[Senate Report 111-119]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 260
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-119

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



 
 TO RESOLVE WATER RIGHTS CLAIMS OF THE WHITE MOUNTAIN APACHE TRIBE IN 
              THE STATE OF ARIZONA, 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

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 313]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 313) to resolve water rights claims of the White 
Mountain Apache Tribe in the State of Arizona, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill (as amended) do 
pass.

                                Purpose

    The purpose of S. 313 is to authorize and confirm the White 
Mountain Apache Tribe's water settlement and authorize funding 
for a drinking water project on the Tribe's reservation in 
Arizona.

                               Background

    The Tribe is located on the Fort Apache Indian Reservation, 
which was established on November 9, 1871. The Reservation is 
over 2,600 square miles covering some 1.66 million acres in the 
White Mountains of east central Arizona.
    The headwaters and tributaries of the Salt River originate 
on the Reservation and are the primary source of water for the 
Tribe and the downstream cities of Avondale, Chandler, Gilbert, 
Glendale, Mesa, Peoria, Phoenix, Scottsdale, and Tempe, the 
Salt River Project, the Roosevelt Water Conservation District, 
and other parties to the Gila River and Little Colorado River 
Adjudication proceedings. Because the Salt River system is a 
major source of water for the Phoenix metropolitan area, any 
claim against the system creates uncertainty among many of 
Arizona's water users.

Claims filed on behalf of the White Mountain Apache Tribe

    On behalf of the Tribe, the United States, in its capacity 
as trustee of the Tribe's reserved water rights, filed claims 
to approximately 180,000 acre-feet of water annually from the 
Salt River system in the pending Gila River Adjudication in 
Arizona. The United States also filed claims to water on behalf 
of the Tribe in the Little Colorado River Adjudication, which 
is also pending in Arizona.

The Settlement and major provisions of S. 313, as amended

    After years of negotiation, the Tribe and the non-federal 
parties\1\ entered into a Quantification Agreement (the 
``Agreement'' or ``Settlement''), which would, among other 
things, resolve the Tribe's claims to water by allocating to it 
a total annual depletion amount of 52,000 acre-feet per year 
and a maximum annual diversion amount of approximately 99,000 
acre-feet per year through a combination of surface water, 
underground water, and Central Arizona Project (CAP) water 
sources. The Tribe and all of the non-federal parties have 
approved the Settlement.
---------------------------------------------------------------------------
    \1\The non-federal parties to the Settlement include the State of 
Arizona; the Tribe; the Salt River Project Agricultural Improvement and 
Power District; the Salt River Valley Water Users' Association; the 
Roosevelt Water Conservation District; the Arizona Water Company; the 
cities of Phoenix, Mesa, Tempe, Chandler, Glendale, Scottsdale, 
Avondale, Peoria and Show Low; the Town of Gilbert; the Buckeye 
Irrigation Company; the Buckeye Water Conservation and Drainage 
District; and the Central Arizona Water Conservation District.
---------------------------------------------------------------------------
    A significant portion of the CAP water allocated to the 
Tribe will come from the pool of CAP water set aside in the 
Arizona Water Settlements Act (P.L. 108-451, Sec. 
104(a)(1)(A)(iii)) for future Arizona Indian water settlements. 
Under the Settlement, the Tribe may, with the approval of the 
Secretary of the Interior, enter into leases within Maricopa, 
Pinal, Pima, and Yavapai counties for the temporary (not to 
exceed 100 years) delivery of any portion of the Tribe's CAP 
water.
    The centerpiece of S. 313 and the Agreement is the 
authorization of construction and funding for a drinking water 
project on the Tribe's Reservation--the Miner Flat Project. The 
Project will consist of a dam, reservoir, treatment plant, and 
water delivery pipeline. The Project will serve the 
Reservation's 15,000 residents and accommodate a growing 
population.
    Currently, a small well field serves the drinking water 
needs of the majority of the residents on the Tribe's 
Reservation, and production from the wells has declined 
significantly over the last few years. As a result, the Tribe 
has experienced chronic drinking water shortages. The Tribe is 
constructing a small diversion project on the North Fork of the 
White River on the Reservation this year. The Tribe indicates 
that when the project is completed it will replace most of the 
lost production from the existing well field, but will not 
produce enough water to meet the current peak demand of the 
Tribe's population. The Project would provide a long-term 
solution for the Tribe's drinking water shortages.
    S. 313 and the Settlement also provide the Tribe 
opportunities to utilize its water quantified in the Agreement.
    S. 313 authorizes approximately $292 million in federal 
appropriations. Of this, $126 million is authorized to 
construct the Miner Flat Project (Project). Some funding for 
the Project may be available from sources other than 
appropriations. In addition to appropriations, the Secretary of 
the Interior may access other sources of funding available for 
Indian water settlements. The remaining $166 million in the 
bill's federal appropriations are authorized for (1) a $50 
million operation, maintenance, and replacement fund; and (2) a 
fund for water related resource management and economic 
development opportunities on the Reservation. For the 
settlement to become legally binding on all the parties, 
$126,193,000 must be appropriated by October 31, 2015. No other 
appropriations are required for the settlement to become 
enforceable. Finally, in addition to federal appropriations, 
non-federal parties will contribute an additional $152 million 
in financial and in-kind contributions.

Tribe's claims against the U.S. that would be waived under S. 313

    The Tribe would provide waivers and releases of its water 
rights claims in exchange for the water rights quantified in S. 
313 and the Agreement; the funds for the Miner Flat Project and 
for its operation, maintenance, and replacement; and 
rehabilitation of existing irrigation systems.
    The Tribe claims that the United States has breached its 
trust obligations to the Tribe by suppressing, neglecting, and 
opposing the reserved water rights of the Tribe. Specifically, 
the Tribe claims that the United States breached its trust 
obligations to the Tribe by intentionally destroying thousands 
of trees and other riparian vegetation along the Tribe's 
streams to increase water runoff to the Salt River and Theodore 
Roosevelt Reservoir. The Tribe also claims that the United 
States cleared thousands of acres of juniper trees and doubled 
the annual allowable cut of its commercial forests in several 
reservation watersheds for the purpose of increasing runoff. 
According to the Tribe, the ecosystem damage from the United 
States' actions is still negatively affecting the Reservation. 
Under the Settlement, the Tribe would waive these claims 
against the United States.
    The Tribe would also waive its other breach of trust claims 
against the United States for, among others things (1) historic 
failure to maintain approximately 90 miles of irrigation 
ditches on the Reservation; (2) historic failure to meet the 
trust obligation to provide a safe drinking water supply for 
the Tribe; (3) suppression of agricultural irrigation; (4) 
failure of the Secretary to reserve the Tribe's water from 
contracts issued downstream for storage in Roosevelt Dam; (5) 
failure of the Secretary to set aside New Conservation Storage 
for the Tribe in the 1995-96 enlargement of Roosevelt 
Reservoir; and (6) failure of the United States to assert the 
reserved water rights of the Tribe in the Environmental Impact 
Statement for the reallocation of CAP water.
    The Tribe would also waive its claims existing prior to the 
enforcement date of this legislation against the United States 
for any claim for allowing trespass, use, and occupancy on the 
Tribe's Reservation in, on, or along the Black River. The 
Tribe, however, retains past, present, and future claims 
against Freeport McMoRan Copper & Gold, Inc., formerly known as 
Phelps Dodge, in S. 313 for trespass, use, and occupancy of the 
Reservation in, on, or along the Black River (``Black River 
Claims''). The legislation does not affect the ability of the 
Tribe or Freeport McMoRan Copper & Gold, Inc. to assert any 
claims or defenses against each other regarding the Black River 
Claims.

