[Senate Report 115-401]
[From the U.S. Government Publishing Office]
Calendar No. 706
115th Congress } { Report
SENATE
2d Session } { 115-401
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TO APPROVE THE SETTLEMENT OF THE WATER RIGHTS CLAIMS OF THE NAVAJO
NATION IN UTAH, TO AUTHORIZE CONSTRUCTION OF PROJECTS IN CONNECTION
THEREWITH, AND FOR OTHER PURPOSES
_______
November 29, 2018.--Ordered to be printed
_______
Mr. Hoeven, from the Committee on Indian Affairs, submitted the
following
R E P O R T
[To accompany S. 664]
[Including cost estimate of the Congressional Budget Office]
The Committee on Indian Affairs, to which was referred the
bill (S. 664) to approve the settlement of the water rights
claims of the Navajo Nation in Utah, to authorize construction
of projects in connection therewith, and for other purposes,
having considered the same, reports favorably thereon with an
amendment in the nature of a substitute and an amendment to the
title and recommends that the bill, as amended, do pass.
PURPOSE
The Navajo Utah Water Rights Settlement Act of 2018, as
amended, would settle the Navajo Nation (Nation) water claims
in the State of Utah (State) and authorize and implement the
Nation & State Settlement Agreement to quantify 81,500 acre-
feet per year of surface and groundwater from the Upper
Colorado River Basin in Utah.
BACKGROUND
The Navajo Nation is a tribe whose reservation extends over
27,000 square miles across the states of Arizona, New Mexico,
and Utah. In August 2003, the Nation and the Governor of the
State of Utah executed a Memorandum of Agreement to commence
settlement discussions.
The Nation and the State reached a general agreement
concerning a proposed water rights settlement in 2010. In 2013,
the Secretary of the Interior appointed a federal negotiations
team to negotiate terms of a settlement. The terms of the
Settlement Agreement were finalized by the federal negotiations
team in 2015. The Navajo Nation Council approved the Settlement
Agreement on January 16, 2016. The State reiterated its support
for the Settlement Agreement by a Senate resolution on July 15,
2015.
NEED FOR LEGISLATION
In 1908, the U.S. Supreme Court held in Winters v. United
States that when Congress set aside lands for a reservation, it
also gave Indian tribes the primary rights to streams on their
reservations. However, Winters did not set forth how to
quantify water rights beyond ``sufficient water to fulfill the
reservation's purpose.''
The issue of quantifying water was resolved in Arizona v.
California. The Court adopted the practicably irrigable acreage
standard.\1\ Collectively, these two cases established the
Indian reserved water rights which may be asserted at any time
and are not lost through nonuse. While many Indian reservations
were established for the purpose of settling Indian people into
agricultural communities, the Federal Government never invested
sufficient resources into water-delivery systems to fulfill
that purpose.
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\1\This standard is used to determine how much state water Indian
reservations should receive by determining how many acres of the
reservation could be reasonably or practically irrigated.
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In order to fulfill the United States' trust responsibility
to Indian tribes, Congress plays an integral role in the Indian
water rights settlements.
BILL SUMMARY
The bill, as amended, would authorize a negotiated
settlement agreement of the Nation's reserved water rights
claim with the State. The bill authorizes $198,300,000 from the
federal government to fund the Navajo Water Development Trust
Fund (Fund). This Fund would be used by the Nation to plan,
design, and construct approved water development projects. The
State would contribute $8,000,000 into the Fund, in
installments, at the discretion of the Secretary of the
Interior, in each of the three years following the execution of
the agreement by the Secretary.
The bill also authorizes $11,100,000 from the federal
government to be deposited into the Navajo Operations,
Maintenance, and Repair (OM&R) trust account for the Nation's
approved water development projects. An additional $1,000,000
will be authorized from the federal government to fund
programmatic costs, including the preparation of a hydrographic
survey of historic and existing water uses on the Nation to be
filed with the adjudication court. Finally, the bill will
allocate 81,500 acre-feet per year from the San Juan River in
the State of Utah to the Nation.
The bill uses a fund-based approach to resolving Indian
water rights settlements.\2\ This simplified settlement
replaces the Department of the Interior's construction
obligations with a water development fund for the Navajo Nation
to use to build water projects on an as-needed basis with the
goal of avoiding likely cost overruns related to planning,
design, and construction of several water development projects.
This approach also indemnifies the United States against any
future financial liability or responsibility for these
projects.
