[House Hearing, 107 Congress]
[From the U.S. Government Printing Office]



 
  H.R. 1913, VALUATION OF NONTRIBAL INTEREST OWNERSHIP OF SUBSURFACE 
     RIGHTS WITHIN THE BOUNDARIES OF THE ACOMA INDIAN RESERVATION
=======================================================================

                          LEGISLATIVE HEARING

                               before the

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION
                               __________

                           September 13, 2001
                               __________

                           Serial No. 107-59
                               __________

           Printed for the use of the Committee on Resources



 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house
                                   or
         Committee address: http://resourcescommittee.house.gov



                     U.S. GOVERNMENT PRINTING OFFICE
75-128                       WASHINGTON : 2002
________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001








                         COMMITTEE ON RESOURCES

                    JAMES V. HANSEN, Utah, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,                   George Miller, California
  Vice Chairman                      Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana     Dale E. Kildee, Michigan
Jim Saxton, New Jersey               Peter A. DeFazio, Oregon
Elton Gallegly, California           Eni F.H. Faleomavaega, American 
John J. Duncan, Jr., Tennessee           Samoa
Joel Hefley, Colorado                Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland         Solomon P. Ortiz, Texas
Ken Calvert, California              Frank Pallone, Jr., New Jersey
Scott McInnis, Colorado              Calvin M. Dooley, California
Richard W. Pombo, California         Robert A. Underwood, Guam
Barbara Cubin, Wyoming               Adam Smith, Washington
George Radanovich, California        Donna M. Christensen, Virgin 
Walter B. Jones, Jr., North              Islands
    Carolina                         Ron Kind, Wisconsin
Mac Thornberry, Texas                Jay Inslee, Washington
Chris Cannon, Utah                   Grace F. Napolitano, California
John E. Peterson, Pennsylvania       Tom Udall, New Mexico
Bob Schaffer, Colorado               Mark Udall, Colorado
Jim Gibbons, Nevada                  Rush D. Holt, New Jersey
Mark E. Souder, Indiana              James P. McGovern, Massachusetts
Greg Walden, Oregon                  Anibal Acevedo-Vila, Puerto Rico
Michael K. Simpson, Idaho            Hilda L. Solis, California
Thomas G. Tancredo, Colorado         Brad Carson, Oklahoma
J.D. Hayworth, Arizona               Betty McCollum, Minnesota
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana

                   Allen D. Freemyer, Chief of Staff
                      Lisa Pittman, Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                 James H. Zoia, Democrat Staff Director
                  Jeff Petrich, Democrat Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                    BARBARA CUBIN, Wyoming, Chairman
              RON KIND, Wisconsin, Ranking Democrat Member

W.J. ``Billy'' Tauzin, Louisiana     Nick J. Rahall II, West Virginia
Mac Thornberry, Texas                Edward J. Markey, Massachusetts
Chris Cannon, Utah                   Solomon P. Ortiz, Texas
Jim Gibbons, Nevada,                 Calvin M. Dooley, California
  Vice Chairman                      Jay Inslee, Washington
Thomas G. Tancredo, Colorado         Grace F. Napolitano, California
C.L. ``Butch'' Otter, Idaho          Brad Carson, Oklahoma
Jeff Flake, Arizona
Dennis R. Rehberg, Montana
                                 ------                                









                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on September 13, 2001...............................     1

Statement of Members:
    Cubin, Hon. Barbara, a Representative in Congress from the 
      State of Wyoming...........................................     1
        Prepared statement of....................................     2
    Skeen, Hon. Joe, a Representative in Congress from the State 
      of New Mexico..............................................     3
        Prepared statement of....................................     4
        Response to questions submitted for the record...........    22

Statement of Witnesses:
    Chino, Hon. Cyrus J., Governor, Pueblo of Acoma, Acoma, New 
      Mexico.....................................................     8
        Prepared statement of....................................     9
        Response to questions submitted for the record...........    27
    McCaleb, Hon. Neal A., Assistant Secretary - Indian Affairs, 
      U.S. Department of the Interior............................    17
        Prepared statement of....................................    18
        Response to questions submitted for the record...........    24
    Sphar, Joe D., Director of Natural Resources, NZ Corporation, 
      Prepared statement of......................................     5
        Response to questions submitted for the record...........    31










H.R. 1913, TO REQUIRE THE VALUATION OF NONTRIBAL INTEREST OWNERSHIP OF 
SUBSURFACE RIGHTS WITHIN THE BOUNDARIES OF THE ACOMA INDIAN RESERVATION

                              ----------                              


                      Thursday, September 13, 2001

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to call, at 2:12 p.m., in 
Room 1324, Longworth House Office Building, Hon. Barbara Cubin 
[Chairman of the Subcommittee] presiding.

 STATEMENT OF THE HONORABLE BARBARA CUBIN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF WYOMING

    Mrs. Cubin. The legislative hearing by the Subcommittee on 
Energy and Mineral Resources will now come to order. The 
Subcommittee is meeting today to hear testimony on H.R. 1913 to 
require the valuation of nontribal interest ownership of 
subservice rights within the boundaries of the Acoma Indian 
Reservation and for other purposes.
    Under Committee rule 4(g), the Chairman--well, since the 
Chairman is the only one here today, I will be the only one 
making the statement, but the record will be kept open for any 
other statements that the Members wish to put in.
    Today the Subcommittee will take testimony on legislation 
introduced by our colleague from New Mexico, Mr. Skeen. H.R. 
1913 is a bill to require the valuation of nontribal ownership 
of subsurface rights within the boundaries of the Acoma Indian 
Reservation followed by the identification of Federal lands of 
comparable value to be exchanged by the Secretary of Interior 
in return for these private minerals.
    In a sense, this bill has been centuries in the making. The 
Pueblo Indians of Acoma have lived atop a mesa known as Sky 
City perhaps longer than any other village in America. When the 
United States and Mexico signed the Treaty of Guadalupe Hidalgo 
in 1848, the land claims of Acoma people and others were 
guaranteed to be respected. Indeed, in 1858 Congress 
specifically recognized an Acoma land claim including Sky City.
    However, at that time the lands below and south of the mesa 
were not patented to the Pueblo of Acoma. Consequently, when 
the transcontinental railroad land grants were being made, the 
St. Louis and San Francisco Railway Company received title to 
alternate sections of public land, some of which lands were 
subsequently included within the boundaries of the Acoma Indian 
Reservation as set in 1928. The United States purchased the 
surface estate of these sections from the successor in interest 
to the railroad grant lands, but the mineral lands, together 
with the right of access to the private minerals, was reserved, 
creating today's split-estate posture.
    I wish to thank Joe Skeen for attempting to correct what 
has become an untenable situation. The Acoma people revere the 
area below Sky City mesa which lies within their reservation 
and would certainly oppose exercise of the private mineral 
rights there. Yet the NZ Corporation has a legitimate right to 
explore and develop their reserved interests.
    In a similar situation over a decade ago, the Department of 
Interior exchanged or purchased private mineral interests in 
the area immediately west of the Acoma Reservation which 
Congress placed into the El Malpais National Monument.
    Basically the question now is this: if an exchange to 
acquire private rights was deemed necessary to protect the 
scenic and historic values for which a national monument was 
established, should we not also allow the Acoma people to 
acquire the private mineral rights within their reservation?
    I want to thank our witnesses for coming today despite the 
terrible circumstances under which our Nation now finds itself. 
It would have been quite easy to cancel this hearing and 
promise to hold it later when our attention in Congress will be 
less diverted, but promises have been made and broken with the 
Acoma for too long.
    And, I would like the terrorists responsible for Tuesday's 
carnage to understand that we will do our best to execute our 
duties as Congressman, and I, as Chairman of this panel, 
despite their heinous actions, I will recess this hearing if 
need be to vote for emergency funding to aid in the disaster as 
President Bush and Congress deem responsible. Otherwise, we 
will continue to do our jobs here and in the Resources 
Committee and attend to matters such as H.R. 1913.
    I now would like to recognize the first witness, my good 
friend the Honorable Joe Skeen, who represents the Second 
District of New Mexico. Joe is one of the gentlemen in this 
Congress that I have followed and enjoyed his friendship ever 
since I came here. Joe's philosophy of government and States 
rights and public lands and private property rights are exactly 
what mine are, and I can say that Joe has taught me a lot 
through the years.
    And, Joe, thank you for being here, and love to hear your 
testimony.
    [The prepared statement of Mrs. Cubin follows:]

  Statement of The Honorable Barbara Cubin, Chairman, Subcommittee on 
                       Energy & Mineral Resources