                          Legislative History

    In the 110th Congress, Senator Kyl introduced S. 3473, the 
White Mountain Apache Tribe Water Rights Quantification Act of 
2008, and the bill was referred to the Committee on Indian 
Affairs. No action was taken on S. 3473.
    In the 111th Congress, a similar bill, S. 313, was 
introduced on January 26, 2009 by Senator Kyl. Senator McCain 
is a cosponsor. The bill was referred to the Committee on 
Indian Affairs. On April 2, 2009, the Committee held a hearing 
on S. 313. On September 10, 2009, at an open business meeting, 
the Committee considered S. 313, and a substitute amendment was 
offered by Senator Barrasso on behalf of Senator Kyl. The 
Committee approved the substitute amendment and ordered the 
bill to be favorably reported, with an amendment, to the 
Senate.

                  Summary of the Substitute Amendment

    During an open business meeting on September 10, 2009, the 
Committee considered and approved an amendment in the nature of 
a substitute to S. 313. Like the original bill, the amendment 
in the nature of the substitute (1) approves, ratifies, and 
confirms the Settlement resolving the Tribe's water-related 
claims in the Gila River and Little Colorado River 
Adjudications; (2) resolves the Tribe's claims for money 
damages against the United States; (3) authorizes the Tribe to 
execute certain waivers of claims against the United States and 
other parties; and (4) authorizes funding for the Project and 
water-related economic development projects benefitting the 
Tribe.
    The substitute amendment, in large part, responds to 
concerns raised by the Administration. It also makes a number 
of technical changes to the bill.
    Section 7, authorizing the water system, is amended in 
several places. In particular, the amendment addresses the 
Administration's concern that the legislation directs the 
Secretary to hold the Project in trust for the benefit of the 
Tribe in perpetuity. Instead, the amendment authorizes the 
United States to convey title to the Project to the Tribe if 
certain conditions are met--one condition, contained in section 
12(b)(3)(B), is that $50 million is appropriated for the 
operation, maintenance, and replacement of the Miner Flat 
Project.
    Section 9, including waivers and releases of claims, amends 
Section 12 of the introduced bill in several places. As 
introduced, S. 313 requires that a number of conditions be met 
by October 31, 2013, in order for the bill's waiver provisions 
to take effect. One of the conditions is that approximately 
$126 million be deposited in a newly created fund for the 
construction of the Miner Flat Project. In order to allow for 
more time to secure appropriations for the project, the 
amendment extends the enforceability deadline by two years to 
2015.
    In addition, at the Administration's request, the 
substitute amendment (1) adds the retention of claims language 
included in the underlying Quantification Agreement; and (2) 
authorizes a waiver of the Tribe's trespass claims against the 
United States relating to the construction of an existing 
diversion dam on the Black River. Section 12, authorizing 
appropriations, amends section 16 of the introduced bill in 
several places. In order to resolve a potential cost issue, the 
substitute amendment modifies the funding mechanism for the 
planning, engineering, design, environmental compliance, and 
construction of the Miner Flat Project.
    One of the funding mechanisms modified by the substitute 
amendment relates to the Emergency Fund for Indian Safety and 
Health (``Emergency Fund'') that was established by Title 6 of 
Public Law 110-293, 25 U.S.C. 443c. In the introduced bill, up 
to $100 million of the Emergency Fund was authorized to be 
transferred to the White Mountain Apache Tribe Water Rights 
Settlement Account if the Secretary determined that annual 
appropriations were not adequate to complete the Miner Flat 
Project by the settlement enforceability date. The substitute 
amendment would require that up to $50 million be transferred 
from the Emergency Fund to the White Mountain Apache Water 
Rights Settlement Subaccount not later than 90 days after the 
date of enactment of the Act. The substitute amendment also 
provides that a separate amount, up to $50 million, may be 
transferred from the Emergency Fund to the White Mountain 
Apache Tribe Water Rights Settlement Subaccount if the 
Secretary determines that annual appropriations will not be 
sufficient to complete required actions before the settlement 
enforceability deadline.
    While it is the intent of the Committee and bill sponsor 
that the funding mechanisms in the substitute amendment only 
apply to the water settlement portion of the Emergency Fund, 
the Committee notes that the law governing the Emergency Fund 
requires that the funds be spent according to an Emergency Plan 
developed jointly by the Attorney General, the Secretary of the 
Interior, and the Secretary of Health and Human Services. The 
Committee expects that an Emergency Plan should be completed 
prior to any funds in the Emergency Fund being distributed. 
Further, there is no intent that the provisions of the 
substitute amendment to S. 313 authorize transfers of funds 
from the amounts set aside for Indian health and public safety 
pursuant to section 601(f) of Title 6 of Public Law 110-293, 25 
U.S.C. 443c(f).
    Without increasing the cost of the bill, section 12 of the 
substitute amendment also includes an authorization for any 
cost overruns of the Project up to $25 million. If there are 
any cost overruns, a corresponding amount would be deducted 
from the other appropriations authorized in the legislation, 
resulting in no net increase cost to the bill.

      Section-by-Section Analysis of S. 313 (Substitute Amendment)


Section 1. Short title

    Section 1 provides the short title of the bill as the 
``White Mountain Apache Tribe Water Rights Quantification Act 
of 2009.''

Section 2. Findings and purpose

    Section 2(a) provides that the White Mountain Apache Tribe, 
the State of Arizona, and the parties to the Quantification 
Agreement have agreed to permanently quantify the water rights 
of the Tribe and settle the Tribe's pending claims in the Gila 
River and Little Colorado River Adjudications in Arizona. It 
also provides that it is federal policy to settle Indian water 
rights claims without lengthy and costly litigation.
    Section 2(b) states that the bill's purposes are to: (1) 
Authorize, ratify, and confirm the Agreement as defined in the 
legislation; (2) authorize and direct the Secretary to execute 
the Agreement; (3) authorize the appropriations necessary for 
the United States to meet its obligations under the Agreement; 
and (4) permanently resolve certain damage claims and all water 
rights claims of the Tribe.

