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OOr8'lE Federal Regisler/Vol. 64, No, 2ID/Monday. November I. J999/Rules and Regulations 58991 Indian tribes with contracts for delivery of CAP water have uli.\izeQ their statutory right to lease or transfer water. ~-1ore specJfical!y, the A~ Chin. Fort McDowdl. Tohono O'odham. Salt River, and Yavapai Prescott tribes have leased or transfen'ed CAP walef. Commenr: lndian tribes should receive compensation for their unused or undeveloped tribal willer resources because of the Federal government's f<lilurr. to provide the tribes with the necessary assistance to fLllly develop their water resources. Response: The issue of compensating the tribes in connecrion with the development of tribal water rights is beyond the scope of this rule. Comment: The Department should permit tribal governmenrs to market their Central A.rizona Project altocat\Qfls on the same basis as the Stale. Central Arizona Water Conservation District's (CA WCD) non-Indian subcontractors have the capability to tak.e direct delivery of CAP water but have no\ taken delivery of substantial quantitles, primarily for .economic r~asons. Tribes with CAP allocations, with the exception of the Ak-Chin lndian Communitv, are not able to take delivery orv put to use any substantial qtlantity of CAP water because the distribution and delivery systems that are needed to allow the tribes to put this water 10 use have not been constructed. Response: We reiterate Ihat we arc encouraging Ihe Lower DJvision States to enact measures and take actions ttlat wilt aBo'N ,he tribes to participate in opportunities covered by this rule. One such example of tribal participation in a Slorage and Interstate Release Agreement would be affording tribes the opportunity to develop und~rground storage facilities where Colorado River water could be stored. In addilion, we note that the State of Arizona is exploring the use of facilities on lribal lands for storage of Color::1do River water. Thus, tribes could participate by lellsing the use of these facilities to the storing entity. Moreover, this rule does not speCifically address or pr~clude independent actions by the Secretary regarding tribal storage and water transfer activities. As stated above, we feel that there has been progress in helping the tribes create irrigation infrastructure or otherwise put their CAP water to llse and is committed to moving forward wHh this program. Only authorized entities can store water under this rule to support an interstate water transaction. No holders of CAP allocations have a right to store this water for an interstate transaction unless they can qualify as an authorized entity under this rule. Only unused water that ls not requested by an entitlement holder (including tribes.) can b~ ::otored 10 SLlpport a Storage and Interstate Release Agreement With respect to the development of ICUA, the rule requires the Storage and lnterstate Release Agreement to desc.ribe the notice given to entitlement holders, including Indian tribes. of opportunities to participate in the development of ICUA. Ground Waler Issues Comment: Because banked water is fungible, the rule should address both intrastate and interslate water storage to preclude a Sturing State from circumventing any restrictions that the Depanmem might impose on the storage or recovery of water stored under an Interstate Storage Agreement (now termed a "Storage and Interstat~ Re\e.ase Agreement"). Several respondents expressed concern that an authorized entity may store water in an aquifer that is hydraulically connected to an aquifer Ihat holds tribal water. Response: The rule specifies in 9 414.3(c) thaI the Secretary will consider various factors in reviewing a proposed Storage and Interstate Release Agreement. including potential effects on trust resources, potential effects on entitlement holders, which includes Indian tribes, and environmental impi.\CL'i. We reilemte that intrastate transactions are nut covered under [his rule. Commem: One respondent stated that the rule should expressly address the legat status of banked CAP water. The respondent is concerned [hat the banked water will be considered CAP water under Federal law and non-Indian water users in Arizona will accrue millions of acre-feel of credits With the sanction of Reclamation. The suhsC'quent recovery of (he stored water will result in significant increases in ground water pumping over and above tbat currently authorized in ilccordance with State law and [he tribes might be precluded from pumping the remaining ground waler reserves because those reserves will increasingly take on the character of CAP water. Response: As noted in 3 414.3(c), the potentia! effects of the proposed measures on the environment. the economy, and tnlst resources are among the factors the Secretary will consider when reviewing the proposed Storage and Interstate Release Agreement. Comment: Revise the rule to incorporate the acre-foot for acre-foot ground water pumping restrictions from the amended CAP master repayment contract and the CAP agricultural subcontracts. Reclamation has a trust responsibility (0 protect lndian ground water from continued ground water mining by non-Indian intere.sts. . Response: Nothing in this regu!i.HI0n modifies the ground water protections found in the CAP contracts or limits the Department's ability to protect trust resources. Also. as noted in ~ 414.3{c). the potential effects of the proposed measures on the environment. the economy, and trust resources are among (he factors the Secretary will consider when reviewing a Storage and interstate Release Agreement. Subsidies Comment: Several respondents stated that the Department should not allow extra non-reimbursable expenses 10 occur in storing water or delivering it to a new location. There were also 5uggestions that, with respect to Arizona, revenue from the Interstate Storage Agreement (now termed a "Storage and Interstate Release Agreement") should be collected to help repay CAWeD's debt to the United States for the CAP. Response: We agree that a proposed Storage and Interstate ReleaS€'. Agreement cannot obligate the United States to incur extra non-reimbursOlble expenses to store water or deliver it to new locations. The Secretary will review the provisions of every proposed Storage and In'efstl:ltc Release Agreement for its flnOlncial impacts on the United Stales and will not execure any agreements that may have adverse financial impacts on the United States. In addition. the United States is currently s~ekjng 10 resolve the recovery of CAWeD's debt to the United States. Power Issues Comment: Sevefell respondent<; stated that Reclamation should analvze the impacts of the rule on power customers in the State of Arizona. When water passes through the Hoover and Davis generalOrs on Ihe way to storage in Arizona, there will be additional power production but CA WCD will incur increased pumping costs to move the water to storage. When stored water is withdrawn by a Nevada entity in the future. less water will pass lhrollgh the Hoover and Davis generalors, resulting in less power prodllction at [hose dams. Wh~n Ar\7.ona ground water pumpers who take CAP water through in-lieu storage are required to go back to ground water pumping, they mOlY require more power during years when stored water is withdrawn from the bank and generation is reduced at Hoover and Davis Dams. Tile rule should provide for compensation of power Customers to protect them from subsidizing water banking.