AN ACT IMPLEMENTING THE CROW-MONTANA RESERVED WATER RIGHTS COMPACT; PROVIDING FOR THE PAYMENT OF SETTLEMENT FUNDS INTO AN ESCROW FUND; ESTABLISHING CONDITIONS TO BE CONTAINED IN AN ESCROW AGREEMENT UNDER WHICH THE FUNDS MAY BE HELD AND BE PAID TO THE CROW TRIBE IN SATISFACTION OF THE STATE'S OBLIGATIONS UNDER THE COMPACT AND IN CONSIDERATION OF THE TRIBE'S AGREEMENT TO RELEASE CERTAIN CLAIMS AGAINST THE STATE; AUTHORIZING THE GOVERNOR AND ATTORNEY GENERAL TO ENTER INTO AN AGREEMENT WITH THE CROW TRIBE AND THE UNITED STATES TO SETTLE CERTAIN CLAIMS AND UNDER WHICH THE STATE MAY MAKE CERTAIN PAYMENTS AND PAY TO THE CROW TRIBE THE FUTURE PROCEEDS OF ANY PRODUCTION TAXES LEVIED UNDER STATE LAW ON THE PRODUCTION OF COAL OWNED BY THE UNITED STATES IN TRUST FOR THE CROW TRIBE; APPROPRIATING FUNDS TO THE DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION; AND PROVIDING AN EFFECTIVE DATE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Findings and purpose. (1) It is the policy of the state of Montana to seek negotiated settlements of federal and Indian reserved water rights claims in Montana under Title 85, chapter 2, part 7.

(2) Pursuant to this policy, the commission commenced negotiations with the Crow Tribe regarding the Tribe's water rights claims on November 12, 1981.

(3) A water rights compact has been agreed to between the commission and the elected representatives of the government of the Crow Tribe that, among other things, provides an allocation of water to the Crow Tribe and provides protection for certain water rights recognized under state law in Montana.

(4) As consideration for the Crow Tribe's agreement to protect certain water rights recognized under state law in Montana and to release certain legal claims asserted against the state, the state of Montana has undertaken an obligation to make certain payments for the benefit of the Crow Tribe and has agreed that any future production taxes collected by the state on production of coal owned by the United States in trust for the Crow Tribe will be paid to the Crow Tribe.

(5) The commission's agreement to the compact and the state's obligation to make payments to the Crow Tribe thereunder is conditioned, among other things, upon the final approval of the compact as set forth in the compact and as required by state, federal, and tribal law and upon the execution and delivery by the Crow Tribe of sufficient releases for the legal claims that the Crow Tribe has agreed to release.

(6) The purposes of [sections 1 through 4] are to provide for the implementation of the compact, to provide a mechanism for settlement of certain claims against the state, and to provide a means to fund the state's financial obligations for the upcoming biennium under its water rights compact with the Crow Tribe.

Section 2. Definitions. As used in [sections 1 through 4], the following definitions apply:

(1) "Commission" means the reserved water rights compact commission.

(2) "Compact" means the Crow-Montana water rights compact as approved by the legislature in [LC 1].

(3) "Department" means the department of natural resources and conservation.

Section 3. Payment of settlement funds into escrow -- requirements for escrow agreement -- notice from attorney general. (1) The department shall enter into an agreement with the Crow Tribe and, if necessary under federal or tribal law, the United States, selecting an escrow agent to hold any funds paid by the state prior to the time they become payable to the Crow Tribe under this section. When an escrow agent has been selected, the department shall negotiate the terms of an escrow agreement with the Crow Tribe, the escrow agent, and if necessary under federal or tribal law, the United States. The terms of the agreement must govern the holding of the funds paid pursuant to the settlement. The escrow agreement must provide that any costs and fees payable for the management of the escrow fund will be borne by the fund, that the funds placed in the escrow account will be invested and held at interest in trust for the Crow Tribe, and that the contents of the fund will become payable to the order of the Crow Tribe only upon the occurrence of all of the following conditions:

(a) the compact has been approved by the Congress of the United States in a form satisfactory to the commission;

(b) the compact has been approved by the Crow Tribe in the manner provided by federal and tribal law, including approval of any tribal referendum presently or later required by federal or tribal law;

(c) the compact has been approved by the Montana water court for inclusion in the final decrees in all affected basins, and the order of approval has been affirmed on appeal or the time for appeal from the water court's approval has expired; and

(d) the Crow Tribe and the United States have furnished releases, pleadings, and proposed orders, in forms acceptable to the attorney general, with respect to all claims, including but not limited to claims for costs and attorney fees, asserted in the civil action captioned Crow Tribe of Indians v. State of Montana et al., Cause No. CV-78-110-BLG-JDS (D. Mont.), or any appeal pending in that action.

