SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Northwestern New Mexico Rural Water Projects Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
Sec. 3. Compliance with environmental laws. 
Sec. 4. No reallocation of costs. 
Sec. 5. Interest rate. 
TITLE I—AMENDMENTS TO THE COLORADO RIVER STORAGE 
PROJECT ACT AND PUBLIC LAW 87–483 
Sec. 101. Amendments to the Colorado River Storage Project Act. 
Sec. 102. Amendments to Public Law 87–483. 
Sec. 103. Effect on Federal water law. 
TITLE II—RECLAMATION WATER SETTLEMENTS FUND 
Sec. 201. Reclamation Water Settlements Fund. 
TITLE III—NAVAJO-GALLUP WATER SUPPLY PROJECT 
Sec. 301. Purposes. 
Sec. 302. Authorization of Navajo-Gallup Water Supply Project. 
Sec. 303. Delivery and use of Navajo-Gallup Water Supply Project water. 
Sec. 304. Project contracts. 
Sec. 305. Navajo Nation Municipal Pipeline. 
Sec. 306. Authorization of conjunctive use wells. 
Sec. 307. San Juan River Navajo Irrigation Projects. 
Sec. 308. Other irrigation projects. 
Sec. 309. Authorization of appropriations. 
TITLE IV—NAVAJO NATION WATER RIGHTS 
Sec. 401. Agreement. 
Sec. 402. Trust Fund. 
Sec. 403. Waivers and releases. 
Sec. 404. Water rights held in trust. 
SEC. 2. DEFINITIONS. 
In this Act: 
(1) 
AAMODT
ADJUDICATION.—The 
term 
‘‘Aamodt adjudication’’ means the general stream 
adjudication that is the subject of the civil action en-
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titled ‘‘State of New Mexico, ex rel. State Engineer 
and United States of America, Pueblo de Nambe, 
Pueblo de Pojoaque, Pueblo de San Ildefonso, and 
Pueblo de Tesuque v. R. Lee Aamodt, et al.’’, No. 
66 CV 6639 MV/LCS (D.N.M.). 
(2) 
ABEYTA
ADJUDICATION.—The 
term 
‘‘Abeyta adjudication’’ means the general stream ad-
judication that is the subject of the civil actions enti-
tled ‘‘State of New Mexico v. Abeyta and State of 
New Mexico v. Arrellano’’, Civil Nos. 7896–BB 
(D.N.M.) and 7939–BB (D.N.M.) (consolidated). 
(3) ACRE-FEET.—The term ‘‘acre-feet’’ means 
acre-feet per year. 
(4) 
AGREEMENT.—The 
term 
‘‘Agreement’’ 
means the agreement among the State of New Mex-
ico, the Nation, and the United States setting forth 
a stipulated and binding agreement signed by the 
State of New Mexico and the Nation on April 19, 
2005. 
(5) ALLOTTEE.—The ‘‘allottee’’ means a person 
that holds a beneficial real property interest in a 
Navajo allotment that— 
(A) is located within the Navajo Reserva-
tion or the State of New Mexico; 
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(B) is held in trust by the United States; 
and 
(C) was originally granted to an individual 
member of the Nation by public land order or 
otherwise. 
(6) ANIMAS-LA
PLATA
PROJECT.—The term 
‘‘Animas-La Plata Project’’ has the meaning given 
the term in section 3 of Public Law 100–585 (102 
Stat. 2973), including Ridges Basin Dam, Lake 
Nighthorse, the Navajo Nation Municipal Pipeline, 
and any other features or modifications made pursu-
ant to the Colorado Ute Settlement Act Amend-
ments of 2000 (Public Law 106–554; 114 Stat. 
2763A–258). 
(7) CITY.—The term ‘‘City’’ means the city of 
Gallup, New Mexico, or a designee of the City, with 
authority to provide water to the Gallup, New Mex-
ico service area. 
(8) COMPACT.—The term ‘‘Compact’’ means 
the Upper Colorado River Basin Compact as con-
sented to by the Act of April 6, 1949 (63 Stat. 31, 
chapter 48). 
(9) CONTRACT.—The term ‘‘Contract’’ means 
the contract between the United States and the Na-
tion setting forth certain commitments, rights, and 
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obligations of the United States and the Nation, as 
described in paragraph 6.0 of the Agreement. 
(10) 
DEPLETION.—The 
term 
‘‘depletion’’ 
means the depletion of the flow of the San Juan 
River stream system in the State of New Mexico by 
a particular use of water (including any depletion in-
cident to the use) and represents the diversion from 
the stream system by the use, less return flows to 
the stream system from the use. 
(11) DRAFT
IMPACT
STATEMENT.—The term 
‘‘Draft Impact Statement’’ means the draft environ-
mental impact statement prepared by the Bureau of 
Reclamation for the Project dated March 2007. 
(12) FUND.—The term ‘‘Fund’’ means the Rec-
lamation Waters Settlements Fund established by 
section 201(a). 
(13) HYDROLOGIC DETERMINATION.—The term 
‘‘hydrologic determination’’ means the hydrologic de-
termination entitled ‘‘Water Availability from Nav-
ajo Reservoir and the Upper Colorado River Basin 
for Use in New Mexico’’, prepared by the Bureau of 
Reclamation pursuant to section 11 of the Act of 
June 13, 1962 (Public Law 87–483; 76 Stat. 99), 
and dated May 23, 2007. 
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(14) NATION.—The term ‘‘Nation’’ means the 
Navajo Nation, a body politic and federally recog-
nized Indian nation as provided for in section 101(2) 
of the Federally Recognized Indian Tribe List of 
1994 (25 U.S.C. 497a(2)), also known variously as 
the ‘‘Navajo Tribe’’, the ‘‘Navajo Tribe of Arizona, 
New Mexico & Utah’’, and the ‘‘Navajo Tribe of In-
dians’’ and other similar names, and includes all 
bands of Navajo Indians and chapters of the Navajo 
Nation. 
(15) NAVAJO-GALLUP WATER SUPPLY PROJECT; 
PROJECT.—The term ‘‘Navajo-Gallup Water Supply 
Project’’ or ‘‘Project’’ means the Navajo-Gallup 
Water Supply Project authorized under section 
302(a), as described as the preferred alternative in 
the Draft Impact Statement. 
(16) NAVAJO INDIAN IRRIGATION PROJECT.— 
The term ‘‘Navajo Indian Irrigation Project’’ means 
the Navajo Indian irrigation project authorized by 
section 2 of Public Law 87–483 (76 Stat. 96). 
(17) NAVAJO RESERVOIR.—The term ‘‘Navajo 
Reservoir’’ means the reservoir created by the im-
poundment of the San Juan River at Navajo Dam, 
as authorized by the Act of April 11, 1956 (com-
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monly known as the ‘‘Colorado River Storage 
Project Act’’) (43 U.S.C. 620 et seq.). 
(18) NAVAJO
NATION
MUNICIPAL
PIPELINE; 
PIPELINE.—The term ‘‘Navajo Nation Municipal 
Pipeline’’ or ‘‘Pipeline’’ means the pipeline used to 
convey the water of the Animas-La Plata Project of 
the Navajo Nation from the City of Farmington, 
New Mexico, to communities of the Navajo Nation 
located in close proximity to the San Juan River 
Valley in the State of New Mexico (including the 
City of Shiprock), as authorized by section 15(b) of 
the Colorado Ute Indian Water Rights Settlement 
Act of 1988 (Public Law 100–585; 102 Stat. 2973; 
114 Stat. 2763A–263). 
(19) NON-NAVAJO
IRRIGATION
DISTRICTS.— 
The 
term 
‘‘Non-Navajo 
Irrigation 
Districts’’ 
means— 
(A) the Hammond Conservancy District; 
(B) the Bloomfield Irrigation District; and 
(C) any other community ditch organiza-
tion in the San Juan River basin in the State 
of New Mexico. 
(20) PARTIAL FINAL DECREE.—The term ‘‘Par-
tial Final Decree’’ means a final and binding judge-
ment and decree entered by a court in the stream 
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adjudication, setting forth the rights of the Nation 
to use and administer waters of the San Juan River 
Basin in New Mexico, as set forth in appendix 1 of 
the Agreement. 
