SEC. 2. DEFINITIONS. 
Section 503 of the Taos Pueblo Indian Water Rights 
Settlement Act (Public Law 111–291; 124 Stat. 3122) is 
amended— 
(1) in paragraph (1), by striking ‘‘and the New 
Mexico Department of Finance and Administration 
Local Government Division on behalf of’’; 
(2) by redesignating paragraphs (3), (4), (5), 
(6), (7), (8), (9), (10), (11), and (12) as paragraphs 
(4), (5), (6), (7), (8), (10), (11), (12), (13), and 
(14), respectively; 
(3) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) MITIGATION
WELL
SYSTEM.—The term 
‘Mitigation Well System’ means a system of wells, 
pipelines, and treatment infrastructure to provide a 
method for offsetting surface water depletion effects 
to the stream segments identified in Article 7.3.3.1.9 
of the Settlement Agreement.’’; and 
(4) by inserting after paragraph (8) (as so re-
designated) the following: 
‘‘(9) PUEBLO TRUST FUNDS.—The term ‘Pueb-
lo Trust Funds’ means— 
‘‘(A) the Taos Pueblo Water Development 
Fund established by subsection (a) of section 
505; 
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‘‘(B) the Taos Pueblo Groundwater Devel-
opment Supplemental Trust Fund established 
by subsection (h) of that section; and 
‘‘(C) the Taos Pueblo Surface Water Shar-
ing Supplemental Trust Fund established by 
subsection (i) of that section.’’. 
SEC. 3. PUEBLO TRUST FUNDS. 
(a) IN GENERAL.—Section 505 of the Taos Pueblo 
Indian Water Rights Settlement Act (Public Law 111– 
291; 124 Stat. 3123) is amended— 
(1) by striking the section heading and insert-
ing ‘‘PUEBLO TRUST FUNDS’’; 
(2) in subsection (a)— 
(A) in the subsection heading, by inserting 
‘‘OF
TAOS
PUEBLO
WATER
DEVELOPMENT 
FUND’’ after ‘‘ESTABLISHMENT’’; and 
(B) in the matter preceding paragraph (1), 
by striking ‘‘(referred to in this section as the 
‘Fund’)’’; 
(3) in subsection (b)— 
(A) by striking the subsection heading and 
inserting ‘‘MANAGEMENT
OF PUEBLO TRUST 
FUNDS’’; and 
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(B) by striking ‘‘the Fund’’ each place it 
appears and inserting ‘‘the Pueblo Trust 
Funds’’; 
(4) in subsection (c)— 
(A) by striking the subsection heading and 
inserting ‘‘INVESTMENT
OF PUEBLO TRUST 
FUNDS’’; 
(B) in the matter preceding paragraph (1), 
by striking ‘‘the Fund’’ and inserting ‘‘the 
Pueblo Trust Funds’’; and 
(C) by striking paragraph (3) and insert-
ing the following: 
‘‘(3) the Trust Fund Reform Act.’’; 
(5) in subsection (d)— 
(A) in the subsection heading, by striking 
‘‘FUND’’ and inserting ‘‘TAOS PUEBLO WATER 
DEVELOPMENT FUND’’; and 
(B) by striking ‘‘the Fund’’ and inserting 
‘‘the Taos Pueblo Water Development Fund es-
tablished by subsection (a)’’; 
(6) in subsection (e)— 
(A) by striking ‘‘the Fund’’ each place it 
appears and inserting ‘‘the Pueblo Trust 
Funds’’; and 
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(B) in paragraph (2), by striking ‘‘speci-
fied in subsection (a)’’ and inserting ‘‘described 
in subsections (a), (h)(2), and (i)(2), as applica-
ble’’; 
(7) in subsection (f), in the matter preceding 
paragraph (1), by striking ‘‘the Fund’’ and inserting 
‘‘the Taos Pueblo Water Development Fund estab-
lished by subsection (a)’’; 
(8) in subsection (g), by striking ‘‘the Fund’’ 
and inserting ‘‘the Pueblo Trust Funds’’; and 
(9) by adding at the end the following: 
‘‘(h) TAOS PUEBLO GROUNDWATER DEVELOPMENT 
SUPPLEMENTAL TRUST FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a fund, to be 
known as the ‘Taos Pueblo Groundwater Develop-
ment Supplemental Trust Fund’ (referred to in this 
subsection as the ‘Groundwater Development Sup-
plemental Trust Fund’), consisting of— 
‘‘(A) amounts appropriated to the Ground-
water Development Supplemental Trust Fund 
under section 509(l); and 
‘‘(B) any interest earned on investment of 
amounts in the Groundwater Development Sup-
plemental Trust Fund under paragraph (3). 
