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                                                       Calendar No. 624
109th Congress                                                   Report
                                 SENATE
 2d Session                                                     109-344

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



 
                           TRIBAL PARITY ACT

                                _______
                                

               September 20, 2006.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 374]

    The Committee on Indian Affairs, to which was referred the 
bill S. 374 to provide compensation to the Lower Brule and Crow 
Creek Sioux Tribes of South Dakota for damage to tribal land 
caused by Pick-Sloan projects along the Missouri River, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill (as amended) do pass.

                                Purpose

    S. 374 amends the Lower Brule Sioux Tribe Infrastructure 
Development Trust Fund Act to increase from $39.3 million to 
$129,822,085 the aggregate amount to be deposited into the 
Lower Brule Sioux Tribe Infrastructure Development Trust Fund 
by the Secretary of the Treasury to provide compensation to the 
Lower Brule Tribe of South Dakota for damage to tribal land 
caused by Pick-Sloan projects along the Missouri River.
    S. 374 also amends the Crow Creek Sioux Tribe 
Infrastructure Development Trust Fund Act of 1996 to increase 
from $27.5 million to $69,222,084 the aggregate amount to be 
deposited into the Crow Creek Sioux Tribe Infrastructure 
Development Trust Fund by the Secretary to provide compensation 
to the Crow Creek Sioux Tribe of South Dakota for damage to 
tribal land caused by Pick-Sloan projects along the Missouri 
River.

                               Background

    The Lower Brule Sioux Tribe and the Crow Creek Sioux Tribe 
were impacted by the Fort Randall Dam and the Big Bend Dam, two 
significant dam construction projects located on the Missouri 
River. Construction of the Fort Randall Project began in 1946 
and of the Big Bend Project in 1960, and both projects resulted 
in the inundation of several thousands of acres of land on the 
reservations of these two Indian tribes.
    Although Congress attempted to mitigate the impacts of 
these two projects on the two reservations and the Indian 
people who were living on them by enacting, in 1962, the Big 
Bend Recovery Act (P.L. 87-735), the insufficiency of the 
Government's mitigation efforts pursuant to that Act eventually 
led to the enactment of the Crow Creek Sioux Tribe 
Infrastructure Development Trust Fund Act of 1996 (P.L. 104-
223) and, one year later, the Lower Brule Sioux Tribe 
Infrastructure Development Trust Fund Act (P.L. 105-132).
    P.L. 104-223 and P.L. 105-132 each created an 
infrastructure development trust fund for the respective tribe, 
the principal balance of which would be derived from a 
percentage of receipts deposited into the United States 
Treasury from the Pick-Sloan Missouri River basin power 
program, and each act authorized payments to the tribe of 
interest earned on the principal balance of the fund for use on 
specified projects and activities. The principal amount 
authorized to be deposited into the Crow Creek Sioux Tribe fund 
was $27,500,000, and the principal amount authorized to be 
deposited into the Lower Brule Sioux Tribe fund was 
$39,300,000.

                           Overview of S. 374

    S. 374 was introduced by Senator Thune on February 14, 
2005, for himself and for Senator Johnson, and referred to the 
Committee on Indian Affairs. S. 374 would amend section 4(b) of 
the Lower Brule Sioux Tribe Infrastructure Development Trust 
Fund Act (P.L. 105-132) by increasing the aggregate authorized 
amount of deposits from the Pick-Sloan power program into that 
tribe's trust fund from $39,300,000 to $186,822,140. It would 
also amend section 4(b) of the Crow Creek Sioux Tribe 
Infrastructure Development Trust Fund Act of 1996 (P.L. 104-
223) by increasing the aggregate authorized amount of such 
deposits into the Crow Creek Sioux Tribe's trust fund from 
$27,500,000 to $105,917,853.
    S. 374 was ordered to be reported without amendment 
favorably by the Committee on June 29, 2005. Shortly 
thereafter, a representative of the United States Government 
Accountability Office (GAO) expressed concern regarding 
language in the Findings section of the bill (section 2(7)) 
stating that a methodology determined appropriate by the 
General Accounting Office entitled the two tribes to additional 
compensation.
    Accordingly, Chairman McCain requested the GAO assess 
whether the approach used in developing the amount of 
additional compensation in S. 374 followed the approach used in 
previous GAO reports for analyzing additional compensation for 
other tribes located along the Missouri River. In May 2006, the 
GAO issued the report requested by Chairman McCain. See GAO-06-
517, Analysis of the Crow Creek Sioux and Lower Brule Sioux 
Tribes Additional Compensation Claims, attached to this report 
as Exhibit 1.
    On June 14, 2006, the Committee held a hearing during which 
the GAO provided testimony on the report, and the tribes and 
their consultant provided their views. Briefly, the GAO 
testified that its research for the report indicated that the 
tribes' consultant deviated in certain respects from the 
approach used in the previous GAO reports addressing additional 
compensation for other Indian tribes impacted by flood control/
power projects on the Missouri River and concluded that the 
GAO's approach does not support the additional compensation 
amounts contained in S. 374. The tribes' consultant testified 
that his approach deviated in part to account for the inferior 
negotiating position of the tribes. He also testified that his 
original calculations did contain an error and provided new 
estimates for compensation based on hisapproach.
    Based on the testimony provided, Senators Thune and Johnson 
prepared a substitute amendment which lowered the compensation 
for the Lower Brule Sioux Tribe from $186,822,140 to 
$129,822,085, and the compensation for the Crow Creek Sioux 
Tribe from $105,917,853 to $69,222,084. This substitute 
amendment was offered at the August 2, 2006, business meeting 
of the Committee and was approved by voice vote. The substitute 
amendment also added a provision clearly stating that the 
compensation provided in this bill is the full and final 
compensation for the Lower Brule Sioux Tribe and Crow Creek 
Sioux Tribe for claims related to the Pick-Sloan projects which 
impacted their reservations.

