[Senate Report 111-204]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 425
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-204

======================================================================
 
 TO PROVIDE FOR EQUITABLE COMPENSATION TO THE SPOKANE TRIBE OF INDIANS 
     OF THE SPOKANE RESERVATION FOR THE USE OF TRIBAL LAND FOR THE 
    PRODUCTION OF HYDROPOWER BY THE GRAND COULEE DAM, AND FOR OTHER 
                                PURPOSES

                                _______
                                

                 June 10, 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. 1388 ]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 1388) to provide for equitable compensation to the 
Spokane Tribe of Indians of the Spokane Reservation for the use 
of tribal land for the production of hydropower by the Grand 
Coulee Dam, and for other purposes, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                                PURPOSE

    The purpose of S. 1388 is to provide fair and equitable 
compensation to the Spokane Tribe for the past and continued 
use of tribal lands by the federal government for the 
generation of hydroelectric power at the Grand Coulee Dam and 
Hydroelectric Project (Project), located on the main stem of 
the Columbia River in the State of Washington. S. 1388 would 
provide additional compensation for the Tribe's losses, 
including the value of the land as a hydroelectric site, and 
make payments comparable to those made to the neighboring 
Confederated Tribes of the Colville Reservation (Colville 
Tribes) under their congressionally approved settlement with 
the United States for similar losses caused by the Project.

                               BACKGROUND

I. Planning and construction of Grand Coulee Dam

    Planning for the construction of the Project began during 
the period from 1927 to 1931, when the Army Corps of Engineers 
(Corps), at the direction of Congress, investigated the 
Columbia River and its tributaries to identify sites at which 
dams could be constructed to produce hydroelectric power at low 
cost. The Corps recommended that dams be constructed at a 
number of sites, including the current site of the Project, 
located on the main stem of the Columbia River in the State of 
Washington.
    The Corps recommended that the construction of the Project 
be undertaken by local governments or private utilities under 
the authority of the Federal Power Act, 16 U.S.C. 
Sec. Sec. 791a et seq. (FPA). If the Project had been 
constructed by a local government or a private utility, section 
10(e) of the FPA (16 U.S.C. Sec. 803(e)) would have required 
that the non-federal licensees pay the Tribe a reasonable 
annual charge, subject to the approval of the Tribe, for the 
use of its land to generate hydropower. In 1933, a non-federal 
entity was issued a preliminary permit to construct a 
hydroelectric project at the current site of the Project by the 
Federal Power Commission.
    Several years later, however, the Federal government 
assumed control of the project. Consequently, the FPA did not 
ultimately apply to the Project because federal dams are not 
subject to licensing pursuant to the FPA. This included section 
10(e) of the FPA which would have provided compensation to the 
Tribe for the use of its lands by a non-federal licensee.

II. Payment of compensation to tribes

    As a part of constructing the Project, under the Act of 
June 29, 1940, Congress granted to the United States ``all the 
right, title, and interest of the Indians in and to the tribal 
and allotted lands within the Spokane and Colville Reservations 
. . . as may be designated therefor by the Secretary of the 
Interior from time to time. . . .''\1\ The Act also recognized 
that the Spokane Tribe and the Colville Tribes had compensable 
interests that would be injured by the Project. These interests 
included the development of hydroelectric power by the tribes, 
a salmon fishery vital to the tribes which would be destroyed 
by project construction, and the inundation of tribal lands 
already identified as potential hydroelectric power sites. The 
Act provided that the Secretary of the Interior was to 
determine an amount of ``just and equitable compensation for 
the tribal lands taken.''\2\
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    \1\See 16 U.S.C. Sec. 835d-h.
    \2\See 16 U.S.C. Sec. 835e.
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    Pursuant to the Secretary of the Interior's determination 
under the Act of June 29, 1940, the Tribe was paid $4,700 in 
compensation and the Colville Tribes were paid $63,000. On two 
occasions, October 2, 2003, and May 15, 2008, the Committee 
received testimony that the original payments made to the 
tribes, $4,700 and $63,000 respectively, were not adequate 
compensation. The testimony emphasized requirement of the Act 
of June 29, 1940, that the tribes were to be provided ``just 
and equitable compensation.'' The testimony also noted the 
decades of lost compensation to the tribes because the Project 
had not been licensed by a non-federal entity under the FPA.

