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                                                        Calendar No. 31
108th Congress                                                   Report
                                 SENATE
 1st Session                                                     108-18

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



 
APPROVING THE SETTLEMENT OF THE WATER RIGHTS CLAIMS OF THE ZUNI INDIAN 
        TRIBE IN APACHE COUNTY, ARIZONA, AND FOR OTHER PURPOSES

                                _______
                                

                 March 10, 2003.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 222]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 222) to approve the settlement of the water rights 
claims of the Zuni Indian Tribe in Apache County, Arizona, and 
for other purposes, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                                PURPOSE

    The purpose of the bill is to resolve all claims in the 
Zuni Indian Tribe to water rights in the Little Colorado River 
basin and elsewhere in Arizona and to provide resources to 
restore riparian wetlands on the Zuni Heaven Reservation that 
are of great religious and cultural significance to the tribe 
and its members.

                               BACKGROUND

    Congress considered the history of the Zuni Indian Tribe in 
detail when it enacted the Zuni Claims Settlement Act of 1990, 
P.L. 101 486 (104 Stat. 1174). As the House Committee on 
Interior and Insular Affairs noted in its report, H. Rep. 101 
727, 101st Cong., 2nd Sess. (1990), on a companion bill (H.R. 
4143) to the legislation that was enacted into law (S. 2203), 
the Zuni Tribe and its probable ancestors--the Anasazi and 
Mogollon--inhabited an area as large as 15 million acres in 
what is now the States of Arizona and New Mexico.
    This area was inhabited as early as 500 B.C., and between 
1250 A.D. and 1540 A.D. large pueblos were constructed in this 
area. By 1450 A.D., this was a cultural and economic center for 
the Zuni, who used the entire 15 million acres for hunting, 
gathering, and farming as well as other life-sustaining 
activities. Spanish explorers learned of the Zuni and the 
``Kingdom of Cibola'' in the late 1530s, and the first major 
contract with Europeans took place when Coronado's expedition 
encountered the Zuni as he searched for Cibola's ``Seven Cities 
of Gold''.
    Spanish missionaries recorded the cultivation of corn by 
the Zuni in 1581, and an expedition in 1583 noted the Zuni's 
irrigation and hunting practices. In 1598, Spain officially 
recognized the Zuni Province when the Zuni acknowledged Spanish 
sovereignty over them. Under Spanish law, the Zuni retained 
ownership of their lands and were treated as autonomous and 
self-governing notwithstanding the overriding sovereignty of 
Spain. The Zuni maintained their autonomy under the government 
of Mexico after that nation achieved its independence from 
Spain in 1821. The 1848 Treaty of Guadalupe Hidalgo offered the 
Zuni the same legal protections they had received under Spanish 
and Mexican rule.
    Subsequently, however, the Zuni were deprived of all but 
about 3 percent of the land they had earlier controlled. In 
1877, the Zuni Reservation was established by executive order, 
consisting of 408,000 acres of land in McKinley and Valencia 
Counties in western New Mexico. Notwithstanding this diminution 
of their lands, the Zuni have continued to make religious 
pilgrimages from their reservation in New Mexico to the area 
now included within the Zuni Heaven Reservation in Arizona. 
See, United States on behalf of the Zuni Tribe of New Mexico v. 
Platt, 730 F. Supp. 318, 318 21 (D. N.M. 1990).
    The Zuni Heaven Reservation was recognized by statute in 
1984, P.L. 98 408, 98 State. 1533 (1984), as amended by P.L. 
101 486, 104 Stat. 1174 (1990), to protect long-standing 
religious and subsistence activities by the Zuni Indian Tribe 
on certain lands in Apache County, Arizona, located upstream of 
the confluence of the Little Colorado and Zuni Rivers.
    The rights of all water users in the basin of the Little 
Colorado River in Arizona have been in litigation since 1979 
before the Superior Court of the State of Arizona in and for 
the County of Apache in an action captioned In re The General 
Adjudication of All Rights to Use Water in the Little Colorado 
River.
    Public policy favors the resolution of such claims by means 
of negotiated settlements, rather than through lengthy and 
costly litigation. After more than four years of negotiations 
amongst representatives of the United States, the Zuni Tribe, 
the State of Arizona, the Salt River Project, Tucson Electric 
Power Company, local irrigation companies, and neighboring non-
Indian communities located in the Little Colorado River basin, 
on June 7, 2002, the parties entered into a settlement 
agreement (Settlement Agreement) to resolve all of the tribe's 
claims to water rights, to assist the tribe in acquiring 
surface water rights, to provide for the tribe's's use of 
groundwater, and to provide for the restoration of riparian 
wetlands of great cultural and religious significance to the 
tribe.
    The proposed legislation ratifies and confirms that 
Settlement Agreement, and authorizes the appropriation of funds 
necessary to carry out its terms. The legislation also 
approves, ratifies, and confirms various related agreements 
among the parties. Because of the unique nature of the Zuni 
Heaven Reservation and the purposes for which it was 
established, the terms of the Settlement Agreement and the 
provisions of S. 222 which seek to implement the Settlement 
Agreement in some instances represent a departure from standard 
principles of Federal-Indian law.
    The Committee recognizes these unique circumstances and the 
history which gives rise to them, and further recognizes that 
the provisions of the Settlement Agreement and the implementing 
legislation are intended to address the unique circumstances as 
well as the respective positions of the parties to the 
Settlement Agreement, and are not intended to establish a 
precedent for other settlements of tribal claims to land and 
water rights.