(21) 
PROJECT
PARTICIPANTS.—The 
term 
‘‘Project Participants’’ means the City, the Nation, 
and the Jicarilla Apache Nation. 
(22) SAN JUAN RIVER BASIN RECOVERY IMPLE-
MENTATION PROGRAM.—The term ‘‘San Juan River 
Basin Recovery Implementation Program’’ means 
the intergovernmental program established pursuant 
to the cooperative agreement dated October 21, 
1992 (including any amendments to the program). 
(23) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of the Interior, acting through 
the Commissioner of Reclamation or any other des-
ignee. 
(24) 
STREAM
ADJUDICATION.—The 
term 
‘‘stream adjudication’’ means the general stream ad-
judication that is the subject of New Mexico v. 
United States, et al., No. 75–185 (11th Jud. Dist., 
San Juan County, New Mexico) (involving claims to 
waters of the San Juan River and the tributaries of 
that river). 
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(25) SUPPLEMENTAL
PARTIAL
FINAL
DE-
CREE.—The term ‘‘Supplemental Partial Final De-
cree’’ means a final and binding judgement and de-
cree entered by a court in the stream adjudication, 
setting forth certain water rights of the Nation, as 
set forth in appendix 2 of the Agreement. 
(26) TRUST FUND.—The term ‘‘Trust Fund’’ 
means the Navajo Nation Water Resources Develop-
ment Trust Fund established by section 402(a). 
SEC. 3. COMPLIANCE WITH ENVIRONMENTAL LAWS. 
(a) EFFECT OF EXECUTION OF AGREEMENT.—The 
execution of the Agreement under section 401(a)(2) shall 
not constitute a major Federal action under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.). 
(b) COMPLIANCE WITH ENVIRONMENTAL LAWS.—In 
carrying out this Act, the Secretary shall comply with each 
law of the Federal Government relating to the protection 
of the environment, including— 
(1) the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.); and 
(2) the Endangered Species Act of 1973 (16 
U.S.C. 1531 et seq.). 
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SEC. 4. NO REALLOCATION OF COSTS. 
(a) EFFECT OF ACT.—Notwithstanding any other 
provision of law, the Secretary shall not reallocate or reas-
sign any costs of projects that have been authorized under 
the Act of April 11, 1956 (commonly known as the ‘‘Colo-
rado River Storage Project Act’’) (43 U.S.C. 620 et seq.), 
as of the date of enactment of this Act because of— 
(1) the authorization of the Navajo-Gallup 
Water Supply Project under this Act; or 
(2) the changes in the uses of the water di-
verted by the Navajo Indian Irrigation Project or 
the waters stored in the Navajo Reservoir authorized 
under this Act. 
(b) USE OF POWER REVENUES.—Notwithstanding 
any other provision of law, no power revenues under the 
Act of April 11, 1956 (commonly known as the ‘‘Colorado 
River Storage Project Act’’) (43 U.S.C. 620 et seq.), shall 
be used to pay or reimburse any costs of the Navajo In-
dian Irrigation Project or Navajo-Gallup Water Supply 
Project. 
SEC. 5. INTEREST RATE. 
Notwithstanding any other provision of law, the inter-
est rate applicable to any repayment contract entered into 
under section 304 shall be equal to the discount rate for 
Federal water resources planning, as determined by the 
Secretary. 
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TITLE I—AMENDMENTS TO THE 
COLORADO RIVER STORAGE 
PROJECT ACT AND PUBLIC 
LAW 87–483 
SEC. 101. AMENDMENTS TO THE COLORADO RIVER STOR-
AGE PROJECT ACT. 
(a) PARTICIPATING PROJECTS.—Paragraph (2) of 
the first section of the Act of April 11, 1956 (commonly 
known as the ‘‘Colorado River Storage Project Act’’) (43 
U.S.C. 620(2)) is amended by inserting ‘‘the Navajo-Gal-
lup Water Supply Project,’’ after ‘‘Fruitland Mesa,’’. 
(b) NAVAJO RESERVOIR WATER BANK.—The Act of 
April 11, 1956 (commonly known as the ‘‘Colorado River 
Storage Project Act’’) is amended— 
(1) by redesignating section 16 (43 U.S.C. 
620o) as section 17; and 
(2) by inserting after section 15 (43 U.S.C. 
620n) the following: 
‘‘SEC. 16. (a) The Secretary of the Interior may cre-
ate and operate within the available capacity of Navajo 
Reservoir a top water bank. 
‘‘(b) Water made available for the top water bank in 
accordance with subsections (c) and (d) shall not be sub-
ject to section 11 of Public Law 87–483 (76 Stat. 99). 
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‘‘(c) The top water bank authorized under subsection 
(a) shall be operated in a manner that— 
‘‘(1) is consistent with applicable law, except 
that, notwithstanding any other provision of law, 
water for purposes other than irrigation may be 
stored in the Navajo Reservoir pursuant to the rules 
governing the top water bank established under this 
section; and 
‘‘(2) does not impair the ability of the Secretary 
of the Interior to deliver water under contracts en-
tered into under— 
‘‘(A) Public Law 87–483 (76 Stat. 96); 
and 
‘‘(B) New Mexico State Engineer File Nos. 
2847, 2848, 2849, and 2917. 
‘‘(d)(1) The Secretary of the Interior, in cooperation 
with the State of New Mexico (acting through the Inter-
state Stream Commission), shall develop any terms and 
procedures for the storage, accounting, and release of 
water in the top water bank that are necessary to comply 
with subsection (c). 
‘‘(2) The terms and procedures developed under para-
graph (1) shall include provisions requiring that— 
‘‘(A) the storage of banked water shall be sub-
ject to approval under State law by the New Mexico 
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State Engineer to ensure that impairment of any ex-
isting water right does not occur, including storage 
of water under New Mexico State Engineer File No. 
2849; 
‘‘(B) water in the top water bank be subject to 
evaporation and other losses during storage; 
‘‘(C) water in the top water bank be released 
for delivery to the owner or assigns of the banked 
water on request of the owner, subject to reasonable 
scheduling requirements for making the release; 
‘‘(D) water in the top water bank be the first 
water spilled or released for flood control purposes 
in anticipation of a spill, on the condition that top 
water bank water shall not be released or included 
for purposes of calculating whether a release should 
occur for purposes of satisfying the flow rec-
ommendations of the San Juan River Basin Recov-
ery Implementation Program; and 
‘‘(E) water eligible for banking in the top water 
bank shall be water that otherwise would have been 
diverted and beneficially used in New Mexico that 
year. 
‘‘(e) The Secretary of the Interior may charge fees 
to water users that use the top water bank in amounts 
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sufficient to cover the costs incurred by the United States 
in administering the water bank.’’. 
SEC. 102. AMENDMENTS TO PUBLIC LAW 87–483. 
(a) NAVAJO INDIAN IRRIGATION PROJECT.—Public 
Law 87–483 (76 Stat. 96) is amended by striking section 
2 and inserting the following: 
‘‘SEC. 2. (a) In accordance with the Act of April 11, 
1956 (commonly known as the ‘Colorado River Storage 
Project Act’) (43 U.S.C. 620 et seq.), the Secretary of 
the Interior is authorized to construct, operate, and main-
tain the Navajo Indian Irrigation Project to provide irriga-
tion water to a service area of not more than 110,630 
acres of land. 
‘‘(b)(1) Subject to paragraph (2), the average annual 
diversion by the Navajo Indian Irrigation Project from the 
Navajo Reservoir over any consecutive 10-year period shall 
be the lesser of— 
‘‘(A) 508,000 acre-feet per year; or 
‘‘(B) the quantity of water necessary to supply 
an average depletion of 270,000 acre-feet per year. 
‘‘(2) The quantity of water diverted for any 1 year 
shall not exceed the average annual diversion determined 
under paragraph (1) by more than 15 percent. 
‘‘(c) In addition to being used for irrigation, the 
water diverted by the Navajo Indian Irrigation Project 
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under subsection (b) may be used within the area served 
by Navajo Indian Irrigation Project facilities for the fol-
lowing purposes: 
‘‘(1) 
Aquaculture 
purposes, 
including 
the 
rearing of fish in support of the San Juan River 
Basin Recovery Implementation Program authorized 
by Public Law 106–392 (114 Stat. 1602). 
