[Senate Report 109-200]
[From the U.S. Government Publishing Office]
Calendar No. 317
109th Congress Report
SENATE
1st Session 109-200
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SPOKANE TRIBE OF INDIANS OF THE SPOKANE RESERVATION GRAND COULEE DAM
EQUITABLE COMPENSATION SETTLEMENT ACT
_______
December 8, 2005.--Ordered to be printed
Filed under authority of the order of the Senate of November 18, 2005
_______
Mr. McCain, from the Committee on Indian Affairs, submitted the
following
R E P O R T
[To accompany S. 881]
The Committee on Indian Affairs, to which was referred the
bill (S. 881), to provide for equitable compensation to the
Spokane Tribe of Indians of the Spokane Reservation for the use
of tribal land for the production of hydropower by the Grand
Coulee Dam, and for other purposes, having considered the same,
reports favorably thereon without amendment and recommends that
the bill do pass.
PURPOSE
The purpose of S. 881 is to provide equitable compensation
to the Tribe for the past and continued use of tribal lands for
the generation of hydropower by the Grand Coulee Dam, located
on the main stem of the Columbia River in the State of
Washington. The Tribe has received compensation in the amount
of only $4,700 for the loss of its tribal lands taken for the
construction of that dam, an amount that is not comparable to
the payments that have been made and that will continue to be
made to the neighboring Confederated Tribes of the Colville
Reservation under the terms of a congressionally approved
settlement with the United States for losses sustained by those
tribes as a result of the construction and operation of the
dam.
BACKGROUND
I. Planning and construction of Grand Coulee Dam
Planning for the construction of the Grand Coulee Dam began
during the period from 1927 to 1931, when the Army Corps of
Engineers, at the direction of Congress, investigated the
Columbia River and its tributaries to identify sites at which
dams could be constructed to produce hydroelectric power at low
cost. The Corps recommended that dams be constructed at a
number of sites, including the current site of the Grand Coulee
Dam.
The Corps recommended that construction of Grand Coulee Dam
be undertaken by local governments or private utilities under
the authority of the Federal Power Act, 16 U.S.C.
Sec. Sec. 791a et seq. Section 10(e) of that Act (16 U.S.C.
Sec. 803(e)) requires a licensee using Indian lands to pay to
the Indian tribe an annual payment for the use of its land. In
1933, an agency of the State of Washington was issued a
preliminary permit to construct a dam at the Grand Coulee site
by the Federal Power Commission. Several years later, however,
the Federal government assumed control of the project. Federal
dam projects were not subject to the Federal Power Act.
II. Payment of compensation to tribes
Under the Act of June 29, 1940, Pub. L. No. 76-690
(codified as amended at 16 U.S.C. Sec. Sec. 835d-835h), in aid
of the construction of the Grand Coulee Dam project, Congress
granted to the United States ``all the right, title, and
interest of the Indians in and to the tribal and allotted lands
within the Spokane and Colville Reservations * * * as may be
designated therefor by the Secretary of the Interior from time
to time. * * * '' This Act also provided that the Secretary of
the Interior was to determine the amount of ``just and
equitable compensation for the tribal lands taken.'' Id.,
codified, as amended, at 16 U.S.C. Sec. 835e.
At the time the Grand Coulee Dam project came under Federal
administration, the United States recognized that the Tribe and
the Confederated Tribes of the Colville Reservation had
compensable interests that would be injured by the project,
including interests in the development of hydropower, in a
salmon fishery vital to the tribes which would be destroyed by
the dam construction, and in tribal lands already identified as
potential hydropower sites that would be inundated as a result
of the construction of the Grand Coulee Dam.
Pursuant to the Secretary of the Interior's determination,
the Tribe was paid $4,700 in compensation and the Confederated
Tribes of the Colville Reservation were paid $63,000. On
October 2, 2003, the Committee received testimony at a hearing
on S.1438 \1\ to the effect that for decades the two tribes had
gone without adequate compensation and had not received the
compensation to which they would have been entitled had the Dam
been constructed under the authority of the Federal Power Act.
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\1\ Similar legislation introduced by Senator Cantwell (with
Senators Inouye and Murray as cosponsors) in the 108th Congress. S.
1438 was passed by the Senate with an amendment on November 19, 2004.
