[Federal Register Volume 71, Number 165 (Friday, August 25, 2006)]
[Notices]
[Pages 50449-50452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-14153]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Office of the Secretary


Central Arizona Project (CAP), Arizona; Water Allocations

AGENCY: Office of the Secretary, Interior.

ACTION: Notice of Modification to the Secretary of the Interior's 
Record of Decision, Publication of a Final Decision of CAP Water 
Reallocation.

-----------------------------------------------------------------------

SUMMARY: The Department is rescinding the February 5, 1992, CAP Water

[[Page 50450]]

Reallocation Decision that modified the March 24, 1983, CAP Water 
Allocation Decision. The Department is publishing a Final Decision of 
CAP Water Reallocation in accordance with the Arizona Water Settlements 
Act (Settlements Act).

FOR FURTHER INFORMATION CONTACT: Randy Chandler, 623-773-6215 .

SUPPLEMENTARY INFORMATION:

I. Previous Notices Related to CAP Water
II. Background of CAP Water Reallocations

I. Previous Notices Related to CAP Water

    Previous notices related to CAP water were published in the Federal 
Register (FR) at 37 FR 28082, December 20, 1972; 40 FR 17297, April 18, 
1975; 41 FR 45883, October 18, 1976; 45 FR 52938, August 8, 1980; 45 FR 
81265, December 10, 1980; 48 FR 12446, March 24, 1983; 56 FR 28404, 
June 20, 1991; 56 FR 29704, June 28, 1991; 57 FR 4470, February 5, 
1992; 57 FR 48388, October 23, 1992; 65 FR 39177, June 23, 2000; 65 FR 
43037, July 12, 2000; 67 FR 38514, June 4, 2002; 68 FR 36578, June 18, 
2003; and 69 FR 9378, February 27, 2004. These notices and decisions 
were made pursuant to the authority vested in the Secretary of the 
Interior (Secretary) by the Reclamation Act of 1902, as amended and 
supplemented (32 Stat. 388, 43 U.S.C. 391), the Boulder Canyon Project 
Act of December 21, 1928 (45 Stat 1057), the Colorado River Basin 
Project Act of September 30, 1968 (82 Stat. 885, 43 U.S.C. 1501), and 
in recognition of the Secretary's trust responsibility to Indian 
tribes.