Section 3. Definitions

    This section defines important terms in S. 313.

Section 4. Approval of the agreement

    This section authorizes, ratifies, and confirms the 
Agreement. It also requires the Secretary in implementing the 
Agreement to comply with the National Environmental Policy Act, 
the Endangered Species Act, and all other applicable federal 
environmental laws.

Section 5. Tribal water rights

    Section 5(a) provides that the Secretary shall hold the 
Tribe's water rights in trust and that they cannot be lost by 
forfeiture or abandonment.
    Sections 5(b), (c), and (d) describe the reallocation of 
and costs associated with CAP water allocated to the Tribe 
under the Agreement.
    Section 5(e) requires the Tribe to enact a tribal water 
code to govern its water rights.

Section 6. Contracts

    Section 6 (a) directs the Secretary to enter into the 
contract as defined in the legislation to provide, among other 
things, that the Tribe may enter into contracts or options to 
lease, contracts to exchange, or options to exchange tribal CAP 
water in four counties within the State of Arizona.
    Section 6(b) specifies the requirements of the contract.
    Section 6(c) ratifies, authorizes, and confirms the 
contract.
    Section 6(d) directs the Secretary to execute the contract.
    Section 6(e) describes the fees and charges applicable to 
tribal CAP water.
    Section 6(f) provides that no tribal CAP water may be 
leased, exchanged, forborne or otherwise transferred by the 
Tribe outside of the State of Arizona.
    Section 6(g) ratifies, confirms, and authorizes the leases 
of tribal CAP water attached as exhibits to the Agreement.

Section 7. Authorization of rural water system

    Sections 7(a) through (d) authorize the planning, design, 
and construction of the Miner Flat Project and describe its 
components, service area, and construction requirements.
    Section 7(e) provides that the Secretary is authorized to 
convey title to the Project to the Tribe after publication in 
the Federal Register of a statement of findings providing that 
the conditions specified in this subsection have been 
satisfied.
    Section 7(g) discusses the applicability of the Indian 
Self-Determination and Education and Assistance Act (25 U.S.C. 
450, et seq.) and directs any contracts entered into under this 
subsection to include the necessary terms to ensure the 
appropriate stewardship of federal funds.
    Section 7(h) requires that the Tribe provide at no cost to 
the Secretary all land that the Secretary deems necessary for 
the Project.

Section 8. Satisfaction of claims

    Section 8(a) provides that the benefits to the Tribe and 
its members under the bill are in full satisfaction of the 
Tribe's and its members' claims for water rights and injuries 
to water rights.
    Section 8(b) provides that the Agreement's maximum annual 
diversion amounts and maximum annual depletion amounts apply to 
uses of water on any lands outside the Reservation subsequently 
determined to be part of the Reservation and to uses of water 
on any fee lands within the Reservation put into trust and made 
part of the Reservation.
    Section 8(c) provides that the Act is not intended to 
recognize or establish any individual right to water.

Section 9. Waiver and release of claims

    Section 9(a) authorizes the United States to execute 
certain waivers of claims in either its capacity as trustee for 
the Tribe and its members or in its own right. It also 
authorizes the Tribe to execute waivers in its own capacity and 
for its members.
    Section 9(b) reserves certain rights of and retains certain 
claims by the Tribe on its own behalf and its members, and the 
United States as trustee for the Tribe and its members, or in 
its own right.
    Section 9(c) establishes the conditions and timing under 
which the waivers are effective.
    Section 9(d) provides that the enforceability date of the 
Settlement will be the date that the Secretary publishes a 
statement of findings in the Federal Register concerning a 
number of listed conditions. Section 9(d) also provides that, 
if the Secretary has not published these findings by October 
31, 2015, then section 9 providing waivers and releases of 
claims will not become effective. It also establishes the 
extent of the water rights available for use on land held in 
trust for the Tribe and its members.
    Section 9(e) provides that there is no effect on the right 
of the United States to take certain actions relating to human 
health, safety, or the environment.
    Section 9(f) provides that except as specified in the 
legislation, there is no effect on rights to water for land 
outside the Reservation boundaries or off-reservation trust 
land.
    Section 9(g) provides that entitlements to water are to be 
satisfied from the water resources set forth in the Agreement 
and the legislation.
    Section 9(h) sets forth certain prohibited objections of 
the Tribe and the United States as trustee for the Tribe.

Section 10. White Mountain Apache Tribe Water Rights Settlement 
        Subaccount

    Section 10(a) establishes the White Mountain Apache Tribe 
Water Rights Settlement Subaccount within the Lower Colorado 
River Basin Development Fund. The subaccount consists of the 
amounts appropriated to the subaccount pursuant subsections (a) 
and (d) of Section 12, and other amounts as are available, 
including $2 million from the State of Arizona as provided in 
subparagraph 13.3 of the White Mountain Apache Tribe Water 
Rights Quantification Agreement dated January 13, 2009.
    Section 10(b) establishes the conditions for expenditures 
and withdrawals of all or part of the White Mountain Apache 
Tribe Water Rights Settlement Subaccount, enforcement of those 
conditions, limitation on the liability of federal officials, 
requirements for an expenditure plan by the Tribe, and 
requirements for annual tribal reporting.
    Section 10(c) specifies that the White Mountain Apache 
Tribe Water Rights Settlement Subaccount is not to be 
distributed on a per capita basis.
    Section 10(d) establishes that amounts in the White 
Mountain Apache Tribe Water Rights Settlement Subaccount are 
not to be made available until the enforceability date.

Section 11. Miscellaneous provisions

    Section 11(a) waives the sovereign immunity of the United 
States and the Tribe for certain specified civil actions under 
the Agreement and the Act.
    Section 11(b) provides that this Act does not quantify or 
otherwise affect the water rights or claims of any other Indian 
tribe other than the Tribe.
    Section 11(c) provides a limitation on liability of the 
United States and directs the Tribe to indemnify the United 
States for stated purposes.
    Section 11(d) provides that the Reclamation Reform Act of 
1982 (43 U.S.C. 390aa et seq.) does not apply in specified 
circumstances.
    Section 11(e) transfers and restores to the Tribe and the 
San Carlos Apache Tribe certain specified portions of named 
secretarial power site reserves located on the Fort Apache 
Indian Reservation and the San Carlos Apache Reservation, 
respectively.
    Section 11(f) provides that the lease or exchange of tribal 
CAP water shall not affect any future allocation or 
reallocation of CAP water by the Secretary.
    Section 11(g) provides that, except with respect to certain 
restored lands and off-Reservation trust land acquired prior to 
January 1, 2008, the Tribe may only obtain additional lands 
taken into trust by the United States through an Act of 
Congress. It further provides that after-acquired trust lands 
outside the Reservation shall not include federal reserved 
water rights and that certain restored lands shall have water 
rights pursuant to Section 8(b).
    Section 11(h) amends Section 3(b)(2) of the White Mountain 
Apache Tribe Rural Water System Loan Authorization Act (Public 
Law 110-390; 122 Stat. 4191) to extend the loan repayment 
commencement date from January 1, 2013 to January 1, 2016 in 
order to coincide with the Act's enforceability date.