    Today the Subcommittee will take testimony on legislation 
introduced by our colleague from New Mexico, Mr. Skeen. H.R. 1913 is a 
bill to require the valuation of non-tribal ownership of subsurface 
rights within the boundaries of the Acoma Indian Reservation, followed 
by the identification of federal lands of comparable value to be 
exchanged by the Secretary of the Interior in return for these private 
minerals.
    In a sense, this bill has been centuries in the making. The Pueblo 
Indians of Acoma have lived atop a mesa known as Sky City perhaps 
longer than any other village in America. When the United States and 
Mexico signed the Treaty of Guadalupe Hidalgo in 1848, the land claims 
of the Acoma people, and others, were guaranteed to be respected. 
Indeed, in 1858, Congress specifically recognized an Acoma land claim, 
including Sky City.
    However, at that time the lands below and south of the mesa were 
not patented to the Pueblo of Acoma. Consequently, when the 
transcontinental railroad land grants were being made, the St. Louis & 
San Francisco Railway Company received title to alternate sections of 
public land, some of which lands were subsequently included within the 
boundaries of the Acoma Indian Reservation as set in 1928. The United 
States purchased the surface estate of these sections from the 
successor in interest to the railroad grant lands, but the mineral 
rights, together with right of access to the private minerals, was 
reserved, creating today's split-estate posture.
    I wish to thank Joe Skeen for attempting to correct what has become 
an untenable situation. The Acoma people revere the area below Sky City 
mesa which lies within their reservation and would certainly oppose 
exercise of the private mineral rights there. Yet, the NZ Corporation 
has a legitimate right to explore and develop their reserved interests.
    In a similar situation over a decade ago, the Department of the 
Interior exchanged or purchased private minerals interests in the area 
immediately west of the Acoma reservation which Congress placed into 
the El Malpais National Monument.
    Basically, the question now is this: if an exchange to acquire 
private rights was deemed necessary to protect the scenic and historic 
values for which a national monument was established, should we not 
also allow the Acoma people to acquire the private mineral rights 
within their reservation?
    I want to thank our witnesses for coming today despite the terrible 
circumstances under which our nation now finds itself. It would have 
been quite easy to cancel this hearing and promise to hold it later 
when our attention in Congress will be less diverted. But promises have 
been made and broken with the Acoma for too long.
    And, I'd like the terrorists responsible for Tuesday's carnage to 
understand that I will do my best to execute my duties as Chairman of 
this panel despite their heinous actions. I will recess this hearing, 
if need be, to vote for emergency funding to aid in the disaster as 
President Bush and Congress deem necessary and appropriate. Otherwise, 
we must continue to do our jobs here in the Resources Committee and 
attend to matters such as H.R. 1913.
    I now turn to our Ranking Member, Mr. Kind, for any statement he 
may have.
                                 ______
                                 

   STATEMENT OF THE HONORABLE JOE SKEEN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW MEXICO

    Mr. Skeen. Thank you, Madam Chairman, Chairlady. I am not 
going to change things around a lot. I want to extend my warm 
regards to you for holding this hearing today, and I know how 
busy the Committee has been working on your major energy bill 
as well as countless other issues. The Acoma people who are 
here today will also be expressing their appreciation to you. I 
know late last year you made a commitment to work with me on 
this bill, and now that we have had at least a partial team in 
place at the Interior Department, and I think we can move 
forward.
    The Acoma Pueblo comprises some 380,000 acres located 56 
miles west of Albuquerque. The legislation deals with 
subsurface mineral rights of Acoma Pueblo trust lands. People 
of Acoma Pueblo, like many other Native American tribes, have 
sought to restore its reservation to its historic boundaries. 
Over 6,000 Pueblo members live on and around the Acoma Mesa, 
which was originally referred to as the "Sky City." The older 
village lies 365 feet above the surrounding valley of the 
sparse, dry farmland with its mixture of pinon and juniper 
trees. It is thought to be one of the oldest continually 
inhabited sites within the United States, first reported by 
Fray Marcos de Niza in 1539--now, that is a long time ago--and 
then visited by Francisco de Coronado's army in 1540.
    In 1988, the Pueblo purchased a large ranch that adjoined 
their reservation, and subsequently the Secretary of the 
Interior took over 100,000 surface acres into trust for the 
Pueblo, and it became a permanent part of the reservation.
    When Acoma purchased the ranch, the subsurface mineral 
rights were not part of the land transfer, and, as you know, 
this is not an uncommon practice where only the surface estate 
was sold from owner to owner. Much of this practice goes back 
to the settling of the West when the government awarded 
checkerboarded pieces of land to railroads in return for their 
building lines across the Nation, and the railroads then sold 
the land to finance their companies' activities, but kept the 
subsurface mineral estate.
    Under this legislation the current owner of the subsurface 
estate would enter into an exchange agreement with the Bureau 
of Land Management, BLM, for equal valued Federal lands and 
rights. In return BLM would receive the subsurface rights 
within the Pueblo boundaries, which would be placed into trust 
by the Secretary of the Interior for the benefit of the Acoma 
Pueblo unifying both the surface and subsurface estate.
    This legislation amounts to a win-win for all of the 
stakeholders involved. First, the Acoma Pueblo does not have to 
worry about the subsurface mineral rights holder attempting to 
exercise its rights. This legislation would give them the total 
control over their lands that they need and deserve under the 
trust responsibility of the United States. The current third-
party owner of the subsurface mineral estate is made whole 
without having to exercise their rights and being placed in 
conflict with the Acoma Pueblo. And, finally, the public wins 
because excess Federal lands will go into the private sector 
and will be returned to the tax rolls.
    The Acoma people are part of a proud Pueblo which provides 
New Mexico with a major portion of the rich cultural heritage 
which makes my State the Land of Enchantment.
    In closing, I ask the Committee to do the right thing and 
to pass this legislation so that Acoma people can continue 
their journey to greatness.
    [The prepared statement of Mr. Skeen follows:]

Statement of Honorable Joe Skeen, a Representative in Congress from the 
                          State of New Mexico

    Madam Chairman, I want to extend my very warm regards to you for 
holding this hearing today. I know how busy the committee has been 
working on your major energy bill as well as countless other issues. 
The Acoma people, who are here today will also be expressing their 
appreciation to you. I know late last year you made a commitment to 
work with me on this bill and now that we have at least a partial team 
in place at the Interior Department I think we can move forward.
    The Acoma Pueblo comprises some 380,000 acres located 56 miles west 
of Albuquerque. The legislation deals with the sub-surface mineral 
rights of Acoma Pueblo trust lands. The people of Acoma Pueblo, like 
many Native American tribes, have sought to restore its reservation to 
its historic boundaries. Over 6,000 Pueblo members live on and around 
the Acoma Mesa which was originally referred to as ``Sky City''. The 
older village lies 365 feet above the surrounding valley of sparse dry 
farmland with its mixture of pinon and juniper. It is thought to be one 
of the oldest continually inhabited sites in the United States, first 
reported by Fray Marcos de Niza in 1539 and then visited by Francisco 
de Coronado's army in 1540.
    The Spanish made the original land grant to the Pueblo of Acoma on 
September 20, 1689 and President Grant confirmed the grant by patent 
issued on November 19th, 1877. In l988, the Pueblo purchased a large 
ranch that adjoined their reservation and subsequently the Secretary of 
the Interior took over 100,000 surface acres into trust for the Pueblo 
and it became a permanent part of the reservation. This additional land 
is necessary as the Pueblo grows and prospers because of new economic 
activity.
    When Acoma purchased the ranch the subsurface mineral rights were 
not part of the land transfer. This is not an uncommon occurrence in 
the West where only the surface estate is sold from owner to owner. 
Much of this practice goes back to the settling of the West when the 
federal government awarded checkerboarded pieces of land to railroads 
in return for their building lines across the nation. The railroads 
then sold the land off to finance their companies activities but kept 
the subsurface mineral estate.
    Under this legislation, the current owner of the subsurface estate 
would enter into an exchange agreement with the Bureau of Land 
Management (BLM) for equal valued federal lands and rights. In return 
the BLM would receive the subsurface rights within the Pueblo 
boundaries which would be placed into trust by the Secretary of the 
Interior for the benefit of the Acoma Pueblo unifying both the surface 
and subsurface estate.
    This legislation amounts to a win-win for all of the stakeholders 
involved. First, the Acoma Pueblo does not have to worry about the sub-
surface mineral rights holder attempting to exercise its rights. This 
legislation gives them the total control over their lands that they 
need and deserve under the trust responsibility of the United States. 
The current third party owner of the sub-surface mineral estate is made 
whole without having to exercise their rights and being placed in 
conflict with the Acoma Pueblo. And finally the public wins because 
excess federal lands will go into the private sector and will be 
returned to the tax rolls.
    Although the mineral rights in question are of an undetermined 
value due to the fact that very little oil and gas exploration or any 
other type of exploration has taken place on these lands. Total control 
over their land allows the Acoma people to engage in mineral 
exploration if they deem it appropriate. Such exploration will not 
occur without this legislation.
    The Acoma people are part of a proud Pueblo which provides New 
Mexico with a major portion of the rich cultural heritage which makes 
my state the ``Land of Enchantment''. In closing I ask the committee to 
do the right thing and pass this legislation so the Acoma people can 
continue their journey to greatness.
                                 ______
                                 
