    [Senate Hearing 112-492]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 112-492

                      S. 134, S. 399, S. 1327, AND S. 1345

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

                                    HEARING

                                   before the

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                       ON

            S. 134, MESCALERO APACHE TRIBE LEASING AUTHORIZATION ACT

             S. 399, BLACKFEET WATER RIGHTS SETTLEMENT ACT OF 2011

             S. 1327 A BILL TO AMEND THE ACT OF MARCH 1, 1933, TO
    TRANSFER CERTAIN AUTHORITY AND RESOURCES TO THE UTAH DINEH CORPORATION,
                             AND FOR OTHER PURPOSES

               S. 1345, SPOKANE TRIBE OF INDIANS OF THE SPOKANE
       RESERVATION GRAND COULEE DAM EQUITABLE COMPENSATION SETTLEMENT ACT

                                   __________

                                OCTOBER 20, 2011

                                   __________

             Printed for the use of the Committee on Indian Affairs

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                          COMMITTEE ON INDIAN AFFAIRS

                       DANIEL K. AKAKA, Hawaii, Chairman
                     JOHN BARRASSO, Wyoming, Vice Chairman
    DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
    KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
    TIM JOHNSON, South Dakota            JOHN HOEVEN, North Dakota
    MARIA CANTWELL, Washington           MIKE CRAPO, Idaho
    JON TESTER, Montana                  MIKE JOHANNS, Nebraska
    TOM UDALL, New Mexico
    AL FRANKEN, Minnesota
          Loretta A. Tuell, 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 October 20, 2011.................................     1
    Statement of Senator Akaka.......................................     1
    Statement of Senator Barrasso....................................    21
    Statement of Senator Bingaman....................................     5
    Statement of Senator Cantwell....................................     5
    Statement of Senator Tester......................................     2
    Statement of Senator Udall.......................................     3
        Prepared statement...........................................     4

                                   Witnesses

    Abrahamson, Hon. Greg, Chairman, Spokane Tribal Council..........    71
        Prepared statement...........................................    75
    Chino, Hon. Mark R., President, Mescalero Apache Tribe...........    26
        Prepared statement...........................................    28
    Jim, Hon. Rex Lee, Vice President, Navajo Nation.................    48
        Prepared statement...........................................    50
    Laverdure, Donald ``Del'', Principal Deputy Assistant Secretary--
      Indian Affairs, U.S. Department of the Interior................     7
        Prepared statement...........................................     9
    Maryboy, Hon. Kenneth, San Juan County Commissioner..............    67
        Prepared statement...........................................    68
    Show, Hon. Terry J., Chairman, Blackfeet Nation..................    29
        Prepared statement...........................................    30
    Tweeten, Chris, Chairman, Montana Reserved Water Rights Compact
      Commission.....................................................    39
        Prepared statement...........................................    41

                                    Appendix

    Baucus, Hon. Max, U.S. Senator from Montana, prepared statement..   107
    King, Hon. Tracy ``Ching'', President, Fort Belknap Indian
      Community Tribal Council, prepared statement...................   109
    Navajo Nation, resolutions.......................................   116
    Nez, Hon. Jonathan, Vice Chairperson, Budget and Finance
      Committee, Navajo Nation Council, prepared statement...........   108
    Philemon, Susie, Member, Navajo Tribe, Aneth Chapter, prepared
      statement......................................................   114

                      S. 134, S. 399, S. 1327, AND S. 1345

                                  ----------

                           THURSDAY, OCTOBER 20, 2011

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 3:12 p.m. in room
    628, Dirksen Senate Office Building, Hon. Daniel K. Akaka,
    Chairman of the Committee, presiding.

              OPENING STATEMENT OF HON. DANIEL K. AKAKA,
                        U.S. SENATOR FROM HAWAII

        The Chairman. The Committee will come to order.
        Aloha. Today, the Committee will hold a legislative hearing
    on four bills dealing with issues that will have significant
    impacts on the ability of Tribes to control and use their own
    resources.
        Two of these bills deal with water. The Committee held a
    roundtable discussion in June on Tribal water issues. What we
    heard from Tribal leaders was that Tribal access to and control
    over water resources is instrumental in supporting Tribal self-
    determination and self-governance.
        The third bill deals with the transfer authority over trust
    funds put in place to benefit the Navajo people.
        The final bill would compensate a Tribe for the use of a
    plan by the Federal Government to produce hydropower.
        The first bill, S. 134, the Mescalero Apache Tribe Leasing
    Authorization Act, was introduced by Senator Bingaman and
    Senator Udall. I am pleased that we have Senator Bingaman here
    with us today to testify on this bill, and I am sure Senator
    Udall will also say more about this important bill during his
    opening statement.
        The second bill we will consider is S. 399, the Blackfeet
    Water Rights Settlement Act of 2011. Senators Tester and Baucus
    have been working hard on this bill for several years. So
    today, the Committee will be able to learn about the progress
    made as a result of their efforts.
        The third bill we will consider, S. 1327, deals with the
    transfer of authority of the Utah Navajo Trust Fund. This bill
    was introduced by Senator Hatch. I look forward to hearing
    testimony from those on both sides of this issue.
        Finally, we will consider S. 1345, a bill that was
    introduced by Senators Cantwell and Murray. This bill would
    provide fair and just compensation to the Spokane Tribe whose
    land was used by the United States for the development of
    hydropower, but was never fairly compensated for that use.
        So, today we will hear from the Administration, the
    affected Tribes and other parties to the legislation. I
    encourage any other interested parties to submit written
    comments to the Committee. The hearing record will remain open
    for two weeks from today.
        I know that my good friends, Senators Tester, Udall, and
    Cantwell, have done a significant amount of work on these
    bills. So I would like to hear from them at this time.
        Senator Tester?

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

        Senator Tester. Thank you, Mr. Chairman. I want to thank
    you for holding this hearing on all the bills, but particularly
    the Blackfeet water rights settlement. It is a very important
    bill to the folks with the Blackfeet Tribe there in Montana. It
    is important to me. It is important to the United States and
    Senator Baucus also.
        First of all, I want to welcome our witnesses from Montana
    Blackfeet Nation, Chairman T. J. Show. He is new to the job,
    but he is certainly not new to this issue. He knows it very,
    very well.
        Mr. Chris Tweeten, Chairman of the Montana Reserved Water
    Rights Compact Commission. Chris has been at this job for a
    very long time. He has the best mind when it comes to water
    rights settlements from a Compact Commission standpoint around,
    and a true pleasure to have him here, too.
        They are joined by colleagues and staffs from Montana. I
    want to welcome them all. And I would also like to welcome Del
    Laverdure from the Department of Interior. He is the Principal
    Deputy Assistant Secretary of Indian Affairs from the
    Department of Interior, also a Montanan. And we should have an
    interesting discussion on this because we are kind of on
    opposite sides of this bill, but I know Del well. He is a good
    friend and hopefully through good conversation, we will be able
    to get on the same sheet.
        I also want to note that Senator Baucus and I are
    cosponsoring this bill, as you have already said, Mr. Chairman.
    He has submitted a statement for the record in full support. He
    and I have cosponsored bills the last two sessions of Congress
    to get this done.
        And as we talk about improving life in Indian Country,
    specifically Blackfeet Territory, I would be remiss to not take
    a moment to recognize the passing of Elouise Cobell. Elouise
    was a member of the Blackfeet Tribe. She fought tirelessly to
    hold government accountable for the promise it made to American
    Indians. She was a friend of mine. She was a friend to all
    Native Americans. I will absolutely miss her, as will thousands
    and thousands of other people around the Country. And I just
    want to take just a brief moment. I don't know if it is
    appropriate or not, but I hope so, just to think about all that
    Elouise Cobell had done for Indian Country in the United
    States.
        Thank you for that, Mr. Chairman.
        We are here to talk about the Blackfeet Water Rights
    Settlement Act. This bill is the right thing to do. It will
    create jobs in Blackfeet Reservation and it will improve
    reservation infrastructure for generations to come.
        Water is the foundation of life for every community, but
    particularly in rural communities. This bill will provide clean
    drinking water for Tribal communities. It will provide good
    Montana water for irrigation, for livestock, for other economic
    development opportunities.
        The bill is the right thing to do because it is the product
    of a complex negotiation to fulfill a trust responsibility that
    the United States has to the Blackfeet Nation. In 1908, the
    U.S. Supreme Court in its decision in Winters v. United States
    said that the government must provide sufficient water to
    reservations that it creates.
        The purpose of creating the Blackfeet Indian Reservation in
    1855 was to create a permanent homeland for the Blackfeet
    people. This bill fulfills the promise to provide the water it
    needs. It will create jobs building water infrastructure
    necessary to, in turn, pay for water rights in the quantified
    Blackfeet Water Compact into usable water for all Montanans
    that live on the Blackfeet Reservation.
        Rather than fight it out in court, Tribal, State and
    Federal officials worked on a government-to-government basis to
    negotiate this contract. The Montana Legislature approved the
    water compact in 2009. The State of Montana supports this bill
    and has agreed to appropriate $35 million to enact it. Now, we
    need support from our end at the United States Federal level.
        Senator Baucus and I have been asking the Department of
    Interior to comment on the proposed legislation in an effort to
    gain their support. I know they have been busy working on other
    settlements, including the Montana Crow Water Settlement, which
    we passed last year, and I want to thank you for your work on
    that, but now it is time to fully engage on the Blackfeet bill.
        I look forward to everybody's testimony today. And of
    course, I am going to have some questions for them when it gets
    done.
        Thank you all for traveling here. I appreciate your
    commitment to Indian Country.
        And thank you again, Mr. Chairman, for giving our bill the
    Committee's attention.
        The Chairman. Senator Udall?

                     STATEMENT OF HON. TOM UDALL,
                      U.S. SENATOR FROM NEW MEXICO

        Senator Udall. Thank you, Chairman Akaka.
        Just as Senator Tester has done, I thank you very much for
    holding hearings on all these bills today.
        And let me also welcome President Chino and his lovely
    wife, who is the First Lady of Mescalero.
        I am especially pleased that the Committee will be
    considering the merits of S. 134, the Mescalero Apache Tribe
    Leasing Authorization Act, a bill that will allow the Mescalero
    Apache Tribe in Southern New Mexico to lease their adjudicated
    water to communities in New Mexico that are in great need of
    water.
        I would like to welcome Senator Bingaman, with whom I have
    been working closely to move Mescalero water legislation
    forward. Senator Bingaman has long been a great advocate of
    Tribal water legislation and has been persistently diligent in
    moving this and other important pieces of water legislation
    through Congress.
        Last year, we celebrated final passage of two 40-plus-year
    water settlements, and this year we continue to press the
    Administration and Appropriations Committees to ensure that
    projects related to these and other Tribal water settlements
    are funded.
        Senator Bingaman is truly an expert on Tribal water issues
    and I look forward to hearing his testimony.
        I hope that through the testimony we hear today, my
    colleagues on the Committee will, number one, understand the
    need for flexible and innovative approaches to water management
    in the arid west; and number two, appreciate the simple and
    logical nature of the Mescalero Apache Tribal Leasing
    Authorization Act; and number three, recognize the great
    benefits that the Mescalero Apache Tribe Leasing Authorization
    Act will be to the Mescalero Tribe and the neighboring
    communities.
        I look forward to hearing from the witnesses and thank my
    colleagues for their careful attention and support of the
    Mescalero Apache Tribe Leasing Authorization Act.
        And I yield back, Mr. Chairman, and thank you again.

       Prepared Statement of Hon. Tom Udall, U.S. Senator from New Mexico
    President Chino

    Introduction
        I am please to introduce my good friend, Mescalero Apache President
    Mark Chino to the Senate Committee on Indian Affairs.
        President Chino has diligently served the Mescalero Apache as
    president for years. He is currently finishing his 3rd two year term as
    President of the Tribe, and has led his Tribe in many great efforts.
    With a focus on economic development, President Chino continues to
    build ties with neighboring communities, and to advocate for federal
    contracts and other economic development opportunities for the Tribe.
        Public service is a family tradition for the Chinos. President Mark
    Chino is the son of President Wendall Chino, an icon in Mescalero
    history, who led the Tribe for over 40 years. I look forward to
    President Chino's continued leadership of the Mescalero Apache, and
    thank him for his dedication to his constituency.
        The Mescalero Apache Tribe Leasing Authorization Act presents great
    opportunities for President Chino and the Mescalero Apache to bolster
    economic development, while helping neighboring communities. I thank
    President Chino for his willingness to participate in today's hearing
    and look forward to hearing from him.

    Vice President Jim Introduction
        I am please to introduce my good friend, Navajo Nation President
    Rex Lee Jim to the Senate Committee on Indian Affairs.
        Formerly the Ranking Member of the Judiciary Committee, and
    Chairman of the Public Safety Committee in the 21st Navajo Nation
    Council, Vise President Jim was sworn in with President Joe Shirley on
    January 11, 2011.
        Vice President Jim was raised in the Rock Point in Arizona, where
    he returned to teach at the local community school after graduating
    from Princeton University. Beyond being an educator, Vice President Jim
    is an author, playwright, and medicine man. He has long been a
    dedicated public servant and continues be a strong leader of the Navajo
    Nation.
        I thank Vice President Jim for his willingness to participate in
    today's hearing, and give testimony on S. 1327, a bill to amend the Act
    of March 1, 1933, to transfer certain authority and resources to the
    Utah Dineh Corporation.

        The Chairman. Thank you very much, Senator Udall.
        Before I call on Senator Cantwell, I would like to call on
    Senator Bingaman for his statement and welcome him as a good
    friend and a brother. He will serve as our first panelist
    today, speaking about S. 134, the Mescalero Apache Tribe
    Leasing Authorization Act.
        Senator Bingaman, will you please proceed?

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

        Senator Bingaman. Thank you very much, Chairman Akaka, for
    your courtesy. And thank you for the chance to speak in favor
    of this bill.
        Senator Udall did a good job of summarizing what is
    involved here. I join him in welcoming President Chino who is
    here today, and who I believe will be testifying here before
    your Committee in a few minutes.
        The Mescalero Apache Tribe I believe will benefit from this
    legislation, which is called the Mescalero Apache Tribe Leasing
    Authorization Act.
        In 1993, the New Mexico Court of Appeals adjudicated about
    2,300 acre-feet of water to the Mescalero Apache Tribe as part
    of the Pecos River Adjudication. But without specific
    Congressional approval, the Tribe is not authorized to lease
    those water rights to others. So that is what this legislation
    would provide. It would provide that authorization.
        S. 134 will allow the Tribe to lease its water rights to
    other communities in their part of New Mexico, in the
    southeastern part of New Mexico, and central New Mexico, that
    have significant water supply needs. We are still in a drought
    situation in New Mexico. We have been now for well over a year.
    This last year has been one of the worst on record in our
    State's history, and unfortunately that circumstance may not
    change that quickly.
        There are various communities such as the Village of
    Ruidoso, the Village of Cloudcroft, the City of Alamagordo that
    will be able to negotiate to lease some of this water from the
    Mescalero Apache Tribe if we are able to pass this legislation.
    So this will be beneficial to the Tribe, of course. It will be
    beneficial to these communities.
        All of this is done under our State law in New Mexico,
    under a process that is overseen by the New Mexico State
    Engineer, who has overall responsibility for water transactions
    and water rights in our State.
        This will also help to strengthen the relationship which is
    already a very good one between Indian and non-Indian
    communities in our State. The bill will greatly benefit all
    concerned, and I appreciate your willingness to consider the
    legislation at this hearing, and I hope you are able to act
    favorably upon it.
        Again, thank you for letting me testify. It is an honor to
    work with Senator Udall on this legislation. I think it is a
    good piece of legislation and one that we need to pass and send
    to the President for signature.
        The Chairman. Thank you, Senator Bingaman, for your
    insights on this bill. And thank you for being here and for
    being patient, and we wish you well. Thank you.
        And now, we will hear from Senator Cantwell.

                   STATEMENT OF HON. MARIA CANTWELL,
                      U.S. SENATOR FROM WASHINGTON

        Senator Cantwell. Thank you, Mr. Chairman. And I appreciate
    your determined advocacy for Indian Country and the leadership
    of this Committee.
        I thank you for having this very important hearing today on
    several pieces of legislation, specifically the Spokane Tribe
    and having the Department of Interior here on S. 1345,
    legislation to provide compensation to the Spokane Tribe for
    the building of a Federal dam on their land 70 years ago, and
    the continued impacts of that today.
        The Grand Coulee Dam project destroyed Tribal schools,
    roads, sacred sites and salmon runs critical to the Tribe's
    livelihood, and culture. This legislation fulfills the Federal
    Government's moral and equitable obligation to treat the
    Spokane Tribe honorably and fairly by finally settling their
    claims and providing the Tribe with just and equitable
    compensation.
        Let me begin by welcoming the Chairman, Greg Abrahamson,
    who is going to be on one of the panels that we have today. He
    has traveled over 2,000 miles to be here from Washington State
    and I thank you for doing that. He has testified in the past on
    similar legislation to S. 1345 and today he is going to be
    making comments about changes to this legislation since the
    last Congress.
        For more than a half-century, the Columbia Basin Project
    has made incredible contributions to our Nation. It has helped
    pull the economy out of the Great Depression. It provided
    electricity that provided aluminum to build airplanes and many
    other things. The project continues today to produce enormous
    revenues and it is a key component of the agricultural economy
    in Eastern Washington, helping to irrigate over 600,000 acres
    of land and provide about 11 percent of the electricity needed
    by various towns across various areas of our State and the
    Pacific Northwest.
        However, these benefits come at a great direct cost to
    Tribal property that have been inundated when the U.S.
    Government built the Grand Coulee Dam. And before dam
    construction, the free flow of the Columbia supported a robust
    and plentiful salmon run that provided virtually all of the
    subsistence of the Spokane Tribe.
        After construction, the Columbia and its Spokane River
    tributary flooded the Tribal communities and sacred places,
    schools and roads, and to this day the effects of the flooding
    are being felt by the Spokane Tribe.
        To date, the Tribe has received only $4,700 for the damages
    that have been done. By comparison, the Colville, whose
    reservation lies just to the west of the Spokane Tribe
    Reservation, received well over $53 million for the losses it
    suffered and continues to suffer as a result of the Columbia
    Basin Project.
        It is an injustice that the Spokane Tribe has not received
    fair and equitable compensation for suffering from similar
    damage, and this legislation would fulfill our obligations to
    the Spokane Tribe. Getting to this point today has been a long
    and evolving process, but I believe the language in this
    legislation addresses any concerns the Department of Interior
    has previously raised and I look forward to hearing their
    testimony today.
        We have also made some key changes to the legislation to
    satisfy the concerns of the Bureau of Reclamation expressed
    during the last hearing on this legislation and in
    correspondence to the Committee in 2008. The Spokane Tribe
    spent several months this year working with the Bureau of
    Reclamation to address their concerns and with the overall
    settlement agreement.
        So I want to thank you, Mr. Chairman, for allowing this to
    be on the agenda today and for the Spokane Tribe coming here
    today to talk about this legislation. I know that there will be
    many people working on this legislation within the Northwest
    delegation, and so I just look forward to working with my House
    and other Senate colleagues, Senator Murray, and other House
    colleagues on this legislation.
        I want to say that I have received letters from different
    local counties, the Governor, the Mayor of Spokane, and many
    others in support of this legislation.
        So I look forward to hearing today's testimony.
        The Chairman. Thank you very much, Senator Cantwell.
        And now, I would like to invite the second panel to the
    witness stand, Mr. Del Laverdure, the Principal Deputy
    Assistant Secretary for Indian Affairs at the Department of
    Interior; and Ms. Pamela Williams is accompanying Mr. Laverdure
    today.
        So welcome, Mr. Laverdure, again and please proceed with
    your testimony.

           STATEMENT OF DONALD ``DEL'' LAVERDURE, PRINCIPAL
           DEPUTY ASSISTANT SECRETARY--INDIAN AFFAIRS, U.S.
              DEPARTMENT OF THE INTERIOR; ACCOMPANIED BY
            PAMELA WILLIAMS, DIRECTOR, INDIAN WATER RIGHTS
                                 OFFICE

        Mr. Laverdure. Good afternoon, Mr. Chairman.
        The Chairman. Good afternoon.
        Mr. Laverdure. And Members of the Committee. My name is Del
    Laverdure. I am the Principal Deputy Assistant Secretary for
    Indian Affairs at the Department of the Interior.
        I am here today to provide the Department's position on S.
    134, the Mescalero Apache Tribe Leasing Authorization Act; S.
    399, the Blackfeet Water Rights Settlement Act of 2011; S.
    1327, a bill to transfer certain authority and resources to the
    Utah Dineh Corporation; and S. 1345, the Spokane Tribe of
    Indians Equitable Compensation Settlement Act.
        But first before I begin, I would like to do, as Senator
    Tester did, and acknowledge the passing of a very significant
    Indian leader, Elouise Cobell, and in fact the Assistant
    Secretary, Larry Echo Hawk, is in flight out there to be
    attending services. Otherwise, he might be here today.
        As far as the testimony, it is important to begin by
    stating that the Administration strongly supports the
    principles of self-determination and self-governance, and
    recognizes that intrinsic to these principles is Tribal control
    over Tribal resources.
        Like Tribal homelands, water is essential to the health,
    safety and welfare of Native people and Tribal governments are
    in the best position to determine how their water will be used.
        S. 134 would enable the Mescalero Apache Tribe to lease its
    adjudicated and quantified water rights for use within the
    State of New Mexico for up to 99 years. The bill to lease water
    rights under S. 134 is consistent with the department's
    longstanding support for leasing quantified water rights
    recognized in Indian water rights settlements.
        Leasing is an important and acceptable way for which Tribes
    may achieve economic value from the use of their resources. The
    Department believes that the policy on approval of water leases
    should parallel aspects of its policies on approving leases of
    land. Therefore, the department supports S. 134, the Mescalero
    Apache Tribe Leasing Authorization Act, with the amendments
    discussed in my full statement for the record.
        It is also important to note that this Administration
    supports the resolution of Indian water rights claims through
    negotiated settlement. Our general policy of support for
    negotiations is premised on a set of general principles that
    include the following.
        That the United States participate in water settlements
    consistent with its responsibilities as trustee to Indians,
    that Indian Tribes receive equivalent benefits for rights which
    they and the United States may release as part of the
    settlement; that Indian Tribes should realize value from
    confirmed water rights resulting from a settlement; and that
    settlements are to contain appropriate cost-sharing
    proportionate to the benefits received by all of the parties
    benefitting from the settlement.
        I want to affirm the Administration's support for settling
    Indian water rights where possible. However, as discussed more
    fully in my written statement, the department cannot support S.
    399 as introduced. S. 399, the Blackfeet Water Rights
    Settlement Act of 2011, would provide approval for and
    authorization to carry out a settlement of the water rights
    claims of the Blackfeet Tribe of the Blackfeet Indian
    Reservation in Montana.
        The Department's major concerns with S. 399 include the
    following. Number one, the high cost of implementing this bill,
    including $591 million of specifically authorized costs and
    unspecified, but significant, additional costs from several
    obligations imposed on the Federal Government without specific
    authorization of funds; number two, the settlement does not
    include a reasonable State cost share to reflect the benefits
    that would enure to the non-Federal and the non-Tribal
    beneficiaries; number three, the lack of information regarding
    what infrastructure projects the Tribe would pursue under the
    settlement and the actual costs for such proposed projects;
    number four, the requirement that the United States establish a
    mitigation fund to benefit a non-Tribal beneficiary; and number
    five, that the settlement does not achieve finality in
    resolving contentious water management issues in the relevant
    basins.
        These are not all of the concerns the Department has with
    S. 399, but they are the most significant concerns as are
    discussed in my written statement submitted for the record.
        The Department believes that the settlement can be
    accomplished in a manner that protects the rights of the Tribe
    and also ensures that the appropriate costs of the settlements
    are borne proportionally. While we do not support S. 399 as
    introduced, the Administration is committed to working with
    Congress and all parties concerned in developing a settlement
    that the Administration can support.
        Consistent with the Administration's strong support for the
    principles of self-determination and self-governance, and our
    recognition that the intrinsic to those principles is Tribal
    control over Tribal resources, the department opposes S. 1327,
    a bill to transfer certain authority and resources to the Utah
    Dineh Corporation. S. 1327 would amend the 1933 Act and its
    subsequent 1968 amendments by identifying the Utah Dineh
    Corporation as the trustee of the former Utah Navajo Trust
    Fund.
        Consistent with our government-to-government relationship
    with the Navajo Nation, the department acknowledges and
    respects the position of the Navajo Nation as it pertains to
    the Utah Navajo Trust Fund. The Department understands that the
    Navajo Nation would like to manage the trust and disburse the
    funds to the Utah Navajo beneficiaries consistent with the
    current disbursements and percentages.
        We also understand that the Navajo Nation opposes this bill
    and has opposed a similar version in the 111th Congress. At
    this time, the department believes it is more appropriate for
    the Navajo Nation to manage the trust and disburse the funds
    consistent with and to further the intent of the 1933 Act.
        And finally, Mr. Chairman, S. 1345, Spokane Tribe of
    Indians of the Spokane Reservation Grand Coulee Dam Equitable
    Compensation Settlement Act. S. 1345 would provide compensation
    to the Spokane Tribe for the use of its land for the generation
    of hydropower by the Grand Coulee Dam. Specifically, S. 1345
    would require the Secretary of the Interior to deposit $99.5
    million over five years into a trust fund held by the United
    States Treasury for the Spokane Tribe.
        The Department is encouraged by significant progress made
    in recent months towards resolving issues of concern to the
    Administration. An example of significant progress is the
    Department's support for the removal of the land transfer
    provisions that were included in previous legislation.
        However, the Administration cannot support S. 1345 in its
    current form. With respect to section five of S. 1345, titled
    Settlement Fund, we believe the basis for the settlement has
    not been established by legal claim of the Spokane Tribe. Since
    the Spokane Tribe has no legal claim, the Department does not
    believe that legislation is appropriate as a settlement of
    claims.
        However, the Department could examine with the Tribe and
    Congress other avenues to address the concerns of the Spokane
    Tribe. The Department, in consultation with the Bonneville
    Power Administration, would be pleased to work with the
    Committee on substitute language or amendments to the
    legislation that we believe could meet the needs of the Spokane
    Tribe and the United States.
        This concludes my statement and I would be happy to answer
    any questions the Committee may have.
        [The prepared statement of Mr. Laverdure follows:]

