackfeet Water Rights Settlement Act of 2010.
        Before we begin the discussion of these two pieces of
    legislation, let me just observe that yesterday was a very
    important day as far as this Committee is concerned, and as far
    as Indian Country is concerned. The House of Representatives
    passed the Tribal Law and Order Act, which originated here in
    this Committee. We spent a long, long time and a lot of effort
    to put together the Tribal Law and Order Act, to pass it
    through this Committee, and pass it through the Senate.
        Yesterday, it passed the House of Representatives. I talked
    to President Obama about it yesterday afternoon. He is excited
    about it. He was also very helpful and pushed very hard to get
    it passed.
        So that is a significant victory and I just want at the
    start of this hearing to say we have now in this same year
    passed the Indian Health Care Improvement Act, which is an
    issue that had not been dealt with for 17 years by the
    Congress. We have also passed the Tribal Law and Order Act,
    both of which are very significant achievements.
        The staff of this Committee and the people who worked on it
    with us here in the Senate should be very proud. I know that it
    is going to make a difference and it is going to save lives and
    it is going to have a significant impact on American Indians
    all across this Country.
        We are going to hold a hearing on bills that would approve
    settlement of Indian water rights litigation. The bills are
    important for securing water supplies for affected Indian
    tribes, for States and also for non-Indian water users. They
    settle longstanding claims against the United States for
    failing to protect tribal water rights.
        The bills provide legal certainty and needed infrastructure
    to ensure that everyone can provide reliable water supplies for
    their communities and can contribute to economic development.
        The first bill, dealing with the Pechanga Band, is a bill
    for which a hearing was requested by Senator Boxer of
    California and Senator Feinstein. But Senator Boxer especially
    has asked that I hold this hearing today. I am happy to do
    that. She is, I believe, at a Foreign Relations Committee
    hearing, but she will be submitting a statement for our
    permanent record and is a very strong supporter of this bill.
        This bill would settle the Pechanga Band's water rights in
    the Santa Margarita River watershed northwest of San Diego,
    California. Securing the Band's water rights is necessary to
    meet their growing need to supply water for commercial,
    agricultural, municipal and domestic uses.
        The second panel will provide testimony on S. 3290, the
    Blackfeet Water Rights Settlement Act of 2010. Let me just say
    that Senator Tester has done a really extraordinary job and is
    pushing very hard to resolve these issues. I know that he has
    wanted this hearing for some time. I am pleased that we will be
    able to do that today.
        The settlement of the Blackfeet water rights will provide
    water and infrastructure improvements for municipal and
    domestic use for irrigation, for livestock and other economic
    development on the Blackfeet Reservation in north central
    Montana.
        Although the Administration was not able to testify today,
    we have spoken with them about these bills, and we will see
    their formal views on both pieces of legislation as we prepare
    for further consideration of the two bills.
        With that, I welcome the witnesses who have traveled to be
    here with us today. Many have traveled long distances and we
    appreciate your willingness to do that.
        I have to leave after the first panel today. Senator Tester
    will Chair the Committee for the second panel. I appreciate his
    courtesy as well.
        We would ask the witnesses to limit their remarks to five
    minutes. Their prepared statements, of course, will be part of
    the permanent record of this Committee and will be submitted in
    their entirety.
        The hearing record will remain open for two full weeks
    following today's hearing, in the event that others wish to
    present formal testimony that would be included as a part of
    the hearing record. We would invite people to do that as well.
        With that, let me call on the witnesses today. The first
    witness is the Honorable Mark Macarro, Chairman of the Pechanga
    Band. Mr. Macarro, thank you very much for being with us. Mr.
    Chairman, you and I have worked together on a number of things.
    I appreciate the outstanding work you do for American Indians
    all across this Country.
        You may proceed, and you may summarize. Your entire
    statement will be part of the permanent record of the
    Committee.

      STATEMENT OF HON. MARK MACARRO, CHAIRMAN, PECHANGA BAND OF
                            LUISENO INDIANS

        Mr. Macarro. Thank you for that, Senator Dorgan.
        Good morning. Good morning, Senator Tester.
        My name is Mark Macarro. I am the Chairman of the Pechanga
    Band of Luiseno Indians.
        The Chairman. Mr. Chairman, let me just say, I am going to
    ask Senator Tester to hold for a moment. Senator Reid is
    returning a call that I have to take for a moment. So you
    proceed, and I will be right back.
        Mr. Macarro. Thank you.
        My name is Mark Macarro. I am the Chairman of the Pechanga
    Band of Luiseno Indians. We are in Temecula, 60 miles north of
    San Diego.
        I am honored to be here today to testify on S. 2956, the
    Pechanga Water Settlement Bill. I have been involved with
    Pechanga's struggles over our water rights over the past 20
    years. I know first-hand what this settlement means to the
    Pechanga people. It means wet water.
        Before I discuss the details of the settlement, I would
    like to first thank Senator Boxer and Senator Feinstein for
    their strong support of the Band in our efforts to introduce
    and move our water settlement bill. We would not be here today
    without their staunch support and commitment to the Band's
    efforts.
        I would also like to thank this Committee for holding a
    hearing on our bill before the August recess. Pechanga greatly
    appreciates Chairman Dorgan's leadership and commitment to
    Indian water settlements and Indian Country in general.
        We understand how busy the legislative schedule is for the
    rest of this year. But we hope there is still time for passage
    of our water settlement this year.
        Last but not least, I would like to thank the Federal
    negotiation team for their active participation throughout the
    settlement process. The Federal negotiation team has been an
    ally and a strong advocate during the negotiation process.
    Pechanga is dedicated to continuing to work with the Federal
    negotiation team to resolve any potential remaining issues in
    order to gain the Administration's support of our bill.
        One member in particular of the Federal negotiation team is
    Patrick Barry of the Indian Resources Section, Department of
    Justice. I was a young man when I got to meet Patrick Barry,
    and his involvement in the water case that this is all about.
    And I think he is toward the senior end of his career now in
    Justice. And I think I am in the middle of mine. So we will see
    how that plays out.
        [Laughter.]
        Mr. Macarro. But it has been well over two decades that we
    have both been working on this settlement. In fact, we met with
    members of the team day before yesterday, on Tuesday, to
    further discuss the Administration's concern. In my opinion, it
    was a very productive meeting and I firmly believe that we will
    be able to reach a deal with the Administration.
        Water is central to who we are as a people. It is in our
    name. Pechaa'anga or Pechaanga, means at Pechaa'a, and Pechaa'a
    means at the place where water drips.
        Today, our tribal government operations, such as our
    environmental monitoring and natural resource management
    programs, exist to fully honor and protect the land and our
    culture upon it. In particular, we are concerned about
    watershed and wellhead protection for our surface and
    groundwater resources and the availability of water for our
    community now and into the future. It is of upmost importance
    to the Band that our water rights are federally recognized in
    order to protect our water in the basin and ensure that the
    basin will continue to provide for generations of Pechanga
    people into the future.
        This settlement has been decades in the making and stems
    from a 1951 Federal District Court case known as United States
    v. Fallbrook Public Utilities District. It also involves my
    tribe, Pechanga, Ramona and Cahuilla, two other tribes in the
    upper watershed, in which the court determined that each of the
    tribes had a prima facie entitlement to water in the Santa
    Margarita River watershed, without specifying the actual amount
    of each tribe's water right.
        Until recently, we had sought to avoid litigation and
    instead worked with those entities around Pechanga to develop
    mutual private agreements for sharing the limited water
    resources in our basin. These efforts at negotiated management
    of water resources were successful and they resulted in two
    agreements: in 2006, the Groundwater Management Agreement with
    Rancho California Water District, RCWD; and in 2007, the
    Recycled Water Agreement with Eastern Municipal Water District.
    Both of these agreements have been successfully implemented and
    are in effect today.
        Significantly, though successful, neither of these
    agreements soght to address the scope or settlement of the
    Band's overall water rights to the Santa Margarita River
    watershed. However, when the other two tribes in our basin,
    Ramona and Cahuilla, initiated litigation in the Fallbrook
    case, we began serious negotiation efforts with RCWD, EMWD and
    the United States to reach a settlement with these parties
    rather than litigate our claims.
        The bill before you today is a result of hard work and
    compromise by all the parties involved. The Band's written
    testimony provides an in-depth description of the Pechanga
    Settlement Agreement. But today I would briefly like to outline
    the provisions of the settlement that are particularly
    important to the Band.
        First, the Pechanga Settlement Agreement recognizes
    Pechanga's Federal reserve right to water in the Santa
    Margarita River watershed under the Fallbrook decree as 4,900
    acre feet per year.
        Second, the settlement agreement allocates 75 percent of
    the groundwater in the Wolf Valley Basin to Pechanga and 25
    percent to Rancho California Water District. This equates to
    1,575 acre feet per year to Pechanga, and 525 acre feet per
    year to Ranch California Water District.
        Third, the settlement agreement extends our existing
    recycled water agreement with Eastern Municipal Water District
    up to 90 years. It allows Rancho California Water District to
    use a portion of that water which was a key provision for the
    settlement to work.
        Fourth, the settlement agreement extends Metropolitan Water
    District's existing service area onto the Pechanga Reservation
    to a greater portion of the reservation, so that Pechanga
    becomes a Metropolitan Water District customer with the ability
    to receive imported water to fulfill our tribal water rights.
        Finally, the settlement provides funding for necessary
    infrastructure for Pechanga to receive that Metropolitan Water
    District Water to pay the connection fees to Metropolitan and
    Eastern Municipal Water Districts and provide a subsidy to
    bring down the cost of the extremely expensive Met Water.
        All the elements of the settlement were carefully
    constructed to create a settlement that is beneficial to all
    parties involved. During our negotiations Pechanga was very
    aware of the fact that there are limited water resources in the
    state of California, and on top of that, we are in difficult
    economic times. That being said, the United States must fulfill
    its trust responsibilities and programmatic responsibilities to
    Pechanga.
        We are open to being convinced by the United States
    otherwise, but we feel that this is a fair and cost-effective
    water settlement, and we believe that the Federal contribution
    of approximately $50 million is justified by Pechanga's waivers
    against the United States and in recognition of the United
    States' programmatic responsibility to the Band.
        I want to thank you again for the opportunity for our water
    bill to be heard. I am happy to answer any questions that you
    may have with respect to the Pechanga water settlement. Thank
    you.
        [The prepared of Mr. Macarro follows:]

      Prepared Statement of Hon. Mark Macarro, Chairman, Pechanga Band of
                                Luiseno Indians

        The Chairman. Mr. Chairman, thank you very much for the
    testimony.
        Next we will hear from Mr. Matt Stone, who is the General
    Manager of the Ranch California Water District in Temecula,
    California. Mr. Stone, you may proceed.

        STATEMENT OF MATTHEW G. STONE, GENERAL MANAGER, RANCHO
                       CALIFORNIA WATER DISTRICT

        Mr. Stone. Good morning, Chairman Dorgan, and good morning
    Senator Tester. My name is Matthew Stone. I am the General
    Manager of Rancho California Water District, also known as
    RCWD, in Riverside County, California.
        I appreciate very much the opportunity to be here on behalf
    of RCWD to present testimony regarding S. 2956, the Water
    Rights Settlement between Pechanga, RCWD, Eastern Municipal and
    the United States.
        First, I would like to thank you, Mr. Chairman, and the
    other Committee members, for scheduling, preparing and holding
    this hearing. We recognize this is a busy time for the
    Committee and for the Senate. Therefore, we appreciate you and
    your staff making this possible. Mr. Rollie Wilson of your
    staff has been extremely helpful for us in preparing for this
    hearing this morning.
        We would also like to give special thanks to the bill's
    sponsor, Senator Barbara Boxer, and her staff for their
    continued support, as well as the bill's co-sponsor, Senator
    Diane Feinstein. We would like to acknowledge also that
    Congressman Joe Baca has introduced a companion bill in the
    House, which currently has six co-sponsors.
        I would also like to personally acknowledge Chairman
    Macarro this morning, who is here representing Pechanga. We
    have been through a lot over the last few years. It has been a
    journey to try to put this puzzle together. We have had a
    little adventure along the way, including a blizzard in Las
    Vegas. I think that is a testament to, we obviously have to
    advocate for our respective interests and sides, but we both
    are trying to work toward a settlement.
        I have prepared and submitted to the Committee my written
    testimony. So this morning I just want to take a few minutes to
    provide you with some background related to Ranch California
    and the Santa Margarita watershed, including a brief
    description of the water rights disputes and how the parties
    found their way here with a proposed solution.
        While RCWD is supportive of the settlement, I can't over-
    emphasize that the proposal is a compromise by all parties,
    which resolves uncertainty and creates a platform for future
    cooperation and partnering. While RCWD believed it had a strong
    basis for defending the challenge to its rights, as I am sure
    Pechanga did as well, there is a cost in terms of money, time,
    and lost opportunity during an extended litigation process. So
    the outcome on that path is not certain.
        A little history regarding Rancho California Water
    District. The district was formed in 1965 to provide a
    continuing and reliable supply to the community as it has now
    developed into the city of Temecula, portions of the city of
    Murietta and Southwest Riverside County. We provide supply and
    wastewater collection and treatment and recycling services to
    over 130,000 people in an area encompassing 160 square miles
    and over 40,000 service connections.
        We deliver approximately 80,000 acre feet of water per year
    to our customers for domestic, agriculture, commercial and
    industrial uses. The sources of our water include local water,
    imported water and reclaimed water. A substantial portion of
    our water supply comes from the Santa Margarita watershed, and
    much of the history of this watershed is written in courts and
    in conflict. The unresolved nature of Pechanga's water rights
    claims creates uncertainty for RCWD and its 130,000 residents.
        The watershed also faces significant supply issues and
    challenges which are common throughout Southern California,
    including population and demand growth, reliance on imported
    water, periodic drought and water quality issues that arise
    over time from inputs of nutrients and salts from a variety
    sources, including agriculture, municipal wastewater discharge,
    urban runoff, septic systems and other sources. In response to
    these challenges, RCWD is in the process of implementing its
    water reclamation project as envisioned in our integrated
    resource plan, which would substantially expand the use of
    recycled water and better integrate the storage of raw,
    imported water in our service area.
        The water reclamation project involves an initial phase to
    construct a pipeline to allow RCWD to store imported water in
    its existing Vail Lake facility for use during dry periods.
    This pipeline is under construction as we speak. Subsequent
    phases of the project are proposed to develop a delivery system
    for recycled water as well as a recycled water demineralization
    facility and brine disposal project. These components of our
    project will significantly improve supply reliability and
    salinity management in our watershed.
        We have recently completed an updated feasibility study for
    the remaining components of the project.
        As has been pointed out, the water rights in the Santa
    Margarita watershed have been under some form of court
    jurisdiction going back to 1928. In 1951, the U.S. initiated
    litigation in the U.S. v. Fallbrook case. And as again noted by
    the Chairman's testimony today, part of that was the finding in
    interlocutory judgment 41 that there are unquantified rights.
        Based on the prima facie evidence in that proceeding, the
    Pechanga believe they have 4,994 acre feet of reserved water
    rights. Part of the effort, then, in working through the
    Federal negotiating team process was to develop a solution to
    provide adequate supply.
        I think we have provided an overview of the settlement in
    our testimony, so I won't repeat that here this morning. I
    would just like to in closing thank you, Mr. Chairman and
    members of the Committee, for the opportunity to testify. I
    want to reiterate that we think the settlement is beneficial
    for all parties. We have worked hard to get here. And we look
    forward to concluding this settlement, hopefully this year, and
    fostering regional cooperation for many, many years to come.
        Thank you very much.
        [The prepared statement of Mr. Stone follows:]

        Prepared Statement of Matthew G. Stone, General Manager, Rancho
                           California Water District

        Good morning Chairman Dorgan, Vice Chairman Barrasso, and members
    of the Committee. My name is Matthew Stone and I am the General Manager
    of Rancho California Water District (RCWD) in Riverside County,
    California. I appreciate the opportunity to appear on behalf of RCWD to
    present testimony regarding S. 2956 on the Pechanga Band of Luiseno
    Mission Indians Water Rights Settlement (Settlement) between Pechanga,
    RCWD, Eastern Municipal Water District (EMWD), and the United States.
        Thank you, Mr. Chairman, and Committee members, Rollie Wilson, and
    other members of your staff for your assistance in scheduling and
    preparing for this hearing. And special thanks to the bill's sponsor,
    Senator Barbara Boxer, and her staff for their continued support, as
    well as the bill's co-sponsor Senator Dianne Feinstein.\1\
    ---------------------------------------------------------------------------
        \1\ The companion bill to S. 2956 is H.R. 5413 sponsored by Joe
    Baca (D-CA) and co-sponsored by six additional members.
    ---------------------------------------------------------------------------
        My testimony provides background information and an overview of the
    terms of the Settlement and its benefits.
    I. BACKGROUND
        RCWD is a ``special district'' organized and operated pursuant to
    the California Water Code and is governed by a seven-member Board of
    Directors that is elected by the voters of the region. RCWD serves the
    area known as Temecula/Rancho California, which includes the City of
    Temecula, portions of the City of Murrieta, and unincorporated areas of
    southwest Riverside County, California.
        RCWD provides water supply, wastewater collection and treatment,
    and water recycling services to over 130,000 people in an area
    encompassing 160 square miles. RCWD has an infrastructure network to
    serve its service area. The District has 940 miles of water mains, 36
    storage reservoirs, one surface reservoir (Vail Lake), 47 groundwater
    wells, and over 40,000 service connections. RCWD receives its imported
    water (treated and untreated) through six Metropolitan Water District
    of Southern California (MWD) water turnouts (three in EMWD's service
    area and three in Western Municipal Water District's (WMWD) service
    area).
        RCWD currently delivers 80,000 acre feet per year (AFY) for
    domestic, commercial, agricultural and landscape uses. RCWD's customer
    profile includes a significant agricultural industry that produces
    avocados, citrus and wine grape products, which add significantly to
    the local and regional economy. In addition, RCWD services residential,
    business and manufacturing customers in Temecula and Murrieta. Larger
    employers in the service area include Abbott Vascular, International
    Rectifier, and Professional Hospital Supply. There is a wide range of
    local businesses that thrive on tourism in our wine region, historic
    old town, and Pechanga's casino. But the region has suffered from the
    impacts of the housing downturn, as Riverside was once the third
    fastest growing county in the nation.
        RCWD's existing water supplies include: Groundwater--Temecula and
    Pauba groundwater basins; Imported Water--MWD's Colorado River Aqueduct
    and the State Water Project; Recycled Water--Santa Rosa Water
    Reclamation Facility operated by RCWD, and the Temecula Valley Regional
    Water Reclamation Facility operated by EMWD. RCWD also manages the
    water storage rights in Vail Lake, which was created through the
    construction of the Vail Dam in 1949. Storm runoff stored in Vail Lake
    is released during the subsequent months into groundwater recharge
    basins.
        RCWD operates mostly within the Santa Margarita Watershed, as
    depicted in the attached map, which encompasses an area of
    approximately 750 square miles (475,000 acres) in southwestern
    Riverside and northern San Diego Counties in southern California.
    Drainage in the basin is provided by the Santa Margarita River with
    flows from Temecula and Murrieta Creeks in the upper watershed. Major
    tributaries of Temecula Creek include Pechanga Creek and Wilson Creek
    via Vail Lake. Major tributaries of Murrieta Creek include Saint
    Gertrudis, Tucalota (via Lake Skinner), and Warm Springs Creeks. After
    the convergence of Temecula and Murrieta Creeks other major tributaries
    to the River include De Luz, Sandia, Rainbow, and Fallbrook Creeks.
    Major lakes in the watershed include Skinner, Vail, Diamond Valley, and
    O'Neil Lakes. A coastal lagoon lies at the mouth of the River on U.S.
    Marine Corps (USMC) Camp Pendleton.
        Multiple studies have indicated that the Santa Margarita Watershed
    is the largest and best example of a riparian and estuarine system in
    southern California. The watershed contains a variety of nearly
    undisturbed natural habitats, including chaparral-covered hillsides,
    riparian woodlands, and coastal marshes, drained by the Santa Margarita
    River, which is formed near the City of Temecula at the confluence of
    the Temecula and Murrieta Creek systems. Upstream, the Temecula and
    Murrieta Creeks are fed by a number of smaller tributaries. Downstream,
    the Santa Margarita River flows into San Diego County and through the
    USMC base at Camp Pendleton, emptying into the ocean at the Santa
    Margarita lagoon.
        The watershed currently faces significant water supply issues and
    challenges that are common throughout southern California, including
    rapid population and water demand growth; significant reliance on
    imported water supply; and water quality issues arising from excessive
    inputs of nutrients from a variety of sources including agriculture,
    nursery operations, municipal wastewater discharges, urban runoff,
    septic systems, and golf course operations. Surface waters and
    groundwater supporting surface water in the Santa Margarita Watershed
    have been under some form of court jurisdiction since 1928. A
    Watermaster has been assigned by the United States District Court for
    the Southern District of California to oversee all water uses within
    the Santa Margarita Watershed. Specific water rights in the watershed
    have not been adjudicated. However, the Stipulated Judgment assigns
    two-thirds of all natural waters to the United States of America (Camp
    Pendleton) and the remaining one-third to RCWD.
        Rights to utilize the water and groundwater stored in Vail Lake are
    defined in the 1940 Stipulated Judgment in the case of Santa Margarita
    versus Vail and Appropriations Permit 7032 issued by the State Water
    Resources Control Board. RCWD stores local runoff in Vail Lake, which
    was created in 1949 through construction of Vail Dam on Temecula Creek.
    RCWD has a surface water storage permit in Vail Lake for up to 40,000
    AF from November 1 to April 30. During these months, RCWD releases
    available water from Vail Lake to the Valle de los Caballos spreading
    basins, about 1.5 miles downstream, for groundwater recharge. From May
    through October, existing State permits prohibit storage and require
    inflow to pass through Vail Lake to Temecula Creek and ultimately to
    the lower watershed. RCWD must meet Gorge flow requirements as set by
    the Cooperative Water Resource Management Agreement between the United
    States on behalf of Camp Pendleton and RCWD. RCWD currently meets this
    requirement by discharging untreated water from MWD into Murrieta
    Creek.
        Eight sub-basins within the Temecula and Pauba Basins provide RCWD
    with groundwater. The amount of groundwater produced annually from
    these basins varies depending on rainfall, recharge, and the amount and
    location of pumping. However, besides RCWD, others pump from the eight
    sub-basins, including: WMWD, Pechanga Indian Reservation, and other
    private pumpers. Groundwater extractions are under court oversight in
    the watershed. Groundwater basins in the upper watershed are not
    adjudicated.
        RCWD continually faces increasing water demands, variability in
    water supplies due to successive years of drought and imported water
    shortages, and water quality challenges necessitating more creative and
    innovative solutions to meet the water needs of its customers. In
    response to such challenges, RCWD is in the process of implementing its
    Water Reclamation Project, which will substantially expand the use of
    recycled and raw water in Riverside County in order to meet local water
    demands through 2050. The Water Reclamation Project involves the
    construction of a pipeline to transport raw water from MWD's aqueduct
    system to Vail Lake during low demand and high supply winter periods, a
    delivery system for recycled water to RCWD's agricultural users, and
    the construction of a demineralization/desalination plant. The Project
    is funded in part under the Title XVI Water Reclamation and Reuse
    Program administered by the United States Department of the Interior
    Bureau of Reclamation. (43 U.S.C. Sec. 390h-32.) \2\
    ---------------------------------------------------------------------------
        \2\ The purpose and intent of the Title XVI funds that RCWD is
    entitled to receive for the Water Reclamation Project is separate from
    the federal contribution under the Settlement; indeed, the interim and
    permanent capacity funds are not tied to a specific project and the
    remaining funds serve as Pechanga's share of the recycled water
    infrastructure costs.
    ---------------------------------------------------------------------------
    II. OVERVIEW OF SETTLEMENT
        The Settlement would assist in the resolution of decades of
    litigation initiated in 1951 by the United States regarding water
    rights in the Santa Margarita River Watershed (United States v.
    Fallbrook Public Utility District et al., Civ No. 3:51-cv-01247
    (S.D.C.A)). The Fallbrook litigation eventually expanded to include all
    water users within the Santa Margarita Watershed, including three
    Indian Tribes (the Pechanga Band of Luiseno Mission Indians, the Ramona
    Band of Cahuilla Indians, and Cahuilla Band of Indians). The United
    States, as trustee, represents all three Tribes before the Fallbrook
    Court.
        In Interlocutory Judgment 41, the Court concluded that each of the
    three Tribes have a recognized federally reserved water right without
    specifying the amount of each of the Tribe's water right. However, the
    Court developed ``prima facie'' findings with respect to each of the
    Tribe's quantifiable water rights. The prima facie evidence established
    the reserved right and set forth the number of acres to which the
    reserved water right applied. Pechanga believes that, based on the
    prima facie evidence established in Interlocutory Judgment 41,
    Pechanga's reserved water rights are at least 4,994 AFY. Pechanga
    requested that the Secretary of the Interior seek settlement of the
    water rights claims involving Pechanga, the United States, and non-
    Federal third parties through a Federal Negotiation Team formed in
    August 2008. Consistent with the United States' policy to resolve
    Indian water rights settlements expeditiously whenever possible, in
    less than two years the parties have managed to reconcile their
    disagreement over Pechanga's water rights claims.
        Under the terms of the Settlement, RCWD has agreed to allocate an
    additional 25 percent of the Wolf Valley Groundwater Basin to Pechanga.
    Additionally, RCWD will wheel imported water made available to Pechanga
    under an Extension of Service Area Agreement (ESAA) with MWD in
    perpetuity. And RCWD agrees to provide desalination and brine disposal
    for recycled water utilized in the Wolf Valley Basin, which will
    improve groundwater quality in the basin for both RCWD and Pechanga.
    Thus, RCWD's contribution to the Settlement involves more than a
    foregoing of its assertion of water rights but instead involves
    implementation of a partnership to utilize, convey and improve the
    quality of local and imported water. In summary, the Settlement will:

