Mutual-benefit projects

Section 507 of the Taos Pueblo Indian Water Rights Settlement Act (Public Law 111–291; 124 Stat. 3126) is amended— (1) in subsection (b)— (A) in paragraph (1), by striking in subsection (a) and inserting under subsections (a) and (c); (B) in paragraph (2), by striking shall and inserting authorized under subsections (a) and (c) shall; and (C) in paragraph (3), in the matter preceding subparagraph (A), by striking section 509(c)(2) and inserting subsections (c)(2) and (k) of section 509; and (2) by adding at the end the following: (c) Supplemental funding for mutual-Benefit projects (1) In general The Secretary, acting through the Commissioner of Reclamation, shall provide financial assistance from funds made available pursuant to section 509(k) to Eligible Non-Pueblo Entities in the form of grants or financial assistance agreements on a nonreimbursable basis or contracts to plan, permit, design, engineer, and construct the Mutual-Benefit Projects, including water treatment. (2) Eligibility To be eligible for funding under paragraph (1), an Eligible Non-Pueblo Entity— (A) shall have applied for funding under subsection (a) prior to the date that is 90 days after the date of enactment of the Taos Pueblo Indian Water Rights Settlement Amendments Act of 2025; and (B) shall apply for funding under paragraph (1) not later than 180 days after that date of enactment. (3) Deadlines (A) In general Grants, contracts, and financial assistance agreements under paragraph (1) shall be subject to the following deadlines, as applicable: (i) Non-mitigation well system projects Subject to subparagraph (B), for each Mutual-Benefit Project that does not include part of the Mitigation Well System— (I) at least 10 percent of funding awarded under paragraph (1) shall be expended not later than 3 years after the date on which that funding is awarded; (II) construction of the Mutual-Benefit Project shall be substantially completed, as determined by the Commissioner of Reclamation, not later than 6 years after the date on which that funding is awarded; and (III) construction of the Mutual-Benefit Project shall be fully completed, as determined by the Commissioner of Reclamation, not later than 8 years after the date on which that funding is awarded. (ii) Mitigation well system Subject to subparagraph (B), for each Mutual-Benefit Project that includes part of the Mitigation Well System— (I) at least 15 percent of funding awarded under paragraph (1) shall be expended not later than 3 years after the date on which that funding is awarded; (II) construction of the Mutual-Benefit Project shall be substantially completed, as determined by the Commissioner of Reclamation, not later than 4 years after the date on which that funding is awarded; and (III) construction of the Mutual-Benefit Project shall be fully completed, as determined by the Commissioner of Reclamation, not later than 5 years after the date on which that funding is awarded. (B) Extension The Commissioner of Reclamation may, for good cause, extend a deadline under clause (i) or (ii) of subparagraph (A) for the applicable grant, contract, or financial assistance agreement. (C) Failure to comply with deadlines If an Eligible Non-Pueblo Entity does not comply with any deadline described in clause (i) or (ii) of subparagraph (A), the Commissioner of Reclamation may— (i) terminate the grant, contract, or financial assistance agreement; and (ii) require the Eligible Non-Pueblo Entity to return unexpended funds. (4) Exceptions Notwithstanding paragraphs (1) and (2), the Commissioner of Reclamation may— (A) award funding returned under paragraph (3)(C) or funding not yet disbursed to the noncompliant Eligible Non-Pueblo Entity to another Eligible Non-Pueblo Entity to plan, permit, design, engineer, and construct any affected portion of the Mitigation Well System or another Mutual-Benefit Project; (B) on consent of the Pueblo and State, contract with a third party to plan, permit, design, engineer, and construct any affected portion of the Mitigation Well System with funding returned under paragraph (3)(C) or not yet disbursed to the noncompliant Eligible Non-Pueblo Entity; and (C) award funding made available pursuant to section 509(k) for alternative or interim offset infrastructure under paragraph (5) if— (i) an Eligible Non-Pueblo Entity obligated to construct part of the Mitigation Well System— (I) does not meet the eligibility requirements under paragraph (2) for the applicable part of the Mitigation Well System by the dates described in that paragraph; (II) is not awarded funding under subsection (a) for the applicable part of the Mitigation Well System by the date that is 1 year after the date of enactment of the Taos Pueblo Indian Water Rights Settlement Amendments Act of 2025; (III) is not awarded funding under this subsection for the applicable part of the Mitigation Well System by the date that is 18 months after that date of enactment; (IV) does not commence construction of the applicable part of the Mitigation Well System by the date that is 2 years after that date of enactment; or (V) does not comply with a deadline described in paragraph (3); and (ii) sufficient funding is available in the Taos Settlement Mutual-Benefit Projects Supplemental Fund established under section 509(k)(3), as determined by the Commissioner of Reclamation. (5) Alternative or interim offset infrastructure (A) In general (i) In general Notwithstanding paragraphs (1) and (2), the Commissioner of Reclamation may, pursuant to paragraph (4)(C), provide financial assistance from funds made available pursuant to section 509(k) in the form of grants or financial assistance agreements on a nonreimbursable basis or contracts— (I) to another Eligible Non-Pueblo Entity to plan, permit, design, engineer, and construct alternative or interim offset infrastructure off Pueblo lands to offset surface water depletion effects on the applicable stream segments in accordance with a proposal from an Eligible Non-Pueblo Entity approved by the State, the Pueblo, and the Secretary; and (II) to the Pueblo to plan, permit, design, engineer, and construct alternative or interim offset infrastructure on Pueblo lands, to be owned and operated by the Pueblo, to offset surface water depletion effects on the applicable stream segments in accordance with a proposal from the Pueblo approved by the State and the Secretary. (ii) Limitation Notwithstanding subsection (b)(2), no non-Federal cost share shall be required for alternative or interim offset infrastructure under clause (i)(II). (B) Effect (i) In general Use of alternative or interim offset infrastructure constructed pursuant to subparagraph (A)(i) shall constitute compliance with requirements in the Settlement Agreement for use of the Mitigation Well System to offset surface water depletions on the applicable stream segments. (ii) Savings provision Nothing in the amendments made by the Taos Pueblo Indian Water Rights Settlement Amendments Act of 2025 precludes agreements among the Pueblo, the Secretary, the State, and affected parties to address depletion offset obligations for the period before the applicable Mitigation Well is fully completed, permitted, and operating. (d) Title to property In no event shall the Commissioner of Reclamation hold title to property acquired or constructed with funding made available pursuant to subsections (c)(2)(A) and (k) of section 509..