[Senate Report 118-259]
[From the U.S. Government Publishing Office]
Calendar No. 661
118th Congress } { Report
SENATE
2nd Session } { 118-259
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A BILL TO AMEND THE NORTHWESTERN NEW MEXICO RURAL WATER
PROJECTS ACT TO MAKE IMPROVEMENTS TO THAT ACT, AND FOR
OTHER PURPOSES
_______
December 4, 2024.--Ordered to be printed
_______
Mr. Schatz, from the Committee on Indian Affairs,
submitted the following
R E P O R T
[To accompany S. 1898]
The Committee on Indian Affairs, to which was referred the
bill (S. 1898) to amend the Northwestern New Mexico Rural Water
Projects Act to make improvements to that Act, and for other
purposes, having considered the same, reports favorably
thereon, with an amendment in the nature of a substitute, and
recommends that the bill, as amended, do pass.
PURPOSE
S. 1898 would amend the Northwestern New Mexico Rural Water
Projects Act\1\ (NNMRWPA) to provide necessary, additional time
and resources to complete the Navajo-Gallup Water Supply
Project to provide clean, reliable water for Navajo communities
in New Mexico and Arizona as part of the Navajo Nation's water
rights settlement agreement in the San Juan River Basin.
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\1\Omnibus Public Land Management Act of 2009, Pub. L. No. 111-11,
123 Stat. 991 (2009).
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BACKGROUND & NEED
The Navajo Nation's 17 million acre reservation in the
Colorado River Basin of the western United States was
established by treaty between the United States and the Navajo
Nation in 1868.\2\ The Treaty recognized the Navajo Nation's
right to use needed water from its reservation's numerous water
sources.\3\ Currently, the Navajo Nation and neighboring
communities rely on a rapidly dwindling and poor quality
groundwater supply that cannot meet the current and future
demands of more than 43 Navajo chapters,\4\ the southwestern
portion of the Jicarilla Apache Nation, and the nearby City of
Gallup, which is the off-reservation home to many Navajo Tribal
members.\5\ As a result, approximately 23 percent of Navajo
Nation households lack running water\6\ and ground water levels
for the City of Gallup have dropped approximately 200 feet in
the past 10 years.\7\ Drought, water scarcity, and the Navajo
Nation's vast and rural reservation complicates water supply
and delivery to its millions of water users, including
necessary large-scale infrastructure construction projects.\8\
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\2\Treaty with the Navajo, U.S.-Navajo Nation, June 1, 1868, 15
Stat. 667. https://americanindian.si.edu/static/nationtonation/pdf/
Navajo-Treaty-1868.pdf (last visited May 21, 2024).
\3\Arizona v. Navajo Nation, 599 U.S. 555 (2023); see also Winters
v. United States, 207 U.S. 564, 576-577 (1908).
\4\The Navajo Nation is divided up geographically into five Tribal
agencies, each of which contains local political subdivisions called
chapters, which are similar in function to counties or municipalities.
Currently, there are 110 chapters, each with its own local governance
organized through a Chapter house and Chapter officials.
\5\Navajo Nation Department of Water Resources, https://
nndwr.navajo-nsn.gov/ (last visited May 21, 2024).
\6\Navajo Nation and Committee staff communication (on file with
the Committee) (indicating the total number of Navajo households and
the number of Navajo households without running water).
\7\Bureau of Reclamation, Navajo-Gallup Water Supply Project,
Projects & Facilities, https://www.usbr.gov/projects/index.php?id=580.
\8\Navajo Nation Department of Water Resources, https://
nndwr.navajo-nsn.gov/ (last visited May 21, 2024).
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In Arizona v. Navajo Nation, the United States Supreme
Court recognized that the responsibility to assist Tribal
Nations, including the Navajo Nation, with their water and
water infrastructure needs rests firmly with Congress:
. . . Congress may enact--and often has enacted--
legislation to address the modern water needs of
Americans, including the Navajos, in the West . . . And
the zero-sum reality of water in the West underscores
that courts must stay in their proper constitutional
lane and interpret the law (here, the treaty) according
to its text and history, leaving to Congress and the
President the responsibility to enact appropriations
laws and to otherwise update federal law as they see
fit in light of the competing contemporary needs for
water.\9\
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\9\See id. at 6-7.
Congress passed the NNMRWPA in 2009 to ratify and confirm
the Navajo Nation San Juan River Basin Water Rights Settlement
Agreement (Agreement) to provide for a long-term, sustainable
water supply to the Navajo Nation and surrounding communities.