‘‘(2) Domestic, industrial, or commercial pur-
poses relating to agricultural production and proc-
essing. 
‘‘(3)(A) The generation of hydroelectric power 
as an incident to the diversion of water by the Nav-
ajo Indian Irrigation Project for authorized pur-
poses. 
‘‘(B) Notwithstanding any other provision of 
law— 
‘‘(i) any hydroelectric power generated 
under this paragraph shall be used or marketed 
by the Navajo Nation; 
‘‘(ii) the Navajo Nation shall retain any 
revenues from the sale of the hydroelectric 
power; and 
‘‘(iii) the United States shall have no trust 
obligation to monitor, administer, or account 
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for the revenues received by the Navajo Nation, 
or the expenditure of the revenues. 
‘‘(4) The implementation of the alternate water 
source provisions described in subparagraph 9.2 of 
the agreement executed under section 401(a)(2) of 
the Northwestern New Mexico Rural Water Projects 
Act. 
‘‘(d) The Navajo Indian Irrigation Project water di-
verted under subsection (b) may be transferred to areas 
located within or outside the area served by Navajo Indian 
Irrigation Project facilities, and within or outside the 
boundaries of the Navajo Nation, for any beneficial use 
in accordance with— 
‘‘(1) the agreement executed under section 
401(a)(2) of the Northwestern New Mexico Rural 
Water Projects Act; 
‘‘(2) the contract executed under section 
304(a)(2)(B) of that Act; and 
‘‘(3) any other applicable law. 
‘‘(e) The Secretary may use the capacity of the Nav-
ajo Indian Irrigation Project works to convey water sup-
plies for— 
‘‘(1) the Navajo-Gallup Water Supply Project 
under section 302 of the Northwestern New Mexico 
Rural Water Projects Act; or 
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‘‘(2) other nonirrigation purposes authorized 
under subsection (c) or (d). 
‘‘(f)(1) Repayment of the costs of construction of the 
project (as authorized in subsection (a)) shall be in accord-
ance with the Act of April 11, 1956 (commonly known 
as the ‘Colorado River Storage Project Act’) (43 U.S.C. 
620 et seq.), including section 4(d) of that Act. 
‘‘(2) The Secretary shall not reallocate, or require re-
payment of, construction costs of the Navajo Indian Irri-
gation Project because of the conveyance of water supplies 
for nonirrigation purposes under subsection (e).’’. 
(b) RUNOFF ABOVE NAVAJO DAM.—Section 11 of 
Public Law 87–483 (76 Stat. 100) is amended by adding 
at the end the following: 
‘‘(d)(1) For purposes of implementing in a year of 
prospective shortage the water allocation procedures es-
tablished by subsection (a), the Secretary of the Interior 
shall determine the quantity of any shortages and the ap-
propriate apportionment of water using the normal diver-
sion requirements on the flow of the San Juan River origi-
nating above Navajo Dam based on the following criteria: 
‘‘(A) The quantity of diversion or water delivery 
for the current year anticipated to be necessary to 
irrigate land in accordance with cropping plans pre-
pared by contractors. 
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‘‘(B) The annual diversion or water delivery de-
mands for the current year anticipated for non-irri-
gation uses under water delivery contracts, including 
contracts authorized by the Northwestern New Mex-
ico Rural Water Projects Act, but excluding any cur-
rent demand for surface water for placement into 
aquifer storage for future recovery and use. 
‘‘(C) An annual normal diversion demand of 
135,000 acre-feet for the initial stage of the San 
Juan-Chama Project authorized by section 8. 
‘‘(2) The Secretary shall not include in the normal 
diversion requirements— 
‘‘(A) the quantity of water that reliably can be 
anticipated to be diverted or delivered under a con-
tract from inflows to the San Juan River arising 
below Navajo Dam under New Mexico State Engi-
neer File No. 3215; or 
‘‘(B) the quantity of water anticipated to be 
supplied through reuse. 
‘‘(e)(1) If the Secretary determines that there is a 
shortage of water under subsection (a), the Secretary shall 
respond to the shortage in the Navajo Reservoir water 
supply by curtailing releases and deliveries in the following 
order: 
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‘‘(A) The demand for delivery for uses in the 
State of Arizona under the Navajo-Gallup Water 
Supply Project authorized by section 303 of the 
Northwestern New Mexico Rural Water Projects 
Act, excluding the quantity of water anticipated to 
be diverted for the uses from inflows to the San 
Juan River that arise below Navajo Dam in accord-
ance with New Mexico State Engineer File No. 
3215. 
‘‘(B) The demand for delivery for uses allocated 
under paragraph 8.2 of the agreement executed 
under section 401(a)(2) of the Northwestern New 
Mexico Rural Water Projects Act, excluding the 
quantity of water anticipated to be diverted for such 
uses under State Engineer File No. 3215. 
‘‘(C) The uses in the State of New Mexico that 
are determined under subsection (d), in accordance 
with the procedure for apportioning the water supply 
under subsection (a). 
‘‘(2) For any year for which the Secretary determines 
and responds to a shortage in the Navajo Reservoir water 
supply, the Secretary shall not deliver, and contractors of 
the water supply shall not divert, any of the water supply 
for placement into aquifer storage for future recovery and 
use. 
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‘‘(3) To determine the occurrence and amount of any 
shortage to contracts entered into under this section, the 
Secretary shall not include as available storage any water 
stored in a top water bank in Navajo Reservoir established 
under section 16(a) of the Act of April 11, 1956 (com-
monly known as the ‘Colorado River Storage Project Act’). 
‘‘(f) The Secretary of the Interior shall apportion 
water under subsections (a), (d), and (e) on an annual 
volume basis. 
‘‘(g) The Secretary of the Interior may revise a deter-
mination of shortages, apportionments, or allocations of 
water under subsections (a), (d), and (e) on the basis of 
information relating to water supply conditions that was 
not available at the time at which the determination was 
made. 
‘‘(h) Nothing in this section prohibits the distribution 
of water in accordance with cooperative water agreements 
between water users providing for a sharing of water sup-
plies. 
‘‘(i) Diversions under New Mexico State Engineer 
File No. 3215 shall be distributed, to the maximum extent 
water is available, in proportionate amounts to the diver-
sion demands of contractors and subcontractors of the 
Navajo Reservoir water supply that are diverting water 
below Navajo Dam.’’. 
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SEC. 103. EFFECT ON FEDERAL WATER LAW. 
Unless expressly provided in this Act, nothing in this 
Act modifies, conflicts with, preempts, or otherwise af-
fects— 
(1) the Boulder Canyon Project Act (43 U.S.C. 
617 et seq.); 
(2) the Boulder Canyon Project Adjustment Act 
(54 Stat. 774, chapter 643); 
(3) the Act of April 11, 1956 (commonly known 
as the ‘‘Colorado River Storage Project Act’’) (43 
U.S.C. 620 et seq.); 
(4) the Act of September 30, 1968 (commonly 
known as the ‘‘Colorado River Basin Project Act’’) 
(82 Stat. 885); 
(5) Public Law 87–483 (76 Stat. 96); 
(6) the Treaty between the United States of 
America and Mexico representing utilization of wa-
ters of the Colorado and Tijuana Rivers and of the 
Rio Grande, signed at Washington February 3, 1944 
(59 Stat. 1219); 
(7) the Colorado River Compact of 1922, as ap-
proved by the Presidential Proclamation of June 25, 
1929 (46 Stat. 3000); 
(8) the Compact; 
(9) the Act of April 6, 1949 (63 Stat. 31, chap-
ter 48); 
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sroberts on PROD1PC70 with BILLS
(10) the Jicarilla Apache Tribe Water Rights 
Settlement Act (106 Stat. 2237); or 
(11) section 205 of the Energy and Water De-
velopment Appropriations Act, 2005 (118 Stat. 
2949). 
TITLE II—RECLAMATION WATER 
SETTLEMENTS FUND 
SEC. 201. RECLAMATION WATER SETTLEMENTS FUND. 
