B-146619, OCT. 18, 1961

B-146619: Oct 18, 1961

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER OF AUGUST 7. IT IS STATED THAT FOUR OF THE INVOLVED LEASES ARE WITH THE MAKAH INDIAN TRIBE AND THE OTHERS WITH INDIVIDUAL ALLOTTEES OF LAND. THAT AT THE TIME OF NEGOTIATION OF THE LEASES THE MINIMUM OFFER OF THE LESSORS WAS BASED UPON THE ESTIMATED FAIR MARKET RENTAL VALUE OF THE PROPERTIES AS DETERMINED BY STAFF APPRAISERS OF THE DISTRICT ENGINEER AT SEATTLE. THAT ALL THE LEASES WERE FINALLY NEGOTIATED AT RENTALS AT LEAST EQUAL TO THE APPRAISED VALUES AND IN SOME CASES SLIGHTLY ABOVE. IT IS STATED FURTHER THAT THE LEASES WERE NEGOTIATED ON ARMY ENGINEER FORM 856. THAT THEY WERE APPROVED AS TO FORM AND SUBSTANCE PRIOR TO CONSUMMATION THEREOF BY THE WESTERN WASHINGTON INDIAN AGENCY IN EVERETT.

B-146619, OCT. 18, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF AUGUST 7, 1961 (ENGRE-AL MAKAH AIR FORCE STATION, WASHINGTON) FROM THE ACTING DIRECTOR OF REAL ESTATE, OFFICE OF THE CHIEF OF ENGINEERS, REQUESTING A DECISION AS TO THE VALIDITY OF 14 LEASES OF INDIAN LANDS IN THE VICINITY OF NEAH BAY, WASHINGTON, REQUIRED FOR THE OPERATION OF THE MAKAH AIR FORCE STATION.

IT IS STATED THAT FOUR OF THE INVOLVED LEASES ARE WITH THE MAKAH INDIAN TRIBE AND THE OTHERS WITH INDIVIDUAL ALLOTTEES OF LAND; THAT THE IMPROVEMENTS ERECTED UPON THE LEASED LAND CONSIST OF A RADAR WARNING STATION, BACHELOR OFFICER QUARTERS AND FAMILY HOUSING FOR PERSONNEL ASSIGNED TO THE STATION; THAT AT THE TIME OF NEGOTIATION OF THE LEASES THE MINIMUM OFFER OF THE LESSORS WAS BASED UPON THE ESTIMATED FAIR MARKET RENTAL VALUE OF THE PROPERTIES AS DETERMINED BY STAFF APPRAISERS OF THE DISTRICT ENGINEER AT SEATTLE; AND THAT ALL THE LEASES WERE FINALLY NEGOTIATED AT RENTALS AT LEAST EQUAL TO THE APPRAISED VALUES AND IN SOME CASES SLIGHTLY ABOVE. IT IS STATED FURTHER THAT THE LEASES WERE NEGOTIATED ON ARMY ENGINEER FORM 856; THAT THEY WERE APPROVED AS TO FORM AND SUBSTANCE PRIOR TO CONSUMMATION THEREOF BY THE WESTERN WASHINGTON INDIAN AGENCY IN EVERETT, WASHINGTON; AND THAT THE COPY OF LEASE NO. DA 45 -108-ENG-4542 WITH CORBETT JOHNSON FORWARDED WITH YOUR LETTER IS IN THE SAME FORMAT AS THE OTHER 13 LEASES.

IN EXPLANATION OF THE REASONS FOR THE SUBMISSION IT IS STATED THAT THE BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, HAS DECLARED ALL OF THE LEASES INVALID SINCE THEY DO NOT CONTAIN CERTAIN MANDATORY CLAUSES ALLEGEDLY REQUIRED BY THE LEASING REGULATIONS OF THE BUREAU OF INDIAN AFFAIRS AND THAT THEREFORE THE SUPERINTENDENT FOR THE WESTERN WASHINGTON INDIAN AGENCY ACTED BEYOND HIS AUTHORITY IN APPROVING THE LEASES. SPECIFICALLY, IT IS STATED THAT THE BUREAU HAS DECLARED THE LEASES INVALID BECAUSE THEY DO NOT CONTAIN:

"A. SPECIAL MANDATORY PROVISIONS REQUIRED BY PARAGRAPHS (A) AND (C) OF SECTION 131.17, TITLE 25, CODE OF FEDERAL REGULATIONS. (THE BUREAU OF INDIAN AFFAIRS HAS INFORMALLY ADVISED THAT PARAGRAPH (B) OF THIS SECTION IS BEING ELIMINATED FROM THIS SECTION OF THE CODE).

