TONGUE RIVER DAM Central to the implementation of the Compact is the repair and raising of the Tongue River Dam. It is fortuitous that the existing Tongue River Reservoir is located in a position to provide a firm water supply for the Northern Cheyenne Tribe. If the federal government were to provide a water supply to the Tribe as provided by the agreement, and the Tongue River Reservoir were not available for enlargement, costs to the federal treasury would be substantially greater. YELLOWTAIL RESERVOIR WATER ALLOCATION Another provision of the agreement allocates 30,000 acre-feet of water from the Bureau of Reclamation's Yellowtail Reservoir to the Northern Cheyenne Tribe. Water supply from Yellowtail Reservoir totals 1,057,000 acre-feet, with only 6,000 acre-feet currently under contract from the Bureau. It has been estimated by the U.S. Bureau of Reclamation that the nearby Crow Tribe's future use from the project may be as much as 480,000 acre-feet (this quantity is not intended as an estimate of the Crow Tribe's reserved water right), leaving over 500,000 acre-feet available for unallocated agricultural and industrial use (see Figure 1). Obviously, 30,000 acre-feet allocated to the Northern Cheyenne Tribe is an extremely small piece of this pie. Nonetheless, the agreement subordinates Northern Cheyenne use to any reserved water rights that are superior to the Bureau of Reclamation's water right at Yellowtail Reservoir. ENVIRONMENTAL MITIGATION AND ENHANCEMENT Montana, in cooperation with Ducks Unlimited and the U.S. Fish and Wildlife Service is developing an extensive wetlands mitigation and enhancement program. Ducks Unlimited has taken the lead in designing this program with about five million dollars allocated to enhancement features alone. COST-SHARE PROVISIONS Unfortunately, the negotiations that led to the introduction of this legislation were the first such negotiations governed by the Criteria and Procedures promulgated by the Department of Interior's Working Group on Indian Water Rights Settlements. These complex and rigid guidelines were developed without substantive input from those affected by their promulgation, and were a significant deterrent in reaching a costshare agreement. The federal negotiating team appointed by the Working Group supported the water rights settlement, including the cost-share, in testimony before the Montana Legislature. Indeed, the concept for the zero interest loan included in S.1607 came from the federal team. Only shortly before the Compact signing ceremony did Montana and the Northern Cheyenne Tribe learn that the federal government would refuse to sign the Compact. Apparently, the OMB continues to oppose the cost-share provisions of the agreement. Montana's financial contributions, discussed in greater detail below, are partitioned among the three primary cost components of the settlement: (1) the Tongue River Dam repair and enlargement, (2) the fish and wildlife enhancement project, and (3) the Tribal Development Fund (see Figures 2 and 3). While I have included a description of all three components in my testimony, it is the State of Montana's position that we have no responsibility to participate in the Tribal Development Fund. As a result of a breach of its federal trust responsibility to the Northern Cheyenne Tribe and as a trustee responsible for promoting the economic vitality of the tribe, the federal government has an obligation to provide a firm water supply to the Northern Cheyenne Tribe. The Settlement Act does this through the repair and enlargement of the Tongue River Dam. All new water associated with this project accrues to the Northern Cheyenne Tribe. The non-tribal water allocation from the project remains constant at 32,500 acre-feet, while the tribal water supply increases from 7,500 to 27,500 acre-feet. The repair of the Tongue River Dam allows the project to be operated more effectively and increases firm water supply. The incremental water supply is allocated entirely to the Northern Cheyenne Tribe. Montana receives 58 percent of the water supply from the dam repair project, while the Tribe receives 42 percent. Montana has agreed to contribute 58 percent of dam repair costs including $7.6 million directly to construction and construction administration and would repay an $11.5 million loan for project construction. In addition, Montana would provide existing project assets (amounting to $23.1 million) that are essential to the raising of the Tongue River Dam. The water supply associated with the raising of Tongue River Dam and the enlargement of the reservoir is allocated entirely to the Northern Cheyenne Tribe. While the State does not receive water from the enlarged project, it has agreed to contribute $1.6 million to construction administration for this part of the project. Clearly Montana's financial contributions to the Northern Cheyenne Indian Reserved Water Rights Settlement exceeds the benefits the State receives from the settlement. The Act includes a project to develop waterfowl wetlands habitat along the Tongue River and surrounding the dam. These activities would be carried out under the Federal Water Project Recreation Act which requires a 25 percent state contribution totalling $1.2 million. The funds authorized to be appropriated for the Tribal Development Fund ($21.5 million) are a federal obligation resulting from the breach of the United State's trust responsibility. The Tribe's estimate of its claims against the United States is significantly larger. Originally, the Tribal Development Fund included only $10 million. The difference, $11.5 million, had been a portion of Montana's contribution to project construction and was structured as a loan through the Small Reclamation Projects Act (SRPA). In accordance with the SRPA, loan repayments would have been deposited in the federal treasury. However, objections to the SRPA loan were voiced by OMB after the agreement had been approved by the Northern Cheyenne Tribal Council, the Montana Legislature, and in principle, by the federal negotiating team. As a result of this untimely and adamant opposition by OMB, the SRPA loan was reconfigured as a loan to the state from the Tribal Development Fund, to be repaid to that fund. Another concern that has been voiced is the precedent-setting nature of this costshare arrangement. Based on our research into past Indian water right settlements approved by Congress, I would conclude that Montana's contribution included in the Northern Cheyenne Indian Reserved Water Rights Settlement Act sets a most positive precedent. As an example, Appendix A shows that, in the Fort Hall settlement supported by the Administration, the State of Idaho contributed $500,000 and the federal government $22,000,000. In fact, there was no state contribution in two of the six settlements passed in the 101st Congress. I direct the committee's attention to previous Indian water rights settlements not to suggest that those settlements are inferior to the Northern Cheyenne agreement in regard to state contributions, but to show they demonstrate the unique contributions provided by non-federal entities to such settlements. It is impossible to apply the Criteria and Procedures across the board because each situation is so unique that cost-share provisions need to be evaluated on their individual merits. The Northern Cheyenne settlement includes a generous non-federal contribution and is worthy of enactment. Apparently there has also been some concern expressed that the federal government, under this Act, would be setting a precedent of funding the repair of non-federal dams. This precedent argument is specious since the Congress has already funded the rehabilitation of two state-owned dams in Montana through the SRPA program. From a broader perspective however, this argument is completely misapplied in the instance of the Tongue River Dam. Indeed, it is fortuitous for the federal government that a dam is in place on the Tongue River. Clearly, the enlargement of the Tongue River Reservoir is the least-cost alternative for supplying the water allocated to the Northern Cheyenne Tribe under this settlement. It is doubtful that many other nonfederal dams are positioned so as to provide a physical solution to contentious Indian reserved water right issues. SUMMARY The Northern Cheyenne Indian Reserved Water Rights Settlement Act of 1991 would establish a positive partnership among the State of Montana, the Northern Cheyenne Tribe and the United States. This partnership and the water supply provided under this Act are essential to the economic vitality of the Northern Cheyenne Tribe and rural economic development in southeastern Montana. Absent this Act, we may well be faced with the possibility of protracted and expensive litigation reminiscent of that which continues to embroil the Wind River Reservation in Wyoming. The State of Montana and the Northern Cheyenne Tribe remain committed to this settlement that has required years to negotiate; I would hope that Congress is now willing to enact legislation allowing this agreement to bear fruit. |