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[Senate Report 106-513]
[From the U.S. Government Publishing Office]

106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-513

======================================================================

 
AMENDING THE COLORADO UTE INDIAN WATER RIGHTS SETTLEMENT ACT OF 1988 TO 
  PROVIDE FOR A FINAL SETTLEMENT OF THE CLAIMS OF THE COLORADO UTE 
  INDIAN TRIBES, AND FOR OTHER PURPOSES

                                _______
                                

   December 15 (legislative day, September 22), 2000.--Ordered to be 
                                printed

                                _______
                                

   Mr. Campbell, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 2508]

    The Committee on Indian Affairs to which was referred the 
bill (S. 2508) amending the Colorado Ute Indian Water Rights 
Settlement Act of 1988 to provide for a final settlement of the 
claims of the Colorado Ute Indian Tribes, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                Purpose

    The purpose of S. 2508 is to make amendments to the 
Colorado Ute Indian Water Rights Settlement Act, P.L. 100-585, 
to fulfill the Federal government's obligation to the Southern 
Ute and Ute Mountain Ute Indian tribes in the manner 
contemplated by the recently completed Animas La Plata Project 
Final Supplemental Impact Statement, July, 2000 and the 
Department of Interior's Record of Decision, September 25, 
2000.

                               Background

    Through successive 19th century treaties, the Federal 
government guaranteed a permanent tribal homeland for the Ute 
Indians. By the 1880's, the various bands of the Ute Indians 
had been settled on three reservations, one in Utah and two in 
Colorado. In the mid-1970's, the Federal government filed as a 
reserved water right claim on behalf of the Ute Mountain Ute 
and Southern Ute Indian Tribes of Colorado (Ute tribes). The 
principle of reserved water rights was first articulated in the 
Supreme Court's decision in Winters v. United States, 207 U.S. 
564 (1908). These ``Winters'' rights have the same priority as 
the date the reservation is established. Because a number of 
significant rivers and streams run through the Southern Ute and 
Ute Mountain Ute Indian reservations, such rights would be 
senior to a large number of existing water rights. The prospect 
of such senior rights would threaten existing water uses in 
three ways. First, even as inchoate and unquantified claims 
they would place a cloud on all water rights established since 
at least as far back as the 1868 Ute Treaty. Second, as the 
tribal reserved rights claims are being adjudicated they would 
cloud other water rights. Finally, the quantified water rights 
would threaten existing rights and uses, even if the Ute tribes 
were unable or unwilling to begin using the water associated 
with their reserved water rights. The economic impact and 
social dislocation associated with this reallocation prompted 
all of the interested parties to try to reach a negotiated 
settlement of the tribal water rights claims.
    In 1988, through the Colorado Ute Indian Water Rights 
Settlement Act, P.L. 100-585 (Settlement Act), Congress 
ratified the Colorado Ute Indian Water Rights Settlement 
Agreement of December 10, 1986 (Settlement Agreement). Under 
the terms of the Settlement Act, the Ute tribes were guaranteed 
a water supply to satisfy the tribe's municipal, industrial, 
and agricultural water needs. Like a number of other Indian 
water rights settlements, the parties relied on newly developed 
water supplies to satisfy tribal water rights claims. Such 
undeveloped water is available from the facilities authorized 
by the Colorado River Basin Project Act of 1968 (P.L. 90-537), 
which authorized the Animas-La Plata Project (ALP or Project) 
as a participating project under the Colorado River Storage Act 
of 1956, Act of April 11, 1956, 70 Stat. 105.
    Under the terms of the Settlement Agreement, the United 
States must supply specified quantities of water to each of the 
Ute tribes at the specified locations. If water is not supplied 
by January 1, 2000, the Ute tribes may elect to return to court 
and litigate their reserved water right claims. This right to 
return to court lapses on January 1, 2005. Each of the parties 
have different reasons for supporting a deadline. A deadline 
ensures that the Ute tribes will not wait indefinitely for the 
completion of the Project. It also ensures that existing water 
users can look forward to the elimination of senior tribal 
reserved water rights claims.
    Construction of the ALP, however, has been delayed by a 
number of factors, mostly related to Federal environmental 
laws. The Animas River is a part of the San Juan River 
watershed, which is a tributary of the Colorado River. Although 
the proposed project would divert water from the Animas River, 
concerns were expressed about the effect of these diversions on 
the San Juan River. Pursuant to the Endangered Species Act, 16 
U.S.C. 1531 et seq. (ESA), in 1990, the U.S. Fish and Wildlife 
Service (Service) issued a draft Biological Opinion indicating 
that under certain circumstances, diversion from the San Juan 
watershed might jeopardize downstream listed species. After 
consultation between various agencies over ``reasonable and 
prudent alternatives,'' the Service incorporated the proposed 
alternative into a final Biological Opinion. This 1991 
alternative limited construction of the ALP to certain 
facilities, restricted annual water depletions, and provided 
for a seven year study of river flows and their effect on 
recovery efforts for listed species. The alternative provided 
for construction of the diversion works and off-stream 
reservoir, but prevented further construction of ALP components 
until the study was completed.
    In 1992 a lawsuit was filed to prevent construction of any 
part of the ALP. This suit raised claims under several 
statutes, including the ESA, but not with respect to the 
Pikeminnow (formerly referred to as the ``Squawfish''.) Those 
parts of the suit based on the ESA were dismissed as premature. 
However another part of the suit asserted that the 1980 
environmental impact statement was inadequate because it did 
not address new circumstances, including changes in the 
Project. In response to this claim the United States began 
preparing a Supplemental Environmental Impact Statement, which 
was completed in 1996. As outlined in the Supplemental EIS, the 
A-LP would be devised into two phases and each of these would 
be divided into two stages. The initial stage of Phase I would 
include the following project features: Durango Pumping Plant, 
Ridges Basin Inlet Conduit, Dam, and Reservoir, Durango, 
Shenandoah, and La Plata Rural M&I Pipelines. These components 
would be constructed to accommodate increased water deliveries 
from other project features. With respect to the remaining 
project features, the Supplemental EIS included the following: 
``Based on the * * * 7-year research study of endangered fish 
in the San Juan River, the size of the dam and reservoir would 
be determined and the dam and pumping plants could be sized 
accordingly.'' 1996 Final Supplemental EIS, S-4.
    Despite this thorough environmental review, opposition to 
the project continued. In an effort to provide a process for 
resolving the conflict between the A-LP's opponents and 
proponents, the State of Colorado sponsored an effort to 
mediate between the two sides. Unfortunately, a consensus was 
not possible. The Ute tribes were amenable to negotiations over 
the quantity of water to be stored on their behalf. Through 
successive tribal elections, however, both Ute tribes remained 
steadfast in their view that they would not agree to any 
settlement that did not provide them with a stored water 
supply. Opponent of the ALP were strident in their view that 
they would only support an approach that did not include the 
construction of any part of the ALP. According to the tribes, 
there were at least three strong arguments to support their 
position that negotiations should be premised on the 
construction of at least some of the ALP. First, since 1988, 
Federal law explicitly assured them a newly developed water 
supply. Second, successive environmental studies demonstrated 
that such a project can be constructed on the Animas River in a 
manner consistent with applicable laws. Third, Federal policy 
encourages Indian tribes to exercise self-determination with 
respect to their natural resources.\1\
---------------------------------------------------------------------------
    \1\ See, e.g, Arizona v. California, 460 U.S. 605, 615 (rejecting 
an attempt to prevent tribal intervention in a general stream 
adjudication where the tribes were already represented by the United 
States.)
---------------------------------------------------------------------------
    Experience teaches that Indian tribes are due a significant 
amount of deference when deciding how to resolve conflicts over 
their natural resources. Tribal governments are often in the 
best position to weigh the tangible and intangible factors that 
make various options more or less risky.\2\ For example, both 
Ute tribes have serious concerns about the uncertainty inherent 
in proposals to exchange their reserved rights claims for 
financial resources to acquire additional water rights. The 
Animas-La Plata Project, Final Supplemental Environmental 
Impact Statement (July 2000) (hereinafter July 2000 Final EIS) 
describes many of the technical limitations that are inherent 
in the acquisition option. In addition, the tribes are 
concerned about the short and long term effects of this 
approach will have on neighboring individuals and governments. 
Unlike the advocates of such acquisition-oriented proposals, 
Indian tribes do not have the luxury of analyzing this 
alternative in a vacuum. The actual implementation of a long-
term program of acquiring land and water rights could easily 
embroil the tribes in equally protracted disputes with local 
governments and private parties over questions of taxation, 
jurisdiction, and regulatory control over such resources. Also, 
the Tribes would be required to apply to the State of Colorado 
for permission to transfer any water rights to new uses. 
Ironically, the proponents of the acquisition program would be 
free to oppose any tribal application to change the type, 
manner or place of use; leaving the tribe with the legal right 
to water, but no effective control over its use. In light of 
these considerations, the Committee is not surprised by the 
tribal opposition to the proposals that rely solely on water 
acquisition and reallocation.
---------------------------------------------------------------------------
    \2\ For the same reason, the Committee notes the support for the 
bill from both the Navajo Nation and the Jiracilla Indian Tribe. Both 
tribes recognize that their own interests are served by a legislative 
proposal that fully finally, and fairly resolves the Ute tribal water 
rights claims.
---------------------------------------------------------------------------
    Negotiations with the ALP opponents also faltered because 
of disagreements on how to account for the non-tribal 
participation in the project. Because the original ALP included 
Indian and non-Indian beneficiaries, the Ute tribes refused to 
support any proposal to construct facilities that would only 
develop a tribal water supply. The Tribes argued that the 
Colorado River Storage Project Act assured non-Indians in the 
region a comprehensive, multi-purpose reclamation project. The 
tribes could see no reason why non-tribal project beneficiaries 
would agree to a settlement of tribal water rights that de-
authorized the project and offered no reciprocal benefits to 
non-tribal project beneficiaries. The project opponents refused 
to see the project in this manner. Because the project 
opponents insisted on some form of project de-authorization, 
the Tribes knew that the project must include enough benefits 
to secure non-Indian support. By contrast, the project opponent 
seemed to expect the non-Indians simply allow the use of the 
settlement to upset non-Indian expectations. This expectation 
was especially unrealistic because the non-Indian beneficiaries 
include the State of Colorado.
    Nevertheless, the Ute tribes and the other project 
beneficiaries faced the prospect that compliance with Federal 
environmental policies might prolong the completion of the 
components needed to fulfill the Federal obligation under the 
Settlement Act. The first deadline was rapidly approaching 
because the United States had not fulfilled its obligations 
under the 1988 Settlement Act, on January 1, 2000, the Ute 
tribes could return to court to assert their reserved water 
rights claims. The Tribes have until January 1, 2005 to assert 
these claims.
    During the 105th Congress, Chairman Ben Nighthorse Campbell 
introduced S. 1771. At a June 28, 1988 hearing, the 
Administration acknowledged that the bill called for a ``scaled 
down'' version of the facilities needed to fulfill the Federal 
government's responsibility to the Tribes. However, the 
Commissioner of the Bureau of Reclamation testified in ``strong 
opposition'' to the bill. This position left the administration 
without a proposal for how to comply with the 1988 Settlement 
Act and without an approach for settling the tribal claims. The 
Administration appeared to be uncomfortable with its inability 
to comply with either the 1988 Settlement Act or the Federal 
government's trust responsibility to Ute tribes.
    In the face of repeated Congressional and tribal concerns, 
the Department commenced an effort to develop an approach for 
developing and resolving this untenable situation. In August 
1998, the Administration presented its proposal for fulfilling 
the Federal government's obligations to the Ute tribes. On 
January 4, 1999, the Department announced its intent to prepare 
a supplemental environmental impact statement to evaluate the 
impacts and alternatives to this ``Administration Proposal.'' 
64 Fed. Reg. 176 (January 4, 1999). According to the Federal 
Register notice: ``At the heart of the proposal is a modified 
ALP which is limited to a smaller dam and reservoir designed to 
supply municipal and industrial water to the Colorado Ute 
Tribes, Navajo Nation, and non-Indian entities in the local 
area.'' The process employed by the Department in completing 
the environmental review of the Administration Proposal 
provides the Committee and the Congress with a comprehensive 
analysis of the impacts and alternatives to the Administration 
Proposal. Because of the extensive public involvement in the 
process, each of the alternatives and refinements has also 
under gone an extra-ordinary level of scrutiny and commentary, 
which greatly assisted the Committee in its consideration of 
how it should proceed. Indeed, Section 404(r) of the Clean 
Water Act, P.L. 92-500, as amended, requires the submission of 
the analysis under section 404(b)(1) to Congress. The 
Department's environmental analysis was especially helpful 
because it recognized the unique circumstances present in this 
case, where the Department is seeking to fulfill its trust 
responsibility to the Colorado Ute tribes by carrying out the 
mandate of the 1998 Settlement Act in a manner consistent with 
Federal law, especially Federal environmental laws.