Section 12. Authorization of appropriations

    Section 12(a) authorizes appropriations of $126,193,000 for 
White Mountain Apache Tribe Rural Water System planning, 
engineering, design, environmental compliance, and construction 
including Bureau oversight activities.
    Section 12(b) establishes within the Treasury the White 
Mountain Apache Tribe Settlement Fund, authorizes for deposit 
an appropriation of $113,500,000, and prescribes the uses 
thereof. It also establishes within the Treasury the White 
Mountain Apache Tribe Maintenance Fund, authorizes for deposit 
an appropriation of $50,000,000, and prescribes the uses 
thereof. It further directs the Secretary to manage and invest 
the funds and establishes the availability date and conditions 
for expenditures and withdrawals.
    Section 12(c) provides for adjustments to the appropriated 
amounts in Subsections 12(a) and (b) based upon certain cost 
indices.
    Section 12(d) authorizes a total transfer of up to 
$100,000,000 from the Emergency Fund for Indian Safety and 
Health to the White Mountain Apache Tribe Water Rights 
Settlement Subaccount. The $100,000,000 total is the result of 
two potential transfers. First, if funding is available in the 
Emergency Fund for Indian Safety and Health account within 90 
days from the date of enactment of this bill, the Secretary is 
required to transfer up to $50,000,000 from the Emergency Fund 
to the White Mountain Apache Tribe Water Rights Settlement 
Subaccount. Second, beginning on January 1, 2012, if the 
Secretary determines that the enforceability date set out in 
the bill is not going to be met because the amounts authorized 
under section 9(a) have not been appropriated, a subsequent 
transfer of up to $50,000,000 from the Emergency Fund is 
authorized.
    Section 12(e) authorizes an appropriation of $2,500,000 for 
operation, maintenance, and replacement costs of the White 
Mountain Apache Tribe Rural Water System and provides its 
availability shall continue until satisfaction of the 
conditions in Subsection 12(g). It further authorizes use of 
the White Mountain Apache Tribe Maintenance Fund beginning 
January 1, 2021 for operation, maintenance, and replacement 
costs of the White Mountain Apache Tribe Rural Water System.
    Section 12(f) authorizes an appropriation of up to 
$25,000,000 for WMAT Rural Water System cost overruns. If there 
are any cost overruns, a corresponding amount would be deducted 
from the appropriations authorized in 12(b)(2)(B) of the 
legislation, resulting in no net increase cost to the bill.
    Section 12(g) provides conditions for expenditures and 
withdrawals of appropriated amounts deposited in the White 
Mountain Apache Tribe Maintenance Fund.

Section 13. Antideficiency

    Section 13 limits the liability of the United States for 
failure to carry out obligations or activities required by the 
Act.

Section 14. Repeal on failure of enforceability date

    Section 14 repeals S. 313 if the Secretary does not publish 
the statement of findings under Subsection 9(d) by October 31, 
2015 effective beginning on November 1, 2015 and provides for 
return to the Treasury of amounts appropriated under 
subsections (a), (b), (d), and (e) of section 12 along with any 
interest. It further provides for return of other amounts 
deposited in the White Mountain Apache Tribe Water Settlement 
Subaccount along with any interest to the respective sources.

Section 15. Compliance with environmental laws

    Section 15 provides that the Secretary, in carrying out the 
Act, must comply with applicable federal environmental laws and 
regulations.

            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. 313 with 
an amendment in the nature of a substitute and ordered the bill 
reported to the Senate, with the recommendation that the Senate 
do pass S. 313 as reported.

                   Cost and Budgetary Considerations


S. 313--White Mountain Apache Tribe Water Rights Quantification Act of 
        2009

    Summary: S. 313 would approve and ratify a settlement 
agreement between the White Mountain Apache Tribe and the state 
of Arizona. The agreement would resolve tribal claims to water 
rights in the state. As part of that agreement, the bill would 
authorize the appropriation of funds to construct a rural water 
system to deliver water to tribal lands. The bill also would 
establish two trust funds for the tribe to protect and restore 
tribal lakes and forests, conduct certain economic development 
projects, and operate and maintain the rural water system. 
Finally, the bill would authorize appropriations for the 
Department of the Interior (DOI) to operate and maintain the 
water system until it is conveyed to the tribe.
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing S. 313 would increase discretionary 
spending by $134 million over the 2010-2019 period and $66 
million after 2019. CBO also estimates that enacting S. 313 
would increase direct spending by $125 million over the 2010-
2019 period and $22 million after 2019. Enacting the 
legislation would not affect revenues.
    S. 313 contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA) because it would 
require the tribe to enact a tribal water code and prohibit it 
from objecting to the drilling or use of some wells. CBO 
estimates that the cost of complying with those mandates would 
be small and far below the threshold established in UMRA ($69 
million in 2009, adjusted annually for inflation).
    S. 313 contains no private-sector mandates as defined in 
UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 313 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     2015     2016     2017     2018     2019   2010-2014  2010-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     CHANGES IN SPENDING SUBJECT TO APPROPRIATION\1\

Settlement Fund:
    Estimated Authorization Level.......        0        0        0        0        0        0      132        0        0        0         0        132
    Estimated Outlays...................        0        0        0        0        0        0      132        0        0        0         0        132
DOI Operation & Maintenance:
    Estimated Authorization Level.......        0        0        0        0        0        0        *        *        *        *         0          2
    Estimated Outlays...................        0        0        0        0        0        0        *        *        *        *         0          2
    Total Changes:
        Estimated Authorization Level...        0        0        0        0        0        0      132        *        *        *         0        134
        Estimated Outlays...............        0        0        0        0        0        0      132        *        *        *         0        134

                                                               CHANGES IN DIRECT SPENDING

Rural Water System:\2\
    Estimated Budget Authority..........        0        0        0        0        0        0       50       40       30       20         0        140
    Estimated Outlays...................        0        0        0        0        0        0       44       37       25       19         0       125
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Excludes amounts authorized to be appropriated for a Tribal Maintenance Fund because CBO expects those amounts would not be needed until 2021.
\2\CBO estimates that an additional $22 million would be spent for the water system after 2019.
Note:  DOI = Department of the Interior; * = less than $500,000.
           Amounts may not sum to totals because of rounding.

