[Senate Report 117-287]
[From the U.S. Government Publishing Office]


117th Congress      }                           {         Report
                                SENATE
 2d Session         }                           {         117-287

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



 
           HUALAPAI TRIBE WATER RIGHTS SETTLEMENT ACT OF 2022

                                _______
                                

               December 22, 2022.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 4104]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 4104) to approve the settlement of water rights claims 
of the Hualapai Tribe and certain allottees in the State of 
Arizona, to authorize construction of a water project relating 
to those water rights claims, and for other purposes, having 
considered the same, reports favorably thereon with amendments 
and recommends that the bill (as amended) do pass.

                                PURPOSE

    S. 4104 authorizes and ratifies the water rights settlement 
agreement between the Hualapai Tribe, certain allottees, and 
the state of Arizona. S. 4104 also funds water-related projects 
and allows the Tribe to access water from the Colorado River, 
the Bill Williams River, and the Verde River. The bill also 
transfers certain lands into trust for the Hualapai Tribe.\1\
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    \1\In the future, land located outside the reservation may only be 
taken into trust through an act of Congress.
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                               BACKGROUND

    The Hualapai reservation was established in two locations 
by a series of Executive Orders.\2\ The primary reservation is 
comprised of approximately 1 million acres along the Grand 
Canyon in northwest Arizona. The secondary reservation is 
comprised of approximately 60 acres located 40 miles south of 
the primary reservation. Although the Hualapai Reservation is 
bordered in part by a 108-mile stretch of the Colorado River, 
the Tribe relies on unpredictable groundwater supplies as its 
primary source of water because it has not yet settled its 
water rights to the river.\3\
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    \2\Exec. Order of January 4, 1883; Exec. Order of December 22, 
1898; Exec. Order of May 14, 1900; Exec. Order of June 2, 1911.
    \3\Hybrid Legislative Hearing on H.R. 263, H.R. 3081, H.R. 5880, 
H.R. 6238, H.R. 6369, H.R. 7612, H.R. 7632, and H.R., 7633 Before the 
Subcomm. On Water, Oceans, and Wildlife of the H. Comm. on Nat. Res., 
117th Cong. (2022) (statement for the rec. of U.S. Dep't of Interior 
Off. of Cong. and Legis. Affs.); Hybrid Legislative Hearing on H.R. 
263, H.R. 3081, H.R. 5880, H.R. 6238, H.R. 6369, H.R. 7612, H.R. 7632, 
and H.R, 7633 Before the Subcomm. On Water, Oceans, and Wildlife of the 
H. Comm. on Nat. Res., 117th Cong. (2022) (testimony of Dr. Damon 
Clarke, Chairman, Hualapai Tribe).
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                          NEED FOR LEGISLATION

    Water use on the primary reservation occurs in two 
locations--Peach Springs and Grand Canyon West--but neither of 
these locations have adequate infrastructure to support 
sustained future use.\4\ Infrastructure problems have not only 
caused general water insecurity, they have also hindered the 
reservation economy by forcing the Tribe to limit its Grand 
Canyon-based tourism activities in Grand Canyon West, the main 
economic driver for the reservation.
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    \4\Peach Springs is supplied by three wells that have old, failing 
infrastructure and issues with E-coli and coliform contamination; the 
well supplying Grand Canyon West ran dry in 2019, forcing the Tribe to 
haul water from 30 miles away.
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    In an effort to address water insecurity and related 
economic development challenges, the Tribe has been negotiating 
its water rights claims since 2011. The first phase of 
negotiations settled the Tribe's water rights to off-
reservation tracts in the Bill Williams River Basin,\5\ and the 
second phase--which includes S. 4104--will settle the remaining 
water rights in the Bill Williams River Basin and the Colorado 
and Verde River Basins. As such, enactment of S. 4104 will 
resolve, fully and finally, all of the Tribe's claims to water 
rights in the State of Arizona.
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    \5\Bill Williams River Water Rights Settlement Act of 2014, Pub. L. 
No. 113-223, 128 Stat. 2096 (2014).
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                          SUMMARY OF THE BILL

    S. 4104 authorizes, ratifies, and confirms the Hualapai 
Water Rights Settlement Agreement; establishes limitations on 
the storage, transfer, lease, and transport of water from the 
Hualapai Central Arizona Project; establishes the Hualapai 
Water Trust Fund Account and the Hualapai Water Settlement 
Implementation Fund Account; adds certain lands to the Hualapai 
Reservation and places additional lands into trust for the 
benefit of the Hualapai Tribe; provides for reallocation of 
approximately 4,000 acre-feet per year of CAP water to the 
Tribe and firms certain specified quantities of that water; and 
places certain requirements on the Secretary of the Interior.