(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a fund, to be known as the 
‘‘Reclamation Water Settlements Fund’’, consisting of— 
(1) such amounts as are deposited to the Fund 
under subsection (b); and 
(2) any interest earned on investment of 
amounts in the Fund under subsection (d). 
(b) DEPOSITS TO FUND.— 
(1) IN
GENERAL.—For each of fiscal years 
2009 through 2023, the Secretary of the Treasury 
shall deposit in the Fund, if available, $120,000,000 
of the revenues that would otherwise be deposited 
for the fiscal year in the fund established by the 
first section of the Act of June 17, 1902 (32 Stat. 
388, chapter 1093). 
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(2) AVAILABILITY OF AMOUNTS.—Amounts de-
posited in the Fund under paragraph (1) shall be 
made available pursuant to this section— 
(A) without further appropriation; and 
(B) in addition to amounts appropriated 
pursuant to any authorization contained in any 
other provision of law. 
(c) EXPENDITURES FROM FUND.— 
(1) IN GENERAL.— 
(A) EXPENDITURES.—Subject to subpara-
graph (B), for each of fiscal years 2009 
through 2028, the Secretary may expend from 
the 
Fund 
an 
amount 
not 
to 
exceed 
$120,000,000, plus the interest accrued in the 
Fund, for the fiscal year in which expenditures 
are made pursuant to paragraphs (2) and (3). 
(B) 
ADDITIONAL
EXPENDITURES.—The 
Secretary may expend more than $120,000,000 
for any fiscal year if such amounts are available 
in the Fund due to expenditures not reaching 
$120,000,000 for prior fiscal years. 
(2) AUTHORITY.—The Secretary may expend 
money from the Fund to implement a settlement 
agreement approved by Congress that resolves, in 
whole or in part, litigation involving the United 
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States, if the settlement agreement or implementing 
legislation requires the Bureau of Reclamation to 
provide financial assistance for, or plan, design, and 
construct— 
(A) water supply infrastructure; or 
(B) a project— 
(i) to rehabilitate a water delivery sys-
tem to conserve water; or 
(ii) to restore fish and wildlife habitat 
or otherwise improve environmental condi-
tions associated with or affected by, or lo-
cated within the same river basin as, a 
Federal reclamation project that is in ex-
istence on the date of enactment of this 
Act. 
(3) USE FOR COMPLETION OF PROJECT AND 
OTHER SETTLEMENTS.— 
(A) PRIORITIES.— 
(i) FIRST PRIORITY.— 
(I) IN GENERAL.—The first pri-
ority for expenditure of amounts in 
the Fund during the entire period in 
which the Fund is in existence shall 
be for the purposes described in, and 
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in the order of, clauses (i) through 
(iv) of subparagraph (B). 
(II) RESERVED AMOUNTS.—The 
Secretary shall reserve amounts de-
posited into the Fund in accordance 
with subclause (I). 
(ii) OTHER PURPOSES.—Any amounts 
in the Fund that are not needed for the 
purposes described in subparagraph (B) 
may be used for other purposes authorized 
in paragraph (2). 
(B) COMPLETION OF PROJECT.— 
(i) NAVAJO-GALLUP
WATER
SUPPLY 
PROJECT.— 
(I) IN
GENERAL.—Subject to 
subclause (II), effective beginning 
January 1, 2009, if, in the judgment 
of the Secretary on an annual basis 
the deadline described in section 
401(f)(1)(A)(ix) is unlikely to be met 
because a sufficient amount of fund-
ing is not otherwise available through 
appropriations made available pursu-
ant to section 309(a), the Secretary 
shall expend from the Fund such 
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funding made available under clause 
(i), if in the judgment of the Sec-
retary on an annual basis a sufficient 
amount of funding is not otherwise 
available through annual appropria-
tions, the Secretary shall expend from 
the Fund such amounts on an annual 
basis consistent with paragraphs (1) 
and (2), as are necessary to pay the 
Federal share of the costs of imple-
menting the Indian water rights set-
tlement agreements entered into by 
the State of New Mexico in the 
Aamodt adjudication and the Abeyta 
adjudication, if such settlements are 
subsequently approved and authorized 
by an Act of Congress. 
(II) MAXIMUM
AMOUNT.—The 
amount expended under subclause (I) 
shall not exceed $250,000,000. 
(iii) MONTANA SETTLEMENTS.— 
(I) IN
GENERAL.—Subject to 
subclause (II), effective beginning 
January 1, 2009, in addition to fund-
ing 
made 
available 
pursuant 
to 
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clauses (i) and (ii), if in the judgment 
of the Secretary on an annual basis a 
sufficient amount of funding is not 
otherwise available through annual 
appropriations, the Secretary shall ex-
pend from the Fund such amounts on 
an annual basis consistent with para-
graphs (1) and (2), as are necessary 
to pay the Federal share of the costs 
of implementing Indian water rights 
settlement agreements entered into by 
the State of Montana with the Black-
feet Tribe, the Crow Tribe, or the 
Gros Ventre and Assiniboine Tribes of 
the Fort Belknap Indian Reservation 
in the judicial proceeding entitled ‘‘In 
re the General Adjudication of All the 
Rights to Use Surface and Ground-
water in the State of Montana’’, if a 
settlement or settlements are subse-
quently approved and authorized by 
an Act of Congress. 
(II) MAXIMUM AMOUNT.— 
(aa) IN
GENERAL.—Except 
as provided under item (bb), the 
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amount expended under sub-
clause 
(I) 
shall 
not 
exceed 
$350,000,000 for the period of 
fiscal years 2009 through 2018. 
(bb) EXCEPTION.—The limi-
tation on the expenditure amount 
under item (aa) may be exceeded 
during the entire period in which 
the Fund is in existence. 
(cc) OTHER FUNDING.—The 
Secretary shall ensure that any 
such funding shall be provided in 
a manner that does not limit the 
funding available pursuant to 
clauses (i) and (ii). 
(iv) ARIZONA SETTLEMENT.— 
(I) IN
GENERAL.—Subject to 
subclause (II), effective beginning 
January 1, 2009, in addition to fund-
ing 
made 
available 
pursuant 
to 
clauses (i), (ii), and (iii), if in the 
judgment of the Secretary on an an-
nual basis a sufficient amount of 
funding is not otherwise available 
through annual appropriations, the 
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Secretary shall expend from the Fund 
such amounts on an annual basis con-
sistent with paragraphs (1) and (2), 
as are necessary to pay the Federal 
share of the costs of implementing an 
Indian water rights settlement agree-
ment entered into by the State of Ari-
zona with the Navajo Nation to re-
solve the water rights claims of the 
Nation in the Lower Colorado River 
basin in Arizona, if a settlement is 
subsequently approved and authorized 
by an Act of Congress. 
(II) MAXIMUM AMOUNT.— 
(aa) IN
GENERAL.—Except 
as provided under item (bb), the 
amount expended under sub-
clause 
(I) 
shall 
not 
exceed 
$100,000,000 for the period of 
fiscal years 2009 through 2018. 
(bb) EXCEPTION.—The limi-
tation on the expenditure amount 
under item (aa) may be exceeded 
during the entire period in which 
the Fund is in existence. 
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(cc) OTHER FUNDING.—The 
Secretary shall ensure that any 
such funding shall be provided in 
a manner that does not limit the 
funding available pursuant to 
clauses (i) and (ii). 
(C) REVERSION.—If the settlements de-
scribed in clauses (ii) through (iv) of subpara-
graph (B) have not been approved and author-
ized by an Act of Congress by December 31, 
2014, the amounts reserved for the settlements 
shall no longer be reserved by the Secretary 
pursuant to subparagraph (A)(i) and shall re-
vert to the Fund for any authorized use, as de-
termined by the Secretary. 
(d) INVESTMENT OF AMOUNTS.— 
(1) IN GENERAL.—The Secretary shall invest 
such portion of the Fund as is not, in the judgment 
of the Secretary, required to meet current with-
drawals. 
(2) CREDITS TO FUND.—The interest on, and 
the proceeds from the sale or redemption of, any ob-
ligations held in the Fund shall be credited to, and 
form a part of, the Fund. 
