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<br />U.S. DEPARTMENT OF THE INTERIOR,
<br />OFFICE OF THE SECRETARY, '
<br />Washington, Dc, October 1,1987.
<br />
<br />Hon. MORRIS K. UDALL,
<br />Chairman, Committee on Interior and Insular Affairs,
<br />House of Representatives, Washington, DC., ,
<br />DEAR MR. CHAIRMAN: This is to present our views on H;R. 2642,
<br />the "Colorado Ute Indian Water Rights Settlement Act of 1987."
<br />On December 10, 1986, the two Colorado Ute Tribes, the State of
<br />Colorado, several other parties and representatives of the Federal
<br />Government entered into a "Final Settlement Agreement" for the
<br />purpose of settling the outstanding water claims of the tribes on
<br />several streams in southwest Colorado. In this instance, as is typi-
<br />cal in situations like this one, exercise of the 1868 priority date of
<br />the tribes' Federal reserved water rights claims could severely dis-
<br />rupt the existing regimen of water use on those streams. By way of
<br />compromise, and in an admirable display of community spirit, the
<br />tribes have agreed to forego this early priority date in return for
<br />water supplied from the Dolores and Animas-La Plata Projects.
<br />We support legislation to implement the December 10, 1986,
<br />Final Settlement Agreement. However, as presently drafted, H.R.
<br />2642 differs from the Final Settlement Agreement in several im-
<br />portant respects. We stand ready to work with the non-Federal par-
<br />ties on legislation consistent with our previous agreements regard-
<br />ing Ute Indian water rights and construction of the Animas-La
<br />Plata Project. '
<br />We want to emphasize the interests we have had in pursuing the
<br />Animas-La Plata Project. This Administration has long had as a
<br />standard for new water projects that the projected long-term bene-
<br />fits of the project, must at least equal its projected costs., Under this
<br />standard, the Animas-La Plata Project is not economically feasible
<br />at current discount rates although it would be considered economi-
<br />cally feasible at its originally authorized discount rate of 3.25 per-
<br />cent. '
<br />In evaluating' this project, we, have cOl)sidered the benefit/cost
<br />standard, non-Federal cost-sharing, and water rights. settlement
<br />concerns. We have, therefore, decided to participate in the Animas-
<br />La Plata Project because it combines Federal construction expendi-
<br />tures with non-Federal monies to produce' a project that provides
<br />for water development and settles the Indian water claims.
<br />The Animas-La Plata Project will provide a means to satisfy the
<br />water claims of the Colorado Ute tribes, while leaving intact the
<br />historical uses already in place on these streams. As. truste,e for
<br />these tribes, the Department of the Interior desires to see the
<br />tribes establish secure and valuable water rights that will be of
<br />true benefit to the tribes, rather than mere "paper" water rights.
<br />The project provides an opportunity to achieve these objectives.
<br />Without doubt, the single most controversial aspect of this bill is
<br />Indian water leasing. The bill provides for the tribes to have the
<br />opportunity to lease water provided by the settlement for off-reser-
<br />vation use both in the State of Colorado and out-of-state. We must
<br />emphasize here that the December 10, 1986,agreement provides for
<br />in-state leasing subject to Colorado procedural law, and for out-of-
<br />
<br />H.Rept. 100-932 0 - 88 - 2
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