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80-010 PS 2002

H.R. 2202 and H.R. 3223

LEGISLATIVE HEARING

BEFORE THE

SUBCOMMITTEE ON WATER AND POWER

OF THE

COMMITTEE ON RESOURCES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

June 5, 2002

Serial No. 107-121

Printed for the use of the Committee on Resources

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

or

Committee address: http://resourcescommittee.house.gov

(II)

COMMITTEE ON RESOURCES

JAMES V. HANSEN, Utah, Chairman

NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,

Vice Chairman

W.J. ‘‘Billy’’ Tauzin, Louisiana

Jim Saxton, New Jersey

Elton Gallegly, California

John J. Duncan, Jr., Tennessee

Joel Hefley, Colorado

Wayne T. Gilchrest, Maryland

Ken Calvert, California

Scott McInnis, Colorado

Richard W. Pombo, California

Barbara Cubin, Wyoming

George Radanovich, California

Walter B. Jones, Jr., North Carolina

Mac Thornberry, Texas

Chris Cannon, Utah

John E. Peterson, Pennsylvania

Bob Schaffer, Colorado

Jim Gibbons, Nevada

Mark E. Souder, Indiana

Greg Walden, Oregon

Michael K. Simpson, Idaho

Thomas G. Tancredo, Colorado

J.D. Hayworth, Arizona

C.L. ‘‘Butch’’ Otter, Idaho

Tom Osborne, Nebraska

Jeff Flake, Arizona

Dennis R. Rehberg, Montana

George Miller, California

Edward J. Markey, Massachusetts

Dale E. Kildee, Michigan

Peter A. DeFazio, Oregon

Eni F.H. Faleomavaega, American Samoa

Neil Abercrombie, Hawaii

Solomon P. Ortiz, Texas

Frank Pallone, Jr., New Jersey

Calvin M. Dooley, California

Robert A. Underwood, Guam

Adam Smith, Washington

Donna M. Christensen, Virgin Islands

Ron Kind, Wisconsin

Jay Inslee, Washington

Grace F. Napolitano, California

Tom Udall, New Mexico

Mark Udall, Colorado

Rush D. Holt, New Jersey

Anibal Acevedo-Vila, Puerto Rico

Hilda L. Solis, California

Brad Carson, Oklahoma

Betty McCollum, Minnesota

Tim Stewart, Chief of Staff

Lisa Pittman, Chief Counsel/Deputy Chief of Staff

Steven T. Petersen, Deputy Chief Counsel

Michael S. Twinchek, Chief Clerk

James H. Zoia, Democrat Staff Director

Jeffrey P. Petrich, Democrat Chief Counsel

SUBCOMMITTEE ON WATER AND POWER

KEN CALVERT, California, Chairman

ADAM SMITH, Washington, Ranking Democrat Member

Richard W. Pombo, California

George Radanovich, California

Greg Walden, Oregon,

Vice Chairman

Michael K. Simpson, Idaho

J.D. Hayworth, Arizona

C.L. ‘‘Butch’’ Otter, Idaho

Tom Osborne, Nebraska

Jeff Flake, Arizona

George Miller, California

Peter A. DeFazio, Oregon

Calvin M. Dooley, California

Grace F. Napolitano, California

Hilda L. Solis, California

Brad Carson, Oklahoma

(III)

CONTENTS

Page

Hearing held on June 5, 2002 ................................................................................. 1

Statement of Members:

Calvert, Hon. Ken, a Representative in Congress from the State of

California ....................................................................................................... 1

Prepared statement on H.R. 2202 and H.R. 3223 ................................. 2

Rehberg, Hon. Dennis R., a Representative in Congress from the State

of Montana, Prepared statement on H.R. 2202 ......................................... 3

Udall, Hon. Tom, a Representative in Congress from the State of

New Mexico, Prepared statement on H.R. 3223 ....................................... 4

Statement of Witnesses:

Birnbaum, S. Elizabeth, Director of Government Affairs, American

Rivers, Washington, DC ............................................................................... 25

Prepared statement on H.R. 2202 ........................................................... 26

Keys, John W., Commissioner, Bureau of Reclamation, U.S. Department

of the Interior, Washington, DC .................................................................. 5

Prepared statement on H.R. 2202 ........................................................... 6

Prepared statement on H.R. 3223 ........................................................... 10

Nypen, Jerry, Manager, Lower Yellowstone Irrigation Districts No. 1

and No. 2, Savage Irrigation District, and Intake Irrigation District,

Sidney, Montana ........................................................................................... 15

Prepared statement on H.R. 2202 ........................................................... 17

Vigil-Muniz, Claudia J., President, Jicarilla Apache Nation, New Mexico 30

Prepared statement on H.R. 3223 ........................................................... 32

(1)

LEGISLATIVE HEARING ON H.R. 2202, TO CONVEY THE LOWER YELLOWSTONE IRRIGATION PROJECT, THE SAVAGE UNIT OF THE

PICK-SLOAN MISSOURI BASIN PROGRAM,

AND THE INTAKE IRRIGATION PROJECT TO

THE PERTINENT IRRIGATION DISTRICTS;

AND H.R. 3223, TO AUTHORIZE THE SECRETARY OF THE INTERIOR, THROUGH THE

BUREAU OF RECLAMATION, TO CONSTRUCT

THE JICARILLA APACHE NATION MUNICIPAL WATER DELIVERY AND WASTEWATER

COLLECTION SYSTEMS IN THE STATE OF

NEW MEXICO, AND FOR OTHER PURPOSES.

Wednesday, June 5, 2002

U.S. House of Representatives

Subcommittee on Water and Power

Committee on Resources

Washington, DC

The Subcommittee met, pursuant to notice, at 2:06 p.m., in room

1334, Longworth House Office Building, Hon. Ken Calvert

[Chairman of the Subcommittee] presiding.

STATEMENT OF THE HON. KEN CALVERT, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. CALVERT. The Subcommittee on Water and Power will come

to order again. The Subcommittee meets today to hear testimony

on two bills: H.R. 2202, to convey the Lower Yellowstone Irrigation

Project, the Savage Unit of the Pick-Sloan Missouri Basin Program,

and the Intake Irrigation Project of the pertinent irrigation districts; and H.R. 3223, to authorize the Secretary of Interior,

through the Bureau of Reclamation, to construct the Jicarilla

ApacheNation Municipal Water Delivery and Wastewater Collection Systems in the State of New Mexico, and for other purposes.

Under Rule 4(b) of the Committee Rules, any oral opening statements at a hearing are limited to the Chairman and the Ranking

Minority Member. If other members have statements, they can be

included in the hearing record under unanimous consent.

2

The subject of Federal facilities’ title transfer has been of particular interest for this Committee and others throughout the West.

Title transfer legislation not only represents a concerted effort to

help shrink the Federal Government, but also transfer facilities

into the hands of those who can more efficiently operate and maintain them.

In early 1995, the Department of Interior announced that the

Bureau of Reclamation would transfer title to a significant number

of facilities to State and local Governments. Since that time, reclamation officials have been working through a self-developed process to implement that concept. Over 10 title transfer bills have

been signed into law since the commencement of this process. This

program remains a high priority within the Subcommittee on

Water and Power and something must be found to facilitate these

transfers.

H.R. 2202 directs the Secretary of Interior to convey the Lower

Yellowstone Irrigation District Nos. 1 and 2 to Dawson and Richland Counties in the State of Montana. This legislation will also

convey the Savage Unit and the Intake Irrigation Project to their

respective irrigation districts upon payment of the district’s share

of construction costs for these projects. Although ownership of the

project will change under this legislation, the bill still would require the Secretary to continue to provide power at a subsidized

cost for the pumping operations.

Although unrelated, the next bill we will hear today is very important, as it deals with delivering safe drinking water to people

in need. While most of us take running water in our homes for

granted, there are many areas in rural portions of the United

States that do not have access to indoor plumbing or water supplies that meet safe drinking water standards.

One example of this is found on the Jicarilla Apache Reservation

in New Mexico. The existing piecemeal municipal water system on

the Jicarilla Apache Reservation, which is owned by the Bureau of

Indian Affairs, has deteriorated over the years due to a lack of capital improvements and maintenance.

Mr. CALVERT. H.R. 3223 will authorize the Secretary of Interior,

through the Bureau of Reclamation, to work with Jicarilla ApacheNation to modernize the water delivery and wastewater collection

infrastructures within the reservation. After construction of the

project is finished, the Jicarilla ApacheNation will assume the annual operation, maintenance and replacement costs of this project.

I certainly look forward to the witnesses that are here today.

[The prepared statement of Mr. Calvert follows:]

Statement of The Honorable Ken Calvert, a Representative in Congress

from the State of California

The subject of Federal facilities transfer has been of particular interest for this

Committee and others throughout the west. Title transfer legislation not only represents a concerted effort to help shrink the Federal Government, but it also transfer’s facilities into the hands of those who can more efficiently operate and maintain

them. Although H.R. 2202 is the first bill of its kind in the 107th Congress, it is

just one bill in a long line of title-transfer legislation that has been very successful

in accomplishing it’s goals.

In early 1995, the Department of the Interior announced that Reclamation would

transfer responsibility for a significant number of facilities to state and local government. Since that time, Reclamation officials have been working through a selfVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6621 80010.TXT HRESOUR1 PsN: HRESOUR1
3

developed process to implement that concept. Over ten title transfer bills have been

signed into law since the commencement of the Department of Interior’s process.

This program remains a high priority within Subcommittee on Water and Power

and expeditious steps must be found to facilitate these transfers.

Although unrelated, the next bill is very important as it deals with delivering safe

drinking water to people in need. While most of us take running water in our homes

for granted, there are many areas in rural portions of the U.S. that do not even

have access to indoor plumbing or water supplies that meet safe drinking water

standards. Large areas within the Jicarilla Apache reservation provide striking examples of these unsanitary conditions. The Federally-owned, piecemeal municipal

water system on the Jicarilla Apache Reservation has deteriorated over the years

due to lack of capital improvements and maintenance. This deterioration has led the

wastewater system and sewage lagoons to operate at over 100% capacity during the

summer months and over 500% capacity during the winter months releasing pollution into the groundwater and into the Amargo Creek.

H.R. 3223 will authorize the Secretary of the Interior, through the Bureau of Reclamation, to work with the Jicarilla ApacheNation to modernize the water delivery

and wastewater collection infrastructures within the Reservation. After the Bureau

completes the project, the Jicarilla ApacheNation will assume the annual operation,

maintenance, and replacement costs of this project.

I look forward to hearing from the witnesses.

Mr. CALVERT. Now I would recognize the Ranking Minority Member or someone in his stead for their statement. We will have some

other statements here shortly, so I will leave it at that.

I would like to introduce the gentleman from Montana, Mr.

Rehberg, the sponsor of H.R. 2202, and the gentleman, Mr. Udall,

the sponsor of H.R. 3223.

At this time, I would like to ask unanimous consent that Congressman Rehberg and Congressman Udall be permitted to sit at

the dais. Without objection, so ordered.

[The prepared statement of Mr. Rehberg follows:]

Statement of The Honorable Dennis Rehberg, a Representative in Congress

from the State of Montana

Thank you Chairman Calvert, for holding this hearing today. I am also grateful

to the witnesses for joining us today to discuss the Lower Yellowstone Irrigation

Project. I look forward to hearing your testimonies.

As you will hear, the Lower Yellowstone Irrigation Projects’ construction began

in 1905; by 1946 over 50,000 acres of farmland were irrigated under the projects.

Total construction cost was over $4 million dollars, and by 1979 the water users had

completed payments. Lower Yellowstone farms currently cover acreage exceeding

56,000 and yearly provide over $20 million dollars of stable revenue for the area.

Over twenty years have passed since the last payment was made to the Bureau

of Reclamation. Today environmental businesses streamlining is essential for success. This also holds true for irrigation projects. Currently, paperwork and overlapping bureaucracy are overwhelming the irrigation facilities. In spite of technical opposition, this title transfer has been encouraged by B.O.R.’s transfer mission statement, which reads, ‘‘Transfer should occur for projects that are efficiently and effectively managed by non–Federal entities.’’

For the last six years over 500 Eastern Montana and Western North Dakota

farms have been working with the Bureau of Reclamation toward this title transfer.

The B.O.R.’s work is complete and we have the ability to reach an agreement that

is mutually beneficial to all parties. The irrigation projects will still operate under

state law, but will eliminate an unnecessary level of bureaucracy, while the Bureau

of Reclamation will shed the oversight responsibility of an efficiently run project.

Mr. Chairman, Jerry Nypen, Director of Lower Yellowstone, will also be submitting additional endorsements for the transfer of Lower Yellowstone Irrigation

Projects. These include endorsements from: Montana Governor Judy Martz, Lower

Yellowstone REA, Montana Water Resources Association, Richland County Commissioners, Richland Economic Development, Upper Missouri Water Association, and

the Sidney Area Chamber of Commerce and Agriculture.

Again, Mr. Chairman, I thank you for holding this hearing today.

4

[The prepared statement of Mr. Tom Udall follows:]

Statement of The Honorable Tom Udall, a Representative in Congress from

the State of New Mexico

I appreciate the opportunity to speak to the Committee on my proposal that will

improve the quality of safe and reliable municipal water and wastewater system to

the Jicarilla ApacheNation.

You will soon receive testimony from the President of the JicarillaNation who will

discuss the importance of this project as well as the discussions she has had with

the Bureau of Reclamation and other stakeholders involved in this very important

project. I would like to thank all the members who are cosponsors and of this important legislation.

Let me begin by saying that the passage of this legislation by our Committee and

eventually the House of Representatives is paramount in addressing the critical

public health issues for the tribe and north central New Mexico. For over two decades the current system, the Dulce municipal water system, has deteriorated due

to a lack of funds and capital improvements made by the Federal trustee.

Mr. Chairman, the Dulce municipal water system has not been in compliance with

Federal safe drinking water standards. Nor compliance with theNational Pollutant

Discharge standards. In fact BIA has been fined for its non-compliance several

times. In addition, the EPA has also listed the water system on the reservation as

the third worst system in EPA Region 6. The failure by the Federal government in

its trust obligation over the years has led to these terrible conditions and is the reason we are here today.

During the 106th Congress legislation was enacted (P.L. 106–243) authorizing the

Bureau of Reclamation to conduct a feasibility study on rehabilitating the Federally

owned water distribution and wastewater system on the Reservation. The legislation also directed the Secretary of Interior to report the findings and recommendations to the Congress within one year. President Vigil–Muniz will touch on those

findings in a moment and you will see the need for action on the municipal water

and wastewater systems. You will also see that the JicarillaNation has invested

over $14.6 million in their efforts to improve the quality of its municipal water and

wastewater system. The Jicarilla’s investment of over $14.6 million is roughly 25%

over the total project cost. Now is the time for the Federal government to participate.

Let me be clear when I say that the lack of investment and rehabilitation in the

municipal water system constructed by the BIA in the 1920’s and expanded in the

1960’s has led to the delivery of inadequate water to the residents of the reservation

and surrounding communities. Until this legislation is approved and project is completed the future of tribal development including additional housing, schools, medical facilities, and elderly care facilities, cannot be built.

We have a Federal obligation and responsibility to improve the deficient Federally

owned water system. I appreciate your support Mr. Chairman in allowing this hearing to take place today. At the completion of today’s hearing I look forward to working with you and the Committee staff to prepare this legislation for consideration

by our Committee and approval by the House.

