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[Senate Report 106-511]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 954
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-511

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TO ESTABLISH A STREAMLINED PROCESS TO ENABLE THE NAVAJO NATION TO LEASE 
  TRUST LANDS WITHOUT HAVING TO OBTAIN THE APPROVAL OF THE SECRETARY OF 
  THE INTERIOR OF INDIVIDUAL LEASES, EXCEPT LEASES FOR EXPLORATION, 
  DEVELOPMENT, OR EXTRACTION OF ANY MINERAL RESOURCES

                                _______
                                

   October 31 (legislative day, September 22), 2000.--Ordered to be 
                                printed

                                _______
                                

   Mr. Campbell, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 2665]

    The Committee on Indian Affairs, to which was referred the 
bill S. 2665, to establish a streamlined process to enable the 
Navajo Nation to lease trust lands without having to obtain the 
approval of the Secretary of the Interior of individual leases, 
except leases for exploration, development, or extraction of 
any mineral resources, having considered the same, reports 
favorably thereon with an amendment in the nature of a 
substitute and recommends that the bill as amended, do pass.

                                Purpose

    The purpose of S. 2665 is to expedite the leasing of Navajo 
Nation (Nation) lands by eliminating duplicative and 
overlapping federal and tribal procedures for the leasing of 
Nation lands.

                               Background

    Under present law, the Secretary of Interior may approve a 
lease of lands that are held in trust by the United States for 
the Navajo for a term of up to 99 years.\1\ Like other Indian 
tribes, the Nation has an administrative process for 
determining whether it should approve the leases held in trust 
for its benefit by the United States. Federal law also requires 
the Secretary of Interior to determine that a lease is in the 
best interest of a tribe before approving a lease of trust 
lands. In most instances, the Bureau of Indian Affairs (BIA) is 
responsible for reviewing a proposed lease to make this 
determination. The BIA approves leases of tribal land to ensure 
consistency with Federal law, including the Federal 
government's trust obligation. The process and standards 
employed by the BIA are very similar to the process the Nation 
employs before it approves the lease of lands held in trust for 
its benefit. Because the BIA only needs to approve leases of 
tribal land which are approved by the Nation and submitted for 
Federal approval, the Nation and BIA lease approval processes 
generally run consecutively. This results in serious and often 
needless delays as the applicant for a lease of tribal land 
must obtain seriatim and often identical reviews from two 
different entities.
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    \1\ 25 U.S.C. Sec. 415(a).
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    Under the proposed substitute amendment approved by the 
Committee, the Secretary may approve the Nation's regulations 
for the leases of tribal lands, except for leases involving the 
exploration or development of mineral resources. After the 
Secretary approves these regulations, leases of Nation trust 
lands will no longer require Secretarial approval if they are 
approved by the Nation pursuant to the regulations. Such leases 
may not exceed the time frames specified in the bill.
    The Nation's current regulations include a process for 
reviewing the environmental impact of proposed leases. The 
Nation informs the Committee that the tribal regulations 
submitted for approval to the Secretary will include such 
provisions. Because the BIA's current leasing regulations 
contain requirements for environmental review, the Secretary 
can only approve tribal regulations if they included such a 
