Mr. ANDERSON, from the Committee on Interior and Insular Affairs, submitted the following REPORT [To accompany S. 404] The Committee on Interior and Insular Affairs, to which was referred the bill (S. 204) to amend the Indian Long-Term Leasing Act, having considered the same reports favorably thereon with an amendment and recommends that the bill as amended do pass. The amendment is as follows: On page 2, strike all of line 18 and insert in lieu thereof the following: Apache Reservation, the Navajo Reservation, the Coeur d'Alene Reservation, the Colorado River Reservation, and the Salt River Reservation, and any other Indian trust or restricted land authorized by specific legislation, which PURPOSE The primary purpose of S. 204, as amended, is to amend section 1 of the 1955 Indian Leasing Act (69 Stat. 539) relating to leases of individual and tribal lands for public, religious, educational, recreation, residential, and business purposes by increasing the maximum term of such leases from 50 to 65 years. The bill also adds the Yavapai Reservation, the Tulalip Reservation, the Fort Apache Reservation, and the Coeur d'Alene Reservation to the list of those tribes authorized to make leases for up to 99 years. The Colorado River Reservation, the San Xavier Reservation, and the Salt River Reservation are also included among those entitled to 99-year lease authority. However, special legislation for each of these tribes was enacted in previous Congresses. S. 204 would also provide for farming leases up to 40 years in length under certain circumstances on all reservations. BACKGROUND The Senate report on S. 34, a bill that became Public Law 255, 84th Congress, the Long-Term Leasing Act, explained the need for such legislation in the following terms: The bill, as reported, would permit the Indian owners of restricted Indian lands in the United States to lease their lands for a period of 25 years with the approval of the Secretary, for public, religious, educational, recreational, residential, or business purposes, including the development or utilization of natural resources in connection with operations under such leases. In addition, these lands could be leased for farming purposes which require the making of substantial investment in the improvement of the land for the production of specialized crops. The bill in section 2 would also authorize leasing of restricted lands of deceased Indians for the benefit of their heirs or devisees. In general, the laws now governing the leasing of restricted Indian lands preclude leasing for periods of longer than 5 years. The absence of authority for long-term leases discriminates against Indians who own restricted lands that are suitable for the location of business establishments, residential subdivisions, summer homes, airports, or for other purposes that require a substantial outlay of capital by the prospective lessee. It also penalizes Indian owners of raw but potentially valuable farmlands on which the cost of subjugation is too great for the Indian himself to finance. In such cases, prospective lessees are willing to undertake these expensive improvements only if guaranteed tenure by a long-term lease. Because of existing limitations upon the duration of leases, many Indian lands which could be profitably utilized under long-term leases are idle, and the Indians are deprived of much-needed income. Other lands that are leased for shorter periods would bring much higher rentals to the Indians if the lands could be leased on a long-term basis. Enactment of S. 34 will remove these unfair restrictions. As attempts have been made to negotiate long-term development leases under this act, it has become obvious that the term is insufficient. Beginning in 1959, the 1955 act has been amended 12 times to allow development leases to be made for terms of up to 99 years on the Palm Springs, Navajo, Dania, Southern Ute, Fort Mojave, Pyramid Lake, Swinomish, Cochiti, Pojoaque, Tesuque, Zuni, Spokane, Gila River, San Carlos Apache, and Hualapai Reservations. Congress has also granted 99-year lease authority on the Colorado River, the San Xavier, and the Salt River Reservations by legislation which does not amend the 1955 act. NEED There are several reasons why a general 50-year lease term or a 25-year farming term are inadequate to permit the proper development of Indian property: S. Rept. 91-378 First, a 50-year-lease term excludes much financing which should be available. Such a term effectively prevents obtaining FHA mortgage insurance and loans from Federal savings and loan associations because of statutory or regulatory limitations. It also excludes loans from other institutional sources, which although they may not be inhibited by law, require lease terms exceeding 50 years before they will loan on the security of a lease. Second, a 50-year-lease term makes no allowance for a large development which must be carried out over a period of years. A large residential-recreational complex such as is contemplated on some reservations may require 10, 15, or even 20 years to complete. Third, a 50-year term does not allow for any buffer to protect a developer. Most