                          Legislative History

    S. 374 was introduced on February 14, 2005, by Senators 
Thune and Johnson and was referred to the Committee on Indian 
Affairs. On June 29, 2005, S. 374 was approved by the Committee 
by voice vote and ordered reported favorably; however, the bill 
was not reported to the full Senate. On June 14, 2006, a 
hearing was held by the Committee on the bill. On August 2, 
2006, S. 374 was approved by the Committee, with an amendment 
in the nature of a substitute, and ordered reported favorably 
to the full Senate.

            Committee Recommendation and Tabulation of Vote

    On August 2, 2006, the Committee, in an open business 
session, considered S. 374. By a voice vote, the Committee 
ordered the bill reported favorably, with an amendment in the 
nature of a substitute, to the full Senate with a 
recommendation that the bill do pass.

        Section-by-Section Analysis of the Substitute Amendment


Section 1. Short title

    Section 1 of the substitute amendment amends the title of 
S. 374 to the Lower Brule and Crow Creek Tribal Compensation 
Act.

Section 2. Findings

    Section 2 of the substitute amendment amends the findings 
of 
S. 374 as introduced to strike the language ``based on a 
methodology determined appropriate by the General Accounting 
Office'' and ``so as to provide parity among compensation 
received by all Missouri River Indian tribes.''

Section 3. Lower Brule Sioux Tribe

    Section 3 of the substitute amendment amends the amount of 
compensation in S. 374 as introduced that would amend the trust 
fund amount created by current law. For the Lower Brule Sioux 
Tribe the substitute amendment reduces this amount from 
$186,822,140 in S. 374 to $129,822,085.

Section 4. Crow Creek Sioux Tribe

    Section 4 of the substitute amendment amends the amount of 
compensation in S. 374 as introduced that would amend the trust 
fund amount created by current law. For the Crow Creek Sioux 
Tribe the substitute amendment reduces this amount from 
$105,917,853 in S. 374 to $69,822,084.

Section 5. Treatment as Final Compensation

    Section 5 of the substitute amendment adds a provision to 
S. 374 as introduced to treat this act as final and full 
compensation to the Lower Brule Sioux Tribe and the Crow Creek 
Sioux Tribe for damages caused by construction of the Fort 
Randall Dam and the Big Bend Dam under the Pick-Sloan Missouri 
River Basin Program.

                   Cost and Budgetary Considerations

    The Congressional Budget Office cost estimate for S. 374 is 
set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 25, 2006.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 374, the Lower Brule 
and Crow Creek Tribal Compensation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
Hoople.
            Sincerely,
                                           Robert P. Murphy
                           (For Donald B. Marron, Acting Director).
    Enclosure.

S. 374--Lower Brule and Crow Creek Tribal Compensation Act

    Summary: S. 374 would increase the size of two existing 
tribal trust funds established by the Lower Brule Sioux Tribe 
Infrastructure Development Trust Fund Act and the Cow Creek 
Sioux Tribe Infrastructure Development Trust Fund Act of 1996. 
Congress created those funds as compensation for damages to the 
tribes caused by the Pick-Sloan Missouri River Basin project; 
this bill would constitute a final settlement of claims by the 
two tribes against the United States. CBO estimates that 
enacting S. 374 would increase direct spending by $66 million 
in 2007 and $169 million over the 2007-2016 period. Enacting 
the bill would not affect revenues.
    S. 374 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. The payments authorized by this bill would benefit 
the Lower Brule Sioux and Crow Creek Sioux tribes.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 374 is shown in the table below. The 
costs of this legislation fall within budget function 450 
(community and regional development).