    Mrs. Cubin. I would like to place into the hearing record 
testimony of Joe Sphar of the NZ Corporation. He was not able 
to attend because of our current national situation.
    Mrs. Cubin. Without objection, that will be so entered.
    [The prepared statement of Mr. Sphar follows:]

     Statement of Joe Dee Sphar, Director of Natural Resources, NZ 
                              Corporation

INTRODUCTION.
    Madame Chairwoman and Members of the Subcommittee on Energy and 
Mineral Resources, my name is Joe Sphar. I am the Director of Natural 
Resources for the NZ Corporation. Thank you for this opportunity to 
testify on H.R. 1913. This legislation is very important to the NZ 
Corporation which currently holds some 67,710 acres of mineral rights 
within the Acoma Indian Reservation. These are rights originally 
granted to NZ's predecessor company by the United States but which 
cannot be developed without great conflict with a sovereign Indian 
nation. H.R. 1913 provides a practical solution that addresses the 
concerns and rights of NZ, as well as the concerns and rights of the 
Pueblo of Acoma.
ORIGIN NZ'S SEVERED MINERAL ESTATE.
    NZ Corporation (``NZ''), f.k.a. New Mexico and Arizona Land 
Company, owns some 67,710 acres of mineral rights within the Acoma 
Reservation in Cibola County, New Mexico. NZ is a publicly traded 
company incorporated in the Territory of Arizona in 1908. Ultimately, 
NZ's mineral title traces to a Federal Charter of 1866 to the Atlantic 
& Pacific Railroad (Ch. 278, 14 Stat. 292) which provided a land grant 
from the public domain as an inducement to build a railroad and 
telegraph line along the 35th Parallel. Portions of this great 
transcontinental rail line from the Rio Grande to the Colorado River 
were subsequently built across what are now the states of New Mexico 
and Arizona. Accordingly, NZ's parent corporation, the St. Louis & San 
Francisco Railway Company, was granted some 1.2 million acres in fee, 
including the subject acreage, for its part in the completed railroad 
construction near Acoma. Title to this railroad mineral estate is well 
established in law. (For a summary see Thomas E. Root, Railroad Land 
Grants from Canals to Transcontinentals, National Resources Law 
Section, American Bar Association Monograph Series, 1988).
    During the early part of the 20th Century, a more socially 
sensitive and better informed Federal Government recognized the Acoma's 
traditional use and aboriginal occupancy of a much wider area in what 
is now Cibola County, New Mexico. However, much of this area had 
already been taken out of public domain status and deeded to the 
railroad parent of New Mexico and Arizona Land Company. In 1936, the 
Federal Government was able to purchase the conflicted lands from NZ. 
However, the purchase for reasons not presently known to NZ did not 
include the mineral rights, which were explicitly excluded along with 
access rights for exploration and development of the reserved mineral 
estate.
CONFLICTED RIGHTS.
    Railroad land grants were made in a checkerboard pattern to insure 
that the Government lands would appreciate along with the newly created 
private railroad lands. Without passing judgement on the merits of the 
original plan, a secondary result throughout the western United States 
has been a management gridlock. Moreover, on a subsequently created 
Indian Reservation, the question of Native American sovereignty is 
brought to fore. From NZ' s view, a virtual taking resulted with the 
creation of the Acoma Reservation. The BIA policy is to always defer to 
Native American oversight. The inequity in this was acutely 
demonstrated in the mid-1970s when an oil company (CITGO) attempted for 
several years to explore at Acoma for oil and natural gas. The concept 
of deep drilling into the Earth (with all that this portends for Acoma 
spirituality) and the potential for desecration of secret religious 
sites on the surface was basically foreign and frightening to the 
religious leaders of Acoma society. The Acoma's refused all of Citgo's 
overtures to allow access to the NZ minerals and or lease the Acoma 
mineral estate checkerboarded with NZ's minerals. Then the Acomas 
unsuccessfully sued NZ for the minerals. (Pueblo de Acoma v. New Mex. & 
Az. Land Co., et al, U.S. District Court No. 82-155, JB, 1983). While 
affirming its title, NZ's access to the mineral estate remains 
effectively blocked by a wall of sovereignty. Yet, the Acoma people 
lack full sovereignty over their aboriginal lands.
PETITION TO CORRECT THIS ERROR OF HISTORY.
    Not long after the lawsuit ended, NZ and the Acomas agreed to work 
together to redress their mutual problems. Clearly, their problems were 
created by the Federal Government in conflicting land grants. NZ has 
worked with four Governors of Acoma Pueblo on this topic over the 
years. Under the active leadership of several Acoma Governors, the 
Pueblo of Acoma is now petitioning the Congress to correct this error 
of history and make their aboriginal lands whole. Whether this movement 
is driven by desire for future mineral development, to attain final 
security for the tradition places and sacred sites or simply as a 
matter of justice is not known to NZ. One can reasonably assume all 
three motivations.
VALUATION OF THE MINERAL ESTATE.
    Internal valuations of the mineral estate range from a minimum of 
$15 per acre to $25 per acre. This appraisal is based largely upon 
comparable Company dispositions of large and small mineral parcels in 
New Mexico and Arizona. It is also cognizant of the regionally better 
geologic prospects for petroleum on the subject mineral estate. The 
Company's extensive wildcat drilling on the Sierra Lucero to the east 
has proven that oil and gas is present in the area and may have been 
trapped in economic accumulations in superior reservoir rocks on the 
structurally higher flank of the Zuni Mountains as represented in large 
portions of the topic Acoma minerals.
    Even in the absence of producing or defined mineral deposits, 
mineral rights are valuable and valued for their potential to create 
future wealth. This potential is commonly marketable even before 
discovery as mineral explorers typically pay bonuses and other 
leasehold payments to mineral right owners. This opportunity has been 
basically denied to both NZ and the Acoma because of the inherent 
conflicts of split estate ownership on lands in reservations status 
(basically beyond the reach of Federal Courts). The potential for 
future income, both leasehold and actual (royalty income, for example) 
may be considered a speculative value residing in all mineral rights. 
Moreover, mineral rights are recognized as a real property right and 
the prospect of future exploration may engender a nuisance value from 
the view of the surface estate owner. In the case at hand, the geology 
is enhancing to the speculative value and the extraordinary religious 
tie of the surface owner to the land makes the nuisance factor highly 
salient. As to comparable sales, NZ has traded, sold or exchanged 
nearly 200,000 acres of mineral rights with the Federal Government in 
support of National Parks and Wilderness Areas. Prices ranged up to 
$27.40 acre (see accompanying Chart hereafter).
    Just over ten years ago and just west of the Acoma Reservation, NZ 
relinquished some 119,000 acres to accommodate the El Malpais 
wilderness. NZ accepted $10 per acre (1989-90 dollars) for these 
minerals which are rather obviously of inferior petroleum potential. At 
the same time and by reference to geologic variables, NZ received 
$27.40 per acre for some 2240 mineral acres to accommodate the 
expansion of the Chaco Canyon National Park. The difference here from 
the $10 price for El Malpais was not so much the size of the 
transaction as the recognizable better potential for petroleum 
discovery on the Chaco minerals. Similarly, NZ received $15 per acre in 
trade value from the Government for its 57,000 acres of checkerboard 
minerals in Mohave County, Arizona in 1987. The price here was partly 
determined by the regional potential for gold discovery (speculative 
value).
    Finally, NZ has for many years running been routinely selling 
mineral rights to its 40 acre recreational lot buyers for $25 per acre. 
A large number of such sales have been generated at this price, whether 
motivated by speculation or nuisance is not certain. Just last year, NZ 
sold one section (640 acres) in Cibola County for $30 per acre to a 
company hoping to site a business there.
    Thus, when looking at either the speculative value or the real 
property, nuisance value the Company concludes that the mineral value 
for the 67,710 acres of fee minerals ranges from $15-25 per acre, or 
from a minimum of $1 million to $1.7 million. NZ would expect and 
presumably accept an independent mineral appraisal. Commercial 
appraisers have approximated the cost of such appraisal at $25,000. NZ 
would accept an equal value of BLM land from their excess lands list in 
the Cibola County or even elsewhere in New Mexico
[GRAPHIC] [TIFF OMITTED] T5128.005

CONCLUSION.
    In the interests of equity and fairness, to both NZ and Acoma, I 
strongly urge this Committee to support passage of H.R. 1913. Thank you 
for this opportunity to testify on this important legislation.
                                 ______
                                 
    Mrs. Cubin. And I would like to apologize to the Acoma 
people that are here today for my mispronunciation.
    Mr. Skeen. You are doing very well. You should have heard 
us when we started out with this.
    Mrs. Cubin. Well, it is good to have you here, and I 
appreciate, Joe, your bringing this issue forward again. We did 
start talking about it last year, and I am sure that we will be 
able to move this legislation forward as soon as possible.
    Mr. Skeen. You are a very decent lady, and I appreciate it 
very much.
    Mrs. Cubin.  Thank you very much. I don't have any 
questions, and I assume you have finished with everything you 
want to say.
    Mr. Skeen. I will always find a place where I have 
something to say and then don't overdo it.
    Mrs. Cubin.  As my mother always said, when you have got 
the votes, shut up; right?
    Mr. Skeen. That is exactly right. Thank you so much.
    Mrs. Cubin.  Thank you, Mr. Skeen.
    The Chair now would like to call panel two to come forward 
to the table. The Honorable Cyrus J. Chino, Governor of the 
Acoma Pueblo of New Mexico; and the Honorable Neal A. McCaleb, 
Assistant Secretary of the Interior for Indian Affairs.
    Mrs. Cubin. The Chair now recognizes Governor Cyrus Chino 
to testify for 5 minutes. The timing light should be on the 
table and will indicate when your time has concluded. That 
yellow light means there is 60 seconds left. So, Governor 
Chino, if you would like to begin.

