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[Senate Report 110-415]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 872
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-415

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

 
  A BILL TO APPROVE THE SETTLEMENT OF THE WATER RIGHTS CLAIMS OF THE 
SHOSHONE-PAIUTE TRIBES OF THE DUCK VALLEY INDIAN RESERVATION IN NEVADA, 
 TO REQUIRE THE SECRETARY OF THE INTERIOR TO CARRY OUT THE SETTLEMENT, 
                         AND FOR OTHER PURPOSES

                                _______
                                

    July 10 (legislative day, July 9), 2008.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 462]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 462) to approve the settlement of the water rights 
claims of the Shoshone-Paiute Tribes of the Duck Valley Indian 
Reservation in Nevada, to require the Secretary of the Interior 
to carry out the settlement, and for other purposes, 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. 462, as amended, is to approve the 
settlement of the water rights claims of the Shoshone-Paiute 
Tribes of the Duck Valley Reservation.

                               BACKGROUND

    Between 1877 and 1910, three presidents established 
reservation lands in Idaho and Nevada for the Western Shoshone 
and Paiute peoples.\1\ The Executive Orders form a reservation 
that encompasses approximately 290,000 acres located nearly 
equally within both states. With the exception of one small 
parcel, the United States holds the entire reservation in trust 
for the Shoshone-Paiute Tribes. There are no allotments.
---------------------------------------------------------------------------
    \1\April 16, 1877, Executive Order, Pres. Hayes (securing lands for 
the Western Shoshone peoples); May 4, 1886, Executive Order, Pres. 
Cleveland (securing lands for the Paddy Cap Band of Paiutes); July 1, 
1910, Executive Order, Pres. Taft (securing lands for water needs by 
Shoshone and Paiutes living on the Duck Valley Reservation).
---------------------------------------------------------------------------
    There are three primary sources of water on the 
reservation:
          (1) The East Fork of the Owyhee River, which flows 
        primarily through the State of Nevada;
          (2) Blue Creek, a tributary to the Owyhee River that 
        flows through the reservation until it meets the Owyhee 
        on the Idaho side of the reservation; and
          (3) Mary's Creek, located in the northeastern part of 
        the reservation, flowing northeasterly through the 
        Reservation into Idaho.
    The Tribes have used these waters for agriculture, 
livestock, fishing and domestic purposes. Since 1862, regular 
reports from Indian Affairs Commissioners and later agents of 
the Bureau of Indian Affairs record the agricultural and 
livestock activities of Shoshone and Paiute Indians living in 
the Duck Valley area of the Owyhee River and on the 
reservation. According to a ``Survey of Conditions of the 
Indians in the United States,'' a 1932 field hearing of the 
U.S. Senate Committee on Indian Affairs focused on the 
agriculture and grazing activities and water needs on the Duck 
Valley Reservation.\2\ While irrigation ditches and modest dams 
had been used with some success in taming the Owyhee River's 
spring flows, the need for water storage was cited as early as 
1889.\3\ The hearing record provides a detailed accounting of 
the Tribe's historic use of water and demand for in-stream, 
ground, and storage rights along the East Fork of the Owyhee 
River; the Tribes' and the Department of the Interior's efforts 
to secure water rights for the Tribe and develop the Duck 
Valley Indian Irrigation Project; and the Bureau of 
Reclamation's interests in protecting water to support the 
Owyhee Project in Oregon.\4\
