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[House Report 112-299]
[From the U.S. Government Publishing Office]

112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    112-299

======================================================================

 
                     MONTANA MINERAL CONVEYANCE ACT

                                _______
                                

December 1, 2011.--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

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1158]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Natural Resources, to whom was referred the 
bill (H.R. 1158) to authorize the conveyance of mineral rights 
by the Secretary of the Interior in the State of Montana, 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 ``Montana Mineral Conveyance Act''.

SEC. 2. FINDINGS.

  Congress finds that--
          (1) under section 503(a)(2) of the Department of the Interior 
        and Related Agencies Appropriations Act, 1998 (Public Law 105-
        83; 111 Stat. 1617), the Secretary of the Interior has conveyed 
        mineral rights in certain very large tracts of coal to the 
        State of Montana, the tracts of which lie as near as 3 or 4 
        miles east of the Northern Cheyenne Indian Reservation;
          (2) development of the coal tracts and other existing and 
        proposed major developments of Federal, State, and private 
        energy resources in areas surrounding the Northern Cheyenne 
        Indian Reservation yield substantial public revenues to the 
        State (including political subdivisions of the State), thereby 
        assisting the State (including political subdivisions of the 
        State) in addressing the impacts of the development;
          (3) although the Northern Cheyenne tribal community 
        chronically suffers harsh economic conditions and severe 
        deficits in public services and facilities, the community does 
        not share in any significant portion of the public revenues 
        generated by surrounding energy development;
          (4) the Northern Cheyenne Tribe has few, if any, sources of 
        revenue available to address development impacts;
          (5) in 2002, the Tribe brought suit against the Secretary, 
        asserting that the proposed conveyances of the extensive 
        Federal coal tracts to the State under the Department of the 
        Interior and Related Agencies Appropriations Act, 1998 (Public 
        Law 105-83; 111 Stat. 1543) would violate--
                  (A) several Federal laws (including regulations); and
                  (B) the Federal trust responsibility to the Tribe;
          (6) subsequently, the Tribe withdrew the suit described in 
        paragraph (5) with prejudice, based in substantial part on 
        commitments that legislation substantially in the form of this 
        Act (and further legislation providing funding to the Tribe to 
        address the impacts of coal development in areas adjoining the 
        Reservation) would be introduced and pursued with support from 
        the State, Great Northern Properties, and others;
          (7) the Tribe asserts that the Tribe retains claims against 
        the United States arising from the failure of the United States 
        to acquire mineral rights underlying approximately 5,000 acres 
        of Reservation land when the Reservation, at the direction of 
        Congress, was expanded eastward to the Tongue River in 1900, 
        the mineral rights of which, as of the date of enactment of 
        this Act, are owned by Great Northern Properties; and
          (8) if the conveyances of mineral rights are carried out 
        under this Act, the Tribe will waive all legal claims against 
        the United States arising from the longstanding and continuing 
        loss of the Tribe of mineral rights relating to the Reservation 
        land.

SEC. 3. DEFINITIONS.

