I 117th CONGRESS 2d Session H. R. 9633 IN THE HOUSE OF REPRESENTATIVES December 20, 2022 Mr. O'Halleran introduced the following bill; which was referred to the Committee on Natural Resources A BILL To authorize Arizona Tribes to enter into lease or exchange agreements and storage agreements relating to their decreed water entitlements as a long-term source of water supply, and for other purposes.

1. Short title This Act may be cited as the Arizona Tribes Water Marketing Act of 2022 . 2. Findings Congress finds as follows: (1) The entire American West and Southwest are facing forecasts of prolonged droughts that will leave States and Tribes facing major water shortages. (2) Recent periods of drought in the American West have also occurred with higher temperatures and reduced snowpack and led to what climate scientists recently concluded was possibly the most severe drought in over 1,200 years. (3) The Colorado River has been under drought conditions since 2000, most recently denoted as the most endangered river in the United States, and the State of Arizona is in a mega-drought according to climate scientists. (4) The Secretary manages the lower Colorado River system in accordance with Federal law including— (A) the Boulder Canyon Project Act of 1928; (B) the 1963 Decision of the U.S. Supreme Court in Arizona v. California; (C) the 2006 Consolidated Decree of the U.S. Supreme Court in Arizona v. California; (D) the Colorado River Basin Project Act of 1968; (E) the Criteria for Coordinated Long-Range Operation of Colorado River Reservoirs Pursuant to the Colorado River Basin Project Act of September 30, 1968; (F) the Grand Canyon Protection Act of 1992; (G) the 2007 Interim Guidelines; and (H) other applicable provisions of Federal law. (5) The 2007 Interim Guidelines will expire in 2026. The 7 States that are within the Colorado River basin are re-negotiating these guidelines with the Federal Government to take account of current forecasts of available supply from the Colorado River, which is dramatically reduced from what it had been when the guidelines were adopted in 2007. (6) Colorado River water that had been stored in Lake Powell and Lake Mead has been gradually used up as the drought has continued. Conservation of water supplies is for the foreseeable future the only viable way to address water shortage and water supplies from the Colorado River. (7) While conservation is the current focus to address the mega-drought in the State of Arizona, additional efforts should be made now to identify future long-term water supplies to offset the reduced supplies available from the Colorado River and other natural rivers and streams flowing in the State. (8) Congress recognizes that there are 22 Tribes in the State of Arizona. Of those Tribes, some have judicially decreed water entitlements decreed to them through various State and Federal court decrees. Other Arizona Tribes have claims pending for additional water entitlements, many of which will also result in judicially decreed Tribal entitlements. These judicially decreed Tribal entitlements to water are currently not available as a potential water supply to offset the reduced supplies available from the Colorado River and other natural rivers and streams flowing in the State. (9) Congress further recognizes that Arizona Tribes that hold judicially decreed rights to water from the Colorado River or other rivers and streams flowing in Arizona should be able to enter into lease or exchange agreements and storage agreements to make such decreed entitlements potentially available to other water users in the State as part of a long-term alternative supply. (10) Making such judicially decreed Tribal water supplies available as a long-term water supply should be considered and implemented as part of a long-term strategy for addressing the mega-drought in the Southwest, and should be considered as part of the ongoing basin State re-negotiation of the 2007 Interim Guidelines. (11) In the meantime, to address the current crisis, all parties with excess supplies of water should consider ways of conserving those supplies through existing Federal and State programs that provide for the conservation of such supplies for the benefit of both Lake Mead and Lake Powell. 3. Purposes The purposes of this Act are— (1) to authorize Arizona Tribes to enter into Lease or Exchange Agreements and Storage Agreements to make their judicially decreed Tribal water entitlements available for use off of their respective Reservations for their economic well-being and for the benefit of their surrounding jurisdictions as water supplies in Arizona become more scarce; and (2) to authorize the Secretary to approve any Lease or Exchange Agreements or Storage Agreements entered into by Arizona Tribes pursuant to paragraph (1). 