         Summary of the Amendment in the Nature of a Substitute

Section 1. Short title

    Subsection (a) cites the short title of the bill as the 
Colorado Ute Settlement Act Amendments of 2000.''
    Subsection (b) provides several Findings. Most of the 
Findings address the need to amend the 1988 Settlement Act in 
light of existing circumstances, without disturbing the 
benefits of the historic Settlement Agreement. As Findings 2 
and 3 explain, 1988 Settlement Act settled the Colorado Ute 
water rights claims without reallocating water from existing 
users, while providing the tribes with a firm water supply, 
including water for irrigation purposes. At the present time, 
however, it is impractical to assume that the ALP will include 
the irrigation component contemplated in 1988. The United 
States cannot fulfill its obligations under the Settlement Act 
unless it provides irrigation water and other benefits to the 
Ute tribes within the time-frames established by the Act. 
However, the environmental review process reveals that the 
United States can provide comparable benefits to the Tribes by 
constructing those parts of the ALP needed to provide municipal 
water supplies, waiving a tribal repayment obligation for this 
water supply, and providing resources to the Ute tribes.
    The Findings also point out that the Federal courts have 
considered the nature and extent of Congressional involvement 
with a project when reviewing Federal compliance with the 
National Environmental Policy Act. This is not to say that 
Congress has a formal role in the NEPA process or that courts 
are under any obligation to take Congressional involvement into 
account. Although this Finding does not compel any entity to 
take Congressional deliberations into account, it would not be 
unprecedented for this to occur.
    Subsection (c) provides five definitions used in S. 2508.