(e) TRANSFERS OF AMOUNTS.— 
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(1) IN GENERAL.—The amounts required to be 
transferred to the Fund under this section shall be 
transferred at least monthly from the general fund 
of the Treasury to the Fund on the basis of esti-
mates made by the Secretary of the Treasury. 
(2) ADJUSTMENTS.—Proper adjustment shall 
be made in amounts subsequently transferred to the 
extent prior estimates were in excess of or less than 
the amounts required to be transferred. 
(f) TERMINATION.—On September 30, 2028— 
(1) the Fund shall terminate; and 
(2) the unexpended and unobligated balance of 
the Fund shall be transferred to the appropriate 
fund of the Treasury. 
TITLE III—NAVAJO-GALLUP 
WATER SUPPLY PROJECT 
SEC. 301. PURPOSES. 
The purposes of this subtitle are— 
(1) to authorize the Secretary to construct, op-
erate, and maintain the Navajo-Gallup Water Supply 
Project; 
(2) to allocate the capacity of the Project 
among the Nation, the City, and the Jicarilla 
Apache Nation; and 
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(3) to authorize the Secretary to enter into 
Project repayment contracts with the City and the 
Jicarilla Apache Nation. 
SEC. 302. AUTHORIZATION OF NAVAJO-GALLUP WATER 
SUPPLY PROJECT. 
(a) IN GENERAL.—The Secretary, acting through the 
Commissioner of Reclamation, is authorized to design, 
construct, operate, and maintain the Project in substantial 
accordance with the preferred alternative in the Draft Im-
pact Statement. 
(b) PROJECT FACILITIES.—To provide for the deliv-
ery of San Juan River water to Project Participants, the 
Secretary may construct, operate, and maintain the 
Project facilities described in the preferred alternative in 
the Draft Impact Statement, including: 
(1) A pumping plant on the San Juan River in 
the vicinity of Kirtland, New Mexico. 
(2)(A) A main pipeline from the San Juan 
River near Kirtland, New Mexico, to Shiprock, New 
Mexico, and Gallup, New Mexico, which follows 
United States Highway 491. 
(B) Any pumping plants associated with the 
pipeline authorized under subparagraph (A). 
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(3)(A) A main pipeline from Cutter Reservoir 
to Ojo Encino, New Mexico, which follows United 
States Highway 550. 
(B) Any pumping plants associated with the 
pipeline authorized under subparagraph (A). 
(4)(A) Lateral pipelines from the main pipelines 
to Nation communities in the States of New Mexico 
and Arizona. 
(B) Any pumping plants associated with the 
pipelines authorized under subparagraph (A). 
(5) Any water regulation, storage or treatment 
facility, service connection to an existing public 
water supply system, power substation, power dis-
tribution works, or other appurtenant works (includ-
ing a building or access road) that is related to the 
Project facilities authorized by paragraphs (1) 
through (4), including power transmission facilities 
and associated wheeling services to connect Project 
facilities to existing high-voltage transmission facili-
ties and deliver power to the Project. 
(c) ACQUISITION OF LAND.— 
(1) IN GENERAL.—The Secretary is authorized 
to acquire any land or interest in land that is nec-
essary to construct, operate, and maintain the 
Project facilities authorized under subsection (b). 
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(2) LAND OF THE PROJECT PARTICIPANTS.—As 
a condition of construction of the facilities author-
ized under this title, the Project Participants shall 
provide all land or interest in land, as appropriate, 
that the Secretary identifies as necessary for acquisi-
tion under this subsection at no cost to the Sec-
retary. 
(3) LIMITATION.—The Secretary may not con-
demn water rights for purposes of the Project. 
(d) CONDITIONS.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall not commence con-
struction of the facilities authorized under sub-
section (b) until such time as— 
(A) the Secretary executes the Agreement 
and the Contract; 
(B) the contracts authorized under section 
304 are executed; 
(C) the Secretary— 
(i) completes an environmental impact 
statement for the Project; and 
(ii) has issued a record of decision 
that provides for a preferred alternative; 
and 
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(D) the Secretary has entered into an 
agreement with the State of New Mexico under 
which the State of New Mexico will provide a 
share of the construction costs of the Project of 
not less than $50,000,000, except that the 
State of New Mexico shall receive credit for 
funds the State has contributed to construct 
water conveyance facilities to the Project Par-
ticipants to the extent that the facilities reduce 
the cost of the Project as estimated in the 
Draft Impact Statement. 
(2) EXCEPTION.—If the Jicarilla Apache Na-
tion elects not to enter into a contract pursuant to 
section 304, the Secretary, after consulting with the 
Nation, the City, and the State of New Mexico act-
ing through the Interstate Stream Commission, may 
make appropriate modifications to the scope of the 
Project and proceed with Project construction if all 
other conditions for construction have been satisfied. 
(3) EFFECT OF INDIAN SELF-DETERMINATION 
AND
EDUCATION
ASSISTANCE
ACT.—The Indian 
Self-Determination and Education Assistance Act 
(25 U.S.C. 450 et seq.) shall not apply to the de-
sign, construction, operation, maintenance, or re-
placement of the Project. 
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(e) POWER.—The Secretary shall reserve, from exist-
ing reservations of Colorado River Storage Project power 
for Bureau of Reclamation projects, up to 26 megawatts 
of power for use by the Project. 
(f) CONVEYANCE OF TITLE TO PROJECT FACILI-
TIES.— 
(1) IN GENERAL.—The Secretary is authorized 
to enter into separate agreements with the City and 
the Nation and, on entering into the agreements, 
shall convey title to each Project facility or section 
of a Project facility authorized under subsection (b) 
(including any appropriate interests in land) to the 
City and the Nation after— 
(A) completion of construction of a Project 
facility or a section of a Project facility that is 
operating and delivering water; and 
(B) execution of a Project operations 
agreement approved by the Secretary and the 
Project Participants that sets forth— 
(i) any terms and conditions that the 
Secretary determines are necessary— 
(I) to ensure the continuation of 
the intended benefits of the Project; 
and 
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(II) to fulfill the purposes of this 
subtitle; 
(ii) requirements acceptable to the 
Secretary and the Project Participants 
for— 
(I) the distribution of water 
under the Project or section of a 
Project facility; and 
(II) the allocation and payment 
of annual operation, maintenance, and 
replacement costs of the Project or 
section of a Project facility based on 
the proportionate uses of Project fa-
cilities; and 
(iii) conditions and requirements ac-
ceptable to the Secretary and the Project 
Participants for operating and maintaining 
each Project facility on completion of the 
conveyance of title, including the require-
ment that the City and the Nation shall— 
(I) comply with— 
(aa) the Compact; and 
(bb) other applicable law; 
and 
(II) be responsible for— 
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(aa) the operation, mainte-
nance, and replacement of each 
Project facility; and 
(bb) the accounting and 
management of water conveyance 
and Project finances, as nec-
essary to administer and fulfill 
the conditions of the Contract ex-
ecuted 
under 
section 
304(a)(2)(B). 
(2) EFFECT OF CONVEYANCE.—The conveyance 
of title to each Project facility shall not affect the 
application of the Endangered Species Act of 1973 
(16 U.S.C. 1531 et seq.) relating to the use of the 
water associated with the Project. 
(3) LIABILITY.— 
(A) IN GENERAL.—Effective on the date of 
the conveyance authorized by this subsection, 
the United States shall not be held liable by 
any court for damages of any kind arising out 
of any act, omission, or occurrence relating to 
the land, buildings, or facilities conveyed under 
this subsection, other than damages caused by 
acts of negligence committed by the United 
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States, or by employees or agents of the United 
States, prior to the date of conveyance. 
(B) TORT CLAIMS.—Nothing in this sec-
tion increases the liability of the United States 
beyond the liability provided in chapter 171 of 
title 28, United States Code (commonly known 
as the ‘‘Federal Tort Claims Act’’). 
(4) NOTICE OF PROPOSED CONVEYANCE.—Not 
later than 45 days before the date of a proposed 
conveyance of title to any Project facility, the Sec-
retary shall submit to the Committee on Resources 
of the House of Representatives and to the Com-
mittee on Energy and Natural Resources of the Sen-
ate notice of the conveyance of each Project facility. 