"B. A PROVISION FOR ADJUSTMENT OF A RENTAL EVERY FIVE YEARS AS REQUIRED BY PARAGRAPH (E) OF SECTION 131.6, TITLE 25, CODE OF FEDERAL REGULATIONS.'

IT IS STATED THAT THE BUREAU DOES NOT INSIST THAT THE LEASES BE CONSIDERED VOID AB INITIO BUT THAT NEW LEASES BE NEGOTIATED BASED UPON THE CURRENT RENTAL APPRAISALS; THAT THE NEW LEASES INCLUDE THE ABOVE MANDATORY PROVISIONS; AND THAT THE BUREAU IS AGREEABLE TO APPRAISALS TO BE MADE BY THE CORPS OF ENGINEERS, SUBJECT HOWEVER TO REVIEW AND APPROVAL BY THE SUPERINTENDENT OF THE WESTERN INDIAN AGENCY.

CONTRARY TO THE BUREAU'S VIEWS IT IS STATED THAT IT IS THE VIEW OF THE OFFICE OF THE CHIEF OF ENGINEERS THAT THE LEASES ARE VALID AND THAT THEREFORE THEY ARE NOT REQUIRED TO BE RENEGOTIATED OR OTHERWISE ALTERED AT THIS TIME FOR THE FOLLOWING REASONS:

"A. AS AFORE STATED, AT THE TIME OF NEGOTIATION THESE LEASES WERE BASED ON A FAIR RENTAL AS DETERMINED BY STAFF APPRAISERS OF THE DISTRICT ENGINEER'S OFFICE, SEATTLE, AND WERE APPROVED BY THE SUPERINTENDENT OF THE WESTERN WASHINGTON INDIAN AGENCY.

"B. NINE OF THE LEASES HAVE BEEN IN EFFECT SINCE 1950, THREE SINCE 1952 AND TWO SINCE 1957.

"C. PARAGRAPH (B) OF SECTION 131.8 AND SECTION 131.9 OF TITLE 25, CODE OF FEDERAL REGULATIONS PROVIDE FOR THE NEGOTIATION OF LEASES WITH ADULT INDIAN OWNERS OF TRUST OR RESTRICTED LANDS AND FOR THE NEGOTIATION OF LEASES ON TRIBAL LANDS FOR RELIGIOUS, EDUCATIONAL, RECREATIONAL OR OTHER PUBLIC PURPOSES OR TO AGENCIES OF THE FEDERAL, STATE OR LOCAL GOVERNMENT AT LESS THAN THE FAIR ANNUAL RENTAL VALUE. THE BUREAU OF INDIAN AFFAIRS CONTENDS THAT THE USE BY THE GOVERNMENT IS NOT SUCH AS IS CONTEMPLATED BY THE PROVISIONS ABOVE CITED SINCE THE QUARTERS FURNISHED THE PERSONNEL OF THIS BASE ARE IN LIEU OF QUARTERS ALLOWANCE. THIS OFFICE CONSIDERS THAT THE LEASES FOR THE MAKAH AIR FORCE STATION ARE FOR A PUBLIC PURPOSE OF THE FEDERAL GOVERNMENT AND THEREFORE THE LEASED PROPERTY DOES NOT NEED TO BE REAPPRAISED OR THE LEASE RENTALS ADJUSTED FROM THAT NOW BEING PAID UNDER THE EXISTING LEASES.'

