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                                                       Calendar No. 397
116th Congress }                                            { Report
                                 SENATE
 1st Session   }                                            { 116-189

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



 
  TO AMEND THE OMNIBUS PUBLIC LAND MANAGEMENT ACT OF 2009 TO MAKE THE 
              RECLAMATION WATER SETTLEMENTS FUND PERMANENT

                                _______
                                

               December 19, 2019.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 886]

         [Including cost estimate of the Congressional Budget]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 886) to amend the Omnibus Public Land Management Act 
of 2009 to make the Reclamation Water Settlements Fund 
permanent, having considered the same, reports favorably 
thereon with an amendment (in the nature of a substitute) and 
recommends that the bill (as amended) do pass.

                                PURPOSE

    The purpose of S. 886 is to extend the termination date of 
the Reclamation Water Settlements Fund for an additional ten 
years; clarify Reclamation Water Settlements Fund eligibility 
for claims concerning Indian water resources; preserve existing 
priorities for Reclamation Water Settlements Fund expenditures 
for the initial Reclamation Water Settlements Fund 
authorization period; provide sufficient funding and time to 
implement the Aamodt Litigation Settlement Act; and authorize a 
project study to advance the Tribal water rights settlement 
agreed to by the Kickapoo Tribe and the State of Kansas.

                               BACKGROUND

    The Omnibus Public Land Management Act of 2009 established 
the Reclamation Water Settlements Fund in the Treasury of the 
United States to provide financial assistance to plan, design, 
and construct, or rehabilitate water infrastructure to 
implement the settlement of claims concerning Indian water 
rights resources approved by Congress. Starting in 2020, the 
Omnibus Public Land Management Act of 2009 will direct 
$120,000,000 in revenue that would otherwise be deposited in 
the Reclamation Fund into the Reclamation Water Settlements 
Fund. The Reclamation Fund is supported by proceeds from the 
sale of public lands; onshore royalties from oil, gas, and 
other mineral leases on Federal lands; and repayments from 
Bureau of Reclamation projects. Balances in the Reclamation 
Fund are not available for Bureau of Reclamation program 
expenditures unless Congress appropriates funds in 
appropriation bills. Over time, congressional appropriations 
from the Reclamation Fund have exceeded receipts into the 
Reclamation Fund, which has created a balance of $16.6 billion 
as of the end of fiscal year 2018.
    At the time of enactment of the Omnibus Public Land 
Management Act of 2009, Congress recognized the growing risk 
unresolved Indian water rights claims posed to both Indian and 
non-Indian water users. Since the Supreme Court holding in 
Winters v. United States,\1\ Indian Tribes may pursue claims to 
federally reserved water rights. Indian Tribes and non-Tribal 
communities often choose to settle these Tribal claims in order 
to avoid the time, expense, hostility, and uncertainty of 
litigation. Since 1990, it has been the policy of the 
Department of the Interior that Indian water rights should be 
resolved through negotiated settlements rather than litigation.
---------------------------------------------------------------------------
    \1\207 U.S. 54 (1908).
---------------------------------------------------------------------------

