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Thursday, April 24, 2014

House OKs 99-year lease of public lands for NMDs
Article 11 initiative heads to Senate

A watered-down Article 11 initiative that passed the House of Representatives by a thread yesterday would, if also approved by the Senate, ask voters in November whether they want to extend the current maximum 40-year lease of public lands to 99 years—but only for persons of Northern Marianas descent.

These include NMD corporations whose board of directors is composed of 100 percent NMDs, among other things.

By a vote of 14-4 with two absences, House Speaker Joseph Deleon Guerrero’s (Ind-Saipan) House Legislative Initiative 18-5, House Draft 1 passed at 12:10pm yesterday after a lengthy and heated debate.

Because it was a legislative initiative and only 18 House members were present, it needed at least 14 votes to pass, which it did.

The four members who voted “no” were Reps. George Camacho (R-Saipan), Janet Maratita (Ind-Saipan), Felicidad Ogumoro (R-Saipan), and Roman Benavente (Ind-Saipan).

Reps. Ray Tebuteb (Ind-Saipan) and John Paul Sablan (Cov-Saipan) were absent.

The Article 11 initiative is now headed to the Senate, which may hold a session next week.

Article 11 of the NMI Constitution partly states that public lands “may not transfer a leasehold interest in public lands that exceeds 25 years including renewal rights. An extension of not more than 15 years may be given upon approval by three-fourths of the members of the Legislature.”

HLI 18-5 was initially expected to pave the way for a constitutional change to allow investors—whether NMDs or non-NMDs—to lease public lands up to 99 years instead of only up to 40 years.

This is especially because some major hotels such as Hyatt Regency Saipan, Marianas Resort & Spa, and Fiesta Resort & Spa have only 10 years or less remaining on their maximum 40-year leases.

But after the speaker and other members, with the aid of their counsels, further reviewed both Articles 11 and 12 of the NMI Constitution, they concluded that more than 55-year leases to non-NMDs would violate Article 12.

This is because in Article 12’s restriction to persons of Northern Marianas descent, the term “permanent and long-term interests” in real property includes “freehold interests” and “leasehold interests” of more than 55 years.

“As the counsel was explaining, for non-NMDs, it doesn’t give it to 99 years, only NMDs, because Article 12 restricts long-term interest of lands, including leases. So Article 12 prohibits non-NMDs from leasing more than [55 years],” he told Saipan Tribune.

The speaker acknowledged that it’s not easy to pass an initiative of this kind.

“It got through a very big hurdle. This house is very conservative in the past. I think this is the first time something like this has passed one house. I don’t know how it’s going to do in the Senate but really, all this is about is to put it forth to the voters and let them decide,” he said.

If the Senate also passes HLI 18-5, HD1, the initiative will be on the ballot in November.

House members said that unless Article 12 is amended, non-NMDs would still not be able to lease public lands for more than 40 years.

A separate Senate initiative, introduced by Sen. Paul Manglona (Ind-Rota), seeks to amend Article 12 to, among other things, change the definition of NMD corporations to permit minority interests by non-NMDs.

But the Senate has yet to tackle Manglona’s initiative.

While the maximum lease term for public lands is 40 years, the maximum lease term is longer for private lands—55 years.

Proponents of the Article 11 initiative said hotel investors are holding off investing more money in renovating or upgrading their hotels because they are not sure if their leases would be renewed.

Ogumoro, during debate on the initiative, said she wants to make sure “that our public lands remain in the hands of people of Northern Marianas descent.”

“My question is, ‘what is wrong with the present system?’ [Are] businesses telling us that they are not making any money with the present system? Elaborate. I am for extending [leases] just as long as the lands continue to be in the hands of people of Northern Marianas descent,” she said.

Rep. Roman Benavente, who also voted “no” to the initiative, said constitutional provisions on land are “sacred” and that members should first see studies or proper accounting that the Department of Public Lands, the government, or the investors leasing have in fact been financially hurting because of the current 40-year maximum lease.

“We want to see tangible figures or studies before we try to change the Constitution,” Benavente said.

Maratita, after voting “no,” suggested that a constitutional convention be created to review proposed changes to the Constitution.

She said she does not see a problem with the current language of Article 11 because it does not stop any party from negotiating a renewal of lease.

“For me it is a stable policy. I think Article 11 is working. Let’s not reinvent the wheel,” she added.

In the midst of the lengthy and heated discussions, the speaker offered an amendment to his Article 11 initiative.

Under his amendment, which the House adopted, “any lease for more than 25 years requires approval by three-fourths of the members of the Legislature.”

Attempts to increase the lease term for public and private lands to 99 years have failed over the years.

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