       Prepared Statement of Donald ``Del'' Laverdure, Principal Deputy
      Assistant Secretary--Indian Affairs, U.S. Department of the Interior
                                    S. 134

        Good afternoon Mr. Chairman, Vice-Chairman Barrasso and Members of
    the Committee. My name is Del Laverdure. I am the Principal Deputy
    Assistant Secretary for Indian Affairs at the Department of the
    Interior (Department). I am here today to provide the Department's
    position on S. 134, the Mescalero Apache Tribe Leasing Authorization
    Act.
        The Administration strongly supports the principles of self-
    determination and self-governance, and recognizes that intrinsic to
    these principles is tribal control over tribal resources. Like tribal
    homelands, water is essential to the health, safety, and welfare of
    Native people, and tribal governments are in the best position to
    determine how their water will be used. Accordingly, the Department
    supports S. 134 with the amendments discussed below.
        S. 134 would enable the Mescalero Apache Tribe to lease its
    adjudicated and quantified water rights for use within the State of New
    Mexico for up to 99 years. The term ``adjudicated water rights'' is
    defined as those rights adjudicated to the Tribe in State v. Lewis, 861
    P. 2d 235 (N.M. Ct. App. 1993). In leasing its adjudicated water
    rights, the Tribe would have to comply with New Mexico laws and
    regulations. In addition, the bill expressly states that the Tribe may
    not permanently alienate any of its adjudicated water rights.
        The ability to lease water rights under S. 134 is consistent with
    the Department's long-standing support for leasing quantified water
    rights recognized in Indian water rights settlements. Leasing is an
    important and acceptable way for which tribes may achieve economic
    value from use of their resources. The Department believes that the
    policy on approval of water leases should parallel aspects of its
    policies on approving leases of land. The Department recommends
    including language in the bill that provides that the Tribe shall
    develop tribal water leasing standards and submit such standards to the
    Secretary of the Interior for approval. The tribal water leasing
    standards should include provisions under which the tribe would
    identify and mitigate impacts that could potentially result from water
    leasing. Following this one-time approval of tribal water leasing
    standards, the Tribe would then have the authority to approve its own
    leases of water. In addition, the Department recommends that language
    should be added clarifying that the bill applies to water leases off
    the Tribe's reservation.

                                     S. 399

        The Department's position on S. 399, the Blackfeet Water Rights
    Settlement Act of 2011, which would provide approval for, and
    authorizations to carry out, a settlement of the water rights claims of
    the Blackfeet Tribe of the Blackfeet Indian Reservation of Montana.

    I. Introduction
        This Administration supports the resolution of Indian water rights
    claims through negotiated settlement. Our general policy of support for
    negotiations is premised on a set of general principles including that
    the United States participate in water settlements consistent with its
    responsibilities as trustee to Indians; that Indian tribes receive
    equivalent benefits for rights which they, and the United States as
    trustee, may release as part of a settlement; that Indian tribes should
    realize value from confirmed water rights resulting from a settlement;
    and that settlements are to contain appropriate cost-sharing
    proportionate to the benefits received by all parties benefiting from
    the settlement. I want to affirm the Administration's support for
    settling Indian water rights where possible.
        Disputes over Indian water rights are expensive and divisive. In
    many instances, Indian water rights disputes, which can last for
    decades, are a tangible barrier to progress for tribes, and
    significantly, hinder the rational and beneficial management of water
    resources. Settlements of Indian water rights disputes break down these
    barriers and help create conditions that improve water resources
    management by providing certainty as to the rights of all water users
    who are parties to the dispute. That certainty provides opportunities
    for economic development, improves relationships, and encourages
    collaboration among neighboring communities. This has been proven time
    and again throughout the West as the United States has pursued a policy
    of settling Indian water rights disputes whenever possible. Indian
    water rights settlements are also consistent with the Federal trust
    responsibility to American Indians and with Federal policy promoting
    Indian self-determination and economic self-sufficiency. For these
    reasons and more, for nearly 30 years, federally recognized Indian
    tribes, states, local parties, and the Federal government have
    acknowledged that negotiated Indian water rights settlements are
    preferable to protracted litigation over Indian water rights claims.
        A Blackfeet water settlement would bring an end to Federal and
    state court litigation that has been ongoing for more than thirty
    years, and resolve conflicts over water use that began more than 100
    years ago. It would open a path forward for the Blackfeet Tribe to
    manage its water and related natural resources in a manner most
    beneficial to its members and future generations, and provide certainty
    to the communities that surround the Reservation. The Department
    recognizes the substantial work and effort that have been put into
    negotiating this settlement by the Blackfeet Tribe and the State of
    Montana. We would like to continue to work with the parties and the
    sponsors to address certain concerns, including those discussed in this
    statement (such as appropriate non-Federal cost share) that could make
    this a settlement that the Administration could support.
        As discussed below, however, we cannot support S. 399 as
    introduced. Our major concerns with this legislation include: (1) the
    high cost of implementing this bill, including $591 million of
    specifically authorized costs and unspecified but significant
    additional costs from several obligations imposed on the Federal
    government without specific authorizations of funds; (2) that the
    settlement does not include a reasonable State cost share to reflect
    the benefits that would inure to the non-Federal and non-tribal
    beneficiaries; (3) the lack of information regarding what
    infrastructure projects the Tribe would pursue under this settlement
    and the actual costs for such proposed projects; (4) the requirement
    that the United States establish a mitigation fund to benefit a non-
    tribal beneficiary; and (5) that the settlement does not achieve
    finality in resolving contentious water management issues in the
    relevant basins. We have other concerns with this legislation; only the
    most significant of our concerns are discussed in this statement.
    However, before we address our significant concerns it is important to
    acknowledge the historical background associated with the water rights
    of the Blackfeet Tribe.

    II. Historical Context
        The history of the relationship between the Blackfeet Tribe and the
    United States is not one of which the United States can be proud. The
    Treaty with the Blackfeet in 1855 encompassed some 27,500 square miles
    of Blackfeet tribal lands in what was to become Montana. The discovery
    of gold in the early 1860s brought the first wave of non-Indians into
    the territory, along with increasing pressure to open the Reservation
    to non-Indian settlement. A series of executive orders reduced and
    reconfigured the Reservation and then in 1888, it was divided into
    three separate and smaller reservations: the Fort Belknap Reservation,
    the Fort Peck Reservation, and the Blackfeet Reservation. The Blackfeet
    Reservation was further diminished in 1895 (Agreement of September 19,
    1895, ratified on June 10, 1896, 29 Stat. 321, chapter 398, hereafter
    ``1895 Agreement''), when the United States purchased from the Tribe
    800,000 acres of land along the western boundary of the Reservation,
    with the Tribe reserving rights to hunt, fish and cut wood and remove
    timber on the ``ceded lands,'' so long as they remained ``public
    lands'' of the United States. The land was thought to have contained
    valuable deposits of gold, silver, and copper, but the mineral reserves
    did not prove out. Instead, a plan to establish a national park on the
    land moved forward. The rights retained in the ceded lands by the Tribe
    in the 1895 Agreement almost immediately became an issue between the
    Tribe and Glacier National Park and have remained so to the present.
        In the 1895 Agreement, the United States promised that the
    Reservation would not be allotted without the consent of the adult men
    of the Tribe (Article V), and, that if the government were to build a
    canal to control the abundant supply of water available seasonally in
    the St. Mary River, the canal would be constructed to provide
    irrigation water for the Reservation (Article III and Meeting Minutes).
    Within just a few years, the Reservation was opened to allotment;
    construction of a canal to capture the supply of the St. Mary River had
    begun, which was done in conjunction with land purchases by the Bureau
    of Reclamation; and the canal was designed and constructed to divert
    St. Mary water off of the Reservation for the benefit of the Milk River
    Project, which is located some 200 miles away, and not for the benefit
    of the Tribe. In 1909, the United States entered into a treaty with
    Canada apportioning the waters of the St. Mary and Milk Rivers. This
    Treaty did not specifically address the water rights of the Blackfeet
    Nation and other Tribes, even though it was concluded just after the
    United States Supreme Court handed down its 1908 decision in Winters v.
    United States--a case involving the Milk River, which established the
    doctrine of Federal Indian reserved water rights.
        There is an abundant supply of water arising on or near the
    Blackfeet Reservation, but much of it is diverted off the Reservation,
    which along with a lack of storage capacity for on-Reservation use and
    a limited growing season, creates numerous challenges for the Tribe.
    These challenges in part account for the high unemployment and
    devastating poverty rate that has plagued the Reservation for
    generations. Securing control of and actively managing Reservation
    water resources would be an important step towards improving economic
    conditions on the Reservation and creating the homeland envisioned in
    the numerous treaties and agreements that serve as the foundation of
    the United States and Blackfeet Tribe's relationship.

    III. Blackfeet Montana Water Rights Compact and Proposed Legislation
        S. 399 would approve a Compact entered into by the Blackfeet Tribe
    and the State of Montana in an effort to settle all the Tribe's water
    rights claims in Montana. The legislation specifically authorizes
    funding of $591 million, but the actual cost to the United States of
    implementing S. 399 would be substantially higher because the
    legislation requires the United States to carry out a number of actions
    spending ``such sums as may be necessary.'' Major costs would be
    incurred to carry out the requirements of section 5(a) related to the
    St. Mary River, section 5(b) related to compensation to the Tribe for
    Milk River Project Rights-of-Way and easements, and section 11
    regarding Milk River water rights. S. 399 as introduced does not even
    attempt to quantify the amounts that the United States would be
    required to pay to satisfy the requirements of these sections.
    Likewise, S. 399 is silent on the amount required for the Birch Creek
    Mitigation Fund that would be established under section 9.
        Of the $591 million that are specifically authorized, $466 million
    are slated for the Blackfeet Land and Water Development Fund
    established in section 8(a) of S. 399. This trust fund would be used by
    the Blackfeet Tribe to carry out activities at its option. The list of
    authorized uses in section 8(a) is extremely broad. $125 million is
    authorized for the Secretary of the Interior to carry out
    rehabilitation and improvement activities for the Blackfeet Irrigation
    Project and Four Horns Dam and Reservoir. The legislation does not make
    clear what would happen if $125 million is not enough to complete the
    work called for in section 5(d) of the Act, although the Tribe may be
    able to use funds provided to it through the Land and Water Development
    Fund to complete the work. As will be discussed further below, this
    needs to be clarified so that the Secretary does not face open-ended
    and unfunded mandates and the United States does not face continuing
    liabilities, instead of finality, despite the expense and breadth of
    this settlement.
        The settlement would recognize a tribal water right to
    approximately 750,000 acre-feet per year of surface water from the flow
    of several rivers on the Reservation, including the St. Mary River, the
    Milk River, Cut Bank Creek, Two Medicine River, Badger Creek and Birch
    Creek. Citizens of the State of Montana benefit under the settlement as
    non-irrigation State based water rights are protected under the Compact
    in each of these basins, while irrigation State based water rights are
    protected for a period of ten years in the Cut Bank Creek and Milk
    River Basins and are then subject to a call by the Tribe.
        The remainder of this testimony will summarize a number of
    significant concerns regarding S. 399 as introduced.

    IV. Major Concerns
    A. Federal Cost
        The Department has serious concerns with the amount of the
    appropriations that would be needed to carry out this settlement.
    Section 14 authorizes appropriations in the amount of $591 million plus
    additional sums as may be necessary to resolve the St. Mary and Milk
    River conflicts and to implement the Birch Creek Agreement discussed
    above. Aside from just the sheer magnitude of the cost of this proposed
    settlement, there is little information regarding the projects the
    Tribe plans on funding using the trust fund that would be established
    under legislation. The Department has made it clear to the Tribe that
    it needs much greater detail and certainty along with a more realistic
    level of funding before it will be able to support S. 399.
        As a practical matter, the size of the Federal obligation created
    under S. 399 in relation to the Department's budget presents
    significant challenges. As an example, the Bureau of Reclamation
    currently has a backlog of more than $2 billion in authorized but
    unfunded rural water projects. This is in addition to other authorized
    but unfunded Reclamation projects. Moreover, the breadth of the many
    benefits that would flow to the Blackfeet Tribe and the non-tribal
    beneficiaries under the settlement at almost exclusively Federal cost,
    such as the rehabilitation and improvement of the Blackfeet Irrigation
    Project and significant funding for unspecified and open-ended water
    and economic development projects, raises serious concerns because of
    the precedent that enactment of such a large settlement could set for
    future Indian water rights settlements.

    B. Non-Federal Cost Share
        S. 399, as introduced, authorizes almost $600 million in Federal
    appropriations. Significantly, the legislation authorizes $125 million
    of this cost for the rehabilitation, improvement, and expansion of the
    Blackfeet Irrigation Project and Four Horns Dam and Reservoir. Many of
    the benefits from Four Horns Dam and Reservoir would go to secure a
    guaranteed water supply for the Birch Creek water users associated with
    Pondera County Canal and Reservoir Company (PCCRC), a private off-
    Reservation irrigation company south of the Reservation. Birch Creek
    forms the southern boundary of the Blackfeet Reservation and was the
    subject of Conrad Inv. Co. v. United States, 161 F. 829, 831 (9th Cir.
    1908), where ``the paramount rights of the [Blackfeet] Indians'' to
    Birch Creek were decreed. If the Tribe develops the full Birch Creek
    water right it negotiated under the Compact with Montana, the water
    supply available to PCCRC will decrease.
        The Birch Creek Agreement between the State and the Tribe attempts
    to solve this problem by authorizing the construction of a new pipeline
    to deliver 15,000 AF/yr to PCCRC, water that is made available by the
    enlargement of Four Horns Dam, a Bureau of Indian Affairs (BIA)
    irrigation project facility. Though the Tribe's consultant estimates
    that full implementation of the cost for the Four Horns project will
    cost as much as $215 million, S. 399 authorizes only $125 million for
    the Secretary to pay for both Four Horns Dam and Reservoir and
    expansion of the Blackfeet Irrigation Project. Any additional required
    funding for this project would need to come from the Tribe's water
    development fund, although this is not clear from the language used in
    S. 399 and would require clarification. The Administration estimates
    that about half of the full implementation cost of $215 million is
    attributable to non-tribal water users. Montana agreed in the Birch
    Creek Agreement to pay the Tribe $14.5 million for its deferral of its
    Birch Creek water right for a period of up to 15 years during
    construction of the Four Horns Dam enlargement and associated
    infrastructure, then for its delivery of 15,000 AF/yr to PCCRC for 25
    years. Additionally, the State, during water rights negotiations, paid
    the Tribe $500,000 to conduct appraisal level designs of the Four Horns
    enlargement project. The State also will contribute an additional $20
    million towards construction of the PCCRC pipeline for a total cost
    share by the State of $35 million, just 6 percent of the specifically
    authorized costs of the settlement and around 33 percent of the
    Administration's estimate of the State's share of the capital cost of
    this project.
        Additional benefits to State users in the Compact arise from the
    Tribe's agreement to protect junior state water rights holders,
    especially in the St. Mary and Milk River basins. These benefits are
    substantial although not quantified in the settlement. The Department
    is confident that settlement benefits, e.g., protecting existing non-
    Indian water users, securing the Tribe's water rights, and empowering
    the Tribe to control and manage its water resources, can be achieved at
    a lower cost than the Birch Creek Agreement contemplates. The United
    States has engaged experts to identify alternatives, and working in
    collaboration with the Tribe, is preparing an alternative proposal for
    consideration by the State. While the Department supports the goal of
    preserving existing water uses whenever possible, substantial Federal
    outlays that benefit non-Indian water users are not acceptable.

    C. Lack of Information Regarding Proposed Use of Trust Fund and
            Infrastructure
        Projects
        Section 8 of S. 399 authorizes the Tribe to use a $466 million Land
    and Water Development Fund for: (1) the acquisition of land or water
    rights; (2) water resources planning, development, and construction,
    including storage and irrigation; (3) agricultural development; (4)
    restoring or improving fish or wildlife habitat; (5) fish or wildlife
    production; (6) any other water storage project, land or land-related
    project, or water or water-related project; (7) cultural preservation;
    (8) the operation and maintenance of water and water-related projects
    and environmental compliance related to projects constructed under this
    Act; (9) development of administrative infrastructure to implement this
    Act, including development of the tribal water code; (10) design and
    construction of water supply and sewer systems and related facilities;
    (11) measures to address environmental conditions on the Reservation;
    and (12) water-related economic development projects. The authorized
    uses of this fund are so broad that it is difficult for the United
    States to evaluate whether the fund is sized appropriately.
        Likewise, the Department does not have sufficient information
    regarding the infrastructure projects that the Tribe wants to carry out
    under this settlement. Without this information, we cannot evaluate the
    Tribe's estimated costs for the proposed projects or determine an
    appropriate Federal cost share. The $125 million authorized for the
    Secretary to carry out infrastructure projects would not be sufficient
    to complete the actions called for under section 5(d) of S. 399 as
    introduced. The legislation should clarify the respective
    responsibilities of the Secretary and the Tribe under the legislation.
    It is our understanding that the Tribe would be responsible for
    completing these infrastructure projects using funds provided to the
    Tribe under this settlement after the Secretary has spent the amount
    specifically authorized in section 14 for these purposes.
        The Blackfeet Irrigation Project (Project) was authorized for
    construction in 1907 at 106,000 acres but only 51,000 acres have been
    completed. Sixty percent of the Project's land is in trust owned by
    either the Tribe or individual tribal members and about 40 percent is
    owned by non-Indians. The BIA estimates the Project's total deferred
    maintenance costs at over $29 million. About 38,300 acres are being
    assessed operation and maintenance fees. Section 5(d)(1) of the
    legislation calls for full build out of the Project to the authorized
    acreage. The rehabilitation of the Project includes plans to enlarge
    Four Horns Reservoir and associated delivery systems, including the
    Birch Creek portion of the Project discussed above. The legislation
    lacks specifics with respect to the proposed rehabilitation projects
    the Tribe plans to undertake. The Department has expressed its concerns
    about the scope and cost of the proposed rehabilitation of the Project,
    and the Tribe is working with us to more narrowly focus its plans for
    rehabilitation. The Tribe is also considering the Department's proposal
    that after completion of an agreed upon rehabilitation and improvement
    of the Project, the United States would transfer to the Tribe title to
    the Project.
        Although not specifically referenced in the legislation, it is
    understood that the Tribe intends to develop a regional drinking water
    system using funding provided under this settlement. Parts of the
    Blackfeet Reservation have been under a ``boil order'' for more than a
    decade. While the Tribe has been working to develop and construct a
    regional water supply system, only portions of it are complete. The
    $466 million Blackfeet Land and Water Development Fund authorized in
    this legislation could be used by the Tribe for funding the proposed
    regional water system, which according to the Tribe's estimates will
    cost around $110 million. If the actual costs of construction are
    higher than that, the Tribe would need to use more of the Fund for this
    purpose. Assuming that the system would serve over 25,000 users, the
    $110 million estimate reflects a cost per person of approximately
    $4,300 for the system, which compares favorably with costs associated
    with other projects in the region. The Tribe is considering how to
    modify its proposal, however, in view of the Department's concerns
    about the expense of the project. Our respective technical experts are
    exploring ways to achieve cost savings through possible redesign of
    certain elements of the proposed regional water system. We are
    confident that a better, more efficient design is possible.

    D. Mitigation Fund to Benefit non-Indians
        The State and the Tribe entered into a side agreement, which the
    proposed legislation would approve and to which it would bind the
    United States, to secure a permanent supply of water for the PCCRC,
    which supplies irrigation water to its members as well as the municipal
    supply to the City of Conrad. Under this side agreement, the State will
    pay the Tribe to defer its use of Birch Creek for a period of up to 15
    years while infrastructure is built to guarantee delivery of water to
    the PCCRC. Once the infrastructure is completed, the Tribe will supply
    15,000 AF/yr for 25 years to PCCRC. Moreover, Section 9 of this bill
    requires the United States to establish a fund ``to be used to mitigate
    the impacts of development of the tribal water right . . . on the Birch
    Creek water supplies of the PCCRC Project'' and authorizes the
    appropriations of ``such sums as are necessary'' for this purpose. The
    United States strongly opposes this unprecedented inclusion of a fund
    to benefit non-Indian beneficiaries in a settlement using scarce
    Federal dollars. While Indian water rights settlements routinely seek
    to protect existing non-Indian water uses so as not to unduly impact
    local economies, they have not to date included Federal funds to
    compensate non-Indian water users if the future exercise of a tribe's
    established water rights causes an impact on future non-Indian water
    uses. The United States cannot afford this sort of precedent, and it is
    unclear what additional potential liabilities this may impose on the
    United States.