                          NEED FOR LEGISLATION

    Since 1978, 35 Indian water rights settlements have been 
finalized with an estimated federal cost of $5.8 billion. In 
the last 10 years alone, Congress has authorized seven new 
settlements that call for federal expenditures totaling 
approximately $2.5 billion. The Bureau of Reclamation's 
principal operating account--the Water and Related Resources 
Account--currently dedicates 14% of its budget to Indian water 
rights settlements. This spending percentage has doubled in the 
past 15 years.
    Currently, the Department of the Interior has 20 
negotiating teams working on new settlements projected to cost 
between $2 and $3 billion in the following states: New Mexico, 
Idaho, Montana, California, Arizona, Washington, Utah, Oregon, 
and Nevada. In addition to current settlement negotiations, 
other settlements will require negotiation in future years. 
There are over 280 federally recognized tribes in the West 
alone (excluding Alaska), and a reliable funding stream will be 
needed to support enacted and future water settlements.
    The Reclamation Water Settlements Fund will begin expending 
funds in 2020 based on the statutorily mandated priority list. 
The remaining balance to complete priority settlements, the 
additional settlements pending before Congress, along with the 
settlements involving current negotiation teams, will exceed 
available expenditures from the Reclamation Water Settlements 
Fund. With the growing demand, the Committee recognizes the 
need to extend the Reclamation Water Settlements Fund by an 
additional 10 years. In doing so, the Reclamation Water 
Settlements Fund will provide a reliable funding source for 
current and future Indian water rights settlements and ensure 
the viability of the United States' preference for settling 
claims for Indian water rights instead of litigation. The 
extension of the Reclamation Water Settlements Fund will also 
alleviate mounting pressure on the Bureau of Reclamation's 
operating budget.
    The Aamodt Litigation Settlement Act (Title VI of the 
Claims Resolution Act) authorized the planning, design, and 
construction of the Pojoaque Basin Regional Water System in 
order to deliver sufficient water to the settlement parties to 
implement the May 3, 2006, settlement agreement among the State 
of New Mexico; the Pueblos of Nambe, Pojoaque, San Ildefonso, 
and Tesuque; the United States; the County of Santa Fe; and the 
City of Santa Fe. The settlement agreement, as authorized by 
Congress through the Aamodt Litigation Settlement Act, resolved 
litigation that began in 1966 regarding claims in the Pojoaque 
Basin of New Mexico. The core of the settlement agreement 
incorporates the Pueblos' commitment to abstain from making 
water priority calls against non-Pueblo users, provided that 
the non-Pueblo users agree to specific options outlined in the 
settlement agreement.
    At the time of enactment, Congress anticipated that the 
cost of the Pojoaque Basin Regional Water System would exceed 
the amounts authorized by Congress. The Aamodt Litigation 
Settlement Act therefore included a provision requiring the 
Secretary of the Interior to initiate negotiations with the 
settlement parties to determine an appropriate cost share for 
the additional contributions in order to ensure that the 
Pojoaque Basin Regional Water System would be completed by the 
substantial completion deadline. The bill would authorize the 
agreement, increase the federal cost share ceiling by an 
additional $137,000,000, and extend the substantial completion 
deadline by an additional four years.
    The Kickapoo Tribe of Kansas and the State of Kansas 
executed an agreement on September 9, 2016, in order to achieve 
a fair, equitable, and final settlement of claims to water 
rights in the Delaware River Basin in Kansas. It is the view of 
the Committee that Congress would benefit from a study 
conducted by the Secretary of Agriculture, in consultation with 
the Secretary of the Interior, of the multipurpose dam 
described in the Upper Delaware and Tributaries Watershed Plan, 
along with recommendations with respect to any material 
alternations or changes to the Upper Delaware and Tributaries 
Watershed Plan. The Committee intends to use the results of the 
study to consider authorizing the water rights agreed to by the 
Kickapoo Tribe and State of Kansas on September 9, 2016.

