The Facts on the Bill Williams River Water Rights Settlement Act

There has been some discussion on my bill H.R. 4924, also known as the Bill Williams River Water Rights Settlement Act. Since this water settlement impacts my constituents and Arizona residents, I would like to take a moment to present the facts on this issue. 

On September 19th, 2014, I introduced H.R. 4924, the Bill Williams River Water Settlement Act of 2014. The entire bipartisan Arizona delegation in both Houses of Congress strongly supports this bill and signed on as original cosponsors of this legislation prior to introduction.

This bill would facilitate the achievement of a fair and equitable settlement of certain claims within the Bill Williams River Watershed among the Hualapai Tribe, the U.S. Department of the Interior acting on behalf of itself and as trustee for the Tribe and, its members, the Arizona Game and Fish Commission, and Freeport-McMoRan.

H.R. 4924 is good for private property owners and good for local economies. This legislation supports thousands of jobs, facilitates an Indian water rights settlement and will result in a significant net water benefit to the basin.

The agreement will provide certainty for the Bagdad Mine, which has an annual economic impact of $339.1 million to the state of Arizona, and sustains nearly 4,000 direct and indirect jobs.

The Hualapai Tribe benefits from this legislation by securing certain water rights from two non-Federal contributions provided by Freeport-McMoRan for an Infrastructure Study Fund and an Economic Development Fund.

Arizona benefits from the bill as the agreement codified into law by this legislation will result in an overall net water use reduction in the basin of nearly 30,000 acre-feet per year. In addition, there is a provision in the bill that allows for additional public access for hunting and fishing. Furthermore, the local counties benefit from the good paying jobs and tax revenue associated with continued use of the mine.

Source: Freeport-McMoRan Presentation to Mohave County on July 2, 2014

The Big Sandy River-Planet Ranch Water Rights Settlement Agreement: 
The first agreement codified by this bill, the Big Sandy River-Planet Ranch Water Rights Settlement Agreement, allows for certain water rights owned by Freeport on Planet Ranch to be severed and transferred to support the company’s mine operation in Bagdad, Arizona. This agreement also allows Freeport to donate 3,400 acres of private land at Planet Ranch to the Arizona Game and Fish Department. The land will then be managed as part of the State’s responsibility under the Multi-Species Conservation Program (MSCP) for the lower Colorado River. "The MSCP is a 50-year federal/state/local Habitat Conservation Plan for Arizona, California, and Nevada. It was created to accommodate 'current water diversions and power production and will optimize opportunities for future water and power development by providing ESA compliance.'" (9.17.14 W&P Briefing Paper on H.R. 4924.) 

The Hualapai Tribe Bill Williams Water Rights Settlement Agreement: 
The Hualapai Tribe Bill Williams River Water Rights Settlement Agreement is the second agreement confirmed by this legislation and “would secure a number of benefits and protections for the Tribe, including two non-Federal funded donations. The Tribe benefits from an immediate financial contribution by Freeport of $1 million for water and infrastructure studies. Freeport has also agreed to make a substantial contribution to the Tribe’s Economic Development Trust."..."Finally, the bill includes a limited waiver of sovereign immunity by the federal government and the Tribe as it relates to enforcement of the terms of the settlement agreements and the Act." (9.17.14 W&P Briefing Paper on H.R. 4924.) 

Source: Freeport-McMoRan Presentation to Mohave County on July 2, 2014

                                                        Facts vs. Fiction:

1) Fiction: The claim that Mohave County will lose tax revenues from lands going into trust for the Tribe or to ownership by the Arizona Game and Fish Commission, creating a negative burden to the county.

Fact: On September 9, 2014, the Arizona Game and Fish Commission (AZGFC) voted unanimously to make in-lieu payments to the counties for the portions of Planet Ranch that are conveyed for Multi-Species Conservation Program purposes. Mohave County will be compensated by the recent AZGFC action, resulting in no net loss in property tax revenue. Furthermore, the amount of property tax revenue for this land is insignificant. In 2013, Freeport-McMoRan paid approximately $2,389.60 (an average of $27.78 per parcel) in property taxes associated with these lands. It is difficult to understand claims that, if these lands are put into Trust and the County foregoes
$2,389.60 of taxes, that this action will create a negative tax burden on the county’s taxpayers. Mohave County levied $51,766,089 in property taxes in 2013; the property tax revenue from this land represents approximately .00004614% of the county’s revenues. 

All remaining private lands will continue to have a tax liability payable by Freeport. Furthermore, the Board has claimed that the Bagdad Mine and Freeport's operation yield no economic benefit to Mohave County. According to the Center for Competitiveness and Prosperity Research at Arizona State University, Freeport's impact on the economy of Mohave County (related to components including, but not limited to, direct effects from Freeport operations, direct and indirect effects from supplier purchases, and indirect effects from consumer spending by Freeport employees) is approximately $16 million annually and 175 jobs. In addition, the economic study found that the Bagdad Mine provides an annual economic impact of $339 million to the State of Arizona and is responsible for the creation of 4,000 direct and indirect jobs. These are real and existing benefits to the State of Arizona, as well as  Mohave County. 

