Memorandum of Disapproval of Bill Reconveying Mineral Interests in Certain Lands Acquired by the United States.

I AM WITHHOLDING my approval of S. 1384, a bill "To provide for the reconveyance of all mineral interests in lands acquired by the United States for certain reservoir projects to former owners thereof, and for other purposes."

The purpose of this measure is to authorize and direct the Secretary of the Army, when he determines that the exploration for or exploitation of mineral interests underlying lands within the Arkabutla, Sardis, Enid and Grenada Reservoir projects in Mississippi will not be incompatible with the development, maintenance and operation of these projects, and that the reconveyance of such mineral interests to former owners thereof will be in the public interest, to convey such interests to the former owners thereof or to their legal heirs upon application made within three years and upon payment to the United States of an amount equal to but not in excess of the purchase price for which said interests were acquired by the United States.

The Department of the Army is nearing the completion of the acquisition of approximately 283,000 acres of land for these four reservoir projects in northwestern Mississippi which are an integral part of the Yazoo River Basin headwater project authorized by the Flood Control Act of June 15, 1936. Approximately 62,000 acres have been acquired subject to retention of oil and gas and minerals of like character by the owners thereof and approximately 106,000 acres of the 218,000 acres acquired in fee simple for three of the reservoirs are available for leasing pursuant to the Mineral Leasing Act for Acquired Lands approved August 7, 1947 (61 Stat. 913). Therefore, there is no objection to the enactment of legislation which would provide for the conveyance of oil and gas and mineral interests of like character underlying some of the lands within these reservoirs to the former owners thereof under conditions provided for in section 2 of the bill.

On 29 March 1956, I approved H. R. 7097, 84th Congress, which provides for the reconveyance of oil and gas and mineral interests in lands within the Demopolis Lock and Dam project, Alabama, by authorizing the Secretary of the Interior to reconvey oil and gas and mineral interests to former owners thereof at the current fair market value of such oil and gas and mineral interests and subject to such reservations and restrictions as in the opinion of the Secretary of the Army are necessary. However, S. 1384 differs significantly from this legislation in that it provides for "payment to the United States of an amount equal to but not in excess of the purchase price for which said interests were acquired by the United States". This provision constitutes a departure from the principle established in other legislation requiring payment of fair market value for minerals disposed of by sale or lease. Furthermore, it is predicated on the fallacious assumption that there was a determination of the "purchase price" of the minerals separate and apart from surface and other interests at the time fee title to the land was acquired by the United States. While the known presence of minerals and any trading in oil and gas leasehold interests were considered in arriving at the appraised fair market value of lands acquired in fee simple for these projects, no separate valuation was assigned to minerals except in those few instances in which a separate estate in minerals had been previously created. Therefore, it would be impossible at this time to determine, in most instances, the "purchase price" paid for the minerals. Under these circumstances, I believe that the job of administering this legislation would be confusing and unsatisfactory to all concerned. However, in withholding my approval, I am hopeful that the Congress may yet enact legislation relating to the mineral interests in these lands similar to H. R. 7097, 84th Congress (Public Law 459, 84th Congress ) referred to above.

DWIGHT D. EISENHOWER