With that, I would like to introduce our first panel of witnesses.

Our first panel is the Honorable John W. Keys, Commissioner, Bureau of Reclamation, U.S. Department of Interior.

Mr. Keys, if you would like to come forward.

Let me remind the witnesses that we’re under Committee Rules,

and please limit your opening remarks to 5 minutes, and certainly

your entire opening statement will be included in the record. It,

certainly, will allow us to have some questions.

Again, we welcome our Commissioner, and you are doing a fine

job, and you are recognized for your opening statement.

5

STATEMENT OF JOHN W. KEYS, COMMISSIONER, BUREAU OF

RECLAMATION, U.S. DEPARTMENT OF THE INTERIOR,

WASHINGTON, D.C.

Mr. KEYS. Mr. Chairman, it is a pleasure to be here. Would you

like me to do both statements at the same time or would you like

to do one and then go to the other?

Mr. CALVERT. If there is no objection, let us do both at the same

time to save some time.

Thank you.

Mr. KEYS. Mr. Chairman, it is a pleasure to be here and give the

Administration’s views on H.R. 2202, first, the Lower Yellowstone

Reclamation Project Conveyance Act. I would ask, certainly, that

my full statement be made part of the record for this hearing.

Mr. CALVERT. Without objection, so ordered.

Mr. KEYS. Mr. Chairman, H.R. 2202 directs the Secretary of the

Interior to transfer title of the Lower Yellowstone Irrigation

Project, the Savage Unit of the Pick-Sloan Missouri Basin Program,

and the Intake Irrigation Project to the respective irrigation districts.

In October 1999 and March of 2000, Reclamation testified before

Congress on proposals somewhat similar to H.R. 2202. In both

cases, Reclamation strongly opposed the legislation because of

issues with the delivery of Pick-Sloan Missouri Basin Power to a

non-Federal project, and the fish and wildlife mitigation involved

and a number of other unresolved issues.

While some progress has been made on a few of these issues significant concerns remain. As presently drafted, the Department of

Interior opposes passage of H.R. 2202. I would like to discuss a few

of the more important issues with you at this time.

Section 4(2) of H.R. 2202 requires that the Secretary continue to

provide the districts Pick-Sloan Missouri Basin Project Use Power

at rates established for districts with Federal contracts, even

though the facilities would no longer be owned by the Federal Government after transfer.

Reclamation is very concerned about the action and the precedent of providing non-Federal irrigation projects with subsidized

electricity intended for the use by Federal projects. While the legislation proposes to eliminate the adjustment to the rate based upon

ability to pay, the rate to be paid would still be subsidized by the

preference power customers, since it is significantly less than

wholesale Pick-Sloan Missouri Basin Project preference customer

rates.

This discrepancy is amplified when you consider wheeled cost.

The 1944 Flood Control Act requires that that power for project use

be delivered directly to the major pumping plants. This project use

power is delivered over non-Federal transmission lines, and the

Federal Government currently has to pay the wheeling cost for the

deliveries.

For both the Lower Yellowstone and Savage Irrigation Districts,

the cost of wheeling exceeds the cost of the energy. Payments for

both of these deliveries are made by the Western Area Power Administration. The costs are then included in the Pick-Sloan Missouri Basin Project power rate which results in preference power

6

customers subsidizing the wheeling costs. We are extremely concerned about this use of Federal power.

There are significant fishery issues that must also be addressed

in the Yellowstone River before title transfer can occur. The Lower

Yellowstone River has been identified as a priority recovery area

for pallid sturgeon, and the Intake Diversion Dam has been identified by the State of Montana as a barrier to the sturgeon’s migration and spawning habitat. The State of Montana is also concerned

about protection of the sauger, another native fish species.

Section 5 of H.R. 2202 would require Interior to provide fish protection facilities or streams to prevent fish from entering the

project’s main canal. It would also require the Secretary to provide

a monitoring program for a minimum of 2 years after construction.

We recommend that this continued Federal oversight and obligation be deleted from the legislation, since one of the benefits of title

transfer is to relieve the United States of both liability and management responsibility of the facilities after the title is transferred.

One other issue of concern is the price and valuation of withdrawn lands that would be transferred. The price tag proposed,

which is the ‘‘value of the remaining repayment obligation for the

Savage Irrigation District,’’ does not reflect a complete analysis of

project facilities’ valuation. The withdrawn lands are not included

in the allocation of costs that are paid by the districts under the

contracts.

Mr. Chairman, there are several other technical issues that must

be addressed on the bill, and we would certainly be glad to work

with staff to make the necessary corrections for those technicalities.

That concludes the statement on H.R. 2202.

[The prepared statement of Mr. Keys on H.R. 2202 follows:]

Statement of John W. Keys, III, Commissioner, Bureau of Reclamation,

U.S. Department of the Interior, on H.R. 2202

Mr. Chairman, my name is John Keys. I am Commissioner of the U.S. Bureau

of Reclamation. I am pleased to provide the Administration’s views on H.R. 2202,

the Lower Yellowstone Reclamation Project Conveyance Act.

Status and Update on Title Transfer Efforts

Before I get to our comments on H.R. 2202, I would like to give the Subcommittee

an update on Reclamation’s title transfer activities.

Since 1996, the Bureau of Reclamation has transferred title to twelve (12) projects

or parts of projects—pursuant to various Acts of Congress. By the end of the 106th

Congress, Reclamation was given authority to transfer title to ten (10) projects or

parts of projects. Since each project is unique, each of the laws enacted by Congress

has different terms and each requires that different actions—such as the completion

of the process under theNational Environmental Policy Act (NEPA), or agreements

with State and local agencies over recreation or cultural resources management—

be taken prior to transfer. I am pleased to say that Reclamation has been moving

very diligently to implement each of these laws. Since May 2001, Reclamation has

transferred five (5) projects, or parts of projects, all of which were authorized by the

end of the 106th Congress.

These are:

1) Clear Creek Distribution System of the Central Valley Project (May 31, 2001)

2) Palmetto Bend Project in Texas (June 26, 2001)

3) Griffith Project in Nevada (July 3, 2001)

4) Nampa Meridian facilities of the Boise Project in Idaho (July 13, 2001)

5) Carlsbad Project lands and facilities in New Mexico (July 18, 2001).

It is important to note that each of these transfers were completed on time or

ahead of schedule and all within the budgets that were estimated when we started.

7

I am very pleased with the effort and priority that our staff has given to completing

these transfers in a timely and cost effective way. I would also like to commend the

hard work and cooperation we have received from the water districts and entities

who have been the recipients of these facilities as well as the other stakeholders

who have been involved.

In each of these successful cases above, a great deal of the work necessary to complete the transfer was begun often by the receiving entities in cooperation with Reclamation prior to the legislation’s enactment into law. This gave us an important

head start and allowed us to recognize and address potential problems in the legislation. In other cases where title has not yet been transferred, limited work on environmental compliance and consultation began prior to enactment. In many of those

situations, some difficult and sometimes unforeseen issues arose or existed and

must be worked through. We are, however, committed to doing that in a timely

fashion.

While we have made a great deal of progress and have had much success with

title transfer, I remain concerned that the process for completing title transfers

takes too long. As such, we have begun a comprehensive review of the Framework

the document that guides our title transfer efforts as well as the transfer process,

to find ways to make it more efficient and cost effective. We plan to solicit the views

and ideas of our own staff who have been involved in the various transfers, our

water user customers and other stakeholders. We also plan to seek the views and

ideas of the members and staff of this Committee and the Congress who have been

involved. The goal of this effort is to help us to see what worked well, what should

be changed and how things might be improved.

H.R. 2202—Lower Yellowstone Reclamation Project Conveyance Act

At this point Mr. Chairman, I would like to turn to H.R. 2202, the Lower Yellowstone Reclamation Project Conveyance Act which directs the Secretary of the Interior to transfer title of the Lower Yellowstone Irrigation Project, the Savage Unit

of the Pick–Sloan Missouri Basin Program (PSMBP), and the Intake Irrigation

Project to the respective irrigation districts.

In October 1999, and again in March 2000, Reclamation testified before Congress

on proposals somewhat similar to H.R. 2202. In both cases, Reclamation strongly

opposed the legislation as premature since significant issues related to the delivery

of Pick Sloan Missouri Basin Program power, fish and wildlife mitigation and a

number of other issues remained unresolved. Since that time, Reclamation has

worked closely with the districts, the State of Montana and the U.S. Fish and Wildlife Service on a number of these issues. Some progress has been made and some

changes have been incorporated into the legislation to reflect that progress. Unfortunately however, significant concerns remain. Therefore, as presently drafted, the Department of the Interior opposes H.R. 2202.

I would like to address, for the Subcommittee, the issues and concerns that have

been raised and to identify a number of technical issues for the Committee’s consideration.

Delivery of Project Use Power After Transfer: Section 4(c) of H.R. 2202 requires

that the Secretary continue to provide the districts with Pick Sloan Missouri Basin

Project Use Power at rates established for entities with Federal contracts for irrigation pumping after transfer, even though the facilities are no longer owned by the

Federal government. Reclamation, as well as many of the Pick Sloan system preference power customers are very concerned about the efficacy of this action as well

as the precedent of providing non–Federal irrigation projects with subsidized electricity intended for use by the beneficiaries of Federal projects. While the legislation

proposes to eliminate the adjustment to the rate based upon their ability-to-pay, as

drafted the rate paid would still be subsidized by the preference power customers,

as it is significantly less than the wholesale PSMBP preference customer rates. The

discrepancy is amplified especially when wheeling costs are considered. The 1944

Flood Control Act requires that PSMBP deliver project use power directly to the

major project pumping plants. This has been interpreted to mean that when Federal

transmission lines are not available to the major pumping plants and the project

use power is wheeled to the major pumping plants over non–Federal transmission

lines, the PSMBP, through the power repayment study is responsible for these ‘‘in

lieu‘‘costs. The cost of this wheeling significantly increased with deregulation of the

wholesale power market. Presently, the Federal Government is paying wheeling

costs to the Lower Yellowstone Rural Electric Association, the rural electric cooperative serving the Lower Yellowstone and Savage Irrigation Districts. For both the

Lower Yellowstone Irrigation District and Savage Irrigation District the cost of

wheeling exceeds the cost of the energy. The minimum annual wheeling cost for

Lower Yellowstone Irrigation District is $42,600 and the minimum annual wheeling

8

cost for Savage Irrigation District is $76,600. Both of these payments are made by

Western Area Power Administration and the costs are then incorporated into the

PSMBP Power Repayment Study. This results in the preference power customers

subsidizing most of the wheeling costs. While I appreciate the districts’ efforts to

move this forward, serious concerns remain.

Yellowstone Fisheries Protection: There are significant fishery issues that need to

be addressed in this basin before title transfer can occur. The lower Yellowstone

River has been identified by the Fish and Wildlife Service’s Recovery Plan as a priority recovery area for pallid sturgeon, and the Intake Diversion Dam has been

identified as a barrier to pallid sturgeon migration and spawning habitat. In addition, the State of Montana is concerned about protection of the sauger, a native fish

species.

Section 5 of H.R. 2202 would require the Secretary to provide fish protection devices to prevent fish from entering the project’s main canal. It would also require

the Secretary to establish a monitoring plan for a minimum of two years following

construction. We recommend that this continued Federal oversight and obligation be

deleted from the legislation since one of the benefits of title transfer is to relieve

the United States of both liability and management responsibility for the facilities.

Price and Valuation: The Administration is concerned that the payment for the

lands and facilities proposed in H.R. 2202 does not protect the financial interests

of the taxpayers of the United States who made substantial investment in this

project. The price tag proposed, which is the ‘‘value of the remaining repayment obligation for the Savage Irrigation District,’’ does not reflect a complete analysis of the

valuation for the Lower Yellowstone Project. In particular, it must consider the

value of the withdrawn lands, which would be transferred under H.R. 2202, but are

not included in the allocation of costs that are paid by the districts in their contracts.

Technical Issues

In addition to the items raised above, we have also identified several technical

issues that should be addressed:

Mineral Rights: It is unclear whether the legislation, as drafted, intends for any

associated mineral rights to be transferred. If mineral rights are to be transferred,

an analysis of the value of that mineral right would need to be prepared and paid

to protect the financial interest of the taxpayers of the United States. In most cases,

especially in those situations where the acquisition of mineral rights were not included when the project lands were acquired, the mineral rights remain in Federal

ownership. If that is the intent, then we suggest the following addition to

Section3(a):

‘‘Conveyance of all lands herein described shall be subject to a reservation

by the United States reserving all minerals of any nature whatsoever, excluding sand and gravel, and subject to oil, gas, and other mineral rights

heretofore reserved of record by or in favor of third parties. Conveyance of

the lands herein described is also subject to permits, licenses, leases, rightsof-use, or rights-of-way of record outstanding in third parties on, over, or

across said lands or facilities.’’

Clarify Existing Ownership in Section 3(a)(2): This sentence needs to be clarified

to make clear that it is the Federally owned project lands that are being conveyed

by this subsection. We suggest the following clarification:

‘‘...convey to the respective irrigation districts by quitclaim deed all fee ownership lands, easements, and rights-of-way the United States possess which

are used in connection with the projects.’’

Documents: Section 3(c) requires that all original documents associated with the

Project be provided to the districts. It is the longstanding policy of the United States

that all original documents are the property of the United States and should remain

so after title transfer. It is appropriate, however, that all relevant records be made

available to the district to reproduce. As such, we suggest that Section 3(c) be modified to read as follows:

‘‘The Secretary shall make available to the irrigation districts all patents,

land deeds, court proceedings, water right abstracts, contracts, special use

permits, licenses, permits, and any other documents of the projects executed

on behalf of the Secretary. The irrigation districts may copy such records

at their sole time and expense, however, all original project records will be

retained by the United States.’’

Withdrawal Revocation Section 3(b)(3)(B): After the first semicolon, the word Section was omitted. The clause should read:

‘‘and lot 7 of Sec. 28, T.152N., R.104W.;’’

9

Payment as Condition of Transfer: Sections 3(d)(1) and 3(d)(2) need to be made

clear that payments by the Savage Irrigation District and the Pick Sloan Missouri

Basin Program beneficiaries are a condition of transfer. As drafted, this section requires that the Secretary accept the payment, but there is no clear linkage between

the receipt of payment and transfer of these facilities. In both 3(d)(1) and 3(d)(2),

the legislation should be modified to read

‘‘As a condition of transfer, the Secretary shall receive...‘‘

Payments To Be Made: Section 3(d)(1) and 3(d)(2) authorize that payments be

made to fulfill the contractual obligations of the District and of the PSMBP power

beneficiaries respectively. It is our understanding that they would repay the present

value, rather than the current value, which have potentially different meanings. As

such, we suggest that the term present value be substituted for the term current

value in both instances.

Power Assistance Payments: The dollar amounts of the aid-to-irrigation payment

obligation reflected in H.R. 2202 should be reduced from $667,702 to $615,693 to

reflect the current amount of aid-to-irrigation scheduled for the Savage Unit.

