[Senate Report 111-115]
[From the U.S. Government Publishing Office]


`                                                       Calendar No. 255
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-115

======================================================================
 
 A BILL TO AUTHORIZE THE SECRETARY OF THE INTERIOR, ACTING THROUGH THE 
COMMISSIONER OF RECLAMATION, TO DEVELOP WATER INFRASTRUCTURE IN THE RIO 
GRANDE BASIN, AND TO APPROVE THE SETTLEMENT OF THE WATER RIGHTS CLAIMS 
     OF THE PUEBLOS OF NAMBE, POJOAQUE, SAN ILDEFONSO, AND TESUQUE

                                _______
                                

                January 20, 2010.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1105]

    The Committee on Indian Affairs, to which was referred the 
bill, S. 1105, to authorize the Secretary of the Interior, 
acting through the Commissioner of Reclamation, to develop 
water infrastructure in the Rio Grande Basin, and to approve 
the settlement of the water rights claims of the Pueblos of 
Nambe, Pojoaque, San Ildefonso, and Tesuque, having considered 
the same, reports favorably thereon, as amended, and recommends 
that the bill do pass.

                                PURPOSE

    The purpose of S. 1105 is to approve an Indian water rights 
settlement, to authorize and direct the Secretary of the 
Interior to execute the settlement agreement and perform all 
obligations of the Secretary pursuant to that agreement, and to 
authorize all actions and appropriations necessary for the 
United States to meet its obligations under the settlement 
agreement and this Act.

                               BACKGROUND

    The Pueblos of Nambe, Pojoaque, San Ildefonso, and Tesuque 
are located in the Pojoaque River Basin, a tributary of the Rio 
Grande in Northern New Mexico. The basin is largely rural and 
agricultural; however, residential development is increasing. 
Water is important to the community, not only for basic 
municipal needs, but also for its sacred role in Pueblo 
culture.
    The Aamodt Litigation Settlement Act, S. 1105, would 
resolve a long-standing Indian water rights case in the State 
of New Mexico. Quantification and settlement of Indian water 
rights requires Federal legislation. Legislation is necessary 
in this instance because the agreement resolves the claims of 
the Pueblos against the United States and releases the United 
States from further liability and because the agreement 
contemplates a number of Federal activities for which 
authorization is required, such as the design and construction 
of a regional water system. Without legislation the Pueblos and 
other parties would be forced to continue to engage in 
litigation to determine the respective rights of water users.
    S. 1105 resolves the Indian water rights claims of four 
Pueblos stemming from the State of New Mexico, ex rel. State 
Engineer v. Aamodt (Aamodt) lawsuit which was filed in April 
1966 making it one of the longest-running Indian water rights 
cases in the United States. A comprehensive Settlement 
Agreement was reached in January 2006 between the Pueblos of 
Nambe, Pojoaque, San Ildefonso, and Tesuque, the State of New 
Mexico, Santa Fe County, and the City of Santa Fe. The 
Settlement Agreement would secure water to meet the current and 
future needs of the four Pueblos, protects longstanding water 
uses and resources in the Basin, preserves centuries-old non-
Pueblo irrigation in the Basin, and provides water for current 
and future uses by all of the Basin's residents.
    Approximately $174.3 million in federal appropriations 
would be authorized by S. 1105. In addition to that amount, the 
State of New Mexico, Santa Fe County, and the City of Santa Fe 
are prepared to contribute about an additional $116.9 million 
to the proposed settlement. These funds would be used to 
construct a water system to serve the Pueblos and county 
residents, fund a Pueblo Water Acquisition Fund and a Pueblo 
Conservation Fund, pay for city water delivery offsets, fund 
operation, maintenance, and recovery of Pueblo water systems, 
fund county water rights acquisitions, and provide in-basin 
water rights to be transferred to the county water utility. If 
sufficient appropriations have not been made by 2020, some of 
the federal costs of S. 1105 may be satisfied by the 
``Reclamation Water Settlements Fund'' which was created by 
Section 10501 of Pub. L. 111-11.

