House Report 105-812 - FLATHEAD INDIAN IRRIGATION PROJECT, MONTANA

[House Report 105-812]
[From the U.S. Government Publishing Office]

105th Congress Report
HOUSE OF REPRESENTATIVES

2d Session 105-812
_______________________________________________________________________

FLATHEAD INDIAN IRRIGATION PROJECT, MONTANA
_______

October 12, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Young of Alaska, from the Committee on Resources, submitted the
following

R E P O R T

together with

DISSENTING VIEWS

[To accompany H.R. 3056]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill
(H.R. 3056) to provide for the preservation and sustainability
of the family farm through the transfer of responsibility for
operation and maintenance of the Flathead Indian Irrigation
Project, Montana, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:

SECTION 1. TRANSFER OF RESPONSIBILITY FOR OPERATION AND MAINTENANCE OF
THE FLATHEAD INDIAN IRRIGATION PROJECT, MONTANA.

(a) Purpose.--The purpose of this Act is to preserve and protect the
viability and sustainability of the family farms and ranches of the
Jocko Valley, Camas Valley, and Mission Valley, Montana, through the
transfer of responsibility for operation and maintenance of the
Irrigation Division of the Flathead Indian Irrigation Project in
Montana. This Act does not affect and is not intended to affect in any
way the negotiation or adjudication of water rights, including those of
the Confederated Salish and Kootenai Tribes of the Flathead Nation.
(b) Definitions.--In this Act:
(1) Irrigation district.--The term ``irrigation district''
means 1 or more irrigation districts organized in accordance
with the paragraph relating to the irrigation systems on the
Flathead Indian Reservation, Montana, under the subheading
``irrigation and drainage'' under the heading ``BUREAU OF
INDIAN AFFAIRS'' in the Act of May 10, 1926 (44 Stat. 464;
chapter 277).
(2) Project.--The term ``Project'' means Irrigation Division
of the Flathead Indian Irrigation Project constructed under
section 14 of the Act of April 23, 1904 (33 Stat. 305, chapter
1495) and section 14 of the Act of May 29, 1908 (35 Stat. 450,
chapter 216).
(3) Tribe.--The term ``Tribe'' refers to the Confederated
Salish and Kootenai Tribes of the Flathead Nation, a federally
recognized tribe organized pursuant to the Indian
Reorganization Act of 1934.
(c) Contract.--Not later than 1 year after the date of enactment of
this Act, the Secretary of the Interior (in this Act referred to as the
``Secretary'') shall offer to enter into a contract with the irrigation
district under which the irrigation district will operate and manage
the Project, including all rights and powers exercised by the Secretary
in the operation of the works, which include the right to use permanent
easements purchased under the Act of May 25, 1948 (62 Stat. 269,
chapter 340). Such contract shall contain each of the following
provisions:
(1) Provisions identifying the trust responsibilities of the
United States to the Tribe that are affected by the operation
and maintenance of the Irrigation Division and ensuring that
the United States is able to fulfill such responsibilities.
(2) Provisions ensuring that in its operation and maintenance
of the Irrigation Division the irrigation district maintains
the interim instream flows established by the Bureau of Indian
Affairs to preserve fisheries pending adjudication of water
rights and, thereafter, as required by the rulings of said
adjudication or negotiation.
(3) Provisions ensuring that existing obligations governing
the repayment of the construction costs of the Project are
continued unaffected by this enactment and the contract; except
that providing the irrigation districts shall make a payment of
$1,000,000 to the United States Treasury on the unmatured
installments of construction debt by December 31, 2001.
(4) Provisions amending the existing repayment contracts
between the irrigation district and the United States to
provide that net revenues from the operation of the Power
Division shall not be used to pay operation and maintenance
costs of the Irrigation Division.
(5) Provisions providing for revocation of the contract and
the irrigation district's right to operate and maintain the
Project if a court of the United States finds that the
irrigation district has operated and persists in operating the
Project in a manner willingly and knowingly damaging tribal
trust assets, but operation of the Project as it was operated
by the Bureau of Indian Affairs Plan of Operations in effect on
October 31, 1997, shall be presumed to provide adequate
protection of such assets, and any changes in operation
required as a result of new information and administrative
policies and decisions adopted pursuant to title 5, United
States Code, judicial decisions, or negotiations shall not be a
ground for revocation of the contract unless the irrigation
district refuses to adapt its operation and maintenance of the
Project to the requirements of such new information, judicial
decisions, or negotiations.
(d) Timing.--The Secretary shall commence negotiations with the
irrigation district as soon as practicable to enable the Secretary and
the irrigation district to enter into the contract not later than 1
year after the date of enactment of this Act.
(e) Property Rights.--
(1) In general.--Under the contract, the Secretary shall
transfer to the irrigation district ownership of all equipment,
machinery, office supplies, and other supplies and equipment
paid for with operation and maintenance funds related to the
project.
(2) Inventory list.--The Secretary shall provide an inventory
list of all supplies and equipment at the Project as of the
date of enactment of this Act, that were purchased with
operation and maintenance funds.
(3) Real property.--Under the contract, the Secretary shall
not transfer to the irrigation district ownership of any real
property right, whether to land, or an easement therein, nor
shall the Secretary transfer to the irrigation district the
ownership of any water right.
(f) Water Rights.--This Act does not affect the negotiation of water
rights between the State of Montana, the United States, and the
Confederated Salish and Kootenai Tribes.