                          LEGISLATIVE HISTORY

    S. 886 was introduced on March 27, 2019, by Senator Udall, 
along with Senators Cortez Masto and Heinrich. The bill was 
referred to the Committee on Energy and Natural Resources. On 
May 23, 2019, the Committee on Energy and Natural Resources 
discharged the bill by unanimous consent. The bill was then 
referred to the Committee on Indian Affairs that same day.
    On July 17, 2019, the Committee on Indian Affairs met to 
consider the bill. The Committee did not hold a legislative 
hearing on the bill.
    Amendment. One amendment, in the nature of a substitute, 
was offered by Senator Udall. The substitute amendment--
           Limits the duration of the Reclamation Water 
        Settlements Fund to an additional 10 years;
           Clarifies that the Reclamation Water 
        Settlements Fund is available only for Indian water 
        rights settlements;
           Ensures settlements that receive 
        congressional authorization prior to litigation are 
        eligible for the Reclamation Water Settlements Fund;
           Ensures the authorized priority list for 
        Reclamation Water Settlements Fund distribution ends 
        after the first 10 years of the Reclamation Water 
        Settlements Fund, and that all Indian water rights 
        settlements would be eligible for Reclamation Water 
        Settlements Fund disbursement during the 10-year 
        extension;
           Extends the termination date for Reclamation 
        Water Settlements Fund disbursements to 2044;
           Establishes a $90 million cap on the amount 
        of annual allocations any individual settlement can 
        receive during the additional 10 years;
           Allows unused Reclamation Water Settlements 
        Funds reserved for water rights claims of the Navajo 
        Nation in the Lower Colorado River basin to be 
        repurposed toward the Lower Colorado River Basin 
        Development Fund, with 65% percent allocated to the 
        Future Water Settlement Subaccount of the Lower 
        Colorado River Basin Development Fund;
           Extends the eligibility date for priority 
        settlements by two years, which will allow the Gros 
        Ventre and Assiniboine Tribes of the Fort Belknap 
        Indian Reservation in Montana and the Navajo Nation in 
        the Lower Colorado River basin in Arizona maintain 
        their respective priorities for the first ten years of 
        the Reclamation Water Settlements Fund, if Congress 
        enacts their settlements within the extended deadline;
           Includes the Aamodt Litigation Settlement 
        Completion Act of 2019 (S. 1875), as revised to address 
        concerns raised by the Department of the Interior 
        during a House hearing on its companion measure (H.R. 
        3292);
           Increases the federal cost ceiling of the 
        Pojoaque Basin Regional Water System by $137 million, 
        extends the substantial completion date by four years 
        (2028), consistent with the ``611(g) Agreement'' 
        reached between the United States and the Aamodt 
        settlement parties, and makes additional conforming 
        amendments; and
           Includes a provision directing U.S. 
        Department of Agriculture, in consultation with the 
        Department of the Interior, to conduct a study of the 
        Upper Delaware and Tributaries Watershed Plan no later 
        than two years after the date of enactment, and make 
        recommendations with respect to any material 
        alternations or changes to the Upper Delaware and 
        Tributaries Watershed Plan in order to facilitate 
        future congressional consideration of the Kickapoo 
        Tribe Water Rights Settlement Agreement.
    The amendment was adopted by voice vote. The bill, as 
amended, was then ordered favorably reported to the Senate by 
voice vote.
    On March 27, 2019, a companion bill was introduced, H.R. 
1904, by Representative Grijalva, in the House of 
Representatives. The bill was referred to the Committee on 
Natural Resources of the House of Representatives. On April 4, 
2019, the House Committee on Natural Resources held a 
legislative hearing on the bill. No further action was taken.
    In the 115th Congress, Senator Udall introduced S. 3168 on 
June 28, 2018. The bill was referred to the Committee on Indian 
Affairs. On July 18, 2018, the Committee held a legislative 
hearing on the bill.
    In the Department of the Interior's written testimony, the 
July 18, 2018, Alan Mikkelsen stated:

          [T]he Department supports Indian water rights 
        settlements grounded in the policy that negotiated 
        Indian water rights settlements are preferable to 
        protracted and divisive litigation as a means of 
        resolving water rights disputes. The Department looks 
        forward to working with the Committee and discussing 
        the best means of achieving future settlements.

                SECTION-BY-SECTION ANALYSIS (AS AMENDED)

Section 1--Short title

    This section states that the bill may be cited as the 
``Indian Water Rights Settlement Extension Act''.

Section 2--Reclamation Water Settlements Fund

    This section extends the period in which the Secretary of 
the Treasury is required to deposit $120,000,000 in revenues 
that would otherwise be deposited in the Reclamation Fund, into 
the Reclamation Water Settlements Fund. Under the existing 
authority, this period runs from fiscal years 2020 through 
2029. This section extends the period in which deposits are 
directed to the Fund by an additional ten years.
    This section would also extend the period in which the 
Secretary of the Interior is authorized to expend amounts from 
the Fund by 10 years, extending the period through 2034. The 
extension period would not be subject to the existing priority 
list. No more than $90 million could be expended for a single 
settlement, unless the Secretary of the Interior determines 
that allocating greater than $90 million to a settlement would 
not adversely affect the funding of other congressionally 
approved settlements.
    This section would clarify that the Reclamation Water 
Settlements Fund is available for claims involving Indian water 
resources and remove the requirement that settlement parties 
must be in litigation in order to be eligible for the 
Reclamation Water Settlements Fund. Section 2(2)(B) also 
ensures that trust fund settlements are eligible for the 
Reclamation Water Settlements Fund by removing the requirement 
that the Bureau of Reclamation must be the agency providing 
financial assistance for the planning, design, and construction 
of water infrastructure, instead substituting the Secretary of 
the Interior.
    This section clarifies that the priorities for the use of 
the Reclamation Water Settlements Fund are limited to the first 
10 years of the Reclamation Water Settlements Fund. Section 
2(C)(i)(I)(cc) amends the Arizona settlement priority to 
require the Secretary of the Interior to repurpose amounts 
otherwise reserved for the Indian water rights settlement 
agreement entered into by the State of Arizona with the Navajo 
Nation to resolve the water rights claims of the Nation in the 
Lower Colorado River basin in Arizona, to the Lower Colorado 
River Basin Development Fund, with 65 percent of that amount 
deposited into the Future Indian Water Settlement Subaccount. 
The repurposing would be available if the Indian water rights 
settlement agreement entered into by the State of Arizona with 
the Navajo Nation to resolve the water rights claims of the 
Nation in the Lower Colorado River basin in Arizona was not 
authorized by Congress by December 31, 2021.
    Section 2(C)(iii) would extend the priority eligibility 
deadline by an additional two years, to December 31, 2021. This 
section provides the Secretary of the Interior with the 
flexibility to fund settlements with pending enforceability or 
substantial completion deadlines, irrespective of the 
priorities.

