[Senate Report 111-117]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 257
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-117

======================================================================
 
   A BILL TO APPROVE THE TAOS PUEBLO INDIAN WATER RIGHTS SETTLEMENT 
                   AGREEMENT, AND FOR OTHER PURPOSES

                                _______
                                

                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. 965]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 965) to approve the Taos Pueblo Indian Water Rights 
Settlement Agreement, and for other purposes, having considered 
the same, reports favorably thereon, with amendments, and 
recommends that the bill (as amended) do pass.

                                PURPOSE

    The purpose of S. 965 is to approve the Taos Pueblo Indian 
Water Rights Settlement, to authorize and direct the Secretary 
to execute the Settlement Agreement and perform all obligations 
of the Secretary under the Settlement Agreement, and to 
authorize all actions and appropriations necessary for the 
United States to meet its obligations under the Settlement 
Agreement and the Act.

                               BACKGROUND

    The Taos Pueblo Indian Water Rights Settlement Act, S. 965, 
resolves a long-standing Indian water rights case in the State 
of New Mexico. Legislation is needed to ratify the 
quantification and settlement of water rights of the Taos 
Pueblo (Pueblo) and to resolve water rights claims of the 
Pueblo against the United States and release the United States 
from further liability. Without legislation the Pueblo and 
other parties would be required to continue to engage in 
litigation to determine their respective water rights.
    S. 965 addresses the water rights claims of the Pueblo 
asserted in the case of State of New Mexico, ex rel. State 
Engineer v. Eduardo Abeyta (Abeyta), filed in 1969, and 
approves the settlement of water rights in three tributaries of 
the Rio Grande in northern New Mexico--the Rio Pueblo, Rio 
Lucero and Rio Hondo. Since 1989, the vast majority of water 
users in the Taos Valley were represented at some point in the 
development of the Settlement Agreement approved by S. 965. 
Settlement parties include the Pueblo, the Taos Valley Acequia 
Association, the Town of Taos, El Prado Water and Sanitation 
District, and the twelve Taos-area Mutual Domestic Water 
Consumers' Associations.
    The Pueblo is located in North-Central New Mexico. Pueblo 
enrollment is 2,458 members and growing. The Pueblo's land base 
is approximately 100,000 acres, including semi-arid lands along 
the Rio Grande, irrigated farmlands, and mountains. At the foot 
of the mountains are Pueblo farmlands that have been irrigated 
in pre-historic and historic times through a complex ditch 
irrigation system. The Blue Lake Wilderness Area, a sacred area 
for the Pueblo, is a major part of the watershed involved in 
the settlement. The Pueblo is also a National Historic Landmark 
and a World Heritage Site.
    S. 965 ratifies the parties' March 31, 2006, Settlement 
Agreement, which resolves the water rights claims of the Pueblo 
and thousands of water right claimants throughout the Taos 
Valley in New Mexico. S. 965 authorizes approximately $121 
million in federal appropriations. Non-Indian parties to the 
settlement intend to seek about an additional $22 million in 
funding from the State of New Mexico for a share of some of the 
settlement costs. If sufficient appropriations have not been 
made by 2020, some of the federal costs of S. 965 may be 
satisfied from the ``Reclamation Water Settlements Fund'' which 
was created by section 10501 of P.L. 111-11.