III. Claims for compensation before the Indian Claims Commission

    Both the Spokane Tribe and the Colville Tribes asserted 
various claims before the Indian Claims Commission (ICC) under 
the Indian Claims Commission Act of 1946, Pub. L. 79-726 
(ICCA). The ICCA included a requirement that all claims be 
filed within five years of the passage of the ICCA. Neither 
tribe asserted claims specifically related to the Project prior 
to the expiration of the ICCA's five year statute of 
limitations.
    However, after the ICCA's statute of limitations had run, 
the Colville Tribes asserted specific claims related to the 
Project. In 1956, the Colville Tribes' original ICC claim was 
divided into four separate claims, at that time, the Colville 
Tribes added specific fishery and hydropower claims to their 
original claim. Twenty years later, in 1976, the ICC ruled on 
the addition of these more specific claims. The ICC ruled that 
the Colville Tribes could amend their original claim even 
though the ICCA's five year statute of limitations had run. The 
ICC determined that the Colville Tribes specific hydropower 
claims could ``relate back'' to the filing of their more 
general original claims and would not be barred by the ICCA 
statute of limitations.\3\
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    \3\Confederated Tribes of the Colville Reservation v. United 
States, 39 Ind. Cl. Comm. 159, 163 (Nov. 18, 1976).
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    Litigation over the Colville Tribes additional claims 
continued until 1992, when the United States Court of Appeals 
for the Federal Circuit finally held that the ICCA's ``fair and 
honorable dealings'' standard allowed the Colville Tribes to 
pursue its hydropower related claims against the United 
States.\4\ This decision led to negotiations between the 
Colville Tribes and the United States to settle the claims. In 
1994, Congress ratified a settlement agreement between the 
Colville Tribes and the United States providing for payment of 
$53,000,000 million in damages and annual installments of 
$15,250,000 in perpetuity, adjusted annually based on revenues 
from the sale of hydroelectric power generated by the 
Project.\5\ The fiscal year 2008 annual payment to the Colville 
Tribes for the sale of hydroelectric power generated by Project 
was $18.2 million.
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    \4\Confederated Tribes of the Colville Reservation v. United 
States, 964 F. 2d 1102 (Fed. Cir. 1992).
    \5\Confederated Tribes of the Colville Reservation Grand Coulee Dam 
Settlement Act, Pub. L. No. 103-436, 108 Stat. 4577 (Nov. 2, 1994) 
(Colville Tribes Settlement Act).
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    Meanwhile, the Spokane Tribe did not attempt to amend its 
original ICC claims with more specific claims after the ICCA's 
statute of limitations had run. And, in 1967, the Spokane Tribe 
settled its ICCA claims. The Spokane Tribe settled its various 
ICC claims (in 1967) long before the ICC ruled (in 1976) that 
the Colville Tribes and other tribes could amend their claims 
even though the ICCA statute of limitations had run. The 
Spokane Tribe also settled long before the federal courts held 
(in 1992) that these claims could be pursued against the United 
States under the ``fair and honorable dealings'' standard of 
the ICCA.
    None of the Spokane Tribes settled claims specifically 
addressed the loss of compensation for the generation of 
hydroelectric power by the Project. As the Tribe testified 
before the Committee,\6\ when it settled its claims, it 
believed that the United States was still planning to 
appropriately compensate the Tribe as set out in the Act of 
June 29, 1940, which authorized the Project and required ``just 
and equitable compensation for the tribal lands taken.''\7\
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    \6\Hearing on S. 1080, H.R. 2120, S. 2494, H.R. 2963, S. 531 Before 
the S. Comm. on Indian Affairs, 110th Cong. 21 (2008) (written 
testimony of Richard Sherwood, Chairman, Spokane Tribe of Indians).
    \7\See 16 U.S.C. Sec. 835e.
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IV. Discussions to appropriately compensate the Spokane Tribe

    Numerous records, beginning in the 1930's and then again in 
the 1970's, support the Spokane Tribe's testimony that the 
United States was planning, albeit belatedly, to appropriately 
compensate the Tribe as required by the Act of June 29, 1940 
authorizing the Project. These records include high-level 
agency discussions, Solicitor's Office Opinions and memoranda, 
interagency proposals and memoranda, congressional findings, 
hearings, and directives--including a Task Force Study from 
1976 to 1980 at the direction of the Senate Committee on 
Appropriations, and negotiations with the two tribes regarding 
adequate compensation for the use of tribal lands to generate 
hydroelectric power by the Project.\8\ These historical and 
legal records often treat the legal basis for the Spokane 
Tribe's claim as having the same validity as the claims that 
the Colville Tribes litigated under the ICCA.
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    \8\See id.
---------------------------------------------------------------------------
    Based on these circumstances, the General Accounting Office 
(GAO) previously testified before the Committee that it would 
be reasonable to settle with the Spokane Tribe in the same 
manner as the settlement with the Colville Tribes. The GAO 
testified:

