[Senate Report 111-118]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 259
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-118

======================================================================



 
AUTHORIZING THE CROW TRIBE OF INDIANS WATER RIGHTS SETTLEMENT, AND FOR 
                             OTHER PURPOSES

                                _______
                                

                January 21, 2010.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 375]

    The Committee on Indian Affairs, to which was referred the 
bill, S. 375, to authorize the Crow Tribe of Indians water 
rights settlement, and for other purposes, having considered 
the same, reports favorably thereon with an amendment in the 
nature of a substitute and recommends that the bill as amended 
do pass.

                                PURPOSE

    The purpose of S. 375 is to achieve a fair, equitable and 
final settlement of claims to water rights in the State of 
Montana by the Crow Tribe and the United States for the benefit 
of the Tribe and tribal allottees. The bill would ratify the 
Crow Tribe-Montana Water Rights Compact entered into by the 
Tribe and the State of Montana on June 22, 1999, direct the 
Secretary of the Interior to execute the Crow Tribe-Montana 
Water Rights Compact, and authorize the appropriation of funds 
necessary for the implementation of the Compact and this bill.

                               BACKGROUND

The Crow Reservation

    The Crow Tribe's Reservation is located in southern Montana 
along the Montana-Wyoming border. The Reservation is the 
largest of the seven Indian reservations located in Montana and 
one of the largest in the United States. The Reservation 
encompasses approximately 2.3 million acres. The Reservation 
includes three mountain ranges, rolling upland plains and 
fertile valleys. Rainfall averages 12 inches per year. 
Reservation agriculture production consists mostly of small 
grains and hay for livestock. Expansive grasslands support 
herds of cattle, horses and buffalo as well as abundant elk, 
deer and other wildlife.
    The Tribe has two treaties with the United States dealing 
with the Tribe's lands. The September 17, 1851 Treaty of Fort 
Laramie recognized and acknowledged a land area of about 38 
million acres as the territory of the Crow Tribe, which 
included within it many valuable water resources including the 
Bighorn and Yellowstone Rivers. The May 7, 1868 Fort Laramie 
Treaty reduced the Tribe's territory to a reservation of about 
8 million acres, with part of the northern boundary being the 
mid-channel of the Yellowstone River.
    Land cessions in the late 19th and early 20th Centuries 
further reduced the Reservation acreage, including removal of 
all lands along the Yellowstone River. The 1904 cession removed 
approximately the northern third of the existing Reservation. 
This land is known as the ``Ceded Strip.'' The size of the 
Ceded Strip is approximately 1.1 million acres. On the Ceded 
Strip, the Huntley Irrigation Project was developed. The Tribe 
was never paid for the sale of the lands for the Huntley 
Irrigation Project, nor was the Tribe able to get back unsold 
lands, as promised. In 1958 Congress passed another law 
restoring tribal ownership over a portion of the Ceded Strip. 
This law restored 15,553 acres of surface ownership and 80,423 
acres of subsurface mineral ownership to the Tribe.
    The tribal land base within the exterior boundary of the 
Reservation was also divided by various allotment acts. By 
1935, there were 5,507 allotments on the reservation, 
consisting of 2,054,055 acres. Many allotments passed into fee 
land status and were alienated from the Tribe or individual 
Indians to non-Indians. This resulted in non-Indian land 
ownership and claims of Montana water rights throughout the 
Reservation. Today, Reservation land is held approximately half 
in trust and half in fee status.
    The primary sources of water on the Reservation are the 
Bighorn River, the Little Bighorn River, Pryor Creek and 
several smaller streams. The Bighorn and Little Bighorn Rivers 
originate in Wyoming and flow north into the Reservation. After 
flowing through the Reservation, the Little Bighorn enters the 
Bighorn River just outside the Reservation boundary near the 
town of Hardin, Montana. The Bighorn River then continues north 
to become a tributary of the Yellowstone River.
    The Reservation is home to approximately 8,000 of the 
11,900 enrolled Tribal members. Close to 40 percent of the 
enrolled Tribal members are below the age of 18. The 
Reservation has high levels of unemployment and poverty, severe 
shortages of housing, and serious needs for health care and 
other basic services. The lack of water infrastructure and 
opportunities to develop water projects on the Reservation 
directly contributes to these problems.
    In the 110th Congress, at a Committee hearing on the bill, 
the Tribe's Chairman testified to the importance of water to 
the Crow people.\1\ He stated that water is vital to the 
Tribe's health and a central part of the Tribe's culture and 
traditions. The Chairman cited the importance of water in the 
Tribe's creation story, where the land is brought up from the 
water. He testified that for the Crow people all things of 
tangible substance, all things that we can touch, feel, smell, 
see and hear come from water. As an example, he noted that in 
the Tobacco Dance Crow people repeat the central truth that all 
things come from water and with water they go. He also 
testified that tribal ceremonies, such as the sweat lodge, 
depend upon particular uses of water that are sacred to the 
Crow people.
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    \1\Hearing on S. 3355, the Crow Tribe Water Rights Settlement Act 
of 2008: Senate Committee on Indian Affairs, 110th Congress (Sept. 11, 
2008) (testimony of Cedric Black Eagle, Vice-Chairman of the Crow 
Tribe); See also, e.g., Robert H. Lowie, The Crow Indians, at 89 
(1956); Edward Curtis, The North American Indian, Vol. VI, Johnson 
Reprint Co., Ltd., at 8, 54-55, 71 (1970); Edward Curtis, The North 
American Indian, Vol. IV, Johnson Reprint Co., Ltd., at 54-56 (1970).
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Yellowtail Dam

    The Yellowtail Dam, located on the Bighorn River, was 
authorized by Congress in 1944, and construction began in 1961. 
Yellowtail Dam reservoir, known as the Bighorn Lake, has a 
total storage capacity of 1,328,360 acre-feet and extends south 
from the dam, across the Montana-Wyoming state line, and about 
20 miles into the State of Wyoming. The dam and reservoir are 
operated by the United States Bureau of Reclamation. 
Authorization to construct the dam also included authority to 
condemn tribal lands necessary for construction of the dam.\2\ 
Prior to this federal action, the Tribe had sought to maintain 
the right to develop its own power and water projects for at 
least fifty years.\3\
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    \2\Lands submerged by the reservoir and its surrounding area on the 
Wyoming side of the state line were condemned as well.
    \3\Opening of the Crow (Montana) Indian Reservation: Hearing Before 
the S. Comm. on Indian Affairs, Part III, 64th Cong. 22 (1916) (letter 
from Crow Tribe Council to S. Comm. on Indian Affairs).
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    Section 12 of S. 375 provides the Tribe shall have the 
exclusive right to develop and market power generation as a 
water development project on the Yellowtail Afterbay Dam. The 
Bureau of Reclamation (BOR) generally has the ability, pursuant 
to a federal project's authorizing legislation, to enter into a 
lease of power privilege agreement with third parties to 
develop power on any or all features of a federal project. In 
entering into these agreements, BOR normally designates that 
the lessee is responsible for an appropriate portion of the 
operation and maintenance costs associated with its facilities. 
While the authorization set forth in S. 375 is not technically 
a lease of power privilege, the Tribe intends to work with BOR 
to appropriately allocate the development, operation and 
maintenance costs associated with a Tribal power project on the 
Yellowtail Afterbay Dam developed pursuant to S. 375.

