Full Committee Hearing- S. 3563

The purpose of the hearing is to receive testimony on S. 3563, to authorize the Secretary of the Interior to conduct studies to determine the feasibility and environmental impact of rehabilitating the St. Mary Diversion and Conveyance Works and the Milk River Project, to authorize the rehabilitation and improvement of the St. Mary Diversion and Conveyance Works, to develop an emergency response plan for use in the case of catastrophic failure of the St. Mary Diversion and Conveyance Works, and for other purposes.

Witness Panel 1

The Honorable Denny Rehberg

United States Congressman

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Witness Panel 1

The Honorable Denny Rehberg

Mr. Chairman, thank you for calling this oversight hearing to discuss the important rehabilitation that needs to be done to the St. Mary Diversion and Conveyance Works and the Milk River Project. By being here today you will hopefully gain an even better understanding of the critical nature of this project. I would additionally like to thank Senator Burns for working together with me to make this hearing happen in Havre today.

As you know, I have introduced legislation in the House, H.R. 5705, that is identical to Senator Burns' bill, in an effort to make this important project and reality.

Over 100 years ago, the United States government recognized the benefit of agriculture production in this region and subsequently the Bureau of Reclamation made significant investments in infrastructure along the St. Mary and Milk River Basins. Due to the flow pattern of the Milk River, an agreement was also entered into in 1921 that allocated water to both the United States and Canada. This agreement is just one example of the importance -- not only nationally but internationally -- of this stretch of water.

However, 100 years have certainly taken a toll on these facilities. The St. Mary's diversion is worn out and in serious need of modernization and rehabilitation. This legislation would not only authorize the rehabilitation and improvement of the St. Mary Diversion and Conveyance Works in the best manner possible but would also ensure that we develop an emergency response plan in case the facilities should ever fail.

The Milk River is a lifeline to northern Montana. Our agriculture, wildlife and small communities are all dependent upon the fair and reliable delivery of water. This project is one of the most complex Bureau of Reclamation projects in the country as it includes federal, tribal, international and state components. With so many entities involved, it is vital that we take the necessary steps to ensure these facilities continue to work.

I look forward to hearing from the rest of our witnesses and I hope this hearing will enable us to push this critical legislation through the House and Senate. Thank you.

Witness Panel 2

Lieutenant Governor John Bohlinger

Co-Chair

St. Mary Rehabilitation Working Group

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Witness Panel 2

Lieutenant Governor John Bohlinger

Chairman Domenici, Ranking Member Bingaman, members of the Energy and Natural Resource Committee, my name is John Bohlinger. I am Montana’s Lt. Governor, and for the past two years I have had the privilege of serving with Mr. Randy Reed as co-chair of the St. Mary Rehabilitation Working Group.

As Montana’s Lt. Governor I welcome you to our state. I thank you for the opportunity to discuss the critically needed rehabilitation of the St. Mary Diversion Works, and to address associated concerns of the Blackfeet Tribe, the Fort Belknap Indian Community, and the Milk River basin. I would also like to express my thanks to Senator Baucus, Senator Burns and Congressman Rehberg for making this issue a priority in the halls of Congress.

I am here today as Governor Schweitzer’s representative, and as the spokesperson for the State of Montana.

Speaking directly to Senate Bill 3563, I would like to acknowledge the role the St. Mary Working Group has played in crafting this legislation. The sixteen members of the Working Group represent a broad partnership of stakeholders; including, the Milk River Irrigation Districts, the Blackfeet Tribe, the Ft. Belknap Indian Community, municipalities, county governments, business interests, and recreational and fishery interests in the Milk River basin.

The catalyst for bringing the Working Group together has been the simple understanding of a shared fate: the negative impacts of failure will be borne by all, just as the benefits of success will be shared by all. Senate Bill 3563 is the culmination of three years of hard work by the St. Mary Working Group and the State of Montana.

We also recognize that the entirety of the St. Mary Diversion Works is located within the boundaries of the Blackfeet Indian Reservation. As such, the sovereignty of tribe must be recognized and respected as a solution is crafted.

The St. Mary Diversion Works are as old the Bureau of Reclamation itself. Energy to construct the 30-mile canal system was provided by steam, horse, and manual labor. Now—after almost 100 years of service—the St. Mary system has reached the end of its useful life.

The steel siphons are plagued with slope instability and are leaking. The five concrete drop structures have deteriorated to the point of rubble. Slides and slope failure is widespread along the canal route. It is not a question of if—but when—the system will fail.

Mr. Chairman, loss of this infrastructure would have devastating economic and social impacts to the Milk River basin and State of Montana. The St. Mary Diversion Works support over 10 percent of Montana’s irrigated agricultural economy.

Without water from the St. Mary River the Milk River would run dry six out of every ten years, and the impacts would extend beyond agriculture. Multiple Hi-line communities depend upon St. Mary Diversion Works for their municipal water. Bowdoin National Wildlife Refuge also depends upon water from the St. Mary River. A sudden failure of the system would result in environmental damage to the St. Mary’s watershed on the Blackfeet Reservation—in a culturally sensitive area that contains critical habitat for the threatened cutthroat and bull trout.

Also at stake is the United States’ water right for the St. Mary River under the 1909 Boundary Waters Treaty. A failure of the St.Mary Diversion Works would preclude the United States from exercising its entitlement to a share of the St. Mary River.

The State of Montana has taken a leadership role and contributed over $1.9 million towards preliminary engineering, economic studies, and administrative and technical support to the Working Group. At the request of the Schweitzer Administration, the State Legislature authorized $10 million in non-federal cost share for reconstructing the St. Mary Diversion Works.

