House Report 113-597 - NORTHERN CHEYENNE LANDS ACT

[House Report 113-597]
[From the U.S. Government Publishing Office]

113th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 113-597

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NORTHERN CHEYENNE LANDS ACT

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September 15, 2014.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed

_______

Mr. Hastings of Washington, from the Committee on Natural Resources,
submitted the following

R E P O R T

[To accompany H.R. 4350]

[Including cost estimate of the Congressional Budget Office]

The Committee on Natural Resources, to whom was referred
the bill (H.R. 4350) to direct the Secretary of the Interior to
take lands and mineral rights on the reservation of the
Northern Cheyenne Tribe of Montana and other culturally
important lands into trust, and for other purposes, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Northern Cheyenne Lands Act''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) The Northern Cheyenne Tribe has depended on its lands and
land-based resources to support its way of life since time
immemorial.
(2) The Tribe has made supreme and historic sacrifices to
repossess and maintain its homeland, including its Reservation
in Montana.
(3) The Tribe currently suffers from tremendous social and
economic challenges, including a lack of employment
opportunities on the Reservation, which can be improved by
strengthening its control over its land base, natural
resources, and trust funds.
(4) The Tribe and its members are currently the beneficial
owners of over 95 percent of the surface lands on the Northern
Cheyenne Reservation and all but approximately 5,000 subsurface
acres of the Reservation.
(5) The Tribe seeks to obtain ownership of approximately
5,000 subsurface acres on its Reservation it does not own
because of an error by the United States to secure that
subsurface when the Reservation was expanded in 1900.
(6) In 2002, the Tribe agreed by settlement to dismiss its
lawsuit against the United States, which alleged that the
United States failed to protect the Reservation from the
impacts of coal development, in return for assistance in
securing tribal ownership of those subsurface rights
substantially in the form of this Act, and to secure mitigation
funding to address the impacts of coal development in areas
adjacent to the Reservation, among other conditions.
(7) To increase tribal ownership of the surface lands, the
Tribe has purchased approximately 932 acres of land within its
Reservation that were taken out of trust ownership status for
various reasons.
(8) The Tribe has purchased approximately 635 acres of land
near Bear Butte, South Dakota, which the Tribe considers sacred
ground for its members, as well as for members of other tribes.
(9) The Tribe now seeks to have the aforementioned lands and
subsurface within the Reservation and Bear Butte lands taken
into trust on its behalf by the United States.
(10) If the actions authorized by this Act are completed, the
Tribe will waive all legal claims against the United States
arising out of the longstanding loss of the subsurface rights
and arising out of the United States management of the Northern
Cheyenne Trust Fund.

SEC. 3. DEFINITIONS.

In this Act:
(1) Fund.--The term ``Fund'' means the Northern Cheyenne
Trust Fund identified in the June 7, 1999 Agreement Settling
Certain Issues Relating to the Tongue River Dam Project which
was entered into by the Tribe, the State of Montana, and
delegates of the Secretary of the Interior, and managed by the
Office of Special Trustee in the Department of the Interior.
(2) Great northern properties.--The term ``Great Northern
Properties'' means the Great Northern Properties Limited
Partnership, which is a Delaware limited partnership.
(3) Permanent fund.--The term ``Permanent Fund'' means the
Northern Cheyenne Tribe Permanent Fund managed by the Northern
Cheyenne Tribe pursuant to the Plan for Investment, Management
and Use of the Fund, as amended by vote of the Tribal
membership on November 2, 2010.
(4) Reservation.--The term ``Reservation'' means the Northern
Cheyenne Reservation.
(5) Secretary.--The term ``Secretary'' means the Secretary of
the Interior.
(6) State.--The term ``State'' means the State of Montana.
(7) Tribe.--The term ``Tribe'' means the Northern Cheyenne
Tribe.

SEC. 4. TRIBAL FEE LANDS TO BE TAKEN INTO TRUST.

Not later than 60 days after the date of the enactment of this Act,
the Secretary shall take the approximately 1,568 acres of land depicted
on the map entitled ``Northern Cheyenne Land Act--Fee-to-Trust Lands''
and dated March 26, 2014, and on the map entitled ``Northern Cheyenne
Land Act--Fee-to-Trust Lands--Lame Deer Townsite'', and dated March 26,
2014, into trust for the benefit of the Northern Cheyenne Tribe.

SEC. 5. MINERAL RIGHTS TO BE TAKEN INTO TRUST.

