II 117th CONGRESS 2d Session S. 5068 IN THE SENATE OF THE UNITED STATES October 11, 2022 Mr. King (for Mr. Luján ) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To amend the Northwestern New Mexico Rural Water Projects Act to make improvements to that Act, and for other purposes.

1. Short title This Act may be cited as the Navajo-Gallup Water Supply Project Amendments Act of 2022 . 2. Definitions Section 10302 of the Northwestern New Mexico Rural Water Projects Act ( 43 U.S.C. 407 note; Public Law 111–11 ) is amended— (1) by redesignating paragraphs (12), (13), (14), (15), (16), (17), (18), (19), (20), (21), (22), (23), (24), (25), (26), (27), (28), (29), and (30) as paragraphs (13), (14), (15), (16), (17), (18), (19), (20), (21), (22), (23), (24), (25), (28), (29), (30), (31), (32), and (33), respectively; (2) by inserting after paragraph (11) the following: (12) Deferred Construction Fund The term Deferred Construction Fund means the Navajo Nation's Navajo-Gallup Water Supply Project Deferred Construction Fund established by section 10602(i)(1)(A). ; (3) in paragraph (14) (as so redesignated)— (A) in the paragraph heading, by striking Draft and inserting Final Environmental ; (B) by striking Draft Impact and inserting Final Environmental ; (C) by striking draft environmental and inserting final environmental ; and (D) by striking March 2007 and inserting July 6, 2009 ; (4) in paragraph (19) (as so redesignated), by striking Draft and inserting Final Environmental ; (5) by inserting after paragraph (25) (as so redesignated) the following: (26) Project Service Area The term Project Service Area means the area that encompasses the 43 Nation chapters, the southwest portion of the Jicarilla Apache Reservation, and the City that is identified to be served by the Project, as illustrated in figure IV–5 (Drawing No. 1695–406–49) of the Final Environmental Impact Statement. (27) San Juan Generating Station The term San Juan Generating Station means the coal-fired, 4-unit electric power plant and ancillary features located by the San Juan Mine near Waterflow, New Mexico. ; and (6) by adding at the end the following: (34) Working Cost Estimate The term Working Cost Estimate means the Bureau of Reclamation document entitled NGWSP October 2020 WCE and dated May 20, 2021, that details the costs totaling $1,705,174,000, at the October 2020 price level, of the Project, as configured on that date. . 3. Navajo-Gallup water supply project (a) Authorization of Navajo-Gallup water supply project Section 10602 of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1379) is amended— (1) in subsection (a)— (A) in the subsection heading, by striking In general and inserting Authorization ; (B) by striking The Secretary and inserting the following: (1) In general The Secretary ; (C) in paragraph (1) (as so designated), by striking Draft Impact Statement and inserting Final Environmental Impact Statement, as further refined in, and including the facilities identified in, the Working Cost Estimate and any subsequent supplemental documents prepared in accordance with the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ). ; and (D) by adding at the end the following: (2) Additional service areas (A) Findings Congress finds that— (i) expanding the Project Service Area would create opportunities to increase service for additional Nation Tribal members and would not increase the cost of the Project beyond authorization levels described in section 10609(a); and (ii) the unit operations and maintenance costs of the Project would be reduced by adding more customers to the Project. (B) Authorizations for additional Project Service Areas (i) New Mexico In addition to delivering water supply from the Project to the Nation communities in the San Juan River Basin, the Nation may expand the Project Service Area in order to deliver water supply from the Project to communities of the Nation within the Rio San Jose Basin, New Mexico. (ii) Arizona In addition to delivering water supply from the Project to the Nation communities of Fort Defiance and Window Rock, Arizona, and subject to section 10603(c)(1), the Nation may expand the Project Service Area in order to deliver water supply from the Project to the Nation community of Lupton, Arizona, within the Little Colorado River Basin, Arizona. ; (2) in subsection (b)— (A) in the matter preceding paragraph (1)— (i) by inserting acquire, before construct, ; and (ii) by striking Draft Impact Statement and inserting Final Environmental Impact Statement, as further refined in, and including the facilities identified in, the Working Cost Estimate and any subsequent supplemental documents prepared in accordance with the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ) ; (B) by