H.R. 4783 Senate Amendment: Senate Amendment to H.R. 4783—The Claims Resolution Act of 2010

H.R. 4783

Senate Amendment to H.R. 4783—The Claims Resolution Act of 2010

Sponsor
Rep. Nick J. Rahall II

Date
November 30, 2010 (111th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

The House is scheduled to consider the Senate Amendment to H.R. 4783 under a closed rule on Tuesday, November 30, 2010.  H.R. 4783 was introduced on March 9, 2010, by Rep. Sander Levin (D-MI), as a bill to accelerate the income tax benefits for charitable cash contributions for the relief of victims of the earthquake in Chile.  The bill passed the House on March 10, 2010, by voice vote.  The bill was then amended in the Senate to include substitute text and was approved by unanimous consent on November 19, 2010.  

Bill Summary

The Senate amendment to H.R. 4783 would provide $914 million in mandatory spending to ratify four Indian water rights settlement agreements.  The bill would also provide $1.15 billion to pay the claimants in Pigford v. Vilsack, a 1997 case in which three African-American farmers alleged that the USDA had discriminated against them and other African-American farmers.  Some Members have expressed concerns that various claims made after the Pigford decision may be fraudulent and have requested investigations.  In addition, the bill would appropriate $3.4 billion to settle the case of Cobell v. Salazar in which hundreds of thousands of Indians with money and land held in trust by the federal government brought suit alleging mismanagement of funds.  H.R. 4783 also includes a one-year extension of the Temporary Assistance for Needy Families program, which provides cash assistance to the poor.

Title ICobell v. Salazar Litigation Settlement Approval

The bill would ratify the settlement of Cobell v. Salazar, a class action discrimination lawsuit, and provide $3.4 billion in direct spending for Indian plaintiffs who brought suit against the federal government alleging the mismanagement of land and funds held in trust.

The plaintiffs in the case are more than 500,000 individual Indians with land and money held in trust by the federal government who alleged that the Interior Department mismanaged billions of dollars in grazing land, gas, oil and other royalties owed to thousands of American Indians.  The case was filed on June 10, 1996, and on December 8, 2009, it was announced that the Obama Administration reached a $3.4 billion settlement with the plaintiffs.  Under the settlement, the federal government would give $1.4 billion to the plaintiffs (divided among the hundreds of thousands of plaintiffs) and would establish a $2 billion program to buy and consolidate Indian land holdings where management accounts have been obscured over time.  Up to $60 million of the $2 billion could be used to provide scholarships for Native Americans.

According to CBO, this provision would increase direct spending by $3.412 billion over ten years.

Title II—Pigford v. Vilsack Litigation Settlement Approval

The bill would ratify a $1.15 billion settlement agreement in Pigford v. Vilsack, a class action lawsuit filed by African-American farmers alleging that the U.S. Department of Agriculture (USDA) had discriminated against them and other African-American farmers by denying their applications for farm loans and benefits.

Background:  In 1999, a Federal District Court approved a settlement to resolve a class action suit between the USDA and black farmers.  The settlement allowed farmers who farmed between 1981 and 1996 to seek monetary payments from the USDA for discrimination if their claim was filed prior to July 1, 1997.  As a result of the original settlement, more than $1 billion was paid out to more than 16,000 farmers.  According to the Congressional Research Service (CRS), following the expiration period for new claims, “Many voiced concern over the structure of the settlement agreement, the large number of applicants who filed late, and reported deficiencies in representation by class counsel.”  The 2008 farm bill included a provision to allow any claimant in the Pigford case who had not previously received a determination to do so.  On February 18, 2010, Attorney General Holder and Secretary of Agriculture Vilsack announced that the second round of claims had been determined and that a new $1.25 billion settlement was agreed to.  This legislation would provide $1.15 billion in direct spending to settle the second round of claims, known as Pigford II.

