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                                                       Calendar No. 245
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-174
_______________________________________________________________________


 
THE SADDLEBACK MOUNTAIN-ARIZONA SETTLEMENT ACT OF 1995, TO PROVIDE FOR 
 THE TRANSFER OF CERTAIN LANDS TO THE SALT RIVER PIMA-MARICOPA INDIAN 
 COMMUNITY, AND THE CITY OF SCOTTSDALE, ARIZONA, AND FOR OTHER PURPOSES

                                _______


   November 17 (legislative day, November 16), 1995.--Ordered to be 
                                printed

_______________________________________________________________________


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

                              R E P O R T

                         [To accompany S. 1341]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 1341) to provide for the transfer of certain lands to 
the Salt River Pima-Maricopa Indian Community and the City of 
Scottsdale, Arizona; having considered the same, reports 
favorably thereon with amendments and recommends that the bill 
as amended do pass.

                                purpose

    The purpose of S. 1341 is to approve an agreement to settle 
a dispute between the Salt River Pima-Maricopa Indian Community 
(hereinafter the ``Community''), and the City of Scottsdale, 
Arizona, over 701 acres of land known as the Saddleback 
property. The property is currently held by the Resolution 
Trust Corporation.

                               background

    The Saddleback property is located in the eastern-most part 
of Scottsdale, abuts 1.7 miles of the northern boundary of the 
Salt River Indian Reservation, and is undeveloped. Its most 
distinctive feature is Saddleback Mountain, a striking natural 
landmark that rises abruptly from the desert floor to a height 
of 900 feet. Due to its location, high conservation value and 
other special features, the property's use and disposition are 
of major importance both to the Community and the City.
    A dispute arose after the Resolution Trust Corporation, in 
its capacity as the receiver for the Sun State Savings & Loan 
Association, acquired the Saddleback property in 1989 and 
subsequently noticed it for sale. The Community submitted the 
highest cash bid for the property, $6,500,000, conditioned upon 
being able to develop the flat portion of the property. The 
City, concerned about the direction that development of the 
property by the Community might follow, sued the Resolution 
Trust Corporation to acquire the property by eminent domain. 
The Resolution Trust Corporation then rejected all auction sale 
bids and determined to transfer the property to Scottsdale 
through the eminent domain litigation. The Community thereupon 
filed civil rights actions against the City and the Resolution 
Trust Corporation, seeking damages.
    Rather than pursue the litigation, the City, the Community 
and the Resolution Trust Corporation sought to resolve their 
dispute through negotiation. The result of their efforts is a 
settlement agreement under which the Resolution Trust 
Corporation will sell the property to Scottsdale and the 
Community for a total of $6,500,000. The City will pay $636,000 
to acquire approximately 98 acres for preservation and 27 acres 
for future expansion of an important traffic artery, Shea 
Boulevard. The Community will pay $5,864,000 to acquire 576 
acres adjoining its reservation. The two lawsuits (NO. CIV 93-
2266-PHX-RCB and NO. CIV 93-2173-PHX-PGR), which are pending in 
the United States District Court for the District of Arizona, 
will be dismissed.
    The settlement agreement provides that 365 acres of the 
property to be acquired by the Community, including Saddleback 
Mountain, will be forever preserved in its natural state for 
use only as a public park and recreation area. Except for a 
limited number of sites that are of particular historical and 
cultural significance to the Community, the public will have 
free access to this area. Together with the preservation 
property to be acquired by the City, it will be jointly managed 
by the City and the Community. The remaining 211 acres to be 
acquired by the Community will be subject to a detailed 
development agreement with the City, as well as the limitations 
and restrictions of current Community zoning laws.
    A continuing disagreement in the settlement negotiations 
concerned the City's ability to enforce the Community's 
commitments regarding the use and development of the lands to 
be added to the Tribe's reservation. Given that the Saddleback 
property is located entirely within Scottsdale's city limits, 
and that there is a high level of local interest and concern 
regarding the future use of the property, the parties agreed to 
seek Federal legislation to eliminate any legal ambiguity as to 
the enforceability of the settlement agreement.

                          LEGISLATIVE HISTORY

    S. 1341 was introduced on October 19, 1995, by Senators 
McCain and Kyl, and was referred to the Committee on Indian 
Affairs. In the House, Representative J.D. Hayworth (R-AZ) 
introduced a companion bill, H.R. 2490, which was referred to 
the Committee on Resources. On October 26, 1995, the Committee 
on Indian Affairs held a hearing on S. 1341, and received 
testimony from witnesses representing the Salt River Pima-
Maricopa Indian Community, the City of Scottsdale, and the 
Administration. All witnesses expressed support for the 
enactment of S. 1341.

            committee recommendation and tabulation of vote

    In an open business session on November 7th, 1995, the 
Committee on Indian Affairs, by voice vote, ordered S. 1341 
reported with an amendment offered by Senator McCain, with the 
recommendation that the Senate do pass the bill as reported.

                 section-by-section analysis of S. 1341

Short title

    Section 1 cites the Short Title as the ``Saddleback 
Mountain-Arizona Settlement Act of 1995''.