One of the most important provisions in S.3563 is the establishment of an affordable cost share agreement for water users who hold repayment contracts with the Bureau of Reclamation. The 1905 authorization for the St. Mary Diversion Works is for the single purpose of irrigation. As a result nearly 100% of the cost to operate and maintain the diversion infrastructure has been borne by irrigators.

A recent study demonstrates that 32% of the annual economic benefit derived from the St. Mary system accrues to irrigated agriculture. The remaining 68% accrues to the public in the form of municipal water, recreation, and fish and wildlife benefits.

In 1905, the Secretary of the Interior authorized construction of the St. Mary Diversion Works in order to provide a stable source of water for irrigation to the lower Milk River valley. As a result of this early 20th century project, settlers moved to the valley and a vibrant regional economy based on agriculture grew out of a dry prairie landscape.

The United States Government owns these facilities and it is time Congress authorized the Bureau of Reclamation to rehabilitate the system in a timely and cost efficient manner. The solution must respect the sovereignty of Blackfeet Tribe, recognize the broad range of public benefits that accrue from the water, and be affordable to irrigators and municipalities.

Again, I thank you for the opportunity to testify.
Mr. Randy Reed

Co-Chair

St. Mary Rehabilitation Working Group

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Witness Panel 2

Mr. Randy Reed

Chairman Domenici and distinguished members of the Senate Energy and Natural Resources Committee

Welcome to Montana and thank you for holding this field hearing in Havre, Montana to discuss the critical need to rehabilitate the St. Mary Diversion Works of the Milk River Project and, address associated concerns of the Blackfeet Tribe, Ft Belknap Indian Community, and the Milk River Basin.

My name is Randy Reed. I am the Co-Chair of the St. Mary Rehabilitation Working Group with Montana Lt. Governor John Bohlinger.

I would like to express my thanks and sincere appreciations to Senator Burns, Senator Baucus and Representative Rehberg. As soon as Montana’s Congressional Delegation became aware of the seriousness of the problems they took on the issue as a top priority.

My great grandfather homesteaded in the Milk River Valley and was among the founders supporting the construction of the Milk River Project at the turn of the 20^th century. Irrigation allowed my great grandfather to settle in Northern Montana and endure. I began farming and ranching in 1984 after graduating from Montana State University with an Agricultural Business Degree. Today, my family benefits from these same water resource facilities and we are able to raise irrigated certified seed potatoes, alfalfa hay and malt barley. We also rely on the project for our drinking water and enjoy the many recreational opportunities supported by the St. Mary Diversion Works.

Senate Bill 3563 recognizes the critical need to rehabilitate the St. Mary Diversion and Conveyance Works. A system wide investigation showed critical shortcomings in the system infrastructure and operation impacts to the environment. The steel siphons are plagued with slope stability problems and leaks, and the concrete in the hydraulic drop structures is severely deteriorating. Landslides along the canal and the deteriorated condition of the structures make the canal unreliable today as a water source.

The State of Montana has spent over half a million dollars to prepare preliminary engineering and economic studies. S.3563 addresses the immediate need to begin the final planning and environmental analysis required to reconstruct the facilities. The bill also allows Reclamation to develop a “strategic plan” and reimbursable funding mechanism that provides critical support should a catastrophic failure occur prior to rehabilitation. It is time for us to be “pro-active” on these issues rather then “reactive”.

The proposed legislation addresses a core issue – cost-share. The ability of irrigators to pay for capital investment represents the crux of the financial crisis associated with this project. As originally authorized, the St. Mary Diversion Works are operated for the single purpose of irrigation. As such, over the last 90 years, nearly 100% of the cost to operate and maintain the diversion infrastructure has been borne by irrigators within the eight irrigation districts of the Milk River Project

Reclamation’s 2005 Current Use Benefits Analysis showed large public benefits accrue from the existence of the St. Mary Diversion Works. A recent preliminary economic study authored by Dr. John Duffield shows that approximately 32% of the annual economic benefit associated with the by the St. Mary Diversion Works accrue to irrigated agriculture. The remaining 68% accrues to the public in the form of municipal water, recreation, fish and wildlife, and extensive riparian areas. However, the 1905 authorization does not reflect this new reality. As a result, irrigators within the Milk River Project are being asked to subsidize the Nation for benefits the public enjoys.

Although rehabilitation of the St. Mary Diversion Works is at the heart of Senate Bill 3563, the proposed legislation addresses other water related needs in the St. Mary and Milk River Basin. S. 3563 contains provisions to address project related concerns on the Blackfeet Reservation and provides funding for the Ft. Belknap Indian Community to study the feasibility of building a rural water system on their reservation. Senate Bill 3563 also authorizes Reclamation to prepare a feasibility study on the need to rehabilitate water diversion and delivery structures within the Milk River Project.

Mr. Chairman, the people of the Milk River Basin and the State of Montana are not looking for a handout through Senate Bill 3563. Residents of the Milk River Basin have worked extremely hard to bring attention to this critical issue. The St. Mary Rehabilitation Working Group represents a broad coalition of basin interests including the Milk River Irrigation Districts, the Blackfeet Tribe, the Fort Belknap Indian Community, municipalities, business interests, and recreational and fishery interests in the Milk River Basin. The residents of the Milk River Basin are hard working people who over generations of families have carved out a living and built communities in this beautiful landscape. With an average per capita income of $14, 585, residents of the Hi-line are not rich. Yet counties, communities and individuals have donated over $275,657 in support of this project.

Now we need the active cooperation and participation of the Bureau of Reclamation. We have tried to constructively engage Reclamation in this project and have been repeatedly told that there is nothing the agency can do under current Reclamation law. Passage of Senate Bill 3563 will allow Reclamation to work with us collectively for an amicable solution.