----------------------------------------------------------------------------------------------------------------
                                                     By fiscal years, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2007    2008    2009    2010    2011    2012    2013    2014    2015    2016
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Lower Brule and Crow Creek Funds
 Spending Under Current Law:
  Interest on Lower Brule Fund:
    Estimated Budget Authority..       2       2       2       2       2       2       2       2       2       2
    Estimated Outlays...........       2       2       2       2       2       2       2       2       2       2
  Interest on Crow Creek Fund:
    Estimated Budget Authority..       1       1       1       1       1       1       1       1       1       1
    Estimated Outlays...........       1       1       1       1       1       1       1       1       1       1
Proposed Changes:
  Transfers to Lower Brule Fund:
    Estimated Budget Authority..       0     130       0       0       0       0       0       0       0       0
    Estimated Outlays...........       0     130       0       0       0       0       0       0       0       0
  Transfers to Crow Creek Fund:
    Estimated Budget Authority..      69       0       0       0       0       0       0       0       0       0
    Estimated Outlays...........      69       0       0       0       0       0       0       0       0       0
  Interest on Lower Brule Fund:
    Estimated Budget Authority..      -2      -2      -2      -2      -2      -2      -2      -2      -2      -2
    Estimated Outlays...........      -2      -2      -2      -2      -2      -2      -2      -2      -2      -2
  Interest on Crow Creek Fund:
    Estimated Budget Authority..      -1      -1      -1      -1      -1      -1      -1      -1      -1      -1
    Estimated Outlays...........      -1      -1      -1      -1      -1      -1      -1      -1      -1      -1
        Total Changes:
          Estimated Budget            66     127      -3      -3      -3      -3      -3      -3      -3      -3
           Authority............
          Estimated Outlays.....      66     127      -3      -3      -3      -3      -3      -3      -3      -3
Lower Brule and Crow Creek
 Tribal Funds Spending Under S.
 374:
    Estimated Budget Authority..      69     130       0       0       0       0       0       0       0       0
    Estimated Outlays...........      69     130       0       0       0       0       0       0       0       0
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: CBO estimates that enacting this 
legislation would result in a net increase in direct spending 
of $66 million in 2007 and $169 million over the 2007-2016 
period. By increasing the maximum funding level of two tribal 
trust funds and establishing a final settlement of certain 
tribal claims against the federal government, CBO estimates 
that enacting S. 374 would increase direct spending by $199 
million over the 2007-2016 period. The bill also would reduce 
direct spending for interest payments made to the tribes by $30 
million over the 2007-2016 period. For this estimate, CBO 
assumes that the bill will be enacted near the beginning of 
fiscal year 2007 and that additional transfers to the trust 
funds would begin in that year.

Trust fund activity under current law

    In 1996 and 1997, the Congress enacted legislation creating 
the Crow Creek Sioux Tribe Infrastructure Development Trust 
Fund (Crow Creek Fund) and the Lower Brule Sioux Tribe 
Infrastructure Development Trust Fund (Lower Brule Fund). Both 
acts authorized the Secretary of the Treasury to transfer 
certain proceeds from electricity sales made by the Western 
Area Power Administration (WAPA), the agency that manage the 
Pick-Sloan project, to each fund. Such transfers were made 
annually until the funds reached the maximum balances set forth 
in law. Consistent with the treatment of similar tribal trust 
funds, both funds are classified as budgetary accounts because 
all claims against the federal government for related damages 
have not been extinguished. Thus, transfers to the funds made 
to date have been considered intragovernmental and have had no 
net effect on the federal budget.
    Current law directs the Secretary to transfer any interest 
earned by the Crow Creek Fund and the Lower Brule Fund into 
separate accounts for the benefit of the tribes. Payments from 
these interest accounts may only occur after the trust fund has 
reached its maximum funding level. Given that both trust funds 
are currently at their maximum levels, CB0 estimates that such 
payments will total $3 million in 2007--$2 million from the 
Lower Brule Fund and $1 million from the Crow Creek Fund--and 
$30 million over the 2007-2016 period.

