[Senate Report 115-318]
[From the U.S. Government Publishing Office]
Calendar No. 532
115th Congress} { Report
SENATE
2d Session } { 115-318
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SAN JUAN COUNTY SETTLEMENT IMPLEMENTATION ACT
_______
August 15, 2018.--Ordered to be printed
_______
Ms. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 436]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 436) to authorize the Secretary of the
Interior to retire coal preference right lease applications for
which the Secretary has made an affirmative commercial
quantities determination, to substitute certain land selections
of the Navajo Nation, to designate certain wilderness areas,
and for other purposes, having considered the same, reports
favorably thereon with amendments and recommends that the bill,
as amended, do pass.
AMENDMENTS
The amendments are as follows: On page 5, strike line 1 and
insert the following:
(f) Deadline.--
(1) In general.--If an existing settlement of coal
On page 5, between lines 6 and 7, insert the following:
(2) Date of valuation.--For purposes of the valuation
process under paragraph (1), the market price of coal
shall be determined as of the date of the settlement.
On page 6, between lines 21 and 22, insert the following:
(D) Land identified as ``Parcels Excluded
from Selection'' on the map entitled ``Parcels
excluded for selection under the San Juan
County Settlement Implementation Act'' and
dated May 11, 2018.
On page 13, after line 10, add the following:
SEC. 6. MAINTENANCE OF ROAD.
The Secretary of the Interior, acting through the Director
of the Bureau of Indian Affairs, shall ensure that BIA Route 54
between I-40 and Alamo, New Mexico, is maintained in a
condition that is safe for motorized use.
PURPOSE
The purpose of S. 436 is to authorize the Secretary of the
Interior (Secretary) to retire coal preference right lease
applications for which the Secretary has made an affirmative
commercial quantities determination, to substitute certain land
selections of the Navajo Nation, and to designate certain
wilderness areas.
BACKGROUND AND NEED
S. 436 seeks to resolve a decades-old Department of the
Interior (DOI) statutory obligation to the Navajo Nation
stemming from provisions of the 1974 Navajo and Hopi Settlement
Act (Public Law 93-531). This Act resolved a boundary dispute
between the Navajo Nation and the Hopi Tribe. In the
settlement, the Navajo Nation ceded acreage from its
reservation to the Hopi Tribe, and many Navajo citizens were
relocated. In return, the Navajo Nation was allowed to select
comparable acreage of Federal lands to be taken into trust for
the Navajo Nation.
By the early 1980s, the Navajo Nation selected the Federal
lands it wanted to be taken into trust. However, some of the
parcels selected in San Juan County, New Mexico, were
encumbered by preference right lease applications (PRLAs).
Under preference right leasing, established in the Minerals
Leasing Act (30 U.S.C. 181 et seq.), the holder of the
preference right can apply for an explorative or prospecting
permit to determine if mineral resources are present at a
public lands site. If the explorative activities are
successful, the permittee can then exercise their
``preference''--the first right to lease those mineral
resources for commercial production.
In the years after the Navajo Nation made its selections,
Congress and the Bureau of Land Management (BLM) have subjected
the parcels to conservation designations such as the Fossil
Forest Resource Natural Area (Public Law 98-603), the Ah-shi-
sle-pah Wilderness Study Area, and the Ah-shi-sle-pah Road Area
of Critical Environmental Concern.
After decades of litigation, BLM, Arch Coal (the holder of
outstanding preference rights), and the Navajo Nation
negotiated a settlement to resolve the PRLAs. S. 436 would
implement the settlement, designate the Ah-shi-sle-pah
Wilderness Study Area as wilderness, and add wilderness-quality
lands to the existing Bisti/De-Na-Zin Wilderness.
LEGISLATIVE HISTORY
S. 436 was introduced by Senator Heinrich on February 16,
2017. The Subcommittee on Public Lands, Forests and Mining held
a hearing on the bill on July 26, 2017.
Similar legislation, H.R. 2402, was introduced by
Representative Lujan in the House of Representatives on May 8,
2017. The Natural Resources Committee's Subcommittee on Indian,
Insular, and Alaska Native Affairs held a hearing on H.R. 2402
on October 4, 2017.
In the 114th Congress, similar legislation, S. 2681, was
introduced by Senator Heinrich on March 15, 2016. The Energy
and Natural Resources Committee held a hearing on S. 2681 on
September 22, 2016.