My family’s future, my communities’ future, and the future of the Milk River basin is dependent on passage of Senate Bill 3563. Does the Unites States close the book on 100 years of history and investment or do we reinvest in our country’s future? Our grandfathers had the vision to establish this project to build Montana communities. This legacy is ours now. Passage of S 3563 is not just about the fate of the farmers and ranchers but rather Montana’s Milk River Basin. Rehabilitation is a legacy that we will pass on to our children and our grandchildren and the many generations beyond

Again, I appreciate this opportunity to testify.
The Honorable Bob Rice

Mayor

The City of Havre

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Witness Panel 2

The Honorable Bob Rice

            Thank you for your willingness to schedule this important hearing here in Havre. My name is Robert E. Rice and I have had the opportunity to serve as Mayor of this fine community for approximately the past five years. On behalf of not only the City of Havre, but the communities of Chinook, Harlem, Dodson and Malta to the East, and Kremlin, Gilford, Hingham, Rudyard and Inverness to the West, who all receive their drinking water from the Milk River, which is fed by the St. Mary Diversion and Conveyance Works, we sincerely appreciate the special effort you are taking today to more fully understand and appreciate the importance of this century-old federal facility to the health, welfare and economic well-being of a large section of northern Montana.

            When you think of this aging piece of infrastructure, I’d like you to think of it in a very personal way. In a drought year like the one we’re currently experiencing, the source of our water for municipal, industrial and economic development purposes comes almost entirely from that which is transferred to the Milk River Basin from the St. Mary River Basin through the engineering marvel that is the St. Mary Diversion and Conveyance Works. From the water you may drink today, to the water used to maintain the lawn outside this building, to the water used for every other single purpose in this and other communities in our area – it is all available to us only because federal policy makers 100 years ago had the vision to invest wisely in this vitally important infrastructure we continue to rely on today. It is now our turn to do what we can to assure that this water delivery system remains structurally sound and will continue to deliver quality drinking water to future generations of Montanans.

            The St. Mary Diversion Facility is known by many as the “Lifeline of the Hi-Line,” the geographic area of northern Montana that encompasses that area of our state from the Rocky Mountain Front to the North Dakota border. The rehabilitation of this facility is estimated to provide a net economic benefit on an annual basis of up to $41.3 million for our state and this country. Many of the economic benefits that can be attributed to St. Mary water come from Municipal, Industrial and Recreational uses, all of which were not part of the congressionally authorized project when it was created in 1905. These economic benefits will continue to grow as the communities on the Hi-Line continue to grow.   The long-term economic value of this project is projected to be as high as $700 million, for a cost-benefit ratio of four-to-one, given the projected cost of this project of $120 million. It is clear that the federal government investment being requested to rehabilitate the St. Mary System will continue to add to the economy of northern Montana and the United States for decades to come.

            The part of Montana served by the St. Mary Diversion and Conveyance Works has traditionally not enjoyed the economic prosperity that other areas have. However, we contribute significantly to the overall economy of Montana and this nation, in large measure due to the continued operation of the St. Mary Diversion Works. The Milk River Basin alone produces $67 million in annual farm earnings, which is fully 38 percent of Montana’s total.

            This critical piece of infrastructure for the City of Havre and for the other communities, who rely heavily on it for their everyday water needs, serves a rural population of over 17,000 people. I implore you to work earnestly toward an investment by the federal government that will keep this ailing but critically important facility not only operational, but a vibrant part of the fabric of our regional economy.

            Thank you for this opportunity.
Ms. Julia Doney

President

Fort Belknap Community Council

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Witness Panel 2

Ms. Julia Doney

Good afternoon Mr. Chairman, members of the Committee, and interested individuals. Thank you for this opportunity to provide the position of the Tribes of the Fort Belknap Reservation and the Fort Belknap Community Council to the Committee on this important legislation. I am Julia Doney, the duly elected president of the Fort Belknap Community Council, the governing body of the Gros Ventre and Assiniboine Tribes of the Fort Belknap Reservation.

The Fort Belknap Reservation:

          First, a few words about the Fort Belknap Reservation. Pursuant to Treaties of the United States signed in 1851 and 1855, and the Act of Congress of 1888, the Fort Belknap Reservation is home to the Gros Ventre and Assiniboine Tribes. Pursuant to the Constitution and Bylaws of the Tribes, the Fort Belknap Community Council is the governing body of the Tribes and tribal members. The Council consists of ten elected representative, including the president.

          The Fort Belknap Reservation, in north-central Montana, lies approximately 50 miles east of Havre and is bounded by the Milk River on the North and the Little Rocky Mountains on the South. The Reservation consists of 697,617.18 thousand acres of trust lands (both allotted and tribal), fee lands, and Montana state school lands. The vast majority of the land ownership is by the United States in trust for the Tribes and for individual Native Americans. Approximately 3,150 enrolled tribal members reside on the Reservation and 3,179 tribal members reside off the Reservation.

          Unemployment is extremely high on the Reservation, with the principle employers being the Tribal government and the United States. Agriculture is the principle industry, with irrigation occurring on about 7,500 acres of the more than 10,000 acre Fort Belknap Irrigation Project in the North part of the Reservation and grazing, dry land farming, and minor amounts of irrigation occurring in the southern portion of the Reservation.   Precipitation ranges from about 20 inches per year in the southern mountains to 12 inches per year in the northern portion of the Reservation.

          Fort Belknap is home to the famous Winters decision, 207 U.S. 564, 1908, which is the seminal case in the “reserved water rights doctrine.” The United States Supreme Court affirmed a lower court decision which determined that the Fort Belknap Tribes had a water right of 500 miners inches (125 cubic feet per second) to irrigate about 7,500 acres of the more than 13,000 acres of the Fort Belknap Indian Irrigation Project. Although no water rights had been filed with the State of Montana under state law, the Court determined that the Tribes’ reserved water right had an 1888 priority date, earlier than upstream, non-Indian water diversions and the Court upheld an injunction against the junior diverters.