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The Confederated Tribes of the Colville Reservation
asserted various claims before the Indian Claims Commission
under the Indian Claims Commission Act of 1946, Pub. L. 79-726
(``ICCA''). However, in addition to their ICCA land claims, the
Colville Tribes sought and obtained, in 1978, an award of
$3.257 million for the loss of fisheries as a result of the
Grand Coulee Dam project, and about 15 years later negotiated a
settlement with the United States of their claim for hydropower
losses resulting from the Dam under the fair and honorable
dealings standard of the ICCA.\2\ In 1994, Congress approved
the settlement agreement, which provided for a compromise final
judgment in the amount of $53,000,000 and annual installments
in perpetuity to be made by the Bonneville Power Administration
(``BPA'') as set forth in the Settlement Agreement between the
Confederated Tribes and the United States.\3\ See, Confederated
Tribes of the Colville Reservation Grand Coulee Dam Settlement
Act, Pub. L. No. 103-436, 108 Stat. 4577 (November 2, 1994)
(``Colville Confederated Tribes Act'').
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\2\ See, written testimony of Peter R. Steenland, Appellate Section
Chief, Environment and Natural Resources Division, United States
Department of Justice, dated August 2, 1994, presented at the hearing
held on that date on H.R. 4757, the Confederated Tribes of the Colville
Reservation Grand Coulee Dam Settlement Act, before the Subcommittee on
Oversight and Investigations, House Committee on Resources. See, also,
Confederated Tribes of the Colville Reservation v. United States, 964
F. 2d 1102 (Fed. Cir., 1992).
\3\ Under the 1994 Colville Settlement Agreement, the annual
installments payable by BPA from revenues derived from power generated
by the Grand Coulee Dam Project are equal to $15,250,000, subject to an
annual adjustment under a formula set forth in section 2 of the
Agreement. See, H. Rept. 103-685.
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Although the Spokane Tribe litigated certain issues under
the ICCA, it did not litigate its claims for loss of water
power values in that forum or elsewhere.\4\ Nevertheless, a
1976 legal memorandum issued by the Office of the Solicitor of
the Department of the Interior discussed the claims of the
Tribe and the Colville Tribes for lost hydropower values in
relation to the construction of the Grand Coulee Dam, and in
reaching the conclusion that the claims of the two tribes had
merit, the memorandum did not contend or suggest that the
Spokane Tribe's claim was weaker than, or legally
distinguishable from, that of the Confederated Tribes.\5\ It
appears that the Spokane Tribe would have a claim to
compensation that is legally comparable to that of the Colville
Confederated Tribes but for the five-year statute of
limitations applicable to claims under the ICCA.\6\
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\4\ In his written testimony submitted to the Committee at its
hearing on S. 1438 held on October 2, 2003, the Spokane Tribe's
Chairman, Warren Seyler, contended that, while the tribe had failed to
assert claims under the ICCA for loss of water power values as a result
of the Grand Coulee Dam project, certain obstacles unique the Tribe
made the task of filing claims under the ICCA ``unusually difficult''--
such as Bureau of Indian Affairs' failure to carry out its advisory
responsibilities under the ICCA by giving the Tribe adequate notice of
its rights to assert claims under the Act (Mr. Seyler stated that they
learned of that from neighboring tribes ``only months before the 1951
filing deadline'') and delay on the part of the Commissioner of Indian
Affairs in approving the Tribe's contract with legal counsel, ``costing
our Tribe much critical time.''
\5\ Memorandum to the Solicitor from Lawrence A. Aschenbrenner,
Acting Associate Solicitor, Division of Indian Affairs, United States
Department of Interior (1976), Reimbursement to the Colville and
Spokane Tribes for Construction of the Grand Coulee and Chief Joseph
Dams.
\6\ Under section 12 of the Indian Claims Commission Act, Pub. L.
No. 79-726 (60 Stat. 1049), claims must have been filed with the
Commission not later than 5 years after the approval of the Act--i.e.,
within 5 years after August 13, 1946.
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SUMMARY OF PROVISIONS OF S. 881
Under the proposed legislation, the Spokane Tribe would be
compensated for the use of its lands for the production of
hydropower by the Grand Coulee Dam under a formula based in
part on that by which the Confederated Tribes of the Colville
Reservation were compensated in the Confederated Tribes of the
Colville Reservation Grand Coulee Dam Settlement Act, Pub. L.
103-436, 108 Stat. 4577 (November 2, 1994). The Spokane Tribe
has contended that it lost lands equivalent in area to 39.4% of
the lands lost by the Colville Confederated Tribes, and that a
settlement based solely on this claimed percentage would
justify payments to the Spokane Tribe equal to 39.4% of the
payments made to the Confederated Colville Tribes. In S. 881,
this percentage has been reduced to 29% with the Tribe's
agreement, in recognition in part of the fact that certain
lands located within, as well as contiguous to, the boundaries
of the Spokane Indian Reservation taken for construction of the
Grand Coulee Dam would be restored or transferred to the Tribe
under section 9 of the bill.
