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[Senate Hearing 113-113]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-113
 
                  S. 434, THE BLACKFEET WATER RIGHTS 
    SETTLEMENT ACT OF 2013 AND S. 611, THE SANDIA PUEBLO SETTLEMENT 
                        TECHNICAL AMENDMENT ACT 

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

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 8, 2013

                               __________

         Printed for the use of the Committee on Indian Affairs

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                      COMMITTEE ON INDIAN AFFAIRS

                 MARIA CANTWELL, Washington, Chairwoman
                 JOHN BARRASSO, Wyoming, Vice Chairman
TIM JOHNSON, South Dakota            JOHN McCAIN, Arizona
JON TESTER, Montana                  LISA MURKOWSKI, Alaska
TOM UDALL, New Mexico                JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                MIKE CRAPO, Idaho
MARK BEGICH, Alaska                  DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii
HEIDI HEITKAMP, North Dakota
        Mary J. Pavel, Majority Staff Director and Chief Counsel
     David A. Mullon Jr., Minority Staff Director and Chief Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 8, 2013......................................     1
Statement of Senator Barrasso....................................     2
Statement of Senator Baucus......................................    11
Statement of Senator Cantwell....................................     1
Statement of Senator Tester......................................     3
Statement of Senator Udall.......................................     3

                               Witnesses

Augare, Hon. Shannon, Councilman, Blackfeet Nation...............    12
    Prepared statement...........................................    14
Joyner, Calvin, Associate Deputy Chief, National Forest System, 
  U.S. Forest Service, U.S. Department of Agriculture............    26
    Prepared statement...........................................    27
Paisano, Hon. Stuart, Councilman, Pueblo of Sandia...............    28
    Prepared statement...........................................    29
Washburn, Hon. Kevin K., Assistant Secretary for Indian Affairs, 
  U.S. Department of the Interior................................     5
    Prepared statement...........................................     7
Weiner, Hon. Jay, Assistant Attorney General, State of Montana...    19
    Prepared statement...........................................    21

                  S. 434, THE BLACKFEET WATER RIGHTS 
    SETTLEMENT ACT OF 2013 AND S. 611, THE SANDIA PUEBLO SETTLEMENT 
                        TECHNICAL AMENDMENT ACT

                              ----------                              

                         WEDNESDAY, MAY 8, 2013

                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:38 p.m. in room 
628, Dirksen Senate Office Building, Hon. Maria Cantwell, 
Chairman of the Committee, presiding.

           OPENING STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    The Chairwoman. The Senate Committee on Indian Affairs will 
come to order.
    We are having a hearing today on S. 434, the Blackfeet 
Water Rights Settlement Act of 2013 and S. 611, the Sandia 
Pueblo Settlement Technical Amendment Act.
    This afternoon, we will be hearing from a variety of 
witnesses within the Administration and various tribes. 
Obviously at the core principle of these issues today is tribal 
self-governance and self-determination, and the ability of 
tribes to exercise jurisdiction over their lands and their 
resources.
    Often legislation is necessary to ensure the tribes can 
exercise those rights and this is a story that we all know in 
the Northwest because during my time in the Senate, we have 
passed several transfer bills for the Hoh and the Quileute 
Tribes so that they could move out of either tsunami or flood 
zone areas.
    We are currently working on legislation for the Spokane 
Tribe that has passed the Senate and the House several times 
which was a land issue in coordination with the Grand Coulee 
Dam.
    I am well aware of the importance of these settlement 
disputes with tribes and the positive impacts they can have 
when the settlements come into effect.
    S. 434, the Blackfeet Water Rights Settlement Act would 
settle a longstanding water dispute between the Blackfeet Tribe 
and the State of Montana and would ratify an agreement that the 
two parties have reached. Today, the Committee will hear from 
both the tribe and the State on how they came to this agreement 
and what it means for the State, the tribe and the surrounding 
communities.
    We will also hear from Kevin Washburn, Assistant Secretary 
of Indian Affairs, Department of the Interior. The Department 
will play an integral role in the negotiation and 
implementation of these water rights settlements.
    This bill was introduced by Senator Baucus and Senator 
Tester, a member of our Committee. I applaud both of them for 
their hard work on this important legislation and their work 
with the tribe and the State Department. Hopefully, we will get 
this signed into law.
    I look forward to working with both of my colleagues as we 
move forward on this legislation.
    The second bill, S. 611, also deals with a tribal 
settlement, the Sandia Pueblo Settlement Technical Amendment 
Act, introduced by Senators Udall and Heinrich. It is a very 
straightforward bill with only one purpose, to finally 
accomplish the transfer of 700 acres of land to the Pueblo of 
Sandia, New Mexico intended to happen when Congress passed the 
original Act in 2013.
    The Act directed the United States Forest Service to 
transfer 700 acres of land of the Sandia Mountain to the Pueblo 
of Sandia in exchange for other land and compensation. These 
Sandia Mountains are of great cultural significance to the 
Pueblo of Sandia and unfortunately, despite the original Act 
and clarifying amendment in 2009, after ten years, the land 
transfer has still not been completed.
    Obviously passage of S. 611 will finally accomplish what 
Congress intended ten years ago by clarifying how these lands 
will be valued and ensuring the land transfer will occur within 
90 days of this passage.
    Today, we will hear from the Sandia Pueblo on this bill and 
also the U.S. Forest Service. I hope today's testimony will 
allow us to move forward.
    I would like to now turn to Vice Chairman Barrasso for any 
opening statement he would like to make.

               STATEMENT OF HON. JOHN BARRASSO, 
                   U.S. SENATOR FROM WYOMING

    Senator Barrasso. Thank you, Madam Chairwoman, for holding 
this hearing. I will keep my statement brief.
    These bills are very important to the people of the 
Blackfeet Tribe and the Sandia Pueblo and deserve our careful 
consideration. We have a panel of witnesses ready to share 
their insight with us on these bills and I appreciate their 
assistance. I am also looking forward to hearing from Senator 
Baucus and his comments on the Blackfeet bill.
    I would say this if Senator Baucus was here but 
additionally, I want to thank him on the record for all the 
work he has done in terms of Indian country. The people of the 
State of Montana will be losing a great advocate when he 
retires. He has served all of them and the rest of our country 
very, very well for almost 40 years, first in the House of 
Representatives and since 1978 in the United States Senate. His 
service will certainly be missed.
    Thank you, Madam Chairman.
    The Chairwoman. I am sure he will appreciate those kind 
remarks.
    Senator Tester, did you want to make a statement?

                 STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. I will be very quick.
    First of all, thank you, Madam Chair and Ranking Member, 
for holding this hearing. I want to thank everyone from 
Blackfeet country for being here and the folks from the 
Interior.
    The water compact process is a tough one. Water is 
incredibly valuable, maybe our most valuable resource. I think 
everyone in this room understands it is better to negotiate 
than to litigate. That is what this is about. We need to make 
sure those negotiations are all in good faith and that we come 
to a conclusion because, quite frankly, time is of the essence.
    I am going to approach Senator Baucus from a different 
angle than the Ranking Member did. He will have been in this 
body for 36 years. The passage of the Blackfeet compact while 
he is here would be an incredible asset. When he is gone, it is 
a jump ball and we do not know what we are going to get.
    I think it is incredibly important that we work, both the 
Department and the Tribe, to make sure we come to an agreement 
sooner rather than later.
    Thank you.
    The Chairwoman. Thank you, Senator Tester. Thank you for 
your leadership on this legislation. We know you will continue 
working on all of that Montana tradition here in the U.S. 
Senate.
    While we are waiting on Senator Baucus, I would like to 
turn to our colleague and member of the Committee, Senator 
Udall, to make a statement on S. 611.

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you very much, Madam Chair.
    I first want to thank Chairwoman Cantwell and Vice Chairman 
Barrasso for holding this hearing and including S. 611, the 
bill to make technical amendments to the T'uf Shur Bien 
Preservation Trust Area Act.
    I would also like to welcome to the Committee Stuart 
Paisano, Councilman, from the Pueblo of Sandia, who will be 
testifying on behalf of the Pueblo. I know the completion of 
this land exchange is very important to the Pueblo and I thank 
Councilman Paisano for coming to share the views of the Pueblo 
on this legislation.
    It is important that the Committee hear the perspective of 
the Pueblo and understand the impact the delays and finalizing 
this land exchange have had on the Pueblo.
    The original T'uf Shur Bien settlement passed in the 108th 
resolved the Pueblo of Sandia's land claims. In addition to the 
large land settlement, the Act directed the Forest Service to 
prepare and offer a separate land exchange to the Pueblo. For 
this land exchange, the Pueblo has been seeking 700 acres of 
Forest Service land in return for transferring 70 acres to the 
Forest Service and agreeing to a conservation easement and 
right-of-way on another 160 acre parcel.
    S. 611 would clarify the intent of Congress to complete the 
long awaited land exchange between Sandia Pueblo and the Forest 
Service. Dispute over how the exchange should be carried out 
has festered for years, despite repeated efforts by Congress to 
make clear its intent on how the Pueblo and the Forest Service 
land should be valued in the exchange.
    While I am frustrated, I know the Pueblo is frustrated that 
this issue has not been resolved administratively, I am glad to 
be moving forward on this legislation which will finally make 
the long-awaited land exchange complete.
    I know the Forest Service would like to further discuss 
some aspects of the bill and I hope we can get more 
clarification from Mr. Joyner on some of the issues in his 
written testimony.
    First, the Forest Service testimony estimates the cost of 
the appraisal of the land at $200,000. I understand Sandia 
Pueblo has had an appraisal of these lands done by a Forest 
Service-approved appraiser in 2005. I also understand the 
appraisal cost $12,000, nowhere close to $200,000. I hope Mr. 
Joyner can clarify to the Committee why they had estimated the 
cost of the appraisal to be so high.
    Second, the Forest Service testimony expresses some concern 
about the 90-day time limit. I would like to point out that 
this land exchange has been mandated for almost 11 years now. 
There is a real trust issue here. Clearly the Forest Service 
needs a deadline to get this exchange done.
    I would like for Mr. Joyner to share with the Committee 
what kind of assurances the Service can give to the Pueblo that 
the exchange will be completed.
    Third, the Forest Service has expressed interest in a 
mandate that the Pueblo would be responsible for sealing the 
open mine added on the La Luz Tract. It is my understanding 
that the Forest Service is experienced in locating and sealing 
mine adits. I would ask that Mr. Joyner explain why the Pueblo 
should be accountable for something the Forest Service is much 
more experienced in doing.
    I look forward to working on this bill with the Committee, 
Sandia Pueblo and the Forest Service to ensure this exchange 
can finally be completed.
    With that, Madam Chair, it is a pleasure being here. That 
completes my testimony.
    The Chairwoman. Thank you, Senator Udall. I know you have 
to be at another hearing that you also have to chair. Thank you 
so much.
    Looking at the history, the Preservation Act is the T'uf 
Shur Bien. When that was first implemented in the transfer, do 
you think this was all a dispute about valuation and that S. 
611 fixes that valuation issue?
    Senator Udall. Absolutely. We have had a lot of disputes in 
terms of valuation. I think this is the best way to go at this. 
We looked at several ways and it seemed the way to do it was to 
do S. 611. Then the Forest Service can come in and talk about 
their point of view.
    I felt the original land exchange that was passed was 
enough but we have had real problems, as I said, for over 11 
years getting this done. I think the technical amendment does 
get it done. It is really a valuation issue.
    The Chairwoman. We will certainly have a chance to ask Mr. 
Joyner about that issue, about the clarity and the valuation 
and hear from the Forest Service in general about this. We 
understand how important it is to the tribe.
    Does the Ranking Member have comments or questions?
    Senator Barrasso. No.
    Senator Udall. Madam Chair, I just want to say that I am 
going to try to make it back here and do everything I can. My 
chairman wants me over there to chair the subcommittee, so I 
will do everything I can to get back.
    Thank you.
    The Chairwoman. Thank you for being here.
    We will now ask the other panel witnesses to come forward. 
If you could leave the middle one open for Senator Baucus for 
the moment. We are hoping he might show up here shortly.
    I want to welcome all our witnesses today: the Honorable 
Kevin Washburn, Assistant Secretary for Indian Affairs; the 
Honorable Shannon Augare, Councilman, Blackfeet Nation from 
Browning, Montana; the Honorable Jay Weiner, Assistant Attorney 
General, State of Montana; Mr. Cal Joyner, Associate Deputy 
Chief, U.S. Forest Service; and the Honorable Stuart Paisano, 
Councilman, Pueblo of Sandia.
    Thank you all for being here. Mr. Weiner, I am going to 
make you the designee if Senator Baucus shows up. I will ask 
you to step back. Mr. Washburn, proceed.

        STATEMENT OF HON. KEVIN K. WASHBURN, ASSISTANT 
       SECRETARY FOR INDIAN AFFAIRS, U.S. DEPARTMENT OF 
                          THE INTERIOR