The Committee on Energy and Natural Resources met in open
business session on May 17, 2018, and ordered S. 436 favorably
reported as amended.
COMMITTEE RECOMMENDATION
The Senate Committee on Energy and Natural Resources, in
open business session on May 17, 2018, by a majority voice vote
of a quorum present recommends that the Senate pass S. 436, if
amended as described herein. Senator Lee asked to be recorded
as voting no.
COMMITTEE AMENDMENTS
During its consideration of S. 436, the Committee adopted
four joint staff amendments. The amendments added a new
paragraph (2) to section (2)(f) to clarify the date for a
market price determination and to make a corresponding
technical fix. The amendments also added a new subparagraph (D)
to section (3)(b)(3) to augment the list of excluded lands not
available for selection and added a new section 6 to govern
road maintenance. These amendments are further described in the
section-by-section analysis.
SECTION-BY-SECTION ANALYSIS
Section 1. Short title
Section 1 contains the short title.
Section 2. Exchange of coal Preference Right Lease Applications
Subsection (a) contains definitions.
Subsection (b) authorizes the Secretary to retire a coal
PRLA under the Mineral Leasing Act (MLA, 30 U.S.C. 181 et seq.)
by issuing a bidding right in exchange for the application's
relinquishment. The bidding right may then be used in lieu of
50 percent of the amount owed for monetary payment of a bonus
in a coal lease sale, or rental or royalty under a Federal coal
lease. This subsection further requires the Secretary to
calculate a payment of amounts owed to a relevant State under
section 35(a) of the MLA based on the combined value of the
bidding rights and the amount received; only a bidding right
shall be considered amounts received.
Subsection (c) directs the Secretary to make payments to a
relevant State from the monetary payments received by the
Secretary when bidding rights are exercised under this Act.
Subsection (d) specifies that payments to a State under
this section are to be treated as a payment under section 35(a)
of the MLA.
Subsection (e) authorizes the transfer of a bidding right
issued for a coal PRLA, and requires the transferor to notify
the Secretary of such transfer. This subsection further
terminates a bidding right seven years from issuance but tolls
the effective period during any time in which exercise of the
bidding right is precluded.
Subsection (f) requires the Secretary to complete the
bidding rights valuation process no later than 180 days after
the Act's enactment if an existing settlement of a coal PRLA
has not yet been implemented. This subsection further clarifies
that the market price of coal shall be determined as of the
date of the settlement.
Section 3. Certain land selections of the Navajo Nation
Subsection (a) cancels land selections made by the Navajo
Nation pursuant to the 1974 Navajo-Hopi Land Settlement Act, as
depicted on the April 2, 2015, map entitled ``Navajo-Hopi Land
Settlement Act Selected Lands.''
Subsection (b) authorizes the Navajo Nation to make new
land selections to replace cancelled land selections and limits
the selection to 15,000 total acres. This subsection also
excludes from selection any land within the National Landscape
Conservation System; within the Glade Forest Recreation Area;
within the Fossil Forest Research Natural Area; within a
special management area or area of critical environmental
concern identified in a land use plan under section 202 of the
Federal Land Policy and Management Act of 1976 (FLPMA, 43
U.S.C. 1712) in effect as of the Act's enactment; land subject
to a lease or contract under the MLA or the Materials Act of
1947 (30 U.S.C. 601 et seq.) as of the date of the selection;
and land identified on the May 11, 2018, map entitled ``Parcels
excluded for selection under the San Juan County Settlement
Improvement Act.'' This subsection also requires that
selections be made within seven years from the Act's enactment
and specifies that any selected lands shall be withdrawn from
disposal, leasing, and development until the selected lands can
be placed into trust for the Navajo Nation.
Subsection (c) requires that the selected land and the
cancelled selections be equal in value, based upon appraisals
conducted in accordance with applicable standards. This
subsection further specifies that appraisals for cancelled
selections be completed within 18 months of the Act's
enactment, while appraisals for new land selections are to be
completed as the Navajo Nation finalizes those selections.
Subsection (d) specifies that the present boundary of the
Navajo Reservation is depicted on the November 16, 2015, map
entitled ``Navajo Nation Boundary.''