                          LEGISLATIVE HISTORY

    S. 222 was introduced on January 28, 2003, by Senator Kyl, 
for himself and Senator McCain, and was referred to the 
Committee on Indian Affairs. On February 26, 2003, the 
Committee ordered the bill favorably reported to the Senate 
with the recommendation that the Senate do pass S. 222.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

    The Committee on Indian Affairs, in an open business 
meeting on February 26, 2003, by voice vote approved S. 222 and 
ordered the bill to be reported favorably to the Senate.

Section-by-Section Analysis

    Section 1.--Short title. Section 1 cites the short title of 
the bill as the Zuni Indian Tribe Water Rights Settlement Act 
of 2003.
    Section 2.--Findings and purposes. Section 2(a) sets forth 
9 Congressional findings that provide the rationale and basis 
for the decision by all parties, including the United States, 
to resolve the tribal water claims by negotiated settlement. 
Section 2(b) describes the purposes of S. 222, which include to 
approve, ratify, and confirm the Settlement Agreement entered 
into by the tribe and neighboring non-Indians, to authorize and 
direct the Secretary of the Interior (Secretary) to execute and 
perform the Settlement Agreement and related waivers, to 
authorize and direct the United States to take legal title to 
certain lands and to hold such lands in trust for the benefit 
of the tribe, and to authorize the actions, agreements, and 
appropriations as provided for in the Settlement Agreement S. 
222.
    Section 3.--Definitions. Section 3 provides 11 definitions 
for terms employed in the bill. These terms are: ``Eastern LCR 
Basin'', ``Fund'', ``Intergovernmental Agreement'', ``Pumping 
Protection Agreement'', ``Reservation'' or ``Zuni Heaven 
Reservation'', ``Secretary'', ``Settlement Agreement'', 
``SRP'', ``TEP'', ``Tribe'', ``Zuni Indian Tribe'' or ``Zuni 
Tribe'', and ``Zuni Lands''.
    Section 4.--Authorizations, ratifications, and 
confirmations. Section 4(a) approves, ratifies, confirms, and 
declares to be valid the Settlement Agreement, to the extent it 
does not conflict with the provisions of S. 222. It also 
authorizes and directs the Secretary to execute the Settlement 
Agreement and any necessary amendments thereto to make the 
Settlement Agreement consistent with this legislation.
    Section 4(b) authorizes the appropriation, to the Zuni 
Indian Tribe Water Rights Fund established in 6(a), 
$19,250,000, to be allocated by the Secretary as follows: 
$3,500,000 in FY2004 for the acquisition of at least 2,350 
acre-feet per year of water rights and associated lands and for 
related activities, the acquisition to be completed by the 
deadline set forth in 9(b), and $15,750,000, to be appropriated 
in three equal installments in FY2004, 2005, and 2006, to 
restore, rehabilitate, and maintain the Zuni Heaven 
Reservation, including the Sacred Lake, wetlands, and riparian 
areas.
    The Committee has been advised by the parties that in the 
event the deadline set forth in the Settlement Agreement is in 
conflict with the schedule of funding set forth in this 
subsection, the Settlement Agreement will be amended to conform 
to the provisions of S. 222.
    Section 4(c) provides that, except as provided in 9, the 
following three agreements, including amendments, are approved, 
ratified, confirmed, and declared to be valid: the agreement 
between the Salt River Project Agricultural Improvement and 
Power District, the tribe, and the United States on behalf of 
the tribe dated June 7, 2002; the agreement between Tucson 
Electric Power Company, the tribe, and the United States on 
behalf of the tribe dated June 7, 2002; and the agreement 
between the Arizona State Land Department, the tribe, and the 
United States on behalf of the tribe dated June 7, 2002.
    Section 5.--Trust lands Section 5(a) provides that, upon 
satisfaction of conditions set forth in paragraph 6.2 of the 
Settlement Agreement and the requirements of 9(a), the 
Secretary shall take the legal title to certain lands 
identified in this subsection into trust for the benefit of the 
tribe.
    Section 5(b) provides that, following the acquisition by 
the tribe of certain lands identified in this subsection and 
upon satisfaction of conditions set forth in paragraph 6.2 of 
the Settlement Agreement and the requirements of 9(a), the 
Secretary shall take the legal title to those lands into trust 
for the benefit of the tribe.
    Section 5(c) provides that, following the acquisition by 
the tribe of certain lands identified in this subsection and 
upon satisfaction of conditions set forth in paragraph 6.2 of 
the Settlement Agreement and the requirements of 9(a), the 
Secretary shall take the legal title to those lands into trust 
for the benefit of the tribe and shall make such lands part of 
the Zuni Indian Tribe Reservation.
    Section 5(d) provides that the Secretary shall have no 
discretion regarding the acquisitions described in subsection 
(a), (b), and (c).
    Section 5(e) provides that no lands within Arizona, other 
than the land described in subsection (a), (b), and (c), shall 
hereafter be taken into trust by the United States for the 
