19–010 

Calendar No. 638

107TH CONGRESS REPORT " SENATE ! 2d Session 107–301

A BILL TO APPROVE THE SETTLEMENT OF THE WATER 

RIGHTS CLAIMS OF THE ZUNI INDIAN TRIBE IN APACHE 

COUNTY, ARIZONA AND FOR OTHER PURPOSES

OCTOBER 8, 2002.—Ordered to be printed 

Mr. INOUYE, from the Committee on Indian Affairs, 

submitted the following 

R E P O R T 

[To accompany S. 2743]

The Committee on Indian Affairs, to which was referred the bill 

(S. 2743) to approve the settlement of the water rights claims of 

the Zuni Indian Tribe in Apache County, Arizona and for other 

purposes, having considered the same, reports favorably thereon 

with an amendment in the nature of a substitute and recommends 

that the bill (as amended) do pass. 

PURPOSE

The purpose of the bill is to resolve all claims in the Zuni Indian 

Tribe to water rights in the Little Colorado River basin and elsewhere in Arizona and to provide resources to restore riparian wetlands on the Zuni Heaven Reservation that are of great religious 

and cultural significance to the tribe and its members. 

BACKGROUND

Congress considered the history of the Zuni Indian Tribe in detail when it enacted the Zuni Claims Settlement Act of 1990, P.L. 

101–486 (104 Stat. 1174). As the House Committee on Interior and 

Insular Affairs noted in its report, H. Rep. 101–727, 101st Cong., 

2nd Sess. (1990), on a companion bill (H.R. 4143) to the legislation 

that was enacted into law (S. 2203), the Zuni Tribe and its probable ancestors-the Anasazi and Mogollon—inhabited an area as 

large as 15 million acres in what is now the States of Arizona and 

New Mexico. This area was inhabited as early as 5000 B.C., and 

between 1250 A.D. and 1540 A.D. large pueblos were constructed 

in this area. By 1450 A.D., this was a cultural and economic center 

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1See, United States on behalf of the Zuni Tribe of New Mexico v. Platt, 730 F. Supp. 318, 318–

21 (D. N.M. 1990). 

for the Zuni, who used the entire 15 million areas for hunting, 

gathering, and farming as well as other life-sustaining activities. 

Spanish explorers learned of the Zuni and the ‘‘Kingdom of 

Cibola’’ in the late 1530s, and the first major contract with Europeans took place when Coronado’s expedition encountered the Zuni 

as he searched for Cibola’s ‘‘Seven Cities of Gold.’’ Spanish missionaries recorded the cultivation of corn by the Zuni in 1581, and an 

expedition in 1583 noted the Zuni’s irrigation and hunting practices. In 1598, Spain officially recognized the Zuni Province when 

the Zuni acknowledged Spanish sovereignty over them. Under 

Spanish law, the Zuni retained ownership of their lands and were 

treated as autonomous and self-governing notwithstanding the 

overriding sovereignty of Spain. The Zuni maintained their autonomy under the government of Mexico after that nation achieved its 

independence from Spain in 1821. 

The 1848 Treaty of Guadalupe Hidalgo offered the Zuni the same 

legal protections they had received under Spanish and Mexican 

rule. Subsequently, however, the Zuni were deprived of all but 

about 3% of the land they had earlier controlled. In 1877, the Zuni 

Reservation was established by executive order, consisting of 

408,000 acres of land in McKinley and Valencia Counties in western New Mexico. Notwithstanding this diminution of their lands, 

the Zuni have continued to make religious pilgrimages from their 

reservation in New Mexico to the area now included within the 

Zuni Heaven Reservation in Arizona. 1

The Zuni Heaven Reservation was recognized by statute in 1984, 

P.L. 98–408, 98 State. 1533 (1984), as amended by P.L. 101–486, 

104 Stat. 1174 (1990), to protect long-standing religious and subsistence activities by the Zuni Indian Tribe on certain lands in 

Apache County, Arizona, located upstream of the confluence of the 

Little Colorado and Zuni Rivers. The rights of all water users in 

the basin of the Little Colorado River in Arizona have been in litigation since 1979 before the Superior Court of the State of Arizona 

in and for the County of Apache in an action encaptured In re The 

General Adjudication of All Rights to Use Water in the Little Colorado River. Public policy favors the resolution of such claims by 

means of negotiated settlements, rather than through lenghty and 

costly litigation. 

After more than four years of negotiations amongst representative of the United States, the Zuni Tribe, the State of Arizona, the 

Salt River Project, Tucson Electric Power Company, local irrigation 

companies, and neighboring non-Indian communities located in the 

Little Colorado River basin, on June 7, 2002, the parties entered 

into a settlement agreement (Settlement Agreement) to resolve all 

of the tribe’s claims to water rights, to assist the tribe in acquiring 

surface water rights, to provide for the tribe’s use of groundwater, 

and to provide for the restoration of riparian wetlands of great cultural and religious significance to the tribe. The proposed legislation ratifies and confirms that Settlement Agreement, and authorizes the appropriation of funds necessary to carry out its terms. 

The legislation also approves, ratifies, and confirms various related 

agreements among the parties. 

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Because of the unique nature of the Zuni Heaven Reservation 

and the purposes for which it was established, the terms of the Settlement Agreement and the provisions of S. 2743 which seek to implement the Settlement Agreement in some instances represent a 

departure from standard principles of Federal-Indian law. The 

Committee recognizes these unique circumstances and the history 

which gives rise to them, and further recognizes that the provisions 

of the Settlement Agreement and the implementing legislation are 

intended to address the unique circumstances as well as the respective positions of the parties to the Settlement Agreement, and 

are not intended to establish a precedent for other settlements of 

tribal claims to land and water rights. 

LEGISLATIVE HISTORY

S. 2743 was introduced on July 17, 2002, by Senator Kyl, for 

himself and Senator McCain, and was referred to the Committee 

on Indian Affairs. The Committee held a hearing on S. 2743 on 

July 18, 2002. On October 1, 2002, the Committee, by voice vote, 

ordered the bill favorably reported to the Senate with an amendment in the nature of a substitute, with the recommendation that 

the Senate do pass S. 2743 as reported. 

COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

The Committee on Indian Affairs, in an open business meeting 

on October 1, by voice vote approved S. 2743, with an amendment 

in the nature of a substitute, and ordered the bill, as amended, to 

be reported favorably to the Senate. 

SECTION-BY-SECTION ANALYSIS

Section 1.—Short title 

Section 1 cites the short title of the bill as the Zuni Indian Tribe 

Water Rights Settlement Act of 2002. 

Section 2.—Findings and purposes 

Section 2(a) sets forth 9 Congressional findings that provide the 

rationale and basis for the decision by all parties, including the 

United States, to resolve the tribal water claims by negotiated settlement. 

Section 2(b) describes the purposes of S. 2743, which include to 

approve, ratify, and confirm the Settlement Agreement entered into 

by the tribe and neighboring non-Indians, to authorize and direct 

the Secretary of the Interior (Secretary) to execute and perform the 

Settlement Agreement and related waivers, to authorize and direct 

the United States to take legal title to certain lands and to hold 

such lands in trust for the benefit of the tribe, and to authorize the 

actions, agreements, and appropriations as provided for in the Settlement agreement S. 2743. 

Section 3.—Definitions 

Section 3 provides 11 definitions for terms employed in the bill. 

These terms are: ‘‘Eastern LCR Basin,’’ ‘‘Fund,’’ ‘‘Intergovernmental 

Agreement,’’ ‘‘Pumping Protection Agreement,’’ ‘‘Reservation’’ or 

‘‘Zuni Heaven Reservation,’’ ‘‘Secretary,’’ ‘‘Settlement Agreement,’’

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‘‘SRP,’’ ‘‘TEP,’’ ‘‘Tribe,’’ ‘‘Zuni Indian Tribe,’’ or ‘‘Zuni Indian Tribe,’’

and ‘‘Zuni Lands.’’

Section 4.—Authorizations, ratifications, and confirmations 

Section 4(a) approves, ratifies, confirms, and declares to be valid 

the Settlement Agreement, to the extent it does not conflict with 

the provisions of S. 2743. It also authorizes and directs the Secretary to execute the Settlement Agreement and any necessary 

amendments thereto to make the Settlement Agreement consistent 

with this legislation. 

Section 4(b) authorizes the appropriation, to the Zuni Indian 

Tribe Water Rights Fund established in § 6(a), $19,250,000, to be 

allocated by the Secretary as follows: $3,500,000 in FY 2004 for the 

acquisition of at least 2,350 acre-feet per year of water rights and 

associated lands and for related activities, the acquisition to be 

completed by the deadline set forth in § 9(b), and $15,750,000, to 

be appropriated in three equal installments in FY 2004, 2005, and 

2006, to restore, rehabilitate, and maintain the Zuni Heaven Reservation, including the Sacred Lake, wetlands, and riparian acreas. 

The Committee has been advised by the parties that in the event 

the deadline set forth in the Settlement Agreement is in conflict 

with the schedule of funding set forth in this subsection, the Settlement Agreement will be amended to conform to the provisions of 

S. 2743. 

Section 4(c) provides that, except as provided in § 9, the following 

three agreements, including amendments, are approved, ratified, 

confirmed, and declared to be valid: the agreement between the 

Salt River Project Agricultural Improvement and Power District, 

the tribe, and the United States on behalf of the tribe dated June 

7, 2002; the agreement between Tucson Electric Power Company,

the tribe, and the United States on behalf of the tribe dated June 

7, 2002; and the agreement between the Arizona State Land Department, the tribe, and the United States on behalf of the tribe 

dated June 7, 2002. 