    Basis of estimate: For this estimate, CBO assumes that S. 
313 will be enacted by the end of calendar year 2010 and that 
the necessary amounts will be appropriated when the settlement 
becomes effective. 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 2016. The 
estimated costs for the authorized water projects are based on 
information from DOI and on historical spending patterns for 
similar activities.
    The White Mountain Apache Tribe and several other parties 
have signed a settlement agreement resolving a water-rights 
dispute in northeast Arizona. The United States would become a 
party to that agreement upon enactment of S. 313, provided that 
certain other conditions are met. Among those conditions, the 
Secretary of the Interior would have to publish a statement of 
findings in the Federal Register indicating that all parties 
have executed the agreement; the U.S. district court would have 
to issue a decree concerning the agreement; sufficient funds to 
construct a rural water system, which CBO estimates would cost 
$147 million, would have to be deposited into the White 
Mountain Apache Tribe Water Rights Settlement Subaccount; and 
Arizona would have to appropriate $2 million for the 
construction of the rural water system.
    Should the Secretary not publish the required statement of 
findings by October 31, 2015, 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.

Spending subject to appropriation

    S. 313 would authorize the appropriation of funds for a 
variety of activities to benefit the White Mountain Apache 
Tribe. The bill would authorize appropriations to construct a 
rural water system and to protect and restore tribal lakes and 
forests, conduct certain economic development projects, and 
operate and maintain the rural water system. Assuming 
appropriation of the necessary amounts, CBO estimates that 
implementing the settlement agreement would increase 
discretionary spending by $134 million over the 2010-2019 
period and $66 million after 2019.
    Most of the amounts authorized to be appropriated by S. 313 
would be allowed to accrue interest on unspent amounts. CBO 
considers the authority to spend amounts credited as interest 
on unspent balances of appropriated funds to be an increase in 
direct spending as discussed later in this cost estimate. CBO 
expects that funds would be appropriated in the year the 
settlement becomes effective. If the Congress chose to 
appropriate funds prior to the year in which those funds would 
be spent, interest would accrue on the unspent balances, and 
the legislation's estimated impact on direct spending would be 
larger.
    Settlement Fund. The bill would authorize the appropriation 
of about $114 million (plus additional amounts needed because 
of increases in construction costs) for the White Mountain 
Apache Tribe Settlement Fund. CBO expects that those funds 
would be appropriated near the beginning of fiscal year 2016--
the enforcement date of the settlement. Funds would be used to 
protect and restore tribal lakes and forests and for certain 
economic development projects. CBO expects that the entire 
amount in the fund (including adjustments for inflation) would 
be recorded as an outlay of $132 million in 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 settlement fund would be recorded as an 
outlay in 2016 when the funds could be spent by the tribe. 
Subsequently, any use of such funds and interest payments to 
the tribe would have no effect on the federal budget.
    DOI Operation & Maintenance. The bill would authorize the 
appropriation of $2.5 million for DOI to operate and maintain 
the new rural water system until 2021 when funds from the 
tribal maintenance fund could be spent. CBO estimates that 
operating and maintaining the rural water system would cost 
about $500,000 a year over the 2016-2020 period.
    Tribal Maintenance Fund. The bill would authorize the 
appropriation of $50 million (plus additional amounts needed 
because of increases in construction costs) for the White 
Mountain Apache Tribe Maintenance Fund. CBO expects that those 
funds would be appropriated in fiscal year 2021 when the funds 
could be spent. Funds would be used to operate and maintain the 
rural water system. CBO expects that the entire amount in the 
fund (including adjustments for inflation) would be recorded as 
an outlay of $66 million in 2021.
    Rural Water System Subaccount. The bill would authorize the 
appropriation of $126 million (plus additional amounts needed 
because of increases in construction costs) to build a rural 
water system for the tribe. Following enactment of S. 313, 
however, the Secretary of the Interior would be authorized to 
use funds from the Future Indian Water Settlement subaccount 
established under Public Law 108-451 and designated to 
implement Indian water settlements in Arizona. CBO expects that 
amounts in that account would be used to execute the 
settlement. The expenditure of those funds would increase 
direct spending (see Direct Spending section, below).
    CBO assumes that the full amount necessary to construct the 
rural water system would be expended from the Future Indian 
Water Settlement Subaccount, resulting in direct spending. If, 
instead, the Congress appropriated funds for that purpose, it 
would reduce the amounts expended from that subaccount and 
lower the legislation's estimated impact on direct spending.
    The bill also would require the Secretary of the Treasury 
to transfer such sums as are available--up to $50 million--from 
the Emergency Fund for Indian Safety and Health (established 
under Public Law 110-293) to the rural water system subaccount 
in 2010. Because no funds have been appropriated for the 
emergency fund, CBO expects that no funds would be available 
for transfer to the subaccount in 2010.

Direct spending

    Future Indian Water Settlement Subaccount. The Arizona 
Water Settlements Act (Public Law 108-451) established this 
subaccount and authorized it to receive up to $250 million of 
receipts from the Lower Colorado River Basin Development Fund, 
with deposits into the subaccount starting by January 2010. The 
Colorado River Basin Development Fund collects receipts from 
the users of the Central Arizona water project and certain 
other receipts from the sale of electricity generated at 
federal water projects. Those amounts are available for federal 
agencies to spend without further appropriation for a variety 
of purposes including operating and maintaining certain water 
projects. The Arizona Water Settlements Act provided that 
amounts deposited in the Future Indian Water Settlement 
Subaccount may be used for Indian water rights settlements in 
Arizona approved by the Congress subsequent to its enactment.
    CBO expects that funds from the Future Indian Water 
Settlement Subaccount would be used to construct the rural 
water system on tribal lands. Based on information from DOI, 
CBO also expects that the tribe would enter into a contract 
with the federal government under the Indian Self-Determination 
and Education Act, which allows Indian tribes to assume 
responsibilities for programs, functions, and services or 
activities that would otherwise be carried out by the federal 
government. Because CBO expects the tribe to assume 
responsibility for constructing the water system, we expect 
that construction of that system would begin in 2016 when the 
tribe would spend funds designated for that purpose. We 
estimate that constructing the water system would increase 
direct spending by $125 million over the 2016-2019 period and 
by $22 million after 2019.
    Interest Earnings on the Settlement Fund and the 
Maintenance Fund. Because we expect that funds would be 
appropriated for both the settlement and maintenance funds 
during the fiscal years in which those funds would be needed, 
we estimate that accrued interest earnings would total less 
than $500,000 and spending of that interest would have a 
negligible impact on direct spending.
    Estimated impact on state, local, and tribal governments: 
S. 313 would require the White Mountain Apache Tribe to enact 
policies that would govern tribal water rights and would 
prohibit the tribe from objecting to the use of some existing 
wells or the drilling of new wells pursuant to future 
adjudication proceedings, as detailed in the agreement. Those 
provisions would be intergovernmental mandates as defined in 
UMRA because they would place statutory requirements on the 
tribe that are separate from provisions of the agreement. CBO 
estimates that the cost of complying with those mandates would 
be small and well below the threshold established in UMRA ($69 
million in 2009, adjusted annually for inflation). Furthermore, 
amounts authorized for the settlement fund could be used to 
develop the tribal water code.
    Other provisions of the bill would benefit the tribe. Any 
costs to the tribe from those provisions would be incurred 
voluntarily as a result of entering into the settlement 
agreement.
    Estimated impact on the private sector: S. 313 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 Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact that would be incurred in 
carrying out S. 313. The Committee believes that the regulatory 
impact of S. 313 will be minimal.