    Mr. Washburn. Thank you, Madam Chairwoman, Vice Chairman 
and Senator Tester. It is good to be back. I was here not long 
ago and I think I have had homework from all of you over the 
last week or so. It has been a pleasure to work on those 
issues.
    Let me say, the Administration is very proud of the four 
water rights settlements that it achieved with Congress in 2010 
benefitting seven different tribes and feels very good about 
those settlements. Water rights settlements continue to be a 
very strong priority of the Administration.
    These are important to tribes for a myriad of reasons, not 
the least of which is they have to have water to preserve their 
own lands and economic development is also very important. We 
remain committed to working with Congress to achieve more water 
rights settlements.
    Today, I am happy to be here to tell you we have made 
serious progress on a water settlement for the Blackfeet Tribe 
of western Montana. The major beneficiary of this settlement 
would be the Blackfeet Tribe. The tribe has negotiated very 
aggressively for a fair settlement but the State has been 
exceedingly responsive and committed to the settlement as well. 
The parties have really worked hard and we have a lot of 
progress to show for that.
    As drafted, the settlement would clearly establish a right 
to more than 744,000 acre feet of water per year for the 
Blackfeet Tribe. I think I can speak for Stuart Paisano and 
other New Mexicans and say we would like to have that much 
water in New Mexico. I am sure Senator Udall would vouch for 
that if he were here.
    Water is indeed sacred to all of us. As we confront a very 
serious drought in New Mexico, I can tell you I know the 
importance of this.
    I am pleased to report today that substantial progress has 
been made. The last time we were here testifying, about 18 
months ago, my predecessor testified on this bill and raised 
five significant issues with the settlement. In the time since 
then, three of those major concerns have largely been settled.
    The number one concern 18 months ago was the cost of the 
Federal contribution. The fiscal scenario has only worsened 
since that time but the parties have worked to reach a Federal 
contribution that the Administration now believes is an 
appropriate amount. It is about $400 million. Again, the 
Administration believes this is a fair Federal contribution to 
the settlement.
    The second identified concern 18 months ago was the State's 
contribution was not enough. I am pleased to report that the 
State of Montana has really stepped up to the plate here as 
well. They have increased their contribution by $14 million for 
a grand total of nearly $50 million.
    The third major Federal concern identified 18 months ago 
was the vagueness of how the Federal contribution would be 
spent. The Administration likes clear deliverables in these 
projects so that it can show the taxpayer how their money is 
being spent. The settlement now has very clearly identified 
projects and a lot of them are spread around to benefit many of 
the communities within the reservation.
    These include water storage, on farm improvements, 
recreation and fisheries development and development and 
rehabilitation of irrigation efforts. There remains tremendous 
flexibility within the Settlement Act to allow the tribe to 
change these purposes if needed once the Act has been signed.
    There are a couple other concerns that remain outstanding. 
One includes an authorization to funding for non-Indian 
entities, something the Administration generally does not like 
because the Administration believes the Federal Trust 
responsibility is to Indian tribes, not to non-Indian entities. 
We are looking at that.
    We are told by the community this is a very unusual 
circumstance, so we are happy to consider that. That is one 
issue that still gives us some concern.
    The other issue is a dispute between the Blackfeet Tribe 
and the Gros Ventre and Assiniboine Tribe of Fort Belknap. This 
remains a serious concern to us. We have a trust responsibility 
to both tribes and have to ensure that both tribes are treated 
fairly. Finality is a very important part of water rights 
settlements. When we get this settled, we want it to be settled 
for all time. We need to resolve all the disputes pending 
within it.
    We will insist on either resolving these claims or at least 
developing some sort of mechanism through which they can be 
resolved in fairly short order so that we know by a date 
certain that it will be resolved.
    There are a handful of other issues but they are not nearly 
as material as the amount of water or the Federal contribution. 
I feel we are getting close. I know we have a lot of leadership 
here, Senator Baucus and Senator Tester, and I know that time 
is of the essence. We are committed to moving forward to try to 
get this one done.
    Let me end on a very important note about jobs. Our 
economic analysis of this settlement shows that the bill would 
create 650 jobs during the five year construction period and 
150 permanent jobs all while resolving an important water 
rights dispute. In an area of significant unemployment, 
anything we can do to create jobs is important. That should be 
an added bonus for this sort of settlement.
    Thank you for giving me the opportunity to appear before 
you today. I will defer to you as to how to proceed.
    [The prepared statement of Mr. Washburn follows:]

 Prepared Statement of Hon. Kevin K. Washburn, Assistant Secretary for 
            Indian Affairs, U.S. Department of the Interior
    Good afternoon Madam Chairwoman, Vice-Chairman Barrasso and Members 
of the Committee. My name is Kevin Washburn. I am the Assistant 
Secretary for Indian Affairs at the Department of the Interior 
(Department). I am here today to provide the Department's position on 
S. 434, the Blackfeet Water Rights Settlement Act of 2013, which would 
provide approval for, and authorizations to carry out, a settlement of 
all water rights claims of the Blackfeet Tribe of the Blackfeet Indian 
Reservation of Montana. At this point, we are unable to support S. 434 
as introduced. However, based on the progress by the parties to date, 
the Administration is committed to achieving a settlement that can be 
supported by all parties.
I. Introduction
    The Obama Administration recognizes that water is a sacred and 
valuable resource for Indian people and supports the resolution of 
Indian water rights claims through negotiated settlements whenever 
possible. Indian water settlements ensure that Indian people have safe, 
reliable water supplies and help fulfill the United States' trust 
responsibility to tribes. At the same time, Indian water settlements 
end decades of controversy and contention among tribes and neighboring 
communities and promote cooperation in the management of water 
resources. The Obama Administration's policy on negotiated Indian water 
settlements continues to be based on the following principles: the 
United States will participate in settlements consistent with its trust 
responsibilities to Indians; Indian tribes should receive equivalent 
benefits for rights which they, and the United States as trustee, may 
release as part of the settlement; Indian tribes should realize value 
from confirmed water rights resulting from a settlement; and 
settlements should contain appropriate cost-sharing proportionate to 
the benefits received by all parties benefitting from the settlement.
    These principles guided this Administration's support for the four 
settlements enacted into law in the Claims Resolution Act of 2010, Pub. 
L. No. 111-291 (Dec. 9, 2010), benefitting seven tribes in three 
different states at a total Federal cost of more than $1 billion: White 
Mountain Apache Tribe in Arizona, the Crow Tribe in Montana and the 
Pueblo of Taos, Pueblo of Nambe, Pueblo of Pojoaque, Pueblo of San 
Ildefonso, and Pueblo of Tesuque in New Mexico. Our support for these 
settlements demonstrates that settling Indian water rights disputes is 
a high priority for this Administration and confirms that we would 
support Indian water settlements that result from negotiations with all 
stakeholders including the Federal government, and that include an 
appropriate Federal contribution and appropriate cost share 
contributions from states and other benefitting parties. Secretary 
Jewell continues to make the negotiation and implementation of Indian 
water rights settlements a high priority for the Department. She 
understands that Indian water rights and related resources are trust 
assets of tribes, and water rights settlements enable the Federal 
Government to protect and enhance those assets. When Congress enacts an 
Indian water right settlement it is not approving an earmark: it is 
fulfilling Congress' unique obligation to Indian tribes. Indian water 
rights settlements can produce critical benefits for tribes and bring 
communities together to face water challenges in a collaborative, 
transparent, and inclusive way. The Department will continue to work 
with the Blackfeet Tribe (Tribe), the State of Montana, the local 
parties, and the sponsors to craft a Blackfeet water rights settlement 
that can be supported by all parties.
    We have been working closely with the Tribe and with the State 
since we testified on October 20, 2011 on S. 399, an earlier version of 
the Blackfeet water rights settlement legislation that was introduced 
in the 112th Congress. We are pleased to report that the parties have 
made significant progress and we view S. 434 as a substantial 
improvement over S. 399. The parties have made substantial progress in 
defining the scope and cost of infrastructure projects that a 
settlement could provide, although we are continuing to clarify details 
concerning the administration of settlement funds. While the 
approximately $400 million total proposed Federal contribution provided 
in S. 434 presents a challenge in these difficult fiscal times, it is 
approximately two-thirds of the cost proposed in S. 399 and reflects 
progress by the settlement parties. Funding challenges aside, the 
Federal contribution is appropriate when compared to other Indian water 
rights settlements.
    While the parties have made substantial progress and we are 
committed to working to achieve a settlement that satisfies all 
parties, we are unable to support S. 434 as introduced. We do believe 
that there is a path forward, but it will take some additional 
negotiations. As with S.399, we remain concerned with the requirement 
in S. 434 that the United States establish a mitigation fund to benefit 
non-Indian water users. Additionally, we have been unable to reach 
agreement with the Tribe on contentious water management issues 
involving the Tribe's water rights in the St. Mary River and Milk River 
Basin, including the relative rights of the Tribe and the Fort Belknap 
Indian Community. Before we address remaining concerns with S. 434 in 
additional detail, it is important to put the Blackfeet water rights 
settlement in context by setting forth the background on the 
negotiations.
II. Background on Negotiation
    Our October 20, 2011, testimony on S. 399 contains a summary of the 
history of the Blackfeet Reservation and the relationship between the 
Tribe and the United States. We will not repeat that summary here but 
will focus on the efforts to resolve the Tribes water rights claims. In 
April 1979, the State of Montana enacted a statewide water rights 
adjudication system and filed an action in State court to quantify the 
Tribe's water rights. At the same time, the United States filed a case 
in Federal Court in Montana to adjudicate the Tribe's water rights 
claims. The question of jurisdiction that arose as a result of the two 
lawsuits was decided in 1983 by the United State Supreme Court, which 
held that state court was the appropriate forum to adjudicate the 
Tribe's water rights. Arizona v. San Carlos Apache Tribe, 463 U.S. 545 
(1983). Both the Montana adjudication and the Federal adjudication of 
the Blackfeet water rights claims have been stayed pending negotiation 
of a settlement of the Tribe's claims through Montana's Reserved Water 
Rights Compact Commission. The Tribe initiated negotiations with the 
Compact Commission in 1989 and in 1990, the Department appointed a 
Federal Negotiation Team to support the negotiations, which proceeded 
on and off until 2007, when the State and the Tribe reached an 
agreement in the form of the Compact. The United States was not a party 
to that agreement. If Congress does not approve the Compact, the 
Tribe's water rights claims will be litigated in the Montana Water 
Court. As stated previously, this Administration prefers to resolve 
Indian water rights claims through negotiated settlements, consistent 
with the United States' trust responsibility and with our policy 
promoting Indian self-determination and economic self-sufficiency. The 
Department has been working closely with the Tribe, the State and the 
sponsors to achieve a settlement of the Blackfeet water rights claims. 
S. 434 reflects the efforts of all of the parties toward this goal.
III. Blackfeet Montana Water Rights Compact and Proposed Legislation
    S. 434 would approve a Compact entered into by the Blackfeet Tribe 
and the State of Montana to settle all the Tribe's water rights claims 
in Montana. As introduced, the legislation specifically authorizes 
funding of $399.8 million. However, there is also a requirement in S. 
434 that the United States establish a mitigation fund composed of 
``such sums as may be necessary'' for the use of non-Indian water users 
in Birch Creek. This fund does not benefit the Tribe or further the 
United States trust responsibilities. Nor are specific amounts or 
limiting factors identified for this fund, therefore it is difficult to 
comment on additional costs that could be associated with the bill. 
Nonetheless, the Department is working with the sponsors of the bill 
toward a resolution on this issue.
    The settlement would recognize a tribal water right to 
approximately 750,000 acre-feet per year of surface water from the flow 
of several rivers on the Reservation, including the St. Mary River, the 
Milk River, Cut Bank Creek, Two Medicine River, Badger Creek and Birch 
Creek. Citizens of the State of Montana would benefit under the 
settlement as non-irrigation State based water rights are protected 
under the Compact in each of these basins, while irrigation State based 
water rights are protected for a period of ten years in the Cut Bank 
Creek and Milk River Basins and are then subject to a call by the 
Tribe. In Birch Creek, the Tribe's total right would increase to 125 
cubic feet per second (CFS) during the irrigation season, an increase 
of 83 CFS. Non-Indian water users south of the Reservation would be 
protected under the Birch Creek Deferral Agreement, a separate 
agreement that would be approved by S. 434. Thus, the legislation 
considers the need to secure wet water for the Tribe as well as the 
interests of surrounding non-Indian communities. The remainder of this 
testimony will summarize a number of concerns regarding S. 434 as 
introduced.
IV. Federal Concerns
A. Federal Cost
    S. 434 includes definite improvements over S. 399 in terms of a 
Federal contribution. In addition, the bill adds flexibility that will 
allow the Tribe to work with the Department to further refine its 
approach to various projects as they are implemented over time. For 
example, S. 434 includes funding for a regional water system for 
Municipal, Rural, and Industrial (MR&I) purposes, providing safe 
drinking water to Blackfeet communities across the Reservation, many of 
whom have had to live under boil orders or with school closures because 
of water quality deficiencies. The Tribe worked closely with the 
Department to extend and improve coverage of the proposed improvements 
to the MR&I system and to build appropriate flexibility into the 
legislation. The improvements and flexibility in S. 434 will ensure 
that the projects constructed are meaningful and cost effective.
    The Tribe significantly modified its approach for rehabilitating 
and enhancing irrigation facilities on the Reservation and developed 
targeted plans for on-farm improvements and water storage and 
development that will help the Tribe achieve the promise of the 
Reservation as a tribal homeland for its people. The Tribe and the 
State worked collaboratively to address Federal concerns with the Four 
Horns Dam proposal and agreed to a more cost-effective approach to 
solving the water use issues that exist between the Tribe and its 
neighbors south of Birch Creek, at the southern boundary of the 
Reservation. In addition, the State is proposing to contribute an 
additional $14 million to address Federal concerns with cost share, 
bringing its total contribution to the settlement to $49 million. The 
Tribe revamped its infrastructure projects and with its experts worked 
closely with the United States to develop the information we needed to 
evaluate the Tribe's estimated costs.
    A Federally funded mitigation fund for non-Indian water users in 
Birch Creek remains in S. 434. We testified about our concern with this 
mitigation fund in October 2011 and the issue remains a significant 
concern for the Department. However, as I stated earlier, the 
Department is working with the sponsors of the bill toward a resolution 
on this issue.
B. Lack of Resolution of Contentious Issues in the St. Mary and Milk 
        River Basins
    S. 434 also leaves important water rights management issues 
unsettled in the St. Mary River and Milk River Basins. As we previously 
testified, leaving these matters unsettled will create significant 
obstacles to the ability of the United States to carry out its water 
rights administration duties in the basins. Our main concern are the 
proposal to provide the Tribe with a firm supply of 50,000 acre feet 
per year on a permanent basis from the St. Mary River and the inherent 
conflict that exists between the water rights of the Blackfeet Tribe 
and the Ft. Belknap Indian Community in the Milk River Basin as set 
forth in their respective Water Rights Compacts with Montana. Although 
the areas of dispute on this issue have narrowed considerably since 
October 2011, as the Department previously testified we would support a 
legislative settlement that resolves this issue. We remain committed to 
continue working with the Tribe and the other settlement parties to 
reach a final and fair settlement of the Tribe's water rights claims in 
the St. Mary and Milk River Basins. We are actively engaged with the 
Blackfeet Tribe and the Ft. Belknap Indian Community on developing a 
solution to the Milk River conflict consistent with the Federal trust 
responsibility that the United States has to both tribes.
C. Title to Infrastructure
    Section 14 of S. 434 provides a proposed mechanism to transfer 
title from the United States to the Tribe of specified project 
infrastructure, including the Blackfeet Indian Irrigation Project, the 
Blackfeet Regional Water System, and various miscellaneous projects 
included as ``Blackfeet Water Storage, Developments and Projects.'' 
This Administration, as we stated in our November 15, 2010, letter of 
support for the White Mountain Apache Tribe Water Rights Quantification 
Act to Senator Dorgan, believes that the transfer of infrastructure 
into tribal ownership is consistent with tribal self-determination and 
sovereignty and that title to such infrastructure provides tribes with 
assets and opportunities they can then manage as reservation economies 
and conditions evolve. However, we are keenly aware that a ``one size 
fits all'' approach to transfer of title to such a variety of projects 
is not appropriate. Some of the projects authorized to be transferred 
are currently held by the United States while title to other 
infrastructure is held directly by the Tribe. Some of the 
infrastructure involved provides services to non-Indians as well as 
Tribal members and transfer processes must take this into account where 
applicable. We would like to work with the Tribe and bill sponsors on 
more tailored title transfer language that will accomplish the tribal 
goals of self-sufficiency and autonomy in a way that is practical and 
can be implemented by the stakeholders working together.
D. Water Marketing
    Like many other Indian water rights settlements, including those in 
Montana, S. 434 contains a variety of provisions authorizing the Tribe 
to temporarily lease, contract, exchange, or enter into other water 
marketing arrangements. However, unlike other Indian water settlements, 
under S. 434 the Department would play little or no role in approving 
these transfers of trust assets. Rather than abdicating all 
responsibility with respect to these assets, the Department would like 
to work with the Tribe to set up water marketing provisions that 
parallel the recent HEARTH Act, Pub. L. No. 112-151 (July 30, 2012), 
provisions dealing with tribal land. We believe that the HEARTH Act 
provides for the exercise of tribal sovereignty while still addressing 
important Federal interests such as environmental review of proposed 
transactions.
E. Federal Fund Management
    S. 434 would authorize establishing in the Treasury a number of 
funds that are intended for use to carry out the provisions of the 
settlement, which involve actions to be taken by various agencies 
within the Department. The language establishing these funds must be 
drafted carefully to ensure that the funding is managed and used as the 
parties intend. For example, funds needed for Federal construction 
obligations must be available to the Department and not subject to 
withdrawal by the Tribe. The Department believes it has recently made 
significant strides in identifying appropriate legislative language to 
address fund management issues. We would like to continue to work with 
the Tribe and the sponsors of bill on these issues.
F. Other Federal Concerns
    We have made significant progress with the Tribe in addressing 
Federal concerns and are hopeful of reaching agreement with the Tribe 
on other issues raised by S. 434, such as the waivers that are part of 
every Indian water rights settlement, and the language needed to fully 
protect allottees' rights under the settlement. We are hopeful also 
that we are close to agreement on solutions to the concerns of the 
National Park Service and United States Forest Service on the interplay 
between the Blackfeet water rights claims and the water rights the 
agencies have in place under their approved compacts with the State of 
Montana. Other issues to be resolved include the Lake Elwell 
allocation, the extent of any tribal preference for developing 
hydropower on the St. Mary Canal Drops, the resolution of longstanding 
issues concerning rights of way, and a more realistic enforceability 
date must be resolved.
V. Conclusion
    Many provisions contained in the bill are the result of a 
meaningful and productive dialogue among the Department, the Tribe, 
other settlement parties and the bill's sponsors. While we are unable 
to support S. 434 as introduced, based on the progress by the parties 
to date, the Administration is committed to achieving a settlement that 
can be supported by all parties. By continuing to work with the 
Blackfeet Tribe, the State of Montana, and the sponsors we can achieve 
a settlement that satisfies Federal concerns and lays the groundwork 
for a better future for the Blackfeet Tribe and other parties to this 
settlement.