Municipal, rural, and industrial water system

    The Bureau of Indian Affairs currently operates and 
maintains an on-reservation water system that is inadequate to 
meet the needs of the Reservation. As a result, tribal members 
must haul their water from other sources or buy bottled water. 
The use of large plastic containers by tribal members to store 
drinking water is common on the Reservation. Tribal members 
often make trips to haul their water from springs in the 
mountains during the summer and buy bottled water in the 
winter. Meeting this basic domestic water need can have a 
significant impact on an impoverished Reservation 
population.\4\
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    \4\Approximately 41% of Crow tribal members living on Reservation 
live below the poverty line. See, LAO Environmental, Crow Indian 
Reservation: Natural, Socio-Economic, And Cultural Resources Assessment 
and Conditions Report 31 (2002) included in U.S. Dep't of the Interior, 
Bureau of Land Mgmt., Final Statewide Oil and Gas Envtl. Impact 
Statement and Proposed Amendment of the Powder River and Billings 
Resource Mgmt. Plans (2003).
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    Moreover, the limited supply of water that is available is 
often not fit for human use. Boiled water orders are a part of 
the way of life on the Reservation. There is also high 
likelihood that treated water from the Crow Agency water 
treatment plant contains a parasite known as cryptosporidium, 
which the Environmental Protection Agency (EPA) classifies as a 
risk to human health,\5\ and can cause mild to severe diarrhea, 
dehydration, stomach cramps, and fevers.\6\
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    \5\Office of Science and Tech. & Office of Water, U.S. Envtl. Prot. 
Agency, EPA-822-R-01-009, Cryptosporidium: Drinking Water Health 
Advisory (2001).
    \6\71 Fed. Reg. 654, 660 (Jan. 5, 2006).
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    In 2006, EPA promulgated a final Federal rule requiring 
public water systems to test for the presence of E. coli in 
untreated water from the lake or river that supplies the 
system's drinking water.\7\ EPA issued the final rule because 
an annual average of 50 colonies of E. coli per 100 milliliters 
of untreated water is a strong indicator that a parasite known 
as cryptosporidium is also in the untreated water.\8\ EPA 
decided to require E. coli testing because these tests are 10% 
of the cost of testing for cryptosporidium.\9\
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    \7\71 Fed. Reg. 654 (Jan. 5, 2006).
    \8\71 Fed. Reg. 654, 657 (Jan. 5, 2006).
    \9\Letter from Barbara Burkland, U.S. Evntl. Prot. Agency, Region 8 
at 2 (Sept. 17, 2009).
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    Under the Federal rule, a public water system like the Crow 
Agency water treatment plant must either test the untreated 
water twice a month for one year, or once a month for two 
years.\10\ The BIA began testing for E. coli in January of 2008 
and, in consultation with EPA, decided by July of 2008 to stop 
testing the untreated water because, with only half of the data 
collected, officials knew the annual average of E. coli 
colonies in the water would never be below 50 colonies per 100 
milliliters.\11\ The sample with the highest level of E. coli 
contained 7,179 colonies of E. coli in 100 milliliters of 
water.\12\
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    \10\71 Fed. Reg. 654, 664-65 (Jan. 5, 2006).
    \11\Letter from Barbara Burkland, U.S. Evntl. Prot. Agency, Region 
8 at 2 (Sept. 17, 2009).
    \12\Id.
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    While the Crow Agency water treatment facility can treat 
water infused with the E. coli bacteria, the facility is not 
equipped to eliminate cryptosporidium and is in need of 
maintenance and repair.\13\ Thus, the Crow Agency water 
treatment plant must either institute the next phase under 
EPA's rules, which is to test for cryptosporidium, on a monthly 
basis for at least a year, or must upgrade their water system 
to treat cryptosporidium.\14\ In the meantime, tribal members 
living on the Crow Reservation consume and bathe in water that 
is likely contaminated with cryptosporidium.
---------------------------------------------------------------------------
    \13\Id. See also, LAO Environmental, Crow Indian Reservation: 
Natural, Socio-Economic, And Cultural Resources Assessment and 
Conditions Report 102 (2002) included in U.S. Dep't of the Interior, 
Bureau of Land Mgmt., Final Statewide Oil and Gas Envtl. Impact 
Statement and Proposed Amendment of the Powder River and Billings 
Resource Mgmt. Plans (2003)(noting that ``The quality of water on the 
Crow Indian Reservation is concern. The water and wastewater systems at 
Crow Agency are severely overworked and in need of maintenance.'').
    \14\Letter from Barbara Burkland, U.S. Evntl. Prot. Agency, Region 
8 at 2 (Sept. 17, 2009).
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    Some tribal members living on the Reservation use wells on 
their property as a source of running water for their homes, 
but these tribal members do not drink the rancid water. Initial 
results from an ongoing study conducted\15\ by Little Big Horn 
College of well water within the Reservation found that seventy 
to eighty percent of the wells tested were contaminated with 
coliform bacteria\16\ at levels that made the water a health 
hazard. Of the remaining wells not contaminated with coliform 
bacteria, sixty percent contained dissolved solids that made 
the water undrinkable.
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    \15\This study is funded by the U.S. Evntl. Prot. Agency to 
Margaret Eggers, a graduate student at Montana State University, and in 
conjunction with the Little Big Horn College. See http://
cfpub2.epa.gov/ncer_abstracts/index.cfm/fuseaction/
display.abstractDetail/abstract/8260 (last visited Sept. 18, 2009), see 
also http://bricc.lbhc.edu/?page=research/water-quality (last visited 
Sept. 18, 2009).
    \16\The presence of coliform in the water is an indicator that an 
organism of fecal origin may also be in the water. See http://
www.epa.gov/safewater/contaminants/ecoli.html (last visited Sept. 17, 
2009).
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    Section 6 of the bill provides authorization for the 
construction of a new municipal, residential, and industrial 
system (``MR&I System'') to meet this basic need that most take 
for granted. Section 6(f) provides that at the request of the 
Tribe, the Secretary will enter into an agreement for the 
design and construction of the MR&I System. The Committee has 
been informed informally that the Tribe and the Secretary of 
Interior intend to work cooperatively in the negotiation of 
this agreement for construction of the MR&I System to ensure 
that the System is constructed in a cost-effective manner. The 
Committee has also been informally informed that, as the lead 
agency, the BOR will provide oversight over the agreement to 
ensure cost efficiency as the MR&I System is constructed. 
Finally, pursuant to section 6(g) the components of this system 
will pass from the United States to the Tribe upon the 
completion of each of the components.