                      SUMMARY OF MAJOR PROVISIONS

    Section 101 directs the Secretary of the Interior, acting 
through the Commissioner of Reclamation, to plan, design and 
construct a regional water system. The purpose of the regional 
water system is to provide water to the four Pueblos and other 
areas within Santa Fe County. Section 101 would also require 
the Pueblos to consent to required rights-of-way necessary for 
the construction of the regional water system.
    Construction on the regional water system may not begin 
until the Secretary executes the Settlement Agreement and the 
Cost-sharing and System Integration Agreement. In addition, the 
State and County must have entered into an agreement with the 
Secretary regarding the non-Federal share of construction 
costs. Costs associated with the County's water distribution 
elements will be borne by the State and local governments. Once 
the regional water system has been constructed, the Secretary 
will convey to each Pueblo any portion of the system located on 
its lands and to the County its part of the distribution 
system.
    Section 102 would require that the Pueblos and Santa Fe 
County enter into an Operating Agreement for the water system 
which must be approved by the Secretary of the Interior. 
Section 103 of the bill would authorize the Secretary to 
acquire water rights for the Pueblos. Section 104 of the bill 
would set out the water delivery and allocation requirements of 
the regional water system developed pursuant to Section 101. 
Section 105 of the bill would establish an Aamodt Settlement 
Pueblos' Fund in the United States Treasury to be used for 
water-related infrastructure, operation and maintenance costs, 
and acquisition of water rights.
    Section 107 would authorize the following appropriations 
over fiscal years 2010 through 2022: $106,400,000 for planning, 
design, and construction of the regional water system (subject 
to annual adjustments for increases in engineering cost 
indices); $15,000,000 for rehabilitation and improvement of 
agricultural delivery facilities (subject to adjustment in 
accordance with the CPI Urban Index commencing October 1, 
2006); $37,500,000 to assist the Pueblos in paying their share 
of operation and maintenance costs (subject to adjustment in 
accordance with the CPI Urban Index commencing January 1, 
2011); and $5,000,000 to acquire reserved water rights for the 
Nambe Pueblo (subject to adjustment in accordance with the CPI 
Urban Index commencing January 1, 2011). Section 107 also 
authorizes $5,400,000 for the acquisition of certain water 
rights if those rights are acquired by December 31, 2010, 
(subject to adjustment in accordance with the CPI Urban Index 
commencing January 1, 2011); and $5,000,000 for the operation, 
maintenance or replacement costs associated with the Pueblo 
water facilities prior to conveyance of those facilities to the 
Pueblos.
    Section 201 would authorize, ratify and confirm the 
Settlement Agreement and the Cost-Sharing and System 
Integration Agreement and requires the Secretary of the 
Interior to execute those agreements.
    Section 203 sets forth the conditions for implementation of 
the Settlement Agreement and enforcement provisions.
    Section 204 provides waivers of the Pueblos and the United 
States, as trustee, to claims and parties in the Aamodt case.

                          LEGISLATIVE HISTORY

    In the 110th Congress, Senators Bingaman and Domenici 
introduced S. 3381 which contained authorizations almost 
identical to S. 1105. On September 11, 2008, the Committee held 
a legislative hearing on S. 3381, and it was reported out of 
the Committee on September 23, 2008. However, S. 3381 was never 
considered by the full Senate.
    In the 111th Congress, S. 1105 was introduced by Senator 
Bingaman on May 20, 2009 with Senator Tom Udall as an original 
cosponsor. S. 1105 was referred to the Committee on Indian 
Affairs and in an open business meeting on September 10, 2009, 
the Committee approved S. 1105 with an amendment offered by 
Senator Tom Udall.
    A companion bill, H.R. 3342, the Aamodt Litigation 
Settlement Act, was introduced in the House of Representatives 
on July 29, 2009, by Representative Lujan. H.R. 3342 was 
referred to the House Committee on Natural Resources. On 
September 9, 2009, a hearing on H.R. 3342 was held by the Water 
and Power Subcommittee of the House Committee on Natural 
Resources.

