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or validity of the rights of the United States or the State to use or permit use of Project Water, the
2 State shall promptly bring and diligently prosecute and /or defend judicial proceedings for the
3 determination of such dispute and shall take all other measures necessary toward the defense and
4 protection of the Project water supply. The United States, upon request of the State, will enter
5 into the proceedings to defend such rights.
6 (b) The construction of the Project Works, the allocation of the water supply from those
7 facilities to the Colorado Ute Tribes, and the provision of funds to the Colorado Ute Tribes in
8 accordance with section 16 of Public Law 106 -554, and the issuance of an amended final consent
9 decree by the State of Colorado as contemplated in subsection 18(c) of Public Law 106 -554 shall
10 constitute final settlement of the tribal claims to water rights on the'Animas and .La Plata Rivers
11 in the State of Colorado.
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13 7. METHOD OF PAYMENT FOR PROJECT CONSTRUCTION COSTS
14 (a) Reclamation has developed a Fiscal Year 2012 (FYI 2) Update to the May 2001 Interim
15 Cost Allocation using October 2011 price levels of the estimated Project construction costs. The
16 FYI Update to the May 2001 Interim Cost Allocation allocates the reimbursable costs of the
17 project among the Project beneficiaries based on the pro rata share of Project storage each
18 respective entity receives in Lake Nighthorse. The State's water capital obligation allocable to its
19 10,440 acre feet of Project water allocation in the FYI Update to the May 2001 Interim Cost
20 Allocation is $36,214,474 which includes' construction costs of $25,503,436 and estimated IDC
21 of $10,711,038 through January 31, 2012 and which takes into account Section 207 of Public
22 Law 108 -447 as amended. This amount is the State's Estimated Repayment Obligation.
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