Section 4. Designation of Ah-Shi-Sle-Pah Wilderness
Subsection (a) designates approximately 7,242 acres of
land, as depicted on the April 2, 2015, map entitled ``San Juan
County Wilderness Designations,'' as wilderness and as a
component of the National Wilderness Preservation System to be
known as the ``Ah-shi-sle-pah Wilderness'' (Wilderness).
Subsection (b) authorizes the BLM Director to administer
the Wilderness subject to valid existing rights, and in
accordance with the Wilderness Act (16 U.S.C. 1131 et seq.).
This subsection makes clear that the designation of the
Wilderness does not create a protective perimeter or buffer
zone around the Wilderness and that the designation does not
preclude the conduct of non-wilderness activities or uses
outside the boundary that can be seen or heard from the
Wilderness areas. The subsection also requires any land or
interest in land within the Wilderness boundary and acquired by
the United States to become part of the Wilderness, and to be
managed in accordance with the Wilderness Act and applicable
laws. The subsection further permits the continuation of
existing livestock grazing in the Wilderness conditioned on
compliance with section 4(d)(4) of the Wilderness Act and the
guidelines set forth in the report accompanying H.R. 5487 of
the 96th Congress (H. Rept. 96-617).
Subsection (c) releases land within the Ah-shi-sle-pah
Wilderness Study Area not designated as wilderness from section
603(c) of FLMPA.
Section 5. Expansion of Bisti/De-Na-Zin Wilderness
Subsection (a) designates approximately 2,250 acres of
Federal land as depicted on the April 2, 2015, map entitled
``San Juan County Wilderness Designations'' as wilderness and
as a component of the National Wilderness Preservation System
and incorporates the land into the Bisti/De-Na-Zin Wilderness.
Subsection (b) authorizes the BLM Director to administer
the land in accordance with the Wilderness Act and the 1984 San
Juan Basin Wilderness Protection Act (Public Law 98-603).
Subsection (c) clarifies that the designation of the land
as wilderness does not create a protective perimeter or buffer
zone around the land and that the wilderness designation does
not preclude the conduct of non-wilderness activities or uses
outside the boundary that can be seen or heard from the
wilderness areas.
Subsection (d) incorporates any land or interest of land
within the wilderness boundary as part of the Bisti/De-Na-Zin
Wilderness and directs that it be managed in accordance with
the Wilderness Act and the 1984 San Juan Basin Wilderness
Protection Act.
Subsection (e) permits the continuation of existing
livestock grazing in the land designated as wilderness
conditioned on compliance with section 4(d)(4) of the
Wilderness Act and the guidelines set forth in the report
accompanying H.R. 5487 of the 96th Congress (H. Rept. 96-617).
Section 6. Maintenance of road
Section 6 directs the Secretary, acting through the
Director of the Bureau of Indian Affairs (BIA), to maintain BIA
Route 54 between I-40 and Alamo, New Mexico, in a condition
that is safe for motorized use.
COST AND BUDGETARY CONSIDERATIONS
The Congressional Budget Office estimate of the costs of
this measure has been requested but was not received at the
time the report was filed. When the report is available, the
Chairman will request it to be printed in the Congressional
Record for the advice of the Senate.
REGULATORY IMPACT EVALUATION
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 436. The bill is not a regulatory measure in
the sense of imposing Government-established standards or
significant economic responsibilities on private individuals
and businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 436, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
S. 436, as ordered reported, does not contain any
congressionally directed spending items, limited tax benefits,
or limited tariff benefits as defined in rule XLIV of the
Standing Rules of the Senate.
EXECUTIVE COMMUNICATIONS
The testimony provided by the Department of the Interior at
the July 26, 2017, hearing on S. 436 follows:
Statement of John Ruhs, Acting Deputy Director for Operations, Bureau
of Land Management, U.S. Department of the Interior
Thank you for the opportunity to present the views of the
Department of the Interior (Department) on S. 436, which would
authorize the Secretary of the Interior to retire a certain
type of Federal coal lease rights--preference right lease
applications (PRLA)--in exchange for issuance of equivalent
value coal bidding rights which the PRLA holder could use
elsewhere on Federal lands; authorize the Navajo Nation to
substitute certain land selections; and designate wilderness
areas in northern New Mexico.