benefit of the tribe except by authority of an Act of Congress 
enactment after the date of enactment of this legislation and 
specifically authorizing the taking of lands into trust by the 
benefit of the tribe.
    Section 5(f) provides that any written certification by the 
Secretary under subparagraph 6.2.B of the Settlement Agreement 
constitutes final agency action under the Administrative 
Procedures Act and is reviewable as provided under chapter 7 of 
title 5, United States Code.
    Section 5(g) provides that lands taken into trust pursuant 
to subsection (a), (b), or (c) shall not have Federal reserved 
rights to surface water or groundwater. Section 5(h) provides 
that water rights and uses for lands taken into trust pursuant 
to subsection (a) or (c) must be determined under subparagraph 
4.1.A and article 5 of the Settlement Agreement. The tribe 
retains any rights or claims to water associated with lands 
taken into trust pursuant to subsection (b) under State law, 
subject to the terms of the Settlement Agreement.
    Section 5(i) provides that water rights appurtenant to 
lands taken into trust pursuant to subsections (a), (b), or (c) 
shall not be subject to forfeiture and abandonment. Section 
5(j) provides that, with respect to lands taken into trust 
pursuant to subsection (a) and (b), the tribe shall make 
payments in lieu of all current and future State, county, and 
local ad valorem property taxes that would otherwise be 
applicable to those lands if they were not in trust.
    Section 5(k) provides that the tribe is authorized to enter 
the Intergovernmental Agreement with Apache County, Arizona, 
and the State of Arizona identified in 3(3) and any 
intergovernmental agreement required to be entered into by the 
tribe under the terms of the Intergovernmental Agreement. The 
scope of the intergovernmental agreements to be entered into by 
the tribe under the terms of the Intergovernmental Agreement is 
as set forth in subparagraph 6.2.A of the Settlement Agreement.
    Section 5(l) provides that the Secretary shall acknowledge 
the terms of any intergovernmental agreement entered into by 
the tribe under this section and shall not, in any 
administrative or judicial action, seek to abrogate the terms 
of any such intergovernmental agreement consistent with 
subparagraph 6.2.A of the Settlement Agreement and S. 2743.
    The subsection further provides that if the United States 
is permitted to intervene in a judicial action commenced during 
a dispute over any intergovernmental agreement entered under 
this section, the United States shall not remove the action to 
the Federal courts, except that the United States may seek 
removal if the action concerns the Secretary's action regarding 
the issuance of rights-of-way under 8(c), the authority of a 
Federal agency to administer programs or the issuance of a 
permit under the Federal Water Pollution Control Act (33 U.S.C. 
1251 et seq.), the Safe Drinking Water Act (42 U.S.C. 300f et 
seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), or any other 
Federal law specifically addressed in intergovernmental 
agreements, or if the intergovernmental agreement is 
inconsistent with a Federal law for the protection of civil 
rights, public health, or welfare.
    Section 5(m) provides that nothing in this legislation 
shall be construed to affect the application of the Act of May 
25, 1918 (25 U.S.C. 211) within the State of Arizona. Section 
5(m) does not affect the application of Jicarilla Apache Tribe 
v. State of New Mexico, 742 F. Supp. 1487 (D. N.M. 1990), in 
the State of New Mexico, or the application of Masayesva v. 
Zah, 792 F. Supp. 1165 (D. Ariz. 1992), in the State of 
Arizona.
    Section 5(n) provides that nothing in this section repeals, 
modifies, amends, changes, or otherwise affects the Secretary's 
obligation to the tribe pursuant to P.L. 98 408, 98 Stat. 1533, 
as amended by the Zuni Claims Settlement Act of 1990, P.L. 101 
486, 104 Stat. 1174.
    Section 6.--Development fund Section 6(a) establishes the 
Zuni Indian Tribe Water Rights Development Fund (Fund) in the 
Treasury of the United States, to be managed and invested by 
the Secretary and to consist of funds appropriated under 
section 4(b), the appropriation to be contributed by the State 
of Arizona pursuant to paragraph 7.6 of the Settlement 
Agreement, and any other funds paid to the Secretary on behalf 
of the Zuni Tribe pursuant to the Settlement Agreement.
    Section 6(b) provides that the Secretary, in the 
management, investment, and disbursement of the Fund, shall 
comply with the American Indian Trust Fund Management Reform 
Act of 1994 (25 U.S.C. 4001 et seq.), S. 222, and the 
Settlement Agreement.
    Section 6(c) provides that investment of the assets of the 
Fund by the Secretary shall comply with the Act of April 1, 
1880 (25 U.S.C. 161), the first section of the Act of June 24, 
1938 (25 U.S.C. 162a), and subsection (b).
    Section 6(d) provides that funds appropriated pursuant to 
4(b)(2) and funds contributed by the State of Arizona pursuant 
to paragraph 7.6 of the Settlement Agreement shall be available 
for expenditure or withdrawal only after the requirements of 
9(a) have been met.