requirement. Nevertheless, in its October 2, 2000 letter to 
Chairman Campbell, Assistant Secretary-Indian Affairs Kevin 
Gover requested two amendments to the text of the substitute 
amendment approved by the Committee. Mr. Gover's letter 
requests with respect to the National Environmental Policy Act 
(NEPA) to require a clause to ensure that any regulations 
approved by the Secretary contain an environmental review 
process similar to NEPA. The nature of environmental review 
required for Secretarial approval of the leasing of trust and 
restricted lands has been a subject of controversy since the 
Federal appellate court ruling in 1972, Davis v. Morton, 469 
F.2d 593 (10th Cir. 1972). The 1972 decision has been 
criticized for its result, reasoning, and premises. It has been 
suggested that Congress should review the application of NEPA 
to Indian tribes, especially with respect to the Federal 
government's approval of the lease of land held in trust for 
Indian tribes. For example, one legal scholar points out, 
subordinating the best interest of an Indian tribe in favor of 
national or public interests may constitute a breach of the 
Federal government's trust obligation to Indian tribes.\2\ A 
breach of trust may occur because there is a tension between 
NEPA, a Federal statute that directs agencies to consider the 
broad national interests when making decisions, and the Federal 
government's trust obligation to Indian tribes and their 
members, which is directed at each Indian tribe's objectives, 
whether they are consistent with broad national or public goals 
or not.\3\ Because the Nation does not object to including 
NEPA-based environmental review of its proposed leases, there 
is no need at this time, for the Committee to undertake the 
review suggested.
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    \2\ Royster, Equivocal Obligations: The Federal-Tribal Trust 
Relationship and Conflicts of Interest in the Development of Mineral 
Resources, 71 N.D.L. Rev. 327 (1995).
    \3\ Ibid.
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    The Administration's second requested change in the 
Committee's amendment involves the Federal government's 
liability. The Department proposes striking the text of 
Sec. 415(e)(5)(B), as reported by the Committee. This provision 
in the amendment approved by the Committee is savings provision 
concerning the Federal government's trust obligation. At the 
Nation's request, this provision was included in the introduced 
version of the bill to eliminate any possibility of 
interpreting the bill as altering the Federal government's 
trust obligation to the tribe. Because the Federal government's 
trust obligation exists even where the United States may not 
have any legal liability, there is no need to explicitly state 
that the Federal government's trust obligation is not affected 
by a provision which defines that liability in greater detail. 
Neither the Committee nor the Nation believe that the Federal 
government's trust obligation is affected by whether this 
provision is explicit or not.
    In many respects, the approach taken in the amendment 
approved by the Committee is similar to other recent Federal 
statutes. These statutes include the American Indian Trust Fund 
Management Reform Act, P.L. 103-412 and the American Indian 
Agricultural Resources Management Act, P.L. 103-177. In each of 
these statutes, tribal governments may receive some of the 
Federal government's authority with respect to the management 
of their resources, often with a corresponding reduction in the 
Federal government's liability with respect to tribal decisions 
that are no longer within Federal control. By crafting a 
careful balance on these issues, Congress can eliminate 
burdensome Federal oversight on those Indian tribes that are 
not in need of direct oversight, while leaving this review in 
place for those tribes that do not wish to take such steps.

