S. 3242 — Taos Pueblo Indian Water Rights Settlement Amendments Act of 2025

This section amends definitions in Section 503 of the Taos Pueblo Indian Water Rights Settlement Act by (1) striking from paragraph (1) “and the New Mexico Department of Finance and Administration Local Government Division on behalf of”; (2) inserting after paragraph (2) a definition of “mitigation well system” as a system of wells, pipelines, and treatment infrastructure to offset surface water depletion effects to the stream segments identified in Article 7.3.3.1.9 of the Settlement Agreement; and (3) inserting after paragraph (8), as redesignated, a definition of “Pueblo trust funds” as (A) the Taos Pueblo Water Development Fund established by section 505(a); (B) the Taos Pueblo Groundwater Development Supplemental Trust Fund established by section 505(h); and (C) the Taos Pueblo Surface Water Sharing Supplemental Trust Fund established by section 505(i).

This section revises Section 505 of the Taos Pueblo Indian Water Rights Settlement Act (part of the Claims Resolution Act of 2010) to retitle it "Pueblo Trust Funds," expand its scope to encompass multiple funds managed and invested by the Secretary of the Interior under the Trust Fund Reform Act, and make conforming terminology changes throughout (replacing references to "the Fund" with "the Pueblo Trust Funds" or specifying the Taos Pueblo Water Development Fund where applicable). (As background, the act ratified a settlement of the Taos Pueblo's water rights claims in the Rio Pueblo de Taos watershed in New Mexico and authorized federal funds for the Pueblo's water development.) It further (1) establishes in the Treasury the Taos Pueblo Groundwater Development Supplemental Trust Fund, to receive appropriations under section 509(l) of the act and interest earnings, with amounts available to the Pueblo for groundwater production, treatment, or delivery infrastructure consistent with the settlement agreement after meeting subsection (e) requirements; and (2) establishes the Taos Pueblo Surface Water Sharing Supplemental Trust Fund, to receive appropriations under section 509(m) and interest earnings, with amounts available to the Pueblo for surface water sharing infrastructure and gages to implement Article 8.2 of the settlement agreement after meeting subsection (e) requirements. This section also makes a clerical amendment to the table of contents for the Claims Resolution Act of 2010.

This section amends subsection (b) of Section 507 of the Taos Pueblo Indian Water Rights Settlement Act to reference funding and requirements under new subsection (c) and section 509(k) (i.e., the Taos Settlement Mutual-Benefit Projects Supplemental Fund). It adds subsection (c), which directs the Secretary of the Interior, acting through the Commissioner of Reclamation, to provide grants, nonreimbursable financial assistance agreements, or contracts from those funds to eligible non-Pueblo entities (which must have applied under subsection (a) within 90 days of enactment and under subsection (c) within 180 days) to plan, permit, design, engineer, and construct mutual-benefit projects (i.e., infrastructure benefiting both the Taos Pueblo and non-Pueblo entities, including water treatment and the Mitigation Well System to offset stream depletions). Subsection (c) establishes construction deadlines—10% of funds expended within 3 years, substantial completion within 6 years (4 years for Mitigation Well System projects), and full completion within 8 years (5 years for Mitigation Well System projects), subject to extensions for good cause—with termination and fund repayment required for noncompliance; it further authorizes reallocation of returned or undisbursed funds to other eligible entities, third parties (with Pueblo and state consent), or alternative/interim offset infrastructure if specified failures occur (e.g., no construction commencement within 2 years of enactment).

This section provides mandatory supplemental appropriations, as adjusted for changes in construction costs since July 2025 per the Bureau of Reclamation Construction Cost Index-Composite Trend and unforeseen market volatility (with adjustments repeatable until fully appropriated and indexing ending on relevant award or deposit dates, not later than 10 years after enactment for mutual-benefit projects), as follows: (1) $161 million for mutual-benefit projects pursuant to section 507(c) of the Taos Pueblo Indian Water Rights Settlement Act, deposited in the Taos Settlement Mutual-Benefit Projects Supplemental Fund; (2) $190 million for deposit in the Taos Pueblo Groundwater Development Supplemental Trust Fund established under section 505(h) of such Act; and (3) $16 million for deposit in the Taos Pueblo Surface Water Sharing Supplemental Trust Fund established under section 505(i) of such Act. (As background, these funds support implementation of the 2010 settlement resolving the Taos Pueblo's water rights claims in the Rio Pueblo de Taos watershed, including shared infrastructure benefiting Pueblo members and surrounding communities.)

This section provides disclaimers under the Taos Pueblo Indian Water Rights Settlement Act (P.L. 111-291; the Taos Pueblo Act), which ratified a settlement resolving the Pueblo's water rights claims in New Mexico and authorized related infrastructure and funding. (1) It specifies that nothing in this Act affects the prior satisfaction of conditions precedent under section 509(f)(2) of the Taos Pueblo Act or the Secretary of the Interior's Federal Register finding published on October 7, 2016, that those conditions were met (under section 509(f)(1)). (2) It further specifies that nothing in this Act, the Taos Pueblo Act, or the Settlement Agreement (as defined in section 503) requires (A) amendments to the Settlement Agreement or Partial Final Decree (as defined in section 503) for the Secretary of the Interior to carry out this Act, or (B) use of the project modification or failure process in Article 13.3 of the Settlement Agreement for alternative or interim offset infrastructure funded under section 507(c)(5).