Under section 5 of S. 881, an interest-bearing settlement
fund account would be established in the Treasury to be known
as the Spokane Tribe of Indians Settlement Fund. From amounts
appropriated pursuant to section 11 of the bill, for fiscal
year 2006, the Secretary of Interior would deposit $17,800,000
into the Fund, and for each of the four fiscal years
thereafter, the Secretary would deposit into the Fund the sum
of $12,800,000. These funds would be held in trust by the
Secretary unless and until the Spokane Business Council
submitted a written notice to the Secretary of a resolution
requesting that all or portion of the amounts in the Fund be
paid to the Spokane Business Council. Of the initial deposit,
$5,000,000 must be used by the Business Council for the
planning, design, construction, equipping, and operation and
maintenance of a Cultural Resource Repository and Interpretive
Center to house cultural resources affected by the operation of
the Grand Coulee Dam and to provide an educational facility
addressing the culture and history of the Spokane Tribe. Of the
remaining amounts deposited in the Fund (including earned
interest), 25% may be used by the Spokane Business Council for
discretionary purposes of general benefit to members of the
Spokane Tribe, while 75% may be used by the Business Council to
carry out resource development, credit, scholarship, or
reserve, investment, and economic development programs.
Under section 6 of S. 881, on March 1, 2007, the
Administrator of the BPA (``Administrator'') must pay the Tribe
an amount equal to 29% of the computed annual payment due to
the Colville Confederated Tribes under Sec. 5(b) of the
Colville Confederated Tribes Act for fiscal years 2005 and 2006
(with the amount for 2005 to be adjusted to reflect the change
in the Consumer Price Index published by the Department of
Labor), and on or before March 1 of each year thereafter, the
Administrator must make annual payments to the Tribe equal to
29% of the payment for the previous fiscal year pursuant to the
Colville Settlement Agreement. The Administrator is required to
make commensurate annual cost reductions to recover each
payment to the Tribe.
Under the terms of section 7 of S. 881, upon payment to the
Tribe, the sections 5 and 6 funds could be used or invested by
the Spokane Business Council in the same manner and for the
same purposes as other Spokane Tribe governmental funds.
Expenditure of funds transferred to the Tribe by the
Administrator would not require approval by the Secretary of
the Interior or the Administrator, and neither the Secretary
nor the Administrator has a trust responsibility for the
investment, supervision or administration of any of the funds
once they have been transferred to the Tribe pursuant to
section 5 or 6. Further, under section 7(c) of S. 881, the
payment of funds under sections 5 and 6, together with interest
and income generated by the funds, are to be treated in the
same manner as payments under section 6 of the Saginaw Chippewa
Tribe of Michigan Distribution of Judgment Funds Act (100 Stat.
677).\7\
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\7\ Pub. L. 99-346 (June 30, 1986). Section 6 of the Saginaw
Chippewa Act provides that distributions of certain funds paid to that
tribe under that Act to its enrolled members are not subject to
Federal, State or local income taxes and that such distributions may
not be used as a basis for denying or reducing (1) financial assistance
or other benefits under the Social Security Act to such tribal member
or the member's household, or (2) any other Federal financial
assistance or benefit to which the tribal member or member's household
may be otherwise entitled.
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Section 8 authorizes the Administrator to deduct certain
sums ($2,600,000 in fiscal year 2007 and $1,300,000 each fiscal
year thereafter in which payments are made under section 6)
from the interest otherwise payable to the Secretary of the
Treasury from ``net proceeds'' as defined in section 13 of the
Federal Columbia River Transmission Act, 16 U.S.C. Sec. 838k,
subject to certain limitations and requirements described in
section 8(b) of the bill.
Under section 9 of S. 881, the Secretary of the Interior is
directed to transfer administrative jurisdiction from the
Bureau of Reclamation to the Bureau of Indian Affairs for
certain lands located within the exterior boundaries of the
Spokane Indian Reservation as well as certain lands along the
south bank of the Spokane River. Such lands are to be held in
trust for the Tribe and included within the Spokane Indian
Reservation, subject to a reservation of rights and easement on
behalf of the United States to carry out the Columbia Basin
Project, including the operation, maintenance, repair and
replacement of boat ramps, docks and other recreational
facilities owned or permitted by the United States and existing
on the enactment of the Act. Any land transferred under section
9 that was, before the date of enactment of the Act, included
in the Lake Roosevelt National Recreation Area would remain
part of the Recreation Area and remain under the administrative
authority or responsibility of the National Park Service.