    Section 6(e) provides that the tribe may make withdrawals 
from the Fund only after the Secretary has approved a tribal 
management plan as described in the 1994 Trust Reform Act which 
requires that funds be spent only for the purposes set forth in 
4(b).
    The Secretary is authorized to take judicial or 
administrative action to enforce the requirement that the 
assets of the Fund be used only in accordance with the 
provisions of S. 222. Neither the Secretary or the Secretary of 
the Treasury shall have any liability for the expenditure or 
investment of monies withdrawn from the Fund (the inclusion of 
this provision is not intended to suggest, however, that 
existing law does not fully protect the United States from 
liability under these circumstances, as it is the Committee's 
view that 25 U.S.C. 4022(c) would provide such protection). The 
tribe is to submit an expenditure plan for approval by the 
Secretary as to any monies held in the Fund that are not 
withdrawn pursuant to this subsection. The plan is to describe 
the manner in which, and the purposes for which, such monies 
will be used. The Secretary determines that the plan is 
reasonable and is consistent with the provisions of S. 222.
    The tribe is to submit to the Secretary an annual report 
describing all expenditures from the Fund during the period of 
the report. Section 6(f) provides that notwithstanding 
subsection (e), funds authorized to be appropriated pursuant to 
4(b)(1) shall be available for use upon appropriation in 
accordance with 4(b)(1) and shall be distributed by the 
Secretary to the tribe upon receipt by the Secretary of a 
written notice from the tribe and a tribal council resolution 
describing the purposes for which the funds will be used.
    In the event the requirements of 9(a) are not met and the 
Settlement Agreement becomes null and void pursuant to 9(b), 
the United States may set off any funds expended or withdrawn 
from the amount appropriated pursuant to 4(b)(1), together with 
any accrued interest, against any claims asserted by the tribe 
against the United States relating to water rights of the Zuni 
Heaven Reservation. Any water rights acquired with funds 
described in this subsection are to be credited; against any 
water rights secured for the Zuni Heaven Reservation by the 
tribe, or by the United States on behalf of the tribe, in the 
Little Colorado River General Stream Adjudication or in any 
future settlement of claims for those water rights. Section 
6(g) provides that no part of the Fund shall be distributed on 
a per capita basis to members of the tribe.
    Section 7.--Claims extinguishment; waivers and releases. 
Section 7(a) provides that the benefits realized by the tribe 
and its members under this legislation, including retention of 
any claims and rights, shall constitute full satisfaction of 
all members' claims for water rights under Federal, State, and 
other laws (including claims rights in groundwater, surface 
water, and effluent) for Zuni Lands (as defined in 3(11)) from 
time immemorial through the effective date set forth in 9(a), 
and for injuries during that period to such rights (including 
also claims for damages for deprivation of water rights and for 
changes to underground water tables) under Federal, State, and 
other laws.
    The legislation is not intended to recognize or establish 
any right of a member of the tribe to water on the Zuni Heaven 
Reservation.
    Section 7(b) authorizes the tribe, on behalf of itself and 
its members, and the Secretary, on behalf of the United States 
in its capacity as trustee for the tribe and its members, as 
part of their obligations under the Settlement Agreement, to 
execute a waiver and release of claims against the State of 
Arizona, any agency or political subdivision thereof, or any 
other person under Federal, State, or other law, for:
          (1) Past, present, and future claims (from time 
        immemorial to the effective date set forth in 9(a) and 
        any time thereafter) to water rights (including 
        groundwater, surface water, and effluent) for Zuni 
        Lands, except as provided in article 5 of the 
        Settlement Agreement;
          (2) Past and present claims (to the effective date 
        set forth in 9(a)) for injuries to water rights 
        (including also claims for damages for deprivation of 
        water rights and changes to underground water tables); 
        and
          (3) Past, present, and future claims for water rights 
        and injuries to water rights (including also claims for 
        damages for deprivation of water rights and changes to 
        underground water tables) for lands outside of the Zuni 
        Lands but located within the Little Colorado River 
        basin in Arizona and based upon aboriginal occupancy of 
        lands by the tribe and its predecessors.
    Section 7(c) authorities the tribe, as part of the 
performance of its obligations under the Settlement Agreement, 
to execute a waiver and release (subject to paragraphs 11.4 and 
11.6 of the Settlement Agreement) for claims against the United 
States (acting in its capacity as trustee for the tribe and its 
members or otherwise acting in their behalf), its agencies, 