                          SUMMARY OF AMENDMENT

    The amendment approved by the Committee addressed certain 
concerns raised by the Administration. For example, in Section 
203, the amendment provides for judicial review of the 
Secretary's decision when the Secretary makes the determination 
of whether the regional water system is substantially complete. 
The amendment also deletes Section 204(a)(9) which the 
Administration had raised a concern about. The Committee was 
informed that local parties determined that Section 204(a)(9) 
was not necessary because it was never the belief of those 
parties that diverting ground or surface water in accordance 
with the terms of the Settlement Agreement would cause an 
unacceptable change in the concentration of the naturally 
occurring constituencies, such as salinity, in the basin's 
water supply. The parties never envisioned litigation among 
themselves related to such issues subsequent to the settlement 
and are of the view that they have resolved all issues related 
to the diversion of water in accordance with the terms of the 
Settlement Agreement.

           SECTION-BY-SECTION ANALYSIS OF S. 1105 AS AMENDED

    S. 1105 has two Titles: Title A authorizes the Pojoaque 
Basin Regional Water System, and Title B ratifies the Pojoaque 
Basin Indian Water Rights Settlement entered by the settling 
parties in 2006.

Section 1. Short title

    Section 1 provides the short title of S. 1105 as the 
``Aamodt Litigation Settlement Act.''

Section 2. Definitions

    This section defines important terms used in S. 1105.

             TITLE I--POJOAQUE BASIN REGIONAL WATER SYSTEM


Section 101. Authorization of regional water system

    Section 101 directs the Secretary of the Department of the 
Interior, acting through the Commissioner of Reclamation, to 
plan, design and construct a regional water system. The purpose 
of the regional water system is to provide water to the four 
Pueblos and Santa Fe County Water Utility. Section 101 also 
requires the Pueblos to consent to required rights-of-way 
necessary for the construction of the regional water system. 
Construction on the regional water system may not begin until 
the Secretary executes the Settlement Agreement and the Cost-
sharing and System Integration Agreement, and the State and 
County have entered an agreement with the Secretary regarding 
the non-Federal share of construction costs. As amended, 
Section 101(f) provides that the federal costs of constructing 
the Pueblo water facilities will be capped. Costs associated 
with the County's water distribution elements will be borne by 
the State and local governments. Once constructed, the 
Secretary will convey to each Pueblo any portion of the 
regional water system located on its lands and to the County 
its portion of the distribution system.

Section 102. Operating agreement

    Section 102 requires the Pueblos to develop and submit to 
the Secretary an Operating Agreement for the regional water 
system and states required provisions of the Operating 
Agreement including distribution lines for the County and the 
Pueblos, the allocation of regional water system capacity, the 
terms of any unused water capacity in the regional water 
system, and other matters.

Section 103. Acquisition of Pueblo water supply for the regional water 
        system

    Section 103, as amended, obligates the Secretary to secure 
and hold in trust a firm supply of water for the Pueblos. 
Specifically, the Secretary is required to acquire water rights 
to 302 acre-feet of Nambe reserved water; acquire water rights 
to 1,141 acre-feet from water acquired by the County for so-
called ``Top of the World water rights'' in the Aamodt case; 
and enter into a contract with the Pueblos for 1,079 acre feet 
of San Juan Chama Project water.
    Section 103(g) clarifies that compliance with subsections 
103(a)-(f) satisfies all obligations of the Secretary to 
acquire and secure a water supply for the Pueblos pursuant to 
the Settlement Agreement. Section 103(h) states that the 
Pueblos, County, or Regional Water Authority may acquire 
additional water rights to ensure that all parties receive the 
full allocation of water provided by the Settlement Agreement.

