Maui News

HAWAIIAN AFFAIRS COMMITTEE ON MAUI TODAY: TO DISCUSS BILL RELATING PAYMENT OF LAND PROCEEDS

February 9, 2009, 9:32 AM HST
* Updated February 11, 10:42 AM
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(Posted by Wendy OSHER © 2009)

The House committee on Hawaiian Affairs holds an informational hearing on Maui today. The focus is House Bill 901-a bill that would amend the law so that the Office of Hawaiian affairs would receive a portion of the income and proceeds from land in the public land trust.

In addition to the income and proceeds previously paid to OHA, the bill seeks $200 million in further resources covering the 30-year period between 1978 and 2008.

The meeting runs from 6 to 8 p.m. at the Paukukalo Hawaiian Homes Community Center. Further hearings will be held in Kona at Kealakehe Elementary School on Tuesday February 10th; at Hilo’s Keaukaha Elementary School on Wednesday February 11th, and at Kauai’s King Kaumualii Elementary School on Thursday February 12th. All hearings begin with a briefing at 6 p.m. followed by the hearing set to begin at 6:05 p.m.

The complete text of the bill is as follows:

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A BILL FOR AN ACT RELATING TO THE OFFICE OF HAWAIIAN AFFAIRS.

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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. In 1978, the state constitution was amended to include article XII, sections 4, 5, and 6 that, among other things, established the office of Hawaiian affairs and its board of trustees. Sections 4, 5, and 6 of article XII of the state constitution provide:

PUBLIC TRUST

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Section 4. The lands granted to the State of Hawaii by Section 5(b) of the Admission Act and pursuant to Article XVI, Section 7, of the State Constitution, excluding therefrom lands defined as “available lands” by Section 203 of the Hawaiian Homes Commission Act, 1920, as amended, shall be held by the State as a public trust for native Hawaiians and the general public.

OFFICE OF HAWAIIAN AFFAIRS; ESTABLISHMENT OF BOARD OF TRUSTEES

Section 5. There is hereby established an Office of Hawaiian Affairs. The Office of Hawaiian Affairs shall hold title to all the real and personal property now or hereafter set aside or conveyed to it which shall be held in trust for native Hawaiians and Hawaiians. There shall be a board of trustees for the Office of Hawaiian Affairs elected by qualified voters who are Hawaiians, as provided by law. The board members shall be Hawaiians. There shall be not less than nine members of the board of trustees; provided that each of the following Islands have one representative: Oahu, Kauai, Maui, Molokai and Hawaii. The board shall select a chairperson from its members.

POWERS OF BOARD OF TRUSTEES

Section 6. The board of trustees of the Office of Hawaiian Affairs shall exercise power as provided by law: to manage and administer the proceeds from the sale or other disposition of the lands, natural resources, minerals and income derived from whatever sources for native Hawaiians and Hawaiians, including all income and proceeds from that pro rata portion of the trust referred to in section 4 of this article for native Hawaiians; to formulate policy relating to affairs of native Hawaiians and Hawaiians; and to exercise control over real and personal property set aside by state, federal or private sources and transferred to the board for native Hawaiians and Hawaiians. The board shall have the power to exercise control over the Office of Hawaiian Affairs through its executive officer, the administrator of the Office of Hawaiian Affairs, who shall be appointed by the board.”

By Act 273, Session Laws of Hawaii 1980, the legislature provided that “[t]wenty per cent of all funds derived from the public land trust, . . . shall be expended by the office of Hawaiian affairs . . . for the purposes of this chapter.” This legislative directive has led to a series of lawsuits concerning the practical application of the twenty per cent apportionment the legislature established to implement article XII, sections 4 and 6, of the Constitution of the State of Hawaii.

In Trustees of the Office of Hawaiian Affairs v. Yamasaki, 69 Haw. 154, 737 P.2d 446 (1987), the Hawaii supreme court concluded that the issue of how the apportionment is formulated is a political question for the legislature to determine.

In response to the Yamasaki decision, the legislature enacted Act 304, Session Laws of Hawaii 1990, to clarify the extent and scope of the twenty per cent portion.

