69–010 

Calendar No. 948 

110TH CONGRESS REPORT " ! SENATE 2d Session 110–450 

PROVIDING FOR EQUITABLE COMPENSATION TO THE SPOKANE TRIBE OF 

INDIANS OF THE SPOKANE RESERVATION FOR THE USE OF TRIBAL 

LAND FOR THE PRODUCTION OF HYDROPOWER BY THE GRAND COULEE 

DAM, AND FOR OTHER PURPOSES 

SEPTEMBER 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. 2494] 

The Committee on Indian Affairs, to which was referred the bill 

(S. 2494) to provide for equitable compensation to the Spokane 

Tribe of Indians of the Spokane Reservation for the use of tribal 

land for the production of hydropower by the Grand Coulee Dam, 

and for other purposes, having considered the same, reports favorably thereon without amendment and recommends that the bill do 

pass. 

PURPOSE

The purpose of S. 2494 is to provide equitable compensation to 

the Spokane Tribe for the past and continued use of tribal lands 

for the generation of hydroelectric power by the Project, located on 

the main stem of the Columbia River in the State of Washington. 

The Tribe received compensation in the amount of $4,700 for the 

loss of its tribal lands taken for the construction of the Project. S. 

2494 would provide additional compensation to the Tribe to better 

reflect the Tribe’s losses, reflect the hydroelectric power value of 

the lands taken, and be comparable to the payments made to the 

neighboring Confederated Tribes of the Colville Reservation 

(Colville Tribes) under the terms of a congressionally approved settlement with the United States for the loss of similar tribal lands 

for the construction and operation of the Project. 


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BACKGROUND

I. Planning and construction of Grand Coulee Dam and hydroelectric project 

Planning for the construction of the Project began during the period from 1927 to 1931, when the Army Corps of Engineers (Corps), 

at the direction of Congress, investigated the Columbia River and 

its tributaries to identify sites at which dams could be constructed 

to produce hydroelectric power at low cost. The Corps recommended that dams be constructed at a number of sites, including the current site of the Project. 

The Corps recommended that the construction of the Project be 

undertaken by local governments or private utilities under the authority of the Federal Power Act, 16 U.S.C. §§ 791a et seq. Section 

10(e) of that Act (16 U.S.C. § 803(e)) requires that non-federal licensees utilizing Indian lands to generate hydroelectric power pay 

to the Indian tribe a reasonable annual charge for the use of its 

land subject to the approval of the tribe. In 1933, an agency of the 

State of Washington was issued a preliminary permit to construct 

a hydroelectric project at the Grand Coulee site by the Federal 

Power Commission. Several years later, however, the Federal government assumed control of the project. Federal dams are not subject to licensing pursuant to the Federal Power Act or the compensation requirements of Section 10(e) of the Act. 

II. Payment of compensation to tribes 

Under the Act of June 29, 1940, in aid of construction of the 

Project, Congress granted to the United States ‘‘all the right, title, 

and interest of the Indians in and to the tribal and allotted lands 

within the Spokane and Colville Reservations . . . as may be designated therefor by the Secretary of the Interior from time to time. 

...’’ See, 16 U.S.C. 835d–h. This Act also provided that the Secretary of the Interior was to determine an amount of ‘‘just and equitable compensation for the tribal lands taken.’’ See, 16 U.S.C. 

§ 835e. 

The United States recognized that the Spokane Tribe and the 

Colville Tribes had compensable interests that would be injured by 

the Project. These interests included the development of hydroelectric power, a salmon fishery vital to the tribes which would be 

destroyed by project construction, and the inundation of tribal 

lands already identified as potential hydroelectric power sites. See, 

Id. 

Pursuant to the Secretary of the Interior’s determination under 

the Act of June 29, 1940, the Tribe was paid $4,700 in compensation and the Colville Tribes were paid $63,000. On two occasions, 

October 2, 2003 and May 15, 2008, the Committee received testimony to the effect that the original payments made to the tribes, 

$4,700 and $63,000 respectively, were not adequate compensation 

to provide the tribes with ‘‘just and equitable compensation’’ as required by the Act of June 29, 1940, and that for decades the two 

tribes had gone without the type of compensation to which they 

would have been entitled had the Project been licensed under the 

authority of the Federal Power Act. 

