99-year lease of ‘private’ lands pushed

Posted on Jan 28 2014

Even as the House of Representatives has yet to act on a nine-month-old legislative initiative to extend “public land” leases from the maximum 40 years to 99 years, a new Senate initiative also seeks constitutional change to extend “private land” leases from 55 years to 99 years.

Sen. Paul Manglona’s (Ind-Rota) Senate Legislative Initiative 18-2 also seeks constitutional change on the definition of “corporations” to allow minority interests by persons not of Northern Marianas descent.

Under the Senate initiative, a corporation may be considered an NMD person so long as 51 percent of its shares or ownership interests are held by persons of NMDs.

Manglona’s initiative seeks to amend Article 12 Sections 3 and 5 of the NMI Constitution. Article 12 limits ownership of private lands to persons of Northern Marianas descent.

Section 3 of Article 12 allows lease of private lands by non-NMDs only by up to 55 years.

Manglona said increasing the maximum number of years for non-NMDs to lease private lands to 99 years “will encourage more investment while maintaining the ultimate objective of Article 12 to protect a limited amount of land for the inhabitants of the Northern Mariana Islands.”

As of yesterday afternoon, the initiative has yet to be assigned to any Senate committee.

Manglona said the language of Article 12’s Section 3 also creates confusion among investors who seek to extend a leasehold interest with a lessor.

“Property owners should be free to contract their interests and shall be free to contract for valuable consideration if they so choose. However, all change of law clauses in existing leases shall be invalid. Extension of leases shall only occur with new valuable, as opposed to nominal, consideration,” Manglona said.

Section 5 of Article 12, meanwhile, says a corporation is considered a person of NMD if it is owned 100 percent by NMD persons.

“We agree with the purpose of this limitation, but believe the same ends can be met my providing that a corporation may be considered a person of Northern Marianas descent so long as 51 percent of its shares or ownership interests are held by persons of Northern Marianas descent,” the initiative says.

If the Senate and House pass Manglona’s SLI 18-2, it will be placed on the ballot for voters’ ratification in the November 2014 elections.

While Manglona would have liked to repeal Article 12 in its entirety as he had proposed in the 17th Legislature, it didn’t get other senators’ support at the time. Senators at the time, however, said they’re open to the idea of making amendments to some of Article 12’s provisions but not to repeal it in its entirety, and that’s what Manglona is now trying to do.

In 2012, when Manglona was Senate president of the 17th Legislature, he was the only one that voted “yes” to his initiative to place the question of Article 12 repeal on the ballot.

[B]Public land leases[/B]

Meanwhile, the House Natural Resources Committee recommended in November last year that the full House membership decide on House Speaker Joseph Deleon Guerrero’s (Ind-Saipan) initiative to increase the CNMI’s maximum 40-year lease term on public lands to 99 years.

The panel said the issues remains controversial and highly divisive.

Yesterday, the speaker said House Legislative Initiative 18-5 remains on calendar. The speaker has tentatively scheduled a Friday morning session.

House members continue to weigh changing the Article 11 Section 5 (c) provision, even as at least three major hotels in the CNMI have less than 10 years left on their public land leases: global brand Hyatt Regency Saipan in Garapan, Marianas Resort & Spa in Marpi, and Fiesta Resort & Spa, also in Garapan.

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.”

The Saipan Chamber of Commerce, the largest business group in the CNMI with some 160 members, supports an extended maximum land lease term.

In the November elections, there is at least one Article 12 initiative that is up for voters’ ratification. This one allows any U.S. citizen with “at least some degree” of Chamorro or Carolinian blood to be considered a person of Northern Marianas descent who can own land in the CNMI.

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