    E. Lack of Resolution in the St. Mary and Milk River Basins
        The proposed legislation leaves important matters involving the
    Tribe's water rights in the St. Mary River and Milk River Basin
    unsettled, imposing upon the Department the obligation to develop
    solutions to these problems after the settlement is enacted. This
    guarantees that there will be significant obstacles to ever achieving
    realistic solutions to these problems. The Department is committed to
    developing real solutions to the issue of Tribe's water rights in the
    St. Mary River and the Milk River before a settlement is enacted. The
    two main concerns of the Department are found in sections 5 and 11 of
    the Blackfeet legislation, although we have other concerns with the
    indefiniteness of some of the legislation's provisions as discussed
    more fully below. Section 5 of the legislation directs the Secretary to
    allocate to the Tribe 50,000 AF/yr of stored water in Lake Sherburne
    Reservoir free of any charges and to agree to lease the water back from
    the Tribe at an undetermined price for an indefinite period of time.
    The provision's apparent goal is to have the Department find a way to
    provide the Tribe with a firm supply of 50,000 AF/yr on a permanent
    basis and use the lease provision as a stop gap measure while the
    effort to find the additional supply is underway. This requirement is
    complex and raises difficult issues, including feasibility and future
    liability. Water rights in the Milk River Basin for both the Blackfeet
    Tribe and the Ft. Belknap Indian Community are set forth in their
    respective Water Rights Compacts with Montana and Section 11 directs
    the Secretary to resolve conflicts that may arise between the two
    tribes.
        Taken together, these issues create real and significant conflicts
    over water use and water availability and will create difficult
    problems for the United States and for the communities that are
    affected by this proposed settlement. They must be resolved before the
    Administration will be able to lend its support to the Blackfeet water
    rights settlement. The purpose of a water rights settlement is to
    create the conditions for harmonious working relationships among the
    parties, but these goals will not be achieved if a settlement creates
    significant new liabilities and leaves significant conflicts over water
    use and water availability unresolved.

    F. Additional Concerns
        We have other concerns with the proposed legislation, including but
    not limited to the following. First, the waivers as set forth in
    section 12 of the legislation are inadequate, particularly given the
    broad nature of this legislation. The Administration has developed
    language that we believe is appropriate for waivers in Indian water
    rights settlements and such language should be followed here. Second,
    further analysis is needed with respect to the rights of allottees. The
    Administration has an obligation to protect allottees and the language
    of Section 7(b) does not contain the certainty that we require so that
    allottees are fully protected under the settlement. Third, the
    Department, including the National Park Service (NPS), believes that
    the water rights (including instream flows) that Glacier National Park
    had quantified in the 1994 Water Rights Compact with the State of
    Montana and the water rights that the Tribe seeks to have confirmed in
    its water rights settlement generally are consistent. The Department is
    working with the Tribe and the NPS to seek a resolution to several
    concerns with the legislation, including water rights of the park,
    potential impacts of the settlement, if any, on park resources, or
    other issues related to the park.'' Lastly, Section 7(f) permits the
    Tribe to lease ``any portion of the tribal water right'' for use off
    the Reservation. While the Department has supported authority for
    tribal water leasing in several prior settlements, it is concerned with
    the broad and uncertain aspects of this language.

    V. Conclusion
        S. 399 and the underlying Compact are the products of a great deal
    of effort by many parties and reflect a desire by the people of
    Montana, Indian and non-Indian, to settle their differences through
    negotiation rather than litigation. This Administration shares that
    goal, and hopes to be able to support a settlement for the Blackfeet
    Tribe after a full and robust analysis and discussion of all aspects
    and ramifications of this large settlement.
        The Administration is committed to working with the Tribe and other
    settlement parties to reach a final and fair settlement of the Tribe's
    water rights claims. This settlement, when completed, will provide
    certainty to the State of Montana and non-Indian users and will enable
    the Blackfeet Tribe to put its water rights to use for the economic
    benefit of the Blackfeet Reservation and its residents. If the parties
    continue to negotiate in good faith, we are hopeful that an appropriate
    and fair settlement can be reached that will contribute to long-term
    harmony and cooperation among the parties.
        We believe settlement can be accomplished in a manner that protects
    the rights of the Tribe and also ensures that the appropriate costs of
    the settlement are borne proportionately. While we do not support S.
    399 as introduced, the Administration is committed to working with
    Congress and all parties concerned in developing a settlement that the
    Administration can fully support.

                                    S. 1327

        The Department opposes S. 1327, a bill to amend the Act of March 1,
    1933, to transfer certain authority and resources to the Utah Dineh
    Corporation, and for other purposes.

    Background
        In 1933, Congress established the Utah Navajo Trust Fund (UNTF),
    Pub. L. No. 72-403, 47 Stat.1418 (1933 Act), which designated Utah as
    the trustee. UNTF's corpus was derived from 37.5 percent of net
    royalties from the extraction of oil and gas deposits under the Navajo
    Reservation's Aneth Extension. According to the statute, the 37.5
    percent net royalties are to be paid to the State of Utah, for the
    health, education and general welfare of the Indians residing in the
    Aneth Extension. In 1968, Congress expanded the beneficiary class to
    include all Navajos living in San Juan County, Utah, Pub. L. No. 90-
    306, 82 Stat. 121. The Navajo Nation has managed 62.5 percent of the
    net royalties since the initial development of oil and gas on the
    Navajo Reservation.
        In approximately 1959, oil and gas wells in the Aneth Extension
    began producing in paying quantities, and the Department, through oil
    and gas mining leases on the Navajo land, began collecting oil and gas
    royalties. The leases are between the Navajo Nation and the producer,
    and are subject to approval by the Secretary of the Interior. \1\ The
    State of Utah is not a party to the tribal leases for these oil and gas
    royalties.
    ---------------------------------------------------------------------------
        \1\ See, e.g., 25 U.S.C.  396a (provision in 1938 Indian Mineral
    Leasing Act allowing tribe to lease unallotted Indian land for mining
    purposes, subject to Secretary of Interior approval); 25 C.F.R. Pt. 211
    (Leasing of Tribal Lands for Mineral Development).
    ---------------------------------------------------------------------------
        In 2008, the State of Utah decided to resign as trustee of the
    UNTF, and allowed UNTF, as a state agency, to sunset. The State moved
    the responsibility to fulfill the liabilities and obligations of the
    repealed UNTF to the State of Utah's Department of Administrative
    Services. The State also provided for a transition process until the
    United States Congress designates a new administrator of the 37.5
    percent of the Utah Navajo royalties identified in the 1933 Act.
        The Office of Natural Resources Revenue (ONNR) receives the Report
    of Sales and Royalty Remittance from the royalty payor and prepares a
    monthly summary of the reported royalties for 21 Aneth leases.
    Currently, the royalties are paid to the ONRR, the same as all other
    Indian leases. The ONRR then forwards the funds to the Navajo Nation,
    and simultaneously reports to the Navajo Regional Office of the Bureau
    of Indian Affairs (BIA) on the respective funding amounts due to Navajo
    Nation and to the State of Utah Navajo trust entity. The BIA then
    forwards correspondence to the Navajo Nation recapitulating the ONRR-
    calculated funding split and directing Navajo Nation to forward the
    appropriate amount to the Utah Navajo trust entity.

    Department's Concerns with S. 1327
        S. 1327 would amend the 1933 Act and its subsequent 1968 amendments
    by identifying the Utah Dineh Corporation as the trustee of the former
    UNTF. Consistent with our government-to-government relationship with
    the Navajo Nation, the Department acknowledges and respects the
    position of the Navajo Nation as it pertains to the UNTF. The
    Department understands that the Navajo Nation would like to manage the
    trust and disburse the funds to the Utah Navajo beneficiaries
    consistent with the current disbursement and percentages. We also
    understand that the Navajo Nation opposes this bill and has opposed a
    similar version in the 111th Congress. The Department, therefore,
    opposes S. 1327. At this time, the Department believes it is more
    appropriate for the Navajo Nation to manage the trust and disburse the
    funds consistent with and to further the intent of the 1933 Act.
        Furthermore, without additional background or definition of whom,
    or what makes up, the Utah Dineh Corporation, the Department is
    concerned with the designation of the Utah Dineh Corporation as the
    trustee for the 37.5 percent. We are also concerned with the deletion
    of a significant portion of the 1933 Act and its subsequent amendments
    that required ``planning of expenditures'' in cooperation with the
    appropriate department, bureaus of the United States and with the
    Navajo Nation. The planning and cooperation would not be required by
    the Utah Dineh Corporation under S. 1327. Also, the Department is
    concerned that S. 1327 would eliminate the reporting requirement of the
    1933 Act, whereby an annual report was sent to the Navajo Area Regional
    Director of the BIA.
        Again, for the above stated reasons, the Department opposes S.
    1327. This concludes my statement. I would be happy to answer any
    questions the Committee may have.

                                    S. 1345

        Thank you for the opportunity to present the Administration's views
    on S. 1345, the Spokane Tribe of Indians of the Spokane Reservation
    Grand Coulee Dam Equitable Compensation Settlement Act.
        S. 1345 would provide compensation to the Spokane Tribe of Indians
    for the use of its land for the generation of hydropower by the Grand
    Coulee Dam. Specifically, S. 1345 would require the Secretary of the
    Interior to deposit $99.5 million over 5 years, $23,900,000 for fiscal
    year 2012 and $18,900,000 for the following 4 fiscal years, into a
    trust fund held by the United States Treasury for the Spokane Tribe.
        The Department is encouraged by significant progress made in recent
    months toward resolving issues of concern to the Administration,
    however, the Administration cannot support S. 1345 in its current form.
        As an example of the significant progress, the Department supports
    the removal of the land transfer provisions that had been included in
    prior legislation. Section 9 (a) of S. 1345, ``Delegation of
    Authority,'' presents an alternative approach for addressing the
    Spokane Tribe's interest in reestablishing its law enforcement
    authorities within the boundaries of the Spokane Reservation. While the
    Department supports the concept of providing a clear delegation of
    authority to the Tribe to achieve its law enforcement goals, we are
    concerned that the language in S. 1345 is overbroad and could be
    construed to delegate more than just the authority intended by the
    Tribe. The Department is willing to work with the Committee or the
    Tribe to craft acceptable language for this provision, and,
    alternatively, is willing to accomplish the intent of this provision of
    the legislation administratively through a written delegation letter
    from the Secretary to the Spokane Tribe.
        With regard to Section 5 of S. 1345, ``Settlement Fund,'' the basis
    for this settlement has not been established by a legal claim of the
    Spokane Tribe. Since the Spokane Tribe has no legal claim, the
    Department does not believe this legislation is appropriate as a
    settlement of claims. However, the Department could examine with the
    Tribe and Congress other avenues to address the concerns of the Spokane
    Tribe.
        Finally, although the Department is concerned with this legislation
    being styled as a settlement act, settlement acts generally should
    include a provision that requires the Tribal government to ratify and
    approve this legislation as a complete settlement prior to the Act
    becoming effective.
        The Department, in consultation with the Bonneville Power
    Administration, would be pleased to work with the Committee on
    substitute language or amendments to the legislation that we believe
    could meet the needs of the Spokane Tribe and the United States.
        Mr. Chairman, this concludes my written statement. I would be
    pleased to answer any questions the Committee may have.

        The Chairman. Thank you very much, Mr. Laverdure.
        For each bill that we are hearing about today, can you tell
    me how the Department will work with sponsors and this
    Committee so that we can all move forward legislatively, while
    still addressing the concerns of the Department and not
    delaying the legislation?
        Mr. Laverdure. Thank you, Mr. Chairman.
        With respect to the Blackfeet Water Rights Settlement Act,
    our Secretary's Indian Water Rights Office has been working
    closely with the Blackfeet Tribe over this past year to try to
    resolve Federal concerns. Our testimony today makes clear that
    the Department still has several significant problems with the
    legislation as introduced, but that we are committed to working
    with the Tribe to find solutions so that the Administration can
    support a Blackfeet settlement.
        With respect to the Spokane Equitable Compensation Act, the
    Department's Associate Deputy Secretary, Meghan Conklin, has
    been working closely with Senator Cantwell's office to resolve
    our concerns and we will continue to do so.
        In addition, the Department would be happy to work with the
    sponsors of the Mescalero Water Leasing Authorization Act,
    which we support, and on S. 1327 regarding the management of
    the trust fund and the Utah Dineh Corporation.
        The Chairman. Thank you.
        Let me call for questions from Senator Tester.
        Senator Tester. Thank you, Mr. Chairman.
        And thank you for being here today, Del. I appreciate your
    testimony.
        You had mentioned one of your first concerns is the high
    cost, $591 million. And then you talked about unspecified
    dollars without specific authorization. Could you flesh that
    out a little bit for me? What are you talking about?
        Mr. Laverdure. Yes, Senator Tester. On page three of the
    formal written testimony submitted to the Committee, the
    paragraph under section three talks about the phrase on a
    number of actions of spending ``such sums as may be necessary''
    and that is in several of the provisions so that it doesn't
    have a finite number. And that is in addition to the $591
    million price tag in the bill as introduced.
        Senator Tester. And so what you are looking for is a
    conversation between the Department and the Tribe to put actual
    numbers in those areas, instead of the verbiage such sums as
    necessary?
        Mr. Laverdure. Yes.
        Senator Tester. Okay.
        Chris, when you get up, I am going to ask you why that
    language is in there so remind me if I forget. Okay?
        The other question I had was, look, I have a lot of respect
    for you. I think you are a good guy. We need somebody in the
    Department that is going to sit down and negotiate in good
    faith with the Tribe and with us. Who is that going to be? Is
    that going to be you? Is that going to be somebody else?
        Mr. Laverdure. We send the entire Federal water rights team
    out to Browning just I think two and a half to three weeks ago.
    If I hadn't had a prior commitment, I would have went myself
    personally, but I can commit to you today that I would be happy
    to be the person heading the Federal water rights team to go
    out there and try to resolve the issues of concern that we
    have.
        Senator Tester. That is good because if we have a point
    person, when we have a point person and you don't get ping-
    ponged around. So I appreciate that.
        Do you know of or have you proposed any alternatives to the
    Tribe or the State to address some of the five major comments
    that you had negative about it? Have we got to that point yet?
        Mr. Laverdure. I would like to turn to my colleague, Pam
    Williams. She is the head of the Secretary's Indian Water
    Rights Office and I know she works closely with all of the
    negotiating teams, so she can answer with specificity the
    questions you have.
        Senator Tester. Okay.
        Ms. Williams. Senator Tester, we have been working with the
    Tribe closely, very intensely in the last few months. And only
    recently we received some proposals from the Tribe that we find
    to be very useful, I think progressive, and we are very excited
    about some of those concepts. And we are looking forward to
    beginning a dialogue immediately with the Tribe on those new
    concepts with them.
        Senator Tester. I appreciate that. Is it within your, I
    mean, negotiations are something that you kick stuff back to
    them. This is a possible solution; this is an idea that could
    work. Have you guys done any of that? Have you guys proposed
    any solutions for the problems that you see?
        Mr. Williams. Yes, we have proposed a number of
    alternatives in the settlement.
        Senator Tester. Okay, good.
        Let me go back to some of the concerns. The size of the
    project, for one. The second one was there wasn't a reasonable
    amount of State dollars. I think about $35 million, correct?
    And hasn't there been water compacts that have been passed that
    had no State match in them whatsoever?
        Number one, what is a reasonable amount? And number two, I
    will say it the way I see it. Why are we holding Blackfeet to a
    higher standard than we hold some of the other water
    settlements to?
        Mr. Laverdure. Three things, Senator Tester. Number one,
    the State contribution is roughly 6 percent of the total amount
    that is proposed in the introduced bill. In addition, the
    Department, to my knowledge, has had concerns with every Indian
    water rights settlement that came from Montana and Montana's
    proportional contribution. And all of them I think have been
    deemed insufficient in the records in each of the testimonies.
    In fact, I had experienced the same when I was on another side
    of the table.
        And with respect to the $35 million that you mentioned, $15
    million was to go for the deferral of 15 years for the call
    right of the Blackfeet, the senior water rights for the
    irrigation project just south of the reservation boundary. And
    then the $20 million was meant for the outlay of the pipeline
    coming from the, to increase the capacity of the irrigation
    project to go down to the community south, which is all to
    benefit a community south of the reservation, as opposed to the
    Blackfeet directly.
        Senator Tester. So what are you saying? Are you saying that
    $35 million isn't being spent correctly? Or are you saying that
    $35 million isn't an adequate amount?
        Mr. Laverdure. We are saying that the $35 million, when the
    State provides proportional contribution, that it should be to
    the benefit of the Blackfeet Nation and its citizens.
        Senator Tester. Okay. If we get this water settlement
    through, and no matter how that $35 million is spent, you
    understand better than anybody in this room what kind of
    benefit it is going to be to the Blackfeet people. Okay.
        I have run out of time. If we have a second round, I have
    more questions.
        The Chairman. Senator Cantwell?
        Senator Cantwell. Thank you, Mr. Chairman.
        Mr. Laverdure, are you speaking on behalf of the entire
    Interior Department? I mean, is the Bureau of Reclamation
    satisfied with this legislation since they are the ones who had
    issues or concerns and actually run Lake Roosevelt from a
    reservoir perspective?
        Mr. Laverdure. Senator Cantwell, I am speaking on behalf of
    the Department, and Reclamation's concerns are partially
    included in the written statement that we provided, which was
    fairly short.
        Senator Cantwell. So even though we have heard from the
    Bureau of Reclamation that they don't have any concerns, you
    are now saying they do?
        Mr. Laverdure. Actually, there were two underlying issues
    submitted in the formal written statement. One was some law
    enforcement provisions that thought could be taken care of
    better outside of some of the underlying Acts that created
    Grand Coulee Dam or authorized it.
        In specific law enforcement, we thought that the Secretary
    could simply delegate the law enforcement authority that the
    Spokane Tribe is seeking, rather than in this legislation where
    there are a number of other non-law enforcement delegations
    that could be provided under that.
        And the second was that this was titled as a settlement act
    from claims and that from the Department's perspective, it is
    more of an equitable compensation because of the long history
    dealing with the Indian Claims Commission Act and the fact that
    Colville was able to amend its underlying claim to include the
    hydropower value and the fisheries issue. Whereas, the Spokane
    Tribe was unable to include that. And that is the piece of the
    equitable compensation.
        Senator Cantwell. But are those Bureau of Reclamation
    issues, the law enforcement and the claim issue?
        Mr. Laverdure. The claim issue is from the Department of
    Justice's perspective; the legal claim issue.
        Senator Cantwell. So does the Bureau of Reclamation, are
    they satisfied with the legislation as it relates to the Lake
    Roosevelt Reservoir?
        Mr. Laverdure. Except the law enforcement aspect of it.
        Senator Cantwell. Okay.
        And then back to this issue, the second issue that you are
    raising. Do you see any difference between the damage to the
    Spokane Reservation, to its way of life, and the damage that
    was done to the Colville Tribe? Do you see any difference in
    the damage?
        Mr. Laverdure. No.
        Senator Cantwell. No, okay. So the damage was the same.
        And the fact that the Colville received a settlement in
    1994 for the exact same harm. You know, they lost access to
    salmon and land and burial sites and all sorts of thing. That
    settlement, my understanding is, had Department of Justice
    support despite the assertion that the Tribe had no legal
    claim, a position that it had argued for many years. Is that
    correct?
        Mr. Laverdure. My understanding, and it was included in the
    2000 GAO report, that Colville actually was able to amend its
    underlying Indian Claims Commission filing and it did include
    the fisheries, as well as the hydropower value. Whereas the
    Spokane were seeking outside the legal ICC claims and were
    unable to amend their underlying claim to include that.
        That was my understanding of the basis of the Colville
    settlement in the mid-1990s.
        Senator Cantwell. So you are saying that the technicality
    of how they reached the agreement and what it was called at the
    time, the Department of Justice basically was supporting the
    agreement because of the structure.
        Mr. Laverdure. I think because of that history that there
    was less objection to that.
        Senator Cantwell. Well, they either objected that they had
    no legal claim, or they did. So I am just trying to understand.
    Do you think the Department of Justice objected to the
    settlement, because they didn't object to it, so I am trying to
    understand that they didn't object to it, what are they, they
    also, what are they saying about the fact that Colville had no
    legal claim?
        Mr. Laverdure. Actually, Senator, I think they did have a
    legal claim, the Colville, because they were able to amend
    their original ICC claim to include the two things that Spokane
    unfortunately did not get to amend their underlying claim to
    include.
        Senator Cantwell. Well, I appreciate that you at least have
    testified today that the damage done to both is exactly the
    same. So at least thank you for that.
        I don't have any more questions. I will have questions for
    the Spokane Tribe when they are before us, Mr. Chairman. Thank
    you.
        The Chairman. Thank you very much, Senator Cantwell.
        Let me welcome and ask our Vice Chair here to make any
    statement and questions that he may have.