          A reasonable case can be made to settle the Spokane 
        tribe's case along the lines of the Colville 
        settlement--a one-time payment for the U.S. Treasury 
        for past lost payments for water power values and 
        annual payments primarily from Bonneville [Power 
        Administration]. Bonneville continues to earn revenues 
        from Spokane reservation lands used to generate 
        hydropower. However, unlike the Colville tribes, the 
        Spokane tribe does not benefit from these revenues. The 
        Spokane tribe does not benefit because it missed its 
        filing opportunity before the Indian Claims Commission. 
        At that time it was pursuing other avenues to win 
        payments for the value of its land for hydropower. 
        These efforts would ultimately fail. Without 
        congressional action, it seems unlikely that a 
        settlement for the Spokane tribe will occur.\9\
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    \9\Spokane Tribe of Indians of the Spokane Reservation Grand Coulee 
Dam Equitable Compensation Settlement Act: Hearing on S. 1438 Before 
the S. Comm. on Indian Affairs, 108th Cong. 64 (2003) (testimony of 
Robert A. Robertson, United States General Accounting Office).
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                          LEGISLATIVE HISTORY

    Settlement bills relating to the Tribe's claims were 
introduced in the past five Congresses. At different times, 
some of these bills either passed the Senate or the House, but 
never in the same Congress. Bills were introduced in the 106th 
Congress (S. 1525 and H.R. 2664), in the 107th Congress (S. 
2567 and H.R. 4859), in the 108th Congress (S. 1438 and H.R. 
1753), in the 109th Congress (S. 881 and H.R. 1797) and in the 
110th Congress (S. 2494 and H.R. 6547). In the 111th Congress, 
Senator Cantwell introduced S. 1388 for herself and Senator 
Murray on June 25, 2009.
    Three hearings have been held on the Tribe's compensation 
bills. On October 2, 2003, the Senate Committee on Indian 
Affairs held a hearing on S. 1438, and on the same date, the 
Water and Power Subcommittee of the House Committee on Natural 
Resources held a hearing on H.R. 1753. On May 15, 2008, the 
Senate Committee on Indian Affairs held a hearing on S. 2494.
    On some of these occasions, the Committee received views on 
the introduced version of the bill and from the Administrations 
in place at that time. On June 28, 2005, the Bureau of 
Reclamation provided the Committee a letter with its views on 
S. 881. And, at the May 15, 2008, the then-Director of the 
Bureau of Indian Affairs testified on S. 2494. The Committee 
understands that the bill it is currently reporting, S. 1388, 
reflects discussions with the Administration based on this 
prior correspondence.

