S. 689, Tule River Tribe Reserved Water Rights Settlement Act of 2025

Bill Summary

S. 689 would secure up to 5,828 acre-feet of water annually for the Tule River Tribe of California by ratifying the Tule River Tribe Reserved Water Rights Settlement Agreement reached in 2007 by the Tule River Tribe, the Tule River Association, and the South Tule Independent Ditch Company.

The bill would appropriate specific amounts to capitalize the Tule River Indian Tribe Settlement Trust Fund, which would be credited, with interest, during the period in which the trust fund is administered by the Department of the Interior (DOI). Once the parties to the settlement have satisfied specified conditions, the federal government would transfer ownership of the trust fund, including any interest credited to the fund, to the tribe for use in constructing water projects for the Tule Tribe Reservation in Tulare County, California. Within 10 years after the settlement conditions are met, S. 689 would direct DOI to transfer a parcel of federal land to be held in trust as part of the Tule Tribe Reservation in California.

Estimated Federal Cost

The estimated budgetary effect of S. 689 is shown in Table 1. The costs of the legislation fall within budget function 300 (natural resources and environment).

Basis of Estimate

For this estimate, CBO assumes that the bill will be enacted before the end of fiscal year 2025 and that the specified amounts will be deposited into the trust fund by the end of the fiscal year.

Using information from DOI and based on the bill’s specifications, CBO expects that the following conditions would be met eight years after enactment:

• The settlement, including amendments required to conform to the bill, would be final and executed;
• All waivers and releases of claims required under the bill would be executed; and
• All appeals would have been exhausted and the courts would have approved the agreement as binding on all parties.

CBO expects that DOI would publish findings in the Federal Register for the settlement, stating that the bill’s conditions have been met and that ownership of the trust fund is to be transferred.

Direct Spending

CBO estimates that enacting the bill would increase direct spending by $902 million over the 2025-2035 period.

Tule River Indian Tribe Settlement Trust Fund. S. 689 would establish a trust fund consisting of two interest-bearing accounts: the Tule River Tribe Water Development Projects Account and the Tule River Tribe Operation, Maintenance, and Replacement Account. The bill would appropriate $568 million to capitalize those accounts—$518 million for water projects and $50 million for operation, maintenance, and replacement.

S. 689 also would appropriate additional amounts to account for inflation over the period from November 2020 until those amounts are deposited into the fund. Based on the assumption that the bill will be enacted near the end of 2025, the amount for inflation would be $127 million; thus, we estimate that the appropriation for the fund would total $695 million.

Of those amounts, the tribe would have immediate access to $20 million from the trust fund to complete technical studies for future water infrastructure projects. The federal government would retain ownership of the remaining amounts until 2033, when CBO expects that all settlement conditions will be satisfied. Interest would be credited to the deposited amounts.

When the federal government transfers ownership of the trust fund to the tribe, the amount transferred (including credited interest) would be considered a federal expenditure. Based on CBO’s projections of interest rates and the assumption that all of the conditions would be met by 2033, CBO estimates that interest earnings would total $207 million. Accordingly, CBO estimates that the total amount transferred in 2033 would be $882 million.

The federal government would retain fiduciary responsibility over the contents of the trust fund until the money is needed by the tribe to plan, design, construct, and maintain water projects; those subsequent actions would not affect the federal budget.

Land Held in Trust. Within 10 years after the settlement conditions are met, S. 689 would direct DOI to transfer about 11,640 acres to be held in trust for the benefit of the tribe as part of the Tule Tribe Reservation in California. That amount consists of 9,037 acres from the Forest Service; 1,837 acres owned by the tribe; and 765 acres from the Bureau of Land Management.

Using information from those agencies, CBO estimates that, starting in 2033, implementing the bill’s provisions would decrease offsetting receipts (and thus increase direct spending) because the Forest Service would no longer collect grazing fees on that land. Using information from the Forest Service about those fees, CBO estimates that the increase in direct spending would be insignificant in every year and over the 2023-2035 period. No federal receipts are collected from tribal land or from land administered by the Bureau of Land Management.

Spending Subject to Appropriation

The agencies also would incur costs to oversee environmental and technical compliance for water projects constructed by the tribe and to transfer land to the trust. Using information from the agencies and average costs to oversee activities for other water settlements, CBO estimates that carrying out those activities would have insignificant costs in every year and would total $1 million over the 2025-2030 period; any related spending would be subject to the availability of appropriated funds.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 2.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting S. 689 would not significantly increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2036.

Mandates

S. 689 contains intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA). CBO cannot determine whether the aggregate cost of those mandates would exceed the annual threshold established in UMRA ($103 million in 2025, adjusted annually for inflation).

S. 689 would require the Tule River Tribe to waive the right to raise claims to some water rights and for certain damage to water, land, and other resources resulting from the loss of water or water rights. The cost of the mandate would be the forgone value of awards and settlements of claims that the tribe would be prevented from raising under the bill. Because both the number of claims that could be barred or terminated and the value of forgone compensation stemming from them are uncertain, CBO has no basis for estimating the cost of the mandate.

The tribe also would be prohibited from permanently giving or selling any portion of the Tribal Water Right. Based on the tribe’s stated intent to keep and use the water rights in a continuous manner for water storage, the cost for the tribe to comply with the prohibition would be small because the tribe has no foreseeable intent to give or sell the right.

By taking land into trust for the Tule River Tribe, the bill would impose a mandate on state and local governments by prohibiting them from taxing that land. Information from Tulare County about taxes and other receipts associated with the land indicate those forgone revenues would total about $100,000 annually.

S. 689 contains no private-sector mandates as defined in UMRA.

Federal Costs: Alaina Rhee

Mandates: Erich Dvorak

Estimate Reviewed By

Ann E. Futrell
Acting Chief, Natural and Physical Resources Cost Estimates Unit

Kathleen FitzGerald 
Chief, Public and Private Mandates Unit

H. Samuel Papenfuss 
Deputy Director of Budget Analysis