The settlement allocated approximately 37,760 acre-feet
annually from the San Juan River and the Navajo Reservoir to
the Navajo Nation, and included authorization for a water
system--the Navajo-Gallup Water Supply Project (Project)--for
the supply, treatment, and transmission of water for municipal,
industrial, commercial, domestic, and stock watering uses to
the Navajo Nation, Jicarilla Apache Nation, and City of Gallup,
New Mexico, and was intended to serve a population of
approximately 250,000 by 2040.\10\
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\10\Id.
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To deliver water and related services, the NNMRWPA
authorized the Bureau of Reclamation within the U.S. Department
of the Interior to design, construct, maintain, and operate the
Project, consisting of approximately 300 miles of pipeline, 19
pumping plants, and two water treatment plants to be
transferred to the Navajo Nation upon completion of the
Project.\11\ Construction for two separate water transmission
systems, the Cutter Lateral and the San Juan Lateral, began in
2012. The Cutter Lateral was completed in October 2020, and in
May 2021, began delivering Project water to approximately 6,000
people in eight Navajo chapters.\12\ Beginning June 2022, the
Navajo Tribal Utility Authority assumed operations of the
entire Cutter Lateral.\13\ By summer 2022, the Bureau of
Reclamation completed more than 50 percent of the remaining San
Juan Lateral.\14\
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\11\Id.
\12\Id. Chapter's include: Huerfano, Tiistohsikaad (Burnham),
Nageezi, Counselor, Ojo Encino, Torreon/Star Lake, Whitehorse Lake, and
Pueblo Pintado.
\13\Id.
\14\Id.
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In July 2023, the U.S. Department of the Interior (DOI)
reported that, of the 300 miles of Project water transmission
pipeline, 285 miles were either installed or under contract\15\
and the Bureau of Reclamation acquired the San Juan Generating
Station's water storage facilities to reduce construction,
operation, and maintenance costs, increase operational
flexibility, and minimize risks to Project operations.\16\
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\15\Legislative Hearing to receive testimony on S. 616, S, 1898, &
S. 1987 Before the S. Comm. on Indian Affs., 118th Cong. (2023)
(statement of Bryan Newland, Assistant Sec'y for Indian Affs., Dep't of
the Interior).
\16\Id.
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The NNMRWPA authorized $870 million in 2007 ($1.414
billion, adjusted to FY 2022 cost) and required the Bureau of
Reclamation complete the Project no later than December 31,
2024.\17\ As of November 2023, the estimated Project cost rose
to $2.175 billion with supply chain issues creating
unanticipated delays.\18\ The Bureau of Reclamation currently
estimates Project completion in 2028.\19\
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\17\Id.
\18\Id.
\19\Bureau of Reclamation, Navajo-Gallup Water Supply Project,
Projects & Facilities, https://www.usbr.gov/projects/index.php?id=580.
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In related legislation, Congress ratified the Navajo
Nation's water rights on portions of its reservation in Utah
with the Navajo-Utah Water Rights Settlement Act of 2020
(NUWRSA).\20\ Successful implementation of the NUWRSA relies on
the conveyance of 2,000 acre-feet of water per year of non-
Project water through the Indian Health Service-funded
Sweetwater Pipeline.\21\ This pipeline would traverse New
Mexico, Arizona, and Utah for the benefit of Navajo communities
in Utah\22\ and deliver a mix of local groundwater from Utah
with higher quality surface water from New Mexico.\23\ While
the NNMRWPA authorizes the regional use, including treatment
and conveyance, of unallocated or non-Project water using
Project facilities,\24\ additional clarification is needed to
authorize storage, treatment, and conveyance outside the
Project's service area to Arizona and Utah.
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\20\Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, 134
Stat. 1182.
\21\Letter from Navajo Nation President Buu Nyrgen to Members of
the U.S. Senate (Nov. 2023) (on file with the Committee) (supporting
the Navajo-Gallup Water Supply Project Amendments Act).
\22\Letter from the New Mexico Interstate Stream Commission to
Members of the U.S. Senate (Nov. 2023) (on file with the Committee)
(supporting the Navajo-Gallup Water Supply Project Amendments Act).
\23\Letter from Navajo Nation President Buu Nyrgen to Members of
the U.S. Senate (Nov. 2023) (on file with the Committee) (supporting
the Navajo-Gallup Water Supply Project Amendments Act).