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‘‘(2) USE
OF
FUNDS.—The Pueblo may use 
amounts in the Groundwater Development Supple-
mental Trust Fund to pay or reimburse costs in-
curred by the Pueblo to investigate, plan, permit, de-
sign, engineer, construct, reconstruct, replace, reha-
bilitate, operate, or repair groundwater production, 
treatment, or delivery infrastructure consistent with 
the Settlement Agreement. 
‘‘(3) INVESTMENT.—On deposit, the Secretary 
shall invest amounts in the Groundwater Develop-
ment Supplemental Trust Fund in accordance with 
subsection (c). 
‘‘(4) INVESTMENT EARNINGS.—Any investment 
earnings, including interest, credited to amounts in 
the Groundwater Development Supplemental Trust 
Fund are authorized to be used in accordance with 
paragraph (2). 
‘‘(5) AVAILABILITY.—Amounts deposited in the 
Groundwater 
Development 
Supplemental 
Trust 
Fund pursuant to section 509(l), or from other au-
thorized sources, shall be available to the Pueblo for 
expenditure or withdrawal after the requirements of 
subsection (e) have been met. 
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‘‘(6) MANAGEMENT.—The Secretary shall man-
age the Groundwater Development Supplemental 
Trust Fund in accordance with subsection (b). 
‘‘(7) CONDITIONS
FOR
EXPENDITURE
AND 
WITHDRAWAL.—All expenditures and withdrawals by 
the Pueblo of funds in the Groundwater Develop-
ment Supplemental Trust Fund shall comply with 
the requirements of subsection (e). 
‘‘(i) TAOS PUEBLO SURFACE WATER SHARING SUP-
PLEMENTAL TRUST FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a fund, to be 
known as the ‘Taos Pueblo Surface Water Sharing 
Supplemental Trust Fund’ (referred to in this sub-
section as the ‘Surface Water Sharing Supplemental 
Trust Fund’), consisting of— 
‘‘(A) amounts appropriated to the Surface 
Water Sharing Supplemental Trust Fund under 
section 509(m); and 
‘‘(B) any interest earned on investment of 
amounts in the Surface Water Sharing Supple-
mental Trust Fund under paragraph (3). 
‘‘(2) USE
OF
FUNDS.—The Pueblo may use 
amounts in the Surface Water Sharing Supple-
mental Trust Fund to pay or reimburse costs in-
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curred by the Pueblo to investigate, plan, permit, de-
sign, engineer, construct, reconstruct, replace, reha-
bilitate, operate, or repair surface water sharing in-
frastructure and gages to facilitate implementation 
of Article 8.2 of the Settlement Agreement. 
‘‘(3) INVESTMENT.—On deposit, the Secretary 
shall invest amounts in the Surface Water Sharing 
Supplemental Trust Fund in accordance with sub-
section (c). 
‘‘(4) INVESTMENT EARNINGS.—Any investment 
earnings, including interest, credited to amounts in 
the Surface Water Sharing Supplemental Trust 
Fund are authorized to be used in accordance with 
paragraph (2). 
‘‘(5) AVAILABILITY.—Amounts deposited in the 
Surface Water Sharing Supplemental Trust Fund 
pursuant to section 509(m), or from other author-
ized sources, shall be available to the Pueblo for ex-
penditure or withdrawal after the requirements of 
subsection (e) have been met. 
