[Senate Report 105-363]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 687
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-363
_______________________________________________________________________


 
   PROVIDING FOR EQUITABLE COMPENSATION FOR THE CHEYENNE RIVER SIOUX 
                     TRIBE, AND FOR OTHER PURPOSES

                                _______
                                

                October 2, 1998.--Ordered to be printed

_______________________________________________________________________


   Mr. Campbell, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 1905]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 1905) to provide for equitable compensation for the 
Cheyenne River Sioux Tribe, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment in the nature of a substitute and recommends that the 
bill (as amended) do pass.

                                purpose

    The purpose of S. 1905, the Cheyenne River Sioux Tribe 
Equitable Compensation Act, is to provide for additional 
compensation to the Cheyenne River Sioux Tribe (CRST) for the 
acquisition by the United States of 104,492 acres of land of 
the Tribe for the Oahe Dam and Reservoir on the Missouri River.

                               background

    In 1944, Congress enacted the Flood Control Act, 33 U.S.C. 
701-1, et seq., which included the Pick-Sloan Missouri River 
Basin Program to increase economic development and to provide 
an array of benefits to the Missouri River Basin and its 
residents. The Pick-Sloan project was designed to provide low-
cost hydro-power; irrigation; flood control; navigation 
benefits; and recreational opportunities.
    In 1948, as part of the program, the federal government, 
through the Army Corps of Engineers (ACE), took possession of 
CRST lands along the river and began construction of the Oahe 
Dam and Reservoir project. By the time Oahe Dam was dedicated, 
in 1962, the accrued impacts of the dam and reservoir on the 
CRST were dramatic; four reservation communities had been 
flooded by the project, 104,492 acres of tribal lands had been 
inundated, and 181 families (30% of the tribal population) had 
been forced to relocate from the fertile bottom lands along the 
river to much less hospitable upland prairie.
    The CRST and its members had long used the fertile bottom 
lands of the river basin for agricultural purposes; for cattle 
and livestock; as a source of timber for home construction, 
fuel and construction purposes; and as a ready source of 
potable water. With construction of the dam and creation of the 
reservoir, however, the once-thriving tribal cattle and 
agricultural sectors were devastated, with an average annual 
loss of cattle projected at 500 head. During the winter of 
1996-97, CRST members lost 30,000 head of livestock that in all 
likelihood would not have been lost had they had access to the 
flood and shelter previously available in the now-flooded 
bottom lands. These losses can be expected to continue into the 
future. Similarly, the loss of access to traditional hunting, 
gathering and ceremonial grounds is permanent.
    The CRST lost some 90% of its timber as a result of the 
construction of the dam and creation of the reservoir. Timber 
provided a viable source of commercial revenues for the tribe 
as well as a source of wood for subsistence needs such as home 
fence and corral construction, fuel and heating, and related 
needs. The bottom lands provided the CRST a source of potable 
water, whereas currently water is scarce, brackish or both.
    The losses suffered by the Tribe were keenly felt, no less 
so for the fact that the Tribe and its members did not receive 
any of the benefits which the Pick-Sloan plan was designed to 
bring to the other residents of the Missouri River Valley. 
Unlike many South Dakota communities that received allocations 
of low-cost hydropower which they were able to turn into a 
source of revenue for their activities, the Tribe's request for 
such an allocation was denied. Nor did theTribe receive any 
low-cost power for its own use. Instead, despite the generation of 
large amounts of hydropower from the Pick-Sloan power program, the cost 
of electricity on the CRST reservation has remained among the highest 
in the United States, burdening an already impoverished membership and 
serving as a barrier to economic development.
    The Tribe also received no flood control benefits from the 
Pick-Sloan dams, as it had never suffered flooding problems 
from the Missouri River, nor did it benefit from the increased 
navigation made possible by the Project. With respect to 
recreation, rather than providing increased recreational 
opportunities for the Tribe, the Project decreased such 
opportunities by depriving the Tribe of access to the river 
from tribal lands. With respect to irrigation, the Tribe 