                    SUMMARY OF PROVISIONS OF S. 1388

    Under the proposed legislation, the Spokane Tribe would be 
compensated for the use of its lands for the production of 
hydroelectric power by the Grand Coulee Dam under a formula 
based in part on that by which the Colville Tribes were 
compensated in the Confederated Tribes of the Colville 
Reservation Grand Coulee Dam Settlement Act, Pub. L. 103-436, 
108 Stat. 4577 (November 2, 1994).
    The Spokane Tribe's lands being used by the Project are 
equivalent in area to 39 percent of the Colville Tribes' lands 
being used.\10\ A settlement based solely on this factor would 
result in payments to the Spokane Tribe equal to 39 percent of 
the payments made to the Colville Tribes. However, the Spokane 
Tribe agreed to reduce this percentage to 29 percent, in 
recognition of the fact that certain lands located within the 
boundaries of the Spokane Reservation taken for the 
construction of the Project are to be restored to the Spokane 
Tribe under the terms of this legislation.
---------------------------------------------------------------------------
    \10\Hearing on S. 1080, H.R. 2120, S. 2494, H.R. 2963, S. 531 
Before the S. Comm. on Indian Affairs, 110th Cong. 21 (2008) (written 
testimony of Richard Sherwood, Chairman, Spokane Tribe of Indians).
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    Under S. 1388, an interest-bearing settlement fund would be 
established in the Treasury to be known as the Spokane Tribe of 
Indians Settlement Fund. Subject to the availability of 
appropriations the Secretary would deposit in the Fund 
$23,900,000 for fiscal year 2010, and for each of the next four 
fiscal years $18,900,000. These funds would be held in trust by 
the Secretary, unless and until the Spokane Business Council 
submits a written request to the Secretary asking that all or 
part of the Fund be paid to the Spokane Business Council. In 
the event such a request is made, $5,000,000 of the initial 
deposit would be used for the planning, design, construction, 
equipping, and operation and maintenance of a Cultural Resource 
Repository and Interpretive Center to house burial remains, 
funerary objects, and other cultural resources affected by the 
operation of the Project and to provide an educational facility 
addressing the culture and history of the Tribe. Of the 
remaining assets of the Fund, 25 percent would be used by the 
Spokane Business Council for discretionary purposes of general 
benefit to members of the Tribe, and 75 percent for resource 
development, credit, scholarship, or reserve, investment, and 
economic development programs.
    In addition, under S. 1388, beginning on March 1, 2010, the 
Administrator of the Bonneville Power Administration 
(Administrator) would pay the Tribe an amount equal to 29 
percent of the annual payment due to the Colville Tribes under 
Sec. 5(b) of the Colville Tribes Settlement Act for fiscal year 
2009. On or before March 1 of each year thereafter, the 
Administrator would make annual payments to the Tribe equal to 
29 percent of the Colville Tribes payment for the previous 
fiscal year. These funds, upon payment to the Tribe, could be 
used or invested by the Spokane Business Council in the same 
manner and for the same purposes as other Spokane Tribe 
government funds.
    Beginning in fiscal year 2020, S. 1388 would allow the 
Administrator to take a $1,300,000 credit against these 
payments to the Tribe in most years. The credit would come from 
funds that the Administrator would otherwise owe the Department 
of Treasury.
    Expenditure of funds transferred to the Tribe by the 
Administrator would not require approval by the Secretary of 
the Interior or the Administrator, and these officials would 
have no trust responsibility for the investment, 
administration, or expenditure of those funds.
    Section 9 discusses the transfer of administrative 
jurisdiction and restoration of ownership of certain lands. 
Sections 9(a) and (b) provide that the Secretary of the 
Interior is directed to transfer administrative jurisdiction 
for certain lands within the exterior boundaries of the Spokane 
Indian Reservation from the Bureau of Reclamation to the Bureau 
of Indian Affairs and that such lands would be held in trust 
for the benefit of the Spokane Tribe and remain a part of the 
Spokane Indian Reservation. These lands would be subject to the 
same trust responsibility as other tribal land held in trust 
within the Reservation. These lands would also be subject to a 
reservation of perpetual rights and easement on behalf of the 
United States regarding the use of these lands as is necessary 
for the operation of the Columbia Basin Project, which includes 
Grand Coulee Dam, and existing recreational facilities owned or 
permitted by the United States.
    Because the lands involved in section 9 include a boundary 
between the Spokane Tribe and the Confederated Tribes of the 
Colville Reservation, section 9(c) provides that nothing in 
section 9 establishes or affects the precise location of the 
actual boundary between the Spokane Indian Reservation and the 
Colville Reservation along the Columbia River, the respective 
use rights of each Tribe in Lake Roosevelt as reserved by the 
Act of June 29, 1940 (16 U.S.C. Sec. 835d), or the common 
boundary of the Indian zones established pursuant to the 1940 
Act.
    Section 9(c) also recognizes an agreement between the 
Spokane Tribe and the Confederated Tribes of the Colville 
Reservation that was formalized in a Joint Resolution adopted 
by the two Tribes on September 17, 1973. The Joint Resolution 
provides--
          (1) that the common boundary of the enlarged Indian 
        zones between the Spokane and Colville Reservations 
        follow the center line of Roosevelt Lake without 
        reference to the course of the submerged Columbia River 
        so that the Spokane Indian zone will be to the east of 
        said center line and the Colville Indian zone to the 
        west;
          (2) that the Tribes establish a policy of reciprocity 
        within both Indian zones where they are adjacent to 
        each other with the cross deputization of game wardens, 
        patrols, and other officers and uniformity in the 
        administration of tribal rights and jurisdiction in 
        that area.
          (3) that there be reserved for later negotiations and 
        accord the question of where the actual common boundary 
        between the two reservations exists on the bottom of 
        the Roosevelt Lake, that is, whether it is at the 
        center line or the west bank of the submerged Columbia 
        River.
    Finally, to help ensure coordinated and consistent 
management of the Project, the Recreation Area, and the tribal 
lands, Section 9(d) also directs the Tribe and the relevant 
agencies of the Department of the Interior to enter into a 
memorandum of understanding regarding the lands. A similar 
agreement has already been reached between the Tribe and the 
State of Washington Department of Fish and Wildlife for 
management of law enforcement activities on acreage covered by 
the Act.
    Section 10 provides that the making of the prescribed 
payments by the Secretary of the Interior and the 
Administrator, together with the restoration of ownership and 
the taking of the specified land into trust on behalf of the 
Tribe, would constitute full satisfaction of the Spokane 
Tribe's claims for past and continued use of tribal lands and 
to a fair share of hydroelectric revenues generated as a result 
of the use of those lands.
    Section 11 would authorize the appropriation of such funds 
as are necessary to accomplish its purpose.
    Section 12 states that the Act would not establish any 
precedent or is binding upon the Southwestern Power 
Administration, Western Area Power Authority, or Southeastern 
Power Administration.