\24\Omnibus Public Land Management Act of 2009, Pub. L. No. 111-11,
123 Stat. 1382 Sec. 10602(h)(1).
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The Committee understands that the Sweetwater Pipeline has
eight identified construction phases, and that seven are
projected to be completed by October 2024, with the remaining
phase listed on the Indian Health Service 2023 Sanitation
Deficiency List\25\ as feasible Tier 2 and Tier 3 projects with
construction expected to begin in 2025. The Committee also
understands that Congress has authorized adequate funding for
the Indian Health Service to complete construction of this
project.
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\25\U.S. Dep't of Health and Human Services, Indian Health Service,
FY 2023 Annual Report of Sanitation Deficiency Levels (2024), https://
www.ihs.gov/sites/dsfc/themes/responsive2017/display_objects/documents/
FY_2023_Appendix_Project_Listing.pdf.
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Accordingly, this legislation amends the NNMRWPA to ensure
completion of the San Juan Lateral, reduce long-term costs,
carry out necessary facility and land transfers, authorize
investment of trust funds, and authorize conveyance of non-
Project water from New Mexico to Utah through the Sweetwater
Pipeline to address challenges caused by arsenic levels in
community water supplies on the Navajo Nation's reservation in
Utah, among other things.\26\
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\26\Letter from Navajo Nation President Buu Nyrgen to Members of
the U.S. Senate (Nov. 2023) (on file with the Committee) (supporting
the Navajo-Gallup Water Supply Project Amendments Act).
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SUMMARY OF S. 1898 AS ORDERED REPORTED
S. 1898, as ordered reported, amends the NNMRWPA to:
Extend construction completion deadlines for
the Project from 2024 to 2029;
Increase the authorization of appropriations
for the Project to $2.175 billion;
Establish operations, maintenance, and
replacement trust fund accounts for the Navajo Nation
and the Jicarilla Apache Nation in lieu of the
temporary operations, maintenance, and replacement
waivers that exist in current law;
Establish a deferred construction trust fund
for the Navajo Nation to defer construction of certain
Project facilities in agreement with the Bureau of
Reclamation, and the Jicarilla Apache Nation, as
applicable;
Expand the Project's service area to certain
communities in New Mexico and Arizona;
Make revisions requested by the Department
of the Interior with regard to certain land transfers;
Prevent dual-taxation of Project facilities;
Limit the City of Gallup's capital costs
repayment obligations;
Authorize the use of Project funds for
renewable energy;
Increase the authorization of appropriations
for certain wells in the San Juan Basin from $30
million to $37.5 million; and
Address minor drafting errors in the bill as
introduced.
LEGISLATIVE HISTORY
On June 8, 2023, Senators Lujan (D-NM) and Heinrich (D-NM)
introduced S. 1898, the Navajo-Gallup Water Supply Project
Amendments Act of 2023. On the same day, the Senate referred
the bill to the Committee on Indian Affairs. On July 12, 2023,
the Committee held a legislative hearing to receive testimony
on S. 1898. On November 15, 2023, the Committee met at a duly
convened Business Meeting to consider the bill. Senator Lujan
timely filed an amendment in the nature of a substitute
correcting minor drafting errors, providing for the delivery of
certain water from New Mexico to Navajo communities in Utah,
and incorporating revisions requested by the DOI. The Committee
adopted Senator Lujan's amendment and ordered S. 1898, as
amended, reported favorably. On December 7, 2023, Senator Mitt
Romney (R-UT) joined as a cosponsor.
On June 9, 2023, Representatives Leger Fernandez (D-NM) and
Stansbury (D-NM) introduced H.R. 3977, an identical companion
bill. On the same day, the House of Representatives referred
the bill to the House Committee on Natural Resources. On April
10, 2024, Representative Curtis (R-UT) joined as a cosponsor.
On July 23, 2024, the House Committee on Natural Resources
Subcommittee on Water, Wildlife, and Fisheries held a
legislative hearing to receive testimony on H.R. 3977.
117th Congress. On October 11, 2022, Senator Lujan (D-NM)
introduced S. 5068, the Navajo-Gallup Water Supply Project
Amendments Act of 2022. On the same day, the Senate referred
the bill to the Committee on Energy and Natural Resources. On
November 29, 2022, the bill was re-referred to the Committee on
Indian Affairs, and the Committee on Energy and Natural
Resources discharged the bill by unanimous consent. The Senate
took no further action on S. 5068 during the 117th Congress.
On November 30, 2022, Representatives Leger Fernandez (D-
NM) and Stansbury (D-NM) introduced H.R. 9371, an identical
companion bill to S. 5068. On the same day, the bill was
referred to the House Committee on Natural Resources. The House
took no further action on H.R. 9371 during the 117th Congress.