Contract Citation: The contract identified in Section 3(d)(1) has expired and has

not been renewed. Savage Irrigation District has been operating under an interim

contracts. We suggest that Section 3(d)(1) be revised to read:

‘‘As a condition of transfer, the Secretary shall receive an amount from the

Savage Irrigation District equal to the present value of the remaining water

supply repayment obligation of $52,680 as full payment...’’

Power Customer Payment: It is our understanding that the Savage Irrigation District has not reached agreement with Western Area Power Administration’s Firm

Power customers on payment of aid-to-irrigation upon title transfer. That should

probably be completed before this legislation is enacted and that agreement should

be reflected in the legislation. We also suggest that H.R. 2202 be modified to more

accurately reflect how the aid-to-irrigation would be repaid and that this payment

reflects the full and complete aid-to-irrigation assistance for this unit. This will also

make H.R. 2202 consistent with previously adopted title transfer legislation:

‘‘Out of the receipts from the sale of power from the Pick–Sloan Missouri

Basin Program collected by the Western Area Power Administration and

deposited into the Reclamation Fund of the U.S. Treasury in the fiscal year

in which this Act becomes law, the amount established by this Act as payment for aid-to-irrigation shall be treated as full and complete payment by

the power customers of all aid to irrigation associated with the facilities of

the Savage Unit.’’

Conservation Easement: It is our understanding that there is agreement between

the parties on the conservation easement referenced in Section 4(b). Therefore, we

suggest inserting ‘‘has been’’ and deleting ‘‘as‘‘in the last paragraph as follows: has

been mutually agreed upon by...‘‘

In closing, let me say that Reclamation continues to work with the districts and

the states of Montana and North Dakota on this title transfer. The major issues of

concern related to project power and fish screens are difficult ones. But, we are interested in continuing our work with this Committee, the districts, Congressman

Rehberg and the Montana delegation to see if creative solutions can be identified.

That concludes my statement, I would be happy to answer any questions.

Mr. KEYS. The other proposed legislation I would like to talk

about today is H.R. 3223, the Jicarilla Apache Reservation Municipal Water System Act.

The Department supports efforts to secure a safe and reliable

water supply system for the Jicarilla ApacheNation. We recognize

that the existing water systems on the reservation at Dulce, New

Mexico, are old, in bad repair, inadequately sized for the current

population and do not always meet Clean Water Act standards.

The Jicarilla ApacheNation has an urgent and immediate need for

additional housing, schools, elderly housing, medical and other facilities which cannot be built until adequate municipal water supply is available.

I would emphasize, and emphasize heavily, that Reclamation

wants to work with the Jicarilla ApacheNation to help solve the

10

problem. However, we cannot support H.R. 3223, as it is currently

written, for the following reasons:

H.R. 3223, as introduced, would require 100-percent Federal

funding for the estimated $45 million in remaining construction

costs. We feel that a more equitable level of cost sharing with the

benefiting entity is desirable. H.R. 3223 places unnecessary restraints on the Secretary of Interior’s flexibility to manage the

budget and would place enormous strain on the existing funding

available to the Bureau of Reclamation.

The ultimate responsibility for long-term operation, maintenance

and replacement of project facilities is not clear, with potentially

conflicting requirements presented in various sections of the bill.

The Department believes that this responsibility and that of obtaining rights of way should be clearly and explicitly defined within

this bill. We believe these responsibilities should be assigned to the

Jicarilla ApacheNation. This recommendation would be consistent

with the expressed desire by theNation to own, operate, and maintain the new facilities.

Mr. Chairman, the report defined in Section 3(5) of H.R. 3223

has not yet been approved by the Office of Management and Budget and should, therefore, be considered only as supporting documentation. We would be happy to work with the sponsor and the

Committee to address these concerns.

Mr. Chairman, that concludes my oral statement on both of these

bills, and I would certainly respond to any questions that you or

your panel may have.

[The prepared statement of Mr. Keys on H.R. 3223 follows:]

Statement of John W. Keys, III, Commissioner, Bureau of Reclamation,

U.S. Department of the Interior, on H.R. 3223

Mr. Chairman and members of the Subcommittee, my name is John Keys. I am

Commissioner of the Bureau of Reclamation. Thank you for the opportunity to appear today to present the Department of the Interior’s views on H.R. 3223, the

Jicarilla Apache Reservation Municipal Water System Act.

The Department supports efforts to secure a safe and reliable water supply system for the Jicarilla ApacheNation. We recognize that the existing water systems

on the reservation at Dulce, New Mexico, are old, in bad repair, inadequately sized

for the current population, and do not always meet Clean Water Act standards. The

Jicarilla ApacheNation has an urgent and immediate need for additional housing,

schools, elderly housing, medical and other facilities, which cannot be built until

adequate municipal water systems are available. However, we cannot support

H.R. 3223 as it is currently written for the following reasons:

H.R. 3223, as introduced, would require 100 percent Federal funding for the estimated $45 million in remaining construction costs. A more equitable level of cost

sharing with the non-tribal beneficiaries is necessary, in accordance with current

Reclamation policy. H.R. 3223 places unnecessary restraints on the Secretary of the

Interior’s flexibility to manage the budget, and would place an enormous strain on

the existing funding.

H.R. 3223 is unclear regarding the roles and responsibilities for the planning, design, and construction of the Project. We recommend that the Secretary be authorized to design and construct the Project by entering into agreements and contracts

as requested by theNation in accordance with the Indian Self–Determination Act

(Public Law 93–638; 25 USC 450).

The ultimate responsibility for long-term operation, maintenance and replacement

of project facilities is not clear, with potentially conflicting requirements presented

in various sections of H.R. 3223. The Department believes that this responsibility,

and that of obtaining rights-of-way, should be clearly and explicitly defined within

this bill. We believe these responsibilities should be assigned to the Jicarilla

ApacheNation. This recommendation would be consistent with the expressed desire

by theNation to own, operate, and maintain the new facilities.

11

The Administration is also concerned with language that authorizes Reclamation

to participate in developing wastewater facilities, which is outside of Reclamation’s

normal mission and will divert resources from Reclamation’s core programs.

The Administration is currently completing its review of the Report defined in Sec

3(5) of H.R. 3223, and will forward it to the sponsor and the Committee as soon

as the review is complete.

Thank you again for the opportunity to comment on H.R. 3223. I would be happy

to answer any questions the Subcommittee may have.

Mr. CALVERT. I thank the gentleman. I think I will start with

Mr. Rehberg.

Mr. Rehberg, any questions?

Mr. REHBERG. Thank you, Mr. Chairman.

Did I mention I know John Thune, and he is a friend of mine.

If I could get the same quick consideration of this bill as he got,

I would move my legislation.

[Laughter.]

Mr. REHBERG. I am not going to wait for that. OK.

Thank you, Mr. Chairman, for holding this hearing today. I am

also grateful to the witnesses for joining us today to discuss the

Lower Yellowstone Irrigation Project. I look forward to hearing

their testimony.

As you will hear, the Lower Yellowstone Irrigation Project’s construction began in 1905. By 1946, over 50,000 acres of farmland

were irrigated under the project. Total construction cost was over

$4 million and by 1979, the water users had completed payments.

Lower Yellowstone farms currently cover acreage exceeding 56,000

acres and provide over $20 million of stable revenue for the area.

Over 20 years have passed since the last payment was made to

the Bureau of Reclamation. In business today, environmental

streamlining is essential for any success. This also holds true for

irrigation projects. Currently, paperwork and overlapping bureaucracy are overwhelming the irrigation facilities. In spite of the apparent opposition to the Bureau of Reclamation, this title transfer

has been encouraged by the Bureau of Reclamation to transfer mission statements, which reads, ‘‘Transfers should occur for projects

that are efficiently and effectively managed by non-Federal entities.’’

For the last 6 years, over 500 Eastern Montana and Western

North Dakota farms have been working with Bureau of Reclamation toward this title transfer. The Bureau of Reclamation’s work

is complete and they now have the ability to reach an agreement

that is mutually beneficial to all parties. Irrigation projects will

still operate under State law, but will eliminate an unnecessary

level of bureaucracy, while the Bureau of Reclamation will shed the

oversight responsibility of an efficiently run project.

Mr. Chairman, Jerry Nypen, director of the Lower Yellowstone,

will be submitting additional endorsements for the transfer of the

Lower Yellowstone Irrigation Projects. These include endorsements

from Governor Judy Martz, Lower Yellowstone REA, Montana

Water Resources Association, the Richland County commissioners,

Richland Economic Development, Upper Missouri River Water Association, and the Sidney Area Chamber of Commerce.

Again, Mr. Chairman, I thank you for allowing this hearing, and

I yield back the balance of my time.

12

Mr. CALVERT. Mr. Udall?

Mr. UDALL OF NEW MEXICO. Thank you very much, Mr. Chairman. I appreciate the opportunity to speak to the Committee on my

proposal today that will improve the quality of safe and reliable

municipal water and wastewater to the Jicarilla ApacheNation.

You will soon receive testimony from the President of the

Jicarilla ApacheNation, who will discuss the importance of this

project, as well as the discussion she has had with the Bureau of

Reclamation and other stakeholders involved in this very important project.

I would like to thank all of the members of the Committee who

are cosponsors of this important legislation. I know Congressman

J.D. Hayworth is here and others are also cosponsors on this.

Let me begin by saying that the passage of this legislation by our

Committee and eventually the House of Representatives is paramount in terms of addressing the critical public health issues for

the tribe and North Central New Mexico. For over two decades, the

current system, the Dolce Municipal Water System, has deteriorated due to a lack of funds and capital improvements made by the

Federal trustee.

Mr. Chairman, the Dolce Municipal Water System has not been

in compliance with Federal Safe Water Drinking Standards, nor in

compliance with theNational Pollutant Discharge Standards. In

fact, BIA has been fined for its noncompliance several times.

In addition, the EPA has also listed the water system on the reservation as the third-worst system in EPA Region VI. The failure

by the Federal Government in its trust obligation over the years

has led to these terrible conditions and is the reason we are here

today.

During the 106th Congress, legislation was enacted, Public Law

106-243, authorizing the Bureau of Reclamation to conduct a feasibility study on rehabilitating the Federally owned water distribution and wastewater system on the reservation. The legislation also

directed the Secretary of Interior to report the findings and recommendations to the Congress within 1 year.

President Vigil-Muniz will touch on those findings in a moment,

and you will see the need for action on the municipal water and

wastewater systems. You also see that the Jicarilla ApacheNation

has invested over $14.6 million I their efforts to improve the quality of its municipal water and wastewater treatment system.

The Jicarilla’s investment of over $14.6 million is over 25 percent

of the total project cost. Now is the time for the Federal Government to participate. Let me be clear when I say that the lack of

investment and rehabilitation in the municipal water system constructed by the BIA in the 1920’s and expanded in the 1960’s has

led to the delivery of inadequate water to the residents of the reservation and surrounding communities.

Until this legislation is approved and the project is completed,

the future of tribal development, including additional housing,

schools, medical facilities and elderly care facilities cannot be built.

We have a Federal obligation and responsibility to improve the deficient Federally owned water system.

I appreciate your support, Mr. Chairman, in allowing this hearing to take place today. At the completion of today’s hearing, I look

13

forward to working with you, and the Committee’s staff, and Mr.

Keys, and the Administration to prepare this legislation for consideration by our Committee and approval by the House.

Thank you very much, Mr. Chairman.

Mr. CALVERT. Thank the gentleman.

Mr. Hayworth?

Mr. HAYWORTH. Mr. Chairman, I thank you.

I join with my colleague from New Mexico in wanting to work to

solve this problem on the Jicarilla Apache Reservation. My friend

from New Mexico outlined the reasons why we need to get this

done. Sitting here in the comfort and prosperity of Washington,

D.C., I think many of us lose sight of the crippling poverty and the

lack of infrastructure that exists really across the width and

breadth of Indian Country, from the Dakotas down through New

Mexico, my own State of Arizona and beyond.

I wanted to follow-up, and Commissioner Keys, I thank you for

being here, and perhaps I misunderstood your testimony, but I just

want to get this straight. As my colleague from New Mexico pointed out, and I am very happy to amplify, we understand the

Jicarilla Tribe has already invested close to 25 percent of the total

cost of this project, some $14.6 million, and yet, if I am not mistaken, Commissioner Keys, in your testimony you make the statement that the project would be, the way the bill is written now,

100-percent Federal funding. That seems to be a discrepancy. Were

you describing something else there?

Mr. KEYS. Mr. Chairman, Mr. Hayworth, as the bill is written,

it says it is a $45-million project, and all of it comes from Federal

funds. Perhaps if it was reworded to say that the total projects was

$59 million, we could take credit for that $14 million that has already been spent as a cost share.

Mr. HAYWORTH. Well, Commissioner, I think we point out that

what we want to do here is to work this out. We welcome the fact

that you support the efforts for safe drinking water and that you

are willing to work here, and also in your testimony you talked

about the urgency of getting something done. And if it is really

more proofreading than policy at stake here, then I think that is

very promising. And I don’t want to leave this hearing with a

misimpression. In my estimation, and in hearing my friend from

New Mexico, and in visiting with my friends, the Jicarilla Apaches,

this is not an insurmountable problem, and we welcome the help

of the Bureau to get this ironed out so we can move forward with

the legislation.

Mr. KEYS. Mr. Chairman, Mr. Hayworth, I would emphasize

again one of the statements I made in the oral, and that is that

we want to work with the tribe in doing this project. We think that

we have the design and construction management people that can

work with the tribe, either us doing it or under self-determination

that allows the tribe to do it. We think that we can do that as well

or better than anyone else.

The issue of cost share on the capital cost is not as onerous as

the one on the operation and maintenance cost. And certainly we

can work with you on the capital cost. We would prefer not to have

to pay operation and maintenance cost forever. In other words, we

14

feel that the entity that is benefiting should pay the operation and

maintenance cost.

Mr. CALVERT. Well, again, Commissioner, I appreciate your attendance today and your willingness to work with us in this matter, and I look forward to the testimony of the president of this

sovereign—

Mr. UDALL OF NEW MEXICO. Would the gentleman yield?

Mr. CALVERT. I will be happy to yield, Mr. Udall, just I yield

back to Mr. Hayworth who will yield to Mr. Udall.

Mr. HAYWORTH. One quick question on this bill as we move forward, some flexibility here. I notice that Mr. Keys mentioned a couple of items. One of them was funding from Reclamation, and I am

sure that one of the problems that we didn’t get specific on is the

amount of money that Reclamation has presently in their budget

to spend on projects like this. We might work on some flexible language to look at other Federal funds possibly to help in construction of this project. So I just like of put that out, and we can work

together to work on some ways we can get this done.

Mr. CALVERT. I thank the gentleman, and, again, I would yield

to my friend from New Mexico.

Mr. UDALL OF NEW MEXICO. Thank you, Mr. Chairman, for your

statement on that, and I appreciate very much the statement of the

gentleman from Arizona and his interest in this important issue.

I hope that what I hear Mr. Keys saying is that these are problems we can work through. On the issue—my understanding on the

issue of the operation and maintenance, the tribe is prepared to

pay operation and maintenance, and I think you will hear that

from the president. So I think we should—if that is the case, then

I think we should take that off the table. And then we need to sort

out, as my able colleague from Arizona said, this issue of the tribe

has already put $14.6 million into this project. So it is considered

by them—and I think it is very legitimate to say this is a sharing

project where a significant amount is made by the tribe and then

the Federal Government is picking up a share of it also.