Crow Irrigation Project

    The first general authorization for the construction of the 
Crow Irrigation Project on the Reservation was in an agreement 
between the Tribe and the United States entered into on 
December 8, 1890, and ratified by Section 31 of the Indian 
Appropriation Act of March 3, 1891, 26 Stat. 989. Subsequent 
acts provided for continued construction and development to 
date. Nearly all of the irrigation facilities were completed 
before 1940. Operation and maintenance of the Crow Irrigation 
Project are currently performed by the Bureau of Indian Affairs 
Office located in Crow Agency, Montana.
    The Project has nine diversion dams, one storage dam with a 
capacity of about 23,000 acre-feet, nine canal systems 
including roughly 320 miles of canals, five drainage systems 
running over 45 miles, and more than 2,300 irrigation 
structures. The primary source of water for the Project 
originates on tribal lands in the Bighorn Mountains which 
border the west side of the Reservation. Essentially all 
irrigation is supplied by surface water sources. In 2006, the 
Project served approximately 1,118 water users. The primary 
irrigated crops are hay and alfalfa, irrigated pasture, sugar 
beets and grains.
    Engineering studies completed for the rehabilitation of the 
Crow Irrigation Project show that the Project's irrigated area 
currently consists of 63,365 acres. The Project lands are 
located along the Big Horn and the Little Big Horn Rivers, 
Pryor Creek, and Lodge Grass Creek, all tributaries to the 
Yellowstone River. There are eleven Project-Operated Units in 
the Crow Irrigation Project scattered over an area 50 miles 
long and 60 miles wide, all within the Reservation. In 1999, 
approximately 61 percent of Crow Irrigation Project irrigated 
lands were held in trust by the United States for the benefit 
of individual Indian landowners and for the Crow Tribe.
    The Crow Irrigation Project serves Indian and non-Indian 
land owners. Non-Indian landowners in the three irrigation 
districts and private ditch companies in the Crow Irrigation 
Project are organized under Montana statutes and are legal 
entities. The Irrigation District Boards, chartered under state 
law, represent only owners of fee lands.
    In a 2006 report on Indian Irrigation Projects, the 
Government Accountability Office found that Crow Irrigation 
Project fees were insufficient to cover the project's 
operations as well as maintenance costs. The Bureau of Indian 
Affairs reported to GAO that deferred construction and 
maintenance costs were more than $54 million. Project financing 
problems have been long known. In 1916, Edgar Merritt, 
Assistant Commissioner of Indian Affairs, testified before the 
United States Senate Committee on Indian Affairs that the 
economics of the Crow Irrigation Project had been a ``hopeless 
failure.''\17\ In addition to the project falling into 
disrepair, upgrades are needed. There is a lack of adequate 
water measurement, and there is a need for automated gate 
controls at key diversion points, as well as installation of 
motorized gate controls.
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    \17\Opening of the Crow (Montana) Indian Reservation: Hearing 
Before the S. Comm. on Indian Affairs, Part IV, 64th Cong. 22 (1916) 
(testimony of Edgar B. Merritt, Commissioner on Indian Affairs).
---------------------------------------------------------------------------
    Section 5 of S. 375 authorizes the rehabilitation and 
betterment of the Crow Irrigation Project so that all Project 
lands can be efficiently utilized for farming and irrigation 
projects in order to maximize the Tribe's economic development 
opportunities. Section 5 provides that BOR shall be the lead 
agency for the rehabilitation and betterment of the Crow 
Irrigation Project. The Committee was informally informed that 
the BOR, in its lead agency capacity intends to assess the Crow 
Irrigation Project Betterment Evaluation prepared by HKM 
Engineering, dated July 31, 2008, to review the benefits it 
provides to allottees.

Crow Tribe water rights

    In 1975, the United States, on behalf of the Crow Tribe, 
brought suit in U.S. District Court for the District of Montana 
to obtain a final determination of the Tribe's water 
rights.\18\ In 1979, the State of Montana initiated a general 
stream adjudication and created the Montana Reserved Water 
Rights Compact Commission to negotiate, on behalf of the 
Governor, settlements with Indian Tribes and federal agencies 
claiming federal reserved water rights in the state of Montana. 
The Compact Commission was established as an alternative to 
litigation as part of the state-wide water adjudication and is 
charged with concluding compacts ``for the equitable division 
and apportionment of waters between the state and its people 
and the several Indian tribes'' and the federal government.\19\ 
Pending the outcome of Compact Commission proceedings, the 
litigation in the U.S. District Court was stayed in 1983.\20\
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    \18\See, U.S. v. Big Horn Low Line Canal Company, et al., No. CIV-
75-34-BLG (filed April 17, 1975).
    \19\Mont. Code Ann. Sec. 85-2-702
    \20\See, Northern Cheyenne Tribe v. Adsit, 721 F.2d 1187, 1189 (9th 
Cir. 1983).
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    The Crow Tribe and the Compact Commission successfully 
negotiated a settlement of the Tribe's water rights claims. The 
Crow Tribe-Montana Compact was approved by the Montana 
legislature in 1999.\21\ Once approved by S. 375, and ratified 
by the Tribe's membership, the Compact is the full and final 
settlement of the Tribe's water rights within the State of 
Montana and the Tribe waives any claims to Montana water rights 
not contained in the Compact.
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    \21\Mont. Code Ann. Sec. 85-20-901.
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    Generally speaking, S. 375 and the Compact provide for a 
May 7, 1868 priority date for the tribal water rights, not 
including the Bighorn Lake storage allocation portion of the 
tribal water rights which is given a priority date of the water 
right held by the BOR.\22\ Existing state uses are protected 
from the assertion of seniority by the Tribe, and new 
development of the tribal water rights will be junior in 
priority to existing uses. In every basin except the Bighorn 
River Basin, the Tribe may also purchase state water rights. 
The State of Montana will issue no new water rights within the 
basins of the Compact.
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    \22\See, Article III of the Compact for specifics of the priority 
dates.
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    The Committee was informally informed that one of the 
documents being developed for purposes of implementation of the 
tribal water rights under Compact is a list of the tribal water 
uses developed as of the date the Compact was ratified by the 
Montana legislature, June 22, 1999. It was explained to the 
Committee that this list is significant for a number of reasons 
relating to administration of the tribal water rights. For 
example, tribal water uses developed as of June 22, 1999, 
include water uses developed by allottees using the tribal 
water rights as of that date. The Committee was informally 
informed that the United States has an interest in reviewing 
this list to confirm that the list includes all such allottee 
water uses. The Committee was also informally informed that the 
Tribe also acknowledges and agrees that tribal water uses 
developed as of June 22, 1999, includes water uses developed by 
allottees, and that the United States shall review the list as 
developed to confirm that the list includes all such allottee 
water uses.
    Congressional approval of S. 375 and the Compact is needed 
to resolve the claims of the Tribe against the United States 
and releases the United States from liability. Without 
legislation, the Tribe, the United States, and other parties 
would be forced to engage in lengthy and costly water rights 
litigation to settle the rights of water users.