Section 2. Amendments to section 6 of the Colorado Ute Indian Water 
        Rights Settlement Act of 1988

    As described in the Findings, the S. 2508 seeks to provide 
the Ute tribes with comparable benefits to those provided under 
the 1988 Settlement Act. Under S. 2508 as reported by the 
Committee, however, the Ute tribes will no longer receive an 
irrigation water supply component under favorable repayment 
terms. In order to provide comparable benefits, S. 2508 amends 
subsection 6(a) of the Settlement Act to eliminate the tribal 
repayment obligation for municipal water supplied by the ALP. 
Also, neither of the Ute Tribes are responsible for the annual 
operation, maintenance, and replacement cost applicable to any 
increment of their water supply until that increment is used by 
the tribe or pursuant to a contract with the tribe.
    The 1988 Settlement Act was premised on the imminent 
completion of most of the authorized components of the ALP. The 
recent environmental review of the ALP calls this assumption 
into question and provides a more reliable indication of which 
ALP components are likely to actually be constructed. The 
reconfigured settlement relies on these components for 
satisfying the Federal government's obligation to the Ute 
tribes. Hewing very closely to the Final EIS and the Record of 
Decision, the Committee amendment specifies that tribal water 
rights claims are to be satisfied with only ``a reservoir, a 
pumping plant, a reservoir inlet conduit, and appurtenant 
facilities with sufficient capacity to divert and store water 
from the Animas River to provide for an average annual 
depletion of 57,100 acre-feet of water * * *.'' Most of the 
developed water supply from these facilities are allocated to 
the Ate tribes.
    This proposed change to the 1988 Settlement Act also 
addresses two collateral concerns affecting the use of the ALP 
to settle tribal water rights claims. First, based on the 
breadth and depth of the environmental review of the project, 
there is no reason to place any limit on the application of 
Federal environmental statutes. Therefore, [section] 6(a)(1)(B) 
of the Settlement Act, as amended by S. 2508 provides: 
``Nothing in this Act shall be construed to predetermined or 
otherwise affect the outcome of any analysis conducted by the 
Secretary or any other Federal official under applicable 
laws.''
    Second, the proposed changes resolve apparent concern over 
how completing those parts of the project needed to settle the 
tribal water rights will affect or prevent a decision on how or 
whether to complete other parts of the project. It would be 
quite unfortunate for the Ute tribes, the United States, and 
other interested parties if this distraction was allowed to 
prevent the consummation of a freely negotiated Indian water 
rights settlement. The committee amendment resolves this issue 
because it requires further, express authorization from 
Congress before additional ALP components may be constructed. 
The project proponents understandably insist that this 
provision will not take effect until and unless the 
construction and operation of the facilities described above. 
Some of the testimony proffered to the Committee argued in 
favor of making this ``de-authorization'' provision effective 
immediately, whether or not any facilities are actually 
constructed. Both Ute tribes expressed concern about such a 
change in the delicate balance achieved by this provision. As 
the Tribes point out, this provision allows those opposed to 
construction of the entire project to support those elements 
needed to satisfy tribal water rights claims without alienating 
the support of either the State of Colorado or those who wish 
to leave open the option of constructing the larger project. 
The proponents of a larger project have certainly made an 
important concession by agreeing to condition any further 
project construction on additional legislation. A number of 
essential parties to this settlement indicate that requiring 
any additional concessions in this regard will cause them to 
rethink and very possibly withdraw their support for the 
settlement. In addition, such a change would entangle this 
settlement agreement in complex interstate negotiations that 
may require years or even decades to complete.
    This section also provides for an up-front repayment of the 
non-Indian municipal and industrial capital repayment 
obligation. This section also points out that Federal law does 
not provide a basis for allocating costs related to ALP 
irrigation components to the municipal and industrial water 
uses or to Colorado River Storage Project power customers. 
Allocating such costs would require an explicit change to 
Federal law. As the July 2000 EIS recognizes, in the absence of 
such a change in the law, those ``sunk costs'' that are 
attributed to project features that are not part of the 
Department's Preferred Alternative are non-reimbursable.

Section 3. Compliance with the National Environmental Policy Act of 
        1969

    This section is not drafted to establish a binding 
determination concerning Federal compliance with NEPA. To the 
extent that Congressional deliberations and determinations 
about the options and benefits under consideration, there is an 
obvious value in memorializing these efforts and conclusions in 
as clear and articulated a fashion as possible.3 The 
continuing Congressional effort to settle tribal water rights 
claims and address regional water quality needs within the area 
to be served by the ALP demonstrates Federal efforts to 
accomplish the ``hard look'' called for by NEPA. As approved by 
the Committee this section does not call upon any other branch 
of the Federal government to take any action. To the extent is 
addressed to any part of the government, it only provides the 
Executive Branch with the option of proffering potentially-
relevant information concerning Congresses part in these 
efforts.
---------------------------------------------------------------------------
    \3\ For example, in Environmental Defense Fund v. Hoffman, 566 F.2d 
1060 (8th Cir. 1977), the 8th Circuit Court of Appeals made the 
following finding: ``There is nothing in the legislative history to 
suggest that Congress made a binding determination on the adequacy of 
the EIS and its compliance with NEPA.'' Nevertheless, the court found 
that Congressional consideration of the adequacy of the mitigation plan 
was relevant, in fact dispositive: ``We note moreover that in light of 
the mitigation plan and the extraordinary executive and congressional 
review process, it would be singularly inappropriate for this Court to 
substitute its judgment for that of Congress as to the impact of the 
project on migratory waterfowl and the adequacy of the mitigation 
plan.'' (emphasis supplied).
---------------------------------------------------------------------------

Section 4. Compliance with the Endangered Species Act of 1973

    This section is modeled after Section 3. Like Section 3, 
this section does not compel any action or decision by any 
other branch of the Federal government. Under Section 4, the 
Executive Branch has the option of providing information 
concerning Congressional deliberations and decisions. This 
provision would only be applicable if the ALP is allowed to 
diver at least 57,100 af/y in a manner consistent with the ESA.

Section 5. Miscellaneous

    This section adds 5 new sections to the 1988 Settlement 
Act.
    Section 15. New Mexico and Navajo Water Matters.--This new 
section of the Settlement Act authorizes the Secretary to 
assign some or all of the Department's interest in a water 
permit. The assignment of the Department's interest in New 
Mexico State Engineer Permit Number 2883 back to the New Mexico 
Interstate Stream Commission or the New Mexico ALP 
beneficiaries is necessary to put the State of New Mexico and 
its citizens on an equal footing with their Colorado neighbors, 
who directly hold their permits for water from the ALP. Because 
the Navajo Nation may not choose to hold its interest in the 
ALP directly, so the provision allows for only part of the 
Department's interest to be assigned. The Committee anticipates 
that the State Engineer may request an assignment back of all 
of the permit except for the portion allocated by agreement 
among the beneficiaries to the Navajo Nation, which is proper 
and necessary to equalize the positions of the two states. The 
Committee encourages the Secretary to complete the assignment 
expeditiously. This new Section also authorizes the Secretary 
to construct a municipal water supply pipeline to convey at 
least 4,680 af/y to Shiprock, New Mexico, on the Navajo Indian 
Reservation.
    Section 16. Tribal Resource Funds.--This section provides 
for the establishment of tribal resource development funds for 
each of the Ute tribes. These funds will assist the tribes with 
their effort to develop their resources. These funds are 
especially important because S. 2508 seeks to equalize the 
benefits provided under its provisions with those provided 
under the 1988 Settlement Act. Consistent with the Department's 
EIS, each tribe will receive $20 million to assist with these 
efforts. The funds are to be used in a manner consistent with 
an economic development plan which must first be approved by 
the Secretary.
    Section 17. Colorado Ute Settlement Fund.--This fund will 
include the appropriations provided for the construction of the 
facilities needed to complete construction of the facilities 
needed to satisfy the Federal government's obligation to the 
Ute tribes.
    Section 18. Final Settlement.--This section provides that 
the construction of the required facilities and the 
appropriation of funds under sections 16 and 17 constitute 
final settlement of tribal claims on the Animas and La Plata 
Rivers in the State of Colorado. Also, the Attorney General may 
file appropriate amendments to ensure that the changes to the 
Settlement Act are reflected in the ongoing litigation 
concerning the reserved water rights claims filed by the United 
States.
    Section 19. Statutory Construction, Treatment of Certain 
Funds.--This section confirms that the amendments made to the 
Settlement Act do not affect is applicability. Also, this 
section confirms that the uncommitted portion of the cost-
sharing obligation from the State of Colorado shall be made 
available to the State upon its request.