Section 5.—Trust lands 

Section 5(a) provides that, upon satisfaction of conditions set 

forth in paragraph 6.2 of the Settlement Agreement and the requirements of § 9(a), the Secretary shall take the legal title to certain lands identified in this subsection into trust for the benefit of 

the tribe. 

Section 5(b) provides that, following the acquisition by the tribe 

of certain lands identified in this subsection and upon satisfaction 

of conditions set forth in paragraph 6.2 of the Settlement Agreement and the requirements of § 9(a), the Secretarys shall take the 

legal title to those lands into trust for the benefit of the tribe. 

Section 5(c) provides that, following the acquisition by the tribe 

of certain lands identified in this subsection and upon satisfaction 

of conditions set forth in paragraph 6.2 of the Settlement Agreement and the requirements of § 9(a), the Secretary shall take the 

legal title to those lands into trust for the benefit of the tribe and 

shall make such lands part of the Zuni Indian Tribe Reservation. 

Section 5(d) provides that the Secretary shall have no discretion 

regarding the acquisitions described in subsection (a), (b), and (c). 

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Section 5(e) provides that no lands within Arizona, other than 

the land described in subsection (a), (b), and (c), shall hereafter be 

taken into trust by the United States for the benefit of the tribe 

except by authority of an Act of Congress enacted after the date of 

enacted of this legislation and specifically authorizing the taking of 

lands into trust for the benefit of the tribe. 

Section 5(f) provides that any written certification by the Secretary under subparagraph 6.2.B of the Settlement Agreement constitutes final agency action under the Administrative Procedures 

Act and is reviewable as provided under chapter 7 of title 5, United 

States Code. 

Section 5(g) provides that lands taken into trust pursuant to subsection (a), (b), or (c) shall not have Federal reserved rights to surface water or groundwater. 

Section 5(h) provides that water rights and uses for lands taken 

into trust pursuant to subsections (a) or (c) must be determined 

under subparagraph 4.1.A and article 5 of the Settlement Agreement. The tribe retains any rights or claims to water associated 

with lands taken into trust pursuant to subsection (b) under State 

law, subject to the terms of the Settlement Agreement. 

Section 5(i) provides that water rights appurtenant to lands 

taken into trust pursuant to subsections (a), (b), or (c) shall not be 

subject to forfeiture and abandonment. 

Section 5(j) provides that, with respect to lands taken into trust 

pursuant to subsection (a) and (b), the tribe shall make payments 

in lieu of all current and future State, county, and local ad valorem 

property taxes that would otherwise be applicable to those lands if 

they were not in trust. 

Section 5(k) provides that the tribe is authorized to enter the 

Intergovernmental Agreement with Apache County, Arizona, and 

the State of Arizona identified in § 3(3) and any intergovernmental 

agreement required to be entered into by the tribe under the terms 

of the Intergovernmental Agreement. The scope of the intergovernmental agreements to be entered into by the tribe under the terms 

of the Intergovernmental Agreement is as set forth in subparagraph 6.2.A of the Settlement Agreement. 

Section 5(l) provides that the Secretary shall acknowledge the 

terms of any intergovernmental agreement entered into by the 

tribe under this section and shall not, in any administrative or judicial action, seek to abrogate the terms of any such intergovernmental agreement consistent with subparagraph 6.2.A of the Settlement Agreement and S. 2743. The subsection further provides 

that if the United States is permitted to intervene in a judicial action commenced during a dispute over any intergovernmental 

agreement entered under this section, the United States shall not 

remove the action to the Federal courts, except that the United 

States may seek removal if the action concerns the Secretary’s action regarding the issuance of rights-of-way under § 8(c), the authority of a Federal agency to administer programs or the issuance 

of a permit under the Federal Water Pollution Control Act (33 

U.S.C. § § 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. 

§ § 300f et seq.), the Clean Air Act (42 U.S.C. § § 7401 et seq.), or 

any other Federal law specifically addressed in intergovernmental 

agreements, or if the intergovernmental agreement is inconsistent 

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with a Federal law for the protection of civil rights, public health, 

or welfare. 

Section 5(m) provides that nothing in this legislation shall be 

construed to affect the application of the Act of May 25, 1918 (25 

U.S.C. § 211) within the State of Arizona. Section 5(m) does not affect the application of Jicarilla Apache Tribe v. State of New Mexico, 742 F. Supp. 1487 (D. N.M. 1990), in the State of New Mexico, 

or the application of Masayesva v. Zah, 792 F. Supp. 1165 (D. Ariz. 

1992), in the State of Arizona. 

Section 5(n) provides that nothing in this section repeals, modifies, amends, changes, or otherwise affects the Secretary’s obligation to the tribe pursuant to P.L. 98–408, 98 Stat. 1533, as amended by the Zuni Claims Settlement Act of 1990, P.L. 101–486, 104 

Stat. 1174. 

Section 6.—Development fund 

Section 6(a) establishes the Zuni Indian Tribe Water Rights Development Fund (Fund) in the Treasury of the United States, to be 

managed and invested by the Secretary and to consist of funds appropriated under section 4(b), the appropriation to be contributed 

by the State of Arizona pursuant to paragraph 7.6 of the Settlement Agreement, and any other funds paid to the Secretary on behalf of the Zuni Tribe pursuant to the Settlement Agreement. 

Section 6(b) provides that the Secretary, in the management, investment, and disbursement of the Fund, shall comply with the 

American Indian Trust Fund Management Reform Act of 1994 (25 

U.S.C. § § 4001 et seq.) (Trust Fund Reform Act), S. 2743, and the 

Settlement Agreement. 

Section 6(c) provides that investment of the assets of the Fund 

by the Secretary shall comply with the Act of April 1, 1880 (25 

U.S.C. § 161), the first section of the Act of June 24, 1938 (25 

U.S.C. § 162a), and subsection (b). 

Section 6(d) provides that funds appropriated pursuant to 

§ 4(b)(2) and funds contributed by the State of Arizona pursuant to 

paragraph 7.6 of the Settlement Agreement shall be available for 

expenditure or withdrawal only after the requirements of § 9(a) 

have been met. 

Section 6(e) provides that the tribe may make withdrawals from 

the Fund only after the Secretary has approved a tribal management plan as described in the Trust Fund Reform Act which requires that funds be spent only for the purposes set forth in § 4(b). 

The Secretary is authorized to take judicial or administrative action to enforce the requirement that the assets of the Fund be used 

only in accordance with the provisions of S. 2743. Neither the Secretary or the Secretary of the Treasury shall have any liability for 

the expenditure or investment of monies withdrawn from the Fund 

(the inclusion of this provision is not intended to suggest, however, 

that existing law does not fully protect the United States from liability under these circumstances, as it is the Committee’s view 

that 25 U.S.C. § 4022(c) would provide such protection). The tribe 

is to submit an expenditure plan for approval by the Secretary as 

to any monies held in the Fund that are not withdrawn pursuant 

to this subsection. The plan is to describe the manner in which, 

and the purposes for which, such monies will be used. The Secretary is to approve the tribal management plan if the Secretary 

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determines that the plan is reasonable and is consistent with the 

provisions of S. 2743. The tribe is to submit to the Secretary an annual report describing all expenditures from the Fund during the 

period of the report. 

Section 6(f) provides that notwithstanding subsection (e), funds 

authorized to be appropriated pursuant to § 4(b)(1) shall be available for use upon appropriation in accordance with § 4(b)(1) and 

shall be distributed by the Secretary to the tribe upon receipt by 

the Secretary of a written notice from the tribe and a tribal council 

resolution describing the purposes for which the funds will be used. 

In the event the requirements of § 9(a) are not met and the Settlement Agreement becomes null and void pursuant to § 9(a), the 

United States may set off any funds expended or withdrawn from 

the amount appropriated pursuant to § 4(b)(1), together with any 

accrued interest, against any claims asserted by the tribe against 

the United States relating to water rights of the Zuni Heaven Reservation. Any water rights acquired with funds described in this 

subsection are to be credited against any water rights secured for 

the Zuni Heaven Reservation by the tribe, or by the United States 

on behalf of the tribe, in the Little Colorado River General Stream 

Adjudication or in any future settlement of claims for those water 

rights. 

Section 6(g) provides that no part of the Fund shall be distributed on a per capita basis to members of the tribe. 

Section 7.—Claims extinguishment; waivers and releases 

Section 7(a) provides that the benefits realized by the tribe and 

its members under this legislation, including retention of any 

claims and rights, shall constitute full satisfaction of all members’ claims for water rights under Federal, State, and other laws (including claims rights in groundwater, surface water, and effluent) 

for Zuni Lands (as defined in § 3(11)) from time immemorial 

through the effective date set forth in § 9(a), and for injuries during 

that period to such rights (including also claims for damages for 

deprivation of water rights and for changes to underground water 

tables) under Federal, State, and other laws. The legislation is not 

intended to recognize or establish any right of a member of the 

tribe to water on the Zuni Heaven Reservation. 