                          LEGISLATIVE HISTORY

    In the 110th Congress, Senator Tester introduced a bill to 
settle the Crow Tribe's water rights with Senator Baucus as an 
original co-sponsor.\23\ The bill was referred to the Committee 
on Indian Affairs. On September 11, 2008, the Committee held a 
hearing on this bill. At an open business meeting on September 
25, 2008, the Committee approved the bill by a voice vote, but 
the bill was not reported to the full Senate pending resolution 
of Senator Barrasso's concerns. The 110th Congress expired 
without the bill being considered on the Senate floor.
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    \23\In the 110th Congress the bill was numbered S. 3355.
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    In the 111th Congress, Senator Tester introduced S. 375, 
the Crow Tribe Water Rights Settlement Act of 2009, on February 
4, 2009, and the bill was referred to the Committee. Senator 
Baucus is an original cosponsor. S. 375 is substantially 
similar to the bill introduced in the 110th Congress. At an 
open business meeting on September 10, 2009, the Committee 
approved S. 375, with an amendment in the nature of a 
substitute.

         SUMMARY OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE

Amendments addressing Wyoming concerns

    On September 10, 2009, the Committee held a business 
meeting on the bill and at that meeting approved a substitute 
amendment that addressed a number of issues, including specific 
issues raised by stakeholders in the State of Wyoming who were 
concerned that the bill, as introduced, might be interpreted to 
affect their rights or the interests of the State of Wyoming.
    The Committee begins with the observations that the Compact 
was negotiated by representatives of the Crow Tribe, the State 
of Montana and the United States in the late 1990s and that the 
parties to the Compact, once it has been approved by Congress, 
will consist of the Crow Tribe, the State of Montana, and the 
United States--not the State of Wyoming or water users within 
the State of Wyoming. Further, under the terms of the Compact 
itself, within 180 days after the Compact has been ratified by 
the last of the three parties, the State of Montana, the Tribe, 
and the United States must file a joint motion to approve a 
proposed decree in a general stream adjudication case that is 
pending in the Water Court of the State of Montana. In that 
adjudication case, the water court is only adjudicating water 
rights located in the State of Montana, and the State of 
Wyoming and users of Wyoming water rights are not parties to 
the case.
    Water users in Wyoming raised concerns about the Compact 
because (i) the Bighorn River runs northward out of Wyoming 
across the Wyoming-Montana state line and flows directly into 
the Crow Indian Reservation in south central Montana, (ii) the 
Bighorn River is a significant interstate tributary of another 
interstate stream, the Yellowstone River, which is the subject 
of the Yellowstone River Compact approved by the States of 
Montana, North Dakota and Wyoming on December 8, 1950, pursuant 
to the Act of June 2, 1949 (P.L. 81-83), and (iii) the tribal-
state Compact is being ratified through legislation of the 
United States Congress. The substitute amendment adopted at the 
Committee's business meeting on September 10, 2009, addresses 
these concerns.

Amendments to Section 10

    Section 10(c)(3) of the bill sets forth a provision whereby 
the Tribe reserves certain claims for damages or injuries to 
water rights arising outside of the State of Montana. The 
substitute amendment strikes this paragraph. The Committee 
notes that the waivers and releases authorized in the bill are 
all limited to the Tribe's ``water rights within the State of 
Montana'' or to events that have occurred in the State of 
Montana. Accordingly, a reservation of rights for damages or 
injuries arising outside of the State of Montana is 
unnecessary.

Amendments to Section 12

    The substitute makes an amendment to Section 12(a) of the 
bill (by adding a new paragraph to the end of that subsection) 
to clarify the meaning and intent of certain provisions of the 
``Streamflow and Lake Level Management Plan,'' an instrument 
that was negotiated separately among the Tribe, the State of 
Montana, and the Bureau of Reclamation (the ``Plan''). Section 
1 of the Plan defines the term ``Instream Flow'' for the 
purposes of the Plan as ``the water flowing in the Bighorn 
River Released from the Yellowtail Afterbay Dam and maintained 
throughout the reach'' from that dam to a certain point 
downstream ``to maintain the fisheries resource.'' Section 2 of 
the Plan includes several provisions that require the Tribe to 
``dedicate'' a specified quantity of the tribal water rights to 
``Instream Flow'' in the Bighorn River.
    The Committee notes that the Streamflow and Lake Level 
Management Plan is a plan that was entered into among the 
Tribe, the State of Montana, and the Department of the Interior 
to achieve a variety of water management objectives. The plan 
is not an instrument transferring or creating water rights; 
rather, as the amendment to Section 12(a) states--

          [A]ny requirement in that plan that the Crow Tribe 
        dedicate a specified percentage, portion, or number of 
        acre feet of water per year of the tribal water rights 
        to instream flow means, and is limited in its meaning 
        and effect to, an obligation on the part of the Crow 
        Tribe to withhold from development or otherwise refrain 
        from diverting or removing from the Bighorn River the 
        specified quantity of water for the duration, at the 
        locations, and under the conditions set forth in the 
        applicable requirement.