    The Chairwoman. Thank you, Assistant Secretary Washburn.
    I want to welcome our colleague, Senator Baucus, and thank 
him for being here today for such an important hearing about an 
issue very important to Montana.
    Before you arrived, you were lauded by Committee members 
for your hard work on behalf of the State of Montana and by our 
Vice Chairman on all your hard work. I want to make sure we 
pass that on to you.
    I certainly appreciate you coming before the Committee 
today to talk about this very important issue to the State of 
Montana.

                 STATEMENT OF HON. MAX BAUCUS, 
                   U.S. SENATOR FROM MONTANA

    Senator Baucus. Thank you, Chairwoman Cantwell.
    Let me say at the outset I am not seeking reelection for 
another term. That enables me to double down on matters of 
extreme importance to Montana and to the country. I will no 
longer have to take time campaigning and will have a lot more 
time to devote to this issue, the water compact, as well as 
others.
    If you have any questions, just let us know or let me know 
what has to be done so I and my colleague, Senator Tester, can 
work with you to get solutions. This is an energizing 
opportunity to get results.
    The Blackfeet Water Rights Settlement, for us and the 
tribe, is really a critical step over two decades of 
negotiations between the Blackfeet Nation, the State of Montana 
and the United States of America. It has been a long time.
    This bill confirms that the United States is a nation that 
honors its commitments to all citizens. As President Teddy 
Roosevelt said, this applies not only to his time but to our 
time, ``Rhetoric is a poor substitute for action and we have 
trusted only to rhetoric. If we are really to be a great 
nation, we must not merely talk, but we must act and act big.'` 
I hope our talk leads to a greater nation.
    Water is the critical resource that makes the high plains 
habitable. You probably note, Madam Chairwoman, that it doesn't 
rain very much in our part of the world. I like to say 
sometimes if you draw a line down the 100th meridian, it rains 
east towards the East Coast, Washington, D.C. gets 40 some 
inches of precipitation a year, but west of the 100th meridian 
until you get to the Cascades, to Washington, our annual 
precipitation is only about 16 inches a year. We need water. 
Water is really, really critical. It makes our plains 
habitable.
    The creation of the Blackfeet Reservation implied a 
commitment on the part of the United States to reserve 
sufficient water to satisfy both present and future needs of 
the tribe. Over a century and a half, the United States, as a 
nation, has failed to fulfill that responsibility, in this 
case, especially to the Blackfeet Nation.
    This hearing is the second in 18 months on this settlement. 
Parenthetically, I think we are making great strides with the 
Administration and making a lot of headway, especially of late. 
We are taking the next step in the slow march toward fulfilling 
our commitment with respect to the 1.5 million acre-feet of 
water that flows on or through the Blackfeet Reservation.
    A settlement ratified by Congress is far preferable to any 
litigation over an acknowledged breach of trust. It is a no 
brainer. By enacting this bill, Congress will both establish a 
Federal reserve water rights for the tribe and authorize funds 
to construct the infrastructure necessary to make water 
available for use.
    Madam Chairwoman, if you were to visit some of this 
infrastructure, you would think to yourself, oh, my God, this 
thing is a sieve, this thing needs repair, it is going to 
collapse. It is that dramatic.
    The tribe will benefit from municipal irrigation and water 
storage improvements. These improvements translate to more jobs 
and better lives. The bill also strikes a balance to leave the 
current non-tribal water users as whole as possible.
    The Blackfeet Water Compact has already been ratified by 
the State of Montana. As this Committee well knows, the 
obligation is now on Congress to complete this settlement. 
Shannon Augare was very instrumental in getting the State of 
Montana to approve their part of the deal.
    I look forward to resolving any remaining issues. There are 
a couple. One is the Federal responsibility for the use of 
water in Birch Creek and also the terms under which the 
Blackfeet may market their water.
    I am also confident that overlapping claims to this bill 
with the Gros Ventres and the Assiniboine Tribes' Milk River 
allocation are resolvable.
    I look forward to cooperating immediately with the Obama 
Administration, the tribe, the State and other stakeholders to 
strengthen the bill for mark-up. We will do what it takes to 
make sure it is a good, clean mark-up. We are committed to make 
this thing work.
    Thank you, Madam Chairwoman, thank you for holding this 
hearing. It means a lot to all of us. This has been going on 
for a long time. Now is the time to resolve it and get the 
legislation passed.
    The Chairwoman. Thank you, Senator Baucus. Thank you for 
being here.
    It is very clear to the Committee that the Montana 
delegation is very interested in seeing this legislation pass 
as soon as possible. We appreciate that very much. We will 
certainly follow up with both of your offices after this 
hearing if there are any outstanding issues.
    Are there any questions from our Committee members? If not, 
thank you very much.
    Senator Baucus. Thank you very much. I appreciate your 
taking the time and my apologies to my friends in taking their 
time from testifying.
    The Chairwoman. We will resume with our second panel, Mr. 
Shannon Augare from the Blackfeet Nation. Thank you for being 
here.

 STATEMENT OF HON. SHANNON AUGARE, COUNCILMAN, BLACKFEET NATION

    Mr. Augare. Thank you, Chairman Cantwell, Vice Chairman 
Barrasso and Senator Tester.
    As Senator Baucus mentioned, I am Montana State Senator 
Shannon Augare. I also serve as Councilman of the Blackfeet 
Tribal Nation in Montana.
    I am honored to be here on behalf of the Blackfeet Nation 
in support of the Blackfeet Water Rights Settlement Act. I want 
to thank the Committee for holding this hearing on S. 434, a 
bill that is critical to the future of the Blackfeet people.
    I also want to thank Senators Baucus and Tester, and their 
respective staffs, for their leadership and strong support of 
this legislation.
    The Blackfeet water rights settlement is the culmination of 
over two decades of work by the tribe. It represents a 
historical breakthrough in the tribe's over century-long battle 
to secure and protect its water rights.
    In the 112th Congress, Senators Baucus and Tester 
introduced Blackfeet Water Settlement legislation. The current 
bill, S. 434, ratifies the Blackfeet-Montana Water Rights 
Compact, resolves significant water claims against the Federal 
Government and most importantly, provides critical resources 
needed for the development of a self-sustaining economy on the 
Blackfeet Reservation and a permanent homeland for the 
Blackfeet people.
    The Blackfeet Tribe resides on the Blackfeet Indian 
Reservation in north central Montana. The reservation is 
located along the eastern Rocky Mountains, borders Glacier 
National Park, Lewis and Clark National Forest and the U.S.-
Canadian border. The reservation was established by treaty with 
the United States in 1855. The present reservation is 
approximately 1.5 million acres and there are currently 17,000 
enrolled members, about half of whom reside on the reservation.
    Six different drainages are encompassed within the 
Blackfeet Reservation: the St. Mary, the Milk, Cut Bank Creek, 
Two Medicine River, Badger Creek and Birch Creek. The St. Mary 
River and the Milk River are allocated between the United 
States and Canada by the 1909 Boundary Waters Treaty. As a 
result, any tribal claim against the system creates a great 
deal of uncertainty among Montana users.
    In December of 2007, after nearly two decades of 
negotiation to resolve the Blackfeet Tribe's water rights, the 
tribe completed a water rights compact with the Montana 
Reserved Water Rights Compact Commission. The compact was 
approved by the Montana State Legislature in April 2009.
    In general, the compact confirms the tribe's water rights 
to all streams on the reservation. It brings certainty to the 
tribe's water rights and protects the tribe's use of the water 
for the tribe's growing population. The Blackfeet Water Rights 
Settlement Act would ratify the tribe's water rights compact 
with the State of Montana. It resolves the Blackfeet Tribe's 
water-related claims against the United States and provides the 
necessary resources needed for the tribe to put its water to 
use and develop a self sustaining economy on our reservation.
    In consideration of the tribe waiving its claim against the 
United States, the legislation authorizes Federal funding for 
vital drinking water projects, water storage projects and 
irrigation and stock development on the reservation.
    It is important to note that the tribe has water-related 
claims, as described in more detail in my prepared written 
statement, against the Federal Government in excess of funds 
authorized in the legislation. Notably, since 2012, the tribe 
has agreed to reduce the amount of funding authorized in the 
legislation by more than $190 million to address concerns 
raised by the Department of Interior.
    Moreover, the State is contributing $49 million toward the 
Blackfeet settlement, the largest contribution the State has 
made to any Montana water settlement to date. Ultimately, if 
this legislation does not pass, the settlement will not become 
effective and the tribe's water rights claims will be 
litigated. If the settlement fails, the tribe will also pursue 
its monetary claims against the United States, resulting in 
years of litigation and potentially a judgment against the 
United States that exceeds the funding authorized in the 
legislation.
    In conclusion, Madam Chairwoman, the Blackfeet Water Rights 
Settlement has critical importance to the future of the 
Blackfeet people and represents decades of hard work by many 
people. The legislation will secure the water rights of the 
tribe through ratification of the tribe's water rights compact, 
will provide necessary funding for the tribe to develop its 
water rights and provide a benefit to the tribe and our 
members.
    The settlement will significantly contribute to development 
of a strong reservation economy, jobs for tribal members and a 
better life for Blackfeet people.
    Finally, although the Department of Interior was involved 
in our negotiations every step of the way, a decade-long 
process, and was intimately involved in drafting of the 
compact, the Administration has raised a number of issues 
relating to S. 434. We are engaged in extensive discussions 
with the Department of Interior to address these issues and 
expect most of these issues to be resolved in a satisfactory 
manner to both parties.
    We want to thank the Committee and your staff. We look 
forward to responding to any questions you have.
    [The prepared statement of Mr. Augare follows:]