(g) COLORADO RIVER STORAGE PROJECT POWER.— 
The conveyance of Project facilities under subsection (f) 
shall not affect the availability of Colorado River Storage 
Project power to the Project under subsection (e). 
(h) REGIONAL USE OF PROJECT FACILITIES.— 
(1) IN GENERAL.—Subject to paragraph (2), 
Project facilities constructed under subsection (b) 
may be used to treat and convey non-Project water 
or water that is not allocated by subsection 303(b) 
if— 
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(A) capacity is available without impairing 
any water delivery to a Project Participant; and 
(B) the unallocated or non-Project water 
beneficiary— 
(i) has the right to use the water; 
(ii) agrees to pay the operation, main-
tenance, and replacement costs assignable 
to the beneficiary for the use of the Project 
facilities; and 
(iii) agrees to pay an appropriate fee 
that may be established by the Secretary 
to assist in the recovery of any capital cost 
allocable to that use. 
(2) EFFECT OF PAYMENTS.—Any payments to 
the United States or the Nation for the use of un-
used capacity under this subsection or for water 
under any subcontract with the Nation or the 
Jicarilla Apache Nation shall not alter the construc-
tion repayment requirements or the operation, main-
tenance, and replacement payment requirements of 
the Project Participants. 
SEC. 303. DELIVERY AND USE OF NAVAJO-GALLUP WATER 
SUPPLY PROJECT WATER. 
(a) USE OF PROJECT WATER.— 
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(1) IN GENERAL.—In accordance with this Act 
and other applicable law, water supply from the 
Project shall be used for municipal, industrial, com-
mercial, domestic, and stock watering purposes. 
(2) USE ON CERTAIN LAND.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), the Nation may use Project water 
allocations on— 
(i) land held by the United States in 
trust for the Nation and members of the 
Nation; and 
(ii) land held in fee by the Nation. 
(B) TRANSFER.—The Nation may transfer 
the purposes and places of use of the allocated 
water in accordance with the Agreement and 
applicable law. 
(3) HYDROELECTRIC POWER.— 
(A) IN
GENERAL.—Hydroelectric power 
may be generated as an incident to the delivery 
of Project water for authorized purposes under 
paragraph (1). 
(B) 
ADMINISTRATION.—Notwithstanding 
any other provision of law— 
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(i) any hydroelectric power generated 
under this paragraph shall be used or mar-
keted by the Nation; 
(ii) the Nation shall retain any reve-
nues from the sale of the hydroelectric 
power; and 
(iii) the United States shall have no 
trust obligation or other obligation to mon-
itor, administer, or account for the reve-
nues received by the Nation, or the ex-
penditure of the revenues. 
(4) STORAGE.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), any water contracted for delivery 
under paragraph (1) that is not needed for cur-
rent water demands or uses may be delivered by 
the Project for placement in underground stor-
age in the State of New Mexico for future re-
covery and use. 
(B) STATE APPROVAL.—Delivery of water 
under subparagraph (A) is subject to— 
(i) approval by the State of New Mex-
ico under applicable provisions of State law 
relating to aquifer storage and recovery; 
and 
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(ii) the provisions of the Agreement 
and this Act. 
(b) PROJECT
WATER
AND
CAPACITY
ALLOCA-
TIONS.— 
(1) DIVERSION.—Subject to availability and 
consistent with Federal and State law, the Project 
may divert from the Navajo Reservoir and the San 
Juan River a quantity of water to be allocated and 
used consistent with the Agreement and this Act, 
that does not exceed in any 1 year, the lesser of— 
(A) 37,760 acre-feet of water; or 
(B) the quantity of water necessary to sup-
ply a depletion from the San Juan River of 
35,890 acre-feet. 
(2) PROJECT
DELIVERY
CAPACITY
ALLOCA-
TIONS.— 
(A) IN
GENERAL.—The capacity of the 
Project shall be allocated to the Project Partici-
pants in accordance with subparagraphs (B) 
through (E), other provisions of this Act, and 
other applicable law. 
(B) DELIVERY CAPACITY ALLOCATION TO 
THE
CITY.—The Project may deliver at the 
point of diversion from the San Juan River not 
more than 7,500 acre-feet of water in any 1 
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1,200 acre-feet of water in any 1 year of the 
water rights of the Jicarilla Apache Nation, 
held by the Secretary and confirmed by the 
Jicarilla Apache Tribe Water Rights Settlement 
Act (Public Law 102–441; 106 Stat. 2237), for 
use by the Jicarilla Apache Nation in the south-
ern portion of the Jicarilla Apache Nation Res-
ervation in the State of New Mexico. 
(3) USE IN EXCESS OF DELIVERY CAPACITY AL-
LOCATION QUANTITY.—Notwithstanding each deliv-
ery capacity allocation quantity limit described in 
subparagraphs (B), (C), and (E) of paragraph (2), 
the Secretary may authorize a Project Participant to 
exceed the delivery capacity allocation quantity limit 
of that Project Participant if— 
(A) delivery capacity is available without 
impairing any water delivery to any other 
Project Participant; and 
(B) the Project Participant benefitting 
from the increased allocation of delivery capac-
ity— 
(i) has the right under applicable law 
to use the additional water; 
(ii) agrees to pay the operation, main-
tenance, and replacement costs relating to 
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the additional use of any Project facility; 
and 
(iii) agrees, if the Project title is held 
by the Secretary, to pay a fee established 
by the Secretary to assist in recovering 
capital costs relating to that additional 
use. 
(c) CONDITIONS FOR USE IN ARIZONA.— 
(1) REQUIREMENTS.—Project water shall not 
be delivered for use by any community of the Nation 
located in the State of Arizona under subsection 
(b)(2)(D) until— 
(A) the Nation and the State of Arizona 
have entered into a water rights settlement 
agreement approved by an Act of Congress that 
specifies the allocation of Colorado River Sys-
tem water to which the use in Arizona will be 
charged; and 
(B) the Secretary has determined by hy-
drologic investigation that sufficient water is 
reasonably likely to be available to supply the 
use in the State of Arizona from water of the 
Colorado River system allocated to the State. 
(2) ACCOUNTING OF USES IN ARIZONA.—Pursu-
ant to paragraph (1), any depletion of water from 
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the San Juan River stream system in the State of 
New Mexico that results from the diversion of water 
by the Project for uses within the State of Arizona 
(including depletion incidental to the diversion, im-
pounding, or conveyance of water in the State of 
New Mexico for uses in the State of Arizona)— 
(A) shall be accounted for as a part of the 
Colorado River System apportionments to the 
State of Arizona; and 
(B) shall not increase the total quantity of 
water to which the State of Arizona is entitled 
to use under any compact, statute, or court de-
cree. 
(d) FORBEARANCE.— 
(1) IN GENERAL.—Subject to paragraphs (2) 
and (3), during any year in which a shortage to the 
normal diversion requirement for any use relating to 
the Project within the State of Arizona occurs (as 
determined under section 11 of Public Law 87–483 
(76 Stat. 99)), the Nation may temporarily forbear 
the delivery of the water supply of the Navajo Res-
ervoir for uses in the State of New Mexico under the 
apportionments of water to the Navajo Indian Irri-
gation Project and the normal diversion require-
ments of the Project to allow an equivalent quantity 
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of water to be delivered from the Navajo Reservoir 
water supply for municipal and domestic uses of the 
Nation in the State of Arizona under the Project. 
(2) LIMITATION OF FORBEARANCE.—The Na-
tion may forebear the delivery of water under para-
graph (1) of a quantity not exceeding the quantity 
of the shortage to the normal diversion requirement 
for any use relating to the Project within the State 
of Arizona. 
(3) EFFECT.—The forbearance of the delivery 
of water under paragraph (1) shall be subject to the 
requirements in subsection (c). 
(e) EFFECT.—Nothing in this Act— 
(1) authorizes the marketing, leasing, or trans-
fer of the water supplies made available to the Na-
tion under the Contract to non-Navajo water users 
in States other than the State of New Mexico; or 
(2) authorizes the forbearance of water uses in 
the State of New Mexico to allow uses of water in 
other States other than as authorized under sub-
section (d). 