IN CONCLUSION IT IS STATED THAT THE BUREAU CONTENDS SINCE THE QUARTERS FURNISHED THE PERSONNEL OF THE AIR FORCE STATION ARE IN LIEU OF QUARTERS ALLOWANCE THE USE FOR SUCH PURPOSE IS NOT SUCH AS CONTEMPLATED BY PARAGRAPH (B) OF SECTION 131.8 AND SECTION 131.9. IT IS FURTHER STATED, HOWEVER, THAT THE OFFICE OF THE CHIEF OF ENGINEERS CONSIDERS THAT THE LEASES FOR THE STATION ARE FOR A PUBLIC PURPOSE OF THE FEDERAL GOVERNMENT AND THAT THEREFORE THE SEVERAL LEASED PARCELS ARE NOT REQUIRED TO BE REAPPRAISED NOR ANY ADJUSTMENTS MADE IN THE RENTALS STIPULATED IN THE LEASES.

WHILE THE DATES THE LEASES WERE EXECUTED ARE NOT SHOWN ON THE ITEMIZED LIST OF THE LEASES ATTACHED TO THE LETTER OF AUGUST 7, 1961, IT IS INDICATED FROM THE TERMS THEREOF THAT THE FIRST 12 LEASES LISTED WERE EXECUTED SOMETIME AROUND APRIL 1, 1950, TO OCTOBER 28, 1952, INCLUSIVE, AND THE BUREAU OF INDIAN AFFAIRS HAS REPORTED THAT THE LAST TWO LEASES WERE BOTH APPROVED ON DECEMBER 12, 1957. THE COPY OF LEASE NO. DA 45-108- ENG-4542 WITH CORBETT JOHNSON, FORWARDED WITH THE LETTER OF AUGUST 7, 1961, PROVIDES FOR A TERM BEGINNING DECEMBER 1, 1957, AND ENDING JUNE 30, 1958, WITH AN AUTOMATIC RENEWAL OPTION FROM YEAR TO YEAR THEREAFTER WITHOUT FURTHER NOTICE NOT TO EXTEND BEYOND JUNE 30, 1982. THE ITEMIZED LIST OF THE LEASES SHOWS THAT THE OTHER LEASES ALSO PROVIDE FOR LONG TERMS SOME OF WHICH EXCEED 25 YEARS.

LONG-TIME LEASING AUTHORITY FOR THE LEASING OF INDIAN LANDS SUCH AS HERE INVOLVED IS CONTAINED IN THE ACT OF AUGUST 9, 1946, 60 STAT. 962, 25 U.S.C. 403 (B) AND (C) AND THE ACT OF AUGUST 9, 1955, 69 STAT. 539, 25 U.S.C. 415.

SECTIONS 1 AND 2 OF THE ACT OF AUGUST 9, 1946, PROVIDE IN PART---

"THAT NOTWITHSTANDING THE PROVISIONS OF ANY OTHER LAW, WITH THE CONSENT IN WRITING OF THE INDIVIDUAL INDIAN, ASSOCIATION OF INDIANS, OR INDIAN TRIBE CONCERNED, ANY RESTRICTED INDIAN LANDS SITUATED WITHIN THE STATE OF WASHINGTON MAY BE LEASED FOR RELIGIOUS, EDUCATIONAL, RECREATIONAL BUSINESS, OR PUBLIC PURPOSES, INCLUDING, BUT NOT LIMITED TO, AIRPORTS, EXPERIMENTAL STATION, STOCKYARDS, WAREHOUSES, AND GRAIN ELEVATORS, FOR PERIODS NOT TO EXCEED TWENTY-FIVE YEARS UNDER SUCH RULES AND REGULATIONS AS THE SECRETARY OF THE INTERIOR MAY PRESCRIBE: * * *

"SUCH LEASES MAY BE MADE ONLY BY THE INDIVIDUAL INDIAN OWNER OF THE LAND OR BY THE AUTHORIZED REPRESENTATIVES OF THE TRIBE OR GROUP OF INDIANS TO WHOM THE LAND BELONGS, SUBJECT TO THE APPROVAL OF THE SECRETARY OF THE INTERIOR OR HIS AUTHORIZED REPRESENTATIVE. * * *"