    Water users in the State of Wyoming raised concerns that, 
because the plan is expressly referred to in Section 12 of the 
bill and in the Compact, the provisions in the Plan requiring 
the Tribe to ``dedicate'' a portion or quantity of the tribal 
water rights to instream flow between two points of the Bighorn 
River might be interpreted as creating, confirming or ratifying 
a water ``use'' which might be interpreted to create a new or 
additional water delivery obligation that the State of Wyoming 
and/or water users in Wyoming would be obligated to fulfill. 
The amendment to Section 12(a) addresses this concern, by 
clarifying that the Tribe's ``dedication'' of a quantity of its 
tribal water rights to instream flow under the Plan is not a 
use or commitment of water that creates any new or additional 
upstream or interstate obligations.
    This clarification in the amendment to Section 12(a) is 
consistent with existing provisions in that subsection of the 
bill, in particular paragraph (1) of subsection (a). Section 
12(a)(1) of the bill states that ``[n]othing in the Compact or 
[the Plan] . . . limits the discretion of the Secretary under 
section 4F of that [P]lan''--which sets forth a list of 6 
factors or criteria for making decisions relating to instream 
flow in the Bighorn River and desired lake levels in the 
Bighorn Lake--or ``requires the Secretary to give priority to 
any factor described in section 4F of the plan over any other 
factor described in that section.''
    The purpose of Section 12(a) is to make it clear that, 
notwithstanding the Compact or Plan, the Bureau retains its 
discretion in balancing the interests of the various 
stakeholders--including Montana, Wyoming, and Federal 
interests--in managing the lake levels in Bighorn Lake. The 
bill, the Compact and the Plan do not alter or limit the 
Secretary's authority or discretion in balancing these 
interests in its management decisions for Bighorn Lake.

Amendments to Section 13

    The substitute also includes amendments to Section 13 that 
address, for the most part,\24\ concerns that arise from 
provisions in the Compact\25\ that state that, with certain 
exceptions, water rights recognized under Montana state law in 
the Bighorn River Basin within Montana that have a priority 
date before the Compact was ratified by the Montana legislature 
in June of 1999 ``are protected from an assertion of senior 
priority in the exercise of current uses of the Tribal Water 
Right developed as of the date'' of such ratification as well 
as from ``new development of the Tribal Water Right after the 
date'' of such ratification. Because these protections are part 
of a compact that is being ratified by an act of Congress, 
water interests in the State of Wyoming have expressed concern 
that the protections from the Tribe's senior water right 
afforded under the Compact to junior Montana water rights might 
be interpreted to cause harm or somehow increase the risk to 
upstream water users in the State of Wyoming.
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    \24\Some minor or technical amendments were made to Section 13 for 
clarification purposes only. The substantive amendments to Section 13 
relate to the Compact provisions set forth in footnote 24.
    \25\See Article III (A)(6)(a)(1) and (2), (B)(6)(a)(1) and (2), 
(E)(6)(a)(1) and (2), and (F)(6)(a)(1) and (2) of the Compact.
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    Accordingly, to preclude any such interpretation of the Act 
or the Compact, the amendment approved by the Committee would 
add a new paragraph to Section 13(f) that states that the 
Compact provisions that afford these protections to certain 
water rights recognized under the laws of Montana ``do not 
limit or otherwise affect existing or future water rights 
(including the exercise of any such rights) outside of that 
State.''
    This particular amendment, added as a new paragraph to the 
end of subsection (f), is consistent with other provisions in 
subsection (f) of Section 13 which generally relate to the 1950 
Yellowstone River Compact between Wyoming, Montana, and North 
Dakota. Subsection (f) of Section 13 makes it clear that the 
bill, the Compact and the Plan have no effect on the meaning, 
interpretation, implementation, application or effect of the 
1950 interstate water compact, or on any of the rights, 
requirements, obligations, allocations of water, or any present 
or future claim, defense or other position asserted in a legal, 
administrative or other proceeding relating to that interstate 
water compact.
    Subsection (f) of Section 13 also makes it clear that the 
bill, the Compact and the Plan do not: (i) make an allocation 
or apportionment of water between states, (ii) address or imply 
whether, how, or to what extent, if any, the tribal water 
rights or any portion of the tribal water rights should be 
accounted for as part of or otherwise charged against any 
allocation of water made to a State under the provisions of the 
Yellowstone River Compact; or (iii) whether, how, or to what 
extent, if any, the Yellowstone River Compact includes or does 
not include the tribal water rights or the water right of any 
Indian tribe as part of any allocation or other disposition of 
water under that compact.
    In short, subsection (f) of Section 13, as amended, was 
included in the bill to clarify that the bill and the Compact 
that it approves are not intended to tip the balance, directly 
or indirectly, that was struck between the signatory states to 
the 1950 Yellowstone River Compact or to make an allocation or 
apportionment of water between any of those states independent 
of the 1950 Yellowstone River Compact.

Other amendments

Amendment to Section 6

    The amendment added a new subsection (g) to Section 6, 
which conveys title of MR&I System (as defined in S. 375) 
facilities to the Tribe after completion of the facility or 
section. This amendment was included to address the 
Administration's concern. In exchange for taking over title to 
the MR&I system and facilities, Section 14(f) was also amended 
to include the establishment of the MR&I OM&R Account. The MR&I 
OM&R Account will be used to fund a portion of the Federal 
trust responsibility for OM&R for this project in the future, 
with the balance of such costs to be borne by the Tribe. The 
immediate transfer of title from the Federal government to the 
Tribe eliminates any future liability for the United States for 
this system, and constitutes a form of consideration for the 
MR&I OMR Account authorization.

Amendment to Section 11

    To address the Administration's concern about the ``early 
availability of funds,'' Section 11(e) in S. 375 was amended to 
provide that, with the exception of very limited funds 
necessary to effectively begin to implement the settlement 
($4,776,000 for the Tribal Compact Administration Account), 
none of the funds deposited into the Crow Settlement Fund shall 
be available to the Tribe until the enforceability date of the 
settlement occurs, the conditions for which are set forth in 
Section 10(e) of the bill.

Amendments to Section 14

    Sections 14(l) & (m) authorizing of imputed interest on 
funds placed into the Crow Settlement Fund prior to the 
enforceability date of the settlement were deleted. These 
changes were in response to Administration concerns that these 
provisions created some difficulties for budgeting on a fiscal 
year basis. Rather than authorize appropriations for imputed 
interest that accrued from enactment through the enforceability 
date on funds in the Crow Settlement Fund, the interest was 
estimated and added to the six Crow Settlement Fund accounts 
(Section 14(c)-(h)) as part of the bill.

           SECTION-BY-SECTION ANALYSIS OF S. 375, AS AMENDED

Section 1. Short title

    Section 1 provides the short title of S. 375 as the ``Crow 
Tribe Water Rights Settlement Act of 2009.''