striking paragraph (1) and inserting the following: (1) San Juan Generating Station (A) In general The water conveyance and storage facilities associated with the San Juan Generating Station, including the diversion dam, the intake structure, the river pumping plant, the pipeline from the river to the reservoir, the dam and associated reservoir, the power line between the river and reservoir, and any associated land, rights-of-way, easements, or ancillary features. (B) Waiver of appraisal Notwithstanding any other provision of law, the Secretary may waive an appraisal relating to the acquisition of the water conveyance and storage facilities associated with the San Juan Generating Station described in subparagraph (A). ; (C) in paragraph (2)(A)— (i) by striking River near Kirtland, New Mexico, and inserting Generating Station Reservoir ; and (ii) by inserting generally before follows United States Highway 491 ; (D) in paragraph (3)(A), by inserting generally before follows United States Highway 550 ; and (E) in paragraph (5), by inserting (including any reservoir facility) after treatment facility ; (3) in subsection (c)— (A) in the subsection heading, by inserting and Facilities after Land ; (B) in paragraph (1), by striking any land or interest in land that is and inserting any land or facilities, or interest in land or facilities, that are ; and (C) by adding at the end the following: (4) Land to be taken into trust (A) In general On satisfaction of the conditions described in paragraph (7) of the Agreement and after the requirements of sections 10701(e) and 10703 are met, the Secretary shall take legal title to the following land and, subject to subparagraph (D), hold that land in trust for the benefit of the Nation: (i) Fee land of the Nation, including— (I) the parcels of land on which the Tohlakai Pumping Plant, Reach 12A and Reach 12B, are located, including, in McKinley County, New Mexico— (aa) sec. 5, T. 16 N., R. 18 W., New Mexico Prime Meridian; and (bb) sec. 33, T. 17 N., R. 17 W., New Mexico Prime Meridian (except lot 9 and the NW 1/4 of lot 4); (II) the parcel of land on which Reach 12.1 is located, including— (aa) NW 1/4 and SW 1/4 sec. 5, T. 16 N., R. 18 W.; (bb) N 1/2 sec. 11, T. 16 N., R. 19 W.; and (cc) sec. 12, T. 16 N., R. 20 W.; and (III) the parcel of land on which Reach 12.2 is located, including NW 1/4 . sec. 2, T. 16 N., R. 21 W. (ii) Public domain land managed by the Bureau of Land Management, including— (I) the parcel of land on which the Cutter Lateral Water Treatment Plant is located, including S 1/2 sec. 9, T. 25 N., R. 9 W., New Mexico Prime Meridian; and (II) the parcel of land on which the Navajo Agricultural Products Industry turnout is located, including NW 1/4 and NE 1/4 sec. 34, T. 26 N., R. 9 W., New Mexico Prime Meridian. (iii) Public domain land managed by the Bureau of Reclamation, including the land underlying the San Juan Generating Station facilities acquired by the United States. (B) Part of Navajo Nation The land taken into trust under subparagraph (A) shall be part of the Navajo Reservation and administered in accordance with the laws and regulations generally applicable to land held in trust by the United States for the benefit of an Indian Tribe. (C) Limitations The land taken into trust under subparagraph (A) shall be subject to valid existing rights, contracts, and management agreements, including easements and rights-of-way. (D) Savings clause Nothing in this paragraph affects any— (i) water right of the Nation in existence on the day before the date of enactment of the Navajo-Gallup Water Supply Project Amendments Act of 2022 ; and (ii) right or claim of the Nation to any land or interest in land in existence on the day before the date of enactment of the Navajo-Gallup Water Supply Project Amendments Act of 2022 . ; (4) in subsection (d)(1)(D), by striking Draft and inserting Final Environmental ; (5) in subsection (e)— (A) by striking The Secretary and inserting the following: (1) In general The Secretary ; and (B) by adding at the end the following: (2) Renewable energy and hydroelectric power (A) Renewable energy For any portion of the Project that does not have access to Colorado River Storage Project power, the Secretary may use not more than $6,250,000 of the amounts made available under section 10609(a)(1) to develop renewable energy. (B) Hydroelectric power Notwithstanding whether a Project facility has access to Colorado River Storage Project power, the Secretary may use not more than $1,250,000 of the $6,250,000 authorized to be used to develop renewable energy under subparagraph (A) to develop hydroelectric power for any Project facility that can use hydraulic head to produce electricity. ; (6) in subsection (h)(1), in the matter preceding subparagraph (A), by inserting , store, after treat ; and (7) by adding at the end the following: (i) Deferred construction of Project facilities (1) Deferred construction of Project facilities On mutual agreement between the Nation and the Secretary, and the Jicarilla Apache Nation if the deferred Project facilities benefit the Jicarilla Apache Nation, construction of selected Project facilities may be deferred to save operation and maintenance expenses associated with that construction. (2) Deferred Construction Fund (A) Establishment There is established in the Treasury a fund, to be known as the Navajo Nation’s Navajo-Gallup Water Supply Project Deferred Construction Fund , to consist of— (i) amounts that correspond to portions of the Project that have been deferred under paragraph (1); and (ii) any interest or other gains on amounts referred to in clause (i). (B) Use of the Deferred Construction Fund The Nation may use amounts in the Deferred Construction Fund— (i) to construct Project facilities that have been deferred under paragraph (1); or (ii) to construct alternate facilities agreed on under subparagraph (C). (C) Alternate facilities consistent with the purpose of the Project On agreement between the Nation and the Secretary, and the Jicarilla Apache Nation if the deferred Project facilities benefit the Jicarilla Apache Nation, and in compliance with all applicable environmental and cultural resource protection laws, facilities other than those previously agreed to be deferred under paragraph (1) may be constructed if those alternate facilities are consistent with the purposes of the Project described in section 10601. (3) Amounts to be deposited Funds allocated from the amounts made available under section 10609(a)(1) to build facilities referred to in paragraph (1) shall be deposited into the Deferred Construction Fund. (4) Adjustments On deposit of amounts into the Deferred Construction Fund under paragraph (3), the adjustments to authorized appropriations under section 10609(a)(2) shall no longer apply to those amounts. (5) Deadline to construct Project facilities On deposit of all amounts into the Deferred Construction Fund for construction of Project facilities agreed on under paragraph (1), the Secretary shall be deemed to have met the obligation under section 10701(e)(1)(A)(ix). (6) Future construction of Project facilities On agreement between the Nation and the Secretary, and the Jicarilla Apache Nation if the deferred Project facilities benefit the Jicarilla Apache Nation, the Nation shall use amounts deposited into the Deferred Construction Fund to construct— (A) Project facilities deferred under paragraph (1); or (B) alternate Project facilities described in paragraph (2)(C). . (b) Delivery and use of Navajo-Gallup water supply project water Section 10603(a)(3)(B) of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1383) is amended— (1) in clause (i), by inserting or, if generated on City-owned facilities, by the City after the Nation ; and (2) in clause (ii), by inserting , except that the City shall retain all revenue from the sale of hydroelectric power that is generated on City-owned facilities after hydroelectric power . (c) Project contracts Section 10604 of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1388) is amended— (1) in subsection (b)(3)— (A) in subparagraph (A), by striking subparagraph (B) and inserting subparagraphs (B) and (C) ; (B) in subparagraph (B)— (i) in the subparagraph heading, by striking Minimum percentage and inserting Maximum percentage ; (ii) by striking at least 25 percent and inserting not more than 25 percent ; and (iii) by striking , but shall in no event exceed 35 percent ; and (C) by adding at the end the following: (C) Maximum repayment obligation The repayment obligation of the City referred to in subparagraphs (A) and (B) shall not exceed $76,000,000. ; (2) in subsection (c)(1)(B), by inserting subsection (f) and before section 10603(g) ; (3) in subsection (d)(1), by striking Draft and inserting Final Environmental ; (4) in subsection (e), by striking Draft and inserting Final Environmental ; and (5) in subsection (f)— (A) by redesignating paragraphs (1) through (5) as subparagraphs (A) through (E), respectively, and indenting appropriately; (B) by inserting before subparagraph (A) (as so designated) the following: (1) Navajo Nation ; (C) in paragraph (1) (as so designated)— (i) in subparagraph (A) (as so redesignated), by striking may waive and all that follows through the period at the end and inserting shall waive, for a period of 15 years, the operation, maintenance, and replacement costs allocable to the Nation. ; (ii) in subparagraph (B) (as so redesignated)— (I) by