THE SENATE                           S.C.R. NO.            200
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                    SENATE  CONCURRENT
                        RESOLUTION

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


 1        WHEREAS, in 1978, the Constitutional Convention
 2   recommended and the people of the State of Hawaii adopted
 3   Section 5 of the State Constitution, which established the
 4   Office of Hawaiian Affairs and designated it as the body which
 5   would hold title to all real or personal property set aside or
 6   conveyed to it as a trust for native Hawaiians and Hawaiians;
 7   and
 8   
 9        WHEREAS, a board of trustees for the Office of Hawaiian
10   Affairs elected by Hawaiians was established; and
11   
12        WHEREAS, in 1979, by enactment of Act 196, Session Laws of
13   Hawaii, later codified as Chapter 10, Hawaii Revised Statutes,
14   the State defined the purpose, powers, duties, land trust
15   revenues, and other features of the Office of Hawaiian Affairs;
16   and
17   
18        WHEREAS, in 1980, by enactment of Act 273, Session Laws of
19   Hawaii, Chapter 10, Hawaii Revised Statutes, was amended to
20   specify that twenty percent of all revenues derived from the
21   disposition of ceded lands were to be transferred to the Office
22   of Hawaiian Affairs; and
23   
24        WHEREAS, between 1981 and 1990, an average of $1.4 million
25   was transferred to the Office of Hawaiian Affairs; and
26   
27        WHEREAS, this amount, however, was significantly lower
28   than the amount owed, and the Office of Hawaiian Affairs
29   initiated discussions with the State to address this concern;
30   and
31   
32        WHEREAS, in 1982, the Legislature passed Act 121, Session
33   Laws of Hawaii, which directed the Auditor to complete the
34   inventory of ceded lands, to study the numerous legal and
35   fiscal issues relating to its use, and to study the use and
36   distribution of revenues from ceded lands; and

 
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 1   
 2        WHEREAS, in 1983, the Trustees of the Office of Hawaiian
 3   Affairs filed two lawsuits against the State, one to obtain
 4   twenty percent of the proceeds the State received to settle a
 5   lawsuit for the illegal mining of sand on Molokai, and the
 6   other to obtain twenty percent of the income and proceeds the
 7   State was receiving for the use of lands surrounding harbors,
 8   Sand Island, Honolulu International Airport, and Aloha Tower;
 9   and
10   
11        WHEREAS, in 1986, the Auditor completed the ceded lands
12   study and submitted its final two-volume report; and
13   
14        WHEREAS, the Auditor found problems with the inventory of
15   ceded and non-ceded lands done by the Department of Land and
16   Natural Resources in that the inventory contained the
17   inaccurate classification of ceded and non-ceded lands and in
18   the acreage of parcels; and
19   
20        WHEREAS, the Auditor recommended that all public lands be
21   within the public land trust, "including all lands title to
22   which vested in the State of Hawaii pursuant to section 5(a) of
23   the Admission Act"; and
24   
25        WHEREAS, the Auditor argued that including all public
26   lands within the public land trust would be consistent in
27   keeping with the trust concept that dated back to the
28   annexation of Hawaii to the United States; and
29   
30        WHEREAS, such a comprehensive inclusion would preclude the
31   need for keeping accurate but costly inventories for the
32   purpose of differentiating ceded from non-ceded lands and trust
33   from non-trust lands; and
34   
35        WHEREAS, in 1987, in Trustees of the Office of Hawaiian
36   Affairs v. Yamasaki, 69 Hawaii 154, 737 P.2d 446 (1987),
37   certiorari denied, 108 S.Ct. 234, 484 U.S. 898, 98 L.Ed.2d 192
38   (1987), the Hawaii Supreme Court ruled that section 10-3,
39   Hawaii Revised Statutes, did not support the claim of the
40   Office of Hawaiian Affairs to twenty percent of a settlement
41   reached by the State in its litigation with Molokai Ranch and
42   that legislative clarification of section 10-13.5, Hawaii

 
 
 
 