Section 2. Purposes

    This section states that S. 375 achieves a fair, equitable, 
and final settlement of claims to water rights in the State of 
Montana for the Crow Tribe and the United States for the 
benefit of the Tribe and allottees. The section also states 
that S. 375 authorizes and ratifies the Crow Tribe-Montana 
Water Rights Compact entered into by the Tribe and the State on 
June 22, 1999. The section further states that S. 375 will 
require the Secretary of the Interior to execute the Compact, 
to perform all actions necessary to carry out the Compact, and 
to appropriate funds necessary for the implementation of the 
Compact and this bill.

Section 3. Definitions

    This section defines important terms used in S. 375.

Section 4. Ratification of Compact

    This section ratifies the entire Compact, except as 
modified by S. 375, and also ratifies any executed amendments 
to the Compact that are consistent with S. 375. To the extent 
that the Compact does not conflict with S. 375, this section 
also directs the Secretary of the Interior to promptly execute 
the Compact, including all exhibits to or parts of the Compact 
requiring the signature of the Secretary, and to carry out all 
Federal compliance necessary to implement the Compact, 
including compliance with all applicable environmental acts and 
regulations.

Section 5. Rehabilitation and improvement of the Crow Irrigation 
        Project

    This section requires the Secretary, acting through the 
Commissioner of Reclamation, to carry out all activities 
necessary to improve the water diversion and delivery features 
of the Crow Irrigation Project, in accordance with an agreement 
to be negotiated between the Secretary and the Tribe. This 
section provides that the scope of the Project's improvement 
will be as described in the ``Engineering Evaluation of 
Existing Conditions, Crow Agency Rehabilitation Study'' 
prepared by HKM Engineering, Inc. and dated July 2008. This 
section also states that the federal government will not seek 
reimbursement for costs incurred in support of the Project from 
users of the tribal water right.
    This section provides that the Secretary's obligation will 
not exceed $160,653,000, except that the total amount of 
$160,653,000 will be increased or decreased, as appropriate, 
based on ordinary fluctuations from May 1, 2008, in 
construction cost indices applicable to the types of 
construction involved in the rehabilitation and improvement.
    This section also states that at the Tribe's request, the 
Secretary will enter into an agreement with the Tribe to 
implement the provisions of this section by which the Tribe 
will plan, design, and construct any or all of the 
rehabilitation and improvement required by this section.

Section 6. Design and construction of MR&I System

    This section requires the Secretary, acting through the 
Commissioner of Reclamation, to carry out such activities as 
are necessary to design and construct the water diversion and 
delivery features of the MR&I System (as defined in S. 375), in 
accordance with an agreement to be negotiated between the 
Secretary and the Tribe. The design and construction the MR&I 
System will be as described in the ``Crow Indian Reservation 
Municipal, Rural and Industrial Water System Engineering 
Report'' prepared by HKM Engineering, Inc. and dated July 2008. 
This section also states that the federal government will not 
seek reimbursement for costs incurred in support of the MR&I 
System for costs allocated to the Tribe.
    This section provides that the Secretary's obligation will 
not exceed $200,840,000, except that the total amount of 
$200,840,000 will be increased or decreased, as appropriate, 
based on ordinary fluctuations from May 1, 2008, in 
construction cost indices applicable to the types of 
construction involved in the design and construction.
    This section also states that at the Tribe's request, the 
Secretary will enter into an agreement with the Tribe to 
implement the provisions of this section by which the Tribe 
will plan, design, and construct any or all of the design and 
construction required by this section.
    This section provides that the Secretary shall transfer 
title of each MR&I System facility or section to the Tribe upon 
completion of the construction each facility or section of the 
MR&I System that is operating and delivering water.
    This section provides that after title to the MR&I System 
is transferred to the Tribe the United States may not be held 
liable for any act, omission, or occurrence related to the 
land, buildings, or facilities conveyed other than damages 
caused by acts of negligence committed by the United States, or 
employees or agents of the United States.
    After title to the MR&I System is transferred to the Tribe 
and amounts are deposited in the MR&I System OM&R account (as 
defined in S. 375), this section states that the federal 
government is not obligated to pay for the operation, 
maintenance and replacement costs of the MR&I System.

Section 7. Tribal water rights

    Section 7(a) provides that it is the intent of Congress to 
provide each allottee with benefits that are equivalent to or 
exceed the benefits allottees currently possess, taking into 
account certain considerations. Section 7(b) states that the 
tribal water rights are ratified, confirmed, and declared to be 
valid, with use of the tribal water rights subject to the 
Compact's terms and conditions. Section 7(c) requires that the 
tribal water rights will be held in trust by the United States 
for the use and benefit of the Tribe and the allottees.
    Section 7(d) provides that any entitlement to water of an 
allottee will be satisfied from the tribal water rights and 
that allottees are entitled to a just and equitable allocation 
of water for irrigation purposes. Section 7(d) further states 
that the water rights and other benefits granted by this bill 
will be considered full satisfaction of any claim of an 
allottee waived pursuant to section 10(a)(2).
    Section 7(d) also provides that once remedies under the 
tribal water code or other applicable tribal law have been 
exhausted, an allottee may seek relief under section 7 of the 
Act of February 8, 1887, or other applicable law. Section 7(d) 
also states that the Secretary has the authority to protect 
allottees' rights as provided in this section.
    Section 7(e) states that, once the Secretary has approved 
the tribal water code pursuant to Section 7(f)(3)(B), and 
except as provided in paragraph (2), the Tribe maintains the 
sole authority to allocate, distribute, and lease the tribal 
water rights in accordance with the Compact. Section 7(e) also 
provides that, subject to the tribal water code and applicable 
tribal and Federal law, an allottee may, pursuant to the tribal 
water code, lease any interest in land held by the allottee, 
together with any water right determined to be appurtenant to 
the interest in land.
    Section 7(f) provides that within three years after the 
Crow tribal members ratify the Compact, the Tribe will enact a 
tribal water code that provides for the management, regulation 
and governance of all uses of the tribal water rights in 
accordance with the Compact. The Tribe's water code must be 
approved by the Secretary and must recognize allottee interests 
in water.

Section 8. Storage allocation from Bighorn Lake

    This section directs the Secretary to allocate to the Tribe 
300,000 acre-feet per year of water stored in Bighorn Lake and 
specifies its usage. As a condition of receiving an allocation 
under this section, this section directs the Tribe to enter 
into an allocation agreement with the Secretary to establish 
the terms and conditions of the allocation. This section also 
permits the Tribe to enter into a service contract, lease, 
exchange, or other agreement providing for the temporary 
delivery, use or transfer of not more than 50,000 acre-feet per 
year of water for use off the Reservation.

