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[Senate Report 114-245]
[From the U.S. Government Publishing Office]

                                                  Calendar No. 443
                                                  
114th Congress }                                    { Report
                                 SENATE
 2d Session    }                                    { 114-245

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THE IRRIGATION REHABILITATION AND RENOVATION FOR INDIAN TRIBAL 
         GOVERNMENTS AND THEIR ECONOMIES ACT (THE IRRIGATE ACT)

                                _______
                                

                 April 27, 2016.--Ordered to be printed

                                _______
                               

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

                              R E P O R T

                         [To accompany S. 438]

    The Senate Committee on Indian Affairs, to which was 
referred the bill (S. 438) to provide for the repair, 
replacement, and maintenance of certain Indian irrigation 
projects, having considered the same, reports favorably with an 
amendment and recommends that the bill, as amended, do pass.

                                PURPOSE

    The purpose of S. 438 would authorize funding to begin 
addressing deferred maintenance costs of certain Indian 
irrigation projects.

                          NEED FOR LEGISLATION

    The bill intends to bring the Bureau of Indian Affairs 
(BIA) irrigation systems into the 21st century by addressing 
the deferred maintenance needs of these systems. Deferred 
maintenance means any maintenance activity that was delayed to 
a future date, in lieu of being carried out at the time at 
which the activity was scheduled to be, or otherwise should 
have been, carried out.
    Many tribal economies depend on these water systems and the 
BIA has an obligation to repair and maintain those irrigation 
systems. This legislation would authorize $35 million a year 
beginning in Fiscal Year 2016 to Fiscal Year 2037 for the 
rehabilitative needs of the BIA irrigation systems.