STATEMENT OF CYRUS J. CHINO, GOVERNOR OF THE ACOMA PUEBLO, NEW 
                             MEXICO

    Mr. Chino. Good afternoon and thank you, Madam Chairwoman 
and members of the Subcommittee on Energy and Mineral 
Resources. My name is Cyrus J. Chino. I am the Governor of the 
Pueblo of Acoma. On behalf of the Pueblo of Acoma, I thank you 
for this opportunity to testify in support of H.R. 1913. I am 
accompanied by council member Petuuche Gilbert, who is also the 
tribal's realty officer.
    Before I continue, I would like to express on behalf of the 
people and government of the Pueblo of Acoma our great sorrow 
at the tragic events of this last week. We are praying for the 
victims, their families, and friends.
    Acoma is an ancient and traditional people. We have 
occupied our lands and our old village, Acoma Sky City, for 
over a thousand years and still speak our native language and 
practice our traditional religion. We know from long experience 
that in order to preserve our culture, we must preserve our 
land and sovereignty.
    I come before you here today to ask you that you support 
the passage of H.R. 1913. H.R. 1913 will correct an historic 
wrong against Acoma caused by the Federal Government, protect 
our sovereign and protect our sacred land and sacred sites from 
inappropriate development.
    Today the NZ Corporation holds 67,710 acres of mineral 
rights within the Acoma Indian Reservation, including mineral 
rights near our ancient and central village, Acoma Sky City.
    The map here is included in the testified statement that we 
are turning in, and there is a map there. In the dark shaded 
area are those areas that we are alluding to, that is, south of 
Acoma Sky City village on top of the mesa.
    NZ serves a right of access to a large portion of the Acoma 
Indian Reservation, including areas of great spiritual 
importance and sensitivity. Acoma would oppose any such efforts 
by NZ, but in the end it might be a Federal court and not Acoma 
itself which would decide what would happen on Acoma land. 
Acoma and NZ have come together to support this important 
legislation.
    Let me briefly describe to you how Acoma lost its land. The 
Spanish and the Mexican Governments, prior to New Mexico's 
addition to the Union, fully recognized Acoma's territory. The 
United States promised in the Treaty of Guadalupe Hidalgo in 
1848 to protect our Pueblo land, but when the transcontinental 
railroad was built, the United States gave a large portion of 
the Acoma's land to the railroad. The United States partially 
corrected this injustice by purchasing the surface rights to 
much of this land from NZ Corporation, but the subsurface still 
belongs to the NZ Corporation.
    Benefits of H.R. 1913. H.R. 1913 will protect Acoma's 
sacred site by unifying the surface and subsurface estates at 
Acoma. The threat that Acoma sacred sites would be disturbed or 
destroyed would be eliminated. We can protect Mother Earth on 
our reservation as we know best how to do.
    H.R. 1913 will restore Acoma's sovereignty over its own 
land.
    H.R. 1913 will right the historic wrong of the taking of 
this land from Acoma and thus fulfill the Federal Government's 
trust responsibility to Acoma.
    H.R. 1913 will also protect the interests of NZ 
Corporation, which feels that it has essentially lost the value 
of its land holdings underneath the Acoma Indian Reservation.
    H.R. 1913 will eliminate the possibility of costly 
litigation, including litigation NZ against the United States 
for its fifth amendment taking of the value of its land and a 
result of the Federal Government recognizing an indignation to 
Acoma on those lands. For example, in establishing the El 
Malpais National Monument which lies immediately adjacent to 
Acoma, Congress specifically authorized the exchange of Federal 
and private mineral rights interests, which principally 
included NZ Corporation. In 1994, Assistant Secretary of Indian 
Affairs concluded that the only way to secure the land for 
Acoma was through a three-party land exchange involving the 
BLM, Bureau of Land Management. However, BLM has taken no 
action; so we need Congress to pass H.R. 1913 to get this done.
    Conclusion. In the event the NZ Corporation believed that 
its right has been unduly encumbered while Acoma believes that 
its rights have been trampled upon, H.R. 1913 is a win-win 
solution to this problem. I urge this Committee to give its 
full support to passage of this important bill. Thank you for 
this opportunity to testify on this matter.
    Mrs. Cubin. Thank you, Governor.
    [The prepared statement of Mr. Chino follows:]