                     SECTION-BY-SECTION OF S. 1388

Section 1. Short title

    Section 1 states that the Act may be cited as the ``Spokane 
Tribe of Indians of the Spokane Reservation Grand Coulee Dam 
Equitable Compensation Settlement Act.''

Section 2. Findings

    Section 2 provides findings made by Congress that describe 
the background and reasons for this legislation.

Section 3. Purpose

    Section 3 states that the purpose of this Act is to provide 
fair and equitable compensation to the Tribe for the use of its 
land for the generation of hydropower by the Grand Coulee Dam.

Section 4. Definitions

    Section 4 provides definitions for various terms used in 
the Act.

Section 5. Settlement Fund

    Section 5(a) establishes an interest-bearing settlement 
fund account in the Treasury of the United States to be known 
as the ``Spokane Tribe of Indians Settlement Fund,'' consisting 
of amounts deposited in the Fund under subsection (b) and any 
interest earned on investment of amounts in the Fund.
    Section 5(b) provides that, from amounts made available 
under section 11, for fiscal year 2010, the Secretary shall 
deposit in the Fund $23,900,000, and for each of the 4 fiscal 
years thereafter, the Secretary shall deposit in the Fund 
$18,900,000.
    Section 5(c) provides that the Fund shall be maintained and 
invested by the Secretary in accordance with the Act of June 
24, 1938 (25 U.S.C. Sec. 162a).
    Section 5(d) provides that at any time after funds are 
deposited into the Fund, the Spokane Business Council may 
submit to the Secretary written notice of the adoption by the 
Spokane Business Council of a resolution requesting that the 
Secretary pay all or portion of the amounts in the Fund to the 
Spokane Business Council, and provides further that not later 
than 60 days after receipt of such notice, the Secretary shall 
pay the amount requested to the Spokane Business Council.
    Section 5(e) provides that, of the initial deposit under 
subsection (b)(1), $5,000,000 shall be used by the Spokane 
Business Council for the planning, design, construction, 
equipping, and continuing operation and maintenance of a 
Cultural Resource Repository and Interpretive Center to house, 
preserve, and protect the burial remains and funerary and 
cultural resources affected by the operation of the Grand 
Coulee Dam, and provide an interpretive and educational 
facility regarding the culture and history of the Spokane 
Tribe. The section also provides that the funding of these 
activities does not alter or affect any authority, obligation, 
or responsibility of the United States under the Native 
American Graves Protection and Repatriation Act (25 U.S.C. 
Sec. Sec. 3001 et seq.), the Archaeological Resources 
Protection Act (16 U.S.C. Sec. Sec. 470aa et seq.), the 
National Historic Preservation Act (16 U.S.C. Sec. Sec. 470 et 
seq.), or the National Environmental Policy Act of 1969 (42 
U.S.C. Sec. Sec. 4321 et seq.). Of all other amounts deposited 
in the Fund (including interest generated on those amounts), 25 
percent shall be reserved by the Spokane Business Council and 
used for discretionary purposes of general benefit to all 
members of the Spokane Tribe, and 75 percent shall be used by 
the Spokane Business Council to carry out resource development 
programs, credit programs, scholarship programs, or reserve, 
investment, and economic development programs.