The Department appreciates the work of Senators Heinrich
and Udall to address concerns on previous versions of this
legislation. While we support the bill's proposed resolution to
longstanding issues concerning mineral development and tribal
land selection, we believe that its wilderness designation
components could be best achieved through standalone
legislation. The Department notes that this type of approach
could accommodate additional stakeholder perspectives
concerning the most appropriate method of protecting the
important resources and uses on these lands. We would also like
to continue discussions with the sponsors and the Committee on
a few remaining issues.
Background Exchange of Coal Preference Right Lease
Applications Prior to 1976, the Secretary was authorized by the
Mineral Leasing Act (MLA) to issue permits to prospect for coal
on public lands in areas where no known coal deposits existed.
If coal was discovered, the prospector could file a preference
right lease application (PRLA). If commercial quantities of
coal were demonstrated, the prospector was entitled to a
``preference right lease,''--a noncompetitive, exclusive right
to mine coal on these public lands for an initial 20-year term.
The Federal Coal Leasing Amendments Act of 1976 repealed
the Secretary's authority to issue prospecting permits and
terminated the preference right leasing program for coal,
subject to valid existing rights. However, coal prospecting
permittees who had filed a PRLA prior to 1976 continue to be
recognized as having valid existing rights that require
adjudication by the BLM. In 1982 and 1987, the BLM promulgated
regulations exclusively for processing these pre-1976 PRLAs.
To date, all coal PRLAs have been processed, except for
eleven held by the Ark Land Company (Ark Land), covering
approximately 21,000 acres in northern New Mexico. These PRLAs
are within three miles of Chaco Culture National Historical
Park and in the Ah-shi-sle-pah Wilderness Study Area (WSA),
Fossil Forest Research Natural Area, and North Road and Ah-shi-
sle-pah Road Areas of Critical Environmental Concern (ACECs).
These areas are not an ideal site for commercial development of
the coal because they have cultural, archaeological,
paleontological (dinosaur fossils), and primitive recreational
significance. In the interest of protecting the important
resources in the area, in 2012, after extensive investigation,
litigation and negotiation, the BLM and Ark Land signed a
settlement agreement that would seek to exchange the eleven
PRLAs for an equal value in Federal bidding rights for Federal
coal within the border of the State of Wyoming. S. 436
clarifies that the bidding rights would be applied to 50
percent of a bonus bid or a royalty payment. This language
seeks to ensure that use of the Federal bidding rights will not
interfere with payment of the State's share of bonus, rentals,
or royalties that would be paid from Federal receipts to the
State of Wyoming or any other State under the bid-sharing
formula in the Mineral Leasing Act (30 U.S.C. 191).
Navajo-Hopi Land Settlement Act. As part of the Navajo-Hopi
Land Settlement Act (P.L. 93-531), the Navajo Nation selected
approximately 12,000 acres of lands which overlap the PRLAs and
are within protected areas such as the Ah-shi-sle-pah WSA and
south of the Bisti/De-Na-Zin Wilderness and the Ah-shi-sle-pah
Road ACEC. These selections have not yet been completed due to
the encumbrance of the PRLAs. The Navajo Nation has sought to
``deselect'' these lands and select others, but is unable to
complete the action without further legislation. The new
legislative authority in S. 436 would allow the Navajo Nation
to finalize its land selections authorized under the Settlement
Act.
Ah-Shi-Sle-Pah WSA & Bisti/De-Na-Zin Wilderness. The Ah-
Shi-Sle-Pah Wilderness Study Area (WSA), comprising 6,563-acres
located about 40 miles south of Farmington, New Mexico, is rich
in petrified wood, fossils, and exposed geologic formations and
is popular for day hikers and photographers who enjoy its
unique geologic history.
The Bisti/De-Na-Zin Wilderness, an area of approximately
41,170-acres located 28 miles south of Farmington, New Mexico,
offers some of the most unusual scenery found in the Four
Corners Region. Natural sandstone weathering has created
hoodoos--tall, thin spires of rock rising up out of the
ground--pinnacles, cap rocks, and other unusual formations.
This area recently received national attention following the
discovery of two fossilized Pentaceratops dinosaur skeletons.