                      SUMMARY OF MAJOR PROVISIONS

    Section 4 of S. 965 ratifies the quantification of the 
water rights of the Pueblo and states that those water rights 
are held in trust by the United States on behalf of the Pueblo.
    Under section 5, the Commissioner of Reclamation is 
directed to provide non-reimbursable grants to the Pueblo to 
plan, design, and construct water related projects. Section 5 
also provides for non-reimbursable grants to restore and 
protect the environment associated with the Buffalo Pasture, a 
culturally sensitive wetland that has been impacted by non-
Indian groundwater production.
    Section 6 establishes a Taos Pueblo Water Development Fund 
in the United States Treasury to be used by the Pueblo for 
acquiring water rights, developing water projects, 
administering water rights, and protecting and enhancing the 
watershed.
    Section 7 of the bill permits marketing of Pueblo water 
rights subject to the approval of the Secretary of the 
Interior. Some of the water marketed by the Pueblo would come 
from a contract entered into by the Secretary of the Interior 
pursuant to section 9.
    Section 8 authorizes the Bureau of Reclamation to provide 
non-reimbursable grants to non-Pueblo entities to develop water 
related projects that are identified in the Settlement 
Agreement as serving the mutual benefit of Pueblo and non-
Pueblo users in the Taos Valley.
    Section 9 authorizes the Secretary of the Interior to enter 
into contracts for the delivery of San Juan-Chama Project water 
to settlement parties. Section 9 specifies that under these 
contracts 2,215 acre-feet per year will be delivered to the 
Pueblo, 366 acre-feet per year will be delivered to the Town of 
Taos, and 40 acre-feet per year will be delivered to the El 
Prado Water and Sanitation District.
    Section 10 authorizes approximately $121 million in federal 
appropriations. Section 10 also provides that one of the 
conditions for the Settlement Agreement and the waivers and 
releases contained in S. 965 to become effective is the 
appropriation by the State of New Mexico of funding for State 
contributions for a share of projects identified in the 
Settlement Agreement.
    Section 11 provides waivers of the Pueblo and the United 
States, as trustee, to claims and parties in the Abeyta case.

                          LEGISLATIVE HISTORY

    In the 110th Congress, Senator Bingaman and Senator 
Domenici introduced S. 3381 which contained authorizations 
nearly identical to S. 965. 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. That bill 
was never considered by the full Senate.
    S. 965 was introduced by Senator Bingaman on May 4, 2009, 
with Senator Tom Udall as an original cosponsor, and referred 
to the Committee on Indian Affairs. At an open business meeting 
on September 10, 2009, the Committee approved S. 965 with an 
amendment offered by Senator Udall.
    A companion bill, the Taos Pueblo Indian Water Rights 
Settlement Act, H.R. 3254, was introduced in the House of 
Representatives on July 17, 2009, by Representative Lujan, and 
referred to the House Committee on Natural Resources. On 
September 9, 2009, a hearing on H.R. 3254 was held by the Water 
and Power Subcommittee of the House Committee on Natural 
Resources.

                          SUMMARY OF AMENDMENT

    During the consideration of S. 965, the Committee adopted 
an amendment to improve the bill. The amendment deleted an 
exemption for Secretarial approval of certain subcontracts and 
extended the deadline for Secretarial approval of certain 
contracts. Both changes were made in response to concerns 
raised by the Administration. The amendment also included a 
technical change to make deadlines consistent.

            SECTION-BY-SECTION ANALYSIS OF S. 965 AS AMENDED

Section 1. Short title

    Section 1 provides the short title of S. 965 as the ``Taos 
Pueblo Indian Water Rights Settlement Act.''

Section 2. Purpose

    Section 2 specifies the purposes of S. 965, including: to 
approve the Taos Pueblo Indian Water Rights Settlement 
Agreement, to authorize the Secretary to execute the Settlement 
Agreement and to perform obligations under it, and to authorize 
necessary actions and appropriations.

Section 3. Definitions

    Section 3 defines terms used in S. 965.

Section 4. Pueblo rights

    Section 4(a) states that the rights to which Taos Pueblo is 
entitled under the Partial Final Decree will be held in trust 
by the United States and not subject to forfeiture, abandonment 
or permanent alienation. Section 4(b) states that the Pueblo 
will not be denied its rights held in trust absent its consent 
unless explicitly abrogated by a future act of Congress.

