150             
HOUSE OF REPRESENTATIVES             H.C.R. NO.            
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                                
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                     HOUSE CONCURRENT
                        RESOLUTION

REQUESTING AN INVENTORYING OF THE PUBLIC LAND TRUST AND
   ESTABLISHMENT OF A JOINT COMMITTEE.



 1       WHEREAS, in 1978, the Constitutional Convention recommended
 2   and the people of the State of Hawaii enacted Section 5 of the
 3   State Constitution, which established the Office of Hawaiian
 4   Affairs (OHA) and designated it as the body which would hold
 5   title to all real or personal property set aside or conveyed to
 6   it as a trust for native Hawaiians and Hawaiians.  A board of
 7   trustees for OHA elected by Hawaiians was established; and
 8   
 9       WHEREAS, by enactment of Act 196, Session Laws of Hawaii
10   (SLH) 1979, chapter 10, Hawaii Revised Statutes (HRS), was
11   adopted.  The Act defined the purpose, powers, duties, land
12   trust revenues, and other features of OHA; and 
13   
14       WHEREAS, by enactment of Act 273, SLH 1980, chapter 10,
15   HRS, was amended to authorize OHA to expend 20 percent of all
16   funds derived from the public land trust, as described in
17   section 10-3, HRS; and 
18   
19       WHEREAS, between 1981 and 1990, an average of $1,400,000
20   was transferred to OHA.  This figure, however, was
21   significantly lower than the amount owed, and OHA initiated
22   discussions with the State to address this concern; and 
23   
24       WHEREAS, the Legislature passed Act 121, SLH 1982, that
25   authorized the Legislative Auditor to complete the inventory of
26   ceded lands, to study the numerous legal and fiscal issues
27   relating to its use, and to study the use and distribution of
28   revenues from ceded lands; and 
29   
30       WHEREAS, in 1983, OHA Trustees filed two lawsuits against
31   the State, one to obtain 20 percent of the proceeds the State
32   received in settlement of a lawsuit for the illegal mining of
33   sand on Molokai and the other to obtain 20 percent of the
34   income and proceeds the State received from lands surrounding
35   harbors, Sand Island, Honolulu International Airport, and Aloha
36   Tower; and 

 
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 1       WHEREAS, in 1986, the Legislative Auditor completed the
 2   ceded lands study and submitted a final two-volume report.  The
 3   Auditor found problems with the inventory of ceded and non-
 4   ceded lands done by the Department of Land and Natural
 5   Resources.  It contained inaccuracies in the classification of
 6   land as ceded or non-ceded, and as trust land or non-trust
 7   land, and in the acreage of parcels.  It recommended that all
 8   public lands be within the public land trust, "...including all
 9   lands title to which was vested in the State of Hawaii pursuant
10   to section 5(a) of the Admission Act.  Including all public
11   lands within the public trust is in keeping with the trust
12   concept that dates back to annexation.  It further precludes
13   the need for keeping accurate but costly inventories for the
14   purpose of differentiating ceded from non-ceded lands and trust
15   from non-trust lands...."; and 
16   
17       WHEREAS, in 1987, in Trustees of the Office of Hawaiian
18   Affairs v. Yamasaki, 69 Hawaii 154, 737 P.2d 446 (1987),
19   certiorari denied, 108 S.Ct. 234, 484 U.S. 898, 98 L.Ed.2d 192
20   (1987), the Hawaii Supreme Court ruled that section 10-3, HRS,
21   did not support the claim of OHA to 20 percent of a settlement
22   reached by the State in its litigation with Molokai Ranch and
23   that legislative clarification of section 10-13.5, HRS, was
24   necessary to resolve facial statutory inconsistencies and to
25   establish the funding of the OHA under chapter 10, HRS, because
26   of a lack of judicially discoverable or manageable standards
27   adequate to permit a judicial determination thereof; and 
28   
29       WHEREAS, after eighteen months of negotiations, OHA
30   Trustees and the State Administration announced a settlement of
31   the ceded lands dispute which defined both the trust and the
32   revenues that were to be allocated to OHA.  The Legislature
33   approved the negotiated settlement by enactment of Act 304, SLH
34   1990.  The Legislature amended chapter 10, HRS, to:
35   
36       (1)  Clarify the lands comprising the public land trust
37            under chapter 10, HRS;
38   
39       (2)  Clarify the revenues derived from the public land
40            trust which shall be considered to establish the
41            amount of funding to OHA for the purpose of the
42            betterment of the conditions of native Hawaiians; and
43   
44       (3)  Provide for a process to determine the actual amounts
45            payable to OHA and for the formulation of a plan for
46            the payment of that sum consistent with the