Prepared Statement of Hon. Shannon Augare, Councilman, Blackfeet Nation
    Chairman Cantwell, Ranking Member Barrasso, and members of the 
Committee, my name is Shannon Augare. I am a Councilman of the 
Blackfeet Tribal Business Council. I am honored to be here on behalf of 
the Blackfeet Tribe in support of the Blackfeet Water Rights Settlement 
Act. I want to thank the Committee for holding this hearing on S. 434, 
a bill that is critical to the future of the Blackfeet People. I also 
want to thank Senator Max Baucus and Senator Jon Tester for their 
strong support of the Tribe in introducing this bill, and their 
understanding of the importance of this bill to the Blackfeet Tribe. I 
also want to thank their staff and the Committee staff for their hard 
work on this bill.
    The Blackfeet Water Rights Settlement is the culmination of over 
two decades of work by the Tribe. It represents a historical 
breakthrough in the Tribe's over century long battle to secure and 
protect its water rights. S. 434 ratifies the Blackfeet-Montana Water 
Rights Compact, resolves significant water related claims against the 
federal government, and most importantly provides the critical 
resources needed for the development of a self-sustaining economy on 
the Blackfeet Reservation and a permanent homeland for the Blackfeet 
People.
The Blackfeet Reservation and the Blackfeet People
    The Blackfeet Reservation was established by treaty in 1855. The 
Reservation is located along the Rocky Mountains in north central 
Montana, adjacent to Glacier National Park, Lewis and Clark National 
Forest and the border with Canada. Our Reservation is renowned for its 
spectacular mountains, majestic plains and abundant natural resources. 
The Blackfeet People have occupied this area since time immemorial. As 
we say: ``We know who we are and where we come from. We come from right 
here. We know, and have always said, that we have forever lived next to 
the Rocky Mountains.''
    Our treaty, known as Lame Bull's Treaty, was signed in 1855. 
Executive orders and statutes followed, each taking large areas of our 
traditional land. We ended up with the land that was most sacred to us: 
our present day reservation. In 1896, the Northern Rockies were taken 
from us because speculators believed there were rich minerals to be 
had. When mineral riches did not materialize, this most sacred part of 
our homeland became part of Lewis and Clark National Forest and a 
portion later became part of Glacier National Park in 1910. To this 
day, we question the legitimacy of the 1896 transaction. While the 
Tribe retained hunting, fishing and timbering rights in the area taken, 
we hope that one day our claims to this area will be resolved.
    The present Blackfeet Reservation is about 1.5 million acres. 
Although the United States had promised our Reservation would never be 
allotted in the 1896 Agreement by which the Northern Rockies were lost, 
the federal government went back on its word and allotted lands within 
the Reservation to individual Tribal members under allotment acts in 
1907 and 1919.
    The Tribe now has over 17,000 members, about half of whom live on 
the Reservation. Our people have worked hard to survive in the 
sometimes harsh climate of the Rocky Mountains, and to live in the 
modern world while maintaining the cultural and spiritual ties to the 
land and its resources.
The Critical Importance of Water
    Water is critical to the Blackfeet People. It is central to our 
culture and our traditions. It is an essential element of our way of 
life, and is crucial to our continuing survival culturally, 
traditionally and economically. Six different drainages are encompassed 
within the Reservation: the St. Mary, the Milk, Cut Bank Creek, Two 
Medicine River, Badger Creek and Birch Creek. These are the veins and 
arteries of the Reservation and provide life to the Blackfeet People 
and bind us together as a People. Water is the source of creation to 
the Blackfeet People. We believe that rivers and lakes hold special 
power through habitation of Underwater People called the Suyitapis. The 
Suyitapis are the power source for medicine bundles, painted lodge 
covers, and other sacred items. Contact with supernatural powers from 
the sky, water and land is made through visions and dreams and 
manifests itself in animals or particular objects. The beaver ceremony 
is one of the oldest and most important religious ceremonies, and 
beaver bundles have particular significance. The ceremonial importance 
of water is especially present in the use of sweat lodges as a place to 
pray, make offerings, cleanse and heal. The sweat lodge remains a part 
of the religious and spiritual lives of many tribal members.
    Water is truly the lifeblood that sustains the Blackfeet people and 
our way of life. The water resources of the Blackfeet Reservation are 
essential to make the Reservation a productive and sustainable homeland 
for the Blackfeet people and for our communities to thrive and prosper. 
Safe and clean drinking water supplies are vital for the growing 
population on the Reservation, and water is critical to our economy 
which is heavily dependent on stock raising and agriculture. The 
Blackfeet Reservation's location along the eastern Rocky Mountain Front 
makes it the home of abundant fish and wildlife, which depend directly 
on the water resources of the Reservation to support them and allow 
them to thrive. Large game animals, including moose, elk, and deer 
abound. The Reservation provides significant habitat for grizzly bears 
and other bears, and for other animals such as lynx, pine marten, 
fisher, mink, wolverine, weasel, beaver, otter, grey wolf, swift fox 
and others. Numerous bird species are also found on the Reservation 
including bald eagle, golden eagle, osprey, ferruginous hawk, northern 
goshhawk, harlequin duck, piping plover, whooping crane, and all 
migratory and shoreline birds, as well as game birds such as the 
sharptail grouse, ringnecked pheasant, mountain dove, Hungarian 
partridge and two other species of grouse. The fishery on the 
Reservation is renowned, and includes the west slope cutthroat trout, 
northern pike, lake trout, rainbow trout, mountain white fish, lake 
white fish, brook trout, brown trout, Yellowstone cutthroat trout, 
walleye, and many others. The threatened bull trout is also be found on 
the reservation. The habitats of these wildlife and fish species depend 
directly on the water resources of the Reservation to support them and 
allow them to thrive.
    The Reservation also possesses significant timber, oil and gas 
resources and other natural resources. Oil and gas production has 
occurred on the Reservation since the 1930s, and the Tribe has recently 
experienced a significantly increased interest in new development on 
the Reservation. The Tribe has also been working hard to develop wind 
energy and the hydroelectric potential on the Reservation. All of these 
activities are dependent on adequate supplies of water.
    Fortunately, we are blessed with an abundant supply of water. Over 
518 miles of stream and 180 water bodies, including eight large lakes, 
are located on the reservation. More than 1.5 million acre-feet of 
water arise on, or flow through, the Blackfeet Reservation on an annual 
basis--the St. Mary River alone contributing over one-third of the 
total supply. Despite the significant water supply, or maybe because of 
it, historically, others have sought to appropriate it for themselves, 
and water has become a precious resource in more modern times.
Historical Water Conflicts
    In 1909, just a year after the historic Winters decision involving 
the Milk River, the United States entered into the Boundary Water 
Treaty with Canada, which, among other things, divided the Milk River 
and St. Mary River between the two countries. However, not a word in 
the Treaty, or the negotiations leading to it, mention the Blackfeet, 
that these streams arise on or near the Blackfeet Reservation, or that 
the Blackfeet have rights to water in these streams. Not long after the 
Boundary Waters Treaty, the United States withdrew significant lands on 
the Blackfeet Reservation under the 1902 Reclamation Act, and began 
construction of the St. Mary facilities to divert most of the United 
States' share of the St. Mary River off the Reservation for use by the 
Bureau of Reclamation Milk River Project over a hundred miles away. The 
United States pursued this course notwithstanding that there was an 
equally feasible project on the Blackfeet Reservation where the water 
could have been brought. The diversion is accomplished through 
facilities on the Reservation, including Sherburne Dam, and a twenty-
nine mile canal through the Reservation that eventually empties into 
the Milk River. The Milk River flows north into Canada and then back 
into the United States near Havre, Montana, where it is heavily 
utilized by the Milk River Project and by the Fort Belknap Reservation.
    There are few historical acts, other than loss of land, that have 
engendered more passion and outrage than this wholesale transfer of 
Reservation water to serve non-Indians far downstream, without a word 
about, or any consideration of, the Blackfeet Tribe's water rights or 
the Blackfeet water needs. The Tribe is left not only with no access to 
and no benefit from, its own water, but a tangled web of confusing and 
non-existent rights of way and easements for the St. Mary Diversion 
facilities on the Reservation. Plans to rehabilitate the hundred year-
old St. Mary Diversion facilities so that the diversion of water off 
the reservation can continue and perhaps increase, have further raised 
water right concerns, and have emphasized the need for a final 
resolution of the Tribe's water rights.
    At the same time that the St. Mary diversion was taking place, non-
Indian water users south of the Reservation built a dam on Birch Creek, 
the southern boundary of the Reservation, which was intended to 
appropriate Birch Creek water for use by the non-Indian water users off 
the Reservation. In Conrad Investment Company v. United States, decided 
by the Ninth Circuit in 1908, the same year as the Winters case, the 
court upheld the Tribe's prior and paramount right to the water. But 
the court did not award the full amount of water necessary to irrigate 
all of the Tribe's irrigable lands, leaving it open for the Tribe to 
claim additional water in the future. United States v. Conrad 
Investment Company, 156 Fed. 123 (D. Mont. 1907), aff'd Conrad 
Investment Co. v. United States, 161 Fed. 829 (9th Cir. 1908). In the 
meantime, Birch Creek has been fully appropriated through non-Indian 
development of 80,000 acres of irrigation immediately off and adjacent 
to the Reservation.
    Allotment brought the third serious conflict between the Tribe and 
non-Indian water users. In an attempt to control the water through the 
land, the Conrad Investment case served as the springboard to the first 
Blackfeet Allotment Act in 1907. Over a span of two congresses, the 
Blackfeet Allotment Act moved forward with various water rights 
provisions intended to make Blackfeet water rights subject to state 
law, to enjoin the United States from prosecuting any further suits 
against water users, and to give preference to settlers on surplus 
lands to appropriate water on the Reservation. See, John Shurts, Indian 
Reserved Water Rights: The Winters Doctrine in its Social and Legal 
Context, 1880s-1930s (University of Oklahoma Press, 2000), Chapter 6. 
These efforts largely failed, thanks in part to a veto from President 
Theodore Roosevelt, but the 1907 Allotment nevertheless became law 
notwithstanding the promise that the Reservation would never be 
allotted. See Agreement of September 26, 1895, ratified June 10, 1896, 
29 Stat 321, 353, Art. V. With allotment, many of the prime irrigation 
lands on the Reservation quickly went out of trust, and the Tribe's 
water rights have gone unprotected from the use of water by non-Indian 
development on the former allotments. Numerous disputes have arisen 
over the years of varying severity, and the need to resolve the Tribe's 
water rights has increasingly become critical.
    The 1907 Allotment Act also authorized the Blackfeet Irrigation 
Project. However, from the outset, the BIA built the Blackfeet 
Irrigation Project with undersized and inadequate delivery systems and 
storage facilities, thereby ensuring that the economic promise of the 
Project would be unfulfilled for the Tribe and Tribal members. Project 
lands continue to have problems in receiving a full supply of water 
because of the early BIA decisions to undersize the Project. 
Traditionally, the Tribe has taken the approach of sharing the resource 
cooperatively, but increased shortages during the late irrigation 
season, and the dilapidated condition of the Blackfeet Irrigation 
Project, have become serious impediments to water use within the 
Reservation.
Water Rights Compact
    Given the historical water rights issues on the Reservation, the 
Blackfeet Water Rights Compact is truly a milestone achievement after 
nearly two decades of negotiations among the Tribe, the Montana 
Reserved Water Rights Compact Commission and the Federal Government. 
The Compact was completed in December 2007. The Montana Legislature 
approved it in April 2009 (85-20-1501 MCA), and it is now before 
Congress for ratification in the Blackfeet Water Rights Settlement Act. 
It will further require approval of the Tribe through a vote of the 
Tribal membership.
    In general, the Compact confirms the Tribe's water rights to all 
streams on the Reservation. It brings certainty to the Tribe's water 
rights and protects the Tribe's use of the water for the Tribe's 
growing population and need to make the Reservation a productive and 
sustainable homeland. The Compact:

   Establishes the Tribe's water right as all surface and 
        groundwater less the amount necessary to fulfill state water 
        rights in all drainages except for the St. Mary River and Birch 
        Creek;

   Establishes a St. Mary water right of 50,000 acre-feet, and 
        requires the parties to identify how the water will be provided 
        to fulfill the Tribe's water right;

   Establishes a Birch Creek water right of 100 cfs, plus 25 
        cfs for in stream flow during the summer and 15 cfs during the 
        winter;

   Protects state water right non-irrigation use and some 
        irrigation uses through ``no-call'' provisions;

   Provides for water leasing off the Reservation;

   Closes on-reservation streams to new water appropriations 
        under state law;

   Provides for Tribal administration of the Tribal water and 
        State administration of state law water rights and creates a 
        Compact Board to resolve disputes between Tribal and State 
        water rights;

   Provides for an allocation of water stored in Tiber 
        Reservoir; and

   Mitigates the impacts of the Tribe's water rights on Birch 
        Creek water users through a separate Birch Creek Agreement by 
        which the Tribe defers new development on Birch Creek for 15 
        years over and above the current Conrad Investment decree, and 
        provides 15,000 acre-feet of water per year to Birch Creek 
        water users from Four Horns Reservoir, the total agreement not 
        to exceed 25 years.

State Approval and State Contribution
    As part of the State approval of the Compact, the State committed 
to contribute $20 million to the Compact. These funds were fully 
authorized and are available when the Compact becomes final. In 2007, 
the Montana Legislature also appropriated $15 million for Birch Creek 
mitigation. Of these funds, $14.5 million has been placed in an escrow 
fund for the Tribe as part of the Birch Creek Agreement, and $500,000 
was used for engineering studies for the Four Horns enlargement. In the 
recent 2013 Legislature, the State also committed an additional $14 
million to the Blackfeet settlement, bringing the total State 
contribution to $49 million. This is a very major contribution on the 
part of the State, and the largest for an Indian water rights 
settlement in Montana.
Blackfeet Water Rights Settlement Act
    The Blackfeet Water Rights Settlement Act will: (1) ratify the 
Tribe's water compact with the State of Montana; (2) resolve the 
Blackfeet Tribe's water-related claims against the United States; and 
(3) provide the necessary resources needed for the Tribe to put its 
water to use and to develop a self-sustaining economy on the Blackfeet 
Reservation.
    Specifically, the bill:

   Ratifies the Compact and authorizes the Secretary to sign 
        it;

   Requires the Secretary to enter into contracts with the 
        Tribe for the delivery of (1) 5,000 acre-feet per year of St. 
        Mary River water through the Milk River Project facilities to 
        the Tribe and (2) any additional available St. Mary water that 
        is identified;

   Compensates the Tribe for deferring its St. Mary River Water 
        Right;

   Expressly provides for the Milk River Project purposes;

   Requires the Secretary to implement the Swift Current Bank 
        Stabilization Project;

   Provides the Tribe with the exclusive right to develop and 
        market hydroelectric power from the St. Mary Storage Unit of 
        the Milk River Project;

   Directs the Secretary to allocate to the Tribe 56,000 acre-
        feet per year of water stored in Lake Elwell and authorizes the 
        Tribe to enter into leases or other agreements for the use of 
        that water for any beneficial purpose subject to certain 
        conditions;

   Requires the Secretary, acting through the Commissioner of 
        Reclamation, to:

     carry out deferred maintenance and Four Horns Dam safety 
        improvements relating to the Blackfeet Irrigation Project;

     carry out the Birch Creek Mitigation Project to provide water 
        from Four Horns Reservoir to state water rights users on Birch 
        Creek;

     plan, design, and construct the Municipal Rural and Industrial 
        water system (involving water intake, treatment, pumping, 
        storage, and pipeline facilities); and

     construct the Blackfeet Water, Storage, and Development Projects.

   Establishes the Birch Creek Mitigation Fund to mitigate the 
        impacts of development of the Birch Creek tribal water right on 
        the Birch Creek water supplies of the Pondera County Canal and 
        Reservoir Company Project;

   Authorizes federal funding for the water-related projects 
        authorized in the legislation;

   Confirms the Tribe's instream water rights in the Lewis and 
        Clark National Forest;

   Requires the Blackfeet Tribe to work with the Fort Belknap 
        Indian Community on resolving any conflict between their 
        respective Milk River water rights, and directs the Secretary 
        of the Interior to resolve such conflict if the Tribe and 
        Community are unable to do so provided certain conditions are 
        met;

   Provides for the waiver and release by the Tribe of water 
        rights claims against Montana and the United States in return 
        for recognition of the tribal water rights and other benefits 
        provided under the Compact and this Act.

