Senate Report 111-204 - 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

[Senate Report 111-204]
[From the U.S. Government Publishing Office]

Calendar No. 425
111th Congress Report
SENATE
2d Session 111-204

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

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 10, 2010.--Ordered to be printed

_______

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

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany S. 1388 ]

The Committee on Indian Affairs, to which was referred the
bill (S. 1388) 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. 1388 is to provide fair and equitable
compensation to the Spokane Tribe for the past and continued
use of tribal lands by the federal government for the
generation of hydroelectric power at the Grand Coulee Dam and
Hydroelectric Project (Project), located on the main stem of
the Columbia River in the State of Washington. S. 1388 would
provide additional compensation for the Tribe's losses,
including the value of the land as a hydroelectric site, and
make payments comparable to those made to the neighboring
Confederated Tribes of the Colville Reservation (Colville
Tribes) under their congressionally approved settlement with
the United States for similar losses caused by the Project.

BACKGROUND

I. Planning and construction of Grand Coulee Dam

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,
located on the main stem of the Columbia River in the State of
Washington.
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.
Sec. Sec. 791a et seq. (FPA). If the Project had been
constructed by a local government or a private utility, section
10(e) of the FPA (16 U.S.C. Sec. 803(e)) would have required
that the non-federal licensees pay the Tribe a reasonable
annual charge, subject to the approval of the Tribe, for the
use of its land to generate hydropower. In 1933, a non-federal
entity was issued a preliminary permit to construct a
hydroelectric project at the current site of the Project by the
Federal Power Commission.
Several years later, however, the Federal government
assumed control of the project. Consequently, the FPA did not
ultimately apply to the Project because federal dams are not
subject to licensing pursuant to the FPA. This included section
10(e) of the FPA which would have provided compensation to the
Tribe for the use of its lands by a non-federal licensee.

II. Payment of compensation to tribes

As a part of constructing the Project, under the Act of
June 29, 1940, 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. . . .''\1\ The Act also 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 by the tribes,
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. The
Act provided that the Secretary of the Interior was to
determine an amount of ``just and equitable compensation for
the tribal lands taken.''\2\
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\1\See 16 U.S.C. Sec. 835d-h.
\2\See 16 U.S.C. Sec. 835e.
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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 that the original payments made to the
tribes, $4,700 and $63,000 respectively, were not adequate
compensation. The testimony emphasized requirement of the Act
of June 29, 1940, that the tribes were to be provided ``just
and equitable compensation.'' The testimony also noted the
decades of lost compensation to the tribes because the Project
had not been licensed by a non-federal entity under the FPA.

III. Claims for compensation before the Indian Claims Commission

Both the Spokane Tribe and the Colville Tribes asserted
various claims before the Indian Claims Commission (ICC) under
the Indian Claims Commission Act of 1946, Pub. L. 79-726
(ICCA). The ICCA included a requirement that all claims be
filed within five years of the passage of the ICCA. Neither
tribe asserted claims specifically related to the Project prior
to the expiration of the ICCA's five year statute of
limitations.
However, after the ICCA's statute of limitations had run,
the Colville Tribes asserted specific claims related to the
Project. In 1956, the Colville Tribes' original ICC claim was
divided into four separate claims, at that time, the Colville
Tribes added specific fishery and hydropower claims to their
original claim. Twenty years later, in 1976, the ICC ruled on
the addition of these more specific claims. The ICC ruled that
the Colville Tribes could amend their original claim even
though the ICCA's five year statute of limitations had run. The
ICC determined that the Colville Tribes specific hydropower
claims could ``relate back'' to the filing of their more
general original claims and would not be barred by the ICCA
statute of limitations.\3\
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\3\Confederated Tribes of the Colville Reservation v. United
States, 39 Ind. Cl. Comm. 159, 163 (Nov. 18, 1976).
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Litigation over the Colville Tribes additional claims
continued until 1992, when the United States Court of Appeals
for the Federal Circuit finally held that the ICCA's ``fair and
honorable dealings'' standard allowed the Colville Tribes to
pursue its hydropower related claims against the United
States.\4\ This decision led to negotiations between the
Colville Tribes and the United States to settle the claims. 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
Project.\5\ The fiscal year 2008 annual payment to the Colville
Tribes for the sale of hydroelectric power generated by Project
was $18.2 million.
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\4\Confederated Tribes of the Colville Reservation v. United
States, 964 F. 2d 1102 (Fed. Cir. 1992).
\5\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).
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Meanwhile, the Spokane Tribe did not attempt to amend its
original ICC claims with more specific claims after the ICCA's
statute of limitations had run. And, in 1967, the Spokane Tribe
settled its ICCA claims. The Spokane Tribe settled its various
ICC claims (in 1967) long before the ICC ruled (in 1976) that
the Colville Tribes and other tribes could amend their claims
even though the ICCA statute of limitations had run. The
Spokane Tribe also settled long before the federal courts held
(in 1992) that these claims could be pursued against the United
States under the ``fair and honorable dealings'' standard of
the ICCA.
None of the Spokane Tribes settled claims specifically
addressed the loss of compensation for the generation of
hydroelectric power by the Project. As the Tribe testified
before the Committee,\6\ when it settled its claims, it
believed that the United States was still planning to
appropriately compensate the Tribe as set out in the Act of
June 29, 1940, which authorized the Project and required ``just
and equitable compensation for the tribal lands taken.''\7\
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\6\Hearing on S. 1080, H.R. 2120, S. 2494, H.R. 2963, S. 531 Before
the S. Comm. on Indian Affairs, 110th Cong. 21 (2008) (written
testimony of Richard Sherwood, Chairman, Spokane Tribe of Indians).
\7\See 16 U.S.C. Sec. 835e.
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IV. Discussions to appropriately compensate the Spokane Tribe