---------------------------------------------------------------------------
    \2\Survey of Conditions of the Indians in the United States Before 
a Subcommittee of the Committee on Indian Affairs, 72nd Cong., 1st 
Sess., Part 28, Nevada 14807-15189 (1934).
    \3\Survey, p. 14933.
    \4\Survey, pp. 14895-15035. Pursued for decades and first 
authorized in 1924, the Bureau of Reclamation's Owyhee Project is a 
comprehensive dam, canal, and pumping system in the Owyhee and Snake 
River Basins to irrigate lands in eastern Idaho and western Oregon. See 
Eric Stene, The Owyhee Project, Bureau of Reclamation History Program, 
Denver, CO (1996), http://www.usbr.gov/dataweb/projects/oregon/Owyhee/
history.html.
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    Until recently, none of the Tribes' water rights from the 
three primary water sources were quantified, despite the 
Tribes' consistent water use. The Shoshones and Paiutes 
residing on the reservation have been irrigators since the 
1860s. Since the 1880s, Interior officials conducted a survey 
of water storage needs, secured additional lands for a storage 
reservoir, and conducted studies on the impacts of an Indian 
irrigation project on the downriver Owyhee Project. In the 
1930s, the federal government authorized and implemented the 
Duck Valley Indian Irrigation Project to provide water storage 
along the East Fork of the Owyhee River for irrigation and 
stock water purposes on the Duck Valley Reservation. The Wild 
Horse Reservoir, located south and upstream of the reservation, 
is the storage reservoir of the Duck Valley Indian Irrigation 
Project. Originally built in 1937, the reservoir was 
reconstructed in 1970.
    Although the Shoshone-Paiute Tribes' water rights had not 
been quantified, individuals along the Owyhee River, Blue 
Creek, and Mary's Creek secured surface and ground water rights 
under the prior appropriation doctrine or through state 
permits.\5\ As early as 1924, the Department of the Interior's 
Office of Indian Affairs and Bureau of Reclamation and the 
Department of Justice conducted inter-agency deliberations on 
whether to pursue a water rights adjudication on behalf of the 
Tribes based on the United States Supreme Court's decision in 
Winters v. United States.\6\ According to the Office of Indian 
Affairs, upstream users and other individuals were interfering 
with the Tribes' traditional agricultural and stock uses.\7\ In 
1931, the Department of Justice prepared a draft bill of 
complaint at the insistence of the Office of Indian Affairs, 
but the Bureau of Reclamation requested that the adjudication 
be withheld for further study of the impacts an Indian project 
would have on the downstream Owyhee Project.\8\ The complaint 
was not filed, and the Owyhee and the Duck Valley Indian 
Irrigation Projects were completed in the 1930s without the 
Tribes' or individual water rights being adjudicated.
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    \5\Both the States of Nevada and Idaho recognized water rights 
under the doctrine of prior appropriation, commonly understood as the 
``first in time'' to appropriate water for beneficial use established 
the ``first right'' to protect that use against other appropriators. 
See James Davenport, Nevada Water Law (Colorado River Commission of 
Nevada, 2003). As early as 1905 in Nevada and 1903 in Idaho, the states 
began regulating water rights by issuing permits.
    \6\207 U.S. 564, 28 S.Ct. 207, 52 L.Ed. 340 (1908).
    \7\Survey, pp. 14938-14940.
    \8\Ibid.
---------------------------------------------------------------------------
    Efforts were reinitiated in the late 1980s to quantify the 
water rights of various users of the three sources of water on 
the Reservation through actions before the Idaho state court 
and the Nevada Division of Water Resources.