 
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 1            restrictions and limitations under existing federal
 2            and state laws and regulations, and bond and
 3            contractual obligations;
 4   
 5   and 
 6   
 7       WHEREAS, after several years of negotiations, by enactment
 8   of Act 35, SLH 1993, the Legislature funded the resulting
 9   settlement by authorizing $136,500,000 in general obligation
10   bond funds to satisfy the States obligation to native Hawaiians
11   for the unsegregated use of ceded lands between 1981 and 1990;
12   and 
13   
14       WHEREAS, there still remains disagreement as to whether OHA
15   is receiving all of its entitlements or ceded land revenues
16   from the State and when negotiations failed, in 1994 OHA filed
17   a lawsuit against the State entitled Office of Hawaiian Affairs
18   v. State of Hawaii, Circuit Court of the First Circuit, State
19   of Hawaii Civil No. 94-0205-01, (Heely case); and 
20   
21       WHEREAS, in 1996, Circuit Judge Daniel G. Heely ruled in
22   part that OHA was entitled to 20 percent of revenue generated
23   by:
24   
25       (1)  Duty Free-Waikiki because Duty Free operations could
26            not exist without the airport concession which is
27            partly on ceded lands;
28   
29       (2)  Hilo Hospital from cafeteria sales, rentals to
30            community groups and patient services;
31   
32       (3)  HFDC and HHA projects; and
33   
34       (4)  Interest on these revenues as provided by law;
35   
36   and
37   
38       WHEREAS, the State filed an appeal with the Hawaii Supreme
39   Court; and 
40   
41       WHEREAS, the Supreme Court suggested that OHA and the State
42   negotiate a settlement; and 
43   
44       WHEREAS, by enactment of Act 329, SLH 1997, a two-year
45   process for resolving the controversy with respect to the
46   proper management and disposition of the lands subject to the
47   public land trust and the proceeds and income therefrom, and to

 
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 1   effectuate Article XII, Section 6 of the Hawaii Constitution,
 2   was established.  The Act also established a joint committee to
 3   gather information, facilitate discussion and secure
 4   recommendations to address issues relating to the lands subject
 5   to the public land trust.  The Act attempted to clarify the
 6   Legislatures statutory definition of "revenue" under section
 7   10-2, HRS.  It further established a non-litigation mechanism
 8   to inventory and map the public trust lands and tried to assure
 9   an adequate level of funding to OHA by providing a lump-sum
10   annual payment of $15,100,000 for the two-year review process;
11   and 
12   
13       WHEREAS, in the past two years, few meetings were conducted
14   by the joint committee, no inventory was completed, and strong
15   dissatisfaction with the two-year cap on revenues was voiced by
16   OHA and its beneficiaries; and 
17   
18       WHEREAS, the Hawaii Supreme Court is presently reviewing
19   Judge Heely's ruling and is awaiting the outcome of the
20   negotiations between the State and OHA.  However, the Supreme
21   Court has expressed frustration at the pace and lack of forward
22   movement in the negotiations between the parties and is
23   preparing to make a ruling that may be devastating to both
24   parties; and 
25   
26       WHEREAS, while the parties have been meeting, there is
27   still no settlement and there appears little chance of
28   settlement because of major disagreements over the scope and
29   amount of the settlement; and 
30   
31       WHEREAS, as a result of these ongoing controversies and
32   continued litigation, the State faces claims for past amounts
33   due, which by some estimates, could exceed one billion dollars.
34   There may be serious deterioration in the confidence of the
35   bond markets in state government financing inclusive of a
36   downgrading in the State's bond rating with attendant lower
37   bond marketability and the risk of higher interest expenses;
38   and 
39   
40       WHEREAS, without a fair settlement, acceptable and binding
41   on the parties, continued litigation can be anticipated at both
42   the State and Federal levels by OHA and the State; and 
43   
44       WHEREAS, one can also expect continued acts of civil
45   disobedience and demonstrations as native Hawaiian
46   beneficiaries seek justice in the form of adequate payments
47   from the ceded land revenues; and 