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

        Senator Barrasso. Thank you very much, Mr. Chairman. I
    appreciate both the business meeting that we have been working
    on together and I look forward to continue working with you on
    those matters. And thank you for holding the discussion and the
    hearings today.
        I note that in the third panel, the Honorable Kenneth
    Maryboy from Monticello, Utah will be here, and Senator Hatch
    and I had a chance to visit at lunch and he is unable to be
    here to welcome Kenneth Maryboy, but wants to extend that
    welcome and I will do that on Senator Hatch's behalf.
        I do have a couple of questions, if I could, Mr. Chairman.
    And it goes back to a 1930s report of advisers on irrigation on
    Indian reservations. We are going back now quite a few years.
    So it was submitted to this Committee over 80 years ago and it
    questioned the viability of the Blackfeet project.
        The report noted that adequate preliminary investigations
    and studies would have condemned the irrigation project as
    unfeasible. And then in 2006, the GAO cited that report, that
    report from 1930, raising very similar concerns about this
    project. So we hear it in 1930 and then we hear it again in
    2006.
        So I realize that the earlier report really is over a half-
    century old, but in light of the recent GAO report, the one
    from 2006, I would like to know: Is it a wise use of taxpayer
    funds to rehabilitate the Blackfeet project?
        Mr. Laverdure. Thank you, Vice Chairman Barrasso.
        I don't dispute some of the background and the factual
    information you provided on that. In fact, we have that. I
    think from the beginning there was 106,000 acres, but only
    roughly half was completed. And you cite some of the conditions
    of it.
        My understanding is there has been some new movement on
    whether in fact aspects of the Blackfeet irrigation project
    would be part of the settlement going forward. That has not
    been changed in the bill as introduced, but that is my
    understanding. And I think that our view is that we would
    tentatively agree without knowing all the details right now.
        Senator Barrasso. Yes, because I was wondering what may
    have changed since that 1930 report to make this project now a
    viable consideration under the water settlement.
        Mr. Laverdure. To my knowledge, I don't think anything has
    changed.
        Senator Barrasso. And I didn't know if there was any BIA or
    other interagency financial feasibility studies of all of the
    projects contemplated by S. 399. Is there such a study? Do you
    know?
        Mr. Laverdure. No.
        Senator Barrasso. Thank you.
        Thank you, Mr. Chairman. I appreciate the time. Thanks.
        The Chairman. Thank you very much, Senator Barrasso.
        Senator Udall?
        Senator Udall. Thank you, Chairman Akaka, and I thank you
    for the witnesses being here today. And let me also echo what
    several Members of the Committee said in terms of Elouise
    Cobell. It is a big loss, I think, to all of us. She was a
    great lady and I think we will all miss her very much.
        Del, I am asking you now about the Mescalero Apache Tribal
    Leasing Authorization Act. Is there a precedent of Tribes being
    able to lease their adjudicated water rights for up to 99
    years?
        Mr. Laverdure. Yes, Senator. The majority of
    Congressionally approved Indian water rights settlements
    contain leasing provisions. However, each marketing provision
    is unique and often tailored to the agreements among the
    settling parties. A 99-year lease term is not unusual and all
    of the Arizona water rights settlements allow them in some way,
    shape or form.
        At this time, the Department doesn't have a precise list of
    all of those that allow a 99-year term because each
    settlement's marketing provisions are worded differently and
    sometimes the key details are omitted from the Federal
    legislation and are in the relevant language within the
    underlying settlement documents.
        Senator Udall. Could you provide to the Committee a rough
    idea of how many Tribes have this authority?
        Mr. Laverdure. We are going to have to go back and look at
    not only the Federal legislation, but the underlying
    agreements, but we can provide that to the Committee.
        Senator Udall. Thank you very much.
        How has water leasing authority been beneficial or
    detrimental to Tribes?
        Mr. Laverdure. I think in general, allowing Tribes to
    receive economic value from their resources is beneficial in
    untold ways, including having direct exercise over control over
    their own resources and receiving much-needed revenues. And I
    fully anticipate that the panel afterwards will be able to
    explicate many of the other reasons that they could utilize
    that authority for.
        Senator Udall. In your testimony, you make the
    recommendation that the Mescalero Apache Tribal Leasing
    Authorization Act be changed to include language that provides
    that the Tribe, and I am quoting now, your testimony, ``shall
    develop Tribal water leasing standards and submit such
    standards to the Secretary of Interior for approval.''
        Will you flesh that out a little bit, expand on your idea
    for the Committee? What would these water leasing standards
    entail?
        Mr. Laverdure. Today, the Department is considering an
    individual bill that will allow a Tribe to lease its water off
    the reservation without secretarial approval of the underlying
    lease. And that is a novel and new issue for the Department.
        The Department has consistently held the view that 25 USC
    Section 177, the restraint on alienation of lands, also applies
    to the water resource as well. So to make water leasing
    consistent with the Department's policy on legislation that
    allows Tribes to lease their own land, the Department believes
    it is prudent for the Secretary to approve standards for the
    leasing of Indian water rights.
        And in terms of detailing those types of standards, they
    would include things like identify and mitigate any
    environmental impacts; ensuring that the fair market value is
    received that could potentially result from this water leasing;
    and more or less things like that that are of a transactional
    business nature, as opposed to regulatory nature.
        Senator Udall. Do you consider these to be part of the
    Department's trust responsibilities vis-a-vis the Tribe?
        Mr. Laverdure. Yes.
        Senator Udall. And I know Senator Tester asked a question
    who, and President Chino is here, I mean who should the
    Mescalero Apache Tribe be dealing with? Will they be dealing
    with you in terms of the expectation on the standards? Or with
    Ms. Williams?
        I know I am going to be asking President Chino. Make sure,
    President Chino, that I ask you about this. And I don't know if
    this is the first time you have heard this or not, but we want
    to make sure that you have somebody to work with so that we
    don't get ourselves in a situation where standards are
    developed and then they aren't acted on quickly, and we can't
    move things along.
        So, it would be you or Ms. Williams or both?
        Mr. Laverdure. Yes, I mean, if you want one point person,
    if it came to me, then I would make sure that we have the legal
    and the policy review of the standard so it doesn't get caught
    up.
        Senator Udall. Great. Are there standards that you have in
    mind right now that are in other water settlements that would
    be able to be looked at right off the bat?
        Mr. Laverdure. Because this is a novel issue, we don't have
    those necessarily there. One, the types of concerns that could
    be utilized are from the Navajo Nation who took over its own
    leasing where they had their leasing of land regulations
    developed and they have some of those concerns listed in there
    that could be utilized in standards.
        Senator Udall. I think both Navajo and Jicarilla Apache,
    both have provisions allowing off-reservation leasing. And so
    that may be an area to look at, too. I think you both are
    nodding in agreement to that.
        So thank you very much, Mr. Chairman.
        The Chairman. Thank you very much, Senator Udall.
        Before I move to the third panel, let me ask whether our
    Members have a second round of questions?
        Senator Tester. I do, Mr. Chairman, if I might.
        The Chairman. Senator Tester?
        Senator Tester. Okay. First thing, Del, could you, and you
    don't have to do it today, if you could get it to me, if you
    don't have it today. If you have it, I would love to hear it.
    What specifically, or maybe this is for Ms. Williams, what
    specifically has been offered up to the Tribe as far as
    solutions from the Department?
        Mr. Laverdure. I think we will have to get back to you on
    that because it is a moving target, from what I understand.
        Senator Tester. That would be fine. Good.
        Well, your recommendations shouldn't be a moving target,
    though. I mean, the negotiations should be a moving target, but
    your recommendations to the negotiations shouldn't be a moving
    target.
        Mr. Laverdure. That is correct.
        Senator Tester. Okay. Good.
        I didn't have anything about the 1930 irrigation project so
    I have to do this first. Things change in 80 years. I have a
    1931 Model A and I have a 2011 GMC pickup and they are a whole
    lot different as far as what is available to them.
        So I am going to approach this from a little different
    perspective. You are familiar with the Bureau of Reclamation
    design, engineering and construction review process? Okay.
        It is my belief that the Bureau sent a review team to the
    reservation to review and analyze the project's information
    before issuing a report on those projects. Is that correct?
        Mr. Laverdure. Yes, I think there has been a DEC review.
        Senator Tester. Yes, and my understanding is that the DEC
    review came out fine. Right?
        Ms. Williams. My understanding, Senator, is when the Bureau
    of Reclamation DEC review took place, they found there wasn't
    sufficient information to conclude that the costs were
    realistic or not realistic. There was simply not enough
    material developed to make definitive determinations.
        I think they found that the material developed was
    accurate, but it simply wasn't enough.
        Senator Tester. Okay. Did they make a request of the Tribe
    for more information? Do you know? If there wasn't enough
    information, did they make that request?
        Ms. Williams. I think they talked about the need for
    additional studies.
        Senator Tester. Okay. Well, that is cool, I just don't want
    to end up, I mean we can go back to the timeline. I think the
    Department got involved with this settlement in 1991, if I am
    not mistaken. And the timeline then means we are going on 20
    years. Correct me if I am wrong.
        And I think that if they need information, we need to get
    them information. Another study isn't exactly what I think we
    need here myself, my opinion.
        One of the last things you said, Del, was that this
    settlement wasn't finished. And let me tell you what I think I
    heard, then you tell me if I was right, that if you supported
    this settlement and this settlement was ratified, the water
    settlement wasn't finished. Is that correct?
        Mr. Laverdure. Senator Tester, just the finality piece was
    more are all the legal claims tucked into the settlement and
    finalized as all the benefits then go in commensurate to that.
    And my understanding was that not all of the provisions that
    are typically required in these settlements were in there.
        Senator Tester. Okay. Well, look, if the Department's right
    on that, we need to get that fixed because the settlement is
    exactly what it is. It is a settlement. And if it isn't a
    settlement, if we are going to come back to this in 20 years or
    50 years or 100 years, then it is not a settlement.
        So if that is not fixed, we definitely, absolutely need to
    get it fixed. So I would just say that.
        Just in the last, just very much in closing, you know
    unemployment in Indian Country, Montana. I mean, you know, the
    challenges that are out there and you know what impact water
    can have on opportunity. And I would just say that if there are
    ways that Senator Baucus and myself can work with the
    Department or with the commission, can work with the Tribe,
    especially the Tribe, so we can all get on the same page, it is
    something that needs to be done. You know that. We can't
    continue to keep saying no. What we have to do is try to find
    ways we can say yes.
        So I appreciate your being here today and thank you for
    your input, and hopefully we can roll up our sleeves and get
    after it.
        Thanks.
        Mr. Laverdure. Thank you, Senator Tester. And we are
    absolutely committed for the resources to deploy and work on
    all of those things.
        The Chairman. Thank you very much, Senator Tester.
        Are there any further questions?
        Senator Cantwell. Yes, Mr. Chairman.
        The Chairman. Senator Cantwell?
        Senator Cantwell. Yes, I just had one last question for Mr.
    Laverdure.
        In your testimony, you say that the Department would
    examine other ways that Tribes and Congress could, avenues for
    concerns of the Spokane. What were you thinking?
        Mr. Laverdure. In the discussions in the Department, I
    think the idea was, at least from a policy perspective, the one
    that I have was to seek some type of measure of justice or
    compensation for the Spokane, just like the Colville did,
    without running into the issues that are listed.
        We are committed to sitting down and working with your
    office and the Spokane Tribe and trying to resolve those issues
    so that they have their share of the equitable settlement.
        Senator Cantwell. And are you saying that that is something
    that is done legislatively or not done legislatively?
        Mr. Laverdure. It would still be accomplished
    legislatively, but we would just work on the language so that
    we alleviated these concerns to get to where I think you and
    the Spokane people would like to be.
        Senator Cantwell. Because you think the word claim sets a
    precedent?
        Mr. Laverdure. The legal team has reviewed it and believes
    that there is no legal claim and the filing was not made at the
    right time.
        Senator Cantwell. Even though they thought the same thing
    on the substance of the Colville?
        Thank you, Mr. Chairman. I got the answer I needed. Thank
    you.
        The Chairman. Thank you.
        Any further second-round questions?
        Thank you. And let me say thank you very much to Mr.
    Laverdure and Pamela for your testimony and your responses. We
    certainly appreciate it. Thank you.
        Mr. Laverdure. Thank you, Mr. Chairman. I appreciate it.
        The Chairman. Now, I would like to invite the third panel
    to the witness table. On our third panel is the Honorable Mark
    Chino, President of the Mescalero Apache Tribe; the Honorable
    Terry Show, Chairman of the Blackfeet Nation; Mr. Chris
    Tweeten, Chairman of the Montana Reserved Water Rights Compact
    Commission; the Honorable Rex Lee Jim, Vice President of the
    Navajo Nation; the Honorable Kenneth Maryboy, the San Juan
    County, Utah Commissioner; and the Honorable Greg Abrahamson,
    Chairman of the Spokane Tribal Council.
        We welcome all of you here to this hearing. Thank you for
    being here. We look forward to your testimony and your
    responses.
        President Chino, will you please proceed with your
    statement?

    STATEMENT OF HON. MARK CHINO, PRESIDENT, MESCALERO APACHE TRIBE

        Mr. Chino. Thank you, Mr. Chairman.
        Good afternoon, Chairman Akaka and Members of the
    Committee. I bring greetings from the great State of New Mexico
    and also from the Mescalero Apache people. I am pleased today
    to be joined by three members of our Tribal Council who are
    here to offer a little moral support and also support of our
    testimony before the Committee today.
        Thank you for having this hearing on S. 134, which was
    introduced by Senator Bingaman and Senator Udall, which would
    authorize the Mescalero Apache Tribe to lease its adjudicated
    water rights. The Mescalero Apache Tribe is located on the
    Mescalero Apache Indian Reservation in the White and Sacramento
    Mountains of South-Central New Mexico, which is within our
    aboriginal territory.
        The reservation is home to a majority of the Mescalero
    Apache Tribal members and we are known for our natural beauty
    and abundant resources which we are obviously very thankful
    for.
        We are a treaty Tribe, having entered into a treaty with
    the United States on July 1st, 1852. Our treaty is called the
    Treaty with the Apaches. And it promised specifically that the
    Tribe would have a permanent homeland in our aboriginal
    territory and impliedly reserves sufficient water rights or
    sufficient water to meet the Tribe's historic, current, and
    future water requirement.
        In 1975, the State of New Mexico sued the United States in
    State court to determine a certain portion of the water rights
    of the United States and of the Mescalero Apache Tribe in the
    Pecos Stream system. The suit, which was State ex rel Reynolds
    v. Lewis et al, was filed pursuant to the McCarran Amendment,
    43 USC Section 666.
        First, the court had to determine whether the McCarran
    Amendment, which waived the United States' sovereign immunity
    from suit in State court to determine the water rights in the
    stream system, allowed for the adjudication of the right of the
    Mescalero Apache Tribe.
        In 1975, after the lease was appealed, the New Mexico
    Supreme Court held that the waiver contained in the McCarran
    Amendment did allow for adjudication of the Tribe's water
    rights. The case was then remanded to the State District Court
    in Chaves County, New Mexico for a determination of our water
    rights.
        The Mescalero Apache Tribe intervened in that particular
    action as a party defendant and a trial was held to determine
    the Tribe's water rights. After the trial, on July 11th, 1989,
    the State court held that the Tribe was entitled to consumptive
    water rights for its historic, present, and future requirements
    in the amount of 2,322.4 acre-feet per year.
        But the State court held that the Tribe would have five
    different priority dates. On appeal, the New Mexico Court of
    Appeals affirmed the consumptive water rights amount and
    reserved the five different priority dates. The Court of
    Appeals held that the Tribe's priority date is that of our
    Treaty with the Apaches, July 1st, 1852.
        After many years of litigation, a portion of the Tribe's
    water rights in the Pecos Stream system have been adjudicated.
    At present, the Tribe has been approached by our governmental
    neighbors to lease water. There is a need for water that the
    Tribe can meet. Additionally, the Tribe will be able to use the
    proceeds from water rights leasing legislation to fund basic
    governmental services.
        Federal law imposes certain restrictions on the alienation
    of the Tribe's property. In particular, the Tribe cannot lease
    our water without Federal legislation specifically authorizing
    us to do so. S. 134 will provide such Federal legislation and
    the Tribe will be authorized to lease our adjudicated water
    rights for a period not to exceed 99 years.
        There are no budgetary concerns with the passage of S. 134
    as implementation of the bill does not require any
    appropriations or expenditures. The legislation holds the
    United States harmless if there is any loss or other detriment
    resulting from any lease, contract or other arrangement entered
    into pursuant to the bill if passed.
        The other treaty Tribes in New Mexico have been authorized
    to lease their water rights for a period not to exceed 99
    years. Under State law, owners of water rights can lease their
    water rights. The Mescalero Apache Tribe is simply seeking the
    same rights to lease our adjudicated water rights.
        Lastly, Mr. Chairman and Members of the Committee, I am
    pleased to inform the Committee that I have met in person with
    Mr. John D'Antonio, the New Mexico State Engineer, and he has
    informed me that the State of New Mexico does not oppose this
    bill. In fact, Mr. D'Antonio stated that he saw this
    legislation as a win-win situation for the State and for the
    Tribe.
        Lastly, Mr. Chairman and Members of the Committee, I am
    disappointed and dismayed that the Department of the Interior
    has in fact tried to propose amendments to this legislation.
    The Tribe was not informed of their intent to do so. In fact,
    we were led to believe that the Department of Interior had no
    specific concern and did not intend to offer any specific
    amendments. And I am disappointed that they have seen fit to do
    so today.
        And with that, Mr. Chairman and Members of the Committee,
    that does conclude my written testimony. I will be pleased to
    answer any questions that the Committee may have.
        Thank you very much, sir.
        [The prepared statement of Mr. Chino follows:]

     Prepared Statement of Hon. Mark R. Chino, President, Mescalero Apache
                                     Tribe

        Chairman Akaka and Committee Members:
        Thank you for having this hearing on Senate Bill 134, introduced by
    Senator Bingaman and Senator Udall, to authorize the Mescalero Apache
    Tribe to lease its adjudicated water rights.
        The Mescalero Apache Tribe is located on the Mescalero Apache
    Indian Reservation in the White and Sacramento Mountains of south
    central New Mexico, which is within the Tribe's aboriginal territory.
    The Reservation is home to the majority of Mescalero Apache Tribal
    members and is known for its natural beauties and abundant resources.
        We are a treaty tribe, having entered into a treaty with the United
    States on July 1, 1852. Our treaty, known as the ``Treaty with the
    Apaches,'' promised that the Tribe would have a permanent homeland in
    its aboriginal territory and impliedly reserved sufficient water to
    meet the Tribe's historic, current and future water requirements.
        In 1975, the State of New Mexico sued the United States in state
    court to determine a certain portion of the water rights of the United
    States and the Mescalero Apache Tribe in the Pecos Stream System. The
    suit, State ex rel. Reynolds v. Lewis et al., was filed pursuant to the
    McCarran Amendment, 43 United States Code, Section 666. First, the
    court had to determine whether the McCarran amendment, which waived the
    United States' sovereign immunity for suit in state court to determine
    water rights in a stream system, allowed for the adjudication of the
    rights of the Mescalero Apache Tribe. In 1975, after the issue was
    appealed, the New Mexico Supreme Court held that the waiver contained
    in the McCarran Amendment did allow for adjudication of the Tribe's
    water rights.
        The case was remanded to the state district court in Chaves County,
    New Mexico, for a determination of the Tribe's water rights. The Tribe
    intervened in the action as a party defendant and a trial was held to
    determine the Tribe's water rights.
        After the trial, on July 11, 1989, the state court held that the
    Tribe was entitled to a consumptive water right for its historic,
    current and future requirements in the amount of 2,322.4 acre feet per
    year. But, the state court held that the Tribe would have five
    different priority dates. On appeal, the New Mexico Court of Appeals
    affirmed the consumptive water rights award of 2,322.4 acre feet per
    year and reversed the five different priority dates. The Court of
    Appeals held that the Tribe's priority date is that of the ``Treaty
    with the Apaches,'' July 1, 1852. See 116 N. M. 194.
        After many years of litigation, a portion of the Tribe's water
    rights in the Pecos Stream System have been adjudicated.
        At present, the Tribe has been approached by its governmental
    neighbors to lease water. There is a need for water that the Tribe can
    meet. Additionally, the Tribe will be able to use proceeds from water
    rights leasing to fund basic governmental services.
        Federal law imposes certain restrictions on the alienation of the
    Tribe's property. See 25 United States Code, Section 177. In
    particular, the Tribe cannot lease its water without federal
    legislation authorizing the same.
        Senate Bill 134 will provide such federal legislation. The Tribe
    will be authorized to lease its adjudicated water rights for a period
    not to exceed 99 years. There are no budgetary concerns with the
    passage of Senate Bill 134 as implementation of the bill does not
    require any appropriations or expenditures. The legislation holds the
    United States harmless if there is any loss or other detriment
    resulting from any lease, contract or other arrangement entered into
    pursuant to the Bill, if passed.
        The other treaty tribes in New Mexico have been authorized to lease
    their water rights for a period not to exceed 99 years. See the Navajo
    Nation Settlement Act, Public Law 111-11, Act of March 30, 2009, and
    the Jicarilla Apache Tribe Settlement Act, Section 7 of Public Law 102-
    441, 106 Stat. 2239. Under state law, owners of water rights can lease
    their water rights. The Mescalero Apache Tribe is seeking the same
    right to lease water.
        Lastly, I am pleased to inform the Committee that I met with John
    D'Antonio, New Mexico State Engineer, and he informed me that the State
    of New Mexico does not oppose this Bill. Mr. D'Antonio stated that he
    saw this legislation as a win--win situation for the State and the
    Tribe.
        This concludes my written testimony.

        The Chairman. Thank you very much, Mr. Chino.
        All or your full statements will be entered into the
    record.
        Mr. Show, please proceed with your testimony.

      STATEMENT OF HON. TERRY J. SHOW, CHAIRMAN, BLACKFEET NATION

        Mr. Show. Thank you, Mr. Chairman. I feel too that on
    behalf of the Blackfeet People, that I also recognize Elouise
    Cobell. She was a Blackfeet Tribal member and to me she was the
    epitome of a Blackfeet member. And I believe she is the epitome
    of all Native people.
        With that, Mr. Chairman and Members of the Committee, my
    name is T. J. Show. I am the Chairman 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, a bill that is crucial to the future of the
    Blackfeet people.
        With me today are Council Member Shannon Augerre and Reese
    Fisher; our Director of Research Monitoring Jerry Lunak; and
    our Water Rights Attorney Jeanne Whiteing.
        I want to thank the Committee for holding this hearing. 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 settlement to
    the Blackfeet Tribe. I also want to thank their staff and their
    Committee staff for their hard work on this bill.
        The Blackfeet water rights settlement is a culmination of
    over two decades of work by the Tribe, the State, and the
    Federal Government. It represents an historic breakthrough in a
    Tribe's over century-long battle to secure and protect its
    water rights.
        S. 399 ratifies the Blackfeet Montana Water Rights Compact,
    resolves certain water-related claims against the Federal
    Government, and provides critical resources for development of
    a self-sustaining economy in a permanent homeland for the
    Blackfeet people.
        The Blackfeet Reservation was established by treaty in
    1855. The reservation originally encompassed much of the State
    of Montana, but was reduced in size by various Federal actions
    to the present 1.5 million acres. The reservation is located
    along the Rocky Mountains in North-Central Montana along the
    U.S.-Canadian border and adjacent to Glacier National Park to
    the west.
        Our reservation is renowned for its protecting mountains,
    majestic plains, abundant national resources and our pristine
    streams and lakes. Over 518 miles of streams and 180 bodies of
    water, including eight large lakes, are located on the
    reservation. More than 1.5 million acre-feet of water arrives
    on or flows through the Blackfeet Reservation on an annual
    basis, the St. Mary River alone contributing to over one-third
    of the total supply.
        Water is critical to the continuing survival of the
    Blackfeet people culturally, spiritually, and economically. We
    have over 18,000 members, about half who live on the
    reservation. Safe and clean drinking water supplies are
    essential for our Tribal communities to grow and thrive.
        Our reservation economy is heavily dependent on
    agriculture, stock raising, requiring substantial stable water
    supplies. Reservation unemployment can run as high as 70
    percent to 80 percent, however, and our economic future
    increase depends on development of our natural resources, along
    with alternative energy resources including hydropower and wind
    energy, all which requires significant water supplies.
        At the same time, the Tribe is committed to preserving our
    unique and special environment and is mindful of conserving the
    quality and quantity of our resources for generations to come.
    Historically, water has been a controversial issue on the
    Blackfeet Reservation, beginning with the 1909 Boundary Waters
    Treaty that divided the St. Mary and Milk River between the
    United States and Canada without consideration or even mention
    of the Blackfeet water rights.
        The treaty facilitated diversion of the United States'
    share of the St. Mary's water off-reservation for 100 years for
    the use of the Bureau of Reclamation Milk River Project. Early
    conflicts on the Birch Creek, the southern boundary of the
    reservation, resulted in a 1908 Federal water rights decree in
    the Conrad Investment case, a case brought by the United States
    at the same time as the Winters case. The case spawned efforts
    to obtain allotment of the reservation as a means of
    controlling the water through ownership of land.
        Given the historical water rights issues on the
    reservation, the Blackfeet Water Rights Compact is truly a
    milestone achievement. The compact, together with S. 399,
    represents a comprehensive settlement of the Blackfeet water
    rights and related issues and achieves three important goals.
        First, it confirms the Tribe's right to surface and
    groundwater on the reservation and provides for an allocation
    of water from the Bureau of Reclamation's Tiber Dam. Second, it
    provides for Tribal administration of Tribal water rights,
    along with protection for State water users. Third, it provides
    funding for projects that are critical to the implementation of
    the Tribe's water rights and homeland purpose of the
    reservation.
        These projects include long-term municipal water systems
    for reservation communities, irrigation and water storage
    improvements on the reservation, energy development, and land
    acquisition.
        The compact was approved by the Montana Legislature in
    April of 2009, two and a half years ago. At that time, the
    State submitted $20 million to the contribution of the
    settlement, which is now fully authorized and available. In
    addition, the 2007 Legislature appropriated $15 million for
    Birch Creek mitigation, for a total of $35 million, the State's
    largest contribution to a Montana settlement. A vote of the
    Tribal membership is also required to give final approval.
        I thank the Committee and the staff, and look forward to
    responding to any questions you may have.
        Thank you.
        [The prepared statement of Mr. Show follows:]

      Prepared Statement of Hon. Terry J. Show, Chairman, Blackfeet Nation

        Mr. Chairman, and members of the Committee, my name is T.J. Show. I
    am Chairman 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 want to thank the Committee for holding this hearing on S. 399, 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. It represents an historical
    breakthrough in the Tribe's over century long battle to secure and
    protect its waters rights. S. 399 ratifies the Blackfeet-Montana Water
    Rights Compact, resolves significant water related claims against the
    Federal Government and most importantly provides the critical resources
    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 Reservation was established by treaty in 1855. The
    Reservation is located along the Rocky Mountains in north central
    Montana adjacent to Glacier National Park. Our Reservation is renowned
    for its spectacular mountains, majestic plains and abundant natural
    resources. The Blackfeet People have occupied this area 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 treaty, known as Lame Bull's Treaty, was signed in 1855.
    Executive orders and statutes followed, each taking large areas of our
    traditional land. In the end, we ended up with the land that was most
    sacred to us: our present day reservation
        In 1896, the Northern Rockies were taken from us because
    speculators believed there were rich minerals to be had. When mineral
    riches did not materialize, this most sacred part of our homeland
    became part of Lewis and Clark National Forest and a portion later
    became part of Glacier National Park in 1910. To this day we question
    the legitimacy of the 1896 transaction. While the Tribe retained
    hunting, fishing and timbering rights in the area taken, we hope that
    one day our claims to this area will be resolved.
        The present Blackfeet 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 to live in the
    modern world while maintaining the cultural and spiritual ties to the
    land and its resources.