Mr. KEYS. Mr. Chairman, Mr. Udall, certainly we are going to

work with you on the thing. There is some confusion in the bill.

Section 4(c)(2) and 4(e) and 6(a)(2) that clouds the issue on operation and maintenance. If the tribe is willing to testify that they

would pay that, certainly that makes our job a lot easier, and that

is something that we would like to see.

Mr. UDALL OF NEW MEXICO. OK. But you don’t see these as insurmountable problems?

Mr. KEYS. Mr. Chairman, Mr. Udall, I do not.

Mr. UDALL OF NEW MEXICO. OK. And you also mentioned about

the study that has been done and you are going to complete your

review of that and let us know how soon?

Mr. KEYS. The study itself is done. The report is in the review

process. I would say we could have it to you in 30 to 60 days.

Mr. UDALL OF NEW MEXICO. OK. Thank you.

Thank you, Mr. Chairman, and I thank the gentleman for yielding.

Mr. CALVERT. I thank the gentleman.

Any other questions for Mr. Keys?

[No response.]

15

Mr. CALVERT. Thank you, Mr. Keys, once again. Have a pleasant

day.

Mr. KEYS. Thank you.

Mr. CALVERT. You are excused.

Mr. CALVERT. Our second panel on H.R. 2202 is Jerry Nypen,

manager of the Lower Yellowstone Irrigation Districts No. 1 and 2

in Montana, and Liz Birnbaum, the Director of Government Affairs, American Rivers, Washington, D.C.

Please take your seats, and, again, I would remind the witnesses

we are under the 5-minute rule, and please limit your testimony

to 5 minutes so we can have time for questions.

Also, if Claudia Vigil-Muniz would like to come forward, too, we

will just have all three of you come up to the front panel. She, of

course, is the president of the ApacheNation and will be testifying

in support of H.R. 3223.

With that, first I will recognize Mr. Nypen to have your opening

statement.

STATEMENT OF JERRY NYPEN, MANAGER, LOWER

YELLOWSTONE IRRIGATION PROJECTS, SIDNEY, MONTANA

Mr. NYPEN. Thank you, Mr. Chairman and members of the Subcommittee. My name is Jerry Nypen, and I am the manager of four

irrigation districts that are being considered for facility transfer in

H.R. 2202. Thank you for this opportunity to testify.

We appreciate the support that this Subcommittee has given for

the transfer of Bureau of Reclamation facilities to local public irrigation districts. I would like my comments to accompany my written testimony for the record.The projects’ facilities for transfer involve water rights and diversion and distribution facilities for providing irrigation water to about 500 farms. But, more importantly,

it provides a significant stable economy for parts of eastern Montana and western North Dakota. Our irrigation districts have successfully cared for the projects for decades, and it is important for

us to emphasize the—

Mr. CALVERT. Let me interrupt the gentleman. Is your mike on?

Or hold the mike closer to you. Pull it up closer to you.

Mr. NYPEN. I don’t think it was on. Mr. Chairman, I can start

over. Is that necessary?

Mr. CALVERT. No, that is not necessary. You go ahead.

Mr. NYPEN. I have a voice that doesn’t carry at all, so I would—

Mr. CALVERT. The entire statement will be entered into the

record without objection, so go ahead.

Mr. NYPEN. Our irrigation district has successfully cared for the

projects for decades, and it is important for us to emphasize that

the districts are very public in nature, organized and operated

under strict statutes of State law. This facility transfer should not

be interpreted as ‘‘privatization’’ or as transfer to private hands.

Why the facility transfer? To the irrigation districts, it is consistent with the Bureau’s intent to transfer projects that are effectively managed by the Federal entities, the non-Federal entities. It

fulfills the original contracts between the Bureau and the districts

that state that congressional approval is necessary for transfer of

title. It allows for local control so that the stability and integrity

of the projects will be preserved in the future. It alleviates a sense

16

of nervousness that is created by an unnecessary layer of Government that can implement national policy for Federal works that

can cripple projects such as ours.

Finally, it will reduce costs for the Bureau of Reclamation, the

irrigation districts, and, consequently, the U.S. taxpayer.

There is concern that compliance with Federal laws will not be

met. However, a memorandum of understanding was executed with

the Bureau spelling out various principles and compliance procedures that are to be met, and the main features of this memorandum of understanding is the compliance with environmental

laws, the Environmental Protection Act, the Historical Preservation

Act, the Endangered Species Act, and the act of Congress that protects the safety from the standpoint of hazardous waste issue. We

recognize these authorities and have worked closely with the various agencies to meet those requirements.

The most involved compliance issue is a Section ESA consultation process. This process is ongoing and parallel with the facility

transfer process. Plans for fish protection devices, including fish

passage and the fish screen device, are near complete. The districts

are willing to operate and maintain these features, and we are

working very closely with the Corps of Engineers and the Bureau

of Reclamation. In fact, next month we have a value engineering

study that will be held in conjunction with these structures.

There is concern for protection of species not listed or threatened

at this time. It is interesting that the State and the Federal Government found healthy populations of many native species, 25 or

more, as a matter of fact, in our irrigation area in spite of the fact

that we have operated for 90 years. It would not be appropriate to

deny the facility transfer because of the concern to protect these

fish that are not endangered or not threatened.

The continuation of Federal power necessary to lift water to the

projects has created complications. The Lower Yellowstone irrigation projects were constructed and are maintained because of

pumping power delivery from another project, another Federal

project, the Pick-Sloan Missouri Basin program. Our irrigation districts are an integral part of the program. The way it works is that

affordable power is delivered to the community irrigation development with financial assistance from the sale of power to preferred

customers. There are no provisions in reclamation law allowing the

power arrangements to continue in a facility transfer situation.

The Bureau and preference customers argue that this bill sets a

precedent, but Congress has already authorized two facility transfers where similar Federal power contracts were specifically extended. The Bureau and the power customers agreed more specifically that it is unfair to continue wielding of the power of local nonFederal power utilities. However, delivery to our community pumping plants is clearly the responsibility of the Federal power program.

Reclamation’s unique relationship between power projects and irrigation exists throughout the Western States, and it seems inappropriate to authorize the continuance of power contracts to irrigation districts on the Colorado and the Snake River systems and not

on the Missouri River system. The continuation of Federal

contracts is absolutely necessary to transfer Lower Yellowstone

17

facilities. Without it the Savage Irrigation District water users

have experienced an increase in their community irrigation fees

from $30 an acre to $70 an acre, making the facility’s transfer financially impossible for the water user.

The customers are concerned that the bill will set another precedent that would allow a flood of irrigation in a non-Federal manner

to become eligible for Federal project use power. They contend that

preference customer rates would go up. The irrigation component

of the Pick-Sloan program is fixed. An established irrigation suballocation of 15 percent of the program’s capacity is the limit. Also,

Congress must authorize every application.

Over-appropriated waters, especially in the western part of the

basin instream-flow designations for fix and in general our country’s social attitudes the Tribunal discourage large-scale irrigation

development will certainly not allow any future runaway community-style irrigation development to take place.

I have been in the business and working with irrigation districts

for 30 years, and I know what it takes to develop a project. Getting

Federal assistance and accomplishing the first lift of water to an

arable area is only a small part of the process. We believe that the

preference power rate of about one-half cent per kilowatt hour is

based on the fact that the planned irrigation development of the

Pick-Sloan program will take place. Therefore, additional fear of

development will not be, in fact, an increase in the power rate. It

is worthy to note that in regard to the power customer’s concern

that a significant benefit to the power customers by utilizing irrigation component of Pick-Sloan exists. The unused portion, about 360

megawatts, is an uncapitalized interest-free Federal investment.

Mr. CALVERT. Excuse me. Please summarize your statement.

Mr. NYPEN. It is important that the facility transfer—excuse me.

I will do that. Thank you. It is important that the Lower Yellowstone facility transfer be authorized at this time. We believe that

the transfer activities to be well over 50 percent complete and is

now at a standstill except for the parallel activity.

Mr. Chairman, transferring the facility of the Lower Yellowstone

project is very beneficial to the United States and to the local communities. The Lower Yellowstone business communities, the producers, the laborers who depend on the welfare of the irrigation

district, and others support the passage of H.R. 2202.

Thank you for the opportunity to testify. I will do my best in answering any questions that you may have.

[The prepared statement of Mr. Nypen follows:]

Statement of Jerry Nypen, Manager, Lower Yellowstone Irrigation Projects,

Sidney, Montana

Mr. Chairman and members of the Subcommittee, my name is Jerry Nypen. I am

the Manager of the Lower Yellowstone Irrigation Districts One and Two, the Savage

Irrigation District, and the Intake Irrigation District. Thank you for the opportunity

to provide testimony on H.R. 2202, Lower Yellowstone Reclamation Projects Conveyance Act. We appreciate this Subcommittee’s support for the transfer of Bureau

of Reclamation features to local public entities.

The three Federal irrigation projects involved in this legislation are located along

a 72-mile section of the Yellowstone River near the borders of the states of North

Dakota and Montana. The Projects’ facilities for transfer involve public water rights

and diversion and distribution facilities for providing irrigation water to about 500

farms. There are about 56,000 acres being irrigated within the Projects resulting in

crop values that exceed $20 million in most years. The Projects provide for a special

18

economy within an area sparsely populated. In fact, the only industry providing stability in the area is irrigated agriculture.

The Bureau of Reclamation constructed the Savage and Intake project features,

55 years ago, and the Lower Yellowstone Project about 90 years ago. The operation

and maintenance as well as replacements and repayment responsibilities were

transferred to our locally formed Irrigation Districts following the construction. We

have successfully cared for the Projects for decades. It is important to emphasize

that the Districts are very public in nature, organized and operating under State

laws. This transfer of title should not be construed as ‘‘privatization’’.

It is important to understand why the transfer of title is being pursued. This

transfer is consistent with the Bureau of Reclamation’s mission of transferring

projects that are ‘‘efficiently and effectively managed by non–Federal entities’’. We

have certainly fulfilled the terms of the original contracts that were executed with

the Bureau of Reclamation. Since these contracts state that transfer of title will

take place with Congressional approval, we expect that the Bureau will abide by

these terms as well.

Transfer is also being pursued to acquire and maintain local control. Local businesses and industry believe that acquiring title is important now to preserve the

stability and integrity of the Projects. Without transfer, the community can only

consider themselves caretakers or custodians of the Projects even though they have

had almost 100% of the responsibility for decades. Transfer will alleviate a sense

of nervousness that is created by implementing national policy for Federal works

that can cripple projects of our nature.

The transfer will reduce costs for the Bureau and the Districts. For example, the

Bureau is required to renew a 50-year old Water Supply Contract for the Savage

District. The Bureau’s water supply is defined as a pumping plant that the Bureau

constructed in 1949. The Savage Irrigation District has operated the pumps and

long discharge lines for 53 years and has replaced them at their cost. However, the

Bureau is still required to renew a 20-year contract at an estimated cost to the District of $60,000. This irrigation development involves only 2,300 acres. Routine review and reporting exercises and other compliances cost all the Districts an estimated $60,000 per year. We are not aware of the savings to the United States for

administrating and maintaining their assets, but it is no doubt significant.

It is important to understand that the Projects will operate the same as they have

in the past. The Districts will carry out their work regardless of ownership of the

physical features. The Districts have met their obligations, and it seems only fair

that ownership is transferred to them at this time.

Fiscal management will be the same. The irrigation works are paid for except $68,280 is to be paid by the Savage Irrigation District, and $667,702 is to be paid

out of Pick–Sloan Program power sales. Both of these amounts are itemized in the

Bill. There is no Federal money involved in the operation and maintenance of the

Projects.

The Districts have worked diligently with the Bureau of Reclamation for five

years setting up the conditions for transfer. We have worked together in organizing

public meetings, various fisheries studies, real estate reviews, recreational agreements with the State of Montana, cultural resources and hazardous waste surveys,

and development of fish protection devices.

A ’Memorandum of Understanding’ was executed with the Bureau spelling out

various principles and compliances that are to be met, the responsibilities for each

phase of the process, and the division of cost. The main feature of this agreement

is the compliances with environmental laws: NEPA, NHPA, ESA and CERCLA. We

recognize these authorities and have worked closely with the various agencies to

meet the requirements.

The most involved compliance activity is a Section 7 ESA process for fish protection. Protection devices will include a fish passage structure and a fish screen that

will be in place before transfer takes place. The Bureau will be responsible for the

installation, and our Districts will be responsible for future operation and maintenance.

There seems to be a misunderstanding by some over the continuation of the Federal power to lift water to the Projects’ community water conveyance systems. Part

of the Lower Yellowstone Irrigation Districts’ lands, and all of the Savage and Intake Irrigation Districts’ lands are at elevations requiring the pumping of water.

These elevated areas were developed and are sustained only because affordable electrical power is delivered from the Pick–Sloan Missouri Basin Program’s irrigation

program.

We are an integral part of the Pick–Sloan Program’s ‘‘ultimate development plan’’,

a unique plan whereby irrigation developments are created and maintained for public benefit within the Missouri River Basin. This Bill maintains the primary purpose

19

of the Pick–Sloan Missouri Basin Program, which is to maintain a stable economy

through irrigation development. That definitely does not change.

The Pick–Sloan Program provides pumping power delivered to the Projects’

pumps at a rate known as the ‘‘project-use-rate’’. This rate, now 1.1 cents per kWh,

has been adjusted downward in the past by the Bureau of Reclamation to 0.25 cents

per kWh to match the districts’ ability-to-pay. This Bill provides for the continuation

of project-use-power under the existing contract conditions except that the abilityto-pay adjustment will no longer be applicable. We are foregoing this condition because we recognize that title transfer savings can offset the adjustment. The Districts obligation to pay full value of the irrigation pumping rate should be recognized as a direct benefit to the U.S. taxpayer.

Parties concerned about continuing the contracts for project-use-power are the Bureau of Reclamation and the Pick–Sloan Program’s power customers. The Bureau

administers the irrigation component of Pick–Sloan, and the power customers pay

for the balance of costs not paid by the irrigation community. This is a unique program that has provided great economic benefits throughout the Western States.

The Bureau and the power customers are concerned that the Bill will set a precedence that would allow a flood of non–Federal irrigation entities to become eligible

for project-use-power causing power rates to go up. But the irrigation-pumping component of Pick–Sloan is fixed. An established irrigation suballocation of 15% of the

Program’s capacity is the limit. Also, Congress must approve every application.

Over-appropriated water in the West, instream-flow designations, and in general

our country’s social attitudes that discourage large-scale irrigation development will

certainly not allow any future runaway community-style irrigation development to

take place.

The States recognize that the intended Pick–Sloan irrigation development will not

happen. Congress passed legislation in the 106th Congress (Dakota Water Resources

Act of 2000) that reduced North Dakota’s potential irrigation to under 60,000 acres,

a mere 5% of that state’s allotment of project-use-power. Montana is intending to

introduce legislation for irrigation programs for about 70,000 acres that will drastically deflate the use of Pick–Sloan pumping also. Federal development for non- Indian projects is no longer being considered in these states. Developments by Local

or State Governments are possible avenues being pursued, but as you would expect,

it would be on a very small scale.

There is no credence to the objectors’ precedence issue. The Bureau’s latest requirement is that the Projects receiving Pick–Sloan project-use-power must be authorized as ‘‘units’’ of the P–SMBP and that the recipients sign a 25-year contract

to pay an appropriate share of costs for construction of P–SMBP power facilities.