Section 104. Delivery and allocation of regional water system capacity 
        and water

    Section 104 concerns the allocation and operation of the 
regional water system including capacity to divert sufficient 
water from the Rio Grande to provide 4,000 acre-feet of 
consumptive water use and requisite peaking capacity. Section 
104 also allocates to the Pueblos 2,500 acre-feet of water per 
year for consumptive use to the four Pueblos plus peaking 
capacity and to the County 1,500 acre feet of water per year 
for consumptive use.

Section 105. Aamodt Settlement Pueblos' Fund

    Section 105 establishes in the Treasury of the United 
States the Aamodt Settlement Pueblos' Fund consisting of funds 
appropriated for the construction of the regional water system 
and additional elements of the settlement including operation 
and maintenance. These additional elements are set forth in 
Section 107.

Section 106. Environmental compliance

    Section 106 provides that the laws of the Federal 
Government related to environmental protection, including but 
not limited to the National Environmental Policy Act (NEPA) and 
the Endangered Species Act (ESA), apply to S. 1105.

Section 107. Authorization of appropriations

    Section 107 would authorize the following appropriations 
over fiscal years 2010 through 2022: $106,400,000 for planning, 
design, and construction of the regional water system (subject 
to annual adjustments for increases in engineering cost 
indices); $15,000,000 for rehabilitation and improvement of 
agricultural delivery facilities (subject to adjustment in 
accordance with the CPI Urban Index commencing October 1, 
2006); $37,500,000 to assist the Pueblos in paying their share 
of operation and maintenance costs (subject to adjustment in 
accordance with the CPI Urban Index commencing January 1, 
2011); and $5,000,000 to acquire reserved water rights for the 
Nambe Pueblo (subject to adjustment in accordance with the CPI 
Urban Index commencing January 1, 2011). Section 107 also 
authorizes $5,400,000 for the acquisition of certain water 
rights if those rights are acquired by December 31, 2010, 
(subject to adjustment in accordance with the CPI Urban Index 
commencing January 1, 2011); and $5,000,000 for the operation, 
maintenance or replacement costs associated with the Pueblo 
water facilities prior to conveyance of those facilities to the 
Pueblos.

        TITLE II--POJOAQUE BASIN INDIAN WATER RIGHTS SETTLEMENT


Section 201. Settlement agreement and contract approval

    Section 201 ratifies and requires the Secretary to execute 
the Settlement Agreement. Section 201 also authorizes the 
Pueblos to enter contracts to lease or exchange water rights as 
provided in the Settlement Agreement.

Section 202. Environmental compliance

    Section 202 provides that the Secretary's execution of the 
Settlement Agreement does not constitute a major Federal action 
for purposes of NEPA. It also provides that in implementing 
Title I, the Secretary is required to comply with the laws of 
the Federal government relating to environmental protection, 
including NEPA and ESA.

Section 203. Conditions precedent and enforcement date

    Section 203, as amended, requires the Secretary to publish 
in the Federal Register a statement of findings that certain 
conditions have been met, to wit: that any changes required of 
the Settlement Agreement by virtue of S. 1105 have been made; 
that the Settlement Agreement, so revised, contain required 
waivers and releases; that Congress has fully appropriated, or 
the Secretary has provided from other authorized sources, all 
funds authorized by S. 1105 by 2016; that the Secretary has 
acquired or entered into contracts for the water supply for the 
Pueblos and that water has been satisfactorily permitted by the 
New Mexico State Engineer; that the State of New Mexico has 
enacted any necessary legislation and provided funding required 
under the Settlement Agreement; that a partial final decree 
setting forth the water rights of the Pueblos has been approved 
by the U.S. District Court for the District of New Mexico; and, 
a final decree setting for the water rights for all parties to 
the Aamodt case has been approved by the U.S. District Court 
for the District of New Mexico by 2017.
    Section 203(c) provides that the Settlement Agreement will 
become enforceable as of the date the U.S. District Court for 
the District of New Mexico enters a partial final decree.
    Section 203(e), as amended, provides that the Secretary 
shall determine whether construction of the regional water 
system is substantially complete and allows for judicial review 
of that determination.