purpose of the bill

The purpose of H.R. 3056 is to provide for the preservation
and sustainability of the family farm through the transfer of
responsibility for operation and maintenance of the Flathead
Indian Irrigation Project, Montana.

background and need for legislation

The Flathead Irrigation Project was authorized in 1908, as
an amendment to the Flathead Allotment Act of 1904. The Project
is located on the Flathead Reservation, but the amendment
required that water be delivered to all irrigable land, whether
owned by tribal members or nonmembers. Of the 127,000 acres in
the Flathead Irrigation Project, 116,000 acres are in private
ownership, with the Irrigation Districts representing 113,000
acres. Of the 22,000 people living on the Flathead Reservation
in the 1990 census, only 3000 were tribal members. Moreover, 90
percent of the land-delivered water is owned in fee by non-
tribal members.
The operation and maintenance of the Project is now managed
by the Bureau of Indian Affairs of the Department of the
Interior (the tribes manage the Power Division of the Project).
The Project landowners pay 100 percent of the operation and
maintenance costs of the Project associated with their land.
However, the operating costs are high, in some cases 50 to 100
percent higher than similar irrigation projects in Montana.
The bill would transfer only the authority to operate and
maintain the Irrigation Division to the Districts. It does not
transfer any property rights, including water rights.

committee action

H.R. 3056 was introduced on November 13, 1997, by
Congressman Rick Hill (R-MT). The bill was referred to the
Committee on Resources, and within the Committee to the
Subcommittee on Water and Power. The Subcommittee on Water and
Power held a legislative hearing on the bill on April 30, 1998.
On June 25, 1998, the Subcommittee on Water and Power met to
consider H.R. 3056. No amendments were offered and the bill was
favorably reported to the Full Committee by a rollcall vote of
7-5, as follows:

----------------------------------------------------------------------------------------------------------------
Republicans Yea Nay Present Democrats Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Doolittle...................... X ........ ......... DeFazio.......... ........ X .........
Calvert........................ X ........ ......... Miller........... ........ X .........
Pombo.......................... X ........ ......... Pickett.......... ........ ........ .........
Chenoweth...................... X ........ ......... Dooley........... ........ X .........
Smith, Linda................... ........ ........ ......... Farr............. ........ X .........
Radanovich..................... ........ ........ ......... Smith, Adam...... ........ ........ .........
Thornberry..................... X ........ ......... Kind............. ........ ........ .........
Shadegg........................ ........ ........ ......... Doggett.......... ........ X .........
Ensign......................... ........ ........ ......... ................. ........ ........ .........
Smith, Bob..................... ........ ........ ......... ................. ........ ........ .........
Cannon......................... X ........ ......... ................. ........ ........ .........
Crapo.......................... X ........ ......... ................. ........ ........ .........
------------------------------- ------------------------------
Total Republicans........ 7 ........ ......... Total ........ 5 .........
Democrats.
----------------------------------------------------------------------------------------------------------------

On August 5, 1998, the Full Resources Committee met to
consider H.R. 3056. Congressman Hill offered an amendment in
the nature of a substitute which clarified the effects of the
bill on tribal water rights; clarified the extent of the
transfer; and delineated the parameters for the operation and
maintenance contract between the Secretary of the Interior and
the Irrigation Districts. The amendment was adopted by voice
vote and the bill, as amended, was ordered favorably reported
to the House of Representatives by a bipartisan rollcall vote
of 25-6, as follows:
Roll No.: 1.
Bill No.: H.R. 3056.
Short title: Flathead Indian Irrigation Project, Montana.
Amendment or matter voted on: Final Passage.

