[Senate Hearing 115-179]
[From the U.S. Government Publishing Office]
S. Hrg. 115-179
S. 664 AND S. 1770
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HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 6, 2017
__________
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COMMITTEE ON INDIAN AFFAIRS
JOHN HOEVEN, North Dakota, Chairman
TOM UDALL, New Mexico, Vice Chairman
JOHN BARRASSO, Wyoming MARIA CANTWELL, Washington
JOHN McCAIN, Arizona JON TESTER, Montana,
LISA MURKOWSKI, Alaska AL FRANKEN, Minnesota
JAMES LANKFORD, Oklahoma BRIAN SCHATZ, Hawaii
STEVE DAINES, Montana HEIDI HEITKAMP, North Dakota
MIKE CRAPO, Idaho CATHERINE CORTEZ MASTO, Nevada
JERRY MORAN, Kansas
T. Michael Andrews, Majority Staff Director and Chief Counsel
Jennifer Romero, Minority Staff Director and Chief Counsel
C O N T E N T S
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Page
Hearing held on December 6, 2017................................. 1
Statement of Senator Flake....................................... 4
Prepared statement........................................... 5
Statement of Senator Hatch....................................... 3
Statement of Senator Hoeven...................................... 1
Statement of Senator Udall....................................... 2
Prepared statement........................................... 2
Witnesses
Begaye, Hon. Russell, President, Navajo Nation................... 7
Prepared statement........................................... 8
Buschatzke, Thomas, Director, Arizona Department of Water
Resources...................................................... 25
Prepared statement........................................... 26
Clarke, Hon. Damon, Chairman, Hualapai Nation.................... 17
Prepared statement........................................... 17
Cox, Hon. Spencer J., Lieutenant Governor, State of Utah......... 24
Prepared statement........................................... 24
Mikkelsen, Alan, Deputy Commissioner, Bureau of Reclamation, U.S.
Department of the Interior..................................... 12
Prepared statement........................................... 12
Appendix
Bennett III, Alfred, Shiprock/Northern Agency, Navajo Nation,
prepared statement............................................. 40
Kalt, Prof. Joseph P., Co-Director, The Harvard Project on
American Indian Economic Development, John F. Kennedy School of
Government, Harvard University, prepared statement............. 37
Response to written questions submitted to Alan Mikkelsen by:
Hon. Catherine Cortez Masto.................................. 43
Hon. Tom Udall............................................... 41
Valencia, Hon. Robert, Chairman, Pascua Yaqui Tribe, letter...... 40
S. 664 AND S. 1770
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WEDNESDAY, DECEMBER 6, 2017
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:50 p.m. in room
628, Dirksen Senate Office Building, Hon. John Hoeven,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN HOEVEN,
U.S. SENATOR FROM NORTH DAKOTA
The Chairman. Good afternoon. I call this hearing to order.
I want to thank our witnesses for being here today.
Before we begin, I also want to extend my sincerest
condolences to the Navajo Nation and to President Begaye, who
is testifying before us today, on the recent loss of Navajo
Nation Code Talker, George B. Willie, Sr.
Mr. Willie served in the Marine Corps with the 2nd Marine
Division. His bravery and sacrifices, and that of all code
talkers, was absolutely invaluable in securing freedom and
victory during World Wars I and II.
On a personal note, my dad was a Marine. I can remember the
movie on the code talkers. As a matter of fact, a friend of
mine growing up, a fellow by the name of John Rice, I think,
wrote the screenplay for that amazing, amazing movie about the
code talkers of World War II.
Certainly we remember and honor Mr. Willie's service and
life today.
With that, this Committee will receive testimony on two
Indian water rights settlement bills, S. 664 and S. 1770.
In the early 1900s, the Supreme Court paved the way for
Indian tribes to settle their water rights in the case of
Winters v. United States. Since then, only a handful of the
Indian tribes have settled their claims for water rights. Many
more claims still need to be addressed.
S. 664, the Navajo Utah Water Rights Settlement Act of 2017
is intended to resolve claims between the Navajo Nation and the
State of Utah regarding water allocation in the San Juan River.
The bill would authorize over $210 million for approved
water development projects for the Navajo Nation and also would
allocate 81,500 acre feet per year of water from the San Juan
River.
S. 1770, the Hualapai Tribe Water Rights Settlement Act of
2017 would resolve the claims of the Hualapai Nation to water
in the Colorado River Basin. The bill would authorize
approximately $173.5 million for water development projects and
reallocate 4,000 acre feet per year of water from the Central
Arizona Project to the tribe.
A lot of stakeholders have given their input on these bills
and we appreciate our witnesses being here today to testify on
them.
Before turning to Senator Flake, I will turn to our Vice
Chairman, Senator Udall, for his opening remarks.
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you so much, Mr. Chairman.
First of all, let me recognize President Begaye who is here
from the Navajo Nation. The Navajo Nation is the largest tribe
in the Nation and overlaps into three States. He is one of the
great leaders in Indian Country. I know the Senators who serve
in those three States always respect having his point of view.
It is wonderful to have you here today, President Begaye
and all your distinguished people here with you. I know we also
have two Navajo Council delegates here with you.
Let me also echo what the Chairman has said regarding
condolences for George Willie, one of the great code talkers.
My father also served in World War II and talked a lot about
the code talkers and the many Navajo code talkers he met during
his life. It is a sad occasion when we have the passing of a
code talker.
With that, because we have votes fast approaching and we
want to get to questions before we have to get over there and
vote, I am going to ask the Chairman to put my opening
statement in the record.
The Chairman. Without objection.
[The prepared statement of Senator Udall follows:]
Prepared Statement of Hon. Tom Udall, U.S. Senator from New Mexico
Thank you, Chairman Hoeven, for calling today's legislative
hearing. I'd first like to acknowledge and welcome President Begaye of
the Navajo Nation. President Begaye is no stranger to this Committee.
He is a strong advocate for the Navajo people. And I welcome his
valuable input on behalf of the Navajo Nation.
I'm glad that we have the opportunity to discuss the specifics of
the bills we're considering today . . . but I'd also like to underscore
the importance of Indian water rights settlements generally.
Indian water settlements are critically important--not only to
fulfilling the United States' fiduciary obligations to tribes, but also
for the long-term economic vitality of the surrounding communities.
This is especially true for my home state of New Mexico and across the
west where water is the lifeblood of many communities, both Indian and
non-Indian.
I often say that western water has a 19th century legal framework--
with 20th century infrastructure--and 21st century pressures of
increasing demand and dwindling resources due to climate change.
Our long-term water supply and consumption are out of balance--even
with current conservation efforts. Every year brings a new ``warmest
year on record'' forecast and with it increased water insecurity across
the arid west.
We must work together to tackle these big challenges. Collectively,
we must step up our efforts to combat climate change as we plan for a
changing planet and what it means for our future water supplies.
I can go on about the threat of severe droughts, decreased
snowpack, and increasing wildfire threats that ravage our precious
watersheds.
Instead, I would simply like to stress that we need more
collaboration and less litigation when it comes managing water in the
21st century.
Indian water rights settlements are a perfect example of the
benefits of collaboration over litigation. These settlements fund vital
water infrastructure for communities that may have gone decades without
adequate sources of water . . . while also providing certainty and
fostering cooperation within and among communities and all water
stakeholders.
It is my sincere hope that the Department of the Interior
prioritizes the management, negotiation and implementation of Indian
Water Settlements now and into the future.
For my part, I will work with my Senate colleagues to ensure that
Congress fulfills its promise. And makes adequate funding available for
these settlements. I'm particularly interested in exploring alternative
funding mechanisms for future Indian water settlements, like extending
the Reclamation Water Settlements Fund established in the Omnibus
Public Lands Management Act of 2009.
This could help provide some certainty in our commitment to work
collaboratively on future Indian water rights settlements.
Turning to the bills themselves, I appreciate the sponsors' efforts
to bring these bills forward. But have some questions on the specifics.
I look forward to our witnesses' testimonies, which will hopefully
provide clarity on potential impacts to tribes in New Mexico and
Arizona.
Again, thank you, Mr. Chairman, for calling this hearing. I yield
back.
The Chairman. With that, I would turn to our President Pro
Tem, Senator Hatch.
STATEMENT OF HON. ORRIN HATCH, PRESIDENT PRO TEMPORE, U.S.
SENATE
Senator Hatch. Thank you so much, Mr. Chairman, for the
opportunity to share my thoughts with the Committee.
I am here today to speak in support of the Navajo Utah
Water Rights Settlement Act of 2017. In doing so, I would like
to introduce two men who were instrumental in making this
agreement a reality: the Lieutenant Governor of my home State
of Utah, Spencer Cox and the President of the Navajo Nation,
Russell Begaye. I am proud of both of you.
These men are good friends who have kindly made the trip to
Washington to provide testimony and speak to the merits of the
legislation before us. I am proud to be able to say a few words
about both of them.
The Committee should know that the State of Utah,
represented by Lieutenant Governor Cox, and the Navajo Nation,
represented by President Begaye, has spent over 13 years
formalizing a negotiated settlement over Navajo water rights
claims on the Colorado River.
Both parties invested significant time and resources on
this issue because water rights settlements are critically
important in many western States, especially in Utah. As
everyone here can appreciate, reaching agreement on water
settlements is extremely difficult, so I applaud our witnesses
today and their hard work in helping us reach the settlement
outlined in my legislation.
My bill would settle the water rights claims of the Navajo
Nation and the United States within the State of Utah by
providing a permanent source of water for the Navajo Nation in
Utah and a water settlement fund to be used for the
construction of drinking water infrastructure on the Navajo
reservation.
In consideration for this water and funding, the Navajo
Nation will waive its water-related claims against the United
States and Utah. Importantly, this will provide both Navajo and
non-Native Americans citizens in the Upper Colorado River Basin
and Utah with certainty regarding their respective water rights
that will allow them to plan for their futures.
It should come as no surprise that the State of Utah and
the Navajo Nation strongly support this settlement.
Mr. Chairman, as you know, water settlement negotiations
are high stakes, take years to complete and often involve
contentious issues. I am appreciative that you are willing to
face up to these issues and handle them.
These negotiations can only be successful when the
participants are dedicated to the cause, act in good faith and
show they are willing to stand up for the people they
represent. Lieutenant Governor Cox and President Begaye have
proven to be valuable partners in the Utah-Navajo settlement
discussions.
Both are committed to moving the Utah-Navajo settlement
forward and working with the Federal Government to resolve any
outstanding issues. They are eager to secure benefits for the
citizens both of the Navajo Nation and the State of Utah. Their
leadership has been invaluable in advancing the settlement
negotiations. I personally am confident they will continue to
push the settlement forward until the job is done.
I am honored to introduce these two wonderful men, these
two witnesses to the Committee, and look forward to working
with all involved stakeholders who share a common goal of
enacting a mutually supportive settlement.
Thank you for allowing me this opportunity to say these few
words. I wish you the best as the leadership of the Committee.
I appreciate the work you are doing.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator. Thank you for being with
us today.
Senator Flake.
STATEMENT OF HON. JEFF FLAKE,
U.S. SENATOR FROM ARIZONA
Senator Flake. Thank you, Mr. Chairman.
Thank you all for being here. I especially want to welcome
Dr. Clarke of the Hualapai Tribe and also Tom Buschatzke, the
director of the Arizona Department of Water Resources.
Because we are in such a rush, I will ask unanimous consent
to have my opening statement included as part of the record.
I described, in a similar hearing last year, the importance
of this settlement, both for the tribe and for those outside of
the reservation in the region. This is critically important to
have some surety moving ahead in terms of the disposition of
Colorado River water and the settlement claims of the Hualapai.
It is also great to have Russell Begaye here from the
Navajo Nation as well.
I welcome all of you and look forward to the questions and
answers.
I would also ask unanimous consent to submit as part of the
record some statements in support from Mohave County, as well
as some other organizations.
The Chairman. Without objection.
Senator Flake. Thank you.
Prepared Statement of Hon. Jeff Flake, U.S. Senator From Arizona
Mr. Chairman, Mr. Vice Chairman, I appreciate you holding this
hearing on S. 1770, The Hualapai Tribe Water Rights Settlement Act.
I would also like to welcome the Hualapai Tribe's Chairman, Dr.
Clarke, and the Director of the Arizona Department of Water Resources,
Tom Buschatzke and thank them for their appearances before the
Committee today.
This is a widely supported settlement and I am pleased to see
representatives from other parties to this settlement, the State of
Arizona, the Central Arizona Water Conservation District, the Salt
River Project, and the Freeport Minerals Corporation here in support of
this settlement.
I also ask that the unanimous resolution of support from Mohave
County be included in the hearing record.
[The information referred to follows:]
RESOLUTION NO. 2017-063
A RESOLUTION CONVEYING THE UNANIMOUS SUPPORT OF THE MOHAVE COUNTY BOARD
OF SUPERVISORS FOR THE HUALAPAI WATER SETTLEMENT AND URGING SENATOR
FLAKE, SENATOR MCCAIN AND CONGRESSMAN GOSAR AND THE ENTIRE ARIZONA
CONGRESSIONAL DELEGATION TO REINTRODUCE AND PURSUE THE PASSAGE OF S.
3300 ORIGINALLY INTRODUCED BY SENATORS FLAKE AND MCCAIN IN 2016
WHEREAS, the Board of Supervisors met in Regular Session this 15th
day of May, 2017; and
WHEREAS, the Hualapai Tribe is a key member and economic driver of
Mohave County; and
WHEREAS, the water settlement they have negotiated with the State
of Arizona as well as other parties represents a responsible and
rational allocation of water for the Hualapai Tribe; and
WHEREAS, the water will allow the Tribe to create hundreds of jobs
for both residents of the Hualapai Reservation and non-reservation
residents of Mohave County.
NOW, THEREFORE, BE IT RESOLVED that the Mohave County Board of
Supervisors conveys its support of this water settlement and urges
Senator Flake, Senator McCain, Congressman Gosar and the entire Arizona
Congressional Delegation to reintroduce and pursue passage of S. 3300,
originally introduced by Senators Flake and McCain in 2016.
PASSED, APPROVED and ADOPTED this 15th day of May, 2017.
MOHAVE COUNTY BOARD OF SUPERVISORS
Gary Watson, Chairman
ATTEST:
Ginny Anderson, Clerk of the Board
This is an important piece of legislation for the tribe and
for Arizona.
The roughly one-million-acre reservation is ill-suited for
an economy based on mining, oil and gas, timber, or agriculture
and the Hualapai are building an economy based on one resource
they have in abundance--people wanting to experience the Grand
Canyon and Colorado River.
Without access to additional reliable water supplies, they
are unable to realize its full potential, which includes a
residential community at Grand Canyon West for their tribal
members who work there.
In short, this legislation provides significant but fair
benefits for the Hualapai.
Mr. Chairman, as I described at a similar hearing last
year, this settlement and legislation also have important
benefits outside the reservation and region.
The Hualapai Tribe makes a claim to Colorado River, a
critically important water source for the state that provides
roughly 40 percent of our water supplies.
This fair settlement dedicates 4,000 acre-feet of CAP's
Colorado River water to the tribe in a way that puts them on
par with existing CAP water users.
Because of the priority of the tribe's claims, there is the
possibility that future development of their water rights would
displace current water users in Arizona.
I am pleased to see the Administration's support of the
policy of settling tribal water rights claims, but am somewhat
disappointed with their continued resistance to support this
particular settlement.
The administration's insistence on repeating the last
administration's commitment to endless groundwater studies is
frustrating.
I ask that the 2015 memorandum from Natural Resource
Consulting Engineers documenting the 16 studies of groundwater
on the reservation that have been in the past 65 years be
entered into the hearing record.
[The information referred to follows:]
Natural Resources Consulting Engineers, Inc.
Oakland, CA, December 4, 2015
MEMORANDUM
To: Hualapai Project Files
RE: Previous Groundwater Studies
This memorandum presents a list and brief description of previous
groundwater studies on the Hualapai Reservation. The list of studies is
separated between the deep regional aquifer and the alluvial-volcanic
aquifers.
Deep Regional Aquifer
Description: The deep regional aquifer on the Hualapai Reservation
includes the Redwall-Muav Aquifer (R-Aquifer) and the Tapeats Sandstone
lying at the bottom of the Paleozoic section in contact with
crystalline basement rocks.
Representative well yields from the R-Aquifer range from 5
to 40 gallons per minute, with 150 gallons per minute the
highest reported in the region (Twenter, 1962; Myers, 1987; and
others).
There is some evidence indicating that faults, fractures,
and folds may enhance aquifer properties that can localize
potential for larger well yields; however targeting these
features using surface geophysics is speculative and drilling
costs are very high.
The USGS conducted a hydrogeological study of the
Reservation between 1957 and 1962 (Twenter, 1962). The R-
Aquifer was identified as the most promising aquifer, but
drilling depths were prohibitive.
Several wells were drilled to various depths (mostly
shallow) in the late `60's and `70's by the BLM and the BIA
loosely based on Twenter's recommendations but most were
unsuccessful (Huntoon, 1977).
Several deeper wells were completed on the Hualapai Plateau
in 1992 by the Bureau of Reclamation. One well drilled near the
GCW resort in 1992 targeted the deep regional R-Aquifer. The
well was deepened in 1999 (Watt, 2000). That well (GCW-1)
encountered groundwater only in the Tapeats Sandstone. The
shallower Redwall and Muav Formations were unsaturated. The
well is equipped with an oilfield-type pumping unit but is
currently unused due to low water quality and low yield (15-26
gpm).
NRCE was contracted in 2005 to investigate and evaluate all
possible water supply options for the resort. The preferred
alternative recommended diversion from the Colorado River.
Groundwater development options were judged to be infeasible
for a variety of reasons, but primarily because of their
inability to supply the sustainable yield required by the Grand
Canyon West resort at a reasonable overall project cost.
DOWL (2013) further assessed a few Colorado River
alternatives considered in the NRCE study. Groundwater
development alternatives were judged to be infeasible in this
study for the same reasons as the 2005 study by NRCE.