The Fort Belknap/Montana Water Rights Compact (Mont. Code Ann § 85-20-1001):

          In 1979, pursuant to amendments to the Montana Water Use Act, the State of Montana filed a general stream adjudication, In the Matter of the Adjudication of All Rights to the Use of Water, Both Surface and Underground, within the State of Montana, Montana Water Court. As an alternative to litigating reserved water rights in the Montana Water Court, the amendments authorized the Montana Reserved Water Rights Compact Commission to negotiate reserved water rights with Montana Indian Tribes and federal agencies.

          In 2001, the state and the Fort Belknap Indian Community ratified a Compact (Copy attached as Exhibit 1) which settled the reserved water rights of the Tribes of the Fort Belknap Reservation between the State and the Community. The Compact quantified the water rights, provided for administration and dispute resolution, provided protections to allottees and non-Indian water users in the Milk River Basin, established the Milk River Coordinating Committee to assure coordination and communication among all Milk River water users, provided for water right protection and enforcement throught the appointment of a water commissioner for the Milk River Basin, and provided for further negotiations among the United States, the Tribes, and the State on federal issues, such as federal financial contribution, an allocation of water from Tiber Reservoir, state/federal cost share, construction of mitigation features to protect Milk River Project. Such three party negotiations have thus far not been successful and the Tribes and the State have decided to seek introduction of federal legislation ratifying the Compact and authorizing such actions as are necessary to implement the Compact. A copy of the most recent draft of the legislation is attached as Exhibit 2.

The draft bill authorizes development of the tribal water right that is consistent with the tribal water development plan that has been approved by the Fort Belknap Indian Community’s counsel.   The Plan as developed would allow the Fort Belknap Indian Community to irrigate sufficient water to meet the tribal needs for the next 30 to 50 years. The level of development is necessary to meet the needs of the Fort Belknap Indian Community and will allow the community to be a real player in the irrigated agricultural economy of the Milk River Basin.

S. 3563:

          The Fort Belknap Indian Community has been closely involved in the deliberations of the St. Mary Working Group. We understand the history, background, and need for action to protect the St. Mary Water supply for the non-Indian water users of the Milk River Project. In the spirit of community and being a good neighbor, the Community would like to be able to support S. 3563.

          However, on March 17, 2006, I, as President of the Fort Belknap Indian Community, provided written comments on a draft of S. 3563. In my comments, I specifically requested that the Fort Belknap Reservation be treated similarly to the Blackfeet Reservation in the legislation and that provisions parallel to those for Blackfeet be included in the legislation for Fort Belknap. To date I have received no response to my comments and request nor was the legislation modified to include the provisions which I requested.

          In addition, while the State and the Community have completed a Reserved Water Rights Compact for the Fort Belknap Reservation, much work still must be done to obtain Congressional ratification of the Compact and authorization of the implementation and funding for the Compact. The State and Community have moved a long way toward agreeing on legislation, please see Exhibit 2. However agreement is not yet complete nor has legislation been introduced. It is anticipated that the Settlement Bill will be introduced at the next Session of Congress. The Fort Belknap Indian Community would request that the Settlement Bill and S 3563 be considered together in the next Session of Congress.

          In short, the Fort Belknap Indian Community believes that consideration of S. 3563 is premature and should be delayed until completion of reserved water rights negotiations in the Milk River basin. It is simply unfair to the Tribes of the Fort Belknap Indian Community to provide yet another benefit to the non-Indian water users while deferring action on the reserved water rights of the Fort Belknap Indian Community.

          For the above reasons, the Fort Belknap Indian Community must oppose the enactment of S. 3563 unless and until legislation ratifying and authorizing the Fort Belknap/Montana Compact is moved forward at the same time as S. 3563 or joined with S. 3563. It simply makes sense to solve all the basin’s water rights issues at the same time.

          Again, thank you for the opportunity to provide this testimony. If you have any questions, please feel free to proceed.
Chief Earl Old Person

Chairman

The Blackfeet Tribe

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Witness Panel 2

Chief Earl Old Person

Good afternoon. I am Earl Old Person, Chairman of the Blackfeet Tribe. I appear here today on behalf of the Blackfeet Tribe and its members.

I would like to express my appreciation to the Chairman of the Senate Energy and Natural Resources Committee, Pete Domenici, for the invitation to provide testimony to the Committee. I would also like to express my appreciation to Senator Burns whose landmark efforts to bring about the rehabilitation of the St. Mary facilities is the subject of the hearing today.

At the outset, I would like to state that the Blackfeet Tribe supports the rehabilitation of the St. Mary diversion facilities and conveyance works. The Tribe understands and is concerned that the diversion facilities and conveyance works may fail, and the physical and environmental impacts of such failure will be felt most directly by the Blackfeet people. There are also some very significant environmental impacts to Reservation lands and waters which have been caused by the Project that are a source of major concern by the Blackfeet. We understand the these environmental issues will be addressed and fixed as part of the rehabilitation effort. These include the siltation of St. Mary’s Lake, an environmental tragedy that is worsening over time, the dewatering of Swiftcurrent Creek which has a substantial impact on the fishery, including the threatened bull trout, the flooding at the confluence of Boulder Creek and Swiftcurrent Creek that occurs on an almost annual basis, and, of course, the leakage of the canal that has impacted tribal lands, resources and wildlife. The Blackfeet Tribe has long sought to have these environmental damages resolved and fixed, and we will push to make sure they are addressed as part of the rehabilitation process. In addition, the water system of the community of Babb has been affected by the operation of the project, and it is our expectation that this issue will be addressed as well.