But many projects receive project-use-power that does not fit this policy. In Montana

and North Dakota; Buffalo Rapids, Buford Trenton, Dodson, Intake, Lower Yellowstone 1&2, Kinsey, Sidney Water Users, Haidle, and Hammond are all public irrigation entities that have been authorized by Congress to receive project-use-power.

Various Acts of Congress including Acts of 1939 and 1944 authorized them. They

are not ‘‘units’’ of Pick–Sloan, nor do they participate in contracts to share costs for

construction of power facilities. In fact four of them are non–Federal irrigation developments. All of these entities are enrolled in the Pick–Sloan Program only for

receiving the project-use-power. They are all satisfying the purpose of the Pick–

Sloan Program; they foster public benefit.

More importantly, precedence has also been clearly set in previous title transfer

processes to leave long-term power contracts alone. Congress recently authorized

two facility transfers where Federal power contracts were specifically extended.

They are Public Law 105–351, ‘‘to convey certain facilities of the Minidoka Project

to the Burley Irrigation District‘‘: In Section 1. (d.) ’PROJECT RESERVED POWER.

The Secretary shall continue to provide Burley (irrigation project) with project reserved power from the Minidoka Reclamation Power Plant, in accordance with

terms of the existing contracts, including renewals thereof as provided in such contracts.’; and Public Law 106–221: the ‘‘Wellton–Mohawk Transfer Act’’, in Section

3: ’WATER AND POWER CONTRACTS. Notwithstanding the transfer, the Secretary and the Secretary of Energy shall provide for and deliver Colorado River

water and Parker–Davis Project Priority Use Power to the District in accordance

with the terms of the existing contracts with the District, including any amendments or supplements thereto or extensions thereof and as provided under section

2 of the agreement’.

There are numerous irrigation project/power project arrangements around the 17

Western States; however, whether it is the Parker Davis Project in Arizona or the

Pick–Sloan Program in Montana, the intentions of the Reclamation Program are the

same to provide project power to main pumping facilities for creating and sustaining

irrigation development for public benefit.

20

It is important to know that our Projects have had project-use-power contracts for

over 50 years, and have provided without fail the intended public benefits. This

would not change with title transfer. It would seem very appropriate to consider

title transfer as a condition that would allow the projects to continue to function

as they have.

The removal of the Projects from the irrigation component of the Pick–Sloan Missouri Basin Program will not allow the transfer of irrigation features to take place!

The power rates would increase from 0.25 cents to 8.0 cents per kilowatt-hour for

3 of the Irrigation Districts, and from 0.25 cents to 3.0 cents for the other District.

The cost of operating and maintaining the public irrigation features to convey water

to the irrigated area for the Savage Irrigation District would increase from $30 per

acre to $70 per acre. Please understand that this is the cost of getting water from

the river to the boundaries of the farms. The true cost of water to the farmers would

be this community cost plus their costs of distribution on their property. This total

cost far exceeds their capability.

We hope that Reclamation’s title transfer was never intended to tear apart the

fabric of an irrigation development by denying access to historically utilized Federal

project power.

Mr. Chairman, transferring the title of Federal irrigation works of the Lower Yellowstone, Savage, and Intake Projects in Eastern Montana and Western North Dakota is very beneficial to the Untied States Government and to the local farms and

businesses. The Government’s work has clearly been completed and the irrigation

districts are very capable of continuing the public benefits for which the Projects

were built.

The Lower Yellowstone business communities, the producers, the laborers who depend on the welfare of the irrigation system, and others support the passage of

H.R. 2202.

Thank you for the opportunity to testify. I would be pleased to answer any questions you may have.

[Attachments to Mr. Nypen’s statement follow:]

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22

23

24

25

Mr. CALVERT. I thank the gentleman.

Ms. Birnbaum, you are recognized for 5 minutes.

STATEMENT OF S. ELIZABETH BIRNBAUM, DIRECTOR OF GOVERNMENT AFFAIRS, AMERICAN RIVERS, WASHINGTON, D.C.

Ms. BIRNBAUM. Good afternoon, Mr. Chairman and members of

the Subcommittee. My name is Liz Birnbaum. I am the Director of

Government Affairs for American Rivers. I want to thank you for

the opportunity to testify today. American Rivers is a national river

conservation organization with over 30,000 members and field offices across the country, including one in Great Falls, Montana.

We strongly oppose H.R. 2202 as currently drafted. I will confine

my comments to the language found in Section 5.

Unfortunately, Section 5 is wholly inadequate for the stated purpose of protecting the native fishes of the Yellowstone River. As

currently written, this section virtually assures that no meaningful

process will be made on fish passage and entrainment issues at Intake Diversion Dam. Specifically, the provision fails to identify a

time horizon for completing the much needed fish protection and

passage devices or to designate responsibility with regard to funding and construction of the devices.

Addressing the effects of the operation of the Lower Yellowstone

Reclamation Projects on endangered species and other native species in the Basin is the linchpin in recovering and maintaining

these native fishes. Failure to deal with the projects’ impacts at

this time will only result in further species listing and more onerous burdens for irrigators in these districts and throughout the

basis. Allowing this legislation to move forward with these omissions would be a disservice to the people of Montana, the irrigation

districts involved, State and Federal agencies, and all those who

care about the native fishers and the Yellowstone River.

Intake Diversion Dam was constructed by the Reclamation Service around 1908 and supplies the water for the four irrigation districts previously discussed. The dam is the lowermost of six lowhead irrigation diversion dams on the Yellowstone River between

Billings, Montana, and its confluence with the Missouri River near

the North Dakota border.

Fish passage and protection is a concern of all of the dams, but

it is especially important at Intake. As discussed previously by

Commissioner Keys, the lower reaches of the Yellowstone contain

the best remaining habitat for species like the Federally endangered pallid sturgeon, the sicklefine chub and sturgeon chub, which

are both candidates for listing, and several species of concern for

the State of Montana, such as the paddlefish and sauger. This

dam’s impediment to spawning migrations for these and other native species is pushing the pallid sturgeon toward extirpation and

will likely lead to the listing of other species.

Fish passage at Intake would reopen nearly 140 miles of historic

spawning areas for the pallid sturgeon. That improvement, combined with efforts underway at upstream dams on the Yellowstone

and important tributaries, could allow this ancient species to access

nearly all of its historic range in the Yellowstone Basin.

In addition to fish passage facilities, installation of fish screens

to prevent entrainment of adult and juvenile fish is equally imporVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 80010.TXT HRESOUR1 PsN: HRESOUR1
26

tant to the recovery of pallids and stopping the decline of the other

native fishes. Again, as discussed by Commissioner Keys, studies

by the Bureau of Reclamation estimate that 70,000 sturgeon chub

per year are killed by entrainment in the main canal, and 100,000

sauger were destroyed in the canal in 1998. In total, their studies

show that be 500,000 and 1 million fish per year are pulled into

the irrigation canal under current conditions, affecting recruitment

of many native species in addition to those already listed.

Section 5 of H.R. 2202 requires that the Secretary of the Interior

‘‘shall provide’’ fish protection devices, with the proviso that the

‘‘The Secretary and irrigation districts shall work cooperatively in

planning, engineering, and construction the fish protection devices.’’ The provision does not state when the devices should be constructed or whether fish passage must precede project transfer. In

addition, this language does not specify a funding source for the

necessary devices, authorize appropriations, or address the question of reimbursability. One might infer from this language that

funding for the projects will be the responsibility of the Federal

Government, yet the question of reimbursability has been a key

issue in the failed negotiations over this project transfer. If the

issue is not resolved in this legislation, this problem, combined

with the bill’s failure to state a deadline or divide responsibilities

between the Secretary and the districts, may well lead to an indefinite delay in construction.

This issue is too important to be left to the vagaries of future appropriations processes after the facilities have been transferred into

private hands. After transfer, Reclamation would have little incentive to fund this $5 to $10 million obligation out of its declining

budgets. Other Federally owned projects would likely receive priority and the problems at Lower Yellowstone might well go

unaddressed.

The importance of these matters to the economic and ecologic

well-being of the Yellowstone Basin can’t be overemphasized. It is

imperative that fish passage and protection devices be installed

and proven to work, and an accepted plan for operation, maintenance and necessary future modifications of the devices be in place

before transferring these facilities. Although this would be consistent with the testimony of Commissioner Keys, we suggest that

the Reclamation should not have continuing responsibility after

transfer. In fact, this is an issue that should be dealt with before

transfer. To do anything less is to set up the citizens of the basin

for increased future conflict and diminished natural values. The

problem will only get worse if it is not resolved now.

We urge the Subcommittee to amend H.R. 2202 to ensure that

fish passage devices be constructed amendment tested before the

projects are transferred to the local beneficiaries. Without such assurances, we will continue to oppose the bill.

Thank you.

[The prepared statement of Ms. Birnbaum follows:]

Statement of S. Elizabeth Birnbaum, Director of Government Affairs,

American Rivers

Good afternoon Mr. Chairman and Members of the Subcommittee, my name is Liz

Birnbaum. I am the Director of Government Affairs for American Rivers. I want to

thank you for the opportunity to testify here today. American Rivers, a national

27

river conservation organization with over 30,000 members, strongly opposes

H.R. 2202, the Lower Yellowstone Reclamation Projects Conveyance Act, as currently drafted.

Our organization has concerns about several aspects of this and other Reclamation title transfer initiatives, a concern dating from at least 1996, when we endorsed

the statement of principles for Reclamation project transfers developed by several

environmental organizations, which is attached to my testimony. Today I will confine my comments to language found under the heading Yellowstone River Fisheries

Protection, Section 5 of H.R. 2202.

Unfortunately, Section 5 is wholly inadequate for the stated purpose of protecting

the native fishes of the Yellowstone River. As currently written, this section virtually assures that no meaningful progress will be made on fish passage and entrainment issues at Intake Diversion Dam. Specifically, the failure to identify a time

horizon for completing the much needed fish protection and passage devices, and the

lack of clearly delineated responsibilities with regard to funding and construction

of the devices render the provision toothless and futile.

Addressing the effects of the operation of the Lower Yellowstone Reclamation

Projects on endangered species other native species in the basin is the linchpin in

recovering and maintaining these species. Failure to deal with the projects’ impacts

at this time will only result in further species listings and more onerous burdens

for irrigators in these districts and throughout the Yellowstone Basin. Allowing this

legislation to move forward with these omissions would be an egregious disservice

to the people of Montana, the irrigation districts involved, State and Federal agencies and all those who care about native fishes and the Yellowstone River.

Geographic and Ecologic Background

Intake Diversion Dam, constructed by the Reclamation Service around 1908, supplies the water for the four irrigation districts involved in this transfer. The dam

is the lowermost of six low-head irrigation diversion dams on the Yellowstone River

between Billings, Montana and its confluence with the Missouri River near the

North Dakota border.

Fish passage and protection is a concern at all of the dams, but it is especially

important at Intake. The lower reaches of the Yellowstone contain the best remaining habitat for species such as the Federally endangered pallid sturgeon, sicklefin

chub and sturgeon chub, both candidates for listing, and several species of concern

for the State of Montana such as the paddlefish and sauger. The impediment this

dam presents to spawning migrations for these and other native species is inexorably pushing the pallid sturgeon toward extirpation and will likely lead to the listing of other species.

Fish passage at Intake would reopen nearly 140 miles of historic spawning areas

for the pallid sturgeon. That improvement, combined with efforts underway at upstream dams on the Yellowstone and important tributaries, could allow this ancient

species to access nearly all of its historic range in the Yellowstone.

In addition to fish passage facilities, installation of fish screens to prevent entrainment of adult and juvenile fish is equally important to the recovery of pallids

and stopping the decline of other native fishes. Studies by the Bureau of Reclamation estimate that 70,000 sturgeon chub per year are killed by entrainment in the

main canal, and 100,000 sauger were destroyed in the canal in 1998. In total, their

studies show that between 500,000 and 1,000,000 fish per year are pulled into the

irrigation canal under current conditions, affecting recruitment of many native species in addition to those already listed.

Improvements at Intake Diversion Dam, in concert with other fish passage and

protection initiatives in the basin, are by far the best chance we have to recover listed species and preclude the listing of more species.

Problems with H.R. 2202

Section 5 requires that the Secretary of the Interior ‘‘shall provide’’ fish protection

devices, with the proviso that ‘‘The Secretary and irrigation districts shall work cooperatively in planning, engineering, and constructing the fish protection devices.’’

The provision does not state when the devices should be constructed, or whether

fish passage must precede project transfer. In addition, this language does not

specify a funding source for the necessary devices, authorize appropriations, or address the question of reimbursability. One might infer from this language that funding for the projects will be the responsibility of the Federal Government, yet the

question of reimbursability has been a key issue in the failed negotiations over this

project transfer. If the issue is not resolved in this legislation, this problem, combined with the bill’s failure to state a deadline or divide responsibilities between the

28

Secretary and the districts, may well lead to an indefinite delay in construction of

the necessary facilities.

This issue is too important to be left to the vagaries of future appropriations processes after the facilities have been transferred into private hands. After transfer,

Reclamation would have little incentive to fund this $5–10 million obligation out of

its declining budgets. Other Federally owned projects would likely receive priority

and the problems at Lower Yellowstone would go unaddressed.

The importance of these matters to the economic and ecologic well being of the

Yellowstone Basin cannot be overemphasized. It is imperative that fish passage and

protection devices be installed and proven to work, and an accepted plan for operation, maintenance and necessary future modifications of the devices be in place before transferring these facilities. To do anything less is to set up the citizens of the

basin for increased future conflict and diminished natural values. The problem will

only get worse if it is not resolved now.

Conclusion

We urge that the Subcommittee amend H.R. 2202 to ensure that fish passage devices be constructed and tested before the projects are transferred to the local beneficiaries. Without such assurances, we will continue to oppose this legislation.

Mr. CALVERT. I thank the gentle lady.

Mr. Rehberg?

Mr. REHBERG. Thank you, Mr. Chairman.

Mr. Nypen, I’m going to ask you an essentially two-pronged question to address both Mr. Keys and Ms. Birnbaum. As far as the

costs, under the transfer of title to this project, what conceivably

would change in the management of the project that you could foresee changing who pays for what? Why shouldn’t the irrigator still

get the preferred price because there’s nothing that anyone is being

asked to do in addition to what they’re already doing? The rest of

the ratepayers are not going to be doing anything any differently,

and the project doesn’t change, the consumption of power doesn’t

change, so why should the charge be any other cost? And then the

second part of my questions is: Again, under the transfer of the

title, what would change environmentally? You are still going to be

responsible for endangered species under the Endangered Species

Act. You are still going to be responsible for NEPA. You still have

to fulfill all those requirements of the Federal Government.

So I guess I don’t understand the opposition to this bill. What

changed in your mind that wouldn’t dictate or necessitate just

going ahead and moving this bill forward, because you are still

going to have the same energy cost and you are still going to have

the same requirement to fulfill environmental policy in this country?

Mr. NYPEN. Mr. Chairman, Mr. Rehberg, nothing changes. Our

irrigation districts have been operating for—some as long as 70

years. There is no change in the operations at all. The real issue

is such that the costs are the same, except this bill does, in fact,

for the cost of power exclude the ability-to-pay clause, which actually raises our payment to the United States for the power. That

is for the power itself.