Section 6. Payments by the Administrator

    Section 6(a) provides that on March 1, 2010, the 
Administrator shall pay to the Tribe an amount equal to 29 
percent of the Computed Annual Payment for fiscal year 
2009.\11\
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    \11\``Computed Annual Payment'' is defined in section 4 of the bill 
as the payment calculated under paragraph 2.b. of the Colville 
Settlement Agreement, without regard for any increase or decrease in 
the payment under section 2.d. of the agreement.
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    Section 6(b) provides that not later than March 1, 2011, 
and March 1 of each year thereafter, the Administrator shall 
pay the Tribe an amount equal to 29 percent of the Computed 
Annual Payment for the preceding fiscal year.
    Section 6(c) provides that in accordance with the payment 
schedule described in subsection (b), the Administrator shall 
make commensurate cost reductions in expenditures, on an annual 
basis, to recover each payment to the Tribe under this section.

Section 7. Treatment after funds are paid

    Section 7(a) provides that payments made to the Spokane 
Business Council or Spokane Tribe under section 5 or 6 may be 
used or invested by the Business Council in the same manner and 
for the same purposes as the Tribe's other governmental funds.
    Section 7(b) provides that neither the Secretary nor the 
Administrator shall have any trust responsibility for the 
investment, supervision, administration, or expenditure of any 
funds after the date on which the funds are paid to the Spokane 
Business Council or Spokane Tribe under section 5 or 6.
    Section 7(c) provides that the payments of all funds to the 
Spokane Business Council and Spokane Tribe under sections 5 and 
6, and the interest and income generated by the funds, shall be 
treated in the same manner as payments under section 6 of the 
Saginaw Chippewa Indian Tribe of Michigan Distribution of 
Judgment Funds Act (100 Stat. 677).\12\
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    \12\Section 6 of the Saginaw Chippewa Act provides that 
distributions of certain funds paid to that tribe under the Act to its 
enrolled members are not subject to Federal, State, or local income 
taxes and that such distributions may not be used as a basis for 
denying or reducing (1) financial assistance or other benefits under 
the Social Security Act to such tribal member or the member's 
household, or (2) any other Federal financial assistance or benefit to 
which the tribal member or member's household may be otherwise 
entitled.
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    Section 7(d) provides that after the date on which funds 
are paid to the Spokane Business Council or Spokane Tribe under 
section 5 or 6, the funds shall constitute Spokane Tribe 
governmental funds and shall be subject to an annual tribal 
government audit.

Section 8. Repayment credit

    Section 8(a) provides that the Administrator shall deduct 
from the interest payable to the Secretary of the Treasury from 
net proceeds (as defined in section 13 of the Federal Columbia 
River Transmission System Act (16 U.S.C. Sec. 838k)) in fiscal 
year 2020, $1,300,000; and in each subsequent fiscal year in 
which the Administrator makes a payment under section 6, 
$1,300,000.
    Section 8(b)(1) provides that except as provided in 
paragraphs (2) and (3), each deduction made under this section 
shall be a credit to the interest payments otherwise payable by 
the Administrator to the Secretary of the Treasury during the 
fiscal year in which the deduction is made, and shall be 
allocated pro rata to all interest payments on debt associated 
with the generation function of the Federal Columbia River 
Power System that are due during the fiscal year. Section 
8(b)(2) provides that if, in any fiscal year, the deduction is 
greater than the amount of interest due on debt associated with 
the generation function for the fiscal year, the amount of the 
deduction that exceeds the interest due on debt associated with 
the generation function shall be allocated pro rata to all 
other interest payments due during the fiscal year. Section 8 
(b)(3) provides that to the extent that a deduction exceeds the 
total amount of interest described in paragraphs (1) and (2), 
the deduction shall be applied as a credit against any other 
payments that the Administrator makes to the Secretary of the 
Treasury.

Section 9. Transfer of administrative jurisdiction and restoration of 
        ownership of land

