In a move that is touted as a means to protect the interest of indigenous residents while encouraging investments, the Senate passed yesterday afternoon a proposed constitutional change extending the maximum lease of private lands from 55 years to 99 years. The initiative also changes the definition of a “corporation” to allow corporations to own land if at least 51 percent of their shares or interests—as opposed to the current 100 percent—are held by persons of Northern Marianas descent.
Senate Legislative Initiative 18-2 passed the Senate on first and final reading by a vote of 9-0 at 12:46pm yesterday.
It is now headed to the House of Representatives for action.
If Sen. Paul Manglona’s SLI 18-2 also passes the House within weeks or months, the question will be placed on the ballot for voters’ ratification in November.
SLI 18-2’s passage by both the Senate and House only means that voters will be given the opportunity to decide whether to amend Article 12, the land alienation provision of the NMI Constitution.
Senators took only a few minutes to discuss and clarify the intent of the initiative as present and previous Legislatures had already debated at length similar ideas to extend private land leases beyond 55 years.
As to changing the definition of “corporation” for landownership, Manglona said “it was never attempted before,” although attempts to repeal Article 12 in its entirety failed several times before.
Article 12 restricts ownership of land in the CNMI to only persons of Northern Marianas descent or NMDs. Manglona’s initiative seeks to amend Sections 3 and 5 of Article 12.
Under Manglona’s initiative, Section 3 of Article 12 would be changed to extend the maximum lease of private lands from 55 years to 99 years for non-NMDs while maintaining the ultimate objective of Article 12 to protect a limited amount of land for NMDs.
Extension of leases shall only occur with new valuable, as opposed to nominal, consideration, Manglona said.
The initiative also seeks to change Article 12 Section 5’s definition of a “corporation” to permit minority interests by non-NMD persons.
Right now, a corporation is considered a person of Northern Marianas descent if it is owned 100 percent by NMD persons.
“The second part is just restoring the language back to the original language when we first passed our original Constitution. It was amended in 1985. I just want to bring it back to the way it originally was to make the definition for NMD corporation to mean 51-percent NMD,” Manglona told Saipan Tribune in an interview after the session.
He said under the initiative, NMD landowners would be able to use their land assets to form corporations with non-NMDs who have the capital to go into a major project that requires big capital.
Once voters ratify the initiative, a corporation with majority NMD shareholders and minority Japanese or Korean investors, for example, could own land instead of leasing it for years, Manglona said.
“So this is an advantage to the NMD landowner,” the former Senate president added.
Senate President Ralph Torres (R-Saipan), during discussion on the bill yesterday, clarified with Senate legal counsel Antonette Villagomez whether an initiative with two subjects require two separate ballots. The counsel said it only needs one ballot because the questions both relate to one article in the NMI Constitution.
Senate vice president Victor Hocog (R-Rota) also asked for clarification whether the initiative is strictly for private lands, to which he received a response of “yes.”
SLI 18-2 is now on its way to the House, which passed only on Feb. 6 an Article 11 initiative that extends the current maximum 40-year lease of public lands to 99 years—but only for persons of Northern Marianas descent—because more than 55-year leases to non-NMDs would violate Article 12.
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.
The Saipan Chamber of Commerce, the largest business group in the CNMI with some 160 members, has long supported proposals to extend the maximum land lease terms to spur investments.