On September 12, 2001, the Hawaii supreme court ruled in Office of Hawaiian Affairs v. State of Hawaii, 96 Haw. 388, 31 P.3d 901 (2001), that Act 304 was effectively repealed by its own terms, so that once again, it was necessary for the legislature to specify the apportionment to be managed and administered by the office of Hawaiian affairs.

In its decision, the Hawaii supreme court affirmed Yamasaki, observing:

“[T]he State’s obligation to native Hawaiians is firmly established in our constitution. How the State satisfies that constitutional obligation requires policy decisions that are primarily within the authority and expertise of the legislative branch. As such, it is incumbent upon the legislature to enact legislation that gives effect to the right of native Hawaiians to benefit from the ceded lands trust. See Haw. Const. art. XVI, §7.

. . . we trust that the legislature will re-examine the State’s constitutional obligation to native Hawaiians and the purpose of HRS § 10-13.5 and enact legislation that most effectively and responsibly meets those obligations.”

Office of Hawaiian Affairs v. State of Hawaii, 96 Haw. at 401, 31 P.3d at 914 (citations omitted).

In reviewing the entire history of the issue of the State’s obligation to transmit to the office of Hawaiian affairs a part of the income and proceeds from the public land trust, the legislature finds that the issue has evolved into two principal aspects, one looking to the past, the other looking to the future.

With regard to the past, the legislature finds that in addition to the amounts of income and proceeds previously paid to the office of Hawaiian Affairs, further resources should be provided to the office of Hawaiian Affairs that represent a re-examination and final determination by the legislature for the period between November 7, 1978 (the ratification date of article XII, sections 4, 5, and 6 of the Constitution of the State of Hawaii), and July 1, 2008, with regard to income and proceeds from the lands in the public trust referred to in article XII, section 4, of the Hawaii constitution. Additionally, the legislature finds that the dollar value of $200,000,000 represents the legislature’s re-examination and final determination of the resources that should be provided to the office of Hawaiian Affairs for the period between November 7, 1978, and July 1, 2008.

The legislature also finds that the resources valued at $200,000,000 will be provided to the office of Hawaiian Affairs in two phases. In the first phase, the legislature by this Act conveys to the office of Hawaiian Affairs the fee simple interest in certain parcels of real property valued at, respectively, the city and county of Honolulu tax assessed value for 2008-2009 of $92,719,415 (certain property in Kakaako on Oahu) and the county of Hawaii tax assessed value for 2007-2008 of $34,483,725 (certain property in Hilo, Hawaii), for a combined value of $127,203,140. In the second phase, the legislature in 2010 will pass an act that conveys to the office of Hawaiian Affairs resources totaling $72,796,860 in value, in the form of conveyance of real property in fee simple.

With regard to the future, the legislature finds that the public interest is best served by the legislature deferring temporarily a re-examination of what amount of income and proceeds from the lands in the public trust referred to in article XII, section 4, of the Hawaii constitution should be provided to the office of Hawaiian Affairs annually beginning on July 1, 2008. In this light, the annual amount will, for the time being, continue to be set by Act 178, Session Laws of Hawaii 2006, which stated:

“. . . [U]ntil further action is taken by the legislature for this purpose, the income and proceeds from the pro rata portion of the public land trust

under article XII, section 6, of the state constitution for expenditure by the

office of Hawaiian affairs for the betterment of the conditions of native

Hawaiians for each fiscal year beginning with fiscal year 2005-2006 shall

be $15,100,000.”

The legislature recognizes that in January 2008, the governor and the office of Hawaiian affairs reached a settlement agreement with respect to all issues relating to the portion of the income and proceeds from the lands in the public trust for the period between November 7, 1978, and July 1, 2008, that the office of Hawaiian affairs was to receive. However, the settlement agreement did not take effect because it was conditioned on certain legislative action that did not occur.

This Act is an expression of legislative policy and not a settlement or a contract. This legislation is a legislative act without distinction from any other legislative act. As it is neither a settlement nor a contract, it can give rise to no lawsuits or claims to enforce it, nor to any claim in the future that any future legislation is barred in any way, or leads to liability in any way, because it somehow conflicts with a settlement, settlement agreement, or contract.