                            ADDITIONAL VIEWS

    On September 10, 2009, this Committee held a business 
meeting and voted to report S. 313, the White Mountain Apache 
Tribe Water Rights Quantification Act of 2009 (the 
``legislation'' or S. 313). On November 10, 2009, the 
Administration, through Commissioner of the Bureau of 
Reclamation Michael L. Connor, submitted a views letter 
(``Views Letter'') regarding the legislation as reported by the 
Committee.
    The Views Letter acknowledges that ``[a]s reflected by the 
changes made in the marked up version of S. 313, substantial 
work has been done and refinements made to this settlement by 
the parties and the Arizona delegation.'' (Views Letter, p. 2). 
The Views Letter notes with approval a number of changes that 
the White Mountain Apache Tribe (the ``Tribe'') agreed to make 
in response to the Administration's concerns relating to, among 
other things, (1) the findings, (2) the definitions, (3) 
potential cost overruns of the Miner Flat Dam and Reservoir 
(the ``Miner Flat Project''), (4) funding for water development 
activities, and (5) the contract provisions under the Indian 
Self Determination Act. The Views Letter also emphasizes 
improvements in areas such as (1) waivers and (2) the title 
transfer of the Miner Flat Project.
    The White Mountain Apache Tribe (the ``Tribe'') has sent 
Senator Kyl and me a letter that responds to the issues raised 
by Commissioner Connor in the Views Letter. I would like to 
submit portions of the responses from the Tribe's letter so 
that the Report also reflects the Tribe's responses to the 
letter:

           *       *       *       *       *       *       *


  1. The Conditions Required for the U.S. to Convey to the Tribe the 
  Miner Flat Project Are Reasonable and Appropriate Given the Complex 
                         Nature of the Project

    At the Administration's request, the Tribe agreed to accept 
title to the Miner Flat Project once the following three 
conditions have been met: (1) The project is declared 
substantially complete; (2) the funds authorized to be 
appropriated for the operation, maintenance, and replacement 
(``OM&R'') of the project have been deposited into the WMAT 
Maintenance Fund; and (3) the Tribe has operated the project 
for five years. S. 313, Section 7(e)(2). Commissioner Connor 
believes ``this new language is an improvement over the 
original language.'' (Views Letter, p. 3)
    The Views Letter, however, recommends several changes, none 
of which the Tribe believes are necessary or warranted. For 
example, it recommends reducing the time period that the Tribe 
is required to operate the project from five years to one year. 
The Miner Flat Project is a relatively complex municipal water 
supply project comprised of a dam, reservoir, water treatment 
plant, 55 mile long water transmission pipeline, several 
pumping stations, and connected distribution systems. The Tribe 
will need to operate the project for several years before it 
has the requisite experience and technical expertise to accept 
title to the project from the United States. It is unreasonable 
for the United States to expect the Tribe to have the requisite 
expertise to operate a Reservation-wide drinking water system 
in only one year. Finally, the language in the bill concerning 
the title transfer is eminently reasonable since at least seven 
other previously authorized Reclamation Indian drinking water 
projects are held in trust in perpetuity by the United States.
    The Views Letter also recommends language limiting the 
liability of the United States associated with the Miner Flat 
Project that becomes effective once the conditions for 
conveyance have been met. S. 313, however, already authorizes a 
waiver of any claims the Tribe may have against the United 
States relating to the OM&R of the Miner Flat Project. (The 
waiver becomes effective once the funds authorized under the 
legislation for the OM&R are deposited into the WMAT 
Maintenance Fund. See S. 313, Section 9(a)(3)(F).) As a result, 
the additional language concerning the United States' liability 
is unnecessary.