Alluvial-Volcanic Aquifers
Description: The main alluvial-volcanic aquifers are in the
northern Aubrey Valley around Frazier Wells (eastern part of the
Reservation), Westwater Canyon, Peach Springs-Truxton Wash Valley, and
elsewhere along the southwest flank of the Hualapai Plateau (e.g. Horse
Flat area and the upper Milkweed Canyon). The alluvial-volcanic
aquifers have areal extents that are limited by the valleys and washes
that contain them. The volume of stored groundwater is similarly
limited. Depth to water is generally shallow, typically less than 500
feet below ground level, and well yields of up to 170 gallons per
minute have been reported. Water from these aquifers is generally
acceptable for domestic use.
The Santa Fe Railroad drilled 6 fairly shallow wells within
Peach Springs between 1903 and 1922. The Hualapai Tribe
acquired use of water from the railroad spring-fed water system
between 1931 and 1954. One well near the town is currently
used.
The USGS conducted a study in 1942 to assist location of
prospective sites for development of stock water supply on the
Hualapai Reservation (Peterson, 1942). In addition to a
hydrogeological characterization of the region, the study
inventoried numerous existing wells and stock ponds. Peterson
recommended 18 sites across the Reservation for drill-testing.
N. J. Devlin evaluated the Peach Springs water system in
1973 and considered possibilities for development of additional
water supplies for the town. Devlin recommended further
development of the aquifer contained in the lake beds of
Truxton Valley. Development of other springs and other
exploration areas were judged to have low potential.
The Indian Health Service drilled two wells in Truxton
Valley in 1972 to provide additional water supply for Peach
Springs. A third well was drilled in 1976 by the IHS in Truxton
Valley near the wells drilled in 1972. These wells currently
supply all of the water needs for the town of Peach Springs.
The Bureau of Reclamation drilled an unsuccessful hole into
Cenozoic volcanics near the head of Milkweed Canyon in 1975. A
second successful well in Westwater Canyon alluvium and
volcanics was completed in 1975. This well currently provides
most of the water to Grand Canyon West via a 30-mile pipeline.
A well drilled in the Frazier Wells area in the eastern
part of the Reservation serves a fish-rearing facility. An
additional two boreholes were completed in the shallow alluvial
aquifer in the Frazer Wells area in an effort by the Tribe to
develop additional groundwater supply. Both wells were dry and
were abandoned.
Regional hydrogeological mapping by Richard Young (State
University of New York at Geneseo) focused on the Tertiary
volcano-sedimentary aquifer in the area of Westwater Canyon
near the well drilled by the Bureau of Reclamation (Young, R.
A., 1987, 1991, 1992, 2007). Stantec (2009) estimated the safe
yield of this aquifer to be approximately 600 afy. Further
development of this aquifer is prohibited by tribal policy as
it would likely reduce spring flow (considered to be a cultural
resource) in its discharge area.
NRCE conducted an evaluation of the groundwater supply for
the town of Peach Springs in 2011. That study included an
inventory of wells in the sub-regional area, a comprehensive
review of the regional geology, an evaluation of hydrologically
attractive areas for development of additional groundwater
supplies in the southern part of the Reservation, and made some
specific recommendations for exploratory evaluation of both the
R-Aquifer and alluvialvolcanic aquifers. The adequacy of
natural aquifer recharge to support existing and future water
needs was also assessed.
Furthermore, I am frustrated that this administration
continues to overlook the significant contributions by the
tribe, Freeport Minerals, and the State.
The non-federal contributions to this settlement are at
least as significant as recently completed and currently
pending settlements, yet the administration's position is that
it is still not enough.
This legislation is an important step that the State of
Arizona needs to take, both for the sake of the Hualapai Tribe
and for all of us in Arizona who depend on Colorado River water
I look forward to working with the tribe, the state
parties, and the administration to find a way forward for this
settlement.
Thank you.
The Chairman. Thank you, Senator Flake.
With that, we will turn to the witnesses. I understand at
this point, the witnesses have agreed to forego their opening
statements in the interest of time because of the votes on the
floor. However, I would ask if there is anything briefly that
the witnesses want to put on the record in the form of an
opening statement? I would offer this opportunity.
Chairman Begaye.
STATEMENT OF HON. RUSSELL BEGAYE, PRESIDENT, NAVAJO NATION
Mr. Begaye. Thank you, Chairman Hoeven, Senator Udall,
Senator Flake and members of the Committee.
I want to really say thank you to the State of Utah for
partnering and collaborating with the Navajo Nation to make
this come about. This has been a very unusual relationship and
partnership in making this come about.
I want to publicly say, I appreciate the leadership from
the Senators and members of Congress, from the Governor and
members of the legislative body in the State of Utah for coming
alongside Navajo and making this possible. I just want to
express my appreciation in that regard.
Thank you.
[The prepared statement of Mr. Begaye follows:]
Prepared Statement of Hon. Russell Begaye, President, Navajo Nation
Ya'at'eeh Chairman Hoeven, Vice-Chairman Udall, and members of the
Committee. My name is Russell Begaye. I am the elected President of the
Navajo Nation. Thank you for this opportunity to present testimony on
S. 664, the Navajo Utah Water Rights Settlement Act. I also wish to
convey the gratitude of the Navajo Nation to Senator Hatch for his
commitment to improving the lives of the Navajo People and for his
leadership in sponsoring this important legislation.
The Navajo Utah Water Rights Settlement Act accomplishes two
things. First, the Act would authorize the Secretary of the Interior to
execute, on behalf of the United States, the Navajo Utah Water Rights
Settlement Agreement. The Settlement Agreement was approved by the
Navajo Nation Council in January 2016. It reflects over a decade of
negotiations involving officials from the Navajo Nation, State of Utah,
and since 2013, the federal government. Second, the Act provides
funding for water supply infrastructure intended to address short-term
and long-term water development needs in the Utah portion of the Navajo
Nation. The challenges of providing access to water on the Navajo
Reservation in Utah are monumental and the conditions are dire--more
than 40 percent of Navajo households lack running water or adequate
sanitation in their homes. In some cases, such as in the community of
Oljato on the Arizona-Utah border, a single spigot on a desolate road,
miles from any residence, serves 900 people.
As this Committee is well aware, in the Treaty of 1868, Navajo
leaders pledged their honor to keep peace with the United States and,
in return, the United States pledged to assist the Navajo People to
create a permanent homeland on their reservation lands. The original
Navajo Reservation on the border of present day Arizona and New Mexico
was enlarged numerous times both by executive order and Congressional
act to encompass lands where Navajos were already living. Land in Utah
was added to the Reservation by executive orders in 1884 and 1905, and
additional acreage was added by the Act of March 1, 1933, 47 Stat.
1418. These Utah Reservation lands would be valueless without a water
supply. In the arid West, it is clear--no lands can be a permanent
homeland without an adequate supply of water, especially potable water.
The Navajo Nation will secure its water rights either through
litigation or through settlement. As this testimony seeks to make
clear, the advantages of settlement in this case far outweigh the
costs, risks, and policy disadvantages of divisive litigation.
I. The Settlement Agreement
The Settlement would result in a win-win for the Navajo Nation and
the State of Utah by quantifying the Navajo Nation's water rights in
the Upper Basin of the Colorado River in Utah in a manner that will
benefit not only the State of Utah and the Navajo Nation, but the
federal government and all water users in the Colorado River basin.
Without a negotiated settlement, conflict over these water rights could
easily devolve into protracted, expensive, and divisive litigation.
Choosing a more conciliatory and productive path, the State of Utah and
the Navajo Nation devoted years to developing an agreement that would
protect existing uses while at the same time guarantee the Navajo
Nation the firm supply of drinking water we need for our reservation to
function as a permanent homeland. We are grateful to Utah Governor Gary
Herbert, Lt. Governor Spencer Cox, their staff and advisors for their
steadfast work to make this settlement a reality.
Of course, Indian water rights settlements require the involvement
and approval of the federal trustee. In February of 2013, Interior
Secretary Ken Salazar appointed a federal negotiation team to
participate in the resolution of the Navajo Nation's claims in Utah.
The Navajo Nation has been working with the federal team to address
their concerns about the terms of the settlement and to develop
information required by the Criteria and Procedures for the
Participation of the Federal Government in Negotiations for the
Settlement of Indian Water Rights Claims, 55 FR 9223 (Mar. 12, 1990).
The Nation is particularly appreciative of the work that the United
States Bureau of Reclamation (Reclamation) has undertaken at the behest
of the federal team to evaluate the water development projects analyzed
by the Nation in determining the dollar amount of the settlement Fund.
For example, Reclamation's Design, Estimating and Construction Advisory
Team Review Report: Navajo Nation/State of Utah Water Rights Settlement
Projects, a report completed in September 2013, made findings and
recommendations that the Navajo Nation Department of Water Resources
(NNDWR) has used to determine the best way to bring water to Navajo
people in Utah.
A. Quantifying the Nation's Water Rights in Utah
Turning first to the quantification of the Navajo Nation's water
rights in Utah, this settlement is a fair and comprehensive resolution
to problems that affect not only the Navajo Nation, but also non-
Indians in Utah and in other parts of the Colorado River Basin as well
as federal interests such as Reclamation projects and endangered
species. The work that has gone into this settlement has resulted in an
agreement that is just and equitable to all parties.
As is typically the case in an Indian water rights settlement, the
Navajo Nation would agree through this settlement to forbear use of
senior water rights that the Nation would likely be able to establish
in litigation. Less typically, the Navajo Nation has worked in
partnership with the State of Utah to develop an agreement that will
maintain the delicate equilibrium that is the Law of the River. The
Navajo Nation recognizes that the San Juan River, the source of its
Utah water rights, is part of the Colorado River system. The Colorado
River is the subject of several interstate Compacts and has been a
touchstone for some of the most complex water litigation of the last
century. The settlement is constructed to avoid further divisive
litigation, including litigation over the applicability of those
compacts to the reserved water rights of the Navajo Nation.
Under the Settlement Agreement, the Navajo Nation has the right to
deplete 81,500 acre-feet per year of surface and groundwater from the
Upper Colorado River Basin in Utah. The Nation further has the right to
divert and store this water right at a rate of 435 cubic feet per
second. The Nation would also secure the ability to market its water
rights to the same extent as other Utah water rights holders. The bulk
of the Nation's Utah water rights would have a priority date of 1884,
when the Utah portion of the Reservation was first set aside for the
Navajo people. Finally, the Settlement Agreement provides for a water
development fund to be used for water infrastructure development to
allow the Navajo Nation to put these water rights to use.
The subordination provisions in the agreement are of substantial
benefit to the non-Indians in Utah. Non-Indian water development in the
San Juan River Basin has been extensive, especially in comparison to
development on the Navajo Reservation. The records of the Utah State
Engineer identify 1,510 state law based permits in the San Juan River
Basin in Utah for water rights, with major surface diversions totaling
more than 158,000 acre-feet per year. In the Navajo Utah settlement, as
in virtually every Indian water rights settlement, the State sought to
protect existing non-Indian uses from impairment by potentially senior
Indian water rights. This result is possible only by the Navajo Nation
agreeing to subordinate it water rights to existing non-Indian water
users. As a result of this subordination, it is estimated that existing
and proposed Navajo uses supplied by infrastructure constructed with
the Fund will experience shortages between 1.8 percent and 11.6 percent
of the time, depending on how Navajo Dam is operated upstream. When the
Navajo Nation puts its entire 81,500 acre-foot per year right to use,
the subordination of the Nation's water right to non-Indian uses could
result in shortages for the Nation 11 percent to 46 percent of the
time.
B. Value of the Settlement
I understand that the Administration and this Committee have a keen
interest in ensuring that water rights settlements, including this one,
make sense for the United States and for the American taxpayer. I will
address this concern briefly in this testimony, and I will be glad to
provide additional follow up information to fully address any concerns
expressed by members of Congress or the Administration's Office of
Management and Budget. There are various ways of calculating the value
of the settlement, and I will highlight two of them today.
First, the Navajo Nation will forbear the use of water that we
would claim in litigation and to which we claim the senior right. Using
conservative estimates of the value of water in this water-stressed
basin, at $3,000 to $10,000 per acre-foot for a perpetual supply of
Colorado River water, the value of the water forborne by the Navajo
Nation is in the range of $250 million to more than $850 million. These
numbers provide clear evidence that the roughly $211 million
authorization of appropriations in the bill as introduced is an
excellent value for American taxpayers.
A second approach to determining the value of this settlement is to
look more closely at the potential liability of the United States, and
the litigation and related costs that would be anticipated in the
absence of settlement. The United States, as trustee for the Navajo
Nation, has a responsibility to protect the Nation's trust resources.
In quantifying the Nation's reserved water rights claims within the
State of Utah, the settlement resolves potential claims that could be
brought against the United States for failure to develop and protect
Navajo water resources. These claims include the failure of the United
States to ensure that the Upper Colorado River Basin Compact (UCRBC)
does not limit Navajo uses of water in Utah.
In the Settlement Agreement, the Navajo Nation made concessions to
protect the State of Utah in two distinct ways. First, the Nation
agreed to reduce the extent of its water right claim to enable Utah to
stay within its Upper Colorado River Basin apportionment. Second, the
Nation agreed not to make calls against upstream water users on the San
Juan River in Colorado and New Mexico because the UCRBC does not
allocate San Juan River water to Utah. By agreeing not to make calls
against upstream water users, the Navajo Nation sidesteps the
significant question of the effect of the interstate compacts on Indian
tribes, and avoids the threat of litigation that could jeopardize the
Law of the River.
The costs of litigation of these issues would be incredibly high
for all sides. The value of this settlement, when viewed as necessary
to maintain existing interstate allocations of the Colorado River, is
practically incalculable, and when this value (of keeping the
settlement within Utah's Upper Colorado River Basin Compact
apportionment and avoiding the displacement of existing water rights)
is added to the value of the water rights discussed above, enactment of
S. 664 is undoubtedly very much in the interest of all taxpayers.
Finally, the forgoing discussion of the return on investment from this
settlement does not take into account the programmatic and policy
priorities that would be fulfilled with the funding that this
settlement proposes for water infrastructure development.
II. Water Development Fund
The settlement includes a water development fund (Fund). Funding
for water management and delivery infrastructure included in this
settlement would improve living conditions for the Nation's citizens.
The economic and human costs of hauling water--which consists of
conveying water in non-sterile containers obtained from water sources
ranging from relatively clean watering points to livestock storage
facilities, often over very long distances--are significant. As the
Navajo Nation's population increases, the need for water delivery and
treatment infrastructure intensifies. S. 664 would establish two funds,
one for planning, design and construction and the other for operation
and maintenance. The bill authorizes the appropriation of approximately
$210 million dollars to these two funds. The State of Utah will
contribute $8 million dollars to the funds for planning, design, and
construction. The United States is also authorized to appropriate $1
million for the hydrographic surveys that are needed to complete the
quantification of Navajo water rights.
Unfortunately, as a result of the hurricanes that wrought havoc in
Houston, Florida, and Puerto Rico this fall, the terrible economic and
social costs associated with the lack of safe water supplies were
thrown into vivid relief for many Americans. Whereas less than 1
percent of Americans overall live in areas without safe water supply
and waste disposal facilities, the corresponding rate on the Navajo
Reservation in Utah has been estimated to be at least 40 percent.
Investment in basic water delivery infrastructure is essential for the
Navajo people, as it is for all Americans; in the absence of the
investment in human sustenance this settlement represents, more Navajo
families will be consigned to living without running water. One study
commissioned by the Nation found that while the Navajo Tribal Utility
Authority, a Navajo government enterprise, delivers about 400 acre-feet
of water per year for municipal and domestic use, meeting the projected
water needs by the year 2050 would require more than a fifteen-fold
increase, to about 6,700 acre-feet/year. Significant investments must
be made now if the Nation has any chance of meeting these future
demands for water.
Safe drinking water is a basic human need, and the consequences of
lack of access to reliable potable water supplies can be staggering.
The Indian Health Service (IHS) reports that for every dollar the
agency spends on home sanitation facilities, at least a twentyfold
return in health benefits is achieved. See https://
www.ihs.govinewsroom/index.cfm/factsheets/safewater/. Accordingly, the
water infrastructure the Nation plans to construct with funding
provided in this settlement will yield important benefits that will
conserve federal health care dollars while sparing people the economic
and human costs of illness directly attributable to contaminated water
and lack of adequate sanitation facilities.
In 2014, NNDWR produced a ``White Paper'' proposing a series of
water development projects to address the water needs of Navajo
communities in Utah. The White Paper was the culmination of work
performed by NNDWR, the engineering firm of Brown & Caldwell, and
Reclamation assessing alternatives methods that might be employed to
meet Navajo water needs. After consideration of all viable
alternatives, the Nation proposed a regional water infrastructure
supply project as the primary method to meet the minimum needs for
drinking water on the Navajo Reservation in Utah. The project as
proposed would rely on groundwater and San Juan River water
conjunctively to most effectively utilize available supplies. In an
attempt to meet water needs in Utah in a comprehensive manner, the
White Paper also proposed a package of smaller developments that would
address long overdue projects on the IHS Sanitation Deficiency List,
address necessary short-term capital improvements, and implement an
agricultural water conservation program. The estimated cost of the
projects included in the White Paper formed the basis for the amount of
the settlement Fund.
The Nation, together with the United States and the State of Utah,
has expended significant time and effort to develop proposed uses of
this funding that will give us the greatest return from the investment.
However, there is flexibility built into the settlement, and once funds
are appropriated under this Act, actual project design, construction,
and management will be the full responsibility of the Navajo Nation.
This Fund-based approach is unique. While other settlements authorize a
federal agency to plan, design and construct water infrastructure
projects, there are several reasons that we think a settlement fund is
the right approach for this settlement. First, the Navajo Nation has an
expert Department of Water Resources with the technical capacity to
manage these kinds of projects and to build them in the most cost-
efficient manner. Second, the water planning studies that have preceded
this settlement make clear that future developments that cannot be
accurately projected now--whether in population size, community
development, water quality, or others--and the Nation needs flexibility
to adapt its water infrastructure plans on an on-going basis. Third,
given the fact that the Navajo Reservation extends into multiple
states, there are potential costs savings in constructing water
projects that may cross-state lines. Fourth, Navajo management of the
funds is consistent with the federal goal of tribal self-determination.