----------------------------------------------------------------------------------------------------------------
Member Yea Nay Present Member Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Young (Chairman)........... X ........ ......... Mr. Miller....... ........ X .........
Mr. Tauzin..................... X ........ ......... Mr. Markey....... ........ ........ .........
Mr. Hansen..................... X ........ ......... Mr. Rahall....... ........ ........ .........
Mr. Saxton..................... ........ ........ ......... Mr. Vento........ ........ X .........
Mr. Gallegly................... ........ ........ ......... Mr. Kildee....... ........ X .........
Mr. Duncan..................... X ........ ......... Mr. DeFazio...... ........ X .........
Mr. Hefley..................... X ........ ......... Mr. Falemavaega.. ........ X .........
Mr. Doolittle.................. X ........ ......... Mr. Abercrombie.. ........ ........ .........
Mr. Gilchrest.................. X ........ ......... Mr. Ortiz........ X ........ .........
Mr. Calvert.................... X ........ ......... Mr. Pickett...... X ........ .........
Mr. Pombo...................... X ........ ......... Mr. Pallone...... ........ ........ .........
Mrs. Cubin..................... X ........ ......... Mr. Dooley....... ........ ........ .........
Mrs. Chenoweth................. X ........ ......... Mr. Romero- ........ ........ .........
Barcelo.
Mrs. Linda Smith............... X ........ ......... Mr. Hinchey...... ........ ........ .........
Mr. Radanovich................. X ........ ......... Mr. Underwood.... ........ ........ .........
Mr. Jones...................... X ........ ......... Mr. Farr......... ........ X .........
Mr. Thornberry................. X ........ ......... Mr. Kennedy...... ........ ........ .........
Mr. Shadegg.................... X ........ ......... Mr. Adam Smith... ........ ........ .........
Mr. Ensign..................... ........ ........ ......... Mr. Delahunt..... ........ ........ .........
Mr. Bob Smith.................. ........ ........ ......... Mr. John......... ........ ........ .........
Mr. Cannon..................... X ........ ......... Ms. Green........ ........ ........ .........
Mr. Brady...................... X ........ ......... Mr. Kind......... ........ ........ .........
Mr. Peterson................... X ........ ......... Mr. Doggett...... ........ ........ .........
Mr. Hill....................... X ........ .........
Mr. Schaffer................... X ........ .........
Mr. Gibbons.................... X ........ .........
Mr. Crapo...................... X ........ .........
----------------------------------------------------------------------------------------------------------------

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to the requirements of clause 2(l)(3) of rule
XI of the Rules of the House of Representatives, and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee on Resources' oversight findings and
recommendations are reflected in the body of this report.

CONSTITUTIONAL AUTHORITY STATEMENT

Article I, section 8 of the Constitution of the United
States grants Congress the authority to enact H.R. 3056.

COST OF THE LEGISLATION

Clause 7(a) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs which would be incurred in carrying out
H.R. 3056. However, clause 7(d) of that rule provides that this
requirement does not apply when the Committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act of 1974.

COMPLIANCE WITH HOUSE RULE XI

1. With respect to the requirement of clause 2(l)(3)(B) of
rule XI of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, H.R.
3056 does not contain any new budget authority, spending
authority, credit authority, or an increase or decrease in tax
expenditures. According to the Congressional Budget Office,
enactment of this bill will affect offsetting revenues by
reducing direct spending.
2. With respect to the requirement of clause 2(l)(3)(D) of
rule XI of the Rules of the House of Representatives, the
Committee has received no report of oversight findings and
recommendations from the Committee on Government Reform and
Oversight on the subject of H.R. 3056.
3. With respect to the requirement of clause 2(l)(3)(C) of
rule XI of the Rules of the House of Representatives and
section 403 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R.
2108 from the Director of the Congressional Budget Office.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. Congress,
Congressional Budget Office,
Washington, DC, October 9, 1998.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3056, a bill to
provide for the preservation and sustain ability of the family
farm through the transfer of responsibility for operation and
maintenance of the Flathead Indian Irrigation Project, Montana.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Kristen
Layman (for federal costs), and Marjorie Miller (for state,
local, and tribal costs).
Sincerely,
James L. Blum
(for June E. O'Neill, Director).
Enclosure.