         Statement of Cyrus J. Chino, Governor, Pueblo of Acoma

I. INTRODUCTION
    Madame Chairwoman and Members of the Subcommittee on Energy and 
Mineral Resources, my name is Cyrus J. Chino. I am the Governor of the 
Pueblo of Acoma. On behalf of the Pueblo of Acoma, I thank you for this 
opportunity to testify in support of H.R. 1913.
    The Pueblo of Acoma is a federally recognized Indian tribe located 
an hour's drive west of Albuquerque, New Mexico. We are a traditional 
people. We have occupied our lands and our old village, Acoma Sky City, 
for over a thousand years. In fact, Acoma Sky City is the oldest 
continuously inhabited city in the United States. Despite 500 years of 
contact with European culture, the people of Acoma have retained their 
language, culture and spiritual traditions.
    I come before you today to ask that you support passage of H.R. 
1913. This legislation will redress an historical injustice against 
Acoma. It will also enable Acoma to protect fully our sacred heritage 
and to regulate appropriately development on our reservation lands. 
Finally, it will address the concerns of the NZ Corporation (formerly 
known as New Mexico and Arizona Land Company) which currently owns 
large portions of the subsurface estate at Acoma, including areas of 
great spiritual importance and sensitivity to Acoma. See Acoma Indian 
Reservation Map, Attachment A. H.R. 1913 is consistent with the Federal 
trust responsibility to American Indians as well as Congressional 
policy in the area of Indian lands management.
    Specifically, H.R. 1913 would direct the Secretary of the Interior: 
(1) to determine the extent and value of the nontribal ownership of 
subsurface rights within the boundary of the Acoma Indian Reservation; 
(2) to negotiate, upon completion of that valuation, an exchange with 
any willing nontribal owners of such rights for rights in Federal land 
within New Mexico identified by the Bureau of Land Management as 
available for disposal and of approximately the same value; and (3) to 
hold the acquired interests in land within the boundaries of the Acoma 
Indian Reservation in trust for the Pueblo of Acoma.
II. HOW ACOMA LOST ITS ANCESTRAL LAND IN THE FIRST PLACE
    Prior to 1848, the Spanish and Mexican governments controlled the 
Southwest and recognized Acoma's aboriginal area as Acoma's territory, 
protecting Acoma's rights throughout that area. In 1848, when the 
United States acquired New Mexico from Mexico it promised, in 
accordance with the Treaty of Guadalupe Hidalgo (1848), that the Pueblo 
Indian tribes and other property holders would by ``respected in their 
property.'' Congress also specifically recognized certain Acoma land 
claims by the Act of December 22, 1858, 11 Stat. 374. which federal 
courts have subsequently held did not limit Acoma's title to only those 
lands recognized therein.
    Notwithstanding these Congressional actions, in 1866 Congress 
issued a Federal Charter to the Atlantic & Pacific Railroad that 
provided for a land grant out of the public domain to support the 
construction of a transcontinental rail and telegraph line. Act of July 
27, 1866, 14 Stat. 292. NZ's parent company, the St. Louis & San 
Francisco Railway Company received 1.2 million acres in fee, including 
large parts of what is now the Acoma Indian Reservation. Under the law, 
unextinguished Indian title lands could not be granted without 
``voluntary session'' by the Tribe. However, U.S. land surveyors, in 
1876 and, again in 1877, through mistake or bad intent, designated 
large amounts of tribal land, including land immediately below the mesa 
of Acoma Sky City, as within the public domain. This designation meant 
that the land was eligible for grant to the railroad company without 
first securing Acoma's permission.
    In subsequent years, Congress recognized Acoma's larger land claims 
and acted to establish formally the Acoma Indian Reservation under 
Federal law. Part of the Acoma Indian Reservation was defined by the 
Act of May 23, 1928 (45 Stat.717). Subsequently, the United States 
purchased substantial land holdings from NZ, and took much of that land 
into trust for Acoma. However, for reasons unknown to Acoma, NZ was 
allowed to retain its subsurface rights on these lands.
    As a result of this history, NZ holds 67,710 acres of subsurface 
rights within the Acoma Indian Reservation, including subsurface rights 
near Acoma Sky City.
III. NZ CLAIMS ACCESS RIGHTS TO MUCH OF THE ACOMA RESERVATION
    When the United States acquired the surface rights from NZ, it 
provided the following exception for the subsurface rights:
        L``...Excepting and Reserving to said party [NZ] of the first 
        part and its successors and assigns, all oil, gas and mineral 
        rights underlying or appurtenant to said lands, together with 
        the right of ingress and egress and of prospecting, developing 
        and operating said lands therefore and removing the same 
        therefrom, subject to such reasonable conditions respecting 
        ingress and egress and the use of the surface of said lands as 
        may be deemed necessary by the Secretary of the Interior.''
    Based on this language, NZ asserts a right of access to large 
portions of the Acoma Indian Reservation, including areas of great 
spiritual sensitivity. While Acoma would oppose any such efforts by NZ, 
in the end it might be a Federal court, and not Acoma itself, which 
would decide what would happen on Acoma land.
    Needless to say, this legal situation, arising initially out of 
Federal government action, puts Acoma and NZ into conflicting 
positions. NZ has a good faith legal claim to develop its subsurface 
assets; at the same time such development would likely affect Acoma 
sacred properties and would involve subsurface assets that rightfully 
belong to Acoma in the first place. NZ believes that its rights have 
been unduly encumbered; while Acoma believes that its rights have been 
trampled upon. Both parties have come together to support a win-win 
solution H.R. 1913. This solution, of necessity, involves the party 
originally responsible for the loss of Acoma land--the Federal 
government.
IV. BENEFITS OF H.R. 1913.
    H.R. 1913 will address, through a voluntary land exchange, a number 
of issues, including:
     LProtection of Acoma sacred sites. By unifying the surface 
and sub-surface estate at Acoma, the threat that Acoma sacred sites 
could be disturbed or destroyed by mineral exploration and extraction 
activity would be eliminated. The threat also to certain sacred 
``viewscapes'', especially from Acoma Sky City, and to certain 
pilgrimage routes, would also be removed. Essentially, in a manner 
consistent with the Federal trust responsibility, Acoma's sovereignty 
within the boundaries of the Acoma Reservation would be more fully 
recognized and strengthened.
     LRighting of an historic wrong through the restoration of 
resources properly belonging to Acoma. The consolidation of Acoma's 
surface and subsurface estate would correct the historic injustice of 
the loss of these lands that had belonged to Acoma for at least a 
thousand years before their taking by the United States. Passage of 
H.R. 1913 would be an example of the Congress living up to the Federal 
trust responsibility in the best possible way.
     LProtection of the interests of the private holder of the 
subsurface. NZ has expressed its belief that, through Federal action, 
it has essentially lost the value of these land holdings, thus raising 
the issue of a Fifth Amendment taking. H.R. 1913 would protect the 
economic interests of NZ in accessing the value of the land granted it 
by the United States by allowing NZ to get disposable BLM land of 
equivalent value elsewhere.
     LMaintenance of the same value of land under Federal legal 
title. Since H.R. 1913 provides that the land exchanged from the BLM 
disposable land list would be of the same value as the subsurface 
acquired in trust by the United States for Acoma, there is no net loss 
of land value under Federal legal title.
     LElimination of an unnecessary obstacle to economic 
development for both NZ and Acoma. For NZ, the lost value of the 
subsurface at Acoma will be freed up for other economic activity. 
Although Acoma has no plans to develop its subsurface resources, by 
consolidating those resources into the Acoma reservation Acoma can 
better regulate such development if, at some future date, it would be 
appropriate and not destructive.
     LElimination of the possibility of costly litigation. 
Should NZ seek to develop its subsurface rights, there would likely be 
extensive ligitation, not only between Acoma and NZ, but also including 
the United States. H.R. 1913 would eliminate the risk of such 
litigation by establishing a voluntary land exchange process for 
resolving this conflict.
V. OTHER CONGRESSIONALLY AUTHORIZED LAND AND MINERAL EXCHANGES
    Under a wide variety of circumstances, the U.S. Congress has 
provided for land and mineral exchanges. In the Indian area, Congress 
has repeatedly passed legislation providing for exchanges and purchases 
of land interests for the benefit of Indian tribes in a manner similar 
to H.R. 1913. Set forth below are brief descriptions of examples of 
relevant Congressionally authorized land exchanges.
     LEl Malpais National Monument and National Conservation 
Area. In establishing the El Malpais National Monument, which lies 
immediately adjacent to Acoma, Congress specifically authorized the 
exchange of Federal and private mineral interests. 16 U.S.C. Section 
460uu-44. Subsequently, exchanges and payments were made at El Malpais 
National Monument which included NZ holdings. In the same legislation, 
Congress also authorized land exchanges with the Pueblo of Acoma. 16 
U.S.C. Section 460uu-45.
     L107th Congress--Public Law 107-28. Directs the Secretary 
of the Interior, acting through the Director of the Bureau of Land 
Management, to convey to the city of Carson City, Nevada, without 
consideration, all right, title, and interest of the United States to 
certain BLM property.
     LUmatilla Indian Reservation Consolidation. Congress 
specifically authorized the Secretary of the Interior, for the purpose 
of effecting land consolidations between Indians and non-Indians within 
the reservation, to acquire by purchase, exchange or relinquishment any 
interests in land within the Umatilla Indian Reservation. 25 U.S.C. 
Section 463e.
     LNavajo-Hopi Land Settlement Act Land Exchanges. The 
Navajo-Hopi Land Settlement Act authorized the Secretary to transfer 
certain land from the Bureau of Land Management to the Navajo Nation 
and, in order to facilitate such transfer, to exchange such lands for 
State or private lands of equal value or, if they are not equal, to 
equalize the values through the payment of money. 25 U.S.C. Section 
640d-10.
     LGeneral Law Providing for Exchanges of Private Lands 
included in Indian reservations for other lands. 43 U.S.C. Section 149 
specifically authorizes public-private land exchanges for Indian 
reservations established by executive order: ``Any private land over 
which an Indian reservation has been extended by Exec-utive order, may 
be exchanged at the discretion of the Secretary of the Interior for 
vacant, nonmineral, nontimbered, surveyed public lands of equal area 
and value situated in the same State or Territory.''
     LRhode Island Indian Claims Settlement Act. Under this 
Act, Congress authorized the Secretary of the Interior to purchase 
``private settlement lands'' as part of a settlement of aboriginal land 
claims and other matters. 25 U.S.C. Section 1707.
     LRattlesnake National Recreational Area. In establishing 
the Rattlesnake National Recreational Area, Congress authorized the 
Secretary of the Interior to acquire, by exchange, gift or purchase 
``non-Federal lands, interests, or any other property. . . .'' 16 
U.S.C. Section ll-3(a). The Secretary of the Interior is even 
authorized, in consultation with the Secretary of Agriculture, to make 
exchanges with the owners of private lands or interests in exchange for 
bidding rights for competitive coal lease sales. 16 U.S.C. Section 460 
ll-3(b)-(e)
     LChickasaw National Recreational Area. Congress authorized 
the Secretary of the Interior to acquire land outside the boundary of 
the recreation area and exchange it for non-Federal lands within the 
boundaries. 16 U.S.C. Section 460hh-1.
     LArapahoe National Recreation Area. Congress authorized 
the Secretary of the Interior to acquire by exchange any non-Federal 
land, or interests therein, located within the Arapaho National 
Recreation Area. 16 U.S.C. Section 460jj-1(c).
     LChattahoochee River National Recreation Area. Congress 
authorized the Secretary of the Interior to acquire by exchange land 
within the recreation area. 16 U.S.C. Section 460ii-1(a).
VI. ACOMA EFFORTS TO UNIFY ITS SURFACE AND SUBSURFACE ESTATE
    Since 1990, the Pueblo of Acoma and NZ have worked to resolve this 
issue. In 1990, the Acoma Tribal Council passed a resolution 
authorizing the tribal administration to negotiate with NZ and U.S. 
Department of Interior to acquire mineral rights within the 
reservation. Since then, each tribal administration has sought to 
complete such a negotiation.
    Notably, by letter dated March 3, 1994, Ada E. Deer, then-Assistant 
Secretary of Indian Affairs, wrote the Acoma Governor and stated: 
``[T]he only available way to secure an outright acquisition would be 
through the three party land exchange transaction between the BLM, the 
NZ Company and the Pueblo [of Acoma]. We will be making a written 
request to the Secretary of the Interior to direct the BLM to begin 
entering into negotiations regarding the three party land exchange 
transaction.'' See Attachment B.
    Although officials at the Bureau of Land Management have indicated 
general support for the idea of transfer of rights, they have indicated 
to Acoma that an exchange would only be carried out if directed and 
authorized by the Congress. For this reason, Acoma now comes before the 
Congress asking that it pass H.R. 1913 and make the Acoma Reservation 
whole.
VII. CONCLUSION
    H.R. 1913 is win-win legislation that addresses and corrects an 
historic wrong against the Pueblo of Acoma. I urge this Committee to 
give its full support to passage of this important bill. Thank you for 
this opportunity to testify on this matter.
                                 ______
                                 
    [Attachments to Mr. Chino's statement follow:]
    [GRAPHIC] [TIFF OMITTED] T5128.002
    
    [GRAPHIC] [TIFF OMITTED] T5128.003
    
    [GRAPHIC] [TIFF OMITTED] T5128.004
    
    [GRAPHIC] [TIFF OMITTED] T5128.001
    
    Mrs. Cubin. The Chair now wishes to recognize the Assistant 
Secretary McCaleb to testify for 5 minutes.

