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BOR-WCAOS SD ID:970-385-6539 . MAY 17'96 . 10:28 No.OOl P.09 1 Summary The St~te of Color~do h~s estim~ted the potential effect of outstanding Indian claims on non.lndilll\ water rights and predicted that all non. Indian irrigation In the ManCOl and La Plata River drainages could be eliminated iC Colorado Ute Tribal water rights el~ims were Cully exercised. During dry yem. the Tribes IVould e"ercise senior wlIter rights to vinually all available water on nwncrous rivers and Stn:OlIlIS in the San Juan River B~sin. It WDS estimated thllt more than 34,000 acres oC land irrigated by non. Indians could be advc:nely impDeted if ~ settlemcnt oC Tribal water righlll cl~ims was not achieved. For years, the Tribes pursued an equitable settlement oC their water righll claims in these river drain aces. In the early 1980's, discussions were initiated to achieve a negotiated settlement of the claims. After continued negotiations. the Tribes and other panics signed the fmal Settlement Agreement on December 10, 1986. Spcc:ifie legislation. the Settlement Act to implement the Settlement Agreement, was enacted by the U.S. Congress on November 3, 1988. The Scttlemcnt Agreement ~1s for availability oC Project water by January I, 2000. to avoid potential litigation or renegotiation oC the Tribal water rights claims. In the 1996 Energy and Water Appropriations Act, the U,S. Congress directed the Secrewy of the Interior to proceed "without delay" with the consuuction of the Project in conConnance with the 1991 Biological Opinion. Cost Sharing and Project Phasing On August IS. 1985, the U.S. Conarcss in Public Law 99.88 appropriated $1 million for design and construction of the Project. The use of those funds was contingent upon the completion by June 30, 1986. of a binding, FedcraUnon.Federal cost.sharing agreement satisfactory to the Secretary of the Interior. Consequently, in late 1985, the Project proponents and the States of Colorado and New Mexico entered into negotiations for a cost sharing agreement, The Federal and non.Federal entities signed the Cost Sharing Agreement on June 30, 1986, and the Settlement Agreement on December 10, 1986. A principal elell1Cllt of the Cost Sharing Agreement and the Indian water richu seUlcment was dividing constrUction of the Project into two phases, Phases I and IL and associated con-sharing obligations. The cost of eonsttucting Phase 1 would be shared by Federal and non.Federal Project participants. As mentioned above. Phase I has since been divided into Staae A and Stage B to accommodate the existing depletion limit of 57,100 acre.feet arising from endangered species conecrns, while allowing for the possibility of additional waler availability pending the outcome of the 7-yw research study for endangered fish. Phase 1. Stage A has becn designed to have independent utility even if Phase B is never completed. Construction of Phase II would be the responsibility of non.Federal Projcc:t panicipanlS. TIle Cost Sharing Agreemcnt also establishes a T ;lbal Development Fund and other Projcet financial arrangements. It specifics that the Tribes, under provisions oCFedcrallaw. can lease or temporarily dispose of water to the cxtcnt pcnniued by State and Federallaws. interstlite compacts, and international treaties. ENVIRONMENTAL CONSIDERATIONS AND REGULATORY COMPLIANCE Lands Reclamation's clasSIfication uf Project lands was completed in the carll' 1970's and recognized three arable (suitable for fanning) land classes. On January 19. 1982, the Secretai)' of the Interior ccnified Ihal Reclllltlation had eompleled an adequate soil SUlVcy nnd classification of lands to be served by the Project. In 1986, previous legislation was amended by Public Law 99.294: the law mandated an S.B