4. Definitions In this Act: (1) 2007 interim guidelines The term 2007 Interim Guidelines means The Final Environmental Impact Statement—Colorado River Interim Guidelines for Lower Basin Shortages and Coordinated Operations for Lake Powell and Lake Mead, dated October 2007, prepared pursuant to the National Environmental Policy Act of 1969, the Council on Environmental Quality’s Regulations for Implementing the Procedural Provisions of NEPA (40 C.F.R. Parts 1500 through 1508), Department of the Interior Policies, and the Bureau of Reclamation’s NEPA Handbook. (2) Allottee The term allottee means an individual who holds a beneficial real property interest in an allotment of Indian land that is— (A) located within the exterior boundaries of a Reservation; and (B) held in trust by the United States. (3) Arizona Indian Water Settlement The term Arizona Indian Water Settlement means an Indian water settlement for an Indian Tribe located within the State that— (A) has been approved and authorized by Congress; and (B) includes as part of the Indian Tribe’s approved and authorized entitlement a judicially decreed entitlement to water for lands located within the boundaries of the State. (4) Arizona Tribe The term Arizona Tribe means an Indian Tribe with lands located within the State that has a decreed water right. (5) Decreed water right The term decreed water right means an entitlement to water included in any final decree entered by a Federal court on behalf of an Arizona Tribe that is appurtenant to lands located within such Arizona Tribe’s Reservation. (6) Consumptive use The term Consumptive Use means— (A) a portion of the decreed water right that has been consumptively used by an Arizona Tribe within the exterior boundary of its Reservation for a minimum of 4 of the 5 calendar years immediately preceding the year of delivery of a portion of the decreed right according to a Lease or Exchange Agreement or Storage Agreement; and (B) any verified reduction in Consumptive Use pursuant to a System Conservation Agreement, a Lease or Exchange Agreement, or Storage Agreement, or from the creation of Intentionally Created Surplus, shall be deemed to be a Consumptive Use in the year in which the reduction occurred, if the reduction is reflected in the Water Accounting Report. (7) Intentionally created surplus or ICS The term Intentionally Created Surplus or ICS means water that is conserved to Lake Mead for future use by a water user pursuant to the 2007 Interim Guidelines. (8) Lease or exchange agreement The term Lease or Exchange Agreement means an agreement to lease or exchange, or an option to lease or exchange, a portion of the Consumptive Use off of a Reservation. (9) Lower basin The term Lower Basin has the meaning given the term in article II(g) of the Colorado River Compact of 1922, as approved by Congress in section 13 of the Boulder Canyon Project Act ( 43 U.S.C. 617l ), and by the Presidential Proclamation of June 25, 1929 (46 Stat. 3000). (10) Person The term person means an individual, a public or private corporation, a company, a partnership, a joint venture, a firm, an association, a society, an estate or trust, a private organization or enterprise, the United States, any Indian Tribe, a governmental entity, or a political subdivision or municipal corporation organized under, or subject to, the constitution and laws of the State. (11) Reservation The term Reservation means the reservation established for each Arizona Tribe but only as to those reservation lands that are located in the State. (12) Secretary The term Secretary means the Secretary of the Interior. (13) State The term State means the State of Arizona. (14) Storage The term storage means the underground storage, in accordance with State law, of a portion of the Consumptive Use off of the Reservation within the Lower Basin in the State. (15) Storage agreement The term Storage Agreement means an agreement, including with the Arizona Water Banking Authority (or successor agency or entity), for the storage of a portion of the Consumptive Use, or the water received under an exchange pursuant to an Lease or Exchange Agreement, or more underground storage facilities or groundwater savings facilities located in the State. (16) Water accounting report The term Water Accounting Report means the annual report of the Bureau of Reclamation entitled the Colorado River Accounting and Water Use Report: Arizona, California, and Nevada . 5. Lease or exchange agreements (a) Authorization Notwithstanding section 2116 of the Revised Statutes (commonly known as the Indian Trade and Intercourse Act ; 25 U.S.C. 177 ) or any other provision of law, beginning on January 1, 2026, each Arizona Tribe is authorized to, subject to the approval of the Secretary under section 7(a), and has the sole authority to, enter into, with any person, a Lease or Exchange Agreement, on the condition that the use off of the Reservation is located in the Lower Basin in the State and is not in Navajo, Apache, or Cochise counties. (b) Term of lease or exchange agreement The term of any Lease or Exchange Agreement entered into under subsection (a) shall be mutually agreed, except that the term shall not exceed 100 years. (c) Modifications Any Lease or Exchange Agreement entered into under subsection (a) may be renegotiated or modified at any time during the term of the Lease or Exchange Agreement, subject to the approval of the Secretary under section 7(a), on the condition that the term of the renegotiated Lease or Exchange Agreement and the term of the original Lease or Exchange Agreement, in the aggregate, does not exceed 100 years. (d) Applicable law Any person entering into a Lease or Exchange Agreement with an Arizona Tribe under this section shall use the water received under the Lease or Exchange Agreement in accordance with applicable Federal and State law. (e) Effect on Arizona indian water settlements (1) In general This Act shall not be construed to amend any Arizona Indian Water Settlement that prohibits off-Reservation Lease and Exchange Agreements. Before entering into a Lease or Exchange Agreement pursuant to the authority set forth in this Act, an Arizona Tribe with a restriction on its authority to lease or exchange its decreed water rights outside the exterior boundaries of its Reservation set forth in its Arizona Indian Water Settlement must first amend the settlement agreement to modify such restrictions in a manner in accordance with its terms. (2) Authorization, ratification and confirmation of amendments An amendment to an Arizona Indian Water Settlement to allow a Lease and Exchange Agreement is hereby deemed to be authorized, ratified, and confirmed in accordance with its terms without further need for congressional action. 