officials, and employees, for:
          (1) Past, present, and future claims (from time 
        immemorial to the effective date set forth in 9(a) and 
        any time thereafter) to water rights for Zuni lands 
        (including groundwater, surface water, and effluent) 
        and any claims for damages for deprivation of such 
        water rights;
          (2) Past and present claims (to the effective date 
        set forth in 9(a)) for injuries to and deprivation of 
        such water rights for Zuni Lands; and
          (3) Past, present, and future claims for water rights 
        (including groundwater, surface water, and effluent) as 
        well as for injuries to and claims for deprivation of 
        such water rights for lands outside the Zuni Lands but 
        located within the Little Colorado River basin in 
        Arizona and based upon aboriginal occupancy of lands by 
        the tribe and its predecessors.
    Section 7(d)(1) authorizes the tribe, on behalf of itself 
and its members, to waive and release all claims against the 
State of Arizona, its agencies and political subdivisions, and 
any other person under Federal, State, or other law for claims 
of interference with the trust responsibility of the United 
States to the tribe arising out of the negotiation of the 
Settlement Agreement or S. 222, as well as all claims against 
those same entities (subject to paragraphs 11.4, 11.6, and 11.7 
of the Settlement Agreement) for past and present claims, 
including natural resource damage claims under the 
Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 (42 U.S.C. 9601 et seq.) (CERCLA), the 
Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.) (OPA), or 
any other applicable statute, for injury to water quality 
accruing from time immemorial through the effective date set 
forth in 9(a) for lands within the Little Colorado River basin 
in the State of Arizona.
    The tribe is also authorized to waive future claims, 
including natural resource claims under CERCLA, OPA, or any 
other applicable statute, for lands within the Eastern Little 
Colorado River [LCR] basin (as defined in 3(1) caused by the 
lawful diversion or use of surface water, the lawful withdrawal 
of water (except within the Zuni Protection Area as provided in 
article 5 of the Settlement Agreement), the parties' 
performance of any obligations under the Settlement Agreement, 
the discharge of oil associated with routine physical or 
mechanical maintenance of wells or diversion structures not 
inconsistent with applicable law, the discharge of oil 
associated with routine start-up and operation of well pumps 
not inconsistent with applicable law, or any combination 
thereof.
    Section 7(d)(2) authorizes the tribe, on behalf of itself 
and its members, to waive its right to request that the United 
States bring any claims for injuries to water quality under the 
natural resource damage provisions of CERCLA, OPA, or any other 
applicable statute, for lands within the Little Colorado River 
basin in the State of Arizona accruing from time immemorial 
through the effective date set forth in 9(a), as well as future 
claims for injuries or threat of injuries to water quality 
under the natural resource damage provisions of CERCLA, OPA, or 
any other applicable statute, for lands within the Eastern LCR 
basin caused by the lawful diversion or use of surface water, 
the lawful withdrawal of water (except within the Zuni 
Protection Area as provided in article 5 of the Settlement 
Agreement), the parties' performance of any obligations under 
the Settlement Agreement, the discharge of oil associated with 
routine physical or mechanical maintenance of wells or 
diversion structures not inconsistent with applicable law, the 
discharge of oil associated with routine start-up and operation 
of well pumps not inconsistent with applicable law, or any 
combination thereof.
    Section 7(d)(3) provides that notwithstanding the waivers 
of future water quality claims authorized in paragraphs 
(1)(B)(ii) and (2)(B) of this subsection, the tribe, on behalf 
of itself and its members, retains any statutory claims for 
injury or threat of injury to water quality under CERCLA and 
OPA as described in subparagraphs 11.4(D)(3) and (4) of the 
Settlement Agreement that accrue at least 30 years after the 
effective date set forth in 9(a).
    Section 7(e) provides that the United States, as part of 
the performance of its obligations under the Settlement 
Agreement, waives and releases past and present claims (subject 
to the limitations set forth in paragraphs 11.4, 11.6, and 11.7 
of the Settlement Agreement) against the State of Arizona, its 
agencies and political subdivisions, and any other entity for: 
past and present common law claims accruing from time 
immemorial to the effective date set forth in 9(a) arising for 
or relating to water quality in which the injury asserted is to 
the tribe's interest in water, trust land, and natural 
resources in the Little Colorado River basin in the State of 
Arizona; and all past and present natural resource damage 
claims accruing through the effective date set forth in 9(a) 
based on injury or threat to natural resources in the Little 
