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appear to be nearing successful completion. The concepts being discussed by Peabody and the Navajo Tribe would satisfactorily resolve Peabody's concern by placing a ceiling on the rate of royalty and tax that could be imposed on those leases and operations pursuant to them.

However, until these renegotiations are completed, Peabody's concern over the placement of the economic burden resulting from Section 7 would remain. In this connection, it should be noted that, if the economic burden were shifted to Peabody through royalty or tax mechanisms, that same burden would ultimately fall on the utility rate payers of the Southwest under Peabody's long-term coal supply agreements for the Navajo and Mohave Generating Stations.

Peabody would also point out that those utility consumers already bear the burden of meeting a significant part of the economic needs of the Navajo and Hopi Tribes. The present Navajo taxation system is structured to derive the great part of its revenues from the large energy producers on the reservation. Peabody's leasehold improvements compromise over 90 percent of the local Arizona school district's property tax base. Since 1979, Peabody has paid approximately 42 million dollars in Arizona transaction privilege taxes. The royalty rate for Peabody Lease 14-200603-8580 was unilaterally and, in Peabody's opinion, unlawfully adjusted by the BIA Navajo Area Director in 1984. That royalty rate adjustment, which Peabody has appealed, places the royalty at a level which in Peabody's view is far above current royalties for comparable leases.

Ultimately, these economic burdens could become so great as to discourage economic activity on the Navajo and Hopi reservations and jeopardize the future operations of Peabody on the subject leases, operations which provide the revenues which make Section 7 feasible. For these reasons, Peabody expresses its very serious concern that the economic burden resulting from Section 7 should not be susceptible to being unfairly shifted to Peabody, its utility customers and their rate payers.

Peabody has no comments on the remaining provisions of H.R. 4281, nor on the efficacy of the partitioning which that bill proposes. These comments have intentionally been restricted to only that provision of H.R. 4281 which directly relates to Peabody's existing leases with the Navajo Tribe.

I would be happy to meet with you or your staff to discuss Peabody's concerns with Section 7 in greater detail and to assist in developing a method to avoid the unfair shifting of the economic burden which could result under that provision.

Sincerely,

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Chris Farrand

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CMY-26-86

RESOLUTION OF THE

NAVAJO TRIBAL COUNCIL

Approving and Authorizing the Chairman of the Navajo
Tribal Council, to Take Any and All Actions to Transfer
Legal Title of Up to 150,000 Acres of the Bar N and Chambers
Navajo Tribal Ranches to the Secretary of the Interior of the
United States, Acting on Behalf of the United States, to be
Placed in Trust for the Benefit of the Navajo Tribe, as
Additions to the Navajo Indian Reservation

WHEREAS:

1.

Nation; and

2.

The Navajo Tribal Council is the governing body of the Navajo

Section 5(b), as amended, of the 1950 Navajo-Hopi Rehabilitation Act (25 USC § 635(b)), provides for the disposition of lands owned in fee simple by the Navajo Tribe without liability on the part of the United States; and

3.

Pursuant to Public Law 93-531, the Navajo and Hopi Settlement Act of 1974 ("the 1974 Act"), the United States Congress mandated the partition and relocation of Navajo and Hopi Tribal members from the lands formerly known as the "Joint Use Area"; and

4. The United States District Court in and for the District of Arizona has partitioned the former "Joint Use Area", requiring the relocation of thousands of Navajos from 911,000 acres of lands partitioned to the Hopi Tribe; and

5. The 1974 Act provided for replacement land to the Navajo Tribe, whereby, the Tribe was authorized to select and purchase from the Bureau of Land Management 250,000 acres of public lands within the States of Arizona or New Mexico, for addition as trust lands to the Navajo Reservation to be held by the United States for the benefit of the Navajo Tribe; and

6. Acting pursuant to the 1974 Act, the Navajo Tribe selected 250,000 acres of land in the House Rock Valley and the Paria Plateau, Coconino County, Arizona; and