Waivers/Funding
    The Tribe has water-related claims against the federal government 
in excess of the funds authorized in the legislation for, among other 
things: (1) the diversion of St. Mary water off the Blackfeet 
Reservation to the Milk River Project for approximately 100 years; (2) 
the environmental and resource damage caused by the St. Mary diversion 
facilities; (3) claims relating to the 1909 Boundary Waters Treaty; (4) 
the United States' unfulfilled promise to construct a new storage 
facility on Two Medicine River after a catastrophic flood in the 1960s; 
and (5) the failure of the United States to protect the Tribe's water 
rights from development by others, particularly on Birch Creek, Cut 
Bank Creek and the Milk River.
    S. 434 authorizes the Tribe to waive these claims in consideration 
for approximately $400 million in federal funding for the vital 
drinking water projects, water storage projects, and irrigation and 
stock development on the Reservation. Importantly, since 2012, the 
Tribe has agreed to reduce the amount of the funding authorized in the 
legislation by more than $190 million to address concerns raised by the 
Department of the Interior. Moreover, the State is contributing $49 
million towards the Blackfeet Settlement, the largest contribution the 
State has made to any Montana water settlement to date.
    The Tribe's technical consultant, DOWL HKM of Billings, Montana, 
has assisted the Tribe in the development of the above projects and has 
prepared reports on each of the projects and the associated costs. 
Separate costs have been developed for each of the projects.
Critical Tribal Need for Water Supply Infrastructure
    The water projects authorized in the legislation include a regional 
water system to provide a long term municipal water supply to 
Reservation communities, funding for the United States' deferred 
maintenance obligations and safety of dams obligations associated with 
the Bureau of Indian Affairs' Blackfeet Irrigation Project, putting new 
lands outside the Project into production through new irrigation 
facilities and small water storage projects, stock water and domestic 
water developments, lake and fishery improvements and enhancements, and 
energy development projects. Settlement funds would also fund the 
implementation of the Compact and the administration of the Tribal 
water right through the Tribal Water Code.
    In particular, it is critical to establish a long-term supply of 
water to Reservation communities. The Tribe has continually had to 
address community water supply problems by cobbling together short term 
fixes. At the same time, the Reservation population has significantly 
increased, and projections are that such increases will continue. A 
long term supply will provide the necessary stability that will allow 
for long term community growth.
    At the time the Reservation was established, it was acknowledged 
that ``[t]here is an abundant supply of water arising on or near the 
Blackfeet Reservation,'' but much of that water is now diverted off the 
Reservation. Along with the lack of storage capacity for on-Reservation 
use and a dilapidated BIA irrigation project, numerous barriers are 
created for the Tribe in its efforts to protect and put to use its 
valuable water resources. These challenges in part account for the high 
unemployment and devastating poverty rate that has plagued the 
Reservation for generations. Unemployment runs as high as 70 percent 
and more half of the employed are below the poverty level. Securing 
control of and actively managing Reservation water resources would be 
an important step towards improving economic conditions on the 
Reservation and creating the homeland envisioned in the numerous 
treaties and agreements that serve as the foundation of the United 
States and Blackfeet Tribe's relationship.
Litigation Will Continue if S. 434 Does Not Become Law
    In 1979, the United States filed suit in federal court seeking to 
quantify the Blackfeet Tribe's water rights. In 1983, the federal 
district court litigation was stayed pending the outcome of the Montana 
State court water adjudication proceedings. The adjudication of the 
Blackfeet tribal water rights in the State court proceedings have been 
stayed pending finalization of the Compact and the Blackfeet settlement 
legislation. Should the negotiated settlement of the Blackfeet Tribe's 
water right claims fail to be ratified by Congress, then the claims of 
the Blackfeet Tribe will be litigated before the Montana Water Court. 
Moreover, if the settlement fails, the Tribe will pursue its monetary 
claims described above against the United States, resulting in years of 
litigation and potentially a judgment against the United States that 
exceeds the funding authorized in the legislation.
Conclusion
    The Blackfeet Water Rights Settlement has critical importance to 
the future of the Blackfeet people and represents decades of hard work 
by many people. The legislation will secure the water rights of the 
Tribe through ratification of the Tribe's water rights compact, and 
will also provide the necessary funding for the Tribe to develop its 
water rights for the benefit of the Tribe and its members. The 
settlement will significantly contribute to the development of a strong 
Reservation economy, jobs for Tribal members, and a better life for the 
Blackfeet people.
    Finally, although the Department of the Interior was involved in 
our negotiations every step of the way in the decades long process, and 
was intimately involved in the drafting of the Compact, the 
Administration has raised a number of issues relating to S. 434. We are 
engaged in discussions with the Department of the Interior to address 
these concerns, and expect most of the concerns will be resolved in a 
satisfactory manner to both parties.
    We thank the Committee and Committee staff and look forward to 
responding to any questions you may have.

    The Chairwoman. Thank you very much.
    Now I will turn to you, Mr. Weiner. Thank you so much for 
your help and coordination. We look forward to your testimony.

STATEMENT OF HON. JAY WEINER, ASSISTANT ATTORNEY GENERAL, STATE 
                           OF MONTANA

    Mr. Weiner. Thank you very much, Madam Chairwoman.
    I am an Assistant Attorney General with the State of 
Montana and I serve as a staff attorney to the Montana Reserve 
Water Rights Compact Commission. I am here today to testify on 
behalf of Governor Steve Bullock and Chris Tweeten, Chairman of 
the Commission.
    I want to extend my thanks to the Committee for this 
hearing, to Senators Tester and Baucus for the leadership they 
have shown on this issue and to the hard work that the tribe 
and the United States have put in along with the State of 
Montana to bring the bill to this point today, which we believe 
is very close to where this bill needs to be so that it can be 
enacted to ratify this very important settlement.
    As you heard from Senator Baucus and Assistant Secretary 
Washburn, this is a jobs bill, this is a jobs and livelihood 
bill. Fifteen percent of Montana's agricultural economy depends 
on the water implicated by this settlement, including the water 
rights held by the United States Bureau of Reclamation for the 
Milk River Project.
    This is an incredibly important settlement to the State of 
Montana. The State has demonstrated that commitment to this 
settlement through the hard work we have put in over the 
decades in negotiations and particularly in identifying the 
State's contribution to the settlement which, as you have 
heard, is the largest contribution to settlement that the State 
has ever made and I believe one of the largest, if not the 
largest monetary contribution a State has ever made to an 
Indian water rights settlement.
    The bulk of that contribution is dedicated to the 
construction of what is known as the Four Horns Project, a 
critical piece of infrastructure to this settlement. As you 
heard from Assistant Secretary Washburn, it was also the 
subject of some of the concerns that the United States raised 
in their testimony 18 months ago.
    Since that time, the tribe and the State, in an effort to 
address those concerns, went back to the table, the tribe's 
engineer looked at a redesign of the project and we were able 
to reduce the cost of that project by a full $90 million in a 
way that while it reduced the overall benefits from the 
project, continued to provide important benefits to the 
Blackfeet Tribe and also to water users south of the Blackfeet 
Reservation out of Birch Creek.
    To make that project work, the State originally proposed to 
contribute $35 million. In the course of the negotiations over 
the last 18 months, the State has agreed, and I am pleased to 
report that this Monday, Governor Bullock signed House Bill 6 
which appropriated the additional $14 million to bring the 
total contribution to the settlement to $49 million, all of 
which has been appropriated or authorized in the form of bonds 
by the State of Montana and is ready to be put to work so we 
can make the settlement implementable.
    The Four Horns Project provides important benefits to those 
south of the reservation water users. It also provides 
important benefits to the tribe by bringing about 
infrastructure that helps the tribe realize economic 
development and monetary benefits from their water resources, 
which are a critical part of policy in reaching Indian water 
rights settlement.
    The State has been troubled in the past that the United 
States has been unwilling to recognize that benefit. We are 
very encouraged by the testimony that Assistant Secretary 
Washburn delivered today and the discussions that have occurred 
with the United States more recently that indicate movement is 
possible on that point. We greatly appreciate that effort and 
look forward to resolving this issue to a successful 
conclusion. We believe we are very close on that point.
    Two other issues raised in Assistant Secretary Washburn's 
testimony today that we continue to work on are the request 
made by the Pondera County Canal and Reservoir Company for a 
mitigation fund. The Pondera County Canal and Reservoir Company 
is the successor to a Kerry Land Act project.
    That Act creates an interesting set of historic 
responsibilities that may exist. The State of Montana supports 
the Canal Company in their request but remain committed to 
working with the United States, the Canal Company, the 
Blackfeet Tribe and our congressional delegation to try to come 
to resolution on that issue as well so that does not become an 
impediment to the implementation of this bill.
    The other issue I wanted to touch on that Assistant 
Secretary Washburn mentioned is the need to have a mechanism 
for resolving conflicts between the Blackfeet and the Ft. 
Belknap Tribes over their water rights on the Milk River, which 
arises on the Blackfeet Reservation, goes into Canada, comes 
back down in north central Montana and then flows across the 
Ft. Belknap Reservation.
    The State of Montana has negotiated compacts with both the 
Blackfeet and the Fort Belknap Tribes. We were certainly aware 
of the issue at the time we negotiated those settlements. In 
our assessment and based on the technical work the State has 
done, we believe the prospect of actual wet water conflict 
between the tribes of those two reservations is exceedingly 
remote.
    Nevertheless, we recognize there are concerns about the 
theoretical possibility of such conflicts and therefore, we 
support the efforts being made by the Administration, the 
Blackfeet and the Fort Belknap Tribes to implement a mechanism 
to resolve such conflicts in the extremely unlikely event they 
were actually to occur.
    I want to extend my thanks to the Committee for this 
hearing. We appreciate it. This is an incredibly important bill 
for the State of Montana. Thank you very much for your time.
    [The prepared statement of Mr. Weiner follows:]

