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[Senate Report 113-202]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 448
113th Congress                                                   Report
                                 SENATE
 2d Session                                                     113-202

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 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

                                _______
                                

                 June 26, 2014.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 1448]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 1448) 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 with an amendment and recommends that 
the bill (as amended) do pass.

                                PURPOSE

    The purpose of S. 1448 is to provide fair and equitable 
compensation to the Spokane Tribe for the past and continuing 
use of tribal lands by the federal government for the 
generation of hydropower by the Grand Coulee Dam.

                               BACKGROUND

    Planning for the construction of the Grand Coulee Dam began 
during the period from 1927 to 1931, when the Army Corps of 
Engineers, 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 Grand Coulee 
Dam. The site chosen for the Grand Coulee Dam consisted, in 
part, of lands held in trust by the federal government for the 
benefit of the Colville and Spokane Tribes.
    The Corps recommended that construction of Grand Coulee Dam 
be undertaken by local governments or private utilities under 
the authority of the Federal Power Act. The Federal Power Act 
requires a licensee using Indian lands to pay an annual payment 
to the Indian tribe for the use of its land. In 1933, an agency 
of the state of Washington was issued a preliminary permit to 
construct a dam at the Grand Coulee site by the Federal Power 
Commission. Several years later, however, the federal 
government assumed control of the project. Federal dam projects 
were not subject to the Federal Power Act, and thus the federal 
government was not obligated to pay the Spokane or Colville 
Tribes an annual payment for use of their lands.
    When the Grand Coulee Dam project was federalized, the 
federal government recognized that development of the project 
affected the interests of the Spokane Tribe and the 
Confederated Tribes of the Colville Reservation and that it 
would be appropriate for the Spokane and Colville Tribes to 
receive a share of revenue from the disposition of power 
produced at Grand Coulee Dam. The Act of June 29, 1940, 
directed the Secretary of the Interior to provide compensation 
to the Colville and Spokane Tribes for the use of the land in 
an amount determined by the Secretary to be just and equitable. 
Pursuant to that Act, the Secretary paid to the Spokane Tribe, 
$4,700, and to the Confederated Tribes of the Colville 
Reservation, $63,000.
    Recognizing those one time payments were insufficient as 
compensation for the use of tribal lands, Congress enacted the 
Confederated Tribes of the Colville Reservation Grand Coulee 
Dam Settlement Act in 1994, to provide further compensation to 
the Colville Tribes for the use of their lands for the Grand 
Coulee Dam. The Colville Settlement Act required a payment of 
$53,000,000 for past use of the land of the Colville Tribes. 
For the continued use of Colville Tribal lands, the Act 
provided annual payments of $15,250,000, adjusted annually 
based on revenues from the sale of electric power from the 
Grand Coulee Dam project by the Bonneville Power 
Administration.
    While the Spokane Tribe suffered harm similar to that 
suffered by the Colville Tribes, Congress did not include the 
Spokane Tribe in the 1994 Act. Further, the Spokane Tribe's 
claims before the Indian Claims Commission had all been fully 
adjudicated, so the Tribe had no mechanism to litigate its 
claims regarding the Grand Coulee Dam in federal court. This 
bill aims to correct this injustice by finally providing fair 
and equitable compensation to the Spokane Tribe.
    S. 1448 would provide the Spokane Tribe with a lump-sum 
payment for the past use of tribal lands, which are now 
submerged under the reservoir created by the Grand Coulee Dam. 
Additionally, the bill would provide the Spokane Tribe with 
annual payments for the continued use of tribal lands, based on 
the sale of hydroelectric power generated by the Grand Coulee 
Dam. The Bonneville Power Administration has stated that these 
annual payments alone would not necessitate a rate increase for 
its utility customers.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    The Act may be cited as the ``Spokane Tribe of Indians of 
the Spokane Reservation Equitable Compensation Act''.

Section 2. Findings

    Section 2 states the findings of Congress that support the 
need for the Act.

Section 3. Purpose

    Section 3 states the purpose of the Act is to provide fair 
and equitable compensation to the Spokane Tribe for use of its 
lands for the generation of hydropower by the Grand Coulee Dam.

Section 4. Definitions

    Section 4 defines the key terms used throughout the Act.

Section 5. Spokane Tribe of Indian Recovery Trust Fund

    Section 5 establishes a Trust Fund of $53 million for the 
Spokane Tribe to be maintained and invested by the Secretary of 
the Interior until the fund is disbursed to the Tribe upon 
their request. Section 5 provides that the Tribe must prepare a 
plan on how it intends to use funds prior to the Tribe's 
request for disbursement of the Fund.

