The Office of Management and Budget advises that, from the standpoint of the Administration's program, there is no objection to the presentation of this report for the consideration of the Committee.

For the Secretary of the Navy.
Sincerely yours,

E. H. WILLETT,

Captain, U.S. Navy, Deputy Chief.

(With permission granted on pages 19 and 37, the following information is placed in the record at this point:)

To: Congressional reference service.

AUGUST 11, 1972.

From: Congressman Phillip Burton, Chairman, Subcommittee on Territorial and Insular Affairs.

The Subcommittee on Territorial and Insular Affairs will conduct a public hearing on September 14, concerning H.R. 5440 which is enclosed.

Please review the legislation and provide information on the following:

1. Is there any precedent for giving the power to adjudicate this class of claims (I.E. Title 28 USC 1346 (b).)

2. What is the usual procedure for adjudicating claims against the United States Government and would this procedure be applicable to U.S. land takings in Guam prior to 1950.

THE LIBRARY OF CONGRESS, CONGRESSIONAL RESEARCH SERVICE, Washington, D.C., September 11, 1972.

To: House Subcommittee on Territorial and Insular Affairs, Attention: Mr. William G. Thomas.

From: American Law Division.

Subject: H.R. 5440, to Amend the Organic Act of Guam to provide jurisdiction in the District Court of Guam to hear and determine claims against the United States.

This is in response to your two questions concerning H.R. 5440, 92nd Congress, which would provide for jurisdiction in the District Court of Guam to hear and determine claims against the United States for just compensation for property acquired prior to August 1, 1950. You ask whether there is precedent for this type of legislation, and whether existing procedures for adjudicating claims against the United States would be available to adjudicate such issues arising out of U.S. land takings in Guam prior to 1950. We treat the questions in reverse order.

The District Court of Guam was created by the "Organic Act of Guam," ch. 512, 64 Stat. 384, effective August 7, 1950, and was given "the jurisdiction of a district court of the United States in all causes arising under the Constitution, treaties, and laws of the Untied States." 48 U.S.C. 1424. Under 28 U.S.C. 1346 (a) (2), the district courts concurrently with the Court of Claims are given jurisdiction of claims against the United States founded upon the Constitution. Claims against the United States for just compensation for property taken for public use are based on the Fifth Amendment of the Constitution. Thus the District Court of Guam already has jurisdiction to hear cases involving claims against the United States for property taken by the United States. Claims based on takings arising prior to 1950 would be barred, however, by 28 U.S.C. 2401: "Every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues." Thus the primary effect of H.R. 5440 would be to allow claims otherwise barred by 28 U.S.C. 2401. 28 U.S.C. 2501 specifies a similar period of limitation for actions brought in the Court of Claims.

We find no precedents directly on point but have found laws which authorized some form of compensation or resettlement for residents of Guam. The Act of November 15, 1945, ch. 483, 59 Stat. 582, authorized the Secretary of the Navy, who was responsible for administration of U.S. control of Guam from 1898 to 1950, to appoint a claims commission to compensate residents of Guam for claims based on war damages caused by "use and occupation of real property." At the same time the Congress provided for transfer of land to the naval government of Guam for transfer to persons "in replacement of lands acquired for

military or naval purposes in Guam." Act of November 15, 1945, ch. 485, 59 Stat. 584. The present government of Guam in considering applications for purchase or lease of government property for residential or agricultural purposes provides for priorities based on the following.