                               BACKGROUND

    The Department of the Interior (DOI) initiated several 
Indian irrigation projects in the late 1800s and early 1900s 
intended as a central component of tribal economies and a means 
of implementing the Federal policy of transitioning Indians to 
an agrarian lifestyle on reservations.\1\ The history of these 
systems is somewhat complex and involved, governed by several 
Acts of Congress and court decisions, with extensive 
legislative histories.\2\
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    \1\``The Federal Government has been involved with Indian 
irrigation since the Colorado River Indian Irrigation Project was 
authorized in 1867.'' Irrigation Projects in Indian Country: Before the 
S. Comm. on Indian Affairs, 113th Cong. (2014) (Statement of Larry 
Roberts, Principal Deputy Assistant Secretary for Indian Affairs, 
Department of the Interior). The Act of March 2, 1867, 14 Stat. 514, 
authorized an appropriation of $50,000 for that irrigation project. See 
also http://www.crwua.org/colorado-river/ten-tribes. The Federal 
involvement relative to funding may be have been reported as early as 
1867, but the Federal policy to move Indians from a nomadic to an 
agrarian lifestyle on a reservation began much earlier and led to this 
subsequent ``involvement''. See also The Wind River Irrigation Project: 
A Class I Overview of Irrigation on the Wind River Reservation, Fremont 
County, Wyoming, Blain Fandrich, at 4 (2007).
    \2\Irrigation Projects in Indian Country: Before the S. Comm. on 
Indian Affairs, 113th Cong. (2014) (Statement of Larry Roberts, 
Principal Deputy Assistant Secretary for Indian Affairs, Department of 
the Interior). See e.g., The Pine River Irrigation Project was 
authorized in 1937: http://www.gpo.gov/fdsys/pkg/BILLS-105s2142es/html/
BILLS-105s2142es.htm; September 22, 1934 Franklin D. Roosevelt: 
Executive Order 6853--Withdrawal of Public Lands for Use in Connection 
with Duck Valley Indian Irrigation Project http://
www.presidency.ucsb.edu/ws/index.php?pid=76419#ixzz2jq2ujsS9.
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    However, these projects have a common thread. While the 
Federal Government, through the Indian Irrigation Service, led 
the construction and administration of these projects, in most 
cases, the construction was not even completed. For some 
projects, the work was ``poorly designed and failed to function 
properly.''\3\
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    \3\The Wind River Irrigation Project: A Class I Overview of 
Irrigation on the Wind River Reservation, Fremont County, Wyoming, 
Blain Fandrich, at 9 (2007). For example, ``by 1899, Chief Inspector of 
Irrigation Walter Graves reported too much money had been expended on 
useless ditches on the Wind River Reservation.'' Id. While a 
comprehensive plan had been developed and ``new irrigation completion 
studies are issued at least once per decade since 1950,'' ultimately, 
``none of the proposed construction projects have been implemented.'' 
Id., at 16.
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    A major shift in Federal policy led to an emphasis on 
``water storage capacity rather than expanding the water 
distribution system,''\4\ with remaining irrigation efforts 
focused on maintenance and operation rather than 
construction.\5\ According to the DOI, most Indian irrigation 
construction activities ended in the 1940s. At that time, 
operation and maintenance was then transferred to the BIA.
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    \4\Id., at 14.
    \5\Id.
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    Indian Irrigation Systems. The BIA has 15 irrigation 
projects that charge their water users an annual operations and 
maintenance fee intended to cover the cost of operating and 
maintaining the project.\6\ These Indian irrigation projects 
are mostly located on Indian reservations across the West and 
deliver water to over 25,000 customers and over 750,000 acres 
of land in ten states. While some projects serve lands still 
owned solely by Indian tribes or individual Indians, some of 
these systems serve both Indian and non-Indians. Those projects 
may serve lands that are ``checkerboarded'' meaning some lands 
are Indian or tribal-owned while other lands within the same 
reservation are owned by non-Indians.
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    \6\Blackfeet, Colorado River, Crow, Duck Valley, Flathead, Fort 
Belknap, Fort Hall, Fort Peck, Pine River, Pyramid Lake, San Carlos, 
Uintah & Ouray, Walker River, Wapato, and Wind River irrigation 
projects.
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    According to the BIA, ``the asset inventory includes 
approximately 6,200 miles of canal and drains and over 58,000 
irrigation structures.''\7\ These projects also assist in the 
production of over $300 million in gross crop revenues 
annually.\8\
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    \7\These figures also include the Navajo Indian Irrigation Project 
in New Mexico and the Pyramid Lake Irrigation Project in Nevada, both 
non-revenue generating irrigation projects. The operations and 
maintenances costs for these two projects are ``paid through 
appropriations or other means'' but not from user fees. Irrigation 
Projects in Indian Country: Before the S. Comm. on Indian Affairs, 
113th Cong. (2014) (Statement of Larry Roberts, Principal Deputy 
Assistant Secretary for Indian Affairs, Department of the Interior).
    \8\BIA Irrigation Accomplishments since the 2006 GAO Report, Bureau 
of Indian Affairs, Department of the Interior, at 1 (2013).
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    The BIA considers these irrigation systems ``revenue 
generating'' because income from agriculture is supposed to be 
generated by the BIA irrigation project fees. Most of these 
revenue-generating projects receive little to no Federal funds 
regardless of whether revenue is generated or not or the 
collected fees from irrigators cover the operations and 
maintenance costs.
    Condition of Indian Irrigation Systems. In 2006, the 
Government Accountability Office (GAO) issued a report titled, 
``Indian Irrigation Projects: Numerous Issues Need to Be 
Addressed to Improve Project Management and Financial 
Stability,'' which highlighted the inefficiencies of the 
operation, maintenance, and management by the BIA. The 16 BIA 
irrigation projects studied in the report, according to the 
GAO, are plagued by maintenance issues, structural 
deficiencies, and insufficient funding for project 
operations.\9\ These maintenance and operations concerns ranged 
from basic maintenance items such as the need to clear weed and 
tree overgrowth and repair cattle-crossings to more long-term 
issues such as the increased demand for water.\10\
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    \9\According to the BIA, the Shoshone-Paiute Tribes operate the 
Duck Valley Indian Irrigation Project under a self-governance compact.