6. Storage agreements (a) Authorization Notwithstanding section 2116 of the Revised Statutes (commonly known as the Indian Trade and Intercourse Act ; 25 U.S.C. 177 ) or any other provision of law, each Arizona Tribe is authorized to, subject to the approval of the Secretary under section 7(a), and has the sole authority to, enter into a Storage Agreement, on the condition that the facility shall be located in the Lower Basin in the State and is not in Navajo, Apache, or Cochise counties. (b) Applicable law Any Storage Agreement entered into under this section shall be in accordance with applicable Federal and State law. (c) Delegation of rights An Arizona Tribe may assign or sell any long-term storage credits accrued as a result of a Storage Agreement, on the condition that the assignment or sale is in accordance with applicable State law. (d) Effect on Arizona indian water settlements (1) In general This Act shall not be construed to amend any Arizona Indian Water Settlement that prohibits off-Reservation Storage Agreements. Before entering into a Storage Agreement pursuant to the authority set forth in this Act, an Arizona Tribe with a restriction on its authority to store its decreed water rights outside the exterior boundaries of its Reservation set forth in its Arizona Indian Water Settlement must first amend the settlement agreement to modify such restrictions in a manner in accordance with its terms. (2) Authorization, ratification and confirmation of amendments An amendment to an Arizona Indian Water Settlement Agreement to allow Storage Agreements, is hereby deemed to be authorized, ratified and confirmed in accordance with its terms without need for further congressional action. 7. Approval by the Secretary (a) Authorization The Secretary shall approve or disapprove any— (1) Lease or Exchange Agreement; (2) modification to a Lease or Exchange Agreement; (3) Storage Agreement; or (4) modification to a Storage Agreement. (b) Secretarial Agreements The Secretary is authorized to enter Lease or Exchange Agreements or Storage Agreements with an Arizona Tribe, provided the Secretary pays the fair market value for the Arizona Tribe’s reduced consumptive use. (c) Requirements (1) In general The Secretary shall not approve any Lease or Exchange Agreement, or any modification to a Lease or Exchange Agreement, any Storage Agreement, or any modification to a Storage Agreement that is not in compliance with— (A) this Act; and (B) the agreement entered into between the Arizona Tribe, the State, and the Secretary under section 10(a). (2) Permanent alienation The Secretary shall not approve any Lease or Exchange Agreement, any modification to a Lease or Exchange Agreement, or any Storage Agreement that permanently alienates any portion of any Arizona Tribe decreed water right. (d) Other requirements The requirement for Secretarial approval under subsection (a) shall satisfy the requirements of section 2116 of the Revised Statutes (commonly known as the Indian Trade and Intercourse Act ; 25 U.S.C. 177 ). (e) Authority of the secretary Nothing in this Act, or any agreement entered into or approved by the Secretary under this Act, including any Lease or Exchange Agreement or Storage Agreement, shall diminish or abrogate the authority of the Secretary to act under applicable Federal law or regulation. 8. Responsibilities of the Secretary (a) Compliance The Secretary, when approving a Lease or Exchange Agreement or a Storage Agreement under this Act, shall ensure such agreement complies with— (1) the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ); (2) the Endangered Species Act of 1973 ( 16 U.S.C. 1531 et seq. ); and (3) all other applicable Federal environmental laws. (b) Documentation The Secretary shall document any Lease or Exchange Agreement or Storage Agreement in the Water Accounting Report. 9. Agreement between an Arizona Tribe and the State (a) In general Before entering into the first Lease or Exchange Agreement or Storage Agreement, an Arizona Tribe shall enter into an agreement with the State that outlines all notice, information sharing, and collaboration requirements that shall apply to any potential Lease or Exchange Agreement or Storage Agreement into which the Arizona Tribe may enter. (b) Requirement The agreement under subsection (a) shall include a provision that requires the Arizona Tribe to submit to the State all documents regarding a proposed Lease or Exchange Agreement or Storage Agreement. 