SECTION-BY-SECTION ANALYSIS OF S. 1898 AS ORDERED REPORTED
Section 1--Short title
This section establishes the short title of the bill as,
the ``Navajo-Gallup Water Supply Project Amendments Act of
2023.''
Section 2--Definitions
This section adds four definitions to the NNMRWPA:
Deferred Construction Fund;
Project Service Area;
Settlement Trust Funds;
Working Cost Estimate; and
amends one definition in the NNMRWPA:
Draft Impact Statement.
Section 3--Navajo-Gallup Water Supply Project
Section 3(a)(1)(A)-(C) replaces the Draft Environmental
Impact Statement, which provides scoping for Project
construction, with the July 6, 2009 Final Environmental Impact
Statement as further refined by the Working Cost Estimate which
identifies additional facilities and environmental documents
pertaining to the design, construction, operation, and
maintenance of the Project.
Section 3(a)(1)(D) authorizes and justifies expanding the
project service area to Navajo communities within the Rio San
Jose Basin, New Mexico and the Navajo community of Lupton,
Arizona within the Little Colorado River Basin, Arizona.
Section 3(a)(2) authorizes the Secretary of the Interior to
acquire facilities for the Project, and incorporates additional
Project facilities, including the water conveyance and storage
facilities and land associated with the San Juan Generating
Station.
Section 3(a)(3) authorizes the Secretary of the Interior to
acquire Project facilities, and directs the Secretary to take
land into trust for the Navajo Nation, including Navajo Nation
fee lands under the Tohlakai Pumping Plant, certain lands in
McKinley County, New Mexico, public domain lands managed by the
Bureau of Land Management under the Cutter Lateral Water
Treatment Plant and the Navajo Agricultural Products Industry
turnout, and land acquired by the United States under the San
Juan Generating Station, provided the United States retain a
perpetual easement to the lands underlying the San Juan
Generating Station and ownership of the San Juan Generating
Station water conveyance and storage facilities when the
underlying land is taken into trust for the Navajo Nation,
unless title is conveyed to the Navajo Nation.
Section 3(a)(4) replaces the Draft Environmental Impact
Statement with the July 6, 2009 Final Environmental Impact
Statement to clarify the conditions required for Project
construction.
Section 3(a)(5) authorizes use of not more than $6.25
million for development of renewable energy, of which not more
than $1.25 million may be used to develop hydroelectric power
for Project facilities.
Section 3(a)(6) permits regional facilities to store non-
Project water.
Section 3(a)(7) authorizes deferral of construction for
selected Project facilities to save on operation and
maintenance expenses, on mutual agreement between the Navajo
Nation and the Secretary, and with the Jicarilla Apache Nation
as applicable; establishes the Navajo Nation's Navajo-Gallup
Water Supply Project Deferred Construction Fund for such
purpose, or to construct alternative Project facilities; and
clarifies certain conditions for construction of alternative
facilities, deposits into the Construction Fund, and
construction deadlines.
Section 3(b) authorizes the City of Gallup to use and
market hydroelectric power for City-owned facilities.
Section 3(c)(1) removes an authority for the Secretary to
waive the Navajo Nation's payments for operation, maintenance,
and replacement costs for up to 10 years that are in excess of
the Navajo Nation's ability to pay.
Section 3(c)(2) replaces the City of Gallup's 25 percent
minimum and 35 percent maximum share of construction costs with
a 25 percent or $76 million maximum repayment obligation.
Section 3(c)(3)-(7) engages the Project Construction
Committee in decision making regarding payment of the Jicarilla
Apache Nation's operations, maintenance, and replacement costs,
and incorporates the July 6, 2009 Final Environmental Impact
Statement into the allocation of construction, operation,
maintenance, and replacement costs for the Project.
Section 3(d)(1) increases the authorization of
appropriations for the Project to $2.175 billion, adjusted for
changes in construction costs and unforeseen market volatility
since October 2022; extends the authorization from fiscal year
2024 to fiscal year 2029; and extends the authorization of
``such sums'' for Operation and Maintenance for the Project
from 10 to 15 years after the Secretary declares the Project to
be substantially complete.
Section 3(d)(2) increases the authorization of
appropriations for the San Juan River Basin conjunctive use
wells from $30 million to $37.5 million, adjusted for changes
in construction costs since 2008, and extends the authorization
from fiscal year 2019 to fiscal year 2032.
Section 3(e) clarifies the authority of states and the
Navajo Nation to tax certain Project activities on trust and
other lands.
