[Senate Hearing 115-343]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-343

                     S. 2154, S. 3060, AND S. 3168

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 18, 2018

                               __________

         Printed for the use of the Committee on Indian Affairs
         
         

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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               BRIAN SCHATZ, Hawaii
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
STEVE DAINES, Montana                CATHERINE CORTEZ MASTO, Nevada
MIKE CRAPO, Idaho                    TINA SMITH, Minnesota
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

                              ----------                              
                                                                   Page
Hearing held on July 18, 2018....................................     1
Statement of Senator Cantwell....................................    12
Statement of Senator Daines......................................    38
Statement of Senator Hoeven......................................     1
Statement of Senator Moran.......................................     3
Statement of Senator Tester......................................     3
Statement of Senator Udall.......................................     2

                               Witnesses

Mikkelsen, Alan, Senior Advisor to the Secretary, Water and 
  Western Resource Issues; Chair, Working Group on Indian Water 
  Settlements, U.S. Department of the Interior...................     4
    Prepared statement...........................................     6
Pickernell, Hon. Harry, Chairman, Confederated Tribes of the 
  Chehalis Reservation...........................................    12
    Prepared statement...........................................    14
Randall, Hon. Lester, Chairman, Kickapoo Tribe...................    15
    Prepared statement...........................................    17
Tubbs, John, Director, Montana Department of Natural Resources 
  and Conservation...............................................    28
    Prepared statement...........................................    29

                                Appendix

Griggs, Burke W., Special Assistant Attorney General, State of 
  Kansas, prepared statement.....................................    43
National Congress of American Indians (NCAI), prepared statement.    50

 
                     S. 2154, S. 3060, AND S. 3168

                              ----------                              


                        WEDNESDAY, JULY 18, 2018


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:08 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. We will call the hearing to 
order.
    I apologize for the late start. We had votes, but I 
appreciate everyone's patience.
    Today, the Committee will receive testimony on three bills: 
S. 2154, the Kickapoo Tribe in Kansas Water Rights Settlement 
Agreement Act; S. 3060, a bill to repeal Section 2141 of the 
revised statues to remove the prohibition of certain alcohol 
manufacturing on Indian lands; and S. 3172, the Indian Water 
Rights Settlement Extension Act.
    The Kickapoo Tribe in Kansas Water Rights Settlement 
Agreement Act, S. 2154, was introduced by Senator Moran on 
November 16, 2017. This bill would approve the tribe's water 
claims in the State of Kansas and authorize the tribe's water 
rights settlement agreement between the tribe and the State.
    Most notably, the legislation would confirm the tribe's 
water right of 4,705 acre-feet of water per year; direct the 
tribe to pass a tribal water code within three years after the 
bill's enactment; and direct the Secretary of Agriculture, in 
consultation with the Secretary of the Interior, to commence a 
study and make recommendations to Congress for the Upper 
Delaware and Tributaries Watershed project.
    Regarding S. 3060, Senator Cantwell introduced the 
legislation on June 13, 2018. This bill would repeal an 1834 
Federal law that prohibited the creation, or continuation, of 
ardent spirit distilleries in Indian Country.
    A House companion bill, H.R. 5317, was introduced by 
Representative Jamie Herrera Beutler. The House Natural 
Resources Committee held a hearing on H.R. 5317 on April 26, 
2018, at which the Department of the Interior provided 
testimony in support of the bill. On May 24, 2018, H.R. 5317 
was reported favorably by the House Natural Resources 
Committee.
    Finally, the Indian Water Rights Settlement Extension Act, 
S. 3168, was introduced by Vice Chairman Udall on June 28, 
2018. This bill would extend in perpetuity the Indian Water 
Rights Settlement Fund, which was established in the Omnibus 
Public Land Management Act of 2009. This settlement fund pays 
for certain water supply infrastructure projects, as described 
in Congressionally-approved Indian water rights settlement 
agreements.
    With that, I will turn to Vice Chairman Udall for any 
opening statement he may have.

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

    Senator Udall. Thank you, Chairman Hoeven, for calling 
today's legislative hearing.
    The three bills before us today cover two issues of great 
importance to Indian Country, economic development and tribal 
water rights settlements.
    Senator Cantwell's bill, S. 3060, repeals an antiquated law 
pasted over 180 years ago that prevents tribes from being able 
to set and operate distilleries on their own lands. The repeal 
of this law, which does not apply to State lands, would remove 
needless barriers to economic development in Indian Country and 
provide parity for tribes.
    Moving on to my bill, S. 3168 would permanently extend the 
Reclamation Water Settlements Fund in order to meet our trust 
responsibility to Indian Country and our obligation to fully 
pay for Indian water rights settlements. These settlement 
funds, which come on line in 2020, will go a long way towards 
paying for the $1.6 billion backlog to complete just five of 
the currently authorized Indian water rights settlements.
    The importance of these settlements to providing certainty 
to both Indian and non-Indian communities cannot be overstated, 
particularly when climate change and drought threaten water 
supplies throughout the West. Each water settlement this bill 
will fund in the future is a carefully crafted agreement 
between multiple water users and is paramount to the economic 
vitality of the community.
    Lastly, Senator Moran's bill, S. 2154, takes important 
steps towards recognizing, quantifying and defining the 
Kickapoo Tribe's reserved water rights. Ultimately, the bill 
would secure the tribe's current and future access to water, 
the life blood of the community.
    These three bills give Congress a chance to do the right 
thing by those tribal communities to whom we owe legal, 
financial and moral obligations.
    Thank you again, Mr. Chairman, for calling this hearing.
    The Chairman. Are there other opening statements?
    I will call on certain individuals for introductions in 
just a moment but are there opening statements prior to that?
    [No audible response.]
    The Chairman. The witnesses today are: Mr. Alan Mikkelsen, 
Deputy Commissioner, Bureau of Reclamation, Department of the 
Interior; The Honorable Harry Pickernell, Chairman, 
Confederated Tribes of the Chehalis Reservation, Oakville, 
Washington; The Honorable Lester Randall, Chairman, Kickapoo 
Tribe, Horton, Kansas; and Mr. John Tubbs, Director, Montana 
Department of Natural Resources, Helena, Montana.
    Thank you very much to all of you for being here.
    Senator Moran, did you want to make an introduction?

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. I would be happy to, Mr. Chairman. Thank you 
very much for the opportunity. I thank you and Vice Chairman 
Udall for holding this hearing.
    I was just visiting with my staff and in the nearly four 
years I have been a member of this Committee, this is the first 
time we have legislation that directly impacts a Kansas tribe. 
I appreciate the cooperation I have received from all of you in 
regard to addressing a water rights issue important to this 
tribe and our State, something the State of Kansas is anxious 
to have resolved, as is the tribe.
    I would use this moment you gave me to make a bit of an 
opening statement and that is this is important and is an issue 
that we will have elections in Kansas and there will be another 
set of public officials dealing with an issue that has been 
unresolved for decades.
    Congresswoman Jenkins, who has led the effort in the House, 
is retiring from the House. Again, this would be useful for us 
to resolve now. I look forward to working with her and all of 
you to see we get this resolved before the end of the 
congressional year.
    Mostly, I would take this opportunity to thank Chairman 
Randall for making the trip from Kansas to discuss this 
legislation and its impact on the tribe. I welcome him to the 
Indian Affairs Committee and look forward to continuing to work 
with him and his tribe as we try to find good solutions that 
benefit tribal members and the State of Kansas.
    Thank you, Mr. Chairman.
    The Chairman. Senator Tester.

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

    Senator Tester. Thank you, Mr. Chairman.
    I want to also echo some of Senator Moran's comments 
thanking you for this hearing. I think this is an important 
hearing on many different fronts.
    Before I get to my introduction, I just want to thank Alan 
Mikkelsen for being here. We appreciate your work at the Bureau 
of Reclamation. I look forward to your opening statement.
    As far as the bill that deals with alcohol prohibition in 
Indian Country, I would just say, at least in Montana, there 
has been a real opportunity to create employment in a very 
positive way, I might add, with micro distilleries. I think now 
is the time this bill deserves some solid debate and hopefully 
we can move it on.
    I also want to thank Senator Moran for his leadership on 
water compacts. I am giving you compliments, Jerry, on your 
water compact. The truth of the matter, is water compacts are 
not easy. We appreciate Senator Moran's leadership on this 
issue and moving it forward.
    I just want to introduce a friend of mine who has come to 
testify on Senator Udall's bill on the reclamation water 
settlements.
    When I was a rookie legislator in the State legislature, 
one of the first people we had a chance to meet was a guy by 
the name of John Tubbs who, at that point in time, came out of 
a Republican administration and helped everyone. It did not 
matter about party, but giving us information when we had to 
make decisions.
    He is someone who now is Director of the Montana Department 
of Natural Resource and Conservation, someone who understands 
water, understands the importance of water, and understands the 
importance of the water rights process. I just cannot thank him 
enough for being here today to give us his wisdom when it comes 
to water rights settlements. He may not look that old but he is 
quite old.
    Thank you, Mr. Chairman.
    The Chairman. I knew he was going to tease you a little 
bit. Senator Tester, I think those were really good remarks all 
around. Senator Moran, thank you as well.
    We will begin with Mr. Mikkelsen. Again, try to keep your 
testimony to about five minutes, if you would.

 STATEMENT OF ALAN MIKKELSEN, SENIOR ADVISOR TO THE SECRETARY, 
  WATER AND WESTERN RESOURCE ISSUES; CHAIR, WORKING GROUP ON 
   INDIAN WATER SETTLEMENTS, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Mikkelsen. Thank you, Mr. Chairman.
    Good afternoon, Chairman Hoeven, Vice Chairman Udall and 
members of the Committee.
    My name is Alan Mikkelsen. I am now the Senior Advisor to 
the Secretary on Water and Western Resource Issues and Chair of 
the Department's Working Group on Indian Water Settlements.
    I am here to testify on behalf of the Department on two 
bills, S. 3168, a bill to permanently extend the Reclamation 
Water Settlement Fund and S. 2154, a bill to authorize the 
Kickapoo Tribe Water Rights Settlement.
    On behalf of the Department, I have also submitted a 
statement for the record on S. 3060, a bill to remove the 
prohibition on certain alcohol manufacturing on Indian lands.
    The Administration continues to support the policy that 
negotiated Indian water rights settlements are preferable to 
protracted and divisive litigation. Negotiated settlements 
allow tribes, States and local water users to achieve finality 
on difficult issues of title to water and free surrounding 
communities to make critical management development decisions.
    Settlements allow the parties to develop creative solutions 
to difficult water resource issues. One of the key factors in 
making settlements meaningful to the health and welfare of 
tribes and to creating water certainty and economic development 
opportunities in the West has been funding.
    Funding is needed to secure new water supplies, build or 
rehabilitate infrastructure required to deliver water, and 
protect resources such as treaty fishing rights that are of 
critical importance to tribes.
    Settlements provide opportunities for local solutions and 
because they have Federal and local cost share requirements, 
the settling parties share the burdens as well as the benefits 
that can arise from investments in infrastructure.
    S. 3168 aims to address the need for funding by permanently 
extending the Reclamation Water Settlement Fund which currently 
authorizes the Secretary of the Interior to expend from the 
Settlement Fund up to $120 million a year of the amounts 
deposited through fiscal year 2029, plus accrued interest in 
each of the years from fiscal year 2020 to fiscal year 2034.
    The Administration remains committed to implementing and 
adequately funding the enacted settlements and has ensured 
adequate funding to implement all authorized settlements 
through the annual budget process. The department looks forward 
to working with the Committee to determine the best approach 
for authorizing future settlements.
    S. 2154 would authorize and ratify the September 2016 
revised settlement agreement between the Kickapoo Tribe and the 
State of Kansas, quantify the tribe's water rights, and direct 
the Secretary of the Interior to enter into the 2016 
settlement. The bill also directs the Secretary of Agriculture 
to complete a study and make recommendations within two years 
related to a surface water project for the tribe.
    The Department has significant concerns with S. 2154. S. 
2154 does not meet the critical goal of all Indian water rights 
settlements, finality. S. 2154 leaves unresolved the ultimate 
cost of the settlement, how those costs are shared amongst the 
parties, and how the water right of the tribe will be realized.
    Moreover, S. 2154 retains the tribe's claims against the 
United States, a key component of Indian water rights 
settlements that is meant to be resolved. S. 2154 also does not 
resolve the issues related to the Plum Creek project and 
infrastructure to meet the tribe's water right.
    While the Department does not dispute the amount of water 
quantified in the 2016 agreement, we have concerns that 
directing the USDA to commence a study and make recommendations 
on potential alterations to this project leaves many 
uncertainties in relation to the amount of water or projects 
that will be needed to address the tribe's water needs. This 
creates unknown costs and potential liability that neither the 
United States nor anyone else should be exposed to.
    In conclusion, I want to emphasize that the department is 
committed to working with the tribe and the State to reach a 
final and fair settlement of the tribe's water right claims 
that adheres to the principles of the department's criteria and 
procedures and that we can fully support. As proposed, however, 
the department cannot support S. 2154.
    This concludes my statement on S. 3168 and S. 2154. I would 
be happy to answer any questions on those bills at the 
appropriate time.
    Thank you.
    [The prepared statement of Mr. Mikkelsen follows:]

Prepared Statement of Alan Mikkelsen, Senior Advisor to the Secretary, 
Water and Western Resource Issues; Chair, Working Group on Indian Water 
              Settlements, U.S. Department of the Interior
s. 2154, the kickapoo tribe in kansas water rights settlement agreement 
                                  act
    Good afternoon Chairman Hoeven, Vice Chairman Udall, and Members of 
the Committee. My name is Alan Mikkelsen, and I am the Senior Advisor 
to Secretary Zinke for Water and Western Resource Issues 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.
    Thank you for the opportunity to provide the Department's views on 
S. 2154, the Kickapoo Tribe in Kansas Water Rights Settlement Agreement 
Act, which would approve and provide authorizations related to a 
settlement agreement involving the water rights of the Kickapoo Tribe 
in Kansas (Tribe). The Tribe and the State of Kansas (State) executed 
this settlement agreement in September 2016. The Department has 
significant concerns about the scope of the settlement agreement 
between the Tribe and the State. As executed, the settlement agreement 
only partially resolves the Tribe's water rights and leaves unresolved 
critical aspects necessary to achieve a final settlement, such as 
anticipated federal funding, cost-sharing by the State or local 
parties, and waivers of claims against the United States.
    For these and other reasons, the Department cannot support S. 2154 
as introduced. That being said, the Department remains eager to work 
with all interested parties to develop and support a settlement that 
adheres to the principles outlined in the Department's 1990 Criteria 
and Procedures regarding the negotiation and resolution of Indian water 
rights claims.
I. Introduction
    Before I begin discussing the Kickapoo settlement, I want to note 
that the Department continues to support the policy that negotiated 
Indian water rights settlements are preferable to protracted and 
divisive litigation. Indian water rights settlements can 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. Congress also plays an important role through reviewing 
and approving Indian water rights settlements as they typically involve 
federal spending, the ultimate resolution of the Tribe's reserved water 
rights, and the waiver of the United States' sovereign immunity. We 
stand ready to work with this Committee and Members of Congress to 
advance Indian water rights settlements that adhere to the principles 
outlined in the Department's 1990 Criteria and Procedures regarding the 
negotiation and resolution of Indian water rights claims.
    The policy framework the Department follows to guide the 
negotiation of Indian water rights settlements--and to support 
legislation authorizing these settlements--includes four general 
principles set forth in the Criteria and Procedures published in the 
Federal Register in 1990:

        (1) the Department participates in water settlements consistent 
        with the federal government's responsibilities as trustee;

        (2) Indian tribes receive equivalent benefits in exchange for 
        the rights they, and the United States as trustee, release as 
        part of a settlement;

        (3) Indian tribes obtain the ability to realize value from 
        confirmed water rights resulting from settlement, which ensures 
        they do not receive legal rights to water supplies that never 
        materialize in the delivery of water;

        (4) settlements contain an appropriate cost-share by all 
        parties benefiting from the settlement.