   STATEMENT OF NEAL A. McCALEB, ASSISTANT SECRETARY, INDIAN 
              AFFAIRS, DEPARTMENT OF THE INTERIOR

    Mr. McCaleb. Thank you, Madam Chairman and members of the 
Committee. Thank you for the opportunity to provide the 
administration's views on H.R. 1913, a bill which directs the 
Secretary to conduct a valuation and exchange of nontribal 
subsurface rights within the boundaries of the Acoma Pueblo 
Indian Reservation. The Department enthusiastically supports 
the goal of transferring the private mineral estate to the 
Acoma Pueblo.
    Having said that, portions of our testimony suggest 
potential amendments to provide other methods to either 
facilitate or expedite this transfer in addition to a swap. 
That is not intended in any way to suggest that these are 
superior or even potentially as good, but simply to facilitate 
the potential transfer and provide alternative methods. These 
methods include the direct purchase of the mineral estate using 
transferrable bidding credits in addition to the land exchange 
option provided in the bill. We also recommend amendments to 
provide for a cost-sharing agreement if either an exchange or 
purchase takes place and to allow additional time to conduct 
the exchange.
    I am not going to make a redundant statement. The history 
of this issue has already been more than adequately covered by 
Congressman Skeen and Governor Chino. I would like to point out 
that an historical background is in my submitted testimony. The 
nontribal interest ownership of the mineral estate within the 
boundaries of the Acoma Pueblo Indian Reservation is 
approximately 68,000 acres. The Bureau of Land Management (BLM) 
currently estimates that the mineral estate consists primarily 
of sand and gravel, but there may also be the potential for oil 
and gas in the area. The private mineral owners have estimated 
costs of an outright purchase, in lieu of an exchange, of their 
mineral estate within the reservation to be between a million 
and $1.7 million. It should be emphasized that no federally 
approved appraisal has been completed for the mineral estate 
interest, and it is possible that the actual value is less than 
their estimate.
    The valuation and the exchange provided for in H.R. 1913 
would result in considerable workload and costs for the BLM 
necessitated by the Federal Land Policy and Management Act, the 
National Environmental Policy Act, and other statutory and 
regulatory requirements. Such steps would include, but would 
not be limited to, appraisals, environmental reviews and 
clearances, public notices, coordination with other landowners, 
and adjudication procedures. The Bureau of Land Management land 
exchange results in costs of approximately $1 million for these 
kinds of activities, an amount close to the private mineral 
owners' estimate of the value for a direct purchase of their 
mineral estate within the reservation.
    At this time it is also unclear as to whether or not an 
agreement on value can be reached between the mineral owner and 
the Secretary of Interior.
    In the interest of time, Madam Chairman, I won't repeat 
what is in the printed testimony that elaborates on these 
points, but would be happy to answer any questions.
    Mrs. Cubin. Okay. Thank you very much, Mr. Secretary.
    [The prepared statement of Mr. McCaleb follows:]

 Statement of Neal McCaleb, Assistant Secretary - Indian Affairs, U.S. 
                       Department of the Interior

    Madam Chairman and Members of the Committee, thank you for the 
opportunity to provide the Administration's views of H.R. 1913, a bill 
which directs the Secretary of the Interior to conduct a valuation and 
exchange of non-tribal subsurface rights within the boundaries of the 
Acoma Pueblo Indian Reservation.
    The Department supports the goal of transferring the private 
mineral estate to the Acoma Pueblo. However, we suggest that the bill 
be amended to allow the Secretary to consider acquisition of the 
mineral estate through a direct purchase or by using transferable 
bidding credits (interest free), in addition to the land exchange 
option provided in the bill. We also recommend amendments to provide 
for a cost-sharing arrangement if either an exchange or purchase takes 
place; and to allow additional time to conduct an exchange.
Background
    When the United States created the Acoma Pueblo Reservation, 
minerals within the reservation lands were already in private 
ownership. They were never transferred to the Acoma Pueblo. The Acoma 
Pueblo has stated that any desire by the owners of the mineral estate 
to begin exploration for minerals on the reservation would disrupt its 
traditional way of life. Leaders of the Acoma Pueblo have long 
expressed their desire to have their land rights intact and that 
includes both the surface and mineral estate.
    The owner of the mineral estate has informed the Acoma Pueblo that 
a trade for land of equal value would be acceptable. An official 
appraisal of the mineral estate does not currently exist, and we have 
no knowledge of any such production on the private mineral estate on 
the Acoma Pueblo lands. The Bureau of Land Management (BLM) was 
approached by the Acoma Pueblo about a year ago to use its exchange 
process to acquire the non-tribal mineral interests within the Acoma 
Pueblo Reservation land. The BLM has responded to these requests by 
suggesting that the Acoma Pueblo seek Congressional authority for such 
a transaction.
Current Estimated Value
    The non-tribal interest ownership of the mineral estate within the 
boundaries of the Acoma Pueblo Indian Reservation is approximately 
68,000 acres. The BLM currently estimates that the mineral estate 
consists primarily of sand and gravel, but that there may be potential 
for oil and gas in the area. The private mineral owners have estimated 
costs of an outright purchase in lieu of an exchange of their mineral 
estate within the Reservation to be between $1 million and $1.7 
million. It should be emphasized that no federally-approved appraisal 
has been completed for the mineral estate interests and it is possible 
that the actual value is less than this estimate.
BLM Land Exchange Process /Costs
    The valuation and exchange provided for in H.R. 1913 would result 
in a considerable workload and costs for the BLM. As with any land 
exchange, the BLM must follow the processing and public involvement 
procedures as required by the Federal Land Policy and Management Act, 
the National Environmental Policy Act and other statutory and 
regulatory requirements. Such steps would include, but would not be 
limited to, appraisals, environmental reviews and clearances, public 
notices, coordination with other landowners, and adjudication 
procedures. The typical BLM land exchange results in costs of 
approximately $1 million an amount close to the private mineral owners' 
estimate of value for a direct purchase of their mineral estate within 
the Reservation. At this time, it is also unclear whether or not an 
agreement on value can be reached between the mineral estate owner and 
the Secretary of the Interior.
Proposed Amendments to H.R. 1913
    The Department would like to work with the Committee to address the 
following concerns with the legislation as introduced.
     LPurchase Option-Given that the anticipated cost to 
process this exchange may exceed the value of the property to be 
acquired, the Department recommends amending the bill to provide the 
Secretary with the option to acquire the interests in the property 
through a direct cash purchase or through the granting of future 
federal lease bidding credits (interest free) in the amount of the 
value of the acquired mineral estate. This option would be in addition 
to consideration of the exchange option already provided for in the 
legislation. Under an outright purchase, or through the future federal 
lease or permit bidding credits (interest free), an exchange would not 
be necessary and there would be no disposal of federal estate. This 
action would take less time and potentially result in considerable net 
savings to the Federal Government.
     LCost-Share-The BLM and a land exchange proponent 
typically share in the costs of processing a land exchange. Currently, 
the introduced legislation does not provide for such a cost-sharing 
arrangement if an exchange is the final transaction that takes place. 
Under the introduced bill, the Secretary is required to negotiate and 
complete the land exchange transaction and incur all of the costs for 
such a transaction. The Department recommends that the bill be amended 
to provide for such a cost-sharing arrangement with the exchange 
proponent, the New Mexico and Arizona Land Company. We also recommend 
that it include provisions for the sharing of costs for the appraisal 
of the mineral estate.
     LTimetableIn addition, the introduced legislation does not 
provide a sufficient timetable for a land exchange transaction to take 
place. As land exchanges can sometimes take longer than two years to 
complete, the Department would recommend that the bill be amended to 
provide the Department with at least three years to complete any 
exchange.
Closing
    Thank you Madam Chairman. I would be happy to answer any questions 
that you or other committee members may have.
                                 ______
                                 