(a) Completion of Mineral Conveyances.--Not later than 60 days after
the date on which the Secretary receives the notification described in
subsection (d), in a single transaction--
(1) Great Northern Properties shall convey to the Tribe all
right, title, and interest of Great Northern Properties,
consisting of coal and iron ore mineral interests, underlying
the land on the Northern Cheyenne Reservation generally
depicted as ``Great Northern Properties'' on the map entitled
``Northern Cheyenne Land Act--Coal Tracts'' and dated February
27, 2014;
(2) the Secretary shall convey to Great Northern Properties
all right, title, and interest of the United States in and to
the coal mineral interests underlying the land generally
depicted as ``Bull Mountains'' and ``East Fork'' on the map
entitled ``Northern Cheyenne Land Act--Coal Tracts'' and dated
February 27, 2014; and
(3) the Secretary shall ensure that the deed for the
conveyance authorized by paragraph (2) shall include a
covenant, running with the land--
(A) that precludes the coal conveyed from being mined
by methods other than underground mining techniques
until any surface owner (as defined in section 714 of
Public Law 95-87 (30 U.S.C. 1304(e))) for any specific
tract has given written consent to Great Northern
Properties to enter such specific tract and commence
surface mining; and
(B) shall not create any property interest in the
United States or any surface owner (as defined in
section 714 of Public Law 95-87 (30 U.S.C. 1304(e))).
(b) Trust Status.--Upon tribal request, the coal and iron ore mineral
interests conveyed to the Tribe under this section shall be held in
trust by the United States for the benefit of the Tribe.
(c) Immunities.--The right, title, and interests conveyed to the
Tribe under subsection (a)(1) shall not be subject to taxation by the
State of Montana (including any political subdivision of the State of
Montana).
(d) Revenue Sharing Agreement.--Consistent with the Settlement
Agreement entered into effective February 19, 2002, by the Montana
State Board of Land Commissioners and the Tribe, the Tribe and Great
Northern Properties have agreed on a formula for sharing revenue from
development of the Northern Cheyenne Federal Tracts in the event that
the Northern Cheyenne Federal Tracts are developed at a later date. The
Tribe shall notify the Secretary in writing that the revenue sharing
agreement remains in effect.
(e) Waiver of Legal Claims.--In return for the conveyances of mineral
interests under subsection (a)--
(1) the Tribe shall waive any and all claims arising from the
continuing failure of the United States to acquire the private
coal and iron ore mineral interests identified in subsection
(a)(1) in trust for the Tribe as part of the Reservation as
directed by Congress in 1900; and
(2) Great Northern Properties shall waive any claim against
the United States relating to the value or completion of the
conveyances under subsection (a).
(f) Rescission of Mineral Conveyances.--If any portion of the mineral
conveyances under subsection (a) is invalidated by a court of competent
jurisdiction and the judgment of that court is not vacated or reversed
on appeal--
(1) not later than 1 year after the date on which there is a
final judgment, the Secretary or Great Northern Properties may
rescind completely each mineral conveyance under subsection
(a); and
(2) if the Secretary or Great Northern Properties carries out
a rescission under paragraph (1), the waiver of the Tribe under
this section shall be considered to be rescinded.

SEC. 6. TRANSFER OF NORTHERN CHEYENNE TRUST FUND TO TRIBE.

(a) Transfer of Fund.--Not later than 30 days after the date of the
enactment of this Act, the Fund shall be transferred to the Tribe and
deposited into the Tribe's Permanent Fund.
(b) Permitted Uses of Fund.--The principal of the Fund, upon deposit
in the Permanent Fund, shall be maintained in perpetuity, and the
earnings of the Permanent Fund shall be used as provided in the
Northern Cheyenne Tribe Permanent Fund Plan.
(c) Waiver of Legal Claims.--In return for transfer of the Fund under
subsection (a), the Tribe shall waive any and all claims arising from
the United States management of the Fund.

SEC. 7. ELIGIBILITY FOR OTHER FEDERAL BENEFITS.

No sums or other benefits provided to the Tribe under this Act shall
result in the reduction or denial of any Federal services, benefits, or
programs to the Tribe or to any member of the Tribe to which the Tribe
or member is entitled or eligible because of--
(1) the status of the Tribe as a federally recognized Indian
tribe; or
(2) the status of the member as a member of the Tribe.

PURPOSE OF THE BILL

The purpose of H.R. 4350 is to direct the Secretary of the
Interior to take lands and mineral rights on the reservation of
the Northern Cheyenne Tribe of Montana and other culturally
important lands into trust.