    Section 9(a) provides that the Secretary shall transfer 
administrative jurisdiction from the Bureau of Reclamation to 
the Bureau of Indian Affairs over all land acquired by the 
United States under the Act of June 29, 1940 (16 U.S.C. 
Sec. 835d), that is located within the exterior boundaries of 
the Spokane Indian Reservation established pursuant to the 
Executive Order of January 18, 1881.
    Section 9(b)(1) provides that all land transferred under 
this section shall be held in trust for the benefit and use of 
the Tribe and shall remain part of the Spokane Indian 
Reservation.
    Section 9(b)(2) provides that the Federal trust 
responsibility for all land transferred under this section 
shall be the same as the responsibility for other tribal land 
held in trust within the Spokane Indian Reservation.
    Section 9(c) provides that nothing in this section 
establishes or affects the precise location of the boundary 
between the Spokane Indian Reservation and the Colville 
Reservation along the Columbia River and Lake Roosevelt or the 
agreements and rights established and provided for in the Act 
of June 29, 1940 (16 U.S.C. Sec. 835d).
    Section 9(d)(1) provides that the United States reserves a 
perpetual right, power, privilege, and easement over the land 
transferred under this section to carry out the Columbia Basin 
Project under the Columbia Basin Project Act (16 U.S.C. 
Sec. Sec. 835 et seq.). Section 9(d)(2) provides further that 
the rights reserved under paragraph (1) further include the 
right to operate, maintain, repair, and replace boat ramps, 
docks, and other recreational facilities owned or permitted by 
the United States and existing on the date of enactment of this 
Act. Section 9(d)(3) provides that land transferred under this 
section that, before the date of enactment of this Act, was 
included in the Lake Roosevelt National Recreation Area shall 
remain part of the Recreation Area, and further provides that 
nothing in this section shall affect the authority or 
responsibility of the National Park Service to administer the 
Lake Roosevelt National Recreation Area under the Act of August 
25, 1916 (39 Stat. 535, chapter 408; 16 U.S.C. Sec. Sec. 1 et 
seq.). Section 9(d)(4) provides that the cognizant agencies of 
the Department of the Interior shall enter into a memorandum of 
understanding with the Tribe to provide for coordination in 
applying this subsection.

Section 10. Satisfaction of claims

    Section 10 provides that payment by the Secretary under 
section 5 and by the Administrator under section 6 and 
restoration of ownership of land in trust under section 9 
constitute full satisfaction of the claim of the Tribe to a 
fair share of the annual hydropower revenues generated by the 
Grand Coulee Dam project for the past and continued use of land 
of the Tribe for the production of hydropower at the Dam.

Section 11. Authorization of appropriations

    Section 11 authorizes the appropriation of such sums as are 
necessary to carry out this Act.

Section 12. Precedent

    Section 12 provides that nothing in this Act establishes 
any precedent or is binding on the Southwestern Power 
Administration, Western Area Power Administration, or 
Southeastern Power Administration.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

    On September 10, 2009, the Committee on Indian Affairs 
convened a business meeting to consider S. 1388 and other 
measures. By voice vote, the Committee voted to have the bill 
favorably reported without amendment.

                   COST AND BUDGETARY CONSIDERATIONS

    The cost estimate for S. 1388, as calculated by the 
Congressional Budget Office, is set forth below:

S. 1388--Spokane Tribe of Indians of the Spokane Reservation Grand 
        Coulee Dam Equitable Compensation Settlement Act

    Summary: S. 1388 would provide compensation to the Spokane 
Tribe of Indians for the use of tribal lands to generate 
hydroelectric power by the Grand Coulee Dam. The bill would 
require the Bonneville Power Administration (BPA) to make 
annual payments to the tribe from receipts generated from the 
sale of electricity. CBO estimates that those payments would 
increase direct spending by $8 million over the 2010-2019 
period.
    The bill also would create the Spokane Tribe of Indians 
Settlement Fund as compensation for land taken to build the 
Grand Coulee Dam. CBO estimates that implementing this 
provision would cost $100 million over the 2010-2014 period, 
assuming appropriation of the authorized amounts.
    Finally, beginning in 2020, the bill would reduce BPA's 
interest payments to the Treasury by $1.3 million annually for 
as long as BPA makes payments to the tribe. Such reductions 
would increase direct spending by $1.3 million a year starting 
in 2020.
    S. 1388 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1388 is shown in the following table. 
The costs of this legislation fall within budget functions 450 
(community and regional development) and 270 (energy).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2010    2011    2012    2013    2014    2015    2016    2017    2018    2019   2010-2014  2010-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority........................       6       6      -4       0       0       0       0       0       0       0         8          8
Estimated Outlays.................................       6       6      -4       0       0       0       0       0       0       0         8          8

                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level...............................      24      19      19      19      19       0       0       0       0       0       100        100
Estimated Outlays.................................      24      19      19      19      19       0       0       0       0       0       100        100
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted near the start of fiscal year 2010 and 
that the authorized amounts will be appropriated each year.