Section 5. Pueblo water infrastructure and watershed enhancement

    Section 5(a) requires the Secretary of the Interior, acting 
through the Commissioner of Reclamation, to provide grants and 
technical assistance to the Pueblo on a non-reimbursable basis 
for specified purposes. Section 5(b) provides that upon the 
enforcement date, all amounts appropriated pursuant to section 
10(c)(1) will be available in grants to the Pueblo after the 
requirements of section 5(c) have been met. Section 5(c) states 
that the Secretary will provide financial assistance pursuant 
to subsection (a) upon Taos Pueblo's submittal of a plan. 
Section 5(d) provides that $10 million of the monies authorized 
to be appropriated pursuant to section 10(c)(1) will be made 
available upon appropriation or upon availability of funds from 
other authorized sources and will be distributed to Taos Pueblo 
upon receipt by the Secretary of a written notice, Tribal 
Council resolution, and a plan for this portion of the funding 
from Taos Pueblo.

Section 6. Taos Pueblo Water Development Fund

    Section 6(a) establishes the Taos Pueblo Water Development 
Fund in the Treasury and specifies uses of the fund by Taos 
Pueblo. Section 6(b) directs the Secretary to manage and 
distribute money from the Taos Pueblo Water Development Fund in 
accordance with the American Indian Trust Fund Management 
Reform Act, S. 965 and the Settlement Agreement.
    Section 6(c) directs the Secretary to invest amounts in the 
Taos Pueblo Water Development Fund in accordance with the 
American Indian Trust Fund Management Reform Act and other 
specified acts. Section 6(d) provides that all monies in the 
Taos Pueblo Water Development Fund will be available to Taos 
Pueblo after the requirements of subsection (e) are met. 
Section 6(e) identifies conditions for expenditures and 
withdrawals from the Taos Pueblo Water Development Fund.
    Section 6(f) provides that $15 million of the monies 
authorized to be appropriated pursuant to section 10(c)(1) will 
be made available upon appropriation for specified purposes and 
will be distributed to Taos Pueblo by the Secretary upon 
receipt of a written notice and Tribal Council resolution. 
Section 6(g) prohibits distribution of the Taos Pueblo Water 
Development Fund on a per capita basis.

Section 7. Marketing

    Section 7(a) authorizes Taos Pueblo to lease water rights 
secured to it under the Settlement Agreement and Partial Final 
Decree subject to approval of the Secretary. Section 7(b) 
authorizes Taos Pueblo to subcontract to third parties water 
made available to the Pueblo under the San Juan-Chama Project 
contract authorized by section 9(b)(1)(A) provided that the 
delivery obligations under such subcontract are consistent with 
the Secretary's existing San Juan-Chama Project obligations and 
subject to approval of the Secretary.
    Section 7(c) specifies certain limitations on the diversion 
or use of water off Pueblo Lands pursuant to Pueblo water 
rights or Pueblo contract rights to San Juan-Chama Project 
water. Section 7(d) specifies the maximum term of any water use 
lease or subcontract and provides that Taos Pueblo will not 
permanently alienate any rights under the Settlement Agreement, 
the Partial Final Decree, or S. 965.
    Section 7(e), as amended, requires Secretarial approval of 
any lease or subcontract within a specified time and provides 
that no Secretarial approval will be required for any water use 
lease with a term of less than 7 years. Section 7(f) states 
that the nonuse by a lessee or subcontractor of any right to 
which Taos Pueblo is entitled under the Partial Final Decree 
will in no event result in a forfeiture, abandonment, 
relinquishment or other loss. Section 7(g) states that the 
approval authority under subsection (e) will not amend, 
construe, supersede or preempt specified State or Federal law, 
and provides that 25 U.S.C. Sec. 177 will not apply to any 
water made available under the Settlement Agreement.
    Section 7(h) declares that nothing in S. 965 will be 
construed to prejudice any party from litigating whether or to 
what extent specified law applies to the use of the Pueblo's 
water outside New Mexico.