The Spokane Tribe and the Colville Tribes asserted various 

claims before the Indian Claims Commission (ICC) under the InVerDate Aug 31 2005 12:17 Sep 10, 2008 Jkt 069010 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\SR450.XXX SR450

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1 Confederated Tribes of the Colville Reservation v. United States, 964 F. 2d 1102 (Fed. Cir. 

1992). 2 Confederated Tribes of the Colville Reservation Grand Coulee Dam Settlement Act, Pub. 

L. No. 103–436, 108 Stat. 4577 (Nov. 2, 1994) (Colville Tribes Settlement Act). 

dian Claims Commission Act of 1946, Pub. L. 79–726 (ICCA). The 

Colville Tribes eventually asserted two claims related to the Project 

under the ICCA. First, the Colville Tribes pursued a claim for the 

loss of their fisheries as a result of the Project and in 1978 settled 

for $3,257,000. Second, the Colville Tribes sought compensation for 

the hydroelectric power value of the lost tribal lands. Pursuant to 

this litigation, the Colville Tribes secured a judicial determination 

that under the ‘‘fair and honorable dealings’’ standard of the ICCA, 

they could assert a claim for compensation for the hydroelectric 

power value of the lost tribal lands.1 In 1994, Congress ratified a 

settlement agreement between the Colville Tribes and the United 

States providing for payment of $53,000,000 million in damages 

and annual installments of $15,250,000 in perpetuity, adjusted annually based on revenues from the sale of hydroelectric power generated by the Grand Coulee project.2

Although the Spokane Tribe settled certain other issues under 

the ICC, it did not file claims for loss of hydroelectric power values 

before the ICCA or any other judicial forum. Rather, the Tribe testified that it believed that the United States was already planning, 

albeit belatedly, to appropriately compensate the Tribe as required 

by the Act of June 29, 1940 authorizing the Project and requiring 

‘‘just and equitable compensation for the tribal lands taken.’’ The 

Tribe’s testimony is supported by numerous records, beginning in 

the 1930’s and then resuming in the 1970’s, of high-level agency 

discussions, Solicitor’s Office Opinions and memoranda, interagency proposals and memoranda, congressional findings, hearings, 

and directives—including a Task Force Study from 1976 to 1980 at 

the direction of the Senate Committee on Appropriations, and negotiations with the two tribes regarding adequate compensation for 

the use of tribal lands to generate hydroelectric power by the 

Project. 

These historical and legal records often treat the legal basis for 

the Spokane Tribe’s claim as the same or comparable to the claims 

eventually filed by the Colville Tribes under the ICCA. The only 

difference between the claims of the two tribes is that the Spokane 

Tribe, relying on discussions with the United States regarding the 

requirements of the Act of June 29, 1940, and the ICCA, did not 

file a claim under the ICCA within its five-year statute of limitations. 

Based on these circumstances, the General Accounting Office 

(GAO) previously testified before the Committee that it would be 

reasonable to settle with the Spokane Tribe in the same manner 

as the settlement with the Colville Tribes. The GAO testified: 

A reasonable case can be made to settle the Spokane 

tribe’s case along the lines of the Colville settlement—a 

one-time payment for the U.S. Treasury for past lost payments for water power values and annual payments primarily from Bonneville. Bonneville continues to earn revenues from Spokane reservation lands used to generate hydropower. However, unlike the Colville tribes, the Spokane 

tribe does not benefit from these revenues. The Spokane 


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3Testimony of Robert A. Robertson, United States General Accounting Office, October 2, 2003, 

before the Senate Committee on Indian Affairs, at 3, reprinted in S. Hrg. 108–375, at 64. 4See, Written Testimony of Richard Sherwood, Chairman, Spokane Tribe of Indians: Hearing 

before the Senate Committee on Indian Affairs, 110th Cong. 12 (May 15, 2008). 

tribe does not benefit because it missed its filing opportunity before the Indian Claims Commission. At that time 

it was pursuing other avenues to win payments for the 

value of its land for hydropower. These efforts would ultimately fail. Without congressional action, it seems unlikely 

that a settlement for the Spokane tribe will occur.3

Accordingly, without congressional legislation, the Spokane Tribe 

may not receive just and equitable compensation for its losses relating to the salmon fishery on which the Tribe was economically 

dependent, the inundation of identified hydroelectric power sites 

that the Tribe could have itself developed, and the loss for the ongoing revenue stream the Tribe would have received under the 

Federal Power Act if the Project had not been put under Federal 

administration. 