    \10\U.S. Gov't Accountability Office. GAO-06-314, Indian Irrigation 
Projects: Numerous Issues Need to Be Addressed to Improve Project 
Management and Financial Stability (2006).
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    A 2007 report found that, for at least one project, since 
the 1930s, ``the irrigation units have remained essentially 
unchanged, except for periodic maintenance in order to keep the 
system operational, such as the replacement of decayed 
structures with like structures at the same locations.''\11\ 
Remarkably, the GAO Report affirms that this type of finding is 
not uncommon for other Indian irrigation projects.\12\
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    \11\The Wind River Irrigation Project: A Class I Overview of 
Irrigation on the Wind River Reservation, Fremont County, Wyoming, 
Blain Fandrich, at 28 (2007).
    \12\U.S. Gov't Accountability Office. GAO-06-314, Indian Irrigation 
Projects: Numerous Issues Need to Be Addressed to Improve Project 
Management and Financial Stability (2006).
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    Since 2007, the BIA has been conducting a Condition 
Assessment for all 16 irrigation projects, completing 12 by 
2013, ``one ongoing through Fiscal Year 2014, with five 
remaining to complete.''\13\ For some projects, a critical 
deficiency ranking was given. This ranking is given if there is 
``a threat to the health and/or safety of the user which may 
occur within two years, an advanced deterioration which has 
resulted (or will result) in the failure of the feature if not 
corrected within two years, an accelerated deterioration of 
adjacent or related materials as a result of the deficiency, or 
a failure to meet a legislated requirement.''\14\
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    \13\BIA Irrigation Accomplishments since the 2006 GAO Report, 
Bureau of Indian Affairs, Department of the Interior, at 3 (2013). 
These assessments also include the Navajo Irrigation Project because 
``the facilities are owned by the BIA and are therefore included in the 
BIA's asset management responsibility.'' Id., at 2.
    \14\The Wind River Irrigation Project: A Class I Overview of 
Irrigation on the Wind River Reservation, Fremont County, Wyoming, 
Blain Fandrich, at 7 (2007).
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    The Committee held a field hearing in Wyoming on April 20, 
2011\15\ and an oversight hearing on Indian irrigation projects 
on September 10, 2014.\16\ Testimony received at both hearings 
indicated that, aside from the increases to the total amount of 
deferred maintenance costs, nothing has changed since the 
release of the GAO Report.
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    \15\The Wind River Irrigation Project--Issues Arising From and 
Contributing to Deferred Maintenance and Other Project Management 
Problems: Before the S. Comm. on Indian Affairs, 112th Cong. 1 (2011).
    \16\Irrigation Projects in Indian Country: Before the S. Comm. on 
Indian Affairs, 113th Cong. 2 (2014).
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    Deferred Maintenance Costs. Recent information from the BIA 
clearly reflects an upward trend in the deferred maintenance 
costs of these systems, growing from $549 million to in excess 
of $567 million in only one quarter year alone in Fiscal Year 
2014. By the end of Fiscal Year 2015, that amount was in excess 
of $576 million.
    While the BIA has indicated that the current backlog of 
deferred maintenance is estimated to be in excess of $576 
million, some Indian tribes estimate that this backlog estimate 
may be even higher. Yet, in Fiscal Year 2014, the BIA only 
allocated $998,000 to rehabilitate BIA irrigation systems. In 
Fiscal Years 2015 and 2016, the BIA provided $2.6 million each 
Fiscal Year for rehabilitation.\17\
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    \17\The total budget for irrigation operations and maintenance 
includes mandatory payments as required by other Federal laws or Court-
ordered payments as well as payments to the Bureau of Reclamation for 
the ability to store water using the BOR reservoirs. See Budget 
Justifications and Performance Information for Fiscal Year 2017. Bureau 
of Indian Affairs, Department of the Interior (2016).
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    The Need for the IRRIGATE Act. The Committee is concerned 
that, without adequate structural updating, the BIA irrigation 
systems will create further inefficiencies to agricultural 
production on Indian reservations. The GAO Report highlighted 
that the deferred maintenance undermines the projects' long-
term sustainability.\18\ The Assistant Secretary for Indian 
Affairs, Kevin Washburn, testified that to effectively address 
the deferred maintenance, the BIA ``would need some sort of 
assured source of funding.''\19\
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    \18\U.S. Gov't Accountability Office. GAO-06-314, Indian Irrigation 
Projects: Numerous Issues Need to Be Addressed to Improve Project 
Management and Financial Stability (2006).
    \19\The IRRIGATE Act: Hearing on S. 438: Before the S. Comm. on 
Indian Affairs, 114th Cong. 1 (2015) (statement of Kevin K. Washburn, 
Asst. Sec'y for Indian Affairs, Department of the Interior). This 
statement echoed Mr. Larry Roberts' testimony before the Committee 
(``[W]ithout new funding deferred maintenance remains an enormous 
challenge.'') Irrigation Projects in Indian Country: Before the S. 
Comm. on Indian Affairs, 113th Cong. at 2 (2014).
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    During the legislative hearing on S. 438, the GAO Director 
of Natural Resources and Environment, Ms. Anne-Marie Fennell, 
testified that, despite the serious backlog, the BIA ``did not 
have a plan for how it would obtain funding to fix the deferred 
maintenance items.''\20\ The tribal water engineer from the 
Wind River Indian Reservation, Mitch Cottenoir, also expressed 
concerns regarding the BIA's continued management of irrigation 
projects.
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    \20\The IRRIGATE Act: Hearing on S. 438: Before the S. Comm. on 
Indian Affairs, 114th Cong. 1 at 9 (2015).
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    Councilman Charles Headdress, Sr. from the Fort Peck 
Assiniboine & Sioux Tribes of Fort Peck Reservation also 
indicated that the IRRIGATE Act, S. 438, would increase 
productivity of irrigable acres, which in turn, would help 
their economy.\21\ Mr. Cottenoir also noted that ``[w]ith 
increased funding and rehabilitation of the system, [the] 
efficiency rates [of irrigation systems] could be raised.''\22\
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    \21\The IRRIGATE Act: Hearing on S. 438: Before the S. Comm. on 
Indian Affairs, 114th Cong. 1 at 20, 45-6. (2015) (Statement of Charles 
S. Headdress, Sr., Council Member, Fort Peck Assiniboine & Sioux Tribes 
of Fort Peck Reservation).
    \22\Id. at 49.
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                          LEGISLATIVE HISTORY