    The Criteria and Procedures also contain guidelines that the 
Department follows in determining whether to support a proposed 
settlement. One important guideline is the concept of finality 
contained in Criteria 3 discussed below.
    Disputes over Indian water rights can be expensive and divisive. In 
many instances, these disputes last for decades, represent a tangible 
barrier to progress for tribes, and significantly hinder the rational 
and beneficial management of water resources. Indian water rights 
settlements can break down these barriers and help create conditions 
that improve water resources management by providing finality and 
certainty for all affected water users. When settlements can be 
reached, they often provide opportunities for economic development, 
improve relationships, and encourage collaboration among neighboring 
communities. Successful settlements are also consistent with the 
Federal trust responsibility to American Indians and with Federal 
policy promoting Indian self-determination and economic self-
sufficiency. These ultimate outcomes and opportunities have been the 
basis for which the United States has pursued a policy of resolving 
Indian water rights disputes through negotiated settlements rather than 
litigation whenever possible.
II. Background
A. The Kickapoo Reservation and the Kickapoo Tribe
    The Kickapoo Tribe originated in the Great Lakes region, but moved 
southwest over time. In 1832, the Tribe and United States entered into 
the Treaty of Castor Hill, which established the original Kickapoo 
Reservation in present-day northeast Kansas.
    The current Reservation, reduced in size after subsequent treaties, 
encompasses about 30 square miles and has its headquarters in Horton, 
Kansas, roughly an hour north of the State capital in Topeka. Of the 
lands within the boundaries of the Reservation, nearly 8,000 of the 
approximately 19,000 acres within the Reservation are currently owned 
either by the Tribe or individual Indians in trust or fee status, and 
the vast majority of these lands are used for agricultural purposes. 
The remaining 11,000 acres are owned by non-Indians, often interspersed 
in a ``checker-boarded'' pattern with lands held by the Tribe or 
individual Indians.
    Total tribal membership, including members living off-Reservation, 
exceeds 1,600. According to the Tribe, roughly one-third of its members 
reside on-Reservation. The Tribe's Golden Eagle Casino, its 
governmental operations, and farming activities provide the primary 
sources of employment for Tribal members. The Tribe lists economic 
development as its top priority.
B. Water Resources of the Kickapoo Reservation
    The Reservation lies within the Upper Delaware River watershed, a 
basin that covers portions of Nemaha and Brown Counties in northeast 
Kansas. The basin's waters flow into Perry Lake, a U.S. Army Corps of 
Engineers facility, which then flow into the Kansas (or Kaw) River 
between Topeka and Lawrence (which then flow into the Missouri River at 
Kansas City). Precipitation averages between 35 to 37 inches per year, 
the vast majority of which falls as rain between April and October.
    No reservoir or other storage facility currently exists on the 
Reservation. A low-head weir (dam) and associated water treatment 
facilities on the Delaware River built in the 1970s provide the primary 
water supply for the Reservation, diverting on average just over 
100,000 gallons per day.
    Drought conditions have occasionally led to crisis conditions on 
the Reservation. For example, the Department--through the Bureau of 
Indian Affairs and Bureau of Reclamation--provided nearly $300,000 in 
2003 to the Tribe to haul over 7 million gallons of water to the 
Reservation for domestic and fire prevention needs because the Delaware 
River and its tributaries were without flow for over sixty (60) days 
that year due to severe weather conditions.
C. 1994 Agreement and Subsequent Litigation
    Between the 1970s and the 1990s, the Tribe worked with the State of 
Kansas and a local watershed district to develop a plan under the 
auspices of the Watershed Protection and Flood Prevention Act, Public 
Law 83-566 (PL-566 program, codified at 16 U.S.C.  1001 et seq.), now 
administered by USDA's Natural Resources Conservation Service (NRCS). 
In 1994, the parties completed an environmental impact statement and 
signed a Watershed Plan (1994 Agreement), which envisioned twenty (20) 
floodwater retarding dams off-Reservation and one multi-purpose dam 
(Plum Creek Reservoir) that would provide 5,700 acre-feet of water 
supply and recreation use for the Tribe's present and future needs. 
Congress authorized funding to implement portions of the 1994 Agreement 
in both 1996 and 1998, and the off-reservation dams have since been 
built.
    Plum Creek Reservoir was not constructed, however, as it would have 
required the acquisition of more than 1,000 acres of non-Indian lands 
checker-boarded with Tribal lands. Most affected non-Indian landowners 
refused purchase offers, and the local district refused to use its 
eminent domain authority.
    In June 2006, the Tribe filed a complaint in federal district court 
against the Bureau of Indian Affairs, U.S. Department of Agriculture's 
Natural Resource Conservation Service (NRCS), the Kansas Department of 
Agriculture's State Conservation Commission, and the local watershed 
district. The complaint alleged that the Federal and State defendants 
had affirmative trust obligations to protect and preserve the Tribe's 
Federal Indian reserved water rights (Winters rights) and failed to do 
so. The complaint also alleged that the local watershed district 
breached its obligations under the 1994 Agreement. The complaint 
sought, among other things, a declaration of the existence and priority 
of the Tribe's Winters rights; an injunction preventing all defendants 
from violating the Tribe's Winters rights; and specific performance of 
the 1994 Agreement.
    After the United States and other defendants filed motions to 
dismiss, the parties agreed to stay the litigation and to seek a 
negotiated settlement. The parties made significant progress toward 
resolving both the water and land acquisitions issues, but the local 
watershed district ultimately voted to reject the key land acquisition 
piece in 2011. The parties then agreed to restructure the litigation 
and focus on the district's obligations under the 1994 Agreement. In 
2013, the federal district court ruled against the Tribe and found that 
the 1994 Agreement did not obligate the district to exercise its 
eminent domain authority to secure the land for Plum Creek Reservoir.
III. Proposed Kickapoo Legislation
    As noted above, the Tribe's 2006 complaint asserted various claims 
related to its Winters rights in the Delaware River basin. Although the 
district court dismissed other claims related to the 1994 Agreement and 
the need to secure land for Plum Creek Reservoir, the Tribe, the State, 
and the United States (through the Department of Justice (DOJ) and the 
Department's Solicitor's Office (SOL)) continued working to resolve the 
underlying water rights issues and negotiated a potential water rights 
settlement. As directed by the court, the parties shared a draft 
settlement with the magistrate judge in December 2015. In September 
2016, the Tribe and State--after making some critical revisions not 
shared with the United States--executed a revised settlement that forms 
the basis of S. 2154 and the subject of this hearing.
    As introduced, S. 2154 would authorize and ratify the revised 
settlement executed by the Tribe and the State in September 2016; 
quantify the Tribe's water rights as outlined in the 2016 settlement; 
direct the Secretary of the Interior to enter into the 2016 settlement 
and take related actions consistent with the legislation; and direct 
the Secretary of Agriculture, through NRCS, to complete a study and 
make recommendations within two (2) years related to Plum Creek 
Project. S. 2154 would waive the Tribe's and United States' claims to 
water rights within the Delaware River Basin upon enactment, yet would 
retain the Tribe's claims against the United States related to its 
water rights. S. 2154 includes no federal appropriations at this time.
IV. Department of the Interior Positions on S. 2154
    While the Department strongly supports Indian water rights 
settlements generally, the Department has significant concerns about S. 
2154 and cannot support the bill as introduced.
    As noted above, representatives from DOI and DOJ negotiated the 
basic structure of a proposed settlement in December 2015, one that the 
three sovereign parties submitted to the magistrate judge overseeing 
the litigation that began in 2006. The federal representatives 
cautioned the other parties and the magistrate judge, however, that any 
settlement would need to be submitted to and approved by the Working 
Group on Indian Water Rights and the Administration as a whole and that 
outstanding issues remained to be resolved, such as federal funding and 
associated cost-sharing as envisioned by the 1990 Criteria and 
Procedures. Rather than pursuing this course, the Tribe embarked on a 
separate process with the State, revising the December 2015 agreement--
without the involvement or approval of the United States--and executing 
this revised settlement agreement in September 2016.
    The Administration has significant concerns about the 2016 
agreement and S. 2154. Criteria 3 of the 1990 Criteria and Procedures 
provides that ``Settlements should be completed in such a way that all 
outstanding water claims are resolved and finality is achieved.'' A 
critical goal for all Indian water rights settlements is achieving 
finality: resolving an Indian tribe's water and related claims once and 
for all and providing certainty both to the Indian tribe and to 
affected State and non-Indian parties with respect to water allocations 
within a basin and related costs to achieve the settlement. Although S. 
2154 and the underlying agreement take steps in this direction, they 
leave unresolved the ultimate cost of the settlement, how those costs 
should be shared, and how the water right will be realized for the 
Tribe. Moreover, S. 2154 explicitly retains the Tribe's claims against 
the United States related to the issues this settlement is meant to 
resolve, the exact opposite of what an Indian water rights settlement 
is meant to achieve.
    A critical piece of this puzzle, one that S. 2154 recognizes as 
unresolved, relates to the Plum Creek Project or similar infrastructure 
to meet the Tribe's water right. The 2016 agreement defines the Tribal 
Water Right as the right to divert or redivert 4,705 acre feet year and 
gives the Tribe a right to store at least 18,520 acre feet in one or 
more yet to be constructed reservoirs. As introduced, S. 2154 would 
direct the Secretary of Agriculture and NRCS to commence a study and, 
within two (2) years, make recommendations on potential alterations to 
the Plan that authorized Plum Creek Project. It is unknown if such 
alterations will increase or reduce the amount of water that could be 
delivered to meet the Tribe's water right, thus leaving uncertainty as 
to whether this project or other projects will be needed to address the 
Tribe's water needs based on a reasonably foreseeable planning horizon. 
Although we generally support the amount of water quantified for the 
Tribe in the 2016 settlement executed between the Tribe and the State, 
the infrastructure needed to deliver reasonably foreseeable necessary 
water is unknown, and neither the United States nor anyone else should 
be exposed to unknown costs or potential liability as S. 2154 would 
allow.
    In addition to the matters noted above, S. 2154 and the underlying 
agreement would alter other considerations developed as part of the 
original agreement--such as the timing of court proceedings and 
settlement enforceability--that had been structured based on previously 
enacted Indian water settlements.
    After the Tribe and the State executed the revised agreement in 
September 2016, the Department and DOJ communicated concerns to the 
Tribe regarding these revisions, recommended that the Tribe follow the 
Indian water rights settlement process set forth in the Criteria and 
Procedures (including formation of a negotiation team), and urged the 
Tribe to dismiss the litigation. The Tribe agreed to dismiss the 
pending lawsuit, and the remaining parties to the litigation filed a 
joint stipulation requesting dismissal without prejudice, which the 
court approved in February 2017. The Department stands ready to work 
with the Tribe and the State through a Federal Negotiation Team and our 
established processes.
V. Conclusion
    The Department recognizes that the Tribe and the State of Kansas 
want to achieve a Kickapoo water settlement and have devoted 
substantial efforts to reach that goal. The Department shares this goal 
and is committed to working with the Tribe and the State to reach a 
final and fair settlement of the Tribe's water rights claims that 
adheres to the principles of the Criteria and Procedures and that we 
can fully support. As proposed, however, the Department cannot support 
S. 2154.
                                 ______
                                 
   s. 3060, a bill to repeal section 2141 of the revised statutes to 
remove the prohibition on certain alcohol manufacturing on indian lands
    Chairman Hoeven, Vice Chairman Udall, and Members of the Committee, 
thank you for the opportunity to present the Department of the 
Interior's (Department) views on S. 3060, a bill to repeal section 2141 
of the Revised Statutes to remove the prohibition on certain alcohol 
manufacturing on Indian lands.
Background
    The Department is aware that the Confederated Tribes of the 
Chehalis Reservation seek to venture into a new economic development 
project that will be 100 percent owned by the Tribe on its Tribal 
lands. This economic development project consists of the construction 
and operation of a distillery. The Tribe approached the Bureau of 
Indian Affairs (BIA) Northwest Regional Office regarding this economic 
development venture and the BIA identified a potential obstacle to the 
project: one section of the Trade and Intercourse Act of 1834 
prohibited distilleries in Indian country. The ban as amended remains a 
part of Federal law. Current 25 U.S.C. 251 reads: ``Every person who 
shall, within the Indian Country, set up or continue any distillery for 
manufacturing ardent spirits, shall be liable to a penalty of one 
thousand dollars; and the superintendent of Indian Affairs, Indian 
Agent, or sub-agent within the limits of whose agency any distillery of 
ardent spirits is set up or continued, shall forthwith destroy and 
break up the same.''
    Other sections of the 1834 law banned the sale and possession of 
liquor in Indian country, and those provisions also remain in the US 
Code at 18 U.S.C. Sections 1154, 1155, and 1156. In 1953, Congress 
enacted what is now codified at 18 U.S.C. Section 1161, waiving the 
application of those sections where a Tribe has enacted a liquor 
ordinance compliant with the terms of that section. The legislative 
history of Section 1161 makes it clear that Congress considered, and 
rejected, adding the distillery ban to the list of sections that would 
not apply where a Tribe had a liquor ordinance. The Department agrees 
that a legislative solution is the best avenue to remedy this situation 
and supports S. 3060.
S. 3060
    S. 3060 would repeal Section 2141 of the Revised Statutes (25 
U.S.C. 251). That section of the Code states that ``Every person who 
shall, within the Indian Country, set up or continue any distillery for 
manufacturing ardent spirits, shall be liable to a penalty of one 
thousand dollars; and the superintendent of Indian Affairs, Indian 
Agent, or sub-agent within the limits of whose agency any distillery of 
ardent spirits is set up or continued, shall forthwith destroy and 
break up the same.''
Conclusion
    Thank you for the opportunity to appear before you today. I am 
happy to answer any questions the Subcommittee may have.
                                 ______
                                 
  s. 3168, to amend the omnibus public land management act of 2009 to 
           make reclamation water settlements fund permanent
    Chairman Hoeven, Vice Chairman Udall, and Members of the Committee, 
I am Alan Mikkelsen, and I am the Senior Advisor to Secretary Zinke and 
Chair of the Working Group on Indian Water Settlements at the U.S. 
Department of the Interior (Department). Thank you for the opportunity 
to discuss S. 3168, a bill to amend the Omnibus Public Land Management 
Act of 2009 (Title X, Part II of Public Law 111-11) to make the 
Reclamation Water Settlements Fund permanent. The Administration 
remains committed to implementing and adequately funding enacted 
settlements, and has ensured adequate funding to implement all 
authorized settlements through the annual Budget process.
    The Department continues to strongly support Indian water rights 
settlements that adhere to the principles outlined in the Department's 
1990 Criteria and Procedures that are grounded in the policy that 
negotiated Indian water rights settlements are preferable to protracted 
and divisive litigation as a means of resolving water rights disputes. 
Negotiated settlements allow tribes, states, and local water users to 
achieve finality on difficult issues of title to water, freeing up 
surrounding communities to make critical management and development 
decisions. Settlements allow the parties to develop creative solutions 
to overarching water resources issues. One of the key factors in making 
settlements meaningful to the health and welfare of tribes and non-
Indian communities, and to creating water certainty and economic-
development opportunities in the West, has been funding. Funding is 
needed to secure new water supplies, build or rehabilitate 
infrastructure required to deliver water, and protect resources such as 
treaty fishing rights that are of critical importance to tribes. 
Settlements provide opportunities for local solutions, and because they 
have federal and local cost-share requirements, the settling parties 
share in the burdens, as well as the benefits, that can arise from 
investments in infrastructure. The FY 2019 Budget requests $173 million 
for the implementation of Indian water rights settlements.
Background
    To date, Congress has enacted 32 Indian water settlements, 
addressing the need for reliable water supplies in Indian country. 
There are over 280 federally recognized tribes in the West alone 
(excluding Alaska), and the Department continues to see an increase in 
requests from tribes and states to enter into water rights settlement 
negotiations. Many of these tribes need: clean, reliable drinking 
water; repairs to dilapidated irrigation projects; and the development 
of other water infrastructure to bring economic development to 
reservations. States increasingly seek settlement of Indian water 
rights to provide certainty for holders of State-based water rights, 
clarify authority to manage water resources, and plan for the future.
    Indian water rights settlements can however be costly, and costs 
have increased over the years. Within the last ten years, the Omnibus 
Public Lands Management Act of 2009 (P.L. 111-11), the Claims 
Resolution Act of 2010 (P.L. 111-291) and the Water Infrastructure 
Improvements for the Nation (WIIN) Act (P.L. 114-322) authorized seven 
new settlements that call for total Federal expenditures totally 
approximately $2.5 billion. Although some mandatory funding was 
provided with the Claims Resolution Act, substantial discretionary 
funding is needed to meet the statutory settlement obligations. Each of 
these settlements contain deadlines by which funding must be completed 
or the settlement fails and long standing, expensive, and disruptive 
litigation resumes. In addition to the statutory requirements to fund 
these settlements within prescribed timeframes, the availability of 
funding has implications for economic development in Indian and non-
Indian communities and raises other human considerations and equity 
concerns. For example, the availability of potable water can affect 
economic development, tribal health and welfare. Stalled funding would 
also delay the receipt of the economic benefits that are associated 
with settlements, which is why the Budget provides sufficient resources 
to implement enacted settlements. These benefits will not fully accrue 
until the physical infrastructure associated with settlements is 
complete and operational. Construction funding also provides short-term 
economic stimulus to localities or regions which is important given the 
high unemployment levels in Indian country.
    The Department currently has 21 Federal negotiation teams working 
with tribes to achieve additional settlements, and 23 teams working on 
implementing enacted settlements. Two of the settlements included as 
priorities for the Settlement fund, Navajo Lower Colorado Basin and 
Fort Belknap, have not been enacted, and the Federal contributions to 
these settlements may approach a billion dollars based on similar 
enacted settlements. While allocation of funding among the priority 
settlements identified in the Settlements Fund is complicated by 
construction schedules and other matters and cannot be fully predicted, 
at this time it appears there will be little, if any, funding in the 
Settlement Fund for settlements not specifically listed as priorities. 
The Department has always given priority to funding settlements in the 
annual Budget.
Reclamation Water Settlements Fund
    In 2009, Congress created the Reclamation Water Settlements Fund, 
which authorizes the deposit of funds that would otherwise be deposited 
into the Reclamation Fund, into a separate account within the U.S. 
Treasury. Currently, the Secretary of the Interior is authorized to 
expend from the Reclamation Water Settlements Fund, without further 
appropriation, up to $120 million a year of the amounts deposited 
through FY 2029, plus accrued interest, in each of the years from FY 
2020 to FY 2034. The Secretary may use money in the Reclamation Water 
Settlements Fund to implement congressionally approved water rights 
settlements, if the settlement requires the Bureau of Reclamation to 
provide financial assistance, or to plan, design or construct water 
supply infrastructure. In addition, the currently authorized 
Reclamation Water Settlements Fund establishes certain funding 
priorities for settlements in the states of New Mexico, Montana, and 
Arizona.
    Finally, the law includes a reversion clause providing that if any 
settlement identified in the above funding priority is not approved by 
an act of Congress by December 31, 2019, the Secretary has the 
discretion to use the reserved funds for any authorized use.
S. 3168
    S. 3168 would make the Reclamation Water Settlements Fund permanent 
and would not prioritize settlements other than those currently 
prioritized. While the current Reclamation Water Settlement Fund will 
become available for expenditures in 2020, much of it is already 
committed to existing, enacted settlements. The Department looks 
forward to working with the Committee to determine the best approach 
for authorizing future settlements.
    The Department takes into consideration the effects of growing 
populations and related water demands, widespread drought in the West, 
and the need for new infrastructure and water storage in many 
locations. These factors are certain to drive an increase in the demand 
for water settlements.
    I want to underscore the importance of these settlements, and 
recognize the aim of the bill sponsor and this Committee in considering 
S. 3168. Disputes over Indian water rights can be expensive and 
divisive. In many instances, these disputes last for decades, represent 
a tangible barrier to progress for tribes, and significantly hinder the 
rational and beneficial management of water resources. Indian water 
rights settlements can break down these barriers and help create 
conditions that improve water resources management by providing 
finality and certainty for all affected water users. When settlements 
can be reached, they provide opportunities for economic development, 
produce critical benefits for tribes and non-Indian parties, and bring 
together communities to improve water management practices in some of 
the most stressed water basins in the country. Successful settlements 
are also consistent with the Federal trust responsibility to American 
Indians and with Federal policy promoting Indian self-determination and 
economic self-sufficiency.
    As noted above, the Department supports Indian water rights 
settlements grounded in the policy that negotiated Indian water rights 
settlements are preferable to protracted and divisive litigation as a 
means of resolving water rights disputes. The Department looks forward 
to working with the Committee and discussing the best means of 
achieving future settlements.
    This concludes my written statement. I am pleased to answer 
questions at the appropriate time.

    The Chairman. Thank you, Mr. Mikkelsen.
    I will turn to Senator Cantwell for the purpose of an 
introduction.

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

    Senator Cantwell. Thank you, Mr. Chairman. Thank you for 
the hearing today.
    I want to welcome the Chairman of the Confederated Tribes 
of the Chehalis Reservation, Henry Pickernell, Sr. I am so glad 
to see him here.
    The Chairman was nominated by the Chehalis Tribal Business 
Council over a year ago to lead the tribe. He is a long-time 
water quality specialist in the tribe's Natural Resource 
Department and a recent graduate of Evergreen State College. He 
also previously served as Vice Chairman of the tribe working on 
the restoration of fisheries in the Chehalis Basin and 
expanding economic opportunities for the Chehalis Tribe.
    I cannot thank him enough for being here today to talk 
about a bill that provides greater economic opportunities for 
the Chehalis Tribe and Indian Country. That legislation, S. 
3060, introduced by myself and Senators Moran and Murray, would 
repeal an outdated, discriminatory law that prohibits tribes 
from operating distilleries on tribal lands.
    With that, Mr. Chairman, again, thank you for having this 
hearing. Thank you, Chairman Pickernell for being here in 
Washington, D.C.
    The Chairman. Thank you, Senator Cantwell.
    Chairman Pickernell, you may proceed with your testimony.

