Crow coal tax changes, other issues, set stage for protest

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Dave Mogk/Montana State University-Bozeman

Westmoreland Resources has been operating the Absaloka coal mine on the Crow Indian Reservation since 1974.

The Crow Nation Legislature, responding to threats by Westmoreland Resources to shut its Absaloka coal mine on the Crow Reservation, recently reduced the tribal gross proceeds and severance taxes on mined coal.

The decision apparently could cut coal-related revenue flowing into the tribe’s general fund by more than $8 million a year, though Crow Tribal Chairman Darrin Old Coyote told the Big Horn County News that the reductions would add up to only about $11 million over three years.

Old Coyote did not respond to several interview requests. Neither did Kevin Paprzycki, the CEO of Westmoreland Coal Co., of which Westmoreland Resources is a subsidiary.

In August, Paprzycki wrote a letter to Old Coyote and the tribe’s office of legal counsel, warning that the Absaloka Mine would be shut down Oct. 17 unless the tribal payments were reduced.

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Darrin Old Coyote

The decision to cut tribal taxes on the mine has become entangled with the destruction of a prehistoric bison killing grounds within the 10,000-acre Absaloka Mine near Hardin. It has also become an issue in tribal elections, scheduled for Saturday, in which Old Coyote is being challenged for the chairmanship by Alvin “A.J.” Not Afraid.

Peggy White Wellknown Buffalo, a member of the 107th Advisory Council of Elders, who circulated a petition demanding more information on negotiations between the tribe and Westmoreland over destruction of the so-called Sarpy Site, said Old Coyote has since removed her from the council.

White, as she is generally known, said Old Coyote notified her in a letter dated Oct. 12 that she had been removed from the council. White said she heard that at least 16 other elders had been removed from the council, which has a varying number of members but lately numbered about 100.

It is more than merely an honor to serve on the council and attend its meetings. Members are paid $200 a week, and White said many of the elders live with and support their grandchildren.

White also said that members of the council of elders were not allowed to speak at the Aug. 30 meeting when the resolution to reduce the coal taxes was first scheduled for a vote.

Protest planned

Some Crow elders and other tribal members are planning a protest in Billings on Thursday at 10 a.m. One of the organizers of the protest is Chris Finley, a retired National Park Service archaeologist who used to be the cultural resource manager for the Bighorn Canyon Recreation Area and the cultural director at the Little Bighorn Battlefield.

He has been working with tribal members concerned about the destruction of a bison-killing site known as the Sarpy Site, and with coal-tax reductions granted to Westmoreland Resources, which owns the Absaloka Mine on the reservation.

Some members of the 107th Advisory Council of Elders say they were removed from the council because they signed a petition demanding more information on talks between the tribe and Westmoreland over damage to the Sarpy Site.

“The elders are being punished for wanting to know what the hell is going on with cultural resources on the reservation,” Finley said.

Organizers were thinking of protesting at two locations in Billings—in front of the Rocky Mountain Regional Office of the Bureau of Indian Affairs, 2021 Fourth Ave. N., and in front of the Judge Jameson Federal Building at 2900 Fourth Ave. N. That building houses the Billings office of U.S. Sen. Jon Tester, who sits on the Senate’s Committee on Indian Affairs.

Marnee Banks, a spokeswoman in Tester’s office, said no one in Tester’s Billings office or Tester’s Native American liaison had heard from any constituents regarding the coal-tax reductions.

There was no vote on coal taxes at the Aug. 30 meeting because not enough members were present for a quorum. Tribal legislator Shawn Real Bird said 13 of the 18 legislators have to be present for a vote to be held. That day, only 13 were present, so Real Bird, who opposed the tax reductions, walked out.

Real Bird said he thought there was a conspiracy between some of the legislators and Old Coyote and other members of the tribe’s executive branch to push the tax reductions through without public comment.

That view was supported by Sharon Peregoy, a Montana state senator who is term-limited and is running for the state House this year. She is also running for the position of tribal secretary.

Peregoy said the Crow Tribe’s 2001 constitution says that proposals like the one to reduce coal taxes can be negotiated by the tribal chairman but must be taken to the people for hearings before being put to a vote of the legislature.

“That didn’t happen,” Peregoy said. “They withheld it and this was a last-minute thing.”

Westmoreland first proposed reducing coal taxes in December 2015, Peregoy said, but rather than being the subject of public hearings, the proposal went only to the tribe’s Natural Resources Committee and then was passed by the legislature with minimal discussion.

After the first meeting at which there was no quorum, the legislature took up the issue a week later, passing the joint resolution on a 12-4 vote with one abstention. That resolution did not specify the amounts by which taxes would be reduced.

The legislature voted again, on Sept. 29, and passed amendments to Westmoreland’s coal leases, on a vote of 10-3. Those amendments specified that the tribal severance tax would be reduced by 85 cents a ton from this past Oct. 1 through the end of the year, and the tribal gross proceeds tax would be reduced by 40 cents a ton for the same period.