Numerous records, beginning in the 1930's and then again in
the 1970's, support the Spokane Tribe's testimony that the
United States was planning, albeit belatedly, to appropriately
compensate the Tribe as required by the Act of June 29, 1940
authorizing the Project. These records include 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.\8\ These historical and
legal records often treat the legal basis for the Spokane
Tribe's claim as having the same validity as the claims that
the Colville Tribes litigated under the ICCA.
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\8\See id.
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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 [Power
Administration]. 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 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.\9\
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\9\Spokane Tribe of Indians of the Spokane Reservation Grand Coulee
Dam Equitable Compensation Settlement Act: Hearing on S. 1438 Before
the S. Comm. on Indian Affairs, 108th Cong. 64 (2003) (testimony of
Robert A. Robertson, United States General Accounting Office).
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LEGISLATIVE HISTORY

Settlement bills relating to the Tribe's claims were
introduced in the past five Congresses. At different times,
some of these bills either passed the Senate or the House, but
never 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), in the 109th Congress (S. 881 and H.R. 1797) and in the
110th Congress (S. 2494 and H.R. 6547). In the 111th Congress,
Senator Cantwell introduced S. 1388 for herself and Senator
Murray on June 25, 2009.
Three hearings have been held on the Tribe's compensation
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 a hearing on H.R. 1753. On May 15, 2008, the
Senate Committee on Indian Affairs held a hearing on S. 2494.
On some of these occasions, the Committee received views on
the introduced version of the bill and from the Administrations
in place at that time. On June 28, 2005, the Bureau of
Reclamation provided the Committee a letter with its views on
S. 881. And, at the May 15, 2008, the then-Director of the
Bureau of Indian Affairs testified on S. 2494. The Committee
understands that the bill it is currently reporting, S. 1388,
reflects discussions with the Administration based on this
prior correspondence.