Section 7(b) authorizes the tribe, on behalf of itself and its members, and the Secretary, on behalf of the United States in its capacity as trustee for the tribe and its members, as part of their obligations under the Settlement Agreement, to execute a waiver and release of claims against the State of Arizona, any agency or political 

subdivision thereof, or any other person under Federal, State, or 

other law, for: (1) past, present, and future claims (from time immemorial to the effective date set forth in § 9(a) and any time 

thereafter) to water rights (including groundwater, surface water, 

and effluent) for Zuni Lands, except as provided in article 5 of the 

Settlement Agreement; (2) past and present claims (to the effective 

date set forth in § 9(a)) for injuries to water rights (including also 

claims for damages for deprivation of water rights and changes to 

underground water tables); and (3) past, present, and future claims 

for water rights and injuries to water rights (including also claims 

for damages for deprivation of water rights and changes to underground water tables) for lands outside of the Zuni Lands but loVerDate Mar 21 2002 04:39 Oct 16, 2002 Jkt 005300 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\WAISREPT\SR301.107 txed01 PsN: PFRM67
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cated within the Little Colorado River basin in Arizona and based 

upon aboriginal occupancy of lands by the tribe and its predecessors. 

Section 7(c) authorities the tribe, as part of the performance of 

its obligations under the Settlement Agreement, to execute a waiver and release (subject to paragraphs 11.4 and 11.6 of the Settlement Agreement) for claims against the United States (acting in its 

capacity as trustee for the tribe and its members or otherwise acting on their behalf), its agencies, officials, and employees, for: (1) 

past, present, and future claims (from time immemorial to the effective date set forth in § 9(a) and any time thereafter) to water 

rights for Zuni lands (including groundwater, surface water, and effluent) and any claims for damages for deprivation of such water 

rights; (2) past and present claims (to the effective date set forth 

in § 9(a)) for injuries to and deprivation of such water rights for 

Zuni Lands; and (3) past, present, and future claims for water 

rights (including groundwater, surface water, and effluent) as well 

as for injuries to and claims for deprivation of such water rights 

for lands outside the Zuni Lands but located within the Little Colorado River basin in Arizona and based upon aboriginal occupancy 

of lands by the tribe and its predecessors. 

Section 7(d)(1) authorizes the tribe, on behalf of itself and its 

members, to waive and release all claims against the State of Arizona, its agencies and political subdivisions, and any other person 

under Federal, State, or other law for claims of interference with 

the trust responsibility of the United States to the tribe arising out 

of the negotiation of the Settlement Agreement or S. 2743, as well 

as all claims against those same entities (subject to paragraphs 

11.4, 11.6, and 11.7 of the Settlement Agreement) for past and 

present claims, including natural resource damage claims under 

the Comprehensive Environmental Response, Compensation, and 

Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.) (CERCLA), the Oil 

Pollution Act of 1990 (33 U.S.C. §§ 2701 et seq.) (OPA), or any 

other applicable statute, for injury to water quality accruing from 

time immemorial through the effective date set forth in § 9(a) for 

lands within the Little Colorado River basin in the State of Arizona. The tribe is also authorized to waive future claims, including 

natural resource claims under CERCLA, OPA, or any other applicable statute, for lands within the Eastern Little Colorado River 

[LCR] basin (as defined in § 3(1) caused by the lawful diversion or 

use of surface water, the lawful withdrawal of water (except within 

the Zuni Protection Area as provided in article 5 of the Settlement 

Agreement), the parties’ performance of any obligations under the 

Settlement Agreement, the discharge of oil associated with routine 

physical or mechanical maintenance of wells or diversion structures 

not inconsistent with applicable law, the discharge of oil associated 

with routine start-up and operation of well pumps not inconsistent 

with applicable law, or any combination thereof.

Section 7(d)(2) authorizes the tribe, on behalf of itself and its 

members, to waive its right to request that the United States bring 

any claims for injuries to water quality under the natural resource 

damage provisions of CERCLA, OPA, or any other applicable statute, for lands within the Little Colorado River basin in the State 

of Arizona accruing from time immemorial through the effective 

date set forth in § 9(a), as well as future claims for injuries or 

9

threat of injuries to water quality under the natural resource damage provisions of CERCLA, OPA, or any other applicable statute, 

for lands within the Eastern LCR basin caused by the lawful diversion or use of surface water, the lawful withdrawal of water (except 

within the Zuni Protection Area as provided in article 5 of the Settlement Agreement), the parties’ performance of any obligations 

under the Settlement Agreement, the discharge of oil associated 

with routine physical or mechanical maintenance of wells or diversion structures not inconsistent with applicable law, the discharge 

of oil associated with routine start-up and operation of well pumps 

not inconsistent with applicable law, or any combination thereof. 

Section 7(d)(3) provides that notwithstanding the waivers of future water quality claims authorized in paragraphs (1)(B) and 

(2)(B) of this subsection, the tribe, on behalf of itself and its members, retains any statutory claims for injury or threat of injury to 

water quality under CERCLA and OPA as described in subparagraphs 11.4(D)(3) and (4) of the Settlement Agreement that accrue 

at least 30 years after the effective date set forth in § 9(a). 

Section 7(e) provides that the United States, as part of the performance of its obligations under the Settlement Agreement, 

waives and releases past and present claims (subject to the limitations set forth in paragraphs 11.4, 11.6, and 11.7 of the Settlement 

Agreement) against the State of Arizona, its agencies and political 

subdivisions, and any other entity for: past and present common 

law claims accruing from time immemorial to the effective date set 

forth in § 9(a) arising for or relating to water quality in which the 

injury asserted is to the tribe’s interest in water, trust land, and 

natural resources in the Little Colorado River basin in the State 

of Arizona; and all past and present natural resource damage 

claims accruing through the effective date set forth in § 9(a) based 

on injury or threat to natural resources in the Little Colorado River 

basin in Arizona, but only for those cases in which the United 

States, or any Federal official, would act on behalf of the tribe as 

a natural resource trustee pursuant to the Natural Resource Contingency Plan as set forth in 40 CFR § 300.600(b)(2) on the effective 

date of this legislation under § 9(a). This subsection further provides that the United States, subject to the retentions set forth in 

paragraphs 11.4, 11.6, and 11.7 of the Settlement Agreement, also 

waives and releases future common law claims against the State 

of Arizona, its agencies and political subdivisions, and any other 

entity arising from or relating to water quality in which the injury 

asserted is to the tribe’s interest in water, trust land, and natural 

resources in the Eastern LCR basin in Arizona accruing after the 

effective date described in § 9(a) and caused by the lawful diversion 

or use of surface water, the lawful withdrawal of water (except 

within the Zuni Protection Area as provided in article 5 of the Settlement Agreement), the parties’ performance of any obligations 

under the Settlement Agreement, the discharge of oil associated 

with routine physical or mechanical maintenance of wells or diversion structures not inconsistent with applicable law, the discharge 

of associated with routine start-up and operation of well pumps not 

inconsistent with applicable law, or any combination thereof. 

Section 7(f) provides that, subject to subsection (b) and (e), nothing in S. 2743 or the Settlement Agreement affects any right of the 

United States, or the State of Arizona, to take any actions (includVerDate Mar 21 2002 04:39 Oct 16, 2002 Jkt 005300 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\WAISREPT\SR301.107 txed01 PsN: PFRM67
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ing enforcement actions) under any laws (including regulations) relating to human health, safety, and the environment. 

Section 8.—Miscellaneous provisions 

Section 8(a) provides for the waiver of the sovereign immunity of 

the United States and the Tribe (except as to claims for money 

damages not specifically provided for in the Settlement Agreement) 

in the event any party to the Settlement Agreement or a Pumping 

Protection Agreement files a lawsuit only relating to the interpretation or enforcement of this legislation, certain agreements identified in § 4(c), or a Pumping Protection Agreement. this subsection 

also provides for a waiver of Federal and tribal immunity, with the 

same limitation, if a landowner or water user in the Little Colorado 

River basin in Arizona files a lawsuit only relating to directly to 

the interpretation or enforcement of Article 11 of the Settlement 

Agreement, the rights of de minimis users in subparagraph 4.2.D 

of the Settlement Agreement, or the rights of underground water 

users under Article 5 of the Settlement Agreement. The tribe is authorized to waive its sovereign immunity from suit in the superior 

Court of Apache County, Arizona (except with claims for monetary 

awards not specifically authorized in the Intergovernmental Agreement) for the limited purposes of enforcing the terms of the Intergovernmental Agreement and any intergovernmental agreement required to be entered into by the tribe under the terms of the Intergovernmental Agreement. Although the text of the legislation does 

not address the issue of a waiver of the sovereign immunity of the 

State of Arizona, the waiver of tribal sovereign immunity set forth 

herein is grounded in assurances made to the Committee that the 

tribe has adequate and reciprocal judicial remedies against the 

State. The Committee views S. 2743 as a contract, and the availability to the tribe of such remedies is a basic assumption of that 

contract. 

Section 8(b) provides that, with respect to water rights made 

available under the Settlement Agreement and used on the Zuni 

Heaven Reservation, such rights shall be held in trust by the 

United States in perpetuity and shall not be subject to forfeiture 

or abandonment. The subsection further provides that State law 

shall not apply to water uses on the Zuni Heaven Reservation, and 

that water rights and uses on the Zuni Heaven Reservation shall 

not be subject to State law or regulation, except that the court with 

jurisdiction over the decree entered pursuant to the Settlement 

Agreement or the Norviel Decree Court may assess administrative 

fees for delivery of this water. 