While the Nation is aware that funding associated with this settlement
is limited to use within the boundaries of the State of Utah, the
flexibility to adopt project designs that take advantage of economies
of scale is particularly important for this settlement. In summary, the
Navajo Nation has the institutional capacity to manage these funds
effectively, to adapt to unforeseen developments, and to produce
results demanded by the Navajo people.
However ultimately configured, the projects that the Navajo Nation
plans to undertake with the settlement Fund will make a lasting impact
on the lives of the Navajo people in Utah. Together, a regional water
supply project, coupled with short-term capital improvements and water/
sanitation facilities connecting homes to the water supply project,
though modest in terms of overall need, represent a comprehensive
approach to meet current and future demands. The work on agricultural
water conservation will help Navajo farmers deal proactively with the
risk of water shortage, and allow for the potential leveraging of funds
available from the USDA for water management. The Fund will make
possible projects that will lead to improved water management and water
availability, making the Navajo Reservation in Utah a place where
people can live and work.
Conclusion
I cannot emphasize enough that securing the Nation's water rights,
and building infrastructure to convert paper water rights into wet
water, are the necessary foundation for economic growth. S. 664 is
important legislation that would confirm the settlement of the Nation's
water rights and help build desperately needed water infrastructure.
When I campaigned for President, the need for infrastructure
development was constantly brought up as a priority by my constituents,
the Navajo people. Infrastructure development is one of the Four
Pillars of my administration, together with job creation, and programs
for Navajo veterans, elders and youth. Your assistance in enacting S.
664 into law will help the Navajo people to realize our economic
potential, creating jobs and improving living conditions in a part of
the country that has been ignored for far too long.
Since signing the Treaty of 1868, the Navajo people have taken
their treaty obligations seriously. When the United States needed us,
brave Navajo men and women heeded the call to serve in all branches of
the armed forces. The Navajo Code Talkers used our language to devise
an unbreakable code; there could be no better example of the way the
partnership between the United States and Native peoples strengthens us
all. For my people, fighting to preserve American freedom is also
fighting to preserve the Navajo homeland. The American ideal is not
just an abstraction; it is a place where communities like those within
the Navajo Nation have a chance to develop into viable economies, where
our young people can learn our values, and where our culture can
thrive. We have a saying, to bee iina--water is life; water helps us
live. Without water and a means to get it to our people, we cannot
survive.
This settlement legislation, if enacted, will help the Navajo
Nation to build vital infrastructure and help our next generation to be
our most successful generation yet. We are asking the United States to
fulfill its promises under the Treaty of 1868 to work with us to a
create a viable homeland. We stand ready to work with Congress and the
Administration, together with the State of Utah, to push this
settlement to this finish line and to ensure that it is implemented.
Again, we appreciate Governor Herbert's and Senator Hatch's leadership
and the Committee's attention to this important issue. With your help,
we can secure a bright and prosperous future for the Navajo Nation.
Thank you. Ahehee'.
The Chairman. Thank you, Chairman Begaye.
Mr. Mikkelsen.
STATEMENT OF ALAN MIKKELSEN, DEPUTY COMMISSIONER, BUREAU OF
RECLAMATION, U.S. DEPARTMENT OF THE INTERIOR
Mr. Mikkelsen. Mr. Chairman, I would ask that my opening
statement be submitted for the record.
I would also simply like to note that the department, for
the record, does support Indian water rights settlements,
particularly as an alternative to the protracted and divisive
litigation that often results if we do not do this.
With that, I will forego my opening statement.
[The prepared statement of Mr. Mikkelsen follows:]
Prepared Statement of Alan Mikkelsen, Deputy Commissioner, Bureau of
Reclamation, U.S. Department of the Interior
Good afternoon Chairman Hoeven, Vice Chairman Udall, and Members of
the Committee. My name is Alan Mikkelsen, and I am the Deputy
Commissioner at the Bureau of Reclamation (Reclamation) and Chair of
the Working Group on Indian Water Settlements at the Department of the
Interior (Department). I am pleased to appear before you today to
discuss Indian water rights settlements, a subject I have first-hand
and extensive experience with given my years working and living
throughout the West.
Thank you for the opportunity to provide the Department's position
on S. 1770, the Hualapai Tribe Water Rights Settlement Act of 2017,
which would approve and provide authorizations to carry out the
settlement of certain water right claims of the Hualapai Tribe in
Arizona (Tribe). The Department has significant concerns about the
Federal costs of the settlement, totaling approximately $173.5 million
in 2016 dollars, which we believe may also underestimate its true cost.
In addition, the United States has significant concerns regarding the
overly-broad and unnecessary waiver of federal sovereign immunity in S.
1770. For these, and other reasons, the Department cannot support S.
1770 as introduced, but is eager to work with all of the interested
parties to negotiate a settlement that adheres to the Criteria and
Procedures.
I. Introduction
Before I begin discussing the Hualapai settlement, I want to note
that the Department supports the policy that negotiated Indian water
rights settlements are preferable to protracted and divisive
litigation. Indian water rights settlements have the potential to
resolve long-standing claims to water, provide certainty to water
users, foster cooperation among water users within a watershed, allow
for the development of water infrastructure, promote tribal sovereignty
and self-sufficiency, and improve environmental and health conditions
on reservations. We understand that Congress plays an important role in
approving Indian water rights settlements, especially when they involve
federal spending, the alteration of the Tribe's reserved water rights,
or the waiver of the United States' sovereign immunity, and we stand
ready to work with this Committee and Members of Congress to advance
Indian water rights settlements. The framework the Department follows
to guide the negotiation of Indian water rights settlements, and the
support for legislation to authorize these settlements, includes four
general principles set forth in the Criteria and Procedures published
in 1990. First, settlements must be consistent with the Nation's trust
responsibilities. Second, Indian tribes must receive equivalent
benefits in exchange for the rights they, and the United States as
trustee, release as part of a settlement. Third, Indian tribes must
obtain the ability to realize value from confirmed water rights, which
ensures they do not receive legal rights to water supplies that never
materialize in the delivery of water. Fourth, settlements must contain
an appropriate cost-share by all parties benefiting from the
settlement. In our current budget climate, concerns over federal costs
are an area of particular interest to the Department as we evaluate
Indian water rights settlements.
II. Historical Context
A. The Hualapai Reservation and the Hualapai Tribe
The Hualapai Tribe's aboriginal homeland is located in the Grand
Canyon and plateau region to the south of the Grand Canyon. The Tribe's
main Reservation was established in January 4, 1883 by Executive Order,
and is comprised of approximately 992,462 acres of tribal trust lands
in northwestern Arizona. The tribal headquarters is Peach Springs,
Arizona, near the southern boundary of the Reservation. The northern
boundary of the main Reservation is 108 miles along the Colorado River
in the Grand Canyon. There is also a 60-acre Executive Order
Reservation located in the Big Sandy River Basin, approximately 40
miles south of the main Reservation.
The population of the Reservation is 1,621, of whom 1,353 are
tribal members, according to the 2010 U.S. Census. The total tribal
membership in 2010, including members living off the Reservation, was
2,300. The majority of on-Reservation residents reside in or near Peach
Springs.
The primary sources of employment on the Reservation are
recreation, tourism, and tribal and federal government services. The
Grand Canyon is the primarily source of tourism on the Reservation,
with considerable tourism activities located at the Tribe's tourism
center, Grand Canyon West, and from river rafting in the Colorado
River. The Tribe also owns and operates the Hualapai Lodge, located in
Peach Springs.
In 2007, the Tribe completed Grand Canyon West, which includes the
Skywalk, a horseshoe-shaped glass-bottom walkway that extends out from
the rim of the Grand Canyon. Annual visitation at Grand Canyon West has
steadily increased since its opening, and exceeded one million visitors
for the first time in 2015, making it the primary economic driver on
the Reservation.
B. Water Resources of the Hualapai Reservation
The main Reservation is located primarily in the Colorado River
Basin with a small portion in the Upper Verde River Basin. The majority
of on-Reservation streams are ephemeral. Several springs discharging
from the regional aquifer at the bottom of canyons can provide base-low
for short perennial reaches, which ultimately discharge to the Colorado
River. The largest of these perennial streams are Diamond Creek and
Spencer Creek, with mean annual flows of over 3,700 acre-feet per year
(afy) and 4,600 afy, respectively. The springs that feed these streams
are remotely located in deep canyons and are not practically accessible
for use by the Tribe. Smaller springs on the plateaus provide water for
livestock purposes.
Groundwater resources on the Reservation occur in varying degrees
of magnitude, depending on the type and location of water-bearing
zones. The Department is conducting groundwater studies in an effort to
accurately characterize the groundwater resources on and near the
Reservation.
The major water use on the Reservation occurs in two locations: the
town of Peach Springs and Grand Canyon West. Three wells serve the
Peach Springs public water supply system and are located approximately
6.5 miles southwest of the town. The current level of water use in
Peach Springs is approximately 250 afy. All supply wells produce water
from the Truxton aquifer, an aquifer in the Truxton Valley that extends
off the Reservation. Water for Grand Canyon West is supplied via a
pipeline from a well approximately 30 miles away. Current water use at
Grand Canyon West is 40 afy. Current cumulative water use for the
Reservation is approximately 300 afy.
III. Proposed Hualapai Tribe Settlement Legislation
The Tribe claims water rights in the Colorado, Verde, and Bill
Williams River basins. Negotiations regarding potential settlement of
the Tribe's water rights claims have been ongoing since 2011, when the
United States established a negotiating team to negotiate .a
comprehensive settlement of all the Tribe's water rights within
Arizona. The settlement was divided into two phases; the first phase
addressed reserved water rights to several off-reservation tracts in
the Bill Williams River Basin and resulted in the Bill Williams River
Water Rights Settlement Act of 2014, P.L. 113-223. The second phase,
addressed in S. 1770, covers additional water rights in the Bill
Williams River Basin, as well as the remainder of the Tribe's water
rights in the Colorado River Basin and the Verde River Basin.
S. 1770 would resolve the Tribe's remaining water rights claims in
Arizona; ratify, and confirm the Hualapai Tribe water rights settlement
agreement among the Hualapai Tribe, the United States, the State of
Arizona, and others; and authorize funds to implement the settlement
agreement. The bill would reallocate 4,000 acre-feet of fourth-priority
Central Arizona Project (CAP) non-Indian agriculture priority water to
the Tribe to be used for any purpose on or off the Reservation within
the lower Colorado River basin in Arizona.
S. 1770 authorizes the appropriation of a total of $173,500,000 for
the following purposes:
$134,500,000 to design and construct the Hualapai Water
Project (Project), consisting of approximately 70 miles of
pipeline from the Colorado River to Peach Springs and Grand
Canyon West, two water treatment plants, several pumping
plants, and other appurtenant features with an overall capacity
designed to deliver 3,414 afy;
$32,000,000 for the Hualapai OM&R Trust Account, to be used
by the Tribe for operation, maintenance, and replacement of the
Project;
$5,000,000 for the Secretary of the Interior for operation,
maintenance, and replacement of the Project until such time
that title of the Project is transferred to the Tribe by the
Secretary; and
$2,000,000 for the Secretary to provide technical
assistance to the Tribe, including operation and management
training for the Project.
IV. Department of the Interior Positions on S. 1770
While the Department continues to strongly support Indian water
rights settlements, the Department has significant concerns about S.
1770 and cannot support the legislation as introduced.
The Department is concerned about the scope and size of the Project
given current and projected water uses on the Reservation. In addition,
we believe the cost to construct a 70-mile pipeline from the Colorado
River lifting water over 4,000 feet in elevation will greatly exceed
the costs currently contemplated in S. 1770 and might trigger
significant additional litigation.
The Department believes it should evaluate the water rights, water
availability, and water resource needs of the tribe from a holistic
viewpoint, including information regarding available groundwater
resources. Completing ongoing groundwater studies will inform the
Department's views on the proposed pipeline.
The Criteria and Procedures require us to analyze whether the
settlement ``include[s] nonFederal cost sharing proportionate to the
benefits received by the non-Federal parties.'' We believe that the
State parties can and should contribute a commensurate share of the
cost of the settlement in return for the benefits they will receive. As
an example, the state of Montana, with barely one million residents,
has contributed tens of millions of dollars in appropriated settlement
funds to Montana Indian Water Rights Settlements.
S. 1770 includes an overly broad waiver of sovereign immunity
provision--which allows for suits against the United States by ``[a]ny
landowner or water user in the Verde River Watershed or the Colorado
River basin within the State of Arizona'' and for the interpretation of
previously enacted statutes. This waiver of sovereign immunity is
unnecessary and overly broad and presents a significant concern for the
United States.
S. 1770 also includes several additional provisions that the
Department is concerned about, including an unnecessary reference to 25
USC Section 211, which we believe is of limited application based on
more current statutes; ambiguous settlement fund management language;
and unnecessary obligations placed on the Bureau of Reclamation with
respect to the proposed Project.
As a final matter, the Department must register serious concern
about provisions of S. 1770 and the settlement agreement that prohibit
the Tribe and the United States from objecting to any use of
groundwater outside the boundaries of the Reservation, even if those
uses interfere with acknowledged Federal reserved groundwater rights.
V. Conclusion
The Department recognizes that the Tribe, the State of Arizona, and
the state parties want to achieve a Hualapai water settlement and have
devoted substantial efforts to that goal. The Department shares this
goal and is committed to working with the Tribe and the parties to
reach a final and fair settlement of the Tribe's water rights claims
that adheres to the Criteria and Procedures, and that we can fully
support.
______
Thank you for the opportunity to provide the Department's position
on S. 664, the Navajo Utah Water Rights Settlement Act of 2017, which
would authorize the settlement of water right claims of the Navajo
Nation (Nation) to the portion of its land within the State of Utah.
The Department supports the goals of the settlement, which include
quantifying the reserved water rights attached to the Utah portion of
the Navajo reservation and facilitating the development of essential
municipal water systems that will provide a reliable quantity and
quality water supply for the communities within the Reservation, which
currently lacks the sort of basic services that most Americans take for
granted. The Department is working with the Nation and sponsor of S.
664 to ensure this bill meets these goals while adhering to the
Criteria and Procedures that guide the Department's participation in
Indian water right settlements.
I. Introduction
Before I begin discussing the Navajo Utah settlement, I want to
note that the Department supports the policy that negotiated Indian
water rights settlements are preferable to protracted and divisive
litigation. Indian water rights settlements have the potential to
resolve long-standing claims to water, provide certainty to water
users, foster cooperation among water users within a watershed, allow
for the development of water infrastructure, promote tribal sovereignty
and self-sufficiency, and improve environmental and health conditions
on reservations. We understand that Congress plays an important role in
approving Indian water rights settlements, especially when they involve
federal spending or the waiver of the United States' sovereign
immunity, and we stand ready to work with this Committee and Members of
Congress to advance Indian water rights settlements.
The framework the Department follows to guide the negotiation of
Indian water rights settlements, and the support for legislation to
authorize these settlements, includes four general principals set forth
in the Criteria and Procedures published in 1990. First, settlements
must be consistent with the Nation's trust responsibilities. Second,
Indian tribes must receive equivalent benefits in exchange for the
rights they, and the United States as trustee, release as part of a
settlement. Third, Indian tribes must obtain the ability to realize
value from confirmed water rights. This ensures Tribes do not receive
legal rights to water supplies that never materialize in the delivery
of water. Fourth, settlements must contain an appropriate cost-share by
all parties benefiting from the settlement. In our current budget
climate, concerns over federal costs are an area of particular interest
to the Department as we evaluate Indian water rights settlements.
II. Historical Context
The Navajo Reservation is the largest Indian reservation in the
United States with a current total membership of 300,048, of which
217,609 live on the reservation. The Navajo Reservation has a total
unemployment rate five times the national average, a median household
income of $20,005, and a poverty level of approximately 42 percent. The
Navajo Indian Reservation consists of approximately 26,600 square miles
in Arizona, New Mexico, and Utah. Approximately 1,987 square miles lie
in southeastern Utah and are the focus of this settlement. The current
boundaries of the Navajo Nation Reservation in Utah were established
over a period of time by two Executive Orders and two congressional
Acts between the years of 1884 and 1958. Currently, there are 5,029
Navajo tribal members residing within the Utah portion of the
reservation.
The portion of the Navajo Reservation in Utah is primarily a desert
landscape with much of the area receiving about 7 inches of water per
year. Surface water resources include the San Juan River and its
tributaries, which flow along the much of the northern boundary of the
Reservation in Utah. The primary potable water source is almost
entirely from groundwater and the majority of the groundwater is of
relatively low quality. The shallow aquifers near Monument Valley
provide the highest quality water, but those aquifers are nearly fully
utilized. The deeper bedrock aquifers in the eastern portions of the
Reservation contain more water but have significant water quality
issues, including high total dissolved solids (TDS) and arsenic. Much
of the Reservation in Utah lacks easy access to potable water. Of the
2,581 households, only roughly half have indoor plumbing. Approximately
46 percent of households haul water, some as far as 50 miles round-trip
from Halchita to Monument Valley.
III. Proposed Navajo Utah Settlement Legislation
Since 2003, the State of Utah, the Nation, and the United States
have worked cooperatively, without litigation, to negotiate a water
rights settlement for the portion of the Navajo Reservation within
Utah.
As introduced, S. 644 contains a number of provisions that the
Department supports. The legislation recognizes a reserved water right
of 81,500 acre-feet per year of depletion for the Navajo Nation, which
will be deducted from the State of Utah's allocation of water in the
Upper Basin of the Colorado River. The Department believes that the
amount of water negotiated is an appropriate quantification of the
Nation's water rights and is in keeping with important statutes,
compacts, and regulations that make up the ``Law of the Colorado
River.'' As part of the proposed settlement, the Navajo agree to
subordinate their reserved water right to all perfected non-tribal
water rights as of the date the settlement is signed, which is
relatively common in in tribal water rights settlements. Finally, S.