(f) COLORADO RIVER COMPACTS.—Notwithstanding 
any other provision of law— 
(1) water may be diverted by the Project from 
the San Juan River in the State of New Mexico for 
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use within New Mexico in the lower basin, as that 
term is used in the Colorado River Compact; 
(2) any water diverted under paragraph (1) 
shall be a part of, and charged against, the con-
sumptive use apportionment made to the State of 
New Mexico by article III(a) of the Compact and to 
the upper basin by article III(a) of the Colorado 
River Compact; and 
(3) any water so diverted by the Project into 
the lower basin within the State of New Mexico shall 
not be credited as water reaching Lee Ferry pursu-
ant to articles III(c) and III(d) of the Colorado 
River Compact. 
(g) PAYMENT OF OPERATION, MAINTENANCE, AND 
REPLACEMENT COSTS.— 
(1) IN GENERAL.—The Secretary is authorized 
to pay the operation, maintenance, and replacement 
costs of the Project allocable to the Project Partici-
pants under section 304 until the date on which the 
Secretary declares any section of the Project to be 
substantially complete and delivery of water gen-
erated by, and through, that section of the Project 
can be made to a Project participant. 
(2) PROJECT PARTICIPANT PAYMENTS.—Begin-
ning on the date described in paragraph (1), each 
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Project Participant shall pay all allocated operation, 
maintenance, and replacement costs for that sub-
stantially completed section of the Project, in ac-
cordance with contracts entered into pursuant to 
section 304, except as provided in section 304(f). 
SEC. 304. PROJECT CONTRACTS. 
(a) NAVAJO NATION CONTRACT.— 
(1) HYDROLOGIC
DETERMINATION.—Congress 
recognizes that the Hydrologic Determination nec-
essary to support approval of the Contract has been 
completed. 
(2) CONTRACT APPROVAL.— 
(A) APPROVAL.— 
(i) IN GENERAL.—Except to the ex-
tent that any provision of the Contract 
conflicts with this Act, Congress approves, 
ratifies, and confirms the Contract. 
(ii) AMENDMENTS.—To the extent 
any amendment is executed to make the 
Contract consistent with this Act, that 
amendment is authorized, ratified, and 
confirmed. 
(B) EXECUTION OF CONTRACT.—The Sec-
retary, acting on behalf of the United States, 
shall enter into the Contract to the extent that 
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maintenance, and replacement of each facility of the 
Project that are allocable to the Nation. 
(5) LIMITATION, CANCELLATION, TERMINATION, 
AND RESCISSION.—The Contract may be limited by 
a term of years, canceled, terminated, or rescinded 
only by an Act of Congress. 
(b) CITY OF GALLUP CONTRACT.— 
(1) CONTRACT
AUTHORIZATION.—Consistent 
with this Act, the Secretary is authorized to enter 
into a repayment contract with the City that re-
quires the City— 
(A) to repay, within a 50-year period, the 
share of the construction costs of the City relat-
ing to the Project, with interest as provided 
under section 5; and 
(B) consistent with section 303(g), to pay 
the operation, maintenance, and replacement 
costs of the Project that are allocable to the 
City. 
(2) CONTRACT PREPAYMENT.— 
(A) IN
GENERAL.—The contract author-
ized under paragraph (1) may allow the City to 
satisfy the repayment obligation of the City for 
construction costs of the Project on the pay-
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ment of the share of the City prior to the initi-
ation of construction. 
(B) AMOUNT.—The amount of the share 
of the City described in subparagraph (A) shall 
be determined by agreement between the Sec-
retary and the City. 
(C) REPAYMENT OBLIGATION.—Any repay-
ment obligation established by the Secretary 
and the City pursuant to subparagraph (A) 
shall be subject to a final cost allocation by the 
Secretary on project completion and to the limi-
tations set forth in paragraph (3). 
(3) SHARE OF CONSTRUCTION COSTS.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary shall determine the 
share of the construction costs of the Project 
allocable to the City and establish the percent-
age of the allocated construction costs that the 
City shall be required to repay pursuant to the 
contract entered into under paragraph (1), 
based on the ability of the City to pay. 
(B) 
MINIMUM
PERCENTAGE.—Notwith-
standing subparagraph (A), the repayment obli-
gation of the City shall be at least 25 percent 
of the construction costs of the Project that are 
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allocable to the City, but shall in no event ex-
ceed 35 percent. 
(4) EXCESS CONSTRUCTION COSTS.—Any con-
struction costs of the Project allocable to the City in 
excess of the repayment obligation of the City, as 
determined under paragraph (3), shall be nonreim-
bursable. 
(5) GRANT FUNDS.—A grant from any other 
Federal source shall not be credited toward the 
amount required to be repaid by the City under a 
repayment contract. 
(6) TITLE TRANSFER.—If title is transferred to 
the City prior to repayment under section 302(f), 
the City shall be required to provide assurances sat-
isfactory to the Secretary of fulfillment of the re-
maining repayment obligation of the City. 
(7) WATER
DELIVERY
SUBCONTRACT.—The 
Secretary shall not enter into a contract under para-
graph (1) with the City until the City has secured 
a water supply for the City’s portion of the Project 
described in section 303(b)(2)(B), by entering into, 
as approved by the Secretary, a water delivery sub-
contract for a period of not less than 40 years begin-
ning on the date on which the construction of any 
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facility of the Project serving the City is completed, 
with— 
(A) the Nation, as authorized by the Con-
tract; 
(B) the Jicarilla Apache Nation, as author-
ized by the settlement contract between the 
United States and the Jicarilla Apache Tribe, 
authorized by the Jicarilla Apache Tribe Water 
Rights Settlement Act (Public Law 102–441; 
106 Stat. 2237); or 
(C) an acquired alternate source of water, 
subject to approval of the Secretary and the 
State of New Mexico, acting through the New 
Mexico Interstate Stream Commission and the 
New Mexico State Engineer. 
(c) JICARILLA APACHE NATION CONTRACT.— 
(1) CONTRACT
AUTHORIZATION.—Consistent 
with this Act, the Secretary is authorized to enter 
into a repayment contract with the Jicarilla Apache 
Nation that requires the Jicarilla Apache Nation— 
(A) to repay, within a 50-year period, the 
share of any construction cost of the Jicarilla 
Apache Nation relating to the Project, with in-
terest as provided under section 5; and 
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sroberts on PROD1PC70 with BILLS
(B) consistent with section 303(g), to pay 
the operation, maintenance, and replacement 
costs of the Project that are allocable to the 
Jicarilla Apache Nation. 
(2) CONTRACT PREPAYMENT.— 
(A) IN
GENERAL.—The contract author-
ized under paragraph (1) may allow the 
Jicarilla Apache Nation to satisfy the repay-
ment obligation of the Jicarilla Apache Nation 
for construction costs of the Project on the pay-
ment of the share of the Jicarilla Apache Na-
tion prior to the initiation of construction. 
(B) AMOUNT.—The amount of the share 
of Jicarilla Apache Nation described in sub-
paragraph (A) shall be determined by agree-
ment between the Secretary and the Jicarilla 
Apache Nation. 
(C) REPAYMENT OBLIGATION.—Any repay-
ment obligation established by the Secretary 
and the Jicarilla Apache Nation pursuant to 
subparagraph (A) shall be subject to a final 
cost allocation by the Secretary on project com-
pletion and to the limitations set forth in para-
graph (3). 
(3) SHARE OF CONSTRUCTION COSTS.— 
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(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary shall determine the 
share of the construction costs of the Project 
allocable to the Jicarilla Apache Nation and es-
tablish the percentage of the allocated construc-
tion costs of the Jicarilla Apache Nation that 
the Jicarilla Apache Nation shall be required to 
repay based on the ability of the Jicarilla 
Apache Nation to pay. 
(B) 
MINIMUM
PERCENTAGE.—Notwith-
standing subparagraph (A), the repayment obli-
gation of the Jicarilla Apache Nation shall be 
at least 25 percent of the construction costs of 
the Project that are allocable to the Jicarilla 
Apache Nation, but shall in no event exceed 35 
percent. 