Section 8. Mutual-benefit projects

    Section 8(a) requires the Secretary, acting through the 
Commissioner of Reclamation, to provide financial assistance in 
the form of grants on a non-reimbursable basis to Eligible Non-
Pueblo Entities to plan, permit, design, engineer and construct 
the Mutual Benefits Projects in accordance with the Settlement 
Agreement for specified purposes. Section 8(b) specifies the 
Federal and non-Federal shares of the total cost of planning, 
designing and constructing the Mutual Benefit Projects and 
authorizes non-Federal share in the form of in-kind 
contributions.

Section 9. San Juan-Chama Project contracts

    Section 9(a) requires that contracts issued under this 
section be in accordance with S. 965 and the Settlement 
Agreement. Section 9(b) authorizes the Secretary to enter into 
3 repayment contracts--one with Taos Pueblo and one each with 
two other settling parties, the Town of Taos and El Prado Water 
and Sanitation District--for the delivery of specified amounts 
of San Juan-Chama Project water, and provides for the 
expiration of each contract if the conditions precedent to the 
settlement set forth in Section 10(f)(2) have not been 
fulfilled by a specified date. Section 9(c) requires the 
Secretary to waive Taos Pueblo's share of the construction 
costs, including both principle and interest, for the San Juan-
Chama Project and specifies that those construction costs 
waived will be non-reimbursable.

Section 10. Authorizations, ratifications, confirmations, and 
        conditions precedent

    Section 10(a) authorizes, ratifies and confirms the 
Settlement Agreement resolving the Taos Pueblo's water rights 
claims in the Taos Valley and amendments to make the Settlement 
Agreement consistent with S. 965. Section 10(b) directs the 
Secretary to execute the Settlement Agreement, including any 
amendments necessary to make the Agreement consistent with S. 
965, after execution by Taos Pueblo.
    Section 10(c) authorizes appropriations for the Taos Pueblo 
Infrastructure and Watershed Fund, the Taos Pueblo Water 
Development Fund, and Mutual Benefits Projects Funding; 
requires adjustment of the amounts authorized by changes in 
costs since April 1, 2007 as indicated by specified indices; 
and requires the funds to be deposited into a Taos Settlement 
Fund to be established in the Treasury, except for specified 
early funds to Taos Pueblo. Section 10(d) authorizes the 
Secretary to enter into agreements and to take measures 
necessary and appropriate to fulfill the intent of the 
Settlement Agreement and S. 965.
    Section 10(e) states that the Secretary's execution of the 
Settlement Agreement will not constitute a major federal action 
under the National Environmental Policy Act and requires the 
Secretary to comply with Federal laws relating to the 
protection of the environment.
    Section 10(f) declares the conditions precedent for the 
Settlement Agreement to become enforceable and for the waivers 
and releases to become effective, and provides that upon 
fulfillment of those conditions the Secretary will publish in 
the Federal Register a statement of finding that the conditions 
have been fulfilled. Section 10(g) declares that the Settlement 
Agreement will become enforceable and the waivers and releases 
will become effective as of the date that the Secretary 
publishes the notice that the conditions precedent set forth in 
subsection (f)(2) have been fulfilled.
    Section 10(h) provides that the Settlement Agreement will 
become null and void, and the waivers and releases will not 
become effective, if the conditions precedent set forth in 
subsection (f)(2) have not been fulfilled by a specified date, 
and requires the return to the Federal government of unexpended 
Federal funds and title to property acquired or constructed 
with expended funds, unless otherwise agreed by the parties and 
approved by Congress, with an exception for the early funds 
made available to Taos Pueblo under sections 5(d) and 6(f) and 
a right for the United States to set off amounts against claims 
asserted by the Pueblo against the United States relating to 
water rights in the Taos Valley.

Section 11. Waivers and releases

    Section 11(a) requires the Taos Pueblo and the United 
States to execute specified waivers and releases associated 
with water rights claims of Taos Pueblo and the United States 
in its trustee capacity to the Pueblo in the Taos Valley or the 
Rio Grande mainstream or tributary water. Section 11(b) 
requires the Taos Pueblo to execute specified waivers and 
releases of certain claims against the United States associated 
with Taos Pueblo's water rights claims. Section 11(c) 
identifies certain rights and claims of Taos Pueblo and the 
United States on its behalf that are retained and provides that 
all rights, remedies, privileges, immunities, powers and claims 
not specifically waived are retained. Section 11(e) provides 
for the tolling of periods of limitation and time-based 
equitable defenses relating to claims described in this 
section.