Colorado River basin in Arizona, but only for those cases in 
which the United States,or any Federal official, would act on 
behalf of the tribe as a natural resource trustee pursuant to 
the Natural Resource Contingency Plan as set forth in 40 CFR 
300.600(b)(2) on the effective date of this legislation under 
9(a).
    This subsection further provides that the United States, 
subject to the retentions set forth in paragraphs 11.4, 11.6 
and 11.7 of the Settlement Agreement, also waives and releases 
future common law claims against the State of Arizona, its 
agencies and political subdivisions, and any other entity 
arising from or relating to water quality in which the injury 
asserted is to the tribe's interest in water, trust land, and 
natural resources in the Eastern LCR basin in Arizona accruing 
after the effective date described in 9(a) and caused by the 
lawful diversion or use of surface water, the lawful withdrawal 
of water (except within the Zuni Protection Area as provided in 
article 5 of the Settlement Agreement), the parties' 
performance of any obligations under the Settlement Agreement, 
the discharge of oil associated with routine physical or 
mechanical maintenance of wells or diversion structures not 
inconsistent with applicable law, the discharge of oil 
associated with routine start-up and operation of well pumps 
not inconsistent with applicable law, or any combination 
thereof.
    Section 7(f) provides that, subject to subsection (b) and 
(e), nothing in S. 222 or the Settlement Agreement affects any 
right of the United States, or the State of Arizona, to take 
any actions (including enforcement actions) under any laws 
(including regulations) relating to humanhealth, safety, and 
the environment.
    Section 8.--Miscellaneous provisions Section 8(a) provides 
for the waiver of the sovereign immunity of the United States 
and the Tribe (except as to claims for money damages not 
specifically provided for in the Settlement Agreement) in the 
event any party to the Settlement Agreement or a Pumping 
Protection Agreement files a lawsuit only resulting to the 
interpretation or enforcement of this legislation, certain 
agreements identified in 4(c), or a Pumping Protection 
Agreement. This subsection also provides for a waiver of 
Federal and tribal immunity, with the same limitation, if a 
landowner or water user in the Little Colorado River basin in 
Arizona files a lawsuit only relating to directly to the 
interpretation or enforcement of Article 11 of the Settlement 
Agreement, the rights of de minimis users in subparagraph 4.2.D 
of the Settlement Agreement, or the rights of underground water 
users under Article 5 of the Settlement Agreement.
    The tribe is authorized to waiver its sovereign immunity 
from suit in the superior Court of Apache County, Arizona 
(except with claims for monetary awards not specially 
authorized in the Intergovernmental Agreement) for the limited 
purposes of enforcing the terms of the Intergovernmental 
Agreement and any intergovernmental agreement required to be 
entered into by the tribe under the terms of the 
Intergovernmental Agreement. Although the text of the 
legislation does not address the issue of a waiver of the 
sovereign immunity of the State of Arizona, the waiver of 
tribal sovereign immunity set forth therein is grounded in 
assurances made to the Committee that the tribe has adequate 
and reciprocal judicial remedies against the State.
    The Committee views S. 222 as a contract, and the 
availability of the tribe of such remedies is a basic 
assumption of that contract.
    Section 8(b) provides that, with respect to water rights 
made available under the Settlement Agreement and used on the 
Zuni Heaven Reservation, such rights shall be held in trust by 
the United States in perpetuity and shall not be subject to 
forfeiture or abandonment. The subsection further provides that 
State law shall not apply to water uses on the Zuni Heaven 
Reservation, and that water rights and uses on the Zuni Heaven 
Reservation shall not be subject to State law or regulation, 
except that the court with jurisdiction over the decree entered 
pursuant to the Settlement Agreement of the Norviel Decree 
Court may assess administrative fees for delivery of this 
water.
    Section 8(c) provides that land taken into trust pursuant 
to 5(a) and 5(b) shall be subject to existing easements and 
rights-of-way and that, notwithstanding any other provision of 
law, the Secretary, in consultation with the tribe, shall grant 
additional rights-of-way or expansions of existing rights-of-
way for roads, utilities, and other accommodations to adjoining 
landowners if the proposed right-of-way: (1) is necessary to 
the needs of the applicant; (2) will not cause significant and 
substantial harm to the Tribe's wetland restoration project or 
religious practices; and (3) will comply with the procedures in 
part 169 of title 25, Code of Federal Regulations (where not 
inconsistent with this subsection) and with other generally 
applicable Federal laws unrelated to the acquisition of 
interests across trust lands.
    Section 8(d) provides that the United States shall not seek 
