Longer leases on private lots fail to pass

A proposal to extend the permissible term for private land leases in the Commonwealth from 55 years to 75 years failed in the House of Representatives on Thursday.

The proposed amendment to Article XII of the Constitution got a 10-9 vote, falling short of the three-fourths majority needed to get the legislative initiative on the ballot next year.

The initiative, sponsored by Rep. Heinz Hofschneider, proposed to extend the permissible leasehold term for private lands from 55 years to 75 years. It also sought to allow existing leasehold agreements to be renegotiated for a new lease term of up 75 years.

Rep. Edward Salas, one of the lawmakers in favor of the initiative, said he was disappointed with the outcome of the vote. He said that lawmakers should at least allow the voters to have their say on the proposal.

“This initiative is very business friendly,” Salas said. “Longer lease terms are more attractive for investors because they allow them more time to recoup the investments. And if we have more people interested in our land, we get some competition going. That increases the value of the land.”

Rep. Diego T. Benavente echoed Salas’ statements, saying the initiative would benefit the economy, as well as individual landowners. “Because of the unwillingness of foreign businessmen to invest in a 55-year lease, local people are having to give away their land at less than premium price. The protection against land alienation that we’re so concerned about actually is not holding up. People are still selling their property, and they are being taken advantage of,” Benavente said.

Rep. Ray Tebuteb, one of the lawmakers who voted against the House initiative, said he was not convinced with the proponents’ main argument that longer lease terms would help boost the economy. “The supporters of this initiative argue that the economy is suffering because of Article 12. But is it really? When the economy was good, Article 12 was in place, too,” said Tebuteb.

He added that he opposes putting the legislative initiative on the ballot because the requirement for ratification is too low. “I’m all for letting the voters decide, but not like this. This issue is too important to be decided by a simple majority,” Tebuteb said, adding that he prefers passing the amendment through the popular initiative process, which requires a two-thirds vote by the electorate.

Rep. Joseph James Camacho gave an entirely different reason for opposing the bill. Camacho, who has run surveys on land issues in his website, said there are more ways to amend the Commonwealth’s land alienation act than extending the lease terms.

“If we pass this initiative, we’re basically ruling out numerous other options for dealing with Article 12,” Camacho said. These options, he said, include abolishing land ownership restrictions, allowing private landowners to sell their land to anyone, allowing long-term residents to own land, allowing any person born in the commonwealth to own land, and designate a zone where anyone can own land.

“I say, let’s give the people a menu and let them pick what they want to do with Article 12, instead of asking them to vote yes or no on one particular option,” said Camacho.

The Senate has passed a similar initiative, which proposes to extend the leasehold term for 80 years. The Senate version, still pending in the House, would also ease the requirements for corporations wishing to buy land in the Commonwealth. Under the initiative, a corporation would be able to own land with only 51 percent of its directors made up of people of Northern Marianas descent, and 51 percent of its stock owned by NMDs.

The Constitution restricts land ownership to persons of Northern Marianas descent. And in order for a corporation to own land, 100 percent of its directors must be NMDs and 100 percent of its voting shares be owned by people of Northern Marianas descent.