(4) EXCESS CONSTRUCTION COSTS.—Any con-
struction costs of the Project allocable to the 
Jicarilla Apache Nation in excess of the repayment 
obligation of the Jicarilla Apache Nation as deter-
mined under paragraph (3), shall be nonreimburs-
able. 
(5) GRANT FUNDS.—A grant from any other 
Federal source shall not be credited toward the 
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share of the Jicarilla Apache Nation of construction 
costs. 
(6) NAVAJO
INDIAN
IRRIGATION
PROJECT 
COSTS.—The Jicarilla Apache Nation shall have no 
obligation to repay any Navajo Indian Irrigation 
Project construction costs that might otherwise be 
allocable to the Jicarilla Apache Nation for use of 
the Navajo Indian Irrigation Project facilities to 
convey water to the Jicarilla Apache Nation, and 
any such costs shall be nonreimbursable. 
(d) CAPITAL COST ALLOCATIONS.— 
(1) IN GENERAL.—For purposes of estimating 
the capital repayment requirements of the Project 
Participants under this section, the Secretary shall 
review and, as appropriate, update the Draft Impact 
Statement allocating capital construction costs for 
the Project. 
(2) FINAL COST ALLOCATION.—The repayment 
contracts entered into with Project Participants 
under this section shall require that the Secretary 
perform a final cost allocation when construction of 
the Project is determined to be substantially com-
plete. 
(3) REPAYMENT OBLIGATION.—The Secretary 
shall determine the repayment obligation of the 
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Project Participants based on the final cost alloca-
tion identifying reimbursable and nonreimbursable 
capital costs of the Project consistent with this Act. 
(e) OPERATION, MAINTENANCE, AND REPLACEMENT 
COST ALLOCATIONS.—For purposes of determining the 
operation, maintenance, and replacement obligations of 
the Project Participants under this section, the Secretary 
shall review and, as appropriate, update the Draft Impact 
Statement that allocates operation, maintenance, and re-
placement costs for the Project. 
(f) TEMPORARY WAIVERS OF PAYMENTS.— 
(1) IN GENERAL.—On the date on which the 
Secretary declares a section of the Project to be sub-
stantially complete and delivery of water generated 
by and through that section of the Project can be 
made to the Nation, the Secretary may waive, for a 
period of not more than 10 years, the operation, 
maintenance, and replacement costs allocable to the 
Nation for that section of the Project that the Sec-
retary determines are in excess of the ability of the 
Nation to pay. 
(2) SUBSEQUENT PAYMENT BY NATION.—After 
a waiver under paragraph (1), the Nation shall pay 
all allocated operation, maintenance, and replace-
ment costs of that section of the Project. 
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(3) PAYMENT BY UNITED STATES.—Any oper-
ation, maintenance, or replacement costs waived by 
the Secretary under paragraph (1) shall be paid by 
the United States and shall be nonreimbursable. 
(4) EFFECT
ON
CONTRACTS.—Failure of the 
Secretary to waive costs under paragraph (1) be-
cause of a lack of availability of Federal funding to 
pay the costs under paragraph (3) shall not alter the 
obligations of the Nation or the United States under 
a repayment contract. 
(5) TERMINATION
OF
AUTHORITY.—The au-
thority of the Secretary to waive costs under para-
graph (1) with respect to a Project facility trans-
ferred to the Nation under section 302(f) shall ter-
minate on the date on which the Project facility is 
transferred. 
(g) PROJECT
CONSTRUCTION
COMMITTEE.—The 
Secretary shall facilitate the formation of a project con-
struction committee with the Project Participants and the 
State of New Mexico— 
(1) to review cost factors and budgets for con-
struction and operation and maintenance activities; 
(2) 
to 
improve 
construction 
management 
through enhanced communication; and 
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(3) to seek additional ways to reduce overall 
Project costs. 
SEC. 305. NAVAJO NATION MUNICIPAL PIPELINE. 
(a) USE OF NAVAJO NATION PIPELINE.—In addition 
to use of the Navajo Nation Municipal Pipeline to convey 
the Animas-La Plata Project water of the Nation, the Na-
tion may use the Navajo Nation Municipal Pipeline to con-
vey non-Animas La Plata Project water for municipal and 
industrial purposes. 
(b) CONVEYANCE OF TITLE TO PIPELINE.— 
(1) IN GENERAL.—On completion of the Navajo 
Nation Municipal Pipeline, the Secretary may enter 
into separate agreements with the City of Farm-
ington, New Mexico and the Nation to convey title 
to each portion of the Navajo Nation Municipal 
Pipeline facility or section of the Pipeline to the City 
of Farmington and the Nation after execution of a 
Project operations agreement approved by the Sec-
retary, the Nation, and the City of Farmington that 
sets forth any terms and conditions that the Sec-
retary determines are necessary. 
(2) CONVEYANCE TO THE CITY OF FARMINGTON 
OR NAVAJO NATION.—In conveying title to the Nav-
ajo Nation Municipal Pipeline under this subsection, 
the Secretary shall convey— 
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(A) to the City of Farmington, the facili-
ties and any land or interest in land acquired 
by the United States for the construction, oper-
ation, and maintenance of the Pipeline that are 
located within the corporate boundaries of the 
City; and 
(B) to the Nation, the facilities and any 
land or interests in land acquired by the United 
States for the construction, operation, and 
maintenance of the Pipeline that are located 
outside the corporate boundaries of the City of 
Farmington. 
(3) EFFECT OF CONVEYANCE.—The conveyance 
of title to the Pipeline shall not affect the applica-
tion of the Endangered Species Act of 1973 (16 
U.S.C. 1531 et seq.) relating to the use of water as-
sociated with the Animas-La Plata Project. 
(4) LIABILITY.— 
(A) IN GENERAL.—Effective on the date of 
the conveyance authorized by this subsection, 
the United States shall not be held liable by 
any court for damages of any kind arising out 
of any act, omission, or occurrence relating to 
the land, buildings, or facilities conveyed under 
this subsection, other than damages caused by 
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acts of negligence committed by the United 
States or by employees or agents of the United 
States prior to the date of conveyance. 
(B) TORT CLAIMS.—Nothing in this sub-
section increases the liability of the United 
States beyond the liability provided under chap-
ter 171 of title 28, United States Code (com-
monly known as the ‘‘Federal Tort Claims 
Act’’). 
(5) NOTICE OF PROPOSED CONVEYANCE.—Not 
later than 45 days before the date of a proposed 
conveyance of title to the Pipeline, the Secretary 
shall submit to the Committee on Natural Resources 
of the House of Representatives and the Committee 
on Energy and Natural Resources of the Senate, no-
tice of the conveyance of the Pipeline. 
SEC. 306. AUTHORIZATION OF CONJUNCTIVE USE WELLS. 
(a) CONJUNCTIVE GROUNDWATER DEVELOPMENT 
PLAN.—Not later than 1 year after the date of enactment 
of this Act, the Nation, in consultation with the Secretary, 
shall complete a conjunctive groundwater development 
plan for the wells described in subsections (b) and (c). 
(b) WELLS IN THE SAN JUAN RIVER BASIN.—In ac-
cordance with the conjunctive groundwater development 
plan, the Secretary may construct or rehabilitate wells and 
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related pipeline facilities to provide capacity for the diver-
sion and distribution of not more than 1,670 acre-feet of 
groundwater in the San Juan River Basin in the State 
of New Mexico for municipal and domestic uses. 
(c) WELLS
IN
THE LITTLE COLORADO
AND RIO 
GRANDE BASINS.— 
(1) IN
GENERAL.—In accordance with the 
Project and conjunctive groundwater development 
plan for the Nation, the Secretary may construct or 
rehabilitate wells and related pipeline facilities to 
provide capacity for the diversion and distribution 
of— 
(A) not more than 680 acre-feet of ground-
water in the Little Colorado River Basin in the 
State of New Mexico; 
(B) not more than 80 acre-feet of ground-
water in the Rio Grande Basin in the State of 
New Mexico; and 
(C) not more than 770 acre-feet of ground-
water in the Little Colorado River Basin in the 
State of Arizona. 
(2) USE.—Groundwater diverted and distrib-
uted under paragraph (1) shall be used for munic-
ipal and domestic uses. 
(d) ACQUISITION OF LAND.— 
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