664 provides for exchange and lease of Navajo's water rights within
Utah, allowing for greater flexibility in the use of water resources
and greater drought resiliency.
As introduced, Section 6 of the bill would authorize $198.3 million
in appropriations for Reclamation to plan, design, and construct
several Navajo water development projects. S. 664 also includes $11.4
million to establish an operation and maintenance fund to cover the
initial operation and maintenance costs associated with projects
constructed from the water development fund, as well as $1 million for
a survey of all current water uses on the Utah portion of the
Reservation, which will allow both the State and Nation to manage water
resources. Section 6 also includes a state contribution of $8 million
payable to the Secretary of the Interior for planning, design and
construction of the Navajo water development projects.
In evaluating the project plans and cost estimates, Reclamation
identified deficiencies that would require significant time and effort
to resolve and very likely would lead to project cost overruns in the
future. Subsequent to the introduction of S. 664, the United States,
the Nation, and the State discussed a simplified settlement, which
would replace the Department's construction obligations under Section 6
with a water development fund to be used by the Nation to build water
projects on an as needed basis. Such a revision would afford the Navajo
Nation the opportunity to achieve economic efficiency and flexibility
in designing and construction water projects over time as needs arise.
We believe that a fund-based settlement would allow for tribal self-
sufficiency in meeting future water needs while, at the same time,
relieving the Department of the risks inherent in attempting to design
and estimate the costs of projects that have not advanced beyond a
conceptual level. We will continue to work with the Nation, the State,
and the bill sponsor to craft changes to the proposed bill that would
allow for Administration support.
The Department also has other concerns about the bill as
introduced. Of significant concern is how the water rights held by
individual Indians on public domain allotments located within the
exterior boundaries of the Reservation will be quantified and
protected. We have made substantial progress with the Nation and the
State in negotiating potential changes to bill language that would
address this concern and are confident that we will be able to
satisfactorily address this issue. The provisions on indexing the water
development fund are also under discussion. Finally, the waiver
language included in the bill as introduced needs to be modified to be
consistent with current Administration policy.
IV. Conclusion
In conclusion, the Department supports the goals of the settlement
which include quantifying the reserved water rights attached to the
Utah portion of the Navajo reservation and facilitating the development
of essential municipal water systems that will provide a reliable
quantity and quality water supply for the communities within the
Reservation. The Department is supportive of a fund-based settlement
for the Navajo Utah Reservation, as it would allow the Nation the
greatest flexibility and self-determination in meeting its future water
needs. The Department is working with the Nation and sponsor of S. 664
to ensure this bill meets these goals while adhering to the Criteria
and Procedures established for tribal water right settlements.
The Chairman. Mr. Clarke.
STATEMENT OF HON. DAMON CLARKE, CHAIRMAN, HUALAPAI NATION
Mr. Clarke. I wanted to thank you, Senator Hoeven, Senator
Udall and members of the Committee, especially Senator Flake,
for bringing this forward to the Committee for their
consideration.
I thank everyone else who has been a part of this to give
us the opportunity to bring water to a very, very rural area.
Without it, we would not be making strides to give our tribe
that economic development.
Thank you.
[The prepared statement of Mr. Clarke follows:]
Prepared Statement of Hon. Damon Clarke, Chairman, Hualapai Nation
Chairman Hoeven, Vice Chairman Udall and members of the Committee,
my name is Dr. Damon Clarke, Chairman of the Hualapai Tribe.
The Hualapai Tribe strongly supports S. 1770, the Hualapai Tribe
Water Rights Settlement Act of 2017. Before I describe the major
elements of this legislation and the critical benefits the Tribe
receives from it, let me briefly inform the Committee of the Tribe's
pressing water needs.
The Hualapai Reservation encompasses approximately 1 million acres
in northwestern Arizona. All lands on the Reservation are tribal trust
lands; there are no allotments or fee inholdings. The Colorado River
forms the 108-mile northern boundary of the Reservation through a
portion of the Grand Canyon.
Our Reservation has no significant surface streams other than the
Colorado River, and has very limited groundwater resources. While the
Tribe now relies on groundwater to serve Peach Springs, which is our
principal residential community, that groundwater is a depletable
resource and well levels on the Reservation are dropping. The Colorado
River is the only feasible water supply for satisfying the long-term
future needs of Peach Springs and of the rest of our Reservation. Our
Tribe needs delivery of Colorado River water both to provide a
permanent and secure water supply for the domestic and residential
needs of our present and future population, and also to fully realize
the unique opportunities for economic development that we have at Grand
Canyon West--a world class on-Reservation tourist development that the
Tribe operates on the western rim of the Grand Canyon.
The Hualapai Reservation does not have the natural resources to
permit commercial agriculture, timber or mineral development. But the
Reservation's virtually unique location on the Grand Canyon gives the
Tribe a strong basis to create a self-sustaining tourism-based economy.
Grand Canyon West is the centerpiece of the Tribe's economy. The Grand
Canyon Resort Corporation, a tribal corporation which operates Grand
Canyon West and other tribal enterprises, along with the tribal
government, currently employs more than 1,500 workers (more than 550 of
which are non-Hualapai members). The Hualapai Tribe is the second
largest employer in Mohave Country, Arizona. Grand Canyon West hosts
over 1 million visitors a year.
As successful as Grand Canyon West has been to date, there is an
even greater unrealized potential to further develop Grand Canyon
West--but we are unable to take advantage of this potential because of
a critical lack of water. The nearest groundwater to Grand Canyon West
is 35 miles away, and the supply from that low-production well is
barely adequate for current operations, and completely inadequate for
growth. With the Colorado River water that the Tribe would receive from
this settlement, and with the infrastructure to deliver that water to
Grand Canyon West that would be authorized by this legislation, the
Tribe could take full advantage of the potential for further
development of Grand Canyon West that would create additional jobs for
both tribal members and non-Indians, as well as provide new revenues
for our tribal government.
But there would also be significant benefits beyond this. I am
accompanied today by Professor Joseph P. Kalt from the Harvard Project
on American Indian Economic Development at the John F. Kennedy School
of Government. Professor Kalt was commissioned by the Tribe to analyze
the economic impact that enactment of S. 1770 would have on the
regional economy of northwestern Arizona and southern Nevada, as well
as on the economy of the State of Arizona and the Nation as a whole.
Professor Kalt's report, which is attached to his written testimony,
states that the significant increase in visitors to both Grand Canyon
West and the Grand Canyon National Park in recent years serves as
evidence that the Grand Canyon will continue to attract a growing
number of visitors in the coming years. His report also states that the
economic development of Grand Canyon West that would be triggered by
the water and infrastructure authorized by this legislation would
support an average of more than 6,500 jobs per year in Arizona, and
close to 1,000 jobs per year in southern Nevada. For the Nation as a
whole, the project would support an average of more than 10,000 jobs
per year, nearly $1.5 billion in federal tax revenues in present value,
and a present value of more than $9.3 billion in gross domestic product
(GDP) for the United States. I believe this settlement is unique among
Indian water settlements in supporting this level of regional and
national economic benefits-benefits that dwarf the level of federal
outlays authorized by S. 1770.
The use and delivery of water for this kind of economic development
is well within the parameters of past Indian water rights settlements.
Most Indian water rights settlements in this century have provided
federal funding for infrastructure development to support commercial as
well as residential uses of water. There is, for example, ample recent
precedent for federally-funded irrigation projects to deliver water to
Indian reservations for purposes of commercial agricultural, where
agriculture is the basis of a tribe's economy. And in other recent
settlements, federally-funded projects have delivered water to support
other kinds of economic development--including hydropower and other
energy development, and a retail travel center. Therefore, the
infrastructure development for the Hualapai Tribe's tourism-based
economy that is authorized by S. 1770 is completely consistent with
past Indian water rights settlements approved by Congress.
The lack of water we currently suffer at Hualapai also imposes
another substantial burden on our members. Grand Canyon West is located
a two-hour drive on a dirt road from Peach Springs, where virtually all
tribal members on the Reservation live. Thus, tribal employees at Grand
Canyon West have daily round-trip commutes of four hours a day to their
jobs, longer in inclement weather. Currently, it is impossible to
locate a residential community at Grand Canyon West because of the lack
of water there. This imposes an unsustainable burden on tribal members
who work at Grand Canyon West, and on their families. The Tribe
urgently needs Colorado River water at Grand Canyon West in order to
allow the Tribe to construct a residential community there so tribal
member can reside near to their jobs on the Reservation.
Over the past seven years, the Hualapai Tribe has, in two phases,
negotiated a settlement of all of the Tribe's reserved water rights
with the State of Arizona and major private entities in Arizona. The
United States actively participated in these settlement negotiations
through a Federal Negotiating Team consisting of representatives from
affected Interior Department agencies and from the Department of
Justice. In phase 1, the parties successfully resolved a portion of the
Tribe's water rights--those in the Bill Williams River watershed, where
the Tribe has a small parcel of Reservation land and some allotted
trust land--in a settlement that was ratified by the Bill Williams
River Water Rights Settlement Act of 2014, Pub. L. 113-223, 128 Stat.
2096 (Dec. 16, 2014).
The Tribe and the State parties have now reached agreement on phase
2. The legislation now before the Committee, S. 1770, would resolve the
Tribe's remaining water rights claims on a comprehensive basis. The
legislation is strongly supported by the State of Arizona and by the
private entities which are parties to the settlement--the Salt River
Project, Central Arizona Water Conservation District and Freeport
Minerals Corporation. It is also strongly supported by Mohave County,
the local jurisdiction in which most of the Reservation is located.
Let me now summarize the principal elements of the comprehensive
water rights settlement ratified by S. 1770:
The Act comprehensively settles of all of the Hualapai
Tribe's federally reserved water right claims for its
Reservation and trust lands.
The Tribe receives exclusive rights to all groundwater and
surface water on the Reservation and its other trust lands, and
agrees not to object to any pumping of groundwater or
diversions of surface water outside the Reservation or its
trust lands.
The Tribe receives an allocation of 4,000 acre-feet a year
of Central Arizona Project water from the Colorado River. Of
this amount, 1,115 acre-feet a year will be ``firmed'' (half by
the United States and half by the State) until 2108 to protect
against future shortages of the availability of Colorado River
water in Arizona. The Act also provides that the Tribe itself
can ``firm'' additional portions of the Central Arizona Project
Water allocated to the Tribe in any year the water is available
and is not needed for delivery to the Reservation.
The legislation authorizes the expenditure of $134.5
million in federal funds (in 2016 dollars) to construct an
infrastructure project to deliver up to 3,414 acre-feet a year
from the Colorado River to the Reservation. The project would
divert water from the Colorado River on the Reservation at
Diamond Creek and then deliver it through a 70-mile pipeline to
both Peach Springs and Grand Canyon West. This system would
replace the Tribe's reliance on the existing groundwater wells
(except when those wells are needed as an emergency backup).
The legislation also authorizes an OM&R Trust Fund of $32
million for the Tribe partially to defray future costs of
operating, maintaining and replacing the project works, $5
million for OM&R costs prior to transfer of the project to the
Tribe, and $2 million for training of Tribal members in
operating and managing the project.
Certain lands designated by the legislation owned by the
Hualapai Tribe near the Reservation will be brought into trust
status and certain other lands currently held in trust for the
Tribe will be made part of the Hualapai Reservation.
There are substantial non-federal contributions to this settlement.
As part of the phase 1 Bill Williams settlement, the Freeport Minerals
Company provided a significant multi-million dollar contribution to a
Hualapai Tribe economic development fund which the Tribe can use to
purchase Colorado River water rights to supplement the allocation of
CAP water provided by the settlement. The 2014 Bill Williams Settlement
Act expressly states that this substantial funding from Freeport
constitutes a non-federal contribution to the Tribe's comprehensive
water rights settlement. Pub. L. 113-223 at sec. 5(d)(1)(B). Freeport
also contributed an additional $1 million to the Tribe that enabled the
Tribe to conduct an essential ``appraisal-plus level'' study to
determine the feasibility and costs of alternative infrastructure
projects to bring Colorado River water to the Hualapai Reservation.
That study is the technical report referenced in this settlement
legislation. The State of Arizona is also making a contribution, which
it values at approximately $3.2 million, in the form of ``firming''
557.5 acre-feet-per year of the CAP water allocated to the Tribe, until
the year 2108. Finally, the Tribe has agreed to fund the cost of
constructing an electrical transmission line to the project, which the
infrastructure study estimates will cost about $40 million. In
aggregate these various non-federal contributions to the settlement
constitute over 30 percent of the Federal costs of the comprehensive
settlement.
Passage of this legislation is absolutely essential if our Tribe is
to realize the full economic potential of our Reservation. We have done
everything possible to provide jobs and income to our people in order
to lift them out of poverty--but the lack of a secure and replenishable
water supply on our Reservation is our major obstacle to achieving
economic self-sufficiency, a goal that Federal Indian policy has long
favored. Passage of this legislation is essential to allow my Tribe to
attain this goal.
Thank you for the opportunity to testify before you today. I will
be pleased to answer any questions you may have, and our Tribe will
help in any way it can to secure enactment of this critical
legislation.
supplemental testimony
This supplemental testimony is in response to several ``concerns''
about the legislation set forth in the written testimony of Deputy BOR
Commissioner Alan Mikkelsen, chair of the Department of Interior's
Working Group on Indian Water Settlements.
The Hualapai Tribe remains disappointed that the Department of
Interior continues to withhold its support for a water rights
settlement that has the strong support not just of the Tribe, but also
of all of the major State and local stakeholders--the Governor of
Arizona, the Arizona Department of Water Resources, the Central Arizona
Water Conservation District, the Salt River Project and Freeport
Minerals Corp. The settlement also has the strong support of Mohave
County, the local jurisdiction in which most of the Reservation is
located.
Disputes between Indian tribes and non-Indians over rights to the
Colorado River are particularly contentious and divisive matters in
Arizona. When, as here, the Hualapai Tribe and the State parties have
worked hard over a period of seven years to resolve one of these
disputes and to craft a compromise that will strengthen both the Tribe
and the non-Indian stakeholders, the Department should respect that
effort by giving its support to that settlement.
For the reasons set forth below, I believe that the criticisms of
the settlement legislation set forth in Deputy Commissioner Mikkelsen's
testimony are misguided.
1. The Need for Additional Groundwater Studies
The Deputy Commissioner's testimony states that the Department must
``complet[e] ongoing groundwater studies'' in order to ``inform the
Department's view on the proposed pipeline.''
This position is, for the Tribe, a particularly frustrating
objection that is likely to lead to years of unnecessary delay in
moving this settlement forward. I have previously pointed out to the
Committee that the groundwater on the Hualapai Reservation has already
been studied for decades, and none of the many prior studies has shown
that there is a supply of groundwater sufficient to meet the long-term
domestic and municipal needs of the Hualapai Tribe. Nor have any of the
prior studies shown that the groundwater is sufficient to permit the
Tribe to realize the significant opportunities for economic development
that exist on the Reservation, but which the Tribe cannot pursue
because of the lack of water. In my supplemental testimony to the
Committee last year on S. 3300, I provided the Committee with a summary
of all of the past Reservation groundwater studies that have been done.
\1\
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\1\ S. 2636, S. 3216, S. 3222, and S. 3300, Hearing before the
Committee on Indian Affairs, United States Senate, 114th Cong., 2d.
Sess. (Sept. 14, 2016) (hereafter ``Hearing on S. 3300'') at 17-20
(Supplemental Testimony of Dr. Damon Clarke, chairman of the Hualapai
Tribe).
---------------------------------------------------------------------------
This summary, which I attach again for the convenience of the
Committee, references 16 prior studies of the groundwater on the
Reservation, from 1942 through 2011, most of which were done by
agencies of the Interior Department, including the U.S. Geological
Survey (USGS), the Bureau of Reclamation (BOR), the Bureau of Land
Management (BLM) and the Bureau of Indian Affairs (BIA). None of these
prior studies gives any reason to believe that the groundwater on the
Reservation can serve as a sufficient and reliable source of water even
for the Tribe's short-term needs, much less for our long-term needs.
In responses to written questions posed by Senator McCain after the
Committee's hearing on S. 3300 last year, then-Assistant Secretary
Larry Roberts said that the prior studies provide ``only general ranges
of estimated groundwater discharges'' and do not ``give a high degree
of certainty'' about the occurrence and movement of groundwater on the
Reservation. Further study, the Assistant Secretary said, ``will
provide improved understanding'' of the hydrogeology and ``may lead to
improved characterization of groundwater resources.'' \2\
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\2\ Id. at 48 (emphasis added).
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Deputy Commissioner Mikkelsen appears to adhere to this prior
Departmental position. Although it is hard to dispute the proposition
that more study ``may lead'' to more information, the relevant question
is whether the additional information is likely to provide the
assurance the Tribe must have if we are expected to rely on
groundwater--a depletable resource--instead of Colorado River water, as
a long-term solution to our Tribe's critical water needs. And based on
the many studies that already have been done--none of which shows that
there are substantial groundwater resources on the Reservation--the
answer to this question is certainly no.
Further, the Department's insistence on conducting additional
groundwater studies comes at an unacceptable cost to the Tribe in terms
of delay, which will certainly be measured in years. The Tribe's
experience with regard to the Department's most recent groundwater
study is instructive.
In February 2015, four years after the Tribe and the State parties
began negotiating this settlement with the active participation of the
Interior Department, the Department--for the first time--told the Tribe
that it wanted to conduct additional groundwater studies on the
Reservation. The Department said that it first would commission the
USGS to study the Truxton Aquifer, which partially underlies the
Reservation in the Peach Springs area, and that the study would be
completed in six months.
The Tribe received the results of that study in January 2017--
almost two years later. And the USGS report was, in the opinion of our
hydrogeological experts, so flawed as to be neither credible nor
useful. Our experts reviewed the study and concluded that it overstates
the amount of groundwater in the Truxton Aquifer by a probable factor
of 2. When we promptly provided the Department in February 2017 with
our experts' reviews of the USGS study, we were told that USGS would
consider those views and inform us as to whether it would revise its
own report in light of them. Ten months later, we have heard nothing
further. Thus, almost three years after the Department told the Tribe
it intended to conduct additional groundwater studies, its first study
is not yet complete. And the Department has admitted that other
groundwater studies on the Reservation will also take years to
complete.