            1)  Establish an initial safe yield of 2100 AFY in the Wolf
            Valley Groundwater Basin (of which Pechanga would receive 75
            percent and RCWD would receive 25 percent) and a means for
            ongoing management and determination of the safe yield;

            2)  Facilitate the provision of interim and permanent capacity
            for delivery of imported water from MWD to its member agency
            EMWD and then through RCWD's distribution system to Pechanga in
            exchange for a federal contribution of $17.9 million;

            3)  Allow RCWD to purchase between 300 and 475 AFY of recycled
            water that Pechanga is currently entitled to purchase from
            EMWD, depending on availability;

            4)  Provide for Pechanga's share of the costs in the amount of
            $2.5 million for RCWD to design and construct an additional
            recycled water pond to increase seasonable storage capacity in
            its existing recycled water system necessary to accommodate the
            EMWD recycled water received by RCWD under the Settlement;

            5)  Provide for Pechanga's share of the costs in the amount of
            $4.46 million for RCWD's design and construction of a
            demineralization and brine disposal project to lower the
            salinity of recycled water received by Pechanga from EMWD (or,
            if such facilities are not constructed, for availability of
            funds to Pechanga for an alternative salinity management
            solution); and

            6)  Provide for mutual waivers of claims for water rights in
            the Santa Margarita River Watershed to prevent future disputes
            between the parties over Pechanga's water rights claims.

        The Settlement is beneficial for all parties involved in that it
    promotes a reliable water supply for Pechanga by incorporating it into
    RCWD's water distribution system, improves the quality and reliability
    of recycled and groundwater supplies for RCWD, and fosters a regional
    solution to Pechanga's water rights claims by incorporating EMWD and
    MWD. The federal monetary contribution of $50 million to the Settlement
    is relatively modest compared to other recent Indian water rights
    settlements. The Settlement would also avoid many additional years of
    litigation at great expense to the parties and the uncertainty
    concerning the availability of scarce water supplies in the region.

    III. CONCLUSION
        Thank you again, Mr. Chairman and other Members of the Committee
    for the opportunity to present this important Indian water rights
    settlement, which will significantly improve the reliability and
    quality of local water supplies for RCWD and Pechanga. RCWD would
    greatly appreciate your support of S. 2956 to move the bill one step
    closer to approval.
        Attachment

        The Chairman. Mr. Stone, thank you very much for your
    testimony.
        Let me ask a question about the actual water that Pechanga
    Band could use. I know you are interested in real water, in
    actual water. The water supplies in California I know, just by
    reading, that those water supplies are relatively scarce. So
    can you elaborate on how the water supply, the actual water
    supply will be provided, and will it have impact on other uses
    in California?
        Mr. Macarro. How much time do we have?
        [Laughter.]
        Mr. Macarro. We are completely dependent on aquifer water,
    water underneath our reservation. So all references to the
    basin basically are the sole source currently of water to the
    tribe.
        For the Band's water, our most productive well happens to
    be a well that is closest to Rancho California's water wells in
    the Wolf Valley portion of the basin. I think over the decades
    there has been this, from our perspective, apparent competition
    for water. There have been hydrologic studies and various
    degrees of linkages to, or hydrologic links between the basins
    that they pump from and we pump from.
        So I think a key part of this agreement shows that we
    recognize that we impact each other's water resource. And the
    best long-term policy is to come up with a policy that manages
    the resource for both of us, all of us that live in the valley.
        So what we tried to do then is part of the protection of
    that resource is to not over-pump it. We have come up with
    some, I think some paradigms that work for us that describe
    safe yield, so that we don't destroy the aquifer that we pump
    from; we don't over-pump it. We manage it. Of course, it
    becomes more critical in drought years and when less is
    available. The aquifer, the basins, are recharged through rain
    events. The more rain we have, the more water we have.
        So when we put this together, it quickly became apparent
    that to meet everybody's needs, over the long term, over the
    next few decades, and looking out 50 to 100 years, that some
    imported water was going to have to be made available. Part of
    those calculations were going to come from other water
    districts and primarily Metropolitan Water District as well.
        So we looked for ways to use existing infrastructure, we
    looked for ways to be as efficient. And I think in the end,
    this settlement represents I think the best nexus of efficiency
    and cost and just overall conservation. So what we end up with
    is an end product that provides, I think rather than impacting
    water, taking away water from other places, I think we are
    looking at moving water through an aggregate system of
    Metropolitan Water District that might otherwise be coming to
    our area and delivering it both to the tribe and to Rancho
    California Water District as those needs, not until those needs
    are there. That is also a critical element of this settlement.
        In other words, we are not going to be getting water that
    we don't need right now. It won't be until the need is
    necessary, that it is made known and present some time down the
    road.
        The Chairman. Mr. Chairman, my understanding, I would ask
    Mr. Stone this as well, the settlement settles the rights of
    individual allottee landowners on the reservation. Is that
    correct?
        Mr. Macarro. That is correct. I wasn't able to address that
    in my oral remarks. It is substantially addressed in our
    written testimony, and I will say that the proposed statute
    confirms existing statutory protections for allottees, and
    includes new ones.
        A key feature is that the statute requires us to develop a
    water code that protects allottee water rights. And then that
    water code has to be approved by the Secretary. Finally, these
    protections are the same as those provided to allottees in all
    other pending water rights settlements. So it is essentially
    similar language, if you have seen this language already in
    recent water bills, the language is similar.
        The Chairman. All right. And one final question. The other
    primary water users sharing the water resource is testifying
    today. Are there other local governments or commercial users
    that support this settlement?
        Mr. Macarro. I believe that, well, the answer is yes.
    Because of who they serve water to, I think it is fair to say,
    and I will let Mr. Stone address that as well, but I think it
    is fair to say that everybody that they provide water to,
    residents, commercial interests, agricultural interests, is
    also supportive of this. Because it takes an unknown and
    creates a known quantity out of it. That is a critical element
    to planning for the future for all of us.
        The Chairman. Mr. Stone?
        Mr. Stone. Yes, I think one of the historical features at
    Rancho California Water District is that we have a
    responsibility as an agent to represent water rights holders in
    the groundwater basin which we overlie. That is a legal
    construction that was developed by the former landowner as the
    district was created. The board takes that trust responsibility
    very seriously and has deliberated the pros and cons of
    settling or litigating.
        But they are the representation of those underlying
    landowners, and water rights holders in our service area.
        The Chairman. Senator Tester?

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

        Senator Tester. Thank you, Mr. Chairman.
        A couple questions for Chairman Macarro. You spoke of
    Federal contribution of about $50 million. In your testimony,
    it is broken down into a recycled water infrastructure of 6.96.
    What exactly does that entail?
        Mr. Macarro. The 6.96?
        Senator Tester. Yes. What exactly is the recycled water
    infrastructure? What are we talking about?
        Mr. Macarro. Those are share of costs that go to storage
    ponds and to brine facilities, about $2.5 or so million toward
    storage ponds, about $4.7 million to the brine facility,
    desalination facility.
        Senator Tester. Okay. And there is almost $18 million for
    delivery capacity. I assume that is water, pipes?
        Mr. Macarro. Transmission, yes.
        Senator Tester. And then there is a water fund, and it is
    broken down from there, but it is a little over $25 million.
    Can you just kind of explain the thought around the water fund
    and how it was set up and its adequacy going into the future?
        Mr. Macarro. Yes. That involves, part of the trust
    responsibility here is the guarantee of water to the tribe into
    the long-term future. The way we anticipate that working is
    that it has to happen with Metropolitan Water District being
    part of the equation, Met being the large wholesaler in
    California for water.
        So those dollars paid initial connection fees and they also
    paid the ongoing annual fees as a Met customer to the tribe.
    And so that is, I think that is, and it is a critical part of
    those whole settlement. So le me say that most of the Federal
    contribution is directed toward programmatic responsibilities
    that ensure that our Tribe is able to use its reserved right
    entitlement. So it is a critical part of the wet water
    equation.
        Senator Tester. Where is the Governor in support of this
    bill?
        Mr. Macarro. The Governor?
        Senator Tester. Yes.
        Mr. Macarro. He is very supportive, I am sure.
        [Laughter.]
        Senator Tester. Not that you are speaking for the Governor,
    but just curious. Has he played a role in this?
        Mr. Macarro. I don't think he has played a role. But I
    can't say that for certain. I know he has been very busy with
    the economy in the State.
        Senator Tester. Right. Administration, you had talked about
    the Administration, you met with the Administration a couple of
    days ago.
        Mr. Macarro. And on an ongoing basis, yes.
        Senator Tester. That is good. And they had expressed some
    concerns, is that what I gathered from it? Could you give me an
    idea what those concerns revolve around?
        Mr. Macarro. Costs. Generally costs. What does the $50
    million involve? Everything that you have asked. We have looked
    at this, we have broken it down into four components. The $18
    million for the pipeline, $2.5 million for the ponds, $4.7
    million from the desal facility and then the Federal
    contribution to the subsidy fund.
        Senator Tester. Thank you very much. Appreciate both your
    testimonies. Thank you.
        Thank you, Mr. Chairman.
        The Chairman. Senator Tester, thank you.
        We thank both of you for your testimony. We would hope you
    would be available for written questions that we wish to submit
    to you.
        Mr. Macarro. We would.
        The Chairman. We will then take this under further
    consideration. As I indicated, Senator Boxer had requested that
    we hold this hearing. Senator Feinstein is a co-sponsor of the
    legislation. It will be helpful if you also will submit, or if
    you will solicit letters from other interests in your region
    and perhaps the Governor as well, to see if we can get some
    letters of support from them as we consider this.
        Mr. Macarro. Can I add something, actually not related to
    this?
        The Chairman. Yes.
        Mr. Macarro. But given the timing, I just want to thank you
    personally, certainly on behalf of my Tribe for the critical
    role you played chairing this Committee, as well as the entire
    Committee, for making the priorities you have of the
    legislation for reauthorization of Indian Health Care and
    certainly Tribal Law and Order. I remember in particular when
    you came in front of NIGA two years ago, and you stated flatly
    and clearly these were your priorities. And here we are today
    with both of these things passed, a tremendous watershed for
    Indian Country.
        And I want to thank you, Senator Tester, Chairman Dorgan,
    it was amazing to see it happen. Thank you.
        The Chairman. I appreciate that a lot. We have a great
    staff, bipartisan staff on this Committee. We have worked very
    hard on these issues to complete them. We still have the
    special diabetes fund that we have to reauthorize, there are a
    number of things yet to do between now and the end of the year.
    But I think we have made substantial progress.
        Certainly in holding hearings on water issues, they are not
    the most exciting issues around, because many of them have
    languished for years and years and years trying to be resolved.
    But they are very important in the life of tribal governments,
    to quantify these water rights and try to address these issues.
    So we appreciate your being here and appreciate both of you
    taking the time to travel to Washington for this hearing.
        Thank you very much.
        Next we are going to have the second panel. And the Energy
    Committee is now meeting on the third floor, so I have to be at
    the Energy Committee markup at 11 o'clock. Senator Tester has
    agreed to Chair. Senator Tester, if you don't mind, I will
    depart to go to the Energy Committee. And if you want to take
    the Chair and introduce the next panel, I would appreciate
    that.
        Senator Tester. [Presiding.] I want to thank the witnesses
    for being here today for the Blackfeet Water Settlement, S.
    3290. And I want to thank you all for making this trip on such
    short notice. You had one week and you are here. Since I go
    back to Montana every weekend, I know that it truly is a
    sacrifice to come here during the summer, where you step into a
    sauna when you step off the airplane.
        But we certainly appreciate your being here, Shannon
    Augare, who is a Blackfeet tribal member, who is soon to be
    State Senator. I want to congratulate you on the primary
    victory, and since you have no general election appointment,
    you are in. Jay Weiner, State of Montana Water Rights Compact
    Commission. Jay has done great work for a long, long time on
    water rights issues in the State of Montana through that
    commission. And we very much appreciate that. John Bloomquist,
    Attorney for the Pondera County Canal and Reservoir Company.
    John is somebody that I have known for quite a while now, and a
    very good attorney, especially when it comes to water rights
    issues. And we appreciate you being here too.
        We are here to discuss S. 3290, the Blackfeet Water Rights
    Settlement Act of 2010. Senator Baucus and I, Senator Baucus
    may show up here at some point in time, if he does, I will
    defer to him. We introduced that legislation back in April of
    this year. It is an important piece of legislation, because
    water is the foundation of life, particularly in rural
    communities. It is critically important for domestic and
    municipal users, for irrigation, livestock and for economic
    development on the whole.
        It has been the policy in Montana and the United States to
    negotiate rather than litigate water rights. So negotiation is
    important, because our diverse communities have many competing
    interests. Nobody gets everything they want. It is important
    that as communities, we work together to solve our problems
    rather than fighting with one another.
        That is why I am proud of the way these folks have worked
    together over the years. The negotiation started some 20 years
    ago. During that time, tribal, State, Federal Government and
    non-Indian water users have negotiated in good faith to craft a
    settlement in way that works for the entire community. They did
    such a good job that the State legislature ratified this
    compact in 2009, when they last met.
        The bill we are considering today will ratify the compact
    at the Federal level. It will resolve claims against the United
    States and authorize funding to improve the reservoir water
    infrastructure. The bill we are talking about today is a good
    bill, it is a good start. It is not perfect. But over the
    coming months, I do look forward to working with you, each and
    every one of you sitting at the table today, and the
    Administration. I doubt that it will be perfect for everybody,
    but I think that we can work to get a bill that everybody can
    live with and will work for the people of North Central Montana
    that are impacted by this water settlement.
        So by working together, we will get it done. Again, I want
    to thank you all for being here on short notice. I know you are
    busy, it is summer time, and you always have things to do. But
    we appreciate your commitment to this piece of legislation and
    to the people you represent.
        With that, Shannon, I will start out with you. You can
    testify, same rules apply, if you can keep it to five minutes,
    it will be great. Your entire written testimony will be a part
    of the record.

      STATEMENT OF HON. SHANNON AUGARE, MEMBER, BLACKFEET TRIBAL
                            BUSINESS COUNCIL

        Mr. Augare. Thank you, Mr. Chairman, members of the
    Committee. My name is Shannon Augare. I am a member of the
    Blackfeet Tribal Business Council and I am honored to be here
    on behalf of the Blackfeet Tribe in support of the Blackfeet
    Water Rights Settlement.
        I am very familiar with this matter, as you mentioned, Mr.
    Chairman, having worked on the ratification of the Blackfeet
    Water Rights Compact as a member of the Montana House of
    Representatives. I want to thank the Committee for holding this
    hearing on Senate Bill 3290, a bill that I believe is critical
    to the future of the Blackfeet people. I also want to thank and
    acknowledge my colleagues, the distinguished Vice Chairman of
    our Tribe, Rusty Tatsey, and councilman Jay St. Goddard for
    being here.
        Today, we together thank you and Senator Baucus for your
    leadership and for your strong support of the Tribe in
    introducing this bill, and for your understanding of the
    importance of this bill to Blackfeet Country. I also want to
    thank your staff and the Committee staff for their hard work on
    this incredibly important bill.
        The Blackfeet Water Rights Settlement is a culmination of
    over two decades of work by the Tribe, State and Federal
    Government. And I know that is a lot of time and a lot of work.
    I am only 30 years old, that is two-thirds of my life. It
    represents a historical breakthrough in the Tribe's over a
    century long battle to secure and protect its water rights. S.
    3290 ratifies the Blackfeet Montana Water Rights Compact,
    resolves significant water-related claims against the Federal
    Government, and most importantly establishes the critical
    infrastructure needed for the development of a self-sustaining
    economy on the Blackfeet Reservation, and of course, a
    permanent homeland for our Blackfeet people.
        The Blackfeet Reservation was established by treaty in
    1855. The Reservation originally encompassed much of the State
    of Montana but has been reduced in size by various Federal
    actions and reservation. It is now about 1.5 million acres. It
    is located along the Rocky Mountain front in North Central
    Montana adjacent to the ever-beautiful Glacier National Park.
    The Reservation is renowned for its spectacular mountain
    scenery, majestic plains and abundant fish and wildlife. The
    Tribe has over 16,000 members, about half of whom live on the
    Reservation.
        Six separate drainages are encompassed within the
    Reservation: St. Mary, the Milk, Cut Bank Creek, Two Medicine,
    Badger Creek and Birch Creek. The annual water supply is
    approximately 1.5 million acre feet, nearly a third of which is
    in the St. Mary River. Water is critical to the continuing
    survival of our Blackfeet people, culturally and economically,
    and has become increasingly critical as development and
    competition for water occurs around us, and as supplies become
    shorter. We understand that scientists have predicted that our
    glaciers in Glacier Park will soon disappear in a matter of
    decades. Safe and clean drinking waters are essential for the
    growing population on our Reservation. And water is critical to
    our economy, which is heavily dependent on stock raising and
    agriculture.
        Unemployment on the Reservation can run as high as 70 to 80
    percent. Water has historically been a contentious issue on the
    Reservation. In the 1909 Boundary Waters Treaty, the United
    States and Canada divided up the St. Mary and Milk Rivers on
    the Reservation without any consideration or mention of the
    Blackfeet water rights. The bulk of the United States' share of
    the St. Mary River, some 180,000 acre feet of water annually,
    has been diverted off-reservation over 100 years by means of
    various facilities built on the Reservation, including a 29-
    mile canal, which carries the water to Milk River, then carries
    it downstream to serve the Federal Milk River project.
        The southern boundary stream, Birch Creek, was the subject
    of early conflicts resulting in a 1908 Federal court decree in
    a case brought by the Federal Government at the time, at the
    same time as the Winters case. While the paramount right of the
    Tribe was recognized, the Tribe was awarded only a portion of
    the water necessary to irrigate its irrigable lands, leaving it
    open for the Tribe to seek additional water in the future.
        Since then, Birch Creek has become fully utilized through
    80,000 acres irrigated adjacent to the Reservation, making it
    difficult as a practical matter for additional water to be made
    available to the Tribe. Allotment of the Reservation has
    brought further water conflicts between the Tribe and the
    purchasers of the allotment. Given the historical water rights
    issues of the Reservation, the Blackfeet Water Rights Compact
    is truly a milestone, achieved after nearly two decades of
    negotiations among the Tribe, the Montana Reserved Water Rights
    Compact Commission and representatives of the Federal
    Government. The compact approved the Montana legislature in
    April of 2009. Tribal approval is also required through a vote
    of our tribal membership.
        The project costs have been developed by the Tribe's
    technical consultants and projects are currently being reviewed
    by the Bureau of Reclamation DEC Team, which will issue its
    report shortly. The Tribes believe that the costs are fully
    justified under the trust obligations of the Federal Government
    and by the Tribe's water-related claims against the United
    States.
        The State has committed to a $20 million contribution to
    the settlement, $4 million of which has already been
    appropriated. In addition, in the 2007 legislature, they
    appropriated $15 million for the Birch Creek agreement, for a
    total State contribution of $35 million. The Tribe is fully
    prepared to address any Federal questions or concerns that may
    be identified by the Administration. Of course, the Federal
    Government was involved in our negotiations from the beginning,
    and we have met with Federal Representatives on a number of
    occasions throughout the negotiation process.
        We have also initiated discussion on the bill's provisions
    which we expect to continue. And we too hope that we can see
    some quick action on this bill this year.
        I want to thank you, Mr. Chairman and members of the
    Committee. I look forward to responding to any questions you
    may have.
        [The prepared statement of Mr. Augare follows:]