Section 3--Amendments to Aamodt Litigation Settlement Act

    This section increases the federal cost ceiling of the 
Aamodt Litigation Settlement Act by an additional $137,000,000 
and extends the substantial completion date by an additional 
four years to June 30, 2028. This section authorizes, ratifies, 
and confirms the 611(g) Agreement, an agreement reached between 
the United States, the State of New Mexico, the Pueblos of 
Nambe, Pojoaque, San Ildefonso, and Tesuque; and the City of 
Santa Fe in order to provide sufficient funding to implement 
the Aamodt Settlement Agreement and complete construction of 
the Pojoaque Basin Regional Water System. This section requires 
the Secretary of the Interior to execute the 611(g) Agreement.

Section 4--Kickapoo Tribe

    This section requires U.S. Department of Agriculture's 
Natural Resource Conservation Service to, in consultation with 
the Secretary of the Interior, commence a study of the 
multipurpose dam described in the Upper Delaware and 
Tributaries Watershed Plan and make recommendations to Congress 
on necessary material alternations to the Plan in order to 
effectuate the water rights agreed to by the Kickapoo Tribe and 
State of Kansas on September 9, 2016.

                   COST AND BUDGETARY CONSIDERATIONS

    The following cost estimate, as provided by the 
Congressional Budget Office, dated October 4, 2019, was 
prepared for S. 886:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 4, 2019.
Hon. John Hoeven,
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. 886, the Indian 
Water Rights Settlement Extension Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Aurora 
Swanson.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    The bill would:
           Increase the amounts authorized to be 
        appropriated to implement the Aamodt Water Settlement 
        by $157 million (including adjustments to account for 
        inflation)
           Appropriate $120 million to the Reclamation 
        Water Settlements fund each year from 2030 through 2039
           Require the Department of Agriculture to 
        study the plan developed by Kickapoo Tribe to resolve 
        their water rights claims and to recommend changes to 
        that plan
    Estimated budgetary effects would primarily stem from:
           Expenditures from the Reclamation Water 
        Settlements fund to implement the Aamodt Water 
        Settlement
    Bill summary: S. 886 would increase the maximum authorized 
amount available to implement the Aamodt Water Settlement by 
$137 million plus expected inflation. The bill also would 
appropriate $1.2 billion after 2029 to the Reclamation Water 
Settlements fund for future Indian water settlements.\2\ 
Finally, the bill would direct the Department of Agriculture to 
study and recommend changes to the plan developed by the 
Kickapoo Tribe to resolve their water rights claims.
---------------------------------------------------------------------------
    \2\ As of 2019, 36 Indian water settlements have been federally 
approved, with total estimated costs--mostly for construction of new 
distribution facilities--in excess of $5.8 billion. See Charles V. 
Stern, Indian Water Rights Settlements, CRS Report R44148 
(Congressional Research Service, April 16, 2019), https://go.usa.gov/
xVGuq.
---------------------------------------------------------------------------
    Estimated Federal cost: The estimated budgetary effect of 
S. 886 is shown in Table 1. The costs of the legislation fall 
within budget function 300 (natural resources and environment).