receives no Project water to irrigate any of the land of the 
Tribe or its members. Thus, the Tribe not only suffered a 
permanent loss of lands and incurred major adverse impacts to 
its way of life, its economy and culture, but also failed to 
receive the benefits which the Project was to provide other 
citizens and communities in the Missouri River Basin.
    It was not until 1954 that the Congress enacted legislation 
to provide compensation to the Tribe in exchange for the 
acquisition of the Tribe's lands. In settlement negotiations 
prior to enactment of this legislation, the CRST requested some 
$23.5 million as compensation for lands taken and 
rehabilitation of tribal standards of living. However, the 
legislation authorized the payment of only $10.6 million for 
damages, rehabilitation and administrative expenses related to 
the settlement, less than half of what the Tribe requested and 
documented.\1\ This amount did not include any compensation for 
the diminishment of the value of some 800,000 acres of grazing 
lands, which resulted from the loss of access to the bottom 
lands along the river as a result of the creation of the 
reservoir. As a rough indicator of under-compensation to the 
Tribe, non-Indians received an average of $49.22 per acre for 
their agriculture lands, while the Tribe received only $21.49 
per acre.
---------------------------------------------------------------------------
    \1\ P.L. 83-776, 68 Stat. 1191 (Sept. 3, 1954).
---------------------------------------------------------------------------
    When the Tribe learned that the Congress had passed 
legislation providing less than half of the amount of 
compensation which it had requested, it began a campaign to 
persuade President Eisenhower to veto the bill. However, it was 
dissuaded from doing so by the late Senator Karl Mundt (R-SD), 
who, writing on behalf of the South Dakota Congressional 
Delegation, acknowledged that the settlement was less than it 
should have been, but promised to remedy the problem in the 
next session: ``If the Tribe would accept the bill as it is now 
before the President, they would have the assurance that the 
South Dakota Congressional Delegation would cooperate fully to 
see that the necessary amendments to the law are introduced and 
acted upon during the next Congress . . . you may be sure that 
we will all do our level best to finish the job.'' \2\ In the 
years that followed, however, no such amendments were 
introduced or acted upon.
---------------------------------------------------------------------------
    \2\ Letter from Karl E. Mundt to CRST Chairman Frank Ducheneaux, 
August 30, 1954.
---------------------------------------------------------------------------
    In the early 1980's, other tribes whose reservations on the 
Missouri River had been adversely affected by flooding caused 
by the construction of Pick-Sloan project dams sought 
additional compensation to rectify what they also considered to 
have been woefully inadequate compensation in view of their 
actual losses. In 1984, the Secretary of the Interior 
established a Joint Tribal-Federal Advisory Committee (JTAC) to 
examine and make recommendations with respect to the effects of 
the impoundment of waters under the Pick-Sloan Missouri River 
Basin Program (Oahe and Garrison Reservoirs) on the Fort 
Berthold and Standing Rock Indian Reservations. The Secretary's 
action implemented a recommendation in the Final Report of the 
Garrison Diversion Unit Commission established pursuant to 
Public Law 98-360, section 207.
    The JTAC study concluded that the compensation that was 
provided to the tribes in the 1950's indeed was inadequate and 
did not take into account the full extent of the tribes' 
losses. In 1990, the Congress asked the General Accounting 
Office (GAO) to review economic analyses prepared by 
consultants for the Fort Berthold and Standing Rock Tribes that 
documented what the tribes considered to be the difference 
between the actual losses suffered as a result of the building 
of the Garrison Dam and the amount the tribes received in 
compensation in 1952. The GAO found numerous problems with 
these analyses and recommended, instead, that the Congress base 
its decision on how much to provide in additional compensation 
on a formula. This formula included a range of additional 
compensation predicated on the present value of the difference 
between the amount originally requested by the tribe and the 
amount received. The high end of the range was established by 
compounding the difference using the corporate interest rate; 
the low end was established by compounding the difference using 
the cost of living rate. The GAO did not consider whether 
additional compensation should be provided, or whether the 
original compensation was adequate.\3\
---------------------------------------------------------------------------