                          Legislative History

    S. 2508 was introduced on May 4, 2000, by Senator Ben 
Nighthorse Campbell, and referred to the Committee on Indian 
Affairs. Senators Pete Domenici and Wayne Allard were joined as 
co-sponsors of the bill. A joint hearing on the bill was held 
with the Committee on Energy and Natural Resources' 
Subcommittee on Water and Power on June 7, 2000.

            Committee Recommendation and Tabulation of Vote

    In an open business session on June 14, 2000, the Committee 
on Indian Affairs, by a voice vote, adopted the bill and 
ordered it reported without amendment. On June 26, 2000, by 
unanimous consent agreement, the bill was referred to the 
Committee on Energy and Natural Resources, for a period not to 
exceed 30 calendar days.

  Section-by-Section Analysis of S. 2508 as Reported by the Committee

    Section 1. Short title, Findings and Definitions.
    Section 2. Amendments to Section 6 of the Colorado Ute 
Indian Water Rights Settlement Act of 1988.--Section 2 of the 
bill amends Section 6, subsection (a) of the Colorado Ute 
Indian Water Rights Settlement Act of 1988, authorizing the 
Secretary of the Interior, through the Bureau of Reclamation, 
to construct a reservoir and appurtenant facilities for storing 
water from the Animas River. This section also specifies the 
allocation of water (average annual depletions) to be diverted 
from the river into the reservoir, the relevant laws pertaining 
to the construction of the reservoir, and limitations on 
construction costs.
    Section 3. Compliance with the National Environmental 
Policy Act of 1969.--Section 3 of the bill outlines how the 
reservoir ALP will comply with the National Environmental 
Policy Act of 1969.
    Section 4 of the bill outlines how the reservoir project 
will comply with the Endangered Species Act of 1973.
    Section 5 of the bill introduces the new sections (Section 
15 to Section 19) to be added to the Colorado Ute Indian Water 
Rights Settlement Act of 1988.
    Section 15 of the bill authorizes the Secretary to convey 
New Mexico State Water Rights Permits to certain individuals or 
entities and authorizes the Secretary to construct a facility 
to deliver water to parts of the Navajo Nation.
    Section 16 of the bill establishes the Southern Ute Tribal 
Resource Fund and the Ute Mountain Ute Tribal Resource Fund, 
and authorizes appropriations for FY2001 and FY2002 to be 
deposited in these funds. This section also provides for 
investment of tribal resource funds, except in case the tribes 
provide their own investment plans, and calls for each tribe to 
submit an economic development plan, for which the Tribal 
Resource Fund will be used. This section also places a 
limitation on per capita distributions and a limitation on 
setting aside the final consent decree.
    Section 17 of the bill establishes the Colorado Ute 
Settlement Fund, authorizes the appropriation of such funds as 
are necessary to complete the reservoir project within six 
years of the date of enactment, and specifies how interest 
should accrue to this fund.
    Section 18 of the bill states that this act constitutes the 
final settlement of the tribal claims to the water rights on 
the Animas and La Plata Rivers in Colorado. This section also 
empowers the Attorney General to file the necessary instruments 
to amend the final consent decree.
    Section 19 of the bill provides a rule of construction 
concerning the effect of these amendments and making the 
uncommitted parts of its cost-sharing obligation available to 
the State of Colorado.

                    Cost and Budgetary Consideration

    The cost estimate for S. 2508, as calculated by the 
Congressional Budget Office, is not presently available. It 
will be included as soon as it is provided to the Committee.

                      Regulatory Impact Statement

    Paragraph 11(b) of XXVI of the Standing Rules of the Senate 
requires that each report accompanying a bill to evaluate the 
regulatory paperwork impact that would be incurred in carrying 
out the bill. The Committee believes that S. 2508 will have 
only de minimis regulatory or paperwork impact.

                        Executive Communications

    The following letters on S. 2508 were received by the 
Committee from the Deputy Secretary of Interior on September 
18, 2000.

                      The Deputy Secretary of the Interior,
                                Washington, DC, September 18, 2000.
Hon. Ben Nighthorse Campbell,
U.S. Senate,
Washington, DC.
    Dear Senator Campbell: I am writing to address two ongoing 
concerns that have been raised with respect to S. 2508, the 
bill to amend the Colorado Ute Indian Water Rights Settlement 
Act of 1988. These concerns appear to question whether the 
federal government should remain committed to resolving the 
remaining tribal water rights claims through the Settlement. We 
think it appropriate and helpful to provide our views on these 
matters, as you and your colleagues consider moving S. 2508 
towards enactment.
    The first issue concerns the validity of the Colorado Ute 
Tribes' water rights claims. Some opponents continue to assert 
that those rights have never been properly established and that 
the settlement violates existing law. These allegations were 
first raised during the public scoping meetings associated with 
the NEPA analysis conducted on the various alternatives for 
final implementation of the settlement. I have attached a copy 
of our response. It describes with particularity the senior 
water rights of the Southern Ute and Ute Mountain Ute tribes, 
as confirmed by Congress, and subsequently by the Colorado 
District Court.
    The second issue raised is a concern that implementing the 
Colorado Ute Settlement may impinge on the water rights of two 
downstream tribes, the Navajo Nation and the Jicarilla Apache 
Tribe. This concerns also is misplaced. It is the failure to 
resolve the ALP matter that would put the downstream tribes' 
water rights most at risk. Without a settlement, the Southern 
Ute and Ute Mountain Ute tribes would move forward with a large 
claim for senior water rights, creating the prospect for a 
conflict with the water rights of downstream tribes. A scaled-
back project avoid this conflict. It also avoids the conflict 
that a larger project would create with respect to the 
downstream tribes' water rights. The ALP settlement also sets 
aside a block of water for the Navajo Nation and funds 
construction of a Farmington to Shiprock drinking water system 
for its benefit. It is not surprising, therefore, that all of 
the potentially affected tribes recently have confirmed their 
support for implementation of the modified settlement through a 
joint letter to the Department. Notwithstanding the concerns 
expressed by others on their behalf, the Navajo Nation and the 
Jicarilla Apache Tribe can speak for themselves, and they have.
    This Administration believes that the implementation of the 
Colorado Ute Water Rights Settlement is long overdue. We will 
therefore continue to press forward with our efforts to bring 
this matter to conclusion. While we are still concerned with 
certain aspects of S. 2508, as outlined in our testimony, we 
believe that those issues can and should be resolved. We look 
forward to working with you toward that end.
            Sincerely,
                                                    David J. Hayes.
                                ------                                

                        Department of the Interior,
                                   Office of the Secretary,
                                Washington, DC, September 10, 1999.
Mr. Phil Doe,
Chairman, Citizens' Progressive Alliance,
Littleton, CO.
    Dear Mr. Doe: This letter is in response to your request 
that the Department of the Interior evaluate the validity of 
the Southern Ute Tribe's water rights, specifically whether the 
Tribe has reserved water rights with an 1868 priority date or 
whether such rights were extinguished by the Act of June 15, 
1880. Your request was made during the public scoping meetings 
associated with the NEPA analysis being conducted on the 
Administration proposal and various alternatives for final 
implementation of the Colorado Ute Water Rights Settlement.
    The Solicitor has evaluated your request and, for the 
reasons explained in the attached opinion, finds no 
justification to question the Tribe's 1868 priority date for 
water rights in the Animas and LaPlata rivers. Since it is the 
position of the Department that the Southern Ute and Ute 
Mountain Ute Tribes never lost their 1868 reserved water 
rights, we will continue to move forward with the ongoing NEPA 
analysis.
            Sincerely,
                                            David J. Hayes,
                                           Acting Deputy Secretary.
                                ------                                

                        Department of the Interior,
                                   Office of the Solicitor,
                                 Washington, DC, September 9, 1999.

