Thursday, September 13, 2001

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Ceded-lands law
deemed invalid

The law had entitled OHA to
a portion of ceded-land revenues

By Pat Omandam

In a stunning setback to native Hawaiian entitlements, the Hawaii Supreme Court has invalidated a 1990 state law that calculates how much the state must pay the Office of Hawaiian Affairs in ceded-land revenues.

Now, any future revenue payments to OHA rests in the hands of a possibly ambivalent state Legislature.

"To repeal Act 304 is like attacking the heartland of what native Hawaiians are entitled to," trustee Colette Machado said. "This is really bad stuff."

OHA Vice Chairman Donald Cataluna said trustees view this as a setback but are hopeful the agency will prevail.

"There is a lot at stake for not only Hawaiians, but also for all of Hawaii Nei," he said.

Gov. Ben Cayetano could not be reached for comment yesterday.

The ruling, in essence, puts OHA back to where it was in 1980, when a state law said the agency was entitled to 20 percent of revenue from ceded or former crown lands. The state and OHA, however, could not agree on what funds were derived from those lands.

The dispute lingered until 1990, when a new state law, Act 304, set up a way for calculating ceded-land revenue. It included revenue from duty-free stands at Honolulu Airport, which sits on ceded land.

As a result of Act 304, the state in 1993 paid OHA $130 million as a partial settlement, which became the foundation for its current $325 million native trust.

But a year later, OHA sued the state for other revenue it believed was owed. After former state Circuit Judge Daniel Heely sided with OHA in 1996, the state appealed the case to the Hawaii Supreme Court.

After watching the state and OHA fail at a negotiated settlement over the past four years, the Hawaii justices reversed Heely's decision yesterday.

The court ruled Act 304 as moot or invalid because it conflicted with a 1998 federal law that banned further use of any airport-related funds to pay claims related to ceded lands. The federal law also excused the state of $28.2 million in airport revenues it had paid OHA for non-airport purposes.

Chairwoman Haunani Apoliona said OHA is left with a situation that is far from clear on how the state's obligation will be carried out. In recent years, annual revenue payments to OHA dropped to $7.5 million from about $15 million.

OHA attorneys are reviewing the decision and any possible appeal, Apoliona said.

Even so, OHA -- which today faces challenges to its constitutionality, like the recent Harold "Freddy" Rice and Patrick Barrett cases -- must ask the next state Legislature to determine how to calculate what the state's 20 percent obligation to OHA should be.

But that may be asking for too much from the 2002 Legislature.

"In my mind, it is very difficult at minimum and nearly insurmountable at maximum," trustee Clayton Hee said.

The former OHA chairman lamented that the OHA board in September 1997 voted against a state settlement offer of $251 million and 360,000 acres, or 20 percent of the state's 1.8 million acres of ceded land.

Senate Vice President Colleen Hanabusa (D, Waianae) believes a funding formula for OHA will be the hottest item on next spring's legislative agenda.

But she fears not all lawmakers will have the "guts" to revisit this controversial issue. Looming are the legal challenges to OHA, as well as next fall's elections, where legislative incumbents face re-election uncertainty because of redrawn political districts.

"Having it as law is one thing, but re-creating it is going to (depend on) whether the Legislature is going to want to tackle this issue this coming year," Hanabusa said.

Hanabusa expects that Hawaiians will be outraged at the ruling and may feel like government has turned its back on them -- again.

"We can't have the Hawaiian people feel any more disenfranchised than how they feel already," she said.

OHA Special

Rice vs. Cayetano arguments

Rice vs. Cayetano decision

Holo I Mua: Sovereignty Roundtable

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