Section 8(c) provides that land taken into trust pursuant to 

§§ 5(a) and 5(b) shall be subject to existing easements and rightsof-way and that, notwithstanding any other provision of law, the 

Secretary, in consultation with the tribe, shall grant additional 

rights-of-way or expansions of existing rights-of-way for roads, utilities, and other accommodations to adjoining landowners if the proposed right-of-way: (1) is necessary to the needs of the applicant; 

(2) will not cause significant and substantial harm to the Tribe’s 

wetland restoration project or religious practices; and (3) will comply with the procedures in part 169 of title 25, Code of Federal 

Regulations (where not inconsistent with this subsection) and with 

11

other generally applicable Federal laws unrelated to the acquisition 

of interests across trust lands. 

Section 8(d) provides that the United States shall not seek reimbursement of costs arising out of the implementation of S. 2743 or 

of the Settlement Agreement against any Indian-owned land within 

the tribe’s Reservation, or make any assessment against such lands 

in regard to such costs. 

Section 8(e) provides that, except as provided in paragraph 5.3 

of the Settlement Agreement (recognizing the tribe’s use of 1,500 

acre-feet per annum of groundwater), neither S. 2743 nor the Settlement Agreement create any vested right to groundwater under 

Federal or State law, or any priority to the use of groundwater 

under Federal or State law that would be superior to any other 

right or use of groundwater. Notwithstanding this limitation, the 

rights of parties to the intergovernmental agreements referred to 

§§ 4(c)(1), (2), or (3) and in paragraph 5.8 of the Settlement Agreement, as among themselves shall be as stated in those agreements. 

Section 8(f) provides that nothing in the Settlement Agreement 

or in S. 2743 quantifies or otherwise affects the water rights, 

claims, or entitlements to water of any Indian tribe, band, or community, other than the Zuni Indian Tribe. 

Section 8(g) provides that execution of the Settlement Agreement 

shall not constitute major Federal action under the National Environmental Policy Act, 42 U.S.C. §§ 4321 et seq. (NEPA), however 

the Secretary shall comply with NEPA and shall carry out any 

other necessary compliance during the implementation of this settlement. 

Section 9.—Effective date for waiver and release authorizations 

Section 9(a) provides that the waiver and release authorizations 

contained in §§ 7(b) and 7(c) shall become effective as of the date 

the Secretary publishes in the Federal Register a statement of all 

of the following findings: (1) that this legislation has been enacted 

in a form approved by the parties in paragraph 3.1.A of the Settlement Agreement; (2) that the funds authorized by § 4(b) have been 

appropriated and deposited into the Fund; (3) that the State of Arizona has appropriated and deposited into the Fund the amount required by paragraph 7.6 of the Settlement Agreement; (4) that the 

tribe has either purchased or acquired the right to purchase at 

least 2,350 acre-feet per annum or surface water rights, or waived 

this condition pursuant to paragraph 3.2 of the Settlement Agreement; (5) that, pursuant to subparagraph 3.1.D of the Settlement 

Agreement, the severance and transfer of surface water rights that 

the tribe owns or has a right to purchase have been conditionally 

approved, or that the tribe has waived this condition as provided 

in paragraph 3.2 of the Settlement Agreement; (6) that, pursuant 

to subparagraph 3.1.E of the Settlement Agreement, the tribe and 

Lyman Water Company have executed an agreement relating to 

the severance and transfer of surface water rights acquired by the 

tribe and the United States, the pass-through, use, or storage of 

the tribe’s surface water rights in Lyman Lake, and the operation 

of Lyman Dam; (7) that, pursuant to subparagraph 3.1.F of the 

Settlement Agreement, all parties to the Settlement Agreement 

have agreed and stipulated to certain Arizona Game and Fish abstracts of water uses; (8) that, pursuant to subparagraph 3.1.G of 

12

the Settlement Agreement, all parties to the Settlement Agreement 

have agreed to the location of an observation well and that well has 

been installed; (9) that, pursuant to subparagraph 3.1.H of the Settlement Agreement, the tribe, Apache County, Arizona, and the 

State of Arizona have executed an Intergovernmental Agreement 

that satisfies all of the conditions in paragraph 6.2 of the Settlement Agreement; (10) that the tribe has acquired title to a particular section of land adjacent to the Zuni Heaven Reservation; 

(11) that the Settlement Agreement has been modified if and to the 

extent that it is in conflict with this legislation and such modification has been agreed to by all the parties to the Settlement Agreement; and (12) that a court of competent jurisdiction has approved 

the Settlement Agreement by a final judgment and decree. 

Section 9(b) provides that if the publication in the Federal Register required under subsection (a) has not occurred by December 

31, 2006, §§ 4 and 5, and any agreements entered into pursuant 

thereto (including the Settlement Agreement and the Intergovernmental Agreement) shall not thereafter be effective and shall be 

null and void. This subsection further provides that any funds and 

the interest accrued thereon appropriated pursuant to § 4(b)(2) 

shall revert to the Treasury, and any funds and the interest accrued thereon appropriated pursuant to paragraph 7.6 of the Settlement Agreement shall revert to the State of Arizona. 

COST AND BUDGETARY CONSIDERATIONS

At the time of filing this report, the cost estimate of the Congressional Budget Office on S. 2743 had yet been received. Compliance 

with Senate Rule XXVI, paragraph 11(a) is therefore impracticable 

at this time. 

EXECUTIVE COMMUNICATIONS

The Committee received written testimony for the Bureau of Indian Affairs, Department of the Interior, for the hearing on S. 2743 

held on July 18, 2002. The written testimony from the Administration is set forth below:

STATEMENT OF NEAL MCCALEB, ASSISTANT SECRETARY—

INDIAN AFFAIRS

Good morning. Mr. Chairman and members of the Committee. I am Neal McCaleb, Assistant Secretary for Indian 

Affairs at the Department of the Interior. I appreciate the 

opportunity to appear before this Committee to discuss S. 

2743, a bill to authorize a water rights settlement for the 

Zuni Heaven Reservation, in northeastern Arizona. 

The Administration generally supports the bill but has 

some concerns with certain provisions. The Administration 

has concluded, however, that the unique context presented 

by the Zuni lands in Arizona may warrant provisions of 

this nature with some modifications. For three reasons, 

the Zuni Settlement presents a unique situation. First, the 

tribal lands at issue are primarily for ceremonial use and 

generally will not be used as a homeland or to accommodate tribal members. Second, the water rights and land 

area involved are relatively small. Finally, the Settlement 

13

provides a benefit by allowing additional lands to be taken 

into trust and provides accompanying water rights. Based 

on the consideration of these unique circumstances, the 

Administration supports S. 2743 in concept. In general, 

many of the provisions found in S. 2743 are the exception 

rather than the rule and may not necessarily be appropriate in other Indian water settlements. 

In general, the settlement reached by the parties is the 

product of a cooperative effort over the last five years 

among the Zuni Tribe, the State of Arizona, the United 

States, the Salt River Project and many other local water 

users. This effort was aided greatly by the work of the 

Honorable Michael C. Nelson, Presiding Judge for Apache 

County Superior Court, who has mediated the settlement 

discussions. The Settlement Agreement has been signed by 

the Tribe and is pending formal signature by the other 

parties. 

Background 

The Little Colorado River (LCR) Basin covers an area of 

approximately 17.2 million acres or 26,964 square miles in 

northeastern Arizona and northwestern New Mexico. The 

main stem of the Little Colorado River is entirely in Arizona. Therefore, this adjudication deals only with claims 

inside the borders of Arizona. Five different Indian tribes 

have reservations, or pending claims to reservation lands, 

within the Basin: the Navajo Nation, Hopi Tribe, Zuni 

Tribe, San Juan Southern Paiute Tribe and the White 

Mountain Apache Tribe. 

The settlement agreement at issue here concerns only 

the Zuni Tribe’s relatively small water right claims at the 

Zuni Heaven Reservation located in the south eastern section of the Basin, at the confluence of the Zuni and Little 

Colorado Rivers. Zuni Heaven is a unique reservation created fairly recently to accommodate the religious and cultural practices of the Zuni. The main Zuni reservation, in 

contrast, is located in New Mexico. The majority of the 

Zuni members reside on the main reservation. 

According to Zuni religious beliefs, a lake formerly located on the Zuni Heaven Reservation is a window into 

heaven. That lake and the surrounding wetlands disappeared in recent history due to upstream diversions and 

groundwater pumping in the surrounding areas. The Settlement provides the Tribe with the water and land to restore the lake for use in future religious ceremonies.

The Zuni Heaven Reservation was established by Congress in 1984 through Public Law 98–498 and expanded in 

1990 through Public Law 101–486 to further the religious 

and cultural needs of the Tribe. That legislation established the land base of the Reservation within the Tribe’s 

aboriginal territory and facilitated the Tribe’s regular pilgrimage from New Mexico to Arizona by authorizing the 

United States to obtain easements along the pilgrimage 

route. 

14

Since 1979, water rights in the Little Colorado river 

basin have been the subject of an Arizona state general 

stream adjudication. The United States file a water rights 

claim on behalf of the Zuni Tribe in the state proceeding 

for water rights to Zuni Heaven. Mirroring most general 

stream adjudications, the litigation has moved very slowly. 