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\2\Alan Mikkelsen, U.S. Dep't of the Interior, Bureau of
Reclamation, Stephen E. Boyd, U.S. Dep't of Justice, Letter to House
Committee on Natural Resources (Sept. 7, 2018).
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LEGISLATIVE HISTORY
On March 15, 2017, Senator Hatch introduced S. 664. The
bill was referred to the Indian Affairs Committee. On December
6, 2017, the Committee held a legislative hearing on the bill.
In the Department of the Interior's written testimony, the
Deputy Commissioner of the Bureau of Reclamation, Alan
Mikkelsen stated:
The Department supports the goals of the settlement,
which include quantifying the reserved water rights
attached to the Utah portion of the Navajo reservation
and facilitating the development of essential municipal
water systems that will provide a reliable quantity and
quality water supply for the communities within the
Reservation, which currently lacks the sort of basic
services that most Americans take for granted. The
Department is working with the Nation and sponsor of S.
664 to ensure this bill meets these goals while
adhering to the Criteria and Procedures that guide the
Department's participation in Indian water rights
settlements.
On October 3, 2018, by voice vote, the Committee ordered
the bill, as amended, to be reported favorably to the Senate.
Amendments. One amendment, in the nature of a substitute,
was offered by Senator Hoeven, on behalf of Senator Hatch. This
substitute amendment did the following:
The substitute amendment addressed concerns raised by the
Department of the Interior regarding cost overruns.
Historically, cost overruns have caused delays into fully
implementing Indian water rights settlements. The Department of
Interior prefers establishing a trust fund so that interest
earned in the account can be applied to future increased costs
of implementing the Indian water rights settlement.
Additionally, the substitute amendment--
Establishes the Navajo Water Development
Trust Fund and the Navajo OM&R Account. The Navajo
Water Development Trust Fund is authorized to receive
$198.3 million from the federal government and the
Navajo OM&R Account is authorized to receive $11.1
million from the federal government;
Stipulates that depletions that occur on
allotted land are accounted for as a depletion by the
Nation, including any water use existing on an
allotment as of the date of the enactment of the bill,
reasonable domestic and stock water uses, and any water
rights that may be decreed in the general stream
adjudication.
Prohibits the Nation from infringing upon
the reasonable domestic and stock water use of an
allottee.
Preserves the rights of public domain
allottees to make claims in the general stream
adjudication;
Requires that off-reservation usage and
leasing be in accordance with the agreement and
approved by the Secretary of the Interior,
Specifies that if a conflict exists between
the bill and the settlement agreement that the text of
the bill will control; and
Makes other grammatical and technical
changes to the bill.
Prior Congresses. In the 114th Congress, Senator Hatch
introduced S. 3482, on November 17, 2016. The bill was referred
to the Committee. No further action was taken.
SECTION-BY-SECTION ANALYSIS
Section 1. Short title
``Navajo Utah Water Rights Settlement Act of 2018.''
Section 2. Purposes
The primary purpose of the Act is to authorize and
implement the Navajo Nation/State of Utah Settlement Agreement
and to permanently settle the Navajo Nation's water rights
claims in Utah.
Section 3. Definitions
This section provides definitions to key terms in the Act.
Section 4. Ratification of Agreement
This section states that Congress ratifies the Settlement
Agreement, which would quantify the water rights of the Navajo
Nation in Utah and establish the conditions that must be met to
make the Agreement effective, including funding for water
development on the Navajo Reservation in Utah. In addition,
Congress authorizes the Secretary of the Interior to execute
the Settlement Agreement on behalf of the United States and to
amend the Agreement as necessary to conform to the Act.
Section 5. Navajo water rights
This section states that Congress confirms that the Navajo
Nation shall have the right to use and deplete up to 81,500
acre-feet per year from water sources in Utah, and that these
rights are held in trust by the United States and are not
subject to forfeiture or abandonment. Further, the water rights
of allottees on or adjacent to the Reservation in Utah must be
satisfied out of the Nation's rights. The Nation may allocate,
distribute, and lease its water rights for off-reservation use
in accordance with the agreement, with the approval of the
Secretary of the Interior. But the Nation is prohibited from
objecting in the general stream adjudication or any other
applicable forum to the quantification of reasonable domestic
and stock uses of the water from this settlement on an
allotment.
Section 6. Navajo trust accounts
This section sets forth that, using the appropriations
authorized in Section 7, the Secretary of the Interior is
authorized to establish the Navajo Utah Settlement Trust Fund
(Fund) that includes two accounts, to plan, design, and
construct the water diversion and delivery of the Navajo water
development projects.