Congressional findings

    Section 2(a) enumerates Congressional Findings that:
          (1) the Salt River Prima-Maricopa Indian Community 
        and the City of Scottsdale, Arizona, have a 
        longstanding interest in a 701-acre tract of land 
        within the City of Scottsdale, known as the Saddleback 
        Property, that lies within the boundaries of the City 
        and abuts the north boundary of the Salt River 
        Reservation;
          (2) the Saddleback Property includes Saddleback 
        Mountain and scenic hilly terrain along the Shea 
        Boulevard corridor in Scottsdale that has significant 
        conservation value and is of historic and cultural 
        significance to the Community;
          (3) in 1989, the Resolution Trust Corporation 
        acquired the Saddleback Property in its capacity as 
        receiver for the Sun City Savings and Loan Association;
          (4) after the Saddleback Property was noticed for 
        sale by the Resolution Trust Corporation, a dispute 
        between the Salt River Community and Scottsdale arose 
        concerning the future ownership, use, and development 
        of the Saddleback Property;
          (5) the Community and the City each filed litigation 
        with respect to that dispute, but in lieu of pursuing 
        litigation, the Community and the City negotiated a 
        Settlement Agreement that addresses their respective 
        concerns regarding the Saddleback Property and provides 
        for dismissal of the litigation;
          (6) under the Settlement Agreement, subject to 
        detailed use and development agreements, the Community 
        will purchase a portion of the Saddleback Property and 
        the City will purchase the remaining portion of that 
        property; and
          (7) the Community and the City agree that the 
        enactment of legislation by Congress to ratify the 
        Settlement Agreement is necessary for the Settlement 
        Agreement to become effective, and for the United 
        States to take into trust the property to be purchased 
        by the Community and make it part of the Reservation.
    (b) sets forth the purposes of this Act to be:
          (1) to approve and confirm the Settlement, Release, 
        and Property Conveyance Agreement executed by the City, 
        the Community, and the Resolution Trust Corporation;
          (2) to ensure that the Settlement Agreement 
        (including the Development Agreement, the Use 
        Agreement, and all other associated ancillary 
        agreements and exhibits) is carried out and is fully 
        enforceable in accordance with its terms, including 
        judicial remedies and binding arbitration provisions;
          (3) to provide for the taking into trust by the 
        United States of the portion of the Saddleback Property 
        purchased by the Community in order to make that 
        portion a part of the Reservation.

Definitions

    Section 3 defines the terms ``City''; ``Community''; 
``Dedication Property''; ``Development Agreement''; 
``Development Property''; ``Mountain Property''; ``Preservation 
Property''; ``Reservation''; ``Saddleback Property''; 
``Secretary''; ``Settlement Agreement''; and, ``Use 
Agreement''.

Approval of agreement

    Section 4 states that the Settlement Agreement is approved 
and ratified and shall be fully enforceable in accordance with 
its terms and the provisions of this Act.

Transfer of properties

    Section 5(a) provides that the Resolution Trust Corporation 
shall transfer: (1) to the Secretary, the Mountain Property and 
the Development Property purchased by the Community; and, (2) 
to the City, the Preservation Property and the Dedication 
Property purchased by the City, upon satisfaction of all 
conditions of closing set forth in the Settlement Agreement.
    (b) provides that the Mountain Property and the Development 
Property transferred to the Community shall, subject to 
sections 6 and 7, be held in trust by the United States for the 
Community and become part of the Reservation.
    (c) provides that, notwithstanding any other provision of 
law, the United States shall not be liable for any preexisting 
conditions on the parcels of land to be transferred to the 
United States in trust for the Community;
    The language of this subsection (c) was requested by the 
Administration and adopted by the Committee.
    (d) provides that, upon satisfaction of all conditions of 
closing set forth in the Settlement Agreement, the Secretary 
shall cause to have plats of survey depicting the Dedication, 
Development, Mountain, and Preservation properties filed with 
the office of the Maricopa County Recorder and the Titles and 
Records Center of the Bureau of Indian Affairs in Albuquerque, 
New Mexico.