Section 12. Interpretation and enforcement

    Section 12(a) provides for a limited waiver of sovereign 
immunity by the United States and Taos Pueblo in any court of 
competent jurisdiction over the subject matter relating only 
and directly to the interpretation or enforcement of the 
Settlement Agreement or S. 965. Section 12(b) states that 
nothing in S. 965 will be interpreted as conferring, 
restricting, enlarging, or determining the subject matter 
jurisdiction of any court. Section 12(c) states that nothing in 
S. 965 will be deemed to determine or limit any authority of 
the State of New Mexico or Taos Pueblo to regulate or 
administer waters or water rights.

Section 13. Disclaimer

    Section 13 disclaims any effect of S. 965 on the land and 
water rights of any other Indian tribe.

            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. 965, as 
amended, and ordered the bill reported to the Senate, with the 
recommendation that the Senate do pass S. 965 as amended.

                   COST AND BUDGETARY CONSIDERATIONS

S. 965--Taos Pueblo Indian Water Rights Settlement Act

    Summary: S. 965 would approve and ratify a settlement 
agreement between the Taos Pueblo and the state of New Mexico. 
The agreement would settle the Pueblo's claims to water rights 
in the state. As part of that agreement, the bill would 
authorize the appropriation of funds to construct and 
rehabilitate water infrastructure and preserve environmentally 
sensitive lands in the Taos Valley. The bill also would 
establish a trust fund for the Pueblo to acquire water rights 
and maintain the water infrastructure. Finally, the bill would 
authorize appropriations to mitigate any adverse impacts on 
Pueblo lands caused by diverting water to execute the 
settlement agreement.
    Based on information from the Department of the Interior 
(DOI), CBO estimates that implementing S. 965 would cost $25 
million over the 2010-2014 period and an additional $114 
million to be spent beginning in fiscal year 2017 (as specified 
by the proposed settlement agreement), assuming appropriation 
of the necessary amounts. Enacting S. 965 would not affect 
direct spending or revenues.
    S. 965 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. 965 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 APPROPRIATIONPueblo Water Infrastructure:
    Estimated Authorization Level..................         1         3         3         3         0         10
    Estimated Outlays..............................         1         3         3         3         0         10
Water Development Fund:
    Estimated Authorization Level..................         3         3         3         3         3         15
    Estimated Outlays..............................         3         3         3         3         3         15
    Total Spending Under S. 965:
        Estimated Authorization Level..............         4         6         6         6         3         25
        Estimated Outlays..........................         4         6         6         6         3         25
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
965 will be enacted early in fiscal year 2010 and that the 
necessary amounts will be appropriated each year. The 
enforcement of the settlement agreement depends on the 
completion of a number of actions by federal, state, local, and 
tribal entities. CBO expects that those actions will be 
completed early in fiscal year 2017. The estimated costs of 
those projects are based on information from DOI and on 
historical spending patterns for similar activities.
    In 2006, the Taos Pueblo in New Mexico and several other 
parties signed a settlement agreement resolving a water-rights 
dispute in the Taos Valley. The United States would become a 
party to that agreement upon enactment of S. 965, provided that 
certain other conditions are met. Among those conditions, the 
Secretary 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 
partial decree concerning the agreement; the Congress would 
have to appropriate sufficient funds to carry out certain 
provisions of the bill, which CBO estimates would cost $139 
million; and New Mexico would have to appropriate amounts it 
would owe the Pueblo under the agreement.
    Based on information from DOI and assuming appropriation of 
the necessary amounts, CBO estimates that implementing the 
legislation would cost $25 million over the 2010-2014 period 
and $114 million after 2016. Should the Secretary of the 
Interior not publish the required statement of findings by 
December 31, 2016, verifying that all conditions necessary to 
execute the agreement have been met, the agreement would not 
take effect, and any appropriated funds that remain unspent and 
title to any property acquired or constructed with federal 
funds would be returned to the federal government (unless 
otherwise specified by the bill).

