H.R. 1324 — Navajo Nation Rio San José Stream System Water Rights Settlement Act of 2025

This section provides the short title, the “Navajo Nation Rio San José Stream System Water Rights Settlement Act of 2025,” and sets out the 15-section table of contents for the Act.

This section states that the purposes of the Act are to settle, on a final basis, all water rights claims in the Rio San José Stream System general stream adjudication in the Thirteenth Judicial District Court of New Mexico for the Navajo Nation and the United States as trustee for the Navajo Nation; to authorize, ratify, and confirm the settlement agreement to the extent it is consistent with the Act; to direct the Secretary to execute the agreement and take any other actions needed to implement it; and to authorize the funds necessary to carry out the agreement and the Act.

This section defines terms for the Rio San José Stream System water rights settlement, including the acequias, the 1983 New Mexico adjudication, the June 11, 2024 addendum to the May 13, 2022 settlement agreement, allotments and allottees in the Rio Puerco Basin and Rio San José Stream System, the Navajo Nation and Navajo Nation lands, the Navajo Nation Water Code, the Navajo Nation Water Use Permit, the Navajo Nation’s water rights, the Navajo Partial Final Judgment and Decree, and the Navajo Trust Fund. It also excludes from the Navajo Nation’s water rights any interests in allotments patented under section 1 of the Act of February 8, 1887 (25 U.S.C. 331), as in effect before the Indian Land Consolidation Act Amendments of 2000.

This section ratifies and confirms the Agreement, as modified by the Act, and authorizes the Secretary of the Interior to execute the Agreement and any conforming amendments or attachments that require the Secretary’s signature, so long as they do not conflict with the Act. It also preserves the Secretary’s authority to approve later modifications that are consistent with the Act and do not otherwise require congressional approval under 25 U.S.C. 177 or other applicable Federal law. This section requires the Secretary, in implementing the Agreement and the Act, to comply with the Endangered Species Act of 1973, the National Environmental Policy Act of 1969 (including implementing regulations), and all other applicable Federal environmental laws and regulations. It requires the Navajo Nation to prepare any necessary environmental documents consistent with those laws, while directing the Secretary to independently evaluate that documentation and remain responsible for its accuracy, scope, and contents. It further provides that the Secretary’s execution of the Agreement is not a major Federal action under NEPA. Finally, it requires costs associated with compliance activities to be paid from the Navajo Trust Fund or other Navajo Nation funding sources, except that costs associated with Federal approval or review of the compliance work, or with inherently Federal functions, remain the responsibility of the Secretary.

This section establishes that the Navajo Nation’s Water Rights are held in trust by the United States on behalf of the Nation and are not subject to loss through non-use, forfeiture, abandonment, or other operation of law. It also provides that state-law based water rights acquired by the Navajo Nation, or by the United States on the Nation’s behalf, after the date for inclusion in the Navajo Partial Final Judgment and Decree are protected from forfeiture, abandonment, or permanent alienation from the time they are acquired. This section further limits the scope of the Navajo Nation’s Water Rights by excluding water rights for allotments, while preserving the Nation’s ability to allow use of those rights on an allotment under the Agreement and this Act. It also states that nothing in the Act quantifies or diminishes any water right, claim, or entitlement to water of an allottee, and requires the Nation not to object in any general stream adjudication, including the Adjudication, to quantification of reasonable domestic, stock, and irrigation water uses on an allotment. As background, general stream adjudications determine the extent of water rights in a river system. Thus, the provision preserves existing and decreed allottee water uses, including any water use existing on an allotment as of the date of enactment and any water right decreed to the United States in trust for an allottee. This section authorizes the Navajo Nation to allocate, distribute, and lease the Navajo Nation’s Water Rights for use on Navajo lands in accordance with the Agreement, this Act, and applicable federal law, including the Long-Term Leasing Act under 25 U.S.C. § 415. It also authorizes the Nation to allocate, distribute, and lease those water rights for use off Navajo lands, subject to the Secretary’s approval, and limits the maximum term of any such lease, including renewals, to 99 years. Finally, it prohibits permanent alienation of any portion of the Navajo Nation’s Water Rights and provides that non-use, including forbearance by the Nation under Article 17.13.4 of the Agreement, does not result in forfeiture, abandonment, relinquishment, or other loss of those rights.

