Ka Wai Ola - Office of Hawaiian Affairs, Volume 7, Number 6, 1 June 1990 — OHA to get 20% ceded land share [ARTICLE]

OHA to get 20% ceded land share

By Deborah Lee Ward and Ann L. Moore A bill to resolve the 10-year controversy over the state's trust obligations to the Office of Hawaiian Affairs goes to Gov. John Waihee this month for his signature. The new law is the result of over two years work between the OHA board Committee on State Ceded Land Entitlements and representatives of the governor's office. The OHA negotiating committee was comprised of trustees Rod Burgess, A. Frenchy DeSoto, Manu Kahaiali'i, Moses Keale, Clarence

Ching, Thomas K. Kaulukukui, Louis Hao and Moanikeala Akaka, assisted by administrator Richard Paglinawan, deputy administrator Stan Lum, land officer Linda Delaney, and attorney Sherry Broder. The OHA entitlement bill, HB 2896, clears up how to determine the revenue due to OHA. The state constitution and Chapter 10 of the Hawai'i Revised Statutes established OHA and called for OHA to get 20 percent of the ceded land revenues. However there was confusion and disagreement over whieh ceded land revenues OHA should get 20 percent of. Legislators who played key roles in passage of this entitlement agreement include members of the Senate Housing and Hawaiian Programs eommittee chaired by Sen. Mike Crozier, the House

Eeonomie Development and Hawaiian Affairs committee chaired by Rep. David Ige, the Senate Ways and Means committee chaired by Sen. Mamoru Yamasaki, and the House Finance eommittee chaired by Rep. Joseph M. Souki. The state negotiating team members are Norma Wong, Patricia Brandt, George Kaeo, and Terence Yamamoto. When it becomes effective HB 2896 will provide OHA an ineome of approximately $8.4 million a year from ceded land, from July 1, 1990, onward. Presently OHA gets about $1.2 millionayearfrom the state in ceded land revenues. The agreed-upon entitlement means an increase of about $7.2 million a year to OHA to serve native Hawaiians (defined as those with 50 percent or more continued page 1 1

Ceded land entitlements

from page 1 Hawaiian blood.) The bill sets up a way for OHA to receive retroactive (past due) ineome for the years it did not receive its 20 percent share, an amount estimated at around $100 million for the 10 years since OHA's founding. An annual report to the legislature and governor will be required on how the trust proceeds are used by OHA. Computation of the past due entitlement does not mean the eheek will be in the mail on July 1. The bill will allow trustees to opt for a combination of money and/or land. A plan for this process will be submitted to the 1991 legislature. The agreement clears up three major questions whieh had to be settled before OHA could get its 20 percent share of ceded land trust revenue. The three questions and the answers are: Q: Whieh lands, under what state departmental jurisdictions are to be identified as the source of trust ineome? A: The ineome from all 5(b), (e) and "z" lands with the sole exception of the Hawaiian Homes trust lands were and are subject to the OHA Native Hawaiian trust regardless of departmental jurisdiction. These lands are subject to the 20 percent ineome entitlement. Section 5(b) of the Admission (or statehood) Act of 1959 transferred the title of nearly 1.4 million acres, the bulk of ceded lands, from the federal government to the state. The 5(b) lands are those 1.4 million acres including submerged lands but for the purposes of the OHA trust exclude the Hawaiian Homes trust lands. Section 5(e) represents 500 acres of federal lands declared surplus and returned to the state within five years of statehood. The "z" lands represent more than 145,000 acres of ceded lands still under national jurisdiction that may return to the state under a 1963 amendment to Section 5(e). The amendment mandates continuing review and possible return of 5(e) land. The amendment repealed the five-year deadline for federal return of ceded lands. Q: What kind or kinds of ineome from these lands are subject to the 20 percent pro rata share of the trust? A: Revenues from the 5(b), (e) and "z" lands were, and are segregated into two categories: sovereign ineome and proprietary ineome.

Sovereign ineome is not subject to the OHA trust. Sovereign ineome is the money the state generates as part of its sovereign power as a government. Sovereign ineome includes personal and corporate ineome taxes, fines, and federal grants or subsidies. Proprietary ineome is subject to the OHA trust. Proprietary ineome is generated from the use, or disposition of, the identified public lands. Among the proprietary revenues are rents, leases and licenses for the use of 5(b), (e) and "z" lands, minerals rights and runway landing fees. Q; How will the clarified entitlement be honored? A: The agreement provides a process for paying OHA under the restrictions of existing federal and state laws and all bond and contractual obligations. Concerning the past due OHA entitlement, the agreement requires the Department of Land and Natural Resources, the Office of State Planning, and OHA to identify parcels of public land whieh may be conveyed to OHA as payment instead of cash. The agreement provides a way to figure out the money due to OHA under the clarified standards. The retroactive (past due) 20 percent entitlement will be calculated for the 10-years from June 16, 1980 through June 30, 1991. The entitlement agreement requires the Department of Budget and Finance and OHA to determine the actual year-by-yearincomesfor this period to determine the full amount due. Six percent compound interest will be paid through June 30, 1982, and 10 percent interest on the years thereafter, up to July 1, 1990. The agreement appropriates $7.2 million for fiseal year 1990-91 as an estimate of the revenue to be derived from the public land trust. The agreement sets aside $500,000 for land surveys, public information meetings and transportation costs to carry out the agreement. The agreement requires that all data relating to lands in the public trust and the revenue the lands produce shall be reviewed by an independent auditor selected by OHA. The Office of State Planning will review existing policies on the use and disposition of public land trust lands, evaluate the effect of present policies on the revenue due to OHA, and

develop and implement policies to ensure OHA gets its money promptly. Among the tasks for OHA trustees to work out with the state are implementation of the entitlements bill with its land-or-cash option; resolution of a trust entitlement for Hawaiians; decisions on how to spend the money to better conditions for native Hawaiians and Hawaiians; and an examination of new laws and their effect on future claims against the federal government. The main issues to be dealt with are land claims, governance, and beneficiary class definitions. As part of this, decisions must be made on the criteria for land selection. Because it concerns the state's ceded land trust the negotiated agreement's terms specifically state that it does not, in any way, replace, affect or impair claims of native Hawaiians and Hawaiians to reparations from the federal government, including claims to federally controlled lands in Hawai'i. While the change represents significant clarifications of the existing Chapter 10 trust, it addresses only the native Hawaiian beneficiaries. By law, OHA must serve all Hawaiians regardless of blood quantum. The funding in the new measure ean benefit native Hawaiians only. There is still a need to define and implement a trust for Hawaiians of less than half native blood. OHA administrator Richard K. Paglinawan said that onee the governor signs HB2896 a negotiating team of OHA trustees will begin talks with the governor's staff on the entitlements due Hawaiians and the question of establishing a separate trust fund to benefit Hawaiians regardless of their blood quantum. To date, funds to benefit Hawaiians have been provided by the state legislature through appropriations from the general fund. Chapter 10 does not make provision for a portion of ceded land trust revenues to eome to Hawaiians. Co-chairs of the OHA negotiating committee, trustees A. Frenchy DeSoto and Rodney K. Burgess, acknowledged the commitment made by the Governor and state administration and legislators to the Hawaiian people in finally trying to right decades of neglect of Hawaiian needs. The action is a most profound step by the state to aeknowledge the aboriginal people of Hawai'i, the trustees said.