                                                    TABLE 1.--ESTIMATED DIRECT SPENDING UNDER S. 886
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal year, millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2020   2021   2022   2023   2024   2025   2026   2027   2028   2029  2020-2024  2020-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Budget Authority..................................      0      0      0      0      0      0      0      0      0      0         0          0
Estimated Outlays...........................................      0     15     17     17     25     28     40     13      2      0        74        157
--------------------------------------------------------------------------------------------------------------------------------------------------------
The increase in direct spending shown in the table would result in an equivalent decrease after 2029 because the amounts that would be spent for the
  Aamodt Water Settlement under the bill would otherwise have been spent after 2029.
S. 886 would also appropriate $120 million to the Reclamation Water Settlements fund each year from 2030 to 2039. The provision would increase direct
  spending after 2029 by $1.2 billion plus any interest that would accrue on unspent balances in the fund that also would be available to spend.

    Basis of estimate: For this estimate, CBO assumes that S. 
886 will be enacted near the end of 2019. S. 886 would increase 
the maximum amount that could be spent for the Aamodt Water 
Settlement and would require the water distribution facilities 
for that settlement to be substantially complete by 2028. 
Because the bill does not specify how much would be needed in 
each year to meet that schedule, CBO has estimated the 
necessary amounts for each year using information from the 
Bureau of Reclamation (BOR).
    Direct spending: Enacting the bill would increase direct 
spending by $157 million over the 2019-2029 period and would 
decrease direct spending by an equivalent amount after 2029. 
CBO does not estimate any increased budget authority over the 
2020-2029 period because the money that would be spent has 
already been provided.
    In addition, the bill would appropriate $1.2 billion for 
Indian water settlements over the 2030-2039 period.
    Aamodt Water Settlement. S. 886 would increase the maximum 
amount authorized to be spent by BOR to construct water 
distribution facilities for the Aamodt Water Settlement by $157 
million--$137 million specified in the bill plus an estimated 
$20 million to account for inflation. By increasing the amounts 
authorized for that project, CBO expects that the $157 million 
needed for constructing those facilities would be spent from 
the Reclamation Water Settlements Fund without further 
appropriation over the next 10 years. That fund was established 
to pay for authorized settlements. Under current law, the 
Aamodt Water Settlement was identified as a priority project 
that will receive amounts from the fund if annual 
appropriations are insufficient to meet the requirements of the 
settlement.
    Under current law, CBO estimates that about $900 million 
will be spent from the fund for settlements over the next 10 
years and the remaining balance of about $500 million will be 
spent after 2029. Under the bill, a portion of that $500 
million balance would be needed sooner and would be expended 
before 2029 to pay for the Aamodt Water Settlement. CBO 
estimates that implementing those provisions would increase 
direct spending by $157 million over the 2020-2029 period. 
There would be an equivalent decrease in direct spending after 
2029.
    Reclamation water settlements fund. S. 886 would 
appropriate an additional $120 million each year from 2030 to 
2039 to fund future Indian water settlements. The bill also 
would extend the fund's termination date from 2034 to 2044. CBO 
estimates that enacting those provisions would increase direct 
spending by at least $1.2 billion; that amount does not include 
the interest that would accrue on unspent balances in the fund 
that also would be available to spend after 2029 before the 
fund is terminated in 2044.
    Spending subject to appropriation: S. 886 would direct the 
Department of Agriculture and other federal agencies to study 
the Upper Delaware and Tributaries Watershed Plan developed by 
the Kickapoo Tribe and other interested parties in the state of 
Kansas. The agencies would be directed to study the 
multipurpose dam described in that plan and recommend changes 
as necessary to achieve an equitable water settlement for the 
Kickapoo Tribe and other parties. CBO estimates that the cost 
of preparing the study would be insignificant.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in Table 1.
    Increase in long-term deficits: CBO estimates that enacting 
S. 886 would increase net direct spending by about $1 billion 
over the 2030-2039 period. However, enacting the bill would not 
increase on-budget deficits by more than $5 billion in any of 
the four consecutive 10-year periods beginning in 2030.
    Mandates: None.
    Estimate prepared by: Federal Costs: Aurora Swanson; 
Mandates: Rachel Austin.
    Estimate reviewed by: Kim P. Cawley, Chief, Natural and 
Physical Resources; H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communication from the 
Executive Branch regarding S. 886.

               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. 886 will 
have a minimal impact on regulatory or paperwork requirements.

                        CHANGES IN EXISTING LAW

    On February 6, 2019, 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.