                          LEGISLATIVE HISTORY

    On April 28, 2022, Senator Sinema (D-AZ) and Senator Kelly 
(D-AZ) introduced S. 4104, the Hualapai Tribe Water Rights 
Settlement Act of 2022. On the same day, the Senate referred 
the bill to the Committee on Indian Affairs. On July 20, 2022, 
the Committee held a legislative hearing. On November 16, 2022, 
the Committee held a mark-up and ordered the bill to be 
reported favorably with an amendment in the nature of a 
substitute.
    On April 28, 2022, Representative O'Halleran (D-AZ) 
introduced H.R. 7633, an identical companion bill. On the same 
day, the House of Representatives referred the bill to the 
Committee on Natural Resources. On April 29, 2022, H.R. 7633 
was further referred to the Committee on Natural Resources, 
Subcommittee on Water, Oceans, and Wildlife. On May 12, 2022, 
the Subcommittee held a hearing and Representatives Stanton (D-
AZ), Gosar (R-AZ), and Gallego (D-AZ) joined as co-sponsors. 
Representative Kirkpatrick (D-AZ) joined as a co-sponsor on May 
18, 2022. To date, the House has taken no further action on 
H.R. 7633.
    Representative Neguse (D-CO) introduced H.R. 5118, the 
Continental Divide Trial Completion Act, along with 
Representatives Leger Fernandez (D-NM), Stansbury (D-NM), and 
Beyer (D-VA) on August 27, 2022. Title V of Division B of H.R. 
5118, is substantially similar to S. 4104. On the day it was 
introduced, H.R. 5118 was referred to the Committee on Natural 
Resources. On September 8, 2021, the bill was further referred 
to the Committee on Natural Resources, Subcommittee on National 
Parks, Forest, and Public Lands. On November 9, 2021, the 
Subcommittee held a hearing. The subcommittee discharged the 
bill on January 19, 2022, and on the same day, the Committee on 
Natural Resources marked up the bill. Representative Neguse 
offered an amendment in the nature of a substitute which was 
agreed to by voice vote. The bill was reported and placed on 
the Union Calendar, as amended, on July 18, 2022. The bill 
passed the House by a vote of 218 to 199 on July 29, 2022. H.R. 
5188 was received in the Senate on August 2, 2022.
    116th Congress. On May 1, 2019, Senators McSally (R-AZ) and 
Sinema (D-AZ) introduced S. 1277, the Hualapai Tribe Water 
Rights Settlement of Act of 2019. On the same day, the Senate 
referred the bill to the Committee on Indian Affairs. The 
Senate took no further action on S. 1277 in the 116th Congress.
    On May 1, 2019, Representatives O'Halleran (D-AZ), Stanton 
(D-AZ), Kirkpatrick (D-AZ), Gallego (R-AZ), Gosar (R-AZ), 
Schweikert (R-AZ), and Lesko (R-AZ) introduced H.R. 2459, an 
identical companion bill. On the same day, the bill was 
referred to the Committee on Natural Resources. On May 8, 2019, 
H.R. 2459 was further referred to the Natural Resources 
Committee, Subcommittee on Water, Oceans, and Wildlife. On June 
6, 2019, the Subcommittee held a hearing. The House took no 
further action on H.R. 2459 in the 116th Congress.
    Prior to the 116th Congress, the Senate Committee on Indian 
Affairs considered various versions of the Hualapai Tribe Water 
Rights Settlement Act.\6\ The House Committee on Natural 
Resources considered the Hualapai Tribe Water Rights Settlement 
Act in the 115th Congress, but no further action was taken.\7\
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    \6\Hualapai Tribe Water Rights Settlement Act of 2017, S. 1770, 
115th Cong. (2017); Hualapai Tribe Water Rights Settlement Act of 2016, 
S. 3300, 114th Cong. (2016).
    \7\Hualapai Tribe Water Rights Settlement Act of 2017, H.R. 4723, 
115th Cong. (2017).
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                          COMMITTEE AMENDMENT