At the same time, we do not believe the diversion and conveyance facilities can be rehabilitated unless the water rights of the Blackfeet Tribe and other claims relating to the Project are resolved. The water rights of the Tribe were never addressed when the Milk River Project was constructed. Neither were the Tribe’s water rights addressed when the United States entered into the 1909 Boundary Water Treaty with Great Britain, which allocated St. Mary’s and Milk River water between the United States and Canada, and which serves as the primary justification for the Milk River Project diversions. As far as the Blackfeet Tribe is concerned, it is our water that has been diverted for use by others for almost a hundred years, and we do not believe that anyone can establish otherwise unless a water rights compact is entered into or an adjudication occurs. Unless the water rights of the Blackfeet Tribe are determined, it is impossible to say that the historical capacity of the St. Mary Canal is available for diversion off the Reservation. And, if a greater capacity canal is constructed – and we understand that this is an option being considered – then it is even more critical that the Tribe’s water rights be determined.

Finally, despite promises by the federal government that the Blackfeet Tribe would benefit from any project that utilized St. Mary and Milk River waters, the Blackfeet Tribe has never received one benefit from the Milk River Project. We have suffered the environmental consequences of the Project, and we must live with the potential failure of the project on a daily basis. We see water being diverted from the Reservation year after year after year, but incredibly the Blackfeet Tribe receives absolutely no benefit from the project. It is high time that this situation changes, and we intend to insure that as part of any rehabilitation effort, the Blackfeet Tribe receives the benefits from the Project to which it is entitled, including an appropriate allocation of water from the Project, other project benefits and compensation for damages and use of Blackfeet water.

For these reasons, the Blackfeet Tribe expects to be a full partner in the rehabilitation process with the Federal government and the State government. It is our expectation that the Tribe will have an equal role in any decision-making process relating to the rehabilitation, and in approving all aspects of the rehabilitation effort, including preliminary studies, planning, design and construction. The Tribe also expects that it will be a full signatory to any final approvals of the final project. I will address these issues in more detail in my remaining remarks.

The Blackfeet Tribe is a sovereign Indian Nation residing on the Blackfeet Indian Reservation and exercising jurisdiction and regulatory control within the Reservation. The present Blackfeet Reservation is only a small part of the historical aboriginal territory of the Blackfeet Tribe, and our people have occupied these lands since time immemorial. The Aboriginal Territory of the Blackfeet Tribe encompasses much of the present State of Montana, and a large area north into Canada, including the St. Mary and Milk Rivers. The Rocky Mountains, and the streams and rivers that flow from the mountains, have long been one of the most culturally and religiously significant areas to the Blackfeet People, and they are a critical part of the oral history, creation stories and ceremonies. The present Blackfeet Reservation was established by Treaty with the United States on October 17, 1855 (11 Stat. 657).

The St. Mary’s and the Milk Rivers originate on and near the present day Blackfeet Reservation, and the Tribe has aboriginal rights to the waters of the two rivers that predate the formation of this country, and treaty rights that date at least from the 1855 Treaty. The Tribe’s water rights are currently the subject of negotiations among the Blackfeet Tribe, the Montana Reserved Water Rights Compact Commission and a Federal Negotiation Team. The adjudication of the Tribe’s water rights has been stayed by the Montana Water Court on a year to year basis in order to allow the negotiations to proceed.

The St. Mary facilities that are the subject of the proposed legislation are located on the Blackfeet Reservation. Since the construction of the facilities almost one hundred years ago, the Tribe has had, and continues to have, fundamental issues relating to water rights, land rights, environmental issues and damages claims that are directly related to the St. Mary facilities and the diversion of St. Mary River water for the Milk River Project. It therefore goes without saying that the Blackfeet Tribe is the primary stakeholder in any effort to rehabilitate the St. Mary diversion and conveyance works of the Milk River Project.

The Blackfeet Tribe has long viewed the massive diversion of St. Mary’s water from the Blackfeet Reservation for purposes of the Milk River Project, as well as the 1909 Boundary Waters Treaty which was used to justify the diversion, as violations of the rights of the Blackfeet people because the water rights of the Blackfeet Tribe were never considered or addressed in the Boundary Waters Treaty or in the diversions of water for the Milk River Project. This state of affairs is completely incomprehensible to the Blackfeet Tribe. Only the year before the Boundary Waters Treaty was concluded in 1909, the U.S. Supreme Court decided the most significant Indian water rights case in the United States, Winters v. United States, 207 U.S. 564 (1908). This case established and defined the fundamental doctrine of Indian reserved water rights that governs Indian water rights in the western United States for almost one hundred years. As this Committee knows, under the Winters doctrine, when an Indian reservation is established by the United States government, sufficient water is reserved to fulfill the purposes of the Reservation, both existing and future, with a priority date of the date of establishment. The Winters case, which arose on the Fort Belknap Reservation and involved the very same Milk River that is involved here today, remains the fundamental basis for Indian water rights in the United States. However, notwithstanding the contemporaneous Winters decision, there is absolutely no acknowledgment or consideration of the water rights of the Blackfeet Tribe in the diversion of water from the Blackfeet Reservation for the Milk River Project or in the Boundary Waters Treaty. The failure to recognize and take into account the Blackfeet reserved water rights puts the very validity of the St. Mary diversion and the Boundary Waters Treaty into question.