  2. The Waivers Are Appropriate and Consistent With Previous Arizona 
                        Indian Water Settlements

    Attachment 2 of the Views Letter recommends several 
unnecessary revisions regarding waiver language. For example, 
the changes suggested to the introductory paragraphs in section 
9(a)(1), (2), and (3) are editorial changes that add nothing to 
the clarity of the waivers. The first suggested change of 
switching the word ``provided'' to ``specifically retained'' is 
unnecessary since the referenced subparagraphs make it 
absolutely clear that the Tribe and the United States ``shall 
retain'' any claims listed in the subparagraph. The second 
suggested change of adding the words ``and notwithstanding any 
provision to the contrary in the Agreement'' creates confusion 
over the effect of the waivers by creating the implication that 
some provision of the underlying settlement agreement 
(``Agreement'') is inconsistent with the language of the 
waivers. There is no inconsistency between the waivers and the 
Agreement and neither the Department nor anyone else has 
identified any such inconsistency. If there were an 
inconsistency, which there is not, that should be addressed 
directly by revising the language of the Agreement, not adding 
some imprecise wording to the waivers.
    The suggested addition of a new subparagraph 9(a)(3)(D) to 
the Tribe's waiver of claims against the United States is 
unnecessary in light of the language of section 13 of the 
legislation, which incorporates the federal Antideficiency Act. 
This proposed wording has never been used in any prior Arizona 
Indian water settlements legislation and the inclusion of the 
proposed language in this instance could be used as an argument 
to infer that such a claim was not waived in the earlier 
settlements. The inclusion of the antideficiency provision is 
sufficient protection against such claim under federal law.
    The suggested deletion of the words ``or the United States 
on behalf of such a tribe, community, nation or allottee'' from 
the retentions set forth in subparagraphs 9(b)(1)(A)(iv), 
(vii), and (b)(2)(D) and (E) would preclude the Tribe from 
objecting to conflicting water claims and claims for injuries 
to the water rights of the Tribe when those claims are asserted 
by the United States on behalf of another tribe. In essence, 
the United States is creating the dichotomy where the Tribe 
could object to those claims if they were asserted directly by 
another tribe, but not when the United States was asserting the 
claims on behalf of another tribe. The suggestion of this 
language deletion raises serious questions whether the United 
States is breaching its trust responsibility to the Tribe and 
not protecting the water rights the Tribe is securing through 
this settlement. The language proposed for deletion has been 
included in several of the prior Arizona Indian water 
settlement agreements.
    The Tribe opposes the proposed addition of language to 
subparagraph 9(b)(2)(F) in Attachment 2, as it injects concepts 
not addressed by the waivers since they are, by their terms, 
limited to waivers and retentions of claims. No such proposed 
language has been included in any prior Arizona water 
settlement act or agreement.
    The Tribe is opposed to deletion of section 9(b)(2)(F) as 
suggested in Attachment 2 to the Views Letter. The suggested 
deletion of language essential for the protection of the 
Tribe's ground water and surface water rights accentuates the 
conflict of interests that permeates the Department of 
Interior's trust obligation to the Tribe. The current language 
was inserted to protect the Tribe's Northern boundary for a 
distance of 12 miles where it abuts the National Forest. 
Presently, there is no threat to the Tribe's agreed to water 
use rights. The Tribe has constructed a housing development 
along the northern boundary. Future Tribal plans project up to 
as many as 30,000 homes and commercial development along this 
12 mile corridor next to national forest lands. If national 
forest lands along this common boundary are traded or sold, or 
if the Forest Service allows pumping of water from national 
forest land along the Tribe's boundary for non-Indian municipal 
use, injury could occur to the Tribe's water rights as agreed 
to in the Agreement. The current reservation of rights and 
retention of claims by the Tribe is necessary to protect the 
integrity of the Tribe's water rights in the Agreement.
    The addition of the proposed new subparagraph 9(d)(1)(G) is 
unnecessary since the definition of the Agreement includes all 
of the attached exhibits, which includes the waivers, and 
subsection 9(d)(1)(A)(ii) already requires the Tribe and the 
Secretary to execute the waivers as part of the Agreement.
    The Tribe also objects to the proposed language in section 
9(a)(4) of Attachment 2 of the Views Letter. The Tribe has a 
long-standing claim (unrelated to water) that approximately 
16,000 acres of reservation land along the 1871 Executive Order 
Northern boundary of the Fort Apache Indian Reservation were 
erroneously surveyed outside of the Tribe's reservation and 
placed in the National Forest. The language that the Views 
Letter proposes in the subsection entitled, ``Effect On 
Claims,'' is not necessary and confuses the issue. For example, 
Attachment 2 uses the term ``concerning title to lands outside 
the current boundary of the reservation.'' It is the Tribe's 
position that title to the erroneously surveyed 16,000 acres 
never changed and remains within the 1871 Executive Order 
boundaries. A survey error cannot change Executive Order 
boundaries of a reservation. Also, the suggested use of the 
term ``current boundary of the reservation,'' implies that the 
boundary has changed or that the ``current boundary'' is an 
established fact. The present language in S. 313, section 3, 
Definitions, (20) Reservation--appropriately deals with the 
survey claim by stating that the depiction of the reservation 
on a map attached to the Agreement as Exhibit 2.81 does not 
constitute an admission by the Tribe with regard to any dispute 
between the Tribe and the United States concerning the legal 
boundary of the reservation. The recently suggested language is 
unnecessary and raises more issues than it resolves.

 3. The White Mountain Apache Tribe Water Rights Settlement Subaccount

    Section 10 establishes the White Mountain Apache Tribe 
Water Rights Settlement Subaccount for the planning, design, 
and construction of the Miner Flat Project for the Tribe. 
Funding in the Subaccount established under section 10 consists 
of funds from (1) the Lower Colorado River Basin Development 
Fund; (2) amounts appropriated under section 12(a); (3) the 
Emergency Fund for Indian Safety and Health; and (4) Arizona 
state funds provided under subparagraph 13.3 of the Agreement.
    The Views Letter states that section 10(b)(1)(A) as written 
allows the White Mountain Apache Tribe to ``withdraw any 
portion of the White Mountain Apache Tribe Water Rights 
Settlement Subaccount.'' The Views Letter suggests that because 
of this, the provision is inconsistent with the concept of an 
Indian Self-Determination and Education Assistance Act (ISDEAA) 
contract as laid out in section 7(g). Accordingly, the Views 
Letter states the legislation should be changed to clarify 
whether the Secretary is being called upon to establish a trust 
fund to be controlled by the Tribe or to accomplish the 
construction of the Miner Flat Project under the Act through an 
ISDEAA contract.
    The Views Letter excerpt from section 10(b)(1)(A) is 
incomplete. Section 10(b)(1)(A), read in its entirety, 
unequivocally states that the Tribe may only withdraw amounts 
from the Subaccount on approval of the Secretary and then only 
pursuant to a ISDEAA agreement with the Secretary under section 
7(g). The Subaccount is under the control of the Secretary, not 
the Tribe. Moreover, section 10(b)(1)(B) states that the Tribe 
under a section 7(g) ISDEAA agreement with the Secretary shall 
only use amounts from the Subaccount for (1) the planning, 
design, and construction of the Miner Flat Project, including 
sums necessary for the Bureau of Reclamation to carry out its 
oversight of the planning, design and construction of the Miner 
Flat Project, (2) to pay any outstanding balance on the loan 
authorized by the White Mountain Apache Tribe Rural Water 
System Loan Authorization Act (Pub. L. 110-390; 122 Stat. 
4191), and (3) to carry out required environmental compliance 
activities associated with planning, design, and construction 
of the Miner Flat Project.
    Section 7(g)(2) referenced in section 10(b)(A) and (B), 
provides that any contract with the Tribe entered pursuant to 
the ISDEAA ``for the purpose of carrying out any provision of 
this Act shall incorporate such provisions regarding periodic 
payment of funds, timing for the use of funds, transparency, 
oversight, reporting, and accountability as the Secretary 
determines to be necessary (at the sole discretion of the 
Secretary) to ensure appropriate stewardship of Federal 
funds.'' No stronger language is required in the legislation to 
place the Subaccount under the control of the Secretary and 
subject to the requirements of the ISDEAA.

       4. The Limited Waiver of Sovereign Immunity Is Appropriate

    The Views Letter's objection to the breadth of the waiver 
of sovereign immunity in section 11(a) for the enforcement or 
interpretation of the legislation or the Agreement would leave 
some of the beneficiaries of the legislation and the Agreement 
without an effective remedy to enforce some of the provisions 
of the legislation or the Agreement if they were violated by 
the Tribe or the United States. There is no risk of additional 
litigation from this waiver unless either the United States or 
the Tribe allegedly violates the legislation or the Agreement. 
In that event, the adversely affected beneficiaries of the 
settlement should be able to seek to enforce the bargain 
approved by Congress and the parties. This waiver is also the 
same as the one included in the Gila River Indian Community 
Water Rights Settlement Act of 2004.