This delay is unfair, unjustified and unacceptable. It is unfair to
the Tribe and the State parties, who have worked diligently and
cooperatively for years to resolve the Tribe's claims to the Colorado
River, and whose work is being undermined by the Department's call for
years of additional studies. It is unjustified because multiple studies
of groundwater on the Reservation have already been done, most of them
by the Department itself, and none of the prior studies suggest that
there is adequate groundwater to satisfy the Tribe's long-term needs.
And it is unacceptable because, as I discuss in my initial testimony,
the lack of water on the Reservation is causing tribal members to
suffer ongoing hardship by having to endure daily four-hour commutes
from their homes in Peach Springs to their jobs at Grand Canyon West,
where the lack of water prevents any residential development. A
solution to this problem cannot be put off for an indefinite number of
additional years in order to allow the Department to conduct more
groundwater studies simply because those studies ``may lead'' to more
information.
2. The Cost Estimates for the Infrastructure Project
Deputy Commissioner Mikkelsen repeats a criticism also made by the
Department in its testimony before this Committee last year that the
costs of the infrastructure project ``will greatly exceed the costs
currently contemplated in S. 1770. . . .'' The Tribe has repeatedly
asked the Department to substantiate this claim of cost overruns so we
could respond to it, and the Department has failed to do so.
The costs in the legislation are based on a thorough study
conducted by a highly regarded engineering firm, DOWL, of Tucson,
Arizona. The DOWL study included significant field investigations and
was conducted at above the appraisal-level standard commonly used in
Indian water settlements. Further, DOWL designed and completed its
study in conjunction with staff from the Bureau of Reclamation, and
based its study on BOR cost estimating methods. Another nationally
recognized water resources specialty contractor, ASI Contractors,
independently developed cost estimates for the project which were used
by DOWL as a check on its own estimates. In short, the Tribe knows of
no reason to expect cost overruns in this project, and nothing in
Deputy Commissioner Mikkelsen's testimony, or in any other information
the Department has provided to the Tribe, is a basis for concluding
otherwise.
In his responses to Senator McCain's written questions last year,
then-Assistant Secretary Roberts did list certain broad cost categories
for which he said BOR concluded that DOWL had underestimated the costs.
\3\ But he also said that BOR has ``no finalized specific reports with
respect to costs of the infrastructure project.'' Id. Without specific
information about which costs the Department believes DOWL has
underestimated, by how much, and why, it is simply impossible for the
Tribe (or for DOWL) to evaluate the Assistant Secretary's generic
summary of BOR's generic claim of cost overruns, or to respond to it.
We do not think it is responsible for the Department to continue to
criticize the DOWL cost estimates without substantiating its
criticisms, providing specific information to the Tribe, and allowing
us the opportunity to address the merits of the specific cost estimates
that concern BOR.
---------------------------------------------------------------------------
\3\ Id. at 49
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3. The Threat of Litigation
Another unsubstantiated Departmental criticism repeated by Deputy
Commissioner Mikkelsen is that the Hualapai settlement ``might trigger
significant additional litigation.'' (emphasis added). The Tribe knows
of no litigation threat that has been made about the infrastructure
project in the Hualapai settlement, even though information about the
project has been in the public domain for well over a year, since the
bill was first introduced in September 2016 in the 114th Congress.
In his responses to Senator McCain's written questions last year,
Assistant Secretary Roberts said it is ``likely that environmental and
conservation organizations will oppose the project, and such opposition
may include litigation. . . .'' \4\ This is speculation on top of
conjecture. To the Tribe's knowledge, no environmental or conservation
organization has publicly expressed opposition to the project, much
less threatened litigation. If the Department has information to the
contrary, it has a responsibility to discuss that information with the
Tribe, which would permit the Tribe to reach out to the concerned
organization in an effort to allay its concerns. The fact that the
Department has never given the Tribe any specific basis for its fear of
litigation, and instead appears to be basing its concern on no more
than what ``may'' happen, is hardly a reasonable ground for not
supporting the settlement.
---------------------------------------------------------------------------
\4\ Id. at 49-50 (emphasis added).
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4. The Non-Federal Cost Share
Deputy Commissioner Mikkelsen criticizes S. 1770 because, he says,
the State parties have not contributed ``a commensurate share of the
costs of the settlement in return for the benefits they will receive.''
As I pointed out in my principal testimony, the non-federal cost
share in S. 1770 is over 30 percent of the amount of the federal cost,
when all non-federal contributions are taken into account (including
the Tribe's own very substantial contribution to the cost of
constructing the project).
It is, however, illuminating to see that the Department raised no
issue with the nonfederal cost share in the Navajo Utah settlement in
S. 664, a bill that was also examined by the Committee at the December
6 hearing. In his testimony on that legislation, Deputy Commissioner
Mikkelsen says that S. 664 authorizes a total of $210.7 million in
federal appropriations for the projects contemplated in that
settlement, and includes a State contribution of $8 million. That non-
federal cost share by Utah is less than 4 percent of the federal cost
of that settlement, as compared to a non-federal cost-share in the
Hualapai settlement that is a full 30 percent of the federal cost.
Indeed, just one element of the non-federal cost share in the
Hualapai settlement--the contribution by Freeport Minerals to the
Tribe's economic development fund--is by itself larger than the entire
contribution by the State of Utah in S. 664, even though the federal
cost of the Hualapai settlement is 18 percent less than the federal
cost of the Navajo Utah settlement. And as I previously pointed out,
Congress specifically stated in the 2014 Bill Williams Settlement Act
that this Freeport contribution is to be treated as a non-federal
contribution to the comprehensive water rights settlement in S. 1770.
Pub. L. 113-223, sec. 5(d)(1)(B).
Thus, as compared to the Navajo Utah settlement, the non-federal
cost share in the Hualapai settlement is more than six times greater in
absolute terms (approximately $50 million v. $8 million), and more than
seven times greater relative to the federal cost of each settlement
(approximately 30 percent v. 4 percent). Yet the Department raises no
objection to the nonfederal cost share in the Navajo Utah settlement
while it criticizes the Hualapai settlement as having a non-federal
cost share that is not ``commensurate.''
The Department's differential treatment of the non-federal cost
share in these two settlements is stark, unexplained and unfair.
5. Off-Reservation Groundwater Pumping
The final significant concern raised in Deputy Commissioner
Mikkelsen's testimony is that S. 1770 prohibits the Tribe from
objecting to any use of groundwater outside the Reservation boundaries.
This concern ignores the fact that the Tribe is given the right to
the exclusive use of all groundwater on the Reservation, thereby
prohibiting any non-Indian from objecting to any tribal use of
groundwater on the Reservation. It also ignores the fact that this
settlement is a negotiated compromise, with reciprocal concessions by
the parties. As the Department surely knows from its participation in
the six years of negotiations that led to this settlement, the State
parties firmly refused to agree to any restrictions on groundwater
pumping outside the Reservation, and advised the Tribe that such
restrictions would require changes to State law that would, as a
practical matter, be impossible to enact in the Arizona Legislature.
The Tribe's agreement to forego such off-Reservation groundwater
restrictions is reasonable because the thrust of the settlement is to
provide the Tribe with sufficient water from the Colorado River to meet
its domestic, commercial and municipal needs, so that the Tribe is not
solely reliant on groundwater, as it is at present.
In this light, the Department's concern that the Tribe has waived
its right to object to off- Reservation groundwater pumping is neither
wise nor practical: had the Tribe adopted the Department's policy
position, it would only have led to an impasse among the parties and a
failure of the settlement negotiation.
While I am disappointed in Deputy Commissioner Mikkelsen's
testimony, I am pleased that he said the Department is ``eager to work
with all of the interested parties'' in the Hualapai settlement to
reach a ``final and fair settlement of the Tribe's water rights
claims'' that the Department can support. The Tribe intends to engage
the Department promptly on this promise, but we nonetheless urge the
Committee to support S. 1770 and to report the bill for action by the
full Senate.
I appreciate the opportunity to submit this supplemental testimony
to the Committee. \5\
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\5\ I would also like to take this opportunity to correct a
misstatement made in my answer to a question at the hearing about the
number of jobs that would be created if S. 1770 is enacted. I have
again reviewed Professor Kalt's report which concludes, at page 51,
that the economic development caused by the Diamond Creek pipeline
would support an average of slightly over 10,000 jobs per year.
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Attachment
Natural Resources Consulting Engineers, Inc.
December 4, 2015 MEMORANDUM
To: Hualapai Project Files
From: NRCE, Inc.
RE: Previous Groundwater Studies
This memorandum presents a list and brief description of previous
groundwater studies on the Hualapai Reservation. The list of studies is
separated between the deep regional aquifer and the alluvial-volcanic
aquifers.
Deep Regional Aquifer
Description: The deep regional aquifer on the Hualapai Reservation
includes the Redwall-Muav Aquifer (R-Aquifer) and the Tapeats Sandstone
lying at the bottom of the Paleozoic section in contact with
crystalline basement rocks.
Representative well yields from the R-Aquifer range from 5
to 40 gallons per minute, with 150 gallons per minute the
highest reported in the region (Twenter, 1962; Myers, 1987; and
others).
There is some evidence indicating that faults, fractures,
and folds may enhance aquifer properties that can localize
potential for larger well yields; however targeting these
features using surface geophysics is speculative and drilling
costs are very high.
The USGS conducted a hydrogeological study of the
Reservation between 1957 and 1962 (Twenter, 1962). The R-
Aquifer was identified as the most promising aquifer, but
drilling depths were prohibitive.
Several wells were drilled to various depths (mostly
shallow) in the late 1960s and 1970s by the BLM and the BIA
loosely based on Twenter's recommendations but most were
unsuccessful (Huntoon, 1977).
Several deeper wells were completed on the Hualapai Plateau
in 1992 by the Bureau of Reclamation. One well drilled near the
GCW resort in 1992 targeted the deep regional R-Aquifer. The
well was deepened in 1999 (Watt, 2000). That well (GCW-1)
encountered groundwater only in the Tapeats Sandstone. The
shallower Redwall and Muav Formations were unsaturated. The
well is equipped with an oilfield-type pumping unit but is
currently unused due to low water quality and low yield (15-26
gpm).
NRCE was contracted in 2005 to investigate and evaluate all
possible water supply options for the resort. The preferred
alternative recommended diversion from the Colorado River.
Groundwater development options were judged to be infeasible
for a variety of reasons, but primarily because of their
inability to supply the sustainable yield required by the Grand
Canyon West resort at a reasonable overall project cost.
DOWL (2013) further assessed a few Colorado River
alternatives considered in the NRCE study. Groundwater
development alternatives were judged to be infeasible in this
study for the same reasons as the 2005 study by NRCE.
Alluvial-Volcanic Aquifers
Description: The main alluvial-volcanic aquifers are in the
northern Aubrey Valley around Frazier Wells (eastern part of the
Reservation), Westwater Canyon, Peach Springs-Truxton Wash Valley, and
elsewhere along the southwest flank of the Hualapai Plateau (e.g. Horse
Flat area and the upper Milkweed Canyon). The alluvial-volcanic
aquifers have areal extents that are limited by the valleys and washes
that contain them. The volume of stored groundwater is similarly
limited. Depth to water is generally shallow, typically less than 500
feet below ground level, and well yields of up to 170 gallons per
minute have been reported. Water from these aquifers is generally
acceptable for domestic use.
The Santa Fe Railroad drilled 6 fairly shallow wells within
Peach Springs between 1903 and 1922. The Hualapai Tribe
acquired use of water from the railroad spring-fed water system
between 1931 and 1954. One well near the town is currently
used.
The USGS conducted a study in 1942 to assist location of
prospective sites for development of stock water supply on the
Hualapai Reservation (Peterson, 1942). In addition to a
hydrogeological characterization of the region, the study
inventoried numerous existing wells and stock ponds. Peterson
recommended 18 sites across the Reservation for drill-testing.
N. J. Devlin evaluated the Peach Springs water system in
1973 and considered possibilities for development of additional
water supplies for the town. Devlin recommended further
development of the aquifer contained in the lake beds of
Truxton Valley. Development of other springs and other
exploration areas were judged to have low potential.
The Indian Health Service drilled two wells in Truxton
Valley in 1972 to provide additional water supply for Peach
Springs. A third well was drilled in 1976 by the IHS in Truxton
Valley near the wells drilled in 1972. These wells currently
supply all of the water needs for the town of Peach Springs.
The Bureau of Reclamation drilled an unsuccessful hole into
Cenozoic volcanics near the head of Milkweed Canyon in 1975. A
second successful well in Westwater Canyon alluvium and
volcanics was completed in 1975. This well currently provides
most of the water to Grand Canyon West via a 30-mile pipeline.
A well drilled in the Frazier Wells area in the eastern
part of the Reservation serves a fish-rearing facility. An
additional two boreholes were completed in the shallow alluvial
aquifer in the Frazer Wells area in an effort by the Tribe to
develop additional groundwater supply. Both wells were dry and
were abandoned.
Regional hydrogeological mapping by Richard Young (State
University of New York at Geneseo) focused on the Tertiary
volcano-sedimentary aquifer in the area of Westwater Canyon
near the well drilled by the Bureau of Reclamation (Young, R.
A., 1987, 1991, 1992, 2007). Stantec (2009) estimated the safe
yield of this aquifer to be approximately 600 afy. Further
development of this aquifer is prohibited by tribal policy as
it would likely reduce spring flow (considered to be a cultural
resource) in its discharge area.
NRCE conducted an evaluation of the groundwater supply for
the town of Peach Springs in 2011. That study included an
inventory of wells in the sub-regional area, a comprehensive
review of the regional geology, an evaluation of hydrologically
attractive areas for development of additional groundwater
supplies in the southern part of the Reservation, and made some
specific recommendations for exploratory evaluation of both the
R-Aquifer and alluvialvolcanic aquifers. The adequacy of
natural aquifer recharge to support existing and future water
needs was also assessed.
The Chairman. I apologize. I should have said President
Begaye and Chairman Clarke. I just wanted to correct the
record.
Lieutenant Governor Cox, do you have any initial comments?
STATEMENT OF HON. SPENCER J. COX, LIEUTENANT GOVERNOR, STATE OF
UTAH
Mr. Cox. I would just say in my small town, we have a
saying that whiskey is for drinking and water should be for
fighting.
Mr. Chairman, I am so grateful that we are not fighting
about this one because it has been 15 years, a long time. It
has been a wonderful relationship. We appreciate President
Begaye and his leadership in making this happen. The entire
State of Utah is in full support of this bill and this
settlement.
Thank you.
[The prepared statement of Mr. Cox follows:]
Prepared Statement of Hon. Spencer J. Cox, Lieutenant Governor, State
of Utah
Mr. Chairman and members of the Committee, thank you for the
opportunity to testify today and to highlight an important example of
two groups with sometimes differing interests coming together to find a
solution to a critical challenge.
Utah is one of the driest states in the Nation. Water is our
lifeblood. Generally, water rights in Utah may only be created under
state law. We recognize, however, that properly-established, federally-
reserved water rights, particularly tribal rights, are an important
exception to that rule. We have committed to use negotiation rather
than litigation as our preferred method of resolving reserved right
claims. Such negotiations require commitment, patience, and trust.
We have developed a high level of trust with the Navajo Nation as
we have worked together for nearly 15 years to develop a reasonable and
equitable resolution of water right claims for the portion of the
Nation located within Utah's borders. This settlement is tremendously
important to Utah because it fits within the structure of the Colorado
River compacts, protects state-based water rights, and improves life
for Utah Navajos.
With these facts in mind, we wholeheartedly support Senator Hatch's
Senate Bill 664 which embodies the Utah/Navajo Settlement and we ask
you to quickly pass the bill.
The following principles guided Utah in its settlement discussions
with the Navajo Nation:
Protecting existing water right commitments, including
those dictated by the structure and language of the Colorado
River compacts, the Law of the Colorado River generally, and
water rights established under Utah law;
Providing finality with respect to the amount of Utah's
Colorado River allocation available for appropriation under
Utah law;
Improving economic opportunities and quality of life for
citizens of the Nation who live in Utah, many of whom lack
basic necessities; including safe drinking water and water for
agriculture and industry,
Respecting neighboring sovereigns, both the Nation and
sister states; and
Promoting positive outcomes from negotiation which would be
unattainable through litigation;
The agreement Senate Bill 664 embodies was initially negotiated
between Utah and the Nation. Confident a settlement could be achieved,
in 2007 the sovereigns petitioned the Department of Interior for the
appointment of a federal negotiating team. The Department appointed a
team in 2013. Review of the settlement by members of that team has
resulted in helpful input.
The Utah Legislature expressed support for the settlement by
passing legislation in 2012 which established a water right settlement
fund for Utah's monetary contribution toward the settlement. The State
legislature has put $2 million in that fund with the understanding that
additional, necessary funds will come from the State's ``rainy-day''
fund.
We recognize funding for this settlement must compete for limited
federal resources with other pressing needs. Nevertheless, we believe
the settlement is essential for success of the Navajo Nation in Utah.
The State and the Nation agree that the contemplated expenditure of
about $200M of federal funds to achieve the settlement is both
justified and appropriate. Both parties also agree that the appropriate
State share for the settlement is $8M and Utah proposes to contribute
that amount.
The settlement fits within the structure of the Colorado River
compacts and protects existing Utah water right commitments. It also
ensures the United States' compliance with its trust obligation to the
Navajo Nation and provides important, related waivers of liability
regarding water rights and past water resource development. The
settlement is fair, reasonable, and equitable to all parties. It
benefits Utah, the Navajo Nation, and all states in the Colorado River
Basin.
This bill, and the process that led to it, is the essence of
cooperative federalism. The state and tribal governments, with input
and assistance from the federal government, have worked together to
find an equitable solution to pressing challenges. This is the kind of
agreement we should celebrate and try to do more often. Again, we
recommend the Committee act favorably on this bill.
And with that Mr. Chairman, I'm happy to answer any questions.