The complete disregard of the water rights of the Blackfeet Tribe is all the more incomprehensible because several alternatives for uses of the United States’ share of St. Mary’s and Milk River water were identified and analyzed, two of which would have benefitted the Blackfeet Tribe. One of the alternatives identified by the Bureau of Reclamation was a Blackfeet only project. The Bureau of Reclamation determined that 60,000 acres on the Blackfeet Reservation could be irrigated feasibly with St. Mary’s water. A second alternative was an all-American Canal route that would have routed the canal through the Reservation and provided benefits to the Tribe on its way downstream to other project users. The third alternative is the present Milk River Project. Ironically, the two alternatives that would have provided benefits to the Blackfeet Tribe were rejected in favor of providing benefits only to non-Indian irrigators downstream on the Milk River.

From the studies of these alternatives, the United States knew when entering into the Boundary Waters Treaty and in constructing the Milk River Project, that the Blackfeet Tribe had a reserved right to St. Mary’s water in an amount of at least that water necessary to irrigate 60,000 acres on the Reservation, or approximately 150,000 acre-feet. Nevertheless, these rights were never discussed or considered in the Boundary Waters Treaty, nor was the impact on the Tribes rights discussed or considered in the final Bureau of Reclamation project selected for construction.

At the time of Boundary Waters Treaty and when the Milk River Project was constructed, the Reservation had been in existence for more than fifty years, and it would have been impossible to ignore the fact that Blackfeet land and waters were involved. It also would have been impossible not to recognize that the Milk River Project, constructed to allow the United States to fully develop its St. Mary’s –Milk water supply, involved a major dam and reservoir and canal system located on the Blackfeet Reservation. It is therefore incredible that the United States did not involve the Blackfeet Tribe in the negotiations of the Boundary Waters Treaty or provide benefits to the Tribe as part of the Milk River Project.

If Blackfeet rights had been acknowledged and considered in the Boundary Waters Treaty, we do not believe that the Milk River Project would have ever been built. The project utilizes a substantial portion of the United States’ share of St. Mary's water, diverting it off the Blackfeet Reservation in a trans-basin diversion for use by non-Indian users far downstream from the Reservation. To this day, the Tribe receives no benefit whatsoever from the Project. At the same time, the Tribe has suffered greatly from environmental problems and damages that have been caused by the diversion facilities on the Reservation.

Among other things, these environmental problems and damages include the following:

• The current outlet structure at Sherburne Dam is unable to pass low flows during the winter months and as a result, Swiftcurrent Creek is completely dewatered and fishery habitat is lost, including habitat for the threatened bull trout.

• The banks of Swiftcurrent Creek have been eroding under the current release regime, and flooding occurs on nearly an annual basis at its confluence with Boulder Creek. Fishery habitat and private property is continually at risk as a result of the erosion and flooding.

• The Swiftcurrent Creek Dike, which was constructed by the Bureau of Reclamation in 1915, diverts all flows from Swiftcurrent Creek and Boulder Creek into Lower St. Mary Lake. These streams previously flowed across a large alluvial fan in the Babb area. As a result of the dike, sediment is continuously deposited into St. Mary Lake. The resulting delta has increased in size by 16 acres between 1958 and 1990. St. Mary’s Lake is a stunningly beautiful alpine lake and is a significant recreational area on the Reservation and source of economic revenue to the Tribe.

• The St. Mary Diversion Dam is a barrier to fish moving upstream, and fish are sometimes caught in the headgates at that location. These impacts may affect the threatened bull trout in addition to other fish species.

• The canal and siphons are in a significantly deteriorated condition and leakagesfrom the canal present environmental problems, and the potential of additional environmental problems if they fail.

A separate problem is the impact the operation of the St. Mary diversion facilities causes to the Babb Community water system. There is a known surface and groundwater interaction between water levels at Babb and surface water runoff carried in adjacent streams and water transported in the St. Mary’s Canal. This interaction affects the community water system and needs to be studied and addressed.

In addition to the water rights and environmental issues, the construction of the Milk River Project is directly contrary to, and in complete derogation of, the promises made to the Tribe that it would benefit from the development of St. Mary=s and Milk River water. These promises were made in return for the Blackfeet Tribe agreeing to allow a right of way for the Milk River Project facilities in an 1895 Agreement, ratified by Congress, and in the development of the two alternatives that would provide irrigation benefits to the Blackfeet Tribe, including the irrigation of 60,000 acres of land within the Blackfeet Reservation. Although that project was determined to be feasible, it was never built. Instead, the rights and interests of the Blackfeet Tribe were sacrificed in favor of downstream development far off the Reservation.

Further, the United States allowed non-Indians on the Blackfeet Reservation to file state water rights claims for essentially all the direct flow water rights on the North and South Forks of the Milk River during this same period. As a result there is no readily available water left for Tribal development in either watershed. The United States was obligated to discuss these circumstances with the Blackfeet Tribe and to take these circumstances into account. However, once again, the United States failed in its obligation to protect the rights of the Blackfeet Tribe.

There are also serious questions about the existence of valid rights of way for the project. Clearly, there can be no construction or reconstruction of the project without valid rights of way, and this issue must be addressed before the rehabilitation can go forward. Although the Bureau of Reclamation has been reviewing this issue for several years, there has been no final report on the rights of way and no discussion with the Tribe concerning this critical matter.

As this history shows, the Blackfeet Tribe has been systematically excluded from the process used to allocate the waters of the St. Mary’s and Milk Rivers, and the Tribe’s rights have been systematically ignored in the subsequent utilization of St. Mary’s water by the Milk River Project. Astonishingly, this disregard of the Blackfeet Tribe and the rights of the Tribe has continued up to the present time. There is still no serious discussion of the Tribe’s water rights, land rights and damages claims in the context of the rehabilitation of the project, and no clear benefits for the Blackfeet Tribe as part of the authorization for the project.