The purpose of this Act is to allow the State to most effectively and responsibly make progress toward meeting part of its constitutional obligation to native Hawaiians by addressing the additional amount of income and proceeds that the office of Hawaiian Affairs is to receive from the public trust pursuant to article XII, sections 4 and 6, of the Hawaii constitution, for the period from November 7, 1978, to July 1, 2008, by:

(1) Conveying certain parcels of real property in fee simple to the office of

Hawaiian affairs; and

(2) Supporting the conveyance with appropriate provisions, such as

exempting all the conveyed lands from the definition of “public lands” in chapter 171, Hawaii Revised Statutes, and exempting the conveyed lands located in Kakaako from the authority of the Hawaii community development authority under chapter 206E, Hawaii Revised Statutes.

SECTION 2. Section 10-13.3, Hawaii Revised Statutes, is repealed.

[“[§10-13.3] Interim revenue. Notwithstanding the definition of revenue

contained in this chapter and the provisions of section 10-13.5, and notwithstanding any claimed invalidity of Act 304, Session Laws of Hawaii 1990, the income and proceeds from the pro rata portion of the public land trust under article XII, section 6 of the state constitution for expenditure by the office of Hawaiian affairs for the betterment of the conditions of native Hawaiians for each of fiscal year 1997-1998 and fiscal year 1998-1999 shall be $15,100,000.”]

SECTION 3. (a) Subject to the rights of the office of Hawaiian affairs set forth in section 8 of this Act including but not limited to the right to inspect and reject any or all of the properties described in this section, all right, title, and interest in the following parcels of land with the existing improvements thereon, except for submerged land, accreted land, or any land makai of the shoreline, shall be conveyed in accordance with section 8 of this Act in fee simple to the office of Hawaiian affairs:

(1) Kakaako Makai: (Lots 2, 3, 4, 5, and 9 as identified on the final

Kakaako park subdivision map dated October 15, 2007, and approved by the city and county of Honolulu department of planning and permitting on November 9, 2007); and

(2) Hilo Banyan drive: Bayview Banyan Corp. (TMK: (3)-2-1-5:21);

Country Club Condo Hotel (TMK: (3)-2-1-5:20); Hilo Hawaiian Hotel (TMK: (3)-2-1-3:5); Naniloa Hotel and Golf Course (TMK: (3)-2-1-1:12; TMK: (3)-2-1-5:13, 14, 16, 17, 27, 32, 39, 41, 42, 46); Reed’s Bay Resort Hotel (TMK: (3)-2-1-5:22); Uncle Billy’s Hilo Bay Hotel Inc. (TMK: (3)-2-1-5:9, 12, 33, 34, 35, 45, 47).

The land described in this section shall be held in trust pursuant to article XII, sections 4, 5, and 6, of the Hawaii constitution, and shall be subject to all laws, including section 171-58, Hawaii Revised Statutes, except as otherwise provided in this Act.

Because these are conveyances in which the State and its agencies are the only parties, the tax imposed by section 247-1, Hawaii Revised Statutes, shall not apply to them.

The property conveyed shall be subject to all encumbrances, whether or not of record, rights of native tenants, leases, contracts, agreements, permits, easements, profits, licenses, rights-of-way, or other instruments applicable to any land conveyed by this section effective or ongoing on the effective date of this Act, which shall remain in full force and effect. These encumbrances may be set forth in the instruments conveying the property to the office of Hawaiian affairs or set forth in a license or similar agreement, a memorandum of which may be recorded concurrently with the instruments conveying the property to the office of Hawaiian affairs. Effective upon conveyance of the property to the office of Hawaiian affairs pursuant to this Act, every reference to the current title-holder or the head of the department or agency in each such instrument, if the title-holder is a department or an agency, shall be construed to be a reference to the office of Hawaiian affairs or its board of trustees.

After the conveyances are made, the property shall be subject to all laws, except as otherwise provided in this Act. The office shall administer the property in accordance with its duties under the Hawaii constitution and as provided by law.