S. 436 Exchange of Coal Preference Right Lease Applications
(Section 2). S. 436 would authorize the Secretary to retire
coal PRLAs by issuing bidding rights in exchange for
relinquishment of the PRLAs. The bill defines a ``bidding
right'' as an appropriate legal instrument that may be used in
lieu of a monetary payment for 50 percent of a bonus bid in a
coal sale under the MLA, or as monetary credit against 50
percent of a rental or royalty payment due under a Federal coal
lease. Thus, a bidding right could be used in lieu of cash for
part of a winning bonus bid in a subsequent coal lease sale, or
used in lieu of cash for part of rental or royalty owed under a
Federal coal lease.
S. 436 further provides for payment in cash of 50 percent
of the amount of the bidding right used in the state where the
new coal lease is issued--or where the royalty payment is made.
The revenue sharing obligation of the MLA to the state would be
made from the cash payments received by the Secretary when
bidding rights are exercised under this Act. Under S. 436,
bidding rights would be fully transferrable to any other person
and the bidding rights holder would have to notify the
Secretary of the transfer. The bidding rights would terminate
after seven years, unless the rights could not be exercised
within the 7-year period under certain conditions outlined in
the bill.
The Department supports the goal of S. 436 to provide
legislative authority for a solution to the long-standing coal
PRLA issue in northern New Mexico. However, the Administration
is concerned about the likely costs associated with this
legislation as drafted. Based on the terms of the legislation,
and in the context of the Ark Land settlement agreement, it
appears these costs could be substantial, which raises
significant challenges for identifying suitable offsets. The
BLM would like to work with the sponsors and the Committee on
language regarding the timing of the valuation of the coal
within the PRLAs, and ensure the Department's Office of
Valuation Services and BLM will determine the fair market value
of the resources consistent with standard valuation practices.
Navajo Nation Land Selection (Section 3). Section 3 of S.
436 would cancel certain land selections made by the Navajo
Nation pursuant to the Navajo-Hopi Land Settlement Act of 1974,
and would authorize the Navajo Nation to make new selections of
equal value to replace those canceled. S. 436 adds the Fossil
Forest Outstanding Natural Area (formerly known as the Fossil
Forest Research Natural Area) to the lands ineligible for
selection.
The Department supports the bill's provisions to allow for
new land selections by the Navajo Nation and providing for the
deselection of the lands now encumbered by the PRLAs. We would
like to continue to work with the sponsors and Committee on
language to ensure consistency with the original intent of the
Navajo-Hopi Settlement Act.
Ah-Shi-Sle-Pah Designation & Bisti/De-Na-Zin Wilderness
Expansion (Secs. 4 & 5). Section 4 of S. 436 would designate
approximately 7,250 acres of BLM-managed lands in northwestern
New Mexico as the Ah-shi-sle-pah Wilderness, including nearly
all of the existing Ah-shi-sle-pah WSA and releasing the
remainder from WSA status. Section 5 of the bill would enlarge
the existing Bisti/De-Na-Zin Wilderness by adding approximately
2,250 acres of BLM-managed lands directly south of the area.
The Department supports Congressional action to resolve
wilderness designation and WSA release issues on public lands
across the West, and we welcome opportunities to further those
efforts. Only Congress can determine whether to designate WSAs
as wilderness or to release them for other multiple uses. We
stand ready to work cooperatively with Congress to achieve this
goal.
We believe that the wilderness designations proposed by S.
436 could be best achieved through a standalone legislative
proposal, similar to the approach taken in the bipartisan
Washington County, Utah, and Owyhee County, Idaho, public lands
legislation advanced during the 110th Congress. Secretary Zinke
is focused on restoring full collaboration and coordination
with local communities and making the Department a better
neighbor. We recognize the significant work of the sponsors on
this proposal. As a general matter, the Department believes
that wilderness decisions are best made as part of a locally
driven process that incorporates the views of a wide range of
stakeholders. In reaching consensus, stakeholders could
ultimately determine that alternative management approaches are
the best mechanism for protecting important resources of these
areas while still accommodating the broad number of uses and
activities permitted on other BLM-managed lands.
Conclusion. Thank you for this opportunity to present
testimony on S. 436. The Department thanks the sponsors and the
Committee for their dedication to this issue. We look forward
to continuing to work with the sponsors to achieve these goals.
CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee notes that no
changes in existing law are made by the bill as ordered
reported.
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