Ka Wai Ola - Office of Hawaiian Affairs, Volume 13, Number 6, 1 Iune 1996 — Governor threatens to withhold airport revenues [ARTICLE+ILLUSTRATION]

Governor threatens to withhold airport revenues

by Patrkk Johnston A battle has been won but the war is far from over.

■ Shortly I after the I Legislature rejected SB 1698 HD 3, Go vernor Ben Cayetano released a draft opinion from the U.S. Depart-

ment of Transportation (DOT) Inspector General's senior counsel arguing that it was illegal for the state to give OHA a share of revenues from the airport tmst fund. Because of this, the govemor said he was going to withhold payment of OHA's portion until the issue was resolved. A portion of the airpoit is built on ceded lands making OHA eligible for a pro-rata share of moneys generated by its operations. Approximately $7.5 million or 50 percent of OHA revenues eome from the aiipon. According to the IG legal opinion, federal airport legislation passed in

1982 (the Airport and Airway Improvement Act, AAIA) prohibits revenues produced by the airport to be used for non-airport operations. The opinion recommended that the Federal Aviation Administration "withhold from its present grant to the Hawai'i Department of Transportation (HDOT) the 28.3 million HDOT paid to OHA as its 20 percent share of gross revenues for fiscal years 1992 throuch 1995."

After the Govemor's release, OHA Chairman Clayton Hee - who had travelled to Washington to address the Smithsonian Institute - made it clear what he thought of the govemor's move. "Govemor Cayetano's action is a knee-jerk reaction to what amounts to a draft opinion by the Inspector General and nothing more." During his Washington trip Hee said he had spoken with top attomeys at the DOT and had determined that what was issued by the IG lawyer is only an opinion and not an official report by the Inspector General. Hee also said the Inspector General had agreed to allow OHA the oppoitunity to provide comment on the "discussion draft report."

Hee indicated that until OHA provides comment and has an "exit conference" with the Inspector General and the Federal Aviation Administration will the discussion draft report be finalized and become a formal document. Officials at OHA say the IG opinion is mistaken, that OHA receiving airport moneys is consistent with federal and state law, and that OHA will argue this point in upcoming hearings or legal proceedings. Hee points out that the discussion draft fails to recognize that OHA's revenue stream was established in

1980 and that DOT regulations state that encumbrances by airport

owners incurred before 1982 will not be affected by the AAIA. "The IG's lawyer is relying on the 1982 date (when the AAIA was passed). We believe the exclusion grandfathers OHA because its creation precedes 1982."

"Governor Cayetano's action is a knee-jerk reaction to what amounts to a draft opinion by the Inspector General and nothing more." - Chairman Clayton Hee

OHA Govemment Affairs Officer Scotty Bowman agrees. "The basis for OHA's objections is that we think the IG's draft opinion is flawed. We think there is a legal basis for receipt of OHA money ffom operations at the airport and continued page 3

Clayton Hee

Airport revenues /™» /

these ean be found in Act 304 and in an exclusion clause in the Department of Transportation's own regulations." Bowman clarifies that Act 304 generally describes that moneys received by OHA shall be equivalent to 20 percent of the revenues derived from the public land trust

"consistent with the restrictions and limitations under the existing federal and state laws and regulations. Hee adds that instead of going along with the draft opinion "it is in the state's best interest to join with the native Hawaiian people and challenge the validity of the

Inspector General's opinion." Hee said he had met with Senators Inouye and Akaka and with Congressman Abercrombie and they are prepared to help the Hawaiian people in any way they ean. They all said that this issue ean be resolved without hurting the Hawaiian people.