    During its consideration of S. 4104, the Committee adopted 
an amendment in the nature of a substitute. The amendment 
increases the authorization of appropriations to $312,000,000; 
corrects the coordinate reference to the Valentine Cemetery 
parcel; prevents the Tribe's leasing and exchanging activities 
from extending to Navajo, Apache, or Cochise Counties; and 
separate the Secretary's environmental review process from the 
process to determine the enforceability date of the settlement 
agreement.

       SECTION-BY-SECTION ANALYSIS OF S. 4104 AS ORDERED REPORTED

Section 1--Short title

    This section sets forth the short title as the ``Hualapai 
Tribe Water Rights Settlement Act of 2022.''

Section 2--Purposes

    This section clarifies that the purpose of the Act is to 
fully and finally resolve the water rights claims of the 
Hualapai Tribe and the United States to water in the state of 
Arizona, including the Verde River, Bill Williams River, and 
the Colorado River; to authorize, ratify, and confirm the 
Hualapai Tribe water rights settlement agreement; to authorize 
and direct the Secretary to execute their duties and 
obligations under the Hualapai Tribe water rights agreement and 
the Act; and to authorize appropriations necessary to carry out 
the Hualapai Tribe water rights settlement agreement.

Section 3--Definitions

    This section clarifies applicable definitions.

Section 4--Ratification and Execution of Hualapai Tribe Water Rights 
        Settlement Agreement

    Section 4(a) authorizes, ratifies, and confirms the 
Hualapai water rights settlement agreement and amendments 
thereto that make the settlement consistent with the Act.
    Section 4(b) directs the Secretary to execute the Hualapai 
water rights settlement agreement; and permits the Secretary to 
approve modifications to appendices and exhibits, provided that 
such modifications are consistent with the Act and do not 
require congressional approval.
    Section 4(c) directs the Secretary to comply with the 
Endangered Species Act, the National Environmental Policy Act 
(NEPA), and other applicable federal laws when implementing the 
settlement agreement, and to prepare any necessary 
environmental documents consistent with applicable provisions 
of such laws. This section also clarifies that execution of the 
settlement agreement by the Secretary shall not constitute a 
major federal action under NEPA.

Section 5--Water Rights

    Section 5(a) directs that the United States will hold, in 
trust, certain water rights for the benefit of the Hualapai 
Tribe and certain allottees.
    Section 5(b) clarifies that certain water rights will not 
be subject to loss through non-use, forfeiture, abandonment, or 
other operation of law.
    Section 5(c) prohibits permanent alienation by the Tribe of 
any water entitlement purchased with amounts in the Economic 
Development Fund described in the settlement agreement.
    Section 5(d) clarifies that the Hualapai Tribe has the 
right to divert, use, and store Hualapai Tribe Central Arizona 
Project (CAP) water in accordance with Section 13.
    Section 5(e) affirms the rights of the Hualapai Tribe to 
use, store, assign, transfer, lease, and transport water from 
the Colorado River and establishes the conditions under which 
such rights may be exercised.
    Section 5(f) prevents the off-reservation sale, lease, 
transfer, or use of groundwater or surface water from the 
Tribe's reservation or trust land, other than under exchange.
    Section 5(g) clarifies that groundwater may be transported 
in accordance with state law: (1) away from Hualapai fee land 
and land the Tribe acquires in fee after the enforceability 
date; and (2) away from land added to the Hualapai Reservation 
by Sections 11 and 12 to other land within the Hualapai 
Reservation.

