79–010 

Calendar No. 532 

115TH CONGRESS REPORT " ! SENATE 2d Session 115–318 

SAN JUAN COUNTY SETTLEMENT IMPLEMENTATION ACT 

AUGUST 15, 2018.—Ordered to be printed 

Ms. MURKOWSKI, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

[To accompany S. 436] 

The Committee on Energy and Natural Resources, to which was 

referred the bill (S. 436) to authorize the Secretary of the Interior 

to retire coal preference right lease applications for which the Secretary has made an affirmative commercial quantities determination, to substitute certain land selections of the Navajo Nation, to 

designate certain wilderness areas, and for other purposes, having 

considered the same, reports favorably thereon with amendments 

and recommends that the bill, as amended, do pass. 

AMENDMENTS

The amendments are as follows: On page 5, strike line 1 and insert the following: 

(f) DEADLINE.— 

(1) IN GENERAL.—If an existing settlement of coal 

On page 5, between lines 6 and 7, insert the following: 

(2) DATE OF VALUATION.—For purposes of the valuation process under paragraph (1), the market price of 

coal shall be determined as of the date of the settlement. 

On page 6, between lines 21 and 22, insert the following: 

(D) Land identified as ‘‘Parcels Excluded from 

Selection’’ on the map entitled ‘‘Parcels excluded 

for selection under the San Juan County Settlement Implementation Act’’ and dated May 11, 

2018. 

On page 13, after line 10, add the following: 

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SEC. 6. MAINTENANCE OF ROAD. 

The Secretary of the Interior, acting through the Director of the Bureau of Indian Affairs, shall ensure that BIA 

Route 54 between I–40 and Alamo, New Mexico, is maintained in a condition that is safe for motorized use. 

PURPOSE

The purpose of S. 436 is to authorize the Secretary of the Interior 

(Secretary) to retire coal preference right lease applications for 

which the Secretary has made an affirmative commercial quantities determination, to substitute certain land selections of the 

Navajo Nation, and to designate certain wilderness areas. 

BACKGROUND AND NEED

S. 436 seeks to resolve a decades-old Department of the Interior 

(DOI) statutory obligation to the Navajo Nation stemming from 

provisions of the 1974 Navajo and Hopi Settlement Act (Public Law 

93–531). This Act resolved a boundary dispute between the Navajo 

Nation and the Hopi Tribe. In the settlement, the Navajo Nation 

ceded acreage from its reservation to the Hopi Tribe, and many 

Navajo citizens were relocated. In return, the Navajo Nation was 

allowed to select comparable acreage of Federal lands to be taken 

into trust for the Navajo Nation. 

By the early 1980s, the Navajo Nation selected the Federal lands 

it wanted to be taken into trust. However, some of the parcels selected in San Juan County, New Mexico, were encumbered by preference right lease applications (PRLAs). Under preference right 

leasing, established in the Minerals Leasing Act (30 U.S.C. 181 et 

seq.), the holder of the preference right can apply for an explorative 

or prospecting permit to determine if mineral resources are present 

at a public lands site. If the explorative activities are successful, 

the permittee can then exercise their ‘‘preference’’—the first right 

to lease those mineral resources for commercial production. 

In the years after the Navajo Nation made its selections, Congress and the Bureau of Land Management (BLM) have subjected 

the parcels to conservation designations such as the Fossil Forest 

Resource Natural Area (Public Law 98–603), the Ah-shi-sle-pah 

Wilderness Study Area, and the Ah-shi-sle-pah Road Area of Critical Environmental Concern. 

After decades of litigation, BLM, Arch Coal (the holder of outstanding preference rights), and the Navajo Nation negotiated a 

settlement to resolve the PRLAs. S. 436 would implement the settlement, designate the Ah-shi-sle-pah Wilderness Study Area as 

wilderness, and add wilderness-quality lands to the existing Bisti/ 

De-Na-Zin Wilderness. 

LEGISLATIVE HISTORY

S. 436 was introduced by Senator Heinrich on February 16, 2017. 

The Subcommittee on Public Lands, Forests and Mining held a 

hearing on the bill on July 26, 2017. 

Similar legislation, H.R. 2402, was introduced by Representative 

Lujan in the House of Representatives on May 8, 2017. The Natural Resources Committee’s Subcommittee on Indian, Insular, and 

Alaska Native Affairs held a hearing on H.R. 2402 on October 4, 

2017. 