    \3\ Indian Issues: Compensation Claims Analyses Overstate Economic 
Losses (GAO/RCED-91-77, May 21, 1991).
---------------------------------------------------------------------------
    In view of the JTAC study findings and the GAO review, the 
Congress enacted legislation that acknowledged, first, that the 
U.S. government did not justly compensate the tribes at Fort 
Berthold and Standing Rock when it acquired their lands and, 
second, that the tribes were entitled to additional 
compensation. Accordingly, the legislation established a $149.2 
million development trust fund for the Three Affiliated Tribes 
of the Fort Berthold Reservation and a $90.6 million 
development trust fund for the Standing Rock Sioux Tribe.\4\ In 
arriving at these amounts, the Congress adopted the GAO formula 
using the corporate interest rate option. Both of these trust 
funds were capitalized in the U.S. Treasury with receipts 
deposited from the power program of the Pick-Sloan Program. The 
legislation provides that the tribes may only spend interest 
earned on these trust funds.
---------------------------------------------------------------------------
    \4\ P.L. 102-575, title XXXV, 106 Stat. 4731 (Oct. 30, 1992).
---------------------------------------------------------------------------
    In 1996, after considering extensive documentation which 
established that the Crow Creek Sioux Tribe had been adversely 
impacted by Pick-Sloan dam construction on the Missouri River 
and that the compensation received by the Tribe also did not 
bear a fair relationship to the adverse consequences suffered 
by the Tribe, the Congress enacted legislation establishing a 
$27.5 million trust fund as additional compensation for the 
Crow Creek Sioux Tribe.\5\ In 1997, on the basis of a similar, 
well-documented historical record, the Congress enacted 
legislation establishing a $39.3 million trust fund for the 
Lower Brule Sioux Tribe.\6\ These trust funds were funded in 
the same manner, and with similar restrictions, as were those 
established for Fort Berthold and Standing Rock.
---------------------------------------------------------------------------
    \5\ P.L. 104-223, 110 Stat. 3026 (Oct. 1, 1996).
    \6\ P.L. 105-132, 111 Stat. 2563 (Dec. 2, 1997).
---------------------------------------------------------------------------
    In 1993, the Cheyenne River Sioux Tribal Council 
unanimously passed a resolution stating that the tribe had not 
received adequate compensation for the damages resulting from 
construction of Oahe Dam and Reservoir. The tribe hired a 
consultant to prepare a new economic analysis of the damages, 
which was published in July 1994.\7\ At the request of Senator 
Daschle, the GAO assessed this new economic analysis, which 
concluded that the Tribe should receive additional compensation 
in an amount between $279 million and $300.7 million for 
damages, rehabilitation and administrative expenses. Using the 
1991 formula, the GAO calculated the amount of additional 
compensation to be $290 million. The GAO noted that the amounts 
that comprised the $290 million figure cannot be readily 
compared with the amounts previously paid to the other tribes, 
first, because the damage to each reservation was unique, 
depending on the acreage lost, the number of tribal members 
living in the taking area, and the value of the resources 
located in the taking area. Also, the additional amounts for 
Fort Berthold and Standing Rock was based on 1990 values.
---------------------------------------------------------------------------
    \7\ Cheyenne River Sioux Tribe's Additional Compensation claim for 
the Oahe Dam (GAO/RCED-98-39, Jan. 1998).
---------------------------------------------------------------------------
    S. 1905 would provide additional compensation for the 
Cheyenne River Sioux Tribe in a manner consistent with that 
provided for the Fort Bethold, Standing Rock, Crow Creek and 
Lower Brule tribes. The bill provides for the establishment in 
the U.S. Treasury of the Cheyenne River Sioux Tribal Recovery 
Account (the ``Account''). For the five fiscal years beginning 
with fiscal year 1999, 10 percent of deposits to the Treasury 
from the preceding fiscal year from the power program of the 
Pick-Sloan Missouri River Basin program would be credited to 
the Account. Beginning in Fiscal year 2004, if no other law 
provides a similar plan for such deposit, 25 percent of 
deposits from the power program would be deposited to the 
credit of the Account until the aggregate of deposits equals 
$290,722,958. The Tribe would be authorized to spend interest 
earned on the Account to promote the economic development, 
education, infrastructure development and/or social welfare of 
the tribe and its members. No amount of the principal could be 
withdrawn nor could any of the interest be used to make per 
capita payments to tribal members.