Section 204. Waivers and releases

    Section 204, as amended, requires the Pueblos to execute a 
waiver and release of all past, present or future claims to 
surface and groundwater rights the Pueblos, or the U.S. on 
behalf of the Pueblos, could have asserted in the Aamodt case; 
all past, present or future claims for damages, losses, or 
injuries to water rights or claims of interference, diversion, 
or taking water for lands within the Pojoaque Basin that could 
have been asserted in the Aamodt case; their defenses in the 
Aamodt case to claims previously asserted by other parties in 
the Aamodt case; and all pending inter se challenges against 
other parties to the Settlement Agreement.
    Section 204 also requires the Pueblos to execute similar 
waivers and releases of all causes of action against the U.S. 
arising out of past, present, or future claims for water rights 
that were asserted or could have been by the United States in 
the Aamodt case; all past, present or future claims for 
damages, losses, or injuries to water rights or claims of 
interference, diversion, etc. for lands within the Pojoaque 
Basin that could have been asserted by the Pueblos against the 
United States in the Aamodt case; and all claims arising out of 
the negotiation or adoption of the Settlement Agreement that 
the Pueblos may have against the United States.
    Section 204 provides that notwithstanding the above waivers 
and releases, the Pueblos and the United States retain claims 
regarding water rights outside the Pojoaque Basin; all claims 
for the enforcement of the Settlement Agreement, the Final 
Decree or S. 1105; all rights to use and protect water rights 
acquired pursuant to state law to the extent not inconsistent 
with the Settlement Agreement of the Final Decree; and all 
rights, remedies, privileges, immunities, powers, and claims 
not specifically waived and released pursuant to the Settlement 
Agreement or S. 1105.
    Section 204 also provides that applicable statutes of 
limitation will be tolled from the date of enactment of S. 1105 
and end on the date of enforcement. It also provides that 
nothing in section 204 revives any claims or tolls any period 
of limitation that expired before the enactment of S. 1105.

Section 205. Effect

    Section 205 provides that nothing in S. 1105 or the 
Settlement Agreement affects the land and water rights, claims, 
or entitlements to water of any Indian tribe, pueblo, or 
community other than the Pueblos.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

    In an open business meeting on September 10, 2009, the 
Committee on Indian Affairs, by voice vote, adopted S. 1105, as 
amended, and ordered the bill reported to the Senate, with the 
recommendation that the Senate do pass S. 1105, as amended.

                   COST AND BUDGETARY CONSIDERATIONS

S. 1105--Aamodt Litigation Settlement Act

    Summary: S. 1105 would approve and ratify a settlement 
agreement between four Pueblos and the state of New Mexico. The 
agreement would settle the Pueblos' claims to water rights in 
the state. As part of the settlement agreement, the bill would 
authorize the appropriation of funds to construct a regional 
water system in the Rio Grande River Basin. The bill also would 
create a trust fund for the Pueblos to maintain that system. In 
addition, the bill would authorize appropriations for the 
Department of the Interior (DOI) to operate and maintain 
certain portions of the system until they are conveyed to the 
Pueblos. Finally, the bill would authorize appropriations for 
the Secretary of the Interior to acquire certain water rights 
on behalf of the Pueblos.
    Based on information from DOI and assuming appropriation of 
the authorized and necessary amounts, CBO estimates that 
implementing S. 1105 would cost $71 million over the 2010-2014 
period and $128 million after 2014. Enacting S. 1105 would not 
affect direct spending or revenues.
    S. 1105 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and would impose no 
costs on state, local, or tribal governments.
    If the Secretary of the Interior acquires property through 
eminent domain in order to construct the regional water system 
under the Aamodt litigation settlement, S. 1105 would impose a 
private-sector mandate as defined in UMRA. Based on information 
from the Department of the Interior, CBO expects that the 
Secretary would use that authority sparingly and that the cost 
of the mandate, if imposed, would fall well below the annual 
threshold established in UMRA for private-sector mandates ($139 
million in 2009, adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1105 is shown in the following table. 
The costs of this legislation fall within budget functions 300 
(natural resources and environment) and 450 (community and 
regional development).