    On February 10, 2015, Senator Barrasso introduced S. 438, 
along with Senators Tester, Daines, Hatch, and Enzi. Senator 
Bennet was later added as a co-sponsor. The bill was referred 
to the Committee on Indian Affairs of the Senate.
    This bill is similar to the amendment Senator Barrasso 
offered to and was included in S. 715, the Authorized Rural 
Water Projects Completion Act, reported by the Energy and 
Natural Resources Committee of the Senate during the 113th 
Congress. No further action was taken on that bill last 
Congress.
    On March 4, 2015, the Committee on Indian Affairs of the 
Senate held a legislative hearing on the bill. On March 18, 
2015, the Committee held a duly called business meeting to 
consider the bill, among other bills. The Committee then 
ordered the bill to be reported favorably, as amended, to the 
Senate by voice vote.

Amendments

    At the March 18, 2015, Committee business meeting, Senator 
Barrasso offered a substitute amendment to S. 438. That 
amendment incorporated recommendations from the Administration, 
made clarifying and technical changes to the bill, and required 
the Secretary of the Interior report to the Committee on the 
progress being made to improve the irrigation systems with the 
IRRIGATE funds. The substitute amendment was adopted by voice 
vote.
    In addition, Senator Barrasso offered another amendment 
that would extend the deadline for the Secretary to conduct 
consultation with affected Indian tribes from 60 to 120 days. 
This amendment was based on a late request by the 
Administration. The Chairman and Vice Chairman agreed to waive 
the 48 hour filing requirement under the Committee rules so 
that the amendment could be offered and considered.
    Senator Tester offered an amendment that would ensure the 
IRRIGATE Act funds expended will not penalize landowners that 
use the BIA irrigation systems. Both of these amendments were 
considered en bloc and adopted by voice vote.

