Statement of Administration Policy: H.R. 5063 - Ft. McDowell Indian Water Rights Settlement

(House)
(Udall (D) AZ and Rhodes (R) AZ)

The Administration strongly opposes enactment of H.R. 5063 because the bill would set a dangerous legal precedent, require Federal contributions far in excess of the Government's legal and trust responsibilities, and fail to extinguish certain related Indian claims.

For these reasons, if H.R. 5063 were presented to the President in its current form, the Secretary of the Interior would recommend a veto of the bill. Each of the bill's serious flaws is addressed below.

Legal and Precedential Concerns

H.R. 5063 would contradict long-standing Federal policy on the validation of water rights. It would do this by statutorily creating a Federal water right for a non-federal entity. If any right exists, it does so exclusively under State rather than Federal law. Thus, by creating a new water right, H.R. 5063 could give rise to legal challenges if it is interpreted to create an unconstitutional taking of property rights. This would create a dangerous precedent for future water settlements and could adversely affect the water rights claims of other Indian communities not a party to this settlement.

Unjustified Federal Contribution

The bill would require the Federal Government to contribute up to $78 million, which represents approximately two-thirds of the settlement cost, to resolve a dispute that exists largely between the Indian community and the State of Arizona. Specifically, the Government would be required to contribute $23 million to a Community Development Trust Fund. Additionally, the United States would have to acquire and provide for the delivery of 13, 933 acre-feet of water to the Community. Assuming recently estimated water prices of $3, 000 per acre-foot, the cost of this requirement would be $42 million. Finally, the Community would receive a $13 million interest-free reclamation loan to be paid back over 50 years. State and local entities would be required to contribute $38 million — one-third of the settlement cost.

Extinguishment of Claims

The bill fails to extinguish all claims against the United States despite the Federal contribution to the settlement package. H.R. 5063 contains specific language preserving claims against the United States for failure to protect the Community from adverse affects related to the authorization and planning for Orme Dam. The result — a "settlement" lacking finality — violates the basic tenets of equity and is unacceptable.