      Prepared Statement of Hon. Shannon Augare, Member, Blackfeet Tribal
                                Business Council

        Mr. Chairman, and members of the Committee, my name is Shannon
    Augare. I am a member of the Blackfeet Tribal Business Council. I am
    honored to be here on behalf of the Blackfeet Tribe in support of the
    Blackfeet Water Rights Settlement Act. I am very familiar with this
    matter, having worked on the ratification of the Blackfeet water rights
    compact as a member of the Montana Legislature.
        I want to thank the Committee for holding this hearing on S. 3290,
    a bill that is critical to the future of the Blackfeet People. I also
    want to thank Senator Max Baucus and Senator Jon Tester for their
    strong support of the Tribe in introducing this bill, and their
    understanding of the importance of this bill to the Blackfeet Tribe. I
    also want to thank their staffs and the Committee staff for their hard
    work on this bill.
        The Blackfeet Water Rights Settlement is the culmination of over
    two decades of work by the Tribe and many other people, including those
    who are testifying here today. It represents an historical breakthrough
    in the Tribe's over century long battle to secure and protect its
    waters rights. S. 3290 ratifies the Blackfeet-Montana Water Rights
    Compact, resolves significant water related claims against the Federal
    Government and most importantly establishes the critical infrastructure
    needed for the development of a self-sustaining economy on the
    Blackfeet Reservation and a permanent homeland for the Blackfeet
    People.
    The Blackfeet Reservation and the Blackfeet People
        The Blackfeet People have occupied the area where the Blackfeet
    Reservation is located since time immemorial. As we say: ``We know who
    we are and where we come from. We come from right here. We know, and
    have always said, that we have forever lived next to the Rocky
    Mountains.''
        Our first treaty, known as Lame Bull's Treaty, was signed in 1855.
    Executive orders and statutes would follow, each taking huge chunks of
    our traditional land. In the end, as a small grace, we ended up with
    the land that was most sacred to us: our present day reservation. But
    this was not due to any good intentions. The simple fact is that the
    land we wanted most was the land they wanted least.
        In 1896 we had the Northern Rockies taken from us because
    speculators believed there were rich minerals to be had. When mineral
    riches didn't pan out, this most sacred part of our homeland became
    Glacier National Park in 1910. To this day we question the legitimacy
    of the 1896 transaction. But thereafter, the modern-day reservation
    boundaries were set. The present Reservation is about 1.5 million
    acres. Although the United States had promised our reservation would
    never be allotted in the 1896 Agreement by which the Northern Rockies
    were lost, the Federal Government went back on its word and lands
    within the reservation were allotted to individual Tribal members under
    allotment acts in 1907 and 1919.
        The Tribe now has over 16,000 members, about half of whom live on
    the Reservation. Our people have worked hard to survive in the
    sometimes harsh climate of the Rocky Mountains, and have attempted to
    live in the modern world while maintaining the cultural and spiritual
    ties to the land and its resources.
    Water is the Essential Element that Binds Us Together
        Water is critical to the Blackfeet People. It is central to our
    culture and our traditions. It is an essential element of our way of
    life, and it is crucial to our continuing survival culturally,
    traditionally and economically. Six different drainages are encompassed
    within the Reservation: the St. Mary, the Milk, Cut Bank Creek, Two
    Medicine River, Badger Creek and Birch Creek. These are the veins and
    arteries of the Reservation and provide life to the Blackfeet People
    and bind us together as a People.
        Water is the source of creation. We believe that rivers and lakes
    hold special power through habitation of Underwater People called the
    Suyitapis. The Suyitapis are the power source for medicine bundles,
    painted lodge covers, and other sacred items. Contact with supernatural
    powers from the sky, water and land is made through visions and dreams
    and manifests itself in animals or particular objects. The beaver
    ceremony is one of the oldest and most important religious ceremonies,
    and beaver bundles have particular significance. The ceremonial
    importance of water is especially present in the use of sweat lodges as
    a place to pray, make offerings and cleanse and heal. The sweat lodge
    remains a part of the religious and spiritual lives of many tribal
    members.
        Various species of plants also have great importance and are
    culturally and religiously significant to the Tribe and Tribal members.
    Particular species of plants are essential for religious ceremonies and
    for their healing and medicinal effects. Both water quantity and
    quality are critical to the survival of these plant species, and to the
    central role of the plant species in the continuing religious and
    cultural practices of Tribal members.
        Pristine water quality is also essential to the cultural and
    religious practices of the Tribe. Preservation of a high level of water
    quality is therefore integrally related to tribal members' ability to
    continue religious, spiritual and cultural practices.
        Water is the lifeblood that not only sustains the Blackfeet people
    but our way of life. The water resources of the Blackfeet Reservation
    are essential to the lives of tribal members, the economic, cultural
    and spiritual well being of the Tribe, and the continuing viability of
    the Reservation as a homeland to the Blackfeet people.
        The Blackfeet Reservation's location along the eastern Rocky
    Mountain Front makes it the home of spectacular mountain scenery and
    abundant fish and wildlife. Large game animals, including moose, elk,
    and deer abound. The Reservation provides significant habitat for
    grizzly bears and other bears, and for other animals such as lynx, pine
    marten, fisher, mink, wolverine, weasel, beaver, otter, grey wolf,
    swift fox and others. Numerous bird species are also found on the
    Reservation including bald eagle, golden eagle, osprey, ferruginous
    hawk, northern goshhawk, harlequin duck, piping plover, whooping crane,
    and all migratory and shoreline birds, as well as game birds such as
    the sharptail grouse, ringnecked pheasant, mountain dove, Hungarian
    partridge and two species of grouse. The fishery on the Reservation is
    renowned, and includes the west slope cutthroat trout, northern pike,
    lake trout, rainbow trout, mountain white fish, lake white fish, brook
    trout, brown trout, Yellowstone cutthroat trout, walleye, and many
    others. The threatened bull trout is also be found on the reservation.
    The habitats of these wildlife species and fish depend directly on the
    water resources of the Reservation to support them and allow them to
    thrive.
        At the same time, water is vital for our communities to thrive and
    prosper. Safe and clean drinking water supplies are essential for the
    growing population on the Reservation, and water is critical to our
    economy which is heavily dependent on stock raising and agriculture.
        The Reservation also possesses significant timber, and oil and gas
    resources and other resources. Oil and gas production has occurred on
    the Reservation since the 1930s, and the Tribe has recently experienced
    a significantly increased interest in new development on the
    Reservation. The Tribe has also been working hard to develop wind
    energy and the hydroelectric potential on the Reservation. All of these
    activities are dependent on adequate supplies of water.
        Fortunately, we are blessed with an abundant supply of water. Over
    518 miles of stream and 180 water bodies, including eight large lakes,
    are located on the reservation. More than 1.5 million acre-feet of
    water arise on or flow through the Blackfeet Reservation on an annual
    basis. Despite the significant water supply, or maybe because of it,
    historically others have sought to appropriate it for themselves, and
    water has become a precious resource in more modern times.
    The Water Wars
        In 1909, the United States entered in to the Boundary Water Treaty
    with Canada. Although the treaty divided the Milk River and St Mary
    River between the two countries, not a word was mentioned about the
    Blackfeet, or the fact that these streams arise on or near the
    Blackfeet Reservation, and that the Blackfeet have rights to them.
        Not long after the Boundary Waters Treaty, the United States
    withdrew significant lands on the Reservation under the 1902
    Reclamation Act, and began construction of the St. Mary facilities that
    would divert most of the United States' share of the St. Mary River off
    the Reservation for use by the Milk River Project over a hundred miles
    away, notwithstanding that there was an equally feasible project on the
    Blackfeet Reservation to which the water could have been brought. The
    diversion is accomplished through facilities on the Reservation,
    including Sherburne Dam, and a twenty-nine mile canal through the
    Reservation that eventually empties into the Milk River. The Milk River
    flows north into Canada and then back into the United States near
    Havre, Montana, where it is heavily utilized by the Milk River Project
    and by the Fort Belknap Reservation. There are few historical acts,
    other than loss of land, that have engendered more passion and outrage
    than this wholesale transfer of Reservation water to serve non-Indians
    far downstream, without a word about or any consideration of Blackfeet
    Tribe's water rights or the Blackfeet water needs. The Tribe is left
    not only with no access to and no benefit from its own water, but a
    tangled web of confusing and non-existent rights of way and easements
    for the St. Mary Diversion facilities on the Reservation.
        At the same time that the St. Mary diversion was taking place,
    there was a concerted effort by water users just south of the
    Reservation to appropriate for themselves the waters of Birch Creek,
    the southern boundary of the Reservation. The situation eventually led
    to litigation in a case brought by the United States contemporaneously
    with the Winters case. The case sought the removal of the Conrad
    Investment Company's dam on Birch Creek which was intended to send
    water to irrigators adjacent to the southern boundary of the
    Reservation. In Conrad Investment Company v. United States, decided by
    the Ninth Circuit in 1908, the same year as the Winters case, the court
    upheld the Tribe's prior and paramount right to the water. But the
    court did not award the full amount of water necessary to irrigate all
    of the Tribe's irrigable lands, leaving it open for the Tribe to claim
    additional water in the future. United States v. Conrad Investment
    Company, 156 Fed. 123 (D. Mont. 1907), aff'd Conrad Investment Co. v.
    United States, 161 Fed. 829 (9th Cir. 1908). In the meantime, Birch
    Creek has been fully appropriated through development of 80,000 acres
    of irrigation immediately adjacent to the Reservation.
        In an attempt to control the water through the land, the Conrad
    Investment case served as the springboard to the first Blackfeet
    allotment act in 1907. Over a span of two congresses, the Blackfeet
    allotment act moved forward with various water rights provisions
    intended to make Blackfeet water rights subject to state law, to enjoin
    the United States from prosecuting any further suits against water
    users, and later to give preference to settlers on surplus lands to
    appropriate water on the Reservation. See, John Shurts, Indian Reserved
    Water Rights: The Winters Doctrine in its Social and Legal Context,
    1880s-1930s (University of Oklahoma Press, 2000). These efforts largely
    failed, thanks in part to a veto from President Theodore Roosevelt, but
    the 1907 Allotment nevertheless became law notwithstanding that in the
    1896 Agreement by which the Northern Rockies were lost to the Tribe,
    the Federal Government agreed that there would be no allotment of the
    Reservation. See Art. V of the Agreement of September 26, 1895,
    ratified by the Act of June 10, 1896, 29 Stat 321, 353.
        Allotment brought the third serious dispute between the Tribe and
    non-Indian water users. The Bureau of Indian Affairs Blackfeet
    Irrigation Project was authorized in the 1907 Allotment Act. However,
    many of the prime irrigation lands both within the Project and in other
    areas of the Reservation on Cut Bank Creek and the Milk River quickly
    went out of trust. The Tribe's water rights have gone unprotected from
    the use of water by non-Indian development on former allotments.
    Numerous disputes have arisen over the years of varying severity, and
    the need to resolve the Tribe's water rights has increasingly become
    critical.
        Traditionally, the Tribe has taken the approach of sharing the
    resource cooperatively, but more recent years have brought shortages
    during the late irrigation season in both the Milk and Cut Bank Creek,
    and the dilapidated condition of the Blackfeet Irrigation Project has
    become a serious impediment to water use within the Project. Plans to
    rehabilitate the hundred year old St. Mary Diversion facilities have
    further raised water right concerns, and the need for the Tribe to
    finally achieve some benefit from those facilities.
    Water Rights Compact
        Given the historical water rights issues on the Reservation, the
    Blackfeet Water Rights Compact is truly a milestone achievement after
    nearly two decades of negotiations among the Tribe, the Montana
    Reserved Water Rights Compact Commission and the Federal Government.
    The Compact was complete in December 2007. It was approved by the
    Montana Legislature in April, 2009 (85-20-1501 MCA), and it is now
    before this Committee for ratification in the Blackfeet Water Rights
    Settlement Act. It will further require approval of the Tribe through a
    vote of the Tribal membership. In general, the Compact:

       Establishes the Tribe's water right as all surface and
            groundwater less the amount necessary to fulfill state water
            rights in all drainages (Milk River, Cut Bank Creek, Two
            Medicine River and Badger Creek) except for the St. Mary River
            and Birch Creek.

       Establishes a St. Mary water right of 50,000 acre-feet, and
            requires the parties to identify how the water will be provided
            to fulfill the Tribe's water right in a manner that does injure
            the Milk River Project.

       Establishes a Birch Creek water right of 100 cfs, plus 25
            cfs for in stream flow during the summer and 15 cfs during the
            winter.

       Protects non-irrigation use and some irrigation uses through
            ``no-call'' provisions.

       Provides for water leasing off the Reservation.

       Closes on-reservation streams to new water appropriations
            under state law.

       Provides for Tribal administration of the Tribal water, and
            State administration of state law water rights, and creates a
            Compact Board to resolve disputes.

       Provides for an allocation of water stored in Tiber
            Reservoir (in an amount to be determined by Congress).

       Mitigates the impacts of the Tribe's water rights on Birch
            Creek water users through a separate Birch Creek Agreement by
            which the Tribe defers new development on Birch Creek for 15
            years and provides 15,000 acre-feet of water per year to Birch
            Creek water users from Four Horns Reservoir, the total
            agreement not to exceed 25 years.

        For obvious historical reasons, the St. Mary River and Birch Creek
    proved to be the most difficult issues for the parties to resolve.
        The Compact includes a Birch Creek Management Agreement as an
    Appendix to the Compact that requires the Tribe and the Pondera County
    Canal and Reservoir Company to develop annual water management plans,
    to meet annually, along with the Bureau of Indian Affairs, and to
    otherwise cooperatively manage their water uses.
        In addition, in the separate Birch Creek Agreement, which is
    mentioned above, the Tribe has committed to enlarge the Four Horns
    Reservoir on the Reservation, a storage facility of the Blackfeet
    Irrigation Project, to provide mitigation water to Birch Creek water
    users. The Tribe will defer new development of Birch Creek water for a
    fifteen year period, during which the enlargement will occur. When the
    enlargement of Four Horns is complete, the Tribe will provide 15,000
    acre-feet of water to Birch Creek water users, for a total agreement
    term of 25 years. Given that Birch Creek is currently a fully utilized
    stream without taking into account an increased Blackfeet water right,
    mitigation measures were the only reasonable and feasible way to reach
    agreement there.
        As to the St. Mary River, additional identification and study of
    alternatives to provide the Tribe's water right will be necessary and
    are included as part of the legislation. A substantial portion of the
    United States' share of the St. Mary River is diverted to the Bureau of
    Reclamation's Milk River Project, as described above. Therefore it will
    be necessary to identify alternatives to provide the Tribe's water
    right. In the meantime, S. 3290 provides that the Tribe will receive it
    water right through an allocation of Sherburne Dam, the Milk River
    Project storage facility on the Blackfeet Reservation. The Tribe will
    lease back the water to the Project, until a permanent water supply is
    identified and implemented for the Tribe. Such an arrangement is the
    only way to ensure that the water rights of both the Tribe and the Milk
    River Project are fulfilled.
        Upon completion of the Compact, a separate concern was raised by
    the Fort Belknap Indian Community relating to the Milk River, and the
    potential for conflict between the Blackfeet and Fort Belknap Milk
    River water rights. While the Blackfeet Tribe believes that the
    potential for conflict is very low, the two tribes have met on a number
    of occasions to resolve any possible conflict. Language was agreed upon
    to be inserted in our respective settlement legislation. The language
    was included in an agreement signed by the Blackfeet Tribe, but not yet
    signed by Fort Belknap. The language appears in the Blackfeet
    legislation in Sec. 11, and we believe it fully protects Fort Belknap.
    The provision requires the Secretary to insure that the water rights of
    both tribes are fulfilled. This is a particular federal responsibility
    due to the United States trust responsibility to both tribes, and
    particularly because the Federal Government was party to the
    negotiations of both tribes.
    State Approval and State Contribution
        As described above, the Blackfeet water rights compact was approved
    by the State Legislature in April 2009. The State of Montana has
    committed to contribute $20 million to the Compact. Along with the
    approval of the Compact in 2009, the State legislature appropriated $4
    million toward the $20 million state contribution, and has committed to
    appropriate the remaining amount in the 2011 legislature. In 2007, the
    Montana Legislature also appropriated $15 million for Birch Creek
    mitigation. Of these funds, $14.5 million has been placed in an escrow
    fund for the Tribe as part of the Birch Creek Agreement (to which the
    Tribe currently has access to the interest), and $500,000 was used for
    engineering studies for the Four Horns enlargement. Therefore, the
    State has committed to a $35 million contribution to the Blackfeet
    settlement. This is very major contribution on the part of the State,
    one of the larger, if not the largest contribution, for an Indian water
    rights settlement in Montana.
    Blackfeet Water Rights Settlement Act
        S. 3290, the Blackfeet Water Rights Settlement Act, carries forth
    the terms of the Blackfeet water rights compact, and addresses the
    issues of particular federal responsibility and federal concern. The
    bill would do the following:

       Approves and ratifies the Compact and the Birch Creek
            Agreement.

       Provides for an allocation of Tiber Dam water.

       Provides 50,000 acre feet of Sherburne Dam water to the
            Tribe in fulfillment of the Tribe's St. Mary water right, to be
            leased to the Milk River Project until a permanent
            alternative(s) to provide the St. Mary right is identified and
            implemented. Authorizes funding to undertake the necessary
            investigation and studies, planning, design and construction to
            provide the St. Mary water right to the Tribe.

       Requires resolution of all rights of way issues related to
            the Milk River Project facilities, involving tribal lands and
            allotted land.

       Authorizes the rehabilitation and improvement of the
            Blackfeet Irrigation Project, including the enlargement of Four
            Horns Reservoir.

       Establishes a Blackfeet Water Settlement Fund and authorizes
            $125M for the Blackfeet Irrigation Project and $93.2 for each
            of five years for other water projects and water related
            projects.

       Provides for a waiver of water related claims against the
            Federal Government.

       Establishes a tribal water right in Lewis and Clark National
            Forest in the amount claimed by the United States on behalf of
            the Tribe.

       Reserves a claim to water in Glacier National Park for the
            Tribe's hunting, fishing and timbering rights reserved in the
            1895 Agreement.

       Requires the Secretary to resolve any conflict involving
            Milk River water between the Tribe and Ft. Belknap.