(2) Within 20 days after all conditions set forth in subsections (1)(a) through (1)(d) have been satisfied, the attorney general shall provide written notice of the satisfaction of the conditions to the escrow agent. The escrow agreement must provide that upon receipt of the written notice provided in this section, the escrow agent shall pay the funds in escrow to the order of the Crow Tribe. This section does not preclude the Crow Tribe from entering into an agreement with the escrow agent or any other entity for the holding of the funds in trust for the Crow Tribe for a period in excess of that provided in this section.

(3) The escrow agreement must provide that in the event the conditions set forth in subsection (1) do not occur within any time limits set in the compact, as those limits may be extended pursuant to the compact by agreement of the parties and the approval of the legislature, or if any party to the compact terminates the compact as provided in the compact prior to payment of the funds to the Crow Tribe as provided in subsection (2), the contents of the escrow fund, including funds paid into the escrow fund by the state and any interest earned on the escrow fund, will revert to the state.

Section 4. Settlement of litigation -- disposition of production taxes collected on coal owned in trust for Crow Tribe. (1) The governor and attorney general may enter into an agreement with the Crow Tribe and the United States for the settlement of the civil action captioned Crow Tribe of Indians v. State of Montana et al., Cause No. CV-78-110-BLG-JDS (D. Mont.), or any appeal pending in that action.

(2) The agreement may:

(a) include a release of all claims asserted by the Crow Tribe and the United States in the action, including but not limited to claims for costs and attorney fees;

(b) provide payments as authorized in the compact and [sections 1 through 4]; and

(c) include an agreement by which the proceeds of any production taxes levied under Montana law on the severance or production of coal owned by the United States in trust for the Crow Tribe are to be paid to the Crow Tribe.

Section 5. Appropriation of settlement funds -- timing of payments. (1) There is appropriated to the department of natural resources and conservation from the general fund $1.5 million in fiscal year 2000 and $1.5 million in fiscal year 2001, together with any interest earned on the amounts appropriated between July 1, 1999, and the date the funds are paid into escrow as provided in subsection (2) at the rate of interest earned on the permanent coal severance tax trust fund, for the purpose of funding the first 2 years' payments under the compact and the completion of the settlement provided for in [section 4].

(2) On July 1, 1999, or as soon after that date as the escrow agreement provided for in [section 3] is reached, the department of natural resources and conservation shall pay the funds appropriated for fiscal year 2000, together with any interest on the appropriated funds, into the escrow account established pursuant to [section 3]. On July 1, 2000, or as soon after that date as the escrow agreement provided for in [section 3] is reached, the department of natural resources and conservation shall pay the funds appropriated for fiscal year 2001, together with any interest on the appropriated funds, into the escrow account established pursuant to [section 3].

Section 6. Coordination instruction. If [LC 1] is not passed and approved, then [this act] is void.

Section 7. Nonseverability. It is the intent of the legislature that each part of [this act] is essentially dependent upon every other part, and if one part is held unconstitutional or invalid, all other parts are invalid.

Section 8. Codification instruction. [Sections 1 through 4] are intended to be codified as an integral part of Title 85, chapter 20, and the provisions of Title 85, chapter 20, apply to [sections 1 through 4].

Section 9. Effective date. [This act] is effective upon the later of:

(1) passage and approval of [this act]; or

(2) passage and approval of [LC 1].

- END -

I hereby certify that the within bill,

HB 0001, originated in the House.

Chief Clerk of the House

Speaker of the House

Signed this	day

of	, .

President of the Senate

Signed this	day

of	, .

HOUSE BILL NO. 1

INTRODUCED BY J. STOVALL

AN ACT IMPLEMENTING THE CROW-MONTANA RESERVED WATER RIGHTS COMPACT; PROVIDING FOR THE PAYMENT OF SETTLEMENT FUNDS INTO AN ESCROW FUND; ESTABLISHING CONDITIONS TO BE CONTAINED IN AN ESCROW AGREEMENT UNDER WHICH THE FUNDS MAY BE HELD AND BE PAID TO THE CROW TRIBE IN SATISFACTION OF THE STATE'S OBLIGATIONS UNDER THE COMPACT AND IN CONSIDERATION OF THE TRIBE'S AGREEMENT TO RELEASE CERTAIN CLAIMS AGAINST THE STATE; AUTHORIZING THE GOVERNOR AND ATTORNEY GENERAL TO ENTER INTO AN AGREEMENT WITH THE CROW TRIBE AND THE UNITED STATES TO SETTLE CERTAIN CLAIMS AND UNDER WHICH THE STATE MAY MAKE CERTAIN PAYMENTS AND PAY TO THE CROW TRIBE THE FUTURE PROCEEDS OF ANY PRODUCTION TAXES LEVIED UNDER STATE LAW ON THE PRODUCTION OF COAL OWNED BY THE UNITED STATES IN TRUST FOR THE CROW TRIBE; APPROPRIATING FUNDS TO THE DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION; AND PROVIDING AN EFFECTIVE DATE.