         Summary of the Amendment in the Nature of a Substitute

Section 1. Short title

    Section 1 cites the short title of the bill as the Navajo 
Nation Trust Land Leasing Act of 2000.

Section 2. Congressional findings and declaration of purposes

    Subsection (a) provides seven Findings that address the 
context for the bill. As these Findings demonstrate, the 
Federal government has assumed the responsibility to review and 
approve the leasing of lands held in trust for Indian tribes. 
In some instances, however, the full exercise of the 
government's authority may be inconsistent with other Federal 
objectives.
    Subsection (b) defines the bill's objectives and purposes. 
These include, the streamlining of the process for approving 
the lease of lands held in trust for the Navajo Nation.

Section 3. Lease of restricted lands for the Navajo Nation

    Section 3 adds six definitions to the Long Term Leasing 
Act, 25 U.S.C. Sec. 415, for the following terms: 
``individually owned Navajo Nation allotted land,'' 
``interested party,'' ``Navajo Nation,'' ``petition,'' 
``Secretary,'' and ``tribal regulations.''
    Section 4 also provision amends the Long Term Leasing Act 
by providing that Secretarial review of a lease is not required 
if the Nation ratifies the lease pursuant to tribal regulations 
approved by the Secretary under Sec. 415(e). The Secretary is 
to approve the Nation's leasing regulations if they are 
consistent with the regulations promulgated by the Department 
pursuant to 25 U.S.C. Sec. 415(a).
    In determining whether the regulations to be promulgated by 
the Navajo Nation meet the requirements of 25 U.S.C. 
Sec. 415(e)(3) the Secretary is to consider the following 
factors to ensure that the Navajo Nation regulations are 
consistent with the BIA's leasing regulations:
          1. The Nation regulations should protect and preserve 
        the Nation's trust assets from loss, damage, unlawful 
        alienation, waste and depletion;
          2. The regulation should promote the interest of the 
        Nation and support the Nation's intended use of the 
        trust asset;
          3. The regulations must provide for the enforcement 
        of all leases or other agreements that provide for the 
        use of trust assets and address a remedy for trespass 
        on tribal trust lands;
          4. The regulations should promote Nation control and 
        self-determination over tribal trust lands and 
        resources;
          5. The regulations should protect and prudently 
        manage Nation trust assets;
          6. The regulations should provide oversight and 
        review of the trust assets, the asset management 
        system, the operational and information system;
          7. The regulations should account for and timely 
        identify, collect, deposit and distribute income from 
        the trust assets to the Nation;
          8. The regulations should provide a verifiable system 
        of records that is capable of identifying:
                  A. The location of the trust asset
                  B. The user of the trust asset;
                  C. The rents or other monies paid to the 
                Nation;
                  D. The value of the trust asset;
                  E. The dates of collection of rental payments 
                and disbursement;
                  F. Any documents pertaining to actions taken 
                to prevent or compensate for any diminishment 
                in value of the trust asset;
                  G. Any documents that evidence actions taken 
                regarding the management and disposition of 
                Nation trust assets.
    Any regulations promulgated by the Nation that address the 
above in a manner consistent with, though not necessarily 
congruent with, 25 CFR Part 162, as amended, shall satisfy the 
requirement that the Nation's regulations be ``consistent 
with'' the BIA leasing regulations
    The Committee has included these factors to demonstrate 
that the Nation's regulations need not be identical to the BIA 
regulations to be consistent with those regulations. Rather, 
the Nation's regulations may be devised to respond to the 
unique and special needs of the Nation.
    Within 120 days, the Secretary is to review the regulations 
submitted by the Nation and issue a decision indicating his 
approval or disapproval. If the Secretary disapproves the 
regulations, this decision is to be accompanied by a written 
explanation of the basis for this decision.
    To assist the Secretary in carrying out his continuing 
responsibilities with respect to the use of tribal lands, the 
amendment approved by the Department requires the Nation to 
provide the Secretary with copies of all approved leases and 
information concerning any direct lease payments.
    With respect to Federal liability, the approved amendment 
also clarifies that the United States is not responsible for 
any losses resulting from a lease approved under the procedures 
authorized by S. 2665. To eliminate any ambiguity with respect 
to the effect of the provision limiting liability, 
Sec. 415(e)(5)(A) and (B) state that the limit on liability 
should be construed to diminish the Secretary's authority to 
protect the rights of the Nation or to absolve the United 
States from its trust obligation to the tribe.
    Under Sec. 415(e)(6), interested parties may petition the 
Secretary to review compliance with the Nation's compliance 
with the regulations approved by the Secretary. The Secretary 
is authorized to take appropriate action to remedy any 
violation. This may include the rescinding of the Secretary's 
approval of the regulations approved under this subsection. 
This would result in the Secretary having to reassume 
responsibility for the approval of land held in trust for the 
Nation. Before seeking to remedy such a violation, the 
Secretary is to provide the Nation with a written determination 
concerning which regulation is alleged to have been violated. 
The Nation is to be given an opportunity to cure the possible 
violation. Also, if the Nation wishes to have a hearing on the 
record, it is to be afforded such an opportunity.

                          Legislative History

    S. 2665 was introduced on May 25, 2000, by Senator Jon Kyl, 
and referred to the Committee on Indian Affairs. At an open 
business meeting on September 27, 2000, Senator Campbell 
proposed an amendment to S. 2665 in the nature of a substitute. 
Senators Pete Domenici and Jeff Bingaman were joined as co-
sponsors of the proposed amendment.

            Committee Recommendation and Tabulation of Vote

    In an open business session on September 27, 2000, the 
Committee on Indian Affairs, by a voice vote, adopted the 
amendment in the nature of a substitute offered by Senator 
Campbell and ordered the bill reported to the Senate, with the 
recommendation that the Senate do pass S. 2665 as reported.