Multi-State adjudications to quantify tribal water rights and other 
        claims

    In 1998, the United States, as trustee for the Tribes, 
filed a claim in an Idaho state court, as part of the Snake 
River Basin Adjudication, for a water right in the Blue Creek 
and St. Mary's Creek.\9\ The Tribes, on their own behalf, later 
intervened in the claim. In 2006, the State of Idaho's Fifth 
District Court entered a final decree that approved a consent 
decree and partial final decrees agreed to by the United 
States, the Tribes, the State of Idaho, and two individual 
water rights holders.\10\ The decrees quantified the parties' 
disputed water rights, including federal reserved water rights 
for the Tribes. No further federal action was necessary with 
respect to this adjudication.
---------------------------------------------------------------------------
    \9\The Snake River Basin Adjudication is a ``statutorily-created 
lawsuit to inventory all surface and ground water rights in the Snake 
River system,'' with its records and background available at http://
www.srba.state.id.us.
    \10\In re Snake River Basin Adjudication, Case No. 39576, Subcases 
51-02002, et al.; 51-12756, et al.; and 51-12604, et al. (Fifth Dist. 
Idaho 2006).
---------------------------------------------------------------------------
    The Snake River Basin Adjudication did not address the 
Tribes' claims against the United States for monetary damages.
    In 1989, the Nevada State Engineer reinitiated proceedings 
to determine all water rights to the use of surface and ground 
water along the East Fork of the Owyhee River.\11\ The water 
rights holders, with rights upstream from the Duck Valley 
reservation, claimed rights under Nevada's law of prior 
appropriation or state-issued permits to instream water rights 
to the Owyhee River. The Tribes claimed surface rights to the 
River, having an 1877 priority date, and water storage rights 
in Nevada.
---------------------------------------------------------------------------
    \11\East Owyhee River Adjudication, Nevada Division of Water 
Resources, State Engineer (1924, pending).
---------------------------------------------------------------------------
    In the late 1990s, the parties, including the United States 
as trustee for the Tribes, initiated negotiations to settle the 
adjudication by agreement, and the State Engineer and Nevada 
court stayed the adjudication for purposes of settlement rather 
than continue withadministrative and judicial proceedings. For 
more than ten years, the parties and the United States worked towards a 
settlement agreement. After years of participation and leadership in 
negotiating an agreement and after making significant progress in 
drafting a settlement agreement, the United States withdrew from the 
settlement negotiations.
    In 2005, the Tribes, the State, and the upstream users 
reached and executed an agreement. The United States did not 
sign the agreement. According to testimony provided to the 
Committee by W. Patrick Ragsdale, Director of the Bureau of 
Indian Affairs at the Department of the Interior, the 
Department disagrees with some provisions of the agreement. 
According to Mr. Ragsdale, neither the final settlement amount 
nor the State of Nevada's cost-share are sufficient to meet the 
Department's Criteria and Procedures for the Participation of 
the Federal Government in Negotiations for the Settlement of 
Indian Water Rights Claims.\12\ The Committee notes, however, 
that the Department has supported a water rights settlement 
where, after applying the Criteria and Procedures, no state 
contribution was required.\13\
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    \12\Criteria and Procedures for the Participation of the Federal 
Government in Negotiations for the Settlement of Indian Water Rights 
Claim, 55 Fed. Reg. 9223-01, 1990 WL 325541 (1990).
    \13\For example, the Department's Criteria and Procedures were 
applied during the water rights negotiation and settlement between the 
United States, State of Idaho, and the Nez Perce Tribe. The final 
agreement and law did not include a federal, cost-share. Pub. L. 108-
447, 118 Stat. 2809, 3431.
---------------------------------------------------------------------------
    The settlement agreement addresses the claims pending in 
the adjudication. The agreement quantifies the Tribes' surface 
and groundwater rights, and provides that the Tribe will 
administer these rights under a tribal water code. The 
agreement provides that the Nevada State Engineer will quantify 
the upstream water users' rights, which will include domestic 
and stock water uses, and administer these rights. The parties 
agreed to an implementation plan to coordinate the 
administration of water rights, particularly during a time of 
water shortage. Under the agreement, the State is required to 
provide gauging, a recording station, and a water commissioner 
to implement and administer the settlement, at an estimated 
cost of nearly $1 million.\14\
---------------------------------------------------------------------------
    \14\The Department failed to acknowledge the State of Nevada's 
nearly $1 million combined monetary and non-monetary contribution 
towards implementing the settlement agreement. The Committee 
acknowledges the State's contribution to quantify the upstream water 
rights' holders and administer aspects of the agreement. The State's 
contribution is appropriate compared to the significant federal 
obligation to the Tribes and the few upstream rights holders who 
benefit from the Duck Valley Indian Irrigation Project.
---------------------------------------------------------------------------