  STATEMENT OF HON. HARRY PICKERNELL, CHAIRMAN, CONFEDERATED 
               TRIBES OF THE CHEHALIS RESERVATION

    Mr. Pickernell. Good afternoon, Chairman Hoeven, Vice 
Chairman Udall, and members of the Committee. My name is Harry 
Pickernell. I am the chairman of the Confederated Tribes of the 
Chehalis Reservation, a federally-recognized Indian tribe 
located in southwest Washington State.
    I am pleased to be here today to testify in support of S. 
3060, a bill that would repeal an antiquated 19th Century law 
that has become an obstacle to the Tribe's economic 
development.
    The Chehalis Reservation was created by Executive Order in 
1864 and is located between the confluence of the Chehalis 
River and the Black River. Much of the Tribe's 4,800 acre land 
base is in a flood plain and the tribe has very little land 
suitable for economic development.
    Southwest Washington has long been an economically-
depressed area lacking in businesses and jobs for tribal 
members and non-Indians alike. The tribe operates a casino but 
is always looking for ways to diversify its economic base to 
continue to support its education, health, housing, safety and 
other programs for its members. Approximately 40 percent of 
tribal members are under the age of 21 and will need jobs in 
the future.
    With the assistance of the Department of the Interior, the 
tribe, in partnership with the Great Wolf Company, also 
developed a Great Wolf Lodge on the tribe's reservation land in 
Grand Mound, Washington. This is the only indoor waterpark in 
Washington State and the only Great Wolf Lodge on an Indian 
reservation.
    Currently, the tribe is planning to develop a stand-alone 
brewery and a stand-alone distillery, both of which will be on-
reservation and 100 percent-owned and operated by the tribe. 
Each of these enterprises is intended to both provide new 
skills and training to tribal members and non-Indians, but also 
provide skilled jobs on the reservation.
    In 1953, Congress enacted 18 U.S.C. Section 1161 which 
excludes application of various Federal liquor prohibitions in 
Indian Country, provided the activities conform to State law 
and are conducted by tribes under liquor ordinances approved by 
the Bureau of Indian Affairs. When Congress established this 
regulatory regime, however, it missed one virtually 
unremembered law that prohibits distilleries in Indian Country.
    That law, which is now codified at 25 U.S.C. Section 251, 
was enacted on June 30, 1834, and reads: ``Every person who 
shall, within the Indian Country, set up or continue any 
distillery for manufacturing ardent spirits, shall be liable to 
a penalty of $1,000; and the Superintendent of Indian Affairs, 
Indian agent, or subagent, within the limits of whose agency 
any distillery of ardent spirits is set up or continued, shall 
forthwith destroy and break up the same.''
    The apparent intent of Section 251 was to prevent non-
Indian traders from avoiding taxation by setting up 
distilleries in Indian Country and also to prevent non-Indian 
traders from selling liquor to Indians who were the wards of 
the United States. As far as the tribe has been able to 
ascertain, Section 251 has never been enforced and has only 
been mentioned in passing once since its enactment 184 years 
ago. The one time Section 251 has even been mentioned in a 
Federal court decision was in a footnote in a Ninth Circuit 
Court of Appeals opinion in 1983.
    That court identified Section 251 as one of the outdated 
statutes that were resolved by Section 1161. In reversing the 
decision, the U.S. Supreme Court identified Section 1161 as 
``abolishing Federal prohibition, and as legalizing Indian 
liquor transactions, as long as those transactions conformed 
both to tribal ordinance and State law,'' but the Court failed 
to identify Section 251 in its decision.
    By allowing the tribe's project to move forward, repealing 
Section 251 will create jobs both for tribal members and the 
surrounding communities and provide an economic return to the 
tribe for use to support its tribal programs. These will 
include jobs constructing the distillery, learning the 
distillery production trade, and addressing the marketing and 
distribution of the tribe's products. By repealing Section 251, 
S. 3060 will not disturb or otherwise affect the requirements 
established by Section 1161 that the tribe, and other tribes, 
must one, comply with State liquor laws and regulations and 
two, have a BIA-approved liquor ordinance for on-reservation 
liquor sales.
    This bill will similarly not affect the ability of the 
State of Washington or other States to collect liquor taxes 
under that same authority. Rather, S. 3060 will simply remove 
an antiquated and nearly forgotten Federal prohibition on the 
construction and operation of distilleries in Indian Country.
    The United States' current policy is to support tribal 
self-determination and self-sufficiency. The Chehalis Tribe and 
other tribes must provide for their members and support 
surrounding communities through economic development. Although 
the tribe has no reason to believe that the Department of 
Interior is inclined to enforce Section 251, the law presents a 
risk that the BIA could ``destroy and break Up'' the tribe's 
distillery after the tribe begins construction.
    Time is of the essence for this legislation. The tribe has 
its building permits in hand, has completed the full design of 
the project, purchased some of the equipment, and needs to 
continue to expend additional funds for development of this 
project. The tribe will also require additional financing to 
complete the project and this 1834 statute serves as a barrier 
to obtaining that financing.
    The tribe urges swift consideration and passage of S. 3060. 
I would be happy to answer any questions the Committee may have 
at this time. Thank you.
    [The prepared statement of Mr. Pickernell follows:]

  Prepared Statement of Hon. Harry Pickernell, Chairman, Confederated 
                   Tribes of the Chehalis Reservation
    Good afternoon Chairman Hoeven, Vice Chairman Udall, and members of 
the Committee. My name is Harry Pickernell and I am the Chairman of the 
Confederated Tribes of the Chehalis Reservation (the ``Tribe''), a 
federally recognized Indian tribe located in southwest Washington 
State. I am pleased to be here today to testify in support of S. 3060, 
a bill that would repeal an antiquated nineteenth century law that has 
become an obstacle to the Tribe's economic development.
    The Chehalis Reservation was created by Executive Order in 1864 and 
is located between the confluence of the Chehalis River and the Black 
River. Much of the Tribe's 4,800 acre land base is in a flood plain and 
the Tribe has very little land suitable for economic development.
    Southwest Washington has long been an economically depressed area 
lacking in businesses and jobs for Tribal members and non-Indians 
alike. The Tribe operates a casino but is always looking for ways to 
diversify its economic base to continue to support its education, 
health, housing, safety and other programs for its members. 
Approximately 40 percent of Tribal members are under the age of 21 and 
will need jobs in the future.
    With the assistance of the Department of the Interior, the Tribe, 
in partnership with the Great Wolf Company, also developed a Great Wolf 
Lodge on the Tribe's reservation land in Grand Mound, Washington. This 
is the only indoor waterpark in Washington State and the only Great 
Wolf Lodge on an Indian reservation.
    Currently, the Tribe is planning to develop a stand-alone brewery 
and a stand-alone distillery, both of which will be on-reservation and 
100 percent owned and operated by the Tribe. Each of these enterprises 
is intended to both provide new skills and training to Tribal members 
and non-Indians, but also provide skilled jobs on the Reservation.
    In 1953, Congress enacted 18 U.S.C. section 1161 (Section 1161), 
which excludes application of various federal liquor prohibitions in 
Indian country provided the activities conform to state law and are 
conducted by tribes under liquor ordinances approved by the Bureau of 
Indian Affairs (BIA). When Congress established this regulatory regime, 
however, it missed one virtually unremembered law that prohibits 
distilleries in Indian country.
    That law, which is now codified at 25 U.S.C. section 251 (Section 
251), was enacted on June 30, 1834, and reads:

         Every person who shall, within the Indian country, set up or 
        continue any distillery for manufacturing ardent spirits, shall 
        be liable to a penalty of $1,000; and the superintendent of 
        Indian affairs, Indian agent, or subagent, within the limits of 
        whose agency any distillery of ardent spirits is set up or 
        continued, shall forthwith destroy and break up the same.

    The apparent intent of Section 251 was to prevent non-Indian 
traders from avoiding taxation by setting up distilleries in Indian 
country and also to prevent non-Indian traders from selling liquor to 
Indians who were the wards of the United States.
    As far as the Tribe has been able to ascertain, Section 251 has 
never been enforced and has only been mentioned in passing once since 
its enactment 184 years ago. The one time Section 251 has even been 
mentioned in a federal court decision was in a footnote in a Ninth 
Circuit Court of Appeals opinion in 1983. That court identified Section 
251 as one of the outdated statutes that were resolved by Section 1161. 
In reversing the decision, the U.S. Supreme Court identified Section 
1161 as ``abolishing federal prohibition, and as legalizing Indian 
liquor transactions as long as those transactions conformed both to 
tribal ordinance and state law,'' but the Court failed to identify 
Section 251 in its decision. \1\
---------------------------------------------------------------------------
    \1\ The Ninth Circuit's footnote is in Rehner v. Rice, 678 F.2d 
1340, 1333 n.6 (9th Cir. 1982), and the U.S. Supreme Court's subsequent 
decision is Rice v. Rehner, 463 U.S. 713 (1983).
---------------------------------------------------------------------------
    By allowing the Tribe's project to move forward, repealing Section 
251 will create jobs both for Tribal members and the surrounding 
communities and provide an economic return to the Tribe for use to 
support its tribal programs. These will include jobs constructing the 
distillery, learning the distillery production trade, and addressing 
the marketing and distribution of the Tribe's products.
    By repealing Section 251, S. 3060 will not disturb or otherwise 
affect the requirements established by Section 1161 that the Tribe (and 
other tribes) must (1) comply with state liquor laws and regulations 
and (2) have a BIA-approved liquor ordinance for on-reservation liquor 
sales. This bill will similarly not affect the ability of the State of 
Washington or other states to collect liquor taxes under that same 
authority. Rather, S. 3060 will simply remove an antiquated and nearly 
forgotten federal prohibition on the construction and operation of 
distilleries in Indian country.
    The United States' current policy is to support tribal self-
determination and self-sufficiency. The Chehalis Tribe and other tribes 
must provide for their members and support surrounding communities 
through economic development. Although the Tribe has no reason to 
believe that the Department is inclined to enforce Section 251, the law 
presents a risk that the BIA could ``destroy and break up'' the Tribe's 
distillery after the Tribe begins construction.
    Time is of the essence for this legislation. The Tribe has its 
building permits in hand, has completed the full design of the project, 
purchased some of the equipment, and needs to continue to expend 
additional funds for development of this project. The Tribe will also 
require additional financing to complete the project and Section 251 
serves as a barrier to obtaining that financing.
    The Tribe urges swift consideration and passage of S. 3060. I would 
be happy to answer any questions the Committee may have at this time.

    The Chairman. Thank you, Chairman Pickernell.
    Now we will turn to Chairman Randall.

   STATEMENT OF HON. LESTER RANDALL, CHAIRMAN, KICKAPOO TRIBE

    Mr. Randall. Good afternoon, Chairman Hoeven, Senator 
Moran, and other members of the Committee. [Greeting in native 
tongue.]
    I am Lester Randall, Chairman of the Kickapoo Tribe in 
Kansas. I am here today to testify on behalf of the Kickapoo 
Tribal Council and tribal members in support of S. 2154, a bill 
to approve our Water Settlement Agreement, enacted in September 
2016 with the State of Kansas.
    That agreement accomplishes a number of critical steps in 
the decades-long effort to achieve water security. I will 
provide an overview of those steps for you in a moment.
    First, I wanted to express the tribe's appreciation to the 
State of Kansas and its political leadership and technical 
staff. A meaningful, respectful partnership has been created 
between the tribe and State on water management in the Delaware 
River basin. We believe this relationship has a long lasting 
value to both sovereigns.
    I also want to express the tribe's appreciation to Senator 
Moran, Congresswoman Jenkins and their staffs for their 
commitment and leadership on this vital matter to the tribe. 
Lastly, I want to thank the attorneys from the Departments of 
the Interior, Justice, and Agriculture who assisted with 
negotiation of this agreement.
    Every Indian water settlement comes to Congress and is 
borne of its own unique circumstances. The Kickapoo Water 
Settlement is no different. What makes our legislation unique 
is that we are asking Congress to approve a water agreement 
that is a direct outgrowth of a water storage project Congress 
blessed 20 years ago in 1998 through the Department of 
Agriculture's Small Watershed Program. We have not yet built 
the storage project but it is more critical today than it was 
20 years ago.
    The Kickapoo Tribe in Kansas has lived in northeast Kansas 
since it entered into the 1832 Treaty of Castor Hill with the 
United States. By virtue of the 1832 treaty, the tribe holds 
senior water rights under the Winters doctrine from the 
Delaware River and its tributaries.
    Water is sacred to our people. It is an essential 
cornerstone to building our homeland. Economic development is a 
top priority with the tribe to the meet growing needs of our 
community and to maximize our economic resources for the 
benefit of our tribal members. A dependable water supply is 
essential for us to meet future housing and economic 
development, fire protection and farming needs.
    Drought is no stranger to the reservation in northeast 
Kansas. Governor Colyer issued a statewide drought declaration 
in March of this year. It is still in effect. Kansas has 
notified the water users in the Delaware River Basin of 
cutbacks due to the drought.
    Because the Kickapoo Reservation sits on a rock formation 
blocking access to groundwater, our only water supply is the 
Delaware River and a few of its tributaries that flow through 
the reservation. We have relied on a small dam and water 
treatment plant on the river, one built with a small grant from 
the United States back in the 1970s. Over the years, the dam 
and treatment plant have required multiple repairs but both 
structures are old and inadequate for our current needs.
    After construction of the small dam and the water treatment 
system, the tribe wanted to embark on a larger water 
development project. We sought assistance through the Bureau of 
Indian Affairs in the early 1980s who sent us to the Soil 
Conservation Office, now NRCS.
    Under the SCS Small Watershed Program, also known as the 
P.L. 83-566 Program, the tribe, in conjunction with the local 
watershed district, began in a decade-long effort in 1983 to 
design a plan for a water storage project known as the Upper 
Delaware and Tributaries Project. The centerpiece of the 
project was a water storage dam to be built on the reservation 
on the Plum Creek. Plum Creek is a tributary to the Upper 
Delaware River. A Federal watershed agreement was executed by 
all the parties in 1994.
    Following a full NEPA EIS review and issuance of a final 
record of decision in 1994 by NRCS, congressional authorization 
for the Plum Creek Project was secured in 1996 by the Senate 
and in 1998 by the House. We have been told by NRCS legal 
counsel that the USDA considers the congressional authorization 
of the project to still be valid. As a project sponsor, it is 
the tribe's responsibility under the P.L. 83-566 Program to 
secure land and water rights for the project.
    As for the land rights, the tribe has purchased 250 acres 
of the Plum Creek drainage all with our own money. Depending on 
the final size of the project, we already own over half of the 
land.
    As for the water rights, in September 2016, the tribe and 
State entered into an agreement to quantify the tribe's water 
rights. An important next step is to have Congress approve the 
agreement. By enacting S. 2154, approving the settlement 
agreement, it approves the water rights to meet the tribe's 
future and present needs, establishes the storage, seepage and 
evaporation components of the tribal water right, monitoring 
and reporting requirements, protects the senior water right for 
the Delaware River Basin, directs the tribe to enact a water 
code to protect and regulate use of water by the tribal 
members, directs the Interior Department to sign an agreement 
and carry out its terms, directs NRCS to consult with the 
Department of the Interior, the tribe and the State to make 
recommendations for the alteration of the Plum Creek Project to 
effectuate the tribe's water right.
    The tribe would like to emphasize that no other land or 
water interests for any other tribes are adversely impacted by 
S. 2154.
    In closing, thank you again for convening this hearing on 
S. 2154. I am happy to answer any questions you might have for 
me. Thank you.
    [The prepared statement of Mr. Randall follows:]

  Prepared Statement of Hon. Lester Randall, Chairman, Kickapoo Tribe
Introduction
    Good afternoon, Chairman Hoeven, Senator Moran, and other members 
of the Committee. I'm Lester Randall, Chairman of the Kickapoo Tribe in 
Kansas. I'm here today to testify on behalf of my Tribal Council and 
Tribal members, in support of S. 2154, a bill to approve our Water 
Settlement Agreement, enacted in September 2016 with the State of 
Kansas. That Agreement accomplishes a number of critical steps in the 
Tribe's decade's long effort to achieve water security. I'll provide an 
overview of those steps for you in a moment.
    First, I wanted to express the Tribe's appreciation to the State of 
Kansas and the leadership and technical staff in its Department of 
Agriculture and Division of Water Resources. A meaningful, respectful 
partnership was created between the Tribe and the State on water 
management in the Delaware River basin that we believe will have 
lasting value to both sovereigns. Thanks also to former Governor Sam 
Brownback and current Governor Jeff Colyer, and also to Attorney 
General Derek Schmidt.
    I also want to express the Tribe's appreciation to Senator Moran 
and his staff, for their commitment and leadership on this vital matter 
to the Tribe. And also, on the House side, to Congresswoman Jenkins and 
her staff for all of their support and assistance.
    Exhibit 1 are copies of Federal and State of Kansas letters 
relevant to S. 2154.
    Exhibit 2 are examples of copies of key local supporters of S. 
2154.
    Every Indian water settlement that comes to Congress is born of its 
own unique circumstances. The Kickapoo Water Settlement bill is no 
different. What makes this legislation, and the underlying Agreement 
between the Tribe and the State, unique is that we are asking the 
Congress to approve a water agreement evolving from a project the 
Congress blessed 20 years ago through the Department of Agriculture's 
Small Watershed Program.
    The Kickapoo Tribe in Kansas has lived in northeast Kansas since it 
entered into the 1832 Treaty of Castor Hill with the United States. In 
a later treaty in 1854 the Tribe ceded over 600,000 acres of land to 
the United States, retaining approximately 150,000 acres for our 
Reservation. An additional cession of land took place in 1862, which 
the Tribe opposed, opening our Reservation to allotment and 
homesteading.
    The Kickapoo Tribe was the first of three other Indian tribes in 
northeast Kansas to compact with the state for their gaming operations 
called the ``Golden Eagle Casino'', the largest employer in Brown 
County. Economic development is the top priority for the Kickapoo 
Tribe, to meet the growing needs of its community and to maximize its 
economic resources for the benefit of tribal members. The Kickapoo 
Tribe has a diverse workforce made up of over 130 professionals and 
technical staff members. The day-to-day operations include issues with 
environmental, health, road maintenance, compliance, financial, legal, 
gaming, and planning community growth.
    Drought is no stranger to our Reservation in northeast Kansas, 
which is east of the 100th Meridian, often thought of as a dividing 
line between the drier western United States and the wetter Midwest. 
Governor Colyer issued a state-wide drought declaration in March of 
this year, which is still in effect. And the Division of Water 
Resources has notified water users in the Delaware River basin, where 
our Reservation sits, of impending cutbacks.
    Water, while being sacred to the Kickapoo, is an essential 
cornerstone to a vibrant homeland. A dependable water supply is 
essential for us to meet our present and future housing, economic 
development, fire protection, and agricultural pursuits at the Tribal 
farming enterprise. By virtue of its 1832 Treaty with the United 
States, the Tribe possesses senior water rights under the Winters 
doctrine, which implicitly reserved sufficient water from the Delaware 
River and its tributaries to make the Reservation a viable, permanent 
homeland for the Kickapoo people. \1\
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    \1\ The Winters doctrine is aptly named after the seminal reserved 
water case Winters v. United States, 207 U.S. 564 (1908), reaffirmed in 
subsequent Supreme Court decisions and followed by numerous lower 
federal and state courts over the past century. See, generally, Cohen, 
Felix, HANDBOOK OF FEDERAL INDIAN LAW (2012 Ed.),  19.03 at 1210-1227.
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    The Tribal community's drinking water needs are critical. The 
Reservation sits on a rock formation blocking access to groundwater. 
The only current water supply is the Delaware River, a modest sized 
river and its tributaries that flow through the Reservation. We've 
relied on a small dam and water treatment plant on the river, one that 
we built with a small grant from the United States government in the 
1970s. Over the years the dam and treatment plant have been repeatedly 
repaired, but both structures are old and inadequate for the current 
needs.
    After construction of the small dam, pump house and treatment 
system, in the mid-1970s, the Tribe wanted to embark on a larger scale 
water development project. The Tribe sought the assistance of the 
Bureau of Indian Affairs in the early 1980s, who sent us to the Soil 
Conservation Service (SCS), which is now the Natural Resources 
Conservation Service (NRCS). Under the SCS Small Watershed Program, 
also known as the PL 83-566 Program, the Tribe in conjunction with a 
local watershed district, four local conservation districts, the State 
of Kansas, and SCS/NRCS, began in 1983 a decade long effort to design, 
plan and seek congressional approval of a water storage project known 
as the Upper Delaware and Tributaries Project. The centerpiece of the 
Project was a multi-purpose storage project to be built on Plum Creek.
    Plum Creek is a tributary to the Upper Delaware River. A federal 
Watershed Agreement was executed by all the parties in 1994, following 
a full NEPA Environmental Impact Statement review, and a final Record 
of Decision issued by NRCS. Congressional authorization was secured for 
the Plum Creek Project in 1996 by the Senate, and in 1998 by the House. 
We have been told by NRCS' legal counsel that the USDA considers the 
congressional authorization of the Project to still be valid. See 
Exhibit 3.
    As a project sponsor, it is the Tribe's responsibility under the 
PL-566 Program to secure two things--first, the land rights for the 
Project, and, second, the water rights.
    As for the land rights, the Tribe over the past decade has 
purchased about 250 acres of land in the Plum Creek drainage--with its 
own money--where the Project would be located. It will continue those 
efforts, offering fair market value or land exchanges where possible. 
Depending on the final size of the Project, the Tribe already owns over 
half of the needed land.
    As for the water rights, in September of 2016, after several years 
of technical negotiations, the Tribe and the State of Kansas' 
Department of Agriculture and Attorney General entered into the 
Agreement that quantifies the Tribe's water right, and how that water 
right is to be administered by the State on the Delaware River and its 
tributaries. The U.S. Departments of Interior, Justice and Agriculture 
were involved in the negotiation of the Settlement Agreement.
    An important next step is to have Congress approve the Tribal-State 
Settlement Agreement. By enacting S. 2154, and approving the Settlement 
Agreement, the Congress:

   Approves the water right of 4,705 acre feet per year as a 
        federal reserved water right;

   Directs the federal Interior Department to execute the 
        Settlement Agreement and to carry out the terms of the 
        Agreement consistent with this Act;

   Establishes the storage, seepage and evaporation components 
        of the Tribal water right;

   Establishes the administration of the right by the State as 
        the senior water right in the river basin;

   Establishes the Tribe's monitoring and reporting 
        requirements for water consumption on the Reservation;

   Directs the Tribe to enact a water code that recognizes and 
        protects the interests of Kickapoo Tribal members who own 
        interests in allotted land on the Reservation, and who have an 
        interest in the water right;

   Directs NRCS, in consultation with the Interior Department, 
        to commence a study of and make recommendations for alterations 
        to the Plum Creek Project to effectuate, in part, the Tribe's 
        water right;

   Splits the waiver of claims by the Tribe against the United 
        States, consistent with the fact that S. 2154 does not 
        authorize the appropriations of funding to construct water 
        storage at the Plum Creek Project or anywhere else on the 
        Reservation, and consistent with a settlement agreement between 
        the Tribe and the United States in a tribal trust lawsuit 
        resolved in April of 2012;

   As set out in more detail below, the Settlement Agreement 
        and S. 2154 are in compliance with the Interior Department's 
        1990 Criteria and Procedures, to the extent relevant, given the 
        unique nature of the Settlement Agreement;

   S. 2154 does not authorize the appropriation of, or 
        appropriate funds, for a water storage project for the Tribe at 
        the Plum Creek Project site or elsewhere. Once reviewed by 
        NRCS, the Tribe contemplates the parties will come back to 
        Congress with recommendations for water storage and the costs 
        associated therewith;

   Though not relevant on the Senate side, the Tribe has been 
        cognizant of the ``Bishop'' process on the House side, and has 
        worked with Congresswoman Jenkins' office to engage the House 
        Natural Resources Committee staff on the unique, phased nature 
        of this settlement.

