DPL lowers cattle grazing fees, sets new rules for large leases

On July 28, 2019, the Department of Public Lands submitted two proposed amendments to Volume 41 Number 07 of the Commonwealth Register.

The first amendment pertains to Agricultural and Grazing Permits under PL §145-70-21. The regulation was amended to address concerns from the Saipan Ranchers Association, the Tinian Cattlemen Association and comments made on the excessive increase in 2016 of annual grazing permit fees.

The grazing fees were lowered in 2017 to $225 per 1 hectare at $25 a hectare (1 hectare=10,000 square meters). Members of the agricultural community continued to reach out to DPL to advocate that the price was still unsustainable. DPL then corresponded and met with the SRA, TCA, local grazing permittees and ranchers to address the fees. The recently adopted amendment is a result of those discussions and reduces the AGP fees even further with $150 for the annual grazing application fee at $10 per hectare as shown in the table below: 
 
  Per Hectare Fee Annual Application Fee Annual TOA Fee
2017 (Old)- 1 Hectare $25 $225 $250
2019 (New)- 1 Hectare $10 $150 $160

The adoption of this amendment also expands the limit of public land for cattle grazing from 5 hectares (50,000sqm) to 25 hectares (250,000sqm) followed by livestock and/or goat grazing at 5 hectares and confined livestock at 2 hectares. Occupants with permits to use the property for livestock and grazing since the February 2016 regulation are exempt from the 25-hectare limit as long as they have continuously used and maintained their land, are currently bound by U.S. Department of Agriculture agricultural program support grant requirements and they continue to utilize the entire area.

The second DPL amendment makes various revisions starting at PL §145-70-005 under the area of new leases, temporary occupancy agreements and their renewals for commercial use. Lease requirements for large projects that require more than two years to construct now have additional stipulations in the attempt to account for both the decline in contract workers and the effort to deter construction delay.

DPL implemented building phase deposits and mandatory Public Benefit with each lease that extends past the two-year period. If the commercial property is estimated to take more than two years to be constructed and is projected that it will be constructed in phases by certified engineers, lessees are required to deposit 5% of the total cost of production for each phase unless a percentage is mutually agreed upon with DPL. 

The previous regulations for projects that take over two years required set a cap of $4 million in base rent and $5 million in additional rent. The regulation amendment now stipulates the condition that the project’s capital investment is no less than $36 million and will benefit the economic development of the Commonwealth. Historically, no CNMI commercial lease project that exceeded two years has ever exceeded $2 million in base rent or additional rent cap but this precautionary measure ensures the financial buffer for the lessee and increases public welfare well before the completing of the structure.

The two regulations were signed into adoption by Attorney General Edward Manibusan on Sept. 23, 2019, and can be found on Volume 41 Number 09 of the September 2019 Commonwealth Register. 

For more information, visit the DPL website at www.dpl.gov.mp or like it on Facebook at www.facebook.com/DPLCNMI. DPL can also be reached at (670) 234-3751 and is located on the second floor of the Joeten Dandan Commercial Building. (PR)