Tribal claims against the United States

    While the Snake River Basin Adjudication did not address 
the Tribes' claims against the federal government, the Tribes 
sought to resolve their claims against the United States in the 
Nevada adjudication and through federal legislation.
    The Tribes' claimed the United States had compromised the 
Tribes' water rights, failed to maintain and complete the Duck 
Valley Indian Irrigation Project, and destroyed tribal 
resources, including the Tribes' historic salmon runs. 
According to the appointed Federal Negotiation Team, the United 
States bore some responsibility for the Tribes' loss of on-
reservation fishing and reduced the reservation's irrigable 
acreage by locating the Wild Horse Reservoir 15 miles upstream 
from the reservation and for failing to maintain and complete 
the Duck Valley Indian Irrigation Project.
    During the settlement negotiations with the State and 
upstream water users, the Tribes and the United States 
discussed the amount of the federal liability to the Tribes for 
failing to observe its trust responsibilities and obligations. 
According to testimony offered at the Committee's April 2007 
hearing, the parties had made progress towards a settlement 
amount to compensate the Tribes for their estimated historic 
losses and anticipated programmatic expenses, such as 
developing the tribal water code. The Tribes initially 
calculated the federal liability at more than $100 million. 
During the settlement negotiations, the federal water 
negotiating team suggested the claims could be settled for more 
than $40 million. Mr. Ragsdale, however, testified that the 
United States Office of Management and Budget calculated the 
final federal burden at less than $10 million--$30 million less 
than the United States had indicated before the negotiating 
team withdrew from the settlement talks. The parties were 
unable to continue settlement negotiations given the United 
States' final determination of its liability.
    As represented by U.S. Senator Harry Reid in his testimony 
before this Committee, U.S. Senators Ensign, Craig and Crapo 
joined him in drafting a bill to authorize a $60 million 
settlement amount. This amount represents less than the Tribes' 
historic losses and estimated future expenditures and yet is 
greater than the federal government's final estimated 
obligations and potential liability. The bill would ratify the 
settlement agreement signed by the parties, make the United 
States a party to the agreement, and resolve the Tribes' breach 
of trust and other claims for monetary damages against the 
United States.

         SUMMARY OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE

    At its July 19, 2007 business meeting, the Committee 
adopted an amendment in the nature of a substitute to S. 462. 
Like the original bill, the amendment in the nature of a 
substitute federally approves, ratifies, and confirms a 
settlement agreement reached by parties to the East Fork of the 
Owyhee River adjudication pending before the Nevada Division of 
Water Resources and resolves the Tribes' claims for money 
damages against the United States.
    At the Committee's April 26, 2007 hearing, the Department 
of the Interior expressed concerns with S. 462 as introduced. 
In response, the bill's sponsors, the Tribes, the States of 
Nevada and Idaho, the upstream water users, and the Department 
addressed these concerns by adding Section 7, describing the 
Duck Valley Indian Irrigation Project, and making significant 
changes to renumbered Section 8, the Development and 
Maintenance Funds, and Section 9, the Waivers and Release of 
Claims. The amendment also includes a number of minor and 
technical changes to clarify the Act and the intentions of its 
sponsors. While the substitute amendment addresses many of the 
Department's concerns, the Department continues to oppose the 
bill as amended.

                         LEGISLATIVE BACKGROUND

    S. 462 was introduced on January 31, 2007, by Senator Harry 
Reid, for himself and Senator John Ensign, and was referred to 
the Committee on Indian Affairs. On April 26, 2007, the 
Committee held a hearing on S. 462. At an open business meeting 
on July 17, 2007, the Committee approved S. 462, with an 
amendment in the nature of a substitute. Senators Craig and 
Crapo became co-sponsors of the bill on July 19, 2007.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

    At an open business meeting held July 19, 2007, the 
Committee on Indian Affairs, by a voice vote, adopted S. 462, 
with an amendment in the nature of a substitute and ordered the 
bill favorably reported to the Senate, with the recommendation 
that the Senate do pass S. 462 as reported.

           SECTION-BY-SECTION ANALYSIS OF S. 462, AS AMENDED

Section 1. Title

    This section provides the title of the Act, which is the 
Shoshone-Paiute Tribes of the Duck Valley Reservation Water 
Rights Settlement Act.

Section 2. Findings

    Section 2 describes the basis for Congressional action. The 
Tribes, the State of Nevada, and the upstream individual water 
users have agreed to end more than a decade of state-law 
adjudication of water rights of all interested parties along 
the East Fork of the Owyhee River, Nevada. This bill supports 
federal policy to settle Indian water rights claims without 
lengthy and costly litigation and bring certainty to the water 
rights of tribes. This bill would also seek to settle tribal 
water-related claims for monetary damages against the United 
States.