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In the 114th Congress, similar legislation, S. 2681, was introduced by Senator Heinrich on March 15, 2016. The Energy and 

Natural Resources Committee held a hearing on S. 2681 on September 22, 2016. 

The Committee on Energy and Natural Resources met in open 

business session on May 17, 2018, and ordered S. 436 favorably reported as amended. 

COMMITTEE RECOMMENDATION

The Senate Committee on Energy and Natural Resources, in 

open business session on May 17, 2018, by a majority voice vote of 

a quorum present recommends that the Senate pass S. 436, if 

amended as described herein. Senator Lee asked to be recorded as 

voting no. 

COMMITTEE AMENDMENTS

During its consideration of S. 436, the Committee adopted four 

joint staff amendments. The amendments added a new paragraph 

(2) to section (2)(f) to clarify the date for a market price determination and to make a corresponding technical fix. The amendments 

also added a new subparagraph (D) to section (3)(b)(3) to augment 

the list of excluded lands not available for selection and added a 

new section 6 to govern road maintenance. These amendments are 

further described in the section-by-section analysis. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

Section 1 contains the short title. 

Section 2. Exchange of coal Preference Right Lease Applications 

Subsection (a) contains definitions. 

Subsection (b) authorizes the Secretary to retire a coal PRLA 

under the Mineral Leasing Act (MLA, 30 U.S.C. 181 et seq.) by 

issuing a bidding right in exchange for the application’s relinquishment. The bidding right may then be used in lieu of 50 percent of 

the amount owed for monetary payment of a bonus in a coal lease 

sale, or rental or royalty under a Federal coal lease. This subsection further requires the Secretary to calculate a payment of 

amounts owed to a relevant State under section 35(a) of the MLA 

based on the combined value of the bidding rights and the amount 

received; only a bidding right shall be considered amounts received. 

Subsection (c) directs the Secretary to make payments to a relevant State from the monetary payments received by the Secretary 

when bidding rights are exercised under this Act. 

Subsection (d) specifies that payments to a State under this section are to be treated as a payment under section 35(a) of the MLA. 

Subsection (e) authorizes the transfer of a bidding right issued 

for a coal PRLA, and requires the transferor to notify the Secretary 

of such transfer. This subsection further terminates a bidding right 

seven years from issuance but tolls the effective period during any 

time in which exercise of the bidding right is precluded. 

Subsection (f) requires the Secretary to complete the bidding 

rights valuation process no later than 180 days after the Act’s enactment if an existing settlement of a coal PRLA has not yet been 

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implemented. This subsection further clarifies that the market 

price of coal shall be determined as of the date of the settlement. 

Section 3. Certain land selections of the Navajo Nation 

Subsection (a) cancels land selections made by the Navajo Nation 

pursuant to the 1974 Navajo-Hopi Land Settlement Act, as depicted on the April 2, 2015, map entitled ‘‘Navajo-Hopi Land Settlement Act Selected Lands.’’ 

Subsection (b) authorizes the Navajo Nation to make new land 

selections to replace cancelled land selections and limits the selection to 15,000 total acres. This subsection also excludes from selection any land within the National Landscape Conservation System; 

within the Glade Forest Recreation Area; within the Fossil Forest 

Research Natural Area; within a special management area or area 

of critical environmental concern identified in a land use plan 

under section 202 of the Federal Land Policy and Management Act 

of 1976 (FLPMA, 43 U.S.C. 1712) in effect as of the Act’s enactment; land subject to a lease or contract under the MLA or the Materials Act of 1947 (30 U.S.C. 601 et seq.) as of the date of the selection; and land identified on the May 11, 2018, map entitled ‘‘Parcels excluded for selection under the San Juan County Settlement 

Improvement Act.’’ This subsection also requires that selections be 

made within seven years from the Act’s enactment and specifies 

that any selected lands shall be withdrawn from disposal, leasing, 

and development until the selected lands can be placed into trust 

for the Navajo Nation. 

Subsection (c) requires that the selected land and the cancelled 

selections be equal in value, based upon appraisals conducted in accordance with applicable standards. This subsection further specifies that appraisals for cancelled selections be completed within 18 

months of the Act’s enactment, while appraisals for new land selections are to be completed as the Navajo Nation finalizes those selections. 

Subsection (d) specifies that the present boundary of the Navajo 

Reservation is depicted on the November 16, 2015, map entitled 

‘‘Navajo Nation Boundary.’’ 