First, persons, their executors or administrators, who have had all of their land acquired either by leasehold or by fee condemnation by the United States, the Naval Government of Guam, or the government of Guam, and who have owned no other land since January 1, 1946 ;

Second, persons, their executors or administrators, who have had a substantial portion of their land acquired either by leasehold or by fee condemnation by the United States, the Naval Government of Guam, or the government of Guam, since July 1, 1944, the remaining portion of whose land is not adequate or sufficient for reasonable agricultural or residential purposes;

Third, persons, their executors or administrators, who do not qualify under either of the preceding priorities and who have been or who may be exicted from land as a result of the taking of such land for public uses by the Federal government or the government of Guam;

Fourth, persons, their executors or administrators, who formerly owned land in the municipality of Agana which land was acquired by the United States, the Naval Government of Guam or the government of Guam. [Amended by P.L. 2-113, effective August 11, 1954; amended by P.L. 2-81, effective March 10, 1954; amended by P.L. 2-47, effective July 23, 1953; amended by P.L. 2-17, effective February 20, 1953; included in Original Government Code of Guam enacted by P.L. 1-88, 1952.] The Government Code of the Territory of Guam 1970, § 13509. We have no information concerning the administration of the present land transfer program, and have found only the enclosed sections of a 1947 report to the Secretary of the Navy concerning the effect of the 1945 legislation. Hopkins Report for the Secretary on the Civil Governments of Guam and American Samoa, §§ IIC 3, IIC 2, IIC 2a.

Some precedent for H.R. 5440 may be found in the creation of the Indian Claims Commission to hear and determine various claims against the United States "notwithstanding any statute of limitation or laches." 25 U.S.C. 70a.

GEORGE COSTELLO,
Legislative Attorney.

EXTRACT OF THE HOPKINS COMMITTEE REPORT FOR THE SECRETARY ON THE CIVIL GOVERNMENTS OF GUAM AND AMERICAN SAMOA

Mention was made above of the vast areas of land on Guam now occupied by the Federal Government, most of which is still owned in fee by individual Guamanians. Congress has acted in two different ways to meet this situation. The Land Transfer Act (Public Law 225, 79th Congress) was passed along with the Meritorious Claims Act and became law on the same day, November 15, 1945. Under this statute the Secretary of the Navy is authorized, "for the purpose of effecting the rehabilitation and resettlement of the residents of Guam", to transfer to the Naval Government of Guam public lands belonging to the United States Government, which are not required for military or naval use, for transfer or sale by the Naval Government in replacement of lands acquired from the Guamanians for military or naval purposes. The Land Acquisition Act (Public Law 594, 79th Congress), approved August 2, 1946, authorizes the Secretary of the Navy to acquire by purchase or otherwise, in the name and for the use of the United States, land and rights of land on Guam. The Act expressly provides that the authority therein granted includes acquisitions for the purpose set forth in the Land Transfer Act, namely acquisitions for the purpose of effecting the rehabilitation and resettlement of the residents of Guam.

The strictly acquisition features, for the military services, is a part of the problem discussed above under IIC 2 and IIC 2a. Although the Land Acquisition Act has been on the books for over seven months no use has as yet been made of it, partly because the military services have not yet reached definite conclusions as to just what land they want permanently, but also because no money has as yet been appropriated by Congress for these acquisitions (Although the Act authorized the appropriation of $1,630,000 to accomplish the purposes of the Act, no actual appropriation has as yet been made.)

Nor has any land been conveyed to Guamanians under the Land Transfer Act. Persons who have been dispossessed of their homes and land by military forces have yet to receive any land comparable or otherwise, in return. (The

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Island Government is doing what it can in this respect, and thousands of Guamanians are living, rather comfortably, in villages erected for them by the Military Government. However, this is, and must be regarded as, only a temporary arrangement and resettlement must be hastened as much as possible). The essence of the whole plan, which has been sanctioned by Congress, under which the authorities have been proceeding for almost two years is that the Federal Government would acquire title to land which it needs permanently, and then the land which has been owned by the Federal Government since the time of the cession, and which is not now needed for military purposes, would be set up as a pool from which could be allocated suitable parcels of land for purchase by those citizens of Guam whose land has been acquired by the United States. At best, there would necessarily be a considerable interval between the two ends of the transaction. As the principal Navy witness testified before the Senate Naval Affairs Committee:

"In effect we propose a series of exchange deeds. Actually there would be a purchase and condemnation program under which the land to be sold by the Federal Government is acquired; and then, when the entire program is completed, it is proposed that the Government land not acquired for any Government purpose be made available for sale to those whose land has been taken in connection with permanent installations."