‘‘(6) MANAGEMENT.—The Secretary shall man-
age the Surface Water Sharing Supplemental Trust 
Fund in accordance with subsection (b). 
‘‘(7) CONDITIONS
FOR
EXPENDITURE
AND 
WITHDRAWAL.—All expenditures and withdrawals by 
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the Pueblo of amounts in the Surface Water Sharing 
Supplemental Trust Fund shall comply with the re-
quirements of subsection (e).’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
for the Claims Resolution Act of 2010 (Public Law 111– 
291; 124 Stat. 3064) is amended by striking the item re-
lating to section 505 and inserting the following: 
‘‘Sec. 505. Pueblo Trust Funds.’’. 
SEC. 4. MUTUAL-BENEFIT PROJECTS. 
Section 507 of the Taos Pueblo Indian Water Rights 
Settlement Act (Public Law 111–291; 124 Stat. 3126) is 
amended— 
(1) in subsection (b)— 
(A) in paragraph (1), by striking ‘‘in sub-
section (a)’’ and inserting ‘‘under subsections 
(a) and (c)’’; 
(B) in paragraph (2), by striking ‘‘shall’’ 
and inserting ‘‘authorized under subsections (a) 
and (c) shall’’; and 
(C) in paragraph (3), in the matter pre-
ceding subparagraph (A), by striking ‘‘section 
509(c)(2)’’ and inserting ‘‘subsections (c)(2) 
and (k) of section 509’’; and 
(2) by adding at the end the following: 
‘‘(c) SUPPLEMENTAL FUNDING FOR MUTUAL-BEN-
EFIT PROJECTS.— 
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‘‘(1) IN
GENERAL.—The Secretary, acting 
through the Commissioner of Reclamation, shall pro-
vide financial assistance from funds made available 
pursuant to section 509(k) to Eligible Non-Pueblo 
Entities in the form of grants or financial assistance 
agreements on a nonreimbursable basis or contracts 
to plan, permit, design, engineer, and construct the 
Mutual-Benefit Projects, including water treatment. 
‘‘(2) ELIGIBILITY.—To be eligible for funding 
under paragraph (1), an Eligible Non-Pueblo Enti-
ty— 
‘‘(A) shall have applied for funding under 
subsection (a) prior to the date that is 90 days 
after the date of enactment of the Taos Pueblo 
Indian Water Rights Settlement Amendments 
Act of 2025; and 
‘‘(B) shall apply for funding under para-
graph (1) not later than 180 days after that 
date of enactment. 
‘‘(3) DEADLINES.— 
‘‘(A) IN GENERAL.—Grants, contracts, and 
financial assistance agreements under para-
graph (1) shall be subject to the following dead-
lines, as applicable: 
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‘‘(i) NON-MITIGATION
WELL
SYSTEM 
PROJECTS.—Subject to subparagraph (B), 
for each Mutual-Benefit Project that does 
not include part of the Mitigation Well 
System— 
‘‘(I) at least 10 percent of fund-
ing awarded under paragraph (1) 
shall be expended not later than 3 
years after the date on which that 
funding is awarded; 
‘‘(II) construction of the Mutual- 
Benefit Project shall be substantially 
completed, as determined by the Com-
missioner of Reclamation, not later 
than 6 years after the date on which 
that funding is awarded; and 
‘‘(III) construction of the Mu-
tual-Benefit Project shall be fully 
completed, as determined by the Com-
missioner of Reclamation, not later 
than 8 years after the date on which 
that funding is awarded. 
