The United States owns territory and property, and the Constitution gives Congress power to regulate, transfer and dispose of that property. That power is absolute and the states have no authority over federal property, even within state borders.
Article IV, Section 3, Clause 2 states:
The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.
The Constitution is silent as to the methods of disposing of property of the United States. In United States v. Gratiot,1 in which the validity of a lease of lead mines on government lands was put in issue, the contention was advanced that "disposal is not letting or leasing," and that Congress has no power "to give or authorize leases." The Court sustained the leases, saying "the disposal must be left to the discretion of Congress."2 Nearly a century later this power to dispose of public property was relied upon to uphold the generation and sale of electricity by the Tennessee Valley Authority. The reasoning of the Court ran thus: the potential electrical energy made available by the construction of a dam in the exercise of its constitutional powers is property which the United States is entitled to reduce to possession; to that end it may install the equipment necessary to generate such energy. In order to widen the market and make a more advantageous disposition of the product, it may construct transmission lines and may enter into a contract with a private company for the interchange of electric energy.3
No appropriation of public lands may be made for any purpose except by authority of Congress.4 However, Congress was held to have acquiesced in the long-continued practice of withdrawing land from the public domain by Executive Orders.5 In 1976 Congress enacted legislation that established procedures for withdrawals and that explicitly disclaimed continued acquiescence in any implicit executive withdrawal authority.6 The comprehensive authority of Congress over public lands includes the power to prescribe the times, conditions, and mode of transfer thereof and to designate the persons to whom the transfer shall be made,7 to declare the dignity and effect of titles emanating from the United States,8 to determine the validity of grants which antedate the government's acquisition of the property,9 to exempt lands acquired under the homestead laws from previously contracted debts,10 to withdraw land from settlement and to prohibit grazing thereon,11 to prevent unlawful occupation of public property and to declare what are nuisances, as affecting such property, and provide for their abatement,12 and to prohibit the introduction of liquor on lands purchased and used for the Reno Indian Colony.13 Congress may limit the disposition of the public domain to a manner consistent with its views of public policy. A restriction inserted in a grant of public lands to a municipality which prohibited the grantee from selling or leasing to a private corporation the right to sell or sublet water or electric energy supplied by the facilities constructed on such land was held valid.14
Unanimously upholding a federal law to protect wild-roaming horses and burros on federal lands, the Court restated the applicable principles governing Congress's power under this clause. It empowers Congress to act as both proprietor and legislature over the public domain; Congress has complete power to make those "needful rules" which in its discretion it determines are necessary. When Congress acts with respect to those lands covered by the clause, its legislation overrides conflicting state laws.15 Absent action by Congress, however, states may in some instances exercise some jurisdiction over activities on federal lands.16
No state may tax public lands of the United States within its borders,17 nor may state legislation interfere with the power of Congress under this clause or embarrass its exercise.18 Thus, by virtue of a Treaty of 1868, according self-government to Navajos living on a reservation in Arizona, the tribal court, rather than the courts of that state, had jurisdiction over a suit for a debt owed by a Navajo resident to a non-Indian conducting a store on the reservation under federal license.19 The question whether title to land that has once been the property of the United States has passed from it must be resolved by the laws of the United States; after title has passed, "that property, like all other property in the state, is subject to the state legislation; so far as that legislation is consistent with the admission that the title passed and vested according to the laws of the United States."20 In construing a conveyance by the United States of land within a state, the settled and reasonable rule of construction of the state affords a guide in determining what impliedly passes to the grantee as an incident to land expressly granted.21 But a state statute enacted subsequently to a federal grant cannot operate to vest in the state rights that either remained in the United States or passed to its grantee.22
In the territories, Congress has the entire dominion and sovereignty, national and local, and has full legislative power over all subjects upon which a state legislature might act.23 It may legislate directly with respect to the local affairs of a territory or it may transfer that function to a legislature elected by the citizens thereof,24 which will then be invested with all legislative power except as limited by the Constitution of the United States and acts of Congress.25 In 1886, Congress prohibited the enactment by territorial legislatures of local or special laws on enumerated subjects.26 The constitutional guarantees of private rights are applicable in territories that have been made a part of the United States by congressional action27 but not in unincorporated territories.28 Congress may establish, or may authorize the territorial legislature to create, legislative courts whose jurisdiction is derived from statutes enacted pursuant to this section other than from Article III.29 Such courts may exercise admiralty jurisdiction despite the fact that such jurisdiction may be exercised in the states only by constitutional courts.30 Congress may also establish non-judicial territorial offices.31 If the powers and duties assigned to these offices are "primarily local" in nature, then Congress may prescribe the manner of appointment for officials to these positions without having to comply with the requirements of Article II's Appointments Clause.32