Section 9. Satisfaction of claims

    This section states that the benefits to the Tribe and the 
allottees under the Compact and the Act shall be considered to 
completely satisfy all claims of the Tribe and the allottees.

Section 10. Waivers and releases of claims

    Section 10(a)(1) waives claims for water rights by the 
Tribe on behalf of itself and its members (but not its members 
in their capacity as allottees) and by the United States on 
behalf of the Tribe and its members (but not members in their 
capacities as allottees).
    Section 10(a)(2) describes the waiver of claims for water 
rights by the United States on behalf of the allottees.
    Section 10(a)(3) describes the Tribe's waiver and release 
of claims against the United States.
    Section 10(b) states that the waivers and releases of 
claims become effective on the enforceability date, which is 
also described in this section.
    Section 10(c) describes the rights retained by the Tribe 
and the United States.
    Subsection 10(d) provides that the Compact and the Act have 
no effect on certain federal laws, or on the authority of the 
United States to carry out activity as a trustee for any Indian 
tribe other than the Tribe, or confers state jurisdiction to 
interpret certain federal laws.
    Section 10(e)(1) describes the enforceability date. Section 
10(e)(1)(B) provides that all of the authorized funds for the 
Crow Settlement Fund shall be deposited before the 
enforceability date occurs.
    Subsection 10(f) describes the process for tolling claims.

Section 11. Crow Settlement Fund

    Section 11 establishes the Crow Settlement Fund that will 
have the following accounts: the Tribal Compact Administration 
account; the Economic Development account; the Water 
Development Projects account; the MR&I System OM&R account; the 
Yellowtail Dam OM&R account; and the Crow Irrigation Project 
OM&R account. This section describes how deposits are made to 
the Settlement Fund, and how the Secretary is to manage, 
invest, and distribute the monies in the accounts. This section 
also describes how the Tribe will withdraw amounts and when 
funds are available to be withdrawn.

Section 12. Yellowtail Dam, Montana

    Section 12 describes provisions of S. 375 related to 
Yellowtail Dam. Section 12(a) discusses the Streamflow and Lake 
Level Management Plan referred to in the Tribal-State Compact. 
It describes the relationship between the Streamflow and Lake 
Level Management Plan, the Tribal-State Compact, and S. 375.
    Section 12(b) states that the Tribe shall have the 
exclusive right to develop and market power generation as a 
water development project on the Yellowtail Afterbay Dam.
    Section 12(c) requires the Bureau of Reclamation to consult 
with the Tribe on at least a quarterly basis on issues related 
to the Bureau's management of Yellowtail Dam.

Section 13. Miscellaneous provisions

    This section includes provisions on the limits of claims 
and rights not waived in the Compact, S. 375, or other ongoing 
matters specified in S. 375. The section also confirms the 
status quo of tribal, state, and federal subject matter 
jurisdiction and regulatory authority. The section waives the 
United States' immunity from suit to enforce the agreement.

Section 14. Authorization of appropriations

    This section authorizes $160,653,000 for the Rehabilitation 
and Improvement of the Crow Irrigation Project; $200,840,000 
for the Design and Construction of the MR&I System; $4,776,000 
for Tribal Compact Administration; $47,762,000 for Economic 
Development Projects; $44,889,000 for Water Development 
Projects; $72,256,000 for MR&I System OM&R $12,987,000 for 
Yellowtail Dam OM&R and $15,207,000 for Crow Irrigation Project 
OM&R. This section also authorizes funds for environmental 
compliance and the Bureau of Reclamation costs for the Crow 
Irrigation Project and MR&I systems. Each amount appropriated 
is to be adjusted to reflect changes in appropriate cost 
indices during the period beginning on May 1, 2008, and ending 
on the date of appropriation.

Section 15. Repeal on failure to meet effective date

    This section states that if the Secretary does not publish 
a statement of findings by March 31, 2016, the Act is repealed 
effective January 1, 2016, with amounts having been 
appropriated and made available reverted to the general fund of 
the Treasury.

            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. 375 with 
an amendment in the nature of a substitute and ordered the bill 
reported to the Senate, with the recommendation that the Senate 
pass S. 375, as amended by the substitute.

                   COST AND BUDGETARY CONSIDERATIONS

S. 375--Crow Tribe Water Rights Settlement Act of 2009

    Summary: S. 375 would approve a compact between the Crow 
Tribe and the state of Montana to settle tribal claims to water 
rights in the state. The bill also would authorize the 
construction and rehabilitation of systems that deliver water 
to tribal lands and would establish a trust fund for the tribe 
to operate and maintain those systems. Finally, the bill would 
authorize appropriations for the Department of the Interior 
(DOI) to develop the water systems.
    Based on information from DOI and assuming appropriation of 
the necessary amounts, CBO estimates that implementing S. 375 
would increase discretionary spending by $193 million over the 
2010-2014 period and $510 million after 2014. Enacting the 
legislation would not affect direct spending or revenues over 
the 2010-2019 period. Enacting the bill would increase direct 
spending by $29 million after 2019.
    S. 375 contains an intergovernmental mandate as defined in 
the Unfunded Mandates Reform Act (UMRA) because it would 
require the tribe to enact a tribal water code. CBO estimates 
that the cost of complying with the mandate would be small and 
well below the threshold established in UMRA ($69 million in 
2009, adjusted annually for inflation).
    This bill contains no private-sector mandates as defined in 
UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 375 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 APPROPRIATION

MR&I Water System:
    Estimated Authorization Level..................        10        15        20        25        25         95
    Estimated Outlays..............................         6        12        17        22        24         81
Crow Irrigation Project:
    Estimated Authorization Level..................        10        15        15        20        20         80
    Estimated Outlays..............................         6        12        14        18        19         69
Crow Settlement Fund:
    Estimated Authorization Level..................         5         0         0         0         0          5
    Estimated Outlays..............................         5         0         0         0         0          5
Administrative Costs for Bureau or Reclamation:
    Estimated Authorization Level..................         8         8         7         7         8         38
    Estimated Outlays..............................         6         8         8         8         8         38
    Total Spending Under S. 375
        Estimated Authorization Level..............        33        38        42        52        53        218
        Estimated Outlays..........................        25        32        38        47        51       193
----------------------------------------------------------------------------------------------------------------
Note:  MR&I = Municipal, Rural, and Industrial Water System.

    Basis of estimate: For this estimate, CBO assumes that S. 
375 will be enacted in fiscal year 2010 and that the necessary 
amounts will be appropriated in the fiscal years in which those 
funds would be spent. Enforcement of the settlement depends on 
the completion of several actions by federal, state, local, and 
tribal entities. For this estimate, CBO expects that those 
actions will be completed in fiscal year 2016. Cost estimates 
for the authorized water projects are based on information from 
DOI and on historical spending patterns for similar activities.

