Central Arizona Project (CAP), Arizona; Water Allocations

AGENCY:

Office of the Secretary, Interior.

ACTION:

Notice of Modification to the Secretary of the Interior's Record of Decision, Publication of a Final Decision of CAP Water Reallocation.

SUMMARY:

The Department is rescinding the February 5, 1992, CAP Water Reallocation Decision that modified the March 24, 1983, CAP Water Allocation Decision. The Department is publishing a Final Decision of CAP Water Reallocation in accordance with the Arizona Water Settlements Act (Settlements Act).

FOR FURTHER INFORMATION CONTACT:

Randy Chandler, 623-773-6215 .

SUPPLEMENTARY INFORMATION:

I. Previous Notices Related to CAP Water

II. Background of CAP Water Reallocations

I. Previous Notices Related to CAP Water

Previous notices related to CAP water were published in the Federal Register (FR) at 37 FR 28082, December 20, 1972; 40 FR 17297, April 18, 1975; 41 FR 45883, October 18, 1976; 45 FR 52938, August 8, 1980; 45 FR 81265, December 10, 1980; 48 FR 12446, March 24, 1983; 56 FR 28404, June 20, 1991; 56 FR 29704, June 28, 1991; 57 FR 4470, February 5, 1992; 57 FR 48388, October 23, 1992; 65 FR 39177, June 23, 2000; 65 FR 43037, July 12, 2000; 67 FR 38514, June 4, 2002; 68 FR 36578, June 18, 2003; and 69 FR 9378, February 27, 2004. These notices and decisions were made pursuant to the authority vested in the Secretary of the Interior (Secretary) by the Reclamation Act of 1902, as amended and supplemented (32 Stat. 388, 43 U.S.C. 391), the Boulder Canyon Project Act of December 21, 1928 (45 Stat 1057), the Colorado River Basin Project Act of September 30, 1968 (82 Stat. 885, 43 U.S.C. 1501), and in recognition of the Secretary's trust responsibility to Indian tribes.

II. Background of CAP Water Allocations

In the Record of Decision published in the Federal Register on March 24, 1983, the Secretary, among other things, allocated CAP water for Indian uses, non-Indian municipal and industrial (M&I) uses, and the remaining amount for non-Indian agricultural uses. Subject to certain conditions, the CAP water for Indian uses was allocated to 12 Indian tribes for irrigation use or for maintaining tribal homelands. Also subject to certain conditions, the CAP water for M&I uses was allocated based on the State of Arizona's 1982 allocation recommendations for non-Indian entities that provided an amount of CAP water for M&I use to certain non-Indian entities, with the remaining amount of CAP water allocated for non-Indian agricultural use.

The CAP non-Indian agricultural water was allocated to 23 non-Indian irrigation districts or other agricultural entities. The CAP non-Indian agricultural water was allocated to each entity as a percentage of the non-Indian agricultural water supply that was available in any given year. Based on the 1983 decision, CAP water service contracts were executed with Indian tribes, which are two-party agreements between the United States and the Indian tribe. CAP non-Indian M&I water service subcontracts and CAP non-Indian agricultural water service subcontracts were executed with those entities desiring to enter into subcontracts for CAP water. The CAP water service subcontracts for the non-Indian M&I water and the non-Indian agricultural water are three-party subcontracts among the entity, the Central Arizona Water Conservation District (CAWCD), and the Bureau of Reclamation (Reclamation). Some of the entities that were allocated non-Indian agricultural water and M&I priority water elected to not contract for the offered allocations. After completing the initial subcontracting process, 29.3 percent of the non-Indian agricultural supply and 65,647 acre-feet of M&I water was not under contract.

Congress enacted the Salt River Pima-Maricopa Indian Community Water Rights Settlement Act of 1988 (102 Stat. 2558) (SRPMIC Act). Pursuant to section 11(h) of the SRPMIC Act, the Secretary was required to request a reallocation recommendation from the Arizona Department of Water Resources (ADWR) for the remaining non-Indian agricultural water that was not under contract. The Secretary was also required to reallocate the uncontracted CAP water for non-Indian agricultural use and to offer new or amendatory subcontracts for such water.

By letter dated January 7, 1991, ADWR recommended an allocation to the Secretary. The Secretary published a notice in the Federal Register on June 20, 1991 (56 FR 28404), inviting public comments on the proposed reallocation of CAP water. After considering the public comments, the Secretary published a final decision in the Federal Register on February 5, 1992 (57 FR 4470). That decision contemplated that new or amendatory CAP water service subcontracts would be offered soon thereafter.