  Prepared Statement of Hon. Jay Weiner, Assistant Attorney General, 
                            State of Montana
    Chairwoman Cantwell and distinguished members of the Senate 
Committee on Indian Affairs, I thank you for the opportunity to provide 
written testimony on this important matter. My name is Jay Weiner, and 
I am staff attorney for the Montana Reserved Water Rights Compact 
Commission. I am here to testify on behalf of Governor Steve Bullock 
and Chris Tweeten, the Chairman of the Montana Reserved Water Rights 
Compact Commission, in support of Senate Bill 434, the Blackfeet Water 
Rights Settlement Act of 2013, and to urge your approval of this bill.
    The Montana Reserved Water Rights Compact Commission was created by 
the Montana legislature in 1979 to negotiate, on behalf of the 
Governor, settlements with Indian Tribes and federal agencies claiming 
federal reserved water rights in the State of Montana. The Compact 
Commission was established as an alternative to litigation as part of 
the statewide water adjudication. It is charged with concluding 
compacts ``for the equitable division and apportionment of waters 
between the State and its people and the several Indian tribes'' and 
the federal government. (Mont. Code Ann.  85-2-702 (2011).) To become 
fully effective, each of these Compacts must be ratified by the Montana 
legislature and the other signatory parties, and then the water rights 
being recognized must be issued as a final decree by the Montana Water 
Court.
    Montana has been remarkably successful in resolving both Indian and 
federal reserved water rights claims through settlement negotiations. 
To date, we have concluded and implemented water rights Compacts with 
the tribes of the Fort Peck, Northern Cheyenne, and Rocky Boy's 
Reservations, as well as with the United States Forest Service, 
National Park Service, Agricultural Research Service, Bureau of Land 
Management, and several units of the Fish and Wildlife Service. The 
Congress has previously ratified the Northern Cheyenne, Rocky Boy's, 
and Crow Compacts. The Northern Cheyenne and Rocky Boy's Compacts are 
substantially implemented, and both tribes have seen substantial 
economic and social benefits from the completed settlements. We expect 
similar economic and social benefits to follow full implementation of 
the Crow Compact, which was ratified by Congress is 2010, by the Crow 
Tribe in 2011 and is presently in the decree phase before the Montana 
Water Court. In addition, the Montana Legislature has ratified a 
Compact with the tribes of the Fort Belknap Reservation, a bill to 
ratify which was introduced during the last session of Congress as S. 
3209. The Compact Commission has also reached a Compact with the 
Confederated Salish and Kootenai Tribes that has not yet been ratified 
by the Montana Legislature. The Blackfeet Tribe-Montana Compact has 
already been approved by the Montana legislature (Mont. Code Ann.  85-
20-1501 (2011)), and is now before Congress for ratification pursuant 
to S. 434, after having been introduced in different forms during the 
two previous sessions of Congress, first as S. 3290 (2010) and then as 
S. 399 (2011). It is now time to enact this bill and ratify the 
Blackfeet Tribe-Montana Compact so the Tribe, the State and the United 
States, and all our citizens, may realize the benefits contained in 
this settlement.
    Some background is in order. Concurrent with the initiation of the 
Montana general stream adjudication and the establishment of the 
Compact Commission in 1979, the United States filed suit in federal 
court to quantify the rights of tribes within the State, including the 
Blackfeet Tribe. Those federal cases have been stayed pending the 
adjudication of tribal water rights in State court. Should the 
negotiated settlement of the Blackfeet Tribe's water right claims fail 
to be approved, then the claims of the Blackfeet Tribe will be 
litigated before the Montana Water Court. The Blackfeet Tribe has 
always had the senior water rights in the basins that are the subject 
of the settlement embodied in S. 434--this Compact does not create 
those rights, it simply quantifies them.
    The Blackfeet Indian Reservation is located in north-central 
Montana, bounded by Glacier National Park and the Lewis and Clark 
National Forest to the west, Canada to the north and prairies and 
farmland to the east and south. The Reservation encompasses 1.5 million 
acres (roughly one and a half times the size of Rhode Island), making 
it one of the largest in the United States. The Reservation is home to 
approximately half of the 17,000 enrolled Tribal members. Unemployment 
on the Reservation is estimated at being up to 70 percent. The region 
is arid, with approximately 13 inches of average annual precipitation. 
Ranching and farming are the major uses of land on the Reservation, 
with the principal crops being wheat, barley and hay.
    The primary sources of water on the Blackfeet Indian Reservation 
are the St. Mary River, the Milk River, the Two Medicine River, and 
Badger, Birch and Cut Bank Creeks. Collectively, these watercourses 
discharge approximately 1.5 million acre-feet per year (AFY) of water, 
with the St. Mary River alone accounting for roughly one-third of that 
total. The St. Mary River originates in the mountains of Glacier 
National Park and flows north and east across the Reservation before 
crossing into Canada. The Two Medicine River and Badger and Birch 
Creeks originate in the mountains to the west of the Reservation and 
flow east, ultimately uniting to form the Marias River just east of the 
Reservation. The Milk River and Cut Bank Creek are prairie streams. The 
Milk River flows from the Reservation northeast into Canada before re-
entering the United States just west of Havre, Montana, while Cut Bank 
Creek flows south and east until it joins the Marias River. The St. 
Mary and Milk Rivers are both subject to an apportionment agreed to 
between the United States and Canada in the 1909 Boundary Waters Treaty 
(BWT), and implemented by a 1921 Order of the International Joint 
Commission that was established by the BWT. Indian water rights were 
not considered during the negotiation or implementation of the BWT. The 
Bureau of Indian Affairs (BIA) manages the Blackfeet Irrigation Project 
on the Reservation. The Blackfeet Irrigation Project serves land in the 
Birch Creek, Badger Creek, Two Medicine River and Cut Bank Creek 
drainages.
    The provisions in S. 434 will recognize and quantify water rights 
as well as off-Reservation storage allocations that will allow the 
Blackfeet Tribe to provide for its growing population and to develop 
its natural resources. The State of Montana and the Blackfeet Tribal 
Business Council agree that this is a fair and equitable settlement 
that will enhance the ability of the Tribe to develop a productive and 
sustainable homeland for the Blackfeet People. We appreciate the 
efforts of the Tribe and the Federal Government to work with the State 
to forge this agreement, and, in doing so, to listen to and address the 
concerns of non-Indian water users both on and off the Reservation. 
This settlement is the product of over two decades of negotiations 
among the parties, which included an intensive process of public 
involvement.
    The Blackfeet Tribal Water Right is quantified separately for each 
drainage basin within the Reservation. The Tribal Water Right for the 
St. Mary River drainage within the Reservation is 50,000 AFY, not 
including the flows of Lee and Willow Creeks. It is worth noting that 
this quantified amount of 50,000 AFY is almost exactly what the United 
States claimed for the Tribe in its November 14, 1997, More Definite 
Statement of Claim filed in the Montana Water Court. The Tribe's water 
right is subject to the limitation that its exercise may not adversely 
affect the water rights held by the Bureau of Reclamation's Milk River 
Project (MRP). The MRP diverts almost the entire United States' BWT's 
share of the St. Mary River into the Milk River for use by MRP 
irrigators in northern Montana approximately 200 miles downstream of 
the Reservation. The balance between tribal rights and MRP needs, and 
the protection of these off-Reservation water users, was a critical 
aspect of the negotiations of this settlement. The Tribe is also 
entitled to groundwater in the St. Mary drainage that is not subject to 
the BWT's apportionment, as well as the entire United States' share 
under the BWT of the natural flow of Lee and Willow Creeks (which are 
located in the St. Mary River drainage), except for the water in those 
streams that is subject to existing water rights under State law. The 
Tribe has agreed to afford protections for those existing water rights 
under State law through the inclusion of a no-call provision.
    The Blackfeet Tribal Water Right in the Milk River is quantified as 
the entire United States' share under the BWT of the Milk River on the 
Reservation, as well as all non-BWT groundwater in the Milk River 
drainage on the Reservation, except for the water that is subject to 
existing water rights under State law. In addition, the Tribe has 
agreed to afford protections for those existing water rights under 
State law, including a no-call provision for uses other than 
irrigation, and a 10 year phase-in for new development of tribal 
irrigation. The tribes of the Ft. Belknap Indian Community (FBIC) also 
claim water rights in the Milk River downstream of the point at which 
the Milk River re-enters the United States from Canada, and the FBIC-
Montana Compact that was approved by the State legislature in 2001 
(Mont. Code Ann.  85-20-1001 (2011)) recognizes significant Milk River 
water rights for the FBIC. Staff for the Compact Commission has 
evaluated the potential of competing demands on the Milk River between 
the Blackfeet Tribe and the FBIC and has concluded that the possibility 
of actual conflict is, as a matter of hydrology, exceedingly remote. 
Nevertheless, the Blackfeet Tribe, the FBIC and the United States have 
worked to identify a mechanism for the resolution of any conflicts that 
might arise, which is reflected in S. 434. The State strongly supports 
this effort.
    The Blackfeet Tribal Water Right in Cut Bank Creek is quantified as 
all of the water (both surface and underground) in that drainage within 
the Reservation, except for the water that is subject to existing water 
rights under State law. The Tribe has also agreed to afford existing 
water rights under State law in the Cut Bank Creek drainage the same 
protections as are provided for in the Milk River drainage. The 
quantifications of the Tribal Water Right in the Two Medicine River and 
Badger Creek drainages are done in the same fashion as the Cut Bank 
Creek quantification, though the protections accorded by the Tribe to 
existing water rights under State law in these two drainages, as on the 
streams in the St. Mary drainage, extend the no-call protection to all 
existing water rights under State law, not just non-irrigation water 
rights.
    The Tribe's water rights in Birch Creek, whose midpoint marks the 
southern of the Blackfeet Reservation, were judicially recognized as 
early as the 1908 Ninth Circuit Court of Appeals decision in the Conrad 
Investment Company case (161 F. 829 (9th Cir.1908)), which was decided 
very shortly after the United States Supreme Court ruled in the seminal 
Indian water rights case Winters v. United States, 207 U.S. 564 (1908). 
The Blackfeet Irrigation Project diverts water from Birch Creek for 
project water users on the Reservation, but historically the Tribe has 
taken far less water from Birch Creek than it was legally entitled to 
take. There is also extensive non-Tribal water resource development 
immediately to the south of Birch Creek, where roughly 80,000 irrigated 
acres, as well as several municipalities, are served by the facilities 
of the Pondera County Canal and Reservoir Company (PCCRC), a privately 
owned irrigation company. PCCRC also operates Swift Dam, which abuts 
the southwest corner of the Reservation. During the irrigation season, 
PCCRC's use diverts nearly all of the water available in Birch Creek. 
Since the unconstrained development of the Tribe's Birch Creek water 
right recognized in this settlement has the potential to cause 
significant impacts to existing users, the balance between tribal and 
off-Reservation water use from Birch Creek was a major component of the 
negotiations.
    The settlement quantifies a substantial Tribal Water Right in Birch 
Creek. The quantification consists of a senior irrigation right of 100 
cubic feet per second (cfs) of Birch Creek natural flow, a seasonably 
variable in-stream flow right (25 cfs from October 1 to March 31, and 
15 cfs from April 1 to September 30), and all groundwater in the Birch 
Creek drainage that is not hydrologically connected to Birch Creek. In 
addition, the Tribe is entitled to the remainder of the water in Birch 
Creek after full satisfaction of existing uses under state law. As part 
of the protection of existing water rights under state law for which 
the State bargained, the Tribe agreed in the Compact to limit the 
development of its Birch Creek irrigation right to the Upper Birch 
Creek Drainage. There are also very specific administration provisions 
in the Compact concerning the manner in which the Tribe may change the 
use of its Birch Creek irrigation right to other beneficial purposes. 
In addition, a Birch Creek Management Plan has been appended to the 
Compact, which commits the Tribe, the BIA and the operators at PCCRC to 
meet prior to each irrigation season to develop management plans to 
maximize the beneficial use of Birch Creek for all water users, and to 
adapt those plans as conditions warrant during the course of each 
irrigation season.
    When the Compact Commission initially presented this proposed 
settlement framework at public meetings south of the Reservation, the 
response was overwhelmingly negative, as stakeholders believed that the 
risks posed to their livelihoods by full tribal development of its 
Birch Creek water rights were insufficiently mitigated. Consequently, 
the parties returned to the negotiating table and entered into an 
Agreement Regarding Birch Creek Water Use (the Birch Creek Agreement) 
on January 31, 2008. The Birch Creek Agreement is a critical component 
of the overall settlement. Under the Birch Creek Agreement, the State 
agreed to put $14.5 million into an escrow fund payable to the Tribe 
after final approval of the Compact by the Montana Water Court. (In 
anticipation of settlement, the 2007 session of the Montana legislature 
fully funded this amount.) In the interim, the Tribe is entitled to 
receive the interest from that fund, up to $650,000 per year. In 
exchange for these payments, the Tribe agreed to defer any development 
of its Birch Creek water rights beyond their current use for a period 
of 15 years from the effective date of the Birch Creek Agreement. In 
addition, the Tribe agreed to prioritize in this settlement 
authorization and funding for the Four Horns Project.
    The Four Horns Project involves the repair and improvement of the 
Four Horns Dam and Reservoir and associated infrastructure, features of 
the Blackfeet Irrigation Project located on the Reservation in the 
Badger Creek drainage. This Project is a critical component of the 
settlement because it is intended to increase the water supply 
available to Birch Creek water users, one of the essential mitigation 
benefits secured by the State in exchange for the financial and other 
commitments made in the Birch Creek Agreement. Specifically, as part of 
that Agreement, the Tribe committed to deliver 15,000 AFY of water from 
Four Horns Reservoir to Birch Creek, for the benefit of Birch Creek 
water users, from the time construction is completed on the facilities 
necessary to make such deliveries possible until a date 25 years from 
the effective date of the Birch Creek Agreement. This provision of 
supplemental water is expected to offset the impacts of the Tribe's 
development of its Birch Creek water rights after the expiration of the 
15 year deferral period. In addition, the existence of infrastructure 
capable of bringing Four Horns water across to Birch Creek provides the 
Tribe with a significant potential market for surplus water from Four 
Horns into the future. This is an important benefit to the Tribe, as it 
enhances the Tribe's ability to realize economic benefits from the 
water rights contained in this settlement. With the Birch Creek 
Agreement in place, PCCRC and other off-Reservation stakeholders 
supported ratification of the Compact by the Montana legislature in 
2009.
    The Tribe and the State initially envisioned a significant 
enlargement of the Four Horns Reservoir. Preliminary engineering 
studies, funded by a $500,000 appropriation from the State legislature, 
indicated that the storage capacity of the reservoir could be 
substantially increased in a cost effective fashion, and that a 
delivery system could be constructed economically to move excess water 
from the reservoir across to Birch Creek for the benefit of all Birch 
Creek water users. The State committed to spend $20 million toward the 
construction of this Project, a commitment which was been fully funded 
by the Montana legislature in the form of a $4 million cash 
appropriation in 2009, and $16 million of bonding authority approved by 
the Legislature during its 2011 session. In its testimony before this 
Committee when the S. 399 was heard in 2011, however, the United States 
asserted that the State's contribution was inadequate, as the United 
States construed the benefits of this Project as not flowing to the 
Tribe. The State took great issue with this position, both because it 
misconstrued the true benefits this Project has for both the Tribe and 
off-Reservation water users, and because the State's proposed $35 
million contribution to the Blackfeet settlement marked one of the 
largest contributions any state has ever made to an Indian water rights 
settlement, and the largest Montana had ever agreed to make.
    Montana has always been extremely proactive in contributing to 
Indian water rights settlements. In the early 1990s, the State spent 
$21.8 million as part of the Northern Cheyenne settlement. The State 
spent $550,000 as part of the smaller Rocky Boys settlement, and $15 
million as part of the Crow Tribe settlement. The State has also made--
and fully funded--its commitment of $17.5 million for the FBIC-Montana 
Compact that has been ratified by the Montana legislature but not yet 
approved by Congress. This amount is made up of $4 million in cash 
(including $3 million that was appropriated in the just-concluded 
legislative session), $9.5 million in bonding authority and $4 million 
of in-kind contributions in the form of modeling and other hydrology 
work that has already been conducted. Moreover, as will be discussed 
immediately below, Montana has now agreed to--and has fully funded--a 
contribution to the Blackfeet settlement in the amount of $49 million. 
The additional $14 million was appropriated by the 2013 session of the 
Montana Legislature.
    This additional amount came about as part of the efforts the State 
and the Tribe have made to address the concerns raised by the United 
States with the structure of the federal ratification legislation. In 
light of the Administration's 2011 testimony, the Tribe's technical 
consultant identified an alternate design for the Four Horns Project, 
one that would bring fewer overall benefits in terms of enhancing the 
water supply but one that was nevertheless capable of ensuring 
continued deliveries of water to irrigators on the BIA's Blackfeet 
Irrigation project as well as of delivering the 15,000 AFY of water to 
Birch Creek that the State bargained for as part of the Birch Creek 
Agreement. The State continues to believe that the benefits to the 
Tribe that flow from this Project warrant federal as well as State 
contributions. But in the interest of ensuring the construction of the 
water delivery system to Birch Creek, which is so critical to the 
successful implementation of this settlement, the State agreed to fund 
the full incremental costs associated with the Birch Creek delivery 
system. S. 434 reflects that commitment.
    S. 434 also contains some language regarding the Four Horns Project 
that is very problematic for the State. Specifically, Section 
10(c)(3)(A) flatly states that none of the costs of the Birch Creek 
portion of the Four Horns Project (S. 434 calls it the ``Birch Creek 
Mitigation Project'') shall be paid by the United States. Yet S. 434 
also provides that it will be the United States--through the Bureau of 
Reclamation--that will oversee the construction of this Project. The 
difficulty with the current language in Section 10(c)(3)(A) is that is 
hands the State the entire financial risk of cost overruns or other 
unforeseen construction-related expenses with no ability to manage the 
Project to ensure that such overruns do not occur. The State is not 
seeking such responsibility, but does want to ensure that the United 
States is properly focused on managing the construction project 
diligently to ensure that the $34 million budget is not exceeded. 
Without a change to the current language, the United States has no 
meaningful incentive to ensure that construction costs are minimized 
and that overruns do not occur. The State asks that the language in 
Section 10(c)(3)(A) be deleted as this bill goes through mark-up.
    The settlement also includes provisions allowing the Tribe to lease 
to water users off the Reservation those portions of its water rights 
that it has stored or directly used. The Tribe must offer water users 
on Birch Creek, Cut Bank Creek, the Milk River and the St. Mary River, 
respectively, a right of first refusal on water leased from those 
drainages to users downstream. The Tribe may lease water from Birch 
Creek, Cut Bank Creek and the Milk River, all of which are within the 
Missouri River Basin, but only for use at other locations within the 
Missouri River Basin.
    In addition, under S. 434, the United States will allocate to the 
Tribe a portion of the water in the Bureau of Reclamation's storage 
facility on Lake Elwell, located along the Marias River in central 
Montana. The FBIC-Montana Compact also contemplates an allocation to 
the FBIC from Lake Elwell, and S. 434 does nothing to impair that 
allocation from occurring at such time as Congress ratifies the FBIC-
Montana Compact. S. 434 further provides that nothing in this 
allocation to the Blackfeet Tribe requires the United States to provide 
any facility for the transportation of the Tribe's allocation from Lake 
Elwell to any point, and also that nothing in this allocation to the 
Blackfeet Tribe diminishes the allocation from Lake Elwell that was 
made to the Chippewa Cree Tribe of the Rocky Boys Reservation as part 
of the Rocky Boys water rights settlement which was ratified by 
Congress in 1999. S. 434 authorizes the Blackfeet Tribe to lease water 
from its Lake Elwell allocation so long as it is for use within the 
Missouri River Basin.
    The Blackfeet water rights settlement also closes all of the on-
Reservation basins to new appropriation under Montana law. In all 
cases, both under a Tribal Water Code and State law, the development of 
small wells and stock uses are not precluded by the basin closures. For 
all on-Reservation basins, water rights under State law will become 
part of the Tribal Water Right if the Tribe reacquires the land and the 
appurtenant water right. This structure will allow the Tribe to 
reconsolidate both land and water resources within the Reservation.
    The Tribe will administer the Tribal Water Right. The State will 
administer water rights recognized under State law. The Blackfeet 
Irrigation Project will use part of the Tribal Water Right and will 
continue to be administered by the BIA under applicable federal law. 
The Blackfeet Tribe will enact a Tribal Water Code to provide for 
administration of the Tribal Water Right in conformance with the 
Compact, this Act, and applicable federal law. In the event a dispute 
arises, the Compact provides for an initial effort between the water 
resources departments of the State and the Tribe to resolve the 
dispute. Should the informal process fail to reach resolution, the 
Compact establishes a Compact Board to hear disputes. Decisions of the 
Compact Board may be appealed to a court of competent jurisdiction.
    The Compact will recognize and protect the Blackfeet Tribe's water 
rights and provides for the improvement of agricultural water systems 
and tribal economic development. The Compact promotes development for 
the benefit of the Blackfeet Nation while protecting other water uses. 
The Compact is the full and final settlement of all of the Tribe's 
water rights claims within the Blackfeet Reservation and the Tribe 
waives any claims to water rights not contained or reserved in the 
Compact. We urge your support in ratifying the Compact by passage of 
this Act.
    *Attachments to this prepared statement have been retained in the 
Committee files.