SUMMARY OF PROVISIONS OF S. 2494

Under the proposed legislation, the Spokane Tribe would be compensated for the use of its lands for the production of hydroelectric 

power by the Grand Coulee Dam under a formula based in part on 

that by which the Colville Tribes were compensated in the Confederated Tribes of the Colville Reservation Grand Coulee Dam Settlement Act, Pub. L. 103–436, 108 Stat. 4577 (November 2, 1994). 

The Spokane Tribe lost lands equivalent in area to 39 percent of 

the lands lost by the Colville Tribes.4 A settlement based solely on 

this factor would result in payments to the Spokane Tribe equal to 

39 percent of the payments made to the Colville Tribes. However, 

the Spokane Tribe agreed to reduce this percentage to 29 percent, 

in recognition of the fact that certain lands located within the 

boundaries of the Spokane Reservation taken for the construction 

of the Project are to be restored to the Spokane Tribe under the 

terms of this legislation. 

Under S. 2494, an interest-bearing settlement fund account 

would be established in the Treasury to be known as the Spokane 

Tribe of Indians Settlement Fund. Subject to the availability of appropriations the Secretary would deposit in the Fund $23,900,000 

for fiscal year 2008, and for each of the four fiscal years thereafter 

$18,900,000. These funds would be held in trust by the Secretary, 

unless and until the Spokane Business Council submits a written 

request to the Secretary asking that all or part of the Fund be paid 

to the Spokane Business Council. In the event such a request is 

made, $5,000,000 of the initial deposit would be used for the planning, design, construction, equipping, and operation and maintenance of a Cultural Resource Repository and Interpretive Center to 

house burial remains, funerary objects, and other cultural resources affected by the operation of the Project and to provide an 

educational facility addressing the culture and history of the Tribe. 

Of the remaining assets of the Fund, 25 percent would be used by 

the Spokane Business Council for discretionary purposes of general 

benefit to members of the Tribe, and 75 percent for resource develVerDate Aug 31 2005 12:17 Sep 10, 2008 Jkt 069010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR450.XXX SR450

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opment, credit, scholarship, or reserve, investment, and economic 

development programs. 

Additionally, on March 1, 2008, the Administrator of the Bonneville Power Administration (Administrator) would pay the Tribe an 

amount equal to 29 percent of the annual payment due to the 

Colville Tribes under § 5(b) of the Colville Tribes Settlement Act for 

fiscal year 2007. On or before March 1 of each year thereafter, the 

Administrator would make annual payments to the Tribe equal to 

29 percent of the Colville Tribes payment for the previous fiscal 

year. These funds, upon payment to the Tribe, could be used or invested by the Spokane Business Council in the same manner and 

for the same purposes as other Spokane Tribe government funds. 

Expenditure of funds transferred to the Tribe by the Administrator would not require approval by the Secretary of the Interior 

or the Administrator, and these officials would have no trust responsibility for the investment, administration, or expenditure of 

those funds. 

The Administrator would be authorized to deduct certain sums 

($1,300,000 in each fiscal year in which payments are made to the 

Spokane Business Council) from the interest otherwise payable to 

the Secretary of the Treasury from ‘‘net proceeds’’ as defined in section 13 of the Federal Columbia River Transmission Act, 16 U.S.C. 

§ 838k, subject to certain limitations. 

The Secretary of the Interior would be directed to transfer administrative jurisdiction for certain lands within the exterior 

boundaries of the Spokane Indian Reservation to the Bureau of Indian Affairs. Such lands would be held in trust for the benefit of 

the Spokane Tribe and remain a part of the Spokane Indian Reservation, subject to a reservation of rights and easement on behalf 

of the United States regarding use of these lands as is necessary 

for the operation of the Columbia Basin Project, which includes 

Grand Coulee Dam, and existing recreational facilities owned or 

permitted by the United States. The lands would also be subject to 

the execution of a memorandum of understanding between the relevant agencies of the Department of the Interior and the Tribe. Finally, nothing in section 9 or in the transfer of such lands would 

establish or affect the location of the boundary between the Spokane Indian Reservation and the Colville Reservation along the Columbia River. 