    Mrs. Cubin. We have a vote going on right now, and I think 
I will go over and vote very quickly and come right back for a 
round of questioning. We just have one vote; so we are recessed 
for about 10 minutes.
    [Recess.]
    Mrs. Cubin. The Subcommittee will please come to order. I 
am just going to ask a couple of questions, and then we do have 
some questions that we would like to submit to you for your 
response in writing. I am supposed to go to the Pentagon at 3 
o'clock, and so that does cut down on the amount of time that 
we have for questions, but I did want to ask Governor Chino, I 
see that Ada Deere requested the Secretary of Interior Bruce 
Babbitt to direct the BLM to conduct this exchange.
    Do you know what happened to that request?
    Mr. Chino. In answer I am going to yield to my realty 
officer, Mr. Petuuche Gilbert.
    Mrs. Cubin.  Would you spell your name for the record, 
please, sir.
    Mr. Gilbert. Yes. My first name is Petuuche, and that is 
spelled P-E-T-U-U-C-H-E, and Gilbert as it is normally spelled.
    I didn't hear entirely the full question. If possible, 
would you repeat it for me?
    Mrs. Cubin.  Yes. Ada Deere had requested that the previous 
Secretary of Interior Bruce Babbitt directed BLM to conduct 
this exchange. Do you know what happened to that request?
    Mr. Gilbert. Nothing. This is a long-standing problem that 
the Pueblo of Acoma has been working on, and over the years we 
may have had these kinds of requests, and that was one of the 
requests to the BIA and the Secretary of Interior at that time 
to assist us on it. There was no action taken.
    Mrs. Cubin.  I certainly sympathize with the need to 
eliminate the split estate and have the Acoma the right to 
preserve the land that is sacred to them and make sure that no 
exploration takes place there.
    I don't care whether Mr. Gilbert or you, Governor Chino, 
answer this question. Would you give us some insight as to why 
you think the BLM and the Department of Interior have been 
reluctant to conduct this proposed exchange unless it is 
directed by Congress, or what are your opinions for the reasons 
for their reluctance?
    Mr. Chino. I would answer in this respect. There has not 
been any move in addressing this by the Federal Government, 
and, of course, there are so many years that we have come about 
addressing this, so in the same essence, the Federal Government 
did never make a move on it for some reasons that I am not 
cognizant of, and it was never communicated to us, and with Ada 
Deere's task, I have never seen anything come through in that 
respect.
    Mrs. Cubin. Assistant Secretary McCaleb, can you describe 
for me--well, first of all, I think in your testimony you said 
that it cost $1 million to $1.7 million for the BLM to do an 
exchange. I assume that is in New Mexico; is that correct?
    Mr. McCaleb. It actually is estimated by the BLM to cost $1 
million; 1 to 1.7 was the estimated value of the mineral 
interests of NZ, but the $1 million is from BLM's experience on 
previous land exchanges.
    Mrs. Cubin.  So that is countrywide, not necessarily New 
Mexico?
    Mr. McCaleb. Yes.
    Mrs. Cubin. Mr. Sphar's testimony reads that a formal 
appraisal of the private mineral estate of the Acoma 
Reservation would be about $25,000, and I would think a similar 
amount would be sufficient to value BLM lands that were 
selected for the exchange for a total of about $50,000. So how 
do you justify the statement that the total cost would be about 
a million dollars?
    Mr. McCaleb. Well, a big part of the cost is because we 
don't know what land is going to be exchanged at this point, 
and then a deeper study would follow. We might get by with an 
environmental assessment, which would be substantially less 
than a full-blown environmental impact statement. But without 
knowing the land that is involved, it is impossible to tell 
that, but we would have to satisfy the deeper requirement of 
the Federal Land Policy and Management Act.
    Mrs. Cubin.  Well, certainly. That goes without saying.
    I think in your testimony you said it takes 3 years to 
complete a land exchange. And why would that be when an 
environmental assessment is required, not an environmental 
impact statement? I wouldn't think that this exchange would be 
controversial; so why would an EIS even be required?
    Mr. McCaleb. First of all, it is not controversial.
    Mrs. Cubin.  Yes. So--.
    Mr. McCaleb. But the need for a process under the Federal 
Land Policy and Management Act, a policy decision is still 
required.
    Mrs. Cubin. Sure, but--.
    Mr. McCaleb. The need for a policy decision would require 
public hearings.
    Mrs. Cubin.  Wouldn't you agree with me that when a project 
or proposed exchange is controversial, that it is much more 
expensive in terms of public scoping, in terms of studies, 
because people are demanding more and more information? If this 
is not controversial, I don't understand the reluctance, the 
apparent reluctance, of the Department of Interior to just get 
going on this.
    Now, I am certainly happy to do everything I can to get 
H.R. 1913 passed, but I really think it is nonsense. I think 
this is something that the Department should just be doing, and 
really it is kind of shameful that this has been going on so 
long and nothing has been done that these people have to end up 
coming here.
    So as I said, I do have to go to the Pentagon, but I will 
submit some more questions both to you, Assistant Secretary, 
and to Mr. Sphar of the NZ Corporation, and I appreciate your 
answers, Mr. Gilbert and Governor, and we will hold the record 
open for your response to those questions.
    [Response to questions submitted for the record follows:]

    1. Response from Hon. Joe Skeen.
    2. Response from Assistant Secretary Neal McCaleb
    3. Response from Governor Cyrus J. Chino
    4. Response from Joe D. Sphar
                                ------                                


  Questions from Representative Ron Kind for Representative Joe Skeen:

    (1) LAccording to their written statement, the 
Administration supports the goal of transferring the private 
mineral estate to the Acoma Pueblo. However, they suggest that 
the bill be amended to allow the Secretary to consider 
acquisition of the mineral estate through a direct purchase or 
by using transferable, interest free bidding credits, in 
addition to the land exchange option provided in the bill. What 
are your thoughts on this recommendation?


    (2) LThe Administration also recommends amendments to 
provide for a cost-sharing arrangement if either an exchange or 
purchase takes place; and to allow additional time to conduct 
an exchange. What are your thoughts on these suggestions?
[GRAPHIC] [TIFF OMITTED] T5128.010

         NEAL A. McCALEB - ASSISTANT SECRETARY, INDIAN AFFAIRS
  RESPONSES TO FOLLOW-UP QUESTIONS TO THE DEPARTMENT OF THE INTERIOR 
 HEARING ON HR 1913, VALUATION & EXCHANGE OF NON-TRIBAL MINERAL RIGHTS 
   WITHIN THE ACOMA INDIAN RESERVATION IN NEW MEXICO HOUSE RESOURCES 
                  SUBCOMMITTEE ON ENERGY AND MINERALS
    Question 1. You state in your testimony that a typical BLM land 
exchange costs about $1 million. How many exchanges does BLM New Mexico 
complete in a typical year, who typically initiates the exchange, and 
what is the purpose of the exchanges?
    Answer: BLM New Mexico is currently working on 9 land exchanges 
within the state. Each exchange may take 2 to 3 years to complete. 
Three of these ongoing exchanges are with the State of New Mexico. 
Typically, BLM New Mexico completes one or two exchanges per year; 
however, no exchanges were completed in fiscal year 2001.
    Private exchanges are typically initiated by the landowner; most of 
the State exchanges are a joint effort between the BLM and the State of 
New Mexico; and some exchanges have been mandated by legislation. Most 
of the exchanges are for the purpose of acquiring private and State 
lands within Wilderness Study Areas and other special management areas, 
or in order to enhance BLM management of sensitive resources. In 
addition, one of the State exchanges currently being processed is for 
the purpose of acquiring State land within the Federal Law Enforcement 
Training Center at Artesia, New Mexico.

    Question 2. Why does it take three years to complete a land 
exchange, especially when an environmental assessment, not an EIS is 
prepared? I wouldn't think that this exchange would be controversial, 
do you?
    Answer: A land exchange is one of the more complex land 
transactions that is conducted by the BLM, since it involves both the 
disposal of federal land and the acquisition of non-federal land. The 
BLM must follow the processing and public involvement procedures 
required by the Federal Land Policy and Management Act (FLPMA), the 
National Environmental Policy Act (NEPA), and other statutory and 
regulatory requirements. Such steps include, but are not limited to, 
land appraisals, environmental reviews and clearances, State Historic 
Preservation Office consultation for cultural resources, Fish and 
Wildlife Service consultation for threatened and endangered species, 
public notices, removal of title encumbrances and mining claims, 
possible cadastral surveys of property boundaries, coordination with 
adjacent landowners and existing authorized users, adjudication 
procedures, and potential protests and appeals. It is not known at this 
time what level of NEPA analysis would be required for this exchange, 
since the specific Federal lands involved in the exchange have not been 
identified and the public scoping process has not been initiated. Many 
land exchanges are controversial. The level of controversy for this 
exchange can only be determined after the specific federal lands 
involved in the exchange have been identified and the public 
involvement process is initiated.