When it is considered that the purchase or condemnation program has not even been started as yet, and that it is estimated that eventually some 5,000 separate tracts will be involved in the land to be acquired, with perhaps another 2,000 individuals other than the fee owners having an interest in the land, the magnitude of the problem can be seen. The Governor of Guam estimates that, if the present short-handed conditions with regard to personnel continue to exist, the present program cannot be completed before a minimum of six and a maximum of ten more years.

Two further features cause complications. The first is that the land to be acquired and the land available for transfer and resettlement is by no means comparable land. An acre of land in one part of the island will equal an acre in another part in number of square feet, but the similarity may stop there. Because of this, it may prove difficult to work out equitable and satisfactory adjustments. The question of value and adjudication in condemnation also must be considered. Unless comparable land is available at the same price as received for the land taken by the Government, someone is going to be disappointed, and injured financially. Where improvements are involved, this question of value gets even more complicated. 1941 or even 1944 values of houses will only produce a fraction of what is needed to rebuild at 1947, or 1948 costs.

The foregoing discussion dealing with land acquisition and retransfer by the Federal Government is equally applicable, or even more so, to the question of rebuilding the cities, particularly Agana. The plan is for the Island Government to acquire title to the entire area of the city, by negotiated purchase or condemnation, and then after the new city is laid out in the same general location but with new street and new lot layouts, to transfer the land back to those who wish to rebuild and resettle in the city. The difficulties with this scheme are many. There is the sheer physical, or clerical and legal, labor involved in acquiring title to so many separate parcels, and the extraordinary task of agreeing on values for each, or determining their value in condemnation. There is the necessary time lag between acquisition of title and resale. There is the complex problem of allocation of priorities to desirable lots in the new layout for, since the city's face and features will be entirely changed, it will be impossible to resell lots as such to former owners. And there is the question of values and costs of rebuilding. In theory, every former owner whose house was destroyed in the war would receive enough from the settlement of his claim under the Meritorious Claims Act and from the condemnation of his land to be able to acquire a comparable parcel and a comparable house. Considerable doubt may be expressed as to whether this will actually work that way in practice. Recommended solutions or even guides are very hard to suggest. The situation deserves constant and diligent attention and study, looked at from an over-all viewpoint so that the mind is not bogged down in detail. The problem is important and serious enough to justify the sole attention of a topflight administrator, with a common-sense practical approach and possessed of a high degree of authority.

RECONSTRUCTION

11C 2.-At the public hearings and in our private talks with the people of the island there was constantly evident the undercurrent of uncertainty and insecurity caused by the fact that great numbers of families had lost their homes and did not know what the future had in store for them. Agana, the capital and metropolis of the island with a prewar population of over 12,000, was laid completely waste by the war so that scarcely a house was left standing. Many smaller municipalities were severely damaged. In addition, with the reoccupation by American forces and the development of the island as a major base for the onslaught on Japan, thousands of others were forced to move from their homes and their sites taken for air fields, supply centers, ammunition dumps, housing areas, recreation spots and the like. None of the municipalities which have been projected to take the place of those destroyed or preempted is yet ready for settlement or resettlement, and there is no clear indication when they will be. Also, many Guamanians find themselves still unable to go back to their small farms or "ranches", to live or even to farm in an effort to raise fresh food stuffs to supplement that which is on sale in local stores.

IIC 2a. The first order of business must be the final determination by the military services-the Army, the Navy and the Marines-of their permanent postwar requirements of land. At present, of the 138,000 acres or 217 square miles of land on Guam, the Federal Government is occupying 76,000 acres or 120 square miles. Of this, 27,000 acres or 42 square miles is owned by the United States, being former crown lands of Spain which passed over to us under the Treaty of Paris, and 52,000 acres, or 80 square miles, are owned by citizens of Guam. (All the above acreage figures are approximate.) It is recognized that the national defense should be and is of prime consideration. However, the military forces have given some indication that they do not need permanently all the land they are now occupying and that they intend to release some. The uncertainty is the crippling force in this connection, as regards the local inhabitants, and if the final determinations can be speeded up and made known promptly it would be of tremendous advantage.