The Chairman. Mr. Buschatzke, any opening comments before
we proceed with some questions?
STATEMENT OF THOMAS BUSCHATZKE, DIRECTOR, ARIZONA DEPARTMENT OF
WATER RESOURCES
Mr. Buschatzke. Chairman Hoeven, Vice Chairman Udall, and
Senator Flake, I too want to express my support to the Hualapai
Tribe and the rest of the State parties who have helped us to
negotiate this settlement. It is really important to the State
of Arizona.
It is one in a line of settlements the State has been able
to work through with tribes in the State. I think it is a great
step forward.
Thank you.
[The prepared statement of Mr. Buschatzke follows:]
Prepared Statement of Thomas Buschatzke, Director, Arizona Department
of Water Resources
I. Introduction
My name is Thomas Buschatzke. I am the Director of the Arizona
Department of Water Resources. Thank you for the opportunity to testify
on behalf of the State of Arizona on S. 1770, the Hualapai Tribe Water
Rights Settlement Act of 2017. The State of Arizona strongly supports
S. 1770.
II. Importance of settling Indian water rights claims in Arizona
There are 22 federally recognized Indian tribes within the State of
Arizona. The total population of all Indian tribes in Arizona as of
2010 was 234,891, which is the third highest among all states. The
total area of all Indian reservations in Arizona is approximately 20
million acres, which is second only to Alaska. Arizona ranks first
among all states in the percentage of tribal land in the state--27.7
percent.
Half of the 22 federally recognized Indian tribes in Arizona still
have unresolved water rights claims. Resolving these claims through
settlement is a strategic priority for the State, not only because it
will avoid the cost and uncertainty of litigating the claims, but it
will provide certainty to all water users in the state regarding
available water supplies in the most expeditious manner possible. In
many cases, a settlement will also provide the tribe with funding to
construct the infrastructure necessary to put its water supplies to
beneficial use.
III. Hualapai Tribe's water rights claims
The Hualapai Tribe is one of the eleven Indian tribes in Arizona
with unresolved water rights claims. The Tribe's main reservation
covers approximately one million acres in the northwestern portion of
the state. The Colorado River forms the northern boundary of the
reservation, and the Grand Canyon National Park is located immediately
north of the reservation. The Tribe also has reservation and trust
lands south of its main reservation in the Bill Williams River
watershed.
The Tribe has asserted claims for both groundwater and surface
water for its reservation and trust lands. The Tribe's claims include a
claim to water from the Colorado River, a critical water supply for
agricultural, municipal and industrial water users along the Colorado
River, as well as water users in Central Arizona using Colorado water
delivered through the Central Arizona Project (CAP).
The Tribe claims a right to Colorado River water for domestic,
municipal and industrial uses on its reservation and trust lands,
including use at Grand Canyon West. Grand Canyon West is a major
tourist attraction located adjacent to the Grand Canyon on the Tribe's
main reservation. One of the main features of Grand Canyon West is the
Skywalk, a glass walkway overhanging the Grand Canyon where tourists
can walk out and look through the glass walkway to the bottom of the
Canyon.
IV. Settlement Negotiations with Hualapai Tribe
In late 2011, the State of Arizona and several other major water
users in the state (collectively referred to as the ``State Parties'')
began negotiating with the Hualapai Tribe for a comprehensive
settlement of the Tribe's water rights claims. The United States
participated in the settlement negotiations through a negotiating team
appointed by the Secretary of the Interior.
Early in the settlement negotiations, the Tribe and State Parties
agreed that as part of a comprehensive settlement of the Tribe's
claims, the Tribe should receive an allocation of CAP water from the
volume of Non-Indian Agricultural (NIA) priority CAP water set aside
for future Indian water rights settlements in Arizona in the Arizona
Water Settlements Act of 2004 (Public Law 108-451). The Tribe and the
State Parties also agreed that the settlement should include an
authorization by Congress of an appropriation of monies to construct a
pipeline to carry the CAP water from the Colorado River to Peach
Springs, the Tribe's main residential center, and Grand Canyon West.
V. Hualapai Phase 1 Settlement
In late 2012, the parties agreed to bifurcate the settlement into
two phases, with Phase 1 consisting of a limited settlement of the
Tribe's water rights claims in the Bill Williams River watershed and
Phase 2 consisting of a comprehensive settlement of all the Tribe's
water rights claims in Arizona, including the Tribe's claims to water
for its main reservation. The settlement was bifurcated so that Phase 1
could become effective as soon as possible without waiting for the
comprehensive settlement to be negotiated. Finalization of the Phase 1
settlement by the end of 2015 was necessary to expedite a water rights
transfer as part of the settlement, resulting in benefits to a state
party, the federal government and the environment.
The Phase 1 settlement was approved by Congress in December 2014
and became law on December 16, 2014 (Public Law No: 113-223). The
settlement became effective in December 2015 after all the conditions
for the settlement were met.
Although the Phase 1 settlement was not a comprehensive settlement
of the Tribe's water rights claims, it included provisions designed to
facilitate a comprehensive settlement that would include an allocation
of NIA priority CAP water to the Tribe and the construction of a
pipeline to carry the water to the Tribe's reservation. Those
provisions are the following:
1. The settlement agreement provides that Freeport Minerals
Corporation (``Freeport''), one of the State Parties, will
transfer $1 million to the Tribe as a contribution toward the
cost of the Tribe's study of water project alternatives for its
main reservation.
2. The settlement agreement provides that Freeport will
contribute money to the Hualapai Tribe Economic Development
Fund. Both the settlement agreement and the legislation
approving the settlement provide that the money may be used
only for the purpose of facilitating settlement of the claims
of the Tribe for rights to Colorado River Water by enabling the
Tribe to acquire Colorado River water rights with the intent to
increase the security of the Tribe's water rights, and to
otherwise facilitate the use of water on the Tribe's
reservation.
3. Both the settlement agreement and the legislation approving
the settlement provide that Freeport's contribution to the
Hualapai Tribe Economic Development fund shall be considered a
non-federal contribution that counts toward any non-Federal
contribution associated with a settlement of the claims of the
Tribe for rights to Colorado River water.
Before the Phase 1 settlement agreement became effective, Freeport
transferred $1 million to the Tribe for the study of water project
alternatives. After the Phase 1 settlement became effective, Freeport
made a multi-million dollar contribution to the Hualapai Tribe Economic
Development Fund for the purposes described above.
VI. Hualapai Phase 2 Settlement
During negotiations for a Phase 2 settlement, the Tribe contracted
with an engineering firm to conduct a study of alternative projects to
bring water from the Colorado River to Peach Springs and Grand Canyon
West on the Tribe's reservation. The Tribe paid for the study in
substantial part with the $1 million that Freeport contributed for that
purpose as part of the Phase 1 settlement. The study concluded that the
most feasible project was a pipeline carrying Colorado River water from
Diamond Creek, located near the southeastern portion of the Tribe's
reservation, to Peach Springs and then on to Grand Canyon West, a total
of 70 miles.
In June 2016, the Tribe and the State Parties agreed to the terms
of a Phase 2 settlement. The key terms of the settlement are the
following:
1. The Tribe will receive an allocation of 4,000 acre-feet per
year of NIA priority CAP water from the volume of NIA priority
CAP water set aside for future Indian water rights settlements
in the Arizona Water Settlements Act of 2004.
2. The United States and the State of Arizona will each firm
557.50 acre-feet per year of the Tribe's NIA priority CAP water
to the equivalent of the higher priority CAP municipal and
industrial priority water during water shortages.
3. The Secretary of the Interior, acting through the
Commissioner of the Bureau of Reclamation, will plan, design,
and construct the Hualapai Water Project, which includes a
pipeline to convey not less than 3,414 acre-feet per year of
Colorado River water from Diamond Creek to Peach Springs and
Grand Canyon West for municipal, commercial, and industrial
uses. Congress will authorize an appropriation of $134.5
million for construction of the Project, $32 million for
operation, maintenance and replacement costs by the Tribe, and
$7 million for use by the Secretary of the Interior in
operating the water project before title is conveyed to the
Tribe and to provide technical assistance to prepare the Tribe
for the operation of the Project.
4. The Tribe will have the right to use all groundwater under
and surface water on its reservation and trust lands.
5. Certain lands adjacent to the Tribe's reservation will be
brought into reservation status and certain lands owned in fee
by the Tribe near its reservation will be held in trust for the
Tribe by the Secretary of the Interior. No additional lands may
be brought into trust for the Tribe without approval by
Congress.
6. The Tribe, the United States and the State Parties will
execute mutual waivers of claims for water rights and injury to
water rights.
A bill approving and authorizing the Phase 2 settlement was
introduced in Congress by Senator Jeff Flake on September 8, 2016 (S.
3300), with Senator John McCain as a co-sponsor. The bill was heard by
the Senate Committee on Indian Affairs on September 14, 2016, but no
further action was taken on the bill. On September 7, 2017, Senator
Flake reintroduced the bill with minor changes, again with Senator
McCain as a co-sponsor. The reintroduced bill, S. 1770, is before you
today.
VII. The State of Arizona Supports S. 1770
The State of Arizona strongly supports S. 1770. The State believes
the Phase 2 settlement authorized by the bill is a reasonable and fair
settlement that will benefit the Hualapai Tribe, the State of Arizona,
Arizona water users and the United States.
A. Hualapai Tribe
For the Hualapai Tribe, the settlement provides a renewable water
supply and the infrastructure to convey that water supply from the
Colorado River to critical areas on the Tribe's reservation. Because
there are no significant surface water streams on the reservation,
water from the Colorado River is the only renewable water supply
available to the Tribe. The water supply will serve the Tribe's main
population center at Peach Springs, which is currently served
groundwater from wells that are experiencing declining water levels.
The water supply will also serve Grand Canyon West, the only viable
economic development area on the Tribe's reservation. Grand Canyon West
is currently served groundwater from a low-production well
approximately 35 miles away.
A pipeline to bring Colorado River water to Grand Canyon West is
essential for further economic development on the Tribe's reservation.
The Tribe's reservation is in a location with breathtaking views of the
west rim of the Grand Canyon. This provides the Tribe with a unique
asset that is a significant economic development resource. Currently,
approximately one million visitors come to Grand Canyon West each year
to walk on the Skywalk and experience the views of the Grand Canyon.
The Tribe would like to further develop Grand Canyon West to include
additional tourist attractions that would significantly increase the
number of visitors each year. However, development at Grand Canyon
West, and the annual number of visitors, is essentially capped at
current levels due to the lack of additional water supplies for the
area. Construction of a pipeline to bring Colorado River to Grand
Canyon West would remove that cap and allow the Tribe to fully utilize
the unique asset on its reservation for economic development.
In addition, the current lack of water supplies prevents the Tribe
from constructing housing near Grand Canyon West for the employees who
work there. As a result, most of those employees live in Peach Springs
and drive to work each day over a dirt road. The travel time is two
hours each way in good weather, for a total travel time of four hours
each day. Travel time is significantly longer in wet or snowy
conditions. Construction of a pipeline to carry Colorado River water to
Grand Canyon West would allow the Tribe to construct a residential
community near Grand Canyon West where its employees can live. Housing
closer to Grand Canyon West will benefit the employees and their
families who would have more time together.
B. State of Arizona and Arizona Water Users
For the State of Arizona, the settlement is a major step toward
resolving the outstanding water rights claims of Indian tribes in the
state. Resolving the Hualapai Tribe's claims through settlement will
avoid the costs and risks associated with litigating the claims and
will provide certainty to water users in the state. Perhaps the main
risk to water users in the state from litigating the Tribe's claims is
a risk to their Colorado River water supplies. As mentioned previously,
the Tribe's reservation is located adjacent to the Colorado River and
the Tribe has asserted claims to water from the River. The Colorado
River supplies the Tribe will receive through the settlement will not
affect the Colorado River entitlements of other water users in the
State because the Tribe will receive a portion of the NIA priority CAP
water being held by the Secretary of the Interior for Indian water
settlements in the state.
Another benefit to the State of Arizona is that the settlement will
provide the Tribe with a renewable water supply to replace its current
groundwater pumping. Use of renewable water supplies instead of
groundwater is consistent with the State's policy of preserving
groundwater supplies for times of drought. Additionally, because the
aquifer beneath the Tribe's reservation extends to areas off the
reservation, the Tribe's use of a renewable water supply will help
preserve groundwater supplies not just for the Tribe, but for non-
tribal water users in the region. This is especially important in this
area of the state, where the groundwater supplies are limited and there
is minimal groundwater recharge.
C. United States
For the United States, the settlement will avoid the costs and
risks to the United States associated with litigating the Tribe's water
rights claims. The risks include the possibility that the Tribe would
prevail in an action in the Court of Federal Claims to recover damages
against the United States for failing to protect its water rights in
the Arizona v. California litigation.
In addition to avoiding the costs and risks of litigation, the
settlement would likely result in a significant economic benefit to the
United States Treasury. The Tribe contracted with Professor Joseph P.
Kalt, Ford Foundation Professor (Emeritus) of International Political
Economy at the John F. Kennedy School of Government at Harvard
University, to prepare a report on the economic benefits of a pipeline
to carry Colorado River water to Grand Canyon West. In his report,
Professor Kalt concluded that the pipeline would result in
significantly more visitors to Grand Canyon West, and that over a 50-
year period, the benefits to the United States from increased federal
tax revenues resulting from the additional visitors would greatly
exceed the federal outlays for construction, operation, and maintenance
of the pipeline. Professor Joseph P. Kalt, Economic Impact of the
Hualapai Water Rights Settlement and Proposed Diamond Creek Pipeline,
July 16, 2017.
VIII. Issues Raised by the Department of the Interior with the 2016
Bill and Phase 2 Settlement
On September 14, 2016, the previous administration provided this
Committee with a statement (``Statement'') of its position on the bill
introduced in 2016 (S. 3300). The statement raised several issues with
the bill and with the Phase 2 settlement. I would like to address two
of those issues.
A. Non-Federal Contribution
In its Statement, the Department of the Interior stated that ``the
State Parties have failed to make earnest efforts to provide for
adequate cost-sharing relative to the benefits they will receive in
this Indian water rights settlement.'' The State of Arizona disagrees
with this statement. As previously mentioned, Freeport made a multi-
million dollar contribution to the Hualapai Tribe Economic Development
Fund as part of the Phase 1 settlement. The Tribe may use this money
only for the purpose of facilitating settlement of its claims for
rights to Colorado River Water by enabling it to acquire Colorado River
water rights to increase the security of the Tribe's water rights, and
to otherwise facilitate the use of water on the Tribe's reservation.
As required by the federal legislation approving the Phase 1
settlement, Freeport's financial contribution to the Hualapai Tribe
Economic Development Fund must be considered a non-federal contribution
towards the Phase 2 settlement. Freeport's payment of $1 million to the
Hualapai Tribe to use toward a study of water project alternatives to
bring water to the Tribe's reservation should also be considered a non-
federal contribution because it was made for the purpose of
facilitating the Phase 2 settlement.
In addition to Freeport's large financial contribution, the State
of Arizona has agreed to firm 557.5 acre-feet of the Tribe's 4,000
acre-feet per year allocation of NIA priority CAP water to the
equivalent of CAP municipal and industrial priority during water
shortages until 2108. The State estimates the cost to firm this water
at $3.2 million dollars.
Finally, the Tribe has agreed to pay the cost of constructing an
electric transmission line to supply power to pump the water through
the pipeline. The Tribe's consultant estimates this cost at
approximately $40 million. Although this is not a contribution by a
State Party, it is a contribution that should be considered when
evaluating the percentage of the costs of the settlement that the
federal government will not be paying because of non-federal
contributions.
The financial contributions that will be made to this settlement by
Freeport and the State of Arizona are very substantial. The State
firmly believes that these contributions show that the State Parties
have made an ``earnest effort'' to provide for adequate cost-sharing
relative to the benefits they will receive from the settlement. When
the $40 million contribution by the Tribe is added to the State
Parties' contribution, the non-federal contributions to the settlement
are more than adequate.
B. CAP Fixed OM&R Charges
The Department of the Interior also expressed opposition to the
provision in the bill requiring the Tribe to pay a CAP fixed OM&R
charge for the use of NIA priority CAP water on the Tribe's
reservation. This charge is an annual charge assessed against all users
of CAP water based on the amount of CAP water they use. The charge is
used by the Central Arizona Water Conservation District (CAWCD) to pay
its fixed costs in operating the Central Arizona Project. The
Department stated that it did not support the charge because it
believed it amounted to a double charge to be paid by the Tribe for
water deliveries--the Tribe's OM&R costs to bring the water to its
reservation through the pipeline to be constructed on the reservation,
and the CAP fixed OM&R charge. The State of Arizona disagrees with the
Department's position on this issue.
First, the Colorado River water the Tribe will receive in this
settlement is legally classified as CAP water. It is appropriate for
all users of CAP water to pay the CAP fixed OM&R charge because without
proper operation, maintenance and replacement of the CAP, there would
be no CAP canal and no CAP water.
Second, the Tribe's payment of CAP fixed OM&R would not amount to a
double charge. All users of CAP water are responsible for paying the
expenses relating to their own delivery systems, as well as CAP fixed
OM&R charges relating to the CAP system. These are separate and
distinct charges.
Third, the Department's argument that the Tribe will not use the
CAP canal to bring its CAP water to its reservation misses the point.
The settlement reduces the water supply that otherwise would be
available to be diverted through the CAP and used for other purposes,
so the Tribe should pay the CAP fixed OM&R charge for the CAP water it
receives. If the Tribe were relieved of the requirement to pay the
charge, the reduced supply in the CAP system would cause an increase in
the charges assessed against all other CAP users, including other
Indian tribes that receive CAP water. It is important to retain the
provision in the bill to avoid this inequitable result.
Moreover, the Tribe has the ability to use the CAP canal in the
future to carry its CAP water for storage in central Arizona or for use
pursuant to a water exchange or lease. The Tribe should therefore be
required to help pay the fixed costs of operating, maintaining and
replacing the CAP.