    The Chairwoman. Mr. Weiner, thank you very much.
    The term you used, wet water conflict, what do you mean by 
that?
    Mr. Weiner. We often speak of wet water as opposed to paper 
water. Paper water is the water you have a right to that you 
might have sitting in a decree in courthouse somewhere but 
there is in the arid west, as you heard from Senator Baucus, 
oftentimes a significant difference between water you may have 
a right to and water you can actually use to grow a crop or to 
have a home.
    Practically speaking, we believe the wet water conflict, 
the practical likelihood of an actual conflict with both the 
Blackfeet and the Fort Belknap Tribes may have an actual need 
for water simultaneously is unlikely to arise in a way that 
would lead to one tribe or the other facing a shortage.
    The Chairwoman. Thank you. I thought I would ask that while 
you were finishing your testimony.
    Now we will turn to Mr. Joyner. Welcome to the Committee. 
Thank you very much for being here.

 STATEMENT OF CALVIN JOYNER, ASSOCIATE DEPUTY CHIEF, NATIONAL 
           FOREST SYSTEM, U.S. FOREST SERVICE, U.S. 
                   DEPARTMENT OF AGRICULTURE

    Mr. Joyner. Madam Chairwoman, Ranking Member Barrasso, 
Senator Tester and other members of the Committee, my name is 
Cal Joyner. I serve as the Associate Deputy Chief of the 
National Forest system.
    Thank you for inviting me here today to testify on S. 611, 
the Sandia Pueblo Settlement Technical Amendment Act.
    S. 611 is a technical amendment to the T'uf Shur Bien 
Preservation Trust Area Act that will allow the intended land 
exchange to proceed. The bill would change language that would 
allow the T'uf Shur Bien Preservation Trust Area Act to finally 
be completed.
    We do not oppose the bill and would like to work with the 
Committee on a few issues to allow the exchange to smoothly 
proceed.
    We would also like to discuss with the Committee the 
possibility of a different, lower cost approach. This approach 
would allow a simple interchange to transfer Federal 
administrative jurisdiction over the subject properties. This 
would reduce the need for expensive surveys, appraisal and 
administrative work and would accomplish the same goals by 
allowing the Bureau of Indian Affairs to hold the property in 
trust for the Pueblo.
    This concludes my statement. I would be pleased to answer 
any questions.
    [The prepared statement of Mr. Joyner follows:]

 Prepared Statement of Calvin Joyner, Associate Deputy Chief, National 
   Forest System, U.S. Forest Service, U.S. Department of Agriculture
    Madame Chairwoman, Ranking Member Barrasso, and members of the 
Committee, thank you for inviting me here today to testify regarding S. 
611, ``Sandia Pueblo Settlement Technical Amendment Act''.
    S. 611 would amend the T'uf Shur Bien Preservation Trust Area Act 
(Act) by adding paragraph (6) to section 413(b) requiring the Secretary 
of Agriculture, upon the receipt of certain consideration and at the 
request of the Sandia Pueblo of New Mexico and the Secretary of the 
Interior, to transfer certain National Forest System (NFS) land to the 
Secretary of the Interior to be held in trust for the Pueblo, if a land 
exchange with the Pueblo currently required by that Act is not 
completed within 90 days of enactment of the bill.
    Last Congress the Committee amended the bill's predecessor (S. 
2024) to require the NFS land conveyed to the Pueblo under paragraph 
(6) be preserved ``as open space, with the natural characteristics of 
the land to be preserved in perpetuity.'' In exchange for the NFS land, 
the bill would require the Pueblo to transfer to the Secretary of 
Agriculture the La Luz tract and an amount equal to the difference 
between the value of: (1) the NFS land as open space; and (2) the sum 
of the fair market value of the La Luz tract and the compensation owed 
to the Pueblo by the Secretary of Agriculture for the right-of-way and 
conservation easement on its Piedra Lisa tract. The La Luz tract would 
be valued comparatively higher, appraised according to its highest and 
best use, as opposed to the NFS land conveyed as open space.
    In contrast to the NFS land conveyed to the Pueblo, the bill would 
not impose deed conditions on the La Luz tract when conveyed to NFS.
    We appreciate the efforts of the Committee staff and members' 
personal staff in bringing these corrections to the revision to a 
hearing. This bill is important in that it will allow the provisions of 
the T'uf Shur Bien Preservation Trust Area Act to be completed. We do 
not oppose the amendment but would like to work with the committee on a 
few issues.

        1. The complexity of the appraisal would require detailed and 
        exacting instructions that could be completed within a year of 
        enactment, but would require more time than the 90 days called 
        for in the Bill.

        2. The bill should make clear that the Pueblo is responsible 
        for sealing the open mine adit on the La Luz Tract as part of 
        the conveyance of this tract.

        3. The appraisal and administrative processing costs would 
        exceed $200,000 and impact the currently planned program of 
        work for the Cibola National Forest.

    This concludes my testimony and I would be happy to answer any 
questions that you may have.

    The Chairwoman. Thank you. I am sure we will have questions 
for you.
    Let us hear from Mr. Paisano. Then we can go to questions 
for the whole panel. Thank you for being here and representing 
the Pueblo of Sandia.

 STATEMENT OF HON. STUART PAISANO, COUNCILMAN, PUEBLO OF SANDIA

    Mr. Paisano. Good afternoon, Chairwoman Cantwell, Vice 
Chairman Barrasso and Senator Tester.
    My name is Stuart Paisano. I was the Governor of the Pueblo 
of Sandia for six years from 2000-2006. I am currently a Tribal 
Council member.
    On behalf of Governor Montoya, Lieutenant Governor 
Gutierrez, our tribal council and the Pueblo of Sandia, we want 
to sincerely thank this Committee for acting so quickly to 
schedule a hearing on this technical amendment of the T'uf Shur 
Bien Preservation Act and for inviting me to testify.
    As you know, a similar technical amendment was introduced 
by Senator Bingaman in 2011 and passed out of this Committee 
but did not make it to the floor for a vote. The Pueblo hopes 
that with passage of the technical amendment, the land exchange 
Congress authorized over 10 years ago in the T'uf Shur Bien 
Preservation Trust Act will finally happen.
    S. 611 provides that if the land exchange directed by the 
2003 Settlement Act is not completed within 90 days of its 
enactment, upon receipt of the consideration provided for in 
amended section 413(B)(6)(b) of the technical amendment, the 
Secretary of Agriculture shall transfer approximately 710 acres 
of the identified National Forest land to the Secretary of the 
Interior in trust for the Pueblo.
    S. 611 also resolves the impasse over valuation of the 
National Forest land at issue that I will explain in a moment 
and should finally accomplish a long overdue land exchange 
directed by the 2003 Act.
    To provide some background, the 2003 Act was passed to 
settle the Pueblo of Sandia's longstanding claim to the 
ownership of the west face of the Sandia Mountain. The Act 
places special protections on the mountain's west face, a 
sacred place to the Pueblo, while retaining it as a part of the 
Cibola National Forest.
    It also contains a provision which directs that ``not later 
than 180 days after the date of enactment of this Act, after 
consultation with the Pueblo, the Secretary of Agriculture 
shall, in accordance with applicable laws, prepare and offer a 
land exchange of National Forest land outside the area and 
contiguous to the northern boundary of the Pueblo's reservation 
for the land owned by the Pueblo in the Evergreen Hills 
Subdivision in Sandoval County contiguous to National Forest 
land, and the La Luz Tract in Bernalillo County.'`
    The Act further provides that the land exchanged to the 
Pueblo ``shall remain in its natural state and shall not be 
subject to commercial development of any kind.'`
    Although the Act provided that the land exchange should 
take place within 180 days, ten years have now passed without 
the exchange being completed. While the Forest Service and the 
Pueblo representatives were quickly able to agree on the 
National Forest land to be transferred to the Pueblo, progress 
on the exchange stalled because of disagreement on how this 
land should be valued.
    Specifically, the Forest Service and Agriculture Department 
officials took the position that despite the Act's restrictions 
on the use of the land to be transferred to the Pueblo--that it 
remain in its natural state and not be commercially developed--
the land still had to be appraised as if those restrictions did 
not exist.
    The Department rested its position on the contention that 
the restrictions on the use of the land to be transferred to 
the Pueblo did not become effective until after the transfer 
and the conditions were not expressed as a condition of 
conveyance.
    To address this, Congress passed a technical amendment to 
the Settlement Act in 2009. The amendment provides that the 
restrictions on the use of the land to be transferred to the 
Pueblo are ``a condition of conveyance.'`
    However, after months of apparent internal analysis and 
discussion, the Agriculture Department officials told the 
Pueblo that the Department viewed the technical amendment as 
effectively meaningless and still maintained that the land to 
be transferred to the Pueblo had to be appraised based on 
highest and best use, without regard to the statutory 
prohibition on development of the land.
    The current technical amendment removes any doubt. It 
amends the 2003 Settlement Act to provide that the Forest 
Service land to be transferred is to be valued ``subject to the 
condition that the land remain in its natural state.'`
    It also provides for the transfer to the Forest Service of 
the approximately 30 acres of the La Luz Tract owned by the 
Pueblo within the Preservation Trust Area that the Forest 
Service has long wanted to acquire. The La Luz Tract is located 
on a cliff-face near the top of the crest of Sandia Mountains. 
It is not susceptible to development.
    Finally, the technical amendment requires the Pueblo to pay 
any difference between the value of the La Luz Tract and the 
trail right-of-way and conservation easement on the 160-acre 
Piedra Lisa Tract that the Pueblo will grant to the Forest 
Service, and the value of the approximately 710 acres of Forest 
Service land the Pueblo is to receive.
    Madam Chairwoman, Vice Chairman and Senator Tester, thank 
you for hearing the Pueblo's views on S. 611. I will be happy 
to try to respond to any questions you or other members of the 
Committee may have.
    [The prepared statement of Mr. Paisano follows:]

Prepared Statement of Hon. Stuart Paisano, Councilman, Pueblo of Sandia
    Good afternoon, Chairwoman Cantwell, Ranking Member Barrasso, and 
Committee Members, my name is Stuart Paisano. I was the Governor of 
Sandia Pueblo for six years, from 2000 to 2006, and am currently a 
Tribal Council Member. On behalf of the Pueblo, I want to express our 
sincere thanks to you and the Committee for acting so quickly to 
schedule a hearing on this technical amendment to the T'uf Shur Bien 
Preservation Act and for inviting me to testify. As you know, a similar 
technical amendment was introduced by Senator Bingaman in 2011 and 
passed out of this Committee, but did not make it to the floor for a 
vote. The Pueblo hopes that with the passage of this technical 
amendment, the land exchange that Congress authorized over 10 years ago 
in the T'uf Shur Bien Preservation Trust Act (hereafter the ``2003 
Settlement Act'' or ``2003 Act'') will finally happen.
    S. 611 provides that, if the land exchange directed by the 2003 
Settlement Act is not completed within 90 days of its enactment, upon 
receipt of the consideration provided for in amended subsection 
413(b)(6)(B) of the technical amendment, the Secretary of Agriculture 
shall transfer approximately 710 acres of identified National Forest 
land to the Secretary of the Interior, in trust for the Pueblo. S. 611 
also resolves the impasse over valuation of the National Forest land at 
issue that I will explain in a moment, and should finally accomplish 
the long overdue land exchange directed by the 2003 Act.
    To provide some background, the 2003 Act was passed to settle the 
Pueblo of Sandia's longstanding claim to the ownership of the west face 
of Sandia Mountain. The Act places special protections on the 
Mountain's west face (the ``Area''), a sacred place to the Pueblo, 
while retaining it as part of the Cibola National Forest. It also 
contains a provision which directs that ``[n]ot later than 180 days 
after the date of enactment of this Act, after consultation with the 
Pueblo, the Secretary [of Agriculture] shall, in accordance with 
applicable laws, prepare and offer a land exchange of National Forest 
land outside the Area and contiguous to the northern boundary of the 
Pueblo's Reservation . . . for land owned by the Pueblo in the 
Evergreen Hills Subdivision in Sandoval County contiguous to National 
Forest land, and the La Luz tract in Bernalillo County.'' The Act 
further provides that land exchanged to the Pueblo ``shall remain in 
its natural state and shall not be subject to commercial development of 
any kind.''
    Although the 2003 Act provided that the exchange should take place 
within 180 days, ten years have now passed without the exchange being 
completed. While the Forest Service and Pueblo representatives were 
quickly able to agree on the National Forest land to be transferred to 
the Pueblo, progress on the exchange stalled because of disagreement on 
how this land should be valued. Specifically, Forest Service/
Agriculture Department officials took the position that, despite the 
Act's restrictions on the use of the land to be transferred to the 
Pueblo--that it remain in its natural state and not be commercially 
developed--the land still had to be appraised as if those restrictions 
did not exist. The Department rested its position on the contention 
that the restrictions on the use of the land to be transferred to the 
Pueblo did not become effective until after the transfer and the 
conditions were not expressed as a condition of the conveyance.
    To address this, Congress passed a technical amendment to the 
Settlement Act in 2009. The amendment provides that the restrictions on 
the use of the land to be transferred to the Pueblo are ``a condition 
of conveyance.'' However, after months of apparent internal analysis 
and discussion, Agriculture Department officials told the Pueblo that 
the Department viewed the technical amendment as effectively 
meaningless and still maintained that the land to be transferred to the 
Pueblo had to be appraised based on its highest and best use, without 
regard to the statutory prohibition on development of the land.
    The current technical amendment removes any doubt on this score. It 
amends the 2003 Settlement Act to provide that the Forest Service land 
to be transferred is to be valued ``subject to the condition that the . 
. . land remain in its natural state.'' It also provides for the 
transfer to the Forest Service of the approximately 30-acre La Luz 
Tract owned by the Pueblo within the Preservation Trust Area that the 
Forest Service has long wanted to acquire. The La Luz tract is located 
on a cliff-face near the top of the crest of Sandia Mountain. It is not 
susceptible to development. Finally, the technical amendment requires 
the Pueblo to pay any difference between the value of the La Luz tract 
and the trail right-of-way and conservation easement on the 160-acre 
Piedra Lisa tract that the Pueblo will grant to the Forest Service, and 
the value of the approximately 710 acres of Forest Service land the 
Pueblo is to receive.
    Thank you for hearing the Pueblo's views on Senate Bill 611 and I 
will be happy to try to respond to any questions that you or other 
members of the Committee may have.