Section 6. Payments by Administrator

    Section 6 provides for annual payments to the Spokane Tribe 
for continued use of tribal lands, based on the revenues from 
the generation of hydroelectric power by the Grand Coulee Dam.

Section 7. Treatment after amounts are paid

    Section 7 describes how the Spokane Tribe may use funds 
provided under sections 5 or 6 of the Act, and states that 
there is no trust responsibility of the Secretary of the 
Interior or the Bonneville Power Administrator towards the 
funds, once they have been paid to the Tribe.

Section 8. Repayment credit

    Section 8 allows the Administrator of the Bonneville Power 
Administration a credit against future interest payments owed 
to the Secretary of the Treasury.

Section 9. Extinguishment of claims

    Section 9 states that upon deposit of the Trust Fund under 
section 5 of the Act, all claims the Spokane has or may have 
against the United States will be extinguished.

Section 10. Administration

    Section 10 states that the Act is not binding or 
establishing precedent for other Power Administrations.

                          LEGISLATIVE HISTORY

    S. 1448 was introduced on August 1, 2013, by Senator Maria 
Cantwell and Senator Patty Murray. The bill was referred to the 
Committee on Indian Affairs. On September 10, 2013, the 
Committee on Indian Affairs held a hearing on the bill. On 
January 29, 2014, the Committee met to consider the bill. One 
substitute amendment was offered, and the bill as amended was 
adopted and ordered favorably reported to the Senate by voice 
vote.

                       SUMMARY OF THE AMENDMENTS

    Senator Cantwell offered an amendment in the nature of a 
substitute. The amendment states that annual payments from the 
Bonneville Power Administration to the Spokane Tribe under 
Section 6(b) will be offset by reductions in expenditures by 
the Administration. The amendment also makes a technical 
correction to update a fiscal year citation, necessary due to 
the lapse of a fiscal year since the bill's introduction.

                        COMMITTEE RECOMMENDATION

    On January 29, 2014, the Senate Committee on Indian Affairs 
held a business meeting to consider S. 1448 and other measures. 
Senator Cantwell introduced a substitute amendment, which was 
accepted by voice vote. The Committee ordered the bill, as 
amended, reported to the full Senate with the recommendation 
that it do pass.

                   COST AND BUDGETARY CONSIDERATIONS

    The following cost estimate, as provided by the 
Congressional Budget Office, dated April 18, 2014, was prepared 
for S. 1448:

                                                    April 18, 2014.
Hon. Jon Tester,
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. 1448, the Spokane 
Tribe of Indians of the Spokane Reservation Equitable 
Compensation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Martin von 
Gnechten and Kathleen Gramp.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 1448--Spokane Tribe of Indians of the Spokane Reservation Equitable 
        Compensation Act

    Summary: S. 1448 would provide compensation to the Spokane 
Tribe of Indians for tribal lands used in the construction of 
the Grand Coulee Dam in Washington. The bill would establish 
the Spokane Tribe of Indians Recovery Trust Fund and would 
require the Bonneville Power Administration (BPA) to make 
annual payments to the tribe from receipts generated from the 
sale of electricity. CBO estimates that enacting S. 1448 would 
increase net direct spending by $56 million over the 2015-2024 
period. Because enacting S. 1448 would affect direct spending, 
pay-as-you-go procedures apply. Enacting the bill would not 
affect revenues.
    S. 1448 contains an intergovernmental mandate as defined in 
the Unfunded Mandates Reform Act (UMRA) because it would 
extinguish the monetary claims of the Spokane Tribe of Indians 
against the United States for hydropower revenues and for past 
and continued use of the tribe's land. CBO estimates that the 
cost of the mandate would not exceed the annual threshold 
established in that act ($76 million in 2014, adjusted annually 
for inflation).
    S. 1448 contains no private-sector mandates as defined in 
UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 1448 is shown in the following table. 
The costs of this legislation fall within budget functions 450 
(community and regional development) and 270 (energy).

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                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2015   2016    2017   2018    2019   2020    2021    2022    2023    2024   2015-2019  2015-2024
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                                                               CHANGES IN DIRECT SPENDING

Spokane Tribe of Indians Recovery Trust Fund
    Budget Authority.................................     53       0      0       0      0       0       0       0       0       0        53         53
    Estimated Outlays................................     53       0      0       0      0       0       0       0       0       0        53         53
Effects on BPA
    Estimated Budget Authority.......................     11     -11      0       0      0       0       0       0       0       3         0          3
    Estimated Outlays................................     11     -11      0       0      0       0       0       0       0       3         0          3
    Total Changes
        Estimated Budget Authority...................     64     -11      0       0      0       0       0       0       0       3        53         56
        Estimated Outlays............................     64     -11      0       0      0       0       0       0       0       3        53        56
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Note: BPA = Bonneville Power Administration.