Possible Member ConcernsSome Members have argued that this second round of settlements for claimants in the Pigford case has been subject to fraud and abuse and that false claims may be paid out as a result of this legislation.  According to reports, “USDA employees and FBI officials estimate that the number of fraudulent claims range from 50 percent to 95 percent.”   In addition, another report states, “Census data pegs the number of U.S. farms operated by black farmers at about 33,000, close to 94,000 claims have been made so far in the discrimination case.”  Republican Reps. Michele Bachmann of Minnesota, Steve King of Iowa, and Bob Goodlatte of Virginia have called for a House investigation into the matter. 

According to CBO, this provision would increase direct spending by $1.15 billion over ten years.

Title III—White Mountain Apache Tribe Water Rights Quantification

The bill would ratify the Water Rights Quantification Agreement reached by the federal government, the state of Arizona, the White Mountain Apache Tribe, and other local parties regarding the Tribe's claim to water rights on and originating from the Fort Apache Indian Reservation.  Under the agreement, the Tribe would receive rights to divert up to 99,000 acre-feet of water from the Salt River annually.  The Tribe would be authorized to enter into water leasing agreements with local towns and water systems.

In addition, the bill would require the Bureau of Reclamation (BOR) to plan, design, construct, operate, maintain, replace, and rehabilitate a rural water system to provide water to the reservation.  The bill would authorize federal funding for a number of local water, environmental and economic development projects for the Tribe.

Specific funding levels include the following:

  • $126 million in mandatory appropriations for the Bureau of Water Reclamation to plan, engineer, design and operate a rural water system to provide water to the Tribe.  The Tribe would be authorized to accept the title to the project after five years of operations.

  • Up to $113.5 million for the “White Mountain Apache Tribe Settlement Fund.”  Funding includes $78.5 million in mandatory funding and the authority to appropriate up to $35 million more.  The fund would be used, in part, for the rehabilitation of existing irrigation systems.

  • $50 million for the “White Mountain Apache Tribe Maintenance Fund” for the operation, maintenance, and replacement costs associated with the delivery of water through the rural water system.  CBO estimates that this funding would not be spent until after the ten year budget window.

  • Up to $35 million for White Mountain Apache Tribe rural water system cost overruns.  Funding includes $24 million in mandatory funding and the authority to appropriate up to $11 million more.

  • $2.5 million for the operation, maintenance, and replacement costs of the White Mountain Apache Tribe rural water system.

Background:  The White Mountain Apache Tribe consists of about 15,000 members residing on 1.7 million acres of land in the Fort Apache Indian Reservation in eastern Arizona.  The reservation was established in 1871 and contains the headwaters of the Salt River, which provides the primary source of water for the metropolitan Phoenix area.   In 1985, the U.S. filed a claim for the Tribe to have access to 180,000 acre-feet of water from the Salt River basin annually.  The claim, as well as other claims by the Tribe for water rights in the area, has been held up in court pending adjudication.  In January 2009, an agreement was reached between the Tribe, the state, the federal government, and a number of other interested parties to settle the Tribes claim rather than continue with litigation.  Under the agreement, the Tribe would be given access to 99,000 acre-feet of water annually, and the federal government would fund the construction of a water distribution system for the Tribe.  The settlement also requires the federal government to establish trust funds for the tribe to restore lakes and forests, conduct economic development projects, and operate and the rural water system.

While the Department of Interior (DOI) generally prefers negotiated Indian water rights settlements rather than prolonged litigation, the DOI and the Bureau of Reclamation (BOR) have raised concerns about the settlement that would be ratified by H.R. 1065.  In testimony provided to the Subcommittee on Water and Power in July, 2009, the commissioner of BOR stated that the $126 million cost estimate for the water system that was prepared by the Tribe was insufficient to assure the project could be completed at the quoted cost.  In addition, BOR expressed concerns that projects were being overfunded.