Mr. ASPINALL. Mr. Chairman, I do have a short statement.

I wish to advise the committee that I introduced this bill at the request of our good and able friend, Mr. Tony Won Pat, Washington Representative from Guam, who has told me many times of the feeling among Guamanians that immediately following World War II private land was taken for military use without the payment of just compensation. It seemed to me that the introduction of legislation along this line would be one way of determining whether this feeling would be substantiated with factual information.

Mr. Chairman, I have been on Guam many times. And I have had reports from the Guamanians personally. And I know that they feel very deeply about it. And I am pleased that you have seen fit to call the hearing this morning so that we can hear from the representatives of Guam. And I will be interested in the testimony to find out the real facts of the matter as well as we can in the time that we have at our disposal.

I especially want to hear from the Department of Defense and from the people interested in the economic welfare of Guam.

Thank you very much.

Mr. BURTON. Thank you, Mr. Chairman.

We will have the witnesses from the Department of Defense testify first.

Please come to the witness table and identify yourselves for the record.

Welcome to the committee, Mr. Frank. Please identify yourself.

STATEMENT OF ABNER FRANK, ASSOCIATE COUNSEL, REAL ESTATE, NAVAL FACILITIES ENGINEERING COMMAND, DEPARTMENT OF THE NAVY

Mr. FRANK. My name is Abner Frank, associate counsel, Real Estate, Naval Facilities Engineering Command. I am pleased to present the views of the Department of the Navy on behalf of the Department of Defense concerning H.R. 5440, a bill "to amend the organic act of Guam."

The purpose of the bill is to amend section 23 of the act of August 1, 1950 (64 Stat. 389), as amended (48 U.S.C. 1424) by adding a new subsection (c). The act of August 1, 1950 is known as the organic act of Guam. Section 22 thereof, as amended, created the district court of Guam, vesting it with the jurisdiction of a district court of the United States in all causes arising under the Constitution, treaties and laws of the United States, regardless of the amount in controversy, and provided for its rules of procedure. H.R. 5440 would add to section 22 a new subsection (c) vesting the district court with special jurisdiction to hear and determine any claim, filed within 1 year from its enactment, against the United States based on its alleged failure to pay just compensation for property acquired from a claimant or from a deceased lineal ancestor of a claimant prior to August 1, 1950.

The bill is an apparent out-growth of the action of the Legislature of Guam, which on January 18, 1971, adopted Resolution No. 6, "Relative to respect fully requesting and memorializing the Congress of the United States to establish a commission to reopen and reexamine the process whereby the Federal Government obtained title to one-third of the territory of Guam with a view to determine whether the people whose land was so acquired were properly compensated for their loss." That document reflects concern primarily with land acquisitions in Guam effected by the Department of the Navy between the end of World War II and the establishment of the territorial government of Guam under the organic act of Guam.

During the period in question, it was the practice of the Department of the Navy in acquiring land in Guam, which is essentially the procedure used today, to have an appraisal made to determine the fair market value. The market value was based on the highest and best use of the land. Negotiations, based on the appraised value, were then conducted with the owner in an effort to reach a settlement. If a settlement was reached, the land was acquired by direct purchase and that would be a final resolution of the matter. If a settlement was not reached, the land would be acquired by condemnation, the estimated compensation deposited in court to the credit of the owner, and further settlement negotiations conducted. If a settlement still could not be reached, the value of the land was determined by a trial. If the award exceeded the Government's estimate of fair market value, following entry of judgment, the owner was paid the deficiency plus interest, and that would be a final resolution of the matter.

The necessity for the finality of executed transactions and litigation is obvious. H.R. 5440 would call for review and reexamination of land value determinations as of a time over 20 years past. Since that time conditions have changed, witnesses have died and memories of those who survive cannot help but be affected by changes in circumstances,