This section establishes the Navajo Nation Rio San José Water Rights Settlement Trust Fund, to remain available until expended, withdrawn, or reverted to the general fund of the Treasury, and directs the Secretary of the Interior to deposit into the fund the amounts made available under section 7(a), together with any investment earnings, including interest. It also requires the Secretary to create two accounts within the trust fund: the Navajo Nation Water Rights Settlement Account and the Navajo Nation Operations and Maintenance Account. This section directs the Secretary to manage, invest, and distribute the trust fund in a manner consistent with the Secretary’s trust fund investment authority under 25 U.S.C. 162a, the American Indian Trust Fund Management Reform Act of 1994 (25 U.S.C. 4001 et seq.), and this section. It authorizes investment earnings, including interest, to be used under subsections (f) and (h). This section makes amounts appropriated to and deposited in the trust fund, including investment earnings, available to the Navajo Nation beginning on the enforceability date, subject to the section’s requirements. It also authorizes up to $15 million of amounts deposited in the Navajo Nation Water Rights Settlement Account, including investment earnings, to be made available immediately upon deposit for: (1) feasibility studies, planning, engineering, design, environmental, cultural, and historical compliance, and rights-of-way or permits for water supply infrastructure; and (2) installing groundwater wells and related infrastructure on Navajo lands to meet immediate domestic, commercial, municipal, and industrial water needs. (Thus, the Nation may use up to $15 million before the enforceability date for near-term water planning and infrastructure.) This section authorizes the Navajo Nation to withdraw amounts from the trust fund either through a Tribal management plan approved by the Secretary under the American Indian Trust Fund Management Reform Act of 1994 or through an approved expenditure plan. It requires that amounts withdrawn under a Tribal management plan, and any investment earnings on those amounts, be spent in accordance with this Act, and it authorizes the Secretary to take judicial and administrative action to enforce compliance. It also requires an expenditure plan to describe how withdrawn amounts will be used, limits approval to plans that are reasonable and consistent with the Act, and authorizes enforcement actions to ensure compliance. This section limits judicial review of the Secretary’s decisions to approve or deny a Tribal management plan or expenditure plan to review available under the Administrative Procedure Act (5 U.S.C. chapter 5, subchapter II, and chapter 7).

This section provides $200,271,000 for the Navajo Nation Water Rights Settlement Account and $23,000,000 for the Navajo Nation Operations and Maintenance Account, with both amounts available until expended, withdrawn, or reverted to the general fund of the Treasury. It also directs that the mandatory appropriations be increased or decreased to reflect ordinary construction cost fluctuations under the Bureau of Reclamation Construction Cost Index–Composite Trend and additional construction cost changes needed to account for unforeseen market volatility, with the adjustment process repeated for each subsequent appropriation until the adjusted amount is appropriated. The indexing period for each increment of funding begins on October 1, 2021, and ends when funds are deposited in the Navajo Trust Fund. In addition, this section requires the State to contribute $3,000,000, as adjusted for inflation under the Agreement, to the Bluewater Toltec Irrigation District and Acequia Madre del Ojo del Gallo, and to provide additional funding if required under Article 17.12.4 of the Agreement.

This section establishes the enforceability date for the Agreement as the date the Secretary publishes a Federal Register finding that: (1) the Agreement has been amended to conform with this Act to the extent it conflicts with the Act; (2) the amended Agreement has been executed by all parties, including the United States; (3) all amounts appropriated under section 7(a) have been appropriated and deposited in the designated accounts of the Navajo Trust Fund; (4) the State has provided $3,000,000 under section 7(c)(1) into the appropriate funding accounts or entered into a funding agreement with the intended beneficiaries, and has enacted legislation allowing a Navajo Nation Water Right to be leased for a term not to exceed 99 years, including renewals; (5) the Decree Court has approved the Agreement and entered the Navajo Partial Final Judgment and Decree; and (6) the waivers and releases under section 9 have been executed by the Navajo Nation and the Secretary. (Thus, the Agreement does not become enforceable until all specified federal, state, court, and tribal conditions are satisfied.)