In order for the rehabilitation to go forward, the following must be done:

1. The water rights of the Tribe must be determined.

2. The land issues relating to the project must be determined and resolved, in particularthe right of way issues.

3. The Tribe’s damages claims against the federal government must be resolved. This includes damages relating to use of Tribal water, use of Tribal land, damages to Tribal land, and environmental damages caused by the Project.

4. The Tribe must receive clear benefits from the project as part of the authorization.

5. The Tribe must be a full partner in the rehabilitation effort, including the preliminary studies, the planning, design and construction.

Witness Panel 3

Mr. Michael Ryan

Regional Director, Great Plains Region

U.S. Bureau of Reclamation

Read statement

Witness Panel 3

Mr. Michael Ryan

Mr. Chairman and members of the committee, my name is Mike Ryan, and I am the Regional Director of the Great Plains Region for the Bureau of Reclamation. I appreciate the opportunity to provide the Department of the Interior’s views on S. 3563, the St. Mary Diversion and Conveyance Works and Milk River Project Act of 2006.

Let me say at the outset that Reclamation has worked extensively with the St. Mary’s Rehabilitation Working Group since its inception. We understand and share their concerns with the state of these facilities and also recognize the adverse consequences that would come with a failure of the system. Given the potential magnitude and costs of the challenges before us, we feel it essential that we proceed with caution in a step-wise and informed manner.

This legislation has a number of components. First, it would authorize the Secretary of the Interior to study the feasibility and environmental impact of rehabilitating the St. Mary Diversion and Conveyance Works and other features of Reclamation’s Milk River Project in North Central Montana. Second, the legislation would authorize the rehabilitation and improvement of the St. Mary Diversion and Conveyance Works. Third, the legislation would authorize the creation of an emergency response plan and fund to use for emergency repairs should there be a catastrophic failure of the facilities prior to implementation of rehabilitation. Fourth, the legislation would require the Secretary to resolve all claims of the Blackfeet Tribe against the United States relating to the portions of the Milk River Project located within the exterior boundaries of the Blackfeet Reservation. Fifth, the legislation would authorize the Secretary to study the feasibility of implementing projects to improve the economic conditions of the Blackfeet Indian Reservation and also to determine the feasibility of rehabilitating the Blackfeet Irrigation Project. Finally, the legislation would authorize study of developing a Municipal, Rural and Industrial (MR&I) water supply project for the residents of the Fort Belknap Reservation and surrounding communities.

Background

The St. Mary Storage Unit of the Milk River Project, often referred to as “the lifeline of the Highline,” was authorized by the Secretary of the Interior on March 25, 1905 and constructed between 1905 and 1921. It was authorized as a single-purpose irrigation project, thus irrigators are responsible for the operation, maintenance, and replacement costs of the facilities. The St. Mary River provides about 50% of the Milk River Project’s water supply for 110,000 acres of irrigated land during normal years, but this percentage increases to approximately 90% during drought years. Three municipalities, two rural water systems, and the Bowdoin National Wildlife Refuge also rely on the Milk River Project for some or all of their water supplies.

The St. Mary Diversion and Conveyance Works have a long history of service. In fact, these facilities have generally outlived their design life, as they have served the people of North Central Montana for almost one hundred years under severe climatic and geologic conditions.

Federal Concerns

The Department recognizes the importance of this Federal project in serving the people of Montana. In addition to the role the St. Mary Diversion and Conveyance Works plays in providing water for agriculture and municipal needs for the people of Montana, these facilities are also relevant to efforts to resolve the water rights claims of the tribes of the Blackfeet and Fort Belknap reservations, to conserve threatened and endangered species, to maintain and improve water quality, to promote power development and recreation, and to ensure implementation of the Boundary Waters Treaty of 1909.

Recognizing these needs, the Department supports the parts of this bill that would provide authorization to carry out appropriate feasibility studies: for rehabilitation of the St. Mary Diversion and Conveyance Works; rehabilitation of prioritized Milk River Project facilities; for appropriate projects with the Blackfeet Reservation; and for a MR&I water supply system on the Fort Belknap Indian Reservation. The purpose of these studies would be to provide the Congress with a complete and comprehensive package of information upon which to build solutions for the water needs of North Central Montana. Typically, a 50-50 cost share among the federal government (50 percent) and local project beneficiaries is provided by legislation authorizing feasibility studies.

The Department also supports the general concept of an emergency plan and fund to be used in the event of a catastrophic failure of the St. Mary Diversion and Conveyance Works prior to rehabilitation. The Department is concerned, however, with the legislation’s provision of investment authority for the Emergency Response Plan. Investing appropriations provides additional monies to finance a governmental purpose outside of the normal appropriations process. The Department has other concerns regarding the specific language contained in the legislation and we would appreciate the opportunity to work with the committee to address these concerns.

The Department does not support authorization for construction of the rehabilitation and improvement of the St. Mary Diversion and Conveyance Works or other features of the Milk River Project. It would be premature for Congress to authorize this major project prior to completion of a feasibility report. It is of critical importance to decision makers that extensive analysis be done in compliance with Reclamation policy, practice and Executive orders, and also in compliance with other Federal laws and policies, including for example the Clean Water Act, the National Environmental Policy Act (NEPA), and the National Historic Preservation Act. The information generated from this analysis is essential to making informed decisions about the future of these facilities.

In addition, outstanding water rights claims of the United States as trustee for the Blackfeet Tribe and Fort Belknap Indian Community are significant to the future of water management in the watersheds dealt with in this bill. The Department believes that pending the resolution of these claims, authorization of a rehabilitation plan for the Milk River Project as called for in this Act is premature. Parts of the Milk River Project facilities are located within the boundaries of the Blackfeet Reservation, and more importantly, the Blackfeet Tribe has asserted Federal reserved water rights to the water currently being delivered through the Milk River Project facilities. The Fort Belknap Indian Community also has asserted significant claims in these watersheds. Federal negotiating teams are currently working with both tribes and the Montana Reserved Water Rights Commission toward settlement of their water rights claims.