The Tribe, Its Membership and Its Reservation, and the Consequences to 
        the Tribal Community from a Lack of Access to a Dependable 
        Water Supply
    The Tribe has an enrolled membership of 1,600, about 400 of whom 
live on or near its 30 square mile Reservation in northeast Kansas. The 
Tribe is organized under the Indian Reorganization Act of 1934, and its 
government operates under a constitution approved by the Secretary of 
the Interior in 1937. The Tribe was moved in the 19th century several 
times by the United States government--from the Fox River Valley in 
Wisconsin to multiple locations in Illinois, Missouri and Kansas--
pursuant to nine treaties spanning a fifty-year period between 1809 and 
1862. \2\ See Exhibit 4. The Tribe has lived in its present territory 
in Kansas since 1832, twenty-nine years prior to Kansas Statehood in 
1861. See Exhibit 5.
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    \2\ See 7 Stat. 117 (1809); 7 Stat. 130 (1815); 7 Stat. 145 (1816); 
7 Stat 200 (1819); 7 Stat. 202 (1819); 7 Stat. 208 (1820); 7 Stat. 391 
(1832); 10 Stat. 1078 (1854); 12 Stat. 1249 (1862).
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    The Tribe presently holds equitable title to 4,859 acres, and fee 
title to another 2,189 acres, of land within its Reservation boundaries 
located within Brown County, Kansas. Tribal members own equitable title 
to another 2,861 acres of allotted land. See Exhibit 6. Under Federal 
law the underlying legal title to this land is held in trust for the 
Tribe and its members by the United States.
    The Tribe created the Kickapoo Housing Authority in 1966-67. The 
federal Housing and Urban Development HUD awarded the Tribe and its 
Housing Authority a grant to construct tribal homes in 1967-68. Prior 
to that, our homes on the Reservation--about 20 in number--were served 
through individual shallow wells at each home. These homes were 
scattered throughout the Reservation on individual allotment lands.
    The first housing project was developed on tribal lands, homes were 
closer together and required a larger water supply. That first housing 
project involved the construction of 40 homes. Second and third housing 
projects followed in the next few years. Because the Tribe did not have 
its own water source, it had to create a means to hook up to the City 
of Horton's water supply, a distance of 5 miles from the housing 
projects. This was a very expensive alternative, and was only viewed as 
a stop-gap measure. It was the only viable alternative, since HUD would 
not provide funding for housing without an assurance of water 
availability.
    The current Kickapoo Water Treatment Plant currently supplies water 
to both Indian members and non-Indians--about 60 persons--who live 
within Reservation boundaries. The Tribe operates its own Tribal 
School--grades K through 12--and would like to supply water to this 
facility, but is unable to supply the school with water from its own 
system.
    The Tribe also provides basic fire protection to all Reservation 
residents, both Kickapoo tribal members and non-Indians alike, under 
mutual aid agreements executed with neighboring jurisdictions. The 
Tribe's ability to do so, however, is limited by an unreliable water 
supply. Reservation residents and numerous Tribal structures are in 
constant danger. In March of 2005, an arsonist set a large fire on 
Kickapoo lands, destroying 1,500 acres. Without the aid of neighboring 
communities, a larger land area, including homes and other structures, 
would likely have been destroyed due to the shortage of water.
    Several housing and economic development opportunities for the 
Kickapoo people have been lost over time because the Kickapoo Tribe 
could not ensure that the Tribe's water works could meet their water 
needs. Several years ago the Kickapoo Tribe was granted, but had to 
reject, a 25-unit housing project awarded by the State of Kansas 
Housing Resources Corporation due to the lack of a stable water source. 
And a constrained water supply restricts economic development 
opportunities on the Reservation, which in turn restricts the 
prosperity of the Tribe and the Kickapoo people.
The Hydrology of the Kickapoo Reservation, and the Crippling Effects of 
        Drought and Drought Sensitivity
    East of the 100th Meridian, the Delaware River in northeast Kansas 
traverses the Kickapoo Reservation and benefits from more than 35 
inches of precipitation annually, with a total average runoff for the 
entire river of about 200,000 acre feet, about 60,000 acre feet of 
which is annually available to the Reservation, about 8,750 acre feet 
from the Plum Creek drainage alone. Unfortunately, despite its 
location, drought and water shortage are not an unknown or unexpected 
part of living in northeast Kansas. The Reservation faces off-again-on-
again drought conditions resulting in a continual challenge in 
obtaining an adequate and reliable water source to meet the basic 
health and sanitary needs of its residents. Indeed, northeast Kansas 
including our Reservation has been identified by the Kansas Water 
Office as a ``drought sensitive'' area of the State.
    In 2003, for instance, the Delaware River and its tributaries were 
completely without flow for over 60 days due to the severe drought 
conditions in the Midwest. The Tribe was forced to severely ration 
water and truck over 7,000,000 gallons of drinking water to the 
Reservation. The Bureau of Indian Affairs provided the Tribe $186,000 
for water-hauling assistance. The Tribe's commercial operations, as 
well families and non-Indian residents, were forced to cut water 
consumption by almost 60 percent. Droughts since 2003 continue to beset 
the Tribe and its members.
    In times of natural drought, such as that experienced in the summer 
of 2003, the combined effect of the drought and the man-made 
impoundments and other land treatment actions in the watershed have 
caused the Upper Delaware River to run dry for long periods of time. A 
generation ago and earlier the watershed was far more reliable for 
meeting the Tribe's needs. Now the water shortages come with increasing 
frequency, and are not just connected to drought events. Developments 
upriver have altered the hydrology.
    On a year-in and year-out basis, the Tribal Council has to issue 
periodic notices to the customers served by its water company that the 
system is in a shortage situation, and voluntary restrictions go into 
effect. In the most challenging conditions the cutbacks are mandatory. 
Indeed, in March of this year the Kansas Water Office announced that 
the water rights above the Muscotah gage on the Delaware River were put 
under State administration due to drought conditions in the watershed. 
See https://kwo.ks.gov/docs/default-source/drought/
rpt_09_midjune2018_drought-- 061218_dk.pdf?sfvrsn=0 Governor Colyer 
also issued a statewide drought declaration at the same time, which is 
still in effect. See https://kwo.ks.gov/docs/default-source/drought/
exec-order-18-11-final.pdf?sfvrsn=2
The Kickapoo Tribe's Forty-Five Year Effort to Develop a Water Supply 
        under Federal Law
    Water security is an essential element of tribal sovereignty, and 
for more than 45 years the Tribe has been on a quest to achieve water 
security and stability. Despite best efforts, the Tribe's long-term 
goal of water security for itself and all Reservation residents has to 
date fallen short.
    In the mid-1970s the Tribe constructed its own rudimentary water 
diversion, treatment and supply system with financial assistance from 
the Federal government. In 1976-1977, the Tribe was awarded a grant 
from what was then called the Economic Development Administration, or 
EDA, of the U.S. Department of Commerce. The grant, in the amount of 
$1.3 million, was for the construction of a low water impoundment dam 
on the Delaware River, an intake and raw water pump station, water 
treatment plant, distribution system, and sewage treatment plant. It 
supplies water to both Indians and non-Indians alike who live within 
the Reservation boundaries and within the reach of the delivery system. 
See Exhibit 7.
    The low water impoundment dam was developed as a temporary supply 
measure to serve the Tribe until a larger, permanent reservoir could be 
developed on the Reservation. A 1970s 25-year comprehensive plan for 
Reservation growth and development, funded by a grant from the 
Administration for Native Americans (ANA), of the U.S. Department of 
Health and Human Services, revealed that the small project funded by 
EDA would only be the first of several steps taken by the Tribe to 
secure water for long-term needs. It also found that without 
impoundment the surface water from the Delaware River system would not 
meet long term water needs, and that the groundwater sources within our 
Reservation boundaries were insufficient. \3\
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    \3\ The Indian Health Service and the BIA funded exploratory 
investigations for groundwater at about that same time, which found 
that there were no reliable sources of groundwater within the 
Reservation boundaries. A similar study was conducted by the Kansas 
Geological Survey in subsequent years, producing the same results. 
http://www.kgs.ku.edu/Hydro/Publications/OFR00_31/index.html 
Consequently, the Tribe has to rely exclusively on surface water for 
tribal domestic and commercial needs.
---------------------------------------------------------------------------
    Construction began on the EDA-funded dam and water treatment 
facility in 1977, with completion in 1978. Then-Kansas Governor Bob 
Bennett attended the ribbon-cutting ceremony. Given our Winters rights 
to water, the Tribe appreciated that the State of Kansas never 
challenged our diversion of water from the Delaware River into our 
fledgling treatment plant and water delivery system.
    At the same time, in 1978, the local watershed district--the Nemaha 
Brown Joint Watershed District #7--submitted to the SCS a General Plan 
for the development of the Upper Delaware River and Tributaries 
Watershed for the development of various water storage, flood control, 
soil erosion and land treatment activities. Kansas law required Nemaha 
Brown to prepare their General Plan, in order to be eligible to secure 
funding for water and soil conservation programs from the Kansas State 
Conservation Commission. SCS also required the watershed district to 
have an approved General Plan. See Exhibit 8.
    The General Plan expressly mentioned the Tribe's fervent intent to 
develop a municipal, commercial, industrial and fire protection water 
supply for its Reservation. The Plan identified 5 possible sites within 
the reservation for the development of a reservoir storage project. One 
of those sites was on Plum Creek, a tributary to the Delaware; the 
other four were on other Delaware tributaries. Id.
    In the early 1980s the Tribe first learned of the federal PL-566 
Small Watershed Program, funded and administered by SCS. The PL-566 
Program law was amended by Congress in 1981 to enable Indian tribes for 
the first time to become local sponsors of watershed development plans, 
and to be eligible for funding from SCS for those purposes. Early on 
the Tribe wrote SCS and inquired whether it could become a local 
project sponsor under the PL-566 program. The Tribe was told it could 
not be an exclusive sponsor, because it did not have jurisdiction over 
the entire Delaware River watershed. Under Kansas law Nemaha Brown 
shared responsibility for the watershed with the Tribe. Neither the 
Tribe nor Nemaha Brown would have exclusive authority to operate 
federal flood and soil erosion control programs in the Delaware River 
watershed. Officials from the Tribe and Nemaha Brown then traveled to 
Washington, D.C. together in February of 1983 to work out more of the 
details of a joint sponsorship with SCS officials.
    This led to the Tribe and Nemaha Brown formally creating a Joint 
Watershed Board in 1983. Exhibit 9. The Agreement states that ``[i]t is 
the understanding of the District and the Tribe that the goal of the 
two local agencies is the ultimate construction of all needed 
structures within the watershed.'' The Plum Creek project was one of 
the key water storage projects contemplated by the parties to the Joint 
Agreement. Both the SCS and the Kansas State Conservation Commission 
officially endorsed the joint co-sponsorship agreement, as did then 
Senator Nancy Landon Kassenbaum.
    The Tribe was then able to secure $156,000 from the Bureau of 
Indian Affairs to retain a Topeka engineering firm to conduct the 
preliminary engineering analysis to initiate the PL 566 application 
process. This was a highly unusual step for the BIA, to expend Indian 
trust funds for the technical services of an engineering firm to be 
used not only to benefit Indian reservation lands but also off-
Reservation, non-Indian interests. Ultimately, it enabled the Kickapoo-
Namaha Brown PL-566 application to receive priority ranking in the 
1990s by SCS.
    Between 1983 and 1994, the Tribe, the Namaha Brown and SCS analyzed 
and selected viable sites for flood retention dams and related land 
treatment activities to be part of the final Watershed Plan. Public 
meetings sponsored jointly by the Kickapoo Tribe and Nemaha Brown were 
held in 1990 and 1991 to explain the nature and scope of the project to 
interested individuals and communities in Brown County. Those meetings 
kicked off the formal EIS process under the National Environmental 
Policy Act (NEPA).
    In June of 1994, the Kickapoo Tribe entered into the Watershed 
Agreement with the watershed district, four local conservation 
districts, the State of Kansas Department of Agriculture, and the SCS 
to jointly develop the Watershed Plan. The Agreement allowed cost-
sharing of flood control and water supply projects under the PL-566 
Program. It set forth an express plan to control erosion, provide 
drinking water and reduce flooding for the entire watershed, through 
the construction of 20 small flood retention dams and one large, multi-
purpose water storage project, the Plum Creek dam and reservoir, 
designed to provide a reliable long-term water supply for the Kickapoo 
reservation. The Plum Creek Project was designed to be a 400 acre water 
surface area and 1200 acre land area, multi-use reservoir that will 
provide for sufficient water to meet the present and future needs of 
the Kickapoo Reservation and its Indian and non-Indian residents. See 
Exhibit 10.
    A notice of publication of the final EIS was published in the 
Federal Register on May 13, 1994. See Exhibit 11. NRCS issued a Record 
of Decision in 1994, approving the project's compliance with NEPA, and 
recommending authorization by the Office of Management and Budget and 
the Congress. See Exhibit 12. On June 30, 1994, the United States Army 
Corps of Engineers (ACE) issued a  404 Clean Water Act permit--Permit 
# DA-199401028--for the Plum Creek project to Nemaha Brown. Revised 
special conditions for the permit to Nemaha Brown were issued by the 
Corps of Engineers on October 16, 2002.
    In 1998, the parties to the 1994 Watershed Agreement obtained final 
Congressional authorization for the development of the Project, 
including Plum Creek, under the Federal PL-566 program. See Exhibits 13 
and 14.
    The Plum Creek storage project is the largest storage site on the 
Reservation. It was designed in 1994 by NRCS to hold about 10,500 acre 
feet of storage capacity, about 3,500 acre feet of which is for flood 
control, and about 7,000 feet of which is for storage of water for 
consumptive uses. The Plum Creek sub-drainage provides sufficient water 
to fill a project of that capacity. On average, over the past 35-year 
period of record, about 8,570 acre feet of water per year flows out of 
Plum Creek into the Delaware River. In most years this will provide the 
Tribe with a reliable source of water. Extended drought cycles may make 
complete annual refill impossible year in and year out, and so the 
project's storage will have to be managed with that in mind. There are 
smaller storage project sites on the Reservation, and those also will 
be kept in mind in future water planning efforts. But the Tribe does 
not own as much of the land area at those smaller alternative sites.
Overview of the September 2016 Kickapoo Tribe Water Rights Settlement 
        Agreement
    The Water Right Settlement Agreement establishes the nature, extent 
and characteristics of the Tribal Water Right and the respective 
rights, duties and obligations of other parties to the agreement. Under 
the Agreement, the Tribe may divert or redivert, as available, up to 
4,705 acre-feet of water per year with a priority date of October 24, 
1832 for any direct use for the Tribe. Domestic use by members and 
allottees does not count against the Tribal Water Right. Kansas 
domestic water rights are exempt from administration to protect the 
Tribal Water Right. The Tribe may store in one or more reservoirs, for 
the purpose of subsequent direct use, up to a combined volume of 18,520 
acre-feet. The combined volume may be increased if seepage 
characteristics of the reservoir or reservoirs requires. Direct use and 
storage allowances of the agreement were determined based on municipal 
build-out concept, using methods consistent with the Kansas law for 
Kansas water users. See Exhibit 15.
    The Settlement Agreement includes a Memorandum of Agreement which 
establishes clear and transparent procedures for communication, 
monitoring and protection of the Tribal Water Right. The MOA provides 
for a process of annual reviews by the State and Tribe to insure it 
remains current, especially as the Tribe develops storage.
    Under the Settlement Agreement, the Kansas Department of 
Agriculture--Division of Water Resources and the Chief Engineer have 
the following responsibilities:

   Agree to recognize the Tribal Water Right with a priority 
        date of October 24, 1832.

   Review applications of Kansas water rights to ensure 
        prevention of injury to the Tribal Water Right and to provide 
        notice of applications to the Tribe.

   Monitor the basin as prescribed in the Memorandum of 
        Agreement.

   Respond to notices of impairment through evaluation and 
        administration, as needed.

   Review annually, with the Tribe, the Memorandum of Agreement 
        to insure it remains appropriate as the Tribe develops its 
        demand and constructs storage.

    Under the Settlement Agreement, the Kickapoo Tribe of Kansas has 
the following responsibilities:

   Construct and maintain dams and other water structures.

   Provide the Chief Engineer copies of inspection reports and 
        notice of signification changes in construction and operation, 
        any structural problems of dams or reservoirs and proposed 
        remedies, and any serious problems such as dam failure.

   Enact a Tribal Water Code.

   Meter all diversion and annually report water use.

   Provide additional data required by the Chief Engineer to 
        administer water rights to protect the Tribal Water Right.

   Review annually, with KDA-DWR, the Memorandum of Agreement.

    It is generally believed that the Delaware River Basin has 
sufficient water supplies to satisfy the rights of the Kickapoo Tribe 
without reducing the established water rights of Kansas water right 
holders.
Key Provisions of S. 2154, Kickapoo Water Rights Settlement Legislation
    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    SECTION 2. PURPOSES.--to approve and authorize the Kickapoo Tribe 
Water Rights Settlement Agreement between the Tribe and the State. 
Direct Interior and Agriculture Departments to execute the provisions 
of the Agreement and the Act.

    SECTION 3. DEFINITIONS.

    SECTION 4.--authorizes, ratifies and confirms the Settlement 
Agreement. Secretary of the Department of the Interior directed to 
execute the Agreement. Key provisions of the Agreement affecting the 
Department and the U.S. include:

   approval of tribal water code [Article 6],

   monitor State administration of state water law in the 
        Delaware River Basin [Article 7],

   publish findings in the Federal Register when all conditions 
        necessary for completion of the Agreement have been fulfilled 
        [Article 10],

   waivers and release of claims [Article 12],

   Compliance with all federal laws, no exceptions of waivers.

    SECTION 5. KICKAPOO TRIBE WATER RIGHTS.--tribal water rights 
confirmed and held in trust, allottee due process protections, tribal 
water code to allocate and administer tribal water rights to allottees 
and members, Secretarial approval of tribal water code.

    SECTION 6. EFFECT OF KICKAPOO TRIBE WATER RIGHTS SETTLEMENT 
AGREEMENT AND ACT.--does not affect the State's administration of state 
water rights, does not affect the ability of the U.S. to enforce 
federal law, does not affect ability of U.S. to fulfill obligations as 
trustee to other tribes or allottees, does not confer jurisdiction on 
state courts, enforceability date.

    SECTION 7. WATER FACILITIES.--NRCS PL-566 Small Watershed Program 
and Upper Delaware River Watershed Plan. Congressional approval in 1996 
and 1998, authorizing a water storage project for the Tribe. Study and 
make recommendations to Congress to possibly alter plan to effectuate, 
in part, the Tribal water rights.