reimbursement of costs arising out of the implementation of S. 
222 or of the Settlement Agreement against any Indian-owned 
land within the tribe's Reservation, or make any assessment 
against such lands in regard to such costs.
    Section 8(e) provides that, except as provided in paragraph 
5.3 of the Settlement Agreement (recognizing the tribe's use of 
1,500 acre-feet per annum of groundwater), neither S. 222 nor 
the Settlement Agreement create any vested right to groundwater 
under Federal or State law, or any priority to the use of 
groundwater under Federal or State law that would be superior 
to any other right or use of groundwater. Notwithstanding this 
limitation, the rights of parties to the intergovernmental 
agreements referred to in 4(c)(1), (2), or (3) and in paragraph 
5.8 of the Settlement Agreement, as among themselves shall be 
as stated in those agreements.
    Section 8(f) provides that nothing in the Settlement 
Agreement or in S. 2223 quantifies or otherwise affects the 
water rights, claims, or entitlements to water of any Indian 
tribe, band, or community, other than the Zuni Indian Tribe.
    Section 8(g) provides that execution of the Settlement 
Agreement shall not constitute major Federal action under the 
National Environmental Policy Act, 42 U.S.C. 4321 et seq. 
(NEPA), however the Secretary shall comply with NEPA and shall 
carry out any other necessary compliance during the 
implementation of this settlement.
    Section 9.--Effective date for waiver and release 
authorizations. Section 9(a) provides that the waiver and 
release authorizations contained in 7(b) and 7(c) shall become 
effective as of the date the Secretary publishes in the Federal 
Register a statement of all of the following findings:
          (1) That this legislation has been enacted in a form 
        approved by the parties in paragraph 3.1.A of the 
        Settlement Agreement;
          (2) That the funds authorized by 4(b) have been 
        appropriated and deposited into the Fund;
          (3) That the State of Arizona has appropriated and 
        deposited into the Fund the amount required by 
        paragraph 7.6 of the Settlement Agreement;
          (4) That the tribe has either purchased or acquired 
        the right to purchase at least 2,350 acre-feet per 
        annum or surface water rights, or waived this condition 
        pursuant to paragraph 3.2 of the Settlement Agreement;
          (5) That, pursuant to subparagraph 3.1.D of the 
        Settlement Agreement, the severance and transfer of 
        surface water rights that the tribe owns or has a right 
        to purchase have been conditionally approved, or that 
        the tribe has waived this condition as provided in 
        paragraph 3.2 of the Settlement Agreement;
          (6) That, pursuant to subparagraph 3.1.E of the 
        Settlement Agreement, the tribe and Lyman Water Company 
        have executed an agreement relating to the severance 
        and transfer of surface water rights acquired by the 
        tribe and the United States, the pass-through, use, or 
        storage of the tribe's surface water rights in Lyman 
        Lake, and the operation of Lyman Dam;
          (7) That, pursuant to subparagraph 3.1.F of the 
        Settlement Agreement, all parties to the Settlement 
        Agreement have agreed and stipulated to certain Arizona 
        Game and Fish abstracts of water uses;
          (8) That, pursuant to subparagraph 3.1.G of the 
        Settlement Agreement, all parties to the Settlement 
        Agreement have agreed to the location of an observation 
        well and that well has been installed;
          (9) That, pursuant to subparagraph 3.1.H of the 
        Settlement Agreement, the tribe, Apache County, 
        Arizona, and the State of Arizona have executed an 
        Intergovernmental Agreement that satisfies all of the 
        conditions in paragraph 6.2 of the Settlement 
        Agreement;
          (10) That the tribe has acquired title to a 
        particular section of land adjacent to the Zuni Heaven 
        Reservation;
          (11) That the Settlement Agreement has been modified 
        if and to the extent that it is in conflict with this 
        legislation and such modification has been agreed to by 
        all the parties to the Settlement Agreement; and
          (12) That a court of competent jurisdiction has 
        approved the Settlement Agreement by a final judgment 
        and decree. Section 9(b) provides that if the 
        publication in the Federal Register required under 
        subsection (a) has not occurred by December 31, 2006, 
        sections 4 and 5, and any agreements entered into 
        pursuant thereto (including the Settlement Agreement 
        and the Intergovernmental Agreement) shall not 
        thereafter be effective and shall be null and void. 
        This subsection further provides that any funds and the 
        interest accrued thereon appropriated pursuant to 
        4(b)(2) shall revert to the Treasury, and any funds and 
        the interest accrued thereon appropriated pursuant to 
        paragraph 7.6 of the Settlement Agreement shall revert 
        to the State of Arizona.