Section 6--Hualapai Water Trust Fund Account; Construction of Hualapai 
        Water Project; Funding

    Section 6(a)(1)-(2) establishes the Hualapai Water Trust 
Fund Account and directs the Secretary to deposit appropriated 
amounts into the account.
    Section 6(a)(3)-(4) requires the Secretary to manage the 
account in accordance with the American Indian Trust Fund 
Management Reform Act of 1994 and other federal laws governing 
the deposit and investment of Tribal funds; to invest the trust 
funds with earnings accruing to the Tribe; and to make the 
trust funds generally available to the Tribe on the 
enforceability date, with funds for environmental compliance 
activities made available immediately upon deposit.
    Section 6(a)(5)-(6) permits the Tribe to withdraw from the 
account pursuant to a Tribal management or expenditure plan 
approved by the Secretary, authorizes the Secretary to approve 
and enforce such management and expenditure plans, states that 
the Secretary's approval decisions generally shall not be 
subject to judicial review except under the Administrative 
Procedure Act.
    Section 6(a)(7) limits use of the trust funds to: (1) 
planning, design, and construction of projects to divert, 
treat, and convey up to 3,414 acre feet per year of water from 
the Colorado River in the lower basin; (2) operation, 
maintenance, and replacement (OM&R) activities on the Hualapai 
Water Project Account; (3) construction of facilities to 
transport electrical power to pump water for the Hualapai Water 
Project; (4) construction, repair, and replacement of 
infrastructure necessary for groundwater wells; (5) acquisition 
of land, interests in land, and water rights off-reservation in 
the Truxton Basin; (6) reimbursement for planning, design and 
engineering costs incurred between the Act's enactment date and 
enforceability date, and construction costs incurred between 
the date the Secretary issues a record of decision and the 
enforceability date; and (7) making contributions to the 
Economic Development Fund described in the settlement agreement 
to purchase additional Colorado River water entitlements and 
appurtenant land.
    Section 6(a)(8)-(12) limits federal liability for 
expenditures and investments made by the Tribe after 
withdrawal; confirms the Tribe will retain title to, control 
over, and operation of any project constructed with trust 
funds; makes the Tribe responsible for the OM&R costs of such 
projects; prohibits per capita distribution of any portion of 
the trust funds; and requires annual reporting regarding 
withdrawals.
    Section 6(b) establishes the Hualapai Water Settlement 
Implementation Fund Account, directs the Secretary to deposit 
appropriated amounts into the account, and requires the 
Secretary to use the account funds to develop basin groundwater 
withdrawal estimates and groundwater monitoring.

Section 7--Authorization of Appropriations

    Section 7 authorizes appropriations of $312,000,000 into 
the Hualapai Water Trust Fund Account and $5,000,000 into the 
Hualapai Water Settlement Implementation Fund Account, and 
provides for indexing and construction cost adjustments to 
account for market volatility.

Section 8--Environmental Compliance

    Section 8 permits the Tribe to begin necessary 
environmental, cultural, and historical compliance activities 
upon the deposit of funds into the Hualapai Water Trust Fund 
Account; reaffirms that nothing in the Act affects or directs 
the outcome of any analysis under NEPA or other applicable 
federal environmental or historical and cultural protection 
law; clarifies that costs associated with such compliance shall 
be paid from the Hualapai Water Trust Fund Account, except that 
the Secretary shall remain responsible for the activities of 
the federal government; permits construction of the Hualapai 
Water Project to begin when the Secretary issues a record of 
decision after completion of an environmental impact statement; 
and permits the Tribe to receive reimbursement from the 
Hualapai Water Trust Fund Account for construction costs 
incurred by the Tribe between the issuance of the Secretary's 
record of decision and the enforceability date.