The making of the prescribed payments by the Secretary of the 

Interior and the Administrator, together with the restoration of 

ownership and the taking of the specified land into trust on behalf 

of the Tribe, would constitute full satisfaction of the Spokane 

Tribe’s claims for past and continued use of tribal lands and to a 

fair share of hydroelectric revenues generated as a result of the use 

of those lands. 

The bill would authorize the appropriation of such funds as are 

necessary to accomplish its purpose. 

The bill does not establish any precedent or is binding upon the 

Southwestern Power Administration, Western Area Power Authority, or Southeastern Power Administration. 


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SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

Section 1 states that the Act may be cited as the ‘‘Spokane Tribe 

of Indians of the Spokane Reservation Grand Coulee Dam Equitable Compensation Settlement Act.’’

Section 2. Findings 

Section 2 provides findings made by Congress that describe the 

background and reasons for this legislation. These findings describe 

the history of site selection and development of the Project, the relationship between the Project and jurisdiction of the Federal 

Power Act, recognition by the federal government of a need to compensate the tribes, the differing experiences of the tribes working 

with the United States and seeking claims pursuant to the Indian 

Claims Commission Act, the harm suffered by the Spokane Tribe 

in comparison to the harm suffered by the Colville Tribes, and the 

Spokane Tribe’s commitment to resolve its claims through this legislation. 

Section 3. Purpose 

Section 3 states that the purpose of this Act is to provide fair and 

equitable compensation to the Tribe for the use of its land for the 

generation of hydropower by the Grand Coulee Dam. 

Section 4. Definitions 

Section 4 provides definitions for various terms used in the Act. 

Section 5. Settlement fund 

Section 5(a) establishes an interest-bearing settlement fund account in the Treasury of the United States to be know as the ‘‘Spokane Tribe of Indians Settlement Fund,’’ consisting of amounts deposited in the Fund under subsection (b) and any interest earned 

on investment of amounts in the Fund. 

Section 5(b) provides that, from amounts made available under 

section 11, for fiscal year 2008, the Secretary shall deposit in the 

Fund $23,900,000, and for each of the 4 fiscal years thereafter, the 

Secretary shall deposit in the Fund $18,900,000. 

Section 5(c) provides that the Fund shall be maintained and invested by the Secretary in accordance with the Act of June 24, 

1938 (25 U.S.C. § 162a). 

Section 5(d) provides that at any time after funds are deposited 

into the Fund, the Spokane Business Council may submit to the 

Secretary written notice of the adoption by the Spokane Business 

Council of a resolution requesting that the Secretary pay all or portion of the amounts in the Fund to the Spokane Business Council, 

and provides further that not later than 60 days after receipt of 

such notice, the Secretary shall pay the amount requested to the 

Spokane Business Council. 

Section 5(e) provides that, of the initial deposit under subsection 

(b)(1), $5,000,000 shall be used by the Spokane Business Council 

for the planning, design, construction, equipping, and continuing 

operation and maintenance of a Cultural Resource Repository and 

Interpretive Center to house, preserve, and protect the burial remains and funerary and cultural resources affected by the operVerDate Aug 31 2005 12:17 Sep 10, 2008 Jkt 069010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR450.XXX SR450

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5 ‘‘Computed Annual Payment’’ is defined in section 4 of the bill as the payment calculated 

under paragraph 2.b. of the Colville Settlement Agreement, without regard for any increase or 

decrease in the payment under section 2.d. of the agreement. 6Section 6 of the Saginaw Chippewa Act provides that distributions of certain funds paid to 

that tribe under the Act to its enrolled members are not subject to Federal, State, or local income taxes and that such distributions may not be used as a basis for denying or reducing (1) 

Continued 

ation of the Grand Coulee Dam, and provide an interpretive and 

educational facility regarding the culture and history of the Spokane Tribe. The section also provides that the funding of these activities does not alter or affect any authority, obligation, or responsibility of the United States under the Native American Graves 

Protection and Repatriation Act (25 U.S.C. §§ 3001 et seq.), the Archaeological Resources Protection Act (16 U.S.C. §§ 470aa et seq.), 

the National Historic Preservation Act (16 U.S.C. §§ 470 et seq.), or 

the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 

seq.). Of all other amounts deposited in the Fund (including interest generated on those amounts), 25 percent shall be reserved by 

the Spokane Business Council and used for discretionary purposes 

of general benefit to all members of the Spokane Tribe, and 75 percent shall be used by the Spokane Business Council to carry out 

resource development programs, credit programs, scholarship programs, or reserve, investment, and economic development programs. 