SIMILAR GENERAL AUTHORITY FOR THE LEASING BY THE OWNERS OF RESTRICTED INDIAN LANDS, WITH THE APPROVAL OF THE SECRETARY OF THE INTERIOR FOR TERMS NOT TO EXCEED 25 YEARS IS PROVIDED FOR IN THE ACT OF AUGUST 9, 1955. THIS STATUTE ALSO PROVIDES THAT LEASES FOR PUBLIC, RELIGIOUS, EDUCATIONAL, RECREATIONAL, RESIDENTIAL, OR BUSINESS PURPOSES WITH THE CONSENT OF BOTH PARTIES MAY INCLUDE PROVISIONS AUTHORIZING THEIR RENEWAL FOR ONE ADDITIONAL TERM OF NOT TO EXCEED 25 YEARS, AND "THAT ALL LEASES AND RENEWALS SHALL BE MADE UNDER SUCH TERMS AND REGULATIONS AS MAY BE PRESCRIBED BY THE SECRETARY OF THE INTERIOR.'

BY LETTER DATED SEPTEMBER 13, 1961, THE THEN ACTING COMMISSIONER OF THE BUREAU OF INDIAN AFFAIRS STATED THAT THE INVOLVED LEASES WHICH IT IS INDICATED WERE APPROVED BY THE SUPERINTENDENT OF THE WESTERN WASHINGTON INDIAN AGENCY CONTAINED OR FAILED TO CONTAIN PROVISIONS IN VIOLATION OF 25 CFR, 1949 EDITION, THEN IN EFFECT AND THAT THEREFORE THE LEASES WERE INVALID. HOWEVER, SINCE THE LAST TWO LEASES WERE EXECUTED ON DECEMBER 12, 1957, THEY NECESSARILY WOULD BE REGARDED AS SUBJECT TO THE REGULATIONS APPEARING AT 21 F.R. 2562, APRIL 19, 1956, AND COMPILED IN THE CUMULATIVE POCKET SUPPLEMENT OF 25 CFR AS OF JANUARY 1, 1957.

THE PARTICULAR VIOLATIONS NOTED BY THE ACTING COMMISSIONER OF INDIAN AFFAIRS ARE STATED IN THE LETTER OF SEPTEMBER 13, 1961, AS FOLLOWS:

"1. THE LEASES WERE APPROVED ON FORMS OTHER THAN THOSE APPROVED BY THE SECRETARY, OR HIS AUTHORIZED REPRESENTATIVE (25 CFR 171.8 AND 171.10). AUTHORITY TO APPROVE LEASES ON FORMS OTHER THAN THOSE APPROVED BY THE SECRETARY HAS NEVER BEEN DELEGATED TO SUPERINTENDENTS.

"2. LEASE FEES WERE NOT COLLECTED IN EACH INSTANCE AS REQUIRED BY 25 CFR 171.16, AND AUTHORIZED BY THE ACT OF FEBRUARY 14, 1920 (41 STAT. 415), AS AMENDED BY THE ACT OF MARCH 1, 1933 (47 STAT. 1417; 25 U.S.C. 413).

"3. THE BONDING REQUIREMENT CONTAINED IN 25 CFR 171.18 WAS NOT WAIVED BY THE COMMISSIONER OR HIS AUTHORIZED REPRESENTATIVE (AREA DIRECTOR).

"4. LEASES NOS. 377 THROUGH 383, 889, 890, 4542 AND 4543 DID NOT CONTAIN THE MANDATORY LIQUOR CLAUSE AS REQUIRED IN 25 CFR 171.20.

"5. LEASES NOS. 889, 890 AND 2083 CONTAIN THE SIGNATURES OF THE SUPERINTENDENT FOR AND IN BEHALF OF CERTAIN OF THE INDIAN LESSORS. THE REFERENCED REGULATIONS AT 25 CFR 171.7 PRESCRIBE THE AUTHORITY OF THE SUPERINTENDENT IN SUCH INSTANCES; HOWEVER, THE REGULATIONS AT 25 CFR 171.16 (17), UNLESS WAIVED BY THE COMMISSIONER OR HIS AUTHORIZED REPRESENTATIVE (AREA DIRECTOR) REQUIRE THAT THE LANDS SO LEASED SHALL BE ADVERTISED. SUCH A WAIVER WAS NOT OBTAINED.