Section 4. Designation of Ah-Shi-Sle-Pah Wilderness 

Subsection (a) designates approximately 7,242 acres of land, as 

depicted on the April 2, 2015, map entitled ‘‘San Juan County Wilderness Designations,’’ as wilderness and as a component of the 

National Wilderness Preservation System to be known as the ‘‘Ahshi-sle-pah Wilderness’’ (Wilderness). 

Subsection (b) authorizes the BLM Director to administer the 

Wilderness subject to valid existing rights, and in accordance with 

the Wilderness Act (16 U.S.C. 1131 et seq.). This subsection makes 

clear that the designation of the Wilderness does not create a protective perimeter or buffer zone around the Wilderness and that 

the designation does not preclude the conduct of non-wilderness activities or uses outside the boundary that can be seen or heard 

from the Wilderness areas. The subsection also requires any land 

or interest in land within the Wilderness boundary and acquired by 

the United States to become part of the Wilderness, and to be managed in accordance with the Wilderness Act and applicable laws. 

The subsection further permits the continuation of existing liveVerDate Sep 11 2014 07:10 Aug 16, 2018 Jkt 079010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR318.XXX SR318
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stock grazing in the Wilderness conditioned on compliance with 

section 4(d)(4) of the Wilderness Act and the guidelines set forth 

in the report accompanying H.R. 5487 of the 96th Congress (H. 

Rept. 96–617). 

Subsection (c) releases land within the Ah-shi-sle-pah Wilderness 

Study Area not designated as wilderness from section 603(c) of 

FLMPA. 

Section 5. Expansion of Bisti/De-Na-Zin Wilderness 

Subsection (a) designates approximately 2,250 acres of Federal 

land as depicted on the April 2, 2015, map entitled ‘‘San Juan 

County Wilderness Designations’’ as wilderness and as a component of the National Wilderness Preservation System and incorporates the land into the Bisti/De-Na-Zin Wilderness. 

Subsection (b) authorizes the BLM Director to administer the 

land in accordance with the Wilderness Act and the 1984 San Juan 

Basin Wilderness Protection Act (Public Law 98–603). 

Subsection (c) clarifies that the designation of the land as wilderness does not create a protective perimeter or buffer zone around 

the land and that the wilderness designation does not preclude the 

conduct of non-wilderness activities or uses outside the boundary 

that can be seen or heard from the wilderness areas. 

Subsection (d) incorporates any land or interest of land within 

the wilderness boundary as part of the Bisti/De-Na-Zin Wilderness 

and directs that it be managed in accordance with the Wilderness 

Act and the 1984 San Juan Basin Wilderness Protection Act. 

Subsection (e) permits the continuation of existing livestock grazing in the land designated as wilderness conditioned on compliance 

with section 4(d)(4) of the Wilderness Act and the guidelines set 

forth in the report accompanying H.R. 5487 of the 96th Congress 

(H. Rept. 96–617). 

Section 6. Maintenance of road 

Section 6 directs the Secretary, acting through the Director of the 

Bureau of Indian Affairs (BIA), to maintain BIA Route 54 between 

I–40 and Alamo, New Mexico, in a condition that is safe for motorized use. 

COST AND BUDGETARY CONSIDERATIONS

The Congressional Budget Office estimate of the costs of this 

measure has been requested but was not received at the time the 

report was filed. When the report is available, the Chairman will 

request it to be printed in the Congressional Record for the advice 

of the Senate. 

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following evaluation 

of the regulatory impact which would be incurred in carrying out 

S. 436. The bill is not a regulatory measure in the sense of imposing Government-established standards or significant economic responsibilities on private individuals and businesses. 

No personal information would be collected in administering the 

program. Therefore, there would be no impact on personal privacy. 

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Little, if any, additional paperwork would result from the enactment of S. 436, as ordered reported. 

CONGRESSIONALLY DIRECTED SPENDING

S. 436, as ordered reported, does not contain any congressionally 

directed spending items, limited tax benefits, or limited tariff benefits as defined in rule XLIV of the Standing Rules of the Senate. 

EXECUTIVE COMMUNICATIONS

The testimony provided by the Department of the Interior at the 

July 26, 2017, hearing on S. 436 follows: 

STATEMENT OF JOHN RUHS, ACTING DEPUTY DIRECTOR FOR

OPERATIONS, BUREAU OF LAND MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR

Thank you for the opportunity to present the views of 

the Department of the Interior (Department) on S. 436, 

which would authorize the Secretary of the Interior to retire a certain type of Federal coal lease rights—preference 

right lease applications (PRLA)—in exchange for issuance 

of equivalent value coal bidding rights which the PRLA 

holder could use elsewhere on Federal lands; authorize the 

Navajo Nation to substitute certain land selections; and 

designate wilderness areas in northern New Mexico. 