----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars--
                                                       ---------------------------------------------------------
                                                          2010     2011     2012     2013     2014    2010-2014
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATIONRegional Water System:
    Estimated Authorization Level.....................        0        0       10       25       35           70
    Estimated Outlays.................................        0        0        6       18       29           53
Settlement Trust Fund:
    Estimated Authorization Level.....................        0        0        3        3        4           10
    Estimated Outlays.................................        0        0        3        3        4           10
DOI Operation and Maintenance Costs:
    Estimated Authorization Level.....................        0        0        1        1        1            3
    Estimated Outlays.................................        0        0        1        1        1            3
Water Rights:
    Authorization Level...............................        5        0        0        0        0            5
    Estimated Outlays.................................        2        2        1        0        0            5
        Total Changes:................................
            Estimated Authorization Level.............        5        0       14       29       40           88
            Estimated Outlays.........................        2        2       11       22       34          71
----------------------------------------------------------------------------------------------------------------
Note: DOI = Department of the Interior.

    Basis of estimate: For this estimate, CBO assumes that S. 
1105 will be enacted early in fiscal year 2010 and that the 
necessary amounts will be appropriated for each year. 
Enforcement of the settlement agreement depends on the 
completion of a number of actions by federal, state, local, and 
tribal governments. Based on information from DOI, CBO expects 
that those actions will be completed by fiscal year 2017. Cost 
estimates for the authorized water projects are based on 
information from DOI and on historical spending patterns for 
similar activities.
    In 2006, four Pueblos in New Mexico (Nambe, Pojoaque, San 
Ildefonso, and Tesuque) and the city and county of Santa Fe, 
New Mexico, signed a settlement agreement resolving a water 
rights dispute (known as the Aamodt case) in the Rio Grande 
River Basin. The United States would become party to that 
agreement upon enactment of S. 1105, provided that certain 
conditions are met. Among other actions, the Secretary of the 
Interior would have to publish a statement of findings in the 
Federal Register indicating that all parties have executed the 
agreement; the U.S. district court would have to issue a 
judgment and final decree concerning the agreement; Congress 
would have to appropriate certain amounts specified in the bill 
(about $68 million) to carry out part of the agreement; and New 
Mexico would have to appropriate funds for the Pueblos.
    Based on information from DOI and assuming appropriation of 
the necessary amounts, CBO estimates that implementing the 
legislation would cost $71 million over the 2010-2014 period 
and $128 million after 2014. Should the Secretary not publish 
the required statement of findings by September 15, 2017, 
verifying that all conditions necessary to execute the 
agreement have been met, the agreement would not take effect, 
and no federal funds could be spent after that date.

Regional water system

    Section 101 would authorize the Secretary of the Interior, 
acting through the Commissioner of Reclamation, to construct a 
regional water system in the Rio Grande River Basin in New 
Mexico. The system would divert water from the Rio Grande River 
to certain Pueblos and to the Santa Fe County Water Utility. 
The state of New Mexico and Santa Fe County would be required 
to pay a portion of the system's cost. Once construction of 
that system is complete, the Secretary would be required to 
convey components of the system to state, local, and tribal 
entities. Assuming appropriation of the necessary amounts, CBO 
estimates that constructing the water system would cost $53 
million over the 2010-2014 period and an additional $75 million 
after 2014.