Pueblo water infrastructure

    Section 5 would authorize the Secretary of the Interior to 
provide grants to the Taos Pueblo to construct and maintain 
water infrastructure and to restore and protect environmentally 
sensitive lands and watersheds. The bill would authorize the 
appropriation of $30 million (plus additional amounts needed 
because of increases in construction costs) over the 2010-2016 
period. Of that amount, $10 million could be expended upon 
appropriation. The remaining $20 million would not be available 
to the Secretary until the enforcement date of the settlement--
near the beginning of fiscal year 2017. CBO estimates that 
implementing this grant program would cost $10 million over the 
2010-2014 period and an additional $24 million beginning in 
2017.

Water Development Fund

    Section 6 would authorize the appropriation of $58 million 
(plus additional amounts needed because of increases in 
construction costs) over the 2010-2016 period for the Taos 
Pueblo Water Development Fund. The Secretary of the Interior 
would be directed to hold those funds in trust for the Pueblo 
until the enforcement date of the settlement--the beginning of 
fiscal year 2017. After that date, the Secretary would be 
required to invest amounts in the fund in U.S. Treasury 
obligations, and those amounts would be available to the Pueblo 
to construct, operate, and maintain certain water system 
facilities owned or operated by the Pueblo.
    Of the total amount authorized to be appropriated to the 
fund, $15 million would be available immediately for the Pueblo 
to acquire certain water rights. Control over those amounts 
would be transferred to the Pueblo when appropriated. The 
remaining amounts could be spent by the Pueblo only after the 
settlement agreement is executed. Assuming appropriation of the 
authorized amounts, CBO estimates that outlays from the fund 
would total $15 million over the 2010-2014 period and $52 
million after 2016.
    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 Taos Pueblo Water Development Fund 
(excluding amounts made available to acquire water rights) 
would be recorded as an outlay in 2017 when the funds could be 
spent by the Pueblo. Subsequently, any use of such funds would 
have no effect on the federal budget. Because S. 965 directs 
the Secretary to invest amounts in the fund only after those 
amounts are available to the Pueblo, CBO expects that no 
interest would accrue on the amounts in the fund until after 
the payments are made in 2017.