striking paragraph (1) and inserting subparagraph (A) expires ; (II) by striking allocated ; and (III) by inserting that are allocated to the Nation after Project ; (iii) in subparagraph (C) (as so redesignated), by striking paragraph (1) and inserting subparagraph (A) ; (iv) by striking subparagraph (D) (as so redesignated) and inserting the following: (D) Antideficiency The Secretary shall not be liable for any failure to carry out any obligation or activity authorized by this subsection if adequate appropriations are not provided expressly by an Act of Congress to carry out the purposes of this subsection. ; and (v) by striking subparagraph (E) (as so redesignated) and inserting the following: (E) Termination of waiver The waiver authorized under subparagraph (A) shall terminate with respect to a section of the Project on the earlier of— (i) the date on which that section of the Project is transferred to the Nation under section 10602(f); and (ii) the date on which the waiver granted by the Secretary under that subparagraph has been in place for 15 years. ; and (D) by adding at the end the following: (2) Jicarilla Apache Nation (A) In general On the date on which the Secretary declares a section of the Project to be substantially complete and delivery of water generated by and through that section of the Project can be made to the Jicarilla Apache Nation, the Secretary shall waive, for a period of 10 years, the operation, maintenance, and replacement costs allocable to the Jicarilla Apache Nation. (B) Subsequent payment by jicarilla apache nation After a waiver under subparagraph (A) expires, the Jicarilla Apache Nation shall pay all operation, maintenance, and replacement costs of that section of the Project that are allocated to the Jicarilla Apache Nation. (C) Payment by united states Any operation, maintenance, or replacement costs waived by the Secretary under subparagraph (A) shall be paid by the United States and shall be nonreimbursable. (D) Antideficiency The Secretary shall not be liable for any failure to carry out any obligation or activity authorized by this subsection if adequate appropriations are not provided expressly by an Act of Congress to carry out the purposes of this subsection. (3) City of Gallup (A) In general On the date on which the Secretary declares a section of the Project to be substantially complete and delivery of water generated by and through that section of the Project can be made to the City, the Secretary shall waive, for a period of 10 years, the operation, maintenance, and replacement costs allocable to the City. (B) Subsequent payment by City of Gallup After a waiver under subparagraph (A) expires, the City shall pay all operation, maintenance, and replacement costs of that section of the Project that are allocated to the City. (C) Payment by united states Any operation, maintenance, or replacement costs waived by the Secretary under subparagraph (A) shall be paid by the United States and shall be nonreimbursable. (D) Antideficiency The Secretary shall not be liable for any failure to carry out any obligation or activity authorized by this subsection if adequate appropriations are not provided expressly by an Act of Congress to carry out the purposes of this subsection. . (d) Authorization of conjunctive use wells Section 10606 of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1392) is amended by adding at the end the following: (i) Wells serving the City of Gallup regional water system (1) In general The Secretary shall enter into a financial assistance agreement with the City to provide funding, using amounts made available under section 10609(b)(3), for the construction or rehabilitation of wells and related pipeline facilities to provide capacity for the diversion and distribution by the City of not more than 1,500 acre feet of groundwater per year. (2) Water rights The water rights associated with any wells constructed or rehabilitated under paragraph (1)— (A) shall not be considered to be part of the Agreement; and (B) shall be considered to be already existing water rights permitted by the New Mexico State Engineer to the City for municipal and domestic uses. (3) Title to wells Title to the wells and related pipeline facilities constructed or rehabilitated in accordance with paragraph (1) shall remain with the City at all times. (4) Associated costs All operation, maintenance, and replacement costs associated with wells and related pipeline facilities constructed or rehabilitated in accordance with paragraph (1) shall be the responsibility of the City. . (e) Authorization of appropriations Section 10609 of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1395) is amended— (1) in subsection (a)— (A) in paragraph (1), by