Section 3. Purposes

    This section states that the bill will resolve outstanding 
issues related to the East Fork of the Owyhee River and will 
ratify the agreement reached by all parties to the East Fork 
Owyhee River adjudication and the United States. The Act will 
also resolve pending water-related Tribal claims for damages 
against the United States, and require that the Secretary of 
the Interior perform all obligations of the Secretary under the 
Agreement and this Act.

Section 4. Definitions

    This section defines important terms used in the Act.

Section 5. Approval, ratification, and confirmation of agreement

    This section ratifies the entire agreement, with an 
exception, and authorizes the Secretary of the Interior to 
perform the obligations ordered in the Act; these obligations 
include environmental compliance required by federal law.
    While the Tribes may store water at Wild Horse Reservoir 
and use tribal water rights on tribal land off the reservation, 
the section states that the bill does not approve, ratify or 
confirm provisions in the Settlement Agreement that would 
appear to allow the Tribes to otherwise market tribal water 
rights off the Reservation.

Section 6. Tribal water rights

    This section states that the Secretary of the Interior 
shall hold the Tribes' water rights in trust and that water 
rights cannot be lost by abandonment, forfeiture, or nonuse. 
The bill, like the Settlement Agreement, requires the Tribes to 
enact a tribal water code to administer tribal water rights. 
This action constitutes an intergovernmental mandate under the 
Unfunded Mandates Reform Act (UMRA), though the cost to 
implement the provision is well below the UMRA's threshold.

Section 7. Duck Valley Indian Irrigation Project

    This section affirms the current status of the federal Duck 
Valley Indian Irrigation Project and states that the federal 
government shall not seek reimbursement for capital costs 
incurred in support of the Project.

Section 8. Development and maintenance funds

    This section authorizes the creation of two funds: a 
Development Fund and a Maintenance Fund. The funds shall be 
held by the Treasury Department and administered by the 
Secretary of the Interior.
    This section also authorizes Congress to appropriate $9 
million annually, for five fiscal years, for the Development 
Fund. The Tribes must use funds from the $45 million 
Development Fund for water resource planning and development; 
for projects related to rehabilitating or expanding the Duck 
Valley Irrigation Project, such as for water resource 
development and agricultural development; for cultural 
preservation; for restoring or improving fish or wildlife 
habitat; and for designing and constructing water supply and 
sewer systems for tribal communities.
    Section 8 authorizes Congress to appropriate $3 million 
annually, for five fiscal years, for the Maintenance Fund. The 
Tribes must use funds from the $15 million Maintenance Fund to 
operate and maintain the Duck Valley Indian Irrigation Project 
and water-related projects authorized under the bill or to 
operate, maintain and replace the water supply and sewer 
systems for tribal communities.
    The Secretary of the Interior is required to manage and 
invest both funds according to the American Indian Trust Fund 
Management Reform Act of 1994. Upon reaching theeffective date 
for the bill, the Secretary must make the funds available to the 
Tribes. Under the bill, the Tribes can access the funds in two ways: By 
submitting a tribal management plan or an expenditure plan. The bill 
states the criteria for spending, reporting, and enforcement of both 
plans. Further, if requested by the Tribes, the Secretary is required 
to include funds in any funding agreements of the Tribes pursuant to 
the Indian Self-Determination Act for approved fund uses. Neither the 
Secretaries of Interior or Treasury retain liability for the 
expenditure or investment of amounts distributed to the Tribes.
    The bill prohibits the payment of per capita payments to 
individual Indians from either fund.

Section 9. Tribal waiver of claims

    This section includes a waiver and release of claims by the 
Tribes and the United States, acting as trustee, against 
parties to the settlement agreement, and a waiver and release 
of claims by the Tribes against the United States as stated in 
the settlement agreement and as described during the extensive 
federal water negotiations.
    Subsection (a) states that the Tribes and United States, as 
trustee, waive all claims to water rights in and damages, 
losses or injuries to water in the East Fork of the Owyhee 
River that were or could be asserted in court proceedings.
    Subsection (b) describes the Tribes' waiver and release of 
claims against the United States. The Tribes' waiver would 
release any claims against the United States for a water right 
or injury to a water right in the East Fork of the Owyhee 
River, for multiple breach of trust claims, and for fishing 
rights that resulted from reduced quantity of water in the East 
Fork and claims accrued before the effective date of the 
section.
    The waivers and release of claims become effective when the 
Secretary of the Interior publishes a statement of findings in 
the Federal Register. Should the Secretary fail to publish a 
statement of findings by December 31, 2015, the settlement 
agreement and the bill shall not take effect and any 
appropriated funds shall be returned to the Treasury.
    This section also describes the rights retained by the 
Tribes and the United States and the process for tolling 
claims.