Limitations on use and development

    Section 6 provides that upon the satisfaction of all of the 
conditions of closing set forth in the Settlement Agreement, 
the properties to be transferred to the City and the Community 
pursuant to section 5 shall be subject to the following 
limitations:
          (1) the Preservation Property shall be forever 
        preserved in its natural state for use only as a public 
        park or recreation area that shall be used, maintained, 
        and subject to section 4(C) of the Settlement 
        Agreement, except that, at the sole discretion of the 
        City, that portion of the Preservation Property known 
        as the Dedication Property may be used to widen, 
        reconfigure, repair or reengineer Shea Boulevard in 
        accordance with section 4(D) of the Settlement 
        Agreement.
          (2) the Dedication Property shall be used to widen, 
        reconfigure, repair or reengineer Shea Boulevard and 
        136th Street, in accordance with sections 4(D) and 7 of 
        the Settlement Agreement.
          (3) the Mountain Property shall be forever preserved 
        in its natural state for use only as a public park or 
        recreation area that shall be used, maintained, and 
        subject to the restrictions set forth in section 5(C) 
        of the Settlement Agreement.
          (4) the Development Property shall be used and 
        developed for the economic benefit of the Community in 
        accordance with the provisions of the Settlement 
        Agreement and the Development Agreement.

Amendments to the settlement agreement

    Section 7 provides that no amendment made to the Settlement 
Agreement (including any deviation from an approved plan 
described in section 9(B) of the Settlement Agreement) shall 
become effective unless the amendment is made in accordance 
with the applicable requirements relating to the form and 
approval of the amendment under sections 9(B) and 34 of the 
Settlement Agreement and is consistent with the provisions of 
this Act.
    Section 9(B) of the Settlement Agreement provides that 
neither the City nor the Community may deviate from any 
requirement of the Settlement Agreement or the Development 
Agreement or the Use Agreement without the prior written 
consent of the other party. Section 34 provides that the 
Settlement Agreement shall not be altered or amended except by 
a writing signed by all parties to the Settlement Agreement.

                   cost and budgetary considerations

    The analysis of the Congressional Budget Office on the 
costs of S. 1341 follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 16, 1995.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed S. 1341, the Saddleback Mountain-Arizona Settlement 
Act of 1995, as ordered reported by the Senate Committee on 
Indian Affairs on November 7, 1995. S. 1341 would ratify a 
settlement agreement that would transfer 701 acres from the 
Resolution Trust Corporation (RTC) to the Salt River Pima-
Maricopa Indian Community (to be held in trust by the 
Department of the Interior) and the city of Scottsdale, 
Arizona. Under the settlement agreement, the Salt River 
Community and the city of Scottsdale have agreed to pay the RTC 
a total of $6.5 million, which would be offsetting collections 
to the federal government. We estimate that enacting S. 1341 
would increase federal collections by $6.5 million in fiscal 
year 1996, but that such collections would be offset by a loss 
of a similar amount some time over the next several years.
    Based on information from the RTC, CBO expects that the 
land would not be sold in the near term in the absence of the 
bill. We cannot predict the timing or price of such a sale 
under current law, but we expect that the land would be sold 
eventually even without this legislation. Hence, CBO estimates 
that enacting S. 1341 would increase offsetting collections to 
the RTC by $6.5 million in fiscal year 1996, thus reducing RTC 
outlays by that amount, but over time, there would be no 
significant net budgetary impact.
    The receipts obtained in 1996 would constitute proceeds 
from a non-routine asset sale. As a result, pay-as-you-go 
procedures would not apply to the bill. Under the 1996 budget 
resolution, proceeds from asset sales are counted in the budget 
totals for purposes of Congressional scoring. Under the 
Balanced Budget Act, however, proceeds from asset sales are not 
counted in determining compliance with pay-as-you-go 
requirements.
    In addition to authorizing the transfer of land, S. 1341 
also would clarify limitations on the use of the lands. For 
example, the city of Scottsdale would be permitted to extend 
and repair certain streets on its land, and part of the 
property transferred to the Salt River Community would be held 
forever as park or recreation lands. Other than the payments 
from the Salt River Community and the city of Scottsdale to the 
RTC, S. 1341 would not significantly affect the budgets of 
state or local governments.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Rachel 
Robertson.
            Sincerely,
                                         June E. O'Neill, Director.

                      regulatory 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. 1341, as 
amended, will have minimal regulatory or paperwork impact.