    SECTION 8. WAIVER AND RELEASE OF CLAIMS; RETENTION OF CLAIMS.--
Tribe and the U.S. waive claims to water rights, Tribe waives claims 
against U.S. for failure to establish water rights, but not damages 
resulting from failure to establish, quantify, acquire, develop, 
enforce or protect such water rights. See Exhibit 16.

    SECTION 9. JUDICIAL PROCEEDINGS.--on enactment of Act, proceedings 
to bind all water rights in the Delaware River Basin to the Agreement 
and the Tribe's water rights, so that Kickapoo water rights become 
enforceable.

    SECTION 10.--MISCELLANEOUS PROVISIONS.--limited waiver of immunity, 
other tribes not affected, limitation on claims for reimbursement, 
nothing affects current law, no use of condemnation or eminent domain.

Compliance with the Federal Criteria and Procedures for the 
        Participation of the Federal Government in Negotiations for the 
        Settlement of Indian Water Rights Claims
    The Kickapoo Settlement is consistent with the United States' 
responsibility as trustee to Indians, and will secure to the Tribe the 
right to use and obtain benefits from Reservation water resources, thus 
ensuring that the Tribe will receive equivalent benefits for claims it 
will waive as part of the settlement. The settlement resolves all 
outstanding Kickapoo water right claims, quantifies a tribal right to 
4,705 acre-feet for all present and future needs on the reservation, 
and does so while creating a mechanism for administering the tribal 
water right vis-a-vis the established water rights of Kansas water 
right holders, thereby creating a framework that will encourage long-
term cooperation among local water interests, the State, the Tribe and 
the United States. The settlement includes a process that will specify 
who may use the tribal water right, where, and under what conditions. 
Finally, this settlement is a crucial and long-awaited step towards 
achieving a permanent tribal homeland promised to the Kickapoo Tribe in 
the treaties and agreements ratified by Congress in in the 19th century 
that serve as the foundation of the relationship between the Tribe and 
the United States.
    The Tribe doesn't disagree that as a general proposition the 
Federal Criteria and Procedures for the Participation of the Federal 
Government in Negotiations for the Settlement of Indian Water Rights 
Claims, 55 FR 9223-01 (C&Ps) provide important guidance to the 
Department in settling Indian reserved water rights, which involve 
claims by the Tribe and third parties, and necessarily involve the 
Department as trustee. And the Tribe doesn't disagree that the C&Ps 
have a role to play in the implementation of S.2154, once enacted. But, 
as in all things, context matters. Behind S. 2154, and the Settlement 
Agreement it approves, is an extraordinarily long history of struggle 
by the Tribe to attain water security and equity in the Delaware River 
watershed, with the knowledge of the Interior Department and the Bureau 
of Indian Affairs, but without the trustee's involvement, until very 
recent years. This struggle included the resolution of legal claims in 
an expensive federal court lawsuit brought by the Tribe to which the 
United States was a party. Key representatives of the Interior, 
Agriculture and Justice Departments, as well as water engineering 
consultants, played an integral role in the resolution of the 
litigation and the negotiation of the Settlement Agreement.
    By letter dated April 6, 2018, the Interior Secretary's Indian 
Water Rights Settlement Office notified the Tribe of its appointment of 
a federal negotiation team under the C&Ps. See Exhibit 17. The team's 
formal appointment (though the members of the team have not all been 
identified as of the date of the writing of this testimony) at this 
point in the settlement process represents another unique aspect of 
this Settlement. S. 2154 is a settlement of the Tribe's water right and 
the myriad details concerning administration of the right in the 
Delaware River watershed. It was negotiated and signed by the Tribe and 
the State in September of 2016. The Tribe does not see the utility of a 
federal negotiation team in relation to the Settlement Agreement that 
S. 2154 approves, with one exception. As noted below in relation to 
criteria #4, however, Section 7 of S. 2154 contains a key direction to 
the Natural Resources Conservation Service to study and make 
recommendations to Congress for changes and improvements to the 
previous watershed plan authorized by Congress in 1998 that included a 
multi-purpose storage project on Plum Creek, a tributary to the 
Delaware River. The federal negotiation team will most certainly play 
an instrumental role in that process, and it should include as a team 
member an official from the Kansas office of the NRCS.
    Notably, the settlement does not include a Federal financial 
contribution. Instead, it is focused on the Federal government's 
programmatic responsibilities, including assistance by the Bureau of 
Indian Affairs (BIA) to work with the SCS/NRCS to fulfill storage needs 
promised in the early 1990s. The Settlement and this Act resolve some 
but not all of the Tribe's damages claims against the Federal 
government, as explained earlier. Importantly, the Settlement provides 
resolution to a primary tribal claim against the federal government, 
that of the failure to secure and protect the federal reserved water 
rights of the tribe in a basin that has seen considerable federal 
investment on private lands (but not on the Tribe's trust lands).
    An important component of the settlement involves progress towards 
development of storage. The SCS now NRCS completed a study in the mid-
1990s of a proposed storage project on Plum Creek that was found to be 
economically feasible and consistent with federal guidelines at the 
time. S. 2154 directs NRCS, the Tribe and the Interior Department to 
revisit the 1994 Plan and make recommendations to Congress for further 
action.
    The following is a description of how the process employed to 
settle the Tribe's water rights complies with the Criteria and 
Procedures.

    1. The Criteria and Procedures are applicable to all negotiations 
involving Indian water rights claims settlements.
    The Criteria and Procedures are applicable as the Tribe and the 
United States government seek to quantify reserved Indian water rights 
through a negotiated framework.
    2. The Department of the Interior will support legislation 
authorizing those agreements to which it is a signatory party.
    The Department of Interior is not yet a signatory party to the 
Kickapoo Global Settlement Agreement (``Agreement''). However, it has 
participated actively through the negotiations that have been an 
outgrowth of the Tribe's lawsuit. The Department cannot become a party 
to the settlement agreement until authorized to do so by Congress via 
ratifying legislation.
    3. Settlements should be completed in such a way that all 
outstanding water claims are resolved and finality is achieved.
    The Agreement will resolve all the outstanding Kickapoo water 
claims on the Delaware River and its tributaries that flow through the 
Kickapoo Reservation. The Settlement Agreement secures the water rights 
of all the water users in the Delaware River Basin vis-a-vis the 
Kickapoo rights, and creates a mechanism for administration of all 
federal and state water rights.
    The Agreement outlines the Tribe's allocation, use, timing and 
potential locations of use.
    Finality respecting the Tribal Water Right is achieved through the 
Agreement. In doing so each party thereby agrees to abide by its terms. 
The Tribe has agreed to waive all claims against state law based water 
users and the United States Government relating to the water rights the 
Agreement recognizes, in exchange for federal legislation approving the 
Agreement and directing the Secretaries of Interior and Agriculture to 
effectuate the terms of the Agreement.
    4. The total cost of the settlement to all parties should not 
exceed the value of the existing claims as calculated by the Federal 
Government.
    The Settlement Agreement does not authorize appropriations and 
therefore this C&P element is not relevant at this stage. As explained 
earlier in this testimony, Congress in 1996 and 1998 authorized the 
Delaware River Project, subject to the availability of appropriations, 
under the authority of the PL-566 Small Watershed Program. Following 
receipt of recommendations from the Natural Resources Conservation 
Service per Section 7 of S. 2154, the Tribe will ask Congress to take 
up the funding authority and mechanism at that time. It is possible 
that the appropriations process may proceed through the agriculture 
committees of the House and Senate, as would occur under the PL-566 
program.
    5. Federal contributions to a settlement should not exceed the sum 
of the following two elements, (1) United States liability if the 
claims were litigated and if the case is lost; federal and non-federal 
exposure in present value based on the size of the claims, value of the 
water, timing of the award, and likelihood of loss and (2) additional 
costs related to federal trust or programmatic responsibilities 
(justification for why such contributions cannot be funded through the 
normal budget process)
    See #4, above. This criteria is not relevant to S. 2154 and the 
Settlement Agreement.
    6. Settlements should include non-Federal cost-sharing 
proportionate to the benefits received by the non-federal parties.
    See #4, above. This criteria is not relevant to S. 2154 and the 
Settlement Agreement.
    7.Settlements should be structured to promote economic efficiency 
on reservationsand tribal self-sufficiency.
    The Tribe, the State of Kansas and the United States have 
negotiated a unique settlement that works to promote efficient use of 
the water resources of the Delaware River in northeast Kansas, and 
thereby promoting economic development on the Kickapoo Reservation, 
tribal self-sufficiency, and the economy of northeast Kansas.
    For over 40 years the Tribe has been working to secure an adequate 
and clean water supply. During this time the Tribe has conducted 
various studies regarding economic development projects, housing 
developments, public safety requirements and community development 
projects. The studies consistently demonstrate a need for a reliable 
water supply to be successful.
    Currently, the Tribe has a need for increased housing on the 
Reservation. However, the Tribe has been limited in its ability to 
build homes, in part because it does not have an adequate water supply 
necessary for housing developments. The Agreement will provide for 
sufficient water for the Tribe to build homes for members. The same 
holds true for economic develop enterprises on the Reservation.
    In addition, the water supply will increase public safety on the 
Reservation. The Reservation has been subjected to fires, which have 
threatened Tribal member's homes and the Reservation's natural 
resources. An adequate water supply will assist the Tribe in achieving 
its fire safety goals.
    8.Operating capabilities and various resources of the Federal and 
non-Federalparties to the claim negotiations should be considered in 
structuring a settlement.
    Throughout the multi-year process of negotiations the parties--
Tribal, State and Federal--have built strong relationships with one 
another that have fostered a willingness to achieve a positive 
settlement. Each party has contributed its unique resources to the 
Agreement. During the negotiation process the parties' strengths and 
weakness were considered and each party contributed to the Agreement in 
a complimentary manner. The final Agreement is a manifestation of each 
party's contribution to the Agreement.
    9.The U.S. shall not bear any obligations or liability regarding 
the investment,management or use of such funds.
    See #4, above. This criteria is not relevant to S. 2154 and the 
Settlement Agreement.
    10.Federal participation in Indian water rights negotiations should 
be conducive tolong-term harmony and cooperation among all interested 
parties through respect for the sovereignty of the of the States and 
tribes in their respective jurisdictions.
    The Tribe appreciates the relationships it established with the 
other negotiating parties through this process. In particular, the 
Tribe appreciates the closer ties it's developed with the State 
Department of Agriculture, Attorney General, and Congressional 
delegation on water related matters. These closer ties build stronger 
channels of communication on other substantive topics.
    Moreover, the terms of the Agreement facilitate long-term harmony 
among all the signatories through providing stability by securing the 
parties water rights. The Agreement also provides detailed processes 
for implementing the provisions of the Agreement. Through the process 
of agreeing to the rules, all the parties carefully considered their 
obligations in the Agreement. As a result, all the parties are aware of 
their obligations and have willingly accepted such obligations. This 
provides for long term harmony and stability among the water users on 
the Delaware River.
    11.Settlements should not include a list of provisions, 
subparagraphs a-j.
    See #4, above. These criteria are not relevant to S. 2154 and the 
Settlement Agreement.
    12-14. Specific cost/financial considerations.
    See #4, above. These criteria are not relevant to S. 2154 and the 
Settlement Agreement.
    15.Settlement agreements should include the following standard 
language: FederalFinancial contributions to a settlement will normally 
be budgeted for, subject to the availability of funds, by October 1 of 
the year following the year of enactment of the authorizing 
legislation.
    See #4, above. This criteria is not relevant to S. 2154 and the 
Settlement Agreement.
    16.Settlements requiring the payment of a substantial Federal 
contribution shouldinclude standard language providing for the costs to 
be spread-out over more than one year.
    See #4, above. This criteria is not relevant to S. 2154 and the 
Settlement Agreement.
    The Settlement and proposed legislation do not include financial 
authorizations for claims already settled by Congress. The claims that 
will be settled have a legal basis, have not been previously resolved 
by Congress, and were not settled in prior cases against the United 
States. The Settlement carries over damages claims not waived in an 
earlier, 2012 Settlement Agreement between the Tribe and the United 
States. See Exhibit 16. The Settlement does not resolve additional 
claims against the United States brought by the Tribe; the legal 
assessment, and potential financial contribution of the United States 
to their resolution, are forthcoming and not included as part of this 
Settlement.
Conclusion
    Thank you again for convening this hearing on S. 2154. It is a 
unique piece of legislation driven by unique circumstances. It is 
important that Congress act now to approve the Kickapoo Water Right 
Settlement Agreement through the enactment of this Act, to enable these 
sovereign entities, with assistance from the United States, to continue 
to build on the momentum gained in the Agreement and the Act. Indian 
water settlements typically are built in increments, and this is no 
different in that respect.

                           INDEX OF EXHIBITS*
------------------------------------------------------------------------
        Exhibit No.                          Description
------------------------------------------------------------------------
1                            Federal and State of Kansas letters
                              relevant to S. 2154
2                            Examples of key local supporters of S. 2154
3                            April 8, 2016 Letter from Deputy Regional
                              Attorney of USDA to Steven Moore Regarding
                              authorization of the Watershed Plan
4                            Map of Former and Present Kickapoo Lands
5                            1832Treaty with the Kickapoos
6                            Current Map of Tribal and Allotted Land
                              Tracts
7                            Small Tribal Dam, Delaware River and Water
                              Treatment Facility Photos
8                            General Plan, Upper Delaware and
                              Tributaries, Nemaha -Brown Watershed Joint
                              District, July 1978
9                            Nemaha- Brown-Kickapoo Joint Watershed
                              Board Agreement
10                           Jan. 1994 Watershed Plan and Environmental
                              Impact Statement (EIS) for Upper Delaware
                              and Tributaries Watershed (Atchison,
                              Brown, Jackson, and Nemaha Counties,
                              Kansas)
11                           Notice of Publication of Final EIS in
                              Federal Register, May 13, 1994
12                           1994 Record of Decision: Upper Delaware and
                              Tributaries Watershed (Atchison, Brown,
                              Jackson, and Nemaha Counties, Kansas)
13                           1996 Final Senate approval for the
                              development of the Project, including Plum
                              Creek, under the Federal PL-566
14                           1998 Final House approval for the
                              development of the Project, including Plum
                              Creek, under the Federal PL-566
15                           Sept. 2016 Final Settlement Agreement
                              between Kickapoo Tribe and State
16                           Joint Stipulation of Settlement between
                              Defendants (Salazar, Secretary of the US
                              Interior) and Kickapoo Tribe of Kansas
                              (Apr. 11, 2012)
17                           April 6, 2018 Letter from Interior
                              Secretary to Kickapoo Tribe notifying
                              Tribe of its appointment of a federal
                              negotiation team under the C&Ps
------------------------------------------------------------------------


    **The Exhibits have been retained in the Committee files and are 
available at https://www.narf.org/nill/documents/
20180711_kickapoo_testimony_s2154.html **

    The Chairman. Thank you, Chairman.
    Director Tubbs.

   STATEMENT OF JOHN TUBBS, DIRECTOR, MONTANA DEPARTMENT OF 
               NATURAL RESOURCES AND CONSERVATION

    Mr. Tubbs. Chairman Hoeven, Vice Chairman Udall, and 
distinguished members of this Committee, thank you for the 
opportunity to appear in front of you today in support of S. 
3168.
    I am John Tubbs, Director of the Department of Natural 
Resources and Conservation for the State of Montana. Governor 
Bullock sends his greetings. Today, I appear on behalf of the 
State of Montana and the Western States Water Council.
    My Department is made up of four divisions: Forestry; Trust 
Lands; Conservation and Resource Development; and, most 
relevant to this hearing, Montana's Water Resource Division.
    This topic today, water settlements, is very near and dear 
to my heart. I have worked on settlements for 30 years. Under 
President Obama, I was proud to serve as Deputy Assistant 
Secretary for Water and Science with the U.S. Department of the 
Interior.
    In 1979, the Montana Legislature established the Montana 
Reserved Water Rights Compact Commission as part of the 
comprehensive State-wide adjudication process to negotiate 
settlements with Montana's tribal Nations and Federal agencies 
claiming reserved water rights within the State of Montana.
    Montana has eighteen compacts settling reserved water 
rights within our borders, including our seven reservations. 
These negotiations were massive undertakings, and Montana is 
very proud that it was able to secure positive results, as well 
as avoid protracted and costly litigation.
    Just last month, Governor Bullock, Secretary Zinke and 
Blackfeet Tribal Chairman Barnes executed the Blackfeet Water 
Rights Settlement that will enable clean drinking water and 
irrigation projects to go forward. As you know, the 
Confederated and Salish and Kootenai Tribes have a water 
settlement bill that is on deck. Thank you, leaders of this 
Committee, for giving these matters the time and attention they 
deserve.
    The State of Montana and Western States Water Council 
supports any effort to provide a stable and appropriate funding 
source for water rights settlements. Of course you are aware 
that previously the Western States Water Council asked the 
Administration and the Congress to fully appropriate the 
receipts and collections accruing to the Reclamation Fund 
subsequent to the Reclamation Act and other acts for their 
intended purpose of continuing conservation, development and 
wise use of resources to meet western water-related needs.
    In regard to S. 3168, Montana and the Western States Water 
Council support this effort to make the Reclamation Water 
Settlement Fund permanent. Congress, and this Committee in 
particular, has made impressive efforts to move water rights 
settlement bills, and it makes good sense for future water 
settlement dollars to be assured.
    Montana and the Western States are committed to continuing 
to work cooperatively with the Department of the Interior and 
the Bureau of Reclamation to meet our present water needs in 
the West, and those of future generations, within the framework 
of State water law, as envisioned by President Roosevelt and 
the Congress in 1902.
    I am happy to be here in support of S. 3168 and stand ready 
to answer any questions you may have related to this testimony.
    [The prepared statement of Mr. Tubbs follows:]

   Prepared Statement of John Tubbs, Director, Montana Department of 
                   Natural Resources and Conservation
    Chairman Hoeven, Vice Chairman Udall, and distinguished members of 
this Committee, thank you for the opportunity to appear in front of you 
today in support of S. 3168.
    I am John Tubbs, Director of the Department of Natural Resources 
and Conservation for the State of Montana. Governor Bullock sends his 
greetings. Today I appear on behalf of the State of Montana and the 
Western States Water Council.
    My Department is made up of four divisions: Forestry; Trust Lands; 
Conservation and Resource Development; and, most relevant to this 
hearing, Montana's Water Resource Division. This topic today--water 
settlements--is very near and dear to my heart. Under President Obama, 
I was proud to serve as Deputy Assistant Secretary for Water and 
Science with the U.S. Department of the Interior.
    The 1979 Montana Legislature established the Reserved Water Rights 
Compact Commission as part of the comprehensive state-wide adjudication 
process to negotiate settlements with Montana's tribal nations and 
federal agencies claiming reserved water rights within the State of 
Montana. Montana has eighteen compacts settling reserved water rights 
within our borders--including our seven reservations. These 
negotiations were massive undertakings, and Montana is very proud that 
it was able to secure positive results, as well as avoid protracted and 
costly litigation. Just last month, Secretary Zinke and Blackfeet 
Tribal Chairman Barnes executed the Blackfeet Water Settlement that 
will enable clean drinking water and irrigation projects to go forward. 
As you know, the Confederated and Salish and Kootenai Tribes have a 
water settlement bill that is on deck. Thank you, leaders of this 
Committee, for giving these matters the time and attention they 
deserve.
    The State of Montana and Western States supports any effort to 
provide a stable and appropriate funding source for water settlements. 
Of course you are aware that previously Western States asked the 
Administration and the Congress to fully appropriate the receipts and 
collections accruing to the Reclamation Fund subsequent to the 
Reclamation Act and other acts for their intended purpose of continuing 
conservation, development and wise use of resources to meet western 
water-related needs.
    In regard to S. 3168, Montana and Western States support this 
effort to make the Reclamation Water Settlement Fund permanent. 
Congress, and this Committee in particular, has made impressive efforts 
to move water settlement bills, and it makes good sense for future 
water settlement dollars to be assured.
    Montana and Western States are committed to continuing to work 
cooperatively with the Department of Interior and the Bureau of 
Reclamation to meet our present water needs in the West, and those of 
future generations, within the framework of state water law, as 
envisioned by President Roosevelt and the Congress in 1902.
    I am happy to be here in support of S. 3168 and stand ready to 
answer any questions you may have related to my testimony.