BACKGROUND AND NEED FOR LEGISLATION

H.R. 4350 authorizes a land exchange to consolidate in
tribal ownership approximately 5,000 acres (or about 8
sections) of private subsurface land within the Northern
Cheyenne Indian Reservation in Montana. The subsurface contains
a significant quantity of saleable coal. The bill also places
two parcels of off-reservation land owned by the Northern
Cheyenne Tribe into trust, waives certain claims of the Tribe
against the United States, and transfers certain funds held by
the United States in trust for the benefit of the Tribe into
the Tribe's Permanent Fund.
The Northern Cheyenne Lands Act is supported by the entire
State of Montana's Board of Land Commissioners, the Montana-
Wyoming Tribal Leader's Council, and the National Congress of
American Indians.
In 1884, an Executive Order reserved lands bordering the
Crow Reservation for the benefit of the Northern Cheyenne
Indians who had returned to their southeastern Montana
homelands after a forced relocation to Oklahoma in 1877. In
1900, pursuant to an Act of Congress and another Executive
Order, the reservation was expanded eastward to the Tongue
River, and an Indian Inspector embarked on a plan to ease
hostilities and tensions between the Tribe's members and non-
Indian settlers and squatters by purchasing all private (mostly
railroad) lands within the Tribe's reservation. The Indian
Inspector, however, missed approximately 8 sections of
subsurface land owned by Northern Pacific Railway. The
subsurface land bears significant coal resources.
Today, a majority of the Tribe's 10,000 members reside on
the reservation, almost all of which is held in trust by the
United States for the benefit of the Tribe except approximately
5,000 acres of subsurface coal. The coal interests in the 5,000
acres of subsurface the government failed to purchase are
currently owned by Great Northern Properties (GNP), a privately
held limited liability partnership that in 1992 acquired a
portion of the former Northern Pacific Railroad land grant
lands in Eastern Montana and Western North Dakota (Letter of
May 21, 2014, submitted for the Subcommittee hearing record on
H.R. 4350, from Charles H. Kerr, President and CEO, Great
Northern Properties Limited Partnership).
The Tribe filed claims against the United States for its
failure to purchase the eight sections of mineral estate owned
by GNP within its reservation. More than 20 years ago, the
Tribe approached GNP with a proposal to acquire the eight
section inholding through a land exchange with the Bureau of
Land Management (BLM). H.R. 4350 authorizes the exchange
negotiated by the Tribe and GNP.
Under H.R. 4350, GNP shall transfer to the Tribe (to be
held in trust by the Secretary of the Interior) its mineral
interests in all eight sections of land in the reservation.
These lands are depicted as ``Great Northern Properties'' on a
map entitled ``Northern Cheyenne Land Act--Coal Tracts'' (note:
due to a drafting error H.R. 4350 as introduced uses an
incorrect map title). The Secretary shall then convey to GNP an
equivalent amount of federal mineral interests (on a ton-for-
ton basis) in tracts of BLM-administered land off the
reservation. Such lands are depicted as ``Bull Mountains'' and
``East Fork'' on the same map.
Under the exchange authorized by H.R. 4350, GNP will
relinquish to the Tribe 117.5 million tons of estimated
saleable coal amenable to surface mining. GNP will receive in
return approximately 112.9 million tons of estimated saleable
coal amenable to a combination of underground and surface
mining methods. Significant tracts transferred to GNP are
speculative for mining development because mining conditions
are challenging and significant amounts of coal are lower
quality than that of the tracts GNP relinquishes to the Tribe.
A detailed technical analysis of the coal and mining conditions
on tracts conveyed to the Tribe and GNP is included in GNP's
May 21, 2014, letter for the record (referenced above).
The land exchange is triggered when the Tribe notifies the
Secretary of the Interior in writing that a revenue sharing
agreement described in Section 5(d) of the bill is in effect.
Under the revenue sharing agreement, which was negotiated by
the Tribe and GNP (consistent with a Settlement Agreement
entered into effective February 19, 2002, by the Montana State
Board of Land Commissioners and the Tribe), the Tribe will
receive a 40 percent royalty from GNP's development of coal on
the federal tracts transferred to GNP. The revenues will assist
the Tribe in mitigating impacts from the mining of coal around
its reservation. Moreover, the revenues will offset a 40
percent royalty BNSF Railroad (or its successors) would receive
from the development of coal in the reservation inholding. Such
a royalty is required pursuant to the 1992 purchase agreement
whereby GNP acquired the eight sections of land in the Northern
Cheyenne Reservation. This royalty is a covenant running with
the land.
H.R. 4350 does not require the Tribe to develop any coal on
its trust lands. Such development remains at the discretion of
the Tribe. A tribal coal lease would undergo the usual review
and approval of the Secretary of the Interior in accordance
with applicable federal Indian mineral leasing laws.
Under the legislation, when the mineral conveyances under
the bill are completed, the Tribe shall waive its claims
related to the government's error committed in 1900 when it
failed to purchase the 5,000 acres of subsurface estate that is
today privately held by a non-Indian entity.
In addition to authorizing mineral conveyances, H.R. 4350
would transfer in trust several parcels of land the tribe
currently owns in fee. The parcels total approximately 1,568
acres and are located within the tribe's reservation, off the
reservation in Big Horn County, Montana, and in Meade County,
South Dakota. The Tribe reports the South Dakota lands are
sacred. These trust conveyances are depicted on maps entitled
``Northern Cheyenne Land Act--Fee-to-Trust Lands'' dated March
26, 2014; ``Northern Cheyenne Land Act--Fee-to-Trust Lands--
Lame Deer Townsite'' dated March 26, 2014.
Finally, H.R. 4350 would transfer to the tribe a trust fund
created under 1999 Agreement settling issues relating to the
Tongue River Dam project. The trust fund is currently held by
the Department of the Interior's Office of the Special Trustee
for American Indians.
In the 112th Congress, a similar bill to consolidate the
Northern Cheyenne Reservation through a land exchange with GNP
and BLM was considered in the Natural Resources Committee. H.R.
1158 (Rehburg) was favorably reported by the Committee by
unanimous consent following a hearing in which the
Administration, the Tribe, and GNP testified. See H. Rept. 112-
299. No further action occurred on the bill.
The Administration supports the goals of H.R. 4350 with
certain modifications to address technical concerns. During
Full Committee markup of the bill, an amendment addressing
technical concerns--correcting a typographical error relating
to the name of a map--was adopted.
The importance of H.R. 4350 to the Northern Cheyenne
Indians cannot be understated. President Llevando ``Cowboy''
Fisher, appearing before the Subcommittee on Indian and Alaska
Native Affairs, testified that the bill ``will improve the
Tribe's ability to self-govern and control its own destiny and
will provide sorely needed economic development opportunities.
I want to stress that the Northern Cheyenne Lands Act is a
Tribal bill.''