The ruling is now part of the Pick-Sloan program. That is the

intent of the Federal Pick-Sloan program, is to move power to

irrigation districts, move it in such a way as to promote the public

benefit that this program fulfills.

The Endangered Species Act question that you have, we fully intend to see that this consultation process is carried out. At the

present time we have fish protection devices that are being deVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 80010.TXT HRESOUR1 PsN: HRESOUR1
29

signed, and we have no objection at all to installing—having these

facilities installed for the protection of fish. We know these facilities are needed and that they will be done prior to the signing of

the transfer.

It is not fully understood, I guess, why we want to extend beyond

that.

Mr. REHBERG. Mr. Chairman, if I could have a follow-up question. What do you anticipate the Federal Government’s financial

obligation if this bill does not pass will be on an annual basis?

What does this cost the Department or the Bureau of Reclamation

annually?

Mr. NYPEN. I am not certain what it costs, and they are incurring the funds that are common to take care of their assets. And

they don’t supply any funds to our project. They review our operations periodically at our cost. They certainly have a lot of accountability to do and associated moneys that they spend to, like I say,

take care of their assets. And I—

Mr. REHBERG. Is it safe to say, then, that the savings of the title

transfer will be equivalent or more than what they are spending;

that the title transfer would, in fact, be, even if the unit costs

would be at the level that they are unless they are indirect savings? Would the title transfer, in fact, be a net gain for them to

oppose this legislation rather than the fact as opposed to a net

cost?

Mr. NYPEN. Mr. Chairman, Mr. Rehberg, yes. I believe that

would be that, at least that analysis would be correct.

Mr. REHBERG. So there would be no reason for the Bureau of

Rec. to oppose this legislation, other than the fact that I haven’t,

since I have been in Congress, found a bill they support yet.

Mr. NYPEN. Not with that point, no.

Mr. REHBERG. Thank you.

Mr. CALVERT. Any additional questions for these two witnesses?

Mrs. Napolitano?

Mrs. NAPOLITANO. Yes.

Mr. CALVERT. Mrs. Napolitano.

Mrs. NAPOLITANO. Thank you, Mr. Chairman.

There are a couple of questions, and I am sure you may have covered part in some of them, but I am concerned about the water

rights, and being able to just transfer the lands and the water

rights, and is there any provision to make sure that those water

rights are not sold to somebody else in the future?

Mr. NYPEN. Mr. Chairman, Mrs. Napolitano, the water rights in

the State of Montana are handled through the prior Appropriations. They are state water rights. The United States appropriated

water through the State of Montana 90 some years ago to get the

project going, because that right is held in the name of the United

States and preserved for the constituents of the project. They cannot be sold or changed in any way without going to the State and

applying for change authorization. They are definite for irrigation

purposes and for the domestic water purposes of the project.

Mrs. NAPOLITANO. Who pays for reeling cost?

Mr. NYPEN. The reeling cost providing the power to the irrigation

projects is paid for by the United States. It is part of the PickSloan Program. The Pick-Sloan Program, when the thing was initiVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 80010.TXT HRESOUR1 PsN: HRESOUR1
30

ated in 1994, the irrigation development was the major part of the

program. That program, it took top priority, and of course the irrigation didn’t develop, and we have additional power that has been

generated twice or two-and-a-half times what was intended. The

plan is that the reeling was always meant to be or intended to be

a part of the program, and it has just recently been reconfirmed by

the Bureau, that it is the Bureau of Reclamation’s responsibility.

The repairs are the power customers of the Pick-Sloan Program.

The program, of course, is administered by the Bureau of Reclamation.

Mrs. NAPOLITANO. And the mitigation of the cost for endangered

species or the cost of the mitigation rather. Who pays for it now,

and who would pay for it if H.R. 2202 goes through?

Mr. NYPEN. We anticipate that the costs of putting new structures in, which may be 5 to 6 million dollars, would be the cost of

the United States. This is a venture mainly to recover an endangered species on a river system where there is no complete evidence that the endangered species, the pallid sturgeon, existed in

numbers in the first place, and we anticipate that to be an obligation to the Federal Government. Once they are installed, the irrigation district has vowed to take the responsibility to operate and

maintain those futures, so that they work in the way that they

were installed.

Mrs. NAPOLITANO. You indicated there was precedence. If there

was such a thing done before, will the districts be willing to consider facing these costs?

Mr. NYPEN. Mr. Chairman, Mrs. Napolitano. The districts can’t

participate in any of the costs from a financial standpoint. We have

a limit as far as what we are capable of paying for the community

to use for irrigation, to get water to the farms, and we are to that

limit. Plus, you are referring to the reeling cost, and going from a

$30 an acre operation and maintenance fee to get public water to

the borders of a farm, from having that go from $30 an acre to $70

an acre is not financially possible to keep—and also about $20,000

for a 400-acre farm, and it is something that is financially infeasible, and if that was done the irrigation project there would collapse.

Mrs. NAPOLITANO. Thank you, Mr. Chairman.

Mr. CALVERT. Any other questions?

[No response.]

Mr. CALVERT. If not, the two witnesses in regards to 2022 are excused, and we will move to our next witness.

Mr. CALVERT. Next I would like to introduce President VigilMuniz, the President of the Jicarilla ApacheNation. You are recognized for your opening statement.

STATEMENT OF CLAUDIA J. VIGIL-MUNIZ, PRESIDENT,

JICARILLA APACHE NATION; ON BEHALF OF THE JICARILLA

APACHE RESERVATION RURAL WATER SYSTEM ACT

Ms. VIGIL-MUNIZ. Thank you. Good afternoon Chairman Calvert,

Ranking Member Smith and distinguished members of the

Committee. My name is Claudia Vigil-Muniz, President of the

Jicarilla ApacheNation.

31

Right now we have a picture of our community, that is an area

photo that we brought to help along with a visual to give you an

idea of what we are talking about. My cameraman is our water administrator, so he will be pointing out certain things as it go

through this.

Thank you for holding this hearing today on H.R. 3223, a bill to

authorize the Bureau of Reclamation to modernize the Federally

owned and managed public water system on the Jicarilla Apache

Reservation. This hearing and this bill are extremely important to

the health and welfare of the Jicarilla ApacheNation because we

are facing a health crisis.

The Department of Interior, acting through the Bureau of Indian

Affairs, initially built the system with materials that we now know

to be hazardous, such as asbestos and lead. Over the years the BIA

expanded the public water system in an ad hoc and haphazard

way, and have never adequately been maintained or upgraded.

In the area served by the original main water line clusters of our

people have suffered from different forms of cancer. My own father

lived in that area and he succumbed to cancer in 1994. Many others have suffered similar deaths, including three other people who

lived on the same street. The wastewater system is a relic of the

past consisting of open sewage lagoons. These unlined ponds are

well over capacity, causing seepage into the ground and spilling

raw sewage into waterways that ultimately leave the reservation.

The sewage ponds are located on the west part of town. When the

winds blow the stench is unbearable.

In addition to the public health and safety hazards the inadequate infrastructure has created a host of other problems on the

reservation. There is an increased use of individual septic systems

which are now failing due to incompatible soil conditions. 200 of

these must be pumped out monthly to prevent standing waste

where our children play. The lack of adequate housing results in

overcrowding with many extended families living under one roof.

The existing infrastructure cannot support new housing. The infrastructure problem threatens the completion of many projects such

as a new public school system or new public school, a school dormitory and a new judicial complex, which all have been authorized

and funded.

In 1996 BIA asked us to take ownership and assume operation

and maintenance responsibilities. The Tribal Council commissioned

studies to determine the viability of this request and ultimately decided against it, given the extent of the deterioration. The problems

escalated in October 1998 when the division system on the Navajo

River failed, leaving the entire community of Dulce without drinking water for 6 days. We had to spend $5 million on an emergency

basis to restore water to the community and to begin making other

needed improvements. We quickly found out that the BIA could not

deal with this problem. We were also turned away by other Federal

agencies. They told us that they could not use their funds on another Federal Agency.

We turned to Congress for help, and in July of 2000, Public Law

106-243 was enacted, authorizing a feasibility report to determine

how to address these problems. The completed report makes the

following conclusions. We have a reliable and sufficient source of

32

high-quality water. The water distribution delivery and wastewater

collection components must be replaced. The wastewater sewage lagoons must be replaced with a modern facility that can meet Federal standards. Construction of these new facilities will have no

significant impact on affected environment and in fact will be environmentally beneficial on all levels. No action is not an option.

H.R. 3223 would implement the recommendations of the report

and authorize a project amount of 45 million. The bill also provides

that theNation would only operate and maintain the facilities upon

the completion of the project, which will save the Department of Interior money in the long run. We also have a second diagram that

gives you an idea of where we are located. We are right on the Colorado border.

To date we have spent nearly $8 million on improvements and

have committed an additional 6 million to begin work on a new

wastewater plant as this is a very urgent matter that cannot be delayed. Last year Senator Domenici was successful in securing 2.5

million for final design work and to prepare for constructions. We

are in the process of putting this money to use as well.

In closing the Jicarilla ApacheNation calls upon this Committee

and Congress as a whole to put a stop to the health hazards caused

by the Federal Government’s irresponsibility and neglect of its

water system. We have done everything that has been asked of us

in pursuit of this project, and we have invested a significant

amount of tribal funds to correct a Federal responsibility. For my

tribe to be self sufficient the Federal Government must own up to

its responsibilities and make sure that the Jicarilla Apache people

have safe drinking water and adequate wastewater facilities.

Please help us move forward with economic development, improved

health conditions and safe housing for our people. We urge immediate and favorable action on H.R. 3223.

That concludes my remarks. I will be happy to respond to any

questions, and my staff is available to work with the Committee

staff to move this project forward. Thank you.

[The prepared statement of Ms. Vigil-Muniz follows:]

Statement of Claudia J. Vigil–Muniz, President, Jicarilla Apache Nation

Chairman Calvert, Ranking Member Smith and distinguished members of the

House Resources Subcommittee on Water and Power, I am pleased to submit this

statement in support of H.R. 3223, the Jicarilla Apache Reservation Rural Water

System Act.

I would first like to thank Chairman Calvert for scheduling this hearing and

thank the members of the Committee for attending today to learn more about the

Jicarilla ApacheNation and this very important project. I also want to commend our

Congressman, Tom Udall for introducing the bill along with our other New Mexico

representatives: Congressman Joe Skeen and Congresswoman Heather Wilson. The

Jicarilla ApacheNation is honored to have the support of additional cosponsors: Congressman J.D. Hayworth, Congressman Dale Kildee, Congressman George Miller,

Congressman Patrick Kennedy, Congressman Dave Camp, Congressman Bob Ney,

Congressman Scott McInnis, Congressman Mike Thompson, and Congressman Robert Ehrlich. I want to especially thank another cosponsor, a long time friend of the

Jicarilla ApacheNation, Congressman Don Young who for many years has provided

tremendous understanding and support on this project and other matters affecting

our Tribe.

This hearing is vitally important to the health and welfare of the Jicarilla ApacheNation. Our people are facing a crisis: the U.S. Department of the Interior owns and

operates the public water system on our Reservation and the water system is a

shambles. When the Department of the Interior’s Bureau of Indian Affairs built the

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water system, it was built in a linear fashion so a single break in the line causes

systemic failure. The Department of the Interior never adequately maintained or

upgraded the water system, so it is simply inadequate to support modern residential

life and is a negative barrier to our community growth and economic development.

The Department of the Interior also constructed the public water system with materials which constitute health hazards, such as asbestos. As a result, our people suffer with no safe drinking water. In community areas served by original water system equipment, we have clusters of deaths from stomach cancer. Even as we speak,

tribal members are forced to drink from this unsafe system. As a tribal government,

we have planned a new school for our children, and though the location for the new

facility lacks water infrastructure, we were forced to break ground to meet funding

requirements of the mill bond. Our complex of government services is at a standstill.

Housing and economic development are on hold because you cannot start new business activity without drinking water.

H.R. 3223 would provide the necessary authorization for the Jicarilla ApacheNation to work in cooperation with our trustee, the United States Department of

the Interior, acting through the Bureau of Reclamation, to replace the existing,

Federally-owned water delivery and wastewater systems on the Jicarilla Apache

Reservation. The current infrastructure is deficient, inadequately sized, and out of

compliance with Federal standards thereby subjecting the people both on and off the

Reservation to serious health and public safety risks. Constructing new water delivery and wastewater infrastructure will provide a safe and adequate supply of drinking water to our Reservation. Authorization of this project is consistent with the

United States Federal trust responsibility owed to the Jicarilla ApacheNation, the

mission of the Bureau of Reclamation, and will allow us to move forward with desperately needed housing, health care, law enforcement, education and other facilities to meet our governmental responsibilities to our citizens. The passage of this

bill is the top priority of the Jicarilla ApacheNation and will be the cornerstone for

building a future for my Tribe. I urge the Committee to act favorably on this bill.

This statement provides a history of the Jicarilla Apache people and background

on the governance of the Jicarilla ApacheNation, including a general overview of our

relationship with the United States. The statement provides a discussion of the Federal Government’s development of the water delivery and wastewater infrastructure

on the Jicarilla Apache Reservation as well as the deterioration of these systems

and the corrective measures that have been undertaken to address these problems.

This statement addresses the relevant sequence of events and discussion of issues

relating to the enactment of Public Law 106–243 on July 10, 2000, which authorized

the Secretary of the Interior to conduct a feasibility study to determine the most

feasible method of developing a safe and adequate municipal, rural, and industrial

water supply for the Jicarilla Apache Reservation. This study, entitled ‘‘Municipal

Water and Wastewater Systems Improvement, Jicarilla ApacheNation, Dulce, New

Mexico, Planning Report/Environmental Assessment’’ was conducted by the Bureau

of Reclamation in cooperation with the Jicarilla ApacheNation, and was completed

in September 2001. This statement discusses this report, the Jicarilla ApacheNation’s objective to implement the recommendations of the report, and the current

progress of the work now being conducted by theNation to improve these systems.

HISTORY OF THE JICARILLA APACHE

For five centuries or more, the mountains and high desert of northern New Mexico have been home to the Jicarilla Apache people, one of six Athapascan groups

which migrated from the North sometime between 1300 and 1500 A.D. The traditional homeland of the Jicarilla Apache people covered more than 50 million acres

bound by four major rivers across what is now the central and eastern region of

northern New Mexico, and adjacent portions of southern Colorado and western

Oklahoma. The variety of terrain and ecosystems provided game, agricultural lands,

water, fish, wildlife and opportunities for intertribal trade. Our traditional lifestyle

included a wide variety of hunting, gathering plants for food and medicine and raising corn and other crops. Jicarilla people lived in clusters of extended family groups

and maintained semi-permanent living areas at preferred locations for hunting and

gathering moving from site to site with the seasons. Undoubtedly, our people lived

through both dry and wet years in this region known for its large-scale climatic

changes, and mastered wise use and management of the land and resources in harmony with the demanding environment. Our resilience and resourcefulness proved

to be the key to our survival and preservation of our culture during the subsequent

tumultuous years following the arrival of European settlers and the American westward expansion.

