Page 80, Draft 11......Wildlife Refuge Lease Lands, walking wetlands, measuring water

Wildlife and Agriculture on Wildlife Refuge Lease Lands and
Other Klamath Reclamation Project Agricultural Lands.

A. Refuge Lease Lands.
With respect to the Wildlife Refuge lands leased for agriculture under
section 4 of the Kuchel Act, Public Law 88-567 (Refuge lease lands),
the Parties (i) recognize the unique history and circumstances of the
Wildlife Refuges lease lands and their dual wildlife and agricultural
values; (ii) recognize that in the conduct of the leasing of the Refuge
lease lands, the Secretary of the Department of the Interior, through
collaborative efforts with growers and water delivery agencies, has
made or may make use of practices, such as walking wetlands, lease
incentives, and other programs, that enhance waterfowl management
while optimizing agricultural use and maximizing lease revenues; and

(iii) seek to further the beneficial partnerships that have developed
between the growers and the Wildlife Refuges. The Parties support
continued lease land farming on TLNWR and LKNWR managed as
described above in (ii).
B. Non-Federal Lands.
The Parties support partnership agreements on private lands within the
Klamath Reclamation Project, and funding for such agreements, for
walking wetlands and other activities that promote wildlife and do not
harm the local agricultural economy or interests of local public
agencies.

Disposition of Refuge Lease Land Revenues.

A. Past Net Revenues from Leasing of Refuge Lands.
i.
Certain costs related to Reclamation Project facilities have
accrued and are currently identified as an outstanding
balance for the Reclamation Project. The net lease
revenues that are in the Reclamation Fund have not been
applied to these costs due to uncertainty in the proper
81


Confidential and Privileged Settlement Communication

application of existing law. The contracts between the
United States and the Klamath Reclamation Project water
users do not address these costs. It is also uncertain
whether the outstanding costs are equal to, less than, or
greater than the current lease revenues in the Reclamation
Fund, or whether past net lease revenues may be applied to
the outstanding Klamath Reclamation Project costs.
Accordingly, pursuant to the Act of August 1, 1956, 70
Stat. 799, and the Act of June 17, 1944, 58 Stat. 279, and
other acts as applicable, after 10% of the net revenues from
leasing of TLNWR lands within the boundaries of TID are
provided to TID, as provided in article 4 of Contract No.
14-06-200-5954, and payment is made to counties from net
revenues from the leasing of Refuge lands in TLNWR and
LKNWR (Area K) in lieu of taxes, as provided in section 3
of Public Law 88-567, the Parties agree that remaining net
revenues from the leasing of Refuge lands in TLNWR and
LKNWR at the time of enactment of the Authorizing
Legislation proposed in Appendix A-1 and deposited in the
Reclamation Fund shall apply as a credit to existing capital
costs of Klamath Reclamation Project facilities.

ii.
In order to resolve any and all disputes or outstanding
issues regarding any debt or encumbrance of the Klamath
Reclamation Project or Project contractors and the
disposition and application of past net revenues from
leasing of lands within the TLNWR or LKNWR, the
United States and KPWU agree that the funds held in the
Reclamation Fund from the Refuges lease land revenues at
the time of enactment of the Authorizing Legislation will
be deemed to be equal to, and applied to liquidate, any and
all debt or encumbrance of the Klamath Reclamation
Project or Project contractors as of the date of enactment of
that act. KPWU and the United States further agree that the
disposition of net lease revenues thereafter shall be in
accordance with the Authorizing Legislation, as described
in Section 15.4.4.B.
iii. The provision in Section 15.4.4.A.ii that any past Klamath
Reclamation Project debt or encumbrance is deemed
satisfied and the provision in Section 15.4.4.B that future
net lease revenues will be applied to future Klamath
Reclamation Project capital costs, does not affect the title
of Klamath Reclamation Project facilities that are currently
owned by the United States. Express Congressional
approval is required to transfer title to any Klamath
Working Draft May 6, 2009

82


Confidential and Privileged Settlement Communication

Reclamation Project facilities now owned by the United
States, and nothing in this Agreement or the Authorizing
Legislation shall affect any such title transfer.

B.
Future Net Revenues from Leasing of Refuge Lands.
The Parties shall support the provisions of the Authorizing Legislation
(Appendix A-1) providing that the disposition of future net revenues
from leasing of Refuge lands will be as follows:

i.
10% of net revenues to TID from leasing of TLNWR lands
within the boundaries of TID, as provided in article 4 of
Contract No. 14-06-200-5954 and section 2(a) of the Act of
August 1, 1956;
ii.
Payment to counties in lieu of taxes as provided in section
3 of Public Law 88-567;
iii. 20% directly, without further authorization, of net revenues
from leasing of TLNWR and LKNWR lands, to the FWS,
Klamath Basin Refuges, for wildlife management purposes
on the TLNWR and LKNWR;
iv. 10% of net revenues to KDD from leasing of LKNWR
lands within the boundaries of KDD, subject to KDD
assuming Reclamations Operation and Maintenance duties
for LKNWR (Area K) lease lands; and
v.
The remainder of the Wildlife Refuges net lease land
revenues will be covered to the Reclamation fund and shall
be applied to future Klamath Reclamation Project capital
costs.
C.
Subject to passage of the Authorizing Legislation Consistent
with Section 15.4.4.B, KDD will accept transfer of all
Operation and Maintenance responsibility for the Reclamation
water delivery and drainage facilities that are within the
boundaries of both LKNWR and KDD (i.e. Area K), exclusive
of the Klamath Straits Drain. After passage of such legislation,
the United States and KDD will amend the April 28, 1943,
Amendatory Contract between the United States and KDD
(Contract No. 14-06-200-5964) to provide for transfer to KDD
of all Operation and Maintenance responsibility for the
Reclamation water delivery and drainage facilities that are
within the boundaries of both LKNWR and KDD, exclusive of
Working Draft May 6, 2009

83

Confidential and Privileged Settlement Communication
the Klamath Straits Drain, consistent with the terms in that
legislation with regard to the disposition of lease revenues.

D.
Upon enactment of the Authorizing Legislation Consistent with
Appendix A-1, TID waives any and all past claims for damages
for breach of contract against the United States arising under
Article 4 of Contract No. 14-06-200-5954 between TID and the
United States.
15.4.5. Authorizing Legislation.
A.
Act of February 21, 1911.
The Parties support the following term in the federal Authorizing
Legislation: Notwithstanding the Act of February 21, 1911, 36 Stat.
925, Klamath Reclamation Project facilities may be used by operators
of the facilities to convey non-Project water for any authorized
purpose of the Klamath Reclamation Project; provided, that all such
use shall be subject to other necessary permits, if any, and all water
delivered into and taken out of Klamath Reclamation Project facilities
will be measured.