                          LEGISLATIVE HISTORY

    On April 2, 1998, Senator Daschle and Senator Johnson of 
South Dakota introduced S. 1905, the Cheyenne River Sioux 
Equitable Compensation Act, which was referred to the Committee 
on Indian Affairs. The Committee held a hearing on S. 1905 on 
July 8, 1998. The Department of the Interior witness expressed 
support for the legislation if it were amended to more closely 
resemble previous legislation providing additional compensation 
to other tribes that lost lands as a result of construction of 
Pick-Sloan dams on the Missouri River. The Cheyenne River Sioux 
Tribe's testimony was in strong support of S. 1905. The 
Committee also received a letter of support for S. 1905 from 
the Governor of South Dakota.
    On July 15, 1998, the Committee on Indian Affairs 
considered and adopted an amendment in the nature of a 
substitute to S. 1905 on behalf of Senator Daschle and Senator 
Johnson (D-SD). The substitute made technical modifications in 
S. 1905 and included changes that (1) clarify that the tribe 
must consult with the Bureau of Indian Affairs and the Indian 
Health Service in preparing its plans for expending interest 
from the trust fund set up under the bill; (2) clarifies that 
expenditures of interest on the fund by the tribe are to be 
audited under the ``single agency'' audit required of tribes by 
the Office of Management and Budget; (3) eliminates a provision 
that would have enabled the tribe to remove the principal of 
the trust fund from the Treasury so as to greatly reduce direct 
spending as defined by the Congressional Budget Act; and, (4) 
limits the tribe's ability to pledge future income from the 
trust for security for loans to 40 percent of such income and 
only for the purchase of land or other capital assets. These 
changes address concerns raised by the Department and the 
Committee understands that they are acceptable to the tribe.

            committee recommendation and tabulation of vote

    The Committee on Indian Affairs, in an open business 
session on July 15, 1998, adopted an amendment-in-the-nature-
of-a-substitute to S. 1905 by voice vote and ordered the bill, 
as amended, reported favorably to the Senate.

                      section-by-section analysis

Section 1--Short title

    This session cites the short title of S. 1905 as the 
``Cheyenne River Sioux Tribe Equitable Compensation Act''.

Section 2--Findings and purposes

    Subsection (a) of this section sets forth nine 
Congressional findings:
    The first finding is that Congress approved the Pick-Sloan 
Missouri River Basin program by passing the Flood Control Act 
of 1944 to promote the general economic development of the 
United States; to provide for irrigation above Sioux City, 
Iowa; to protect urban and rural areas from floods of the 
Missouri River; and for other purposes;
    The second finding is that the Oahe Dam and Reservoir 
project is a major component of the Pick-Sloan program, and 
contributes to the economy of the United States by generating a 
substantial amount of hydropower and impounding a substantial 
quantity of water;
    The third finding is that, notwithstanding the 
contributions referred to in the first finding, the Oahe Dam 
and Reservoir project has contributed little to the economy of 
the Cheyenne River Sioux Tribe;
    The fourth finding is that the Oahe Dam and Reservoir 
project overlies the eastern boundary of the Cheyenne River 
Sioux Indian Reservation;
    The fifth finding is that the Oahe Dam and Reservoir 
project has inundated the fertile wooded bottom lands of the 
Tribe along the Missouri River that constituted the most 
productive agricultural and pastoral lands of the tribe and the 
homeland of the members of the tribe; as a result of that 
inundation, the project severely damaged the economy of the 
tribe and the members of the tribe;
    The sixth finding is that the Secretary appointed a Joint 
Tribal Advisory Committee that examined the Oahe Dam and 
Reservoir project and that advisory committee concluded that 
(A) the Federal Government did not justify, or fairly 
compensate the tribe for, the Oahe Dam and Reservoir project 
when the Federal Government acquired 104,492 acres of land of 
the tribe for that project; and, (B) the tribe should be 
adequately compensated for the acquisition described in (A);
    The seventh finding is that the Comptroller General of the 
United States, after applying the same method of analysis used 
for the compensation of similarly situated Indian tribes, 
determined that the appropriate amount of compensation to pay 
the tribe for acquisition described in the sixth finding would 
be $290,722,958;
    The eighth finding is that the tribe is entitled to receive 
additional financial compensation for the acquisition described 
in the sixth finding in a manner consistent with the 
determination of the Comptroller General referred to in the 
seventh finding; and,
    The ninth finding is that the establishment of a dual cash 
account with the amounts made available to the tribe under this 
Act is consistent with the principles of self-governance and 
self-determination.
    Subsection (b) of section 2 states the purposes of the Act 
as (1) to provide for additional financial compensation to the 
tribe for the acquisition of 104,492 acres of tribal land for 
the Oahe Dam and Reservoir project in a manner consistent with 
the determination of the Comptroller General of the United 
States described in the seventh finding; and, (2) to provide 
for the establishment of the Cheyenne River Sioux Tribal 
Recovery Account, a dual cash account to be managed by the 
Office of Trust Fund Management of the Department of the 
Interior in order to make payments to the tribe to carry out 
projects under a plan prepared by the tribe.