In a follow-up letter to the Subcommittee in November, 2009, the Commissioner reiterated the Administration's concerns.  According to the letter, only $5 million of the $113.5 million authorized for the Settlement Fund was needed to implement the settlement.  The letter stated, "Given the benefits being obtained by the Tribe under this settlement, the Administration would consider the approximately $109 million of additional funding for a development fund authorized under this bill to be excessive."  The concerns raised by the Administration were not addressed in the underlying bill.

Possible Member Concerns:  Some Members may be concerned that, according to CBO, H.R. 1065 would increase discretionary spending by $200 million and increase direct spending by $147 million without addressing key concerns the Administration and Members of the Committee have brought forward.  Members may be concerned that, because the project has not been subject to a BOR approved cost assessment, the final cost of the water system to the taxpayer could be far more than expected.  In addition, Members may be concerned that the portions of money authorized for the White Mountain Apache Tribe Settlement Fund may be excessive and unnecessary to settle the claim, as the Administration has asserted.  While Members may support settling the Indian water rights claims, they may be concerned that there has been no certification that the cost of the settlement—as opposed to the cost of litigation—would result in a net benefit to taxpayers.

Title IV—Crow Tribe Water Rights Settlement

The bill would ratify a 1999 water rights settlement between the Crow Nation and state of Montana and require the Bureau of Reclamation to provide up to $131.8 million in federal funding to rehabilitate and improve the water diversion and delivery features of the Crow Irrigation Project.  Funding for the project includes $73.8 million in mandatory funding and the authority to appropriate up to $58 million in additional funding.

In addition, the bill would provide up to $246.3 million for the construction of a municipal, rural, and industrial water system for the Reservation.  Funding for the project includes $146 million in mandatory funding and the authority to appropriate up to $100.3 million in additional funding.

The bill would also authorize the Secretary of the Treasury to transfer otherwise unappropriated funds to the Secretary of Interior as follows:

  • $4.7 million for Tribal Compact Administration.
  • $20 million or Energy Development Projects.
  • $47 million for the day-to-day operations of the municipal, rural, and industrial water system.
  • $10 million for the day-today operations of the Crow Irrigation Project.

Background:  The Crow Nation Indian Reservation includes 2.3 million acres and is located about 70 miles southeast of Billings in Montana.  The reservation is the fifth largest American Indian reservation in the U.S. and is home to more than 7,900 American Indians.  In 1985, the federal government, the Crow Tribe and the state of Montana entered into negotiations to settle disputed water rights claims. In 1999, the tribe and the state of Montana reached an agreement on a compact providing for an allocation of water for the tribe, subordinating that right to existing state based water uses, water rights administration, water marketing, and dispute resolution mechanisms.

Title V—Taos Pueblo Indian Water Rights Settlement

The bill would provide a total of $124 million in direct and authorized spending to ratify the Taos Pueblo Indian Water Rights Settlement Agreement.

The settlement gives the Taos Pueblo water rights totaling 11,927 acre-feet per year in depletions, including 2,215 acre-feet per year from the San Juan-Chama Project.  Included in the settlement is an agreement by the Pueblo to initially abstain from using 4,678 acre-feet per year for continued non-Indian use.

Under the settlement, the bill establishes the Taos Pueblo Water Development Fund within the U.S. Treasury to pay for or reimburse the costs incurred by the Pueblo.  The bill provides $88 million for the Water Development Fund.  Funding includes $50 million in mandatory funding and the authority to appropriate up to $38 million more.  $15 million of the $88 million would be available for the purpose of purchasing water rights in the Taos Valley.

In addition, the legislation would provide $16 million in mandatory spending and authorize the appropriation of an additional $20 million for “mutual-benefit projects” that would minimize the impacts of water use by non-Indian entities on the Taos Pueblo lands. The federal cost-share for these projects would be 75 percent.