This section requires the Navajo Nation and the United States, acting as trustee for the Nation, to waive and release specified claims in exchange for recognition of the Navajo Nation’s water rights and other benefits under the Agreement and this Act. The waivers cover claims relating to water rights in the Rio San José Stream System, including claims asserted or that could have been asserted before the Enforceability Date, and claims for damages, losses, or injuries to water rights, land, or natural resources arising from interference with, diversion of, or taking of water rights that accrued on or before the Enforceability Date. This section also requires the Navajo Nation to waive claims against the United States first arising before the Enforceability Date relating to: (1) Rio San José Stream System water rights asserted or that could have been asserted by the United States as trustee; (2) foregone benefits from non-Navajo use of water on and off Navajo Lands; (3) damage to water, land, natural resources, and related hunting, fishing, gathering, or cultural rights caused by loss of water or water rights; (4) failures to operate, maintain, or defer maintenance on irrigation systems or projects; (5) failures to establish municipal, rural, or industrial water delivery systems on Navajo Lands; (6) damages from construction, operation, or management of irrigation projects on Navajo Lands, including impacts to fish and wildlife habitat; (7) failures to provide dam safety improvements on dams on Navajo Lands; (8) litigation of claims relating to any Nation water right in the Rio San José Stream System; and (9) negotiation, execution, or adoption of the Agreement and this Act. This section makes the waivers effective on the Enforceability Date and preserves specified claims and rights, including: enforcement of, and claims accruing after the Enforceability Date relating to, water rights recognized under the Agreement, this Act, or the Navajo Partial Final Judgment and Decree; claims relating to water quality and environmental laws, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Safe Drinking Water Act, and the Federal Water Pollution Control Act (Clean Water Act); rights to use and protect water rights acquired after enactment; claims for land or natural resource damage not caused by loss of water rights; claims in basins other than the Rio San José Stream System, subject to the Agreement’s treatment of Rio Puerco Basin claims; and any rights or claims not specifically waived. It also states that the Agreement and this Act do not alter government sovereignty except as provided in section 11, and do not limit the United States’ ability to carry out activities authorized by law.

This section provides that the benefits under this Act fully satisfy, replace, and substitute for any claim of the Navajo Nation against the United States that the Nation waives and releases under section 9(b). (Thus, the Nation may not seek additional compensation from the United States for those released claims.)

This section gives the United States’ consent, on the Enforceability Date, to state-court jurisdiction in the District Court for the Thirteenth Judicial District of New Mexico, and on appeal in the New Mexico Court of Appeals and New Mexico Supreme Court, for the limited purpose of judicial review of a Navajo Nation Water Use Permit decision under the Agreement. It limits that review to the administrative record and to determining whether the decision is supported by substantial evidence, is not arbitrary, capricious, or contrary to law, is not in accordance with the Agreement or the Navajo Partial Final Judgment and Decree, or shows fraud or action outside the Navajo Nation’s authority. It also requires Navajo Nation Water Code or Navajo Water Law provisions that satisfy Article 17.10 of the Agreement to receive full faith and credit in covered proceedings, directs state courts to certify questions of interpretation of other Navajo Nation law provisions to the Navajo Nation court, exempts interpretation of Article 17.10.6 standards from certification, and preserves the Decree Court’s jurisdiction to interpret and enforce the Agreement.

This section provides that the Act does not waive the sovereign immunity of the United States, does not quantify or diminish any land or water right or claim of any Indian Tribe, band, Pueblo, or community other than the Navajo Nation, and does not affect any provision of law or regulation in effect on the day before enactment regarding pre-enforcement review of any Federal environmental enforcement action. It also establishes that, in the event of a conflict between the Agreement and the Act, the Act controls.

This section provides that nothing in the Act or the Agreement affects the rights or claims of allottees, or the United States acting as trustee for allottees, to water rights or damages relating to land allotted under the Indian General Allotment Act (25 U.S.C. 331). It also requires that, when adjudicated, water rights for allotments be treated separately from the Navajo Nation’s water rights and excluded from the Navajo Partial Final Judgment and Decree. (Thus, allotment water rights are resolved outside the Nation-wide decree.) In addition, it specifies that separately adjudicated allotment water rights are not subject to the restrictions or conditions that apply to the Navajo Nation’s water rights, unless the allotment later becomes Navajo Nation lands, in which case those rights become subject to the Act’s and Agreement’s restrictions and conditions. Finally, it authorizes allottees, or the United States as trustee for allottees, to assert water rights claims in the Rio San José Stream System or the Rio Puerco Basin.

This section authorizes the Navajo Nation to expand the service area of the Navajo-Gallup Water Supply Project to deliver water to communities within the Rio San José Basin in New Mexico. As background, the Navajo-Gallup Water Supply Project is a federally authorized rural water project that provides a long-term water supply for the Navajo Nation and nearby communities. If Project facilities are still owned by the Bureau of Reclamation when water is delivered to the Rio San José Basin, the Navajo Nation must obtain written approval from the Commissioner of Reclamation for the final design of the connection and related facilities and coordinate construction of those facilities with the Commissioner.

This section limits the United States’ liability for any failure to carry out obligations or activities authorized by this Act, including obligations or activities under the Agreement, unless Congress expressly provides adequate appropriations to carry out the Act’s purposes. (Thus, if Congress does not appropriate sufficient funds, the federal government is not liable for nonperformance.)