Section 3--Definitions

    This section defines the seven terms used in the Act: 
``Account'' means the Cheyenne River Sioux Tribal Recovery 
Account established under section 4: ``Cheyenne River Sioux 
Tribe; Tribe'' means the Itazipco, Siha Sapa, Minniconjou, and 
Oohenumpa bands of the Great Sioux Nation that reside on the 
Cheyenne River Reservation, located in central South Dakota; 
``Fund'' means a consolidated account numbered 14X8365 for 
tribal trust funds in the United States Treasury that is 
managed by the Secretary, through the Office of Trust Fund 
Management within the Department of the Interior; ``Program'' 
means the power program of the Pick-Sloan Missouri River Basin 
program, administered by the Western Area Power Administration; 
``Secretary'' means the Secretary of the Interior; and ``Tribal 
Council'' means the governing body of the Tribe.

Section 4--Cheyenne River Sioux Tribal Recovery Account

    Subsection (a) requires the Secretary of the Treasury to 
establish in the Fund a dual cash account to be known as the 
``Cheyenne River Sioux Tribal Recovery Account''. The interest 
component of the account shall be used to make payments to the 
tribe in accordance with this Act; the principal component of 
the account may not be expended. The corpus and the income of 
the account may be invested in accordance with applicable law.
    Subsection (b)(1) requires the Secretary of the Treasury, 
beginning with fiscal year 1999, and for each year thereafter 
until the aggregate of deposits is $290,722,958, to deposit 
into the Fund, to the credit of the Recovery Account, 10 
percent of the receipts from the deposits to the Treasury for 
the preceding fiscal year from the Program;
    Subsection (b)(2) requires that, beginning with fiscal year 
2004, if no other law provides for the compensation to parties 
in conjunction with an applicable plan for the Program, the 
Secretary of the Treasury shall deposit into the Fund 25 
percent of the receipts from the deposits to the Treasury for 
the preceding fiscal year from the Program, until the aggregate 
of deposits equals $290,722,958.
    Subsection (b)(3) provides that if, within 60 days after 
the end of a fiscal year, the Secretary of the Treasury fails 
to deposit into the Fund the amount described in subsection 
(b)(1) or (b)(2), the Secretary of the Treasury shall deposit 
interest on such amount, determined for the period beginning on 
the day after the termination of the 60-day period and ending 
on the date inwhich the amount described on (b)(1) or (b)(2) is 
deposited, at a rate of interest commonly referred to as the Treasury 
overnight rate.
    Subsection (c)(1) requires the Secretary, acting through 
the Office, upon the request of the tribe, to make payments to 
the tribe from the interest credited to the interest component 
of the account, beginning at the end of the first fiscal year 
during which interest is credited to the account.
    Subsection (c)(2) requires the tribe to use the payments 
made under this subsection only for carrying out projects and 
programs pursuant to the plan prepared under subsection (d).
    Subsection (c)(3) requires that each request by the tribe 
under subsection (c)(1) to withdraw funds shall be accompanied 
by a resolution from the Tribal Council authorizing the 
withdrawal of funds in a manner that complies with the terms of 
this Act.
    Subsection (d)(1) requires that the Tribal Council, no 
later than 18 months after the date of enactment of this Act, 
prepare a plan for the use of the payments made to the tribe 
under subsection 4(c).
    Subsection (d)(2) requires that the plan developed under 
this subsection to provide for the manner in which the tribe 
will expend the payments referred to in subsection (d)(1) to 
promote economic development, infrastructure development, 
educational, health, recreational, and social welfare 
objectives of the tribe and its members, or any combination of 
these activities.
    Subsection (d)(3) requires the Tribal Council to make 
available for review and comment by the members of the tribe a 
copy of the plan before it becomes final, in accordance with 
procedures established by the Tribal Council. The Tribal 
Council may update the plan annually by revising it in a manner 
that provides the members of the tribe to review and comment on 
any proposed revision. In preparing the plan and any revisions 
to update it, the Tribal Council shall consult with the 
Secretary of the Interior and the Secretary of Health and Human 
Services.
    Subsection (d)(4) provides that the activities of the tribe 
in carrying out the plan under this subsection shall be audited 
as part of the annual single-agency audit that the tribe is 
required to prepare pursuant to the Office of Management and 
Budget circular numbered A-133, that the audit shall include 
written findings as to whether the funds received by the tribe 
under this subsection to carry out the plan were expended in a 
manner consistent with this section, and that a copy of these 
findings shall be inserted in the published minutes of the 
Tribal Council proceedings for the session at which the audit 
is presented to the Tribal Council.
    Subsection (e) prohibits any portion of any payment made 
under this section from being distributed to any member of the 
Tribe on a per capita basis.
    Subsection (f)(1) provides that the tribe may enter into an 
agreement under which the tribe pledges future interest from 
the account as security for a loan or other financial 
transaction.
    Subsection (f)(2) provides that the Tribe may enter into an 
agreement under subsection (f)(1) only in connection with the 
purchase of land or other capital assets, but may not pledge, 
for any year under such agreement, an amount greater than 40 
percent of the income from interest from the account.