Finally, it is important to note that the Tribe agreed to pay the
CAP fixed OM&R charge during the negotiations for the Phase 2
settlement in return for the benefits it will receive through the
settlement. It is also important to note that payment of the charge by
the Tribe will not impose any additional costs on the federal
government. For those reasons, it is not inequitable to either the
Tribe or the Federal Government to retain the provision in the bill.
IX. Conclusion
The State of Arizona strongly supports S. 1770, the Hualapai Tribe
Water Rights Settlement Act of 2017. The bill is important to the State
of Arizona because it authorizes a comprehensive settlement of the
Hualapai's Tribe's water rights claims, including its claims to the
Colorado River--a critical water supply for water users in the state.
Settlement of the Tribe's water rights claims is an important step in
achieving the State's goal of settling all outstanding Indian water
rights claims in the state. Settlement of the claims will avoid the
costs and risks of litigation, and will provide certainty to water
users in the state.
The settlement will provide significant benefits to the Hualapai
Tribe in return for settling its water rights claims. The settlement
will allow the Tribe to replace its groundwater use with a renewable
water supply, consistent with the State's policy of preserving non-
renewable groundwater supplies for use during drought conditions. The
settlement will allow the Tribe to maximize economic development on the
reservation by providing the water necessary for expansion of
development at Grand Canyon West. The Tribe will also have sufficient
water to construct a residential community near Grand Canyon West so
that employees will no longer be required to endure a daily commute of
two-hours to work and two-hours back to their homes.
Finally, the settlement will provide significant benefits to the
United States. The settlement will avoid the costs and risks to the
United States of litigating the Tribe's water rights claims. It will
also provide a significant financial benefit to the United States
Treasury through increased tax revenues resulting from the Tribe's
expansion of Grand Canyon West. The financial benefits that the United
States will receive through the settlement will greatly exceed the
costs that the United States will incur in constructing a pipeline to
bring water from the Colorado River to the Tribe's reservation.
The Chairman. Again, thanks to all of our witnesses for
being here.
I would open with a question for Mr. Buschatzke. In Mr.
Mikkelsen's testimony, he points out that ``Parties can and
should contribute commensurate share of the costs of the
settlement in return for benefits they receive.''
He notes, the State of Montana and that they have
contributed millions of dollars in appropriated settlement
funds to the Montana Indian Water Rights Settlement.
My question, has the State of Arizona decided how much of
their money should be contributed or will be contributed to the
Indian water rights settlement?
Mr. Buschatzke. Chairman Hoeven, the total non-Federal
contribution from within the State of Arizona among the State
parties, including the State itself, is about 30 percent
compared to the Federal appropriation. We think that is a
pretty significant contribution.
The State of Arizona itself is putting $3.2 million towards
furthering of non-Indian agricultural CAP water. The threshold
for meeting the criteria for a reasonable split between Federal
and non-Federal is a little unclear.
I would note that in Mr. Mikkelsen's testimony on S. 664,
the total contribution from the State of Utah was about 8
percent compared to the appropriation. I think from the
perspective of the State of Arizona and the State parties, our
non-Federal contributions are significant and do come up with a
fair and reasonable mixture between non-Federal and Federal.
The Chairman. I would ask President Begaye for his thoughts
on that same issue.
Mr. Begaye. I just want to say that this bill will provide
water to 40 percent that do not have water in the State of
Utah, members of my Nation. We have waited years for the
opportunity to be able to say to Utah Navajos that this
settlement will give all of our Utah Navajos water.
Right now, many of them do haul water. A lot of the
contamination that is up there they deal with on a daily basis.
To have this settlement done and providing water to all of our
Utah Navajos is something we are looking forward to. The
quality of water will be there.
Thank you.
The Chairman. Lieutenant Governor Cox, in your testimony,
you state the settlement proposed by S. 664 is fair, reasonable
and equitable to all parties. You went on to say that this bill
benefits all States in the Colorado River Basin.
Talk about that a bit in terms of the big picture and how
it benefits all the States?
Mr. Cox. In the big picture, it gives us some certainty
when it comes to the water rights in the Colorado River Basin
by finally putting to bed this outstanding claim. Within the
water rights already reserved for the State of Utah, it gives
us an opportunity to have certainty while protecting existing
water rights. We are now able to ensure the water rights of the
Navajos as well.
One thing I would add to your previous question, Mr.
Chairman, is that none of the infrastructure that is
contemplated with the proceeds of this bill would be used for
non-Indian rights. Unlike the Arizona bill, this is 100 percent
for the Navajo Nation and those in need.
The State of Utah has already set aside $2 million for this
project and has committed to set aside another $6 million in
addition for a total of $8 million, again 100 percent going to
bringing drinking water to the Navajos in Utah.
The Chairman. Thank you, Lieutenant Governor.
Commissioner Mikkelsen, from the perspective of the Bureau,
your thoughts on these settlements in terms of support and
benefit?
Mr. Mikkelsen. Mr. Chairman, thank you.
We do not have a formula to determine whether State or
local cost share is sufficient, but we must be mindful of what
funding the Federal Government can provide in assisting
communities to resolve these longstanding disputes.
We have not made a determination on such for the Navajo-
Utah settlement. However, just as a general matter, the higher
the State and local contribution, the better.
The Chairman. Thank you.
Again, I would like to thank all of the witnesses for being
here today and turn to Vice Chairman Udall.
Senator Udall. Thank you, Mr. Chairman. Thank you for
holding this very important hearing.
Mr. Mikkelsen, it has been brought to my attention that S.
1770 has a reference to an outdated statute from 1918 that
deals with reservation lands. That statute is 25 U.S.C. 211. It
says ``No Indian reservation shall be created, nor shall any
additions be made to one, within the limits of the States of
New Mexico and Arizona except by an act of Congress.''
If you go back and read the Congressional Record from 1918
when this was proposed, the intent is very clear that Senators
at the time wanted to restrict Native Americans from acquiring
land.
Mr. Chairman, I would like to include this legislative
history in today's Committee record.
The Chairman. Without objection.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Udall. Mr. Mikkelsen, do you feel it is appropriate to cite
this statute in S. 1770? Is it needed to accomplish the bill's goals?
Mr. Mikkelsen. Mr. Chairman, Senator, thank you.
We are aware of the Section 211 language in this bill and have had
several conversations with tribes about this language. This
Administration has concerns about citing Section 211 in this bill.
Senator Udall. Do you basically consider this an obsolete provision
that should just be ignored?
Mr. Mikkelsen. Again, we have concerns about citing Section 211 and
we have not reached any determinations beyond that at this time, sir.
Senator Udall. Will you give me in writing the opinion of the
department in consultation with your solicitor as to how you feel about
this specific provision?
Mr. Mikkelsen. Certainly.
Senator Udall. Thank you very much.
As I understand it, the Navajo-Utah project could be the first of
its kind project where the Federal Government gives the money directly
to the tribe to plan, design and construct the water project as opposed
to Congress giving the funds to the Bureau of Reclamation and they
would do those activities.
President Begaye, can you please describe for the Committee why the
tribe prefers planning and constructing the project itself versus
Reclamation constructing the project for the tribe?
Mr. Begaye. What is really important in this situation with that is
by Navajo Nation constructing the project, we use Navajo purpose,
meaning that unemployment being at 46 percent, we would be able to
address much of that by using Navajo people to construct any of the
construction that will be taking place. That is one that is really
important to us, that we put our Navajo people to work using these
dollars.
Secondly, we would be able to use our own Navajo Nation laws. That
is also important to us because we have assumed authority over our
surface land, so any type of archeological or clearances, we will be
able to use Navajo Nation laws in that regard.
We can expedite the process of any kind of construction that may
take place. It is important as a sovereign Nation that we are able to
do that, employ our people and use our laws in order to build and
construct any kind of construction that may take place in relationship
to this. That is really important to us.
Thank you.
Senator Udall. Thank you, President Begaye.
Mr. Mikkelsen, is this model where Congress provides planning and
construction dollars directly to tribes the new normal? What are the
implications of this new model to the Federal trust responsibility?
Mr. Mikkelsen. Each Indian water rights settlement is unique in its
own way so it is difficult to say broadly that this is the new
direction of Indian water rights settlements. However, that being said,
we are confronting serious cost gaps on specific projects included in
recent settlements. This has underscored the problems inherent in
trying to estimate costs on projects at a conceptual level.
A fund-based settlement allows the tribes to make the decisions on
the kinds of projects that best fit their needs as noted by the
President.
Senator Udall. Thank you so much.
We are now five minutes into a vote. I have a number of other
questions. I will submit those to you for the record and hope you will
get back to us promptly on those.
Thank you, Mr. Chairman.
The Chairman. Senator Flake.
Senator Flake. Thank you, Mr. Chairman. I will be as brief as I
can.
Mr. Buschatzke, can you clarify a response given to an earlier
question? Will any of the infrastructure contemplated in the bill, the
Hualapai bill, serve non-Indian entities?
Mr. Buschatzke. Senator Flake, the entire breadth of that bill does
create infrastructure to deliver water exclusively to the Hualapai
Tribe and on the reservation itself.
Senator Flake. Exclusively to the Hualapai, no non-Indian uses.
Thank you.
Mr. Mikkelsen, thanks for your leadership for the Bureau of
Reclamation and services as chair of the Working Group on Indian Water
Rights Settlements. I am pleased with the commitments we have received
from Secretary Zinke to work with me to advance the settlement. I
appreciate the work the working group has done.
I am a bit troubled, however, that despite these commitments we
continue to see old concerns raised that were raised and addressed
during the last Administration. The Administration's position is
additional non-Federal contributions are required but to the best of my
knowledge, the Administration has not set a required threshold for
State parties.
As I have said before, I think the non-Federal contributions in the
settlement are larger than other completed or pending settlements. Will
the department work with State parties to better define a threshold for
non-Federal contributions it thinks is appropriate?
Mr. Mikkelsen. The answer to that question is obviously yes. We
will work with all the parties to advance these settlements.
Senator Flake. Dr. Clarke, you make a very compelling case for what
this settlement means for the economy of the Hualapai people. I
appreciated the study that Professor Kalt produced. I was impressed by
the economic benefits that it showed for the tribe, the State and the
region.
Have you had a chance to explain the tribe's perspective and
Professor Kalt's study to the OMB?
Mr. Clarke. No, we have not. We have asked for numerous meetings
with OMB and we have been turned away. We would still like to meet with
them to provide them with this opportunity to show what Professor Kalt
has given us.
Senator Flake. Very briefly, what are some of the economic benefits
that will accrue to the tribe?
Mr. Clarke. The economic benefits are going to be that we want to
provide numerous jobs, over 10,000 jobs. At this time, I would like to
defer this question to Professor Kalt.
Mr. Kalt. Senator, I won't recap my entire study but in a nutshell,
while the Hualapai Water Rights Settlement arises in the context of an
Indian water rights dispute, it actually economically should be viewed
as a regional economic development project.
The current water situation is such that not only is the Hualapai
Tribe and its population being capped by limited water supplies, but
the very successful and growing economic development occurring
particularly with the tribe's Grand Canyon West Tourism Development
Enterprise, it is reaching its maximum given the water supplies that
are available.
Removing that cap via the settlement would produce substantial net
benefits, not only to the United States GDP, but also to the Federal
Government. Even from a Federal perspective, my research, using
modeling routinely employed by Federal agencies, for example, in
studying their impacts, my research finds this project would pay off
the Federal appropriation of roughly $173 million in less than three
years and have 47 years of benefits if you have a 50-year life to a
pipeline.
This is a net positive for the Nation. It is a regional economic
development project in its economic instance. It happens to arise in
this case in the context of an Indian water rights settlement.
Senator Flake. Thank you.
Thank you, Director Buschatzke, the State has done very good work.
There is a great partnership between the tribes and the State and with
our office will have to try to advance this settlement and others.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Flake.
I want to thank all of the witnesses for being here today. I
apologize that we had to move through this as quickly as we did because
of the votes. I think your being here and the information you provided
is very important and very helpful for the process.
Vice Chairman, do you have anything else?
Senator Udall. I would just thank the witnesses very much. We
really appreciate it.
The Chairman. With that, the hearing record will be open for two
weeks.
Again, thanks to our witnesses for being here.
We are adjourned.
[Whereupon, at 3:15 p.m., the Committee was adjourned.]
A P P E N D I X
Prepared Statement of Prof. Joseph P. Kalt, Co-Director, The Harvard
Project on American Indian Economic Development, John F. Kennedy School
of Government, Harvard University
Thank you for the opportunity to submit this testimony concerning
S. 1770, the Hualapai Tribe Water Rights Settlement Act of 2017. My
name is Joe Kalt and I am the Ford Foundation Professor (Emeritus) of
International Political Economy at the John F. Kennedy School of
Government, Harvard University and co-director of The Harvard Project
on American Indian Economic Development. For more than 30 years, the
Harvard Project on American Indian Economic Development has been
engaged in research into the sources of, and impediments to, sustained
economic development on America's Indian reservations.
I have been asked by the Hualapai Tribe to examine the regional
economic implications of the proposed settlement of the Tribe's water
rights claims, as this settlement is set out in S. 1770. The
centerpieces of the settlement are: (1) the proposed federally-funded
construction of a 70-mile pipeline that would divert Colorado River
water at Diamond Creek on the Hualapai reservation to the Hualapai
Tribe's principal residential community at Peach Springs, Arizona, and
to the Tribe's world-class tourist development on the south rim of the
Grand Canyon at Grand Canyon West; and (2) provision of a maximum of
4,000 acre feet of low priority Central Arizona Project (CAP) Non-
Indian Agricultural water for use on the reservation. Under the
settlement, the federal outlays for construction, operation, and
maintenance of the Pipeline are calculated to be $173.5 million.
I find that this expenditure would pay for itself many times over
in terms of any metric of relevance. Specifically, in terms of jobs and
worker income, business revenues and gross domestic product, and state,
local and federal tax collections, the cost to the Federal Government
of building the Pipeline would be swamped by the benefits that the
expansion of adequate water supplies via the Pipeline would generate.
These results are set out in detail in my report to the Tribe, attached
hereto.
The reasons for the overwhelmingly positive payoffs of the proposed
Hualapai water rights settlement are straightforward. First, without
the additional water supplies that the Diamond Creek Pipeline would
deliver, the Hualapai Tribe is effectively maxed out in its ability to
accommodate further growth in its onreservation population because its
current water supplies will not support the housing and related
infrastructure that the Tribe's citizens will need. This portends
forcing increasing numbers of Hualapai citizens to live off-
reservation.
Second, with critical implications for the entire regional economy
of northwest Arizona and southern Nevada and at the heart of the
federal and overall US public's interest in the settlement, existing
water supplies and sources are insufficient to support further economic
development of the Hualapai Tribe's thusfar highly successful Grand
Canyon West tourism enterprise. Grand Canyon West, with its iconic
Skywalk overlook at the western reaches of the Grand Canyon, currently
enables approximately 1.1 million tourists per year to visit and
experience the Grand Canyon. Foreign visitors to the United States,
many of whom utilize Las Vegas as a ``jumping off'' point, make up a
very large portion of Grand Canyon West's patrons. The visitors to
Grand Canyon West spend their money on locally-provided travel and
tourism services. This has proven to be a tremendous boon to the
regional economy, with the Hualapai Tribe's Grand Canyon Resort
Corporation (which owns Grand Canyon West) employing more than 1,500
workers. More than 550 of these workers are non-Hualapai, and the Tribe
is now the second largest employer in Mohave County, Arizona.
The consuming public of the United States and beyond has a strong
and growing demand for the recreational and tourism experiences that
Hualapai enterprises produce: Paralleling the experience of the United
States' National Park Service at Grand Canyon National Park,
visitorship at Grand Canyon West has skyrocketed in recent years.
Allowing inadequate water supplies at Hualapai to now choke off demand
at Grand Canyon West will demonstrably and severely harm not only the
Hualapai Tribe, but also the recreational tourism industry and the
workers and suppliers who support that industry in Arizona, Nevada and,
ultimately, the nation.
While the proposed Diamond Creek pipeline arises in the context of
an Indian water rights settlement, in its economic essentials, the
Pipeline is properly viewed as a region-wide economic infrastructure
project. Such projects are in the national economic interest when they
support economic growth and activity with net economic benefits for the
nation which exceed project costs. This is decidedly the case here.
My research finds that building the Diamond Creek Pipeline and
supplying the much-needed water it will carry to the region will create
and sustain decades of economic growth and development for Hualapais
and non-Hualapais alike. Using standard and widely-accepted tools of
regional economic impact modeling of the same type routinely used by
federal agencies in assessing the impacts of those agencies' spending,
I find that over a useful pipeline life of at least fifty years, and
expressed in terms of net present value, the growth in visitorship and
economic development made possible by the Pipeline would support an
average of more than 10,100 American jobs per year, nearly $1.5 billion
in federal tax revenues in present value, over $6.2 billion in income
for US workers in present value, and more than $9.3 billion in gross
domestic product (GDP) for the United States (in present value). These
results are summarized in Figure 1.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The job and value generation that would be supported by the Diamond
Creek Pipeline would accrue to the benefit of the US economy as a
whole, with the most concentrated impacts occurring in Arizona and
southern Nevada. The human results would be substantial improvement in
economic conditions for Hualapai and non-Hualapai citizens alike. For
the federal government, the Pipeline would be a substantial net revenue
generator. Looking at the net present value of federal tax revenues on
a levelized basis (i.e., treating the federal tax receipts generated
over the life of the pipeline like an annual mortgage payment made to
the Federal Government), the settlement would result in $58 million in
annual levelized federal tax collections. Economically, this means that
the settlement would have an effective ``payback'' period of only 3
years, leaving decades of continuing federal tax collections after
paying off the $173.5 million federal cost of the settlement. The
proposed Hualapai water rights settlement would be a net benefit to the
U.S. taxpayer.