        SECTION-BY-SECTION ANALYSIS OF BILL AS ORDERED REPORTED

Section 1--Short title; Table of contents

    Section 1 states that the Act may be cited as the 
`Irrigation Rehabilitation and Renovation for Indian Tribal 
Governments and Their Economies Act,' or the IRRIGATE Act.

Section 2--Definitions

    The bill defines the term ``fund'' to mean the Indian 
Irrigation Fund established by the bill. The bill defines the 
term ``Indian Tribe'' to have the same meaning as it does in 
section 4 of the Indian Self-Determination and Education 
Assistance Act. The bill defines the term ``Secretary'' to mean 
the Secretary of the Interior.

                    TITLE I--INDIAN IRRIGATION FUND

Section 101--Establishment

    This section establishes the Indian Irrigation Fund that 
will consist of amounts deposited in the Fund pursuant to 
Section 103 and interest earned to repair certain Indian 
irrigation projects.

Section 102--Deposits to fund

    This section establishes that $35,000,000 will be deposited 
in the Indian Irrigation Fund (Fund) each year from Fiscal Year 
2016 to 2037. The funds will come from the reclamation fund 
(established by 32 Stat. 388, chapter 1093).

Section 103--Expenditures from fund

    This section establishes that the Secretary of the Interior 
may expend not more than the sum of $35 million and interest 
accrued for each of Fiscal Years 2016 through 2037 to the 
extent provided in advance of appropriations acts. The 
Secretary may expend more than $35 million if additional funds 
are available in the Fund as a result of a failure of the 
Secretary to expend all the amounts available in 1 or more 
prior years.

Section 104--Investments of amounts

    The Secretary of the Treasury may invest excess amounts 
from the Fund if there is enough money to meet current 
withdrawals. Interest accrued and any sales from such 
investments shall be credited to and become a part of the Fund.

Section 105--Transfers of amounts

    Amounts to be transferred in the Indian Irrigation Fund 
shall be transferred at least monthly from the general fund on 
the basis of estimates by the Secretary of the Interior.

Section 106--Termination

    At the end of Fiscal Year 2037, the Indian Irrigation Fund 
shall terminate and unexpended funds returned to the 
reclamation fund.

   TITLE II--REPAIR, REPLACEMENT, AND MAINTENANCE OF CERTAIN INDIAN 
                          IRRIGATION PROJECTS

Section 201--Repair, replacement and maintenance of certain Indian 
        irrigation projects

    This section requires that the Secretary of the Interior 
create a program to address the deferred maintenance needs of 
Indian irrigation projects that pose risks to public or 
employee safety or natural or cultural resources and impede 
management and efficiency of the Indian irrigation projects. 
Section 201 establishes that the Secretary of the Interior 
shall transfer $35 million, plus any accrued interest, from the 
Fund to the BIA every year from 2016 to 2037 to carry out the 
program to address the deferred maintenance needs of Indian 
irrigation projects described in Section 202. This section also 
ensures that the IRRIGATE funds expended will not penalize 
landowners that use the BIA irrigation systems, consistent with 
the Federal Government's responsibility for these systems.

Section 202--Eligible projects

    This section establishes that the projects eligible for 
these funds are Indian irrigation projects in the western 
United States and are owned by the Federal Government, managed 
and operated by the BIA (or Indian tribes through Indian Self 
Determination and Education Assistance Act contracts or 
compacts), and have documented deferred maintenance.

Section 203--Requirements and conditions

    This section requires that within 120 days after enactment 
the Secretary in consultation with the Assistant Secretary for 
Indian Affairs and representatives of affected Indian tribes 
shall develop and submit to Congress (1) programmatic goals to 
carry out the new Indian irrigation program and (2) funding 
prioritization criteria to serve as a methodology for 
distributing the funds.