Beginning in the late 1600’s, the Jicarilla aboriginal land base shifted in location

and was reduced in geographic spread as the Comanches migrated out of the Great

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Basin toward the Texas Gulf Coast and other Apache people were pushed out of

southwest Kansas merging with the Jicarilla. Trade and French exploration of the

region enabled the Comanches to obtain guns though the Apaches were blocked

from obtaining guns. The lack of access to weapons required the Apaches to remain

close to the foothills year round thus making them more vulnerable and further disrupting traditional patterns of subsistence. After European contact, lands and resources of the Jicarilla people were appropriated by others but we maintained our

core areas. In the 1800’s, the Mexican government awarded numerous land grants to Americans and occasionally to Indians to recognize our prior rights. By 1841, the Jicarilla

people were acknowledged to have the ownership and right to use of the largest

land grant, consisting of 1.7 million acres east of the Taos Pueblo in northern New

Mexico. Following the 1846 annexation of this territory by the United States, this

land grant was purchased by an American in 1847 without our consent. Pressure

for lands and resources among settlers and the Jicarilla people caused increasingly

strained relations and the Jicarilla people were further dispossessed from traditional, sacred homelands.

By 1850, most of the Jicarilla Apache people were located in New Mexico practicing small scale agriculture and grazing, In 1851, a treaty was signed between the

United States and the Jicarilla Apache and plans were developed to move the

Jicarillas away from the non–Indian settlement in northern New Mexico. Our treaty, however, was not ratified. The Jicarillas made many attempts to establish small

farms on the newly-reserved tribal territory though these efforts were continuously

hampered by non–Indian settlement pressures. These settlers not only forcibly appropriated the Tribe’s fertile lands, including extensive forest reserves, and water

resources, but also pressured local governing officials to ignore efforts to secure a

firm tribal land base for the Jicarilla Apache people.

To address these problems, a number of Executive Orders reservation were issued

to establish a reservation land base for the Jicarilla Apache people. Executive Orders of President Ulysses S. Grant in 1874 and Rutherford B. Hayes in 1880 were

issued establishing a reservation land base for the Jicarilla Apache people. However,

primarily due to pressure from non–Indian settlers, these orders were rescinded and

around 1883, and the Federal Government relocated the Jicarilla Apache people to

the south to live with the Mescalero Apaches. This move proved unwise because the

land at Mescalero was being irrigated by the Mescaleros or non–Indian settlers, and

the Jicarilla people returned home to northern New Mexico and continued efforts

to secure a permanent homeland of its own.

Finally on February 11, 1887, President Grover Cleveland issued an Executive

Order which established the Jicarilla Apache Reservation on part of our original

homeland in north-central New Mexico bordering Colorado. In 1907, President Theodore Roosevelt issued another Executive Order establishing the southern portion of

the Reservation. These Executive Order reservation orders were ratified by Congress in 1919. These laws finally ended the forced dispossession and removal that

our people endured for nearly 200 years. With adequate water, timber, wildlife and

agricultural lands coupled with a seemingly more supportive Federal Government

trustee, our Tribe was poised to undertake sustained development of the Reservation lands and resources as our permanent home.

The Jicarilla Apaches began the 20th Century fighting epidemic outbreaks of Tuberculosis, trachoma, measles, and influenza. These epidemics resulted in a devastating loss of our population. Over 90% of the Jicarilla children were infected with

Tuberculosis. Our people persevered and steadily continued to develop our resources

and planned to use the revenue from our timber harvesting to purchase sheep and

cattle for grazing. However, the United States controlled and managed our timber

resources, but failed to properly manage revenue derived from the sale of our timber. By 1912, 130 million board feet of timber were sold but funds were not delivered threatening the Tribe’s wealth and economic security at a critical time of our

development. In 1917, Congress recognized that the Department of the Interior’s

mismanagement was causing the Tribe unnecessary suffering while our funds were

encumbered. The Department of the Interior also failed to develop our water resources causing overgrazing and extensive damage to the Reservation resources. In

1919, livestock was finally delivered to the Reservation which diversified the

Jicarilla Apache way of life from bare subsistence to a ranching economy. Yet, tribal

revenue derived from resources uses and sales, primarily timber, continued to be

mismanaged by the Federal Government as documented in several Senate field

hearing which confirmed that the Tribe was not receiving the benefits from tribal

resources development.

On August 3, 1937, our Tribe accepted the provisions of the Indian Reorganization

Act (IRA), and adopted a Constitution, bylaws and corporate charter enabling quick

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and efficient governmental organization. The Constitution vested authority in the

Tribal Council to regulate use of land in conformity with land and resources protection. The Tribe made ‘‘sustained yield’’ the guiding principal governing resources development. Acceptance of the IRA reinforced specific duties of the Department of the

Interior to protect and enhance our land and resources.

During the middle part of the century, our livestock and resources management

continued to grow. At this time, the prevailing Federal Policy of terminating the

legal status of Indian tribes did not affect our Tribe as we were deemed traditional

and not ‘‘eligible for termination.’’ In the 1950’s, mineral exploration started on the

southern part of the Reservation, and soon development of our oil and gas began

to generate revenue for the Tribe. At the same time, our livestock economy began

to decline due to the lack of water development and drought conditions.

By 1960, 90% of the tribal population resided in or near the community of Dulce

demonstrating another major shift in our economy. Both the Tribe and the Federal

Government, acting through the Department of the Interior’s Bureau of Indian Affairs, had to reconstruct the tribal economy based on centralized governmental services, natural resources management, and commercial enterprise development. In

particular, timber and oil and gas development provided a steady and reliable

source of revenue and employment opportunities. Increased major infrastructure, including schools, public health facilities, tribal offices, and housing accompanied the

Tribe’s increased economic development. Tribal government revenue from natural

resources extraction and revenue from the settlement of the land claims settlement

coupled with a good relationship with and infrastructure support from the Congress

and the Department of the Interior provided a strong framework for the economic

growth of the tribe.

The modern era also represented another major development as the Tribe became

more active in its exercise of tribal government authority and which often required

the Tribe to challenge the Department of the Interior’s policy decision-making. In

1976, the Tribal Council enacted a tribal severance tax ordinance on oil and gas tax

to raise additional governmental revenue. The Tribe successfully defended its authority in the landmark 1982 Supreme Court decision Merrion v. Jicarilla Apache

Tribe, which upheld the right of the Tribe to impose these taxes to fund tribal government services. Our Tribe continued to assert its rights and move forward with

protecting our water resources.

During the 1970’s, the Tribe asserted its authority to protect its water resources

because the Department of the Interior failed to do so when erecting major Federal

water projects diverting our water resources to serve communities off the Reservation. The Tribe sued the Department of the Interior and the Federal Government

to defend our water resources and our efforts ultimately resulted in the congressional enactment of P.L. 102–441, the Jicarilla Apache Tribe Water Rights Settlement Act in 1992. This settlement statutorily guaranteed our Tribe perpetual water

rights for commercial, municipal and domestic use as well as the ability to market

or lease water to third parties for use off the Reservation.

During this period, the Tribe similarly prevailed in suing the Department of the

Interior for its failure to properly value tribal oil and gas and account for royalties

as required by the applicable leases, statutes and regulations. In 1989, however, the

Supreme Court issued an unfavorable decision in Cotton Petroleum v. New Mexico

allowing the state to impose severance taxes on non–Indian producers who worked

with the tribal government to develop tribal trust resources on the Jicarilla Apache

Reservation. We strongly disagree with the Court’s rationale for this decision because it places discriminatory and unfair impediments on our economy with no requirement that the state return any revenue or services back to the Reservation.

The resulting dual taxation burden caused by this decision continues to plague Indian economies nationwide and is a matter that we have been working to address

through Federal legislation. With the exception of the case, the Jicarilla ApacheNation has been extremely successful in asserting its rights and holding the Federal

Government accountable for its responsibilities owed to the Tribe.

In the 21st Century, the Jicarilla ApacheNation continues to assert its rights, protect its resources and hold the Department of the Interior and the United States

accountable for obligations guaranteed by Federal law and for its failure to uphold

these obligations. When the Department of the Interior, acting through the BIA, allowed the Federally-owned water delivery and wastewater systems to deteriorate to

the point of threatening the public safety and welfare of our people and nearby residents, the Jicarilla ApacheNation, in keeping with our long tradition of resilience

and resourcefulness, immediately undertook action to address this problem.

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PROFILE OF THE JICARILLA APACHE NATION

The Jicarilla ApacheNation is a Federally recognized Indian tribe organized under

the Indian Reorganization Act of 193455, 25 U.S.C. § 461 et seq. In addition land

set aside by the 1887 and 1907 Executive Orders that established the Jicarilla

Apache Reservation, the Jicarilla ApacheNation reacquired approximately 137,150

acres of additional land taken into trust by the United States, resulting in a total

Reservation land base of 879,917 acres. The Jicarilla Apache Reservation is geographically located in the resource-rich San Juan Basin, a geologic basin containing

large amounts of oil, gas, coal, uranium, and geothermal reserves.

The Jicarilla ApacheNation has approximately 4,000 members with nearly 85% of

our members (3,300) living on the Reservation. The town of Dulce in the northeastern part of the Reservation serves as the headquarters and tribal government

seat and is the location of most of the social and economic activity of the Reservation. Most of the residents are concentrated in Dulce.

In accordance with the Jicarilla Apache Revised Constitution, the Jicarilla Apache

Legislative Council, an eight member body elected by members living on the Reservation, is the governing body of the Jicarilla ApacheNation. A President and Vice

President are elected by the on–Reservation tribal membership establishing the

head executive branch of government which directs all of the various tribal departments. The Constitution provides for a third branch of government, the Jicarilla

Apache Tribal Court.

The Jicarilla ApacheNation is the largest employer in the region with employing

about 750 people, and provides law enforcement and detention, fire protection and

rescue, health care, education, natural resources development and management, elderly care, road maintenance, environmental protection, fitness and wellness services to the citizens on the Reservation. The Jicarilla ApacheNation raises governmental revenue through development and regulation of our oil and natural gas to

fund over 90% of its operating budget. TheNation also formed the Jicarilla Energy

Company (JECO) to develop, produce and market our oil and gas reserves. TheNation offers world class big game hunting and fishing that attracts visitors worldwide.

We have also instituted a land acquisition program to purchase and recover some

of our original homelands in order to expand our agricultural resource base and create additional opportunities for tribal social and economic growth. The high elevation and mountainous terrain of the Reservation has proven to be inadequate to

accommodate theNation’s increasing agricultural and ranching activities. In addition, 99% of theNation’s population is located in the town of Dulce on the extreme

northeastern edge of the Reservation. These circumstances have necessitated the

purchase of land east of Dulce, known as the Mundo Ranch recently reacquired and

taken into trust status, to provide for additional housing and governmental services

facilities.

DEVELOPMENT OF WATER INFRASTRUCTURE

The existing water and wastewater facilities that use the Tribe’s water rights are

held in trust by the United States Department of the Interior and operated by the

Bureau of Indian Affairs (BIA) Jicarilla Agency (Agency) staff. The initial water

supply system was erected in the early 1900’s in the community of Dulce primarily

to serve the BIA operations and facilities. The source of the community’s water supply is the Navajo River located about a mile from Dulce. Water is diverted from the

Navajo River and pumped up hill to the water treatment plant before being released

into the community for public consumption.

Upon settlement by tribal members into the town of Dulce, the BIA provided a

couple of outdoor spigots or faucets along the main water line from which member

could draw water. In the early 1960’s the Tribal Council requested the BIA to extend its water delivery services to tribal members with homes located along the

main water line. The BIA granted this request, and for the first time, some of the

tribal members began to experience the convenience and health benefits of indoor

plumbing.

As the needs of the community expanded over the years, the Dulce water system

also grew from a small BIA-contained system to one that provides water delivery

and wastewater services to the entire town of Dulce. However, with no overall comprehensive planning for capacity, public health and safety considerations, the water

system developed on an ad hoc basis whereby water line extensions branched out

from the original main line to serve tribal buildings, individual commercial development, housing subdivisions, additional BIA facilities, and other public facilities. Because the Dulce water system developed in a linear fashion with only one source

of water to the point of delivery, a single water main break results in water delivery

failure to a significant number of people. The linear nature of the system also creVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6621 80010.TXT HRESOUR1 PsN: HRESOUR1
37

ates stagnant zones which causes water to become stale thereby creating a serious

health threat to the community.

During the late 1980s and the 1990s the BIA-operated water treatment plant had

several drinking water quality citations as the existing plant was under sized and

outdated unable to meet new drinking water standards. Public health officials suspected that the water supply could be contributing to a marked rise in stomach and

intestinal related diseases in the community.

The unlined sewage treatment lagoons were constructed with BIA and Indian

Health Service funding. This outdated wastewater disposal system is not only obsolete but is also overcapacity, spilling poorly treated effluent into Amargo Creek that

is tributary to the San Juan River. This system is on the verge of failure, and is

currently operating without the properNational Pollutant Discharge Elimination

System permit, which expired in 1995. This system cannot qualify for a permit renewal under present circumstances, and under Federal law, exposes the BIA to fines

of up to $25,000 per day. The sewage lagoons are operating at 100% over capacity

during the summer and at 500% over capacity in the winter as a result of lower

evaporation rates. This overcapacity as well as seepage from the unlined lagoons

has resulted in wastewater spilling into the Amargo Creek, which feeds back into

the Navajo River, and eventually into the Colorado River. The community also suffers from unbearable odors from the sewage lagoons. Given the density of the local

housing, the current system not only threatens the Dulce community but also poses

significant public health, welfare and safety threats to communities off the Reservation.

The inadequacy of the existing facilities has also given rise to an additional public

health and safety concern. The demand for and proliferation of additional housing

has occurred without access to community water and wastewater facilities, and have

resulted in increased private wells and septic tanks. More than 200 septic systems

have been identified and are not functioning properly because the marine shale-derived soils in the area have limited absorptive characteristics and are unsuitable for

drain field application. There are documented cases of standing septic waste in open

areas and near children playing in the streets.

All of these documented deficiencies and public health dangers demand that the

only solution is to completely replace and rehabilitate both the water delivery an

wastewater collection and treatment systems. Yet, for more than twenty years,

these systems have been steadily deteriorating due to inadequate Federal funding

for regular maintenance and improvements. However, the Jicarilla BIA Agency has

continued to exercise Federal responsibility and control over these systems by allocating funds from its budget to cover salaries for the operators, electrical power and

chemicals to operate the treatment plant. In addition, the Agency has submitted

budget information for a number of years documenting the shortfall in funding to

operate and maintain the existing systems.

Despite these efforts, the Federal Government has consistently under funded the

operations, maintenance and replacement program for the systems and has reluctantly continued to manage the town’s drinking water and wastewater systems.

This has lead to significant degradation of existing systems and replacement in conformance with new standards is virtually non-existent.

In 1996, the BIA inquired whether the Jicarilla ApacheNation would assume ownership and operation of the systems. To evaluate the feasibility of this request, theNation commissioned studies in 1997 with PNM, the largest public utility in the

state of New Mexico, to assess the condition of the water and wastewater facilities

in Dulce. A field investigation and engineering analyses were performed by PNM

Water Services and the findings indicated serious degradation of existing water and

wastewater pipelines and related facilities. It also indicated that there was a substantial capacity problem for this size of community with little opportunity for expansion given the condition and capacity of existing systems. The most serious findings were the poor condition and capacities of the existing water treatment plant

and sewage treatment system, a series of evaporative lagoons. The study illustrated

that both systems were operating at of above design capacity and were not meeting

Federal standards for public health and stream discharge standards. Discharge of

poorly treated effluent into a tributary of the Navajo River in the San Juan basin

was occurring routinely under an expiredNational Pollutant Discharge Elimination

System (NPDES) permit. The findings indicated that for the systems to be brought

up to current operating standards and meet Federal water quality standards it

would cost in excess of $25 million. This investment would not, however, provide

for long-term community expansion.