 
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 1       WHEREAS, the Legislature believes that it is in the publics
 2   interest, due to the difficulty, time, uncertainty, disruption
 3   of public purposes, impact on the public land trust, and
 4   expense of judicial resolution of disputed claims, that another
 5   approach be taken.  This new approach should result in the
 6   repair of the State's fiduciary obligations to native Hawaiians
 7   as it relates to the public land trust.  Such a resolution is
 8   necessary and in the best interests of the State and the
 9   beneficiaries of the public land trust; and 
10   
11       WHEREAS, to facilitate resolution of these issues, based on
12   fairness and equity, the Legislature finds it necessary to
13   provide assistance to the parties; now, therefore,
14   
15       BE IT RESOLVED by the House of Representatives of the
16   Twentieth Legislature of the State of Hawaii, Regular Session
17   of 1999, the Senate concurring, that the Governor and OHA
18   immediately meet with the leadership of both houses to assess
19   the status of the negotiations surrounding the Heely case; and
20   
21       BE IT FURTHER RESOLVED that a new joint committee be
22   established to study and make recommendations on all
23   outstanding and anticipated issues identified by the joint
24   committee as currently or potentially relating to the public
25   land trust, including the possible set aside and transfer of a
26   portion of the public land trust to OHA as partial or full
27   satisfaction of any past or future obligations under section
28   5(f) of the Admissions Act; and 
29   
30       BE IT FURTHER RESOLVED that the makeup of the committee
31   shall consist of six members, of which the Senate President,
32   the Speaker of the House of Representative and the Governor
33   shall each appoint one member; OHA shall appoint two members;
34   and the Circuit Court of the First Circuit shall appoint one
35   member to represent the native Hawaiian beneficiaries of the
36   public land trust; and 
37   
38       BE IT FURTHER RESOLVED that all members of the joint
39   committee shall be appointed no later than thirty days after
40   the last day of session for the Twentieth Legislature, and the
41   joint committee shall convene its initial meeting within thirty
42   days after appointment of the last member; and 
43   
44       BE IT FURTHER RESOLVED that the joint committee shall
45   conduct public hearings throughout the State to facilitate
46   discussions and formulate recommendations on issues within the
47   joint committees purview; and 

 
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 1       BE IT FURTHER RESOLVED that the joint committee submit a
 2   progress report to the Legislature no later than 20 days prior
 3   to the convening of the Regular Session of 2000 and submit a
 4   final report to the Legislature no later than 20 days prior to
 5   the convening of the Regular Session of 2001; and 
 6   
 7       BE IT FURTHER RESOLVED that the Auditor coordinate the
 8   completion of a comprehensive inventory and map database of all
 9   lands currently subject to section 5(f).  All state departments
10   and agencies that use or manage public lands shall fully comply
11   with any and all reasonable requests made by the Auditor.  The
12   Auditor shall identify the entire public trust lands, assets,
13   and natural resources.  Before commencing the actual
14   inventorying and mapping of these ceded lands, the Auditor
15   shall first recommend and obtain approval from the joint
16   committee as to the scope and period of time in which said
17   study shall include.  The Auditor shall also, to the extent
18   feasible, comply with the joint committees requests once the
19   inventorying and mapping is commenced; and 
20   
21       BE IT FURTHER RESOLVED that the Auditor submit a progress
22   report to the Legislature no later than 20 days prior to the
23   convening of the Regular Session of 2000 and submit a final
24   report with copies of the inventory and maps to the Legislature
25   no later than 20 days prior to the convening of the Regular
26   Session of 2001; and
27   
28       BE IT FURTHER RESOLVED that certified copies of this
29   Concurrent Resolution be transmitted to the Governor, Board of
30   Trustees of OHA, Chairperson of the Board of Land and Natural
31   Resources, Director of Transportation, Director of Business,
32   Economic Development, and Tourism, Superintendent of Education,
33   Director of Health, President of the University of Hawaii,
34   Comptroller, and the Auditor.
35 
36 
37 
38                         OFFERED BY:  ____________________________