Section 9 also requires ``cognizant agencies of the Department
of the Interior'' to enter into a memorandum of understanding
with the Tribe to provide for the coordination in the
application of section 9(c).\8\
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\8\ S. 881 does not provide a deadline for the transfer of
administrative jurisdiction over the subject lands from the Bureau of
Reclamation to the Bureau of Indian Affairs, but the Committee
interprets this section to mean that the transfer will occur within a
reasonable time. The Committee encourages the cognizant agencies to
negotiate and execute the memorandum of understanding prior to the
actual transfer of jurisdiction, even though the bill does not
expressly require that the memorandum of understanding be executed
before the transfer. The Committee has been informed that the Tribe has
no objection to and supports the direct involvement of the State of
Washington, Stevens County, and Lincoln County in the development of
the memorandum of understanding. The Committee anticipates that the
State's participation in the memorandum of understanding would be the
best way to clarify and resolve a range of possible jurisdictional
issues, if any, that might arise. Further, the Committee does not
interpret section 9 of S. 881 to have any effect on the status of real
property on the south bank of the Spokane River that may belong to the
State or Lincoln County--if indeed the State or county own or claim to
own any such real property.
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Section 10 provides that the making of the prescribed
payments under sections 5 and 6, together with the restoration
of ownership in trust under section 9, constitute full
satisfaction of the Tribe's claims to a fair share of annual
hydropower revenues generated by the Grand Coulee Dam Project
for the past and continued use of the land of the Tribe for the
production of hydropower at the Grand Coulee Dam.
Section 11 of S. 881 authorizes the appropriation of such
funds as are necessary to accomplish the Act, and section 12
provides that nothing in this Act establishes any precedent or
is binding on the Southwestern Power Administration, Western
Area Power Administration, or Southeastern Power
Administration.
LEGISLATIVE HISTORY
Settlement bills relating to the Tribe's claims were
introduced in the 106th Congress (S. 1525 and H.R. 2664), in
the 107th Congress (S. 2567 and H.R. 4859), and in the 108th
Congress (S. 1438 and H.R. 1753). On October 2, 2003, the
Senate Indian Affairs Committee held a hearing on S. 1438, and
on the same date the Water and Power Subcommittee of the House
Resources Committee held a hearing on H.R. 1753. In the 109th
Congress, S. 881 was introduced on April 21, 2005, by Senator
Cantwell, for herself and Senators Dorgan, Murray and Inouye,
and was thereafter referred to the Committee on Indian Affairs.
H.R. 1797, related legislation introduced by Representative
Cathy McMorris and cosponsored by Representatives Norman Dicks,
Dale Kildee and Jay Inslee, was passed by the House of
Representatives on July 25, 2005.
COMMITTEE RECOMMENDATION AND TABULATION OF VOTE
The Committee on Indian Affairs, in an open business
session on June 29, 2005, by voice vote ordered that S. 881 be
reported favorably to the Senate, without amendment.
SECTION-BY-SECTION ANALYSIS
Section 1--Short title
Section 1 states that the Act may be cited as the ``Spokane
Tribe of Indians of the Spokane Reservation Grand Coulee Dam
Equitable Compensation Settlement Act.''
Section 2--Findings
Section 2 states 17 findings made by Congress that detail
the background to and reasons for this legislation.
Section 3--Purpose
Section 3 states that the purpose of this Act is to provide
fair and equitable compensation to the Tribe for the use of its
land for the generation of hydropower by the Grand Coulee Dam.
Section 4--Definitions
Section 4 provides definitions for various terms used in
the Act.
Section 5--Settlement fund
Section 5(a) provides for the establishment in the Treasury
of the United States of an interest-bearing trust fund to be
known as the ``Spokane Tribe of Indians Settlement Fund,''
consisting of amounts deposited in the Fund under subsection
(b) and any interest earned on investment of amounts in the
Fund.
Section 5(b) provides that, from amounts made available
under section 11, for fiscal year 2006, the Secretary shall
deposit in the Fund $17,800,000, and for each of the 4 fiscal
years thereafter, the Secretary shall deposit in the Fund
$12,800,000.
Section 5(c) provides that the Fund shall be maintained and
invested by the Secretary in accordance with the Act of June
24, 1938 (25 U.S.C. Sec. 162a).