    Question 3. Can you describe for the Subcommittee the process 
whereby NZ Corporation's mineral rights were acquired in the El Malpais 
National Monument to the west of the Acoma Reservation? How much was 
the administrative cost to conclude that exchange or purchase? Who paid 
those costs, the government or the corporation, or were they shared?
    Answer: The BLM has completed 3 land exchanges totaling 95,566 
acres and 3 direct purchases totaling 40,935 acres to acquire NZ 
Corporation mineral rights in the El Malpais National Monument. The 
costs for these transactions have varied depending upon the complexity 
of the transaction. The administrative costs for the individual direct 
purchases have generally been less than $25,000, in addition to the 
purchase price of the mineral interests. These costs have generally 
been paid by the BLM. However, the BLM processing costs for the 
individual land exchange transactions are estimated to have exceeded 
$300,000 per transaction. The NZ Corporation provided some additional 
assistance and support for the land exchange transactions. However, due 
to the age of these exchanges, we do not have immediate access to the 
records and it is not known if the support was in services or in 
reimbursement for costs. It should be noted that the previous 
individual land exchange transactions have been for smaller acreage 
than the 67,700-acre acquisition addressed by HR 1913, and therefore 
the processing costs for these previous transactions may be less than 
an estimated cost for the proposed Acoma acquisition.

    Question 4. Mr. Sphar's testimony reads that a formal appraisal of 
the private mineral estate in the Acoma Reservation would be 
approximately $25,000. I would think that a similar amount would be 
sufficient to value BLM lands selected for exchange, for a total of 
about $50,000. How do you justify the statement that total costs would 
be about $1 million?

    Answer: As indicated previously, a land exchange is a complex land 
transaction that involves both the disposal of federal land and the 
acquisition of non-federal land. It is possible that the costs of an 
appraisal for the federal and non-federal lands involved in the land 
exchange may be in the range of $25,000 to $50,000. However, it is 
difficult to estimate the appraisal costs for the Federal lands or 
interests in land since the specific Federal lands have yet to be 
identified. The Federal land or interests in land to be exchanged may 
be a single large parcel, several parcels of various sizes, multiple 
scattered small parcels, or a variety of interests in land. These 
differences and appraisal complexities can have a significant impact on 
the costs of an appraisal. Also, appraisal costs are only a small part 
of the overall costs of a land exchange. Other costs include NEPA 
compliance, cadastral survey costs if necessary, hazardous material 
clearances, threatened and endangered species consultation, cultural 
resources clearances and consultation, removal of title encumbrances 
including mining claims, public notice procedures and responding to 
protests and appeals, and adjudication procedures. These total costs 
can exceed $1 million, especially for the larger and more complex land 
exchanges.

    Question 5. You also state that a provision for cost sharing is 
necessary because otherwise the BLM will bear all the administrative 
costs of the exchange. I don't read that in the text of HR 1913, 
though. Does silence in the bill about cost-sharing override current 
policy and guidelines for BLM's exchanges which include cost sharing?
    Answer: Land exchange regulations and BLM policies and procedures 
require the sharing of costs for processing of land exchanges. It may 
not be necessary to include specific language in HR 1913 that requires 
compliance with specific land exchange regulations (43 CFR 2200) and 
cost share provisions. However, to clarify the intent of HR 1913, we 
would recommend that language be included to require that any land 
exchange be processed in accordance with the provisions of existing 
regulations.

    Question 6. I appreciate the Administration's willingness to work 
with the Committee to find a way to complete a buy-out by direct 
purchase. Have you asked the NZ Corporation about whether they would 
prefer a cash payment? Does the Administration support reprogramming to 
cover the cost of a cash buy-out?
    Answer: The BLM has not discussed the option of a direct purchase 
with the NZ Corporation to acquire the mineral interests within the 
Pueblo of Acoma. However, in the past, the BLM has been successful in 
working with the NZ Corporation to acquire NZ mineral interests within 
El Malpais National Monument.
    The Department of the Interior has received and is currently 
reviewing a request by Senator Bingaman for DOI to make a reprogramming 
request to the Appropriations committees of available Land and Water 
Conservation Fund (LWCF) monies for a direct purchase of the NZ 
Corporation's mineral interests. The Department is assessing whether 
the use of LWCF monies is an appropriate means for acquiring the NZ 
Corporation's mineral estate. It should be noted that thdre are over 
150 ofthe 561 recognized tribes that may have similar private mineral 
estate in holdings. For example, in New Mexico, NZ holds 10,610 acres 
of mineral estate in the Pueblo of Laguna, and 55,610 acres of mineral 
estate within the Navajo Reservation. The use of LWCF monies for Acoma 
could therefore set a precedent that may not be in the public interest.

    Question 7. The idea of bidding credits was used to purchase 
private minerals beneath the Mount St. Helens National Volcanic 
Monument in a bill passed by the 105``` Congress. There, the private 
mineral owner was amenable to this mechanism because that company 
actively bids on Gulf of Mexico oil and gas leases where bonus bids are 
often quite large. Am I correct that the bidding credits to be 
proffered in lieu of cash would be transferable - and thus have a 
market value close to their face value?
    Answer: Although the BLM has not discussed the option of bidding 
credits directly with the NZ Corporation to acquire the mineral 
interests within the Pueblo of Acoma, bidding credits are transferable 
and are established at the value of the interests acquired.

    Question 8. Would this exchange, in part, fulfill the trust 
responsibilities of the Secretary of the Interior toward the Pueblo of 
Acoma? If the mineral estate in question were to remain private and NZ 
Corporation decides to exercise their rights to access the subsurface 
to explore them, how would the Secretary react?
    Answer: The land exchange would fulfill in part the trust 
responsibility of the Secretary. The land exchange or transfer is to 
correct an oversight of the Federal Government when it was granting the 
land to the Pueblo of Acoma. The Pueblo considers this land sacred and 
would consider any developmental activity on the property an intrusion. 
Pursuant to the Secretary's mineral leasing and development authority, 
leasing and or development of the subsurface minerals would not occur 
without the Pueblo's involvement.
    If the mineral estate were to remain private, the Department could 
not preclude the NZ Corporation from developing the resource. The 
Department could assist the Tribe in reviewing NZ's proposal to develop 
the resource and ensuring that the plan complied with all pertinent 
environmental and cultural resources laws and regulations.
                                 ______
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.006
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.007
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.008
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.009
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.011
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.012
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.013
                                 
                                 [GRAPHIC] [TIFF OMITTED] T5128.014
                                 
    Mrs. Cubin. So, yes, I also am, with unanimous consent, and I am 
the only one unanimously here, submitting Mr. Kind's testimony for the 
record and questions as well that will be submitted to you for answers 
on this.
    [The prepared statement of Mr. Kind follows:]

Statement of the Honorable Ron Kind, A Representative in Congress from 
                         the State of Wisconsin

    Thank you, Madam Chairwoman. The Subcommittee meets today to 
consider H.R. 1913, a legislative proposal designed to consolidate 
ownership of the surface and subsurface-or the mineral estate of 
approximately 68,000 acres in the Pueblo of Acoma.
    When the United States created the Acoma Indian Reservation, the 
mineral estate had already been deeded to a railroad company, as part 
of this country's Western expansion and construction of the 
transcontinental railroad.
    ``N Z''--the successor to the railroad company and current owner of 
the lands in question-is entitled to develop the mineral estate it 
owns. However, they recognize and appear sensitive to the objections of 
the Acoma people.
    Understandably, the Acoma would prefer to see their Pueblo's 
ancient lands preserved and have objected to NZ's intention to explore 
for and develop mineral deposits within reservation boundaries.
    Both parties have, it would appear, attempted to resolve the 
conflict amicably. And, I commend them both for their efforts. However, 
short of giving up their rights to the minerals, NZ cannot resolve the 
Acoma's concerns.
    And, since the United States started the problem by deeding the 
Acoma's aboriginal land to the railroad, it seems only fair that 
Congresses authorize the proposed exchange.
    In closing, I commend my friend and colleague, Joe Skeen, for his 
efforts on behalf of Native Americans, a campaign which has become a 
hallmark of his tenure here in Congress.
                                 ______
                                 
    Mrs. Cubin. So thank you all very much. I do apologize that 
we have had to cut this short, but we will do the work you have 
called on us to do, and we will work with you to see that your 
land is protected and that it gets off the dime, that something 
starts moving.
    Thank you too, Mr. McCaleb, for your testimony.
    Subcommittee is now adjourned.
    [Whereupon, at 2:57 p.m., the Subcommittee was adjourned.]

                                   -