                               Memorandum

To: Acting Deputy Secretary.
From: Solicitor.
Re: Southern Ute Tribe's Water Rights Priority Date.

    You have requested that this Office evaluate the validity 
of the Southern Ute Tribe's water rights claims, as a result of 
issues raised during the NEPA process associated with the 
Administration proposal for final implementation of the 
Colorado Ute Water Rights Settlement. Specifically, you 
requested an analysis of whether the Tribe has reserved water 
rights with an 1868 priority date or whether such rights were 
extinguished by the Act of June 15, 1880. For the reasons 
explained below, we conclude that the Southern Ute Tribe's 
water rights have a priority date of 1868.
    As a threshold matter, it is important to note that the 
Southern Ute Tribe's 1868 priority date was judicially 
established through approval of Consent Decrees on December 19, 
1991, by Colorado District Court, Water Division 7. Under the 
1986 Settlement Agreement, as implemented by Congress through 
the 1988 Settlement Act, all tribal water rights claims in the 
Animas and LaPlata rivers, including the priority date of those 
water rights, were properly before the Court in 1991 and 
included in the order of the Court accepting the Consent 
Decree. Accordingly, further judicial review on the propriety 
of the 1868 priority date is now barred by the doctrine of res 
judicata. Danielson v. Vickroy, 627 P.2d 752, 761 (Colo. 1981) 
(an issue is res judicata if it was before the court in 
proceedings which resulted in a decree.). Thus, even if we were 
to find a basis upon which to question the validity of the 
Tribe's priority date, which for reasons explained below we do 
not, the time to raise this issue has long since passed.
    Notwithstanding the jurisdictional bar to raising such an 
issue at this time, the Southern Ute Tribe never lost its 1868 
priority date. The Tribe's reserved water rights arise from its 
1868 Treaty with the United States which established the Ute 
Reservation in southwestern Colorado. It is well-settled that 
establishment of an Indian reservation carries with it an 
implied reservation of the amount of water necessary to fulfill 
the purposes of the reservation with a priority date no later 
than the date of creation of the reservation. See Winters v. 
United States, 207 U.S. 564, 576-77, (1908); see also Arizona 
v. California, 373 U.S. 546, 599-601 (1963); United States v. 
Winans, 198 U.S. 371 (1905).
    No congressional action has done anything to change the 
priority date of the Tribe's water rights. Two statues did, 
however, substantially affect the Tribe's land ownership. In 
1880, Congress passed an act to allot the Southern Ute 
reservation. See Act of June 15, 1880, ch. 223, 21 Stat. 199 
(1880). Under this Act, all ``surplus'' lands of the 
Reservation (lands not allotted) were deemed to be public lands 
of the United States, available for entry by non-Indians. Then 
in 1934, the Indian Reorganization Act (IRA), 25 U.S.C. 
Sec. 463 et seq. (1994), officially ended the allotment era and 
authorized the Secretary to restore unclaimed ``surplus'' lands 
of any Indian reservation to tribal ownership. Restoration of 
the present Southern Ute Reservation occurred on September 14, 
1938. See 3 Fed. Reg. 1425 (1938).
    The 1880 Act did not extinguish the Tribe's rights in 
``surplus'' lands and did nothing to affect the Tribe's water 
rights for unclaimed ``surplus'' lands later restored to tribal 
ownership under the IRA. Termination of diminution of treaty 
rights ``will not be lightly inferred,'' Solem v. Bartlett, 465 
U.S. 463, 470 (1984), and requires express legislation or a 
clear inference of congressional intent gleaned from 
surrounding circumstances and legislative history. Bryan v. 
Itasca Cty., 426 U.S. 373, 392-93 (1975). The 1880 Act did not 
contain clear congressional intent to change the boundaries of 
the Tribe's reservation and did not provide the Tribe with full 
compensation for the land ceded, the combination of which might 
have indicated that the reservation had been diminished. See 
Solem v. Bartlett, 465 U.S. at 469-70. Similarly, the 1880 
Act's complete silence on the issue of water rights must be 
interpreted as leaving in place, not terminating, these 
valuable rights. Although much tribal land did, in fact, become 
divested from tribal ownership, the overwhelming majority of 
land which now makes up the Southern Ute Indian Reservation was 
retained in federal ownership and never conveyed to non-Indian 
parties.
    Because lands declared ``surplus'' by the 1880 Act could be 
sold only under certain conditions, including for the benefit 
of the Ute bands, the Tribes retained an interest in the unsold 
land. This interest included all property rights not 
specifically divested. As the Department has noted previously, 
during the time between allotment in 1880 and restoration of 
unclaimed lands in 1938, the United States became a ``trustee 
in possession'' for the disposal of the ceded land and the 
Tribe retained an equitable interest until it received payment 
for the land. Restoration to Tribal Ownership--Ute Lands, I 
Dep't of Interior, Op. Solicitor 832, 836-37 (1938). The 
promise of payment created a trust between the United States 
and the Tribe. See Minnesota v. Hitchcock, 185 U.S. 373, 394-95 
(1902); Ash Sheep Co. v. United States, 252 U.S. 159, 164-66 
(1920).
    The decision of the Supreme Court in United States v. 
Southern Ute Tribe, 402 U.S. 159 (1971) has been put forth as a 
reason why the Southern Ute's water rights were extinguished. 
However, this Supreme Court decision is not relevant to the 
current inquiry. Southern Ute discussed the res judicata effect 
of the Tribe's claims in front of the Indian Claims Commission 
(ICC). The ICC claims at issue, however, concerned ``surplus'' 
lands which had passed into private ownership or were reserved 
for other federal purposes, not, as is the case here, unclaimed 
lands which were later restored to tribal ownership. Some have 
suggested that the Southern Ute decision also affected the 
water rights claims of the Ute Mountain Ute Tribe. However, the 
western half of the pre-1880 reservation, which is today's Ute 
Mountain Ute Reservation, was never allotted. See Southern Ute, 
402 U.S. at 171. Neither the 1880 Act nor any subsequent 
congressional action affected the Ute Mountain Ute's water 
rights which also retain an 1868 treaty date priority.
    All cases which have addressed the issue conclude that the 
original treaty-date priority to water applies to unclaimed 
``surplus'' lands which are restored to tribal ownership. See 
United States v. Anderson, 736 F. 2d 1358 (9th Cir. 1984); In 
re-Big Horn River System, 753 P. 2d 76 (Wyo. 1988) (Big Horn 
I), aff'd without opinion by an equally divided court; and In 
re Big Horn River System, 899 P. 2d 848 (Wyo. 1995) (Big Horn 
IV). Anderson developed a three-prong test for extinguishment 
of a Winters right; namely, there must be: (1) cessation of the 
reservation, (2) opening of that land to homesteading, and (3) 
conveyance into private ownership. Anderson, 736 F. 2d at 1363. 
While the Ninth Circuit held that no Indian reserved water 
rights exist ``on those reservation lands which have been 
declared public domain, opened to homesteading, and 
subsequently conveyed into private ownership,'' id. at 1363 
(emphasis added), it left in place the district court's 
decision which awarded a treaty-date priority for water rights 
to ``lands opened for homesteading which were never claimed.'' 
Id. at 1361 (emphasis added). In the case of the Utes, the land 
restored to the Southern Ute Indian Reservation was never 
conveyed into private ownership. Since the land was never 
conveyed into private ownership, the 1868 priority date was 
never affected.
    The Wyoming Supreme Court reached the same conclusion when 
it found a treaty-date priority for ``all the reacquired lands 
on the ceded portion of the [Wind River] reservation.'' 753 P. 
2d at 114 (Big Horn I). Similarly, Big Horn IV held that a 
treaty-date priority for reserved water rights extends to 
``restored, retroceded, undisposed of, and reacquired lands 
owned by the Tribes; fee lands held by Indian allottees; and 
lands held by Indian and non-Indian successors to allottees.'' 
899 P. 2d at 855.
    The Department notes that Big Horn IV also held that the 
reservation purpose and reserved water rights ``no longer 
existed for lands acquired by others after they had been ceded 
to the United States for disposition.'' Id. at 854 (emphasis 
added). This reasoning, which comports with Anderson's three-
prong test, was used by the Court to conclude that non-Indian 
settlers, under the Homestead Act and other land-entry 
statutes, did not have a treaty-date priority. This holding, 
however, does nothing to alter the fact that lands ceded by the 
Southern Ute Tribe, which were opened to settlement but 
unclaimed by settlers and later restored to tribal ownership, 
retain water rights with a treaty-date priority. Anderson, Big 
Horn I, and Big Horn IV stand for the proposition, and the 
Department concludes, that the Tribe retains its original 1868 
priority date for all restored ``surplus'' lands.