Section 5(d) provides that at any time after funds are
deposited into the Fund, the Spokane Business Council may
submit to the Secretary written notice of the adoption by the
Spokane Business Council of a resolution, requesting that the
Secretary pay all or a portion of the amounts in the Fund to
the Spokane Business Council, and provides further that not
later than 60 days after receipt of such a notice, the
Secretary shall pay the amount requested to the Spokane
Business Council.
Section 5(e) provides that, of the initial deposit under
subsection (b)(1), $5,000,000 shall be used by the Spokane
Business Council for the planning, design, construction,
equipping, and continuing operation and maintenance of a
Cultural Resource Repository and Interpretive Center to house,
preserve, and protect the burial remains, funerary objects, and
other cultural resources affected by the operation of the Grand
Coulee Dam, and provide an interpretive and educational
facility regarding the culture and history of the Tribe. The
funding of these activities does not, however, alter or affect
any authority, obligation, or responsibility of the United
States under the Native American Graves Protection and
Repatriation Act (25 U.S.C. Sec. Sec. 3001 et seq.), the
Archaeological Resources Protection Act (16 U.S.C.
Sec. Sec. 470aa et seq.), the National Historic Preservation
Act (16 U.S.C. Sec. Sec. 470 et seq.), or the National
Environmental Policy Act of 1969 (42 U.S.C. Sec. Sec. 4321 et
seq.). Of all other amounts deposited in the Fund (including
interest generated on these amounts), 25 percent shall be
reserved by the Spokane Business Council and used for
discretionary purposes of general benefit to all members of the
Tribe, and 75 percent shall be used by the Spokane Business
Council to carry out resource development programs, credit
programs, scholarship programs, or reserve, investment, and
economic development programs.
Section 6--Payments by the Administrator
Section 6(a) provides that on March 1, 2007, the
Administrator shall pay to the Tribe the amount that is equal
to 29 percent of the Computed Annual Payment for fiscal year
2005, adjusted to reflect the change in the Consumer Price
Index for all urban consumers published by the Department of
Labor, from the date on which the payment for fiscal year 2005
was made to the Colville Tribes to the date on which payment is
made to the Tribe under this provision, and the amount that is
equal to 29 percent of the ``Computed Annual Payment'' for
fiscal year 2006.\9\
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\9\ ``Computed Annual Payment'' is a term defined in section 4 of
S. 881 that refers to the annual payment to the Confederated Tribes of
the Colville Reservation pursuant to their Settlement Agreement with
the United States. See footnote 3, above.
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Section 6(b) provides that on or before March 1, 2008, and
March 1 of each year thereafter, the Administrator shall pay to
the Tribe the amount that is equal to 29 percent of the
Computed Annual Payment for the previous fiscal year.
Section 6(c) provides that pursuant to the payment schedule
in subsection (b), the Administrator shall make commensurate
cost reductions in expenditures on an annual basis to recover
each payment to the Tribe. This specific cost reduction plan
will be included in the annual budget submitted to Congress.
Section 7--Treatment after funds are paid
Section 7(a) provides that payments made to the Spokane
Business Council or the Spokane Tribe under section 5 or 6 may
be used or invested by the Spokane Business Council in the same
manner and for the same purposes as other Tribe governmental
funds.
Section 7(b) provides that neither the Secretary nor the
Administrator shall have any trust responsibility for the
investment, supervision, administration, or expenditure of any
funds after the date on which the funds are paid to the Spokane
Business Council or Tribe under section 5 or 6.
Section 7(c) provides that the payments of all funds to the
Spokane Business Council and Spokane Tribe under sections 5 and
6, and the interest and income generated by the funds, shall be
treated in the same manner as payments under section 6 of the
Saginaw Chippewa Indian Tribe of Michigan Distribution of
Judgment Funds Act (100 Stat. 677). Section 6 of the Saginaw
Chippewa Act provides that distributions of certain funds paid
to that tribe under the Act to its enrolled members are not
subject to Federal, State or local income taxes and that such
distributions may not be used as a basis for denying or
reducing (1) financial assistance or other benefits under the
Social Security Act to such tribal member or the member's
household, or (2) any other Federal financial assistance or
benefit to which the tribal member or member's household may be
otherwise entitled.
Section 7(d) provides that after the date on which funds
are paid to the Spokane Business Council or to the Tribe under
section 5 or 6, the funds shall constitute Spokane Tribe
governmental funds and shall be subject to an annual tribal
government audit.
Section 8--Repayment credit
Section 8(a) provides that the Administrator shall deduct
from the interest payable to the Secretary of the Treasury from
net payments (as defined in section 13 of the Federal Columbia
River Transmission System Act (16 U.S.C. Sec. 838k)) $2,600,000
in fiscal year 2007 and $1,300,000 in each subsequent fiscal
year in which the Administrator makes a payment under section
6.
