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. . their decreed water rights off-reservation, subject to applicable law. Last, the state agreed to support and contribute to tribal development fund accounts which would provide the tribes with the resources necessary to develop their water rights. The federal cost-share demand was the first major issue which had to be addressed by the parties. In 1985, Congress had appropriated $1 million for construction of the Animas-La Plata Project, but conditioned this appropriation on a non-federal cost-share agreement being in place by June 30, 1986.11/ When the negotiations commenced, the federal negotiators made it clear that federal approval of a cost-share plan would also be contin- gent upon a final settlement of the Indian reserved water rights claims. With the June 30, 1986, deadline looming, the parties struggled to reach a cost-share agreement satisfactory to the Department of Interior and the Office of Management and Budget and a settlement agreement on the reserved water right claims satisfactory to all other parties to the litigation. Meeting these goals proved difficult; ultimately the state and tribes decided to negotiate without the federal government and to attempt to reach agreement among themselves. In March 1986, Col- orado and the two Ute Tribes were successful in reaching an Agreement in Principle on all matters -~ non-federal cost-sharing and financial participation in the construction of the Animas-La Plata Project, quantification of the Indian reserved water right claims on each of the rivers, and a balance of the thorny legal issues concerning marketing of Indian reserved water rights. In June, the federal government was asked back to the nego- tiating table. Their efforts proved to be successful, and on June 30, 1986, the State of Colorado, the New Mexico Interstate Stream Commission, several Colorado and New Mexico water user entities, the two Ute Indian Tribes and the Secretary of the Interior signed a binding cost-share agreement for the construc- tion of the Animas-La Plata project.12/ By signing this agree- ment, the Secretary of the Interior certified that the non- federal cost-share contributions were reasonable and this certi- fication allowed the federal release of the first $1 million for construction of the Animas-La Plata Project. To justify the economics of the cost-share agreement to the Office of Management and Budget, the Department of the Interior relied on a project cost-benefit analysis which considered off-reservation tribal leasing of water. The parties to the state water court litiga- tion also agreed to a set of principles which established the parameters of the negotiated settlement of the reserved water right claims. -5-