H.R. 3056--A bill to provide for the preservation and sustainability of
the family farm through the transfer of responsibility of the
Flathead Indian Irrigation Project, Montana

H.R. 3056 would transfer responsibility for operating and
maintaining the Flathead Indian Irrigation Project from the
Bureau of Indian Affairs (BIA) to local irrigation districts in
Montana. The bill would require the Secretary of the Interior
to enter into a contract with the irrigation districts to
transfer this responsibility within one year of the bill's
enactment. In addition, the bill would require the districts to
make a payment of $1 million to the U.S. Treasury by December
31, 2001. Finally, H.R. 3056 would transfer all irrigation
equipment, machinery, and office supplies to the districts and
would grant them access to use permanent easements purchased by
the federal government for operating the irrigation project.
CBO estimates that implementing H.R. 3056 would result in
new discretionary spending of less than $1 million over fiscal
years 1999 and 2000, assuming the availability of appropriated
funds. This spending would be for the costs of negotiating a
contract with the irrigation districts and paying severance to
BIA employees whose jobs would be eliminated by the transfer.
In addition, enacting H.R. 3056 would affect direct
spending, primarily by changing offsetting receipts collected
by the federal government; and thus, pay-as-you-go procedures
would apply to the bill. In total, CBO estimates that enacting
H.R. 3056 would reduce direct spending by about $1 million
either in fiscal year 2001 or the first quarter of fiscal year
2002, and that the net imipact on direct spending would be less
than $500,000 in other years over the 1999-2003 period.
First, CBO estimates the bill would increase offsetting
receipts by $1 million in either fiscal year 2001 or 2002 by
requiring that the irrigation districts make such a payment as
a condition for the transfer. Second, because the federal
government would no longer operate and maintain the Flathead
Project, enacting the bill would eliminate both the collections
of fees charged for operating the project and the direct
spending that results from using such fee income. The loss of
fees and the reduction in spending of such fees would offset
each other. Finally, by transferring irrigation equipment and
machinery to the districts, the bill would likely decrease
offsetting receipts from the sale of surplus federal property,
but CBO estimates that any forgone receipts would probably be
less than $500,000.
H.R. 3056 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act. Local
governments might incur some costs as a result of the bill's
enactment, but these costs would be voluntary.
The CBO staff contact for this estimate is Kristen Layman
(for federal costs), and Marjorie Miller (for state, local, and
tribal costs). This estimate was approved by Paul N. Van de
Water, Assistant Director for Budget Analysis.

compliance with public law 104-4

H.R. 3056 contains no unfunded mandates.

changes in existing law

If enacted, H.R. 3056 would make no changes in existing
law.