Section 6. Payments by the Administrator 

Section 6(a) provides that on March 1, 2008, the Administrator 

shall pay to the Tribe an amount equal to 29 percent of the Computed Annual Payment for fiscal year 2007.5

Section 6(b) provides that not later than March 1, 2009, and 

March 1 of each year thereafter, the Administrator shall pay the 

Tribe an amount equal to 29 percent of the Computed Annual Payment for the preceding fiscal year. 

Section 6(c) provides that in accordance with the payment schedule described in subsection (b), the Administrator shall make commensurate cost reductions in expenditures, on an annual basis, to 

recover each payment to the Tribe under this section. This section 

also provides that this cost reduction plan shall be included in the 

annual budget submitted by the Administrator to Congress. 

Section 7. Treatment after funds are paid 

Section 7(a) provides that payments made to the Spokane Business Council or Spokane Tribe under section 5 or 6 may be used 

or invested by the Business Council in the same manner and for 

the same purposes as the Tribe’s other governmental funds. 

Section 7(b) provides that neither the Secretary nor the Administrator shall have any trust responsibility for the investment, supervision, administration, or expenditure of any funds after the date 

on which the funds are paid to the Spokane Business Council or 

Spokane Tribe under section 5 or 6. 

Section 7(c) provides that the payments of all funds to the Spokane Business Council and Spokane Tribe under sections 5 and 6, 

and the interest and income generated by the funds, shall be treated in the same manner as payments under section 6 of the Saginaw Chippewa Indian Tribe of Michigan Distribution of Judgment 

Funds Act (100 Stat. 677).6


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financial assistance or other benefits under the Social Security Act to such tribal member or 

the member’s household, or (2) any other Federal financial assistance or benefit to which the 

tribal member or member’s household may be otherwise entitled. 

Section 7(d) provides that after the date on which funds are paid 

to the Spokane Business Council or Spokane Tribe under section 

5 or 6, the funds shall constitute Spokane Tribe governmental 

funds and shall be subject to an annual tribal government audit. 

Section 8. Repayment credit 

Section 8(a) provides that the Administrator shall deduct from 

the interest payable to the Secretary of the Treasury from net proceeds (as defined in section 13 of the Federal Columbia River 

Transmission System Act (16 U.S.C. 838k)) in fiscal year 2008, 

$1,300,000; and in each subsequent fiscal year in which the Administrator makes a payment under section 6, $1,300,000. 

Section 8(b)(1) provides that except as provided in paragraphs (2) 

and (3), each deduction made under this section shall be a credit 

to the interest payments otherwise payable by the Administrator to 

the Secretary of the Treasury during the fiscal year in which the 

deduction is made, and shall be allocated pro rata to all interest 

payments on debt associated with the generation function of the 

Federal Columbia River Power System that are due during the fiscal year. Section 8(b)(2) provides that if, in any fiscal year, the deduction is greater than the amount of interest due on debt associated with the generation function for the fiscal year, the amount 

of the deduction that exceeds the interest due on debt associated 

with the generation function shall be allocated pro rata to all other 

interest payments due during the fiscal year. Section 8(b)(3) provides that to the extent that a deduction exceeds the total amount 

of interest described in paragraphs (1) and (2), the deduction shall 

be applied as a credit against any other payments that the Administrator makes to the Secretary of the Treasury. 

Section 9. Transfer of administrative jurisdiction and restoration of 

ownership of land 

Section 9(a) provides that the Secretary shall transfer administrative jurisdiction from the Bureau of Reclamation to the Bureau 

of Indian Affairs over all land acquired by the United States under 

the Act of June 29, 1940 (16 U.S.C. § 835d), that is located within 

the exterior boundaries of the Spokane Indian Reservation established pursuant to the Executive Order of January 18, 1881. 

Section 9(b)(1) provides that all land transferred under this section shall be held in trust for the benefit and use of the Tribe and 

shall remain part of the Spokane Indian Reservation. 

Section 9(b)(2) provides that the Federal trust responsibility for 

all land transferred under this section shall be the same as the responsibility for other tribal land held in trust within the Spokane 

Indian Reservation. 