Settlement trust fund

    Section 105 would authorize the appropriation of $57.5 
million to be deposited into the Aamodt Settlement Pueblos' 
Fund. A portion of that amount would be adjusted for increases 
in construction costs. Once certain conditions have been met, 
the Secretary of the Interior would be required to invest 
amounts in the fund in U.S. Treasury obligations. The fund 
would be used by the Pueblos to operate and maintain certain 
portions of the regional water system owned by the Pueblos.
    Amounts in the fund could not be spent by the Pueblos until 
certain conditions specified in the bill are met. About 35 
percent of the funds would be available for expenditure after 
the United States District Court approves the settlement 
agreement, which we expect would occur in 2012. Those funds 
would be used by the Pueblos to acquire certain water rights 
and to operate and maintain certain water systems. CBO expects 
that the Pueblos would spend between $3 million and $5 million 
a year over the 2012-2016 period for those purposes.
    The remaining 65 percent of the funds could be spent when 
the Secretary determines that certain portions of the new 
regional water system are substantially complete. Information 
from DOI suggests that the system would be substantially 
complete by the end of 2017. At that time, we expect that the 
settlement agreement would be executed, the remaining funds 
would be available to the Pueblos, and the budget would record 
an expenditure of $42 million. In total, CBO estimates that 
implementing this provision would cost $10 million over the 
2010-2014 period and $51 million after 2014.
    Payments to certain tribal 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 into the Aamodt Settlement Pueblos' Fund (excluding 
amounts made available for certain Pueblo water systems) would 
be recorded as an outlay in 2017 when the funds could be spent 
by the Pueblos. Subsequently, any use of such funds would have 
no effect on the federal budget. Because S. 1105 directs the 
Secretary to invest amounts in the fund only after those 
amounts are available to the Pueblos, CBO expects that no 
interest would accrue on the amounts in the fund until 2017 
when federal payments could first be spent by the Pueblos.

DOI operation and maintenance costs

    Section 107 would authorize the appropriation of $5 million 
for DOI to pay operation and maintenance costs associated with 
certain portions of the regional water system prior to their 
conveyance to the Pueblos. Based on information from DOI, CBO 
expects that land and infrastructure associated with those 
projects would be conveyed to the Pueblos in 2017. Assuming 
appropriation of the authorized amounts, CBO estimates that 
operating and maintaining those projects would cost about $1 
million a year over the 2012-2016 period.

Water rights

    Section 103 would authorize the appropriation of $5.4 
million for the acquisition of water rights pursuant to the 
settlement agreement. Those funds would be used by the 
Secretary of the Interior to acquire, on behalf of the Pueblos, 
a specified amount of water from Santa Fe County. Assuming 
appropriation of the authorized amounts, CBO estimates that 
acquiring those water rights would cost $5.4 million over the 
2010-2012 period.
    Estimated impact on State, local, and tribal governments: 
S. 1105 contains no intergovernmental mandates as defined in 
UMRA. The bill would authorize water projects and provide other 
assistance that would benefit state, local, and tribal 
governments. Any costs to those governments would be incurred 
voluntarily as a condition of federal assistance.
    Estimated impact on the private sector: If the Secretary of 
the Interior acquires property through eminent domain in order 
to construct the regional water system under the proposed 
settlement, the bill would impose a private-sector mandate as 
defined in UMRA. The cost of the mandate would be the fair 
market value of the property and any expenses incurred by the 
owners in transferring that property to the federal government. 
Based on information from the DOI, CBO expects that only a few 
small tracts of private land may need to be acquired and that 
the value of that land is small. CBO therefore expects that the 
cost of the mandate, if imposed, would fall well below the 
annual threshold established in UMRA for private-sector 
mandates ($139 million in 2009, adjusted annually for 
inflation).
    Estimated prepared by: Federal Costs: Jeff LaFave; Impact 
on State, Local, and Tribal Governments: Melissa Merrell; 
Impact on the Private Sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.


               REGULATORY AND PAPERWORK IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill 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. 1105 will be minimal.

                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that the 
enactment of S. 1105 will not make any changes in existing law.