CAP water service subcontracts for the reallocated water were not executed for several reasons, including but not limited to the following: (1) Some entities could not meet the financial feasibility requirements for receipt of CAP water; (2) lack of agreement on the form of the CAP water service subcontract to offer the entities, and (3) financial difficulties of the CAP non-Indian agricultural sector.

Beginning in the early 1990s, long-term utilization of the CAP water available for reallocation under the 1992 decision and from the uncontracted M&I water was a central issue in negotiations to resolve various operational and financial disputes between Reclamation and CAWCD. After attempts at negotiations failed, water contracting issues were included in litigation and a resulting stipulated settlement between the United States and CAWCD. To implement some of the conditions contained in the stipulated settlement, new Federal legislation was required.

After the 1992 decision but before Federal legislation was enacted, the Secretary published in the Federal Register on June 4, 2002 (67 FR 38514), a notice of proposed modification to the 1983 decision. The 1983 decision provided that the M&I allocation can be made more firm by execution of feasible non-potable effluent exchanges with Indian tribes and the M&I allocation was subject to adoption of a pooling concept whereby all M&I entities share in the benefits of effluent exchanges. The pooling concept provision was included in the CAP M&I water service subcontracts. The 2002 proposed modification to the 1983 decision was to delete the mandatory effluent pooling provision in M&I subcontracts with the cities of Chandler and Mesa and from other M&I water service subcontracts upon request. That provision in the CAP M&I water service subcontracts was an impediment to effluent exchanges and effective water management in central Arizona. The final decision was published in the Federal Register on June 18, 2003 (68 FR 36578), that deleted the mandatory effluent pooling provision, after review and consideration of public comment.

On December 10, 2004, the Settlements Act was enacted (Pub. L. 108-451). The Settlements Act provides, among other things, for (1) A final allocation of CAP water, with a CAP supply permanently designated for Indian uses and a CAP supply designated for non-Indian M&I or non-Indian agricultural uses, (2) a reallocation by the Secretary of 65,647 acre-feet of currently uncontracted CAP M&I water to 20 specific M&I entities, (3) ratification of the Arizona Water Settlement Agreement (the “master agreement”) among the United States, ADWR, and CAWCD, which provides a statutory-based framework to enable the CAP non-Indian agricultural districts to relinquish existing rights to the delivery of CAP non-Indian agricultural priority water under their CAP water service subcontracts, including their rights, if any, to the reallocated water, and (4) a reallocation of the relinquished and uncontracted non-Indian agricultural supply to various Arizona Indian tribes and ADWR for future M&I use. The Settlements Act provides, in section 111, that certain actions, including the allocation decisions referenced herein “shall be void” if “the Secretary [of the Interior] does not publish a statement of findings under section 207(c) by December 31, 2007.” The Settlements Act also repeals section 11(h) of the SRPMIC Act. To reallocate the CAP non-Indian agricultural water and the uncontracted CAP M&I water in accordance with the Settlements Act, it is necessary to modify the 1983 decision, as amended and supplemented, rescind the 1992 decision, and publish a final reallocation decision.

Decision

The 1992 CAP Water Reallocation Decision is rescinded as of the date of this notice. The Final Decision of CAP Water Reallocation, in accordance with the Settlements Act that modifies the 1983 CAP Water Allocation Decision, as amended and supplemented, follows. Except as modified herein, the 1983 CAP Water Allocation Decision, as amended and supplemented, shall continue to be in full force and effect.

Final Reallocation Decision

This final reallocation decision is effective as of the date of this notice subject to section 111 of the Settlements Act and is made to memorialize the reallocation of CAP water in accordance with the Settlements Act, as set forth below:

Reallocation to Arizona Indian Tribes

(A) I hereby reallocate 197,500 acre-feet of agricultural priority water per year pursuant to section 104(a)(1)(A) of the Settlements Act, made available pursuant to the master agreement for use by Arizona Indian tribes, of which

(i) 102,000 acre-feet per year is hereby reallocated to the Gila River Indian Community;

(ii) 28,200 acre-feet per year is hereby reallocated to the Tohono O'odham Nation; and

(iii) 67,300 acre-feet per year is hereby retained for reallocation to Arizona Indian tribes, subject to the following conditions as specified in section 104(a)(1)(B) of the Settlements Act.

(B) Conditions: The reallocation of agricultural priority water made herein pursuant to section 104(a)(1)(A)(iii) of the Settlements Act shall be subject to the conditions that

(1) Such water shall be used to resolve Indian water claims in Arizona, and may be allocated by the Secretary of the Interior to Arizona Indian tribes in fulfillment of future Arizona Indian water rights settlement agreements approved by an Act of Congress. In the absence of an Arizona Indian water rights settlement that is approved by an Act of Congress after the date of enactment of the Settlements Act, the Secretary shall not allocate any such water until December 31, 2030. Any allocations made by the Secretary after such date shall be accompanied by a certification that the Secretary is making the allocation in order to assist in the resolution of an Arizona Indian water right claim. Any such water allocated to an Arizona Indian tribe pursuant to a water delivery contract with the Secretary under this clause shall be counted on an acre-foot per acre-foot basis against any claim to water for that Tribe's reservation.