Section 9--Waivers, Releases, and Retention of Claims

    Section 9(a) authorizes the Tribe, and the United States as 
trustee for the Tribe, to execute a waiver and release of past, 
present, and future claims against Arizona, the United States, 
and other parties for certain water rights and injury to water 
rights, as well as claims regarding negotiation, execution, or 
adoption of the settlement agreement, related judgements or 
decrees, or the Act. This section also provides for the 
retention of certain claims by the Tribe and establishes that 
the waivers and releases shall become effective on the 
enforceability date.
    Section 9(b) authorizes the United States, as trustee for 
allottees of the Tribe, to execute a waiver and release of 
past, present, and future claims against Arizona and other 
parties for certain water rights and injury to water rights, as 
well as claims regarding negotiation, execution, or adoption of 
the settlement agreement, related judgements or decrees, or the 
Act. This section also provides for the retention of certain 
claims by the allottees and establishes that the waivers and 
releases shall become effective on the enforceability date.
    Section 9(c) authorizes the United States, acting in all 
capacities except as trustee for other Indian Tribes, to 
execute a waiver and release of past, present, and future 
claims against the Hualapai Tribe, its members, and any agency, 
official, or employee of the Tribe for certain water rights and 
injury to water rights, as well as claims regarding 
negotiation, execution, or adoption of the settlement 
agreement, related judgements or decrees, or the Act. This 
section also provides for the retention of certain claims by 
the United States and establishes that the waivers and releases 
shall become effective on the enforceability date.
    Section 9(d) authorizes the United States, acting solely on 
behalf of the Department of the Interior, to execute a waiver 
and release of claims against Freeport for injury to water 
rights in connection with the Bill Williams River phase 2 water 
rights settlement agreement, as well as claims regarding 
negotiation or execution of that settlement agreement, the 
Hualapai Tribe water rights settlement agreement, or the Act. 
This section also provides for the retention of certain claims 
by the United States, establishes that the waivers and releases 
shall become effective on the enforceability date, and provides 
that the Bill Williams River phase 2 water rights settlement 
agreement shall have no precedential effect or establish any 
standard or methodology for quantification of water rights 
claims in other proceedings.

Section 10--Satisfaction of Water Rights and Other Benefits

    Section 10(a) affirms that benefits realized under this 
Act, the Bill Williams agreements, and the Bill Williams Act by 
the Tribe, its members (except in their capacity as allottees), 
and the United States as trustee shall be in full satisfaction 
of such beneficiaries' claims for water rights and injury to 
water rights, and that any entitlement to water of such 
beneficiaries for Hualapai land shall be satisfied out of the 
water resources provided for in such acts and agreements.
    Section 10(b) affirms that benefits realized under this 
Act, the Bill Williams agreements, and the Bill Williams Act by 
allottees of the Tribe shall replace, substitute for, and fully 
satisfy all claims for water rights and injury to water rights 
regarding the allotments of the allottees and the United States 
as trustee, and that any entitlement to water of such 
beneficiaries for allotments shall be satisfied out of the 
water resources provided for in such acts and agreements. This 
section further provides that nothing in this Act or the 
Hualapai Tribe water rights settlement agreement recognizes or 
establishes any allottee or Tribal member rights to water on 
Hualapai land, or prohibits the Tribe or an allottee from 
acquiring additional water rights.

Section 11--Land Added to Hualapai Reservation

    This Section adds certain specified lands to the Hualapai 
Reservation.

Section 12--Trust Land

    Section 12(a) takes certain specified lands into trust for 
the benefit of the Hualapai Tribe.
    Section 12(b) adds the lands taken into trust under Section 
12(a) to the Hualapai Reservation and provides for the 
administration of such lands in accordance with the laws and 
regulations generally applicable to Tribal trust lands.
    Section 12(c) clarifies that lands taken into trust under 
Section 12(a) remain subject to valid existing rights, 
easements, rights-of-way, contracts, and management agreements.
    Section 12(d) clarifies that this section does not affect 
existing water or land rights of the Tribe in existence prior 
to enactment of this Act.
    Section 12(e) requires an act of Congress to take future 
lands taken into trust for the Tribe and clarifies that such 
lands will have water rights under state law only, with no 
federally reserved water rights.