    The Critical Importance of Water
        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 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 to the Blackfeet People. 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.
        Water is truly the lifeblood that sustains the Blackfeet people and
    our way of life. The water resources of the Blackfeet Reservation are
    essential to make the Reservation a productive and sustainable homeland
    for the Blackfeet people and for our communities to thrive and
    proposer. Safe and clean drinking water supplies are vital for the
    growing population on the Reservation, and water is critical to our
    economy which is heavily dependent on stock raising and agriculture.
        The Blackfeet Reservation's location along the eastern Rocky
    Mountain Front makes it the home of abundant fish and wildlife, which
    depend directly on the water resources of the Reservation to support
    them and allow them to thrive. 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 and fish species depend directly on the
    water resources of the Reservation to support them and allow them to
    thrive.
        The Reservation also possesses significant timber, and oil and gas
    resources and other natural 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, the St. Mary River alone contributing over one-third of the
    total supply. 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.

    Historical Water Conflicts
        In 1909, the United States entered in to the Boundary Water Treaty
    with Canada, which among other things, divided the Milk River and St.
    Mary River between the two countries. However, not a word in the
    Treaty, or the negotiations leading to it, mention the Blackfeet, that
    these streams arise on or near the Blackfeet Reservation, or that the
    Blackfeet have rights to water in these streams.
        Not long after the Boundary Waters Treaty, the United States
    withdrew significant lands on the Blackfeet 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, non-
    Indian water users south of the Reservation built a dam on Birch Creek,
    the southern boundary of the Reservation, which was intended to
    appropriate Birch Creek water for use by the non-Indian water users off
    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 non-Indian
    development of 80,000 acres of irrigation immediately off and 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 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 the promise
    that the Reservation would never be allotted. See Agreement of
    September 26, 1895, ratified June 10, 1896, 29 Stat 321, 353, Art. V.
        Allotment brought the third serious conflict 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. At the same time, the BIA built the Blackfeet Irrigation
    Project with undersized and inadequate delivery systems and storage
    facilities, thereby ensuring that the economic promise of the Project
    would be unfulfilled for the Tribe and Tribal members.
        Traditionally, the Tribe has taken the approach of sharing the
    resource cooperatively, but increased shortages during the late
    irrigation season in both the Milk and Cut Bank Creek, and the
    dilapidated condition of the Blackfeet Irrigation Project have become
    serious impediments to water use within the Reservation. Plans to
    rehabilitate the hundred year old St. Mary Diversion facilities have
    further raised water right concerns, and have emphasized the need for
    the Tribe to finally resolve its water rights.

    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 2008. 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 confirms the
    Tribe's water rights to all streams on the Reservation, bringing
    certainty to the Tribe's water rights and the ability to protect and
    use the water for the Tribe's growing population and needs to make the
    Reservation a productive and sustainable homeland. 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 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.

       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 state water right 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.

        Additional identification and study of alternatives to provide the
    Tribe's St. Mary water right will be necessary and are included as part
    of the legislation. As described above, nearly the entire United
    States' share of the St. Mary River is diverted off the Reservation to
    the Bureau of Reclamation's Milk River Project. In the meantime, S. 399
    provides that the Tribe will receive its 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 extremely minimal, the two tribes 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 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. These funds were
    fully authorized and are available when the Compact becomes final. 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, 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, and the largest for an Indian
    water rights settlement in Montana.

    Blackfeet Water Rights Settlement Act
        S. 399 carries forward the terms of the Blackfeet Water Rights
    Compact, and addresses issues of particular federal responsibility and
    federal concern. The bill would do the following:

       Approves and ratifies the Compact and the associated Birch
            Creek Agreement.

       Authorizes the 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 and
            authorizes necessary investigation and studies to provide a
            firm supply 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.

        The Tribe has identified a number of projects that are critical to
    the implementation of the Tribe's water right under the Compact. These
    projects include a regional water system to provide a long term
    municipal water supply to Reservation communities, improvements to
    irrigation and water storage on the Reservation associated with the
    Bureau of Indian Affairs' Blackfeet Irrigation Project including
    enlargement of Four Horns Reservoir as provided for in the Birch Creek
    Agreement, putting new lands outside the Project into production
    through new irrigation facilities and small water storage projects,
    stock water and domestic water developments, energy development
    projects, and acquisition of lands on the Reservation that have gone
    out of trust. Settlement funds would also fund the implementation of
    the Compact and the administration of the Tribal water right through
    the Tribal Water Code.
        In particular, it is 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.
        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.
        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 Phase I
    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.

    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.
        The cost of settlement is fully justified by the needs of the
    Reservation and the potential Tribal claims against the United States
    associated with (1) the one-hundred year old diversion of St. Mary
    water off the Reservation to the Milk River Project over a hundred
    miles away, (2) the environmental and resource damages caused by the
    St. Mary diversion facilities, (3) claims relating to the 1909 Boundary
    Waters Treaty, (4) the United States promise to construct a new storage
    facility on Two Medicine after a catastrophic flood in the 1960's, (5)
    the failure of the United States to properly operate and maintain the
    Blackfeet Irrigation Project, and (6) the failure of the United States
    to protect the Tribe's water right from development by others,
    particularly on Birch Creek, Cut Bank Creek and Milk River.

    Conclusion
        The Blackfeet Water Rights Settlement has critical importance to
    the future of the Blackfeet people and represents decades of hard work
    by many 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, jobs for Tribal members, and a better life for the
    Blackfeet people.
        Even though the Department of the Interior was involved in our
    negotiations every step of the way in the decades long process, and was
    intimately involved in the drafting of the Compact, the Administration
    has raised a number of issues relating to S. 399. We are engaged in
    discussions with the Department of the Interior to address these
    concerns, and expect they will be resolved in a satisfactory manner to
    both parties.
        We thank the Committee and Committee staff and look forward to
    responding to any questions you may have.
                                     ______

              Suppemental Prepared Statement of Hon. Terry J. Show

        Mr. Chairman, and members of the Committee, we appreciate the
    opportunity to provide this Supplemental Testimony in support of S.
    399, Blackfeet Water Rights Settlement Act. This supplemental testimony
    provides additional information about the Settlement, and responds to
    certain issues raised at the hearing on the bill held on October 20,
    2011.
        As stated in our hearing testimony, the Blackfeet Water Rights
    Settlement is the culmination of over two decades of work by the Tribe,
    and represents an historical breakthrough in the Tribe's over century
    long battle to secure and protect its waters rights. S. 399 ratifies
    the Blackfeet-Montana Water Rights Compact, resolves certain water
    related claims against the Federal Government and provides the critical
    resources needed for the development of a self-sustaining economy on
    the Blackfeet Reservation and a permanent homeland for the Blackfeet
    People.

    Cost of the Settlement
        The Department of the Interior has expressed concern about the cost
    of the Blackfeet settlement. In particular, Interior has expressed
    concern about the precedent the settlement would set for future water
    settlements. However, the cost of the Blackfeet settlement is
    consistent with other Indian water rights settlements involving
    reservations of similar size, water allocations, types of resources and
    Bureau of Indian Affairs irrigation projects. For example, the cost of
    the recently enacted Crow Tribe Water Rights Settlement, Title IV, P.L.
    111-291, 12 Stat. 3097 (2010) is $464.99 million, principally for an
    MR&I water system and rehabilitation of the Crow Irrigation Project.
    The total cost of the recent Navajo San Juan Settlement, Subtitle B,
    P.L. 111-11 (2009), is $934.1 million principally for the Navajo-Gallup
    Water Supply Project ($870M), conjunctive use wells ($30M), and for
    irrigation projects ($34.1M).
        Since the Blackfeet water rights compact was completed in 2007, the
    Blackfeet Tribe has consistently indicated a willingness to enter into
    discussions with the Administration to further refine the costs of
    settlement. However, the Administration only recently began discussions
    with the Tribe in July of this year (2011).
        Otherwise, we are unaware that the Department of the Interior's
    consideration of Indian water rights settlements is intended to or
    should take into account any backlog for appropriated but unfunded
    Bureau of Reclamation projects as Interior suggests in its testimony.
    Whether and to what extent the Bureau of Reclamation has a backlog has
    nothing to do with the settlement of Indian reserved water rights and
    the Federal Government's trust responsibility to ensure that the
    Tribe's water rights are fully established and protected.

    Information Regarding Settlement Project
        The Department of the Interior also expressed concern about the
    level of information regarding the Tribe's projects funded under the
    settlement. Interior requested and the Tribe provided a list of
    projects and estimated costs for each proposed project for purposes of
    a BOR review. However, the level of information required by BOR is not
    possible without the expenditure of millions of dollars upfront. For
    example, the $500,000 spent on studies for just one project--the Four
    Horns project--was not adequate, according to BOR, to verify cost
    estimates. We believe the issue has to do with the Departments attempt
    to treat Tribal settlement projects like BOR projects. BOR projects are
    developed for funding by Congress over many years. By the time BOR
    proposes funding for its projects, it has already received millions of
    dollars in appropriations to develop the project. For Indian water
    settlements, federal funds are not available for development of
    projects to the degree BOR prefers. Nevertheless, Congress has
    consistently funded tribal projects. See e.g., P.L. 111-291 (2010),
    which authorizes funding four Indian water rights settlements,
    including funding for MR&I projects and irrigation projects with
    similar levels of information to the Blackfeet projects.

    Four Horns Enlargement Project
        As part of the Birch Creek Agreement entered into between the State
    and Tribe, the Tribe agrees to mitigate impacts to Birch Creek water
    users for a 25 year period by providing 15,000 acre feet of water from
    an enlarged Four Horns Reservoir through a pipeline to Birch Creek. The
    Department of the Interior's testimony states that the total cost of
    implementing the Birch Creek agreement is $215 million, half of which
    is attributable to benefits to Birch Creek water users. Interior has
    significantly misinterpreted and misstated the costs.
        The $215 million cost is the cost for the complete rehabilitation
    and improvement of the Badger-Fisher unit of the Blackfeet Irrigation
    Project, including full build out and enlargement of Four Horns and the
    pipeline to provide water to Birch Creek. However, the Tribe has not
    proposed full rehabilitation and build-out of the Badger-Fisher unit.
    Instead, the Tribe has proposed to spend $125 million for the Badger-
    Fisher unit, including partial rehabilitation of the unit and the Four
    Horns enlargement and pipeline. Of this amount, the pipeline to provide
    the 15,000 acre feet of water to Birch Creek plus a proportionate share
    of an increased feeder canal is approximately $36 million. Therefore,
    the amount attributable to non-Indian benefits at the high end is $36/
    $125 or 28 percent. Taking into account the State contribution of $20
    million, the amount attributable to non-Indian benefits from federal
    funds is $16 ($36-$20)/$125 or 13 percent. Further, taking into account
    that the benefit is only for 25 years and after that time the Tribe
    would receive 100 percent of the benefit from the enlarged Four Horns,
    and assuming a life expectancy of 100 years (the age of the current
    project), the amount attributable to non-Indian benefits from federal
    funds is reduced to a little over 3 percent (one-fourth of 13 percent).
        In addition, under the Birch Creek agreement, the Tribe receives a
    payment from the State of $14.5 million to provide the 15,000 acre feet
    of water for the 25 year period. In effect, the Tribe is marketing the
    15,000 acre feet to Birch Creek paid for by the State. Taking the State
    payment to the Tribe into account, the federal funds benefit to Birch
    Creek water users is effectively reduced to zero.
        We are requesting the Department of the Interior to correct its
    statement to the Committee on this issue.
        We also point out that the reason mitigation is necessary for Birch
    Creek water users is the failure of the United States to fully ensure
    and protect the Blackfeet Tribe's water rights in Birch Creek. Pursuant
    to a 1908 federal court decree in Conrad Investment Co. v. United
    States, 161 F.829 (9th Cir. 1908), contemporaneous with the Winters
    case, the Tribe's water rights were partially quantified based on its
    then existing uses. However, the court made clear that the Tribe could
    obtain additional water for additional irrigable lands when needed. In
    the meantime, the Birch Creek users developed over 70,000 acres of land
    immediately adjacent to the Reservation, fully utilizing all remaining
    water in Birch Creek. The United States never took steps to limit such
    development or to go back to court to obtain a complete adjudication of
    the Tribe's water rights in the face of such development until the
    1970s. Indeed, the Birch Creek water users argue that the United States
    facilitated the development of their lands through the 1894 Carey Act.

    Additional Benefits to Non-Indians
        The Department of the Interior also argues that there are
    additional benefits to state users through protections to junior state
    water users in the St. Mary and Milk Rivers, and that the costs
    relating to such benefits are unquantified. Nevertheless, Interior
    insists that such unquantified benefits can be secured at a lower cost.
    However, Interior fails to mention that the largest beneficiary from
    the protections for the junior state water in the St. Mary River is the
    Bureau of Reclamation's Milk River Project. The Milk River Project
    diverts the entire U.S. share of the St. Mary River off the Blackfeet
    Reservation through a 29-mile canal and uses it over a hundred miles
    downstream for the benefit of non-Indian water users. It is the Bureau
    of Reclamation that insisted the Tribe protect its junior state water
    rights in the St. Mary for the benefit of the Milk River Project and
    its water users. Indeed, BOR wanted stronger language in the Tribe's
    water rights compact for this purpose.
        The only protection for junior state water users in the Milk River
    is for non-irrigation uses such as domestic water supplies and stock
    water uses. The Tribe agrees to not make a call on such uses. There is
    no cost relating to such protection, and we are unclear why Interior
    objects to such protections for domestic and stock uses.

    Resolution of St. Mary/Milk Issues
        The Milk River Project's use of the entire U.S. share of the St.
    Mary River is the reason why the Tribe's 50,000 acre feet of St. Mary
    water is problematic to the Department of the Interior. In addition, a
    question has also been raised as to whether the Blackfeet Tribe's Milk
    River water right and the Fort Belknap Tribe's Milk River water right
    can both be fully satisfied. While the Tribe believes that the
    potential for such conflict between the Tribes is extremely remote,
    since the Department of the Interior participated in the negotiations
    of both Compact, both Tribes feel that if there is an issue, it is an
    issue for the U.S. to resolve. The Fort Belknap Compact was completed
    in 2001; the Blackfeet Compact was completed in 2007. The Department
    has made no attempt to determine whether a conflict exists, and if so,
    the extent of such. Again, however, the Blackfeet Tribe believes that
    such a conflict is extremely remote.
        Because the St. Mary/Milk issues are uniquely federal issues that
    the Department has not yet resolved, the exact costs, if any, are not
    yet known. However, Interior cannot complain since it is within its
    authority to fully resolve the issues and to determine any costs
    involved.

    Non-Federal Cost Share
        As previously set out in our testimony, the State contribution to
    the settlement is $35 million. Of this amount, $15 million was
    appropriated and made available by the Montana Legislature in 2009--
    $14.5 million has been put into an account for the Tribe as part of the
    Birch Creek agreement, and $500,000 already has been utilized for
    studies relating to the Four Horns enlargement. The 2011 Legislature
    authorized the issuance of bonds for the remaining $20 million. The
    State contribution is therefore fully available.
        The $35 million state contribution to the Blackfeet settlement is
    also the largest Montana contribution to a settlement. The contribution
    to the Crow settlement was $15 million. The State contribution to the
    Rocky Boys settlement was $550, 000, $400,000 of which is in the form
    of State services. There was a $16.5 million contribution to the
    Northern Cheyenne settlement which the State paid in the form of a loan
    from the Federal Government. We are aware of other settlements where
    there has been no federal contribution at all. For example, there is no
    state contribution at all in the Nez Perce Snake River Basin
    Settlement, Div. J, Title X, P.L. 108-447 (2004), a settlement of over
    $120 million. Indeed, in the Nez Perce settlement, the State of Idaho
    received federal funds of over $25 million for a habitat fund.

    Mitigation Fund for PCCC
        At the request of the Pondera County Canal and Reservoir Company,
    located on Birch Creek south of the Reservation, a mitigation fund was
    included in the present bill for the purpose of mitigating any impacts
    at the end of the 25 year term of the Birch Creek Agreement. The Tribe
    supports this provision, but it is up to PCCRC and the United States to
    resolve any issues relating to it. We note however, that
    notwithstanding Interior's statements that such a fund is
    unprecedented, such provisions have been included in other Indian water
    rights settlements. Indeed, settlements have routinely included funding
    for mitigation. For example: (1) the Taos Pueblo Indian Water Rights
    Settlement, Title V of P. L. 111-291 (Sec. 509(c)(1)(B)), authorizes
    $38 million to mitigate impacts non-Indian water users, a portion of
    which is a mandatory appropriation; (2) the Soboba Band of Luiseno
    Indian Settlement Act, P.L. 110-297 (2008) (Sec. 5a and Sec. 6)
    authorizes $10 million for the San Jacinto Restoration Fund to operate
    and maintain a recharge project (this is compared to the total
    appropriation for the Tribe of $11 million); and (3) the Snake River
    Water Rights Act of 2004 (Nez Perce), P.L. 108-447, Div. J., Title X
    (Sec. 5(b)(1), authorized $2 million for mitigation for local
    governments.
        The Tribe also notes that while the United States has criticized
    the Tribe for including certain protections for non-Indian water uses,
    it states in this section of its discussion of the PCCRC mitigation
    fund, that Indian water rights settlements ``routinely seek to protect
    existing non-Indian water user so as not to unduly impact local
    economies.'' We agree.

    Additional Concerns
        We believe the additional concerns raised by Interior are all
    matters that are easily resolved through discussions between the Tribe
    and Interior. We note that the nature of many of these concerns arise
    from the Department's many conflicts of interest in seeking to
    represent and protect water rights of various federal entities like the
    Bureau Reclamation and the Park Service, as well as other Tribes and
    allottees, and its conflicts of interest in limiting its own liability
    relating to failures to protect the Tribe's water rights while at the
    same time purporting to protect such rights in the context of this
    present settlement.

        The Chairman. Thank you very much, Mr. Show, for your
    testimony.
        We will now hear from Chris Tweeten. Please proceed with
    your statement.

     STATEMENT OF CHRIS TWEETEN, CHAIRMAN, MONTANA RESERVED WATER
                       RIGHTS COMPACT COMMISSION

        Mr. Tweeten. Thank you, Mr. Chairman, Members of the
    Committee.
        First of all, I would like to remind the Committee that we
    saw the United States' objections to this bill for the first
    time within the last 24 hours, so we obviously have not had an
    opportunity to fully develop our reactions to those objections.
    And with your permission, we would like to submit a
    supplemental statement in which we will fully respond to those
    objections as we understand them.
        The Chairman. Without objection.
        Mr. Tweeten. One, I would like to respond briefly to
    Senator Barrasso's observation regarding the lack of recent
    studies with respect to the feasibility of the improvements
    that are recommended in this legislation. As part of our $15
    million appropriation that Chairman Show referred to a minute
    ago, $500,000 was set aside and expended for a feasibility
    study with respect to the feasibility of the enlargement of the
    Four Horns Reservoir and the improvement of infrastructure to
    deliver water trans-basin from Badger Creek into the Birch
    Creek drainage.
        That study was done. The conclusion was that the
    improvement of Four Horns and the creation of that
    infrastructure was both technologically and financially
    feasible. So, that part of the expenditures in the bill at
    least has been studied and we would be happy to provide
    whatever further information we can gather with respect to
    those studies for the Committee's consideration.
        With respect to Senator Tester's question regarding the
    objection as to the open-endedness of certain aspects of the
    compact, the inclusion of language regarding the expenditure of
    such sums as may be necessary was not, obviously, original to
    this compact. That language appears in lots of other Federal
    legislation, as I understand it. Those projects that are being
    discussed, of course, are projects that are going to be
    designed and developed by the Blackfeet Tribe. And so we would
    like to have an opportunity to visit with them specifically
    about those before we respond more directly to Senator Tester's
    question and we will include that in our supplemental
    statement.
        The Blackfeet Compact is a linchpin of the settlement of
    water rights for Native American Tribes that covers virtually
    the entire northern half of Montana east of the Rocky
    Mountains. The Blackfeet Tribe is the northern headwaters of
    the Missouri River. It also provides the headwaters for the
    Milk River, which in our written statement we explain begins on
    the reservation, goes into Canada.
        It is the subject of an international treaty apportionment.
    It then comes back into the United States, where its waters are
    collected in Fresno Reservoir, which is a Bureau of Reclamation
    project, and then distributed to irrigation interests
    downstream. One-seventh, I believe, of the storage in Fresno
    Reservoir has been allocated by the bureau to the Tribes at
    Fort Belknap.
        So when you consider that there are four Indian
    reservations across northern Montana that touch upon the Milk
    River, beginning with Fort Peck in the east and then ending at
    the headwaters with the Blackfeet Tribe, you can understand how
    complicated and interrelated all these water rights issues are
    and how important it is for us to obtain finality with respect
    to the issues surrounding the Blackfeet water rights.
        We agreed wholeheartedly with Senator Tester's observation
    about the importance of economic development on the Indian
    reservations in Montana in general, and on the Blackfeet
    Reservation specifically. It provides intrinsic benefits to the
    people of the Blackfeet Reservation who are among the poorest
    residents of the State of Montana.
        The State of Montana develops whenever economic development
    occurs within our boundary, whether it is on an Indian
    reservation or not. Economic development on our reservations is
    economic development for the State.
        And finally, and most importantly, the uncertainty that
    surrounds the unquantified nature of Indian reserve water
    rights is eliminated when those rights are compacted and those
    compacts are brought to the Congress and ratified by the
    Congress.
        So the benefits to the State of Montana from this bill,
    both economically and in terms of creating certainty for our
    water development going forward, are substantial incentives for
    the State.
        Hopefully, Senator Tester will ask me a question and give
    me an opportunity to respond to the United States' concern
    regarding the adequacy of the State's cost share. As Mr.
    Laverdure said, the United States has objected to the cost
    share in all of our compacts that have come before Congress.
    Congress has seen fit to overrule all of those objections. And
    as I hope to be able to explain, it ought to overrule that
    objection here as well.
        Thank you, Mr. Chairman. I look forward to questions.
        [The prepared statement of Mr. Tweeten follows:]