Section 7. Authorization of appropriations
This section authorizes appropriations of $198,300,000 to
the Fund for the planning, design and construction of approved
water development projects, and within that Fund, authorizes
appropriations of $11,100,000 for the Navajo OM&R Account of
the Fund. Additionally, the bill authorizes $1,000,000 to fund
programmatic costs, including the preparation of a hydrographic
survey of historic and existing water uses on the Reservation
to be filed with the adjudication court. The State shall
contribute $8,000,000 to the Secretary of the Interior for
deposit into the Fund.
Section 8. Conditions precedent
This section establishes conditions that must be met for
the settlement and the waivers to become effective, including
the appropriation of funds authorized in Section 7, the
execution of the waivers, and the entry of a final judgment and
decree by the adjudication court. These conditions must occur
by October 31, 2030 unless the parties to the Agreement extend
the deadline.
Section 9. Waivers and releases
This section dictates the waivers and releases that must be
executed in order for the settlement to be binding and
effective. Because tribal water rights are held in trust by the
United States, Congress must affirmatively state what claims
are settled and disposed of by the Act.
Section 10. Miscellaneous provisions
This section sets forth the expression of Congress' intent
that nothing in this Act shall establish a standard for the
qualifications of the water rights of any other tribe or to
quantify or adversely affect the water rights of any tribe
other than the Navajo Nation.
Section 11. Relation to allottees
This section clarifies that nothing in this Act or the
agreement shall affect the rights or claims of allottees, or
the United States, acting in capacity as trustee for or on
behalf of allottees, for water rights or damages related to
lands allotted by the United States to allottees.
Section 12. Antideficiency
This section states that the United States shall not be
liable for any failure to carry out any obligation or activity
authorized by this Act if adequate appropriations are not
provided expressly by Congress to carry out the purposes of
this Act.
November 28, 2018.
Hon. John Hoeven,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 664, the Navajo Utah
Water Rights Settlement Act of 2018.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Aurora
Swanson.
Sincerely,
Keith Hall,
Director.
Enclosure.
COST AND BUDGETARY CONSIDERATIONS
S. 664--Navajo Utah Water Rights Settlement Act of 2018
Summary: S. 664 would secure up to 81,500 acre-feet of
water annually for the Navajo Nation by ratifying a settlement
being negotiated between the United States, the state of Utah,
and the Navajo Nation. The bill would authorize the
appropriation of $209 million to capitalize the Navajo Utah
Settlement Trust Fund, an interest-bearing fund established
under the bill. After the parties meet certain conditions, the
federal government would transfer ownership of the fund
(including any earned interest that is appropriated to the
fund) to the nation for constructing projects to deliver water
to the reservation of the Navajo Nation in Utah. The bill also
would direct the Bureau of Reclamation (BOR) to survey water
use on the reservation. Using information from BOR, CBO
estimates that enacting those provisions would cost $242
million over the 2019-2023 period, assuming appropriation of
the authorized and necessary amounts.
Enacting S. 664 would affect direct spending by increasing
offsetting receipts because the state of Utah would be required
to contribute $8 million to the trust fund; therefore pay-as-
you-go procedures apply. However, because the federal
government would record a federal expenditure of the fund's
balance when ownership of the fund is transferred to the Navajo
Nation, there would be no net effect on direct spending over
the 2019-2023 period. Enacting the bill would not affect
revenues.
CBO estimates that enacting S. 664 would not increase
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
S. 664 contains intergovernmental mandates as defined in
the Unfunded Mandates Reform Act (UMRA). CBO cannot determine
whether the cost of those mandates would exceed the annual
threshold established in UMRA ($80 million in 2018, adjusted
annually for inflation). S. 664 contains no private-sector
mandate as defined in UMRA.
Basis of estimate: For this estimate, CBO assumes that S.
664 will be enacted by the end of 2018. The bill would
authorize the appropriation of specific amounts but does not
specify in which year any appropriation should be provided. CBO
has estimated how much would need to be provided each year
based on information from BOR. CBO expects all of the following
conditions to be met by 2023:
The parties have finalized and executed the
settlement including amendments required to conform
with the bill,
Utah has contributed $8 million to the trust
fund and enacted the necessary legislation,
All parties have executed waivers and
releases of claims as required under the bill, and
The court has confirmed the water rights of
the Navajo Nation in accordance with the bill.