Trust fund activity under S. 374

    S. 374 would increase the size of the Lower Brule Fund by 
$91 million (for a new maximum of $130 million), and the Crow 
Creek Fund by $42 million (for a new maximum of $69 million). 
Each fund would receive deposits equal to 25 percent of the 
gross revenues from the Pick-Sloan project from the previous 
year. Those annual deposit would continue until the total 
balance of the trust fund reaches the new maximum level. Based 
on information from WAPA, CBO estimates that gross electricity 
sales revenues from the Pick-Sloan project will be $318 million 
in 2006 and average approximately $34 million per year 
thereafter. Thus, CBO estimates that deposits to the Crow Creek 
Fund would reach its new maximum level in 2007, and the Lower 
Brule Fund would reach its new maximum level in 2008.
    S. 374 would extinguish any future claims against the 
federal government by the two tribes upon full funding of their 
trust funds. Consistent with the treatment of similar tribal 
funds, the balances would thereafter be considered under tribal 
ownership. The federal budget excludes trust funds that are 
held and managed in a fiduciary capacity by the federal 
government on behalf of Indian tribes, so CBO expects that the 
trust fund will be reclassified as nonbudgetary and the 
transfer of funds to the tribes would be recorded on the budget 
as new direct spending equal to the full balance of the trust 
fund. As a result, CBO estimates that enacting S. 374 would 
increase direct spending by $69 million in 2007 for the Crow 
Creek Fund, and by $130 million in 2008 for the Lower Brule 
Fund.
    After those funds are transferred, any future interest 
earnings and payments would not be considered part of the 
federal budget. Additionally, because under the bill the Lower 
Brule Fund would fall below its maximum funding level in 2007, 
no interest payments would be made to the tribe in that year. 
As such, CBO estimates that enacting S. 3174 would reduce 
direct spending for interest payments to the tribes by $3 
million in 2007 and $30 million over the 2007-2016 period.
    Previous CBO estimate: On July 7, 2005, CBO transmitted a 
cost estimate for S. 374, the Tribal Parity Act, as ordered 
reported by the Senate Committee on Indian Affairs on June 29, 
2005. That version of the legislation also would have increased 
deposits (by different amounts) to the Lower Brule Fund and the 
Crow Creek Fund. The July 7, 2005 version of the legislation 
however, would not have extinguished all related claims against 
the federal governments directed in the August 2006 version of 
the legislation. CBO's current cost estimate reflects those 
differences.
    Intergovernmental and private-sector impact: S. 374 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Enacting this legislation would benefit the 
two tribes.
    Estimate prepared by: Federal Costs: Daniel Hoople. Impact 
on State, Local, and Tribal Governments: Marjorie Miller. 
Impact on the Private Sector: Carla-Marie Ulerie.
    Estimate approved by: Jeffrey M. Holland, Chief, 
Projections Unit.

               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 to 
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. 374 will be de 
minimis.

                        Executive Communications

    The Committee has received no official executive 
communications on S. 374.
      

                               EXHIBIT 1

    Report to the Chairman, Committee on Indian Affairs, U.S. Senate

             United States Government Accountability Office

    ANALYSIS OF THE CROW CREEK SIOUX AND LOWER BRULE SIOUX TRIBES' 
                     ADDITIONAL COMPENSATION CLAIMS

                                May 2006



                        Changes in Existing Law

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1535, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new language to be added in italic, existing law to 
which no change is proposed is shown in roman):

              LOWER BRULE AND CROW CREEK COMPENSATION ACT


Public Law 105-132; 111 Stat. 2565

           *       *       *       *       *       *       *



SEC. 4. ESTABLISHMENT OF LOWER BRULE SIOUX TRIBE INFRASTRUCTURE 
                    DEVELOPMENT TRUST FUND.

           *       *       *       *       *       *       *


    (b) Funding.--Beginning with fiscal year 1998, and for each 
fiscal year thereafter, until such time as the aggregate of the 
amounts deposited in the Fund is equal to $129,822,085 
[$39,300,000], the Secretary of the Treasury shall deposit into 
the Fund an amount equal to 25 percent of the receipts from the 
deposits to the Treasury of the United States for the preceding 
fiscal year from the Program.

Public Law 104-223; 110 Stat. 3027

           *       *       *       *       *       *       *



SEC. 4. ESTABLISHMENT OF CROW CREEK SIOUX TRIBE INFRASTRUCTURE 
                    DEVELOPMENT TRUST FUND.

           *       *       *       *       *       *       *


    (b) Funding.--Beginning with fiscal year 1997, and for each 
fiscal year thereafter, until such time as the aggregate of the 
amounts deposited in the Fund is equal to $69,222,084 
[$27,500,000], the Secretary of the Treasury shall deposit into 
the Fund an amount equal to 25 percent of the receipts from the 
deposits to the Treasury of the United States for the preceding 
fiscal year from the Program.