    Attachments

    RESOLUTION of the WESTERN STATES WATER COUNCIL regarding the THE 
       RECLAMATION FUND--Rohnert Park, California--June 29, 2017
    WHEREAS, in the West, water is indeed our ``life blood,'' a vital 
and scarce resource the availability of which has and continues to 
circumscribe growth, development and our economic well being and 
environmental quality of life--the wise conservation and management of 
which is critical to maintaining human life, health, welfare, property 
and environmental and natural resources; and
    WHEREAS, recognizing the critical importance of water in the 
development of the West, the Congress passed the Reclamation Act on 
June 17, 1902 and provided monies ``reserved, set aside, and 
appropriated as a special fund in the Treasury to be known as the 
`reclamation fund,' to be used in the examination and survey for and 
the construction and maintenance of irrigation works for the storage, 
diversion, and development of water for the reclamation of arid and 
semiarid land. . .'' in seventeen western states, to be continually 
invested and reinvested; and
    WHEREAS, then President Theodore Roosevelt stated, ``The work of 
the Reclamation Service in developing the larger opportunities of the 
western half of our country for irrigation is more important than 
almost any other movement. The constant purpose of the Government in 
connection with the Reclamation Service has been to use the water 
resources of the public lands for the ultimate greatest good of the 
greatest number; in other words, to put upon the land permanent 
homemakers, to use and develop it for themselves and for their children 
and children's children. . .;'' \1\ and
---------------------------------------------------------------------------
    \1\ State of the Union Address, 1907.
---------------------------------------------------------------------------
    WHEREAS, the Secretary of the Interior was authorized and directed 
to ``locate and construct'' water resource projects to help people 
settle and prosper in this arid region, leading to the establishment of 
the Reclamation Service--today's U.S. Bureau of Reclamation; and
    WHEREAS, western states and the Bureau of Reclamation have worked 
in collaboration to meet the water-related needs of the citizens of the 
West, and protect the interests of all Americans, recognizing changing 
public values and the need to put scarce water resources to beneficial 
use for the ``ultimate greatest good of the greatest number;'' and
    WHEREAS, the Bureau of Reclamation has facilities that include 338 
reservoirs with the capacity to store 245 million acre-feet of water, 
irrigating approximately 10 million acres of farmland that produce 60 
percent of the nation's vegetables and 25 percent of its fruits and 
nuts, as well as providing water to about 31 million people for 
municipal and industrial uses, while generating more than 40 billion 
kilowatt hours of energy each year from 53 hydroelectric power plants, 
enough to serve 3.5 million households, while providing 289 recreation 
areas with over 90 million visits annually, and further providing flood 
control, and fish and wildlife benefits; and
    WHEREAS, project sponsors have and continue to repay the cost of 
these facilities, which also produce power receipts that annually 
return some one billion in gross power revenues to the federal 
government, prevent millions in damages due to floods each year, and 
supports over $45 billion in economic returns and supporting over 
344,000 jobs; and
    WHEREAS, the water and power resources developed under and flood 
control provided by the Reclamation Act over the last century supported 
the development and continue to be critical to the maintenance of 
numerous and diverse rural communities across the West and the major 
metropolitan areas of Albuquerque, Amarillo, Boise, Denver, El Paso, 
Las Vegas, Los Angeles, Lubbock, Phoenix, Portland, Reno, Sacramento, 
Salt Lake City, Seattle, Tucson and numerous other smaller cities; and
    WHEREAS, western States are committed to continuing to work 
cooperatively with the Department of Interior and Bureau of Reclamation 
to meet our present water needs in the West and those of future 
generations, within the framework of state water law, as envisioned by 
President Roosevelt and the Congress in 1902; and
    WHEREAS, according to the Administration's FY 2018 request actual 
and estimated receipts and collections accruing to the Reclamation Fund 
are $ 1.969 billion for FY 2016, $1.475 billion for FY 2017, and $1.528 
billion for FY 2018, compared to actual and estimated appropriations of 
$996 million for FY 2016, $ 1 billion for FY 2017, and $878 million for 
FY 2018 and as a result the unobligated balance at the end of each year 
respectively is calculated to be $15.133 billion, $15.608 billion and 
$16.308 billion; and
    WHEREAS, this unobligated balance in the Reclamation Fund continues 
to grow at an increasing rate from an actual balance of $5.67 billion 
at the end of FY 2006, to the estimated $16.308 billion by the end of 
FY 2018, over a 187 percent increase; and
    WHEREAS, under the Reclamation Act of 1902, the Reclamation Fund 
was envisioned as the principle means to finance federal western water 
and power projects with revenues from western resources, and its 
receipts are derived from water and power sales, project repayments, 
certain receipts from public land sales, leases and rentals in the 17 
western states, as well as certain oil and mineral-related royalties--
but these receipts are only available for expenditure pursuant to 
annual appropriation acts; and
    WHEREAS, with growing receipts in part due to high energy prices 
and declining federal expenditures for Reclamation purposes, the 
unobligated figure gets larger and larger, while the money is actually 
spent elsewhere for other federal purposes contrary to the Congress' 
original intent;
    NOW THEREFORE BE IT RESOLVED, that the Western States Water Council 
asks the Administration and the Congress to fully appropriate the 
receipts and collections accruing to the Reclamation Fund subsequent to 
the Reclamation Act and other acts for their intended purpose in the 
continuing conservation, development and wise use of western resources 
to meet western water-related needs--recognizing and continuing to 
defer to the primacy of western water laws in allocating water among 
uses--and work with the States to meet the challenges of the future.
    BE IT FURTHER RESOLVED, that such ``needs'' may include the 
construction of Reclamation facilities incorporated as part of a 
Congressionally approved Indian water right settlement.
    BE IT FURTHER RESOLVED, that the Administration and the Congress 
investigate the advantages of converting the Reclamation Fund from a 
special account to a true revolving trust fund with annual receipts to 
be appropriated for authorized purposes in the year following their 
deposit (similar to some other federal authorities and trust accounts).
                                 ______
                                 
  RESOLUTION of the WESTERN STATES WATER COUNCIL in support of INDIAN 
          WATER RIGHTS SETTLEMENTS--Albuquerque, New Mexico--
                            October 20, 2017
    WHEREAS, the Western States Water Council, an instrumentality of 
eighteen western states advising Western Governors on water policy, has 
consistently supported negotiated settlement of disputed Indian water 
rights claims; and
    WHEREAS, the public interest and sound public policy require the 
resolution of Indian water rights claims in a manner that is least 
disruptive to existing uses of water; and
    WHEREAS, negotiated quantification of Indian water rights claims is 
a highly desirable process which can achieve quantifications fairly, 
efficiently, and with the least cost; and
    WHEREAS, the advantages of negotiated settlements include: (i) the 
ability to be flexible and to tailor solutions to the unique 
circumstances of each situation; (ii) the ability to promote 
conservation and sound water management practices; and (iii) the 
ability to establish the basis for cooperative partnerships between 
Indian and non-Indian communities; and
    WHEREAS, the successful resolution of certain claims may require 
``physical solutions,'' such as development of federal water projects 
and improved water delivery and application techniques; and
    WHEREAS, the United States has developed many major water projects 
that compete for use of waters claimed by Indians and non-Indians, and 
has a responsibility to both to assist in resolving such conflicts; and
    WHEREAS, the settlement of Native American water claims and land 
claims is one of the most important aspects of the United States' trust 
obligation to Native Americans and is of vital importance to the 
country as a whole and not just individual tribes or States; and
    WHEREAS, the obligation to fund resulting settlements is analogous 
to, and no less serious than the obligation of the United States to pay 
judgments rendered against it; and
    WHEREAS, Indian water rights settlements involve a waiver of both 
tribal water right claims and tribal breach of trust claims that 
otherwise could result in court-ordered judgments against the United 
States and increase costs for federal taxpayers; and
    WHEREAS, current budgetary pressures and legislative policies make 
it difficult for the Administration, the states and the tribes to 
negotiate settlements knowing that they may not be funded because 
either they are considered earmarks or because funding must be offset 
by a corresponding reduction in some other expenditure, such as another 
tribal or essential Interior Department program;
    NOW, THEREFORE, BE IT RESOLVED, that the Western States Water 
Council reiterates its support for the policy of encouraging negotiated 
settlements of disputed Indian water rights claims as the best solution 
to a critical problem that affects almost all of the Western States; 
and
    BE IT FURTHER RESOLVED, that the Western States Water Council urges 
the Administration to support its stated policy in favor of Indian land 
and water settlements with a strong fiscal commitment for meaningful 
federal contributions to these settlements that recognizes the trust 
obligations of the United States government; and
    BE IT FURTHER RESOLVED, that Congress should expand opportunities 
to provide funding for the Bureau of Reclamation to undertake project 
construction related to settlements from revenues accruing to the 
Reclamation Fund, recognizing the existence of other legitimate needs 
that may be financed by these reserves; and
    BE IT FURTHER RESOLVED, that Indian water rights settlements are 
not and should not be defined as Congressional earmarks; and
    BE IT FURTHER RESOLVED, that steps be taken to ensure that any 
water settlement, once authorized by the Congress and approved by the 
President, will be funded without a corresponding offset, including 
cuts to some other tribal or essential Interior Department program.

    The Chairman. Thank you, Director Tubbs.
    Now we will start with five minute rounds of questioning.
    My first question would be for Chairman Pickernell. It 
sounds like an interesting project. You have this distillery 
project. Can you talk a bit about the benefits it will provide 
in terms of jobs, economic impact, what your product is, and 
how you plan to sell it and so forth? Can you tell us a bit 
more about that?
    Mr. Pickernell. The plan for the distillery is to work in 
junction with a restaurant, a fine dining restaurant. One half 
will be a fine dining restaurant and the other half will be a 
working distillery with a glass partition where people can 
watch.
    The first phase is the construction. That is going to bring 
probably 100 jobs to the surrounding communities and tribal 
members. After construction, we plan to have 30 to 40 full-time 
positions as permanent positions to fill that business.
    The Chairman. What will you distill, whiskey?
    Mr. Pickernell. I believe it is bourbon.
    The Chairman. Will that be provided at the restaurant?
    Mr. Pickernell. No, it will be distributed as well.
    The Chairman. Distributed as well.
    Mr. Pickernell. Correct.
    The Chairman. Mr. Mikkelsen, I have a question for you 
regarding the Vice Chairman's bill, S. 3168. Can you tell us a 
bit about how extending the Reclamation Water Settlement Fund 
would benefit tribes and other stakeholders? Can you also talk 
a bit about the cost as well?
    Mr. Mikkelsen. Thank you, Mr. Chairman.
    There is roughly $2.6 billion authorized by Congress in 
recent years for Indian water rights settlements. That is not 
an indexed number; that is the actual.
    The Chairman. Two billion dollars billion for how long?
    Mr. Mikkelsen. Two point six billion dollars that you have 
authorized here in Congress for water rights settlements. That 
number, obviously, does not include anything in the pipeline 
right now. We believe, with some of the settlements mentioned 
here, that there is probably roughly another $5 billion worth 
of settlements currently in the pipeline.
    I would also note that we have 22 settlements we are 
negotiating across the Country right now in addition to the 32 
that have been approved by Congress. Those 22 include some of 
those approaching congressional authorization and congressional 
action here. That is included in that $5 billion figure I am 
talking about.
    I would also add that currently roughly 12 percent of 
Reclamation's current budget goes toward Indian water rights 
settlements. We are going to have to have a discussion with the 
Committee and the Hill on where we are going in the future to 
fund all of these settlements.
    The Chairman. Right. That is why I am trying to understand 
what we have authorized and what the outstanding total is 
pending in water settlements. That is what I am trying to get 
at. You were getting at it but I am not sure I got the totals. 
How much is authorized versus how much is pending?
    Mr. Mikkelsen. You have authorized, at this point, about 
$2.66 billion. That is not an indexed number; that is the 
actual number you authorized. You have appropriated roughly 
about $1.6 billion out of what you have already authorized that 
still has to be appropriated.
    The Chairman. How much is outstanding in terms of what has 
been approved for funding?
    Mr. Mikkelsen. There is about $1.6 billion that is 
outstanding of currently authorized projects.
    The Chairman. So $1 billion is covered, $1.6 billion is 
authorized, yet unfunded?
    Mr. Mikkelsen. Yes, $2.6 is authorized and about $1.6 
billion is still outstanding.
    The Chairman. I am trying to understand, does that include 
all of the water rights agreements that have been approved?
    Mr. Mikkelsen. The number we are talking about here is just 
authorized, currently authorized.
    The Chairman. Already currently authorized?
    Mr. Mikkelsen. Already currently authorized.
    The Chairman. Not anything we are looking at authorizing?
    Mr. Mikkelsen. That is correct.
    The Chairman. Thank you.
    Vice Chairman Udall.
    Senator Udall. Thank you very much, Mr. Chairman.
    How many Indian water rights settlements are Interior and 
DOJ currently negotiating across the Country? I think you said 
the number of teams across the Country is 22?
    Mr. Mikkelsen. We are working on 22 settlements right now. 
We actually have 21 Federal negotiation teams and one 
assessment team out there right now, Senator.
    Senator Udall. The Navajo Utah legislation will cost 
upwards of $200 million. The Hualapai settlement will also end 
up somewhere in that range. The CSKT settlement from the last 
Congress will possibly cost more than $2 billion. That is just 
three settlements, isn't that correct?
    With that in mind, what is the total estimated cost of all 
those settlements that are still in the middle of negotiations, 
at least in the billions?
    Mr. Mikkelsen. Roughly $5 billion.
    Senator Udall. Your estimate does not even include costs, 
overruns or inflation, correct?
    Mr. Mikkelsen. That is correct.
    Senator Udall. Could you estimate the percentage of Bureau 
of Reclamation's budget that goes toward Indian water rights 
settlements currently?
    Mr. Mikkelsen. It is currently roughly about 12 percent.
    Senator Udall. Do you envision that percentage to grow as 
more settlements are agreed upon?
    Mr. Mikkelsen. The Reclamation budget has become a major 
contributor to Indian water rights settlements so I would have 
to say the answer to that is yes.
    Senator Udall. Your testimony states ``The Reclamation 
Settlement Fund is already spoken for through 2029.'' What 
happens when the fund expires? How would Reclamation look to 
cover the shortfall moving forward?
    Mr. Mikkelsen. I would say we are looking forward to the 
opportunity that this bill affords us to discuss how to address 
the issue in the future. We do look forward to working with you 
on this.
    Senator Udall. Basically, the answer is yes to the 
question. It is all spoken for and we do not have a good plan 
for moving forward. Basically, I think that is what you are 
saying. I am not asking for a response.
    Mr. Mikkelsen, I would just like to say for the record that 
I find it very difficult, knowing the current funding 
constraints we face in Congress, to fund these Indian water 
rights settlements solely through discretionary spending.
    This Administration and Congress have said they are 
committed to Indian water rights settlements versus costly 
litigation. However, we need that commitment tied to a true 
financial commitment. I look forward to working with you on 
this Indian water rights funding mechanism.
    The Chairman. You mentioned 12 percent of the BOR budget 
goes to Indian water rights settlements. Do you know how much 
that is?
    Mr. Mikkelsen. Yes, sir. It is basically $120 million a 
year right now out of $1 billion.
    Senator Udall. That is the total. You deposit the money in 
the Treasury and every year Treasury is not allowed to spend 
any more than $120 million, is that correct?
    Mr. Mikkelsen. That is correct.
    The Chairman. In addition to any other appropriated funds 
though, or is that total?
    Mr. Mikkelsen. That is in a discrete fund. The Bureau of 
Indian Affairs also contributes to these settlements.
    The Chairman. That is in addition to what we appropriate 
separately for these agreements, correct or not?
    Mr. Mikkelsen. Some of it is mandatory and some of it is 
discretionary.
    The Chairman. That was my question.
    Senator Udall. Mr. Tubbs, under my proposed legislation, 
there are at least 11 States, predominantly in the West, who 
would be eligible for the Bureau of Reclamation funding to 
plan, design or construct a water project.
    Please explain how implementing prompt, quality Indian 
water rights settlements clarify water issues for surrounding 
communities?
    Mr. Tubbs. In four words: increased certainty, reduced 
risks. It increases certainty for those communities and reduces 
risk. Any water rights settlements are part of the statewide 
water rights system. As a reserved right, they are not 
quantified until negotiated. They remain a large uncertainty 
for State-based water rights holders as well as the tribal 
members themselves.
    Only through negotiated settlements, because we do not 
think litigation is a good idea, are we able to quantify those 
water rights. When we do, it is permanent. We need a permanent 
funding solution to go with the permanent settlement.
    The tribes are being asked to sign, in our settlements, a 
waiver that all litigation will be settled by the passage of 
these Acts. A permanent fund to go with that level of 
commitment by the United States is, I think, an appropriate 
measure as well as the Reclamation Fund being the appropriate 
source.
    Senator Udall. Mr. Tubbs, what is the benefit of supporting 
a permanent fund to encourage Congress-approved Indian rights 
settlements or agreements versus litigation? I think you 
touched on a little bit of that. As you know, I think you have 
been around a while, as Senator Tester said, some of these 
pieces of litigation can go on for 40 years. We have had one in 
New Mexico for more than 40 years.
    You have the tribe and all the surrounding communities with 
uncertainty. Is that correct?
    Mr. Tubbs. That is correct. It is substantial. Right now, 
we have two that have not seen Federal settlement, the CSKT and 
the Ft. Belknap in our State.
    Should those go into litigation, you are absolutely 
correct. There would be decades of uncertainty where the 
quantification of those water rights would be based on an 
objection process by individual water right owners.
    They would all have to hire their own attorneys. Each 
municipality would have to represent their interests. The State 
of Montana would have to be in the fight as well as well as the 
sovereign tribe and the United States.
    The settlement packages bring all of that together in one 
large negotiation. It is cost effective. It also addresses the 
future needs of not only the tribal communities, but often the 
non-tribal interests around those tribal communities. Both 
sides benefit greatly.
    Bottom line, from a water rights perspective, we need 
certainty. Through Federal settlement, we can get that. The 
Reclamation Fund needs to be there to fund the investments 
necessary to garner that certainty.
    Senator Udall. There is very little certainty when you have 
litigation.
    Mr. Tubbs. Right now, the Blackfeet was the most recent one 
that was fully executed and signed off by the Secretary this 
year. It needs to be funded by 2025. That is over $400 million 
Congress needs to appropriate.
    I think you and your colleagues would appreciate having a 
safe harbor for meeting the settlement of a legal claim against 
the United States as opposed to a discretionary allocation 
within your tight budgets
    Senator Udall. Thank you so much, Mr. Chairman.
    The Chairman. Senator Moran.
    Senator Moran. Mr. Chairman, again, thank you for hosting 
this hearing. Thank you for scheduling it on a day when I could 
participate.
    Let me direct my questions to Chairman Randall. First of 
all, Chairman, you heard the testimony of the Department of the 
Interior. In your testimony, you complimented the cooperation 
you had from the Department of the Interior and others in 
reaching this settlement agreement that would be confirmed by 
S. 2154.
    What role did Interior play in those negotiations? When you 
thanked them for their involvement, what was that involvement?
    Mr. Randall. We did thank them. There were several agencies 
involved in this, the State, Ag, Justice and the Department of 
the Interior. I think the involvement could probably be better 
answered by Steve Moore, our lawyer. Mr. Chairman, do you mind 
if Steve Moore comes and answers some of this question?
    The Chairman. Mr. Moore.
    Mr. Moore. Thank you, Mr. Chairman and Senator Moran.
    As Mr. Tubbs alluded, settlement negotiations involving 
Indian water rights span several years, involve technical and 
legal analysis, complex technical and legal analysis.
    The Chairman. Would you state your name and position for 
the record, please?
    Mr. Moore. Steven Moore, an attorney with the Native 
American Rights Fund in Colorado. I represent the Kickapoo 
Tribe.
    Senator Moran. Mr. Moore, my question to the chairman, 
which you can help answer, is we are appreciative of the 
Department of the Interior participating in these discussions 
that resulted in this split settlement. But today, they 
testified they oppose the legislation that approves the 
settlement they apparently participated in the negotiations of.
    What is the disconnect here? What is missing?
    Mr. Moore. I think from the tribe's standpoint, Senator, 
the disconnect is a rigid application of the Interior 
Department criteria and procedures to a water settlement that 
has been negotiated as an outgrowth of the development of a 
project under the USDA Small Watershed Program.
    There are important elements of the criteria and procedures 
that would benefit the remaining negotiation aspects between 
the tribe, the State and NRCS. Section 7 of S. 2154 provides 
that mechanism by directing NRCS to convene a consultation 
process with Interior, the tribe and the State, bring us back 
to the table, reevaluate and resize the project that was 
authorized now 20 years ago by both the House and the Senate 
after full NEPA review. That was a 20-year process the tribe 
engaged in.
    Now we are 20 years hence. We are going to need a 
supplemental EIS. We need to resize the project in the 
watershed and then do a cost analysis. The way the tribe would 
like to proceed under congressional directive is that would be 
Phase II under Section 7 of S. 2154.
    However, right now let us approve the water right, lock it 
in, provide certainty to the State and the water users in the 
Delaware River Watershed, provide certainty to the tribe, and 
not potentially risk losing all the gains we have made in 
quantifying the water right.
    We want Congress to confirm and then we would begin that 
process in Federal court in Kansas of binding all the few water 
users in the Delaware River Watershed to the water right. These 
things are done incrementally by tribes and States in the 
United States.
    We have had great cooperation with the United States, but 
we find ourselves, ironically, here today trying to lock in 
that water right and then move on with NRCS and complete the 
process under the Small Watershed Program.
    We do find it is very ironic that the Interior Department 
cannot come to the hearing today and support this process. We 
feel as though Interior is bound by their obligation to their 
own criteria and procedures. Their criteria and procedures do 
not bind USDA and the Small Watershed Program process.
    Senator Moran. If I can, Mr. Chairman, let me follow up.
    You described, in a sense, that we are locking in the water 
right and then we can proceed to determine how we are going to 
best use that water right in storage and application. What 
would be the consequence of waiting until all those other 
issues were resolved before locking in the water right?
    If this legislation does not become law and we fail to 
accomplish that, then the tribe is sent back to do more I guess 
to meet the criteria and procedures of the Department of the 
Interior but in the period of time in which the tribe has to do 
that, what are we losing in the absence of passage of this 
legislation? What would be the detriment?
    Mr. Moore. The absolute detriment to the tribe, to the 
State of Kansas and its administrative scheme, is that we risk 
the water right that has now been fully negotiated would be 
second-guessed by later administrations, State, Federal, 
tribal, and then the water right is lost.
    If we lose all of the gains we have made to date on the 
water right, we could end up having to start over completely. 
The testimony of the State of Kansas makes abundantly clear 
that the State is 100 percent behind S. 2154 and the 
congressional approval of the water right. The State of Kansas 
has been wonderful to work with, their legal and technical 
staff.
    There is tremendous risk, tremendous downside to not 
approving the water right now. There is no downside to 
approving it.
    Senator Moran. When the chairman outlined the long history 
of this issue and this project, it almost makes you nauseous to 
think of all the steps that have been necessary over such a 
long period of time. To be so close now to getting at least a 
significant portion of this issue behind us, it would be, in my 
view, a terrible mistake to let that opportunity pass.
    This issue has been around as long as I have been a public 
official. It would be nice to see the opportunities that Kansas 
and the tribe have created, with the support of Agriculture and 
to some degree, Interior, completed while that opportunity now 
presents itself.
    It would be a terrible loss if we have to re-litigate these 
issues one more time with a different set of State officials, 
Federal officials or tribal officials.
    Mr. Chairman, thank you very much.
    The Chairman. Thank you.
    Senator Daines.