II. Background of CAP Water Allocations

    In the Record of Decision published in the Federal Register on 
March 24, 1983, the Secretary, among other things, allocated CAP water 
for Indian uses, non-Indian municipal and industrial (M&I) uses, and 
the remaining amount for non-Indian agricultural uses. Subject to 
certain conditions, the CAP water for Indian uses was allocated to 12 
Indian tribes for irrigation use or for maintaining tribal homelands. 
Also subject to certain conditions, the CAP water for M&I uses was 
allocated based on the State of Arizona's 1982 allocation 
recommendations for non-Indian entities that provided an amount of CAP 
water for M&I use to certain non-Indian entities, with the remaining 
amount of CAP water allocated for non-Indian agricultural use.
    The CAP non-Indian agricultural water was allocated to 23 non-
Indian irrigation districts or other agricultural entities. The CAP 
non-Indian agricultural water was allocated to each entity as a 
percentage of the non-Indian agricultural water supply that was 
available in any given year. Based on the 1983 decision, CAP water 
service contracts were executed with Indian tribes, which are two-party 
agreements between the United States and the Indian tribe. CAP non-
Indian M&I water service subcontracts and CAP non-Indian agricultural 
water service subcontracts were executed with those entities desiring 
to enter into subcontracts for CAP water. The CAP water service 
subcontracts for the non-Indian M&I water and the non-Indian 
agricultural water are three-party subcontracts among the entity, the 
Central Arizona Water Conservation District (CAWCD), and the Bureau of 
Reclamation (Reclamation). Some of the entities that were allocated 
non-Indian agricultural water and M&I priority water elected to not 
contract for the offered allocations. After completing the initial 
subcontracting process, 29.3 percent of the non-Indian agricultural 
supply and 65,647 acre-feet of M&I water was not under contract.
    Congress enacted the Salt River Pima-Maricopa Indian Community 
Water Rights Settlement Act of 1988 (102 Stat. 2558) (SRPMIC Act). 
Pursuant to section 11(h) of the SRPMIC Act, the Secretary was required 
to request a reallocation recommendation from the Arizona Department of 
Water Resources (ADWR) for the remaining non-Indian agricultural water 
that was not under contract. The Secretary was also required to 
reallocate the uncontracted CAP water for non-Indian agricultural use 
and to offer new or amendatory subcontracts for such water.
    By letter dated January 7, 1991, ADWR recommended an allocation to 
the Secretary. The Secretary published a notice in the Federal Register 
on June 20, 1991 (56 FR 28404), inviting public comments on the 
proposed reallocation of CAP water. After considering the public 
comments, the Secretary published a final decision in the Federal 
Register on February 5, 1992 (57 FR 4470). That decision contemplated 
that new or amendatory CAP water service subcontracts would be offered 
soon thereafter.
    CAP water service subcontracts for the reallocated water were not 
executed for several reasons, including but not limited to the 
following: (1) Some entities could not meet the financial feasibility 
requirements for receipt of CAP water; (2) lack of agreement on the 
form of the CAP water service subcontract to offer the entities, and 
(3) financial difficulties of the CAP non-Indian agricultural sector.
    Beginning in the early 1990s, long-term utilization of the CAP 
water available for reallocation under the 1992 decision and from the 
uncontracted M&I water was a central issue in negotiations to resolve 
various operational and financial disputes between Reclamation and 
CAWCD. After attempts at negotiations failed, water contracting issues 
were included in litigation and a resulting stipulated settlement 
between the United States and CAWCD. To implement some of the 
conditions contained in the stipulated settlement, new Federal 
legislation was required.
    After the 1992 decision but before Federal legislation was enacted, 
the Secretary published in the Federal Register on June 4, 2002 (67 FR 
38514), a notice of proposed modification to the 1983 decision. The 
1983 decision provided that the M&I allocation can be made more firm by 
execution of feasible non-potable effluent exchanges with Indian tribes 
and the M&I allocation was subject to adoption of a pooling concept 
whereby all M&I entities share in the benefits of effluent exchanges. 
The pooling concept provision was included in the CAP M&I water service 
subcontracts. The 2002 proposed modification to the 1983 decision was 
to delete the mandatory effluent pooling provision in M&I subcontracts 
with the cities of Chandler and Mesa and from other M&I water service 
subcontracts upon request. That provision in the CAP M&I water service 
subcontracts was an impediment to effluent exchanges and effective 
water management in central Arizona. The final decision was published 
in the Federal Register on June 18, 2003 (68 FR 36578), that deleted 
the mandatory effluent pooling provision, after review and 
consideration of public comment.
    On December 10, 2004, the Settlements Act was enacted (Pub. L. 108-
451). The Settlements Act provides, among other things, for (1) A final 
allocation of CAP water, with a CAP supply permanently designated for 
Indian uses and a CAP supply designated for non-Indian M&I or non-
Indian agricultural uses, (2) a reallocation by the Secretary of 65,647 
acre-feet of currently uncontracted CAP M&I water to 20 specific M&I 
entities, (3) ratification of the Arizona Water Settlement Agreement 
(the ``master agreement'') among the United States, ADWR, and CAWCD, 
which provides a statutory-based framework to enable the CAP non-Indian 
agricultural districts to relinquish existing rights to the delivery of 
CAP non-Indian agricultural priority water under their CAP water 
service

[[Page 50451]]

subcontracts, including their rights, if any, to the reallocated water, 
and (4) a reallocation of the relinquished and uncontracted non-Indian 
agricultural supply to various Arizona Indian tribes and ADWR for 
future M&I use. The Settlements Act provides, in section 111, that 
certain actions, including the allocation decisions referenced herein 
``shall be void'' if ``the Secretary [of the Interior] does not publish 
a statement of findings under section 207(c) by December 31, 2007.'' 
The Settlements Act also repeals section 11(h) of the SRPMIC Act. To 
reallocate the CAP non-Indian agricultural water and the uncontracted 
CAP M&I water in accordance with the Settlements Act, it is necessary 
to modify the 1983 decision, as amended and supplemented, rescind the 
1992 decision, and publish a final reallocation decision.

