Ka Wai Ola - Office of Hawaiian Affairs, Volume 20, Number 05, 1 May 2003 — Legislators kill ceded lands revenue bill [ARTICLE+ILLUSTRATION]

Legislators kill ceded lands revenue bill

By Sterling Kini Wong The Office of Hawaiian Affairs will receive ceded land revcnues from the state, but exactly how mueh money OHA should be paid, and ffom what sources, remains unclear. On April 23, Gov. Linda Lingle signed into law Act 23 that will transfer $9.5 million to OHA from certain state funds for unpaid ceded land revenue. (See related story, page 4.) The new law stems from an agreement in

February between the state and OHA for $12.3 million the state acknowledged it owed OHA from July 1, 2001 . At the same time, the state provided OHA with $2,6 million of that settled amount of back revenue, with thc remainder to be appropriated through legislation. In February, Gov. Linda Lingle, through an Executive Order, reinstated a process by whieh to pay OHA for undisputed ceded land revenues. However, legislators on April 2 killed another bill (SB 1151) proposed by OHA that sought to See BILL on page 6

Former OHA Trustee Frenchy DeSoto listens lrrtently as Rlchard Klnney stams the House-amended SB1151 (HD2) formulat1ng ceded land revenues payment3. Photo Noomi Sodetcr>i

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BILL from page 1 clarify the formula for this payment process and would specify whieh ceded lands OHA ean receive revenue from. "I am frustrated by the legislature's unwillingness to deal with this issue," said OHA Administrator Clyde Nāmu'o. "But I am pleased at the way the governor has reacted to reinstating a process by whieh OHA would continue to receive payments." According to the Statehood Admissions Act, ceded lands were to be held in public trust for five purposes, one of whieh is for the betterment of the conditions of Native Hawaiians. In 1980 the legislature decided that 20 percent of all funds derived from the public land trust would be given to OHA. Act 304, passed in 1990, clarified this legislation by stating what ceded land revenue OHA would receive 20 percent of. The Hawai'i Supreme Court nullified the act in Sept. 2001 because a provision that provided OHA with revenue derived from the Honolulu International Airport, a third of whieh sits on ceded land, conflicted with federal legislation. Although the Supreme Court did not dispute that the state is obligated to pay OHA non-airport derived revenue, former Gov. Ben Cayetano halted all ceded land revenue pay- ■ ments to OHA from July 1, 2001. SB11S1 was OHA's attempt to reenact Act 304. The same bill had been submitted last session but lawmakers did not act. At the llth hour, House leaders, including Speaker Calvin Say, amended the bill (SB1151/HD2) to include a caveat that all ceded lands would be valuated as raw, undeveloped land — even if there were buildings and improvements to the land whieh raised its real property value.

"It wouldn't be fair for OHA to receive 20 percent of revenues from improvements that it made no contributions to," explained Water, Land Use and Hawaiian Affairs Chairman Ezra Kanoho (D- Wailua Homesteads, Līhu'e). The amended bill was met with strong opposition in the form of over 200 testimonials from the Hqwaiian community. Vicky Holt Takamine, president of 'īlio'ulaokalani Coalition, said the bill was an insult to the Hawaiian people and a breach of the state's fiduciary duties as the trustee of ceded lands. "Maybe it is time that we take all these ceded lands back and we manage our own lands and we decide what the state of Hawai'i deserves," Takamine said.

First Hawaiian Bank Vice President Corbett Kalama said in real estate development transactions the landowner factors in the future revenue based on improvements to the land. "It would be extremely awkward to expect a landowner to limit the revenue determinant to the value of the raw land," Kalama said. Kanoho said the testimonies were based on emotion and a bill must be based on what is fair. "This is not a game of popular vote," he said. Because the governor has already reinstated a payment process to OHA, Kanoho said that "there is no reason to rush into something and have to change it later." The finance committee unanimously voted down the bill "because the state does not have the

funds to pay the full 20 percent to OHA, said member Maile Shimabukuro (D-Wai'anae-Mākaha-Mākua). Nāmu'o said the payment process Gov. Lingle reinstated would pay OHA between $8.5-9.3 million annually. "It is a good start but our position is that there is a lot more owed to OHA that cannot be paid until Act 304 is reidstated," he said. Nāmu'o said in 1998 OHA was collecting about $8 million annually just from airport revenues. A bill to establish a Public Lands Resolution Task Force to seek resolution of issues related to OHA's ceded lands revenue entitlements was killed in conference committee. OHA opposed the measure. ■

OHA Chalrperson Haunanl Apolkana testifies against the House amended verslon of S8 1 151 at the Aprll 2 hearing before the House Flnance Committee as Center of Hawalkan Studles Director Uiikala Kame'eleihiwa and students protest the state's manogement of, and distribution of revenues to Hawailans from, ceded lands. Photo Naomi sodetani