COMMITTEE ACTION

H.R. 4350 was introduced on April 1, 2014, by Congressman
Steve Daines (R-MT). The bill was referred to the Committee on
Natural Resources, and within the Committee to the
Subcommittees on Indian and Alaska Native Affairs and Energy
and Mineral Resources. On May 7, 2014, the Subcommittee on
Indian and Alaska Native Affairs held a hearing on the bill. On
May 29, 2014, the Natural Resources Committee met to consider
the bill. The Subcommittees on Indian and Alaska Native Affairs
and Energy and Mineral Resources were discharged by unanimous
consent. Congressman Daines offered an amendment designated
Young #1; the amendment was adopted by voice vote. No further
amendments were offered and the bill, as amended, was then
adopted and ordered favorably reported to the House of
Representatives by voice vote.

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Natural Resources' oversight findings and
recommendations are reflected in the body of this report.

COMPLIANCE WITH HOUSE RULE XIII

1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(2)(B)
of that rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974. Under clause 3(c)(3) of rule
XIII of the Rules of the House of Representatives and section
403 of the Congressional Budget Act of 1974, the Committee has
received the following cost estimate for this bill from the
Director of the Congressional Budget Office:

H.R. 4350--Northern Cheyenne Lands Act

Summary: H.R. 4350 would require the Bureau of Land
Management (BLM) to convey 9,400 acres of land containing coal
deposits to Great Northern Properties, a private company, if
the company conveys certain mineral rights to the Northern
Cheyenne Tribe. The land conveyances would not be finalized
unless the tribe waived all claims related to the failure of
the United States to acquire certain mineral rights underlying
the tribe's reservation land.
Based on information provided by BLM, the tribe, and firms
operating in the coal industry, CBO estimates that enacting the
legislation would reduce net offsetting receipts (thus
increasing direct spending) by $2 million in 2024; therefore,
pay-as-you-go procedures apply. Enacting the bill would not
affect revenues and would have no significant impact on
discretionary spending.
H.R. 4350 would preempt the authority of state and local
governments to tax land and mineral interests conveyed to the
Northern Cheyenne Tribe of Montana. Those requirements would be
mandates as defined in the Unfunded Mandates Reform Act (UMRA),
but CBO estimates that the costs of the mandates would be
minimal. The bill contains no private-sector mandates as
defined in UMRA.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 4350 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment).