Section 5--Eligibility of tribe for certain programs and services

    Subsection 5(a) states that no payment made to the tribe 
pursuant to this Act shall result in the reduction or denial of 
any service or program to which, pursuant to Federal law, (1) 
the tribe is otherwise entitled because of the status of the 
tribe as a federally recognized Indian Tribe or (2) any 
individual who is a member of the tribe is entitled because of 
the status of the individual as a member of the tribe.
    Subsection (5)(b) states that no payment made pursuant to 
this Act shall be subject to any Federal or State income tax.
    Subsection (5)(c) states that no payment made pursuant to 
this Act shall affect Pick-Sloan Missouri River Basin power 
rates.

Section 6--Sale of western area power authority

    Subsection 6(a) provides that if, before the amount 
specified in section 4(b)(1) is deposited into the Fund, the 
United States sells or otherwise transfers title to the assets 
and income of the Western Area Power Administration (WAPA) to 
an entity other than the United States, (1) an amount of the 
proceeds from that sale equal to the difference between the 
amount specified in section 4(b)(1) and the aggregate amount 
that has been paid into the Fund as of the date of the sale of 
the WAPA, shall be deposited in the Fund; or (2) the purchaser 
may assume responsibility for making payments to the Treasury 
for deposit in the Fund in amounts determined under section 
4(b)(1).
    Subsection (6)(b) provides that, if a purchaser assumes the 
responsibility for making the payments described in 6(a)(2), 
the purchaser shall provide the tribe with appropriate security 
to secure those payments.

                   cost and budgetary considerations

    The cost estimate for S. 1905, as amended, as provided by 
the Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 10, 1998.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1905, the Cheyenne 
River Sioux Tribe Equitable Compensation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
(for federal costs), and Marjorie Miller (for the impact on 
state, local, and tribal governments).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