Section 4--Navajo Nation Water Rights
Section 4(a)(1)(A) makes a technical correction to maintain
the statutory requirement that all deposits to the Navajo
Nation Water Resources Development Trust Fund shall occur by
December 31, 2019.
Section 4(a)(1)(B) extends the deadline for the United
States to appropriate funding for the San Juan River Basin
conjunctive use wells from December 31, 2019 to December 31,
2032.
Section 4(a)(1)(C) extends the deadline for construction of
Project facilities from December 31, 2024 to December 31, 2029.
Section 4(a)(1)(D) requires the United States to make all
deposits into the Deferred Construction Fund by December 31,
2029, and clarifies that, as long as the United States has made
the required deposits into the Deferred Construction Fund by
December 31, 2029, that any deferred construction projects that
have yet to be constructed will not preclude the Secretary from
otherwise meeting the required deadline for construction of
Project facilities of December 31, 2029.
Section 4(a)(2) makes a technical correction to update
reference to the correct trust fund, based on amendments made
in this bill.
Section 4(b) replaces the previously authorized interest-
bearing Trust Fund with three interest-bearing Settlement Trust
Funds consisting of the: Navajo Nation Water Resources
Development Trust Fund; Navajo Nation Operations, Maintenance,
and Replacement Trust Fund; and Jicarilla Apache Nation
Operations, Maintenance, and Replacement Trust Fund, and makes
additional changes by:
Establishing the Navajo Nation Water
Resources Development Trust Fund; authorizing
appropriation of $10 million; and establishing
conditions for its use, management, investment, and
conditions for expenditure;
Establishing the Navajo Nation Operations,
Maintenance, and Replacement Trust Fund; authorizing
appropriation of $250 million; and establishing
conditions for its use, management, investment,
expenditure, as well as addressing fluctuations in
costs, and a time frame for cost indexing;
Establishing the Jicarilla Apache Nation
Operations, Maintenance, and Replacement Trust Fund;
authorizing appropriations of $10 million; requiring
the Secretary conduct an ``Ability to Pay'' study prior
to establishing the Jicarilla Trust Fund, to determine
amounts exceeding the Tribes' ability to pay certain
costs; and establishing conditions for its use,
management, investment, expenditure, as well as
addressing fluctuations in costs, and a time frame for
cost indexing;
Directing the Secretary to manage, invest,
and make available Settlement Trust Funds to the Navajo
Nation and the Jicarilla Apache Tribe in accordance
with certain federal Indian trust asset management
requirements;
Clarifying applicable Indian trust fund
management law; and
Establishing certain conditions for
expenditures and withdrawals from the Settlement Trust
Funds, including:
Requiring the Navajo Nation and
the Jicarilla Apache Nation to submit to the
Secretary for approval management and
expenditure plans prior to withdrawal of
Settlement Trust Funds;
Authorizing the Secretary to
take judicial or administrative action to
enforce the management plans;
Requiring the Tribes to submit
annual expenditure reports to the Secretary;
Preventing such expenditures
from being distributed on a per capita basis;
and
Extending the tolling of
equitable defenses for the Navajo Nation from
March 1, 2025 to March 1, 2030, and extending
the waivers and releases to sue from March 1,
2025 to March 1, 2030.
Section 5--Non-Project Water for Use in the State of Utah
Section 5(1)-(3) sets forth criteria to authorize non-
Project water to flow outside the Project Service Area to
Navajo communities in Utah through Project and non-Project
infrastructure by:
Establishing not more than 2,000 acre-feet
of water may be treated, stored, or conveyed per year
to Navajo communities in Utah through Project and non-
Project infrastructure (Sweetwater Pipeline);
Clarifying such water shall be considered
part of the Navajo Nation's water rights quantification
under the Navajo Utah Water Rights Settlement Act (P.L.