striking $870,000,000 for the period of fiscal years 2009 through 2024 and inserting $1,923,200,000 for the period of fiscal years 2009 through 2029 ; (B) by striking paragraph (2) and inserting the following: (2) Adjustments (A) In general The amount under paragraph (1) shall be adjusted by such amounts as may be required— (i) by reason of changes since October 2020 in construction cost changes in applicable regulatory standards, as indicated by engineering cost indices applicable to the types of construction involved; and (ii) to address construction cost changes necessary to account for unforeseen market volatility that may not otherwise be captured by engineering cost indices described in clause (i), as determined by the Secretary, including repricing applicable to the types of construction and current industry standards involved. (B) Deferred Construction Fund Amounts deposited in the Deferred Construction Fund shall not be adjusted pursuant to this paragraph. ; and (C) in paragraph (4)(B), by striking 10 years and inserting 15 years ; (2) in subsection (b)— (A) in paragraph (1), by striking $30,000,000, as adjusted under paragraph (3), for the period of fiscal years 2009 through 2019 and inserting $37,500,000, as adjusted under paragraph (4), for the period of fiscal years 2009 through 2032 ; (B) in paragraph (2), by striking 2024 and inserting 2032 ; (C) by redesignating paragraphs (3) through (6) as paragraphs (4) through (7), respectively; (D) by inserting after paragraph (2) the following: (3) City of Gallup wells There is authorized to be appropriated for the construction or rehabilitation and operation and maintenance of conjunctive use wells for the City $18,000,000, as adjusted under paragraph (4), for the period of fiscal years 2021 through 2029. ; (E) in paragraph (4) (as so redesignated)— (i) by striking The amount under paragraph (1) and inserting the following: (A) San Juan Wells and Wells in the Little Colorado and Rio Grande Basins The amount under paragraphs (1) and (2) ; and (ii) by adding at the end the following: (B) City of Gallup wells The amount under paragraph (3) shall be adjusted by such amounts as may be required by reason of changes since 2021 in construction costs, as indicated by engineering cost indices applicable to the types of construction or rehabilitation involved. ; (F) in paragraph (5) (as so redesignated), by striking paragraphs (1) and (2) and inserting paragraphs (1), (2), and (3) ; and (G) in paragraph (6) (as so redesignated), by striking paragraphs (1) and (2) and inserting paragraphs (1), (2), and (3) . (f) Taxation of construction, operation, and maintenance of Project facilities Part III of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1379) is amended by adding at the end the following: 10610. Taxation of construction, operation, and maintenance of Project facilities (a) Nation land Any activity constituting the construction, operation, or maintenance of Project facilities— (1) shall, if the activity takes place on land that is held in trust by the United States for the benefit of the Nation, be subject to taxation by the Nation; and (2) shall not be subject to any fee, tax, assessment, levy, or other charge imposed by any State or political subdivision of a State. (b) Other land Any activity constituting the construction, operation, or maintenance of Project facilities— (1) shall, if the activity takes place on land other than the land described in subsection (a)(1), be subject to taxation by the State in which the land is located, or by a political subdivision of that State to the extent authorized by the laws of that State; and (2) shall not be subject to any fee, tax, assessment, levy, or other charge imposed by the Nation. . 4. Navajo Nation water rights (a) Agreement Section 10701(e)(1)(A) of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1400) is amended— (1) in clause (ix), by striking 2024 and inserting 2029 ; and (2) by adding at the end the following: (x) Deferred Construction Fund (I) In general Not later than December 31, 2029, the United States shall make all deposits into the Deferred Construction Fund in accordance with section 10602(i)(3). (II) Project deadline On deposit of the amounts into the Deferred Construction Fund under subclause (I), even if certain Project facilities have not yet been constructed, the Secretary shall be deemed to have met the deadline described in clause (ix). . (b) Waivers and releases Section 10703 of the Northwestern New Mexico Rural Water Projects Act ( Public Law 111–11 ; 123 Stat. 1403) is amended— (1) in subsection (d)(1)(A), by striking 2025 and inserting 2030 ; and (2) in subsection (e)(2), in the matter preceding subparagraph (A), by striking 2025 and inserting 2030 .