  In this Act:
          (1) Cheyenne tracts.--The term ``Cheyenne tracts'' means the 
        aggregate tract of land that--
                  (A) is located in the eastern portion of the State 
                within the boundaries of the Reservation;
                  (B) comprises approximately 5,000 acres;
                  (C) is generally depicted on the map entitled 
                ``Cheyenne Coal Land Conveyance'' and dated April 7, 
                2010; and
                  (D) is comprised of land located in--
                          (i) T. 2 S., R. 44 E., sec. 17;
                          (ii) T. 2 S., R. 44 E., sec. 19, E\1/2\ and 
                        E\1/2\W\1/2\, Lots 1-4;
                          (iii) T. 3 S., R. 44 E., sec. 5, S\1/2\ and 
                        S\1/2\N\1/2\, Lots 1-4;
                          (iv) T. 3 S., R. 44 E., sec. 7, E \1/2\ and 
                        E\1/2\W\1/2\, Lots 1-4;
                          (v) T. 3 S., R. 44 E., sec. 9, N\1/2\, SW\1/
                        4\, and W\1/2\SE\1/4\, Lots 2-4;
                          (vi) T. 3 S., R. 44 E., sec. 17;
                          (vii) T. 3 S., R. 44 E., sec. 19, E\1/2\ and 
                        E\1/2\W\1/2\, Lots 1-4; and
                          (viii) T. 3 S., R. 44 E., sec. 21, N\1/2\, 
                        SW\1/4\, and SW\1/4\ SE\1/4\, Lots 1 and 2.
          (2) Federal tracts.--The term ``Federal tracts'' means the 
        unleased tracts of land that--
                  (A) are located in the State;
                  (B) are located outside of the boundaries of the 
                Reservation;
                  (C) consist of approximately 5,000 acres;
                  (D) are generally depicted on the map entitled 
                ``Federal Coal Land Conveyance'' and dated March 18, 
                2011; and
                  (E) are comprised of land located in--
                          (i) T. 3 S., R. 44 E., sec. 26, S\1/2\;
                          (ii) T. 3 S., R. 44 E., sec. 34;
                          (iii) T. 3 S., R. 45 E., sec. 30, E\1/2\SW\1/
                        4\ and SE\1/4\, Lots 1-4;
                          (iv) T. 4 S., R. 44 E., sec. 2, S\1/2\N\1/2\ 
                        and S\1/2\, Lots 1-4;
                          (v) T. 6 N., R. 27 E., sec. 4, S\1/2\N\1/2\ 
                        and S\1/2\, Lots 1-4;
                          (vi) T. 6 N., R. 27 E., sec. 8;
                          (vii) T. 6 N., R. 27 E., sec. 10;
                          (viii) T. 6 N., R. 27 E., sec. 14; and
                          (ix) T. 6 N., R. 27 E., sec. 22.
          (3) Great northern properties.--The term ``Great Northern 
        Properties'' means--
                  (A) the Great Northern Properties Limited 
                Partnership, which is a Delaware limited partnership; 
                and
                  (B) any successor to the ownership interest of Great 
                Northern Properties in any coal or iron that underlies 
                the Cheyenne tracts.
          (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. MINERAL RIGHTS CONVEYANCES.

  (a) In General.--Notwithstanding any other Federal law (including 
regulations) that otherwise applies to the conveyance of any Federal 
coal right, title, or interest, if Great Northern Properties conveys to 
the Tribe all mineral interests of Great Northern Properties underlying 
the Cheyenne tracts in accordance with this Act, the Secretary shall 
convey to Great Northern Properties all right, title, and interest of 
the United States in and to the coal underlying the Federal tracts.
  (b) Immunities.--The mineral interests underlying the Cheyenne tracts 
conveyed to the Tribe under subsection (a) shall not be subject to 
taxation by the State (including any political subdivision of the 
State).

SEC. 5. TERMS AND CONDITIONS OF MINERAL CONVEYANCES.

  (a) Waiver of Legal Claims.--In return for the mineral conveyances 
under section 4(a), the Tribe shall waive any and all claims arising 
from the continuing failure of the United States to acquire in trust 
for the Tribe as part of the Reservation the mineral rights underlying 
approximately 5,000 acres of Reservation land (the Cheyenne Tracts) as 
directed by Congress in 1900.
  (b) Condition.--As a condition of the mineral conveyances by the 
Secretary under section 4(a), the Tribe and Great Northern Properties 
shall jointly notify the Secretary in writing that the Tribe and Great 
Northern Properties have agreed on a formula for the sharing of revenue 
from coal produced from any portion of the Federal tracts.
  (c) Completion of Mineral Conveyances.--Notwithstanding any other 
Federal law (including regulations) that otherwise applies to the 
conveyance of any Federal coal right, title, or interest, after 
satisfaction of the condition described in subsection (b) and not later 
than 90 days after the date on which the Secretary receives written 
notification under subsection (b), the mineral conveyances under 
section 4(a) shall be completed in a single transaction.
  (d) Rescission of Mineral Conveyances.--
          (1) In general.--If any portion of the mineral conveyances 
        under section 4(a) is invalidated by a Federal district court, 
        and the judgment of the Federal district court is not vacated 
        or reversed on appeal, the Secretary or Great Northern 
        Properties may rescind completely each mineral conveyance under 
        section 4(a).
          (2) Effect.--If the Secretary or Great Northern Properties 
        carries out a rescission under paragraph (1), the waiver of the 
        Tribe under subsection (a) shall be considered to be rescinded.