 
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 1   Revised Statutes, was necessary to resolve facial statutory
 2   inconsistencies and to establish the funding of the Office of
 3   Hawaiian Affairs under Chapter 10, Hawaii Revised Statutes,
 4   because of a lack of judicially discoverable or manageable
 5   standards adequate to permit a judicial determination thereof;
 6   and
 7   
 8        WHEREAS, after eighteen months of negotiations, the
 9   Trustees of the Office of Hawaiian Affairs and the State
10   Administration announced a settlement of the ceded lands
11   dispute which defined both the trust and the revenues that were
12   to be allocated to the Office of Hawaiian Affairs; and
13   
14        WHEREAS, in 1990, the Legislature approved the negotiated
15   settlement by enacting Act 304, Session Laws of Hawaii; and
16   
17        WHEREAS, the Legislature amended Chapter 10, Hawaii
18   Revised Statutes, to:
19   
20        (1)  Clarify the lands comprising the public land trust
21             under Chapter 10, Hawaii Revised Statutes;
22   
23        (2)  Clarify the revenues derived from the public land
24             trust to establish the amount of funding owed to the
25             Office of Hawaiian Affairs for the purpose of the
26             betterment of the conditions of native Hawaiians; and
27   
28        (3)  Provide for a process to determine the actual amounts
29             payable to the Office of Hawaiian Affairs and for the
30             formulation of a plan for the payment of that sum
31             consistent with the restrictions and limitations
32             under existing federal and state laws and
33             regulations, and bond and contractual obligations;
34   
35   and
36   
37        WHEREAS, in 1993, after several years of negotiations, by
38   enactment of Act 35, Session Laws of Hawaii, the Legislature
39   funded the resulting settlement by authorizing $136.5 million
40   in general obligation bond funds to satisfy the State's
41   obligation to native Hawaiians for the unsegregated use of
42   ceded lands between 1981 and 1990; and

 
 
 
 
 
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 1   
 2        WHEREAS, there still remains disagreement as to whether
 3   the Office of Hawaiian Affairs is receiving all of its
 4   entitlements or ceded land revenues from the State and when
 5   negotiations failed, in 1994, the Office of Hawaiian Affairs
 6   filed a lawsuit against the State entitled Office of Hawaiian
 7   Affairs v. State of Hawaii, Circuit Court of the First Circuit,
 8   State of Hawaii Civil No. 94-0205-01, ("Heely case"); and
 9   
10        WHEREAS, in 1996, Circuit Judge Daniel G. Heely ruled in
11   part that the Office of Hawaiian Affairs was entitled to twenty
12   percent of revenue generated by:
13   
14        (1)  Duty Free-Waikiki because Duty Free operations could
15             not exist without the airport concession which is
16             partially situated on ceded lands;
17   
18        (2)  Hilo Hospital from cafeteria sales, rentals to
19             community groups, and patient services;
20   
21        (3)  Housing Finance and Development Corporation and
22             Hawaii Housing Authority projects; and
23   
24        (4)  Interest on these revenues as provided by law;
25   
26   and
27   
28        WHEREAS, the State filed an appeal with the Hawaii Supreme
29   Court; and
30   
31        WHEREAS, the Supreme Court suggested that the Office of
32   Hawaiian Affairs and the State negotiate a settlement; and
33   
34        WHEREAS, in 1997, by enactment of Act 329, Session Laws of
35   Hawaii (Act 329), a two year process for resolving the
36   controversy with respect to the proper management and
37   disposition of the lands subject to the public land trust and
38   the proceeds and income therefrom, and to effectuate Article
39   XII, section 6 of the Hawaii Constitution, was established; and
40   
41        WHEREAS, Act 329 also established a joint committee to
42   gather information, facilitate discussion, and secure

 
 
 
 
 
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 1   recommendations to address issues relating to the lands subject
 2   to the public land trust; and
 3   
 4        WHEREAS, Act 329 attempted to clarify the Legislature's
 5   statutory definition of "revenue" under section 10-2, Hawaii
 6   Revised Statutes, and also established a non-litigious
 7   mechanism to inventory and map the public trust lands, all
 8   while assuring an adequate level of funding to the Office of
 9   Hawaiian Affairs by providing a lump-sum annual payment of
10   $15,100,000 during the two-year review process; and
11   
12        WHEREAS, in the past two years, few meetings were
13   conducted by the joint committee, no inventory was completed,
14   and strong dissatisfaction with the two-year cap on revenues
15   was voiced by the Office of Hawaiian Affairs and its
16   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 Office of Hawaiian Affairs;
21   and
22   
23        WHEREAS, however, the Supreme Court has expressed
24   frustration at the pace and lack of forward movement in the
25   negotiations between the parties and is preparing to make a
26   ruling that may be devastating to both parties; and
27   
28        WHEREAS, while the parties have been meeting, there is
29   still no settlement with little chance of settlement because of
30   major disagreements over the scope and amount of the
31   settlement; and
32   
33        WHEREAS, as a result of these ongoing controversies and
34   continued litigation, the State faces claims for past amounts
35   due which could exceed one billion dollars; and
36   
37        WHEREAS, if this billion dollar estimate becomes a
38   reality, there may be a serious deterioration in the State's
39   bond rating; and
40   
41        WHEREAS, without a fair settlement, acceptable and binding
42   on the parties, continued litigation can be anticipated at both

 
 
 
 