        Section-by-Section Analysis of the Substitute Amendment

    Section 1 of the bill provides a short title.
    Section 2 of the bill provides Findings and Purposes.
    Section 3 of the bill makes the following amendments to 25 
U.S.C. 415, commonly known as the ``Long Term Leasing Act'':
          (1) Definitions for the following terms: 
        ``Individually owned Navajo Indian allotted land,'' 
        interested party,'' ``Navajo Nation,'' ``petition,'' 
        ``Secretary,'' and ``tribal regulations.''
          (2) The Nation is authorized to approve business and 
        agricultural leases for an initial lease period of 25 
        years, with options to renew a lease for up to two 
        additional 25 year periods if the lease is executed 
        pursuant to approved regulations. The tribal 
        regulations may also provide for lease terms of 75 
        years for the following purposes: public, educational, 
        recreational, or residential purposes.
          (3) The Secretary is to review the proposed tribal 
        leasing regulations within 120 days. If they are not 
        approved, the Secretary must explain the basis for that 
        decision in writing.
          (4) The Nation is to provide the Secretary with 
        appropriate documents needed to carry out remaining 
        Federal obligations.
          (5) The United States is not liable for losses to 
        parties to leases approved under the tribal 
        regulations. However, this does not diminish the 
        government's trust obligation.
          (6) Interested parties may submit timely petitions to 
        the Secretary to review the Nation's compliance with 
        the approved regulations. The Secretary may find that a 
        lease was approved in a manner inconsistent with the 
        proposed regulations and take necessary action to 
        remedy the violation. However, the Secretary must first 
        notify the tribe and provide it with an opportunity to 
        address any violation.

                    Cost and Budgetary Consideration

    The cost estimate for S. 2665, as amended, as calculated by 
the Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 2, 2000.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2665, the Navajo 
Nation Trust Land Leasing Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Lanette J. 
Keith (for federal costs), and Marjorie Miller (for the impact 
on state, local, and tribal governments).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 2665--Navajo Nation Trust Land Leasing Act of 2000

    S. 2665 would authorize tribes in the Navajo Nation to 
lease lands in trust for certain purposes. Under current law, 
the tribes must seek the approval of the Secretary of the 
Interior before leasing lands in trust. Based on information 
from the Bureau of Indian Affairs, CBO estimates that 
implementing this legislation would not significantly affect 
the federal budget. Implementing S. 2665 would not affect 
direct spending or receipts, because any income resulting from 
leasing agreements entered into under this legislation would be 
paid directly to the appropriate tribal government. Hence, pay-
as-you-go procedures would not apply to the bill.
    S. 2665 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments. 
Enactment of this legislation would benefit the Navajo Nation 
by streamlining the process of leasing tribal lands.
    The CBO staff contacts for this estimate are Lanette J. 
Keith (for federal costs), and Marjorie Miller (for the impact 
on state, local, and tribal governments). This estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

                      Regulatory Impact Statement

    Paragraph 11(b) of XXVI of the Standing Rules of the Senate 
requires that each report accompanying a bill evaluate the 
regulatory paperwork impact that would be incurred in carrying 
out the bill. The Committee believes that S. 2665 will have de 
minimis regulatory or paperwork impact.

                        Executive Communications

    The Committee has received a letter in support of S. 2665 
from the Department of Interior on October 2, 2000, which 
letter is set forth below:

                        Department of the Interior,
                                   Office of the Secretary,
                                   Washington, DC, October 2, 2000.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Department of the Interior has 
reviewed S. 2665, the ``Navajo Nation Trust Leasing Act,'' as 
amended. We would like to express our views on this 
legislation.
    Staff from the Bureau of Indian Affairs have worked closely 
with the Navajo Nation, the Committee staff and Senator Kyl's 
staff in the development of this amended version of the 
legislation. We appreciate the thoughtful deliberation and 
cooperative effort that went into drafting the language within 
S. 2665.
    The purpose of this legislation is to establish a 
streamlined process for the leasing of certain Navajo Nation 
trust lands and we believe S. 2665 will accomplish this goal. 
Furthermore, this legislation, by authorizing the Navajo Nation 
to lease tribal trust land, pursuant to approved tribal 
regulations, without Secretarial approval, will further the 
Administration's policies supporting Indian self-government and 
economic development. The Department requests the following two 
text changes to S. 2665 as marked out of the Senate Indian 
Affairs Committee September 27, 2000.

          Sec. 3. page 7, line 3, insert ``and provide for an 
        environmental review process'' following ``amendments 
        thereto''.
          Sec. 3. page 7, line 22, strike paragraph (5)(A) and 
        (B) and replace with the following (5) ``the United 
        States shall not be liable for losses sustained by any 
        party to a lease executed pursuant to tribal 
        regulations under paragraph (1), including the Navajo 
        Nation. Nothing in this paragraph shall be construed to 
        diminish the Secretary's authority to take appropriate 
        actions, including canceling a lease, in furtherance of 
        its trust obligations to the Navajo Nation.''