These dire conditions escalated in October of 1998, when the drinking water diversion system on the Navajo River failed leaving the community without water for

6 days. This required emergency funding from the Tribe to repair the diversion ilVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6621 80010.TXT HRESOUR1 PsN: HRESOUR1
38

lustrating the vulnerability of the Tribe’s diversion and pumping plant system. TheNation, unable to get necessary funding from BIA or other Federal programs, was

compelled to expend $5 million on an emergency basis to replace the water treatment plant and associated facilities in 1999.

The magnitude of the infrastructure issues couple with the BIA’s inability to comprehensively address the scope of the problems associated with their systems left

the tribal leadership with no alternative but to take the lead to resolve these issues.

With the PNM information in hand, theNation approached a number of agencies,

in addition to the BIA, such as the Indian Health Service, EPA and USDA to see

if any programmatic funding existed to assist theNation with this serious set of

problems. Given that the these systems are titled with the BIA, most Federal programs had limited resources to deal with these problems. To deal with this magnitude of funding needs, theNation was advised to seek specific legislation to have

appropriations designated for a specific agency to manage in cooperation with theNation.

TheNation then approached the Bureau of Reclamation to see if their agency

would be willing to work on this issue. TheNation was advised to seek authorization

for a Feasibility Study so a report to Congress concerning the problem could be prepared to assist in developing authorizing legislation for this project. TheNation

worked closely with the New Mexico Congressional delegation to develop legislation

that would authorize the Bureau of Reclamation to prepare the Feasibility Report

to determine the most feasible method of developing a safe and adequate municipal,

rural, and industrial water supply for the Jicarilla Apache Reservation. P.L. 106–

243 was signed into law on July 10, 2000 and directed the Secretary of the Interior

to work in cooperation with the Jicarilla ApacheNation in conducting this study.

The statute also authorized $200,000 for the completion of the study and required

the Secretary to report back to Congress on the status of the work within one year

from the time funding was appropriated.

FEASIBILITY STUDY AND REPORT AUTHORIZED BY PUBLIC LAW 106–243

In September 2001, the Bureau of Reclamation, in cooperation with the Jicarilla

ApacheNation completed the feasibility study and report authorized by P.L. 106–

243, entitled ‘‘Municipal Water and Wastewater Systems Improvement, Jicarilla

ApacheNation, Dulce, New Mexico, Planning Report/Environmental Assessment.’’

The findings of this report were similar to the PNM report regarding the condition

and capacity of existing systems but suggested that none of the older existing pipelines be salvaged due to age and size. This resulted in a $35 million estimate to

adequately replace existing deteriorated facilities and to build a new conventional

wastewater treatment plant to treat water to Federal discharge standards, eliminate the serious odor problem permeating the community, and have a new water

supply source for stream enhancement, construction and irrigation purposes that

was previously being evaporated.

The report goes on to say that to adequately solve both immediate environmental

and public health concerns and meet long-term growth and economic development

needs of the Jicarilla ApacheNation, an additional $10 million will be needed resulting in a recommendation to Congress to authorize construction of water and wastewater facilities at a cost of $45 million.

THE NATION’S CONTRIBUTIONS TO THE SYSTEMS

After discovering the Federal programs and funding sources were limited to solve

even the immediate capacity problems and public health concerns, theNation was

compelled to fund several projects beginning in 1998.

On a percentage basis, this investment would amount to more than 20% of total

project costs if what the nation has already funded is added to the Federal portion

being requested. TheNation recently committed an addition $6 million to begin conVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6621 80010.TXT HRESOUR1 PsN: HRESOUR1
39

struction on the new wastewater treatment plant because the current situation is

so extreme and required immediate action. The total project cost is broken listed

below:

In addition, theNation is making the commitment to assume title to the facilities

and to operate these facilities in perpetuity once constructed to Federal standards.

This is a significant Federal benefit as it alleviates the Federal liability in the operation of a substandard system and shifts the costs of operations, maintenance and

replacement of these facilities to theNation. It is estimated by the O,M & R portion

of the report, that it will cost approximately $750,000 per year to adequately operate and maintain these facilities. The Federal investment would be protected under

tribal management as BIA funding for this purpose has been significantly cut over

the years resulting in the current conditions that exist today. The present value of

this cost over a 50-year project life at a 6% financing rate is $ 12 million.

By authorizing this project, Congress will provide for the United States to meet

its trust responsibility to theNation by providing adequate water and wastewater

infrastructure to protect and advance the health, safety and welfare of the Jicarilla

people. TheNation has fulfilled all that was asked of us to demonstrate the extensive need our people have for adequate infrastructure that a majority of Americans

currently enjoy. TheNation, in cooperation with Reclamation and with the assistance of Congress, has demonstrated the poor condition that these facilities are in

and have exposed the risk facing the Bureau of Indian Affairs as it continues to operate these facilities in their current condition. TheNation has also demonstrated its

resolve in improving conditions for our people by investing nearly $14 million in infrastructure of its own financial resources even though we believe strongly that the

United States has failed in providing these services as part of its trust responsibility

to theNation.

CONGRESSIONAL LEGISLATION

This discussion provides a section-by-section analysis of H.R. 3223.

Section 1. Short Title—Jicarilla Apache Reservation Rural Water System Act.

Section 2. Purposes of the Act

• to ensure a safe and adequate rural, municipal, and water supply and wastewater system on the Jicarilla Apache Reservation;

• to authorize BOR to plan, design, and construct the water supply, delivery, and

wastewater collection systems on the Jicarilla Apache Reservation;

• to require, at the election of the Jicarilla ApacheNation, that BOR contract with

theNation under the Indian Self–Determination Act for the planning, design,

and construction of the project; and

• to establish a process for theNation to eventually assume ownership and responsibility for the system upon the completion of the project.

Section 3. Definitions. Self-explanatory.

Section 4. Jicarilla Apache Reservation Rural Water System.

(a) & (b) authorizes construction and scope of the project to rehabilitate and replace the water delivery and wastewater collection systems on the Jicarilla Apache

Reservation.

(c) construction cost of the project will be borne by the Federal Government, and

the existing amount of operation and maintenance funding currently incurred by the

40

Federal Government shall continue to be available to theNation through contracting

under the Indian Self–Determination Act.

(d) theNation is given recognition of the fact that it has expended $7.3 million on

the Federal systems and that this amount shall be deemed to have satisfied any

project beneficiary share that the authorizing committees may require.

(e) after the project is completed and the water system is rehabilitated, theNation

will assume responsibility and liability under the relevant plans.

Section 5. General Authority authorizes the Secretary to enter into agreements

and to promulgate regulations relevant to the project.

Section 6. Project Requirements -

(a) Secretary has to prepare a project plan within 60 days of enactment of the

statute;

(b) Secretary shall designate a project manager;

(c) Secretary and Tribe shall commit to a transition plan regarding operation and

maintenance of the system during and after construction;

(d) Secretary shall have oversight responsibility and shall incorporate ‘‘value engineering analysis’’ an engineering term of art;

(f) Service area shall be within the boundaries of the Reservation;

(g) Nation shall develop an operation, maintenance and replacement plan;

(h) Project shall be subject the Indian Self–Determination Act;

(i) Secretary shall issue an annual report on the progress of the project; and

(j) Title shall be held in trust by the United States and will be transferred only

by another act of Congress.

Section 7. Authorization of Appropriations -

(a) $45 million, subject to necessary price and cost adjustments, is authorized to

be expended on the project;

(b) Funds may only be appropriated after an appraisal and feasibility study have

been completed, and an operation, maintenance replacement has been completed by

theNation.

(c) NEPA requirements must be satisfied.

(d) Amounts authorized and appropriated to be expended may not be subject to

agency financing reductions.

Section 8. Prohibition on use of funds for irrigation purposes.

Section 9. Water Rights theNation has sufficient water rights in the basin for this

project and the project will have no adverse Endangered Species Act related issues.

CONCLUSION

In sum, the Jicarilla ApacheNation is suffering premature deaths, community

members are subject to continuing health hazards, and community development is

blocked by the Department of the Interior’s failure to maintain and modernize the

public water system that it established and undertook to operate on the Reservation. Interior has asked the Jicarilla ApacheNation to take over the operation of the

public water system, and as a tribal government we are willing to take over the operation of a safe and sound public water system. But before we will take over the

operation, Interior must fix the health hazard that it has created.

Mr. CALVERT. Thank you.

Mr. Hayworth.

Mr. HAYWORTH. Thank you, Mr. Chairman.

Madam President, again, thank you for coming, and we thank

you for your testimony and also the explanation of just what your

community faces. And I am pleased to join my colleague from New

Mexico to move this legislation. I believe we received some encouraging signs from the Bureau of Reclamation, and I am just interested in your evaluation as you sat and listened to the preceding

testimony. Do you feel comfortable that we can move forward in a

constructive fashion, in a bipartisan way, and with the Bureau as

well as with your tribe to solve this problem, using this bill as a

starting point and understanding that we have some things to iron

out here?

Ms. VIGIL-MUNIZ. I believe so.

Mr. HAYWORTH. Well, again, I think that those who join us here

today, when they hear what you are confronting, the health hazVerDate 11-MAY-2000 14:43 Apr 10, 2003 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6602 80010.TXT HRESOUR1 PsN: HRESOUR1
41

ards, the environmental hazards and the frustration and indignity

of trying to solve a problem and trying to reach out and get this

done is something that underscores the urgency of the action.

And, Mr. Chairman, I again thank you for having his hearing

and then moving forward in this direction.

And, Madam President, again, as we visited earlier today before

coming in the hearing room, I stand ready to work with you and

your tribe, and my colleague from New Mexico and other colleagues

on the Committee, to find a legislative solution of this, and I thank

you for your attendance.

I yield back.

Mr. CALVERT. I thank the gentleman.

Mr. Udall.

Mr. UDALL OF NEW MEXICO. Thank you, Mr. Chairman, and I

yield to the gentlelady from California, Ms. Solis.

Ms. SOLIS. Thank you, Mr. Udall.

I also want to associate my comments with Mr. Hayworth’s, surprisingly. On this one we agree. This in fact I view as an environmental justice issue. This community has done as much as they

can feasibly do through their own efforts and creative uses, by putting money together to begin a project to address these egregious

issues that face your particular reservation. I commend you and

hope that we can work with you. This Committee will work with

you to see how we can look at any other mitigation issues that

were raised during the year, but I had an opportunity to meet with

some of the members and was very interested in hearing of some

of the challenges that they have, not only the fact that they are

faced with many water cleanup, contaminated water cleanup challenges, but also the fact that this also where I believe nuclear testing occurred in prior years, so that also has some definite impacts

in the surrounding area that I know at this time we can’t begin to

address. But we can certainly start looking at something that adds

more of a challenge to what it is you all are trying to do.

So I just wanted to associate myself with support of this bill, bipartisan effort here. And thank you for coming here and testifying

this afternoon before our Committee. Thank you.

Mr. UDALL OF NEW MEXICO. Yield.

Ms. SOLIS. Yield back the balance of my time.

Mr. UDALL OF NEW MEXICO. Thank you very much for those eloquent words on this issue.

Madam President, let me first of all thank you for your leadership on this issue. I think you have shown a great deal of initiative

since you have been president. I think you have pulled together a

good team to work on this, and I think we are making significant

progress, and on my part, I just want to commit to you that I will

work with the rest of the Committee members and the Chairman

to do whatever we can to expedite this.

I think you brought one of your counselors with you also today,

if you would like to introduce him to the Committee, Carson

Vicente; is that correct?

Ms. VIGIL-MUNIZ. Yes, that’s correct.

Mr. Chairman, may I introduce him?

Mr. CALVERT. Yes. Certainly, you go ahead an introduce your

guest.

42

Ms. VIGIL-MUNIZ. Carson Vicente, the legislative counsel; also

have Mike Hammond, who is our water administrator; and Shana

Nancity who is our lobbyist here in D.C.

Mr. UDALL OF NEW MEXICO. Thank you. Good to have you here.

You heard the testimony of Commissioner Keys. On the issue of

operation and maintenance after the project is complete, could you

tell us what the position of the JicarillaNation is on that?

Ms. VIGIL-MUNIZ. Mr. Chairman, Mr. Udall, we plan to take over

the title at that point in time when the project is completed, and

we will take over the responsibility of the operation and maintenance at our cost.

Mr. UDALL OF NEW MEXICO. That was my understanding all

along, and I think that the three sections of the bill that the Commissioner mentioned, those sections specifically referred to in the

language, ‘‘The tribe shall assume responsibility for and liability

related to the annual operation, maintenance and replacement cost

of the project in accordance with this act.’’ That was one of the sections, and I believe that was very clear. I think you referred also

to Section 4(c) here, 4(c)(2). In the purposes it talks about ‘‘To establish in which the ApacheNation shall assume title and responsibility for ownership, operation, maintenance and replacement of

the system.’’ So we are once again in the legislation being clear

there.

And in 4(c)(2), which is one that the Commissioner mentioned,

it says, ‘‘The Federal share of cost of operation and maintenance

of the rural water supply project shall continue to be available for

operation and maintenance in according with the Indian Self-Determination Act.’’ So that may be the area where we need to work

a little bit with the Commissioner on, but he, I think, showed his

support and willingness to work with us. And I don’t know if you

have any other comments based on what he said in terms of stating the position of theNation.

Ms. VIGIL-MUNIZ. Mr. Chairman, Mr. Udall, if I understand correctly on the 638 issues, they are referring to BIA dollars that are

currently being applied to the operation and maintenance, which is

approximately 100,000, and those dollars are what we plan to take

over and use toward contributing toward the operation and maintenance cost.

But, yes, we can work with Commissioner Keys and try to resolve the language issue and try to get that much clearer so that

they understand where we are coming from.

Mr. UDALL OF NEW MEXICO. And what you talk about 638 dollars, you are talking about the program that if a tribe takes over

a function and operates it itself, they are then entitled to have

money to do that, and that is the $100,000 you are referring to?

Ms. VIGIL-MUNIZ. That is correct.

Mr. UDALL OF NEW MEXICO. Yes, OK.

Thank you very much, Mr. Chairman.

Mr. CALVERT. I thank the gentleman.

I think that we can work out the differences with the Commissioner, the three of us, Mr. Hayworth, Mr. Udall and myself and

our Committee staff, and try to, one work out the operations maintenance language in the bill, and also I think we need to get some

flexibility in the bill for additional funding from different Federal

43

agencies potentially, and I think we can do that, and hopefully we

can get together a bill that we can bring up here and mark up and

send out.

And so with that positive news, unless there are any other comments from the Committee, we stand adjourned.

I thank Madam President for your attendance today, and we appreciate your flying all the way out here. With that, we are adjourned.

[Whereupon, at 3:09 p.m., the Subcommittee was adjourned.]

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