                                                     John D. Leshy.

                        Changes in Existing Law

    In compliance with subsection 12 of rule XXXVI of the 
Standing Rules of the Senate, the Committee notes the following 
changes in existing law (existing law proposed to be omitted is 
enclosed in black brackets, new matter printed in italic):

SEC. 6. REPAYMENT OF PROJECT COSTS.

    [(a) Municipal and Industrial Water.--
          (1) The Secretary shall defer, without interest, the 
        repayment of the construction costs allocable to each 
        Tribe's municipal and industrial water allocation from 
        the Animas-La Plata and Dolores Projects until water is 
        first used either by the Tribe or pursuant to a water 
        use contract with the Tribe. Until such water is first 
        used either by a Tribe or pursuant to a water use 
        contract with the Tribe, the Secretary shall bear the 
        annual operation, maintenance, and replacement costs 
        allocable to the Tribe's municipal and industrial water 
        allocation from the Animas-La Plata and Dolores 
        Projects, which costs shall not be reimbursable by the 
        Tribe.
          (2) As an increment of such water is first used by a 
        Tribe or is first used pursuant to the terms of a water 
        used contract with the Tribe, repayment of that 
        increment's pro rata share of such allocable 
        construction costs shall commence by the Tribe and the 
        Tribe shall commence bearing that increment's pro rata 
        share of the allocate annual operation, maintenance, 
        and replacement costs.]
    (a) Reservoir; Municipal and Industrial Water.--
          (1) Facilities.--
                  (A) In General.--After the date of enactment 
                of this subsection, but prior to January 1, 
                2005, the Secretary, in order to settle the 
                outstanding claims of the Tribes on the Animas 
                and La Plata Rivers, acting through the Bureau 
                of Reclamation, is specifically authorized to--
                          (i) complete construction of, and 
                        operate and maintain, a reservoir, a 
                        pumping plant, a reservoir inlet 
                        conduit, and appurtenant facilities 
                        with sufficient capacity to divert and 
                        store water from the Animas River to 
                        provide for an adverse annual depletion 
                        of 57,100 acre-feet of water to be used 
                        for a municipal and industrial water 
                        supply, which facilities shall--
                                  (I) be designed and operated 
                                in accordance with the 
                                hydrologic regime necessary for 
                                the recovery of the endangered 
                                fish of the San Juan River as 
                                determined by the Sam Juan 
                                River Recovery Implementation 
                                Program;
                                  (II) include an inactive pool 
                                of an appropriate size to be 
                                determined by the Secretary 
                                following the completion of 
                                required environmental 
                                compliance activities; and
                                  (III) include those 
                                recreation facilities 
                                determined to be appropriate by 
                                agreement between the State of 
                                Colorado and the Secretary that 
                                shall address the payment of 
                                any of the costs of such 
                                facilities by the State of 
                                Colorado in addition to the 
                                costs described in paragraph 
                                (3); and
                          (ii) deliver, through the use of the 
                        project components referred to in 
                        clause (i), municipal and industrial 
                        water allocations--
                                  (I) with an average annual 
                                depletion not to exceed 16,525 
                                acre-feet of water, to the 
                                Southern Ute Indian Tribe for 
                                its present and future needs;
                                  (II) with an average annual 
                                depletion not to exceed 16,525 
                                acre-feed of water, to the Ute 
                                Mountain Ute Indian Tribe for 
                                its present and future needs;
                                  (III) with an average annual 
                                depletion not to exceed 2,340 
                                acre-feet of water, to the 
                                Navajo Nation for its present 
                                and future needs;
                                  (IV) with an average annual 
                                depletion not to exceed 10,400 
                                acre-feet of water, to the San 
                                Juan Water Commission for its 
                                present and future needs;
                                  (V) with an average annual 
                                depletion of an amount not to 
                                exceed 2,600, acre-feet of 
                                water, to the Animas-La Plata 
                                Conservancy District for its 
                                present and future needs;
                                  (VI) with an average annual 
                                depletion of an amount not to 
                                exceed 5,230 acre-feet of 
                                water, to the State of Colorado 
                                for its present and future 
                                needs; and
                                  (VII) with an average annual 
                                depletion of an amount not to 
                                exceed 780 acre-feet of water, 
                                to the La Plata Conservancy 
                                District of New Mexico for its 
                                present and future needs.
                  (B) Applicability of Other Federal Law.--The 
                responsibilities of the Secretary described in 
                subparagraph (A) and subject to the 
                requirements of Federal laws related to the 
                protection of the environment and otherwise 
                applicable to the construction of the proposed 
                facilities, including the National 
                Environmental Policy Act of 1969 (42 U.S.C. 
                4321 et seq.), the Clean Water Act (42 U.S.C. 
                7401 et seq.), the Clean Water Act (42 U.S.C. 
                7401 et seq.), and the Endangered Species Act 
                of 1973 (16 U.S.C. 1531 et seq.). Nothing in 
                this Act shall be construed to predetermine or 
                otherwise affect the outcome of any analysis 
                conducted by the Secretary or any other Federal 
                official under applicable laws.
                  (C) Limitation.--
                          (i) In general.--If constructed, the 
                        facilities described in subparagraph 
                        (A) shall not be used in conjunction 
                        with any other facility authorized as 
                        part of the Animas-La Plata Project 
                        without express authorization from 
                        Congress.
                          (ii) Contingency in application.--If 
                        the facilities described in 
                        subparagraph (A) are not constructed 
                        and operated, clause (i) shall not take 
                        effect.
          (2) Tribal construction costs.--Construction costs 
        allocable to the facilities that are required to 
        deliver the municipal and industrial water allocations 
        described in subclauses (I), (II) and (III) of 
        paragraph (1)(A)(ii) shall be nonreimbursable to the 
        United States.
          (3) Nontribal water capital obligations.--Under the 
        provisions of section 9 of the Act of August 4, 1939 
        (43 U.S.C. 485h), the nontribal municipal and 
        industrial water capital repayment obligations for the 
        facilities described in paragraph (1)(A)(i) may be 
        satisfied upon the payment in full of the nontribal 
        water capital obligations prior to the initiation of 
        construction. The amount of the obligations described 
        in the preceding sentence shall be determined by 
        agreement between the Secretary of the Interior and the 
        entity responsible for such repayment as to the 
        appropriate reimbursable share of the construction 
        costs allocated to that entity's municipal water 
        supply. Such agreement shall take into account the fact 
        that the construction of facilities to provide 
        irrigation water supplies from the Animas-La Plata 
        Project is not authorized under paragraph (1)(A)(i) and 
        no costs associated with the design or development of 
        such facilities, including costs associated with 
        environmental compliance, shall be allocable to the 
        municipal and industrial users of the facilities 
        authorized under such paragraph.
          (4) Tribal water allocations.--
                  (A) In general.--With respect to municipal 
                and industrial water allocated to a Tribe from 
                the Animas-La Plata Project or the Dolores 
                Project, until that water is first used by a 
                Tribe or used pursuant to a water use contract 
                with the Tribe, the Secretary shall pay the 
                annual operation, maintenance, and replacement 
                costs allocable to that municipal and 
                industrial water allocation of the Tribe.
                  (B) Treatment of costs.--A Tribe shall not be 
                required to reimburse the Secretary for the 
                payment of any cost referred to in subparagraph 
                (A).
          (5) Repayment of pro rata share.--Upon a Tribe's 
        first use of an increment of a municipal and industrial 
        water allocation described in paragraph (4), or the 
        Tribe's first use of such water pursuant to the terms 
        of a water use contract--
                  (A) repayment of that increment's pro rate 
                share of those allocable construction costs of 
                the Dolores Project shall be made by the Tribe; 
                and
                  (B) the Tribe shall bear a pro rata share of 
                the allocable annual operation, maintenance, 
                and replacement costs of the increment as 
                referred to in paragraph (4).