        The Tribe has identified a number of projects that are critical to
    the implementing the Tribe's water right under the Compact. The
    projects include rehabilitation and build-out of the Blackfeet
    Irrigation Project, including the Four Horns enlargement, irrigation
    development on the Milk River, Cut Bank Creek and Birch Creek, and a
    regional water system to provide a long term municipal water supply to
    several communities on the Reservation, including East Glacier,
    Browning, Starr School, and Seville, and a separate water supply for
    the Town of Babb.
    Badger/Fisher Unit-Water Supply Augmentation and Irrigation Project
            Rehabilitation & Betterment (including Four Horns Enlargement)
        The components for this project include an enlarged & rehabilitated
    feeder canal from Badger Creek to an off-stream dam & reservoir, Four
    Horns Dam, an enlarged Four Horns Dam from about 20,000 AF to 70,000 AF
    (actually a new dam just downstream from the existing dam), an enlarged
    and rehabilitated main canal from the dam to the Badger-Fisher Unit of
    the Blackfeet Irrigation Project, irrigation unit rehabilitation and
    betterment, including some on-farm improvements, and a water supply
    pipeline (gravity) from Four Horns Dam to off-reservation water users.
    The Four Horns enlargement is critical to the implementation of the
    Compact as set forth above.
        The rehabilitation and betterment of the Blackfeet Irrigation
    Project is essential to continuing irrigation in this hundred year old
    project. The Project was authorized by the 1907 allotment, as part of
    the Indian Appropriations in the Act of May 1, 1907, 34 Stat. 1035.
    Currently, nearly 30,000 acres of land are included in the project, but
    the Project has never been completed. In addition, the current
    dilapidated state of the project severely limits full irrigation to
    lands in the project.
    Two Medicine River Irrigation Development
        This project includes selective betterment and on-farm improvements
    on the Two Medicine Unit of the Blackfeet Irrigation Project and a
    major enlargement of Mission Lake with pumping facilities.
    Birch Creek Irrigation Development
        This project includes selective betterment and on-farm improvements
    on the Birch Creek Unit of the Blackfeet Irrigation Project.
    Milk River Irrigation Development
        Much of the economically developable run-of-the-river irrigation
    (no storage facilities) has been already developed on the Milk River by
    non-Indians within the Reservation. New irrigated acreage will require
    new storage. This project may include the purchase and rehabilitation
    of existing irrigated lands, and development of new Tribal irrigated
    lands, including the construction of new storage and irrigation water
    delivery systems. This project will allow the Tribe to establish its
    own irrigation in the Milk River drainage, something it has not been
    able to do without storage given the existing non-Indian irrigation.
    Cut Bank Creek Irrigation Development
        Much of the economically developable run-of-the-river irrigation
    (no storage facilities) has been already developed on Cut Bank Creek by
    non-Indians within the Reservation. New irrigated acreage will require
    new storage. This project may include purchase and rehabilitation of
    existing irrigated lands, and developing new Tribal irrigated lands,
    including the construction of new storage and major water delivery
    systems. Like the Milk River Project, this project will allow the Tribe
    to establish irrigation in the Cut Bank Creek Drainage which it has
    been unable to do without storage given the existing non-Indian
    irrigation.
    Regional Water System
        The Blackfeet Tribe, Indian Health Service (IHS) and other entities
    have designed and are currently constructing a Phase 1 regional water
    system within the Reservation. The source is at Lower Two Medicine
    Lake, with an associated water treatment plant, with water service
    pipelines going to the towns of East Glacier and Browning. The current
    project focuses on current needs. The proposed project would provide a
    50 year water long-term community water supply and would include
    enlarging the treatment plant and Phase 1 pipelines and extending the
    pipeline from Browning to serve Indian communities to the eastern
    boundary of the Reservation, including the Star School and Seville
    areas.
        For many years, East Glacier has been under a boil order issued by
    EPA. The Town of Browning has had frequent problems with its current
    water supply which is provided by groundwater wells. These wells have
    experienced supply and quality problems that have affected a continuous
    water supply for Browning. The Seville water supply is currently
    provided through an agreement with the City of Cut Bank. However, the
    ability of Cut Bank to continue to provide water to this reservation
    community given the City's own water supply problems is in doubt.
    Therefore, it is critical for another supply for Seville to be
    provided.
        It is also critical to establish a long term supply of water to
    Reservation communities. The Tribe has continually had to address
    community water supply problems by cobbling together short term fixes.
    At the same time, the Reservation population has significantly
    increased, and projections are that such increases will continue. A
    long term supply will provide the necessary stability that will allow
    for long term community growth.
    St. Mary River Water Development
        Components of this project include enlarging Lower St. Mary's Lake
    and Spider Lake and other potential off-stream storage facilities and
    improvements. These projects may serve as potential projects to supply
    the Tribe's St. Mary water right. A municipal water system for the Town
    of Babb is also included. Like other Reservation communities, Babb now
    relies on an inadequate and problematic well system. A potential 500-
    acre irrigation project has further been identified that will allow the
    Tribe some irrigation benefits which now accrue only to the Bureau of
    Reclamation's Milk River Project.
    Blackfeet Stock Water and Irrigation Developments
        This project would include individual stock water and irrigation
    developments scattered throughout the Reservation. The project would
    allow individual Indian allotment holders that are not within any
    irrigation project to develop small irrigation developments and also
    stock water development for their cattle.
    Compact Administration
        A permanent Blackfeet Water Rights/Water Resource Office would be
    responsible for implementing the water rights compact, developing a
    revised water code, administering water rights on the Reservation,
    developing a water management plan and implementing the water rights
    settlement projects.
    The Cost of Settlement
        The Tribe's technical consultant, DOWL HKM of Billings, Montana,
    has assisted the Tribe in the development of the above projects and has
    prepared reports on each of the projects and the associated costs.
    Separate costs have been developed for each of the projects. $125
    million has been provided for in the legislation for the Four Horns
    enlargement which is required to fulfill the commitment to provide
    mitigation water to Birch Creek water users, and is set out separately
    in the legislation. The cost of the remaining projects will potentially
    exceed the remaining $466 million. The Tribe proposes to construct the
    most critical projects within the funds provided for in the
    legislation. Much of the cost is associated with the rehabilitation and
    betterment of the Badger-Fisher, Two Medicine and Birch Creek units of
    the Blackfeet Irrigation Project. The Regional Water System is
    estimated to cost $107,481,500. All of the projects are currently being
    reviewed by a Bureau of Reclamation DEC Team (design, engineering and
    construction), and the DEC Team's report will be issued shortly.
        The costs of settlement are fully justified by the needs of the
    Reservation and the potential Tribal claims against the United States
    associated with the St. Mary Diversion, the environmental and resource
    damages caused by the diversion facilities, claims relating to the 1909
    Boundary Water Treaty, the failure of the United States to properly
    operate and maintain the Blackfeet Irrigation Project, and the failure
    of the United States to protect the Tribe's water right from
    development by others.
    Conclusion
        The Blackfeet Water Rights Settlement represents the hard work of
    many people. The settlement has critical importance to the future of
    the Blackfeet people. The legislation will secure the water rights of
    the Tribe through ratification of the Tribe's water rights compact, and
    will also provide the necessary funding for the development of vital
    reservation water projects, including drinking water projects, water
    storage projects and irrigation and stock development. The settlement
    will significantly contribute to the development of a strong
    Reservation economy and a better life for the Blackfeet people.
        The Tribe is prepared to address any federal concerns that may be
    identified, and has initiated contact with the Administration for this
    purpose.
        We thank the Committee and Committee staff and look forward to
    responding to any questions you may have.
        Attachment

        Senator Tester. Thank you, Shannon.
        Jay Weiner?

              STATEMENT OF JAY WEINER, ASSISTANT ATTORNEY
      GENERAL, STATE OF MONTANA; LEGAL COUNSEL, MONTANA RESERVED
                    WATER RIGHTS COMPACT COMMISSION

        Mr. Weiner. Thank you, Senator Tester.
        My name is Jay Weiner, I am an Assistant Attorney General
    with the State of Montana and legal counsel to the Montana
    Reserved Water Rights Compact Commission. It is my privilege
    and honor to be here today to testify in support of S. 3290,
    ratifying the Blackfeet Tribe's water rights settlement.
        As you have heard, this settlement is a long time in
    coming. I am a little bit older than Shannon, but the 20 years
    that this has been in negotiation reflects about half of my
    life.
        This is the product of truly significant hard work by the
    Tribe, by the State of Montana. We appreciate the participation
    of the United States in our process as well. I want to thank
    the Tribe for the leadership they have shown. I would also be
    remiss today if I did not make mention of Susan Cottingham, the
    program director of the Compact Commission, who is retiring at
    the end of this month. The work that she has put in over the
    years has been invaluable in the success that Montana has had
    in the numerous water rights settlements that we have
    concluded.
        My written testimony expands at some length about the
    specifics of the settlement. So what I just want to touch on
    today is what we believe is the critical balance that was
    struck in the settlement. And you heard a little bit of that
    from the prior panel as well, that to make these negotiated
    settlements work, a balance needs to be struck between
    recognizing the legitimate, significant senior water rights
    claims of a tribe with the reliance on that water that non-
    Indian users have come to have over the 150 or so years that
    there has been settlement in Montana. Roughly 15 percent of
    Montana's agricultural economy depends on water that is
    involved in the Blackfeet Water Rights Settlement. It was
    certainly a priority of the State during these negotiations to
    ensure that we could meet those two goals. I believe the
    settlement has faithfully done that.
        One of the critical ways that we did that, and Shannon made
    mention of this as well, is that the State has contributed and
    continues to contribute $35 million to mitigate the impact of
    the Tribe's Birch Creek water right on non-Indian irrigators
    who also take water out of Birch Creek, which is the
    Reservation's southern boundary stream. The centerpiece of that
    plan is the rehabilitation and enlargement of the Four Horns
    Reservoir, which is a storage facility on the Badger Creek
    drainage to the north of Birch Creek.
        The State contributed half a million dollars out of the
    2007 legislative session to preliminary engineering studies.
    And we believe that those studies show that it is both cost-
    effective and reasonable to significantly enlarge the Four
    Horns Reservoir to make it capable of serving its current users
    as well as bringing additional water over to Birch Creek, which
    is a critical part of making the settlement work.
        As I said, the State has put $35 million into that, $19
    million of which has already been appropriated. We expect to
    see the additional $16 million in the Governor's budget that
    will be submitted to the 2011 session of the Montana
    legislature that will convene this January.
        I should also note that the Blackfeet Water Rights
    Settlement is important for the United States being able to
    recognize and utilize the full share of its entitlements out of
    both the St. Mary and the Milk River which are subject to the
    1909 Boundary Waters Treaty with Canada. That is a treaty that
    apportioned significant cross-boundary streams. Our feeling in
    Montana is that we were an after-thought to some extent and the
    Canadians got a very good deal and we did not get such a good
    deal.
        But this settlement is critical to making sure that what we
    do get from that treaty we are able to make benefit of for all
    of us who live south of the 49th parallel. That is a critical
    portion of this settlement as well.
        Finally, I know that a representative from the Fort Belknap
    Tribe was invited to be here today. Unfortunately, he could not
    attend. I know that he has submitted written testimony, and I
    would like to say, because the Compact Commission negotiated
    the settlement with the Fort Belknap Tribes as well as the
    Blackfeet Tribe, that we believe our technical analysis
    indicates that the possibility of actual conflict on the Milk
    River, which is a stream that originates on the Blackfeet
    Reservation, runs up into Canada and then back down into
    Montana and runs across the Fort Belknap Reservation, the
    possibility of conflict between the two tribes based on what we
    are proposing to quantify in their respective settlements is
    extraordinarily remote. We believe there is really no practical
    likelihood of any actual conflict arising.
        That said, the Blackfeet Tribe and the Fort Belknap Tribes
    recognizing the possibility of theoretical conflict had
    negotiated for a memorandum of understanding which empowered
    the Secretary to effectively mediate between the two tribes in
    the event that in the future a conflict were to arise. That
    provision is embodied in S. 3290. So we do not believe there is
    any meaningful prospect of inter-tribal conflict that would
    result from the approval of this settlement.
        And I see that my time is running short, so I will conclude
    my remarks. I again express my gratitude for the hard work,
    Senator Tester, that you and your staff have put in, that
    Senator Baucus and his staff have put in. We are very
    appreciative of all of the work that you have done on all the
    Indian water rights settlements that have come up from Montana.
    We look forward to continuing to work with both your offices,
    with the Committee, with our partners, the Blackfeet Tribe, and
    with the United States, to get this settlement into shape that
    it can be ratified hopefully this year.
        Thank you very much for the opportunity to be here.
        Senator Tester. As do we, Jay. Thank you.
        [The prepared statement of Mr. Weiner follows:]

    Prepared Statement of Jay Weiner, Assistant Attorney General, State of
         Montana; Legal Counsel, Montana Reserved Water Rights Compact
                                   Commission

        Chairman Dorgan and distinguished members of the Senate Committee
    on Indian Affairs, I thank you for the opportunity to provide written
    testimony on this important matter. My name is Jay Weiner, and I am a
    Montana Assistant Attorney General and staff attorney for the Montana
    Reserved Water Rights Compact Commission. I am here to testify on
    behalf of Chris Tweeten, the Chairman of the Montana Reserved Water
    Rights Compact Commission, the State of Montana and Governor Brian
    Schweitzer, in support of S. 3290, the Blackfeet Water Rights
    Settlement Act of 2010, and to urge your approval of this bill.
        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 statewide 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 (2009).)
        Montana has been remarkably successful in resolving both Indian and
    federal reserved water rights 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 Blackfeet, Crow and
    Fort Belknap Reservations that are in the process of approval. Earlier
    this year, this Committee recommended to the full Senate a ``do pass''
    on Senate Bill 375, as amended, ratifying the Crow Water Rights
    Settlement. The Blackfeet Tribe-Montana Compact has already been
    approved by the Montana legislature (Mont. Code Ann. Sec. 85-20-1501
    (2009)), and is now before Congress for ratification pursuant to S.
    3290.
        Concurrent with the initiation of the Montana general stream
    adjudication and the establishment of the Compact Commission in 1979,
    the United States filed suit in federal court to quantify the rights of
    tribes within the State, including the Blackfeet Tribe. Those federal
    cases have been stayed pending the adjudication of tribal water rights
    in state court. Should the negotiated settlement of the Blackfeet
    Tribe's water right claims fail to be approved, then the claims of the
    Blackfeet Tribe will be litigated before the Montana Water Court. The
    Blackfeet Tribe has always had the senior water rights in the basins
    that are the subject of the settlement embodied in S. 3290--this
    Compact does not create those rights, it simply quantifies them.
        The Blackfeet Indian Reservation is located in north-central
    Montana, bounded by Glacier National Park and the Lewis and Clark
    National Forest to the west, Canada to the north and prairies to the
    east and south. The Reservation encompasses 1.5 million acres (roughly
    one and a half times the size of Rhode Island), making the Reservation
    one of the largest in the United States. The Reservation is home to
    approximately half of the 16,000 enrolled Tribal members. Unemployment
    on the Reservation is estimated at being up to 70 percent. The region
    is arid, with approximately 13 inches of average annual precipitation.
    Ranching and farming comprise the major uses of land on the
    Reservation, with the principal crops being wheat, barley and hay.
        The provisions in S. 3290 will recognize and quantify water rights
    as well as off-Reservation storage allocations that will allow the
    Blackfeet Tribe to provide for its growing population and to develop
    its natural resources. The State of Montana and the Blackfeet Tribal
    Business Council agree that this is a fair and equitable settlement
    that will enhance the ability of the Tribe to develop a productive and
    sustainable homeland for the Blackfeet 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.
    This settlement is the product of over two decades of negotiations
    among the parties, which included an intensive process of public
    involvement.
        The primary sources of water on the Blackfeet Indian Reservation
    are the St. Mary River, the Milk River, the Two Medicine River, and
    Badger, Birch and Cut Bank Creeks. (See Attachment A.) Collectively,
    these watercourses contain approximately 1.5 million acre-feet per year
    (AFY) of water, with the St. Mary River alone accounting for roughly
    one-third of that total. The St. Mary River originates in the mountains
    of Glacier National Park and flows north and east across the
    Reservation before crossing into Canada. The Two Medicine River and
    Badger and Birch Creeks originate in the mountains to the west of the
    Reservation and flow east, ultimately uniting to form the Marias River
    just east of the Reservation. Birch Creek delineates the Reservation's
    southern boundary. The Milk River and Cut Bank Creek are prairie
    streams. The Milk River flows northeast into Canada before re-entering
    the United States just west of Havre, Montana, while Cut Bank Creek
    flows south and east until it joins the Marias River. The St. Mary and
    Milk Rivers are both subject to an apportionment agreed to between the
    United States and Canada in the 1909 Boundary Waters Treaty (BWT), and
    implemented by a 1921 Order of the International Joint Commission that
    was established by the BWT. Indian water rights were not considered
    during the negotiation or implementation of the BWT. The Bureau of
    Indian Affairs (BIA) manages the Blackfeet Irrigation Project on the
    Reservation. The Blackfeet Irrigation Project serves land in the Birch
    Creek, Badger Creek, Two Medicine River and Cut Bank Creek drainages.
        The Blackfeet Tribal Water Right is quantified separately for each
    drainage basin within the Reservation. The Tribal Water Right for the
    St. Mary River drainage within the Reservation is 50,000 AFY, not
    including the flows of Lee and Willow Creeks. This water right is
    subject to the limitation that its exercise may not adversely impact
    the water rights held by the Bureau of Reclamation's Milk River Project
    (MRP), which diverts almost the entire United States' share under the
    BWT of the St. Mary River into the Milk River for use by MRP irrigators
    in northern Montana approximately 200 miles downstream of the
    Reservation. The balance between tribal rights and MRP needs, and the
    protection of these off-Reservation water users, was a critical aspect
    of the negotiations of this settlement.
        In 1902, when Congress authorized, and the Bureau of Reclamation
    began to develop, the MRP, insufficient attention was given to the
    senior water rights of the Blackfeet Tribe. Historically, the Tribe has
    received neither benefits from nor compensation for the St. Mary River
    water used by the MRP, which can account for up to 90 percent of the
    MRP's water supply in dry years. At the same time, water users in this
    federal project have for generations depended on the St. Mary River
    water delivered to Project facilities for their livelihoods. This
    settlement addresses these two factors by providing for an interim
    allocation to the Tribe of 50,000 AFY of St. Mary River Water stored in
    Sherburne Reservoir, which is located contiguous to the Reservation and
    just inside Glacier National Park. That water is to be leased by the
    Tribe back to the Bureau of Reclamation for use by the MRP, at a rate
    to be negotiated between the Tribe and the United States, while studies
    are conducted to identify a permanent solution capable of satisfying
    the Tribe's water rights while keeping the MRP whole. The Tribe is also
    entitled to groundwater in the St. Mary drainage that is not subject to
    the BWT's apportionment, as well as the entire United States' share
    under the BWT of the natural flow of Lee and Willow Creeks (which are
    located in the St. Mary River drainage), except for the water in those
    streams that is subject to existing water rights under state law.
        The Blackfeet Tribal Water Right in the Milk River is quantified as
    the entire United States' share under the BWT of the Milk River, as
    well as all non-BWT groundwater in the Milk River drainage on the
    Reservation, except for the water that is subject to existing water
    rights under state law. In addition, the Tribe has agreed to afford
    protections for those existing water rights under state law, including
    a no-call provision for uses other than irrigation, and a 10 year
    phase-in for new development of tribal irrigation. The tribes of the
    Ft. Belknap Indian Community also claim water rights in the Milk River
    downstream of the point at which the Milk River re-enters the United
    States from Canada. Staff for the Compact Commission, which also
    negotiated a settlement of the water rights of the Ft. Belknap Indian
    Community that was approved by the State legislature in 2001 (Mont.
    Code Ann. Sec. 85-20-1001 (2009)), has evaluated the potential of
    competing demands on the Milk River between the Blackfeet Tribe and the
    Ft. Belknap Indian Community and has concluded that the possibility of
    actual conflict is exceedingly remote. Nevertheless, the Blackfeet
    Tribe and the Ft. Belknap Indian Community have negotiated a memorandum
    of understanding over Milk River water uses pursuant to their
    respective settlements, which contemplates that the Secretary of the
    Interior shall, with the consent of the tribal governments, identify
    and implement alternatives to resolve any such conflict that might
    someday arise. This provision is included in S. 3290 as well.
        The Blackfeet Tribal Water Right in Cut Bank Creek is quantified as
    all of the water (both surface and underground) in that drainage within
    the Reservation, except for the water that is subject to existing water
    rights under state law. The Tribe has also agreed to afford existing
    water rights under state law in the Cut Bank Creek drainage the same
    protections as are provided for in the Milk River drainage. The
    quantifications of the Tribal Water Right in the Two Medicine River and
    Badger Creek drainages are done in the same fashion as the Cut Bank
    Creek quantification, though the protections accorded by the Tribe to
    existing water rights under state law in these two drainages extend the
    no-call protection to all existing water rights under state law, not
    just non-irrigation water rights. (This more expansive no-call
    protection also extends to existing water rights in the St. Mary River
    drainage.)
        The quantification of the Tribal Water Right in Birch Creek was a
    major component of the negotiations. The Tribe's water rights in Birch
    Creek were judicially recognized as early as the 1908 Ninth Circuit
    Court of Appeals decision in the Conrad Investment Company case (161 F.
    829 (9th Cir.1908)), which was decided very shortly after the United
    States Supreme Court ruled in the seminal Indian water rights case
    Winters v. United States (207 U.S. 564 (1908)). The Blackfeet
    Irrigation Project diverts water from Birch Creek for project water
    users on the Reservation, but historically the Tribe has taken far less
    water from Birch Creek than that to which it was legally entitled.
    There is also extensive water resource development immediately to the
    south of Birch Creek, where roughly 80,000 irrigated acres, as well as
    municipalities, are served by the facilities of the Pondera County
    Canal and Reservoir Company (PCCRC). PCCRC also operates Swift Dam,
    which abuts the southwest corner of the Reservation. During the
    irrigation season, PCCRC's use diverts nearly all of the water
    available in Birch Creek. As the unconstrained development of the
    Tribe's Birch Creek water right recognized in this settlement has the
    potential to cause significant impacts to existing users, the balance
    between tribal and off-Reservation water use from Birch Creek was a
    major component of the negotiations.
        The settlement quantifies a substantial Tribal Water Right in Birch
    Creek. The quantification consists of a senior irrigation right of 100
    cubic feet per second (cfs) of Birch Creek natural flow, as well as a
    seasonably variable in-stream flow right (25 cfs from October 1 to
    March 31, and 15 cfs from April 1 to September 30), and all groundwater
    in the Birch Creek drainage that is not hydrologically connected to
    Birch Creek. In addition, the Tribe is entitled to the remainder of the
    water in Birch Creek after full satisfaction of existing uses under
    state law. As part of the protection of existing water rights under
    state law for which the State bargained, the Tribe agreed in the
    Compact to limit the development of its Birch Creek irrigation right to
    the Upper Birch Creek Drainage. There are also very specific
    administration provisions in the Compact concerning the manner in which
    the Tribe may change the use of its Birch Creek irrigation right to
    other beneficial purposes. In addition, a Birch Creek Management Plan
    (Attachment B) has been appended to the Compact, which commits the
    Tribe, the BIA and the operators at PCCRC to meet prior to each
    irrigation season to develop management plans to maximize the
    beneficial use of Birch Creek for all water users, and to adapt those
    plans as conditions warrant during the course of each irrigation
    season.
        When the Compact Commission initially presented this proposed
    settlement framework at public meetings south of the Reservation, the
    response was overwhelmingly negative, as stakeholders believed that the
    risks posed to their livelihoods by full tribal development of its
    Birch Creek water rights were insufficiently mitigated. Consequently,
    the parties returned to the negotiating table and entered into an
    Agreement Regarding Birch Creek Water Use (the Birch Creek Agreement)
    on January 31, 2008. The Birch Creek Agreement (Attachment C) is a
    critical component of the overall settlement. Under the Birch Creek
    Agreement, the State agreed to put $14.5 million into an escrow fund
    payable to the Tribe after final approval of the Compact by the Montana
    Water Court. (In anticipation of settlement, the 2007 session of the
    Montana legislature fully funded this amount.) In the interim, the
    Tribe is entitled to receive the interest from that fund, up to
    $650,000 per year. In exchange for these payments, the Tribe agreed to
    defer any development of its Birch Creek water rights beyond their
    current use for a period of 15 years from the effective date of the
    Birch Creek Agreement. In addition, the Tribe agreed to prioritize in
    this settlement authorization and funding for the Four Horns Project.
        The Four Horns Project involves the repair and improvement of the
    Four Horns Dam and Reservoir and associated infrastructure, features of
    the Blackfeet Irrigation Project located on the Reservation in the
    Badger Creek drainage. Preliminary engineering studies, funded by a
    $500,000 appropriation from the State, indicate that the storage
    capacity of the reservoir can be substantially increased in a cost
    effective fashion, and that a delivery system can be constructed
    economically to move excess water from the reservoir across to Birch
    Creek for the benefit of all Birch Creek water users. The studies
    suggest that this can be accomplished without reducing the access of
    Badger Creek water users, including those within the Blackfeet
    Irrigation Project, to the quantity of water currently stored in Four
    Horns that they use. The State has committed to spend $20 million
    toward the construction of this Four Horns Project, $4 million of which
    has already been appropriated.
        One of the essential mitigation benefits secured by the State in
    exchange for the financial and other commitments made in the Birch
    Creek Agreement is the Tribe's agreement to deliver 15,000 AFY of water
    from Four Horns to Birch Creek, for the benefit of Birch Creek water
    users, from the time construction is completed on the facilities
    necessary to make such deliveries possible until a date 25 years from
    the effective date of the Birch Creek Agreement. This provision of
    supplemental water is expected to offset the impacts of the Tribe's
    development of its Birch Creek water rights after the expiration of the
    15 year deferral period. In addition, the existence of infrastructure
    capable of bringing Four Horns water across to Birch Creek provides the
    Tribe with a potential market for surplus water from Four Horns into
    the future. With the Birch Creek Agreement in place, PCCRC and other
    off-Reservation stakeholders supported ratification of the Compact by
    the Montana legislature in 2009.
        The settlement also includes provisions allowing the Tribe to lease
    to water users off the Reservation those portions of its water rights
    that it has stored or directly used. The Tribe must offer water users
    on Birch Creek, Cut Bank Creek, the Milk River and the St. Mary River,
    respectively, a right of first refusal on water leased from those
    drainages to users downstream. Water from Birch Creek, Cut Bank Creek
    and the Milk River, all of which are within the Missouri River Basin,
    may only be leased for use at other locations within the Missouri River
    Basin.
        In addition, under S. 3290, the United States will allocate to the
    Tribe a portion of the water in the Bureau of Reclamation's storage
    facility on Lake Elwell, located along the Marias River in central
    Montana. The bill provides for the Tribe's allocation to be all water
    not yet allocated from that storage facility, less the quantity of
    water agreed to by the Tribe and the Ft. Belknap Indian Community that
    may be allocated to Ft. Belknap in the future pursuant to its own water
    rights settlement. The bill further provides that nothing in this
    allocation to the Blackfeet Tribe requires the United States to provide
    any facility for the transportation of the Tribe's allocation from Lake
    Elwell to any point. The Tribe may lease water from this Lake Elwell
    allocation so long as it is for use within the Missouri River Basin.
        The settlement also closes all of the on-Reservation basins to new
    appropriation under Montana law. In all cases, both under Tribal Code
    and State law, the development of new small domestic and stock uses are
    not precluded by the basin closures. For all on-Reservation basins,
    water rights under state law will become part of the Tribal Water Right
    if the Tribe reacquires the land and the appurtenant water right. This
    structure will allow the Tribe to reconsolidate both land and water
    resources within the Reservation.
        The Tribe will administer the Tribal Water Right. The State will
    administer water rights recognized under state law. The Blackfeet
    Irrigation Project will use part of the Tribal Water Right and will
    continue to be administered by the BIA under applicable federal law.
    The Blackfeet 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
    resources 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 Compact will recognize and protect the Blackfeet Tribe's water
    rights and provides for the improvement of agricultural water systems
    and tribal economic development. The Compact promotes development for
    the benefit of the Blackfeet People while protecting other water uses.
    The Compact is the full and final settlement of all of the Tribe's
    water rights claims within the Blackfeet Reservation and the Tribe
    waives any claims to water rights not contained or reserved in the
    Compact. We urge your support in ratifying the Compact by passage of
    this Act.