5. The Amount of Federal Funding for the Settlement Is Appropriate and 
                               Justified

    The Views Letter questions whether the $113.5 million 
authorized to be established under section 12 is an appropriate 
amount of federal funding. In that regard, it states that the 
uses to which the $113.5 million fund would be put are not 
clearly specified because of the latitude given to the Tribe in 
section 12(b)(2)(C) to spend the funds in a number of very 
different ways. This is contradictory to what the Views Letter 
states in the first paragraph of its ninth point that `` . . . 
authorizing funding for water development activities to be 
carried out directly by the Tribe rather than the Secretary is 
consistent with the goals of self-determination and self-
sufficiency and will allow the Tribe to prioritize what 
projects to carry out with available funds.''
    The WMAT Settlement Fund was negotiated by the Tribe to 
fund water related economic development projects such as, 
rehabilitation of fish hatcheries and existing recreational 
lakes facilities, repair and rehabilitation of existing 
irrigation systems neglected by the Bureau of Indian Affairs, 
protection, restoration, and economic development of forest and 
watershed health, and other water related economic development 
projects utilizing the Tribe's retained water rights. The Views 
Letter is incorrect when it states that the $113.5 million 
authorized to be appropriated to the Secretary is not part of 
the consideration for settlement of the Tribe's reserved water 
rights. The Views Letter is correct that $4.95 million of the 
$113.5 million authorized to be appropriated for repairs to the 
irrigation system is contingently tied to a waiver by the Tribe 
of a breach of trust claim against the federal government. The 
waiver becomes effective upon appropriation of the $4.95 
million to rehabilitate the irrigation system.
    The $109 million of remaining funding would be subject to 
appropriations and is not a condition precedent that must be 
accomplished in order for the settlement to be final and 
enforceable, but that does not mean that the $109 million is 
not consideration for the settlement. The Tribe is aware that 
these appropriations are not a condition precedent for the 
settlement to become effective and that the United States is 
not liable to the Tribe if it fails to appropriate these funds 
under S. 313. The authorization of these appropriations, 
however, is of great value to the Tribe and is part of the 
consideration of the settlement.
    The Tribe negotiated for the authorizations for 
appropriations for wet water development in exchange and in 
consideration for relinquishing approximately 25,000 acre-feet 
of Salt River Water annually. The Salt River Project places a 
value of $6,000 per acre foot for Salt River Water. The Tribe 
relinquished Salt River Water with an 1871 priority date valued 
at $150 million annually in exchange for and in consideration 
for funding for wet water development. The 25,000 acre-feet 
annually is part of the original 180,000 acre-feet diversion 
right claimed by the United States in 1985 for the Tribe in the 
general stream adjudications.
    The Views Letter also ignores the Tribe's agreement to 
waive its breach of trust claims against the federal 
government, the Tribe's trustee, for its total failure to stop 
the Phelps Dodge Corp., now known as Freeport Copper and Gold 
Inc., from trespassing on the Tribe's land since 1944. Hundreds 
of millions of dollars in profit were made by Freeport from the 
construction of a diversion dam on the Black River, half of 
which is on the Tribe's reservation trust land. The trespass is 
still ongoing. The Tribe waived its very valuable trespass and 
unjust enrichment claim against the United States in exchange 
for anticipated Administration support of S. 313, but that 
support has not been forthcoming as evidenced by the Views 
Letter that questions the amount of the Federal Government's 
contribution to the Tribe's water rights settlement.
    The value of other potential breach of trust claims against 
the United States that will be waived by the Tribe and which 
are summarized in the Tribe's Liability Paper dated August 19, 
2009, and addressed to Pam Williams, Director of the 
Secretary's Indian Water Rights Office, far exceeds the total 
federal contribution to the Tribe's water rights settlement, 
including the cost of the Miner Flat Project, which without 
question, is a trust obligation of United States (Views Letter 
at 1, ``The Reservation's need for reliable and safe drinking 
water is not in question.'').
    Mentioned, but not addressed by the Views Letter, is the 
trust fund to subsidize the OM&R costs of the domestic water 
supply system to be constructed under S. 313. The Tribe's 
expert consultants have estimated that the OM&R trust 
obligation would cost the United States approximately $2.163 
million a year. Once the OM&R trust fund in the amount of $50 
million is established under section 12(b)(3), the United 
States shall be relieved of paying annual OM&R expenses of the 
trust obligation. Assuming inflation at 3% annually, the Tribe 
will be required to subsidize the $50 million trust fund within 
28 years; assuming a 4% return on investment of the trust fund 
by the Tribe, it will take 42 years. Stated another way, 
assuming a 100 year lifetime of the Miner Flat Project, the 
United States is being relieved of $84 million in taxpayer 
expense if the trust fund cannot achieve more than a 4% rate of 
return with an average annual inflation rate of 3%.
    In sum, the Views Letter is dismissive, without citation or 
viable argument, of the value of the Tribe's waiver in S. 313 
of potential water related breach of trust claims against the 
United States.

6. The Use of Funds for the WMAT Settlement From the Emergency Fund for 
      Indian Safety and Health Is Consistent With the Underlying 
                             Authorization

    Under Title VI of the Tom Lantos and Henry J. Hyde United 
States Global Leadership Against HIV/AIDS, Tuberculosis, and 
Malaria Reauthorization Act of 2008 (P.L. 110-293) (the 
``Act''), Congress established the Emergency Fund for Indian 
Safety and Health (``Emergency Fund'') and authorized up to $1 
billion over a five-year period for water supply projects that 
are part of congressionally approved water settlements. The 
Miner Flat Project fits squarely within this criterion. 
Accordingly, S. 313, as reported, authorizes the use of a 
limited amount of funds from the Emergency Fund for the 
construction of the Miner Flat Project. The Views Letter argues 
that this provision undermines the language in the Act 
specifying that the funding be allocated in accordance with a 
Secretarial plan. While the Act requires the Administration to 
prepare this plan by July 30, 2009, it has failed to do so. 
Therefore, the Administration cannot require that S. 313 comply 
with a plan it has failed to prepare.

7. The Parties Have Agreed To Extend the Time To Secure Federal Funding 
                            for the Project

    The Views Letter correctly points out the challenges 
associated with securing the federal funding necessary to 
implement the settlement by 2015. As a result, the parties have 
agreed to extend that date until 2020.
                                                       John McCain.
                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 313 as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets; new matter is printed in italic; existing law in 
which no change is proposed is shown in roman):
    Subsection (b)(2) of P.L. 110-390, 122 Stat. 4191--Terms 
and Conditions of Loan.--The loan provided under subsection (a) 
shall--(1) be at a rate of interest of 0 percent; and (2) be 
repaid over a term of 25 years, beginning on January 1, [2013] 
2016.

                                  
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