Background:  The Taos Pueblo is located approximately 70 miles north of Santa Fe, New Mexico, encompassing an area of approximately 100,000 acres of land, with more than 2,450 enrolled tribal members. The Supreme Court ruled in 1876 that the Taos Pueblo was not an Indian tribe within the meaning of the 1834 and 1851 Non-intercourse Acts. This meant that non-Indians were able to buy Pueblo lands without regard to federal Indian law, resulting in significant loss of Pueblo lands to non-Indians. In 1924 the Supreme Court reversed its ruling in 1876, which threw into question the legal ownership of the land and water rights of the Taos Valley.   This provision would ratify and approve the water rights claims of the Taos Pueblo agreed to in a May 2006 Settlement Agreement, and signed by the majority of water users in the Taos Valley.

Possible Member Concerns:  The Administration stated that providing early settlement benefits is not good public policy, and the settlement benefits should be made available to all parties only when the settlement is final so that it is enforceable.  Congressman McClintock (R-CA), the Ranking Republican of the House Water and Power Subcommittee, stated that Congress should not be, “Just a rubber stamp” when it comes to settling Indian water rights claims particularly when tax dollars are used.

Title VI—Aamodt Litigation Settlement

The bill would ratify the Aamodt litigation settlement of the Pueblos of Nambe, Pojoaque, San Ildefonso, and Tesuque (the Four Pueblos).  The settlement agreement requires the U.S. to provide 2,500 acre-feet per year of imported water for Pueblo use.  The settlement also requires the Bureau of Reclamation to plan, design and construct the Regional Water System that would divert and distribute water to the Four Pueblos and the Santa Fe County Water Utility.  The Pueblos and Santa Fe County would jointly operate the Regional Water System through the formation of a Regional Water Authority.

 The bill also requires the federal government to fund a number of water projects including:

  • $106.4 million for the Secretary of the Interior, acting through the Commissioner of Reclamation, the planning, design, and construction of the Regional Water System and the conduct of environmental compliance activities.  Funding includes $56.4 million in mandatory funding and the authority to appropriate up to $50 million more through FY 2024.

  • $5.4 million for the acquisition of water rights.

  • $20 million for the “Aamodt Settlement Pueblos' Fund” for the Pueblos to operate and maintain the water system.  Funding includes $15 million in mandatory funding and the authority to appropriate up to $5 million more.  

  • $37 million to assist in paying the Pueblos' share of the cost of operating, maintaining, and replacing the Pueblo Water Facilities and the Regional Water System.

Background:  The Nambe, Pojoaque, San Ildefonso and Tesuque Pueblos ("Four Pueblos") are located in the Pojoaque River Basin, a tributary of the Rio Grande in northern New Mexico.  The Basin is largely rural and agricultural, although residential development is increasing.  Sources of employment include the Los Alamos National Laboratory, businesses in the City of Santa Fe, and increasingly the Pueblos or their commercial enterprises.  The Pueblo of Pojoaque is the commercial hub of the Basin and commercial development along the major highway in the Basin is growing.  The Aamodt water rights claims litigation was originally filed by the U.S. on behalf of the Four Pueblos in 1966 and involves more than 2,500 defendants.  A comprehensive Settlement Agreement was signed by the State of New Mexico and affected parties in May 2006.

Possible Member Concerns:  According to the Department of Interior (DOI), this provision limits the amount of funding available to construct the Pueblo Water Facilities to an amount certain, which is indexed based on construction cost fluctuations.  Some Members may be concerned that DOI has questioned the validity of the cost estimates that the settlement parties are relying on for regional water system.  The parties rely on an engineering report dated June 2007 that has not been verified by the level of study that the Bureau of Reclamation (BOR) would recommend in order to assure reliability.  Much of the cost information contained in the engineering report was arrived at three years ago, and according to a letter from the BOR, the total project cost estimates cannot be relied upon.