116-260), and shall be accounted for as a depletion by
the Navajo Nation to be counted against the State of
Utah's apportionment under the 1948 Compact for
purposes of the depletion accounting;
Clarifying Project funds shall not be used
for any additional infrastructure costs in New Mexico,
Arizona, or Utah to connect the Project to the
Sweetwater Pipeline;
Preventing Project participants' share of
the operation, maintenance, and replacement costs from
increasing in connection with the use of non-Project
infrastructure;
Clarifying the United States has no
obligation to provide Navajo communities in Utah with
non-Project water under this agreement, nor shall any
federal funds be provided for non-Project construction,
operation, or maintenance costs related to storage or
conveyance;
Prohibiting use of federal funds for the
Sweetwater Pipeline, other than Indian Health Service
funding and funds authorized in the Navajo Utah Water
Rights Settlement Act;
Clarifying construction of the Sweetwater
Pipeline shall not delay the Project nor components of
the Project in a manner that would be prejudicial to
any Project participant;
Establishing delivery of non-Project water
is subject to the terms of the Navajo Utah Water Rights
Settlement Act, the state of Utah issuing a decreed
water right pursuant to the Navajo/Utah Settlement
Agreement, the state of Utah not incurring any
additional financial obligations beyond those
identified in the Navajo/Utah Settlement Agreement, and
the execution of an implementation agreement between
the Navajo Nation and the state of Utah to account for
the use of non-Project water consistent with the Navajo
Utah Water Rights Settlement Act; and
Clarifying the state of New Mexico has no
obligation to provide non-Project water or any funding
to Navajo Nation communities in Utah.
COST AND BUDGETARY CONSIDERATIONS
The cost estimate from the Congressional Budget Office
requested on S. 1898 has not yet been received. Due to time
constraints, the CBO letter will be printed in the
Congressional Record.
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. 1898, as
reported, will have minimal impact on regulatory or paperwork
requirements.
EXECUTIVE TESTIMONY
The written statement of the Honorable Bryan Newland,
Assistant Secretary for Indian Affairs, U.S. Department of the
Interior, before the Committee on Indian Affairs, delivered on
July 12, 2023, follows below:
Aanii (Hello)! Good afternoon, Chairman Schatz, Vice
Chairman Murkowski, and Members of the Committee. My name is
Bryan Newland. I am the Assistant Secretary for Indian Affairs
at the Department of the Interior (Department). Thank you for
the opportunity to present testimony regarding S. 1898, the
Navajo-Gallup Water Supply Project Amendments Act of 2023,
which would amend the Northwestern New Mexico Rural Water
Project Act, P.L. 111-11, Title X, Subtitle B, Part III,
amended by P.L. 114-57 (together the 2009 Act). The Department
supports S. 1898.
Introduction
The United States acts as a trustee for the land and water
rights of Tribes, American Indians, and Alaska Natives. The
United States has a trust responsibility to Indian Tribes and
Indian people and consistent with that has charged itself with
moral obligations of the highest responsibility and trust.
These obligations are at their greatest when it comes to
protecting the ability of Tribes, and their citizens, to
maintain their existence on lands the United States holds in
trust for their benefit. The Biden Administration recognizes
that water is essential for people to lead healthy, safe, and
fulfilling lives on Tribal lands. Water is the among the most
sacred and valuable resources for Tribal nations.
The Administration further recognizes that long-standing
water crises continue to undermine public health and economic
development in Indian Country. The Administration strongly
supports the resolution of Indian reserved water rights claims
through negotiated settlements. Indian water settlements
protect the senior water rights reserved by Tribal Nations and
help ensure that the citizens of these Nations have reliable
and safe water for drinking, cooking, and sanitation; improve
the public health and environment on reservations; enable
economic growth; promote Tribal sovereignty and self-
sufficiency; and help fulfill the United States' trust
responsibility to Tribes. At the same time, water rights
settlements have the potential to end decades of conflict and
contention among Tribal Nations and neighboring communities and
promote cooperation in the management of water resources.
Congress plays an important role by enacting legislation to
ratify Indian water rights settlements. We stand ready to work
with this Committee and Members of Congress to advance Indian
water rights settlements and uphold our sacred trust
obligations to Indian country.
We have a clear charge from the President and Secretary
Haaland to protect Tribal reserved water rights and improve
water access and water quality on Tribal lands. To that end,
the Biden Administration's policy on negotiated Indian water
settlements continues to be based on the following principles:
the United States will participate in settlements consistent
with its trust responsibilities to Tribal Nations; Tribes
should receive equivalent benefits for rights which they, and
the United States as trustee, may release as part of the
settlement; Tribes should realize value from confirmed water
rights resulting from a settlement; and settlements should
contain appropriate cost-sharing proportionate to the benefits
received by all parties benefiting from the settlement. In
addition, settlements should provide finality and certainty to
all parties involved.