Recognizing that the Zuni claims lent themselves to settlement, the parties devoted significant effort to negotiations. 

The Settlement Agreement and S. 2743, which would ratify that agreement, are the fruits of that negotiation. 

The draft legislation (S. 2743) 

S. 2743 approves and authorizes federal participation in 

the main settlement agreement, which includes three subsidiary agreements with individual parties. When fully implemented, this agreement would constitute a final settlement of the water rights claims of the Zuni Tribe and the 

United States’ claims on behalf of Zuni. The settlement 

agreement will secure a water budget of approximately 

5,500 acre-feet per year, including both surface water and 

groundwater, for the rehabilitation and restoration of the 

Sacred Lake, wetlands and riparian areas of the Reservation. The surface water component of this water budget 

would be secured through the purchase of state law base 

water rights from willing sellers, as well as through flood 

flows of the Little Colorado River. To supplement surface 

flows in times of drought and to allow for the initiation of 

restoration activities while surface water rights are acquired, the settlement provides for a groundwater right of 

1,500 acre feet per year. 

The settlement involves significant cost sharing and cooperation among the federal government and the state and 

local parties. The Tribe’s non-Indian neighbors have 

agreed to assist in the acquisition of water rights, to store 

surface water supplies for the Tribe, and to make other 

contributions to carry out the settlement. In addition, 

some water supplies for the settlement will be secured 

through up to $6 million in water protection grants funded 

by the State of Arizona. The federal contribution of $19.25 

million to the settlement would be authorized. These federal funds would be used for the acquisition of water 

rights, as well as other actions necessary to restore the Sacred Lake, the wetlands and riparian areas of the Zuni 

Heaven Reservation. 

We believe the federal contribution contemplated in S. 

2743 is appropriate to facilitate resolution of the Zuni 

Tribe’s claims. The settlement is designed to release the 

United States from any potential damage claims that 

might be asserted by the Tribe and to relieve the government of the obligation to litigate, at significant cost and 

over many years, the Tribe’s water rights claims. At the 

same time, a final resolution of the Tribe’s water rights 

claims would provide certainty to its neighbors, enabling 

them to plan and make necessary investments based on 

15

the assurance that they have secure and stable water 

rights. 

Concerns with the draft legislation 

The Administration in concept supports the settlement 

set forth in S. 2743, but has a few areas of concern with 

the bill as drafted. We are committed to working with the 

Committee, Senator Kyl, and the settlement parties during 

the upcoming August recess in this regard to reach a mutually agreeable solution. 

We believe through working with the Committee and 

Senator Kyl, we can improve the following areas of the 

bill: Our first area of concern are the water quality waivers. The broad waivers within S. 2743 need to be clarified 

to avoid future litigation regarding the distinction between 

the sovereign capacity and trust capacity of the United 

States and to safeguard the authority of the United States 

enforcement authority. Second, the provisions regarding 

rights-of-way across tribal trust land conflict with established law and may lead to unnecessary litigation. Third, 

the United States opposes any additional waiver of its sovereign immunity as there exist sufficient avenues to address the interpretation or enforcement of S. 2743. Fourth, 

S. 2743 raises a concern regarding the authority of the 

United States to remove actions to a federal court. Finally, 

S. 2743 treats land taken into trust as state lands for purposes of environmental regulation and permitting, contrary 

to current law and practice. The United States believes, 

however, that the intentions of the parties to the Settlement Agreement can be addressed thorough alternative 

language while reducing litigation risk. 

Conclusion 

Negotiated agreements among Indian tribes, states, local 

parties, and the federal government, in general, are the 

most effective way to resolve reserved water right claims 

in a manner that secures tribal rights to assured water 

supplies for present and future generations while at the 

same time providing for sound management of an increasingly scare resource. The known benefits of settlement 

generally outweigh the uncertainties that are inherent in 

litigation to the Tribe, the state, other interested parties 

and the United States. On balance, the very unique circumstances of the Zuni and their lands and the benefits of 

this settlement, with certain modifications, outweigh concerns regarding these unusual aspects of this settlement. 

We appreciate Senator Kyl’s commitment to working 

with us and look forward to working closely with the Committee and the settlement parties to refine and clarify the 

language of S. 2743 to ensure that this legislation can be 

enacted into a law that advances the interests of all parties.

On August 15, 2002, the Committee submitted several questions 

to the Secretary of the Interior regarding the proposed legislation, 

and on September 20, 2002, the Administration submitted its reVerDate Mar 21 2002 04:39 Oct 16, 2002 Jkt 005300 PO 00000 Frm 00015 Fmt 6659 Sfmt 6602 E:\WAISREPT\SR301.107 txed01 PsN: PFRM67
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sponse to the Committee’s August 15, 2002, letter. The Committee’s questions and the Administration’s response are set forth 

below:

U.S. SENATE, 

COMMITTEE ON INDIAN AFFAIRS, 

Washington, DC, August 15, 2002. 

Hon. GALE NORTON, 

Secretary, Department of the Interior, 

Washington, DC. 

DEAR SECRETARY NORTON: I am writing to enclose questions 

from the U.S. Senate Committee on Indian Affairs in following up 

to the Committee’s hearing on S. 2743, a bill to approve the settlement of water rights claims of the Zuni Indian Tribe in Apache 

County, Arizona, and for other purposes. 

The Committee would very much appreciate the Department’s 

views on the legal issues implicated by a number of provisions of 

the bill. 

Sincerely, 

DANIEL K. INOUYE, Chairman. 

Enclosure. 

QUESTIONS REGARDING S. 2473

1. Section 5(j) 

Section 5 of the proposed legislation directs that certain lands 

shall be taken into trust by the United States on behalf of the Zuni 

Tribe. Section 5(j)(1) provides that ‘‘such lands shall not be considered lands within an Indian reservation or lands owned or held by 

any Indian for the purposes of Article 20, paragraph 5 of the Arizona Constitution, for the purpose of paying in lieu taxes pursuant 

to this subsection and the Intergovernmental Agreement between 

the Zuni Tribe, Apache County, Arizona, and the State of Arizona.’’

Section 5(j)(2) provides that ‘‘the Zuni Tribe shall make payments 

in lieu of all current and future State, county, and local ad valorem 

property taxes that would otherwise be applicable to those lands if 

they were not in trust.’’

Article 20, paragraph 5, of the Constitution of the State of Arizona provides in relevant part that ‘‘no taxes shall be imposed by 

this State on any lands or other property within an Indian reservation owned or held by any Indian; but nothing herein shall preclude the State from taxing as other lands and other property are 

taxed, any lands and other property outside of an Indian Reservation owned or held by any Indian, save and except lands as have 

been granted or acquired as aforesaid, or as may be granted or confirmed to any Indian or Indians under any act of Congress.’’

Congress certainly has the authority to allow a state to tax Indian lands that would otherwise be free from tax, and it can authorize states to impose payments in lieu of taxes as S. 2743 does 

in Section 5(j)(2). Congress can also determine whether or not particular lands shall be considered ‘‘lands within an Indian reservation or lands owned or held by any Indian’’ for purposes of Federal 

law. It does not however appear that Congress holds the power, 

under the Constitution, to direct the State of Arizona to characVerDate Mar 21 2002 04:39 Oct 16, 2002 Jkt 005300 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\WAISREPT\SR301.107 txed01 PsN: PFRM67
17

terize these lands in any particular manner for purposes of determining the applicability of provisions of the Arizona Constitution, 

as Section 5(j)(1) purports to do, where none of the possible interpretations would infringe on any Federal law or right. While Congress can authorize Arizona to impose such a burden on Indian 

lands, it cannot override a prohibition on the exercise of such authority set forth in state law, if such exists, because ‘‘to the extent 

that a claimed bar to state jurisdiction * * * is premised on the 

[] state Constitution[], that is a question of state law over which 

the state courts have binding authority.’’ Arizona v. San Carlos 

Apache Tribe of Arizona, 463 U.S. 545, 561 (1983). The present 

wording of Section 5(j)(1) thus appears to intrude impermissibly 

into an area of state authority. 

Question. In light of the above, is it the position of the United 

States that the proposed language of section 5(j)(1) is consistent 

with all constitutional limitations on the power of Congress? 

Question. If Section 5(j)(1) as drafted is constitutionally inform, 

is substitute language (‘‘notwithstanding the provisions of the Arizona Enabling Act * * *’’ or some similar language?) necessary to 

authorize the State of Arizona and its political subdivisions to require the Zuni Tribe to make payments in lieu of taxes on these

lands (assuming but not determining that such authority would 

exist under Arizona law), or is the present language of Section 

5(j)(2) sufficient to provide such authority? 

2. Sections 5(k), 5(l) 

Section 5(k) authorizes the Zuni Tribe to enter into an Intergovernmental Agreement with the State of Arizona and Apache County and ‘‘any intergovernmental agreement required to be entered 

into by the Tribe under the terms of the Intergovernmental Agreement.’’ Section 5(l) provides that the Secretary of the Interior shall ‘‘acknowledge the terms’’ of these agreements and prohibits the 

Secretary from seeking to abrogate their terms. Nothing in Section 

5(k) limits the scope of the subject matter of these agreements. 