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you, Chairman Hoeven and Vice 
Chairman Udall.
    I want to welcome a couple of Montanans to the Committee. 
John Tubbs from Helena serves as our State's Director of the 
Department of Natural Resources and Conservation. Welcome, 
John.
    I would also welcome Alan Mikkelsen, Senior Advisor to the 
Secretary of Interior for Water and Western Resource Issues and 
also Chair of the Working Group on Indian Water Settlements at 
the Department who is from St. Ignatius but I believe is now 
based in Colorado.
    You are also a part-time fly fishing guide. I am sure you 
would rather be out on a stream as the water has now cleared 
up, versus being here. I am grateful you both are here. Thank 
you.
    I also want to echo your sentiments, Mr. Tubbs, that water 
rights settlements are preferable to resolving water rights 
claims via litigation. I went to school at Montana State to get 
an engineering degree. I did not go to the University of 
Montana to get a law degree because you need some great lawyers 
but it is also really expensive when it comes time to litigate.
    It is certainly the less costly and preferred option. The 
settlements also provide more certainty for tribes as well as 
other water users across Montana.
    I would like to focus today on Vice Chairman Udall's Indian 
Water Rights Settlement Extension Act. I very much appreciate 
the Vice Chairman's intention here. Indian water rights 
settlements, like the Blackfeet settlement, need to be funded 
in a very timely manner. Unfortunately, discretionary 
appropriations are trickling in quite slowly.
    I have continued to make the charge to the Department of 
the Interior to request more funding for the Blackfeet water 
rights settlement so that Congress can fund it by the 2025 
enforceability date. As we all know, there has been a lot of 
work to get it to this point.
    I am conscious, however, of the Indian Water Rights 
Settlement Extension Act's impact on the deficit as it would 
authorize $120 million in new mandatory spending every year 
from 2030 onward in perpetuity. Overall, I am interested to 
learn more about this legislation.
    Mr. Mikkelsen, if this legislation were enacted, how would 
the department prioritize disbursal of the newly authorized 
funds, meaning for fiscal years 2030 and beyond, after the 
projects specified in the underlying law are complete?
    Mr. Mikkelsen. Thank you, Senator Daines.
    As you noted, the settlement fund is likely to be expended 
funding priority settlements and the department has not yet 
developed prioritization criteria given the time horizon in 
which the Settlement Fund will be fully expended.
    Senator Daines. I have a follow-up question, Mr. Mikkelsen. 
As additional water rights settlements are ratified by Congress 
would they then be able to be funded by the Reclamation Water 
Settlements Fund if permanently extended as this bill proposes?
    Mr. Mikkelsen. Yes. Any authorized Indian water rights 
settlement would be eligible. The answer to your question is 
yes.
    Senator Daines. Thank you.
    I want to switch now to Mr. Tubbs. Would you agree that 
this proposed change to current law is unlikely to benefit the 
Blackfeet water rights settlement since it has to be funded by 
2025, four years before the current authorization for the 
Reclamation Water Settlement Fund is set to expire?
    Mr. Tubbs. I would agree that should Congress actually come 
through and get the appropriations done, having watched 
Congress over the decades, I do want to work with you and make 
sure we do get to that by 2025 so that this fund is available.
    If I may, I would mention one other point of clarification 
I think would be useful to the Committee. While I believe the 
Reclamation Fund is the appropriate source of funding for these 
types of settlements, the burden is placed on Reclamation 
because, as you know, Reclamation is separated from the 
Department of the Interior in the appropriations process to its 
own grouping, not allowing the full girth of the agency to come 
to bear.
    Within your processes on the congressional side, you are 
limiting the issue to the Reclamation side of the appropriating 
committees. The Interior side of the committees is not dealing 
with this under the budget cap issues you face. It really 
places Reclamation, the agency, in harm's way that even though 
this benefits all of the Interior agencies and often other 
agencies like Agriculture and the Army Corps of Engineers, the 
burden in the budget cap process is falling strictly on 
Reclamation itself.
    I think that is a distinction worthy of this Committee's 
knowledge.
    Senator Daines. Thank you. I am out of time but you just 
highlighted another reason why we are in desperate need of 
reforming our budgeting and appropriating processes in terms of 
authorizing committees, appropriations committees, the funds 
and agencies and so forth. That is another topic for another 
day.
    Thank you, Mr. Tubbs, for that comment.
    The Chairman. Thank you, Senator Daines.
    Vice Chairman Udall, did you have additional questions?
    Senator Udall. I have one additional question.
    Chairman Randall, in New Mexico we have had some years like 
the one we are in where we have had very limited snow pack in 
the mountains and thus very little water for downstream 
communities. Then we had a good year or two and a long stretch 
of persistent drought.
    This, along with devastating wildfires, has especially 
strained our watersheds and water resources but we have been 
working on a number of water settlements that are critically 
important for the tribes and surrounding communities.
    It is important that they have water security in times of 
drought. Negotiating the settlements is not always easy. As we 
say in the West, whiskey is for drinking and water is for 
fighting. It is a good start and I believe we must continue to 
do our part as the Federal Government to pay our fair share.
    Chairman Randall, the question I have is how will securing 
permanent funding to implement Indian water settlements help 
tribes like Kickapoo better adapt to a changing environment?
    Mr. Randall. Even though at this time we are not asking for 
the appropriations part, it is detrimental to every tribe. As 
tribal leaders, we all talk about how important water is to our 
people.
    As for our tribe, speaking for my tribe only, I have a 
bunch of kids back home watching this because we have to work 
on our future. Without the future, there is no tribe. Without 
the funding, what Mr. Tubbs said they are trying to do for the 
tribes is great.
    Without the water, we always say, the Indian way, water is 
life. That is what we believe. Water is sacred to us. Without 
the funding for the water settlements, it would be detrimental 
to all the tribes and even the surrounding communities.
    In the surrounding communities like ours, we have just as 
many non-members using our water as we do. It affects everyone 
around us. I hope that answered your question a little bit.
    Senator Udall. That was very good.
    Mr. Chairman, after hearing all this testimony today, the 
questioning and contributions by Senators, I would like to say 
in our bill, 3168, we are trying to bring certainty, as Mr. 
Tubbs said, to the process.
    What ends up happening is when you have the authorization 
ending in 2029, all of these people are out in the field 
negotiating. We have water settlements that have gone on. 
Giving certainty allows communities to move forward and 
negotiate settlements and allows them to bring certainty for 
tribes, non-Indian communities and surrounding or nearby 
tribes.
    I think I want to make really clear and note for the record 
that my bill is outside the ten-year scoring window. Therefore, 
the bill will not score. What we are trying to do is help 
Reclamation, help the tribes and everyone in this process 
understand there is going to be dollars there. If you do a 
settlement, there are going to be dollars there to take care of 
it.
    Thank you very much.
    Mr. Randall. I would definitely say we support John Tubbs' 
bill.
    Mr. Tubbs. Mr. Chairman, if I may. Mr. Mikkelsen suggested 
there are 22 settlements being negotiated with a potential cost 
of around $5 billion, one of the largest being the Confederated 
Salish and Kootenai settlement that is fully engaged at 
Interior and Mr. Mikkelsen.
    At $120 million per year, one of the certainties that is 
improved is the tribal governments are competing with each 
other with a deadline of 2029 when the money runs out. You are 
actually pitting tribes against tribes on who gets on first. If 
it was possible to extend that so there was enough certainty 
beyond 2029 and tribes could see their future within that 
allocation, I think you would give certainty to tribal 
communities.
    Senator Udall. Thank you very much for that comment.
    The Chairman. The hearing record will be open for two 
weeks.
    I want to thank all the witnesses for their time and 
testimony today.
    Also, before we adjourn, I want to take a moment to 
personally thank two our Committee staffers who will be 
leaving, Ken Rooney, who served as counsel for Senator Udall's 
staff, and Hanna Beyer, who served on my staff as our 
Committee's press secretary.
    Both have served the Committee with distinction and we wish 
them well in their future endeavors. We thank them for all 
their hard work.
    With that, our hearing is adjourned. Again, thank you.
    [Whereupon, at 4:13 p.m., the Committee was adjourned.]