(2) Notwithstanding clause 1 above and in accordance with section 104(a)(1)(B)(ii) of the Settlements Act, I hereby retain 6,411 acre-feet of water per year for use for a future water rights settlement agreement approved by an Act of Congress that settles the Navajo Nation's claims to water in the State of Arizona. If Congress does not approve this settlement before December 31, 2030, the 6,411 acre-feet of CAP water shall be available to the Secretary of the Interior under clause 1 above; and

(3) The agricultural priority water shall not, without specific authorization by Act of Congress, be leased, exchanged, forborne, or otherwise transferred by an Arizona Indian tribe for any direct or indirect use outside the reservation of the Arizona Indian tribe.

(C) In consultation with Arizona Indian tribes and the State of Arizona, the Secretary of the Interior shall prepare a report for Congress by December 31, 2016, that assesses whether the potential benefits of section 104(a)(1)(A)(iii) of the Settlements Act are being conveyed to Arizona Indian tribes pursuant to water rights settlements enacted subsequent to the Settlements Act. For those Arizona Indian tribes who have not yet settled water rights claims, the report shall describe whether any active negotiations are taking place and identify any critical water needs that exist on the reservation of each such Indian tribe. The report shall also identify and report on the use of unused quantities of agricultural priority water made available to Arizona Indian tribes under section 104(a)(1)(A)(iii) of the Settlements Act.

2. Reallocation to ADWR

(A) I hereby reallocate up to 96,295 acre-feet of agricultural priority water per year to ADWR, pursuant to section 104(a)(2)(A) of the Settlements Act and subject to subparagraph 9.3 of the master agreement, to be held under contract in trust for further allocation pursuant to section 104(a)(2)(C) of the Settlements Act. Direct use of the agricultural priority water by ADWR is prohibited under the master agreement and this notice.

(1) Further Allocation: In accordance with section 104(a)(2)(C) of the Settlements Act, before water may be further allocated the Director of ADWR shall submit to the Secretary of the Interior a recommendation for reallocation. As soon as practicable after receiving the recommendation, the Secretary shall carry out all of the necessary reviews of the proposed reallocation in accordance with applicable Federal law. If the Director's recommendation is rejected, the Secretary shall request a revised recommendation from the Director of ADWR and proceed with any reviews required.

(B) The reallocation of agricultural priority water to ADWR pursuant to section 104(a)(2)(A) and section 104(a)(2)(C) of the Settlements Act is subject to the master agreement, including certain rights provided by the master agreement to water users in Pinal County, Arizona.

(C) The agricultural priority water reallocated to the ADWR shall be subject to the condition that the water retain its non-Indian agricultural delivery priority.

3. Reallocation of Uncontracted Central Arizona Project M&I Priority Water, as recommended by the Director of ADWR

(A) I hereby reallocate 65,647 acre-feet of uncontracted M&I water per year to the State of Arizona entities, pursuant to section 104(2)(D)(b)(1) of the Settlements Act, as shown in the following Table 1—Uncontracted M&I Water.

4. Contracting for Reallocated Water

(A) I hereby direct the Commissioner of Reclamation, through his Regional Director, Lower Colorado Region, Boulder City, Nevada to proceed, in accordance with the Settlements Act, with offering to enter into contracts, amendments to contracts, subcontracts, or amendments to subcontracts for the delivery of the agricultural priority water to the Arizona Indian tribes as described in this notice, the agricultural priority water to ADWR as described in this notice and in accordance with the master agreement, and the uncontracted M&I water to entities as described in Table 1 of this notice.

(B) If the Secretary is precluded under applicable Federal law from entering into a subcontract with an entity identified in Table 1 of this notice, then the Secretary shall request a revised recommendation from the Director of ADWR and reallocate and enter into a subcontract for the delivery of water in accordance with section 104(b)(2)(B) of the Settlements Act and section 4 (A) of this notice.

DATES:

Effective Date: This Final Reallocation Decision is effective as of the date of this notice and is revocable under the applicable provisions of the Settlements Act. In the event that a statement of findings is not published in the Federal Register by December 31, 2007, as required by section 207(c) of the Settlements Act, this Final Reallocation Decision and all decisions made herein will, be void and automatically revoked as of January 1, 2008, and shall have no force or effect as of that date.