     Prepared Statement of Chris Tweeten, Chairman, Montana Reserved Water
                           Rights Compact Commission

        Chairman Akaka 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 Chris Tweeten, and I am
    the Chairman of the Montana Reserved Water Rights Compact Commission. I
    am here to testify on behalf of Attorney General Steve Bullock, the
    Commission, the State of Montana and Governor Brian Schweitzer, in
    support of Senate Bill 399, the Blackfeet Water Rights Settlement Act
    of 2011, 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. It 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.  85-2-702 (2011)).
        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, Rocky Boy's,
    and Crow Compacts. The Northern Cheyenne and Rocky Boy's Compacts are
    substantially implemented, and both tribes have seen substantial
    economic and social benefits from the completed settlements. We are now
    working actively on the implementation of the Crow Nation's settlement,
    and we expect similar economic and social benefits to follow
    implementation. In addition, we have reached a Compact agreement with
    the tribes of the Fort Belknap Reservation that is in preparation for
    submission to Congress for ratification. The Blackfeet Tribe-Montana
    Compact has already been approved by the Montana legislature (Mont.
    Code Ann.  85-20-1501 (2011)), and is now before Congress for
    ratification pursuant to S. 399.
        Montana has also been extremely proactive in contributing to these
    Indian water rights settlements. In the early 1990s, Montana spent
    $21.8 million as part of the Northern Cheyenne settlement. The State
    spent $550,000 as part of the smaller Rocky Boys settlement, and $15
    million as part of the Crow Tribe settlement. The State has also made-
    and almost fully funded-commitments for the two settlements that have
    been ratified by the Montana legislature but not yet approved by
    Congress. The State has committed $17.5 million to the Fort Belknap
    settlement, $14.5 million of which has already been appropriated or
    authorized: $1 million in cash, $9.5 million in bonding authority and
    $4 million of in-kind contributions in the form of modeling and other
    hydrology work that has already been implemented. Finally, as will be
    discussed in greater detail below, Montana has fully funded its $35
    million commitment to the Blackfeet water rights settlement.
        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. 399_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 and
    farmland to the east and south. The Reservation encompasses 1.5 million
    acres (roughly one and a half times the size of Rhode Island), making
    it 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 are the major uses of land on the Reservation,
    with the principal crops being wheat, barley and hay.
        The provisions in S. 399 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 discharge 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 from the Reservation 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. It is worth noting that
    this quantified amount of 50,000 AFY is almost exactly what the United
    States claimed for the Tribe in its November 14, 1997, More Definite
    Statement of Claim filed in the Montana Water Court. * The Tribe's
    water right is subject to the limitation that its exercise may not
    adversely affect the water rights held by the Bureau of Reclamation's
    Milk River Project (MRP). The MRP diverts almost the entire United
    States' BWT share 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.
    ---------------------------------------------------------------------------
        * A copy of the information referred to has been retained in
    Committee files.
    ---------------------------------------------------------------------------
        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. 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 the Bureau
    of Reclamation's MRP 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
    Tribe has agreed to afford protections for those existing water rights
    under state law through the inclusion of a no-call provision.
        The Blackfeet Tribal Water Right in the Milk River is quantified as
    the entire United States' share under the BWT of the Milk River on the
    Reservation, 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 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,
    as a matter of hydrology, 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. 399 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, as on the
    streams in the St. Mary drainage, extend the no-call protection to all
    existing water rights under state law, not just non-irrigation water
    rights.
        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 it was legally
    entitled to take. There is also extensive non-Tribal water resource
    development immediately to the south of Birch Creek, where roughly
    80,000 irrigated acres, as well as several municipalities, are served
    by the facilities of the Pondera County Canal and Reservoir Company
    (PCCRC), a privately owned irrigation company. 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. Since 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, 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 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. *
    ---------------------------------------------------------------------------
        * A copy of the information referred to has been retained in
    Committee files.
    ---------------------------------------------------------------------------
        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 * 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 legislature, 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, a commitment which
    has been fully funded by the Montana legislature in the form of a $4
    million cash appropriation in 2009, and $16 million of bonding
    authority approved by the Legislature during its 2011 session. These
    monies, coupled with the $14.5 million that the State has already put
    in escrow for the Tribe as part of the Birch Creek agreement comprise
    the $35 million State contribution to this settlement.
        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. The Tribe may lease water from Birch
    Creek, Cut Bank Creek and the Milk River, all of which are within the
    Missouri River Basin, but only for use at other locations within the
    Missouri River Basin.
        In addition, under S. 399, 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, and also that nothing in this allocation to the
    Blackfeet Tribe diminishes the allocation from Lake Elwell that was
    made to the Chippewa Cree Tribe of the Rocky Boys Reservation as part
    of the Rocky Boys water rights settlement which was ratified by
    Congress in 1999. S. 399 authorizes the Blackfeet Tribe to lease water
    from its Lake Elwell allocation so long as it is for use within the
    Missouri River Basin.
        The Blackfeet water rights 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 Nation 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.

                Supplemental Prepared Statement of Chris Tweeten

        Chairman Akaka and distinguished members of the Senate Committee on
    Indian Affairs, I thank you for the opportunity to provide additional
    written testimony on this important matter.
        This testimony is in direct response to several points raised in
    both the written and oral testimony presented to you by the United
    States at the Hearing on S. 399, the Blackfeet Water Rights Settlement
    Act of 2011, that this Committee held on October 20, 2011.
        In both its written and oral testimony, the United States attacked
    the State of Montana's contribution to this settlement as inadequate.
    The State takes great issue with this characterization. The $35 million
    that the State has committed to this settlement and that, in a
    demonstration of our commitment to the success of this settlement, has
    already been fully funded, represents one of the largest contributions
    a state has ever made to any Indian water rights settlement. Indeed
    there have been many water settlements that have been enacted with no
    state contribution whatsoever. Montana's contribution to this
    settlement is also the largest contribution the State has made to any
    Montana settlement. As a point of contrast, the State contributed $15
    million to the Crow Tribe water rights settlement, a settlement that
    this Administration supported before the Congress less than a year ago,
    and which the Congress enacted last December.
        Part of the United States' position on state contribution appears
    to stem from its view of the Four Horns rehabilitation project
    contemplated by the settlement as being ``for the benefit of the
    community south of the reservation, instead of the Blackfeet
    directly,'' as Principal Deputy Assistant Secretary for Indian Affairs
    Donald Laverdure stated at the hearing on October 20, 2011. But this
    statement, the substance of which is repeated in the United States'
    written testimony, reflects a fundamental mischaracterization of the
    Four Horns project, and of the structure of the settlement itself.
        According to analysis conducted by the Tribe's technical consultant
    and independently evaluated by the Montana Reserved Water Rights
    Compact Commission's technical staff, the Four Horns Project will
    capture roughly 50,000 acre-feet per year more water than the dam,
    which the BIA has allowed to fall into a state of disrepair, can store.
    The Project will also address some significant sedimentation and other
    repair issues that dramatically limit the utility of the infrastructure
    at present. The majority of the water made available by the Four Horns
    Project will provide a firm source of supply for the Badger-Fisher Unit
    of the Blackfeet Irrigation Project, a Bureau of Indians Affairs
    project located on the Reservation.
        According to the same analysis, this more reliable supply has the
    capacity to increase the productivity of the lands served by that unit
    of the Blackfeet Irrigation Project, and thus the value of the crops
    grown, by nearly $10 million per year. Preliminary engineering
    analysis, funded by a $500,000 contribution from the State, has
    indicated that this enlargement is a feasible and economically
    reasonable project. Moreover, the Tribe's technical consultant has
    determined that the incremental cost of engineering the Four Horns
    Project to be capable of delivering water to Birch Creek is roughly $25
    million. The State intends to contribute $20 million to the design and
    construction of this infrastructure.
        The State's contribution reflects more than a fair amount for the
    benefits that will be received by non-Indians from this infrastructure.
    Pursuant to the Birch Creek Agreement, the substance of and context for
    which are addressed in my written testimony submitted to the Committee
    in advance of the Hearing on October 20, 2011, the Tribe has agreed to
    defer development of new uses of its Birch Creek water right for a
    period of 15 years, and to provide 15,000 acre-feet per year of water
    to non-Indian water users on Birch Creek for a period of 10 years, in
    exchange for a payment from the State of $14.5 million. The tangible
    benefit provided by the State to the Tribe concerning the use of its
    water rights. At the end of the 25 year period covered by the Birch
    Creek Agreement, the Tribe has no further obligation to supply water
    for the benefit of non-Indians. But the infrastructure to bring water
    from Four Horns to Birch Creek will remain under the Tribe's control
    and is available for its benefit should it choose to lease some portion
    of its water rights to Birch Creek water users or others.
        The economy on and around the Blackfeet Reservation is such that
    Birch Creek water users constitute perhaps the most optimal market for
    the Tribe to lease its water. As Mr. Laverdure noted in his testimony
    concerning S. 134, the Mescalero Apache Tribe Leasing Authorization
    Act, heard by this Committee at the same hearing that considered the
    Blackfeet Water Rights Settlement Act, leasing is an important
    mechanism by which a tribe can receive economic benefits from a water
    rights settlement. The State's contribution of roughly 80 percent of
    the cost of the infrastructure to bring water from Four Horns to Birch
    Creek is thus of direct and significant benefit to the Blackfeet Tribe.
    Thus, contrary to the misperception of the United States, the State
    contribution directly benefits the Blackfeet Tribe. By benefitting the
    Tribe, it also protects the non-Indian water users. This is exactly the
    sort of win-win arrangement that underpins successful settlements.
        In its written testimony, the United States also asserts that the
    State contribution is inadequate because it does not fully account for
    the ``[a]dditional benefits to State users in the Compact arise from
    the Tribe's agreement to protect junior state water rights holders,
    especially in the St. Mary and Milk River basins.'' This statement
    completely ignores the fact that it is the United States itself
    (through the water rights claims filed by the Bureau of Reclamation for
    its Milk River Project) which is overwhelmingly the largest ``junior
    state water rights holder'' in those two basins. It is wholly
    inappropriate for the United States to claim that the protection of its
    own water rights is a ``non-federal'' benefit. Montana believes that
    the United States bears significant responsibility for those costs, and
    likewise for the benefits achieved in the Blackfeet water rights
    settlement for protecting that project's water rights--particularly
    where it is the United States that concomitantly developed that Project
    over a century ago while failing to safeguard the Tribe's water rights.
        The United States has also expressed concern with the ``broad and
    uncertain aspects'' of the provisions in S. 399 regarding the Tribe's
    ability to lease its water rights. It is difficult to see what is
    uncertain about the leasing provisions. Section 7(f) of S. 399 provides
    that the Tribe, consistent with expressed United States policy about
    water leasing, will have the right to lease portions of its water right
    ``in accordance with article IV.D.2 of the Compact for use off the
    Reservation within the Missouri River Basin, subject to the tribal
    water code and the terms and conditions of the Compact and applicable
    Federal law.'' Article IV.D.2 of the Compact provides a lengthy
    explanation (the provision runs three full pages) of both the processes
    and the conditions whereby the Tribe may lease its water rights. The
    United States ought to be fully familiar with these provisions, as
    members of the Blackfeet Federal Negotiating Team participated in
    scores of public and staff-level meetings and conference calls,
    including several marathon drafting sessions where all of the Compact
    language was discussed in extreme detail. Thus it is at best indicative
    of poor communication within the Department of the Interior and at
    worst highly disingenuous for the United States to raise before this
    Committee vague and unsubstantiated ``concerns'' on an issue of this
    sort. If the United States has difficulty with specific terms with the
    language in the Compact, that would obviously be important information
    to have. The generalized nature of its written testimony is unhelpful
    if we are to be able meaningfully to address the United States'
    concerns.
        The State of Montana, the Blackfeet Tribe and the United States
    have been working on reaching this settlement for fully two decades. It
    is disappointing for the United States, in its testimony before this
    Committee, to act as though it is a latecomer to the settlement
    process. Nevertheless, the State of Montana is heartened by the United
    States' commitment to this Committee that it intends to work diligently
    on this settlement and to put forward its own proposals for how it
    would like to resolve the issues it has raised. The State is eager to
    receive those proposals, and to do all it can to ensure the successful
    ratification of the Blackfeet Water Right Settlement Act of 2011.

        The Chairman. Thank you very much, Mr. Tweeten, for your
    statement.
        Mr. Rex Lee Jim, please proceed with your testimony.

      STATEMENT OF HON. REX LEE JIM, VICE PRESIDENT, NAVAJO NATION

        Mr. Jim. Good afternoon, Chairman Akaka and honorable
    Members of the Committee. Senator Cantwell, Senator Tester, and
    Senator Udall, thank you for your time.
        My name is Rex Lee Jim. I am the Vice President of the
    Navajo Nation. I am here before you today to discuss the Navajo
    Nation's position concerning potential changes to the Utah
    Navajo Trust Fund pursuant to S. 1327. I will quickly summarize
    the Navajo Nation's position.
        Through oil and gas revenues, the Navajo Nation Trust Fund
    provides much-needed funding for Utah Navajos. As a result of
    negotiation between the Navajo Nation, the State of Utah and
    the Federal Government, 37.5 percent of royalties received
    through oil and gas development go to the State of Utah to be
    administered for the benefit of Utah Navajos. The UNTF is
    funded with royalties from Navajo Nation oil and gas leases on
    Navajo trust lands. Those funds come first to the Navajo Nation
    and then are paid out of the trust fund for the Navajo Nation's
    general funds account.
        Utah passed legislation in 2008 that effectively ends both
    disbursements from the UNTF and ends the trust fund
    administration. In finding a new trustee, Congress should focus
    on finding a trustee capable of managing and growing the fund
    to ensure the fund's long-term survival for the ongoing benefit
    of Utah Navajos. Congress should not appoint a trustee without
    a record of such management and without independent capital or
    assets.
        The Navajo Nation believes that, consistent with principles
    of self-determination, the Navajo Nation should be appointed as
    the new trustee for the Utah Navajo Trust Fund. The Navajo
    Nation has a successful record of managing and increasing its
    own trust fund; has a highly developed legal system that
    respects the rule of law; and has a well-established budgeting
    and auditing process for the appropriation of funds.
        Finally, the Navajo Nation is concerned about how the
    process of developing legislation and assigning a new trustee
    will take place. In a process that so greatly affects the vital
    interests of the Navajo Nation and Utah Navajos, Congress needs
    to respect our sovereign status and our government-to-
    government relationship.
        In spite of the Navajo Nation's considerable interest in
    the future of the Navajo Trust Fund, including who will be
    designated as the new trustee, S. 1327 was introduced by the
    Honorable Senator Hatch without adequate consultation by the
    Senator or his staff with the Navajo Nation government or the
    beneficiaries. In the previous 111th Congress, Senator Bennett
    from Utah also did not consult the Navajo Nation when he
    introduced a near carbon copy of this legislation.
        With me today are Jonathan Nez, the Council Delegate
    representing the Utah Chapters of Navajo Mountain, an objector
    whose statement I also would like to submit for the record,
    with your permission of course; John Billie, President of Aneth
    Chapter; Linda Brown, Secretary of the Aneth Chapter; and
    Andrew Tso, a beneficiary who lives in the Aneth Extension, and
    who all also oppose this legislation drafted and introduced
    without their knowledge or consent.
        Designating the Navajo Nation as trustee of the UNTF is the
    only position consistent with the policy established by the
    United States Congress to recognize the sovereignty of the
    Navajo Nation and the right of the Navajo Nation to self-
    determination in matters which concern the nation's land,
    resources and citizens.
        The Navajo Nation is committed to ensuring that the UNTF
    continues to grow and benefit current and future generations.
    In developing parameters of the trust, the Navajo Nation will
    consult closely with the local Utah Navajo community,
    considering first and foremost their interests and the critical
    importance of local control. Moreover, we Navajos will resolve
    any conflicts internally by talking things out in conformity
    with our culture and laws.
        S. 1327 was introduced without adequate consultation with
    the Navajo Nation and government or the beneficiaries and would
    give the important Federal trust responsibility over the
    nation's resources and citizens to an unproven nonprofit
    corporation. S. 1327 does not respect the Navajo Nation's
    sovereignty and right to self-determination, and this Committee
    should oppose it.
        Chairman Akaka and honorable Members of the Committee, on
    behalf of the Navajo Nation, I wish to express my appreciation
    for this opportunity to provide testimony to the Senate
    Committee on Indian Affairs on a government-to-government
    basis.
        Thank you and I look forward to your questions.
        [The prepared statement of Mr. Jim follows:]

     Prepared Statement of Hon. Rex Lee Jim, Vice President, Navajo Nation

        Good Morning Chairman Akaka, Honorable Members of the Committee on
    Indian Affairs. I am Rex Lee Jim, Vice President of the Navajo Nation.
    I am here to provide testimony in regard to the future of the Utah
    Navajo Trust Fund (UNTF) and Senate Bill 1327 introduced by the
    Honorable Senator Orrin Hatch.
        As the Committee knows, the State of Utah has declared its desire
    to withdraw as trustee of the UNTF. The State of Utah passed
    legislation in 2008 that effectively ends most disbursements from the
    UNTF, ends the trust fund administration, and moves the trust assets to
    a new fund pending selection of a new trustee. The Utah legislation
    specifically calls on Congress to appoint a new trustee for the UNTF.
    The Navajo Nation no longer has a role in the planning of expenditures
    from the UNTF, as is mandated under the 1933 Act. Consistent with
    federal policy toward Indian tribes, the Navajo Nation is requesting
    that Congress designate the Navajo Nation as the new trustee of the
    UNTF.
        Please be aware that the Navajo Nation has many elected officials
    at various levels of government, all of whom have individual agendas
    that may or may not coincide with the broader goals and policies of the
    Navajo Nation. However, the Navajo Nation has its own law that governs
    who may speak on behalf of the Navajo Nation and our People. Pursuant
    to Navajo Nation law, only the testimony today is representative of the
    Navajo Nation in this matter. See Exhibit A, Navajo Nation Position
    Statement.

    History of Utah Navajo Lands and UNTF
        The Utah portion of the Navajo Nation has a complex history of
    additions, withdrawals, restorations and exchanges. The United States
    added the lands in the Utah Territory that lay south of the San Juan
    and Colorado rivers by Executive Order on May 17, 1884. Navajo People
    have a historic tie to this area and have continuously occupied this
    land since long before the captivity of Navajos in 1864. On November
    19, 1892, four years before Utah was awarded statehood, then President
    Benjamin Harrison, by executive order, took back those lands in the
    Utah portion of the Navajo Nation which lay west of the 110 parallel
    (what is called ``the Paiute Strip''), and placed those lands back in
    the public domain. Navajo lands in the Utah Territory which lay east of
    the 110 parallel remained part of the Navajo Nation. On May 15, 1905,
    by executive order, President Theodore Roosevelt added the Aneth area
    in Utah to the Navajo Nation. In 1908, the Department of the Interior
    made an administrative withdrawal of the Paiute Strip from the federal
    public domain, designating those lands again for exclusive use by the
    Navajo. In 1922, the Department of the Interior again took the Paiute
    Strip away from the Navajo, and put the lands back into the public
    domain. The Paiute Strip was again withdrawn from the public domain in
    1929.
        The federal legislation that created the UNTF was the result of
    negotiation and agreement between the Navajo Nation, the State of Utah,
    and the United States Government. In 1930 and 1931, the Navajo Tribal
    Council asked the Commissioner of Indian Affairs to negotiate on its
    behalf to permanently restore the Paiute Strip to the Navajo Nation,
    based on the previous set asides of this area by the federal government
    and on historic Navajo occupation. On July 7 and 8, 1932, at its annual
    meeting in Fort Wingate, the Navajo Nation Council gave its support to
    proposed federal legislation which would restore the Paiute Strip to
    the Navajo Nation and to add lands to the Aneth area of the Nation,
    between Montezuma Creek and the Colorado border (what is referred to as
    the Aneth Extension).
        After Utah citizens voiced opposition to the proposed addition of
    the Aneth Extension and the Paiute Strip to the Navajo Nation, the
    Commissioner of Indian Affairs negotiated on behalf of the Navajo
    Nation with a Utah committee made up of San Juan County representatives
    to satisfy their concerns. In order to gain the Utah committees'
    support for the 1933 Act, the Commissioner of Indian Affairs made
    several concessions to the Utah committee. These concessions included
    prohibitions on further Native American homesteads or allotments in San
    Juan County, fencing of Native allotments outside the new Navajo Nation
    boundaries, fencing of the Aneth Extension's northern boundary, and
    agreement that state game laws would apply to Navajos hunting outside
    the Nation's boundaries. The proposed legislation also included an
    unusual provision that in the event oil and gas was discovered in the
    Aneth Extension and the Paiute Strip, instead of all net oil and gas
    royalties going to the federal government to administer on behalf of
    Navajo citizens, 37\1/2\ percent of those royalties would instead go to
    the State of Utah to be administered for ``the tuition of Indian
    children in white schools and/or in the building of roads across [the
    newly added lands], or for the benefit of the Indians residing
    therein.'' A final concession to Utah in the proposed legislation
    provided that Utah could exchange any state school trust lands inside
    the Aneth Extension and the Paiute Strip for equivalent federal lands,
    and that any fees or commissions for the exchange would be waived.
    Congress enacted the legislation Congress in 1933, as Pub. L. No. 403,
    47 Stat. 1418 (1933) (``1933 Act'').
        In 1958, by Act of Congress, the Navajo Nation was further expanded
    within San Juan County. Under the 1958 Act, the Navajo Nation and the
    United States government exchanged Navajo Nation lands at Glen Canyon
    Dam and Page, Arizona for federal lands northwest of and adjacent to
    the Aneth Extension, including the McCracken Mesa area. In 1949 and
    1998, with the Navajo Nation as party to the negotiations, state school
    trust lands within the Navajo Nation were made Navajo Trust Lands in
    exchange for other federal lands given to Utah. Currently, negotiations
    are under way to exchange school trust lands in the Aneth Extension
    with other federal lands under authority of the 1933 Act.
        In 1968, Congress amended the 1933 Act, redefined the purposes of
    the UNTF, and expanded its class of beneficiaries to include all
    Navajos in San Juan County. The amended legislation provided that trust
    monies can be used ``for the health, education and general welfare of
    the Navajo's residing in San Juan County.'' The 1968 Amendments also
    provided that trust funds could be used for projects off the Navajo
    Nation provided that the ``benefits'' were proportional to the
    expenditures from the trust. This vague term ``proportional'' provided
    one of the main vehicles for mismanagement of the trust monies.