Upon reflection, the foregoing economic impacts of the proposed
settlement should not be surprising. The very positive effects that the
proposed settlement would have for the federal treasury and the U.S.
economy as a whole arise because the Diamond Creek Pipeline would
ultimately enable far greater numbers of U.S. and non-U.S. consumers to
enjoy resources that can be supplied by the Hualapai Tribe. Those
resources take the form of the scenic wonder that is the Grand Canyon
and the experiences the Tribe's tourism enterprises create around that
scenic wonder. If current water supply constraints at Hualapai are
allowed to cap the Tribe's economic development, the Tribe's--and the
nation's--resource that is the Grand Canyon will have much of its
productive potential for the consuming public untapped. Economics would
say that failure to adopt the settlement and build the Diamond Creek
Pipeline would leave an incredible and durable national resource
``underemployed'' in serving the wants and desires of the consuming
public. The consuming public and the many parts of the U.S. economy
that directly and indirectly undergird the Hualapais' tourism economy
will be the losers if the Diamond Creek Pipeline project does not go
forward.
In short, the nature of the resource that is the Grand Canyon is
such that the most basic economic ``outputs'' that visitors seek--i.e.,
the vistas, the cultural impact, and the other experiences that the
Grand Canyon ``produces''--can be ``reused'' or ``re-consumed'' by
visitors again and again, one consumer after another, at effectively
little or no incremental cost. The only costs are the costs of enabling
consumers to be at Grand Canyon West with the kind of tourism support
services (lodging, meals, the Skywalk, etc.) provided by the Hualapai
Tribe and made possible by an adequate water supply. We know from the
willingness of consumers to pay on the order of $100 per day for more
than a million tickets per year that expanding the ability of consumers
to experience the Grand Canyon yields tremendous economic value. The
proposed Diamond Creek Pipeline project has the capacity to do just
that--and thus yield benefits which far exceed the costs to the
Hualapai Tribe, the regional economy, the national economy, and state,
local, and federal governments that far outweigh its costs. When we
look for infrastructure projects which can benefit the nation and its
economy, the Diamond Creek Pipeline is precisely the kind of project we
should be looking for.
*The report, Economic Impact of the Hualapai Water Rights
Settlement and Proposed Diamond Creek Pipeline has been
retained in the Committee files.*
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
Prepared Statement of Alfred Bennett III, Shiprock/Northern Agency,
Navajo Nation
I'm Alfred Bennett 3rd of Shiprock, New Mexico, Shiprock/Northern
Agency, Navajo Nation. Part of the Shiprock Agency extends into
Southern Utah.First of all I'm against S.664 because it is not in the
best interest of my People as a whole. Your version has it as a final
work, but it is a proposed legislation from our Council (legislation
no. 0412-15 Approving the ``Proposed'' Navajo Utah Water Rights
Settlement Agreement 01/26/2016 passed yea 13 nay 07 not voting 04).As
in past Anglo-Native American histories all agreements & treaties has
always been changed or broken to take advantage of the different Native
Nations thru out history. So this agreement is an example of what has
happen in the past. I can say our Navajo President was out of line by
agreeing to this ``Proposed'' settlement. The reason is that he is
giving away our claims of 60+or- miles of water of the Big Colorado
River/Lake Powell in Utah for nothing. The U.S.Government has not even
finish constructing the 12 farm blocks in the 1962 Navajo Indian
Irrigation Project (NIIP) Act, but they did finish the Rio Chama
diversion tunnel under the Continental Divide in New Mexico in the
1970s. They even enlarged the tunnel during construction. Which our
leaders are now in Washington D.C. requesting money to finish this
project. This delay cost us hundreds of thousands or millions of acre
feet of water per year. Only God knows! The priority date is also wrong
because there were Navajos hiding out in the canyons of southern Utah
who never surrendered and went to Ft.Sumner/Bosque Redondo and signed
the Treaty of 1868. The Navajo water rights priority date on this
agreement should be 1866 not what is in S.664! There is no real goal &
timetables in this agreement and no Environmental Impact Statement
(EIS) that I have seen. Mr. Chairman and Committee members thank you
for your time and blessing to all. Vote no until we are truly
compensated for our losses of the past.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Alan Mikkelsen
Question 1. Funding for Indian water rights settlements can often
include a mix of discretionary spending and mandatory spending, as you
know. Mandatory funds are an increasingly important part of the
spending equation, given Interior's budget constraints.
This falls against the backdrop of growing backlog of ``authorized
but unfunded'' settlements, potentially as large $1 billion dollars as
of FY2016, as Interior asserted at a 2016 hearing before the House
Committee on Natural Resources. \1\
---------------------------------------------------------------------------
\1\ Testimony of John Bezdek, Senior Advisor to the Deputy
Secretary of the U.S. Department of the Interior, in U.S. Congress,
House Natural Resources Committee, Subcommittee on Water and Power,
Legislative Hearing on Water Settlements, 110 Congress, 2nd sess., May
24, 2016, available at http://democrats-naturalresources.house.gov/
irno/media/doc/testimonvbezdek.pdf
---------------------------------------------------------------------------
a. The department did not specify the methodology for the figure
referenced above (i.e., whether it includes expenditures that have been
foregone when they were initially expected to take place and/or those
that are planned for obligation in future years). Please provide a list
of projects referenced in the testimony that remain ``authorized but
unfunded.''
b. Please provide a list of Indian water rights settlements in
which Congress provided direct/mandatory funds, the amount of mandatory
appropriations versus discretionary appropriations, and any remaining
amounts necessary relative to the authorization ceiling.
Answer. The following tables provide a list of Indian water rights
settlements that are currently authorized, but have not been fully
funded or have on-going, statutorily mandated costs. As requested, the
tables distinguish between mandatory and discretionary appropriations.
Table 1
----------------------------------------------------------------------------------------------------------------
Source of Appropriated Balance to
Settlement Funding Estimated Cost through 9/30/17 Complete
----------------------------------------------------------------------------------------------------------------
Aamodt Litigation Construction 65,287,000 29,266,993 36,020,007
Trust Fund 37,500,000 37,500,000 0
Mandatory 73,100,000 56,400,000 16,700,000
Total 175,887,000 123,166,993 52,720,007
----------------------------------------------------------------------------------------------------------------
Crow Construction 198,139,000 36,152,413 161,986,587
Trust Fund 0 0 0
Mandatory 277,935,000 277,935,000 0
Total 476,074,000 314,087,413 161,986,587
----------------------------------------------------------------------------------------------------------------
Navajo-Gallup Construction 771,593,000 432,717,449 338,875,551
Trust Fund 50,000,000 41,978,000 8,022,000
Mandatory 680,000,000 180,000,000 500,000,000
Total 1,501,593,000 654,695,449 846,897,551
----------------------------------------------------------------------------------------------------------------
Pechanga Construction 0 0 0
Trust Fund 37,166,000 400,000 36,766,000
Mandatory 0 0 0
Total 37,166,000 400,000 36,766,000
----------------------------------------------------------------------------------------------------------------
Blackfeet Construction 246,500,000 0 246,500,000
Trust Fund 234,290,000 800,000 233,490,000
Mandatory 0 0 0
Total 480,790,000 800,000 479,990,000
----------------------------------------------------------------------------------------------------------------
Federal Total Construction 1,281,519,000 498,136,855 783,382,145
Trust Fund 358,956,000 80,678,000 278,278,000
Mandatory 1,031,035,000 514,335,000 516,700,000
Federal Total 2,671,510,000 1,093,149,855 1,578,360,145
----------------------------------------------------------------------------------------------------------------
Table 2
Other Ongoing: IWRS Settlements--Federal
------------------------------------------------------------------------
Appropriated in
FY 2017
------------------------------------------------------------------------
Ak Chin 15,735,000
Animas La-Plata 2,652,000
Nez Perce 5,184,000
Pyramid Lake 142,000
San Carlos Apache 1,550,000
------------------------------------------------------------------------
Total Other 25,263,000
------------------------------------------------------------------------
Note: Table 2 lists the FY2017 appropriated funding for those
enacted settlements with ongoing costs but no authorization
ceiling. That funding provides for a variety of activities.
Funding for the Ak Chin and Animas La Plata water rights
settlements will predominantly provide for ongoing operations
and maintenance (O&M) costs for completed water projects.
Funding for the Nez Perce water rights settlement will allow
for annual leasing of water from willing sellers to augment the
flow of the Snake River. Funding appropriated for the Pyramid
Lake water rights settlement will be used to cover the Federal
portion of the preparation and implementation of the Truckee
River Operating Agreement (TROA). For the San Carlos Apache
water rights settlement, the annual appropriations will be used
to continue planning, designing, and completing pre-
construction activities for a project to deliver 12,000 acre-
feet of allocated Central Arizona Project (CAP) water.
Question 2. In 2014, The Bureau of Reclamation's Upper Colorado
Region and Lower Colorado Region, in collaboration with the 10 member
tribes of the Colorado River Basin Tribes Partnership commenced the
Colorado River Basin Ten Tribes Partnership Tribal Water Study to build
on the technical foundation of the Colorado River Basin Water Supply
and Demand Study. Please provide a status update on Tribal Water Study?
Answer. The Colorado River Basin Ten Tribes Partnership Tribal
Water Study is nearly complete. The Study's Draft Report has been
reviewed by the member tribes of the Ten Tribes Partnership and is
currently under review by DOI and Reclamation. We anticipate the
Study's Final Report will be published in 2018.
Question 3. What are the Department's views regarding the
applicability of 25 USC 211 in S. 1770? (Question posed during hearing)
Answer. Enacted in 1918 (40 Stat. 570), the statute placed certain
limitations on the creation of Indian reservations in New Mexico and
Arizona. However, it has been the longstanding position of the
Department that, following the enactment of the Indian Reorganization
Act (25 USC 5101 et seq.) in 1934, Section 211 does not limit the
addition to (or creation of) Indian reservations when done consistent
with Congressional enactments such as the IRA. That position has been
confirmed by the Interior Board of Indian Appeals and a federal
district court. Accordingly, the Department does not believe its
citation in the pending legislation would be relevant or useful, but
would instead be unnecessary and potentially create confusion regarding
applicable authorities.
______
Response to Written Questions Submitted by Hon. Catherine Cortez Masto
to Alan Mikkelsen
Question 1. The Bureau of Reclamation, like so many other agencies
within the Federal Government, have dealt with shortfalls in budgetary
funding, which has hurt our government's ability, at times, to partner
effectively with necessary stakeholder, and have sometimes inflicted
negative impacts on our public lands, natural resources, and
conservation programs.
Do you believe more funding would allow the Interior Department to
be a better partner to industry and the taxpayer?
Answer. The Administration is committed to making the tough
decisions that will lead to a balanced budget. At the same time,
Reclamation remains fully committed to upholding Reclamation's mission
to deliver water and power in an economically and environmentally
sustainable manner in the interest of the American public. We must
continue to prioritize our resources in order to ensure we uphold
Reclamation's mission and remain vigilant stewards of taxpayer money.
Question 2. The recent budget request for the Bureau of Reclamation
is $1.1 billion, a cut of $209 million. The request proposes cuts for
WaterSMART grants [the 50/50 cost share funding program used by
irrigation/water districts, Tribes, and States can to quickly implement
projects that conserve and use water more efficiently--and helping to
increase use of renewable energy and protect fragile environment],
water recycling and reuse projects, drought response, and rural water
projects. The state of Nevada gets the least rainfall than any other
state in the Nation so we have to be incredibly mindful of persistent
drought conditions as well as infrastructure improvements.
a. Do you believe these cuts Will undermine these successful
programs that help Nevada and other locations in the West respond to
drought conditions in innovative ways?
Answer. The President's FY 2018 budget proposes to balance program
priorities. WaterSMART grants, water recycling and drought response
activities allow Reclamation to assist local communities in their need
to address current and future water shortages. In addition to those
activities, rural water projects help build strong, secure communities
and are important to supporting the livelihood of local economies. In
order to ensure Reclamation continues to deliver water and generate
hydropower into the future, we must work to carryout Reclamation's
mission in an efficient and sustainable manner.
b. The Bureau of Reclamation operates significant facilities in
both the Upper and Lower Colorado River Regions. How will these budget
cuts affect needed rehabilitation of aging water delivery
infrastructure in both regions?
Answer. As Reclamation's assets continue to get older, there is a
growing need to monitor and rehabilitate Reclamation's infrastructure.
It is essential that Reclamation maintain and improve its existing
infrastructure in order to deliver reliable water and power, ensure
system reliability and maintain safety and sustained water
conservation. Reclamation's annual budget includes the best yearly
representations of the appropriated funds needed for maintenance at
Reclamation facilities. When funding is not available from revenues,
customers or other federal agencies, Reclamation aims to strategically
leverage its appropriated funds to ensure the delivery of water and
power benefits.
c. In rural communities, the availability of funding and resources
to meet treatment standards and improve water reuse is more
challenging. Do you believe that funding cuts will undermine your
administration of these programs, if you are confirmed?
Answer. The WaterSMART program assists entities as they plan for
and implement actions to increase water supply reliability and maintain
economic productivity in the western United States in the face of
serious water challenges brought on by wide-spread drought, increased
populations, aging infrastructure, and environmental requirements. The
Department requested $59.1 million in funding for this program in the
FY18 budget.
Question 3. Most people know the Colorado River is the economic
engine of the southwest and supplies drinking water to 36 million
Americans, and that the use of that water outstrips supply. The seven
states, water users, federal agencies and even the country of Mexico
have a history of close cooperation, which has become ever more
important as drought and increased water demands have left the two big
reservoirs, Lakes Powell and Mead, at all-time lows.
Projections show that if no action is taken to reduce water use,
usage restrictions could devastate the environment, cripple our
communities and agriculture, and stall the economy.
Several years ago, four large municipal water suppliers (Denver,
Las Vegas, Phoenix and southern California) partnered with the U.S.
Bureau of Reclamation on a pilot $11 million ``system conservation''
program. This System Conservation Program (SCP) pays water users to
conserve and dedicate extra water to storage in Lakes Powell or Mead.
The program has successfully demonstrated that farmers and ranchers
want to participate in programs that provide for temporary, compensated
and voluntary reductions of water use. Now demand from farmers and
ranchers is so high that the program can only afford one in four
requests. In 2016, the Senate voted 77 to 23 to authorize
appropriations up to an additional $50 million for SCP, and it was
included in the Water Infrastructure Improvements for the Nation (WIIN)
Act.
Can you say whether the Bureau of Reclamation will continue and
expand this market-based program that compensates farmers and ranchers
for voluntarily conserving water?
Answer. Reclamation is currently investing significant effort to
contend with the long-term impacts of the multi-year drought in the
Colorado River Basin, which, among Colorado River
water conservation activities, includes the Pilot System
Conservation Program. The System Conservation Program was conceived by
the funding entities and Reclamation as a 2-year program to test the
viability of voluntary, compensated, water conservation projects that
reduce consumptive use and create ``system water'' to assist with
maintaining storage in Lakes Powell and Mead. Although Reclamation is
currently operating under a continuing resolution for 2018 and
Reclamation's 2018 budget is uncertain, Reclamation has obtained
commitments for additional funding from the non-federal partners and
additional conservation projects will be implemented for the fourth
consecutive year. Under the Consolidated and Further Continuation
Appropriations Act, 2015, Public Law No 113-235, Section 206 (128 Stat.
2312), the Secretary of the Interior is required to submit to Congress
by September 30, 2018, a report evaluating the effectiveness of the
pilot projects and making a recommendation whether the activities
undertaken by the pilot projects should continue. Reclamation continues
to work with funding entities to determine the future of the program.
Question 4. Regarding the Colorado River, the years-long drought in
the West have taken a toll on our water resources, as you know. Both
the Lower Basin states and the Upper Basin States are working to
develop Drought Contingency Plans (DCP) to improve water management in
way that stabilizes reservoir levels. Lake Mead is one of the two
largest storage reservoirs on the Colorado River system. Lake Mead
water levels are important to Nevada because they determine whether a
shortage is declare on the Colorado River. If a shortage is declared,
Nevada would see a reduction in its water supply. The proposed DCP
specifies voluntary reductions for each of the Lower Basin states in
order to protect the water in Lake Mead. Meanwhile, the Upper Basin
States are reviewing the DCP and developing actions of their own as
well. If an agreement were to be implemented, my constituents
especially would have greater certainty about the longer-term
reliability of the Colorado River, supporting the economic and
environmental health of southern Nevada.
Will you exercise your authority and leadership to help the states
finalize their DCPs, work with them on the legislation necessary to
implement it, and then help them make implementation successful? We
need your help to make finalizing the DCP a priority.
Answer. Reclamation continues to be engaged in ongoing
conversations regarding the development of Drought Contingency Plans in
the Lower and Upper Colorado River Basins. We are encouraged by the
diligent efforts of all the Basin States in working toward final
agreement on their Drought Contingency Plans and to work within
available water supplies. Reclamation has conducted modeling that
indicates that the current plans proposed by the States would benefit
both the Upper and Lower Basin states. Reclamation and Interior have
actively participated in negotiations between the states and between
the basins, have suggested solutions and have encouraged the States to
finalize their plans. We look forward to continuing our work throughout
the Colorado River Basin to develop plans that prevent Lake Mead and
Lake Powell from reaching critically low elevations.
Question 5. A March 2016 Reclamation study says, ``One of the
greatest challenges we face is dealing with the impacts of climate
change on our nation's water. . . We need to continue to develop
collaborative strategies across each river basin to ensure that our
nation's water and power supplies, agricultural activities, ecosystems,
and other resources all have sustainable paths forward.''
Specifically in regards to the Colorado River Basin, the report
projects that the growing threat of climate change impacts the region
saying that reductions in spring and early summer runoff could
translate into a drop in water supply for meeting irrigation demands
and adversely impact hydropower operations at reservoirs.
Obviously, climate change impacts play a large factor in the
further work to be done on water settlements. Can you describe the
challenges climate change poses to this process and how Reclamation
takes these issues into consideration?
Answer. Reclamation is at the forefront of dealing with changing
conditions in the Colorado River Basin, whether due to the highly
variable flows into the Basin, the ongoing 18 year historic drought, or
the growing demands on Colorado River water supplies from competing
interests. As mentioned above, Reclamation is actively involved with
the Basin States through Drought Contingency Planning to address short
and long term solutions for the basin to work within the Law of the
River and the water supplies available during the current drought and
potential long-term supplies.