The Administration has also expressed concern that, although the bill establishes a limit on the amount of funding that the U.S. can expend for construction of the Pueblo Water facilities, the bill allows the settlement to be voided if the water system is not completed by 2021.  According to the BOR, this nullification provision creates a risk that, even if the U.S., the county, the state, and the Pueblos all follow through on their commitments under the agreement and this bill, the settlement could fail in the event that the costs for the system turn out to be higher than the current estimates contemplate or than the authorizations allow.  This could mean a return to litigation after the expenditure of significant resources.

According to CBO, the combined mandatory cost of four tribal water rights settlements in the bill (excluding authorized funding and transferred funds) would be $914 million over ten years.

Title VIII—General Provisions and Offsets

Unemployment Compensation Program Integrity:  The bill includes a number of provisions designed to reduce federal spending by improving the accuracy of disbursements of unemployment insurance (U.I.) benefits.  According to CBO, the provisions would reduce spending by $3.19 billion over five years and $4.9 billion over ten years.   The bill would allow Federal income tax refunds to be used to recover any U.I. overpayment.  Under current law, only U.I. overpayments as a result of fraud by the recipient may be taken from tax refunds.  In addition, the bill would require employers to report the first day of a new employee’s earnings so that U.I. overpayments can be better prevented when recipients return to work and their benefits should end.  The bill would also allows the federal government to collect repayment of unemployment compensation debts from the states immediately, rather than over a period of up to 10 years.

Extension of Temporary Assistance for Needy Families:  The bill would extend the Temporary Assistance for Needy Families (TANF) block grant and mandatory child care funding and program authority through the end of FY 2011 at current funding levels ($16.5 billion for TANF and $2.917 billion for child care). 

The legislation would alter funding levels for the TANF “healthy marriage” and “responsible fatherhood” programs for FY 2011, most notably changing the funding levels from $100 million for marriage and $50 million for fatherhood to $75 million for each initiative.   The bill would also extend TANF supplemental grants to 17 historically poor or fast-growing States (AL, AZ, AR, AK, CO, FL, GA, ID, LA, MS, MT, NV, NM, NC, TN, TX, and UT)  through June 30, 2011.  In addition, the bill would require states to file reports regarding the use of TANF funds. Failure to do so would result in a 4 percent reduction of the states’ TANF grant funding.

According to CBO, these provisions would reduce federal spending by $16 million over ten years.

Customs User Fees; Continued Dumping and Subsidy Offset:  The bill would extend two customs users fees through Sept. 30, 2019; one of the fees currently expires on Dec. 10, 2018, while the other expires on Nov. 30, 2018.   In addition, the bill would also delay payments relating to the continued dumping and subsidy offset.  By using these fees for as an offset, the funds would no longer be available for trade initiatives.

According to CBO, these provisions would reduce mandatory spending by $2 billion over ten years.

Emergency Fund for Indian Health & Safety:  The bill would reduce the authorization for the Emergency Fund for Indian Safety and Health by nearly $400 million, from $2 billion to $1.602 billion.

Rescission of Funds From WIC Program:  The bill would rescind $562 million in funding for the Women, Infants and Children (WIC) supplemental nutrition programs.

According to CBO, this provision would reduce spending by $562 million. 

Cost

According CBO, the bill contains litigation settlements for African-American farmers and certain Indian individuals with money and land held in trust by the federal government which would increase mandatory spending by $4.562 billion over ten years.  In addition, the bill contains four Indian water rights settlements which CBO estimates will increase mandatory spending (not including additional authorizations) by $914 million over ten years.  Thus, the bill would increase mandatory spending by $5.37 billion over ten years.   CBO estimates that provisions in the bill would also result in a net reduction in revenue of $2.2 billion over ten years. 

To offset the increased mandatory spending and loss of revenue, CBO estimates that the bill includes $7.617 billion in direct spending reductions over the next ten years.  Therefore, CBO estimates the total net effect of the legislation would be to reduce deficits by $1 million over the FY 2011 – FY 2020 period.