10. Agreement between an Arizona Tribe, the State, and the Secretary (a) In general Before approving the first Lease or Exchange Agreement or Storage Agreement under section 7, the Secretary shall enter into an agreement with the State and the Arizona Tribe that describes the procedural, technical, and accounting methodologies for any Lease or Exchange Agreement or Storage Agreement into which the Arizona Tribe may enter, including quantification of the reduction in Consumptive Use and water accounting. (b) NEPA The execution of the agreement under subsection (a) shall not constitute a major Federal action for purposes of the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq. ). (c) Effect Nothing in this Act shall prohibit the Secretary from agreeing with the Arizona Tribe and the State to a modification to an agreement entered into under subsection (a) (including an appendix or exhibit to the agreement) on the condition that the modification— (1) is in compliance with this Act; and (2) does not otherwise require congressional approval under section 2116 of the Revised Statutes (commonly known as the Indian Trade and Intercourse Act ) ( 25 U.S.C. 177 ) or any other provision of law. 11. No effect on Arizona Tribe decreed water rights (a) Temporary use A Lease or Exchange Agreement or Storage Agreement— (1) shall provide for the temporary use or storage of a portion of the Consumptive Use off of the Arizona Tribe’s Reservation; and (2) shall not permanently alienate the decreed water right. (b) Priority status (1) In general The lease or exchange of a portion of the Consumptive Use shall not cause that portion to lose or change its priority under the relevant decree. (2) Non-use Any non-use by a person who is a party to any Lease or Exchange Agreement or Storage Agreement with the Arizona Tribe shall not result in forfeiture, abandonment, relinquishment, or other loss by the Arizona Tribe of all or any portion of the decreed water right. (c) Reservation of rights The lease, exchange, or storage of a portion of the Consumptive Use shall not reduce or limit the right of the Arizona Tribe to use the remaining portion of the decreed water right on its Reservation. (d) Storage agreements Any Storage Agreement shall account for the quantity of water in storage off of an Arizona Tribe’s Reservation in accordance with applicable State law. 12. Allottee use of water (a) Interference The lease, exchange, or storage of a portion of the Consumptive Use shall not directly or indirectly interfere with, or diminish, any entitlement to water for an allottee under Federal or Tribal law. (b) Water rights of allottees The Secretary shall protect the rights of the allottees to a just and equitable distribution of water for irrigation purposes, pursuant to section 7 of the Act of February 8, 1887 (commonly known as the Indian General Allotment Act ) (24 Stat. 390, chapter 119; 25 U.S.C. 381 ) (referred to in this section as the Act ). (c) Relief under Tribal law Prior to asserting any claim against the United States pursuant to the Act, or any other applicable law, an allottee shall exhaust all remedies available under applicable Tribal law. (d) Relief under the indian general allotment act Following an exhaustion of remedies available under applicable Tribal law, an allottee may seek relief under the Act, or any other applicable law. (e) Relief from the secretary Following exhaustion of remedies available under the Act, or any other applicable law, an allottee may petition the Secretary for relief. 13. Consideration paid to Arizona Tribes An Arizona Tribe, and not the United States in any capacity, shall be entitled to all consideration due to an Arizona Tribe under any Lease or Exchange Agreement or Storage Agreement. 14. Liability of the United States (a) Limitation of liability The United States shall not be liable to an Arizona Tribe or to any party to a Lease or Exchange Agreement or Storage Agreement in any claim relating to the negotiation, execution, or approval of any Lease or Exchange Agreement or Storage Agreement, including any claim relating to the terms included in such an agreement, except for claims related to section 8(a). (b) Obligations The United States shall have no trust obligation or other obligation to monitor, administer, or account for— (1) any funds received by an Arizona Tribe as consideration under any Lease or Exchange Agreement or Storage Agreement; or (2) the expenditure of such funds. 15. Application (a) In general This Act shall apply only to the portion of the decreed water right that is available for use in the State. (b) Requirement The portion of the decreed water right described in subsection (a) shall not be used, directly or indirectly, outside the Lower Basin in the State or in Navajo, Apache, or Cochise Counties, unless such use is otherwise authorized pursuant to a congressionally approved Indian water rights settlement. (c) No effect on Navajo-Utah water rights settlement This Act shall not affect any provisions in the Navajo-Utah Water Rights Settlement Act, Consolidated Appropriations Act, section 1102 ( Public Law 116–260 , December 27, 2020), that authorize the Navajo Nation to allocate, distribute, and lease the Navajo water rights for any use on the Reservation in accordance with the Navajo-Utah settlement agreement, and applicable Tribal and Federal law or allocate, distribute, and lease the Navajo water rights for off-Reservation use in accordance with the Navajo-Utah settlement agreement, subject to the approval of the Secretary. 16. Rule of construction (a) In general Nothing in this Act establishes, or shall be considered to establish, a precedent in any litigation involving, or alters, affects, or quantifies, any water right with respect to— (1) the United States; (2) any other Indian Tribe, band, or community; (3) any State or political subdivision or district of a State; or (4) any person. (b) Effect Nothing in this Act exempts the implementation of a Lease or Exchange Agreement, or a Storage Agreement and the operation of applicable Colorado River System reservoirs from any requirements of applicable Federal environmental laws.