SUMMARY OF PROVISIONS OF S. 1388

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's lands being used by the Project are
equivalent in area to 39 percent of the Colville Tribes' lands
being used.\10\ 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.
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\10\Hearing on S. 1080, H.R. 2120, S. 2494, H.R. 2963, S. 531
Before the S. Comm. on Indian Affairs, 110th Cong. 21 (2008) (written
testimony of Richard Sherwood, Chairman, Spokane Tribe of Indians).
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Under S. 1388, an interest-bearing settlement fund 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 2010, and for each of the next four
fiscal years $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
development, credit, scholarship, or reserve, investment, and
economic development programs.
In addition, under S. 1388, beginning on March 1, 2010, 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
Sec. 5(b) of the Colville Tribes Settlement Act for fiscal year
2009. 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.
Beginning in fiscal year 2020, S. 1388 would allow the
Administrator to take a $1,300,000 credit against these
payments to the Tribe in most years. The credit would come from
funds that the Administrator would otherwise owe the Department
of Treasury.
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.
Section 9 discusses the transfer of administrative
jurisdiction and restoration of ownership of certain lands.
Sections 9(a) and (b) provide that the Secretary of the
Interior is directed to transfer administrative jurisdiction
for certain lands within the exterior boundaries of the Spokane
Indian Reservation from the Bureau of Reclamation to the Bureau
of Indian Affairs and that such lands would be held in trust
for the benefit of the Spokane Tribe and remain a part of the
Spokane Indian Reservation. These lands would be subject to the
same trust responsibility as other tribal land held in trust
within the Reservation. These lands would also be subject to a
reservation of perpetual rights and easement on behalf of the
United States regarding the 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.
Because the lands involved in section 9 include a boundary
between the Spokane Tribe and the Confederated Tribes of the
Colville Reservation, section 9(c) provides that nothing in
section 9 establishes or affects the precise location of the
actual boundary between the Spokane Indian Reservation and the
Colville Reservation along the Columbia River, the respective
use rights of each Tribe in Lake Roosevelt as reserved by the
Act of June 29, 1940 (16 U.S.C. Sec. 835d), or the common
boundary of the Indian zones established pursuant to the 1940
Act.
Section 9(c) also recognizes an agreement between the
Spokane Tribe and the Confederated Tribes of the Colville
Reservation that was formalized in a Joint Resolution adopted
by the two Tribes on September 17, 1973. The Joint Resolution
provides--
(1) that the common boundary of the enlarged Indian
zones between the Spokane and Colville Reservations
follow the center line of Roosevelt Lake without
reference to the course of the submerged Columbia River
so that the Spokane Indian zone will be to the east of
said center line and the Colville Indian zone to the
west;
(2) that the Tribes establish a policy of reciprocity
within both Indian zones where they are adjacent to
each other with the cross deputization of game wardens,
patrols, and other officers and uniformity in the
administration of tribal rights and jurisdiction in
that area.
(3) that there be reserved for later negotiations and
accord the question of where the actual common boundary
between the two reservations exists on the bottom of
the Roosevelt Lake, that is, whether it is at the
center line or the west bank of the submerged Columbia
River.
Finally, to help ensure coordinated and consistent
management of the Project, the Recreation Area, and the tribal
lands, Section 9(d) also directs the Tribe and the relevant
agencies of the Department of the Interior to enter into a
memorandum of understanding regarding the lands. A similar
agreement has already been reached between the Tribe and the
State of Washington Department of Fish and Wildlife for
management of law enforcement activities on acreage covered by
the Act.
Section 10 provides that 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.
Section 11 would authorize the appropriation of such funds
as are necessary to accomplish its purpose.
Section 12 states that the Act would not establish any
precedent or is binding upon the Southwestern Power
Administration, Western Area Power Authority, or Southeastern
Power Administration.

SECTION-BY-SECTION OF S. 1388

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.

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 known
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 2010, 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. Sec. 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 operation 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.
Sec. Sec. 3001 et seq.), the Archaeological Resources
Protection Act (16 U.S.C. Sec. Sec. 470aa et seq.), the
National Historic Preservation Act (16 U.S.C. Sec. Sec. 470 et
seq.), or the National Environmental Policy Act of 1969 (42
U.S.C. Sec. Sec. 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, 2010, the
Administrator shall pay to the Tribe an amount equal to 29
percent of the Computed Annual Payment for fiscal year
2009.\11\
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\11\``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.
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Section 6(b) provides that not later than March 1, 2011,
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.

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).\12\
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\12\Section 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) 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.
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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. Sec. 838k)) in fiscal
year 2020, $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.
Sec. 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 or the
agreements and rights established and provided for in the Act
of June 29, 1940 (16 U.S.C. Sec. 835d).
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.
Sec. Sec. 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. Sec. Sec. 1 et
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.

COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

On September 10, 2009, the Committee on Indian Affairs
convened a business meeting to consider S. 1388 and other
measures. By voice vote, the Committee voted to have the bill
favorably reported without amendment.

COST AND BUDGETARY CONSIDERATIONS

The cost estimate for S. 1388, as calculated by the
Congressional Budget Office, is set forth below:

S. 1388--Spokane Tribe of Indians of the Spokane Reservation Grand
Coulee Dam Equitable Compensation Settlement Act

Summary: S. 1388 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. CBO estimates that those payments would
increase direct spending by $8 million over the 2010-2019
period.
The bill also 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 $100 million over the 2010-2014 period,
assuming appropriation of the authorized amounts.
Finally, beginning in 2020, the bill would reduce BPA's
interest payments to the Treasury by $1.3 million annually for
as long as BPA makes payments to the tribe. Such reductions
would increase direct spending by $1.3 million a year starting
in 2020.
S. 1388 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. 1388 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 year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010-2014 2010-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Estimated Budget Authority........................ 6 6 -4 0 0 0 0 0 0 0 8 8
Estimated Outlays................................. 6 6 -4 0 0 0 0 0 0 0 8 8

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level............................... 24 19 19 19 19 0 0 0 0 0 100 100
Estimated Outlays................................. 24 19 19 19 19 0 0 0 0 0 100 100
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Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted near the start of fiscal year 2010 and
that the authorized amounts will be appropriated each year.