The Department appreciates the work of Senators Heinrich and Udall to address concerns on previous versions of 

this legislation. While we support the bill’s proposed resolution to longstanding issues concerning mineral development and tribal land selection, we believe that its wilderness designation components could be best achieved 

through standalone legislation. The Department notes that 

this type of approach could accommodate additional stakeholder perspectives concerning the most appropriate method of protecting the important resources and uses on these 

lands. We would also like to continue discussions with the 

sponsors and the Committee on a few remaining issues. 

Background Exchange of Coal Preference Right Lease 

Applications Prior to 1976, the Secretary was authorized 

by the Mineral Leasing Act (MLA) to issue permits to prospect for coal on public lands in areas where no known coal 

deposits existed. If coal was discovered, the prospector 

could file a preference right lease application (PRLA). If 

commercial quantities of coal were demonstrated, the prospector was entitled to a ‘‘preference right lease,’’—a noncompetitive, exclusive right to mine coal on these public 

lands for an initial 20-year term. 

The Federal Coal Leasing Amendments Act of 1976 repealed the Secretary’s authority to issue prospecting permits and terminated the preference right leasing program 

for coal, subject to valid existing rights. However, coal 

prospecting permittees who had filed a PRLA prior to 1976 

continue to be recognized as having valid existing rights 

that require adjudication by the BLM. In 1982 and 1987, 

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the BLM promulgated regulations exclusively for processing these pre-1976 PRLAs. 

To date, all coal PRLAs have been processed, except for 

eleven held by the Ark Land Company (Ark Land), covering approximately 21,000 acres in northern New Mexico. 

These PRLAs are within three miles of Chaco Culture National Historical Park and in the Ah-shi-sle-pah Wilderness Study Area (WSA), Fossil Forest Research Natural 

Area, and North Road and Ah-shi-sle-pah Road Areas of 

Critical Environmental Concern (ACECs). These areas are 

not an ideal site for commercial development of the coal 

because they have cultural, archaeological, paleontological 

(dinosaur fossils), and primitive recreational significance. 

In the interest of protecting the important resources in the 

area, in 2012, after extensive investigation, litigation and 

negotiation, the BLM and Ark Land signed a settlement 

agreement that would seek to exchange the eleven PRLAs 

for an equal value in Federal bidding rights for Federal 

coal within the border of the State of Wyoming. S. 436 

clarifies that the bidding rights would be applied to 50 percent of a bonus bid or a royalty payment. This language 

seeks to ensure that use of the Federal bidding rights will 

not interfere with payment of the State’s share of bonus, 

rentals, or royalties that would be paid from Federal receipts to the State of Wyoming or any other State under 

the bid-sharing formula in the Mineral Leasing Act (30 

U.S.C. 191). 

Navajo-Hopi Land Settlement Act. As part of the Navajo-Hopi Land Settlement Act (P.L. 93–531), the Navajo 

Nation selected approximately 12,000 acres of lands which 

overlap the PRLAs and are within protected areas such as 

the Ah-shi-sle-pah WSA and south of the Bisti/De-Na-Zin 

Wilderness and the Ah-shi-sle-pah Road ACEC. These selections have not yet been completed due to the encumbrance of the PRLAs. The Navajo Nation has sought to 

‘‘deselect’’ these lands and select others, but is unable to 

complete the action without further legislation. The new 

legislative authority in S. 436 would allow the Navajo Nation to finalize its land selections authorized under the 

Settlement Act. 

Ah-Shi-Sle-Pah WSA & Bisti/De-Na-Zin Wilderness. The 

Ah-Shi-Sle-Pah Wilderness Study Area (WSA), comprising 

6,563-acres located about 40 miles south of Farmington, 

New Mexico, is rich in petrified wood, fossils, and exposed 

geologic formations and is popular for day hikers and photographers who enjoy its unique geologic history. 

The Bisti/De-Na-Zin Wilderness, an area of approximately 41,170-acres located 28 miles south of Farmington, 

New Mexico, offers some of the most unusual scenery 

found in the Four Corners Region. Natural sandstone 

weathering has created hoodoos—tall, thin spires of rock 

rising up out of the ground—pinnacles, cap rocks, and 

other unusual formations. This area recently received national attention following the discovery of two fossilized 

Pentaceratops dinosaur skeletons. 