(b) The office of Hawaiian affairs shall cooperate with other state agencies to designate and grant such access rights and easements as may be reasonably necessary for the benefit and use of adjoining properties owned by the State. Each of the instruments creating such access rights or granting such easements shall provide that the office of Hawaiian affairs, or any successor owner of the servient property, shall have the right to reasonably relocate any such access areas or easements so granted. The cost of initially identifying such access areas or designating and granting any such easements shall not be the responsibility of the office of Hawaiian affairs. The cost of relocating any such access areas or easements shall be paid by the office of Hawaiian affairs or any such successor owner, as the case may be. Each of the instruments creating such access rights or granting such easements shall also provide that the office of Hawaiian affairs shall only be responsible for a reasonable share of the cost of maintaining any such access areas and easement areas, as the case may be, and that the office, its tenants, licensees, concessionaires, successors, and assigns shall not be liable for injuries or damages arising from the use of such access areas or easement areas by other state agencies or their invitees.

(c) Notwithstanding subsection (b), the office of Hawaiian affairs shall not be required to approve any access rights or grant any access easements to other state agencies that would materially diminish the value of the servient property or that would materially interfere with the use of the servient property by the office or any lessee, tenant, licensee, concessionaire, or other occupant of the property, unless otherwise provided by law.

(d) The conveyances made by this section shall not include any of the State’s rights to minerals or surface or ground water. As directed by the attorney general, the appropriate boards, agencies, officers, and employees of the State shall:

(1) Execute instruments of conveyance as may be necessary and proper to the office of Hawaiian affairs, as grantee, to convey the interest and title of the State and its boards and commissions to these lands and improvements in fee simple; and

(2) Record the instruments in the land court or bureau of conveyances, as appropriate.

(e) This section shall not limit the power of the legislature to enact any laws.

SECTION 4. The real property conveyances made under this Act shall be deemed income and proceeds from the lands in the public trust referred to in article XII, sections 4 and 6, of the Hawaii constitution, as if they had been paid out of the income and proceeds from such lands pursuant to article XII, sections 4 and 6, of the Hawaii constitution. With regard to any properties conveyed to the office of Hawaiian affairs under this Act that are part of the public land trust referred to in article XII, sections 4 and 6, of the Hawaii constitution, nothing in this Act shall remove those properties from that public land trust.

SECTION 5. To the extent that the State has waived sovereign immunity for a suit, claim, cause of action, or right of action regarding the amount of income and proceeds the office of Hawaiian affairs is to receive from the public trust pursuant to article XII, sections 4 and 6, of the Hawaii constitution, that waiver is withdrawn.

SECTION 6. Section 171-2, Hawaii Revised Statutes, as amended to read as follows:

“§171-2 Definition of public lands. “Public lands” means all lands or interest therein in the State classed as government or crown lands previous to August 15, 1895, or acquired or reserved by the government upon or subsequent to that date by purchase, exchange, escheat, or the exercise of the right of eminent domain, or in any other manner; including accreted lands not otherwise awarded, submerged lands, and lands beneath tidal waters which are suitable for reclamation, together with reclaimed lands which have been given the status of public lands under this chapter, except:

(1) Lands designated in section 203 of the Hawaiian Homes Commission Act, 1920, as amended;

(2) Lands set aside pursuant to law for the use of the United States;

(3) Lands being used for roads and streets;

(4) Lands to which the United States relinquished the absolute fee and ownership under section 91 of the Hawaiian Organic Act prior to the admission of Hawaii as a state of the United States unless subsequently placed under the control of the board of land and natural resources and given the status of public lands in accordance with the State Constitution, the Hawaiian Homes Commission Act, 1920, as amended, or other laws;

(5) Lands to which the University of Hawaii holds title;

(6) Lands to which the Hawaii housing finance and development corporation in its corporate capacity holds title;

(7) Lands to which the Hawaii community development authority in its corporate capacity holds title;

(8) Lands to which the department of agriculture holds title by way of foreclosure, voluntary surrender, or otherwise, to recover moneys loaned or to recover debts otherwise owed the department under chapter 167;

(9) Lands which are set aside by the governor to the Aloha Tower development corporation; lands leased to the Aloha Tower development corporation by any department or agency of the State; or lands to which the Aloha Tower development corporation holds title in its corporate capacity;

(10) Lands which are set aside by the governor to the agribusiness development corporation; lands leased to the agribusiness development corporation by any department or agency of the State; or lands to which the agribusiness development corporation in its corporate capacity holds title; [and]

(11) Lands to which the high technology development corporation in its corporate capacity holds title[.]; and

(12) Lands conveyed to the office of Hawaiian affairs pursuant to Act , Session Laws of Hawaii 2009.