S. 1905--Cheyenne River Sioux Tribe Equitable Compensation Act

    Summary: The federal government acquired 104,492 acres of 
land from the Cheyenne River Sioux to construct the Oahe Dam 
and Reservoir project. The Comptroller General determined that 
about $291 million would be the appropriate amount of 
compensation to pay the Cheyenne River Sioux for the taking. To 
provide compensation for the taking, S. 1905 would establish a 
tribal recovery fund for the Cheyenne River Sioux. Beginning 
with the year in which S. 1905 is enacted, the bill would 
direct the Secretary of the Treasury to deposit specified 
portions of the previous year's receipts from the Pick-Sloan 
Missouri River basin program into a separate account in the 
U.S. Treasury on behalf of the Cheyenne River Sioux. Once a 
total of $291 million is deposited, no further principal 
deposits would be made.
    The bill would require that principal amounts be invested 
in interest-bearing Treasury securities and that the fund's 
interest earnings be made available to the Cheyenne River Sioux 
without fiscal year limitation or the need for further 
appropriation. CBO estimates that disbursements of those 
earnings would increase direct spending by $13 million over the 
1999-2003 period. Implementing S. 1905 also would increase the 
administrative costs of the Departments of the Treasury and the 
Interior, but CBO estimates that any such costs would not be 
significant.
    Because S. 1905 would affect direct spending, pay-as-you-go 
procedures would apply. The legislation contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1905 is shown in the following table. 
The costs of this legislation fall within budget function 450 
(community and regional development).

                                    [By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                1999    2000    2001    2002    2003
----------------------------------------------------------------------------------------------------- -------------
                                           CHANGES IN DIRECT SPENDING
Estimated Budget Authority...................................       0       1       2       4       6
Estimated Outlays............................................       0       1       2       4       6
----------------------------------------------------------------------------------------------------------------
Note: Implementing S. 1905 also would increase discretionary spending, but the amounts involved would be less
  than $500,000 a year.

    Basis of estimate: For the purposes of this estimate, CBO 
assumes that S. 1905 will be enacted near the beginning of 
fiscal year 1999.
    Beginning with the year in which S. 1905 is enacted, the 
bill would direct the Secretary of the Treasury to deposit 10 
percent of the previous year's receipts from the Pick-Sloan 
Missouri River basin program into a separate account in the 
U.S. Treasury on behalf of the Cheyenne River Sioux. Beginning 
in 2004, the bill would direct the Secretary of the Treasury to 
deposit 25 percent of the previous year's receipts into the 
account. Once a total of $291 million is deposited, no further 
principal deposits would be made. The bill would direct that 
the deposits be invested in interest-bearing Treasury 
securities and that the fund's interest earnings be made 
available to the Cheyenne River Sioux without fiscal year 
limitation or the need for further appropriation.
    Based on information from the Western Area Power 
Administration--which markets electricity produced from the 
Pick-Sloan Missouri River Basin--CBO estimates that receipts 
from the Pick-Sloan project will total about $250 million 
annually over the next several years. On that basis, CBO 
estimates that, if S. 1905 is enacted in fiscal year 1999, the 
fund would be fully capitalized in fiscal year 2006. The 
deposits to the trust fund would be intragovernmental 
transfers, and thus, no net outlays would be associated with 
them.
    S. 2131 would make the fund's interest earnings available 
to the tribe and the state. For the purpose of this estimate, 
CBO assumes that deposits into the fund will be made by 
December 1 of each year, the initial deposit would be made by 
December 1, 1998, and earn interest for 10 months of fiscal 
year 1999. Interest earnings would first become available for 
spending in fiscal year 2000. We assume that the balance in the 
fund would earn interest at an annual rate of about 6 percent, 
which is CBO's baseline projection of the interest rate on 30-
year Treasury bonds. Unspent interest in the accounts also 
would earn interest, but at a lower (short-term) rate of about 
5 percent.
    As a result, CBO estimates that interest earnings in the 
following amounts would be made available to the Cheyenne River 
Sioux: $1 million in 2000, $2 million in 2001, $4 million in 
202, and $6 million in 2003. The interest earnings would 
increase as the fund is fully capitalized, so that in 2009, and 
each year thereafter, about $19 million would be made available 
to the tribe, assuming that the interest earnings are withdrawn 
each year.
    It is possible that enacting S. 2131 would allow the United 
States to avoid future costs from possible claims by the 
Cheyenne River Sioux related to the taking of tribal lands. 
Because the bill would provide for compensating the Cheyenne 
River Sioux for the complete value of the taking, CBO estimates 
that enacting the bill would probably be more costly than any 
potential judgment (which might provide for only partial 
compensation). However, CBO has no basis for estimating the 
likelihood, timing, or amount of any judgment.
    S. 1905 would increase the administrative costs of the 
Departments of the Interior and the Treasury. CBO estimates 
that any such amounts would be less than $500,000 each year and 
would be subject to appropriation action.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays that are subject to pay-as-you-go procedures 
are shown in the following table. (The bill would not affect 
governmental receipts.) For the purposes of enforcing pay-as-
you-go procedures, only the effects in the current year, the 
budget year, and the succeeding four years are counted.