SEC. 6. ELIGIBILITY FOR OTHER FEDERAL BENEFITS.

  No 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. 1158, as ordered reported, is to 
authorize the conveyance of mineral rights by the Secretary of 
the Interior in the State of Montana.

                  BACKGROUND AND NEED FOR LEGISLATION

    In 1900, President William McKinley and Congress expanded 
the Northern Cheyenne Reservation, located in the State of 
Montana. At the time, the federal government purchased the 
eight sections of land from the Northern Pacific Railway 
Company within the Northern Cheyenne Reservation extension 
area, but failed to also buy the railway company's underlying 
subsurface rights. Those eight tracts of subsurface land (5,120 
acres) are now owned by Great Northern Properties (GNP) and are 
the only subsurface tracts not held in trust for the Tribe by 
the United States. Securing into tribal ownership those eight 
sections of land has been a priority of the Northern Cheyenne 
Tribe for decades, and H.R. 1158 would finally accomplish that 
goal.
    If enacted, this bill would fulfill an obligation by the U. 
S. Government to correct an error that has gone on for 111 
years. The enactment would consolidate the ownership of mineral 
estate on the Northern Cheyenne Reservation, allowing the Tribe 
to control the development of its resources at its discretion.
    H.R. 1158 would provide for a land exchange; in return the 
Northern Cheyenne Reservation would waive its legal claims 
relating to the failure of the United States to acquire 
subsurface mineral rights on the Tribe's reservation for the 
Tribe. Under the exchange, the Secretary of the Interior would 
transfer to GNP the subsurface ownership rights to eight 
sections of federal coal tracts. These federal coal tracts are 
located several miles from the Northern Cheyenne Tribe. GNP 
would transfer to the Northern Cheyenne Tribe ownership of the 
eight sections of surface rights that GNP owns on the Tribe's 
Reservation.
    In addition to the transferring of the lands, the bill 
would require the Northern Cheyenne Tribe to waive each legal 
claim relating to the failure of the United States to acquire 
in trust for the Tribe the private mineral interests underlying 
the Cheyenne Reservation. Additionally, GNP and the Tribe would 
jointly notify the Secretary of the Interior when they agree on 
a revenue sharing formula from the coal produced from the 
federal tracts. As it currently stands, the Tribe would receive 
40% interest in GNP's royalties.

                            COMMITTEE ACTION

    H.R. 1158 was introduced on March 17, 2011, by Congressman 
Denny Rehberg (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 June 22, 2011, the Subcommittee on 
Indian and Alaska Native Affairs held a hearing on the bill. On 
July 20, 2011, the Full 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 Don Young (R-AK) offered an amendment; the 
amendment was adopted by unanimous consent. The bill, as 
amended, was ordered favorably reported to the House of 
Representatives by unanimous consent.

            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. 1158--Montana Mineral Conveyance Act

    Summary: H.R. 1158 would require the Bureau of Land 
Management (BLM) to convey 5,000 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 
reservation land.
    Based on information provided by BLM, the tribe, and firms 
operating in the coal industry, CBO estimates that implementing 
the legislation would reduce net offsetting receipts (thus 
increasing direct spending) by $17 million over the 2012-2021 
period; 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. 1158 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1158 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--
                                                             -------------------------------------------------------------------------------------------
                                                               2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2011-2016  2011-2021
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                                                               CHANGES IN DIRECT SPENDING

Forgone Receipts from Bonus Bids:
    Estimated Budget Authority..............................      1      3      0      0      0      0      0      0      0      0         4          4
    Estimated Outlays.......................................      1      3      0      0      0      0      0      0      0      0         4          4
Forgone Receipts from Royalties:
    Estimated Budget Authority..............................      0      0      0      1      2      3      3      4      1      0         3         13
    Estimated Outlays.......................................      0      0      0      1      2      3      3      4      1      0         3         13
    Total Changes:
        Estimated Budget Authority..........................      1      3      0      1      2      3      3      4      1      0         7         17
        Estimated Outlays...................................      1      3      0      1      2      3      3      4      1      0         7        17
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Note:  Components may not sum to totals because of rounding.