    With the addition of these amendments, we have no objection 
to the legislation, and fully support its passage. In addition, 
the Department requests the accompanying report language to 
Sec. 3. page 7, line 3, to read ``The environmental review 
process established by the Navajo Nation shall be compatible 
with the process established by the National Environmental 
Policy Act.''
    The Office of Management and Budget has advised that there 
is no objection from the standpoint of the Administration's 
program to the presentation of this report.
            Sincerely,
                                               Kevin Gover,
                               Assistant Secretary--Indian Affairs.

                        Changes in Existing Law

    In compliance with subsection 12 of rule XXXVI of the 
Standing Rules of the Senate, the Committee notes the following 
changes in existing law (existing law proposed to be omitted is 
enclosed in black brackets, new matter printed in italic):

                            25 U.S.C. 415(c)

    Leases involving the Hopi Tribe and the Hopi partitioned 
lands accommodation agreement.
    Notwithstanding subsection (a) of this section, a lease of 
land by the Hopi Tribe to Navajo Indians on the Hopi 
Partitioned Lands may be for a term of 75 years, and may be 
extended at the conclusion of the term of the lease.

           *       *       *       *       *       *       *

                            25 U.S.C. 415(d)

                              Definitions

    For purposes of this section--
          (1) the term ``Hopi Partitioned Lands'' means lands 
        located in the Hopi Partitioned Area, as defined in 
        section 168.1(g) of title 25, Code of Federal 
        Regulations (as in effect on October 11, 1996); [and]
          (2) the term ``Navajo Indians'' means members of the 
        Navajo Tribe[.];
          (3) the term ``individually owned Navajo Indian 
        allotted lands'' means Navajo Indian allotted land that 
        is owned by 1 or more individuals located within the 
        Navajo Nation;
          (4) the term ``Navajo Nation'' means the Navajo 
        Nation government that is in existence on the date of 
        enactment of this Act;
          (5) the term ``Secretary'' means the Secretary of the 
        Interior; and
          (6) the term ``tribal regulations'' means the Navajo 
        Nation regulations as enacted by the Navajo Nation 
        Council or its standing committees and approved by the 
        Secretary.

           *       *       *       *       *       *       *

25 U.S.C. 415(e)

           *       *       *       *       *       *       *

          (1) Any leases by the Navajo Nation for purposes 
        authorized under subsection (a), except a lease for the 
        exploration, development, or extraction of any mineral 
        resources, shall not require the approval of the 
        Secretary if the term of the lease does not exceed 75 
        years (including options to renew), and the lease is 
        executed under tribal regulations that are approved by 
        the Secretary under this subsection.
          (2) Paragraph (1) shall not apply to individually 
        owned Navajo Indian allotted land located within the 
        Navajo Nation.
          (3) The Secretary shall have the authority to approve 
        or disapprove tribal regulations required under 
        paragraph (1). The Secretary shall not have approval 
        authority over individual leases of Navajo trust lands, 
        except for the exploration, development, or extraction 
        of any mineral resources. The Secretary shall perform 
        the duties of the Secretary under this subsection in 
        the best interest of the Navajo Nation.
          (4) If the Navajo Nation has executed a lease 
        pursuant to tribal regulations under paragraph (1), the 
        United States shall not be liable for losses sustained 
        by any party to such lease, including the Navajo 
        Nation, except that--
                  (A) the Secretary shall continue to have a 
                trust obligation to ensure that the rights of 
                the Navajo Nation are protected in the event of 
                a violation of the terms of any lease by any 
                other party to such lease, including the right 
                to cancel the lease if requested by the Navajo 
                Nation; and
                  (B) nothing in this subsection shall be 
                construed to absolve the United States from any 
                responsibility to the Navajo Nation, including 
                responsibilities that derive from the trust 
                relationship and from any treaties, Executive 
                Orders, or agreements between the United States 
                and the Navajo Nation, except as otherwise 
                specifically provided in this subsection.

           *       *       *       *       *       *       *

                                  
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