‘‘(ii) MITIGATION
WELL
SYSTEM.— 
Subject to subparagraph (B), for each Mu-
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tual-Benefit Project that includes part of 
the Mitigation Well System— 
‘‘(I) at least 15 percent of fund-
ing awarded under paragraph (1) 
shall be expended not later than 3 
years after the date on which that 
funding is awarded; 
‘‘(II) construction of the Mutual- 
Benefit Project shall be substantially 
completed, as determined by the Com-
missioner of Reclamation, not later 
than 4 years after the date on which 
that funding is awarded; and 
‘‘(III) construction of the Mu-
tual-Benefit Project shall be fully 
completed, as determined by the Com-
missioner of Reclamation, not later 
than 5 years after the date on which 
that funding is awarded. 
‘‘(B) EXTENSION.—The Commissioner of 
Reclamation may, for good cause, extend a 
deadline under clause (i) or (ii) of subpara-
graph (A) for the applicable grant, contract, or 
financial assistance agreement. 
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‘‘(C) FAILURE
TO
COMPLY
WITH
DEAD-
LINES.—If an Eligible Non-Pueblo Entity does 
not comply with any deadline described in 
clause (i) or (ii) of subparagraph (A), the Com-
missioner of Reclamation may— 
‘‘(i) terminate the grant, contract, or 
financial assistance agreement; and 
‘‘(ii) require the Eligible Non-Pueblo 
Entity to return unexpended funds. 
‘‘(4) 
EXCEPTIONS.—Notwithstanding 
para-
graphs (1) and (2), the Commissioner of Reclama-
tion may— 
‘‘(A) award funding returned under para-
graph (3)(C) or funding not yet disbursed to 
the noncompliant Eligible Non-Pueblo Entity to 
another Eligible Non-Pueblo Entity to plan, 
permit, design, engineer, and construct any af-
fected portion of the Mitigation Well System or 
another Mutual-Benefit Project; 
‘‘(B) on consent of the Pueblo and State, 
contract with a third party to plan, permit, de-
sign, engineer, and construct any affected por-
tion of the Mitigation Well System with funding 
returned under paragraph (3)(C) or not yet dis-
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‘‘(IV) does not commence con-
struction of the applicable part of the 
Mitigation Well System by the date 
that is 2 years after that date of en-
actment; or 
‘‘(V) does not comply with a 
deadline described in paragraph (3); 
and 
‘‘(ii) sufficient funding is available in 
the 
Taos 
Settlement 
Mutual-Benefit 
Projects Supplemental Fund established 
under section 509(k)(3), as determined by 
the Commissioner of Reclamation. 
‘‘(5) ALTERNATIVE OR INTERIM OFFSET INFRA-
STRUCTURE.— 
‘‘(A) IN GENERAL.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
paragraphs (1) and (2), the Commissioner 
of Reclamation may, pursuant to para-
graph (4)(C), provide financial assistance 
from funds made available pursuant to sec-
tion 509(k) in the form of grants or finan-
cial assistance agreements on a nonreim-
bursable basis or contracts— 
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‘‘(I) to another Eligible Non- 
Pueblo Entity to plan, permit, design, 
engineer, and construct alternative or 
interim offset infrastructure off Pueb-
lo lands to offset surface water deple-
tion effects on the applicable stream 
segments in accordance with a pro-
posal from an Eligible Non-Pueblo 
Entity approved by the State, the 
Pueblo, and the Secretary; and 
‘‘(II) to the Pueblo to plan, per-
mit, design, engineer, and construct 
alternative or interim offset infra-
structure on Pueblo lands, to be 
owned and operated by the Pueblo, to 
offset surface water depletion effects 
on the applicable stream segments in 
accordance with a proposal from the 
Pueblo approved by the State and the 
Secretary. 
‘‘(ii) 
LIMITATION.—Notwithstanding 
subsection (b)(2), no non-Federal cost 
share shall be required for alternative or 
interim offset infrastructure under clause 
(i)(II). 
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‘‘(B) EFFECT.— 
‘‘(i) IN GENERAL.—Use of alternative 
or interim offset infrastructure constructed 
pursuant to subparagraph (A)(i) shall con-
stitute compliance with requirements in the 
Settlement Agreement for use of the Miti-
gation Well System to offset surface water 
depletions on the applicable stream seg-
ments. 