S. 1898, a bill to amend the Northwestern New Mexico Rural Water
Project Act to make improvements to the Act, and for other
purposes
Background
The 2009 Act, which was part of the Omnibus Public Land
Management Act of 2009, approved settlement of the Navajo
Nation's water rights claims in the San Juan River Basin in New
Mexico and, as the cornerstone of the settlement, directed the
Secretary (acting through the Bureau of Reclamation
(Reclamation)) to design, construct, operate, and maintain the
Navajo Gallup Water Project (Project). When completed, the
Project will provide a reliable and sustainable domestic,
municipal, and industrial water supply from the San Juan River
to 43 Chapters of the Navajo Nation, including the Nation's
capital of Window Rock, Arizona; the city of Gallup, New
Mexico; and the southwest portion of the Jicarilla Apache
Reservation. All of these entities are currently relying on a
shrinking supply of groundwater that is of poor quality and is
inadequate to meet present domestic water needs, let alone
projected needs.
The 2009 Act authorized an appropriation of $870 million
(2007 price level), adjusted annually using engineering cost
indices, to plan, design, and construct the Project, which
includes construction of two water transmission laterals--the
Cutter and San Juan Laterals. The Department, through
Reclamation, has been implementing the 2009 Act with
significant success. In October 2021, Reclamation declared
substantial completion of the Cutter Lateral, the smaller of
the two laterals, and it transferred operation, maintenance,
and replacement responsibilities for the Cutter Lateral to the
Navajo Nation in June 2022. As of May 2021, the completed
segments of the Project have facilitated delivery of drinking
water to 6,000 people (1,500 households) in eight Navajo
chapters. Reclamation has also made significant progress on the
San Juan Lateral and has completed over 50 percent of the
features on the lateral. Reclamation and their partners have
completed or are currently constructing 285 of the 300 miles of
Project water transmission pipelines. Recently, Reclamation
acquired the San Juan Generating Station water system
facilities that will provide both construction and operation
and maintenance savings, increased operational flexibility, and
reduced risks to operations for the Project.
S. 1898 Provisions and Positions of the Department of the Interior
S. 1898 would amend the Act in several ways:
Increase the authorized Project cost ceiling. S. 1898
provides an additional authorization of $725.7 million to
complete the Project. This is comprised of $689.45 million to
address a cost/funding cost gap, $30 million for Navajo
community connections to the Project water transmission line,
and $6.25 million for renewable energy features.
The 2009 Act's appropriation ceiling was based on a
preliminary, 2007 appraisal-level design estimate rather than a
feasibility level design estimate, which is the level of
estimation that Reclamation recommends for reliability. As
final design and construction of the Project progressed, the
difference between the 2009 Act's appropriation ceiling and the
costs estimated to complete the Project (Working Cost Estimate)
became apparent. The most recent indexed authorized
appropriation ceiling is $1,413.7 million (October 2022 price
level) but the Project Working Cost Estimate is $2,138.4
million (October 2022 price level). After accounting for non-
Federal funding contributions from the Project beneficiaries
received through the Contributed Funds Act, Reclamation
estimates the cost/funding gap is $689.45 million. The cost
increases are based on more reliable cost estimate updates,
primarily associated with the two water treatment plants and
the San Juan Lateral intake. Moreover, the latest Working Cost
Estimate reflects the significant inflation and market
volatility, at levels not seen in 40 years, which have far
outpaced projected indexing used in updating the appropriation
ceiling.
The Department supports the additional authorization
contained in S. 1898. The additional authorization will enable
Reclamation to complete the Project in accordance with
requirements of the 2009 Act and is reflective of Project
participant's needs and the reality of construction costs in
this remote area of New Mexico. The additional authorization of
$6.25 million for renewable energy development will enable
Reclamation to construct lower cost and alternative power
generation for areas on the project (notably the Cutter
Lateral) where Colorado River Storage Project (CRSP) power is
not available. This provision also provides up to $1.25 million
of the $6.25 million to develop small hydropower generation for
Project facilities to help offset a portion of the Project's
pumping costs. The additional authorization of $30 million for
community connections is critical to the Project's success and
will ensure that water deliveries are made to all Navajo
communities within the original Project service area. The
Navajo Nation has agreed to provide an additional $60 million,
approximately, of its own funding to cover the full costs of
connecting all existing Navajo communities to the San Juan
Lateral.
Operation, Maintenance, and Replacement (OM&R) Waiver. S.
1898 provides for a $250 million OM&R trust fund for the Navajo
Nation and up to a $10 million OM&R trust fund for the
Jicarilla Apache Nation, the latter conditioned on an ability
to pay analysis. The 2009 Act includes a provision allowing the
Secretary to waive, for a period of not more than 10 years, the
OM&R costs allocable to the Navajo Nation when the Secretary
determines those costs exceed the Nation's ability to pay.
Reclamation conducted an ability to pay analysis in 2020,
following Reclamation practice for evaluating the enduser's
ability to pay for municipal and industrial water systems, that
concluded the Navajo Nation did not have the ability to pay.