Section 10. Miscellaneous

    This section includes provisions on the limits of claims 
and rights not waived in the agreement, the bill, or other 
ongoing matters specified in the bill. The section also 
confirms the status quo of tribal, state, and federal subject 
matter jurisdiction and regulatory authority. The section 
waives the United States' immunity from suit to enforce the 
agreement and limits State review of federal actions authorized 
under the bill.

                   COST AND BUDGETARY CONSIDERATIONS

    The cost estimate for S. 462, as prepared by the 
Congressional Budget Office, is set forth below.
    The legislation authorizes two settlement funds to be 
funded at a total of $12 million annually, for 5 consecutive 
years. Because the annually appropriated funds will be held in 
an account with the Secretary of the Interior, the 
Congressional Budget Office interprets the bill as authorizing 
Congress, in the final appropriations year, to appropriate 
interest-earned on the appropriated amounts held by the 
Secretary. The CBO estimates that Congress is authorized to 
appropriate an estimated $9 million in interest that the funds 
would have earned over five years.

S. 462--Shoshone-Paiute Tribes of the Duck Valley Reservation Water 
        Rights Settlement Act

    Summary: S. 462 would create two trust funds as part of a 
potential settlement to a water rights dispute between the 
Shoshone-Paiute Tribes of the Duck Valley Indian Reservation, 
the state of Nevada, and the federal government. Assuming 
appropriation of the necessary amounts, CBO estimates that 
implementing S. 462 could cost $69 million over the 2008-2012 
period if the United States agrees to the settlement. However, 
the United States is not currently a party to the settlement 
agreement reached by other parties involved in the dispute 
regarding Nevada's East Fork of the Owyhee River. If the 
federal government does not agree to the settlement, S. 462 
would have no effect on the federal budget. Enacting S. 462 
would not affect direct spending or revenues.
    The bill would require the Shoshone-Paiute Tribes of the 
Duck Valley Indian Reservation to adopt policies governing 
tribal water rights. That requirement would be an 
intergovernmental mandate as defined in the Unfunded Mandates 
Reform Act (UMRA). CBO estimates that the cost of the mandate 
would be small and well below the threshold established in UMRA 
($66 million in 2007, adjusted annually for inflation). 
Furthermore, appropriations resulting from authorizations 
contained in the bill could be used to pay for any such costs.
    S. 462 contains no private-sector mandates as defined in 
UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 462 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--
                                 ---------------------------------------
                                   2008    2009    2010    2011    2012
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Appropriations for Deposits to
 Trust Funds:
    Estimated Authorization           13      13      14      14      15
     Level......................
    Estimated Outlays...........      13      13      14      14      15
Receipts and Spending of Trust
 Funds:
    Estimated Authorization          -13     -13     -14     -14      54
     Level......................
    Estimated Outlays...........     -13     -13     -14     -14      54
Total Changes:
    Estimated Authorization            0       0       0       0      69
     Level......................
    Estimated Outlays...........       0       0       0       0      69
------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
462 will be enacted near the end of fiscal year 2007 and that 
the entire amounts estimated to be necessary will be 
appropriated for each fiscal year. Potential costs, however, 
hinge upon the agreement reached in the fall of 2006 by the 
Shoshone-Paiute Tribes of the Duck Valley Indian Reservation, 
the state of Nevada, and several individual water users over a 
water rights dispute relating to the Duck Valley Irrigation 
Project. Currently, the United States is not a party to this 
agreement. For this estimate, CBO assumes that the United 
States will agree to the settlement and that S. 462 would 
codify this potential agreement. Accordingly, CBO assumes that, 
by fiscal year 2012, all parties will have executed the 
components of the agreement as specified under the bill.