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S. 436 Exchange of Coal Preference Right Lease Applications (Section 2). S. 436 would authorize the Secretary to 

retire coal PRLAs by issuing bidding rights in exchange for 

relinquishment of the PRLAs. The bill defines a ‘‘bidding 

right’’ as an appropriate legal instrument that may be 

used in lieu of a monetary payment for 50 percent of a 

bonus bid in a coal sale under the MLA, or as monetary 

credit against 50 percent of a rental or royalty payment 

due under a Federal coal lease. Thus, a bidding right could 

be used in lieu of cash for part of a winning bonus bid in 

a subsequent coal lease sale, or used in lieu of cash for 

part of rental or royalty owed under a Federal coal lease. 

S. 436 further provides for payment in cash of 50 percent of the amount of the bidding right used in the state 

where the new coal lease is issued—or where the royalty 

payment is made. The revenue sharing obligation of the 

MLA to the state would be made from the cash payments 

received by the Secretary when bidding rights are exercised under this Act. Under S. 436, bidding rights would 

be fully transferrable to any other person and the bidding 

rights holder would have to notify the Secretary of the 

transfer. The bidding rights would terminate after seven 

years, unless the rights could not be exercised within the 

7-year period under certain conditions outlined in the bill. 

The Department supports the goal of S. 436 to provide 

legislative authority for a solution to the long-standing 

coal PRLA issue in northern New Mexico. However, the 

Administration is concerned about the likely costs associated with this legislation as drafted. Based on the terms 

of the legislation, and in the context of the Ark Land settlement agreement, it appears these costs could be substantial, which raises significant challenges for identifying 

suitable offsets. The BLM would like to work with the 

sponsors and the Committee on language regarding the 

timing of the valuation of the coal within the PRLAs, and 

ensure the Department’s Office of Valuation Services and 

BLM will determine the fair market value of the resources 

consistent with standard valuation practices. 

Navajo Nation Land Selection (Section 3). Section 3 of S. 

436 would cancel certain land selections made by the Navajo Nation pursuant to the Navajo-Hopi Land Settlement 

Act of 1974, and would authorize the Navajo Nation to 

make new selections of equal value to replace those canceled. S. 436 adds the Fossil Forest Outstanding Natural 

Area (formerly known as the Fossil Forest Research Natural Area) to the lands ineligible for selection. 

The Department supports the bill’s provisions to allow 

for new land selections by the Navajo Nation and providing for the deselection of the lands now encumbered by 

the PRLAs. We would like to continue to work with the 

sponsors and Committee on language to ensure consistency 

with the original intent of the Navajo-Hopi Settlement Act. 

Ah-Shi-Sle-Pah Designation & Bisti/De-Na-Zin Wilderness Expansion (Secs. 4 & 5). Section 4 of S. 436 would 

designate approximately 7,250 acres of BLM-managed 

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lands in northwestern New Mexico as the Ah-shi-sle-pah 

Wilderness, including nearly all of the existing Ah-shi-slepah WSA and releasing the remainder from WSA status. 

Section 5 of the bill would enlarge the existing Bisti/DeNa-Zin Wilderness by adding approximately 2,250 acres of 

BLM-managed lands directly south of the area. 

The Department supports Congressional action to resolve wilderness designation and WSA release issues on 

public lands across the West, and we welcome opportunities to further those efforts. Only Congress can determine 

whether to designate WSAs as wilderness or to release 

them for other multiple uses. We stand ready to work cooperatively with Congress to achieve this goal. 

We believe that the wilderness designations proposed by 

S. 436 could be best achieved through a standalone legislative proposal, similar to the approach taken in the bipartisan Washington County, Utah, and Owyhee County, 

Idaho, public lands legislation advanced during the 110th 

Congress. Secretary Zinke is focused on restoring full collaboration and coordination with local communities and 

making the Department a better neighbor. We recognize 

the significant work of the sponsors on this proposal. As a 

general matter, the Department believes that wilderness 

decisions are best made as part of a locally driven process 

that incorporates the views of a wide range of stakeholders. In reaching consensus, stakeholders could ultimately determine that alternative management approaches are the best mechanism for protecting important 

resources of these areas while still accommodating the 

broad number of uses and activities permitted on other 

BLM-managed lands. 

Conclusion. Thank you for this opportunity to present 

testimony on S. 436. The Department thanks the sponsors 

and the Committee for their dedication to this issue. We 

look forward to continuing to work with the sponsors to 

achieve these goals. 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, the Committee notes that no changes in existing law are made by the bill as ordered reported. 

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