[Senate Report 116-79]
[From the U.S. Government Publishing Office]
Calendar No. 182
116th Congress } { Report
SENATE
1st Session } { 116-79
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TO APPROVE THE SETTLEMENT OF THE WATER RIGHTS CLAIMS OF THE NAVAJO
NATION IN UTAH, AND FOR OTHER PURPOSES
_______
September 9, 2019.--Ordered to be printed
_______
Mr. Hoeven, from the Committee on Indian Affairs,
submitted the following
R E P O R T
[To accompany S. 1207]
[Including cost estimate of the Congressional Budget Office]
The Committee on Indian Affairs, to which was referred the
bill (S. 1207) to approve the settlement of the water rights
claims of the Navajo Nation in Utah, and for other purposes,
having considered the same, reports favorably thereon without
amendment, and recommends that the bill do pass.
PURPOSE
The Navajo Utah Water Rights Settlement Act of 2019, 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's reservation extends over 27,000 square
miles across the states of Arizona, New Mexico, and Utah.
Tribal citizens residing on the Utah portion of the
reservation, approximately 1,927 square miles, rely upon the
San Juan River and its tributaries and groundwater to meet
present water use demands. For example, a significant
percentage of residents in the Utah portion of the reservation
must haul water to meet domestic needs, since groundwater wells
on the eastern half of the reservation exceed safe drinking
water limits for arsenic and water quality standards for Total
Dissolved Solids and pH.
The reserved water rights of the Navajo Nation in Utah were
subject to the general stream adjudication in the Seventh
Judicial District in and for Grand County, Utah, commonly known
as the Southeastern Colorado River General Adjudication. In
lieu of asserting claims through the adjudication, in August
2003, the Nation and the Governor of the State of Utah executed
a Memorandum of Agreement to commence settlement discussions to
quantify the Nation's water rights.
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, with the goal of
resolving all the Nation's potential reserved water rights
claims in Utah. The federal negotiation team finalized the
terms of the Settlement Agreement in 2015, subject to the
approval of Congress. The State memorialized its support for
the Settlement Agreement by a Senate resolution, with the
concurrence of the Governor of Utah, on July 15, 2015, and the
Navajo Nation Council approved the Settlement Agreement on
January 16, 2016.
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
impliedly reserved sufficient water for Indian tribes to
fulfill the purpose of creating the reservation. However,
Winters did not set forth a method to quantify water rights
beyond ``sufficient water to fulfill the reservation's
purpose.'' In 1963, the U.S. Supreme Court established a method
for quantifying agricultural water rights in Arizona v.
California, adopting the practicably irrigable acreage
standard.\1\ Collectively, these two cases established that
Indian reserved water rights may be asserted at any time, are
not lost through nonuse, and are paramount to water rights
later perfected under state law.
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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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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.
In order to fulfill the United States' trust responsibility to
Indian tribes and authorize federal funding to the federal cost
share of a settlement, 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, 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, which would come out of the
State of Utah's undeveloped apportionment from the Colorado
River. The bill would allow the Nation to exchange or lease
water within the State of Utah, but prohibits exchanges or
leases of the San Juan River blow Lee's Ferry.
The bill uses a fund-based approach to resolving Indian
water rights settlements.\2\ This approach 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. The Department of the
Interior, with the agreement of settlement parties, indicated
the goal of the trust fund approach was to avoid potential cost
overruns related to planning, design, and construction of
several water development projects. Consistent with this
approach, the Nation will be required to submit requests to
withdraw funds from the trust fund to the Secretary of the
Interior, subject to the Secretary's approval of an expenditure
plan. The United States will be indemnified against any future
liability for the expenditure or investment of any amounts
withdrawn from the Fund. The Committee understands the benefits
of a trust fund for this settlement. The Committee looks
forward to working with the Administration on future
settlements to determine the most efficient, cost-effective
means of funding infrastructure to deliver water to Indian
tribes in order to implement water settlements.