The Department of the Interior remains committed to these ongoing settlement negotiations. For over 30 years, Tribes, States, local parties, and the Federal government have recognized that, when possible, negotiated Indian water rights settlements are preferable to protracted litigation over Indian water rights claims. In addition to defining the extent of tribal water rights, negotiations allow settlement parties to develop creative solutions to water use problems. The Department is concerned that passage of S. 3563 would negatively impact efforts to resolve water rights claims for the Tribes of the Blackfeet and Fort Belknap reservations. Although this bill requires the Secretary to consult with the State, the Blackfeet Tribe, and the Board for the Milk River Project regarding the selection of an alternative for rehabilitating the project, the bill does not ensure coordination between efforts to settle tribal water claims and the rehabilitation project. There is a risk of creating parallel and potentially conflicting tracks for negotiating rehabilitation and water management strategies.

In negotiating Indian water rights settlements, the Federal government seeks settlements that resolve all outstanding water claims and achieve finality. The requirement in S. 3563 that the Secretary “shall resolve any land, water, environmental, and other claims of the Blackfeet Tribe against the United States relating to the portions of the Milk River Project located within the exterior boundaries of the Blackfeet Reservation” would effectively separate out some of the Blackfeet Tribe’s water-related claims against the United States for separate resolution from the Tribe’s other claims. This provision exacerbates the risk that this bill, rather than facilitating the resolution of existing Indian water rights claims, will complicate and slow the process of negotiating a comprehensive settlement.

The Department also objects to language in S. 3563 imposing a legislative timeline on the Secretary of the Interior with respect to settling Indian water rights and other claims.   The Secretary should have discretion to determine the scope and merit of the claims to be settled, as well as be given latitude to determine the sorts of solutions that fit within the abilities of the Department.   A mandate to the effect that the “Secretary shall resolve any … claims” also suggests that the availability of federal funds and resources is unlimited.

Need for Studies Prior to Authorization

While the Department cannot support authorizing the rehabilitation of this project at this time, the Department supports studying rehabilitation of the St. Mary Diversion and Conveyance Works. The feasibility study would develop and analyze alternative means (starting with a screening of alternatives at an appraisal level of detail) for the rehabilitation of St. Mary storage and conveyance facilities; endangered species issues; Tribal water issues and interests; fish and wildlife resource issues; municipal water supply concerns; and international considerations related to the apportionment of the St. Mary and Milk Rivers. Reclamation believes that a feasibility report can be completed in 3 years, a timeline that allows for the necessary aspects of the planning process (engineering, hydrology, economic, environmental, cultural, Tribal and international considerations) to be incorporated. Until this is accomplished we believe that an informed determination of a project plan, project features and project costs is not possible, and therefore construction authorization at this time is premature.

In the search for a comprehensive solution to the water and related issues in North Central Montana, the Department supports engaging the Tribes of the Blackfeet and Fort Belknap Indian Reservations in studies to identify implementable solutions to their water needs. These studies must be done in consultation with the Tribes and in coordination with ongoing efforts to negotiate comprehensive water rights settlements.   We would like to work with the committee on setting some parameters on the appropriate scope and number of the projects to be studied.

The Department agrees that the extent of infrastructure needs of the Milk River Project and the costs of rehabilitation must be made clear to the Congress, along with the extent and costs of other projects that could be of benefit to the Blackfeet and Belknap Tribes. The Department is concerned with some of the language contained in the legislation regarding these issues and we would again appreciate the opportunity to work with the committee and the Tribes toward mutually acceptable legislation.

Federal Reimbursability/Repayment Concerns

The project repayment terms identified in Section 3(b)(4) of S. 3563 depart from the accepted project repayment practice to a degree that creates a dangerous precedent for the extensive aging infrastructure needs throughout the West. This legislation requires the Federal government to cover the full cost of the “public benefits” of the project, and also pay for the vast majority of the traditionally reimbursable side of the ledger. The legislation identifies that 55 percent of the project costs will be Federal and 45 percent will be reimbursable. The legislation then assigns 75% of this reimbursable cost to the Federal Government. The Federal share therefore is at least 88.75%, not the 55% stated in subsection (4)(A)(ii). The legislation also caps non-reimbursable obligations at $25 million. The legislation should require the use of current Reclamation procedures for determining non-Federal cost-share that have been applied across the western states.

Given the extensive infrastructure needs throughout the West, the Department believes S. 3563 would significantly impact Reclamation’s ability to address aging infrastructure and would appreciate the opportunity to work with the committee to refine these costs. We would further emphasize that the Department has a longstanding policy making local beneficiaries responsible for ensuring that project operation, maintenance, and replacement costs for facilities are met. This legislation could cost the Federal government over $160 million, while authorizing multiple feasibility studies that could, if implemented, cost the Treasury hundreds of millions more. In addition the potential Federal contribution to pending Indian Water Rights Settlements has not been addressed.

At the same time, we recognize the importance of this project, and are committed to the most efficient use of Federal resources to assure its continued viability.

Thank you for the opportunity to comment on S. 3563.

Hearings and Business Meetings

Witness Panel 1

The Honorable Denny Rehberg

Witness Panel 2

Lieutenant Governor John Bohlinger

Mr. Randy Reed

The Honorable Bob Rice

Ms. Julia Doney

Chief Earl Old Person

Witness Panel 3

Mr. Michael Ryan