Shoshone-Paiute Tribes Water Rights Development and Maintenance Funds

    S. 462 would create two trust funds for the Shoshone-Paiute 
Tribes as part of the water rights settlement. The bill would 
authorize the appropriation of $9 million a year, plus interest 
earnings on the unspent balance of the fund, over the 2008-2012 
period for the Shoshone-Paiute Tribes Water Rights Development 
Fund to pay for costs to rehabilitate the Duck Valley 
Irrigation Project; acquire land and water rights; restore fish 
and wildlife habitat; develop water laws; and build sewer 
systems and other water-related projects. Over the same period, 
the bill also would authorize the appropriation of $3 million a 
year, plus interestearned on unexpended balances, for the 
Shoshone-Paiute Tribes Water Rights Operation and Maintenance Fund for 
similar activities.
    In total, CBO estimates that S. 462 would authorize the 
appropriation of $69 million to the new funds. Several 
conditions would have to be met to transfer control of the new 
trust funds to the tribes. The Secretary of the Interior would 
have to publish a statement of findings in the Federal Register 
indicating that all parties have executed the agreement, the 
Fourth Judicial District in Nevada would have to issue a 
judgment and final decree concerning the settlement, and the 
amounts authorized under the bill for fiscal years 2008 through 
2012 would have to be appropriated. Because those conditions 
would not be met until the appropriations are made for 2012, 
deposits in the funds during the first four years would be 
considered intragovernmental and would have no net effect on 
the federal budget. When the conditions for final settlement 
have been met, control over the use of the trust funds would be 
transferred to the tribe and the budget would record an 
expenditure of an estimated $69 million in 2012. However, if 
the United States does not become a party to the agreement, 
control over the use of the trust funds would not be 
transferred and the bill would have no cost in 2012 (even if 
the authorized amounts were appropriated each year).
    Beginning in 2012, the tribes would be able to withdraw all 
or part of the amounts in the funds upon the approval by the 
Secretary of the Interior. For any portion of amounts that are 
not withdrawn, the tribes would be required to submit to the 
Secretary an expenditure plan and subsequently would file an 
annual report describing their spending activities.
    Estimated impact on state, local, and tribal governments: 
S. 462 would require the tribes to adopt water policies that 
would govern tribal water rights as detailed in the agreement. 
That requirement would be an intergovernmental mandate as 
defined in UMRA because it would place a statutory requirement 
on the tribes that is separate from provisions of the 
agreement. CBO estimates that the cost of the mandate would be 
small and well below the threshold established in UMRA ($66 
million in 2007, adjusted annually for inflation). Furthermore, 
appropriations resulting from authorizations for the 
development fund could be used to pay for any such costs.
    Estimated impact on the private sector: S. 462 contains no 
private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Leigh Angres; Impact 
on State, Local, and Tribal Governments: Leo Lex; Impact on the 
Private Sector: Amy Petz.
    Estimate approved by: Jeffrey Holland, Chief, Projections 
Unit, Budget Analysis Division.

                          PREEMPTION STATEMENT

    Section 5(c) of the amendment in the nature of a substitute 
to S. 462 preempts Nevada law with respect to water marketing. 
The State of Nevada, State of Idaho, the Tribes and the other 
affected water rights holders in the Nevada adjudication 
support this provision.

                      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 
implementing this legislation. The Committee has concluded that 
enactment of S. 462 will create only de minimis regulatory or 
paperwork burdens.

                        EXECUTIVE COMMUNICATIONS

    The Committee has not received an official communication 
from the Administration on the provisions of the bill as 
amended. The Department of the Interior provided testimony to 
the Committee, which is in the hearing record.\15\
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    \15\Hearing on S. 462, Shoshone-Paiute Tribes of Duck Valley Water 
Rights Settlement Act Before the Senate Comm. on Indian Affairs, 110th 
Cong. (2007), S. Hrg. 110-105 (testimony of W. Patrick Ragsdale, 
Director, Bureau of Indian Affairs).
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                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
enactment of S. 462 will result in no changes in existing law.

                                  
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