Section 13--Reallocating of CAP NIA Priority Water; Firming; Water 
        Delivery Contract; Colorado River Accounting

    Section 13(a) directs the Secretary to reallocate the 
Hualapai Tribe CAP water to the Tribe on the enforceability 
date.
    Section 13(b) provides for firming of the Tribe's CAP 
water.
    Section 13(c) directs the Secretary to enter into a water 
delivery contract with the Tribe for permanent service for an 
unlimited term, and outlines the contract requirements for 
delivery area, method of delivery, distribution of CAP non-
Indian agricultural delivery priority water, leases and 
exchanges and their terms (including barring the Hualapai tribe 
from leasing CAP water within Navajo, Apache, and Cochise 
counties), entitlements to lease and exchange funds, conditions 
for water use and storage, prohibition on use of water outside 
the lower basin of the state, CAP fixed OM&R charges, CAP 
pumping energy charges, waiving property tax equivalency 
payments, lessee responsibility for charges, advance payments, 
calculation of delivery charges, and CAP repayment.
    Section 13(d) provides that Hualapai Tribe CAP water 
diverted directly from the Colorado River shall be accounted 
for as deliveries of CAP water within the State.

Section 14--Enforceability Date

    Section 14(a) clarifies the enforceability date is the date 
on which the Secretary publishes in the Federal Register a 
statement of findings that: (1) conflicts between this Act and 
the Hualapai Tribe water settlement agreement have been 
resolved; (2) required waivers and releases have been executed; 
(3) abstracts have been completed; (4) the appropriated amounts 
have been deposited into the Hualapai Water Trust Fund Account; 
(5) the Gila River adjudication decree has been approved; and 
(6) the Secretary has executed the required water delivery 
contract. (These report requirements do not include issuance of 
a record of decision pursuant to section 8(d).)
    Section 14(b) requires the Secretary to publish a statement 
of findings by April 15, 2029--or a later date mutually agreed 
to by the Tribe, the United States, and the State--and provides 
for the repeal of this Act, the return of appropriated amounts, 
and the voiding of contracts, agreements, secretarial actions 
pursuant to the Act if the Secretary fails to meet the 
enforceability date. This section further provides that 
Sections 11 and 12 regarding trust lands shall remain in 
effect, notwithstanding any failure by the Secretary to meet 
the enforceability date.
    Section 14(c) provides that, if the Secretary fails to meet 
the enforceability date, the United States may offset trust 
funds used or authorized under this Act against claims by the 
Tribe described in Section 9(a)(2)(A).
    Section 14(d) clarifies the conditions under which the Bill 
Williams River phase 2 water settlement agreement will take 
effect and become enforceable.

Section 15--Administration

    Section 15(a) provides for a limited waiver of the 
sovereign immunity of the Tribe and the United States.
    Section 15(b) clarifies that nothing in this Section alters 
the law regarding pre-enforcement review of Federal 
environmental or safety-related enforcement actions.
    Section 15(c) directs the Secretary, acting through the 
U.S. Geological Survey Water Use Program, to estimate 
groundwater withdrawals for the Truxton Basin outside the 
boundaries of the Hualapai Reservation, to provide annual 
estimates of such withdrawals, and to notify the state if 
groundwater withdrawals exceed estimates.
    Section 15(d) states that the United States is not liable 
for any failure to carry out any obligation or activity 
authorized by this Act if adequate appropriations are not 
provided or there are not enough monies available to carry out 
the Act.
    Section 15(e) clarifies that the Reclamation Reform Act of 
1982 shall not apply to any person, entity, or tract of land 
solely on the basis of receipt of a benefit under this Act, 
execution or performance of this Act, or the use, storage, 
delivery, lease, or exchange of CAP water.
    Section 15(f) clarifies that this Act does not modify 
certain other federal laws, water compacts, or treaties.

                   COST AND BUDGETARY CONSIDERATIONS

    The Congressional Budget Office estimate of the costs of S. 
4104, as ordered reported, has been requested but was not 
received at the time the report was filed. When the 
Congressional Budget Office completes its cost estimate, it 
will be posted on the Internet at www.cbo.gov.

               REGULATORY AND PAPERWORK IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee believes that S. 4104 will 
have minimal impact on regulatory or paperwork requirements.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding S. 4104.

                        CHANGES IN EXISTING LAW

    On February 11, 2021 the Committee unanimously approved a 
motion to waive subsection 12 of rule XXVI of the Standing 
Rules of the Senate. In the opinion of the Committee, it is 
necessary to dispense with subsection 12 of rule XXVI of the 
Standing Rules of the Senate to expedite the business of the 
Senate.

                                  [all]