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted near the end of fiscal year 2011.
    H.R. 1158 would authorize BLM to convey eight tracts of 
federal land totaling 5,000 acres and containing coal deposits 
to Great Northern Properties. Five of those tracts are located 
in the Bull Mountains area, and three of those tracts are 
located in the Bridge Creek area. Based on information from BLM 
and the coal industry, CBO estimates that conveying those 
tracts would reduce gross offsetting receipts by $33 million 
over the 2012-2021 period because those properties would have 
otherwise been leased to the highest bidder for coal 
production. Because the federal government distributes 50 
percent of receipts from coal mining activities to the state 
where those activities occur, we estimate that enacting the 
bill would reduce net offsetting receipts by $17 million over 
the 2012-2021 period.

Bull Mountains tracts

    In April 2011, BLM issued a decision to lease the five 
tracts of federal land in the Bull Mountains area that would be 
conveyed to Great Northern Properties under the bill. Based on 
information from the agency, CBO expects that, under current 
law, BLM will conduct the lease sale early in fiscal year 2012 
and that the company awarded the tracts will pay the full bonus 
bid within two years. We also expect that production--from 
underground mining--and receipts from associated royalty 
payments will begin within three years of the lease sale based 
on information from firms operating in the coal industry.
    Forgone Receipts from Bonus Bids. Based on information from 
BLM and firms operating in the coal industry, CBO estimates 
that the Bull Mountains tracts contain about 35 million tons of 
recoverable coal. Under current law, we estimate that gross 
bonus bid payments for leasing those tracts will total about $7 
million (between 10 and 30 cents per ton). The bonus bid will 
probably be paid in two installments, an initial payment of 20 
percent of the total amount and a subsequent payment of the 
remaining 80 percent of that amount. Because half of the total 
bonus bid receipts will be paid to Montana, the net amount of 
offsetting receipts deposited in the Treasury from the bonus 
bid will total roughly $4 million over the 2012-2013 period 
under current law.
    Forgone Receipts from Royalties. Based on information from 
firms operating in the coal industry, CBO expects that coal 
production from the Bull Mountains tracts will begin in 2015 
and total about 14 million tons over the 2015-2021 period. 
Estimated annual production and royalty receipts (equal to 8 
percent of the annual production) vary from year-to-year 
because the federal tracts are not contiguous and production 
will alternate between federal lands and private lands over 
that period. In total, CBO estimates that gross royalty 
receipts from coal production within the Bull Mountains tracts 
will total about $26 million over the 2015-2021 period under 
current law. Of that amount, $13 million will be paid to 
Montana and $13 million will be deposited in the Treasury as 
offsetting receipts.

Bridge Creek tracts

    H.R. 1158 would direct BLM to convey three tracts of 
federal land in the Bridge Creek area of Montana to Great 
Northern Properties. Based on information from BLM and firms 
operating in the coal industry, CBO expects that, under current 
law, those tracts would not be leased within the next 10 years 
and would not generate any receipts for the federal government 
over that period. Thus, we estimate that conveying the Bridge 
Creek tracts to Great Northern Properties would not affect 
direct spending over the 2012-2021 period.

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. 
Because the tribe has not filed a lawsuit related to 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. 1158 would reduce the amount of offsetting 
receipts that would be deposited in the Treasury from certain 
coal leases and related royalty payments; 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. 1158, THE MONTANA MINERAL CONVEYANCE ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON NATURAL RESOURCES
                                                                    ON JULY 20, 2011
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                                                                                   By fiscal year, in millions of dollars--
                                                     ---------------------------------------------------------------------------------------------------
                                                       2011   2012   2013   2014   2015   2016   2017   2018   2019   2020   2021   2011-2016  2011-2021
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                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact......................      0      1      3      0      1      2      3      3      4      1       0         7         17
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    Intergovernmental and private-sector impact: H.R. 1158 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Jeff LaFave; Impact on 
state, local, and tribal governments: Melissa Merrell; 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, 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 implementing the 
legislation would reduce net offsetting receipts (thus 
increasing direct spending) by $17 million over the 2012-2021 
period; therefore, pay-as-you-go procedures apply. Enacting the 
bill would not affect revenues and would have no significant 
impact on discretionary spending.
    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, as ordered reported, is to authorize 
the conveyance of mineral rights by the Secretary of the 
Interior in the State of Montana.