                        executive communications

    The Department of the Interior testified on S. 1341 at the 
Committee hearing on October 26, 1995. A copy of that testimony 
follows:

    Statement of Terrance Virden, Acting Director, Office of Trust 
 Responsibilities, Bureau of Indian Affairs, Department of the Interior

    Good Morning Mr. Chairman and Members of the Committee. My 
name is Terry Virden, Acting Director, Office of Trust 
Responsibilities, Bureau of Indian Affairs. It is my pleasure 
to come before you today to present the Department of the 
Interior's views on S. 1341, a bill ``To provide for the 
transfer of certain lands to the Salt River Pima-Maricopa 
Indian Community and the City of Scottsdale, Arizona, and for 
other purposes.''
    S. 1341, if enacted, would resolve a dispute between the 
City of Scottsdale, Arizona, and the Salt River Pima-Maricopa 
Indian Community. The bill would approve and ratify a 
Settlement, Release and Property Conveyance Agreement (which 
includes a Development Agreement and a Land Use Agreement) for 
the Salt River Pima-Maricopa Indian Community, the City of 
Scottsdale, Arizona, and the Resolution Trust Corporation. It 
also ensures that the Settlement Agreement is carried out and 
fully enforceable by its terms, including judicial remedies and 
binding arbitration provisions.
    The bill resolves conflicts and resulting lawsuits between 
the City and the Community, and provides for land transfers 
from the Resolution Trust Corporation to both parties. The City 
of Scottsdale and the Salt River Pima-Maricopa Indian Community 
have spent many months in negotiations and have agreed on the 
use of the property.
    The 701-acre parcel of land is within the City of 
Scottsdale and is contiguous to the north boundary of the Sale 
River Indian Reservation. The Resolution Trust Corporation 
acquired the Saddleback property in 1989, as receiver for the 
failed Sun States Savings and Loan Association. In October of 
1993, the city filed a condemnation action in an attempt to 
block a transfer of the property to the Community through an 
advertised sale conducted by the Resolution Trust Corporation. 
The condemnation action was brought because the city had 
certain use restrictions which could be enforced against the 
Community if the property were acquired in trust status, and 
concern that the Community's acquisition of the property would 
limit the City's right to control traffic in the northeast part 
of the city.
    In response to the city's condemnation suit and the 
Resolution Trust Corporation's failure to transfer the property 
to the tribe (as the high bidder), the tribe filed a civil 
rights action in Federal District Court. As previously 
indicated, the parties to the two suits have now negotiated 
settlement agreements with the understanding that special 
legislation is needed to authorize the negotiated land 
transfers and confirm the agreed-upon land use restrictions.
    The BIA generally supports reservation expansions to 
include lands which are contiguous to existing reservation 
boundaries, when local officials have been consulted about 
potential jurisdictional conflicts and an attempt has been made 
to address their concerns. S. 1341 would approve and ratify a 
Settlement Agreement which is dated September 11, 1995, but was 
executed on various other dates on behalf of the Resolution 
Trust Corporation, the City, and the Community.
    The Settlement Agreement provides for the transfer of 
approximately 125 acres to the City of Scottsdale, Arizona. The 
Settlement Agreement also provides for the transfer of 
approximately 576 acres to the Community in trust status, with 
365 acres of ``mountain property'' to be preserved largely in 
its natural state for the general public. The Community would 
have exclusive use of specifically-identified ``special 
cultural land'' within the ``mountain property,'' and it would 
be free to develop the 211-acre ``development property'' in 
accordance with specific use restrictions which have been set 
forth in a separate Development Agreement. Among other things, 
the Development Agreement would prohibit any future use which 
obstructs existing drainages or facilitates any gambling 
activities which would not be legal within the City of 
Scottsdale.
    The Settlement Agreement would also provide for the 
transfer of certain water rights from the Resolution Trust 
Corporation, and the transfer of a roadway within the 
``development property'' from the City. Both transfers are to 
be made to the ``United States in trust for the Community'' by 
quitclaim deed. The City and the Community are paying fair 
market value for their respective shares of the property.
    While we strongly support the enactment of S. 1341, we 
recommend existing Section 5(b) be amended by adding: 
``Notwithstanding any other provision of law, the United States 
shall not incur any liability for conditions, existing prior to 
the transfer, on the parcels of land to be transferred to the 
United States in trust for the Salt River Pima-Maricopa Indian 
Community.''
    Consistent with our support for cooperative agreements in 
land acquisition and reservation expansion cases, we support 
the enactment of S. 1341. We believe that the Settlement will 
achieve an equitable resolution of the ongoing litigation, 
provide a basis for future economic development on the Salt 
River Indian Reservation. It will require only a limited 
expenditure of federal funds for the completion of the land 
transfers and no additional federal funds for the management of 
the land to be acquired on behalf of the Community. Further, we 
commend the City and the Community for their cooperative 
efforts--as government to government--to achieve this 
settlement.
    This concludes my prepared statement. I would be happy to 
answer any questions you may have.

                        changes in existing law

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that 
enactment of S. 1341, as amended, will make no change in any 
existing law.