These documents have not been made available to the Committee, 

and it is unclear whether any binding agreement has yet been executed by the parties as to their content. Congressional authorization of the execution of these Intergovernmental Agreements, in advance of any final determination of their scope and contents, could 

deprive Congress of the ability to review Intergovernmental Agreements that, as ultimately negotiated by the parties, may have an 

impact on tribal lands or resources to which the United States hold 

legal title. 

Question. Please provide copies of any agreements to be authorized by section 5(k), including evidence, if available, that the parties have entered into binding agreements as to their terms. 

Question. If the parties to the agreements to be authorized by 

section 5(k) have not yet entered into binding agreements as to 

their terms, please identify any legally binding restrictions upon 

which Congress can rely to insure that its advance approval of 

agreements the terms of which are yet to be established does not 

subject the Zuni Tribe to the risk that other prospective parties to 

these agreements will refuse to bargain in good faith. Alternatively, 

please propose new statutory language that would preclude such a 

result. 

18

3. Section 5(l) 

Section 5(l)(3) prohibits the United States from removing an action to Federal court if the United States intervenes in an action 

regarding an intergovernmental agreement. The effect of this provision is closely linked to issues of sovereign immunity addressed 

below with regard to section 8(a), and questions regarding removal 

appear with the discussion of that provision. 

4. Section 6(e) 

Section 6(e) of the bill provides that neither the Secretary of the 

Interior nor the Secretary of the Treasury shall have any liability 

‘‘for the expenditure of investment of the monies withdrawn’’ by the 

tribe from the Water Rights Development Fund. No mention is 

made of the liability of the United States itself. 

Question. Is the language insulating the two Secretaries from liability also intended to protect the United States from liability and, 

if so, does it in fact have that effect? 

Question. Does 25 U.S.C. 4022(c) already provide the protection 

from liability Section 6(e) is intended to provide? 

5. Section 7(b) 

Section 7(b)(5) waives the claims of the Zuni Tribe and of the 

United States in its capacity as trustee for the tribe for certain ‘‘future claims for injuries to water quality’’ accruing after the effective date of the legislation. 

Question. Does the waiver of certain future claims for injuries to 

water quality contained in section 7(b), or any other provision of 

the bill, limit the authority of the Environmental Protection Agency, or any other Federal agency, to regulate water quality under 

the Clean Water Act or other legal authority or to seek compensation for damages to natural resources? If not, is the present language narrowly tailored and does it express that intention with sufficient clarity and specificity? 

Question. What precedents exist in other legislation for a statutory waiver for future claims of this kind? 

6. Section 7(c)(5) 

Section 7(c)(5) of the bill authorizes the tribe to waive ‘‘claims for 

breach of the trust responsibility of the United States to the Zuni 

Tribe arising out of the negotiation of the Settlement Agreement or 

this Act.’’ The Restatement (Second) of Trust, 216(2) states that ‘‘The consent of the beneficiary does not preclude him from holding the 

trustee liable for a breach of trust, if * * * (b) the beneficiary, 

when he gave his consent, did not know of his rights and of the 

material facts which the trustee knew or should have known and 

which the trustee did not reasonably believe that the beneficiary 

knew[.]’’ Furthermore, ‘‘where the trustee has an adverse interest 

in the transaction, the consent of the beneficiary does not preclude 

him from holding the trustee liable for a breach of trust not only 

under the circumstances stated in Subsection (2), but also if the 

transaction to which the beneficiary consented involved a bargain 

which was not fair and reasonable.’’ Id., 216(3). 

S. 2743 does not identify any particular breaches of trust that 

may have occurred or that may occur in the course of the negotiaVerDate Mar 21 2002 04:39 Oct 16, 2002 Jkt 005300 PO 00000 Frm 00018 Fmt 6659 Sfmt 6602 E:\WAISREPT\SR301.107 txed01 PsN: PFRM67
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tion of the Settlement Agreement or the enactment of this legislation, and it is not evident that any particular actions by the United 

States have been brought to the attention of the tribe as potentially 

giving rise to a breach of trust action against the United States in 

this regard. Under these circumstances, it is not immediately apparent whether the proposed waiver would have any effect, as a demand for a general waiver of this sort, not limited to particular 

identified circumstances giving rise to the need for such a waiver, 

might well be inconsistent with the United States’ trust responsibilities to the tribe. 

Question. Please identify representative published judicial opinions in which the Department is or has been involved in which the 

validity of such a waiver of liability as to undisclosed breaches of 

trust has been upheld or rejected. If no published opinion is available adopting one or the other of these positions, please identify 

relevant unpublished opinions and provide copies for the use of the 

Committee. 

Question. Please identify any particular circumstances or any 

general public policy justifying the proposed waiver of liability for 

unspecified breaches of trust with regard to the negotiation of the 

Settlement Agreement and the enactment of the proposed legislation that is now included in S. 2743. 

7. Section 8(a) 

Waiver of Federal and tribal sovereign immunity 

Section 8(a)(1) of the bill waives the sovereign immunity of the 

United States and the tribe (except as to claims for money damages) to allow other parties to this settlement agreement to enforce 

certain rights against the United States and the Zuni Tribe. This 

provision does not specify, however, whether the waiver is applicable in state court as well as in Federal court. Section 8(a)(2) allows 

the tribe to waive its sovereign immunity (except with regard to 

money damages) in a particular state court for the purposes of enforcing various intergovernmental agreements. Waivers of sovereign immunity are interpreted narrowly. Accordingly, it could 

perhaps be argued that in the absence of any explicit mention of 

a waiver of immunity in state court, section 8(a)(1) should be interpreted as allowing suit to be brought in Federal court only. Cf. 

Atascadero State Hospital v. Scanlon, 473 U.S. 234, 241 (1985) (‘‘in 

order for a state statute or constitutional provision to constitute a 

waiver of Eleventh Amendment immunity, it must specify the 

State’s intention to subject itself to suit in federal court’’). 

Question. If it is intended that Section 8(a)(1) waives sovereign 

immunity to allow suits to be brought in state court, should the 

text be modified to make it explicit that state court jurisdiction is 

contemplated? 

Waiver of tribal immunity to allow suits in State court 

The McCarran Amendment, 43 U.S.C. § 666, has been interpreted as subjecting tribal water rights to the jurisdiction of state 

courts under certain circumstances. In general, however, public policy disfavors the adjudication of tribal rights in state courts. For 

the reason stated above, the extent to which S. 2743 would expand 

state court jurisdiction over tribal rights is unclear; nevertheless it 

20

appears that at least some limitation on the ability the tribe would 

otherwise have to litigate its rights in Federal court is contemplated beyond that imposed by the McCarran Amendment 

itself. 

Question. If it is indeed the intent that state court jurisdiction 

be extended over tribal rights beyond that granted in the 

McCarran Amendment, what public policy supports that extension 

of state authority? 

Waiver of State sovereign immunity 

Section 8(a)(1) of the bill waives the sovereign immunity of the 

United States and the Zuni Tribe to allow other parties to the settlement agreement to enforce certain rights against the United 

States and the tribe. There is, however, no reciprocal provision that 

waives the sovereign immunity of the State of Arizona to allow the 

tribe to enforce its rights against the State or its agencies. Although the Zuni Tribe’s attorney did not express concerns about 

the tribe’s ability to enforce its rights against the State based on 

existing law, the testimony of the Deputy Attorney General of the 

State of Arizona was contradictory as to whether or not the tribe 

could obtain judicial relief against the State. Furthermore, even if 

current Arizona law clearly allows the tribe all necessary enforcement rights in the courts of the State, changes in Arizona law 

could hinder the tribe’s ability to enforce such rights in the future. 

Any waiver of tribal immunity should be fully reciprocated by the 

State, both now and in the future, and consideration should be 

given to whether the wavier should apply in the Federal courts. 

While Congress cannot unilaterally abrogate the Eleventh 

Amendment immunity of the State of Arizona, Seminole Tribe of 

Florida v. Florida, 517 U.S. 44 (1996), it can condition the granting 

of a benefit on the waiver of such immunity by the State where, 

as here, the waiver is germane to the purpose of giving the benefit. 

South Dakota v. Dole, 483 U.S. 203 (1987). The State of Arizona 

will receive substantial benefits with the enactment of this legislation, in that it will receive certain authority over Indian lands that 

would otherwise be denied to it and will achieve the extinguishment of tribal claims to water that could otherwise be asserted 

against it. Under such circumstances, Congress can require the 

State to offer an irrevocable waiver of its sovereign immunity as a 

condition of receiving the benefits provided under this legislation. 

Question. What additional language would be necessary to ensure that the tribe’s right to enforce its rights against the State of 

Arizona in all appropriate courts is not restricted by the State’s 

sovereign immunity, either now or in the future? 

Non-water related matters in intergovernmental agreements 

Although the Committee staff has not been provided with drafts 

of the intergovernmental agreements, it may be that some provisions of these agreements may relate to matters that are not directly related to the water rights issues that are the subject of the 

general stream adjudication in the Apache County court. The language in section 5(l)(3) prohibiting the United States from seeking 

Federal court removal of litigation over such intergovernmental 

agreements indicates that at least some such cases will be litigated 

in the Arizona courts. Even if it is considered desirable to extend 

21

the waiver of tribal or Federal sovereign immunity beyond that 

provided by the McCarran Amendment to allow all water-related 

issues to be litigated in the state courts, that does not necessarily 

mean that matters that do not directly relate to water rights 

should also be litigated in those courts. 