Spending subject to appropriation

    S. 375 would authorize appropriations for a variety of 
activities to benefit the Crow Tribe. The Secretary of the 
Interior would be authorized to construct and rehabilitate 
water infrastructure on tribal lands, operate and maintain that 
infrastructure, and sponsor development projects for the tribe. 
CBO estimates that implementing the settlement would increase 
discretionary spending by $193 million over the 2010-2014 
period and $510 million after 2014.
    Municipal, Rural, and Industrial (MR&I) Water System. 
Section 6 would authorize the appropriation of $201 million, 
plus adjustments for increases in construction costs, to build 
an MR&I water system that would deliver water to communities 
and businesses on tribal lands. Based on information from DOI, 
CBO expects that construction of the MR&I water system would 
begin in 2010 and take about 10 years to complete. CBO 
estimates that implementing this provision would cost $81 
million over the 2010-2014 period and $143 million after 2014, 
assuming appropriation of the necessary amounts (including 
adjustments for inflation).
    Crow Irrigation Project. Section 5 would authorize the 
appropriation of $161 million, plus adjustments for increases 
in construction costs, to rehabilitate and improve the Crow 
Irrigation Project, which delivers water to farmland on tribal 
lands. Based on information from DOI, CBO expects that 
improvements to the Crow Irrigation Project would begin in 2010 
and take about 10 years to complete. CBO estimates that 
implementing this provision would cost $69 million over the 
2010-2014 period and $110 million after 2014, assuming 
appropriation of the necessary amounts (including adjustments 
for inflation).
    Crow Settlement Fund. Section 11 would authorize the 
appropriation of about $198 million (including $5 million to 
administer the tribal compact), plus adjustments for increases 
in construction costs, to be deposited into the Crow Settlement 
Fund. Amounts in the fund would be used for economic and water 
development projects and for operation and maintenance of the 
Crow Irrigation Project, the MR&I system, and the Yellowtail 
Dam, in Montana.
    Except for amounts appropriated to administer the tribal 
compact, which could be spent by the tribe after it ratifies 
the compact, amounts in the fund could not be spent by the 
tribe until certain conditions are met. Among others, the 
Secretary of the Interior would have to publish a statement of 
findings in the Federal Register indicating that all parties 
have executed the compact; the Montana water court and U.S. 
district court would have to issue a judgment and final decree 
concerning the compact; $198 million would have to be 
appropriated to the Crow Settlement Fund; and Montana would 
have to appropriate amounts due to the tribe under the compact. 
Should the Secretary not publish the required statement of 
findings by March 31, 2016, 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.
    CBO expects that the tribe would ratify the compact in 2010 
based on information from the tribe. At that time, the tribe 
could spend amounts appropriated to the Crow Settlement Fund to 
administer the compact, and the budget would record an 
expenditure of $5 million. Based on information from DOI, CBO 
expects that all other conditions necessary to execute the 
agreement would be met in 2016. At that time, all other amounts 
in the fund could be spent by the tribe, and the budget would 
record an expenditure of $212 million (including adjustments 
for inflation). The Secretary of the Interior would then be 
required to invest those amounts in U.S. Treasury obligations.
    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 settlement fund (excluding the amount for 
tribal compact administration) would be recorded as an outlay 
in 2016 when the funds could be spent by the tribe. 
Subsequently, any use of such funds would have no effect on the 
federal budget. Because S. 375 would direct the Secretary to 
invest amounts in the fund only after those amounts are 
available to the tribe, CBO expects that no interest would 
accrue on the amounts in the fund until 2016. CBO estimates 
that, in total, implementing section 11 would cost $5 million 
in 2010 and $212 million in 2016.
    DOI Administrative Costs. S. 375 would authorize the 
appropriation of such sums as may be necessary for DOI to 
conduct certain administrative activities related to the 
compact. Based on information from DOI, CBO estimates that DOI 
would need about $8 million a year to carry out its 
responsibilities under the bill, including $1 million a year 
over the 2010-2011 period for environmental compliance 
activities related to the compact. In total, CBO estimates that 
those administrative activities would cost $38 million over the 
2010-2014 period and $45 million after 2014, assuming 
appropriation of the necessary amounts.

Direct spending

    Section 8 would allocate a portion of the water supply in 
Bighorn Lake that was created by the construction of the 
Yellowtail Dam to the Crow Tribe. The legislation would require 
that any capital costs of the Yellowtail Dam that would be 
allocated to the tribe as a result of enacting S. 375 would be 
nonreimbursable by the tribe. (Nonreimbursable costs are costs 
incurred by the federal government to construct a project that 
are not recovered from project beneficiaries.)
    Under current law, about one-third of the capital costs of 
the Yellowtail Dam will eventually be repaid to the federal 
government by private entities that contract for water supplies 
from Bighorn Lake. (The remaining two-thirds of those costs 
will be repaid by ratepayers who receive electricity from the 
dam.) Under the bill, about 90 percent of those capital costs 
would become nonreimbursable because most of the water in 
Bighorn Lake would be allocated to the tribe. Currently, the 
tribe does not purchase water from the lake and, hence, does 
not pay for any portion of the capital costs of the dam. 
Further, the tribe is not expected to enter into a contract for 
water from the dam in the next 10 years. CBO expects that, at 
some point after 2019, one or more entities will purchase water 
from Bighorn Lake. Those entities would repay a portion of the 
capital costs of the dam ($29 million) over several years. Such 
collections are classified as offsetting receipts (a credit 
against direct spending), are deposited into the Reclamation 
Fund, and cannot be spent without further appropriation.
    By making a portion of the capital costs of the Yellowtail 
Dam nonreimbursable, enacting this legislation would result in 
the loss of offsetting receipts totaling about $29 million 
sometime after 2019.
    Intergovernmental and private-sector impact: S. 375 would 
require the Crow tribe to enact policies that would govern 
tribal water rights as detailed in the agreement. That 
requirement would be an intergovernmental mandate as defined in 
UMRA because it would place a statutory requirement on the 
tribe that is separate from provisions of the agreement. CBO 
estimates that the cost of the mandate would be small and well 
below the threshold established in UMRA ($69 million in 2009, 
adjusted annually for inflation). Furthermore, amounts 
authorized for the Crow Settlement Fund could be used to pay 
for any such costs.
    This bill contains no private-sector mandates as defined in 
UMRA.
    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. 375 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. 375 will not effect any changes in existing 
law.

                                  
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