           *       *       *       *       *       *       *

    (i) Compliance With the National Environmental Policy Act 
of 1969.--
          (1) Authority.--Nothing in this Act shall be 
        construed to alter, amend, or modify the authority or 
        discretion of the Secretary or any other Federal 
        official under the National Environmental Policy Act of 
        1969 (42 U.S.C. 4321 et seq.) or any other Federal law.
          (2) Determination of congress.--Subject to paragraph 
        (3), in any defense to a challenge of the Final 
        Environmental Impact Statement prepared pursuant to the 
        Notice of Intent to Prepare a Draft Environmental 
        Impact Statement, as published in the Federal Register 
        on January 4, 1999 (64 Fed. Reg. 176-179), or the 
        compliance with the National Environmental Policy Act 
        of 1969 (42 U.S.C. 4321 et seq.) or the Federal Water 
        Pollution Control Act (33 U.S.C. 1251 et seq.), and in 
        addition to the Record of Decision and any other 
        documents or materials submitted in defense of its 
        decision, the United States may assert in its defense 
        that Congress, based upon the deliberations and review 
        described in paragraph (9) of section 1(b) of the 
        Colorado Ute Settlement Act Amendments of 2000, has 
        determined that the alternative described in such Final 
        Statement meets the Federal government's water supply 
        obligations to the Ute tribes under this Act in a 
        manner that provides the most benefits to, and has the 
        least impact on, the quality of the human environment.
          (3) Application of provision.--This subsection shall 
        only apply if Alternative #4, as presented in the Draft 
        Supplemental Environmental Impact Statement dated 
        January 14, 2000, or an alternative substantially 
        similar to Alternative #4, is selected by the 
        Secretary.
          (4) No effect of modification of facilities.--The 
        application of this section shall not be affected by a 
        modification of the facilities described in subsection 
        (a)(1)(A)(i) to address the provisions in the San Juan 
        River Recovery Implementation Program.

           *       *       *       *       *       *       *

    (j) Compliance With the Endangered Species Act of 1973.--
          (1) Authority.--Nothing in this section shall be 
        construed to alter, amend, or modify the authority or 
        discretion of the Secretary or any other Federal 
        official under the Endangered Species Act of 1973 (16 
        U.S.C. 1531 et seq.) or any other Federal law.
          (2) Determination of congress.--Subject to paragraph 
        (3), in any defense to a challenge of the Biological 
        Opinion resulting from the Bureau of Reclamation 
        Biological Assessment, January 14, 2000, or the 
        compliance with the Endangered Species Act of 1973 (16 
        U.S.C. 1531 et seq.), and in addition to the Record of 
        Decision and any other documents or materials submitted 
        in defense of its decision, the United States may 
        assert in its defense that Congress, based on the 
        deliberations and review described in paragraph (9) of 
        section 1(b) of the Colorado Ute Settlement Act 
        Amendments of 2000, has determined that constructing 
        and operating the facilities described in subsection 
        (a)(1)(A)(i) meets the Federal government's water 
        supply obligation to the Ute tribes under that Act 
        without violating the Endangered Species Act of 1973 
        (16 U.S.C. 1531 et seq.).
          (3) Application of provision.--This subsection shall 
        only apply if the Biological Opinion referred to in 
        paragraph (2) or any reasonable and prudent alternative 
        suggested by the Secretary pursuant to section 7 of the 
        Endangered Species Act of 1973 (16 U.S.C. 1536) 
        authorizes an average annual depletion of at least 
        57,100 acre-feet of water.
          (4) No effect of modification of facilities.--The 
        application of this subsection shall not be affected by 
        a modification of the facilities described in 
        subsection (a)(1)(A)(i) to address the provisions in 
        the San Juan River Recovery Implementation Program.

           *       *       *       *       *       *       *

SEC. 15. NEW MEXICO AND NAVAJO NATION WATER MATTERS.

    (a) Assignment of Water Permit.--Upon the request of the 
State Engineer of the State of New Mexico, the Secretary shall, 
in a manner consistent with applicable State law, assign, 
without consideration, to the New Mexico Animas-La Plata 
Project beneficiaries or the New Mexico Interstate Stream 
Commission any portion of the Department of the Interior's 
interest in New Mexico Engineer Permit Number 2883, dated May 
1, 1956, in order to fulfill the New Mexico purposes of the 
Animas-La Plata Project, so long as the permit assignment does 
not affect the application of the Endangered Species Act of 
1973 (16 U.S.C. 1531 et seq.) to the use of the water involved.
    (b) Navajo Nation Municipal Pipeline.--The Secretary may 
construct a water line to augment the existing system that 
conveys the municipal water supplies, in an amount not less 
than 4,680 acre-feet per year, of the Navajo Nation to the 
Navajo Indian Reservation at Shiprock, New Mexico. The 
Secretary shall comply with all applicable environmental laws 
with respect to such water line. Construction costs allocated 
to the Navajo Nation for such water line shall be 
nonreimbursable to the United States.
    (c) Protection of Navajo Water Claims.--Nothing in this Act 
shall be construed to quantify or otherwise adversely affect 
the water rights and the claim of entitlement to water of the 
Navajo Nation.

           *       *       *       *       *       *       *

SEC. 16. TRIBAL RESOURCE FUNDS.