    Basis of estimate: For this estimate, CBO assumes that this 
bill will be enacted near the end of 2014.

Spokane Tribe of Indians Recovery Trust Fund

    S. 1448 would create the Spokane Tribe of Indians Recovery 
Trust Fund to provide compensation for land taken from the 
tribe by the federal government to build the Grand Coulee Dam. 
S. 1448 would require that $53 million be deposited to that 
trust fund on the first day of the first fiscal year after 
enactment. Under the bill, the Spokane Tribal Business Council 
would have 18 months to prepare a plan detailing how the trust 
fund would be used before the amounts deposited in the trust 
fund, as well as any accrued interest, could be spent.
    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 this trust fund would be recorded as budget 
authority and outlays at the time of the deposit. The Secretary 
of the Interior would be required to invest the funds in 
government securities until those funds are expended by the 
tribe.

Budgetary effects on the Bonneville Power Administration

    The legislation also would require BPA to make an annual 
payment to the Spokane Tribe of Indians. Beginning in 2014 and 
extending through 2024, that payment would equal 25 percent of 
the annual payment that BPA makes under current law to the 
Confederated Tribes of the Colville Reservation. After 2024, 
the annual payment to the Spokane Tribe would increase to 32 
percent of the payment to the Confederated Tribes. CBO 
estimates that payments would total about $5 million annually 
until 2024 and then increase to about $8 million. Under the 
legislation, those payments would continue as long as 
electricity is generated at the Grand Coulee Dam.
    Because BPA's operating costs are driven primarily by 
market and environmental conditions that are difficult to 
control, CBO expects that the agency would not be able to 
offset the cost of this bill by reducing operating expenses. 
Instead, we anticipate that BPA would increase the rates it 
charges customers for electricity to cover that cost. 
Therefore, those payments would generally be offset by an 
equivalent increase in the revenue collected from customers. 
However, because BPA has already set the rates it will charge 
customers for electricity through 2015, CBO expects that the 
agency would use reserve funds to make payments to the tribe 
for 2014 and 2015. CBO expects that BPA would use $11 million 
of reserves for payments to the tribe in 2015 and that the 
agency would adjust its rates in 2016 to replenish the 
reserves. Beginning in 2016, CBO expects that the additional 
annual payment would become part of BPA's cost structure and 
would be fully offset by an increase in rates for electricity. 
Therefore, CBO estimates no net effect of the annual payments 
and rate increases after 2016.
    In addition, starting in 2024, S. 1448 would reduce BPA's 
interest payments to the Treasury by $2.7 million in the years 
that BPA makes payments to the tribe. Because those payments 
offset direct spending, such reductions would have the effect 
of increasing direct spending by $2.7 million a year 
indefinitely, starting in 2024.
    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 change in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

          CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 1448, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON INDIAN AFFAIRS ON JANUARY 29, 2014
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                                                                                   By fiscal year, in millions of dollars--
                                                     ---------------------------------------------------------------------------------------------------
                                                       2014   2015   2016    2017   2018   2019   2020   2021   2022   2023   2024  2014-2019  2014-2024
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                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Effect......................      0     64     -11      0      0      0      0      0      0      0      3        53         56
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    Estimated impact on state, local, and tribal governments: 
S. 1448 contains an intergovernmental mandate as defined in 
UMRA. Upon deposit of funds into the trust for the tribe, 
monetary claims against the United States for hydropower 
revenues and for past and continued use of the tribe's land 
would be extinguished. Eliminating an existing right of action 
is a mandate because the right to seek redress and recover 
damages beyond what is provided in the bill would be lost. 
Based on information from the tribe, CBO expects it is unlikely 
that the tribe would pursue such claims. Therefore, CBO 
estimates that the cost, if any, of the mandate would not 
exceed the annual threshold established in that act ($76 
million in 2014, adjusted annually for inflation).
    Estimated impact on the private sector: S. 1448 contains no 
private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal costs: Martin von Gnechten 
and Kathleen Gramp; Effect on state, local, and tribal 
governments: Melissa Merrell; Effect on the private sector: 
Marin Burnett.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

               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. 1448 will 
have a minimal impact on regulatory or paperwork requirements.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding S. 1448.

                        CHANGES IN EXISTING LAW

    In accordance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that the 
enactment of S. 1448 will not make any changes in existing law.

                                  
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