"6. LEASES NOS. 4542 AND 4543, APPROVED DECEMBER 12, 1957, DID NOT CONTAIN THE MANDATORY TERMINATION PROVISIONS AS CONTAINED IN 25 CFR 171.17 (A) AND (B). SEE CUMULATIVE POCKET SUPPLEMENT AS OF JANUARY 1, 1957.'

SECTION 171.8 OF THE REGULATIONS (1949 EDITION) AUTHORIZES THE NEGOTIATION OF INDIVIDUAL LEASES AND PERMITS BY ADULT INDIANS (OTHER THAN THOSE NON COMPOS MENTIS) "ON FORMS APPROVED BY THE SECRETARY OR HIS AUTHORIZED REPRESENTATIVE * * * SUBJECT TO THE REQUIREMENTS OF THIS PART AND THE WRITTEN APPROVAL OF THE SUPERINTENDENT.'

A SIMILAR PROVISION IS CONTAINED IN SECTION 171.8 OF THE REGULATIONS APPEARING AT 21 F.R. 2562, APRIL 19, 1956, APPEARING IN THE CUMULATIVE POCKET SUPPLEMENT AS OF JANUARY 1, 1957. SECTION 171.10 (A) (1949 EDITION) PROVIDES THAT "TRIBES, ACTING THROUGH THEIR TRIBAL COUNCILS, MAY NEGOTIATE, ON FORMS APPROVED BY THE SECRETARY OR HIS AUTHORIZED REPRESENTATIVE AND SUBJECT TO THE APPROVAL OF THE SECRETARY OR HIS AUTHORIZED REPRESENTATIVE, LEASES OR PERMITS WITH RESPECT TO TRIBAL LANDS.' A SIMILAR PROVISION IS CONTAINED IN SECTION 171.9 OF THE REGULATIONS APPEARING AT 21 F.R. 2562, APRIL 19, 1956.

SECTION 171.16 (1949 EDITION) PROVIDES FOR THE PAYMENT OF STIPULATED FEES BY THE LESSEE OR PERMITTEE ON A GRADUATED SCALE COMMENSURATE WITH THE AMOUNT OF THE RENTAL.

SECTION 171.18 (1949 EDITION) PROVIDES THAT UNLESS OTHERWISE PROVIDED BY THE COMMISSIONER OR HIS AUTHORIZED REPRESENTATIVE, FULL PERFORMANCE OF THE CONDITIONS OF EACH LEASE OR PERMIT ISSUED UNDER THIS PART SHALL BE GUARANTEED BY A SATISFACTORY CORPORATE SURETY BOND OR INDIVIDUAL SURETY BOND IN A PENAL SUM OF NOT LESS THAN ONE YEAR'S RENTAL, PLUS THE ESTIMATED VALUE OF ANY IMPROVEMENTS TO BE CONSTRUCTED BY THE LESSEE OR PERMITTEE FOR THE BENEFIT OF THE LESSOR OR PERMITTER. THESE REQUIREMENTS ARE SUBJECT TO CERTAIN EXCEPTIONS AND PROVISION IS MADE FOR DEPOSITING CASH OR NEGOTIABLE UNITED STATES TREASURY BONDS OR OTHER NEGOTIABLE TREASURY OBLIGATIONS IN LIEU OF BONDS.

SECTION 171.20 (1949 EDITION) REQUIRES THAT ALL LEASES ISSUED PURSUANT TO THE REGULATIONS SHALL CONTAIN LIQUOR AND MORALITY CLAUSES AS THEREIN PROVIDED. SIMILAR PROVISIONS ARE CONTAINED IN SECTION 171.17 (C) OF THE REGULATIONS APPEARING IN CUMULATIVE POCKET SUPPLEMENT AS OF JANUARY 1, 1957.