Decision

    The 1992 CAP Water Reallocation Decision is rescinded as of the 
date of this notice. The Final Decision of CAP Water Reallocation, in 
accordance with the Settlements Act that modifies the 1983 CAP Water 
Allocation Decision, as amended and supplemented, follows. Except as 
modified herein, the 1983 CAP Water Allocation Decision, as amended and 
supplemented, shall continue to be in full force and effect.

Final Reallocation Decision

    This final reallocation decision is effective as of the date of 
this notice subject to section 111 of the Settlements Act and is made 
to memorialize the reallocation of CAP water in accordance with the 
Settlements Act, as set forth below:

 Reallocation to Arizona Indian Tribes

    (A) I hereby reallocate 197,500 acre-feet of agricultural priority 
water per year pursuant to section 104(a)(1)(A) of the Settlements Act, 
made available pursuant to the master agreement for use by Arizona 
Indian tribes, of which
    (i) 102,000 acre-feet per year is hereby reallocated to the Gila 
River Indian Community;
    (ii) 28,200 acre-feet per year is hereby reallocated to the Tohono 
O'odham Nation; and
    (iii) 67,300 acre-feet per year is hereby retained for reallocation 
to Arizona Indian tribes, subject to the following conditions as 
specified in section 104(a)(1)(B) of the Settlements Act.
    (B) Conditions: The reallocation of agricultural priority water 
made herein pursuant to section 104(a)(1)(A)(iii) of the Settlements 
Act shall be subject to the conditions that
    (1) Such water shall be used to resolve Indian water claims in 
Arizona, and may be allocated by the Secretary of the Interior to 
Arizona Indian tribes in fulfillment of future Arizona Indian water 
rights settlement agreements approved by an Act of Congress. In the 
absence of an Arizona Indian water rights settlement that is approved 
by an Act of Congress after the date of enactment of the Settlements 
Act, the Secretary shall not allocate any such water until December 31, 
2030. Any allocations made by the Secretary after such date shall be 
accompanied by a certification that the Secretary is making the 
allocation in order to assist in the resolution of an Arizona Indian 
water right claim. Any such water allocated to an Arizona Indian tribe 
pursuant to a water delivery contract with the Secretary under this 
clause shall be counted on an acre-foot per acre-foot basis against any 
claim to water for that Tribe's reservation.
    (2) Notwithstanding clause 1 above and in accordance with section 
104(a)(1)(B)(ii) of the Settlements Act, I hereby retain 6,411 acre-
feet of water per year for use for a future water rights settlement 
agreement approved by an Act of Congress that settles the Navajo 
Nation's claims to water in the State of Arizona. If Congress does not 
approve this settlement before December 31, 2030, the 6,411 acre-feet 
of CAP water shall be available to the Secretary of the Interior under 
clause 1 above; and
    (3) The agricultural priority water shall not, without specific 
authorization by Act of Congress, be leased, exchanged, forborne, or 
otherwise transferred by an Arizona Indian tribe for any direct or 
indirect use outside the reservation of the Arizona Indian tribe.
    (C) In consultation with Arizona Indian tribes and the State of 
Arizona, the Secretary of the Interior shall prepare a report for 
Congress by December 31, 2016, that assesses whether the potential 
benefits of section 104(a)(1)(A)(iii) of the Settlements Act are being 
conveyed to Arizona Indian tribes pursuant to water rights settlements 
enacted subsequent to the Settlements Act. For those Arizona Indian 
tribes who have not yet settled water rights claims, the report shall 
describe whether any active negotiations are taking place and identify 
any critical water needs that exist on the reservation of each such 
Indian tribe. The report shall also identify and report on the use of 
unused quantities of agricultural priority water made available to 
Arizona Indian tribes under section 104(a)(1)(A)(iii) of the 
Settlements Act.