    The Chairwoman. Thank you, Mr. Paisano.
    I am going to defer my questions to my colleague, Senator 
Tester, and let him go first, since it deals with the State of 
Montana and its ten years of negotiation. Maybe we can get to 
the bottom of this. Go ahead.
    Senator Tester. Actually 20 years.
    Thank you very much, Madam Chair. You are very kind.
    Kevin, I have a couple questions for you. Part of it deals 
with the Four Horns Project. Correct me if I don't have this 
right.
    I believe there is language that states no Federal funds 
will be used on the Four Horns Project, yet that project will 
be overseen by the BOR. It will be State funds overseen by the 
BOR. My concern is, first of all, do you agree with that 
description?
    Mr. Washburn. I am not sure that I do. I think certainly 
the vast majority of the contribution, maybe that is right. The 
vast majority of the contribution is from the State.
    Senator Tester. What incentive does the BOR have to 
minimize cost, do it on a timely basis, all those kind of 
things?
    Mr. Washburn. Whenever the settlement agreements are put 
into effect, you all passed the Act and there is an agreement 
that has to follow. That agreement requires our signature and 
there are usually mechanisms for enforcement if someone doesn't 
live up to their responsibilities under the agreement. That is 
one way we can handle those issues.
    Senator Tester. You would anticipate the BOR would probably 
have some enforcement provisions in it?
    Mr. Washburn. We would certainly be willing to talk to them 
about that.
    Senator Tester. I would rather have you guys do it than us 
but I guess push come to shove we could do it through 
appropriations or whatever.
    Your predecessor, a fellow we all know and love, Del 
Laverdure, said basically he was going to do the negotiations, 
the reason was because a lot of times people negotiate and 
cannot cut the deal in the end.
    You have a great team around you. There is absolutely no 
downplaying their ability; they are very, very good. In the 
end, they have to be able to make the call or you have to be 
able to make the call. The question is, I don't want to have 
them do the work and then somebody come in, you or above you, 
and say all right, deals off. Are you personally involved in 
this, number one, and two, can you make the call on this?
    Mr. Washburn. Senator, it is a team effort at the 
Administration, especially when you are dealing with matters of 
hundreds of millions of dollars. I am very lucky to be working 
with Pam Williams and many people on our team will tell you, I 
have enormous respect for the chairman. Jeannie Whiting, chief 
negotiator for the tribe, and I were water lawyers together in 
the mid-1990s and I do have a personal interest in this.
    Frankly, Senator, every time you and I have met, you have 
raised this issue with me, so I am personally interested in the 
issue. I will remain personally involved because I think we can 
get there. I hear that from everyone at the table.
    Senator Tester. I just wanted to get it on the record too. 
I think you are a great guy, I think the people working for you 
are great people. In the end, I really don't want to have this 
thing hung up by an administrative problem. I want to have the 
people who are the decision-makers in the room.
    Mr. Washburn. Senator Tester, I left out Mike Connor, the 
Commissioner of the Bureau of Reclamation, we were just talking 
about this last week too, so there are a lot of people engaged 
at the Administration.
    Senator Tester. Jay, you talked a bit about the Milk River 
and wet water conflicts. The way I read it, paper or wet, 
either way you want to go, there is not enough water in the 
Milk to fulfill both water compacts.
    Mr. Weiner. Senator, I would not agree with that 
characterization as we have looked at it.
    Senator Tester. Good. So you think there is enough water in 
the Milk to take care of both water compacts?
    Mr. Weiner. I think one of the complications about giving 
you a yes or no answer to that question is that as you know 
well--this is home country for you--the Milk River is subject 
to a series of complicated water issues. There are issues that 
relate to the implementation of the 1909 Boundary Waters Treaty 
with Canada and the 1921 order under that Treaty that allocates 
the flows of the St. Mary and the Milk Rivers between the 
United States and Canada.
    There are issues with the rehabilitation of the St. Mary's 
facilities of the Milk River Project which diverts a 
significant amount of water from the St. Mary's River over to 
the Milk.
    One of the things that is a challenge and has been a 
challenge for all of us negotiating the Blackfeet Settlement is 
there are those other factors that exist out there, there are 
efforts going on to try to address rehabilitation, efforts 
going on that the State of Montana has been very involved with 
to try to reopen that 1921 Order.
    In terms of how the water supply plays out in the future, 
that will have some bearing on some of those hydrologic 
outcomes as opposed to a straight yes or no. In terms of the 
historic flow records we have looked at, the technical analysis 
we have done, I would give you a no.
    Senator Tester. Shannon, real quick, thanks for being here. 
The Blackfeet Tribe and the Ft. Belknap Tribe have conflicting 
water rights in the Milk. Both have a priority date of 1855. 
Correct me if I am wrong on any of this. To address this issue, 
the bill has language for the two tribes to try to reach an 
agreement over a ten year period and continue working with the 
Secretary if an agreement is not reached.
    We all want to control our own destiny. I think it is 
critically important for you and Ft. Belknap to be able to do 
that. I am concerned about what happens if an agreement is not 
reached. I guess the question is, if this language stays in and 
is agreed to as is, which I don't know if you support or not, 
if you do support it which I assume you do, maybe that is a 
wrong assumption, and the tribes don't agree on a solution 
working between yourselves, would you support the Secretary 
resolving the issue?
    Mr. Augare. Thank you for the question. We support a 
dispute resolution process. I want to be clear that the Ft. 
Belknap Tribe is a great friend and ally of the Blackfeet 
Nation. We have a longstanding partnership together. We are 
willing to continue that cooperation to reach a middle of the 
road, commonsense approach.
    The Department of Interior did make a proposal. We are 
looking at that proposal. I would not necessarily agree it 
would be a good idea for a future Secretary to perhaps make a 
decision that would affect two different tribal nations. I 
think this is something we need more time to spend with each 
other and discuss thoroughly.
    Senator Tester. I have run over. I want to thank the 
Chairwoman again. Let me just say this.
    I think this is a real critically important point. I trust 
you. You are right, we are talking about a future Secretary, we 
don't know who it is and talking about someone in the tribal 
council and probably won't be you in that time period either. 
If there is something you can put in that water compact to 
force the negotiations on both sides, I think it would be 
absolutely helpful.
    Thank you very much, Madam Chair.
    The Chairwoman. Thank you.
    Vice Chairman Barrasso.
    Senator Barrasso. Thank you, Madam Chairwoman.
    Secretary Washburn, in the Blackfeet Water Rights 
Settlement Act, the Federal share of the settlement is roughly 
$400 million. Of that, about $37 million would go to deferred 
maintenance and dam safety improvements on the irrigation 
project, the Blackfeet Irrigation Project.
    I understand the irrigation project is similar in some 
respect to what we see in Wyoming in the Wind River Project, 
including that it suffers from significant deferred maintenance 
problems. Addressing that problem, to me, seems to be a good 
feature of this bill.
    Some of the BIA irrigation projects, including Wind River, 
don't really have a water settlement vehicle to get funding for 
the deferred maintenance. The issue is still out there, so I 
feel compelled to ask, is the Department working on a plan to 
address the deferred maintenance problems plaguing Indian 
irrigation projects like the one in Wyoming, the Wind River? If 
so, could you please describe what you are working on?
    Mr. Washburn. Let me tell you that there are some things 
they don't tell you when you take these jobs. One of them was 
school construction. No one told me about the deferred school 
construction problems. Another is the deferred maintenance on 
these projects.
    After our last hearing when you raised this issue with me, 
I went home and did some homework. I read your hearing 
transcript from the hearing about two years ago in Riverton. We 
met with David Mullon, your Staff Director, about this problem.
    I cannot tell you that, No, there is not a plan. Honestly, 
because in difficult fiscal times like this, it would sort of 
take a magic wand to solve this problem but I am willing to 
work with you. This is a political question that has existed 
since around 1930. I think it is fair to say so the solutions 
are not simple. I would be happy to continue working with you 
to try to develop some sort of plan for addressing this.
    Senator Barrasso. There were a lot of big promises and 
plans back then and they all stopped as a result of the 
Depression, difficult fiscal times, as you say. It just seems 
there is a lot that still needs to be done.
    This bill provides for the transfer of title to certain 
water project infrastructure to the Blackfeet Tribe, to own and 
operate and maintain. Evidently some of the folks who use or 
rely on this infrastructure aren't tribal members. I think we 
heard that testimony. Your written testimony expresses some 
concern about this arrangement.
    I do want to know--and I wasn't quite sure reading the 
testimony--are all of the facilities located on the 
reservation?
    Mr. Washburn. Senator, I am not sure I know the answer to 
that. Certainly there are facilities involved with this overall 
project located off the reservation because parts of this 
project deliver water almost 200 miles away to Ft. Belknap. I 
think there are portions of this not on the reservation or 
portions of the overall project that would benefit.
    Certainly, there are non-Indians on the reservation. Much 
of this project benefits both Indians and non-Indians. We think 
that is one of the complications of the title issues--who owns 
what and who is responsible for what. We think we can work out 
some of those issues with agreements about how we transfer 
title. Those are some of the difficult but niggling details 
about this settlement we feel still need some attention.
    Senator Barrasso. That was the curiosity I had. What do you 
think needs to be done to address the concerns you have 
regarding the non-Indian stakeholders who might be affected by 
these proposed transfers? I don't know if you want to go into 
that now or get back to us on that but I think it is certainly 
worth your consideration and thought.
    Mr. Washburn. Thank you.
    Senator Barrasso. Thank you, Madam Chairwoman.
    The Chairwoman. I guess I would like to continue with that. 
There are several issues you brought up in your testimony, 
Secretary Washburn, the amount of money and the settlement and 
why you thought it was in the ballpark.
    Mr. Washburn. Appropriate.
    The Chairwoman. Appropriate--the non-Indian impacts, the 
actual cubic feet part of the settlement dealing with Ft. 
Belknap. Which of these issues are the sticking points and 
which are, as you said, the smaller things you just need to 
work out, technical things we need to come to terms with? What 
do you think is the real sticking point here?
    Mr. Washburn. Certainly making sure we can fulfill our 
trust responsibilities to both tribes, the Ft. Belknap and the 
Blackfeet Tribes are important, so that is probably one of the 
biggest ones that sticks in my mind.
    There are some marketing issues we need to work out, 
whether the tribe will be able to lease its water rights and 
how that will be accomplished.
    The Chairwoman. The concern there is?
    Mr. Washburn. It is a trust resource. We take the position 
the water rights are held in trust by the United States. 
Ordinarily, at least with land that is marketed, leased or 
something like that, there is usually some sort of role for the 
Federal Government to approve because we are responsible for 
it.
    We treat water in a similar fashion, but we are working to 
try to be creative with the tribe to give the tribe greater 
control over that because we believe in self determination and 
self governance and having the tribe exercise control.
    The Chairwoman. That would be the first time we would have 
a self-governance issue around water?
    Mr. Washburn. No. This has been an issue in most of our 
water rights settlements. I will say usually there is a 
requirement for Secretary approval. I think the Blackfeet want 
a little bit more control and we're willing to entertain those 
ideas because we believe in self governance but we are just 
trying to figure out what works.
    The Chairwoman. Mr. Weiner, how do you see this issue with 
Ft. Belknap and the Birch Creek issue?
    Mr. Weiner. The Ft. Belknap issue, we certainly support the 
efforts of the United States to work with the two tribes to try 
to reach a resolution of them. We certainly think the tribes' 
idea for a process approach is a wise one because as I have 
said, we don't really see the practical likelihood of conflict. 
I think a process, if one is to arise, is a very reasonable 
approach to us.
    On the Birch Creek side of things, on the marketing front, 
the State strongly supports the tribe's effort to market this 
water. That is of great benefit both to the tribe in terms of 
economic development and to the State which has users 
potentially interested in leasing that water from the tribe. We 
are strongly supportive of the tribe. We put specific marketing 
language drawn from prior Indian settlements into the compact 
itself that was ratified by the State.
    We do want to address the Federal concerns, so the State is 
happy to play whatever constructive role in that we can.
    The Chairwoman. Mr. Augare, do you have any comments on 
that?
    Mr. Augare. I would just say for the record that we are in 
support of the Pondera River Canal Company. It would be an 
economic benefit to the tribe over time. From that perspective, 
we very much stand in support of that effort.
    The Chairwoman. Mr. Joyner, let us turn to your testimony. 
You brought up several issues and so did our colleague who was 
here earlier, Senator Udall, about the complexity of this 
appraisal. How do you think we can resolve this issue?
    Mr. Joyner. There are two ways we could resolve this issue. 
The language as currently written clearly takes care of the 
valuation issue. We can move forward with the appraisal, very 
clearly.
    The estimate of $200,000 is based on the cost of the 
appraisal, the title search, the administrative work and other 
surveys that might occur. We can move forward and expend those 
funds. That would be the majority of the Cibola National Forest 
lands budget for a given year. It would take precedence over 
their other work but it could be done.
    The other option we would like the Committee to consider 
would be language that would allow the conveyance to be handled 
as a simple land transfer between the Department of the 
Interior and the Department of Agriculture in which case the 
appraisal would not have to be done at all. It would simply be 
a change of jurisdictions. We could provide that concept 
language if that is desired.
    The Chairwoman. Is it my recollection that is what we have 
done in other situations before?
    Mr. Joyner. It has been done simply between agencies, yes.
    The Chairwoman. Between the Forest Service?
    Mr. Joyner. Between the Forest Service and the Park 
Service.
    The Chairwoman. I think the Hoh was done that way or no?
    Mr. Joyner. I am sorry?
    The Chairwoman. I think the Hoh land settlement in 
Washington State may have been done that way?
    Mr. Joyner. I believe you are right.
    The Chairwoman. It has been done that way when you have an 
agreement between organizations?
    Mr. Joyner. Yes.
    The Chairwoman. Mr. Paisano, any comments on different ways 
to reach this valuation or agreement between agencies?
    Mr. Paisano. On behalf of the Pueblo of Sandia, we think we 
could agree to this. However, we would like to see some 
legislation authorizing and directing it. Because of the length 
of time that has transpired, as Senator Udall indicated in his 
testimony, there just been a lot of back and forth. There is a 
lot of frustration that has built up with the Pueblo.
    We have an excellent working relationship with the local 
Forest Service and want to maintain that but again we want to 
ensure that we have some finalization to this legislation.
    The Chairwoman. Mr. Joyner's possible recommendation of 
just having the Forest Service and the Park Service make a land 
transfer would satisfy?
    Mr. Joyner. Yes.
    The Chairwoman. Okay. I have to say I have personally been 
through these issues in my State as well. It does sometimes 
seem mysterious why something that could be so simply done 
isn't done. We will have to find out why that happens.
    We have heard everyone's testimony today. I think we have 
highlighted a few things that we still need to make sure we 
come to terms on but I would say to everyone on both issues, 
certainly on the water issues in Montana, these issues are best 
resolved with people working together.
    We chaired a hearing that our colleague, Senator Johnson 
wanted us to chair in a different committee but it was the San 
Joaquin Water Settlement after 18 or 20 years of legal battles 
and people came together.
    I think we definitely would prefer to come together and 
resolve these as opposed to many, many more years of legal 
battle. It sounds like we have to do a little more work here 
but hopefully we can get this done. Our colleagues are going to 
be putting in a lot of work to make sure we do.
    I thank everyone for their testimony. We will look forward 
to hearing more from all of you as we resolve these issues and 
move forward this year.
    We are adjourned.
    [Whereupon, at 3:41 p.m., the Committee was adjourned.]

                                  
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