                 ADDITIONAL VIEWS OF SENATOR TOM UDALL

    I am pleased that the Indian Affairs Committee voted to 
report S. 1105, Aamodt Litigation Settlement Act. I appreciate 
the support of my colleagues on this bill and the efforts of 
the Chairman to move this bill forward in a timely manner.
    Following the Committee Business Meeting in which S. 1105 
was reported, the Administration submitted a letter to the 
Committee, through Commissioner of Reclamation Michael L. 
Connor, expressing its views on S. 1105. As explained in 
Commissioner Connor's letter, these views supplement his 
testimony delivered to the House Subcommittee on Water and 
Power on September 9, 2009 on identical companion legislation, 
H.R. 3342.
    In response to both the letter and the testimony, I 
received a letter from representatives of the seven local 
government parties to the Aamodt settlement and leadership of 
the Pueblos of San Ildefonso, Nambe, Pojoaque, and Tesuque 
discussing some of the issues raised. To ensure clarity and 
completeness of the Committee's report on S. 1105, I would like 
to submit portions of this response that address issues raised 
by the Administration and Commissioner Connor:
    First. The Commissioner expressed concerns about the 
allocation of risk in the event that the cost of constructing 
the Regional Water System exceeds the budget authorization. The 
non-federal settlement parties agree that execution of the 
Cost-Sharing Agreement should be made a condition of beginning 
construction and that requirement is already in Section 
101(d)(1) of S. 1105.
    The Commissioner also suggested that the Bureau of 
Reclamation be required to consult with the State and the 
Pueblos regarding any cost increases. The State, Santa Fe 
County and the Pueblos all expect that the Bureau of 
Reclamation will consult with us during the design, and 
construction phases. If there are any cost increases, the 
regular on-going consultation process will provide the best 
opportunity to allocate responsibility for such increases. It 
is difficult, if not impossible, to allocate the responsibility 
for cost overruns in the abstract. The non-federal parties 
strongly urge the Congress to proceed with this legislation 
with that understanding but without additional language added 
to address this concern.
    Second. The Commissioner proposed to revise the language 
pertaining to the San Juan-Chama project water required to 
fulfill terms of this settlement. The language proposed by the 
Commissioner is acceptable to the Pueblos. This change involves 
inserting the word ``construction'' before the word ``cost'' in 
Section 103(e)(1)(C).
    Third. The non-federal parties think the language in the 
Bill as written adequately address the concern raised by the 
United States about Section 107(c)(2)(B). However, we do not 
object to the clarification suggested by the Commissioner on 
behalf of the United States, that the legislation state ``both 
that the Secretary is authorized to pay operation, maintenance, 
or replacement costs for the Regional Water System until the 
Regional Water System is completed and the amount authorized in 
section 107(c) for the Aamodt Settlement Pueblos' Fund has been 
appropriated to that Fund, and that thereafter the Federal 
Government shall have no obligation to pay for the operation, 
maintenance, and replacement costs of the Regional System''.
    Fourth. The non-federal parties agree that there is value 
in harmonizing the language in Sections 105(d)(7)(C) and 
Section 203(f). We propose the following three changes to 
achieve that:

     Insert as new section 203(f)(4):
    Right to Set-Off. The United States shall be entitled to 
set off any funds expended or withdrawn from the amounts 
appropriated pursuant to section 107(c) together with any 
interest accrued against any claims against the United States 
relating to water rights in the Pojoaque Basin asserted by a 
Pueblo that received the direct benefit of such funds.

     Section 105(d)(7)(C) should be similarly modified 
to read ``If the conditions precedent in section 203 have not 
been fulfilled by September 15, 2017, the United States shall 
be entitled to set off any funds expended or withdrawn from the 
amounts appropriated pursuant to section 107(c) for the direct 
benefit of a Pueblo, together with any interest accrued, 
against any claims asserted by that Pueblo against the United 
States relating to the water rights in the Pojoaque Basin.''

     Section 203(b)(2) should be modified to parallel 
Section 203(f)(3).

                                                         Tom Udall.

                                  
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