        Attachments

        Senator Tester. John Bloomquist?

    STATEMENT OF JOHN E. BLOOMQUIST, ATTORNEY, PONDERA COUNTY CANAL
                         AND RESERVOIR COMPANY

        Mr. Bloomquist. Thank you, Senator Tester, members of the
    Committee and staff. My name is John Bloomquist, I am an
    attorney from Helena, Montana, and I am testifying on behalf of
    the Pondera County Canal and Reservoir Company, which I will
    refer to in my remarks as PCCRC.
        PCCRC is a non-profit corporation located in Valier,
    Montana. Its history dates back more than 124 years to
    settlement and development under the Carey Land Act and other
    Federal laws.
        Today, PCCRC supplies water to approximately 450 water
    users for irrigation and stock water purposes, covering over
    80,000 acres of irrigated lands that are the foundation of the
    regional agricultural economy. PCCRC also supplies municipal
    water to the citizens of the city of Conrad.
        The major source of water for the project is Birch Creek,
    which is located along the southern boundary of the Blackfeet
    Indian Reservation. The waters of Birch Creek are also stored
    in two major reservoirs operated by PCCRC, Swift Dam and Lake
    Frances.
        PCCRC is interested in the compact, primarily because of
    the potential impact on its water supply. It is estimated that
    the impact of the Tribal Water Right on Birch Creek will reduce
    project water supplies by approximately 15,000 acre feet per
    year. This would affect 22,500 acres of irrigation within the
    project, reducing producers' revenue by just under $8 million
    per year, reducing land values by $500 to $600 per acre on
    affected areas and reducing improvement value by $225 to $300
    per acre.
        That is why legislation ratifying the compact should
    include adequate mitigation measures. We are pleased that S.
    3290 does so by directing the Secretary to make improvements to
    the Four Horns Dam, which will assist in providing mitigation
    water to PCCRC, and by establishing a fund to mitigate long-
    term impacts on project users.
        With that background, let me go to the heart of the matter
    to explain why it is appropriate for the Federal legislation to
    establish a fund to mitigate the compact's long-term impacts on
    PCCRC. The first reason is that the impact is the direct result
    of Federal policies. The settlement of water rights claims
    reflects one set of important Federal policies. The PCCRC
    itself reflects another. The PCCRC project exists in large part
    as a project developed under the Federal Carey Land Act, which
    encouraged settlement and development of associated irrigation
    projects.
        We believe both Federal policies should be furthered in the
    legislation and are in fact furthered by the establishment of
    the mitigation fund. The second reason for the mitigation fund
    is, although there is some uncertainty about the precise
    magnitude of the economic impact on the project, 25 years from
    now everyone agrees that it will be substantial. In many cases,
    the impact of the water compact on non-tribal water users is
    mitigated directly and permanently as this compact does for the
    Milk River project.
        However, with respect to PCCRC, the direct mitigation is
    temporary with a 10-year deferment period, followed by a 15-
    year period where 15,000 acre feet of Four Horns water would be
    delivered to the company. After 25 years, the direct mitigation
    ends.
        For farm families who have been on land for generations, 25
    years is not a very long time. Without a mitigation fund,
    irrigators will have to either pay sharply higher costs or
    alternatively, get out of farming. In either case, the economic
    impact will be great, not only to PCCRC and its users, but to
    the entire regional economy.
        We suggest that the most fair and efficient way to address
    this is by establishing the mitigation fund, which is set forth
    in the legislation. Initially capitalize the fund at $27
    million. That fund would be administered by a Federal agency,
    and the fund would be available to support appropriate
    mitigation measures. For example, it may be used to lease water
    from the Blackfeet Tribe, construct water savings projects, or
    if necessary, purchase PCCRC shares for the retirement of
    irrigation lands.
        We would be happy to work with the Committee to provide
    further details about the appropriate operations of the
    mitigation fund.
        In conclusion, we commend Senator Baucus and you, Senator
    Tester, for your work on this legislation. We also commend the
    State of Montana and the Blackfeet Tribe and the Federal
    officials who have been involved in the long and difficult
    negotiation of the compact. We particularly appreciate the
    State's and the Tribe's support for including mitigation
    provisions in the legislation. We are committed to work with
    the parties to produce a bill that settles water rights claims
    and provides economic opportunities to all residents in North
    Central Montana.
        Thank you, Senator.
        [The prepared statement of Mr. Bloomquist follows:]

      Prepared Statement of John E. Bloomquist, Attorney, Pondera County
                          Canal and Reservoir Company

        Mr. Chairman and Committee Members, my name is John E. Bloomquist
    and I am an attorney from Helena, Montana and I am appearing before you
    today on behalf of the Pondera County Canal and Reservoir Company. On
    behalf of the Pondera County Canal and Reservoir Company, I wish to
    express our thanks for the invitation to testify on S. 3290, a bill
    which is critical to the water users of the Pondera County Canal and
    Reservoir Company and to a very large region of north central Montana.
    I also wish to express our thanks to Senators Max Baucus and Jon
    Tester, and their staffs for their hard work on this bill and in
    particular the provisions of the bill which relate to Birch Creek water
    supplies.
    I. Introduction and Overview
        The Pondera County Canal and Reservoir Company (``PCCRC'' or the
    ``Company'') is a non-profit corporation located in Valier, Montana
    which owns and operates, for the benefit of its users, an irrigation
    and water supply project situated in north-central Montana. PCCRC
    supplies water to approximately 450 water users for irrigation and
    stock watering purposes as well as providing municipal water to the
    citizens of the City of Conrad in Pondera County, Montana.
        Water associated with the PCCRC project is supplied to PCCRC's
    users via an extensive system of canals and storage reservoirs which
    were developed by the Company's predecessors beginning in the mid to
    late 1880's. The major source of water for the project is known as
    ``Birch Creek,'' which is located along the southern boundary of the
    Blackfeet Indian Reservation in north-central Montana.
        PCCRC is the successor to water rights developed and appropriated
    from Birch Creek for use within the Company's water supply project. The
    waters of Birch Creek are also stored in two major reservoirs owned by
    PCCRC (Swift Dam and Lake Frances) for distribution to the Company's
    water users for irrigation and municipal purposes. In addition, Lake
    Frances is utilized by recreationalists and anglers in this region of
    Montana for the fishing and recreational opportunities provided by the
    reservoir.
        Because of the critical importance of Birch Creek to PCCRC's water
    supply, the Company has been actively involved in following
    negotiations among the State of Montana, the Blackfeet Tribe, and the
    United States in the efforts to quantify the Blackfeet Tribe's reserved
    water rights for Birch Creek and other water sources. PCCRC has
    actively monitored and commented on in the negotiations conducted by
    the Montana Reserved Water Rights Compact Commission (RWRCC), the
    Blackfeet Tribe, and the United States for approximately 20 years.
        The negotiations of the Tribal Water Right (TWR) for Birch Creek
    have been closely followed by PCCRC due to the critical nature of Birch
    Creek as the major water source for the Company's water users. Over the
    years, PCCRC and its representatives have closely monitored the various
    proposals discussed by the state, tribal, and federal negotiation teams
    regarding the quantification and use of the TWR for Birch Creek.
        Throughout the negotiation process, the chief issue for PCCRC, on
    behalf of its water users, has been to evaluate the impact on the
    Company's water supply of any Birch Creek TWR which would ultimately be
    negotiated by the state and the Tribe. PCCRC's main issue throughout
    the process has been to make sure the Company's water supply is not
    adversely affected by the quantification and ultimate development of
    the TWR for Birch Creek.
        In negotiations for the Birch Creek TWR, PCCRC has consistently
    advocated various proposals which recognize the existence of a
    substantial Birch Creek TWR for use and development by the Blackfeet
    Tribe while also recognizing the importance of the Company's Birch
    Creek water supply for its users. In this vein, PCCRC has been very
    active in suggesting proposals for mitigation of impacts on PCCRC's
    water supply by the development of the TWR on Birch Creek. Mitigation,
    and the concept of developing and implementing various measures to
    protect water users who may be affected by the development of tribal
    water rights, has been an effective mechanism in Montana in achieving a
    variety of water settlements between the State of Montana and various
    Indian Tribes in Montana.
        The concept of mitigation of impacts of the Birch Creek TWR has
    been recognized by the State of Montana and the Blackfeet Tribe.
    Mitigation, in the context of the Montana-Blackfeet Compact, includes
    two important components. The first component involves the development
    and construction of additional water storage opportunities within the
    Blackfeet Indian Reservation associated with the Four Horns Dam and
    Reservoir. Four Horns Dam and Reservoir, and the development and
    betterment of the dam, reservoir, and associated water delivery systems
    represent a viable opportunity to improve water storage capabilities on
    the Blackfeet Indian Reservation for the benefit of the Blackfeet
    Tribe, while also providing a viable source of mitigation water which
    could be available to Birch Creek to offset the impacts to PCCRC's
    water supply by development of the negotiated Birch Creek TWR. PCCRC
    believes the provisions included in S. 3290 concerning improvements to
    the Four Horns Dam, reservoir, and water delivery system is a critical
    component of the Montana-Blackfeet Tribe water rights compact and
    strongly supports congressional approval and authorization of these
    projects on the Blackfeet Reservation.
        The second component of mitigation of impacts of the Birch Creek
    TWR involves adequate funding to assure that mitigation projects become
    a reality, and that mitigation from the development of the Birch Creek
    TWR provides long-term solutions, not only for the Tribe but for other
    Birch Creek water users as well.
        Regarding mitigation funding, PCCRC has actively worked with the
    State of Montana and the Blackfeet Tribe to secure state funding for
    deferment of implementation of the Birch Creek TWR for a period of
    years, as well as assuring the delivery of water from an improved Four
    Horns Dam and Reservoir system to PCCRC's water delivery system from
    Birch Creek. As set forth in the Birch Creek Agreement which
    accompanies the Montana-Blackfeet Compact, the Tribe has agreed to
    defer development of its Birch Creek TWR above historic use for a
    period of 15 years. In addition, the Tribe has agreed to deliver to
    Birch Creek approximately 15,000 Acre-Feet (``AF'') per year from an
    improved Four Horns Dam and Reservoir until the 25th anniversary of the
    Birch Creek Agreement.
        In the spring of 2009, the State of Montana and the Blackfeet Tribe
    amended the Birch Creek Agreement to further support the components of
    successful mitigation for a period beyond the 25-year term set forth in
    the Birch Creek Agreement. On February 13, 2009, the state and the
    Blackfeet Tribe agreed that the Four Horns project improvements be
    included in federal legislation which would ratify the Montana-
    Blackfeet Water Compact, and that additional funding may be required to
    mitigate impacts of development of the Birch Creek TWR after the
    expiration of the Birch Creek Agreement. In the amendment to the Birch
    Creek Agreement, both the state and the Blackfeet Tribe agreed to
    support federal funding for this purpose.
        Based upon the amendment to the Birch Creek Agreement, as set forth
    above, PCCRC supported the Montana-Blackfeet Compact as the compact was
    presented to the 2009 Montana legislature. PCCRC's support for the
    compact was grounded upon the recognition by both the State of Montana
    and the Blackfeet Tribe that development of the Birch Creek TWR would
    at times adversely affect PCCRC's Birch Creek water supply, and that
    the Four Horns Dam and Reservoir improvements and additional mitigation
    funding were viable opportunities to mitigate impacts on PCCRC's Birch
    Creek water supplies from development of the TWR. The 2009 Montana
    Legislature passed the Montana-Blackfeet Compact, setting the stage for
    this historic agreement to be presented to the United States Congress
    for ratification.
        S. 3290 contains provisions which recognize the necessity of
    improving the Four Horns dam, reservoir, and delivery facilities so
    that water stored in Four Horns may be delivered to PCCRC's water
    system from Birch Creek. In addition, S. 3290 includes provisions which
    authorize the establishment of a Birch Creek Mitigation Fund to be used
    to mitigate impacts from development of the Birch Creek TWR on the
    water supplies of PCCRC. These provisions contained within S. 3290 are
    integral to the long-term success of the Montana-Blackfeet Tribe water
    rights settlement and provide the necessary framework for a successful
    compact which meets the needs of the State of Montana, the Blackfeet
    Tribe, and the water users of PCCRC who depend upon Birch Creek water
    supplies.
    II. Background of the PCCRC Project and Rationale for S. 3290 Birch
            Creek Mitigation Provisions
    A. History of PCCRC and Use of Water by PCCRC Water Users
    1. PCCRC History
        The history of PCCRC and the associated development and use of the
    PCCRC water supply dates back over 124 years. Water right
    appropriations and the associated delivery systems of the present day
    PCCRC were developed in accordance with various state and federal laws
    designed to encourage irrigation and reclamation of the arid west for
    agricultural purposes. In the early days of settlement, homesteaders
    appropriated water from Birch Creek and Dupuyer Creek for irrigation
    purposes on homestead lands, and public domain lands, at the behest and
    encouragement of Congress. In fact, several of PCCRC`s water rights for
    these sources pre-date Montana statehood.
        In addition to water rights appropriated by settlers in the region
    under the Homestead laws, PCCRC also has its origin grounded in a
    substantial part under the federal Carey Land Act of 1894, wherein,
    Congress authorized grants of public domain lands to certain western
    states to encourage settlement and reclamation of those arid lands.
    Although lands were granted to the states by the Federal Government
    under the Carey Land Act, it was expected that private enterprise would
    finance and develop the actual reclamation and associated water supply
    and distribution systems associated with irrigation of the lands
    provided to the states with ultimate disposition of the lands to the
    settlers. PCCRC's development as a Carey Land Act project began in
    about 1909. As part of the early development of the PCCRC water supply
    system, the Federal Government assessed the available water supply from
    Birch Creek for the project and deemed the water supply to be
    sufficient to authorize development of the project under the Carey Land
    Act. A major portion of PCCRC's irrigated acres and development of the
    water storage and distribution supply serving these lands has as its
    origin the development of the project under the federal Carey Land Act.
        As mentioned above, under the Carey Land Act, both the Federal
    Government and state of Montana assessed the water supply for the
    project, and after confirming water supplies were sufficient,
    encouraged PCCRC's predecessors to construct and finance much of the
    water supply and distribution systems which serve PCCRC's shareholders
    today. Under the auspices of both state and federal statutes,
    corporations were established to construct the water supply systems
    which eventually provided water to settlers who acquired lands served
    by the project. PCCRC itself is the successor ``operating company'' to
    it predecessor ``construction company'' which financed and developed
    the system which serves irrigators and communities in the Valier and
    Conrad areas of north central Montana.
        As a result of the development of a major portion of the water
    supply system under the terms of the Carey Land Act, PCCRC is owned and
    controlled by shareholders of the Company who are the successors of the
    original homesteaders and settlers who reclaimed arid lands using the
    project water supply. PCCRC holds the water rights used by its
    shareholders from Birch Creek, Dupuyer Creek, and other area sources
    for the benefit of its water users. PCCRC also operates Swift Reservoir
    on Birch Creek and Lake Frances near the town of Valier, the two major
    storage reservoirs associated the project, as major components of the
    Company's Birch Creek water delivery system. As also required under the
    Carey Land Act, PCCRC's predecessors developed and constructed over 500
    miles of canals and laterals to serve the acres irrigated by the
    project.
        As a result of development of the project under the Federal Carey
    Land Act, PCCRC supplies water to approximately 450 shareholders for
    agricultural purposes, as well as supplying the city of Conrad with its
    municipal water supply. PCCRC is responsible for managing the water
    supply and distribution works which supplies water to over 80,000 acres
    of irrigated lands in the area. These 80,000 acres of irrigated lands
    provide the foundation of the local and regional agricultural economy
    of this area of Montana.
    B. PCCRC Water Supply System
    1. Birch Creek
        Birch Creek provides PCCRC shareholders with approximately eighty-
    five percent (85 percent) of the water used in the Company's storage
    and distribution system. Near the headwaters of Birch Creek, PCCRC owns
    and operates Swift Reservoir which was constructed in about 1912 and
    reconstructed after a catastrophic flood in 1964 to store and regulate
    a portion of the Company's water supply. The construction of Swift
    Reservoir was done by PCCRC's predecessors as part of the Carey Land
    Act obligations of the Company. Swift Reservoir can store over 30,000
    acre-feet of Birch Creek water which the Company can regulate and
    release from Birch Creek to the Company's main Birch Creek diversion
    system, known as the ``B Canal.'' From Birch Creek, via the B Canal,
    the Company diverts water to its main storage facility known as ``Lake
    Frances'' situated near the town of Valier, Montana. Lake Frances has a
    storage capacity of approximately 115,000 acre-feet and was constructed
    in 1909, also as part of the Company's predecessors Carey Land Act
    obligations. Lake Frances, in addition to being the project's main
    storage and distribution reservoir, also serves as a popular recreation
    site for anglers and recreationalists in this region of Montana.
    2. Dupuyer Creek
        Dupuyer Creek also serves as source of PCCRC's water supply which
    is stored and distributed to its shareholders. Although an important
    source of water, Dupuyer Creek supplies the Company with approximately
    fifteen percent (15 percent) of PCCRC's water supply requirements,
    substantially less than the Company's reliance on Birch Creek.
        PCCRC holds several water rights for the waters of Dupuyer Creek
    which are diverted from the creek via the Company's ``D Canal'' and
    delivered to the distribution and storage system. Although Dupuyer
    Creek is an important source of the Company's water supply, Birch
    Creek, and water supplied by Birch Creek at the Company's B Canal
    diversion, is the predominant source of supply for the users of the
    PCCRC water supply system.
    C. Historic Water Distribution from Birch Creek Supplies
        In addition to PCCRC using water from Birch Creek, the Blackfeet
    Irrigation Project (BIP) operated by the U.S. Bureau of Indian Affairs
    (BIA), also diverts water from Birch Creek for irrigation purposes on
    the Blackfeet Reservation. \1\ Pursuant to the decree in United States
    v. Conrad Investment Co., 156 F. 123 (D. Mont. 1907), aff'd. 161 F. 829
    (9th Cir. 1908), diversions from Birch Creek for the BIP have
    historically varied from approximately 11 cubic feet per second
    (``c.f.s.'') to 50 c.f.s. during the irrigation season, or as expressed
    volumetrically, from approximately 1,495 AF to 7,450 AF/year, based on
    available Company records.
    ---------------------------------------------------------------------------
        \1\ Establishment of the BIP by Congress occurred in 1907. See, 34
    Stat. 1035-1036.
    ---------------------------------------------------------------------------
        In addition to use of Birch Creek water by the Blackfeet Tribe for
    irrigation purposes, PCCRC has worked with the Tribe and allowed on
    average approximately 6 c.f.s to flow past the B Canal diversion for
    instream flow purposes. The volume of water associated with the 6
    c.f.s. bypassing the B Canal on Birch Creek over the course of a year
    results in approximately 4,380 AF/year of Birch Creek water for
    instream use by the Tribe. Under the Montana-Blackfeet Compact, the
    Blackfeet Tribe's water right on Birch Creek has been quantified at
    levels that exceed historic demands of the Tribe for the water of Birch
    Creek.
    D. Birch Creek Tribal Water Right as Established in Montana-Blackfeet
            Compact
    1. Article III, Section C., Birch Creek Tribal Water Right
        Under the Montana-Blackfeet Compact, the components of the Birch
    Creek TWR may be summarized as follows: \2\
    ---------------------------------------------------------------------------
        \2\ As provided herein, the TWR is summarized for purposes of this
    written testimony. Articles II, III, and IV of the Compact should be
    reviewed together and in conjunction with the two (2) Birch Creek
    agreements, in order to properly examine the extent and potential
    effect of the Birch Creek TWR.