Mutual-benefit projects

    Section 8 would authorize the Secretary of the Interior to 
provide grants to local governments (other than the Taos 
Pueblo) for projects intended to mitigate the impact of 
diverting water from present uses to execute the settlement. 
The bill would authorize the appropriation of $33 million (plus 
additional amounts needed because of increases in constructions 
costs) over the 2010-2016 period. The funds would be available 
on the settlement's enforcement date--the beginning of fiscal 
year 2017. Assuming appropriation of the authorized amounts, 
CBO estimates that implementing this grant program would have 
no cost over the 2010-2014 period and would cost $38 million 
after 2016.
    Intergovernmental and private-sector impact: S. 965 
contains no intergovernmental or private-sector 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.
    Estimate prepared by: Federal costs: Jeff LaFave; Impact on 
state, local, and tribal governments: Melissa Merrell; Impact 
on the private sector: Marin Randall.
    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. 965 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. 965 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. 965, The Taos Pueblo Indian Water Rights 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. 965 
was reported, the Administration submitted a letter to the 
Committee, through Commissioner of Reclamation Michael L. 
Connor, expressing its views on S. 965. 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. 3254.
    In response to both the letter and the testimony, I 
received a letter from Pueblo of Taos Governor Ruben A. Romero, 
and War Chief Bernard Lujan discussing some of the issues 
raised. To ensure clarity and completeness of the Committee's 
report on S. 965, I would like to submit portions of the 
Pueblo's response that address issues raised by the 
Administration and Commissioner Connor. In the portions below, 
the Pueblo refers to the Administration's testimony before the 
House Subcommittee on Water and Power on September 9, 2009 as 
``Administration Testimony,'' and the letter submitted by 
Commissioner Conner to the Committee as the ``Connor letter.'' 
The Pueblo's letter stated in part:
    We commend Commissioner Connor and this Administration for 
their vision and commitment to our settlement efforts that have 
resulted in strong Administration support for the core 
settlement components and no objection to the overall cost of 
our settlement.
    As Commissioner Connor's letter highlights, substantial 
compromises by Taos Pueblo have also made this achievement 
possible. We are waiving the vast majority of our formidable 
senior historic water rights claims--approximately 23,000 AFY--
and settling for 11,927.51 AFY of depletion rights. As 
Commissioner Connor emphasizes, ``[t]his is very valuable 
water'' that ``has been estimated to be as much as $10,500 to 
$12,000 per acre-foot of consumptive use'' (Connor letter at 
2). Simple math therefore suggests the value of this 
``tremendous compromise'' (Administration Testimony at 4) 
ranges over $240 million--far in excess of the settlement 
funding for the Pueblo of $88 million and the total federal 
settlement funding of $121 million. The Administration further 
recognizes there is ``no guarantee that the Pueblo will be able 
to acquire enough state-based water to put all its forborne 
water rights to use'' (Connor letter at 1-2). As Commissioner 
Connor has noted, ``[t]he United States participated actively 
in the negotiations . . . and was able to resolve most issues 
of concern to the Government'' (Administration Testimony at 3). 
``The willingness of the Pueblo, in particular, to agree to 
reasonable and necessary compromises has been impressive'' 
(id). Several of our additional significant compromises and the 
associated core settlement components are summarized in the 
Administration Testimony under ``Provisions that the 
Administration Supports'':
     LWaivers and releases of claims (Administration 
Testimony at 4);
     LFunding for the ``central and noteworthy'' 
protection of our sacred Buffalo Pasture (id. at 4);
     L``Perhaps the most significant positive attribute 
of the negotiated settlement is that it solidifies and makes 
permanent many water sharing arrangements that the Pueblo and 
its non-Indian neighbors have struggled for years to 
establish'' (id. at 5); and
     L``Overall, it provides some innovative mechanisms 
for managing water in Taos Valley to satisfy the Pueblo's 
current and future water needs, while minimizing disruption to 
non-Indian water users'' (id. at 6).
    We have made further compromises to address the current 
Administration's concerns through amendments (1) deleting the 
exemption from Secretarial approval of subcontracts of San 
Juan-Chama Project (SJCP) water for terms less than 7 years in 
Section 7(e)(2), and (2) extending the time for the Secretary 
to enter into the SJCP contracts to six months after enactment. 
We appreciate that the Administration presented its views in 
the context of its support for the fundamental terms of the 
settlement and the Pueblo's substantial compromises and 
leadership. Our views and the steps we have taken to address 
the Administration's four remaining concerns are as follows:
1. ``A closer look'' at the costs of the settlement and the United 
        States'' share has shown they are reasonable and appropriate
    A close look at the costs of the settlement and the share 
of costs borne by the United States was taken by the Federal 
