Friday, August 3, 2001

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State, OHA to
resume talks on
land revenue

A settlement could cost the
state as much as $1.2 billion

By Pat Omandam

The state and the Office of Hawaiian Affairs have agreed to resume talks over past-due revenues from certain ceded or public trust lands. A settlement is likely to cost the state hundreds of millions of dollars.

The talks stalled in April 1999.

"This is not going to be a one-month or six-month process," said trustee Donald Cataluna.

"We'll be lucky if we can get a settlement in two years."

The ceded-land negotiations stem from a 1996 Circuit Court ruling by Judge Daniel G. Heely. Heely, who has since moved to the mainland, said OHA could sue for ceded-land revenues generated from housing sales and rentals, Hilo Hospital patient services, off-site Duty Free Shoppers and interest income.

The case is pending before the Hawaii Supreme Court.

Estimates of what the state owes range up to $1.2 billion.

When talks ended, the parties were about $53.3 million apart. OHA's final offer to the state was for it to pay OHA $304.6 million -- $152.3 million now and an additional $152.3 million the year after.

The state had insisted on $251.3 million and is steadfast on a global settlement that prevents OHA from suing the state again over such claims.

OHA Chairwoman Haunani Apoliona said yesterday Gov. Ben Cayetano in March agreed to resume the negotiations. Taking his cue, the OHA board in May unanimously agreed to renew talks with the state.

And the board yesterday re-formed an ad hoc committee on entitlements and negotiations to resume those talks.

"Given that open door from him, we did take formal action to reconstitute the committee," she said.

The trustees on the negotiating team are Colette Machado, Linda Dela Cruz, Charles Ota, Oz Stender and John D. Waihee IV.

Apoliona said Cayetano was unsure how conclusive the talks would be. The board has already consulted with attorney James Duffy, who serves as OHA's counsel for these negotiations, to get up to speed on how things stand.

Still, Apoliona said she is uncertain when the formal talks will begin or how long they may last.

"It depends on what kinds of issues are to be settled yet," she said.

OHA's negotiating team will report back to the full OHA board for approval. This time, the number of trustees on the team has been expanded to five members, which is a board quorum.

That means the ad hoc committee meetings must comply with the open-meetings requirements under the state Sunshine Law and file public-meeting notices and agendas.

Those changes were enough to dissuade Machado from serving as chairwoman. Apoliona had selected her to lead the negotiations, but Machado refused after the fifth member was added.

She and Stender agreed it would not give OHA the flexibility to negotiate because the panel would have to comply with open-meeting requirements.

Apoliona said it will be up to the five trustees to select a chairperson from among themselves.

Negotiations began in early 1998, and by December of that year, the Hawaii justices warned both parties to resolve their dispute or they may do it for them.

But any resolution by the Hawaii court was put on hold to await the result of the Rice vs. Cayetano case that went on appeal before the U.S. Supreme Court in October 1999. In what is known as the Rice decision, the U.S. justices ruled on Feb. 23, 2000, that it was unconstitutional for the state to restrict OHA elections to those of Hawaiian ancestry.

A subsequent lawsuit last summer opened the OHA elections to candidates of all ethnicities.

The Rice decision also deemed the current OHA board as "de facto" trustees, and forced the nine trustees to resign last September or face state legal action to remove them from office.

Meanwhile, the state Auditor's Office is overseeing a comprehensive ceded-lands inventory. An accurate count of all former crown lands would help in the negotiations.

Office of Hawaiian Affairs

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