            a. Irrigation--100 c.f.s. Direct Use water right of the natural
    ---------------------------------------------------------------------------
            flow of Birch Creek for use in the Upper Birch Creek Drainage;

            b. Instream Flow--a natural flow right in Birch Creek of 15
            c.f.s. from October 1 to March 31; and 25 c.f.s. from April 1
            to September 30 of each year;

            c. Additional Flow Right--after satisfaction of all state-based
            water rights, Tribe may divert or authorize use of all natural
            flow in Birch Creek as measured at State Highway 358 bridge;

            d. Groundwater Right--all groundwater not hydrologically
            connected to Birch Creek;

            e. Priority Date--October 17, 1855;

            f. Period of Use--b., c., and d. above year round and a. above
            April to October 1 of each year;

            g. Points/Means of Diversion--as authorized by Tribal Water
            Code;

            h. Call Protection--other than rights from Birch Creek, all
            other sources in Basin 41M protected from call for water under
            the instream flow TWR;

            i. Birch Creek Management Plan--TWR for irrigation also
            governed by Birch Creek Management Plan Agreement; and

            j. Commencement of Development--TWR for irrigation and instream
            flow subject to Agreement on Birch Creek Water Use.

    2. Impact of Birch Creek TWR on PCCRC Water Supply
        Under the Montana-Blackfeet Compact, the TWR on Birch Creek does
    not have a volumetric cap or limit. As such, the compact does not
    establish a readily identifiable block of Birch Creek water from which
    to assess firm impacts on the PCCRC Birch Creek supply. However, based
    upon PCCRC water use records, and based upon the terms of the TWR as
    set forth in the compact, and the ancillary agreements, estimates have
    been presented by state and tribal representatives which calculate the
    impact on PCCRC water supplies to be approximately 15,000 AF/year.
        Assuming an average delivery of irrigation water by PCCRC to its
    water users of 8 inches per acre, an impact of a loss of 15,000 AF/year
    to PCCRC will affect 22,500 acres of irrigation within the PCCRC
    project. Given this potential substantial impact on PCCRC water users
    and acres served under the PCCRC project, PCCRC has actively
    participated with state and tribal representatives in examining a
    variety of mitigation measures in an attempt to lessen effects from
    development of the compacted Birch Creek TWR and to achieve long-term
    security for the Company's water supply.
        Because PCCRC is a very efficient user of water for irrigation
    purposes, PCCRC has been able to serve project shareholders and acres
    under the project with water within the Company's historic diversion
    and distribution patterns. However, any additional loss of water supply
    as a result of development of the Birch Creek TWR could have serious
    adverse effects on PCCRC's water users and the local and regional
    economy.
    E. Proposals to Mitigate Impacts of the Birch Creek TWR on PCCRC Water
            Users
        The State of Montana, the Blackfeet Tribe, and PCCRC have
    identified various alternatives to help mitigate full development of
    the proposed TWR on Birch Creek. These alternatives include proposals
    for projects which would provide additional water to Birch Creek as
    well as proposals for state-based water users to lease water from the
    Blackfeet Tribe, or to otherwise mitigate a loss of Birch Creek water
    supplies on the PCCRC project. S. 3290 includes important provisions in
    this regard.
    1. Blackfeet/Montana Agreement Regarding Birch Creek Water Use
        Due to impacts of the Birch Creek TWR on PCCRC's Birch Creek water
    supplies, the state and the Tribe have negotiated the ``Agreement on
    Birch Creek Water Use'' as part of the TWR for Birch Creek. Under the
    agreement, which is a collateral agreement to the compact, the Tribe
    has agreed to defer any additional use of the negotiated TWR on Birch
    Creek, over and above a set level of use for irrigation and instream
    flow purposes, for a period of 15 years. In addition, the Tribe and the
    state agreed that they would jointly seek federal funding authorization
    in any federal legislation for the betterment and improvement of Four
    Horns Dam and Reservoir on the Blackfeet Reservation, including
    construction of facilities to deliver a minimum of 15,000 AF/year of
    water from an enlarged Four Horns to PCCRC's Birch Creek water delivery
    system. Under the Birch Creek Agreement, the Tribe has agreed to
    deliver water from an improved Four Horns Dam and Reservoir to Birch
    Creek for an additional ten-year period. As such, under the Birch Creek
    Agreement, PCCRC's water supplies should remain relatively secure for
    approximately 25 years.
    2. Birch Creek Agreement Amendment
        In February 2009, the state and the Blackfeet Tribe amended the
    Birch Creek Agreement. The amendment was largely a result of concerns
    expressed by PCCRC that the long-term security of the Company's Birch
    Creek water supply was placed at risk. Under the February 2009
    amendment, the state and the Tribe agreed that mitigation of impacts of
    development of the Birch Creek TWR is necessary to avoid adverse
    effects to PCCRC's water supply and that those impacts can be mitigated
    by improvements to the Four Horns Project situated on the Blackfeet
    Indian Reservation. Under the amendment, the state and Tribe agreed
    that improvements to the Four Horns Project would be included in the
    federal legislation and further agreed that additional funding would be
    required to mitigate impacts of development of the Birch Creek TWR
    beyond the 25-year term set forth in the Birch Creek Agreement. Both
    the state and Tribe agreed to support federal funding for this purpose.
        As a result of the Birch Creek Agreement and the amendment to the
    Birch Creek Agreement, PCCRC supported passage of the Montana-Blackfeet
    Compact by the 2009 Montana Legislature. Based upon these agreements
    and upon inclusion of provisions within S. 3290 that recognize
    mitigation for Birch Creek, PCCRC has supported introduction of this
    important federal legislation.
    3. Provisions of S. 3290 to Mitigate Development of the TWR
        S. 3290 includes important provisions to implement the mitigation
    measures contemplated by the Birch Creek Agreement and amendment.
    Provisions included within S. 3290 addressing the need to fully develop
    the Four Horns Dam and Reservoir; to construct facilities to deliver
    not less than 15,000 acre-feet of water per year for delivery to
    PCCRC's water delivery system under the Birch Creek Agreement; the
    ability to lease water from an improved Four Horns Dam and Reservoir
    system; and the establishment of a Birch Creek mitigation fund are all
    provisions of the federal legislation which are necessary to achieve
    mitigation of impacts on PCCRC's water supply associated with the
    development of the Birch Creek TWR. See, Sections 5 and 11, S. 3290.
    PCCRC believes these provisions of S. 3290 are critical to the long-
    term success of the Compact and its ancillary agreements. PCCRC
    believes these provisions provide the necessary framework for the
    historic agreements made by the State of Montana and the Blackfeet
    Tribe to be successful for both Tribal and non-tribal water users on
    Birch Creek.
        PCCRC believes the mitigation provisions of S. 3290 for Birch Creek
    are essential to the long-term success of the Compact. While PCCRC
    understands certain aspects of mitigation and the provisions in this
    regard in S. 3290 may need further refinement, PCCRC believes
    mitigation provisions will assure the development of beneficial
    improvements for Four Horns Dam and Reservoir, as well as securing the
    benefits of these improvements for the Blackfeet Tribe. PCCRC also
    believes the mitigation provisions of S. 3290 are important to avoid
    unnecessary adverse effects on PCCRC's water supplies on Birch Creek
    associated with development of the Birch Creek TWR. By securing a long-
    term solution to water supplies on Birch Creek, S. 3290 will assure
    that the Blackfeet Tribe benefits from implementation of the Montana-
    Blackfeet Compact and that PCCRC's water users will continue to have
    access to necessary water supplies upon which the project was
    historically developed.
    III. Conclusion
        PCCRC commends the hard work of all involved with the complexities
    of the Montana-Blackfeet Compact. PCCRC remains committed to continue
    working with the State of Montana, the Blackfeet Tribe, and the
    Administration in securing federal legislation to ratify the compact
    and the ancillary agreements on Birch Creek. PCCRC is ready to address
    any concerns which may be identified with the federal legislation in an
    effort to assure the successful implementation of the compact for all
    water users on Birch Creek.
        On behalf of PCCRC, we thank the Committee and the Committee's
    staff for the opportunity to provide PCCRC's view of S. 3290 and look
    forward to continued input on this important legislation.

        Senator Tester. I want to thank you for being here, too,
    John. I appreciate the testimony of all three of you. It is
    unfortunate Tracy could not make it, Tracy King, President of
    the Fort Belknap. We will encourage him to get that written
    testimony in, so it can all be a part of the record.
        I also want to recognize Rusty Tatsey and Jay St. Goddard,
    and Jeannie Whiting for being here from the Tribe. We very much
    appreciate you guys making the trip also.
        I am going to start with Shannon. I have a few questions
    for you. The Blackfeet Tribe, is their support for the bill
    solid? Is it weak? Are there concerns? Give me an idea of the
    lay of the land as far as support for this bill in Blackfeet
    Country.
        Mr. Augare. The Blackfeet Tribe, I believe, needs to have
    an understanding of what State and Federal Government is
    proposing to them. The State of Montana has already pulled
    together their appropriations package. We are waiting on
    Federal Government to act so we can take a vote of the people.
        So we are waiting on your work, Senator.
        Senator Tester. So there needs to be an education process?
        Mr. Augare. Right.
        Senator Tester. Assuming we get this bill through sooner
    rather than later, do you have a plan to educate folks on what
    this bill does?
        Mr. Augare. We have begun a discussion around what a media
    market campaign might look like. But again, we are waiting for
    the final package that Federal Government will produce.
        Senator Tester. Okay. On Fort Belknap, it was touched on a
    bit by Jay, I have been told that there are some concerns
    there. Are you aware of the concerns? Do you feel as solid as
    Jay does about the fact that you think there is very, very
    little chance of it becoming a problem?
        Mr. Augare. Good question. We have been committed to the
    idea of holding open dialogues with the Fort Belknap Tribal
    Business Council. We remain committed to that open dialogue. We
    do want to address their concerns. So we are very openly
    engaged about that process with them.
        Senator Tester. Has dialogue occurred up to now?
        Mr. Augare. Yes, I believe so. Yes. And there is a
    provision in the bill that allows for further discussions to
    occur. So their concerns are addressed in an appropriate
    manner.
        Senator Tester. A difficult question, too bad Tracy isn't
    here, like I said. But he got waylaid in the flight. Is your
    relationship good with them? Is there animosity there, or are
    folks sympathetic to get the thing done?
        Mr. Augare. I believe we all want to resolve our water
    rights issues in an expeditious manner. From my understanding,
    their water right compact has been in process since 2000. We
    have completed ours in 2007. We look at our relationship with
    the Fort Belknap community tribal business council as a
    positive one. But we are not wanting to delay this action any
    further. We want to complete the process.
        Senator Tester. All right. The bill authorizes an
    appropriation for the Blackfeet land and water development
    fund. What kinds of projects do you envision occurring from
    this fund?
        Mr. Augare. We have a number of projects identified. We are
    right now waiting for the DEC review to be completed. We will
    be providing your office and other interested parties, of
    course, with that report once it is issued.
        Senator Tester. Okay, and my last question for you, how
    does the Tribe feel about the mitigation measures that John
    Bloomquist explained that the Pondera Canal Company is
    proposing?
        Mr. Augare. We remain supportive, so long as it, I will
    emphasize repeatedly, does not delay our compact. We want to
    meet an agreement soon. But we are supportive.
        Senator Tester. Before I get to you, Jay, I see Senator
    Baucus has entered the house. Did you have anything you would
    like to say, Max?
        Senator Baucus. At the appropriate time.
        Senator Tester. We are asking questions, but you are busy.
        Senator Baucus. We are all busy.
        Senator Tester. Okay, good enough. We will keep going.
        Jay, in other water compacts we have considered this year,
    the Department of Interior was always concerned about non-
    Federal cost share. Montana is contributing $35 million to this
    process. Do you think that is fair?
        Mr. Weiner. Senator Tester, $35 million is more than
    Montana has ever been asked to contribute before. We
    contributed $15 million to the Crow Settlement that this
    Committee has heard. Thirty-five million dollars, we believe,
    reflects the benefits that we have sought and that we believe
    is a fair amount, yes.
        Senator Tester. Good. Are there other things that they have
    contributed or could contribute that are non-monetary?
        Mr. Weiner. Certainly. The State has put extensive
    resources over the two decades of negotiation into technical
    analyses that will assist the Blackfeet Tribe as they develop
    their water code to help both the Tribe and the State
    understand the water resources on the Reservation. The State
    has put significant technical resources into looking at water
    use of the Bureau of Reclamation's Milk River project, which
    diverts almost the entire United States share of the St. Mary
    River across the Blackfeet Reservation and down to Milk River
    project lands, 200 miles off the Reservation. And the technical
    work the State has done in relation to both the Blackfeet and
    the Fort Belknap settlements we believe are of significant
    value directly to the United States in their operation of their
    Milk River project.
        Senator Tester. Okay. Mitigation measures that the Pondera
    Canal Company is providing, does Montana support those?
        Mr. Weiner. Montana has the same position as the Blackfeet
    Tribe, which is that we do support Pondera's request, but we
    would like this bill to move as soon as possible.
        Senator Tester. Okay. When you started your testimony, you
    said this has been going on for about half your life. You have
    been in the business of water for a while. Are you aware of the
    Federal Government providing any similar mitigation funds,
    mitigation measures, for non-Indian water users off-
    reservation?
        Mr. Weiner. I am not familiar with the Federal Government
    providing funds directly to a private irrigation company, but I
    am certainly familiar with the Federal Government working with
    non-Indians off the reservation both in and outside of Bureau
    of Reclamation projects.
        Senator Tester. Thank you. Thank you for your testimony and
    your answers.
        John, once again, good to have you here. The Pondera Canal
    Company, what is their support on this bill?
        Mr. Bloomquist. Senator, thank you again for the invitation
    as well. Our support for the bill, we certainly supported the
    introduction of the bill and movement of the bill with
    mitigation. We view the mitigation as a necessary component of
    a successful compact. That mitigation, taking the two forms
    that are presented in the bill, which is the improvement,
    development of the Four Horns project, which we believe
    provides the necessary mitigation water to offset impacts of
    development of the tribal water right on Birch Creek, and two,
    the mitigation fund, which provides long-term security. Those
    two components, we believe, are necessary for a successful
    compact, and we support the bill wholeheartedly with those.
        As far as the mitigation fund goes, and I understand their
    issues, perhaps the Administration or Interior on that fund, we
    plan on meeting with them later today to start to identify some
    of those issues. But again, we believe that Federal monies here
    are appropriate, given the underlying Federal policies that are
    involved here. I think actually Senator Dorgan hit it on the
    head during the last bill when he talked about these very old
    conflicts and settlements that have languished for years and
    years and years. In this era of water rights settlements, or to
    achieve these water rights settlements in this era, we are
    going to have to have the necessary tools. Mitigation is not
    only in this compact a critical tool, but in others as well,
    and I think will be a necessary tool.
        So we are supportive of this measure. We need the
    mitigation to be in place, both the wet water, if you will, and
    the fund.
        Senator Tester. I just want to refresh my memory on some
    things that you brought up in your testimony. Swift Dam and
    Lake Frances, do they supply the irrigators with water at this
    point in time, the irrigation district with water? They do?
        Mr. Bloomquist. Yes, Senator. Swift, just for edification,
    Swift Dam is a storage reservoir on Birch Creek in the
    headwaters area, which is a regulating reservoir, developed in
    about 1912 with construction of the project. Lake Frances is
    the primary storage reservoir offstream from Birch Creek and
    stores about 112,000 acre feet. Those are linked to the entire
    system.
        Senator Tester. So those two, just help me out with this,
    John, those two supply 80 percent of the water supply for the
    irrigated land?
        Mr. Bloomquist. Senator Tester, Birch Creek supplies
    approximately 85 percent of the water for the project.
        Senator Tester. Where does the other 15 percent come from?
        Mr. Bloomquist. We have some from Dupuyer Creek, which is
    just south, and then a very small amount from the Dry Fork,
    Marias River.
        Senator Tester. And also for my memory, the Four Horns
    Reservoir, its renovation will come out of the State dollars?
        Mr. Bloomquist. The renovation of Four Horns, the State has
    contributed $20 million, pledged $20 million to mitigation of
    the Four Horns project. The balance is going to be necessary
    from this legislation.
        Senator Tester. The compact just went through the State
    legislature in 2009. I will assume that you were a part of that
    discussion? Was there support from the Canal company?
        Mr. Bloomquist. Senator Tester, we did support the bill and
    the passage of the compact in the Montana legislature. And that
    support came as a result of the state and the Tribe putting an
    amendment to the Birch Creek agreement, which we felt gave the
    commitments to long-term mitigation as well as seeking Federal
    monies for that purpose.
        Senator Tester. And you had said earlier you are going to
    meet with Interior tomorrow?
        Mr. Bloomquist. Today actually. This afternoon we have our
    first meeting.
        Senator Tester. We would love to know how those discussions
    go, as you move forward. I am sure that you all will probably
    be a part of that.
        Thank you all. I appreciate your testimony, appreciate your
    answers, your questions.
        Senator Baucus, if you would like.