    (a) Establishment.--
          (1) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        section, $20,000,000 for fiscal year 2001 and 
        $20,000,000 for fiscal year 2002. Not later than 60 
        days after amounts are appropriated and available to 
        the Secretary for a fiscal year under this paragraph, 
        the Secretary shall make a payment to each of the 
        Tribal Resource Funds established under paragraph (2). 
        Each such payment shall be equal to 50 percent of the 
        amount appropriated for the fiscal year involved.
          (2) Funds.--The Secretary shall establish a--
                  (A) Southern Ute Tribal Resource Fund; and
                  (B) Ute Mountain Ute Tribal Resource Fund.
        A separate account shall be maintained for each such 
        Fund.
    (b) Adjustment.--To the extent that the amount appropriated 
under subsection (a)(1) in any fiscal year is less than the 
amount authorized for such fiscal year under such subsection, 
the Secretary shall, subject to the availability of 
appropriations, pay to each of the Tribal Reserve Funds an 
adjustment amount equal to the interest income, as determined 
by the Secretary in his or her sole discretion, that would have 
been earned on the amount authorized but not appropriated under 
such subsection had that amount been placed in the Fund as 
required under such subsection.
    (c) Tribal Development.--
          (1) Investment.--The Secretary shall, in the absence 
        of an approved tribal investment plan provided for 
        under paragraph (2), invest the amount in each Tribal 
        Resource Fund in accordance with the Act entitled, ``An 
        Act to authorize the deposit and investment of Indian 
        funds'' approved June 24, 1938 (25 U.S.C. 162a). The 
        Secretary shall disburse, at the request of a Tribe, 
        the principal and income in its Resource Fund, or any 
        part thereof, in accordance with a resource acquisition 
        and enhancement plan approved under paragraph (3).
          (2) Investment plan.--
                  (A) In General.--In lieu of the investment 
                provided for in paragraph (1), a Tribe may 
                submit a tribal investment plan applicable to 
                all or part of the Tribe's Tribal Resource 
                Fund.
                  (B) Approval.--Not later than 60 days after 
                the date on which an investment plan is 
                submitted under subparagraph (A), the Secretary 
                shall approve such investment plan if the 
                Secretary finds that the plan is reasonable and 
                sound. If the Secretary does not approve such 
                investment plan, the Secretary shall set forth 
                in writing and with particularity the reasons 
                for such disapproval. If such investment plan 
                is approved by the Secretary, the Tribal 
                Resource Fund involved shall be disbursed to 
                the Tribe to be invested by the Tribe in 
                accordance with the approved investment plan.
                  (C) Compliance.--The Secretary may take such 
                steps as the Secretary determines to be 
                necessary to monitor the compliance of a Tribe 
                with an investment plan approved under 
                subparagraph (B). The United States shall not 
                be responsible for the review, approval, or 
                audit of any individual investment under the 
                plan. The United States shall not be directly 
                or indirectly liable with respect to any such 
                investment, including any act or omission of 
                the Tribe in managing or investing such funds.
                  (D) Economic development plan.--The principal 
                and income derived from tribal investments 
                under an investment plan approved under 
                subparagraph (B) Shall be subject to the 
                provisions of this section and shall be 
                expended only in accordance with an economic 
                development plan approved under paragraph (3).
          (3) Economic development plan.--
                  (A) In general.--Each Tribe shall submit to 
                the Secretary a resource acquisition and 
                enhancement plan for all any portion of its 
                Tribal Resource Fund.
                  (B) Approval.--Not later than 60 days after 
                the date on which a plan is submitted under 
                subparagraph (A), the Secretary shall approve 
                such investment plan if the Secretary finds 
                that the plan is reasonably related to the 
                protection, acquisition, enhancement, or 
                development of natural resources for the 
                benefit of the Tribe and its members. If the 
                Secretary does not approve such plan, the 
                Secretary shall, at the time of such 
                determination, set forth in writing and with 
                particularity the reasons for such disapproval.
                  (C) Modification.--Subject to the approval of 
                the Secretary, each Tribe may modify a plan 
                approved under subparagraph (B).
                  (D) Liability.--The United Stats shall not be 
                directly or indirectly liable for any claim 
                cause of action arising from the approval of a 
                plan under this paragraph, or from the use and 
                expenditure by the Tribe of the principal or 
                interest of the Funds.
    (d) Limitation on Per Capita Distributions.--No part of the 
principal contained in the Tribal Resource Fund, or of the 
income accruing to such funds, or the revenue from any water 
use contract, shall be distributed to any member of either 
Tribe on a per capita basis.
    (e) Limitation on Setting Aside Final Consent Decree.--
Neither the Tribes nor the United States shall have the right 
to set aside the final consent decree solely because the 
requirements of subsection (c) are not complied with or 
implemented.

           *       *       *       *       *       *       *

SEC. 17. COLORADO UTE SETTLEMENT FUND.

    (a) Establishment of Fund.--There is hereby established 
within the Treasury of the United States a fund to be known as 
the ``Colorado Ute Settlement Fund''.
    (b) Authorization of Appropriations.--There is authorized 
to be appropriated to the Colorado Ute Settlement Fund such 
funds as are necessary to complete the construction of the 
facilities described in section 6(a)(1)(A) within 6 years of 
the date of enactment of this section. Such funds are 
authorized to be appropriated for each of the first 5 fiscal 
years beginning with the first full fiscal year following the 
date of enactment of this section.
    (c) Interest.--Amounts appropriated under subsection (b) 
shall accrue interest, to be paid on the dates that are 1, 2, 
3, 4, and 5 years after the date of enactment of this section, 
at a rate to be determined by the Secretary of the Treasury 
taking into consideration the average market yield on 
outstanding Federal obligations of comparable maturity, except 
that no such interest shall be paid during any period where a 
binding final court order prevents construction of the 
facilities described in section 6(a)(1)(A).

           *       *       *       *       *       *       *

SEC. 18. FINAL SETTLEMENT.

    (a) In General.--The construction of the facilities 
described in section 6(a)(1)(A), the allocation of the water 
supply from those facilities to the Tribes as described in that 
section, and the provision of funds to the Tribes in accordance 
with sections 16 and 17 shall constitute final settlement of 
the tribal claims to water rights on the Animas and La Plata 
Rivers in the State of Colorado.
    (b) Statutory Construction.--Nothing in this section shall 
be construed to affect the right of the Tribes to water rights 
on the streams and rivers described in the Agreement, other 
than the Animas and La Plata Rivers, to receive the amounts of 
water dedicated to tribal use under the Agreement, or to 
acquire water rights under the laws of the State of Colorado.
    (c) Action by the Attorney General.--The Attorney General 
shall file with the District Court, Water Division Number 7, of 
the State of Colorado, such instruments as may be necessary to 
request the court to amend the final consent decree to provide 
for the amendments made to this Act under the Colorado Ute 
Indian Water Rights Settlement Act Amendments of 2000.

           *       *       *       *       *       *       *

SEC. 19. STATUTORY CONSTRUCTION; TREATMENT OF CERTAIN FUNDS.

    (a) In General.--Nothing in the amendments made by the 
Colorado Ute Settlement Act Amendments of 2000 shall be 
construed to affect the applicability of any provision of this 
Act.
    (b) Treatment of Uncommitted Portion of Cost-Sharing 
Obligation.--The uncommitted portion of the cost-sharing 
obligation of the State of Colorado referred to in section 
6(a)(3) shall be made available, upon the request of the State 
of Colorado, to the State of Colorado after the date on which 
payment is made of the amount specified in that section.

                                  
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