Direct spending

    S. 1388 would require BPA to make annual payments to the 
Spokane Tribe. Under the bill, such payments would equal 29 
percent of the annual payment BPA currently makes to the 
Colville Tribes. Those payments would continue so long as 
electricity continues to be generated at the Grand Coulee Dam. 
CBO estimates that payments to the Spokane Tribe would begin in 
2010 and would average about $6 million per year. Because BPA's 
operating costs are driven by market and environmental 
conditions that are difficult to control, CBO expects that the 
agency would not be able to offset the cost of this bill by 
reducing operating expenses as directed by the bill. Instead, 
we anticipate that BPA would increase the rates it charges for 
electricity to cover those costs.
    Because BPA has already set the rates it will charge 
customers for electricity in 2010 and 2011, CBO expects that 
the agency would use reserve funds to make payments to the 
tribe in those years. Information from BPA indicates that the 
agency has already collected roughly $8 million to cover a 
portion of payments the agency anticipated it might be 
obligated to make to the tribe if legislation similar to S. 
1388 were enacted. CBO expects that, under the bill, BPA would 
spend $12 million of reserves for payments to the tribe in 2010 
and 2011 and that the agency would raise its rates in 2012 to 
replenish the portion of reserves paid to the tribe that was 
not specifically collected for that purpose (about $4 million). 
CBO expects that, under current law, BPA would not spend 
reserve funds currently designated for making payments to the 
tribe because the agency has no authority or requirement to do 
so.
    Beginning in 2012, CBO expects that the $6 million annual 
payment to the Spokane tribe would become part of BPA's cost 
structure and would be fully offset by an increase in the rates 
it charges for electricity.

Spending subject to appropriation

    S. 1388 would create the Spokane Tribe of Indians 
Settlement Fund as compensation for land taken to build the 
Grand Coulee Dam. The bill would authorize the appropriation of 
$100 million over the 2010-2014 period to that fund. Assuming 
appropriation of the authorized amounts, CBO estimates that 
implementing S. 1388 would cost $100 million over the 2010-2014 
period.
    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 to the fund in any year would be recorded as budget 
authority and outlays in that year. The Secretary of the 
Interior would be required to invest the appropriated funds in 
government securities until those funds are expended by the 
tribe. Subsequently, the trust fund would be nonbudgetary, and 
any use of such funds and interest payments to the tribes would 
have no effect on the federal budget.
    Intergovernmental and private-sector impact: S. 1388 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. The payments authorized by this bill would 
benefit the Spokane Tribe.
    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.

                        EXECUTIVE COMMUNICATION

    The Committee has not received an executive communication 
from the Administration on the provisions of S. 1388.

               REGULATORY AND PAPERWORK IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill evaluate 
the regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee has concluded that the 
regulatory and paperwork impacts of S. 1388 should be de 
minimis.

                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
enactment of S. 1388 makes no changes to existing law.

                  ADDITIONAL VIEWS OF SENATOR CANTWELL

    The following sets forth Senator Cantwell's views 
concerning the effect of section 9 on the boundary between the 
reservations of the Spokane and Colville tribes:
    Section 9 also provides that nothing in this section 
establishes or affects the precise location of the actual 
boundary between the Spokane Indian Reservation and the 
Colville Reservation along the Columbia River, the respective 
use rights of each Tribe in Lake Roosevelt as reserved by the 
1940 Act, or the common boundary of the Indian zones 
established pursuant to the 1940 Act in a Joint Resolution 
adopted by the two Tribes on September 17, 1973.
    That agreement provides:
    1. That the common boundary of the enlarged Indian zones 
between the Spokane and Colville Reservations follow the center 
line of Roosevelt Lake without reference to the course of the 
submerged Columbia River so that the Spokane Indian zone will 
be to the east of said center line and the Colville Indian zone 
to the west.
    2. That the Tribes establish a policy of reciprocity within 
both Indian zones where they are adjacent to each other with 
the cross deputization of game wardens, patrols, and other 
officers and uniformity in the administration of tribal rights 
and jurisdiction in that area.
    3. That there be reserved for later negotiations and accord 
the question of where the actual common boundary between the 
two reservations exists on the bottom of the Roosevelt Lake, 
that is, whether it is at the center line or the west bank of 
the submerged Columbia River.
    Nothing in this section affects these rights and agreement 
inter se. It is recognized that the actual boundary between the 
two Reservations on the Columbia River and Lake Roosevelt is a 
matter to be resolved by further negotiation and accord between 
the Spokane and Colville Tribes. Accordingly, it is recommended 
that any unresolved issues regarding the common Reservation 
boundary should be a matter to be resolved through further 
negotiations between the two Tribes and are not affected in any 
way by the proposed legislation.
                                                    Maria Cantwell.

                                  
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