                            A P P E N D I X

   Prepared Statement of Burke W. Griggs, Special Assistant Attorney 
                        General, State of Kansas
Introduction
    Good afternoon, Chairman Hoeven, Vice Chairman Udall, Senator 
Moran, and the other members of the Committee. I am Burke Griggs, 
Special Assistant Attorney General for the State of Kansas and 
associate professor of law at Washburn University, where I teach 
natural resources law. Between 2014 and 2016, I served as the State's 
Counsel of Record in the settlement negotiations that produced the 2016 
Kickapoo Tribe Water Rights Settlement Agreement (``Agreement''), the 
first reserved water rights settlement in Kansas history. I am here 
today on behalf of the State of Kansas (``State'') to testify in 
support S. 2154, a bill to approve the Agreement. On behalf of former 
Governor (and now Ambassador) Sam Brownback, Governor Jeff Colyer, 
Attorney General Derek Schmidt, Jackie McClaskey, Secretary of the 
Kansas Department of Agriculture, David W. Barfield, Chief Engineer of 
the Kansas Division of Water Resources (DWR), and Tracy Streeter, 
Director of the Kansas Water Office, I am pleased to write that the 
State fully and enthusiastically supports S. 2154. By effecting the 
Agreement in statute, S. 2154 will establish certainty for all water 
rights owners in the Delaware River Basin of Kansas and clarify the 
protection of those rights in times of water shortage.
    The State expresses its gratitude and respect for the Kickapoo 
Tribe (``Tribe''), Chairman Randall, and their counsel, who have all 
worked tirelessly to achieve the Agreement. That work has produced a 
relationship of mutual trust between the State and the Tribe. The State 
would also like to express its gratitude to the Tribe's federal 
representatives at the Departments of Justice and the Interior, who 
have provided valuable expert assistance to both the Tribe and the 
State as they worked through the technical and procedural requirements 
of the Agreement. Finally, the State expresses its gratitude to Senator 
Moran and his staff for their commitment and leadership on this matter, 
and to Representative Jenkins and her staff for their assistance as 
well.
    My testimony consists of five sections. Section I provides 
background to the Tribe's reserved water right, the Tribe's ongoing 
efforts to secure necessary water-supply infrastructure, and the 
litigation and negotiation which together produced the Agreement. 
Section II summarizes the Agreement and its effect upon Kansas water 
rights upstream and downstream of the Reservation. Section III 
summarizes S. 2154, which approves, authorizes, and ratifies the 
Agreement. Section IV briefly explains how S. 2154 complies with the 
1990 Criteria and Procedures for approving tribal reserved water rights 
settlements.
I. Background
A. The Tribe's Reserved Water Right in the Delaware River Basin and 
        Kansas Water Law
    The Tribe's ancestral homelands are in the Fox River Valley of 
Wisconsin, but the United States removed the Tribe south and west 
between 1809 and 1862, from Illinois to Missouri and finally to Kansas. 
The Tribe's equitable title to land within the present boundaries of 
Kansas dates to 1832, when the Tribe signed the Treaty of Castor Hill, 
which established a reservation bestriding the Missouri River in 
northeast Kansas and northwest Missouri. Subsequent treaties in 1854 
(the same year as the Kansas-Nebraska Act) and 1862 (the same year as 
the Homestead Act) dramatically reduced the size of the original 
reservation. The present Kickapoo Reservation (``Reservation'') 
encompasses thirty square miles in Brown County, Kansas. Of that, the 
Tribe holds equitable title to 4,589 acres and fee title to 2,189 
acres; tribal members own equitable title to another 2,681 acres of 
allotted land. Non-Indian successors in title to Indian allottees own 
the remainder of the acreage within the boundaries of the Reservation.
    The Reservation is located within the uplands of the Delaware River 
Basin (``Basin'') in northeast Kansas, a part of the state that is 
generally lacking in substantial groundwater supplies. \1\ Unlike 
nearby communities such as Topeka, which can access both surface and 
groundwater, the Tribe is dependent upon the river alone. As set forth 
more extensively in the testimony of Chairman Randall, the Tribe has 
faced chronic and severe water shortages due principally to periods of 
drought, diversions by holders of Kansas water rights upstream 
(including watershed dams), and, paradoxically, conservation practices 
such as field terracing. As Kansas irrigators and other water users 
seek out localized supplies of surface water and groundwater in the 
Basin, their diversions threaten to diminish surface flows even 
further. Given the Tribe's water supply situation and present levels of 
water rights development in northeast Kansas, establishing the Tribe's 
water right has become an important matter for both sovereigns.
---------------------------------------------------------------------------
    \1\ T. J. TROMBLEY et al., OVERVIEW OF WATER RESOURCES IN AND NEAR 
INDIAN LANDS IN NORTHEASTERN KANSAS AND SOUTHEASTERN NEBRASKA, U.S. 
GEOLOGICAL SURVEY WATER-RESOURCES INVESTIGATIONS REPORT 96-4070 (1996).
---------------------------------------------------------------------------
    As this Committee well knows, Native American tribes are entitled 
to substantial water rights under federal law. Under the Supreme 
Court's decision in Winters v. United States, 207 U.S. 564 (1908) and 
its progeny, the Court has repeatedly held that tribes possess implied 
federal reserved water rights with attributes necessary to ensure that 
the Reservation is a viable homeland for the Tribe in perpetuity. 
Pursuant to what has become known as the ``Winters Doctrine,'' this 
federal, implied, and reserved water right has two principal 
attributes: a priority date of October 24, 1832--the date of the Treaty 
of Castor Hill, which established the Tribe's homeland in Kansas--and 
of sufficient quantity to satisfy all present and future water uses for 
the Reservation's purposes, including the various irrigation, domestic, 
municipal, industrial, and cultural uses of water. Due to their nature 
as implied, reserved rights, Winters rights are presently perfected and 
immune from abandonment.
    But declaring that a right exists is a far piece from enjoying its 
benefits; and the Winters Doctrine generally presents two formidable 
burdens. The first burden is borne principally by a tribe--that of 
transforming the bare legal rights afforded it under Winters into wet 
water and water-supply infrastructure. The second burden is borne by 
the tribe, the United States, and the relevant state together--that of 
integrating a federal reserved water right into long-established state-
law based systems for water rights administration. Because most 
reservations across the western United States exist in areas that are 
severely over-appropriated--that is, there are far more state-law based 
water rights than there are water supplies to satisfy both those rights 
and federal reserved rights-most tribal reserved water rights 
litigation in the West has taken the form of basin-wide water rights 
adjudications in state court, which have generally proven to be 
difficult, expensive, and contentious proceedings. \2\
---------------------------------------------------------------------------
    \2\ For example, the Gila River Adjudication in Arizona has 
produced the largest and longest judicial proceeding in the history of 
Arizona, and among the most complex in American history. See Joseph M. 
Feller, The Adjudication that Ate Arizona Water Law, 49 ARIZ. L. REV. 
405 (2007). Recent major water rights adjudications, such as the Big 
Horn Adjudication in Wyoming (1997-2014) and the Snake River Basin 
Adjudication in Idaho (1987-2014), took decades to resolve nearly half 
a million dispersed state and federal claims into approximately 150,000 
decreed water rights. The Snake River decree alone runs 275,000 pages. 
And these are the successful ones.
---------------------------------------------------------------------------
    Fortunately, the Tribe and the State have managed to avoid many of 
the hydrological and legal pitfalls of a typical reserved water rights 
proceeding. Hydrologically, the Basin is located in the relatively wet 
(albeit drought-prone) region of northeast Kansas; as a consequence, 
the recognition and effectuation of the Tribe's Winters right should 
not fundamentally disrupt statelaw based water rights. I can state this 
with confidence, because under the Kansas Water Appropriation Act 
(KWAA), K.S.A.  82a-701 et seq., Kansas enjoys a legal regime that is 
well-suited to integrating the Tribe's federal reserved rights with 
state-law water rights, generally according to the prior appropriation 
doctrine. Under the KWAA, all non-domestic uses of water in the State 
have been permitted and quantified since 1945 under a centralized 
administrative system led by the Chief Engineer of DWR, with 
jurisdiction over both surface and groundwater statewide. Since 1978, 
the KWAA has required annual water-use reporting for all non-domestic 
rights. These permitting and reporting requirements have provided 
water-usage data enabling the State and the Tribe to work through the 
contours of the Tribe's Winters right within a legally well-defined 
waterscape of existing property rights--and to accommodate that right 
while establishing certainty and security for all state water rights in 
the Basin.
B. Efforts by the Tribe and State parties to secure land and water 
        infrastructure under The NRCS's Small Watershed Program
    Like many tribes across the West, the Tribe began to seek support 
for its water needs during the 1970's. However, it pursued these 
efforts through a program that no other tribe has employed: the United 
States Department of Agriculture-National Resources Conservation 
Service's Small Watershed Program, also known as the P.L. 83-566 
program. Starting in 1983, the Tribe and the Nemaha-Brown Counties 
Watershed Board formed a Joint Watershed Board, which worked with four 
local conservation districts, the State, and NRCS to develop a 
Watershed Plan. The Watershed Plan envisioned an extensive system of 
small flood-retention dams across the Basin and five larger, multi-
purpose reservoirs, four which could serve tribal lands. The largest of 
those four was to be sited on Plum Creek, a tributary of the Delaware, 
and was designed to provide a long-term water supply for the Tribe as 
part of the Upper Delaware and Tributaries Project (``Project''). Over 
the next ten years, the Project underwent full review under the 
National Environmental Policy Act (NEPA), which produced an 
Environmental Impact Statement (EIS) that was approved via a Record of 
Decision by the NRCS in 1994. The United States Army Corps of Engineers 
issued a Clean Water Act Section 404 permit that same year, amending it 
in 2002. In 1997, the parties to the Joint Watershed Plan obtained 
Congressional authorization enabling further review of the Project. \3\
---------------------------------------------------------------------------
    \3\ Senate Report 105-13, April 22, 1997.
---------------------------------------------------------------------------
    The State is hopeful that the Tribe can develop its necessary water 
infrastructure through the P.L. 83-566 Program, but also recognizes 
that the Tribe, as the sponsor of the project, bears responsibility for 
seeing the project through.
C. Litigation, Negotiation, and Agreement, 2006-2017
    Despite the cooperation and progress achieved by the Joint 
Watershed Board between 1983 and 1998, disputes began to emerge 
regarding the issue of land acquisition for Plum Creek Reservoir--
including the issue of whether the Tribe could force the State to 
condemn land necessary for its construction. In 2006, the Tribe sued 
the Bureau of Indian Affairs and the State, requesting that they 
condemn such land and recognize the Tribe's Winters water right. \4\ 
For the next several years, the litigation proceeded along two 
different paths: a contentious dispute over land acquisition between 
the Tribe and the Brown-Nemaha Board, and a generally cooperative 
effort concerning the recognition of the water right issue. (The State 
has never challenged the existence of the Tribe's Winters right, and 
has protected the Tribe's existing water-supply infrastructure since 
1978.) The Federal District Court for the State of Kansas resolved the 
land issue in 2014; as set forth more fully in Chairman Randall's 
testimony, the Tribe has taken full responsibility for acquiring the 
necessary land for its reservoir through voluntary purchases from 
willing sellers, and has acquired 250 acres so far. In the wake of the 
court's resolution of the land issue, the State and the Tribe agreed to 
suspend active litigation and devote their full attention to 
negotiating the details of the Tribal Water Right. After two years of 
cooperative technical and legal negotiations, the Tribe and the State 
signed the Agreement on September 8, 2016. Following the execution of 
the Agreement, the parties filed a joint stipulation of dismissal 
without prejudice, and the court dismissed the case without prejudice 
in February, 2017.
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    \4\ Kickapoo Tribe of Indians of the Kickapoo Reservation in Kansas 
vs. Bruce I. Knight et al., No. 06-CV-2248-CMTJJ (D. Kan., 2006-2017).
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II. The 2016 Kickapoo Tribe Water Rights Settlement Agreement
A. The Principal Elements of the Agreement
    The Agreement integrates the recognition and operation of the 
Tribal Water Right in harmony with the established legal and 
administrative structures of the KWAA, while preserving the Tribe's 
autonomy over the ownership, use, and governance of the Tribal Water 
Right. The Agreement establishes the nature, extent, and attributes of 
the Tribal Water Right as well as the respective rights, duties, and 
obligations of the Tribe and the State. Please allow me to summarize 
the five most important components of the Agreement from the State's 
perspective.
    First, there is the Tribal Water Right itself, as fully described 
in Article 5 of the Agreement. The two most important attributes of the 
Tribal Water Right are its priority and its authorized quantities of 
annual diversion and overall storage. The Agreement recognizes the 
priority date of the Tribal Water Right as October 24, 1832--the date 
of the Treaty of Castor Hill, which makes this right by far the oldest 
recognized water right in the State, predating Kansas statehood by 
nearly thirty years. The Tribe may divert up to 4,705 acre-feet of 
water annually, for any direct use by the Tribe. The Tribe is also 
authorized to store up to a combined volume of 18,520 acre-feet in any 
year, in one or more reservoirs, to support this direct use. This 
combined volume may be increased if the seepage losses from reservoir 
storage exceed current estimates memorialized in the Agreement. These 
authorized quantities of the Tribal Water Right were determined based 
on a municipal build-out concept, treating the Tribe's water needs as 
essentially similar to that of a growing municipality in eastern 
Kansas. Water resources engineers for both the State and the Tribe 
agreed that, given the Tribe's planned water uses, this method is 
superior to the default method of quantifying reserved water rights for 
tribes according to the ``practically irrigable acreage'' method that 
predominates in other reserved water rights proceedings. \5\ Because 
Kansas is a prior appropriation state and the Tribe holds a federal 
reserved right that is also the senior water right in the Basin, the 
Agreement presents no takings issues under the United States or Kansas 
Constitutions.
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    \5\ See, e.g., Arizona v. California, 373 U.S. 546, 600-01 (1963).
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    Second, Article 5 sets forth other rights and duties of the Tribe. 
Importantly, the Agreement recognizes the Tribe's right to market its 
water to non-Indians for irrigation and any other beneficial uses 
recognized under the KWAA, including off-reservation uses, provided 
that the Tribe provides notice and an opportunity for hearing to the 
Chief Engineer. The Tribe has full responsibility to construct and 
maintain its water-supply infrastructure to federal standards; it must 
provide the Chief Engineer with copies of inspection reports for and 
significant changes to that infrastructure. In the event of any 
structural problems or failures, the Tribe must provide prompt or 
immediate notice to DWR, as the situation requires. The Tribe must 
account to the State for all use of the Tribal Water Right; it must 
also meter all of its diversions and report its annual water usage to 
DWR, and provide any additional data necessary to administer Kansas 
non-domestic water rights in times of shortage. The Agreement contains 
standard forms to enable consistent and prompt communication of this 
information.
    Third, Article 6 of the Agreement requires the Tribe to enact a 
Tribal Water Code within three years after the date of enactment of 
federal legislation approving the Agreement--ideally, S. 2154, in this 
session of Congress. The Tribal Water Code must provide the following: 
a governance and permitting system for all uses of the Tribal Water 
Right, including storage; that allocations of water to allottees and 
members of the Tribe shall be satisfied with water from the Tribal 
Water Right; due process protections for allottees and members of the 
Tribe regarding individual allocations for irrigation rights; and full 
administrative procedures for subsequent changes to such allocations. 
Notably, the Agreement does not limit the ability of allottees and 
members to obtain additional state-law water rights under the KWAA, 
provided, of course, that water is available and that they comply with 
the statutory and administrative requirements of the KWAA. Such state-
law, individually-granted water rights are not to be counted against 
the Tribal Water Right.
    Fourth, Article 7 of the Agreement sets forth the procedures by 
which the State, through the Chief Engineer, shall protect the Tribal 
Water Right. The Chief Engineer shall review all subsequent 
applications for any new Kansas water rights and for changes to 
existing Kansas water rights to ensure that they do not impair the 
Tribal Water Right. As part of that review, the Chief Engineer shall 
provide notice to the Tribe and to the United States, and grant a 
hearing if either the Tribe or the United States shows that the 
approval of such an application could impair the Tribal Water Right. 
Article 7 fully incorporates a subsidiary agreement, a Memorandum of 
Agreement (MOA), to protect the Tribal Water Right by administering 
non-domestic Kansas water rights during times of water shortage. The 
MOA is a necessary part of the Agreement, because the Tribe's present 
use of water under the Tribal Water Right is relatively small; but as 
the Tribe builds out water-supply infrastructure to the full capacity 
of that right, DWR's administration of Kansas water rights will evolve 
accordingly. Thus, the MOA contains detailed procedures for monitoring 
stream conditions and protecting the water supplies stored at the 
Tribe's existing low-head dam, as well as for future storage at the 
proposed Plum Creek Reservoir. Because of these evolving water-supply 
dynamics, the State and the Tribe are required to review the MOA on an 
annual basis, to ensure that it remains appropriate as the Tribe 
develops new water demands and constructs additional storage. Notably, 
the Agreement expressly forbids the administration of Kansas domestic 
water rights, and it also recognizes the ``no injury rule,'' which 
states that the Chief Engineer will not administer non-domestic Kansas 
water rights when such administration would not reduce the impairment 
of the Tribal Water Right.
    Article 7 of the Agreement and the MOA fully integrate the senior 
Tribal Water Right into a set of procedures for protecting all water 
rights in Kansas in harmony with KWAA, while respecting the 
jurisdictional boundaries between the State and Tribal sovereigns. Both 
the Tribe and the State recognize that communication and cooperation 
are essential to the protection of the Tribal Water Right.
    Finally, Articles 10 through 12 set forth the terms by which the 
Agreement will realign the parties to the 2006-2017 lawsuit. Article 10 
requires the original complaint in the 2006-2017 lawsuit to be amended, 
to add as new defendants all Kansas water rights holders in the Basin. 
This provision will enable these holders to review, participate in, and 
be bound by the terms of the Agreement. At the same time, Article 10 
also requires the dismissal of Chief Engineer Barfield from the 2006-
2017 lawsuit (a dismissal that has since occurred). Article 11 realigns 
the United States from defendant to plaintiff, so that it can claim 
legal title for the Tribal Water Right and equitable title in the same 
on behalf of the Tribe; it also requires the dismissal of the Director 
of the Bureau of Indian Affairs from the lawsuit (a dismissal that has 
also since occurred). Under Article 12, the Tribe, in return for the 
State's recognition of the Tribal Water Right, waives any future claims 
to federal reserved water rights other than the Tribal Water Right; 
waives any claims for past damages for water shortages caused by a lack 
of recognition of the Tribe's pre-Agreement, unquantified Winters 
right; and waives all claims against the State relating to the 2006-
2017 lawsuit. None of these provisions are effective until the bill (or 
a subsequent equivalent) is enacted into law. Once enacted, the Federal 
District Court for the State of Kansas retains jurisdiction to enforce 
the Agreement and its enabling legislation.
B. Kansas Water Rights affected by the Agreement
    During times of shortage, when the Tribe is unable to meet its 
direct demands or when storage is below target levels, the Tribe may 
request the administration of non-domestic Kansas upstream water 
rights. At this time, these non-domestic rights are few and relatively 
small: they include 2 irrigation rights, 4 industrial rights, 2 
recreational rights, and storage rights for 23 sediment-control small 
watershed dams. These watershed dams will be required to bypass 
inflows, but will not be required to release water that has already 
been stored. And in any case, the no-injury rule applies: the Chief 
Engineer will not administer these Kansas water rights if he determines 
that administration would be futile--that is, if he determines that 
curtailing them will not result in additional water being made 
available for the Tribal Water Right.
    As the Tribe builds out its own water infrastructure to fully 
develop the Tribal Water Right, the Tribe will use and store water that 
formerly flowed downstream. However, few water rights are immediately 
downstream of the Reservation. Moreover, the maximum drainage area 
anticipated to be controlled by the Tribe's reservoir storage is 
anticipated to be less than 5 percent of the drainage area above Valley 
Falls, Kansas.
    Maps of the relevant upstream and downstream portions of the Basin 
are attached to my testimony as Exhibits 1 and 2 respectively.
III. S. 2154 Effects the Tribe-State Consensus of the Agreement
    S. 2154 gives the approval of the United States to the Agreement, 
thus enabling it to become effective. The bill has five principal 
components, which I will summarize briefly.
    First, the bill authorizes, ratifies, and confirms the Agreement, 
its recognition of the Tribal Water Right, and its procedures for 
protecting that right. (These details are summarized above in Section 
II of this testimony).
    Second, Section 7 of the bill directs the NRCS and the Secretary of 
Interior's Indian Water Rights Office to cooperate in a study of the 
Upper Delaware and Tributaries Project, which commenced under the P.L. 
83-566 program and was authorized by the Senate in 1997. (See Section 
I.B of this testimony). The study, to be completed within two years of 
the bill's enactment, will make recommendations for updating the 
Watershed Plan as necessary to effectuate the Tribal Water Right. This 
is a crucial part of the bill, for it directs the United States to 
employ pre-existing legal and regulatory approvals in effectuating the 
Tribal Water Right.
    Third, the bill confirms and authorizes the realignment of the 
parties to the 2006-2017 lawsuit (as set forth in Sections 10 and 11 of 
the Agreement), and affirms the Agreement's waivers (as set forth in 
Section 12 of the Agreement). These details are summarized above in 
Section II.A. of this testimony.
    Fourth, the bill expressly forbids the use of eminent domain in 
acquiring land necessary for the development of the Tribal Water Right 
and its infrastructure. This provision makes clear that the Tribe has 
the responsibility for making all such acquisitions through voluntary 
transactions with willing sellers.
    Finally, the bill neither appropriates funds nor authorizes the 
appropriation of funds for a water storage project at the Plum Creek 
Project site or elsewhere. Once the NRCS reviews the project as 
required in Section 4 of the bill, the Tribe will bear the burden of 
obtaining the necessary appropriations.
IV. The Agreement and S. 2154 Comply With Congressional Requirements
    Like all tribal reserved rights, the Tribal Water Right is subject 
to the Federal Criteria and Procedures for Participation of the Federal 
Government in Negotiations for the Settlement of Indian Water Rights 
Claims (``Criteria and Procedures''). \6\ These are not regulations, 
but are rather a set of sixteen guidelines that federal agencies are to 
follow in determining whether and how to support a particular tribal 
water rights settlement. Since their publication in 1990, successive 
administrations have applied the Criteria and Procedures with various 
interpretations. Based on the State's review, both the Agreement and S. 
2154 fully comply with the Criteria and Procedures. The testimony of 
Chairman Randall summarizes that compliance in greater detail, but the 
State would like to emphasize three aspects of that compliance.
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    \6\ 55 Fed. Reg. 9223-9225 (March 12, 1990).
---------------------------------------------------------------------------
    First, S. 2154 authorizes, ratifies, and confirms the Agreement, 
thus resolving with finality all water-related and other legal claims 
by the Tribe against the State. Second, the United States--represented 
ably by counsel from the Departments of Justice and the Interior--has 
been fully involved in the negotiation of the Agreement. Passage of S. 
2154 will enable the Department of the Interior to become a party to 
the Agreement.
    Finally--and perhaps most importantly--the bill neither 
appropriates nor authorizes the appropriation of funds. As a 
consequence, the fiscal requirements of the Criteria and Procedures are 
not relevant to S. 2154. If the bill is enacted, those requirements 
will engage after the NRCS and Interior issue their recommendations 
pursuant to Section 7 of the bill; at that point, the burden will fall 
upon the Tribe to obtain congressional authorization of the 
appropriations necessary to effectuate those recommendations. Because 
of the unique features of the P.L. 83- 566 program, it is possible that 
the appropriations process may proceed through the agriculture 
committees of the Senate and the House.
Conclusion
    By way of conclusion, the State would like to emphasize two points 
about S. 2154. First, it ratifies the Agreement, which is the 
culmination of years of trusting and effective cooperation among the 
Tribe, the State, and the United States. Second, the bill does not 
request money; it is the initial step in an incremental legislative 
process--a process that the State hopes can obtain assistance through 
the P.L. 83-566 program. Because of these two points, the State fully 
supports S. 2154 and requests the Committee to vote to advance the 
bill. On behalf of the State, I thank the Committee for the opportunity 
to provide this testimony.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                 ______
                                 
 Prepared Statement of the National Congress of American Indians (NCAI)
    On behalf of the National Congress of American Indians (NCAI), the 
oldest and largest national organization advocating on behalf of 
American Indians, Alaska Natives and Indian tribal governments, we 
thank the members of the Senate Committee on Indian Affairs for the 
opportunity to provide this testimony for the record. The following 
testimony will focus on NCAI's support for S. 3168, a bill to amend the 
Omnibus Public Land Management Act of 2009 to make the Reclamation 
Water Settlements Fund permanent.
Indian Water Settlements
    Tribes retain pivotal legal rights to available water resources 
based upon aboriginal rights claims and federal reserved water rights 
claims, yet Indian wet water resources are scarce. For this reason, 
tribes consistently work together with the federal government to 
resolve existing legal claims to water through coordinated Indian water 
rights settlements. Such settlements can provide water to tribal 
nations sufficient for homeland purposes, and also provide certainty 
for local communities and states with respect to finite water 
resources. Indian water rights settlements are critically important to 
tribal nations and the American nation as a whole. While the Department 
of the Interior's Bureau of Indian Affairs, Office of the Solicitor, 
and Secretary's Indian Water Rights Office play major roles in settling 
Indian water rights claims, the Bureau of Reclamation (Reclamation) 
plays a critical role in all facets of such settlements, particularly 
with respect to implementing water projects associated with Indian 
water settlements. A vital component for Reclamation's work is water 
settlement funding.
S. 3168--Permanent Extension of Reclamation Water Settlements Fund
    S. 3168 would extend the Reclamation Water Settlements Fund 
(Reclamation Fund) permanently, ensuring that the time-tested Indian 
water rights settlement process can continue into the future without 
the threat of losing settlement funding by a date certain. The 
Reclamation Fund, codified at 43 U.S.C.  407, is only authorized to 
receive deposits beginning in FY 2020 and ending FY 2029, yet the Fund 
is already deemed critical and will be heavily relied upon by currently 
enacted and future Indian water rights settlements.
    The Reclamation Fund is vital to funding infrastructure projects, 
such as irrigation canals, dams and storage reservoirs, treatment 
facilities, and distribution facilities, tied to Indian water rights 
settlements. These infrastructure projects ensure that wet water 
reaches Indian lands and peoples for domestic, commercial, municipal, 
agricultural, industrial, and ceremonial uses. Importantly, future 
Indian water rights settlements are currently authorized to tap into 
the Reclamation Fund for infrastructure needs only until FY 2034, when 
the Fund terminates and would revert back to the U.S. Treasury under 
current law.
    The process of preparing for water settlements, actually 
negotiating settlement language, and implementing settlements takes 
years and in many instances decades. Each water settlement is unique, 
and takes into account a host of minute hydrological details; specific 
population considerations; historical considerations; political, legal, 
as well as scientific realities; consideration of the federal trust 
responsibility; and present and future uses. Having a sunset date of 
2034 for the Reclamation Fund unduly burdens the settlement process, 
placing a timeclock on the water settlement process that only in some 
instances may be finalized. In other instances, the sunsetting of the 
Reclamation Fund could leave parties at the table during negotiations, 
only to have critical funding resources removed from the process, 
potentially unraveling any progress made and resulting in overall water 
uncertainty.
    This is important to note since, as the Department of the Interior 
recently testified, Congress has only enacted 32 Indian water 
settlements. The Department also indicated that there are over 280 
federally recognized tribes in the West (excluding the 229 tribes in 
Alaska), and it has seen an increase in requests from both tribes and 
states to enter into water settlement negotiations. These requests will 
only increase as regions develop climate adaptation plans, in addition 
to dealing with real world challenges such as drought and water 
shortage due to other factors like industrial agricultural uses or 
natural resource development.
    For these reasons, NCAI fully supports S. 3168 to ensure funding 
resources are available for all current and future enacted Indian water 
rights settlements. This approach ensures a future of water security, 
which is a paramount concern for regions combatting severe drought and 
water shortages. As this Committee is aware, even though Indian water 
settlements often take years to finalize and ratify through 
Congressional action, they are by far the preferred vehicle for 
determining water rights and achieving water certainty.
Conclusion
    In conclusion, NCAI appreciates the opportunity to provide 
testimony to the Senate Committee on Indian Affairs. Water resources 
are vital to ensuring a healthy future for tribal nations and providing 
certainty to local communities and states regarding available finite 
water resources. For the aforementioned reasons, NCAI reiterates its 
support for S. 3168.

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