                   COST AND BUDGETARY CONSIDERATIONS

    On February 27, 2003, the cost estimate of the 
Congressional Budget Office was received and a copy of that 
estimate follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 27, 2003.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 222, the Zuni Indian 
Tribe Water Rights Settlement Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

S. 222--Zuni Indian Tribe Water Rights Settlement Act of 2003

    Summary: S. 222 would approve and ratify a water rights 
settlement agreement between the Zuni Indian Tribe, the 
surrounding community, and the State of Arizona. The bill would 
authorize the appropriation of funds to the Department of the 
Interior (DOI) to implement the agreement, but most of those 
funds could not be spent until the agreement is approved by all 
parties involved and certain other conditions have been met. S. 
222 would create the Zuni Indian Tribe Water Rights Development 
Fund and would allow the tribe to spend amounts deposited in 
the fund (including interest earnings) without further 
appropriation.
    Based on information from DOI, CBO estimates that 
implementing S. 222 would cost $19 million over the 2004-2006 
period, assuming appropriation of the authorized amounts. 
Enacting S. 222 would not affect direct spending or revenues.
    S. 222 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs or duties imposed by this bill upon state, local, or 
tribal governments would be those assumed by them voluntarily 
as parties to the settlement agreement.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 222 is shown in the following table. The 
costs of this legislation fall within budget function 450 
(community and regional development).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2003     2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level.......................................        0        9        5        5        0        0
Estimated Outlays.........................................        0        2        2       15        0        0
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: S. 222 would authorize the appropriation 
of a total of $19 million over the 2004-2006 period to be 
deposited in the Zuni Indian Tribe Water Rights Development 
Fund to satisfy a settlement agreement between the Zuni Indian 
Tribe, the surrounding community, and the state of Arizona. For 
purposes of this estimate, CBO assumes that the amounts 
authorized for each year would be appropriated as specified in 
the bill.
    Within that total authorization, S. 222 would authorize the 
appropriation of $5 million each year over the 2004-2006 period 
to deposit in Zuni Indian Tribe Water Rights Development Fund 
to benefit the Zuni tribe. Funds would be used to restore, 
rehabilitate, and maintain the Zuni Heaven Reservation and 
could not be spent by the tribe until the settlement is agreed 
to by all parties and certain conditions are met. Unless all 
conditions of the settlement are met by December 31, 2006, any 
funds appropriated to implement S. 222 would be returned to the 
Treasury.
    Trust funds that are held and managed in a fiduciary 
capacity by the federal government on behalf of Indian tribes 
are treated as nonfederal entities. As a result, outlays would 
be recorded on the budget in the year that all funds are 
provided to the tribe and the settlement agreement is final. 
Therefore, CBO estimates that this provision would cost $15 
million in fiscal year 2006. Once the settlement is final and 
those amounts are recorded as outlays, subsequent use by the 
tribe would be nonbudgetary (that is, it would have no further 
impact on the federal budget).
    S. 222 also would authorize the appropriation of $4 million 
in fiscal year 2004 for the Zuni tribe to purchase water rights 
and associated land in Arizona. Based on information from the 
tribe, CBO estimates that the tribe would complete this 
purchase by the end of fiscal year 2005. If the settlement 
agreement does not go into affect by the deadline, the $4 
million provided for water rights and land acquisition would 
not be returned to the Treasury. Consequently, CBO estimates 
that this provision would cost $4 million over the 2004-2005 
period, assuming the appropriation of the specified amounts.
    Intergovernmental and private-sector impact: S. 222 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Any costs or duties imposed by this bill upon 
state, local, or tribal governments would be those assumed by 
them voluntarily as parties to the settlement agreement.
    Estimate prepared by: Federal costs: Julie Middleton; 
Impact on State, Local, and Tribal Governments: Marjorie 
Miller; and Impact on Private Sector: Cecil McPherson.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                        EXECUTIVE COMMUNICATIONS

    On February 26, 2003, in a letter to Chairman Campbell, the 
Department of Interior expressed its support for S. 222. A copy 
of that letter follows:

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                 Washington, DC, February 25, 2003.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Department of the Interior 
understands the Committee will be marking up S. 222, the ``Zuni 
Indian Tribe Water Rights Settlement Act of 2003.'' S. 222 is 
nearly identical to S. 2743, the ``Zuni Indian Tribe Water 
Rights Settlement Act of 2002,'' as reported during the 107th 
Congress. The Administration supported S. 2743 as reported and 
is pleased this important legislation has been reintroduced 
during this Congress.
    S. 222 is the product of a cooperative effort over the last 
five years among the Zuni Tribe, the State of Arizona, the 
United States, the Salt River Project and many other local 
water users. The bill would approve and authorize federal 
participation in the main settlement agreement, which includes 
three subsidiary agreements with individual parties. When fully 
implemented, this agreement would constitute a final settlement 
of the water rights claims of the Zuni Tribe and the United 
States' claims on behalf of Zuni. This settlement involves 
significant cost sharing and cooperation among the federal 
government and the state and local parties.
    The Office of Management and Budget has advised that there 
is no objection to the presentation of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                David L. Bernhardt,
                      Director, Office of Congressional and
                Legislative Affairs and Counselor to the Secretary.

                      REGULATORY 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 paperwork impact that would be incurred in 
carrying out the bill. The Committee believes that the 
regulatory impact of S. 222 will be minimal.

                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that the 
enactment of S. 222 will not result in any changes in existing 
law.