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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 April 11, 2019, Senator Romney introduced S. 1207. The
bill was referred to the Indian Affairs Committee. The
Committee did not hold a legislative hearing on this bill. On
May 15, 2019, by voice vote, the Committee ordered the bill,
without amendment, to be reported favorably to the Senate. On
January 17, 2019, a House companion bill was introduced, H.R.
664.
Prior Congresses. In the 115th Congress, Senator Hatch
introduced S. 664, on March 15, 2017. 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 delayed full implementation of
Indian water rights settlements. The Department of the Interior
preferred a trust fund for this settlement in order to shift
the cost uncertainty risk onto the Nation and increase the
Nation's flexibility on how to development projects to meet
their immediate needs. 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.
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 2019.''
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
and directs 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.
The Settlement Agreement and S. 1207 will be voided if these
conditions do not 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.
COST AND BUDGETARY CONSIDERATIONS
Bill Summary: S. 1207 would secure up to 81,500 acre-feet
of water annually for the Navajo Nation in Utah by ratifying a
settlement among the federal government, the State of Utah, and
the Navajo Nation. CBO estimates that the bill would authorize
the appropriation of $241 million (including adjustments to
account for inflation and interest earnings) to capitalize the
Navajo Utah Settlement Trust Fund, an interest-bearing fund
established under the bill that would be administered by the
Department of the Interior. After the parties have satisfied
certain conditions, the federal government would transfer
ownership of the fund (including any appropriated interest
earnings) to the nation for constructing projects to deliver
water to the Navajo reservation in Utah. The bill also would
direct the Bureau of Reclamation (BOR) to survey water use on
the reservation.
Estimated Federal cost: The estimated budgetary effect of
S. 1207 is shown in Table 1. The costs of the legislation fall
within budget function 300 (natural resources and environment).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 1207
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By fiscal year, millions of dollars
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2019 2020 2021 2022 2023 2024 2019-2024
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Navajo Utah Settlement Trust Fund
Estimated Authorization.................... 0 16 50 51 53 54 224
Estimated Outlays.......................... 0 0 0 0 0 224 224
Interest Appropriated to the Navajo Utah
Settlement Trust Fund
Estimated Authorization.................... 0 0 1 3 5 7 17
Estimated Outlays.......................... 0 0 0 0 0 17 17
Survey of Water Use
Estimated Authorization.................... 0 1 0 0 0 0 1
Estimated Outlays.......................... 0 * 1 * 0 0 1
Total Changes
Estimated Authorization.................... 0 17 51 54 58 61 242
Estimated Outlays.......................... 0 * 1 * 0 241 242
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Components may not sum to totals because of rounding; * = between zero and $500,000.
Basis of estimate: For this estimate, CBO assumes that S.
1207 will be enacted by the end of 2019. The bill would
authorize the appropriation of specific amounts but does not
specify the year in which any appropriation should be provided.
CBO has estimated the necessary amounts for each year using
information from BOR and assumes that by 2024 all of the
following conditions would be met:
The parties would have finalized and
executed the settlement, including amendments required
to conform to provisions of S. 1207;
The State of Utah would have contributed $8
million to the trust fund and enacted certain necessary
legislation;
All parties would have executed waivers and
releases of claims as required under the bill; and
The courts would have confirmed the water
rights of the Navajo Nation in accordance with the
bill.
In addition, CBO assumes that the amounts authorized in
order to capitalize the fund (with adjustments to account for
anticipated inflation, as required by the bill) would be
appropriated over the 2020-2024 period. In 2024, BOR would
publish a statement of findings in the Federal Register that
the bill's conditions have been met and ownership of the trust
fund would be transferred to the Navajo Nation.