‘‘(ii) SAVINGS
PROVISION.—Nothing 
in the amendments made by the Taos 
Pueblo Indian Water Rights Settlement 
Amendments Act of 2025 precludes agree-
ments among the Pueblo, the Secretary, 
the State, and affected parties to address 
depletion offset obligations for the period 
before the applicable Mitigation Well is 
fully completed, permitted, and operating. 
‘‘(d) TITLE TO PROPERTY.—In no event shall the 
Commissioner of Reclamation hold title to property ac-
quired or constructed with funding made available pursu-
ant to subsections (c)(2)(A) and (k) of section 509.’’. 
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SEC. 5. FUNDING. 
Section 509 of the Taos Pueblo Indian Water Rights 
Settlement Act (Public Law 111–291; 124 Stat. 3128) is 
amended by adding at the end the following: 
‘‘(k) SUPPLEMENTAL FUNDING FOR MUTUAL-BEN-
EFIT PROJECTS.— 
‘‘(1) MANDATORY APPROPRIATION.—Out of any 
funds in the Treasury not otherwise appropriated, 
the Secretary of the Treasury shall transfer to the 
Secretary to award funding pursuant to section 
507(c) $161,000,000, as adjusted pursuant to para-
graph (2). 
‘‘(2) FLUCTUATION IN COSTS.— 
‘‘(A) IN
GENERAL.—The amount under 
paragraph (1) shall be adjusted by such 
amounts as may be justified— 
‘‘(i) by reason of changes since July 
2025 in construction costs, as indicated by 
the Bureau of Reclamation Construction 
Cost Index-Composite Trend; and 
‘‘(ii) to address construction cost 
changes necessary to account for unfore-
seen market volatility that may not other-
wise be captured by engineering cost indi-
ces applicable to the types of construction 
involved, as determined by the Secretary, 
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including repricing applicable to the types 
of construction and current industry stand-
ards involved. 
‘‘(B) REPETITION.—The adjustment proc-
ess under this paragraph shall be repeated for 
each subsequent amount appropriated until the 
amount authorized, as adjusted, has been ap-
propriated. 
‘‘(C) PERIOD OF INDEXING.—The period 
of indexing adjustment under this paragraph 
for any increment of funding shall end on the 
date on which the relevant funding is awarded, 
but in no event shall funds be indexed later 
than 10 years after the date of enactment of 
the Taos Pueblo Indian Water Rights Settle-
ment Amendments Act of 2025. 
‘‘(3) DEPOSIT IN FUND.—The Secretary shall 
deposit the funds made available pursuant to para-
graph (1) in a noninterest-bearing fund, to be 
known as the ‘Taos Settlement Mutual-Benefit 
Projects Supplemental Fund’, to be established in 
the Treasury of the United States so that such 
funds may be made available to carry out section 
507(c). 
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‘‘(l) TAOS PUEBLO GROUNDWATER DEVELOPMENT 
SUPPLEMENTAL TRUST FUND.— 
‘‘(1) MANDATORY APPROPRIATION.—Out of any 
funds in the Treasury not otherwise appropriated, 
the Secretary of the Treasury shall transfer to the 
Secretary for deposit in the Taos Pueblo Ground-
water Development Supplemental Trust Fund estab-
lished by section 505(h) (referred to in this sub-
section as the ‘Groundwater Development Supple-
mental Trust Fund’) $190,000,000, as adjusted pur-
suant to paragraph (2). 
‘‘(2) FLUCTUATION IN COSTS.— 
‘‘(A) IN
GENERAL.—The amount under 
paragraph (1) shall be adjusted by such 
amounts as may be justified— 
‘‘(i) by reason of changes since July 
2025 in construction costs, as indicated by 
the Bureau of Reclamation Construction 
Cost Index-Composite Trend; and 
‘‘(ii) to address construction cost 
changes necessary to account for unfore-
seen market volatility that may not other-
wise be captured by engineering cost indi-
ces applicable to the types of construction 
involved, as determined by the Secretary, 
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including repricing applicable to the types 
of construction and current industry stand-
ards involved. 