Section 9(c) provides that nothing in this section establishes or 

affects the precise location of the boundary between the Spokane 

Indian Reservation and the Colville Reservation along the Columbia River and Lake Roosevelt. Any unresolved issues relating to the 

Tribes’ common Reservation boundary would not be affected in any 

way by the proposed legislation; however, the Committee does recVerDate Aug 31 2005 12:17 Sep 10, 2008 Jkt 069010 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\SR450.XXX SR450

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ommend that all such issues be resolved through further negotiations between the two tribal sovereigns. 

Section 9(d)(1) provides that the United States reserves a perpetual right, power, privilege, and easement over the land transferred under this section to carry out the Columbia Basin Project 

under the Columbia Basin Project Act (16 U.S.C. §§ 835 et seq.). 

Section 9(d)(2) provides further that the rights reserved under 

paragraph (1) further include the right to operate, maintain, repair, 

and replace boat ramps, docks, and other recreational facilities 

owned or permitted by the United States and existing on the date 

of enactment of this Act. Section 9(d)(3) provides that land transferred under this section that, before the date of enactment of this 

Act, was included in the Lake Roosevelt National Recreation Area 

shall remain part of the Recreation Area, and further provides that 

nothing in this section shall affect the authority or responsibility 

of the National Park Service to administer the Lake Roosevelt National Recreation Area under the Act of August 25, 1916 (39 Stat. 

535, chapter 408; 16 U.S.C. §§ 1et seq.). Section 9(d)(4) provides 

that the cognizant agencies of the Department of the Interior shall 

enter into a memorandum of understanding with the Tribe to provide for coordination in applying this subsection. 

Section 10. Satisfaction of claims 

Section 10 provides that payment by the Secretary under section 

5 and by the Administrator under section 6 and restoration of ownership of land in trust under section 9 constitute full satisfaction 

of the claim of the Tribe to a fair share of the annual hydropower 

revenues generated by the Grand Coulee Dam project for the past 

and continued use of land of the Tribe for the production of hydropower at the Dam. 

Section 11. Authorization of appropriations 

Section 11 authorizes the appropriation of such sums as are necessary to carry out this Act. 

Section 12. Precedent 

Section 12 provides that nothing in this Act establishes any 

precedent or is binding on the Southwestern Power Administration, 

Western Area Power Administration, or Southeastern Power Administration. 

LEGISLATIVE HISTORY

Settlement bills relating to the Tribe’s claims were introduced in 

the past five Congresses. At different times, some of these bills 

passed the Senate and the House, but not in the same Congress. 

Bills were introduced in the 106th Congress (S. 1525 and H.R. 

2664), in the 107th Congress (S. 2567 and H.R. 4859), in the 108th 

Congress (S. 1438 and H.R. 1753), and in the 109th Congress (S. 

881 and H.R. 1797). In the 110th Congress, Senator Cantwell introduced S. 2494 for herself and Senators Inouye and Murray on December 17, 2007. 

Two rounds of hearings have also been held on these bills. On 

October 2, 2003, the Senate Committee on Indian Affairs held a 

hearing on S. 1438, and on the same date, the Water and Power 

Subcommittee of the House Committee on Natural Resources held 


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a hearing on H.R. 1753. On May 15, 2008, the Senate Committee 

on Indian Affairs held a hearing on S. 2494. 

COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

On June 19, 2008, the Committee on Indian Affairs convened a 

business meeting to consider S. 2494 and other measures. The 

Committee voted to have the bill favorably reported without 

amendment. 

COST AND BUDGETARY CONSIDERATIONS

The cost estimate for S. 2494, as calculated by the Congressional 

Budget Office, is set forth below: 

S. 2494—Spokane Tribe of Indians of the Spokane Reservation 

Grand Coulee Dam Equitable Compensation Settlement Act 

Summary: S. 2494 would provide compensation to the Spokane 

Tribe of Indians for the use of tribal lands to generate hydroelectric 

power by the Grand Coulee Dam. The bill would require the Bonneville Power Administration (BPA) to make annual payments to 

the tribe from receipts generated from the sale of electricity. Those 

payments to the tribe would be offset by increases in the rates 

charged to BPA’s customers for electricity, and thus would result 

in no net cost to the government. Under the bill, BPA also would 

be relieved from making certain interest payments to the Treasury. 