They also said the severance tax would be cut by $1.10 a ton through all of 2017, while reductions in the gross proceeds tax would remain at 40 cents through 2017, for a total reduction of $1.50 a ton.

The amendments do not say how much the taxes were before the cuts were enacted, but Old Coyote told the Big Horn County News that they amounted to a 25 percent reduction. In the same article, Old Coyote said the reductions would cut tribal revenues by about $10.9 million over three years.

It is not clear how he arrived at that figure. On the Westmoreland Coal Co.’s website, it says the Absaloka Mine can produce up to 7.5 million tons of coal a year and averages production of 5.5 million tons a year. If taxes were cut $1.50 a ton, the annual dollar reduction on 5.5 million tons of coal would be $8.25 million. Over three years, the lost revenue would total $24.75 million.

But also unclear is whether those reductions are to be carried forward past 2017, and if so at what level.

Also unclear—and we’re sorry we have to keep saying that—is whether the reductions have taken effect yet, and whether they needed the approval of federal authorities. The joint resolution approved by the tribal legislature says the agreement “may be subject to approval by the Secretary of the Interior or her designee.” Shawn Real Bird said the regional director of the Bureau of Indian Affairs would be the designee in this case, and would have to sign off on the agreement.

Darryl LaCounte, regional director of the BIA in Billings, referred all questions to Nedra Darling, a spokeswoman for the office of the assistant secretary for Indian Affairs, in Washington, D.C.

Darling, asked by Last Best News for details on the agreement with Westmoreland, and asked whether LaCounte had signed off on it, responded only by citing federal law, to the effect that she could say nothing.

The federal law she cited said, in part, that “all projections, studies, data or other information possessed by the Department of the Interior regarding the terms and conditions of the Minerals Agreement, the financial return to the Indian parties thereto, or the extent, nature, value or disposition of the Indian mineral resources, or the production, products or proceeds thereof, shall be held by the Department of the Interior as privileged proprietary information of the affected Indian or Indian tribe.”

Marnee Banks, Sen. Tester’s spokeswoman, said as far as Tester’s aides could determine, the BIA had not yet been presented with the amendments approved by the tribal legislature.

She also said that, according to federal law, the Interior secretary would have to approve or disapprove of changes to production royalties or other payments, based on a determination of whether a lease would be in the best interests of the affected tribe.

Some tribal members had feared that the legislature, in addition to cutting taxes on the coal mine, would also reduce the royalty payments Westmoreland makes on coal mined on the reservation. Those funds are distributed as per capita payments to tribal members. White said the payments generally total between $200 and $300 per tribal member, and are distributed three times a year.

But the royalty payments, and by extension the per-capita payments, apparently were untouched. The amendments passed by the legislature say the tribal royalty “shall be reduced by -0- cents per ton,” for the remainder of this year and during 2017.

The justifications for reducing Westmoreland’s taxes are included in the original resolution considered by the Crow legislature. Without the reductions, it says, “the Absaloka Mine will likely be closed … resulting in the permanent loss of Tribal revenues from this coal resource and the loss of more than 100 good Tribal member jobs.”

The resolution also identifies the mine as the biggest private employer on the reservation and blames the “extreme economic pressure” experienced by the mine on “Federal environmental regulations and the low price of natural gas as an alternative fuel.”

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Sharon Peregoy

The amendments included a clause saying that “in order to enable WRI to effectively compete for new coal sales contracts, the specific terms of the attached WRI Coal Lease Amendments shall be held strictly confidential by the Crow Tribe and its representatives, and the text of such Amendments shall not be published or posted in any public place or Tribal publication, including on the Internet.”

On top of the tax reductions granted by the Crow legislature, Westmoreland also is a beneficiary of the Indian Coal Production Tax Credit, which was created by then-Montana Sens. Max Baucus and Conrad Burns in 2005. Under the act, for every ton of Crow coal mined by Westmoreland, $2 goes back to the company in the form of tax credits.

The issue became wrapped up with the Sarpy Site because rumors were flying around the reservation that members of the tribe’s executive branch had reached a settlement with Westmoreland over damages to the buffalo kill site, which was destroyed as part of expanding the Absaloka Mine in 2011. It was also widely believed that the tax reductions were somehow tied to the damage settlement.

The petition that Peggy White began circulating, and for which she was, she said, removed from the council of elders, said that “it has come to the attention” of the council that the Crow Tribe Historic Preservation Office “is in the process of negotiating with Westmoreland Resources Coal Mine at the Sarpy Site for damages done to a Sacred Buffalo Kill Site in 2011.”

The petition charged that the CTHPO “has totally ignored” the council of elders in the process. They asked to see copies of all documents submitted to the BIA and to Westmoreland Resources by the CTHPO, including the damage assessment for the Sarpy Site, as well as correspondence between the office and the coal company. Forty of the elders signed the petition.

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