Administration during the many years of settlement negotiations 
at which the Department of the Interior and the Department of 
Justice were at the settlement negotiations table. In addition, 
in April 2007, Taos Pueblo provided the Federal Administration 
an updated estimate and justification for the Pueblo's 
settlement funds and the other local parties provided updated 
cost estimates for the Mutual-Benefit Projects.
2. The early timing of a portion of Pueblo settlement funding is 
        necessary to the linchpin components of this settlement that 
        the Administration supports
    The Administration notes that ``providing early settlement 
benefits is not good public policy,'' and acknowledges that 
``[l]imited departure from this practice may sometimes be 
appropriate'' (Connor letter at 2). Such a limited departure is 
appropriate and justified in this case because of the tight 
connection between the purposes and amount of the early funding 
and the innovative settlement mechanisms at the core of the 
settlement that are supported by the Administration as 
illustrated by the following examples (totaling approximately 
the $25 million authorized by S. 965):
     L``The Department understands the Pueblo's need 
for immediate access to funds, especially to halt deterioration 
of the condition of the Buffalo Pasture'' (Connor letter at 3), 
which is included in the early funding purposes (Sections 5(a), 
5(d)(1) and 6(f)(1));
     LEarly funding purposes include acquiring water 
rights to meet the critical initial target level of exercise of 
our Historically Irrigated Acreage water rights and the 
staffing needed for the many other water sharing arrangements 
which the Administration supports (see Administration Testimony 
at 5);
     LEarly funding for water infrastructure (Sections 
5(a)(1), 5(d), and 6(f)(1)) includes the irrigation 
infrastructure improvements needed to enable us to reach the 
HIA initial target; and
     LCertain Pueblo drinking water infrastructure 
problems identified by the Indian Health Service as in need of 
urgent attention are eligible for this early funding.
    While the dollar amount of the early funding is greater 
than that of settlements dating back six and ten years ago, it 
is commonly known that the costs of water rights, for instance, 
have dramatically increased, and the overall costs of the Taos 
settlement are quite modest in comparison with enacted and 
pending Indian water rights settlements, especially given the 
claims we are waiving. The existing language in Section 
10(h)(3) allows the United States the right ``to set off any 
funds expended or withdrawn'' from the early funding for water 
rights purchases and other early funding purposes ``against any 
claims asserted by the Pueblo against the United States 
relating to water rights in the Taos Valley.'' Although we 
believe this sufficiently addresses the Administration's 
concern ``that no entity can benefit if the settlement fails'' 
(Connor letter at 2), we welcome their suggestions for 
clarification.
3. The remaining exemption from Secretarial approval of leases of water 
        rights appurtenant to tribal lands is consistent with 
        exceptions in recent settlement legislation
    We agreed to the Administration's request to eliminate the 
exemption in Section (7)(e)(2) from Secretarial approval for 
subcontracts of our SJCP contract rights. Since the 
Administration's additional concern about the short-term lease 
exemption came to light, we have explained why retaining the 
exemption for leases of less than 7 years is consistent with 
precedent, policy and practice (compare Pub. L. No. 111-11, 
Sec. 10701(d) (no Secretarial approval required for Navajo 
Nation leases, contracts or other transfers of water rights not 
under federal water contract) with id. Sec. 10701(c)(1)(B) 
(Secretarial approval required for subcontracts of federal 
contract water); see also Snake River Water Rights Act of 2004, 
Pub. L. No 108-447, Sec. 7(g) (subject to Water Code and 
without further approval of the Secretary, Snake River Tribe 
may lease reserved water right through state water bank). We 
appreciate that the Secretary's Office of Indian Water Rights 
is engaged with us in reviewing these and other comparable 
exceptions from the ``standard practice'' (Connor letter at 3).
4. The limited waiver of sovereign immunity in Section 12(a) is 
        appropriate
    Section 12(a) was revisited at length in our negotiation of 
waivers and releases of claims with the Departments of Justice 
and Interior last fall. Rather than ``engender additional 
litigation'' (Connor letter at 3), we believe the limited 
waiver in Section 12(a) ``if any Party to the Settlement 
Agreement brings an action in any court of competent 
jurisdiction over the subject matter relating only and directly 
to the interpretation or enforcement of the Settlement 
Agreement or this Act . . . for the limited and sole purpose of 
such interpretation or enforcement'' will avoid future 
frivolous litigation over whether the McCarran Amendment, 43 
U.S.C. Sec. 666, which waived the United States' sovereign 
immunity for ``adjudication'' and ``administration'' of water 
rights, also waived immunity from suits to enforce water rights 
settlements. Moreover, similar provisions to Section 12(a) have 
been enacted for other Indian water rights settlements.

                                                         Tom Udall.

                                  
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