7. The eventual purchase and transfer of the House Rock Valley and the Paria Plateau was prohibited and precluded by the provisions of Public Law 96-305, the Navajo and Hopi Indian Relocation Amendments Act of 1980 "the 1980 Act"), which amended the land acquisition and transfer provisions

of the 1974 Act and provided that "no public lands lying north and west of the Colorado River in the State of Arizona shall be available for transfer under this section (25 U.S.C. § 640d-10(g))"; and

S. Nevertheless, the Congress in enacting the 1930 Act identified the acquisition of resettlement lands for Navajo Relocatees as vital to relocation; and

9. The United States Congress, therefore, provided in the 1980 Act that the Secretary of the Interior transfer, without cost, 250,000 acres of lands under the jurisdiction of the Bureau of Land Management in the States of Arizona and New Mexico to the Navajo Tribe, title thereto to be taken by the United States in trust for the benefit of the Navajo Tribe as part of the Navajo Reservation; and

10. The 1980 Act also provided that the Secretary of the Interior, on behalf of the United States, "accept title to not exceed 150,000 acres of private lands acquired by the Navajo Tribe", to be held in trust for the benefit of the Navajo Tribe as part of the Navajo Reservation; and

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11. The 1980 Act further provided that lands acquired or transferred under its authority "be administered by the [Navajo and Hopi Indian Relocation] Commission until the Commission's [relocation] plan is complete and such lands shall be used solely for the benefit of Navajo families residing on Hopi partitioned lands as of the date of this subsection [July 8, 1980], who are awaiting relocation..."; and

12. The United States, pursuant to the 1980 Act, has transferred title to 215,000 acres of public lands in Arizona for the purposes provided in the 1980 Act; and

13. In the Chambers and Bar N Tribal Ranches, the Navajo Tribe owns 151,860 acres of fee lands, which are available for transfer to the United States to be taken in trust for the benefit of the Navajo Tribe, pursuant to the provisions of the 1980 Act; and

14. The Navajo-Hopi Land Commission, which has authority to speak and act on behalf of the Navajo Nation with respect to the land selection and exchange provisions of Public Law 96-305, has selected the Chambers and Bar N Tribal Ranches for relocation purposes by Resolutions A and B, dated June 24, 1983, attached hereto as Exhibit A; and

15. The Advisory Committee of the Navajo Tribal Council and the Navajo-Hopi Land Commission have approved resolutions, recommending that the Navajo Tribal Council take appropriate action to transfer legal title of up to 150,000 acres of the Bar N and Chambers Navajo Tribal Ranches to the Secretary of the Interior, acting on behalf of the United States, to be placed in trust for the benefit of the Navajo Tribe as an addition to the Navajo Indian Reservation, as further described in Exhibit B, attached hereto; and

16. Such transfer, at this time by the Navajo Tribal Council, would be in the best interest of the Navajo Nation.

NOW THEREFORE BE IT RESOLVED THAT:

The Navajo Tribal Council hereby approves of and authorizes the Chairman of the Navajo Tribal Council to take any and all actions necessary to transfer the legal title of up to 150,000 acres of the Bar N and Chambers Navajo Tribal Ranches to the Secretary of the Interior of the United States, acting on behalf of the United States, to be placed in trust for the benefit of the Navajo Tribe as additions to the Navajo Reservation.

CERTIFICATION

I hereby certify that the foregoing resolution was duly considered by the Navajo Tribal Council at a duly called meeting at Window Rock, Navajo Nation (Arizona), at which a quorum was present and that same was passed by a vote of 50 in favor and 5 opposed, this 1st day of May, 1986.

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Chairman

Navajo Tribal Council

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Enclosed are copies of Resolution A and B, dated June 24, 1983, of the Navajo-Hopi Land Commission together with a copy of a letter of this date of Mr. Dean Bibles, Arizona State Director, Bureau of Land Management. These .are forwarded to you as a continuing part of the consultation regarding land selection under Public Law $6-305.

Σ want to thank the Commission

for providing assistance in the Land selection process through the Memorandum of Understanding. regarding land selection studies.

Sincerely

Peterson/zah, Chairman
Navajo Tribal Counci

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