Section 8(b)(1) provides that except as provided in
paragraphs (b)(2) and (b)(3), each deduction made under this
section shall be a credit to the interest payments otherwise
payable by the Administrator to the Secretary of the Treasury
during the fiscal year in which the deduction is made, and
shall be allocated pro rata to all interest payments on debt
associated with the generation function of the Federal Columbia
River Power System that are due during the fiscal year. Section
8(b)(2) provides that if, in any fiscal year, the deduction is
greater than the amount of interest due on debt associated with
the generation function for the fiscal year, the amount of the
deduction that exceeds the interest due on debt associated with
the generation function shall be allocated pro rata to all
other interest payments due during the fiscal year. Section
8(b)(3) provides that to the extent that a deduction exceeds
the total amount of interest described in paragraphs (1) and
(2), the deduction shall be applied as a credit against any
other payments that the Administrator makes to the Secretary of
the Treasury.
Section 9--Transfer of administrative jurisdiction and restoration of
ownership of land
Subsection 9(a) provides that the Secretary of the Interior
shall transfer administrative jurisdiction from the Bureau of
Reclamation to the Bureau of Indian Affairs over all land
acquired by the United States under the Act of June 29, 1940
(16 U.S.C. Sec. 835d), that is located within the exterior
boundaries of the Spokane Indian Reservation established
pursuant to the Executive Order of January 18, 1881, and all
land on the south bank of the Spokane River that extends
westerly from Little Falls Dam to the confluence of the Spokane
River and the Columbia River and that is located at or below
contour elevation 1290 feet above sea level.
Subsection 9(b) provides that all land transferred under
this section shall be held in trust for the benefit and use of
the Tribe and shall become part of the Spokane Indian
Reservation.
Subsection 9(c)(1) provides that the United States reserves
a perpetual right, power, privilege, and easement over the land
transferred under this section to carry out the Columbia Basin
Project under the Columbia Basin Project Act (16 U.S.C.
Sec. Sec. 835 et seq.). Subsection 9(c)(2) provides further
that the rights reserved include the right to operate,
maintain, repair, and replace boat ramps, docks, and other
recreational facilities owned or permitted by the United States
and existing on the date of enactment of this Act. Subsection
9(c)(3) provides that land transferred under this section that,
before the date of enactment of this Act, was included in the
Lake Roosevelt National Recreation Area shall remain part of
the Recreation Area, and provides further that nothing in this
section shall affect the authority or responsibility of the
National Park Service to administer the Lake Roosevelt National
Recreation Area under the Act of August 25, 1916 (39 Stat. 535,
chapter 408; 16 U.S.C. Sec. 1 et seq.). Subsection 9(c)(4)
provides that the cognizant agencies of the Department of the
Interior shall enter into a memorandum of understanding with
the Spokane Tribe to provide for coordination in applying this
subsection.
Section 10--Satisfaction of claims
Section 10 provides that payments by the Secretary under
section 5 and the Administrator under section 6 and transfer of
administrative jurisdiction to the Bureau of Indian Affairs and
restoration of ownership of land in trust and added to the
Reservation under section 9 constitute full satisfaction of the
claim of the Tribe to a fair share of the annual hydropower
revenues generated by the Grand Coulee Dam project for the past
and continued use of the land of the Spokane Tribe for the
production of hydropower at Grand Coulee Dam.
Section 11--Authorization of appropriations
Section 11 authorizes the appropriation of such funds as
are necessary to carry out this Act.
Section 12--Precedent
Section 12 provides that nothing in this Act establishes
any precedent or is binding on the Southwestern Power
Administration, Western Area Power Administration, or
Southeastern Power Administration.
COST AND BUDGETARY CONSIDERATIONS
The cost estimate for S. 881, as provided by the
Congressional Budget Office, is set forth below:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 7, 2005.
Hon. John McCain,
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. 881, the Spokane
Tribe of Indians of the Spokane Reservation Grand Coulee Dam
Equitable Compensation Settlement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mike Waters.
Sincerely,
Douglas Holtz-Eakin.
Enclosure.
