Ka Wai Ola - Office of Hawaiian Affairs, Volume 9, Number 6, 1 June 1992 — Native Hawaiian Legal Corporation [ARTICLE]

Native Hawaiian Legal Corporation

N H L C Rc|)ort

Legislature acts on Hawaiian Home Lands

The following article was prepared by the staff of the Native Hawaiian Legal Corporation. It summarizes 1992 state legislative actions on Hawaiian Home Lands bills and resolutions. HFDC payments to OHA and DHHL (SB 2638 and SB 2485) These two bills affected the ability of the state to build affordable housing on ceded lands. At issue was how mueh the state would have to pay the DHHL and OHA for their share of revenues from ceded lands now in sugar cultivation under general leases. State law requires that 30 percent of such revenues go to OHA and 20 percent to DHHL. The issue boiled down to howto calculate "revenue." The Senate proposed a formula (introduced by Sen. Mike Crozier) for compensation based on: 1) fair market value 90 days before eonveyance from the Department of Land and Natural Resources to the Housing Finance Development Corporation, the state's housing development agency; 2) a share of the future revenues received from commercial activities developed on the lands. The House Water, Land Use and Hawaiian Affairs committee (chaired by Reps. David Hagino and Jackie Young) countered with a formula setting value of the lands at the appraised value as set forth in the development agreement between the HFDC and the developer of the housing. It would also require an appraisal

based on the "highest and best use," a standard used by courts to set value based on foreseeable land use plans. The House Finance Committee (chaired by Rep. Joseph Souki) reversed the WLH committee by tying value to the current agricultural value of the land (the lowest possible value). This formula would have lowered the payments due the DHHL, and eliminated any payments to the DHHL for revenues from commercial lands (the Senate proposal). Of the three proposals, this was the worst possible bill for Native Hawaiians. In the conference committee draft, the legislators finally agreed, over many objections, to a formula setting the land value at what had been proposed by the WLH committee's "highest and best use" of the land. In addition, it included Crozier's proposal to provide for payments based on revenues from lands used for commereial purposes. This was the version passed by the legislature. SB 2485, whieh deals with OHA's entitlement to 30 percent of the same revenue source, passed in a similar form. The money bills for the DHHL (HB 2922 and SB 2855) SB 2855 provided for compensation due the DHHL for the past illegal uses of DHHL lands by public agencies under gubernatorial executive orders and proclamations. The governor originally proposed a payment £

of $12 million for these uses since 1959. This amount was based on past due rents plus whatever interest those sums could earn at the rate set by statute for unpaid judgements. He intended to supplement this sum next year as more appraisal information became available. The Senate (Crozier) increased that payment to $16 million to take into account a different interest rate, i.e. that prevailing rate whieh financial institutions would charge for residential mortgage loans. It also provided for money to: 1) fund the continuing work of the governor's task force investigating breaches of trust between 1959 and 1988; b) pay for claims against the United States government; e) pay for an audit of the sugar land entitlements for the DHHL; d) pay for lands at Honokowai already used for affordable housing; e) pay for capital improvement projects to build infrastructure on DHHL lands ($25 million). The House (Hagino/Young) WLH committee increased the back rent compensation amount to $24 million and provided another $8.5 million in advance payments to the DHHL for eontinuing public uses of trust lands. It also placed the CIP funds ($25 million) into HB 2922. The Senate Ways and Means Committee (chaired by Sen. Mamoru Yamasaki) cut that appropriation to $13.9 million. The House Finance Committee (Souki) cut back the appropriation to $12 million as a final payment to the DHHL. The conference committee on these bills agreed to only the $12 million proposed by Rep. Souki, but restored various items, as indicated in the last eolumn below:

Resolutions on Self-determination (HCR 405/SCR 152) Sen. Crozier refused to pass out these resolutions. Resolution to request full funding for the DHHL (HCR 406) Rep. Souki killed this resolution.

Senate House House Fin.Conf. SB 2855 $12.0 m. $32.6 m. $12.0 m. $12.0 m. Task Force .675 m. 0 0 .64 m. Claims v. U.S. .50 m. 0 0 ,35 m. Sugar lease audit. .50 m. 0 0 ,10 m. Honokowai .925 m . 0 0 .925 m. HB 2922 $13.9 m. $25.0 m. $25.0 m. $13.9 m.