                     STATEMENT OF HON. MAX BAUCUS,
                       U.S. SENATOR FROM MONTANA

        Senator Baucus. Thank you very much, Mr. Chairman, Senator
    Tester, John.
        It is good to see other friends here, Councilman Augare,
    Jay Weiner and John Bloomquist. Good to see you all here too.
    This is a good testament of our working together to pass this
    legislation.
        Just to review, this Act ratifies the water rights compact
    with the Blackfeet Nation. The legislation will bring clean
    water to reservation families, support tribal agriculture and
    provide long-term economic development. When the United States
    and the Blackfeet people signed a treaty 150 years ago, the
    Blackfeet Reservation was on a tract of land the size of the
    State of Delaware abutting Glacier National Park and the
    Canadian border. Over 100 years ago, the U.S. Supreme Court
    ruled that such treaties imply a commitment, a commitment to
    reserve sufficient water to satisfy both present and future
    needs of a tribe.
        This legislation is a product of over 10 years of
    negotiation between diverse groups of users in the area. The
    State of Montana legislature has already appropriated $19
    million in support of its work to implement the compact to
    satisfy that Supreme Court ruling, obligation that our Country
    has to the tribes.
        As you can see from our witnesses at the table, and I can
    tell from the questions you asked and the answers given, the
    parties are dedicated to working together. And we all very much
    appreciate that.
        And also working with the Committee to move this water
    compact through Congress. I very much look forward to working
    with the whole group here. We are close. Let's get it passed. A
    little wrinkle left, but we are all on the same track. It is
    just a matter of getting this wrinkle out so we can get this
    done to the mutual satisfaction of everyone here. I think we
    can. We have an obligation to do that, now that we are so
    close. I just want to thank everybody very much for the effort
    that they have undertaken, especially you, Mr. Chairman, all
    your efforts to help get this put together.
        Senator Tester. Thank you, Senator Baucus. I would be
    remiss if I didn't say thank you for your leadership on a
    number of things, including this. We very, very much appreciate
    it. And thanks for taking time out of your schedule to come in
    and talk about this important piece of legislation.
        Senator Baucus. You bet. It really makes a difference.
    Seeing is believing. We all go out there and look at the leaks
    and the problems, how important water is down the road for a
    lot of different people. It just underlines the urgency that we
    pass this very quickly.
        Senator Tester. Well, I want to repeat, thank you, thank
    you to the folks who testified today. I very much appreciate
    your coming today. It made this hearing possible. I want to
    thank the members of the Council for coming up today, too, I
    very much appreciate Rusty and Jay for you guys coming up, and
    Jeannie.
        With that, we will adjourn. Thank you all.
        [Whereupon, at 11:37 a.m., the Committee was adjourned.]

                                A P P E N D I X

      Prepared Statement of Tracy King, President, Fort Belknap Community
                                    Council

        I am the President of the Fort Belknap Community Council and as a
    representative of the Fort Belknap Indian Community Council, I would
    like to present this statement on behalf of the six thousand plus
    members of the Gros Ventre and Assiniboine Tribes of the Fort Belknap
    Indian Community. The Fort Belknap Indian Community (FBIC) has serious
    concerns about the current form of the proposed Blackfeet Water Rights
    Settlement Act of 2010 (``Act'' or ``Settlement Act'') and the
    potential adverse impacts suffered by FBIC should the Blackfeet Tribe
    fully exercise the water rights purportedly acknowledged in the
    Settlement Act. While FBIC acknowledges that the Blackfeet Tribe does
    possess water rights, FBIC challenges the amount of those water rights
    set forth in the Settlement Act. Although disappointed with the
    Blackfeet Settlement Act, FBIC remains committed to cooperative
    discussions with all interested parties, including the Blackfeet Tribe,
    the State of Montana, and the United States, to collectively resolve
    areas of disagreement and mitigate negative impacts caused by
    exercising Settlement Act rights of the Tribes.
        FBIC recognizes that the Blackfeet Tribe is entitled to water
    rights, and specifically rights in the Milk River. In fact, the
    Blackfeet Tribe's entitlement to such rights derives from the same
    treaty of October 17, 1855, that reserved water rights in the Milk
    River for FBIC. Accordingly, these reserved rights of the Blackfeet
    Tribe and FBIC are of equal priority.
        The proposed Blackfeet Settlement Act takes the position that the
    Blackfeet Tribe has a superior claim to these water rights to the
    detriment of FBIC. This false assumption appears to be the basis for
    granting all the natural flow of the Milk River above the Western
    Crossing without regard for the water rights granted to the FBIC in our
    Water Compact. Rather than a shared priority as provided in the
    recognized treaty, the Settlement Act describes the Blackfeet Tribe's
    right to be senior in priority, and if fully executed, would deprive
    FBIC of the full benefit of its recognized water rights.
        Unlike the proposed Blackfeet Settlement Act, the FBIC Compact
    recognizes the shared interest and expressly provides for a mechanism
    to allow for consideration of the water needs of the Blackfeet Tribe.
    This provision authorizes a process by which the two tribes can reach a
    compromised settlement on the allocation of their water rights to the
    Milk River, and to account for such a settlement in future operations
    of the Milk River. This provision of the FBIC Compact that allows for
    the incorporation of an agreement with the Blackfeet Tribe and was
    negotiated with the understanding that the Blackfeet's claim to water
    would be based upon a reasonable calculation of the Tribe's needs as
    determined by their amount of practicably irrigable acreage (PIA)
    within the Milk River on trust lands above the Western Crossing. To say
    that the United States and FBIC had agreed to give the Blackfeet Tribe
    all of the natural flow to the Milk River within the Blackfeet
    Reservation at the time the FBIC Compact had been negotiated is
    unreasonable and totally without merit.
        This cooperative measure does not subordinate FBIC's water rights,
    nor does it mandate FBIC to compromise its fundamental rights. It is
    simply a confirmation of FBIC's desire to work amicably with the Bureau
    of Indian Affairs to resolve conflicts that may develop as each Tribe
    exercises their mutually shared water rights. Importantly, this
    provision is in no way an acknowledgement that the Blackfeet Tribe
    possesses a superior right to FBIC, which is a position that FBIC
    strongly refutes and rejects.
        Because of the shared right and equal priority, FBIC further
    challenges the quantity of water and the appropriate measure for
    determining the quantity of water that should be made available to the
    Blackfeet Tribe. With equal priority, one Tribe could potentially only
    acquire a larger quantity of water than the other Tribe based on
    demonstrating a higher amount of practicably irrigable acreage, or upon
    a court's decree allocating more water to a specific tribe. However,
    given limitations on the amount of tribal and allotted irrigable lands
    on the Milk River within the Blackfeet reservation, it is not at all
    clear that the Blackfeet Tribe would successfully be able to claim all
    of the natural flow of the Milk River and as a result some of the
    natural flow would remain available for use by the FBIC to meet their
    water needs and rights.
        Significantly, the Blackfeet Settlement Act seeks to preserve a set
    amount of water for the Blackfeet Tribe based on a standard of
    quantification that is quite different from the standard utilized to
    quantify FBIC's water rights. The proposed Settlement Act claims all
    the natural flow and merely agrees to hold existing State water users
    harmless. FBIC is unaware of any justification for the sweeping extent
    of this water claim. It is the opinion of our water use experts,
    Natural Resources Consulting Engineers, Inc. (NRCE), that the Blackfeet
    Tribe's true claim to water in the Milk River is extremely limited
    because of limited amounts of PIA lands and the short growing seasons
    that would make irrigation not feasible.
        Unlike the FBIC Compact, the proposed Blackfeet Settlement Act
    incorporates non-agriculture water use in the quantification of the
    Blackfeet Tribe's water rights. The potential impacts on FBIC's water
    supply are significant in that the Blackfeet Settlement Act seems to
    indicate that the Blackfeet Tribe is claiming their right to water
    based on quantification that does not involve agricultural uses as
    required under ``reserved rights doctrine'' that serves as a basis for
    Indian Water Rights. The use of another standard becomes problematic in
    that it disrupts the rights under the FBIC Compact, where rights to
    water have been quantified utilizing agriculture water use and the PIA
    standard.
        FBIC's water rights claim has been quantified based primarily on
    agricultural water uses and FBIC expects that the proposed Blackfeet
    Settlement Act would do likewise. Analyses of past Blackfeet Tribe
    irrigation-based claims had shown that the potential impacts to FBIC
    were less than under the presently proposed Blackfeet Settlement Act.
    Based on what was understood with the previously anticipated smaller
    impacts, FBIC had been willing to reach a compromised settlement to the
    previously proposed Blackfeet Tribe water claims based on PIA Standard.
        The Blackfeet Settlement Act, as currently proposed, is not based
    on any specific type of water use, agricultural or otherwise. Instead,
    the current proposed Settlement Act attempts to lay a senior claim to
    virtually the entire U.S. share of the natural flow of the Milk River
    basin within the Blackfeet Reservation. Furthermore, the proposed
    Settlement Act allows use of the water for any purpose any time of the
    year. FBIC could no longer count on agricultural return flows or on any
    other practical limitations to the Blackfeet Tribe's use of the natural
    flow of the Milk River located within the Blackfeet Reservation.
        Under a worst case scenario, if the Blackfeet Tribe was to fully
    consume its claimed Milk River water right, denying the availability of
    this water to any other parties in the Milk River system, significant
    impacts will occur with regard to FBIC's water supply in some years.
    The average annual impact would be approximately 9 percent. However,
    this impact is variable; in many years, it would be zero, and in the
    worst 10 percent of all years, it would average about 39 percent, a
    severe impact on FBIC's water right.
        Moreover, NRCE also concludes that the quantity specified in the
    proposed Settlement Act would have a significant impact on the Milk
    River Project as well as the FBIC water right. All other existing Milk
    River users, including the Milk River Project, would be impacted by the
    proposed Settlement Act. NRCE's technical analysis concluded that the
    impact on the Milk River Project would average 13,600 acre-feet per
    year. Additionally, during the 10 percent of years in which the impacts
    are most severe, the average impact would be 54,500 acre-feet per year.
    The full extent of these consequential harms and impacts that would
    result from the exercise of the Blackfeet Tribe's water right as set
    forth in the proposed Settlement Act must be fully considered. While
    such impacts may be negligible in the St. Mary River basin, the impacts
    are much more severe in the Milk River basin.
        It is recognized that it may not be feasible or practical now or in
    the near future for these impacts to physically materialize. However,
    should the proposed Settlement Act come into effect, the mere presence
    of such a large-scale Blackfeet water right to Milk River flows would
    be a continuing cause for concern to FBIC. The Fort Belknap Indian
    Community is therefore seeking to have their rights protected by
    limiting the Blackfeet Tribes use of water in the Milk River to an
    amount that could be claimed under the PIA standard and other domestic
    agricultural uses.
        Compounding the problem of the adverse impact that would be
    sustained by FBIC is the fact that with water settlements negotiated
    through compacts, federal legislation is required for implementation.
    Any subsequent issue that may arise with a provision set forth in the
    underlying compact itself becomes very difficult to correct because any
    corrections would also require amending a federal statute.
        Here, FBIC's agreement to include a provision in our Compact to
    accommodate the Blackfeet Tribe's right to water in the Milk River
    becomes even more disadvantageous to FBIC's interest in that the
    Compact negotiations with the Blackfeet Tribe did not apply the same
    PIA standard for quantifying the Blackfeet Tribe's water right. Once
    the Settlement Act has been approved by Congress, any subsequent
    amendment or additional provision needed to address an unresolved issue
    with the Blackfeet Settlement Act would require going back to Congress
    and seeking amending legislation, which would be a very costly and a
    time consuming process for the FBIC. Therefore, it is incumbent upon
    all the parties to work diligently to resolve the impacts caused by the
    proposed Blackfeet Settlement Act on the water rights confirmed to the
    FBIC in their Compact.
        These issues cause a potentially disrupting and limiting impact on
    the FBIC's water projects and uses, which are based on the use of water
    for agriculture and other purposes. The FBIC wishes to resolve these
    issues with the Blackfeet Tribe in order to further the water rights
    settlement negotiations between the United States, the FBIC and the
    State of Montana so that their respective Compacts can become
    effective.
        While this is an issue of heightened concern for the FBIC, what is
    equally concerning is the response of the Montana Reserved Water Rights
    Compact Commission in addressing this issue. In response to our request
    that the Commission assist the Tribes in formulating a resolution of
    this matter, we were advised that the Commission would not intervene or
    assume an active role in effectively resolving a dispute that was
    characterized as ``a fight between the two tribes.'' This is not an
    ``Indian vs. Indian'' issue, rather, it is a dispute that has come to
    develop as a direct consequence of the Compact Commission's erroneous
    assumption that the water rights of the Blackfeet Tribe are senior in
    priority to FBIC and an incorrect quantification standard being applied
    to Blackfeet Tribe's water right causing a substantial allocation over
    and above what is properly deserved under the PIA standard.
        The Tribe feels that under these circumstances, this issue can
    hardly be characterized as an inter-tribal dispute, and that the State
    Compact Commission, in light of its governing mandate, cannot so easily
    discount its role and obligation to resolve this matter. It is FBIC's
    position that the Compact Commission has both a legal and an ethical
    obligation to affirmatively seek a compromised solution that protects
    the interests of all affected parties. This is evidenced by the
    Commission's governing mandate. The Reserved Water Rights Compact
    Commission was established by the Montana legislature to conclude
    compacts for the equitable division and apportionment of waters between
    the State and its people and the several Indian Tribes claiming
    reserved water rights within the state. The mandate of the Compact
    Commission is to settle water rights disputes within the state, not to
    create new ones. Any determination of reserved water rights on the
    Blackfeet Reservation necessarily requires the Montana Reserved Water
    Rights Compact Commission to reach an understanding with the FBIC where
    such a determination directly impacts the rights of FBIC or its
    members. By authorizing a tribal compact that wholly undermines the
    very basis of another Tribe's previously negotiated water rights, the
    Commission will have acted in violation of the terms and provisions of
    its governing mandate. We request that Congress take affirmative steps
    to ensure that the rights that have been negotiated on behalf of FBIC
    as set forth in the FBIC Compact are not eclipsed by the terms of
    another Tribe's Settlement Act.
        FBIC does desire to reach a compromised solution with the Blackfeet
    Tribe to be incorporated into a modified Compact that accommodates the
    interests of both Tribes, the State of Montana, and the United States
    as trustee, and better clarifies future tribal operations so as to
    avoid future litigation that would potentially jeopardize the interests
    of all affected parties.
        We propose that the following language be added to the proposed
    Blackfeet Settlement Act:

            Article IIISec. F
            Sec. 7. Mitigation of Impacts
             In the unlikely event that the water right conferred upon the
            Blackfeet Tribe in basin 40 F impacts the water rights of the
            Fort Belknap Indian Community, then such impacts will be
            mitigated out of Project Water from the Milk River Project.

        Our proposal represents the best efforts of FBIC to resolve the
    potential problems that are likely to occur in the future between FBIC
    and the Blackfeet Tribe in the development and implementation of our
    equal water rights claims. The proposal was written under the
    assumption that the problem at hand is not only FBIC's problem, but
    rather is a problem that directly impacts each of the four major
    parties involved, and consequently, is a problem that should be solved
    by all the parties, including the Blackfeet Tribe, FBIC, the United
    States, and the State of Montana.
        We recognize that that the interests of the two Tribes in this
    matter certainly are not diametrically opposed and that a workable
    solution to this issue can be reached. However, it should be noted that
    unless significant revisions to the terms of the Settlement Act are
    instituted, FBIC will continue our objections to the passage of the
    Settlement Act. The FBIC's objection would be based on the fact that
    while the proposed Settlement Act allows for the full and final
    settlement of the federal reserved water rights on the Blackfeet Indian
    Reservation, it dramatically impacts and limits the same rights on the
    Fort Belknap Reservation in the process. It should be pointed out that
    under the terms of the Montana Code relating to the water settlement
    process, no compact is effective and binding unless it is approved and
    ratified by ``any affected tribal governing body,'' and that because
    the interests and rights of FBIC would be adversely effected by the
    implementation of the proposed Settlement Act, FBIC would refuse to
    approve it in its current form.
        FBIC believes it is necessary that the Blackfeet Settlement Act
    seek to balance an equitable recognition of the Blackfeet's rights with
    sufficient protections for water users at Fort Belknap who have an
    equal recognized claim. Any determination of a federal reserved water
    right on the Blackfeet Reservation necessarily requires the Montana
    Reserved Water Rights Compact Commission to reach an understanding with
    FBIC where such a determination directly impacts the rights of the
    Tribe or tribal members. We believe that it is of paramount importance
    that the State assist the Tribes and work collaboratively with them in
    seeking solutions to this complex problem, especially as the only
    alternative is to litigate this matter in court, an outcome that would
    obviously be disadvantageous to the interests of all affected parties.
        Thank you for your consideration of this matter.
        Attachment

                                     ______

                   Prepared Statement of The Blackfeet Tribe

        The Blackfeet Tribe is a sovereign Indian Nation residing on the
    Blackfeet Indian Reservation in Montana and exercising jurisdiction and
    regulatory control within the Reservation. Water is the most critical
    resource issue for the Tribe today. It is vital to the treaty promise
    of a permanent self-sustaining homeland for the Blackfeet people.
    The Blackfeet Reservation
        The Blackfeet Reservation was formally established by Treaty with
    the United States on October 17, 1855 (11 Stat. 657). Located along the
    eastern slopes of the Rocky Mountains, the Reservation is bordered on
    the north by Canada and on the west by Glacier National Park and Lewis
    and Clark National Forest. Birch Creek forms the southern border, and
    the eastern border is partially formed by Cut Bank Creek and Birch
    Creek as they merge to form the Marias River. The Rocky Mountains, and
    the streams and rivers that flow from the mountains, have long been one
    of the most culturally and religiously significant area to the
    Blackfeet People, and they are a critical part of the oral history and
    cultural and religious customs of the Tribe.
        The present reservation is only a small part of the historical
    aboriginal territory of the Blackfeet Tribe that encompassed much of
    the present State of Montana, and a large area north into Canada. It
    was gradually reduced to the present 1.5 million acres through various
    executive orders, an act of Congress, and two congressionally ratified
    agreements in 1888 and 1895. The Reservation was allotted in 1907 (34
    Stat. 1035) and 1919 (41 Stat. 3). The current land ownership is
    approximately 65 percent Indian and 35 percent non-Indian. The Tribe
    has an active land acquisition program, and the amount of Indian lands
    increases regularly.
        Oil and gas, timber resources, and grazing make up a significant
    portion of the Tribe's revenue base. The Tribe also has a Class II
    gaming casino in Browning, and operates several other smaller
    enterprises.
        There are 16,000 enrolled members of the Blackfeet Tribe, about
    half of whom reside on the Reservation. The Tribe is the largest
    employer, and unemployment ranges as high as 67 percent or more.
    Ranching and irrigation are the mainstay of the Reservation economy,
    and the BIA's Blackfeet Irrigation Project is a critical part of the
    ranching/irrigation economy.
    Water Resources
        Several drainages are encompassed within the Reservation. To the
    west, the St. Mary's River originates near the Glacier Park/Reservation
    border, flows north onto the Reservation and then directly north into
    Canada. The Milk River originates on the Reservation as the North Fork,
    South Fork and Middle Fork. The Middle Fork and South Fork merge to
    form the Milk River proper which flows northeasterly through the
    Reservation into Canada and then back into the United States at the
    eastern crossing near Havre, Montana. Cut Bank, Two Medicine, and
    Badger and Birch all flow easterly through the Reservation and into the
    Marias River at the eastern boundary of the Reservation. Birch Creek is
    the southern boundary of the Reservation.
        The average annual water supply on the Reservation is nearly 1.5
    million acre feet. A significant portion of the water supply is in the
    St. Mary River (663,800 acre-feet average annual flow). The estimated
    average annual flow for all other streams is: Milk River--76,100 acre-
    feet; Cut Bank Creek--137,300 acre-feet; Two Medicine River and Badger
    Creek--431,400 acre-feet and Birch Creek--129,100 acre-feet.
    Water Rights Negotiations
        The Tribe's water rights were the subject of negotiations among the
    Tribe, the Montana Reserved Water Rights Compact Commission and a
    Federal Negotiation Team for well over a decade. In December 2007, the
    Tribe and the State reached a final compact quantifying the Tribe's
    water rights basin by basin and addressing issues relating to
    administration and water marketing. The Compact also provides for an
    allocation of water from the Bureau of Reclamation Lake Elwell (Tiber
    Dam) downstream from the Reservation on the Marias River, as part of
    the Tribe's water right. \1\ Of critical importance to the Tribe is the
    50,000 acre foot allocation of St. Mary River water which must be
    provided from newly developed St. Mary water or Milk River Project
    water to be made available through administration of the Milk River
    Project.
    ---------------------------------------------------------------------------
        \1\ All but a small part of the water impounded in Lake Elwell
    flows from the Blackfeet Reservation.
    ---------------------------------------------------------------------------
        The Tribe and the State also entered into an agreement relating to
    Birch Creek, by which the Tribe will defer additional use of Birch
    Creek water for fifteen years, and then will provide water to non-
    Indian Birch Creek water users from an enlarged Four Horns Reservoir,
    one of the storage facilities of the Blackfeet Irrigation Project. The
    agreement is conditioned on congressional approval of the Compact,
    funding for the enlargement, and necessary federal authorization.
    Water Related Claims Against the United States
        As part of a final settlement of its water rights, the Tribe
    expects to resolve its water related claims against the United States.
    With settlement funding, the Tribe will be seeking to rehabilitate and
    better the Blackfeet Irrigation Project, to construct critical water
    storage projects, a regional water system serving Reservation
    communities, and other water related projects. The Tribe will also be
    seeking a resolution of the environmental damages and problems caused
    by the Milk River Project facilities through mitigation and
    environmental restoration projects, and to resolve right of way issues
    relating to the project.
        These projects and other funding are justified by the Tribe's
    claims against the Federal Government which include, among others:

            1) the failure of the United States to protect Blackfeet water
            rights in the negotiation and completion of the 1909 Boundary
            Water Treaty with Great Britain allocating the St. Mary and
            Milk River between the United State and Canada;

            2) the failure of the United States to protect Blackfeet water
            rights or to provide any benefits to Blackfeet in the 1902
            authorization and construction of the Bureau of Reclamation
            Milk River Project;

            3) the failure of the United States to mitigate or repair the
            physical and environmental damages caused by the St. Mary
            diversion facilities utilized to divert water off the
            Reservation for the Milk River Project;

            4) the failure of the United States to properly maintain rights
            of way for the St. Mary diversion facilities, and the Project's
            continuing use of land relinquished to the Tribe from the
            original land withdrawal for the St. Mary diversion facilities;

            5) the failure of the United States to protect Blackfeet water
            rights against the establishment and utilization of state water
            rights by non-Indians on the Reservation, which state rights
            utilize a majority of the available water in Milk River, Cut
            Bank Creek and Birch Creek;

            6) the failure of the United States to complete and properly
            operate and maintain the BIA Blackfeet Irrigation Project;

            7) the failure of the Department of the Interior to provide
            additional storage to the Tribe in fulfillment of the Tribe's
            agreement to build a smaller Two Medicine Dam after it failed
            in the 1960's, no part of which would extend into Glacier
            National Park; and

            8) other water related claims.