Question. What matters not relating directly to water rights, if 

any, are to be addressed in intergovernmental agreements executed 

pursuant to the proposed legislation? 

Question. If matters not directly relating to water rights are to 

be litigated in the Arizona courts, what policy considerations justify 

this limitation on the right the tribe would otherwise have to litigate those issues in Federal court? 

Federal removal 

If the United States intervenes in an action regarding a dispute 

over an intergovernmental agreement executed pursuant to section 

5, section 5(l)(3) prohibits the United States from removing that action to Federal court. Section 8(a), on the other hand, imposes no 

restriction on the right of the United States to remove actions to 

Federal court. 

Question. If it is intended that all litigation on matters set forth 

in section 8(a) is to take place in the Apache County court, should 

section 8(a) be modified to impose restrictions on the right of the 

United States to seek removal to Federal court if an action described in that subsection is filed against it? 

8. Section 8(b) 

Section 8(b)(1)(F)(i) requires the Zuni Tribe to adopt a tribal 

water code ‘‘that is reasonably equivalent to State water law (including statutes relating to dam safety and groundwater management)[.]’’ Section 8(b)(1)(F)(ii), in turn, provides that until a tribal 

water code is adopted, the Secretary, in consultation with the 

State, ‘‘shall administer water use and water regulation’’ on particular lands. While it is apparently the intent of the parties that 

‘‘dam safety’’ would be regulated by the Secretary until such time 

as the tribal water code is adopted, regulation of ‘‘dam safety’’ is 

not unambiguously included within the authority over ‘‘water use 

and water regulation’’ granted to the Secretary in section 

8(b)(1)(F)(ii). 

Does section 8(b)(1)(F)(ii) need to be amended to more closely 

track the language of section 8(b)(1)(F)(i) with regard to ‘‘dam safety’’ so as to ensure that no gap in regulatory authority exists until 

the tribal water code is adopted, or is it necessary to include an explicit reference to dam safety in section 8(b)(1)(F)(ii)? 

9. Section 8(c) 

Section 8(c) provides that the United States and the Zuni Tribe 

‘‘shall not unreasonably withhold consent for easements and rightsof-way for roads, utilities, and other necessary accommodations for 

adjoining landowners across [certain of its] lands * * * unless such 

easements and rights-of-way will cause significant and substantial 

harm to the Tribe’s wetland restoration project or religious practices.’’

This provision does not provide any limiting principle to define 

the tribe’s obligations and could be interpreted to impose substanVerDate Mar 21 2002 04:39 Oct 16, 2002 Jkt 005300 PO 00000 Frm 00021 Fmt 6659 Sfmt 6602 E:\WAISREPT\SR301.107 txed01 PsN: PFRM67
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tial burdens on the tribe’s lands. The Zuni Governor’s testimony indicated that he viewed this as a simple matter of ‘‘neighborliness’’ to accommodate purely local uses by existing adjoining landowners 

whose properties would otherwise be landlocked. The effect of the 

present broad language, however, is not limited to such matters 

and could, for example, require the tribe to acquiesce in the construction of major regional transportation corridors (highways, 

power lines, pipelines, etc.) across its lands, since the State or a 

gas or electric utility could become an ‘‘adjoining landowner’’ at 

some time in the future through purchase of adjoining lands or by 

the exercise of the power of eminent domain. There does not seem 

to be any justification for subjecting the tribe’s sovereignty and 

property rights to such a limitation, unlike other tribal landowners. 

Nor does it seem desirable to restrict the authority of the Secretary 

of the Interior to exercise discretion in approving such potential future uses. 

Question. Would it not be desirable to modify section 8(c) to place 

reasonable limits on the scope of this obligation so that the tribe 

is not permanently subjected to an unbounded and unreciprocated 

duty to provide others with access across its lands for uses that 

cannot now be anticipated? 

DEPARTMENT OF THE INTERIOR, 

OFFICE OF THE SECRETARY, 

Washington, DC, September 20, 2002. 

Hon. DANIEL K. INOUYE, 

Chairman, Committee on Indian Affairs, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: Enclosed are the Administration’s response 

to questions submitted following the July 18, 2002, hearing on S. 

2743, Zuni Heaven Water Rights Settlement Act. 

Thank you for the opportunity to provide this material to the 

Committee. 

Sincerely, 

JANE M. LYDER, 

Legislative Counsel, Office of 

Legislative Affairs. 

Enclosure. 

ADMINISTRATION RESPONSE TO INDIAN AFFAIRS COMMITTEE

QUESTIONS

1. Section 5(j) 

Question. In light of the above, is the position of the United 

States that the proposed language of section 5(j)(1) is consistent 

with all constitutional limitations on the power of Congress? 

Section 5(j)(1) of S. 2743 as introduced is constitutionally infirm. 

Under the U.S. Constitution, Congress has the legislative power to 

regulate commerce with the Indian tribes, but has no power to direct a State on how the State shall construe the State’s constitution, which Section 5(j)(1) purports to do. 

Question. If Section 5(j)(1) as drafted is constitutionally infirm, 

is substitute language (‘‘notwithstanding the provisions of the Arizona Enabling Act * * *’’ or some similar language?) necessary to 

23

authorize the State of Arizona and its political subdivisions to require the Zuni Tribe to make payments in lieu of taxes on these 

lands (assuming but not determining that such authority would 

exist under Arizona law), or is the present language of Section 

5(j)(2) sufficient to provide such authority? 

Section 5(j)(2) would direct the Zuni Tribe to make certain payments to States, counties, and localities in lieu of taxes that would 

otherwise have been applicable with respect to the land. Section 

5(j)(2) is consistent with the legislative power of Congress under 

the Constitution to regulate commerce with Indian tribes. Section 

5(j)(2) would not expand or contract the power of Arizona or its political subdivisions to impose or collect taxes, would not pre-empt 

Section 20 of the Arizona Constitution, and would not constitute 

the consent of the United States for purposes of Section 20 of the 

Arizona Enabling Act (Act of Congress of June 20, 1910). In other 

words, section 5(j)(2) appears to be sufficient to bind the Tribe to 

its agreement to make payments in lieu of taxes to the extent taxes 

would otherwise be owed under Arizona law if the land had not 

been taken into trust under this bill. 

2. Sections 5(k), 5(l) 

Question. Please provide copies of any agreements to be authorized by section 5(k), including evidence, if available, that the parties have entered into binding agreements as to their terms. 

To the best of our knowledge, the parties have not entered into 

any intergovernmental agreements. 

Question. If the parties to the agreements to be authorized by 

section 5(k) have not yet entered into binding agreements as to 

their terms, please identify any legally binding restrictions upon 

which Congress can rely to insure that its advance approval of

agreements the terms of which are yet to be established does not 

subject the Zuni Tribe to the risk that other prospective parties to 

these agreements will refuse to bargain in good faith. Alternatively, 

please propose new statutory language that would preclude such a 

result. 

By our reading, sections 5(k) and 5(l) have four effects. First, section 5(k) authorizes the Tribe to enter into certain intergovernmental agreements, but otherwise expresses no congressional intent with respect to the content of these agreements. Second, section 5(l)(1) requires the Secretary of the Interior to acknowledge 

the terms of any intergovernmental agreement. Under the bill, the 

United States will not be a party to these agreements and any acknowledgment does not bind the Secretary to the terms of the 

agreements, but merely requires that she take notice of the agreements under the procedures for taking these lands into trust. 

Third, Section 5(l)(2) of the bill states that the Secretary of the 

Interior ‘‘shall not seek to abrogate, in any administrative or judicial action, the terms of any intergovernmental agreement that are 

consistent with subparagraph 6.2.A of the Settlement Agreement 

and this Act.’’ This section limits its affect to the particular provisions set forth in subparagraph 6.2A of the settlement agreement. 

Subparagraph 6.2A delineates the operative provisions to be contained in any intergovernmental agreement. In this way, the Secretary is only bound to those provisions currently set forth in the 

settlement agreement, rather than being subject to unknown future 

24

provisions. In the same manner, subparagraph 6.2A provides certainty to the Tribe and the other parties as to the operative provisions of any intergovernmental agreement, thus limiting the extent 

of the future negotiations concerning these agreements. 

Fourth, section 5(l)(3) of the bill provides that if the United 

States becomes a party-intervenor in a judicial action commenced 

during a dispute over any intergovernmental agreement entered 

into under the legislation, the United States cannot remove the judicial action to a Federal court. The Administration recommends 

that section 5(l)(3) be deleted from the bill. Federal policy, expressed in existing removal statutes, that allow the United States 

to litigate in Federal courts, should not be overridden by the bill. 

3. Section 5(l) 

This section did not direct a question to the Department for response. With respect to the removal provision in section 5(l)(3), see 

the above discussion. 

4. Section 6(e) 

Question. Is the language insulating the two Secretaries from liability also intended to protect the United States from liability and, 

if so, does it in fact have that effect? 

We believe that the intent of section 6(e) is to protect the United 

States from liability after moneys are withdrawn by the Tribe. This 

language mirrors section 11(f) of the Shivwits Band of the Paiute 

Indian Tribe of Utah Water Rights Settlement Act, Public Law 

106–263, 114 Stat. 737 (2000), and section 104(b)(2)(A) of the Chippewa Cree Tribe of the Rocky Boy’s Reservation Indian Reserved 

Water Rights Settlement and Water Supply Enhancement Act, 

Public Law 106–163, 113 Stat. 1778 (1999). 

