[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. *
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    * A copy of the information referred to has been retained in 
Committee files.
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    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.

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    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.
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