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<br />k:, ,1 avoid potential litigation or renegotiation of the Tribal water rights claims, As previously <br />I " stated, in the 1996 Energy and Water Appropriations Act, the u.s. Congress directed the <br />Secretary of the Interior to proceed "without delay" with the construction of the Project in <br />conformance with the 1991 Biological Opinion. <br /> <br />On August 15, 1985, the U.S. Congress in Public Law 99-88 appropriated $1 million for <br />design and construction of the Project. The use of those funds was contingent upon the <br />completion by June 30,1986, ofa binding, Federal/non-Federal cost-sharing agreement <br />satisfactory to the Secretary of the Interior. Consequently, in late 1985, the Project <br />proponents and the States of Colorado and New Mexico entered into negotiations for a cost <br />sharing agreement. The Federal and non-Federal entities signed the Cost Sharing Agreement <br />on June 30, 1986, and the Settlement Agreement on December 10, 1986, <br /> <br />A principal element of the Cost Sharing Agreement and the Indian water rights settlement was <br />dividing construction of the Project into two phases, Phases I and IT, and associated cost- <br />sharing obligations. The cost of constructing Phase I would be shared by Federal and non- <br />Federal Project participants, As mentioned above, Phase I has since been divided into Stage <br />A and Stage B to accommodate the existing depletion limit of 57, 1 00 acre-feet arising from <br />endangered species concerns, while allowing for the possibility of additional water availability <br />pending the outcome of the 7-year research study for endangered fish. Phase I, Stage A has <br />been designed to have independent utility even if Phase B is never completed. Construction of <br />Phase IT would be the responsibility of non-Federal Project participants. The Cost Sharing <br />Agreement also establishes a Tribal Development Fund and other Project financial <br />arrangements. It specifies that the Tribes, under provisions of Federal law, can lease or <br />temporarily dispose of water to the extent permitted by State and Federal laws, interstate <br />compacts, and international treaties. <br /> <br />In 1988, the U.S. Congress enacted the Settlement Act to settle outstanding water rights <br />claims of the Tribes. The Settlement Act was the culminating event of years of effort and <br />negotiation by the Tribes and non-Indian water users to settle outstanding water rights claims <br />by the Tribes in the Animas and La Plata Rivers drainages, as well as in other rivers and <br />streams arising on or flowing through the Tribal reservations. <br /> <br />The Settlement Act mandates delivery of Project water to the Tribes by January 1, 2000, to <br />avoid future litigation or renegotiation of Tribal water rights claims. Final settlement of the <br />Tribes' reserved water rights claims on the Animas and La Plata Rivers is subject to the <br />following conditions in the Settlement Act: <br /> <br />, ,~ <br /> <br />· Ridges Basin Reservoir, Long Hollow Tunnel, and Dry Side Canal to the turnout <br />to Dry Side Lateral are to be completed so as to enable delivery of water to the <br />Tribes on or before January 1,2000. These features are included in Phase I. <br /> <br />· If those features are not completed by January 1, 2000, then by January 1, 2005, <br />the Tribes must elect to either retain the Project water rights or commence <br />litigation or renegotiation of their pending reserved water rights claims. <br /> <br />18 <br />