CBO estimates that provision would reduce interest payments received by the Treasury by $13 million over the 2009–2018 period 

and by $1.3 million per year after 2018. (Those effects constitute 

an increase in direct spending.) Finally, the bill would create the 

Spokane Tribe of Indians Settlement Fund as compensation for 

land taken to build the Grand Coulee Dam. CBO estimates that 

implementing this provision would cost $76 million over the 2009–

2012 period, assuming appropriation of the authorized amounts. 

S. 2494 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of S. 2494 is shown in the following table. The costs 

of this legislation fall within budget functions 450 (community and 

regional development) and 270 (energy). 

By fiscal, in millions of dollars— 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009– 

2013 

2009– 

2018 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Payments to Spokane Tribe 

Settlement Fund Account: 

Authorization Level .... 19 19 19 19 0 0 0 0 0 0 76 76 

Estimated Outlays ..... 19 19 19 19 0 0 0 0 0 0 76 76 

CHANGES IN DIRECT SPENDING 

Interest Credits for BPA: 

Estimated Budget Authority ..................... 1 1 1 1 1 1 1 1 1 1 7 13 

Estimated Outlays ...... 1 1 1 1 1 1 1 1 1 1 7 13 

Note: Amounts may not sum to totals because of rounding. 


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Basis of estimate: For this estimate, CBO assumes that the bill 

will be enacted by the beginning of 2009 and that the authorized 

amounts will be appropriated beginning that year. 

Spending subject to appropriation 

S. 2494 would create the Spokane Tribe of Indians Settlement 

Fund as compensation for land taken to build the Grand Coulee 

Dam. The bill would authorize the appropriation of $18.9 million 

annually over the 2009–2012 period to that new tribal trust fund. 

The Secretary of the Interior would be required to invest those 

amounts in government securities until those funds are expended. 

CBO estimates that implementing the bill would cost $76 million 

over the 2009–2012 period. 

Payments to certain tribal trust funds that are held and managed in a fiduciary capacity by the federal government on behalf 

of Indian tribes are treated as payments to a nonfederal entity. As 

a result, CBO expects that the entire amount deposited to the fund 

in any year would be recorded as budget authority and outlays in 

that year. Subsequently, the trust fund would be nonbudgetary, 

and any use of such funds and interest payments to the tribes 

would have no effect on the federal budget. 

Direct spending 

S. 2494 would require BPA to make annual payments to the Spokane Tribe. Under the bill, such payments would equal 29 percent 

of the annual payment BPA currently makes to the Colville Tribe. 

For this estimate, CBO assumes that payments to the Spokane 

Tribe would begin in 2009 and would average about $6 million per 

year. Payments would continue so long as electricity continues to 

be generated at the Grand Coulee Dam. Although the bill would require that the payments be offset by commensurate cost reductions, 

CBO expects that those payments would contribute to an increase 

in costs to the agency. Because BPA is a cost-recovery agency that 

charges its customers for the electricity it generates, CBO expects 

that those payments to the tribe would become part of BPA’s cost 

structure and would be offset by an increase in the new electricity 

rates that the agency plans to impose in 2009. Thus, this annual 

payment to the tribe would result in no net cost to the government. 

The bill also would allow BPA to reduce the amount of interest 

that it pays to the U.S. Treasury for funds borrowed to construct 

BPA’s infrastructure. The bill would authorize BPA to forgo interest payments of $1.3 million a year for as long as payments are 

made to the tribe. Thus, CBO estimates that enacting this provision would increase the Treasury’s outlays for net interest by $13 

million over the 2009–2018 period. 

Intergovernmental and private-sector impact: S. 2494 contains no 

intergovernmental or private-sector mandates as defined in UMRA 

and would impose no costs on state, local, or tribal governments. 

The payments authorized by this bill would benefit the Spokane 

Tribe. 

Estimate prepared by: Federal costs: Leigh Angres and Kathleen 

Gramp; Impact on state, local, and tribal governments: Melissa 

Merrell; Impact on the private sector: MarDestinee Perez. 

Estimate approved by: Theresa Gullo Deputy Assistant Director 

for Budget Analysis. 


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12 

REGULATORY AND PAPERWORK 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 and paperwork impact that would be incurred in carrying 

out the bill. The Committee has concluded that the regulatory and 

paperwork impacts of S. 2494 should be de minimus. 