                           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.

                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.

               ADDITIONAL VIEWS OF HON. EDWARD J. MARKEY

    H.R. 1158 would restore complete ownership to the Northern 
Cheyenne Tribe of the surface and subsurface mineral estate 
within its Reservation borders. The Tribe was deprived of such 
ownership due to federal error for over 100 years. The bill as 
written would address this error by affecting a three way trade 
of mineral rights between the Tribe, the United States and 
Great Northern Properties, a privately held corporation.
    While we support the aim of this legislation and the 
proposed trade as a means of achieving that aim, we have 
noteworthy concerns relating to key provisions of the bill. 
Majority and Minority Committee staffs continue to seek common 
ground on the following issues:
    Waiver of Liability. H.R. 1158 requires the Northern 
Cheyenne Tribe to waive legal claims related to the failure of 
the United States to acquire in trust for the Tribe the 
subsurface mineral estate on specific tracts located on the 
reservation. The Administration testified at a hearing on the 
bill that this waiver should be in the text of the bill. The 
Administration also recommended that Great Northern Properties 
(GNP) waive its potential claims against the U.S.
    Language in Section 4(a) and 5(c) of the bill. H.R. 1158 
requires the conveyance be carried out ``notwithstanding any 
other federal law (including regulations).'' The Administration 
is concerned that the language is overly broad and as a result 
could affect a waiver of the National Environment Protection 
Act (NEPA).
    Language that requires the conveyance to be carried out 
within 90 days. The bill requires the three way trade between 
the parties to be completed within 90 days of the Secretary 
receiving a revenue-sharing agreement between GNP and the 
Tribe.\1\ The Administration is concerned not only that 90 days 
is not enough time to conduct its own internal processes, such 
as tribal consultation on sacred sites, but also that such a 
time period is too restrictive in light of pending litigation 
involving Signal Peak Energy, the current operators of an 
underground mine adjacent to one of the GNP-selected areas of 
federal land called Bull Mountains. Signal Peak Energy 
initiated a ``lease by application'' (LBA) process for the Bull 
Mountains area, which opened it up to competitive bidding from 
other entities. However, the Bureau of Land Management (BLM) 
has not awarded the lease to any entity as the LBA process is 
being challenged in federal court by various environmental 
groups. The bill would remove the possibility of any other 
entity from receiving a coal lease as a result of the LBA 
process because it would require conveyance of the Bull 
Mountains coal estate directly to GNP.
---------------------------------------------------------------------------
    \1\ The bill would also authorize a revenue sharing agreement 
between GNP and the Tribe under which GNP will pay the Tribe a 
percentage of the revenues it receives from the development of coal 
located on the federal tracts. It is anticipated that the federal 
tracts will produce revenue for the Tribe in the near and long term.
---------------------------------------------------------------------------
    Accordingly, the Administration is concerned that the bill 
would not only thwart pending litigation but also provide an 
unfair advantage to Signal Peak Energy since it has already 
worked out an agreement with GNP for lease of the Bull 
Mountains area to continue its current underground mining 
operations.
    Potential Budgetary Impacts. Testimony received from the 
Administration indicated that there could be pending coal 
leases on some of the tracts involved. Transferring those 
parcels out of federal ownership could have budgetary impacts. 
Another concern is that such a conveyance would prevent the 
government from receiving a ``bonus payment'' per its 
regulations governing the LBA process.
    Lack of appraisal language. The bill does not require an 
appraisal of the GNP-selected federal lands and simply affects 
an acre-for-acre exchange of federal land for the Reservation 
tracts. The Administration estimated that the federal coal 
rights that the bill would require BLM convey to GNP may 
contain, based on preliminary estimates, ``nearly twice as much 
coal'' as the subsurface tracts on the Tribe's Reservation. As 
a result, BLM is concerned that the bill favors GNP over tribal 
interests. Moreover, for a subsurface mineral estate exchange, 
the Administration also noted that appraisals are a matter of 
course so any bill that would bypass this requirement would set 
a negative precedent.

                                                  Edward J. Markey.

                                  
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