‘‘(B) REPETITION.—The adjustment proc-
ess under this paragraph shall be repeated for 
each subsequent amount appropriated until the 
amount authorized, as adjusted, has been ap-
propriated. 
‘‘(C) PERIOD OF INDEXING.—The period 
of indexing adjustment under this paragraph 
for any increment of funding shall end on the 
date on which the amount under paragraph (1) 
is deposited in the Groundwater Development 
Supplemental Trust Fund. 
‘‘(m) TAOS PUEBLO SURFACE WATER SHARING SUP-
PLEMENTAL TRUST FUND.— 
‘‘(1) MANDATORY APPROPRIATION.—Out of any 
funds in the Treasury not otherwise appropriated, 
the Secretary of the Treasury shall transfer to the 
Secretary for deposit in the Taos Pueblo Surface 
Water Sharing Supplemental Trust Fund estab-
lished by section 505(i) (referred to in this sub-
section as the ‘Surface Water Sharing Supplemental 
Trust Fund’) $16,000,000, as adjusted pursuant to 
paragraph (2). 
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‘‘(2) FLUCTUATION IN COSTS.— 
‘‘(A) IN
GENERAL.—The amount under 
paragraph (1) shall be adjusted by such 
amounts as may be justified— 
‘‘(i) by reason of changes since July 
2025 in construction costs, as indicated by 
the Bureau of Reclamation Construction 
Cost Index-Composite Trend; and 
‘‘(ii) to address construction cost 
changes necessary to account for unfore-
seen market volatility that may not other-
wise be captured by engineering cost indi-
ces applicable to the types of construction 
involved, as determined by the Secretary, 
including repricing applicable to the types 
of construction and current industry stand-
ards involved. 
‘‘(B) REPETITION.—The adjustment proc-
ess under this paragraph shall be repeated for 
each subsequent amount appropriated until the 
amount authorized, as adjusted, has been ap-
propriated. 
‘‘(C) PERIOD OF INDEXING.—The period 
of indexing adjustment under this paragraph 
for any increment of funding shall end on the 
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date on which the amount under paragraph (1) 
is deposited in the Surface Water Sharing Sup-
plemental Trust Fund.’’. 
SEC. 6. DISCLAIMERS. 
(a) CONDITIONS PRECEDENT.—Nothing in this Act 
shall be construed to affect— 
(1) the previous satisfaction of the conditions 
precedent in subsection (f)(2) of section 509 of the 
Taos Pueblo Indian Water Rights Settlement Act 
(Public Law 111–291; 124 Stat. 3128); or 
(2) the validity of the finding published by the 
Secretary of the Interior in the Federal Register on 
October 7, 2016, pursuant to subsection (f)(1) of 
that section that those conditions precedent were 
fully satisfied. 
(b) SETTLEMENT AGREEMENT; PARTIAL FINAL DE-
CREE.— 
(1) DEFINITIONS.—In this subsection, the 
terms ‘‘Partial Final Decree’’ and ‘‘Settlement 
Agreement’’ have the meanings given those terms in 
section 503 of the Taos Pueblo Indian Water Rights 
Settlement Act (Public Law 111–291; 124 Stat. 
3122). 
(2) DISCLAIMERS.—Nothing in this Act, the 
Taos Pueblo Indian Water Rights Settlement Act 
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(Public Law 111–291; 124 Stat. 3122), or the Set-
tlement Agreement shall be construed to require— 
(A) an amendment of the Settlement 
Agreement or the Partial Final Decree for the 
Secretary of the Interior to carry out this Act; 
or 
(B) use of the project modification or fail-
ure process in Article 13.3 of the Settlement 
Agreement for alternative or interim offset in-
frastructure funded under subsection (c)(5) of 
section 507 of the Taos Pueblo Indian Water 
Rights Settlement Act (Public Law 111–291; 
124 Stat. 3126). 
Æ 
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