2) Fiction: The claim that the legislation will negatively affect the potential for future development, and thus will impact the potential collection of future property taxes.

Fact: Planet Ranch is owned by Freeport, and I am told that Freeport does not intend to develop this land in any way, other than putting the lands back into agricultural use. Second, as illustrated in Exhibit VI.12 - Countywide Land Use Diagram - Sub Area 8, of the Mohave County General Plan 2010 (page 75), the privately-owned Planet Ranch lands are not designated for urban, suburban, or rural development, nor are they identified for any industrial or commercial development. The Board has failed to provide us any master plan, long-range plan, or any planning document whatsoever that includes this land as potential growth for the County.

When Planet Ranch was put up by the City of Scottsdale for sale, the Board did not make a bid or show any interest in acquiring the property at that time. Furthermore, while the final route for I-11 has not been determined to date, the preferred route is not close to this isolated location, which takes in excess of an hour to travel to on a dirt road. I am co-chair of the I-11 Caucus and one of the primary advocates of this infrastructure project. I have not seen this land on any map that shows close proximity to a potential I-11 path.  One can only conclude that there are no immediate plans for development of this remote area.

3) Fiction: The claim that this water settlement will lead to a loss of access to Planet Ranch lands for hunting, fishing, and other recreation purposes.

Fact: Planet Ranch is currently under private ownership, and there has been no public access to this land for many years. To access the land, a person would have to technically trespass on Freeport's private property. A provision in H.R. 4924 directs public land management agencies to allow public access on the land acquired. In fact, most Multi-Species Conservation Program land in Arizona already contains some form of hunting and fishing. The provision in the bill will lead to new access for hunters and fisherman. 

4) Fiction: The claim that this agreement will result in more water being transferred out of Mohave County or the basin.

Fact: Freeport has generously agreed to a "diversion limitation" or a cap on its withdrawals from the wellfield and other specified groundwater wells at its historic maximum pumping level of 10,055 acre-feet per year (AFY). This will result in an overall net water use reduction from current entitlements and current use in the basin of nearly 30,000 acre-feet per year. The bill does not transfer, affect, or infringe upon any vested or existing water rights held by Mohave County. Water rights claims in Arizona are still unresolved for 11 different tribes and the drought conditions have put even more pressure on scarce water resources. During these tough times, an agreement where a private water rights holder willingly volunteers to reduce water use to which it is legally entitled by 30,000 AFY is a great thing.

5) Fiction: The claim that lights "flicker" in nearby towns when the water pumps are turned on for the Bagdad Mine. 

Fact: This claim is not credible, nor is it coming from a power utility. The power grid for Arizona does not rest on a precipice dependent upon whether a few water pumps are turned on. 

6) Fact: 
This Agreement DOES NOT :
- Settle all Claims of the Hualapai Tribe to the Colorado River
- Transfer ownership of Planet Ranch to the Federal Government
- Give Land to the Hualapai Tribe or the US
- Limit Public Access to the MSCP Lands
- Authorize the Construction of a Pipeline from Planet Ranch or Lincoln Ranch to the Bagdad Mine
- Authorize new Withdrawals from the Wikieup Wellfield
- Increase Withdrawals or Diversion of Water in the Bill Williams Watershed 

7) Fact: The agreements that will be codified by this legislation are important in terms of water supply certainty. Arizona water law requires that the beneficial use of the water rights not lapse for more than five years. Failure to put such water rights to use during that time frame can result in the forfeiture of those water rights. Since Freeport completed the purchase of Planet Ranch in December 2011, this legislation must be signed into law, and the water rights on Planet Ranch must be put to beneficial use by December 2016. Failure to put such water rights to use could result in Freeport losing $20+ million dollars that the company invested to acquire these private water rights. This would be a significant loss not only to the company but to the employees and municipalities who benefit from Freeport’s Arizona operations.

“As with all mining operations, the Bagdad operation requires a dedicated water supply…Although the company believes the Bagdad operation has sufficient water resources to support current operations, Bagdad faces the potential for increases in competing water demands and variability in water supplies due to an on-going drought,” stated Mr. Francis McAllister, a Freeport executive who testified at the hearing on this bill.

8) Fact: One thing I think we all should agree upon is that we respect private property rights. A private land owner can sell land or water rights to whomever they want. A private land owner has the right to fence off private property and exclude a trespasser. Freeport invested $20+ million dollars to acquire these private water rights. The County did not bid when these water rights or land were up for sale, and the County has not used eminent domain to acquire these lands.The rule of law supports Freeport’s right to utilize or sell its private property. 


I recently sent a letter to the Mohave County Board of Supervisors responding to their concerns and included many of the facts listed above. Click HERE to read that letter.