Senate Report 111-119 - TO RESOLVE WATER RIGHTS CLAIMS OF THE WHITE MOUNTAIN APACHE TRIBE IN THE STATE OF ARIZONA, AND FOR OTHER PURPOSES

[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.