reservations are, to one degree or another, removed from existing developed areas and therefore anyone proposing to develop land there faces risks and uncertainties not existing in established communities. Furthermore, in almost every area, a buyer's resistance to leases exists which must be overcome. These and similar factors may prevent development at as rapid a pace as anticipated when a lease is made. Fourth, a 50-year term does not take into consideration the problem of refinancing when a holder of a lease wishes to sell his interest. This is particularly critical where housing developments are concerned. The same limitations apply in refinancing already mentioned for original financing and some latitude must exist, either in the original lease term or in the ability to extend that term later, so that refinancing will be possible. Fifth, the Bureau of Indian Affairs has encountered difficulty in leasing certain Indians lands for farming purposes where, under existing 25-year authority, the lessee is required to make a substantial investment. This is demonstrated most dramatically in those reservation areas best suited for orchard purposes. Studies indicate that a lease period of not less than 40 years is necessary to permit the amortization of cost of subjugating land and planting citrus and apple orchards. AMENDMENT The amendment to the bill is to protect the 99-year leasing authority of the Colorado River, San Xavier, and Salt River Reservations. The bill as introduced does not include these reservations in the list of those which may make 99-year leases although they have that authority under other law. The bill omits the reference in the present law to the production of specialized crops, but it retains the basic provision about substantial investments in the improvement of the land. Farming leases that do not require substantial investments in improvements are included in the bill in order that all nonmineral leasing authority may be included in one act. S. 204 limits farming leases that require the making of a substantial investment in the improvement of the land to a maximum of 40 years. The bill retains the language of the present law to the effect that business leases may include the development or utilization of natural resources in connection with operations under such leases, but adds a clarifying statement that the authority to lease land for the develop S. Rept. 91-378 ment or utilization of natural resources does not extend to leases for purposes that are subject to the Indian mineral leasing laws. The Secretary of the Interior may not approve any lease with a term longer than is necessary to obtain maximum economic benefits for the Indian owners. COST No additional Federal expenditures will result from the enactment of this bill. DEPARTMENTAL REPORTS The favorable reports of the Department of the Interior and the Bureau of the Budget are set forth below: U.S. DEPARTMENT OF THE INTERIOR, Hon. HENRY M. JACKSON, Chairman, Committee on Interior and Insular Affairs, DEAR MR. CHAIRMAN: This is in response to your request for the views of this Department on S. 204, a bill to amend the Indian LongTerm Leasing Act. We recommend the enactment of this bill if it is amended as discussed in this report. The bill amends the act of August 9, 1955 (69 Stat. 539), by extending the equivalent of a 50-year lease (25-year initial lease plus an option to renew for 25 years) to 65 years for public, religious, educational, recreational, residential, or business purposes. It extends the term for leasing for farming purposes where substantial investment in the improvement of the land is required from 25 years, with no option to renew, to 40 years, with no option to renew. Grazing leases remain set at a 10-year period. This bill contains language that makes it clear that business leases, while they may be made to develop or utilize natural resources in connection with operations under the lease, do not extend to leases for purposes that are subject to the laws governing mining leases of Indian lands, the laws under which minerals, including oil and gas, are exploited. The bill also adds the Yavapai, Havasupai, Tulalip, Fort Apache, and Lummi Reservations to the list of reservations that now have 99-year leasing authority. The act had already been amended to permit leases for public, religious, educational, recreational, residential, or business purposes and for farming purposes which require the making of substantial investment in the improvement of the land for the growing of specialized crops for not to exceed 99 years, including any renewal options, on the following reservations and pueblos: Agua Caliente (Palm Springs) (act of Sept. 21, 1959 (73 Stat. 597)); Navajo (act of June 11, 1960 (74 Stat. 199)); Dania (now Hollywood) (act of Oct. 4, 1961 (75 Stat. 804)); Swinomish (act of Sept. 28, 1968 (82 Stat. 884)); Southern Ute (act of Oct. 10, 1962 (76 Stat. 805)); Fort Mojave (act of Nov. 4, 1963 (77 Stat. 301)); Cochiti, Pojoaque, Tesuque, and Zuni (act of Oct. 12, 1968 (82 Stat. 1003)); Spokane (act of June 10, 1968 (82 Stat. 174)); Pyramid Lake (act of Apr. 27, 1966 (S0 Stat. S. Rept. 91-378 |