S. 881--Spokane Tribe of Indians of the Spokane Reservation Grand
Coulee Dam Equitable Compensation Settlement Act
Summary: S. 881 would establish and authorize funds to be
appropriated to the Spokane Tribe of Indians Settlement Fund to
compensate the Spokane Tribe of Indians for the use of its land
by the Grand Coulee Dam project in Washington. Starting in
2007, the bill would require the Bonneville Power
Administration (BPA) to make annual payments to the tribe from
receipts generated from the sale of electricity. Those payments
to the tribe would be offset by increases in the rates charged
to BPA's customers for electricity sales, and thus would result
in no net cost to the government. Under the bill, BPA also
would be relieved from making certain interest payments to the
Treasury for funds borrowed on BPA's behalf. CBO estimates that
provision would reduce receipts collected by BPA by $13 million
over the 2007-2015 period, and by $1.3 million per year after
2015. (Those effects constitute an increase in direct
spending.)
Assuming appropriation of the necessary amounts, CBO
estimates that implementing the bill would cost $69 million
over the 2006-2010 period for payments into the Spokane Tribe
of Indians Settlement Fund. S. 881 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA). The payments authorized by
this bill would benefit the Spokane Tribe.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 881 is shown in the following table. The
costs of this legislation fall within budget functions 450
(community and regional development) and 270 (energy).
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By fiscal year, in millions of dollars--
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Payments to Spokane Tribe Settlement Fund Account:
Authorization level....................................... 18 13 13 13 13 0 0 0 0 0
Estimated Outlays......................................... 18 13 13 13 13 0 0 0 0 0
CHANGES IN DIRECT SPENDING
Interest Credits for BPA:
Estimated Budget Authority................................ 0 3 1 1 1 1 1 1 1 1
Estimated Outlays......................................... 0 3 1 1 1 1 1 1 1 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted by the end of fiscal year 2005 and that
the authorized amounts will be appropriated for each year.
Spending Subject to Appropriation
This bill would authorize the appropriation of payments to
the Spokane Tribe as compensation for land taken to build the
Grand Coulee Dam. The bill would authorize the appropriation of
$18 million in 2006 and $13 million annually over the 2007-2010
period to a new tribal trust fund. Thus, CBO estimates that
implementing the bill would cost $18 million in 2006 and $69
million over the 2006-2010 period.
Payments to certain trust funds that are held and managed
in a fiduciary capacity by the Federal Government on behalf of
Indian tribes are treated as payments to a nonfederal entity.
As a result, CBO expects that the entire amount deposited to
the fund in any year would be recorded as budget authority and
outlays in that year. Because the trust funds would be
nonbudgetary, the subsequent use of such funds by the tribe
would not affect Federal outlays.
Direct Spending
S. 881 would require BPA to make annual payments to the
Spokane Tribe. Under the bill, such payments would be equal to
29 percent of the annual payment BPA currently makes to the
Colville Tribe. The payments would begin in 2007 and would
total about $5 million per year, except in 2007 when BPA would
be required to make two payments. Payments would continue so
long as electricity continues to be generated at the Grand
Coulee Dam. Although the bill would require that the payments
be offset by commensurate cost reductions, CBO expects that
these payments would contribute to an increase in costs to the
agency. Because BPA is a cost-recovery agency that charges its
customers for the electricity it generates, CBO assumes that
these payments to the tribe would become part of BPA's cost
structure and would be offset by an increase in the new
electricity rates that the agency plans to impose in 2007.
Thus, this annual payment to the tribe would result in no net
cost to the government.
The bill also would allow BPA to reduce the amount of
interest costs that is transfers to the U.S. Treasury for funds
borrowed to construct BPA's infrastructure. The bill would
authorize BPA to forgo interest payments of $2.6 million in
2007 and $1.3 million each year thereafter for as long as
payments are made to the tribe. As a cost-recovery agency, BPA
would reduce its annual collections from electricity ratepayers
by the amount of these forgone interest payments. Thus, CBO
estimates that BPA collections, which are recorded in the
budget as offsetting receipts, would be reduced by $2.6 million
in 2007 and about $13 million over the 2007-2015 period.
Intergovernmental and private-sector impact: S. 881
contains no intergovernmental or private-sector mandates as
defined in UMRA. The payments authorized by this bill would
benefit the Spokane Tribe.
Previous CBO estimate: On June 16, 2005, CBO transmitted a
cost estimate for H.R. 1797, the Spokane Tribe of Indians of
the Spokane Reservation Grand Coulee Dam Equitable Compensation
Settlement Act, as ordered reported by the House Committee on
Resources on May 18, 2005. The two versions of the legislation
are similar, and our cost estimates over the 2006-2015 period
are the same.