Spending subject to appropriation: S. 1207 would authorize
the appropriation of $224 million (including adjustments to
account for inflation) in capital, an estimated $17 million in
accrued interest, and $1 million for a survey of water use over
the 2019-2024 period. Assuming appropriation of those amounts,
CBO estimates that the bill would cost $242 million over the
same period (see Table 1).
Navajo Utah Settlement Trust Fund. S. 1207 would establish
the Navajo Utah Settlement Trust Fund, consisting 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 appropriation of $198 million for
constructing water projects and $11 million for OM&R, for a
total of $209 million. Because the bill requires adjustments
for inflation, CBO estimates that the total amount would rise
to $224 million for the 2020-2024 period.
Under the bill, the federal government would retain
ownership of amounts deposited into the trust fund until 2024,
when all the settlement conditions are expected to be
satisfied. Deposited amounts could be credited with interest
earnings if those earnings are appropriated to the trust fund.
In 2024, the federal government would transfer ownership of the
trust fund to the Navajo Nation; the amount transferred
(including any appropriated interest earnings) would be
considered a federal expenditure. Based on projections of
interest rates and assumptions concerning the timing of
appropriations, CBO estimates that interest earnings would
total $17 million. Accordingly, CBO estimates that the total
amount transferred would be $241 million.
The federal government would retain fiduciary
responsibility over the funds until they are needed by the
Navajo Nation to plan, design, construct, and maintain water
projects, but those subsequent actions would not affect the
federal budget.
Survey of Water Use. S. 1207 would authorize the
appropriation of $1 million to implement the bill and to survey
historical and current water use on the portion of the Navajo
reservation in Utah. CBO estimates that the survey would take
about three years to complete and would cost $1 million over
the 2019-2024 period.
Nonbudgetary effects: Once the settlement is finalized and
executed by the parties, S. 1207 would require the State of
Utah to contribute $8 million to the trust fund in three
installments. CBO estimates that the state would pay $2.67
million in 2021, 2022, and 2023 and that those amounts would be
transferred to the Navajo Nation in 2024, when all the
settlement conditions are expected to be satisfied. Generally,
when the federal government takes control of assets that belong
to others, those amounts are considered nonbudgetary and their
collection and disbursement do not affect the deficit.
Mandates: 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 ($82 million in 2019, adjusted
annually for inflation).
The mandates would arise from several of the bill's
requirements:
Ratification of the Navajo Water Rights
Settlement Agreement to the extent that the agreement
does not conflict with the bill's provisions. Because
that agreement has not been finalized by the Navajo
Nation 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.
A requirement that the State of Utah to
contribute $8 million to the Navajo Utah Settlement
Trust Fund. That amount is below the UMRA threshold.
Prohibition of the Navajo Nation from
raising claims to certain water rights or for damage to
water, land, and other resources resulting from the
loss of water or water rights.
In addition to the cost of the state's payment to the trust
fund, there would be a tribal mandate that would involve the
forgone value of awards and settlements of claims that the
Navajo Nation could not raise. 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 mandates' costs. Therefore,
CBO cannot determine whether the cost of the intergovernmental
mandate would exceed the annual threshold.
S. 1207 contains no private-sector mandates as defined in
UMRA.
Estimate prepared by: Federal Costs: Aurora Swanson,
Mandates: Rachel Austin.
Estimate reviewed by: Kim P. Cawley, Chief, Natural and
Physical Resources; Susan Willie, Chief, Mandates Unit; Theresa
Gullo, Assistant Director for Budget Analysis.
EXECUTIVE COMMUNICATIONS
The Committee has received no communication from the
Executive Branch regarding S. 1207.
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. 1207 will
have a minimal impact on regulatory or paperwork requirements.
CHANGES IN EXISTING LAW
On February 6, 2019, the Committee unanimously approved a
motion to waive subsection 12 of rule XXVI of the Standing
Rules of the Senate. In the opinion of the Committee, it is
necessary to dispense with subsection 12 of rule XXVI of the
Standing Rules of the Senate to expedite the business of the
Senate.
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