 
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 1   the state and federal levels by the Office of Hawaiian Affairs
 2   and the State; and
 3   
 4        WHEREAS, one can also expect continued acts of civil
 5   disobedience and demonstrations as native Hawaiian
 6   beneficiaries seek justice in the form of adequate payments
 7   from the ceded land revenues; and
 8   
 9        WHEREAS, the Legislature believes that it is in the
10   public's interest, due to the difficulty, time, uncertainty,
11   disruption of public purposes, impact on the public land trust,
12   and expense of judicial resolution of disputed claims, that
13   another approach be taken; and
14   
15        WHEREAS, this new approach could result in the repair of
16   the State's fiduciary obligations to native Hawaiians as it
17   relates to the public land trust; and
18   
19        WHEREAS, such a resolution is necessary and in the best
20   interests of the State and the beneficiaries of the public land
21   trust; and
22   
23        WHEREAS, to facilitate resolution of these issues, based
24   on fairness and equity, the Legislature finds it necessary to
25   provide assistance to the parties; now, therefore,
26   
27        BE IT RESOLVED by the Senate of the Twentieth Legislature
28   of the State of Hawaii, Regular Session of 1999, the House of
29   Representatives concurring, that the Governor and the Trustees
30   of the Office of Hawaiian Affairs immediately meet with the
31   leadership of both houses to assess the status of the
32   negotiations surrounding the Heely case; and
33   
34        BE IT FURTHER RESOLVED that a new joint committee shall be
35   established to study and make recommendations on all
36   outstanding and anticipated issues identified by the joint
37   committee that currently or potentially relate to the public
38   land trust, including the possible set aside and transfer of a
39   portion of the public land trust to the Office of Hawaiian
40   Affairs in partial or full satisfaction of any past or future
41   obligations under section 5(f) of the Admission's Act; and
42   

 
 
 
 
 
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 1        BE IT FURTHER RESOLVED that the membership of the
 2   committee shall consist of four members, of which the Senate
 3   President, the Speaker of the House of Representatives, the
 4   Governor, and the Office of Hawaiian Affairs shall appoint one
 5   member; and 
 6   
 7        BE IT FURTHER RESOLVED that all members of the joint
 8   committee shall be appointed by no later than thirty days after
 9   the last day of session of Regular Session of 1999, and the
10   joint committee shall convene its initial meeting within thirty
11   days after appointment of the last member; and
12   
13        BE IT FURTHER RESOLVED that the joint committee shall
14   conduct public hearings throughout the State to facilitate
15   discussions and formulate recommendations on issues within the
16   joint committee's purview; and
17   
18        BE IT FURTHER RESOLVED that the joint committee submit a
19   progress report to the Legislature no later than twenty days
20   prior to the convening of the Regular Session of 2000 and
21   submit a final report to the Legislature no later than twenty
22   days prior to the convening of the Regular Session of 2001; and
23   
24        BE IT FURTHER RESOLVED that the Auditor coordinate the
25   completion of a comprehensive inventory and map database of all
26   lands currently subject to section 5(f) of the Admission Act;
27   and
28   
29        BE IT FURTHER RESOLVED that all state departments and
30   agencies that use or manage public lands shall fully comply
31   with any and all reasonable requests made by the Auditor; and
32   
33        BE IT FURTHER RESOLVED that the Auditor shall identify the
34   entire public land trust including lands, assets, and natural
35   resources; and
36   
37        BE IT FURTHER RESOLVED that before commencing the actual
38   inventory and mapping of these ceded lands, the Auditor shall
39   first recommend and get approval from the joint committee as to
40   the scope and period of time the inventory shall include; and
41   
42        BE IT FURTHER RESOLVED that the Auditor shall also, to the

 
 
 
 
 
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 1   extent feasible, comply with the joint committee's requests
 2   once the inventory and mapping is commenced; and
 3   
 4        BE IT FURTHER RESOLVED that the Auditor submit a progress
 5   report to the Legislature no later than twenty days prior to
 6   the convening of the Regular Session of 2000 and submit a final
 7   report with copies of the inventory and maps to the Legislature
 8   no later than twenty days prior to the convening of the Regular
 9   Session of 2001; and
10   
11        BE IT FURTHER RESOLVED that certified copies of this
12   Concurrent Resolution be transmitted to the Governor, the
13   President of the Senate, the Speaker of the House of
14   Representatives, the Board of Trustees of the Office of
15   Hawaiian Affairs, the Chairperson of the Board of Land and
16   Natural Resources, the Director of Transportation, the Director
17   of Business, Economic Development, and Tourism, the
18   Superintendent of Education, the Director of Health, the
19   President of the University of Hawaii, the Comptroller, and the
20   Auditor.
21 
22 
23 
24                         OFFERED BY:  ____________________________