SECTION 171.17 (1949 EDITION) (ERRONEOUSLY REFERRED TO IN THE LETTER OF SEPTEMBER 13, 1961, AS SECTION 171.16) PROVIDES THAT UNLESS OTHERWISE PERMITTED BY THE COMMISSIONER OR HIS AUTHORIZED REPRESENTATIVE, THE SUPERINTENDENT, PRIOR TO THE ISSUANCE BY HIM OF A LEASE OR PERMIT IN ACCORDANCE WITH THE REGULATIONS OR IN ACCORDANCE WITH A POWER GRANTED BY THE OWNERS, SHALL ADVERTISE THE LAND FOR LEASE OR PERMIT IN ORDER THAT THE HIGHEST POSSIBLE RENTAL MAY BE OBTAINED.

SUBPARAGRAPHS (A) AND (B) OF SECTION 171.17 OF THE REGULATIONS APPEARING IN CUMULATIVE POCKET SUPPLEMENT AS OF JANUARY 1, 1957, REQUIRE THAT ALL LEASES OR PERMITS CONTAIN CERTAIN SPECIAL TERMINATION PROVISIONS IN THE EVENT OF TERMINATION OF THE FEDERAL TRUST RESPONSIBILITIES AND SUPERVISION WITH RESPECT TO THE LAND DURING THE LEASE TERM.

THE STATUTORY PROVISIONS AUTHORIZING LONG-TERM LEASES SUCH AS HERE INVOLVED SPECIFICALLY PROVIDE THAT SUCH LEASES AND RENEWALS SHALL BE MADE UNDER SUCH TERMS, RULES AND REGULATIONS AS MAY BE PRESCRIBED BY THE SECRETARY OF THE INTERIOR. WHILE THE APPLICABLE REGULATIONS ISSUED PURSUANT TO THE STATUTORY AUTHORITY AUTHORIZE THE NEGOTIATION OF INDIVIDUAL AND TRIBAL LEASES AND PERMITS ON FORMS APPROVED BY THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE, IT IS STATED IN THE LETTER OF SEPTEMBER 13, 1961, THAT AUTHORITY TO APPROVE LEASES ON FORMS OTHER THAN THOSE APPROVED BY THE SECRETARY OF THE INTERIOR HAS NEVER BEEN DELEGATED TO SUPERINTENDENTS. IN THE CIRCUMSTANCES, EVEN IN THE ABSENCE OF ANY OTHER OBJECTIONS, THE LEASES WOULD HAVE NO VALIDITY SINCE THEY WERE NOT EXECUTED ON FORMS APPROVED BY THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE. IN ADDITION, SINCE IT IS REPORTED THAT ALL EXCEPT TWO OF THE LEASES (NOS. 2083 AND 2086) DID NOT CONTAIN THE MANDATORY LIQUOR CLAUSE AS REQUIRED BY SECTIONS 171.20 (1949 EDITION) AND 117.17 (C) (CUMULATIVE POCKET SUPPLEMENT AS OF JANUARY 1, 1957) OF THE REGULATIONS AND THAT LEASES NOS. 4542 AND 4543 DID NOT CONTAIN THE MANDATORY PROVISIONS AS REQUIRED BY SECTION 171.17 (A) AND (B) OF THE LATTER REGULATIONS, SUCH LEASES WOULD BE LEGALLY OBJECTIONABLE ON THAT BASIS. ALSO, SINCE THE TERMS OF EIGHT OF THE LEASES EXCEED 25 YEARS SUCH LEASES WOULD BE IN CONTRAVENTION OF THE STATUTORY LIMITATIONS IN THE ACTS OF AUGUST 9, 1946, AND AUGUST 9, 1955.

ACCORDINGLY, SINCE THE LEASES WERE NOT EXECUTED ON FORMS APPROVED BY THE SECRETARY AS CONTEMPLATED AND REQUIRED BY THE APPLICABLE REGULATIONS AND SINCE, AS INDICATED ABOVE, THEY OTHERWISE FAILED TO MEET THE REQUIREMENTS OF THE REGULATIONS, IT IS OUR VIEW THAT THE LEASES AS NOW EXECUTED ARE INVALID.