DISSENTING VIEWS

We are strongly opposed to H.R. 3056, legislation proposing
to shift operations and management of the Flathead Indian
Irrigation Project (FIIP) away from control by the Bureau of
Indian Affairs (BIA)--and thus away from the Flathead Tribes--
by transferring such authority to the Flathead Reservation's
non-Indian irrigation districts (known as the Joint Board of
Control or JBC).
FIIP is the largest irrigation project in the state of
Montana and includes 17 dams and over 1,300 miles of canals and
laterals. Most of the water stored or diverted by the project
arises on an flows westwardly from the 10,000 foot Mission
Mountain range. This project was built and paid for by the BIA.
The original 1904 congressional authorization makes it quite
clear that the project was to benefit the Reservation's Indian
population. To this day, these are Tribal lands held in trust
by the United States. Nearly all of the project's reservoirs
are in this area and are on Tribal or Indian owned lands.
Transferring these facilities to non-Indian control would
violate our trust obligation to the Tribes and the commitments
made in Treaty and in the statutory authorizations of the FIIP.
The early part of this century was a time in Federal /
Indian relations generally known as the Allotment Era. During
that period, the Federal government pursued an ill-conceived
policy intended to break up the communal nature of the Indian
reservations, contravening the commitments the nation had made
to tribes just 50 years earlier during the Treaty Era. In the
Treat of Hellgate, the Federal government gave assurances to
the Salish and Kootenai Tribes that it would protect the
Reservation and its resources and preserve them for the
exclusive use of the Tribes. The later concept of allotting the
reservations by granting each Tribal member 80 or 160 acres was
an attempt to transform the Indian people into a European model
of a farming society. On the Flathead Reservation, transforming
the Indians into farmers required water for crops, so the
Congress authorized the construction of FIIP as part of the
Flathead Allotment Act. In addition, those lands that remained
after the Reservation was allotted were declared ``surplus''
and opened to non-Indian homesteading in direct violation of
the 1855 Treaty. The authorization for FIIP was amended in
1908, allowing irrigation canals to be extended to also serve
homesteaders. The legislative history reflects the
understanding of Congress ``that in all probability three-
fourths of the irrigable lands would be allotted to Indians.''
(H.R. Rep. No. 1189, 60th Cong., 1st Sess, 2 (1908)).
The 1904 Flathead Allotment Act (FAA) authorized proceeds
from the forced sale of Reservation lands an Tribal timber to
be used to pay for most of the construction costs of FIIP. The
1908 amendments required the homesteaders to repay the United
States for their pro rata share of the debt of construction for
those portions of the project that were serving homesteaded or
unallotted lands. The amendments further specified that when
the debt had been repaid on those portions of the project
serving unallotted lands, ``such irrigation works'' would pass
to the owners of those lands. The non-Indian irrigators have
argued repeatedly that this provision mandates ``turnover'' of
all project works to their control, but this argument has been
rejected by the courts and various Solicitors of the Department
of the Interior. In 1987, President Reagan's Interior and
Justice Department Solicitors informed the U.S. District Court
for Montana that, relative to the turnover provision, ``The
Secretary submits that the plaintiff (JBC) asks the court to
read a statute Congress never wrote * * * The plaintiff's
interpretation of the law is inaccurate.''
It is with this important historical background that we
find ourselves addressing H.R. 3056. The basic premise for H.R.
3056 is the JBC's contention that it can quite simply operate
the FIIP more efficiently than can the BIA and that the BIA has
mismanaged the project so this Indian irrigation project should
be turned over to the non-Indian irrigation districts. No
evidence has been presented to the Committee regarding the
alleged efficiency that would be gained through the JBC's
operation. No alternative annual operating plans or budgets
were provided to the Committee, just the unadorned claim that
they can do it cheaper and that the BIA's annual operations and
maintenance (O&M) charges are to high.
As indicated above, FIIP is one of the largest irrigation
projects in the country and most of the reservoirs and many of
the canals are on Tribal lands, not fee lands owned by non-
Indians. The reservoirs have a major impact on Treaty rights,
including hunting, fishing and other types of outdoor
activities such as camping. The canals intersect most rivers
and streams crossing the Reservation and can quite readily be
managed to dry up those streams. Since the project has a major
impact on the Reservation's Treaty guaranteed fishery
population and habitat, costs of operating the project have
included fish screens and access to biological experts for
questions of stream flows that are needed to protect the
fishery.
The Committee has received no evidence that the non-Indian
irrigators could better manage these impacts of the project,
and in fact, the evidence suggests the opposite. In 1987, 1989,
1990, 1991 and 1992 the JBC went to the Interior Board of
Indian Appeals to challenge the project's recommended instream
flow regime. The JBC also objected to, and for a period of time
refused to pay for, the installation of fish screens to prevent
fish from being sucked out of the Reservation's streams and
into irrigation canals. The BIA has access not only to fishery
biologists, but to hydrologists and many other professionals.
Under a contract with the BIA, the Flathead Tribes have
undertaken a multi-million dollar Safety of Dams project to
repair a number of the dams on the Reservation that are aging
and in need of repair. The Committee received no evidence
indicating that the farmers who constitute the JBC would be
willing and capable to take over these obligations. Ironically,
if the Flathead Tribes themselves were to propose to take over
management and operation of the FIIP under the Indian Self-
Determination Act (P.L. 93-638 as amended) they would have to
demonstrate capability. Nothing in this bill imposes the same
requirement on the non-Indian irrigators.
While the proponents of H.R. 3056 claim that the BIA O&M
charges are too high, the Committee did receive evidence that
the immediately adjacent Missoula Irrigation Project, an off-
reservation, non-federal project, has O&M fees of $22 per
acre--more than $2 per acre higher than the O&M fees at FIIP.
Without specific evidence that the non-Indian irrigators could
produce significant savings, these figures suggest that the BIA
O&M costs are not out of line. In addition, the Tribes have
expressed concern that Indian employees of the FIIP might lose
their jobs with the change in management, contributing to high
Reservation unemployment rates.
In closing, we point out the strong distate we have not
just for taking this important piece of Reservation
infrastructure away from the people for whom the Reservation
was established, but in weighing in after the courts have
repeatedly--at the federal, state, tribal and administrative
level--and overwhelmingly rejected the position of the JBC on
turnover and other aspects of project operation. The courts
have had far more opportunity to examine the nuances of this
matter than has the Committee and they have not found any
justification for the transfer of the project. Similar opinions
have been given by Interior Department Solicitors in two
Republican and one Democratic Administration that have examined
the manner.
Not only is there no justification for this bill, but it
establishes a precedent that will be of concern to every other
Indian reservation with an infrastructure that also benefits
local non-Indians. H.R. 3056 should be rejected.

George Miller.
Peter DeFazio.
Dale E. Kildee.
Eni Faleomavaega.
Donna Christian-Green.
Bruce Vento.