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By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024
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CHANGES IN DIRECT SPENDING

Estimated Budget Authority................................. 0 0 0 0 0 0 0 0 0 2 0 2
Estimated Outlays.......................................... 0 0 0 0 0 0 0 0 0 2 0 2
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Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted near the end of fiscal year 2014.

Forgone receipts from bonus bids

H.R. 4350 would require BLM to convey 9,400 acres of
federal land containing coal deposits to Great Northern
Properties.
Based on information provided by BLM and firms operating in
the coal industry, CBO estimates that the affected lands
contain 113 million tons of coal. CBO expects that, under
current law, the federal government will lease lands containing
up to 90 percent of that coal as early as 2024. Based on
information regarding recent bonus bids paid for federal lands
in western states containing coal, CBO expects that firms would
pay between 30 and 40 cents per ton to lease the affected land,
and we estimate that the bonus bids for those leases would
total about $18 million. Because firms generally pay bonus bids
on coal leases in five equal installments over a five-year
period, CBO estimates that gross proceeds from bonus bids
(before making payments to states) would be about $3 million in
2024. CBO also estimates that conveying the affected lands
would not affect offsetting receipts from royalties because any
production on those lands will not occur until after 2024 under
current law.
Because BLM would distribute 49 percent of those proceeds
to the state of Montana and CBO expects that the federal
government would receive payment for those leases in equal
installments over five years beginning in 2024, we estimate
that enacting the bill would reduce net offsetting receipts by
$2 million in 2024. That estimate reflects the expected value
of offsetting receipts taking into account various scenarios
regarding the quantity and value of the coal deposits and the
timing of lease sales.

Waiver of claims

The Northern Cheyenne Tribe asserts claims against the
federal government because the government did not acquire
mineral rights on lands that were added to the reservation in
1900. Under the bill, the tribe would waive those claims. CBO
expects that any litigation related to the claims would not be
completed or settled within the next 10 years. Therefore, we
estimate that the waiver of those claims would not affect
direct spending during the next decade.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. H.R. 4350 would reduce the amount of offsetting
receipts that would be deposited in the Treasury from certain
coal leases; therefore, pay-as-you-go procedures apply. The net
changes in outlays that are subject to those pay-as-you-go
procedures are shown in the following table.

CBO ESTIMATE OF PAY-AS-YOU GO EFFECTS FOR H.R. 4350, THE NORTHERN CHEYENNE LANDS ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATURAL RESOURCES ON
MAY 29, 2014
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By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-2019 2014-2024
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NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 0 0 0 0 0 0 0 0 0 2 0 2
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Intergovernmental and private-sector impact: H.R. 4350
would preempt the authority of state and local governments to
tax land and mineral interests conveyed to the Northern
Cheyenne Tribe of Montana. Those requirements would be mandates
as defined in UMRA, but CBO estimates that the costs of the
mandates would be minimal. The bill would benefit the Northern
Cheyenne Tribe of Montana. The bill contains no private-sector
mandates as defined in UMRA.
Estimate prepared by: Federal costs: Jeff LaFave and Martin
von Gnechten; Impact on state, local, and tribal governments:
Jon Sperl; Impact on the private sector: Amy Petz.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
2. Section 308(a) of Congressional Budget Act. As required
by clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives and section 308(a) of the Congressional Budget
Act of 1974, this bill does not contain any new budget
authority, spending authority, credit authority, or an increase
or decrease in revenues or tax expenditures. Based on
information provided by the Bureau of Land Management, the
tribe, and firms operating in the coal industry, CBO estimates
that enacting the legislation would reduce net offsetting
receipts (thus increasing direct spending) by $2 million in
2024.
3. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goal or
objective of this bill is to direct the Secretary of the
Interior to take lands and mineral rights on the reservation of
the Northern Cheyenne Tribe of Montana and other culturally
important lands into trust.

EARMARK STATEMENT

This bill does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of
the House of Representatives.

COMPLIANCE WITH PUBLIC LAW 104-4

This bill contains no unfunded mandates.

COMPLIANCE WITH H. RES. 5

Directed Rule Making. The Chairman does not believe that
this bill directs any executive branch official to conduct any
specific rule-making proceedings.
Duplication of Existing Programs. This bill does not
establish or reauthorize a program of the federal government
known to be duplicative of another program. Such program was
not included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-139
or identified in the most recent Catalog of Federal Domestic
Assistance published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169) as relating to other programs.

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or
tribal law.

CHANGES IN EXISTING LAW

If enacted, this bill would make no changes in existing
law.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]