    The Navajo Nation Has Sovereignty Over Its Lands, Resources and
            Citizens
        The Navajo Nation is a sovereign Native Nation located in the
    southwestern United States with territory in the States of New Mexico,
    Arizona and Utah. Numerous Executive Orders, Acts of Congress and
    Treaties have guaranteed the rights of our Nation to the surface use,
    and the subsurface mineral resources, of much of our traditional lands.
    For over forty years, the Navajo Nation has enjoyed a government-to-
    government relationship with the United States, respectful of the
    Nation's sovereignty and self-determination in its own affairs, and
    free of the policies of paternalism which have blemished the past. It
    remains critical to the sovereignty and self-determination of the
    Navajo Nation that the United States respect our government-
    togovernment relationship in deciding matters that uniquely concern and
    affect Navajo lands, resources and citizens. It is also crucial to the
    integrity of our Nation and its political institutions that passage of
    any federal legislation directly affecting our interests is done with
    the consent of the Navajo Nation government.
        The Utah Navajo Trust Fund is capitalized completely by royalties
    from Navajo Nation mineral leases on Navajo Nation lands in Utah which
    were added to the Navajo reservation in 1933. Since the 1970s, the
    Navajo Nation has been the fiscal agent for all UNTF royalties,
    distributing money every year to the State of Utah out of the Nation's
    general funds, for investment in the UNTF. The beneficiaries of the
    UNTF are those Navajo citizens residing in San Juan County, Utah. Only
    members of the Navajo Nation are eligible beneficiaries of the UNTF.
    The future of the UNTF is clearly a Navajo Nation issue and Congress
    should respect our sovereignty in this matter.

    The Navajo Nation Was Never Consulted and Is Adamantly Opposed to
            Senate Bill 1327
        In spite of the Navajo Nation's considerable interest in the future
    of the Utah Navajo Trust Fund, including who will be designated as the
    new trustee, Senate Bill 1327 was introduced by the Honorable Senator
    Hatch without adequate consultation by the Senator or his staff with
    the Navajo Nation government or the beneficiaries. See Exhibits A and
    B, Aneth Chapter and Red Mesa Resolutions. In the previous 111th
    Congress, Senator Bennett from Utah also did not consult the Navajo
    Nation before submitting his bill.
        The Navajo Nation is adamantly opposed to Senate Bill 1327. Senate
    Bill 1327 would give the federal trust responsibility for royalties
    from Navajo Nation mineral leases to a nonprofit corporation, the Utah
    Dineh Corporation. Senate Bill 1327 would give control over
    approximately thirty (30) million dollars in trust funds and assets, as
    well as an additional 6 to 8 million dollars a year of royalties from
    Navajo mineral leases, to a corporation with zero experience as a
    trustee, and absolutely no outside capital. In the event of any breach
    of trust by the Utah Dineh Corporation, the beneficiaries would have no
    remedy against the corporation. Senate Bill 1327 fails to ensure any
    accountability or transparency in the use of trust fund monies and
    fails to ensure that the trust will exist into perpetuity for the
    benefit of future generations of Navajo beneficiaries. Senate Bill 1327
    broadly expands the original purposes of the trust and could lead to
    misuse and misappropriation of trust funds. Senate Bill 1327 would
    violate the common law of trusts by designating a handful of
    beneficiaries as the trustee and causing countless conflicts of
    interest.
        On the other hand, the Navajo Nation would be an accountable,
    responsible and transparent trustee of the Utah Navajo Trust Fund. The
    Navajo Nation has been the fiscal agent for royalties of the UNTF for
    over 30 years. The Navajo Nation has a successful record of managing,
    investing, and increasing the value of multiple Navajo Nation trust
    accounts, including many multi-million dollar accounts. The Navajo
    Nation has a well established budgeting and auditing process for the
    appropriation of funds. Importantly, unlike the Utah Dineh Corporation,
    the Navajo Nation has sufficient outside assets to be accountable to
    the beneficiaries and can be sued in Navajo Nation Court with consent
    of the Navajo Nation Council. Our vision includes further consultation
    with the local Navajo Chapters and Utah Navajo communities in
    developing the parameters of the trust.
        The Oil and gas revenue for the trust will not last forever. The
    trust must be grown and managed successfully not only to pay for needed
    expenditures in the short term, but for the benefit of future
    generations of Navajos in San Juan County as well. The trust also
    should be managed to ensure its survival in perpetuity. The Navajo
    Nation is committed to ensuring that the UNTF continues to grow and
    benefit current and future generations of Utah Navajos and the Navajo
    Nation should be made the new trustee. Senate Bill 1327 does not ensure
    a trust corpus in perpetuity.

    Conclusion
        Designating the Navajo Nation as trustee of the UNTF is the only
    position consistent with the policy established by the United States
    Congress to recognize the sovereignty of the Navajo Nation and the
    right of the Navajo Nation to self-determination in matters which
    concern the Nation's lands, resources and citizens. Senate Bill 1327
    was introduced without adequate consultation with the Navajo Nation
    government or the beneficiaries and would give the important federal
    trust responsibility over the Nation's resources and citizens to a non-
    profit corporation. Senate Bill 1327 does not respect the Navajo
    Nation's sovereignty and right to self-determination and this Committee
    should oppose it.
        I appreciate this opportunity to provide testimony to the Senate
    Committee on Indian Affairs. The Navajo Nation looks forward to working
    with the Committee and the Utah delegation in a government-to-
    government relationship as reasonable legislation is introduced to
    secure the future of the Utah Navajo Trust Fund. Thank you.

        Attachments

        The Chairman. Thank you very much, Vice President Jim, for
    your testimony.
        Commissioner Maryboy, please proceed.

    STATEMENT OF HON. KENNETH MARYBOY, SAN JUAN COUNTY COMMISSIONER

        Mr. Maryboy. Greetings, good afternoon, aloha, Mr. Akaka.
    Happy birthday, Chairman, a little bit late.
        Senators Cantwell, Udall, good afternoon.
        My name is Kenneth Maryboy. It is an honor to come before
    you the second time. I am on the Navajo Nation Counsel. This is
    going to be my fourth and last term on the Navajo Nation
    Council and I am one of the lucky 24 to go back on the Navajo
    Nation Council. I am in a second term as a San Juan County
    Commissioner for the San Juan County, Utah.
        I represent 10,500 Navajos in the State of Utah, and of
    course, 300,000 Navajo Nation in Arizona, New Mexico and Utah,
    as well as the Chairman of the five Tribes in Utah, which is
    the Paiute, Shoshone, Goshu, Ute, and the Navajo.
        So with that, it is truly and honor to be able to address
    you this afternoon regarding the Senate bill 1327. This
    Committee is important to the Dineh. We are grateful for your
    insight, of your willingness to listen to the people. We are
    specifically grateful for the opportunity to shed light on some
    of the questions surrounding the Utah Dineh Corporation.
        The beneficiary of Utah Trust Fund, the certain state of
    trust, and various functions have an interest in the outcome of
    this process. In 1933, the United States Congress signed into
    law an Act which created the Utah Navajo Trust Fund. The Act
    added the section of Federal land known as an Aneth Extension
    to the existing Navajo Reservation.
        In regard to the 1933 final Act, the United States District
    Court explained in order to compensate the State for the
    resulting loss of tax revenues and the increase in the need for
    the government services to the Act to provide internal ally,
    that the 37.5 percent of the net royalty of oil and gas
    production within extension would be paid to the State of Utah
    provided by the 37.5 percentile.
        Of said royalties shall be expanded to the State of Utah in
    the tuition of Indian children in school and white schools and
    other building maintenance, roads across the reservation in
    lands described section and hereafter of all the benefits of
    Indians residing there, 47 State, 14, 18, 19, 33.
        This was an argument of the State of Utah to benefit the
    Indians living in the Aneth Extension. In 1968, an amendment
    expanded beneficiary, including the Navajos living in San Juan
    County, Utah. The Navajo Nation wasn't overlooked in 1933 Act.
    In 1968 amendment, they were given 62.5 percent of the
    royalties from those trust fund wells of many other wells
    located in the Utah portion of the Navajo Reservation.
        The Tribe received 100 percent of the royalty in addition
    to the agreement was amazed at the royalty paid to the Utah
    would be based on the fixed price at $45 per barrel. This means
    that when the oil and the selling at $90, that the trust fund
    received the equivalence of royalties of only 18.75 percent.
    And the Tribe received 8l.25 percent.
        It is not my purpose today to argue whether these past
    agreements are fair or equitable. They are the laws and we are
    bounded by laws and the State of Utah has asked Congress to
    relieve them of their duties over the trust funds. Normally in
    such cases, if the beneficiary or legal ages, they would be
    required to select a new trustee.
        It is true that we are citizens of the Navajo Nation. We
    are proud to be the citizens. We are also citizens of the State
    of Utah. We are also citizens of the San Juan County, Utah. It
    is our citizenship of San Juan County.
        So with this, I submitted my testimony and I stand to
    answer questions from the Committee.
        [The prepared statement of Mr. Maryboy follows:]

          Prepared Statement of Hon. Kenneth Maryboy, San Juan County
                                  Commissioner

        Honorable Chairman Akaka, Vice Chair Barrasso, Members of the
    Committee, Senator Hatch,
        My name is Kenneth Maryboy. I am a Navajo Nation Delegate, and a
    County Commissioner for San Juan County, Utah:
        This is truly an honor to be able to address you in this morning in
    regard to Senate Bill 1327. This Committee is important to the Dineh.
    We are grateful for your insight and for your willingness to listen to
    the people. We are especially grateful for the opportunity to shed
    light on some of the questions surrounding Utah Dineh Corporation, the
    beneficiaries of the ``Utah Navajo Trust Fund,'' the current state of
    the trust fund, and the various factions who have an interest in the
    outcome of this process.
        In 1933, the Unites States Congress signed into law the Act which
    created the Utah Navajo Trust Fund.
        That Act added a section of federal land, known as the Aneth
    extension, to the existing Navajo Reservation.
        In regard to the 1933 final Act, the United States District Court
    explained:

            In order to compensate the State for the resulting loss of tax
            revenues and increased need for governmental services, the Act
            provided, inter alia, that 37\1/2\ percent of net royalties
            from oil and gas production within the Extension were to be
            paid to the State of Utah: ``provided that the 37\1/2\
            percentum of said royalties shall be expended by the State of
            Utah in the tuition of Indian children in white schools and/or
            in the building of maintenance of roads across the lands
            described in section 1 hereof, or for the benefit of the
            Indians residing therein.'' 47 Stat. 1418 (1933).

        This was an agreement with the State of Utah for the benefit of the
    ``Indians'' living on the Aneth Extension.
        The 1968 amendment expanded the beneficiaries to include Navajos
    living in San Juan County, Utah.
        The Navajo Nation was not overlooked in the 1933 Act or in the 1968
    amendment; they were given 62\1/2\ percent of the royalties from those
    ``Trust Fund'' wells. Of the many other wells located on the Utah
    portion of the Navajo Reservation, the Tribe receives 100 percent of
    the royalties. In addition, an agreement was made that the royalties
    paid to Utah would be based on a fixed price of $45 per barrel. This
    means that when oil is selling for $90, that the Trust Fund receives an
    equivalent royalty of only 18\3/4\ percent and the Tribe receives 81\1/
    4\ percent.
        It is not my purpose today argue whether these past agreements are
    fair or equitable. They are the law, and we are bound by the law. The
    State of Utah has asked Congress to relieve them of their duty as the
    trustee over the Trust Fund. Normally, in such a case, if the
    beneficiaries are of legal age they would be required to select a new
    trustee.
        It is true that we are citizens of the Navajo Nation. We are proud
    to be citizens. We are also Citizens of the State of Utah. We are also
    Citizens of San Juan County, Utah. It is our citizenship in San Juan
    County along with our Race, which qualifies us as beneficiaries of the
    Utah Navajo Trust Fund.
        There is some disagreement among Utah Navajos about who should be a
    beneficiary, or who should be the Trustee. Fortunately we have
    political sub-units which help to determine the ``mind'' of the people.
    Our Chapter governments have had their say in the formation of the Utah
    Dineh Corporation. They have had their say in the appointment of board
    members. And they will have their say in the reorganization of the
    board once the Corporation is charged with the responsibilities of
    Trustee.
        We cannot expect a consensus on such a matter any more than
    Congress would expect a consensus on the matters on which they vote.
    But we do have the ability to hear all concerns and to put the matter
    to a vote. We have resolutions from all but the Aneth Chapter in favor
    of appointing Utah Dineh Corporation as trustee. There is more of a
    division on this matter in Aneth because they were named as
    beneficiaries in the 1933 act, and many there believe that the 1968
    amendment was a mistake. I acknowledge their concern. I share their
    frustration. But the 1968 amendment was made for a wise purpose. Over
    time as the population has shifted from one place to another; as
    generation has come and gone, to isolate the beneficiaries to a small
    geographic area like the Aneth extension would cause many more problems
    than it would ever solve.

    Utah Dineh Corporation
        In July 2010, this same issue was heard by the Natural Resources
    Committee. At the time Mr. Ross O Swimmer suggested two possible
    options for the beneficiaries; to allow the Navajo Nation to step in as
    Trustee, or have the Utah Navajos form a private non-profit
    organization to manage the trust. This was the genesis of the Utah
    Dineh Corporation. Other existing non-profits were also considered, but
    it was determined that if this was going to be done right, the new
    beneficiary should be a new entity with no prior history. A fresh new
    company has been formed. It is fully at the mercy of the Utah Chapters.
    Until it is named as the trustee, it will remain a dormant shell. The
    board that is in place was put there by the chapters. Or, in the case
    of the Aneth Chapter, by a volunteer until an appointment became
    necessary.
        Currently Utah Dineh does not even have a checking account. It
    never has had a checking account. There is not possibility of
    mismanagement, because it has not been activated other than as a shell
    corporation formed in the State of Utah. It has articles of
    incorporation, and bylaws. Its current board members serve with not
    promise of compensation. Travel expenses are born by the individual
    board members, or by a sponsor.
        I am confident that Utah Dineh Corporation can take full advantage
    of the current management of the Utah Navajo Trust Fund Holding
    Account. We also have the promise of support from the State of Utah,
    including the people who were involved with the previous administration
    of the fund. We have the support of several key people with the Navajo
    Nation and hope that once this matter is decided in favor of Utah Dineh
    Corporation that we will have the full support and cooperation of the
    Navajo Nation as well.
        Naturally a transition from the current Trust Fund Holding Account
    to a new trustee will not happen in an instant. We anticipate an
    orderly transition.
        In the future, we expect that the Trust Fund will provide
    opportunities for matching funds from Utah's Community Impact Board;
    from federal program grants such as education, housing, etc; from State
    and Federal highway funds; from the Navajo Nation for programs that
    they would like to see offered to members of the tribe in Utah.
        With the ``Holding Account'' simply accumulating money, the people
    are suffering from lack of services. There is much good that needs to
    be done, but for the past three years, there has not been an entity
    authorized by Congress to act. This cannot continue. The people have
    spoken as a majority. Utah Dineh Corporation is well structured and
    still in its original wrapper waiting to be used. All we lack is the
    nod from this Committee.
        The Navajo Nation, if they were the trustee would have a distinct
    advantage of sovereign immunity. It would be nice to lay aside any
    concerns about potential future law suits. While this is of great
    benefit to the trustee, it is not of benefit to the beneficiaries who
    should have legal recourse to ensure accountability of the trustee.
    Utah Dineh Corporation is not immune from full accountability. Charging
    them with the fiduciary role of trustee is the correct course for this
    Committee.
        Thank you.

        The Chairman. Thank you very much, Commissioner Maryboy,
    for your testimony.
        Chairman Abrahamson, will you please proceed with your
    testimony?

      STATEMENT OF HON. GREG ABRAHAMSON, CHAIRMAN, SPOKANE TRIBAL
                                COUNCIL

        Mr. Abrahamson. Thank you, Chairman Akaka, Senator Cantwell
    and other Members of the Committee. My name is Gregory J.
    Abrahamson. I am Chairman for the Spokane Tribe of Indians. I
    appear before the Senate Committee on Indian Affairs to testify
    on S. 1345. With me today are Tribal Council Members Michael
    Spencer, Rudie Peone, David C. Wynecoop, Jr., and Rodney W.
    Abrahamson.
        I would also like to thank Senator Murray and Senator
    Cantwell for their support on this legislation.
        We are here today as a full Tribal Council with the
    authority from the general membership to act on behalf of the
    Tribe to finally resolve this matter. We are shocked and
    dismayed with the statement submitted by DOI and are frankly
    blindsided by their position, particularly because we had
    reached agreement with the Bureau of Reclamation and the
    Bonneville Power Administration and understood that DOI
    supported S. 1345.
        Apparently, the Department has once again failed its trust
    responsibility to the Tribe. We came here today on behalf of
    the Spokane Tribe to finally conclude our efforts to work with
    the Untied States to recognize and fulfill its trust
    responsibility to keep the promises of the United States to the
    Tribe, finally treat the Spokane Tribe fairly and honorably,
    recognize the contributions the Spokane Tribe continues to make
    for the benefit of our Nation, compensate the Tribe for the use
    of its land and injuries caused by the construction and
    operation of Grand Coulee Dam.
        I came here today to summarize the written statement for
    the record submitted by the Tribe and the critical need for
    this important legislation. Unfortunately, I feel compelled to
    recount the history one more time of the false promises that
    underscore the DOI's lack of good faith to resolve this matter.
        Spokane Tribe has struggled to protect our reservation
    since agreement with the United States in 1877. This settlement
    must be viewed with historic context for over more than 130
    years. We therefore have submitted a detailed statement.
        The Spokane Reservation is located in Eastern Washington at
    the confluence of the Spokane and Columbia Rivers. These two
    rivers are expressly and legally part of our reservation and
    remain in Tribal ownership today. Our life, culture, economy,
    and religion center around the rivers. We are river people. We
    were fishing people. We depended heavily on the rivers and the
    historic salmon runs they brought to us. We were known by our
    neighbor Tribes as salmon eaters.
        The Spokane River, which is named after our people, was and
    is the center of our world. We call it the path of life. Our
    best lands and fishing sites are at the bottom of Lake
    Roosevelt. Our salmon runs have been destroyed. The history of
    the last 70 years have led to the systematic destruction of the
    Spokane Indian people's culture and way of life.
        We continue to survive, but the time has come for the
    United States to recognize the profound effect the construction
    of Grand Coulee Dam has had on us. The Spokane Tribe has
    suffered enormous and catastrophic losses due to the project.
    In short, the construction of Grand Coulee Dam project was
    deadly for the members of the Spokane Tribe. We lost our salmon
    runs, which devastated our culture and our lives. Over 3,000
    acres of land, Tribal communities, schools, roads, orchards,
    farms were flooded. Burial sites were flooded. Access across
    river was blocked. The historic trade and commerce was lost and
    forced physical relocation of households.
        And those impacts continue today. Grand Coulee is operated
    for many purposes, power, irrigation, salmon flows, and flood
    control. Lake Roosevelt fluctuates seven feet or more every
    year. These operations flush our fish, disrupt our enterprises,
    erode our lands, impair recreation, affect water quality, among
    other things.
        The Grand Coulee project, more than any other economic
    asset available to Washington State or the Pacific Northwest,
    has provided extraordinary levels of benefits, not just for the
    Northwest, but for the entire Nation.
        The Spokane Tribe and its members lost a lot to Grand
    Coulee. The inability of the Spokane Tribe to receive just
    compensation for the seizure of our lands has severely impacted
    the ability of the Tribal government to provide for the basic
    needs of our members. The extreme disparity between the losses
    suffered by the Spokane people and the contrast to the enormous
    benefits Grand Coulee provides to the Nation and the Northwest
    is inconceivable and continues to reflect an extremely sad
    chapter in America's history.
        There is simply no way the United States can ever make up
    for the damage caused. The United States repeatedly promised to
    compensate both the Spokane and the Colville Tribes for the use
    of their Tribal lands. These promises became the basis of U.S.
    settlement with the Colville Tribe. Only one Tribe has been
    compensated.
        Some Federal agencies have said we did not file Coulee
    claims within the 1951 deadline. Neither did the Colvilles.
    They were allowed to amend their original claim in 1975 to add
    Coulee hydropower claims, but neither Tribe had a legal claim.
    Both Tribes have a moral, equitable claim, yet only Colville
    Tribe is compensated.
        Technical defenses by the Federal agencies are not fair,
    honorable or just. Congress recognized that the legislation is
    the fair and honorable thing to do. The settlement was approved
    by the Senate in the 108th Congress, by the House in the 109th
    Congress. Over the years, the Tribe has amended the legislation
    to address many concerns and has done so once again.
        Despite numerous concessions by the Tribe in this effort to
    resolve this issue, the efforts of key legislators such as
    Senators Cantwell, Murray, Inouye and others, and agreement
    with BPA and BOR, the United States has simply failed to
    fulfill its trust responsibilities to the Tribe.
        In 1994, Congress approved a settlement with the Colville
    Tribe. The Spokane settlement is based on the Colville
    Settlement. The Spokane Tribe lost 39 percent of its land in
    proportion to the Colvilles. The payments to the Spokane in the
    bill before the 106th Congress was set at 39 percent of the
    Colvilles.
        In the 108th Congress, at the request of Members of
    Congress, the Spokane Tribe was reduced from 39 percent to 29
    percent of the Colvilles for return of lands taken by the
    reclamation of the project, including an enlarged Spokane River
    outside reservation boundaries known as the far or the south
    bank of the river.
        In the 108th Congress, the Senate passed a bill directing
    the return of these lands. In the 109th Congress, the House
    passed a bill directing return of these lands. In the 110th
    Congress, return of the south bank of the river to the Tribe
    was removed from the bill. The bill still called for return of
    the lands within the reservation taken for the project that
    included portions of the river within the reservation.
        Now to satisfy the Bureau of Reclamation concerns regarding
    erosion and landslides, no lands are to be returned to the
    Tribe, in exchange for the confirmation and delegation of
    authority by the Department of Interior set forth in the 1990
    Lake Roosevelt Cooperative Management Agreement with respect to
    the land within the boundaries of Spokane Indian Reservation.
        So now we do not get our land back, yet our payment is 29
    percent, not 39 percent of the Colvilles.
        Section 9 provides for the protection of the Bureau of
    Reclamation and project operations. Section 9 leaves intact the
    authority of the National Park Service over the lands taken
    from the Tribe. The Spokane and Colville Tribes have agreed to
    a disclaimer regarding reservation boundaries in section 9 that
    remain from earlier versions of the bill.
        We were promised our reservation and our rivers in 1877.
    Our rivers have been flooded. We have endured enormous impacts
    to our lands, culture, and way of life. The United States
    promised to compensate us, but continues to changes it position
    and creates more obstacles in an effort to avoid reaching an
    agreement.
        The Colvilles have been compensated for the same wrongs we
    have suffered. The time has come to treat us equally. We
    deserve fair and honorable treatment by our trustees in the
    region and this Country for the use of our lands that are used
    to generate such enormous benefit at our expense.
        I thank you for this opportunity and am open to any
    questions.
        Thank you.
        [The prepared statement of Mr. Abrahamson follows:]

     Prepared Statement of Hon. Greg Abrahamson, Chairman, Spokane Tribal
                                    Council