EXECUTIVE COMMUNICATION

At a May 15, 2008, hearing, the Department of the Interior testified in opposition to S. 2494. The Department questioned whether 

awarding such a settlement was warranted because the Tribe had 

not brought a legal claim against the United States. The Department also provided written testimony that stated: 

‘‘The Department is also concerned with transferring 

land and jurisdiction from the Bureau of Reclamation to 

the Bureau of Indian Affairs for the Tribe absent a prior 

written agreement to fully address Reclamation’s and National Park Service’s future ability to manage Grand Coulee Dam, Lake Roosevelt, and the Columbia Basin Project. 

Such a written agreement should clearly address a number 

of issues associated with transferring land into trust status, such as future liability for damages from shoreline 

erosion and heavy metal contamination in sediments from 

upstream mining, as well as issues related to land and 

recreation management, including consideration of the existing five-party Lake Roosevelt Cooperative Management 

Agreement. While under the present draft Reclamation 

would be granted a perpetual easement to operate the Columbia Basin Project, it is imperative that the parties specifically reach agreement on the details of the lands and 

easement rights involved and how the transferred areas 

will be managed prior to the passage of this legislation. At 

a minimum, such an agreement should be required prior 

to the actual transfer taking place.’’

In addition, the views of the Administration on S. 2489 as introduced were provided in a letter from George Skibine, Deputy Assistant Secretary for Policy and Economic Development—Indian Affairs, United States Department of the Interior, dated June 18, 

2008, and are set forth below: 

DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, DC, June 18, 2008. 

Hon. BYRON L. DORGAN, 

Chairman, Committee on Indian Affairs, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The following sets forth the views of the 

Department of the Interior on S. 2494, the ‘‘Spokane Tribe of Indians of the Spokane Reservation Grand Coulee Dam Equitable Compensation Settlement Act’’. The Department opposes the bill. The 

Administration has worked with the Spokane Tribe over the last 

several years on this issue. We believe negotiations to correct several serious issues should continue. 


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13 

S. 2494 would provide compensation to the Spokane Tribe for the 

use of its land for the generation of hydropower by the Grand Coulee Dam. Specifically, S. 2494 would require the Secretary of the 

Interior, subject to the availability of appropriations, to deposit 

$99.5 million over five years, $23,900,000 for fiscal year 2008 and 

$18,900,000 for the following four fiscal years, into a trust fund 

held in the U.S. Treasury and maintained and invested by the Secretary of the Interior for the Spokane Tribe to be known as the 

‘‘Spokane Tribe of Indians Settlement Fund’’. S. 2494 would also 

transfer certain land and administrative jurisdiction from the Bureau of Reclamation (BOR) to Bureau of Indian Affairs (BIA) for 

the Spokane Tribe. The land transferred would be held in trust for 

the Spokane Tribe and would become part of the reservation. 

The Spokane Tribe has not brought forward a legal claim that 

would warrant this type of settlement. The Administration questions whether the Tribe has or could bring any legal claim that 

would entitle it to compensation as contemplated under the bill. In 

light of the lack of any pending legal claim, the Administration 

does not believe this legislation is currently justified as a settlement of claims. 

The Department is also concerned with transferring land and jurisdiction from the Bureau of Reclamation to the Bureau of Indian 

Affairs for the Tribe absent a prior written agreement to fully address Reclamation’s and National Park Service’s future ability to 

manage Grand Coulee Dam, Lake Roosevelt, and the Columbia 

Basin Project. Such a written agreement should clearly address a 

number of issues associated with transferring land into trust status, such as future liability for damages from shoreline erosion and 

heavy metal contamination in sediments from upstream mining, as 

well as issues related to land and recreation management, including consideration of the existing five-party Lake Roosevelt Cooperative Management Agreement. While under the present draft Reclamation would be granted a perpetual easement to operate the Columbia Basin Project, it is imperative that the parties specifically 

reach agreement on the details of the lands and easement rights 

involved and how the transferred areas will be managed prior to 

the passage of this legislation. At a minimum, such an agreement 

should be required prior to the actual transfer taking place. 

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, 

GEORGE T. SKIBINE, Deputy Assistant Secretary for Policy and Economic 

Development—Indian Affairs. 

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. 2494 makes no changes to existing law. 

Æ 


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