    Claims Relating to the 1909 Boundary Water Treaty
        The 1909 Boundary Waters Treaty allocates the St. Mary River and
    the Milk River between the United States and Canada. The Treaty was
    concluded only a year after the seminal Supreme Court's decision in
    Winters v. United States that first defined the federal reserved water
    rights doctrine applicable to Indian tribes. Notwithstanding that the
    Winters case involved the Milk River, one of the two streams allocated
    under the Boundary Waters Treaty, Blackfeet water rights are not
    mentioned and were not taken into consideration in the 1909 Treaty. \2\
    ---------------------------------------------------------------------------
        \2\ A similar case involving Birch Creek on the Blackfeet
    Reservation had been filed by the same U.S. Attorney that filed the
    Winters case was decided by the Ninth Circuit in the same year. Conrad
    Investment Co. v. United States, 161 F. 829 (9th Cir. 1908).
    ---------------------------------------------------------------------------
        Only a few years before the conclusion of the Boundary Water
    Treaty, the Reclamation Service had identified a feasible Blackfeet
    Reservation project on the eastern side of the Reservation of up to
    100,000 acres utilizing St. Mary water. (Approximately 70,000 acres
    were on the Reservation and 30,000 acres were off the Reservation.)
    This was one of three alternatives for use of the United States' St.
    Mary allocation identified and described in the Reclamation Services
    Fourth Annual Report to Congress, House Doc. No. 86, 59th Cong., 1st
    Sess. (1906) at 177-181. The other two projects were: (1) an All
    American canal that would carry water to the downstream Milk River
    water users in a canal traversing the Reservation and located entirely
    within the United State; and (2) the project that finally was built and
    exists today, diverting St. Mary's water into the Milk, through Canada,
    and back to the United States for use by Milk River water users over a
    hundred miles from the Blackfeet Reservation. The Reclamation Service
    concluded that both the Reservation project and the downstream project
    were feasible, but Reclamation chose to build a project serving only
    non-Indian water users, thereby rejecting any benefit to the Blackfeet
    Tribe in favor of the non-Indian project.
        Based on the identification of a feasible irrigation project on the
    Blackfeet Reservation by the Reclamation Service in 1906, the United
    States was obligated to ensure that water for the Reservation project
    was taken into consideration in the 1909 Boundary Waters Treaty,
    particularly given the recent decision in the Winters case. Yet, the
    United States failed to obtain an allocation of water in the Boundary
    Waters Treaty to satisfy the Tribe's St. Mary Winters claim and the
    Milk River Project.
    Claims Relating to the Bureau of Reclamation Milk River Project
        For nearly a hundred years, nearly the entire United States' share
    of the St. Mary's River has been diverted off the Blackfeet Reservation
    for use by the Bureau of Reclamation's Milk River Project. Water is
    stored at Lake Sherburne on the Reservation and is diverted trans-basin
    through a 29 mile canal on the Reservation that discharges into the
    North Fork of the Milk River. The canal includes two sets of large
    siphons, and a series of five large concrete drop structures near the
    lower end of the canal. Upon discharge into the Milk River, the River
    flows through Canada for 216 miles before it returns to the United
    States and is stored in Fresno Reservoir northwest of Havre for use by
    the Milk River Project.
        The Milk River Project was authorized in 1902 as one of the first
    projects under the 1902 Reclamation Act. In large part, the Milk River
    Project was used to justify the United States share of St. Mary River
    and the Milk River under the 1909 Boundary Waters Treaty. The Treaty
    served as the final go ahead for the Milk River Project, and
    construction of the Project was begun immediately upon completion of
    the Treaty. The Blackfeet Tribe has significant claims relating to
    construction of the project.
    Water Rights Claims
        The St. Mary River arises near the western boundary of the
    Reservation and flows only on the Reservation. The River flows directly
    from the Reservation into Canada where it becomes part of the Hudson
    Bay drainage. The Blackfeet Tribe is the sole entity with a clear and
    direct right to St. Mary's water. As set forth above, at least as of
    1906, the Tribe had an identified Winters right to sufficient water to
    feasibly irrigate 70,000 acres of Reservation lands. Nevertheless, the
    Blackfeet Tribe's water rights were completely ignored in the
    authorization and construction of the Milk River Project. The Milk
    River Project utilizes nearly the entire U.S. allocation of St. Mary
    water through the elaborate trans-basin diversion that diverts St. Mary
    water into the Milk River, carrying it downstream for use by the
    Project. For over a hundred years, the United States has directly taken
    and used Blackfeet water for use by the Milk River Project, leaving no
    available water in the St. Mary River to fulfill the water rights of
    the Tribe, representing a permanent loss of water to the Blackfeet
    Tribe. The Boundary Waters Treaty and the Milk River Project have
    directly facilitated the taking of Blackfeet water and have deprived
    the Tribe and its members of water that would otherwise be used on the
    Reservation for the benefit of the Blackfeet Tribe.
    Failure to Provide Project Benefits to the Blackfeet Tribe
        Since the completion of the Milk River Project in 1917, as much of
    the United States share of St. Mary's as possible has been diverted
    from the Reservation for use by the Milk River Project users. The Tribe
    has not been able to use one drop of the water, and to this day, the
    Tribe has not benefitted in any manner from the Project,
    notwithstanding the use of tribal water and Reservation lands by the
    Project.
        The lack of benefit to the Tribe and its members is directly
    contrary to promises made to the Tribe in exchange for the right of way
    for Project diversion facilities and canal. As part of the 1895
    Agreement between Tribe and the United States, ratified by Congress in
    the Act of June 10, 1896, 29 Stat. 321, 353, by which the Tribe, under
    significant pressure, ceded its western lands that are now part of
    Glacier National Park and Lewis and Clark National Forest, the Tribe
    was asked to provide a right of way for the Milk River Project canal
    and facilities on the clear representation that the Project would bring
    water to Reservation lands. Article VII of the 1895 Agreement provides
    that a right of way shall be granted for, among other things, canals
    and irrigating ditches through the Reservation.
        As documented in the transcript of the negotiations of the 1895
    Agreement, the provision of the right of way was based on the
    representation that the Tribe would benefit from the Project. As stated
    to the Tribe:

             In case the Government sees fit to build ditches or canals
            across the reservation men will be employed and paid the same
            as when railroads are built. I think it would be a good thing
            if this canal was built. You might want the water in different
            places on the reservation where this ditch runs. This is [the]
            canal running from St. Mary's Lake across to Milk River that I
            refer to especially. Now, I think you all understand pretty
            well what is meant.

        S. Doc. No. 118, 54th Cong. 1st Sess.(1896) at 20-21. The clear
    import is that the Tribe would benefit from the Milk River Project
    facilities if it provided rights of ways for the Project. Such benefit
    has never materialized.
        Over the years, the amount of water diverted from the Reservation
    has expanded. Municipal water users were added and additional lands
    have been brought into the Project. There are also other water users
    who have been able to use Project water because of lack of enforcement
    by the Bureau of Reclamation or the State. Even a wildlife refuge
    (Bowdoin) is provided water from the Project, but not the Blackfeet
    Tribe. In sum, there have been a multitude of entities and individuals
    who are receiving St. Mary water from the Milk River Project and
    otherwise benefitting from the Project, except for the very entity that
    has the most direct claim to the water--the Blackfeet Tribe. On the
    other hand, the Tribe has suffered significant environmental and
    property damage as a result of the Project, and it is the Tribe who
    would be directly impacted by any failure of the Project.
    Environmental and Resource Damages
        At the same time the Milk River Project facilities utilize tribal
    lands and have caused serious environmental problems on the
    Reservation. Water is stored in Sherburne Dam on the Reservation and is
    released into Swiftcurrent Creek. Swiftcurrent joins with another
    stream, Boulder Creek, and both are diverted into Lower St. Mary Lake
    by a dike. St. Mary Diversion Dam then diverts the water into the St.
    Mary Canal, where it is carried for 29 miles before dumping into the
    North Fork of the Milk River. Two major sets of siphons and five
    concrete drops are part of the facilities.
    Sherburne Dam
        The primary Milk River Project storage facility on the Reservation
    is Sherburne Dam, completed in 1919. It releases water into
    Swiftcurrent Creek which is diverted through the St. Mary diversion
    facilities into St. Mary Lake.. The current outlet structure is unable
    to pass law flows during the winter months, and as a result
    Swiftcurrent Creek dries up, causing important wintering habitat for
    the threatened bull trough to be lost.
    Bank Erosion and Flooding
        Swiftcurrent Creek and Boulder Creek come together, and both are
    diverted into Lower St. Mary Lake. The banks of Swiftcurrent Creek have
    eroded below the confluence of Boulder Creek. Both streams provide
    critical habitat for the threatened bull trout. Continued erosion also
    contributes to regular flooding of tribal and individual member lands
    at the confluence of the two streams. This flooding also affects a
    tribal graveyard in the area. For years, the Tribe has complained of
    the annual flooding to the Bureau of Reclamation, but to no avail.
    St. Mary Lake
        Swiftcurrent Creek Dike, completed in 1915, diverts all flows from
    Swiftcurrent Creek and Boulder Creek into Lower St. Mary Lake, a
    beautiful, pristine alpine lake. The combined sediment load of both
    streams is deposited into the Lake, creating a delta approximately 16
    acres in size. The sedimentation has destroyed commercial fishing in
    the lake, and is destroying recreational and aesthetic values relating
    to the Lake. The diversion of water into St. Mary Lake also causes the
    level of the Lake to fluctuate. This affects use of Tribal lake shore
    property and the value of the lake shore property.
    St. Mary Diversion Dam
        The St. Mary Diversion Dam and head works were constructed around
    1910 and are used to divert water from St. Mary Lake into the 29 mile
    St. Mary canal. The dam and head works are in poor condition and have a
    negative impact on the fishery resources. The diversion dam acts as a
    barrier to fish movement and fish become entrained in the canal through
    the head gates during the irrigation season. These facilities affect
    the threatened bull trout and other Reservation fishery resources.
    St. Mary Canal
        The St. Mary Canal, completed in 1915, is an unlined earthen canal
    approximately 29 mile in length, and is in poor condition. It has a
    number of deficiencies, and is responsible for significant seepage. The
    canal affects surrounding wildlife habitat and contributes to
    environmental damage along its length.
    St. Mary Siphon
        The siphon includes two 90-inch steel barrels approximately 3,200
    feet in length that traverse the St. Mary Valley. The siphons have had
    significant leaks, contributing to environmental damage, and represent
    significant environmental and safety hazards to the Reservation.
    Hall Coulee Siphon
        The Hall Coulee Siphon consists of two 78 inch steel pipes,
    approximately 1,404 feet in length. Like the St. Mary Siphon, leaks
    from the siphon have resulted in environmental damage, and represent
    significant environmental and safety hazards on the Reservation.
    Drop Structures
        Water from the St. Mary Canal passes through five concrete drops
    before the water is dumped into the North Fork of the Milk River. Like
    the siphons, the drop structures are in deteriorated condition and
    represent significant environmental and safety hazards on the
    Reservation.
    Babb Community Water System
        The town of Babb is the Reservation community in the vicinity of
    the St. Mary diversion facilities. It is located on Hwy. 89,
    approximately 10 miles for the Canadian border. Wells serving the north
    Babb area depend on groundwater recharge being recharged from leakage
    of the St. Mary Canal. Any fix of the canal must take into
    consideration the potential impact to the Babb community water system.
        The Milk River Project diversion facilities on the Blackfeet
    Reservation are now nearly one hundred years old. The rehabilitation of
    the diversion facilities was authorized by the 2007 Water Resources
    Development Act (WRDA). The St. Mary provision of the WRDA legislation
    provides that no construction on the St. Mary rehabilitation may take
    place until the Blackfeet Tribe's water rights compact is approved by
    Congress or January 1, 2011, whichever comes first.
    Claims Against the United States Relating to the St. Mary Diversion
            Facility Right of Way
        In addition to the water rights, property and environmental claims
    relating to the St. Mary diversion facilities, there are significant
    ownership issues and right of way issues that have remained unresolved
    over the years. The Bureau of Reclamation lacks rights of way for
    portions of the facilities and the canal and lacks flowage easements in
    critical areas. There are also other ownership issues. The following
    issues relating to the Bureau of Reclamation facilities on the
    Reservation require resolution:

       Ownership issues relating to Sherburne Dam.

       Issues relating to ownership of timber and oil and gas in
            the Dam area.

       Lack of easement or authority to utilize Swiftcurrent Creek.

       Lack of authority to construct dike that diverts water from
            Swiftcurrent and Boulder Creeks into St. Mary Lake.

       Lack of flowage easement from St. Mary Lake to diversion.

       Lack of ownership/right of way/easements relating to Camp 9.

       Trespass issues relating to Camp 9 and other areas
            relinquished to the Tribe pursuant to the Act of August 28,
            1937.

       Lack of easements/rights of way in Spider Lake area.

       Flooding/inundation issues relating to dam at Spider Lake.

       BOR maintenance roads outside of right of way.

       Lack of flowage easements relating to drops.

       Use of borrow, fill, and sand and gravel without
            compensation to tribe.

       Ownership issues relating in entire reach of St. Mary Canal.

       Issues relating to BOR leases to private parties on the
            Reservation.

    Claims Relating to the Blackfeet Irrigation Project
        The Blackfeet Irrigation Project was authorized in 1907, only five
    years after the Milk River Project. The Blackfeet project suffers from
    similar condition problems as the Milk River Project and needs
    significant rehabilitation. The Project also needs to be finally
    completed.
        The Project is divided into three units: Two Medicine; Badger-
    Fisher; and Birch Creek. There are currently 38,082 assessed acres in
    the project. Project completion or build out is approximately 53,000
    acres. Rehabilitation and betterment of the project is a major focus of
    a comprehensive settlement, and is essential to the Birch Creek
    deferral agreement entered into by the Tribe and the State of Montana,
    a related agreement to the Compact.
        The Bureau of Indian Affairs has failed to complete the Blackfeet
    Irrigation Project As a result the Project does not provide the full
    economic benefit to the Tribe and its members that a fully completed
    project would provide. The BIA has also failed to properly operate and
    maintain the Project. As a result, the Project is in a significantly
    dilapidated condition and cannot property deliver water to Project
    lands, affecting the ability of Project water uses to make a living and
    to economically benefit from the Project.
    Claims Against the U.S. Concerning to the Failure to Protect Tribal
            Water Rights in Relation to Non-Indian Development
        On the Milk River, Cut Bank Creek and Birch Creek, the United
    States allowed non-Indian development to occur under state water rights
    without objection and without protecting of the Blackfeet Tribe's water
    rights. On the Milk River and Cut Bank Creek, substantial non-Indian
    development was allowed to occur that utilized a significant portion of
    direct flow water, without regard to the prior rights of the Blackfeet
    Tribe, making those streams essentially unavailable to the Tribe
    without the construction of expensive storage.
        On Birch Creek, which was subject to a 1908 federal court decree in
    Conrad Investment Co. v. United States, 161 F. 829 (9th Cir. 1908), the
    court awarded only the amount of water currently being used at the
    time, but the court provided that the decree could be re-opened when
    additional water was needed. 161 F. at 835. However, the United States
    allowed non-Indian development to occur that utilized all remaining
    water supplies over and above the amount decreed to the Tribe, without
    regard to future modification of the decree. By allowing non-Indian
    development to utilize all additional supplies, the United States
    essentially precluded any additional development by the Tribe as
    provided for in the decree.
    Claims Relating to the Two Medicine Dam
        In 1964, a disastrous flood occurred on the Blackfeet Reservation,
    causing significant loss of life and property damage. Lower Two
    Medicine Dam on the Two Medicine River, one of the Blackfeet Irrigation
    storage facilities was destroyed. The Reservation was declared a
    disaster area and funds were quickly appropriated by Congress to
    partially repair the damage to Reservation homes, and to begin the
    process to replace Two Medicine Dam. In rebuilding the Two Medicine
    Dam, the Tribe was convinced to agree to a smaller facility and lesser
    storage because of Department of the Interior concerns about the dam
    backing up water into Glacier National Park. In exchange the Department
    of the Interior promised that an additional storage facility would be
    built for the Tribe further downstream on Two Medicine River. This was
    necessary because the smaller replacement reservoir, unlike the
    original storage facility, was not sufficient to irrigate all the
    irrigable lands in the Two Medicine Unit of the Blackfeet Irrigation
    Project. The Two Medicine Dam was replaced, but a second storage
    facility has never been constructed as promised.
    Claims Relating to Divide Creek
        Divide Creek serves as a portion of the western boundary between
    the Reservation and Glacier National Park. The major eastern entrance
    to the Park and the start of the well-known Going-to-the-Sun Road is
    located at Divide Creek. Ranger facilities are located near the Creek,
    as is a major Park visitor center and other private resort development.
        Historically, significant erosion has occurred in Divide Creek, and
    regular flooding has occurred. At least since the late 1980's, because
    of the significant development in the area, the Park Service has
    responded to flood conditions on Divide Creek with stream-clearing and
    channelization activities using heavy equipment. This has caused a loss
    of aquatic habitat and adverse water quality impacts. The main bridge
    over Divide Creek at the entrance to the Park also contributes to
    flooding problems as debris and other materials are caught under the
    bridge, creating a logjam and increasing the flooding problem in the
    area.
        Since the early 1990's, the Park Service has indicated that it
    would adopt a long term plan to address the flood conditions without
    use of heavy equipment. The Park Service completed a Value Analysis for
    Divide Creek in 1992, identifying a number of alternatives for a long-
    term plan. More recently, in connection with plans for a major
    modification to the Park visitor center and other improvements, it was
    represented that the required Environmental Assessment would address
    alternatives to the Divide Creek flooding problems. However, the Park
    Service subsequently concluded that insufficient funding was available
    to analyze the issues. Therefore, the flooding and sedimentation
    problems at Divide Creek, with resulting adverse impacts to fisheries
    and water quality, continue to occur with no solution presently in
    sight.
    Conclusion
        The above discussion set out the primary water related claims of
    the Blackfeet Tribe against the United States. These claims represent
    damages of hundreds of millions of dollars due to loss of water, loss
    of benefits, damages to the environment and Reservation property and
    failure of the United States trust to carry out its trust
    responsibility to the Tribe relating to Tribal water rights and use of
    water. The claims serve as the basis for the federal contribution to
    the Blackfeet water rights settlement.
                                     ______

     Prepared Statement of William ``Snuffy'' Main, Chairman, Gros Ventre
                                Treaty Committee

                                     ______

            Tamara Backstrom, St. Hawthorne, CA
            Nansi Buenrostro, North Hollywood, CA
            Eloise Cornejo-Miller, Anaheim, CA
            Robert Corral, Chino Hills, CA
            Sandra Cruz, Burbank, CA
            Spring Drake, Los Angeles, CA
            Patricia Farias, Los Angeles, CA
            Lisa Garcia, Long Beach, CA
            John Gomez, Jr., Temecula, CA
            Judy Ann Hoofe, Los Angeles, CA
            Fabian M. Ledesma, San Fernando CA
            Janet Logan, West Covina, CA
            Renee Lovan, Ontario, CA
            Mark Lucero, Riverside, CA
            Michael Lucero, San Bernardino, CA
            Ric Macaisa, Los Angeles, CA
            Michael Madariaga, Temecula, CA
            Henry Madariaga, Temecula, CA
            Jackie Madariaga, Temecula, CA
            Karrie Madariaga, Temecula, CA
            Lawrence Madariaga, Temecula, CA
            Remy Madariaga, Temecula, CA
            Katherine Medina, Alhambra, CA
            Regina P. Marquez, Whittier, CA
            Stacy Mestaz, Chino Hills, CA
            Kelly Morningstar Madariaga, Temecula, CA
            Susan Osuna, Los Angeles, CA
            Michael A. Rios, Beaumont, CA
            Joyce Robins, Fontana, CA
            Daniel R. Rodarte, Chino, CA
            Debra Lyn Rodarte, Chino, CA
            Paul Rodarte, Montebello CA
            Darlene Saunders, Chino Hills, CA
            Brenda Simon, Rancho Cucamonga, CA
            Jessica Solorzano, Ontario, CA
            Christopher Ernest Tavizon, La Crescenta, CA
            Danielle Jeanne Tavizon, La Crescenta, CA
            Janelle Lynn Tavizon, La Crescenta, CA
            Yolanda Valadez, South El Monte, CA
            Helga M. Walston, Riverside, CA