                                                        [By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1998    1999    2000    2001    2002    2003    2004    2005    2006    2007    2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays..............................................       0       0       1       2       4       6       7      10      14      17      18
Changes in receipts.............................................                                      Not applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments: 
S. 1905 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments. The bill would, however, impose some conditions on 
the tribe for receipt of the authorized payments. It would 
require the tribe to prepare a plan for use of the payments and 
to obtain an audit of the funded expenditures. Based on 
information provided by tribal officials, CBO does not expect 
that these conditions would result in significant additional 
costs for the tribe.
    Estimated impact on the private sector: This bill would 
impose no new private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Mark Hadley. Impact on 
State, Local, and Tribal Governments: Marjorie Miller.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
carrying out the bill S. 1905, as amended. The Committee finds 
that the regulatory impact of S. 1905, as amended, will be 
minimal.

   Statement of Michael Anderson, Deputy Assistant Secretary--Indian 
                Affairs, U.S. Department of The Interior

    Good morning, Mr. Chairman and members of the Committee. I 
am pleased to be here today to present the Department of the 
Interior's views on S. 1905, the ``Cheyenne River Sioux Tribe 
Equitable Compensation Act.'' If enacted, this bill would 
provide to the Cheyenne River Sioux Tribe much deserved 
benefits of the Missouri River Basin Pick-Sloan Program. We 
could support this legislation, if amended.
     I wish to thank Senator Daschle for introducing the bill 
which addresses long standing problems regarding development in 
the Missouri River Basin and its impacts on Indian tribes 
residing in the region.
    S. 1905 is a continuation of the United States efforts to 
correct inequities of a regional Federal development project 
which affected several Tribes. The Pick-Sloan Missouri River 
Basin Program, or Pick-Sloan, is a major Federal program that 
provides for economic development, irrigation, and flood 
control in the Missouri River Basin. One of the major 
components of Pick-Sloan is the Oahe Dam and Reservoir, which 
had a devastating impact on the Cheyenne River Sioux Tribe, its 
culture, and its economy.
    Fifty years ago the Oahe Dam and Reservoir flooded over 
104,402 acres of Tribal homelands. This required most of the 
Tribe's residents to relocate from historical cultural 
homelands and fertile river lands. These lands were taken and 
permanently sacrificed to provide for the general welfare of 
the United States, and this Tribe along with others in the area 
were never properly compensated.
    S. 1905 allows the Cheyenne River Sioux Tribe to be fully 
compensated for its sacrifices and share in the economic 
development it has provided over the past fifty years.
    S. 1905 currently drafted has significant pay-as-you-go 
implications. Unlike two previously enacted bills, whose direct 
spending was limited to annual interest on the ``trusts,'' S. 
1905 as currently drafted includes direct spending of the 
amount of the ``trust'' that accrues through 2002 (about $100 
million) and would therefore require an offsetting decrease in 
direct spending or increase in receipts. The Administration 
could support enactment of S. 1905 if it were redrafted in a 
manner similar to the bills passed for the Lower Brule and Crow 
Creek Tribes, with some additional technical modifications. 
However, the Administration is concerned that this type of off-
budget financing approach appears to be without cost. A more 
straight forward approach would be to rely on the 
authorization/discretionary appropriation process. The 
Department would be happy to work with the Committee in this 
regard.
    This concludes my testimony in support of S. 1905. I will 
be happy to respond to any questions you may have.

                        changes in existing law

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill are required to be set in the accompanying Committee 
report. The Committee states that enactment of S. 1998 will not 
result in any changes in existing law.