Direct spending

S. 1388 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 Tribes. Those payments would continue so long as
electricity continues to be generated at the Grand Coulee Dam.
CBO estimates that payments to the Spokane Tribe would begin in
2010 and would average about $6 million per year. Because BPA's
operating costs are driven 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 as directed by the bill. Instead,
we anticipate that BPA would increase the rates it charges for
electricity to cover those costs.
Because BPA has already set the rates it will charge
customers for electricity in 2010 and 2011, CBO expects that
the agency would use reserve funds to make payments to the
tribe in those years. Information from BPA indicates that the
agency has already collected roughly $8 million to cover a
portion of payments the agency anticipated it might be
obligated to make to the tribe if legislation similar to S.
1388 were enacted. CBO expects that, under the bill, BPA would
spend $12 million of reserves for payments to the tribe in 2010
and 2011 and that the agency would raise its rates in 2012 to
replenish the portion of reserves paid to the tribe that was
not specifically collected for that purpose (about $4 million).
CBO expects that, under current law, BPA would not spend
reserve funds currently designated for making payments to the
tribe because the agency has no authority or requirement to do
so.
Beginning in 2012, CBO expects that the $6 million annual
payment to the Spokane tribe would become part of BPA's cost
structure and would be fully offset by an increase in the rates
it charges for electricity.

Spending subject to appropriation

S. 1388 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
$100 million over the 2010-2014 period to that fund. Assuming
appropriation of the authorized amounts, CBO estimates that
implementing S. 1388 would cost $100 million over the 2010-2014
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. The Secretary of the
Interior would be required to invest the appropriated funds in
government securities until those funds are expended by the
tribe. 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.
Intergovernmental and private-sector impact: S. 1388
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: Jeff LaFave; Impact on
state, local, and tribal governments: Melissa Merrell; Impact
on the private sector: Marin Randall.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.

EXECUTIVE COMMUNICATION

The Committee has not received an executive communication
from the Administration on the provisions of S. 1388.

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. 1388 should be de
minimis.

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. 1388 makes no changes to existing law.

ADDITIONAL VIEWS OF SENATOR CANTWELL

The following sets forth Senator Cantwell's views
concerning the effect of section 9 on the boundary between the
reservations of the Spokane and Colville tribes:
Section 9 also provides that nothing in this section
establishes or affects the precise location of the actual
boundary between the Spokane Indian Reservation and the
Colville Reservation along the Columbia River, the respective
use rights of each Tribe in Lake Roosevelt as reserved by the
1940 Act, or the common boundary of the Indian zones
established pursuant to the 1940 Act in a Joint Resolution
adopted by the two Tribes on September 17, 1973.
That agreement provides:
1. That the common boundary of the enlarged Indian zones
between the Spokane and Colville Reservations follow the center
line of Roosevelt Lake without reference to the course of the
submerged Columbia River so that the Spokane Indian zone will
be to the east of said center line and the Colville Indian zone
to the west.
2. That the Tribes establish a policy of reciprocity within
both Indian zones where they are adjacent to each other with
the cross deputization of game wardens, patrols, and other
officers and uniformity in the administration of tribal rights
and jurisdiction in that area.
3. That there be reserved for later negotiations and accord
the question of where the actual common boundary between the
two reservations exists on the bottom of the Roosevelt Lake,
that is, whether it is at the center line or the west bank of
the submerged Columbia River.
Nothing in this section affects these rights and agreement
inter se. It is recognized that the actual boundary between the
two Reservations on the Columbia River and Lake Roosevelt is a
matter to be resolved by further negotiation and accord between
the Spokane and Colville Tribes. Accordingly, it is recommended
that any unresolved issues regarding the common Reservation
boundary should be a matter to be resolved through further
negotiations between the two Tribes and are not affected in any
way by the proposed legislation.
Maria Cantwell.