Tough one. This question is testing your Critical Reasoning skills more than anything. The question asks: if X (criteria discussed in lines 16-32), then what MUST BE TRUE? Therefore, approach it as if it were a MUST BE TRUE Critical reasoning question.
What are the premises?
Everything stated in X - the criterias(!):
To guarantee water rights, the land needs to...(1)
the land in question lies within an enclave under exclusive federal jurisdiction, (2)
the land has been formally withdrawn from federal public lands — i.e., withdrawn from the stock of federal lands available for private use under federal land use laws — and set aside or reserved, and (3)
the circumstances reveal the government intended to reserve water as well as land when establishing the reservation.
Now, take a look a at what answer C says (the conclusion):
C. There would be no
legal basis for the water rights of the Rio Grande pueblos. - Wait a minute! The second paragraph says that the Rio Grande Pueblo "never formally constituted a part of federal public land". Now look at what premise (1) states. Therefore, Rio Grande Pueblos would never be awarted water rights, as they were not part of a federal jurisdiction.
I hope it helps,
9 minutes 14 seconds.
Can anyone explain why #2 is C?