2. Reallocation to ADWR

    (A) I hereby reallocate up to 96,295 acre-feet of agricultural 
priority water per year to ADWR, pursuant to section 104(a)(2)(A) of 
the Settlements Act and subject to subparagraph 9.3 of the master 
agreement, to be held under contract in trust for further allocation 
pursuant to section 104(a)(2)(C) of the Settlements Act. Direct use of 
the agricultural priority water by ADWR is prohibited under the master 
agreement and this notice.
    (1) Further Allocation: In accordance with section 104(a)(2)(C) of 
the Settlements Act, before water may be further allocated the Director 
of ADWR shall submit to the Secretary of the Interior a recommendation 
for reallocation. As soon as practicable after receiving the 
recommendation, the Secretary shall carry out all of the necessary 
reviews of the proposed reallocation in accordance with applicable 
Federal law. If the Director's recommendation is rejected, the 
Secretary shall request a revised recommendation from the Director of 
ADWR and proceed with any reviews required.
    (B) The reallocation of agricultural priority water to ADWR 
pursuant to section 104(a)(2)(A) and section 104(a)(2)(C) of the 
Settlements Act is subject to the master agreement, including certain 
rights provided by the master agreement to water users in Pinal County, 
Arizona.
    (C) The agricultural priority water reallocated to the ADWR shall 
be subject to the condition that the water retain its non-Indian 
agricultural delivery priority.

3. Reallocation of Uncontracted Central Arizona Project M&I Priority 
Water, as recommended by the Director of ADWR

    (A) I hereby reallocate 65,647 acre-feet of uncontracted M&I water 
per year to the State of Arizona entities, pursuant to section 
104(2)(D)(b)(1) of the Settlements Act, as shown in the following Table 
1--Uncontracted M&I Water.

[[Page 50452]]



                    Table 1.--Uncontracted M&I Water
------------------------------------------------------------------------
                              Amount in                        Amount in
   State of Arizona entity    acre-feet    State of Arizona    acre-feet
                               per year         entity          per year
------------------------------------------------------------------------
Town of Superior............        285  City of Chandler....      4,986
Cave Creek Water Company....        806  Del Lago (Vail)           1,071
                                          Water Company.
Chaparral Water Company.....      1,931  City of Glendale....      3,053
Town of El Mirage...........        508  Community Water           1,521
                                          Company of Green
                                          Valley.
City of Goodyear............      7,211  Metropolitan              4,602
                                          Domestic Water
                                          Improvement
                                          District.
H2O Water Company...........        147  Town of Oro Valley..      3,557
City of Mesa................      7,115  City of Phoenix.....      8,206
City of Peoria..............      5,527  City of Surprise....      2,876
City of Scottsdale..........      2,981  City of Tucson......      8,206
AVRA Cooperative............        808  Valley Utilities            250
                                          Water Company.
                                        --------------------------------
    Total Water Reallocated.  .........  ....................     65,647
------------------------------------------------------------------------

4. Contracting for Reallocated Water

    (A) I hereby direct the Commissioner of Reclamation, through his 
Regional Director, Lower Colorado Region, Boulder City, Nevada to 
proceed, in accordance with the Settlements Act, with offering to enter 
into contracts, amendments to contracts, subcontracts, or amendments to 
subcontracts for the delivery of the agricultural priority water to the 
Arizona Indian tribes as described in this notice, the agricultural 
priority water to ADWR as described in this notice and in accordance 
with the master agreement, and the uncontracted M&I water to entities 
as described in Table 1 of this notice.
    (B) If the Secretary is precluded under applicable Federal law from 
entering into a subcontract with an entity identified in Table 1 of 
this notice, then the Secretary shall request a revised recommendation 
from the Director of ADWR and reallocate and enter into a subcontract 
for the delivery of water in accordance with section 104(b)(2)(B) of 
the Settlements Act and section 4 (A) of this notice.

DATES: Effective Date: This Final Reallocation Decision is effective as 
of the date of this notice and is revocable under the applicable 
provisions of the Settlements Act. In the event that a statement of 
findings is not published in the Federal Register by December 31, 2007, 
as required by section 207(c) of the Settlements Act, this Final 
Reallocation Decision and all decisions made herein will, be void and 
automatically revoked as of January 1, 2008, and shall have no force or 
effect as of that date.

    Dated: August 22, 2006.
Dirk Kempthorne,
Secretary of the Interior.
 [FR Doc. E6-14153 Filed 8-24-06; 8:45 am]
BILLING CODE 4310-MN-P