Estimate prepared by: Federal Costs: Mike Waters, Lisa Cash
Driskill, Julie Middleton, and Jimin Chung. Impact on State,
local and Tribal governments: Marjorie Miller. Impact on the
Private Sector: Selena Caldera.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
REGULATORY AND PAPERWORK IMPACT
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. The Committee believes that the
regulatory and paperwork impact of S. 881 should be minimal.
EXECUTIVE COMMUNICATIONS
The Committee received the following communication, dated
June 28, 2005, from the Department of the Interior regarding S.
881:
U.S. Department of the Interior,
Bureau of Reclamation,
Washington, DC, June 28, 2005.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: This letter sets forth the views of the
Department of the Interior on S. 881, ``Spokane Tribe of
Indians of the Spokane Reservation Grand Coulee Dam Equitable
Compensation Settlement Act''. The Administration opposes the
bill.
S. 881 would provide compensation to the Spokane Tribe for
the use of its land for the generation of hydropower by the
Grand Coulee Dam. Specifically, S. 881 would require the
Secretary of the Interior to deposit $69 million over 5 years,
$17,800,000 for fiscal year 2006 and $12,800,000 for the
following 4 fiscal years, into a trust fund held by the U.S.
Treasury for the Spokane Tribe. S. 881 would also transfer land
and administrative jurisdiction from the Bureau of Reclamation
to Bureau of Indian Affairs for the Spokane Tribe. The land
transferred would be held in trust for the Spokane Tribe and
would become part of the reservation.
The Administration has several issues with this bill.
First, the Spokane Tribe has not brought forward a legal claim
that would warrant this type of settlement and there is no
legal claim pending. The Administration questions whether the
Tribe has or could bring any legal claim that would entitle it
to compensation as contemplated under the bill. In light of the
lack of any pending legal claim and the lack of Administration
support for this legislation, the Administration does not
believe this legislation is currently justified as a settlement
of claims. The Administration therefore believes it would be
premature to assume that future budget proposals will recommend
discretionary appropriations at the levels proposed in the
bill. Regardless, the Administration has been working with the
Spokane Tribe to address the Tribe's concerns. However, no
agreement has been reached to date. The Administration believes
these negotiations should continue.
Second, the Department is concerned with transferring land
and jurisdiction from the Bureau of Reclamation to the Bureau
of Indian Affairs for the Tribe absent a prior written
agreement to fully address future management responsibilities.
While under the present draft Reclamation would be granted a
perpetual easement to operate the Columbia Basin Project, it is
imperative that the parties specifically reach agreement on the
details of the lands and easement rights involved and how the
transferred areas will be managed prior to the passage of this
legislation. At a minimum, such an agreement should be required
prior to the actual transfer taking place.
Third, both the Executive and the Judicial Branches are
faced with the question of Congress' intent when it puts land
into trust status. What specific duties are required of the
Secretary, administering the trust on behalf of the United
States, with respect to trust lands? Tribes and individual
Indians frequently assert that the duty is the same as that
required of a private trustee. Yet, under a private trust, the
trustee and the beneficiary have a legal relationship that is
defined by private trust default principles and a trust
instrument that defines the scope of the trust responsibility.
Congress, when it establishes a trust relationship, should
provide the guideposts for defining what that relationship
means.
Much of the current trust controversy stems from the
absence of clear guidance as to the parameters, roles, and
responsibilities of the trustee and the beneficiary. As
Trustee, the Secretary may face a variety of issues, including
land use and zoning. Accordingly, the Secretary's trust
responsibility to manage the land should be addressed with
clarity and precision. Congress should decide these issues, not
the courts.
Along these lines, the pending litigation-related
assertions and claims made against the Department regarding its
stewardship of trust properties suggest the need to identify
and mitigate current programmatic weaknesses before becoming
obligated with new responsibilities for additional lands that
may be taken into trust. The broad claims for historical
accounting, trust mismanagement, Indian assertions of unfunded
mandates and trust responsibilities and the presence of
statutory requirements that require funding for activities with
little commensurate advantage for Indian beneficiaries suggest
the need for a critical evaluation of any activity designed to
take additional lands into trust until after these other
situations are addressed materially.
When we are required to transfer federal lands and then
take the land into trust, Congress potentially is subjecting
the United States to new responsibilities and it should clearly
state what those responsibilities are.
The Office of Management and Budget has advised that there
is no objection to the presentation of this report from the
standpoint of the Administration's program.
Sincerely,
John W. Keys III,
Commissioner.
CHANGES IN EXISTING LAW
In compliance with subsection 12 of rule XXVI of the
Standing Rules of the Senate, the Committee finds that S. 881
makes no changes to existing law.