The Department supports establishing a $250 million OM&R
trust fund for the Navajo Nation because it will assist the
Nation in paying OM&R during the time needed to increase the
customer base and economic development necessary to support
full OM&R payments. While the 2009 Act did not provide OM&R
assistance to the Jicarilla Apache Nation, the Department
supports up to a $10 million OM&R trust fund if the allocable
OM&R costs are in excess of the Jicarilla Apache Nation's
ability-to-pay.
Expand the Project service area. S. 1898 would also expand
the Project to serve the Navajo Nation's four chapters in the
Rio San Jose Basin (RSJB) in New Mexico and the Lupton
community in Arizona to help the Navajo Nation increase the
customer base and potentially lower OM&R costs. The proposed
amendments do not include funding that would be needed to
increase the capacity of the Crownpoint Lateral, nor additional
improvements necessary to supply the RSJB.
The Department supports the expansion of the Project
service area.
Cap the City of Gallup's Repayment Obligation. S. 1898
would cap the City of Gallup's (City) repayment obligation at
25% of its allocated construction costs, not to exceed $76
million. Under the 2009 Act, the City is responsible for paying
between 25% to 35% of its allocable costs, based on its ability
to pay. Reclamation estimates that this provision would reduce
the City's repayment obligation by approximately $33 million.
The Department does not oppose the cap on the City's
repayment obligation.
Project Lands Transfer. S. 1898 would transfer Navajo fee
lands and Bureau of Land Management lands, upon which easements
have been acquired for Project purposes, to the Navajo Nation
in trust with the condition that Reclamation would retain
easements for Project construction, operation, and maintenance.
S. 1898 also transfers ownership of land underlying the
recently acquired San Juan Generating Station water conveyance
and storage facilities to the Navajo Nation in trust. S. 1898
provides for an easement for Reclamation to continue to carry
out construction, operation, and maintenance necessary to
incorporate those facilities into the Project until title
transfer under section 10602(f) of the 2009 Act.
The Department supports the land transfer provisions of S.
1898, which would take land into trust, exclusive of Project
facilities. We would like to make technical changes to the Bill
to clarify that Reclamation would retain ownership of Project
facilities and infrastructure on the land until transferred to
the Navajo Nation under section 10602(f) of the 2009 Act.
Deferred Construction. S. 1898 would authorize
establishment of a Deferred Construction Fund and execution of
a deferred construction agreement under which the Navajo Nation
would acknowledge that full capacity of several Project
features will not be needed until future demands materialize.
The Navajo Nation would be able to use the Deferred
Construction Fund to construct or expand facilities as higher
demand requires over time.
The Department supports establishing a Deferred
Construction Fund because it will allow Reclamation to first
construct those water treatment and storage facilities needed
to satisfy anticipated demand over the next 20-plus years,
rather than immediately beginning work on the larger facilities
that will not be needed until demand increases substantially.
This provision is fiscally conscious and minimizes OM&R costs
that would otherwise be spent on un-used Project facilities in
the first years of water deliveries while providing for the
later development of facilities to meet the Project's full
build-out demand.
Extend Completion Deadline to December 31, 2029. S. 1898
extends the date by which the Project must be completed to
December 31, 2029.
The Department supports extending the Project completion
deadline. Necessary design changes, including incorporating San
Juan Generating Station water system facilities into the
Project, have created delays in construction and a deadline
extension is necessary to allow remaining Project features to
be completed.
Eliminate Double Taxation. S. 1898 would allow taxation by
either the Navajo Nation or the State of New Mexico depending
on the ownership of land underlying Project facilities.
Currently, both the State of New Mexico and the Navajo Nation
have been taxing Federal contractors on construction activities
on Navajo Tribal lands.
The Department supports eliminating the double taxation
that is an additional and unnecessary cost to the Project.
Reclamation estimates that this provision will save
approximately $50 million.
Conclusion
The Department appreciates the dedication of all parties,
including the Navajo Nation, the Jicarilla Apache Nation, the
City of Gallup, and the State of New Mexico in developing S.
1898 and the willingness of all the parties to reach consensus
on contentious issues. The Department supports S. 1898, as it
will allow the Department to fulfill the commitments made in
the 2009 Act to deliver clean drinking water to the Navajo
Nation and other Project beneficiaries.
EXECUTIVE COMMUNICATIONS
The Committee has received no communications from the
Executive Branch regarding S. 1898.
CHANGES IN EXISTING LAW
On February 9, 2023, 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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