In addition, CBO assumes that the amounts authorized to be
appropriated to capitalize the fund (with adjustments to
account for anticipated inflation as required by the bill)
would be appropriated over the 2019-2023 period. In 2023, BOR
would publish a statement of findings in the Federal Register
that the conditions have been met and the ownership of the
trust fund would be transferred to the Navajo Nation.
Spending subject to appropriation
CBO estimates that implementing the bill would cost $242
million over the 2019-2023 period, assuming appropriation of
the authorized and necessary amounts.
Survey of Water Use. S. 664 would authorize the
appropriation of $1 million for costs to implement the bill and
for conducting a survey of historic and existing water use on
the portion of the reservation located within Utah. CBO
estimates that the survey would take about three years to
complete and would cost $1 million over the 2019-2023 period.
Navajo Utah Settlement Trust Fund. S. 664 would establish
the Navajo Utah Settlement Trust Fund, which would consist of
two interest-bearing accounts--the Navajo Water Development
Projects Account and the Navajo Operation, Maintenance and
Replacement (OM&R) Account. To capitalize those accounts, the
bill would authorize the appropriation of $198 million for
constructing water projects and $11 million for OM&R for a
total of $209 million. CBO estimates that the authorized
appropriations would increase by $15 million because of the
authorized adjustments for anticipated inflation. Amounts
deposited into the fund would be credited with interest
earnings if those earnings are appropriated to the trust fund.
Under the bill, the federal government would retain
ownership of amounts deposited into the trust fund until 2023,
when all the settlement conditions are expected to be
satisfied. At that time, the federal government would transfer
the ownership of the trust fund to the Navajo Nation, and the
amount in the fund (including any appropriated interest
earnings) would be considered a federal expenditure. Based on
CBO's projections of interest rates and the assumed timing of
appropriations, CBO estimates those interest earnings would
total $17 million. Accordingly, CBO estimates the total amount
transferred would be $241 million.
The federal government would retain fiduciary
responsibility over the amounts until they are needed by the
Navajo Nation to plan, design, construct, and maintain water
projects, but those expenditures would not affect the federal
budget.
Changes in direct spending
S. 664 would require the state of Utah to contribute $8
million to the trust fund in three installments once the
settlement is finalized and executed by the parties. CBO
estimates that the state would pay those installments of $2.67
million in 2020, 2021, and 2022 and that those amounts would be
recorded in the federal budget as offsetting receipts. CBO
estimates that enacting that provision would have no net effect
on direct spending over the 2019-2023 period because the total
amount contributed by the state to the trust fund would be
transferred to the Navajo Nation in 2023.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
Increase in long-term direct spending and deficits: CBO
estimates that enacting S. 664 would not increase direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2029.
Mandates: S. 664 contains intergovernmental mandates as
defined in UMRA. Specifically, the bill would:
Ratify the Navajo Water Rights Settlement
Agreement to the extent that the agreement does not
conflict with provisions in the bill. Because the
agreement has not been finalized by the tribe and the
state of Utah, actions the parties could take to
complete the agreement would be limited to those
allowed under the bill. Such a restriction is a mandate
under UMRA.
Require the state of Utah to contribute $8
million to a trust fund to be administered by the U.S.
Department of the Interior.
Prevent the Navajo Nation from raising
claims to some water rights and claims for certain
damage to water, land, and other resources resulting
from the loss of water or water rights.
The cost of the mandates would include the state's payment
to the trust fund as well as the forgone value of awards and
settlements of claims that the Navajo Nation would be prevented
from raising under the bill. Because both the number of claims
that could be barred or terminated and the value of forgone
compensation stemming from those claims are uncertain, CBO has
no basis for estimating the cost of the mandate. Therefore, CBO
cannot determine whether the cost of the intergovernmental
mandate would exceed the annual threshold established in UMRA
for such mandates ($80 million in 2018, adjusted annually for
inflation).
S. 664 contains no private-sector mandates as defined in
UMRA.
EXECUTIVE COMMUNICATIONS
The Committee has received no communication from the
Executive Branch regarding S. 664.
REGULATORY AND PAPERWORK IMPACT STATEMENT
Paragraph 11(b) of rule XXVI of the Standing Rules of the
Senate requires each report accompanying a bill to evaluate the
regulatory and paperwork impact that would be incurred in
carrying out the bill. The Committee believes that S. 664 will
have a minimal impact on regulatory or paperwork requirements.
CHANGES IN EXISTING LAW
In accordance with Committee Rules, subsection 12 of rule
XXVI of the Standing Rules of the Senate is waived.
[all]