Section 204--Study of Indian irrigation program and project management

    This section establishes that within 2 years, the 
Secretary, acting through the Assistant Secretary for Indian 
Affairs, shall complete a study that evaluates options for 
improving programmatic and project management of BIA-managed 
Indian irrigation projects. The report, submitted to Congress, 
will also include recommendations for improvement in each 
qualifying project area. Prior to conducting the study, the 
Secretary is required to consult with Indian tribes with 
jurisdiction over the land on which an eligible project is 
located and consider input of landowners served by the project. 
This section also requires the Secretary of the Interior to 
report every 2 years to Congress on the progress being made to 
improve the irrigation systems with the IRRIGATE funds.

Section 205--Tribal consultation and user input

    This section establishes that, within 120 days of enactment 
and prior to spending any funds on a project, the Secretary 
shall consult with impacted Indian tribes and consider the 
input of landowners.

Section 206--Allocation among projects

    This section establishes that, for every year funding is 
available through 2037, each eligible project with critical 
maintenance needs qualifies for at least some funding. This 
section establishes additional considerations for prioritizing 
funding for Indian irrigation projects.
    This section limits the total allocation for any individual 
project to no more than $15 million during any consecutive 
three year period. Notwithstanding the cap, if the full amount 
of $35 million cannot be allocated because the costs of the 
remaining maintenance activities exceed the cap, the Secretary 
may allocate funds in accordance with this title. This section 
authorizes the Indian Self Determination and Education 
Assistance Act to apply to activities under this section.

                   COST AND BUDGETARY CONSIDERATIONS

    Summary: S. 438 would establish a new Indian Irrigation 
Fund and transfer $35 million from the existing Reclamation 
Fund into the proposed fund each year over the 2016-2037 
period. Those annual deposits, and interest credited to the 
unspent balances in the new fund, would be authorized to be 
appropriated for maintaining Indian Irrigation projects 
operated by the Bureau of Indian Affairs (BIA) in the western 
United States.
    Based on information from the BIA, CBO estimates that 
implementing the legislation would cost $152 million over the 
2016-2020 period and about $625 million after 2020. Pay-as-you-
go procedures do not apply to this legislation because it would 
not affect direct spending or revenues.
    S. 438 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).

----------------------------------------------------------------------------------------------------------------
                                                                      By fiscal year, in millions of dollars--
                                                                   ---------------------------------------------
                                                                     2016   2017   2018   2019   2020  2016-2020
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                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level.....................................     35     35     36     37     37        180
Estimated Outlays.................................................     18     26     34     37     37        152
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    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 438 is shown in the following table. The 
costs of this legislation fall within budget functions 300 
(natural resources and environment) and 450 (community and 
regional development).
    Basis of estimate: For this estimate, CBO assumes that S. 
438 will be enacted before the end of 2015 and that the 
authorized amounts will be appropriated for each fiscal year. 
Estimated outlays are based on information from the BIA and on 
historical spending patterns for similar projects.
    S. 438 would authorize the annual appropriation of $35 
million, and any interest credited to the proposed fund, for 
maintenance of Indian Irrigation projects owned by the federal 
government and operated by the BIA. According to the BIA, the 
agency operates 18 Indian Irrigation projects that would be 
eligible to receive appropriated funds under the bill. The 
total cost to complete the deferred maintenance for all those 
projects is currently estimated to be about $600 million. S. 
438 funds also could be used for additional maintenance costs 
until 2037.
    CBO estimates that implementing S. 438 would cost $152 
million over the 2016-2020 period and about $625 million 
thereafter, assuming appropriation of the authorized amounts.
    Pay-As-You-Go considerations: None.
    Intergovernmental and private sector impact: S. 438 
contains no intergovernmental or private-sector mandates as 
defined in UMRA.
    Estimate prepared by: Federal Costs: Aurora Swanson; Impact 
on State, Local, and Tribal Governments: Melissa Merrell; 
Impact on the Private Sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Assistant Director for 
Budget Analysis.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding S. 438.

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

                        CHANGES IN EXISTING LAW

    In accordance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, S. 438 makes no changes to 
existing law.

                                  [all]
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