        The Chairman. Thank you very much.
        I will defer my questions and let me call on Senator
    Cantwell for her questions.
        Senator Cantwell. Thank you, Mr. Chairman. Thank you. I
    appreciate it.
        Chairman Abrahamson, good to have you here and your
    testimony is much appreciated. We heard from the BIA earlier
    about the filing of claims. Could you explain where the Spokane
    Tribe was in 1951 when this deadline was supposed to have
    transpired?
        Mr. Abrahamson. Yes, thank you, Senator.
        We at that time our Tribe was just splitting. The Colville
    Tribe was over the Spokane Tribe, our agency, at that time
    because of the ruralness of where we were at. Their agency was
    there and we just moved away from the Colville agency and was
    establishing our own reservation and we didn't have our lawyers
    or anybody intact at that time. Our government was just being
    formed there.
        Senator Cantwell. So they are penalizing you not because
    you weren't impacted, but because of the fact that you weren't
    properly formed at the time?
        Mr. Abrahamson. Yes, at that time, the government at that
    time should recognize and brought it up to our leadership at
    that time to file something or to at least acknowledge that the
    Tribe should do something with that body of water there.
        Senator Cantwell. And that was 16 days before the filing? I
    mean, we are talking about a small period of time. Is that
    correct?
        Mr. Abrahamson. Yes.
        Senator Cantwell. Okay. And you mentioned fair and
    honorable dealing standards of the ICCA.
        Mr. Abrahamson. Yes. We recognize that we don't have a
    legal claim and that it is just a moral claim. And it is one
    that was done by a colloquy when the 1994 legislation was done.
    And Senator Inouye, Senator Murray, Senator Bradley, and
    Senator McCain was four of them that did a colloquy to deal
    with the Spokane Tribe fairly during that legislation.
        Senator Cantwell. And is that your understanding of what
    the Department of Interior was also saying today, that they
    believe that there should be an equitable settlement?
        Mr. Abrahamson. We would hope that is what the intent was,
    but our people have been coming back here since the 1940s. We
    had a delegation of leadership that came back and that was just
    when the war happened. And they told our delegation leadership
    that we have a war to fight; we will deal with you later. That
    has been 71 years ago there, so.
        Senator Cantwell. Thank you, Mr. Chairman.
        The Chairman. Thank you very much, Senator Cantwell.
        Senator Tester?
        Senator Tester. Thank you, Mr. Chairman.
        We will get right to it. One of the things that Mr.
    Laverdure said from Interior was the State's share not being
    reasonable. Being prompted slightly on this, could you talk
    about the adequacy of the State's share, Mr. Tweeten?
        Mr. Tweeten. Senator Tester, thank you for the question.
        I think any fair reading of the bill and the compact would
    suggest that the proportion of benefits flowing to the Tribe
    and the State tremendously favors the Tribe. Objections have
    been raised in prior settlements to the idea of taking projects
    that States want and trying to ``hide them under the Indian
    blanket,'' I think was the phrase that was used. There are no
    such projects in this compact.
        The expenditures that the State makes in the compact are
    specifically designed for the mitigation of the effects of the
    compact on non-Indian water users, but the benefits of those
    mitigation efforts flow directly to the Tribe. For example, the
    compact provides for deferral on the part of the Tribe in the
    development of its water right on Birch Creek.
        In consideration of that agreement to defer, the State has
    set aside a fund of $14.5 million that will be payable to the
    Tribe when certain conditions are fulfilled. That is
    functionally the equivalent of a lease of that water in the
    sense that there is a payment on the part of the State to
    protect the flow of that water going downstream.
        But as Mr. Laverdure said, allowing the Tribe to receive
    value for resources is beneficial in many ways, and that
    provision provides the Tribe the opportunity to directly
    receive value for the use of its resources. So I think it is
    directly beneficial to the Tribe.
        The Four Horns project is the same. The Tribe has deferred
    or agreed to provide water downstream for a period of years for
    the use of the Pondera Canal Company, but once that period of
    years expires, the use of the Tribe's water is completely up to
    the Tribe and the canal company has no legal or equitable claim
    on it.
        The hope is, of course, on the part of the canal company,
    is that the Tribe will agree to negotiate a lease of some of
    the water in the Four Horns Reservoir to flow downstream to the
    Pondera Canal Company at a fair market rate. But the Tribe is
    under no obligation to make that lease and once that mitigation
    period of 25 years expires, the water in the expanded Four
    Horns project belongs to the Tribe.
        So I think the argument that the State's cost share doesn't
    somehow contribute to the benefit of this compact and
    legislation for the Tribe is completely misplaced.
        Senator Tester. Let me get to that point, and this can be
    for either one of you, T.J. or Chris. When you do these kinds
    of negotiations, are people from the Federal Government usually
    at the table when you are doing these negotiations?
        Mr. Show. Thank you, Mr. Chairman.
        To my knowledge, they have been there every step of the
    way. They have participated to my knowledge in everything. That
    is kind of what is disheartening about this whole process is
    they have been intricately and intimately part of this process.
        Senator Tester. That is a good sign on one hand. Did they
    ever provide you with a written list of concerns?
        Mr. Show. Not that I know of.
        Senator Tester. Okay. Did they ever present you any
    alternatives to the compact?
        Mr. Show. No. To my knowledge, the only thing that was ever
    brought up is problems.
        Senator Tester. Okay. One of the things that, it was either
    you or Mr. Tweeten said, I think it was you, that the
    objection, this was the first time you had seen them happened
    in the last 24 hours. That is correct, right?
        Mr. Tweeten. Senator, that is correct.
        Senator Tester. And Ms. Williams, I am glad you are still
    here. I hope there are other folks from the Department here. I
    am not going to call you up to talk. Don't worry. But I would
    just say that the only way you solve problems around this place
    is to talk and to discuss and to negotiate, whether we are
    negotiating among this Committee or you are negotiating with
    the Tribes. I would just tell you that for the objections to be
    heard for the first time by these guys in the last 24 hours is
    totally unacceptable. It is just totally unacceptable. It just
    doesn't cut it.
        So I would hope that we can ramp that up in the future.
    What is done is done, but the communication needs to be much
    better if that is the case. And I don't mean to lecture. It is
    just a fact that we are not going to get anything done if that
    doesn't happen. Good communication is that.
        Just a last thing, and I know, T.J., it is hard to predict
    what the Tribe is going to do, but how was the support for this
    so far among the people on the Blackfeet Reservation?
        Mr. Show. Mr. Chairman, it is my belief that when the
    people know what I know, and this is an education process that
    we all go through, I believe that they will support this and I
    believe they do support this. You will always have opposition.
    That is granted. But I believe they do support this and I do
    support this.
        Senator Tester. Good. Let's go to another Tribe. Let's go
    to Fort Belknap because I think that you guys talked about the
    headwaters of the Milk and its impacts on the Fort Belknap
    Tribe about 150 miles away from you guys. Have you worked with
    them to resolve problems with them in regards to this water?
    And either one of you can answer it.
        Mr. Tweeten. I think Chairman Show can probably talk more
    directly about the specific discussions, but we have done on
    the State side considerable study with respect to the
    possibility of the provisions of the Blackfeet Compact somehow
    affecting flows that we have agreed to compact with the Fort
    Belknap Tribe downstream. And we think the possibility, as a
    hydrologic matter, of those conflicts is extraordinarily slim.
        Senator Tester. Do they think that, too?
        Mr. Tweeten. Mr. Chairman, I won't speak for them about
    that. Perhaps Chairman Show can talk about it.
        Senator Tester. Okay. T.J.?
        Mr. Show. We have sat down with the Fort Belknap Tribe and
    we both have come to the same conclusion that the Secretary
    kind of put us in this situation. We believe it is him that
    needs to help make a decision to get us out, so to speak, I
    guess.
        Senator Tester. Okay, all right.
        Thank you, Mr. Chairman. I ran over time.
        Just as kind of a sidebar, I want to thank Richard Litsey
    for being here from Senator Baucus's office.
        Thank you very much, Mr. Chairman.
        The Chairman. Thank you very much, Senator Tester.
        Senator Udall?
        Senator Udall. Chairman Akaka, thank you very much. I can't
    tell you how honored I am to see two of our distinguished
    Native American leaders here before the Committee. I have
    prepared longer statements about both of them, about President
    Mark Chino and also about Vice Chairman Rex Lee Jim, which I
    will put in the record. We are late in the day here and I want
    to get directly to the questions. But I was going to flatter
    both of you greatly and I will do that in the record and try to
    get directly to questions so that we can resolve the business
    of the Committee.
        And also, of course, welcome Selena, the wife of President
    Mark Chino, the First Lady of the Mescalero. Good to have you
    here, and all the other officials with both Tribes.
        I would also, and I don't know what the timing was here in
    terms of when the Department learned it was going to take a
    position on specific bills, but I find it a little bit striking
    to hear all of the leaders say that this is the first time they
    heard from the Department about objections. I agree with what
    Senator Tester said.
        It seems to me a simple phone call, even if the timing, the
    Department knows it is going to appear at the hearing; the
    leaders know they are going to be here. To at least receive
    some kind of notice that the Department is going to take a
    position on a piece of legislation that has been working its
    way through is a reasonable way to work.
        It is meant more as a comment to try to urge better
    communication in the future, so that we can get fully to the
    issues. Some of the questions, President Chino, that I am going
    to ask, I don't want you to respond too hastily because I think
    you need to look at this and hear from the Department about
    this proposal in terms of standards and that kind of thing. And
    I don't want to put you in a position to have to take a
    position against it right now. So if you want to defer on that,
    that will be fine.
        But let me start with President Chino. Would you describe
    for the Committee the water situation in the region surrounding
    the Mescalero Apache Nation? What is the size of the
    surrounding communities? What is the availability of water?
    Have any of your neighbors expressed interest in leasing the
    Tribe's adjudicated water? And does the Mescalero Apache Tribe
    have a surplus of water?
        Mr. Chino. Thank you, Senator Udall.
        As you and Senator Bingaman are well aware, we are located
    in a resort area of the State of New Mexico. To a certain
    extent, we are isolated, and not only our economy, but the
    economies of the communities surrounding us rely very heavily
    on tourism and travel. U.S. 70 is a major east-west route
    through the reservation that brings a lot of traffic into our
    area.
        And we have been approached, Senator, by the City of
    Alamagordo, by the village of Cloudcroft, by the village of
    Ruidoso and the Ruidoso Downs as to the possibility of leasing
    our adjudicated water rights.
        So as Senator Bingaman alluded to in his remarks, the State
    of New Mexico has been in a very serious drought situation for
    the better part of a year and a half and we are very much in
    the middle of that. And the communities' interest in acquiring
    some of our water certainly indicates to us that not only is
    there an interest, but there is a very definite need and a very
    severe need of those surrounding communities for this very
    precious resource which we have and which we would very much
    like the ability to interact with those communities and to
    enter into some type of agreement that would be mutually
    beneficial.
        Senator Udall. And it would obviously be an economic
    benefit to the Mescalero Apache Tribe to be able to lease your
    water to these communities.
        Mr. Chino. Very much so, Senator. The Tribe would use the
    proceeds, for example, to provide college scholarships for our
    students who wish to go on and pursue a higher education. We
    would use it to fund our fire and rescue. We would use it to
    provide various services that any government would provide to
    its citizens. So it would be very beneficial to us, Senator,
    yes.
        Senator Udall. President Chino, I want to ask a question
    about Mr. Laverdure's testimony where he said that he would
    like to see language included providing that the Tribe ``shall
    develop Tribal water leasing standards and submit such
    standards to the Secretary for approval.''
        But I don't want to force you into a situation to take a
    position now if you don't want to. The record I believe the
    Chairman will say will be open for a week or more and you could
    make a comment like that. But if you want to comment today, I
    would be happy to hear it.
        Mr. Chino. I definitely would like to comment, Senator.
        Senator Udall. Please.
        Mr. Chino. The notion that the Department of Interior
    provided to the Committee that the water leasing requirement
    should be consistent with land leasing requirements is
    virtually a new policy that certainly the Tribe has never heard
    of from the Department of the Interior. And I feel very
    strongly, and I believe I can speak for the Tribal Council as
    well, that we believe that this is nothing more than an effort
    on the Department of the Interior to implement new policy at
    the expense of the Mescalero Apache Tribe's legislation.
        In fact, the record will show that the Department of
    Interior has a precedent of never involving itself in
    requesting these so-called water use codes and standards of any
    Tribe. Our cousins at Jicarilla were not subject to the same
    requirements, nor was the Navajo Nation.
        So we feel that it is very, very unfair, grossly unfair to
    subject us to these requirements when other Tribes weren't
    subjected to the same. It is simply a matter of fairness,
    Senator.
        Senator Udall. And it appears to me that Mr. Laverdure's
    testimony was that this was a first in time. This was a
    precedent. Do you agree or disagree with that in terms of the
    leasing situation? He seemed to be describing that this had
    never been done before. Do you agree or disagree on that one?
        Mr. Chino. Well, I think, Senator, with respect to the
    leasing, I don't think that that particular aspect is new. I
    think the concept of equating water rights to land leasing
    requirements by the Department is certainly a new concept. And
    as I said, to our knowledge, it has never been put forth as an
    issue until now.
        And our concern is that it is being put forth now in the
    context of requiring our Tribe to submit to these requirements
    and to formulate water codes and other things that other Tribes
    have not been subjected to and requirements have not been made
    of those Tribes.
        Senator Udall. Thank you.
        Mr. Chairman, I have already run over. I have a couple more
    questions that I can ask and then I will be complete and won't
    need a second round or anything. Would that be all right?
        The Chairman. Will you please continue.
        Senator Udall. Okay. Thank you.
        These questions here are both to Vice President Rex Lee Jim
    and also to Commissioner Maryboy.
        Based on the original 1993 statute, is there any way the
    Navajo Nation could legally divert these royalties outside of
    Utah?
        Mr. Jim. Senator Udall, thank you for that question.
        It is not possible because it is mandated by the U.S.
    legislation and the Navajo Nation has proven over the years
    that it has always paid out that amount to the trust.
        Senator Udall. Commissioner Maryboy?
        Mr. Maryboy. Senator Udall, it is an Act that was re-
    amended in 1968 and furthermore the 1933 Act stands as the body
    here that was initially enacted in 1933. So with that, I stand
    on behalf of the Utah Navajos that it is about time we
    administer our funding. For many years, we never laid a hand on
    this until now.
        Senator Udall. Which Navajo Nation chapters in Utah support
    the Utah Dineh Corporation as trustee and which chapters
    support the Navajo Nation as trustee? And this is also a
    question for both of you.
        Mr. Maryboy. Senator, we have board members from Navajo
    Mountain all the way down to Aneth. As a matter of fact, I have
    the former chapter president, Leonard Lee, which is a part of
    the board member to the Utah Dineh Corporation. And as far as I
    know, all the chapters are in support of keeping the money in
    Utah.
        Senator Udall. Now, I have information here, and it may be
    incorrect and I want both of you to speak to this. There are
    seven chapters in Utah. Is that correct?
        Mr. Maryboy. Seven chapters.
        Senator Udall. Both of you are nodding, so I assume that is
    correct. And apparently, three support the Navajo Nation as
    trustee. So that would mean there is a split between these
    chapters.
        Is that correct or incorrect, Vice President Jim?
        Mr. Jim. Thank you. With me today is Honorable Jonathan
    Nez, who represents Navajo Mountain and whose chapter opposes
    the current bill. I spoke to members in Dennehotso and Mexican
    Water, they also oppose the current bill. We do have a
    resolution from Red Mesa and Aneth who oppose this bill. We
    have a process that we go through at the local chapters. It is
    put on the agenda and discussed and a motion invoked, and that
    is what we have. Thank you.
        Senator Udall. Thank you.
        Mr. Maryboy?
        Mr. Maryboy. Mr. Chairman, for the record, the resolution
    was submitted from all seven chapters and I just barely got a
    email and a text from Alex Bitsinnie, which is with the Navajo
    Mountain Chapter, as well as James Adakai for the record, with
    Oljato Chapter asking and pleading to continue to support the
    bill.
        Senator Udall. Vice President Jim, what kind of
    accountability would the Navajo Nation have if it were trustee?
        Mr. Jim. First of all, we have a legal system that is in
    place. So we do have the Navajo judicial branch who oversees
    the laws and interprets them. And recently, they have been able
    to challenge some of the actions of the Council in order to
    maintain integrity and we have that in place. And we have
    several trust funds in the multimillions of dollars that we
    oversee. So we have an auditing process in place to keep us
    accountable.
        And should for any reason, the Navajo Nation violate the
    trust fund, then the beneficiaries have the ability to take us,
    the Navajo Nation, to court. And the Navajo Nation Council has
    agreed to waiver, and with the assets that we have, it would
    cover anything that may have been misspent.
        Mr. Maryboy. Senator?
        Senator Udall. Yes?
        Mr. Maryboy. The former President, the same question was
    raised and he refused to waive the sovereign immunity if there
    is any wrongdoing to the trust fund. Furthermore, there is a
    legal opinion that was drafted by the former Attorney General
    which is Lewiston Atocci, telling the Navajo Nation that this
    is something that the Utah Navajos can do themselves.
        And on top of that, I think we have capable and able
    educated students, young men, that have been looking for jobs
    elsewhere for the longest time, and are able to do this as
    well. We have 67.5 percent which is already going into the
    Navajo Nation, which we hardly or don't see. And outside the
    wells, 100 percent of that is going to the Navajo Nation we
    hardly see or don't see.
        So we have our own independent medical facilities and we
    have been doing things on our own for so long.
        Senator Udall. Well, I very much appreciate both of your
    answers and at this point I think the best thing from my
    perspective is submit some additional questions for the record
    for you to answer outside of the hearing, and then we will be
    able to see everything fully in the record and work with both
    of you on this issue.
        Mr. Chairman, I want to just thank you very much. I realize
    I went way over and thank you for your courtesies. This has
    been a long hearing, but I think it has been an important one.
        And I would thank all of the witnesses here today. I think
    you have made an excellent case in your testimony and you have
    given us a lot to think about. And Chairman Akaka has been very
    aggressive about moving the agenda on bills. And I think, once
    again, we have had a very good hearing day here.
        Thank you very much.
        The Chairman. Thank you very much, Senator Udall, for your
    questions and your cooperation here.
        I want to add my thanks to all of you, my warm mahalo thank
    you very much to all the witnesses in today's hearing. I do
    have questions for you that I will defer and place in the
    record for you. The record will be open for two weeks so other
    Members may add questions as they have them and concerns that
    they can communicate with you.
        The whole effort here is to try to work together and
    resolve some of these issues that have been pending these years
    and try to resolve them at this point in time.
        I want to also thank the Administration for providing their
    views on these bills, and especially I want to thank the Tribal
    representatives and the affected parties who are here. It is
    very important for the Committee to hear from all of you, and
    that is what I am trying to do, to give more of you an
    opportunity to let us know how you feel about these issues.
        And I would tell you thank you so much for adding to that
    and we will continue to do this with other issues as well, but
    ask you to please work closely with us, with the Committee and
    also with the Administration. In some cases, communication is a
    problem and we will continue to work on that as well and try to
    improve that, but we can do it only if we work together and it
    is happening.
        Again, I want to thank you for all of this.
        The hearing is adjourned.
        [Whereupon, at 5:12 p.m., the Committee was adjourned.]

                                A P P E N D I X

        Prepared Statement of Hon. Max Baucus, U.S. Senator from Montana

        Chairman Akaka, thank you for holding this hearing on an extremely
    important bill.
        A wise man from Indian Country once said, ``I do not think the
    measure of a civilization is how tall its buildings of concrete are but
    rather how well its people have learned to relate to their environment
    and fellow man.'' This bill speaks to both lessons.
        The Blackfeet Water Rights Settlement Act is a critical step in two
    decades of negotiations between the Blackfeet Nation, the State of
    Montana, and the U.S. The bill ratifies the water rights compact with
    the Blackfeet Nation. It confirms that the United States is a nation
    that honors its commitments to all its citizens, including those who
    belong to Tribal Nations.
        The Blackfeet people call the mountains of their homeland the
    ``backbone of the world.'' Yet even the strongest back will bend
    without water. The backbone of the world is at the same time a
    wellspring. It is this crucial resource that makes the high plains
    habitable, and it is this crucial resource before us today. Water is
    critical for the variety of land uses that occur on the reservation:
    farming, ranching, timber, oil and gas development, and tourism. These
    activities also harken back to the efforts of our recently departed
    friend Elouise Cobell, who forced a long-standing resolution to the
    payments and royalties of these activities.
        In the same spirit as Eloise's legacy, the creation of the
    Blackfeet Reservation a century and a half ago implied a commitment on
    the part of the United States to reserve sufficient water to satisfy
    both present and future needs of a Tribe. With this hearing, we are
    taking the next step on the slow march toward fulfilling that
    commitment.
        By ratifying this compact, Congress will both establish the federal
    reserved water rights of the Tribe and authorize funds to construct the
    infrastructure necessary to make the water available for use. This
    infrastructure includes rehabilitation of the Blackfeet Irrigation
    Project and construction of other water projects. It also mitigates the
    impacts of the Tribe's water rights on current non-tribal water users.
    The Blackfeet Water Compact has already been ratified by the State of
    Montana. As this Committee knows well, the obligation is now on
    Congress to complete the settlement.
        Four out of seven tribal water compacts in Montana have already
    been ratified by Congress. I look forward to diligent work with the
    other tribes to complete theirs. The wheel is turning, and every
    compact will be addressed. I am confident, for instance, that any
    overlapping claims in this bill with the Gros Ventre and Assiniboine
    Tribes' Milk River allocation are resolvable.
        I look forward to cooperating immediately with the Obama
    Administration, the Tribe, the state, and other stakeholders to
    strengthen the bill in order to move forward. The Blackfeet have a
    bright future, and it will be brighter still with this settlement.
                                     ______

     Prepared Statement of Hon. Jonathan Nez, Vice Chairperson, Budget and
                    Finance Committee, Navajo Nation Council

                                     ______

       Prepared Statement of Hon. Tracy ``Ching'' King, President, Fort
                    Belknap Indian Community Tribal Council

                                     ______

       Prepared Statement of Susie Philemon, Member, Navajo Tribe, Aneth
                                    Chapter

        We strongly feel that Senate bill 1327 should be constructed and
    enacted with these amendments for the following reasons:

        1. Massive drilling and exploration for oil and gas had devastated
    our Aneth community, livelihood and health.
        2. Fifty-four (54) years of oil and gas extraction had polluted and
    contaminated our surface and underground fresh drinking water. Nearly
    all natural springs and artesian wells in Aneth Greater Oil Field are
    unsafe for human consumption therefore many families still haul
    drinking water from border towns, 25 to 80 miles away.
        3. Half of the land area in Aneth community is impacted and ruined
    due to clearing of natural vegetation for drilling sites, network of
    roads, oil pits and holding trances and exposed pipelines. Drilling
    site constructed every \1/4\ of miles apart throughout Aneth community.
        4. Miles of high powered electricity lines criss-crossing Aneth
    land to operate every oil pumps to 1,000 wells. Pipelines are
    everywhere as well, some unused but still buried underneath the ground.
        5. Pollution, contamination and land damaged at this multitude had
    impacted the health of Aneth residents.
        6. Navajo Nation, Utah State, and federal government has
    consistently ignored and has offered no protection, relief, or solution
    to the people's health and devastation of our community. In fact Navajo
    Tribal government designated Aneth community as a ``sacrificial area.''
        7. Despite enormous wealth and revenues from oil, aneth community
    has no stable economy that would offer decent living. There are only
    two convenience stores, high price of gasoline which high than the
    national average, potholes of one central paved road and many families
    are still lack modern conveniences of electricity and indoor plumbing.
        8. For over fifty (50) years, Navajo Nation had flourished on Aneth
    oil wealth but they never gave serious thought to the problems or to
    work with us to our desire to grow as a community.
        9. Aneth area is still open market for drilling which current
    tribal administration is strongly advocating for it.
        10.We like to have Indian Senate Committee to consider the revision
    of the Lease Agreement within Aneth Greater Oil Field.

            Report No. 91-10 to Utah State Legislature--November 1991 has
            been retained in Committee files.
                                     ______