Question. Does 25 U.S.C. § 4022(c) already provide the protection 

from liability Section 6(e) is intended to provide? 

Section 6(e) and 25 U.S.C. § 4022(c) may provide similar protection, however, section 6(e) would mirror provisions that the Congress determined were necessary in previous Indian water settlements and would ensure that no additional liability would attach 

to the United States as a result of the Zuni Heaven settlement. 

5. Section 7(b) 

Question. Does the waiver of certain future claims for injuries to 

water quality contained in section 7(b), or any other provision of 

the bill, limit the authority of the Environmental Protection Agency, or any other Federal agency, to regulate water quality under 

the Clean Water Act or other legal authority or to seek compensation for damages to natural resources? If not, is the present language narrowly tailored and does it express that intention with sufficient clarity and specificity? 

Section 7(b) as currently drafted can be read as limiting the Environmental Protection Agency’s enforcement authority. Based on 

revisions to this section made by the parties during the August recess, all authorities of the Environmental Protection Agency and 

other federal agencies under the Clean Water Act or any other federal statute have been preserved. A limited future waiver of claims 

under the natural resource damages provisions of CERCLA is included in the new language. This waiver is limited, however, to 

25

those natural resource damage claims, caused by a defined list of 

otherwise lawful activities, that the Zuni Tribe could have brought 

itself or requested the United States to bring on its behalf as a natural resource trustee. This provision does not affect the United 

State authority to bring natural resources damage claims in other 

contexts as a natural resource trustee. The intent of this provision 

is to protect water users who are otherwise complying with the law 

from claims for natural resource damages brought by the Tribe or 

by the United States as a natural resource trustee on its behalf. 

However, even the limited waiver of the United States’s authorities 

is troubling in this context. This provision departs from current Indian law and policy. We concluded that the unique nature of this 

settlement—particularly that the Zuni lands in Arizona involved in 

this settlement will not be used as a homeland, that the lands at 

issue are primarily for ceremonial use, that the water rights and 

land involved is relatively small and the fact that the Tribe negotiated and supports the agreement—weighs in favor of departure 

from otherwise settled law and policy. 

Question. What precedents exist in other legislation for a statutory waiver for future claims of this kind? 

We are unaware of any precedent for these sorts of water quality 

waivers. These waivers are workable in this settlement because of 

the unique context of the Zuni lands in Arizona.

6. Section 7(c)(5) 

Question. Please identify representative published judicial opinions in which the Department is or has been involved in which the 

validity of such a waiver of liability as to undisclosed breaches of 

trust has been upheld or rejected. If no published opinion is available adopting one or the other of these positions, please identify 

relevant unpublished opinions and provide copies for the use of the 

Committee. 

Since 1993, every Indian water rights settlement entered into by 

the United States has included such a waiver, including section 9.4 

of the Shivwits Band of the Paiute Indian Tribe of Utah Water 

Rights Settlement Agreement, ratified by the Shivwits Band of the 

Paiute Indian Tribe of Utah Water Rights Settlement Act, Public 

Law 106–263, 114 Stat. 737 (2000), section 5(c) of the Chippewa 

Cree Tribe of the Rocky Boy’s Reservation Indian Reserved Water 

Rights Settlement and Water Supply Enhancement Act, Public 

Law 106–163, 113 Stat. 1778 (1999), and the Confederated Tribes 

of the Warm Springs Reservation Indian Water Rights Settlement 

Agreement (Nov. 1997) (settled without federal legislation). 

Question. Please identify any particular circumstances or any 

general public policy justifying the proposed waiver of liability for 

unspecified breaches of trust with regard to the negotiation of the 

Settlement Agreement and the enactment of the proposed legislation that is now included in S. 2743. 

The provisions of the proposed settlement of the Zuni Tribe’s 

water rights claims represent agreements that have been reached 

between the Zuni Tribe and the state parties. The general willingness of the Administration to support agreements reached between 

the Tribe and its neighbors is consistent with the cornerstone of 

modern Indian law and policy to facilitate tribal self-determination 

by ‘‘giv[ing] the Indians control of their own affairs and their own 

26

property.’’ See Mescalero Apache Tribe v. Jones, 411 U.S. 145, 152 

(1973) (quoting 78 Cong. Rec. 11,125 (1934) (Rep. Howard)). Along 

with such control and self-determination comes the need to take responsibility for agreements entered into and decisions made. The 

policy of including these waivers in Indian water settlements over 

the last decade is consistent with this responsibility. 

7. Section 8(a) 

Question. If it is intended that Section 8(a)(1) waives sovereign 

immunity to allow suits to be brought in state court, should the 

text be modified to make it explicit that state court jurisdiction is 

contemplated? 

The Administration objects to that portion of Section 8(a)(1) that 

waives the sovereign immunity of the United States and purports 

to make the U.S. subject to suit in state courts. With respect to the 

jurisdiction of state courts, State law defines the jurisdictions of 

State courts. State courts of general jurisdiction would have the authority, if otherwise applicable sovereign immunity is waived, to 

exercise jurisdiction of the claims Section 8 addresses. Along the 

same lines, we note that the waiver in S. 2743 does not broaden 

the McCarren Amendment’s waiver of the United States’ sovereign 

immunity in state court. 

Question. If it is indeed the intent that state court jurisdiction 

be extended over tribal rights beyond that granted in the McCarren 

Amendment, what public policy supports that extension of state authority? 

The United States does not support the broad waiver of sovereign 

immunity in S. 2743. We believe that existing statutory waivers of 

the United States’ sovereign immunity are sufficient to ensure that 

the United States is accountable for agreements entered into in 

this settlement concerning tribal rights. 

Question. What additional language would be necessary to ensure that the tribe’s right to enforce its rights against the state of 

Arizona in all appropriate courts is not restricted by the State’s 

sovereign immunity, either now or in the future? 

This question perhaps should be directed to the State of Arizona. 

Question. What matters not relating to water rights, if any, are 

to be addressed in intergovernmental agreements executed pursuant to the proposed legislation? 

The provisions to be addressed in the intergovernmental agreements are set forth in subparagraph 6.2A of the Settlement Agreement, and include payment of in lieu of taxes; provisions related 

to rights-of-way; wildlife management; agreements by the Tribe 

with respect to the delegation of programs under federal environmental statutes; tribal waiver of sovereign immunity; recognition of 

Zuni religious practices by the State and local governments and 

their agreement not to unreasonably withhold any necessary approvals for activities on Zuni fee lands related to the Tribe’s religious practices. 

Question. If matters not directly relating to water rights are to 

be litigated in the Arizona courts what policy considerations justify 

this limitation on the right the tribe would otherwise have to litigate those issues in Federal court? 

The removal authority of the United States in S. 2743 was modified during the August recess to allow removal by the United 

27

States where federal issues are raised. The remaining provisions 

were agreed to by the Zuni Tribe and the State parties. 

Question. If it is intended that all litigation on matters set forth 

in section 8(a) is to take place in the Apache County court, should 

section 8(a) be modified to impose restrictions on the right of the 

United States to seek removal to Federal court if an action described in that subsection is filed against it? 

The removal authority of the United States in S. 2743 was modified during the August recess to allow removal by the United 

States where federal issues are raised. The remaining provisions 

were agreed to by the Zuni Tribe and the State parties.

8. Section 8(b) 

Question. Does section 8(b)(1)(F)(ii) need to be amended to more 

closely track the language of section 8(b)(1)(F)(i) with regard to 

‘‘dam safety’’ so as to ensure that no gap in regulatory authority 

exists until the tribal water code is adopted or is it necessary to 

include an explicit reference to dam safety in section 8(b)(1)(F)(ii)? 

The intent of that provision appears to be that the Secretary’s 

authority would cover all water related matters on these lands. 

9. Section 8(c) 

Question. Would it not be desirable to modify section 8(c) to place 

reasonable limits on the scope of this obligation so that the Tribe 

is not permanently subjected to an unbounded and unreciprocated 

duty to provide others with access across its lands for uses that 

cannot now be anticipated? 

We agree that modifications to the current language of section 

8(c) are needed. During the August recess, we worked out new language for the rights-of-way provision. The new right-of-way provision clarifies that existing federal regulations with respect to the 

granting of rights-of-way will remain in place, with the exception 

that the Zuni Tribe has agreed to limit its objections to rights-ofway so long as they do not substantially or significantly harm the 

Tribe’s wetlands rehabilitation project and the Tribe’s uses of the 

land for cultural and religious practices. This protects the Zuni 

from significant impacts to their lands. Pursuant to these modifications, the Secretary would retain authority to grant rights-of-way. 

The Tribe would need to inform the Secretary about encroachment 

on its cultural and religious practices. This process is not intended 

to allow the United States to second guess the religious beliefs of 

the Zuni or to require detailed or public inquiry into the nature of 

those beliefs. 

REGULATORY IMPACT STATEMENT

Paragraph 11(b) of rule XXVI of the Standing Rules of the Senate requires that each report accompanying a bill evaluate the regulatory paperwork impact that would be incurred in carrying out 

the bill. The Committee believes that the regulatory impact of S. 

2743 will be minimal. 

28

CHANGES IN EXISTING LAW

In compliance with subsection 12 of rule XXVI of the Standing 

Rules of the Senate, the Committee finds that the enactment of S. 

2743 will not result in any changes in existing law.

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