SECTION 7. Section 206E-32, Hawaii Revised Statutes, is amended to read as follows:

§206E-32 District; established, boundaries. The Kakaako community development district is established. The district shall include that area bounded by King Street; Piikoi Street from its intersection with King Street to Ala Moana Boulevard; Ala Moana Boulevard, inclusive, from Piikoi Street to its intersection with the Ewa boundary of Ala Moana Park also identified as the Ewa boundary of tax map key 2-3-37:01; the Ewa boundary of tax map key 2-3-37:01 from its intersection with Ala Moana Boulevard to the shoreline; the shoreline from its intersection with the property line representing the Ewa boundary of property identified by tax map key 2-3-37:01 to the property line between Pier 2 and Pier 4; the property line between Pier 2 and Pier 4 from its intersection with the shoreline to Ala Moana Boulevard; Ala Moana Boulevard from its intersection with the property line between lands identified by Pier 2 and Pier 4 to Punchbowl Street; and Punchbowl Street to its intersection with King Street; provided that the following parcels at Pier 1 and Pier 2 shall be deleted from the Kakaako community development district boundaries and conveyed to the department of land and natural resources to be set aside for the department of transportation and the foreign-trade zone division of the department of business, economic development, and tourism, to ensure continued maritime and foreign commerce use: all of lot 3 and parcels 2, 3-A, A, and B of the Forrest Avenue subdivision, as shown on the map filed with the bureau of conveyances of the State of Hawaii as file plan 2335; and lots A-1 and A-2, as shown on map 2, filed in the office of the assistant registrar of the land court of the State of Hawaii with land court application 1328; and provided further that all existing easements affecting and appurtenant to the parcels to be deleted from the Kakaako community development district boundaries shall not be affected by this change.

The district shall also include that parcel of land identified by tax map key 2-1-14:16, situated mauka of Pier 6 and Pier 7 and makai of Nimitz Highway, being the site for the existing Hawaiian Electric power plant and related facilities.

Any other provision of this section or of this chapter notwithstanding, the Kakaako community development district shall not include any lands conveyed in fee simple to the office of Hawaiian affairs pursuant to Act , Session Laws of Hawaii 2009; provided further that these lands shall not be subject to any of the provisions of this chapter.

SECTION 8. (a) During regular business hours, the State shall make available to the office of Hawaiian affairs and its authorized representatives the State’s files that contain any of the following regarding properties to be conveyed to the office pursuant to this Act:

(1) Copies of soil reports, site plans, engineering reports, archaeological and historical studies, plans, and surveys;

(2) Zoning entitlement and other land use documents and records including, without limitation, all current governmental permits, approvals and authorizations;

(3) Copies of notices from governmental agencies regarding any violations of laws or ordinances;

(4) Copies of all leases and correspondence with any lessees under any of the leases;

(5) Copies of licenses and concession agreements and all correspondence with any of the parties to such licenses and concession agreements;

(6) Copies of any other agreements affecting or relating to any of the property, and correspondence with any of the parties to such other agreements;

(7) Copies of any existing surveys, and aerial photos; and

(8) Copies of all plans and other documents relating to any improvements on any of the property.

(b) The State shall permit the office of Hawaiian affairs and its authorized representatives to enter upon and conduct reasonable physical inspections of the property to be conveyed to the office of Hawaiian affairs under this Act, including subsurface investigations under the property and inspections of the buildings and other improvements located upon the property; provided that such entry and inspections shall be conducted in a manner that reasonably minimizes interference with the use of the property by the occupants of the property.

(c) The office of Hawaiian affairs shall have until the later of:

(1) October 1, 2009; or

(2) Six months after the State has provided the office with access to all the documents and property described in subsections (a) and (b); to conduct a due diligence investigation of the property to be conveyed to the office pursuant to this Act.

(d) If the office of Hawaiian affairs determines in its sole and absolute discretion that there exists any condition with respect to any of the property to be conveyed to the office pursuant to this Act that makes the property unsuitable for the intended uses of the property by the office of Hawaiian affairs, the office may reject any or all of the property to be conveyed to it pursuant to this Act by written notice to the State given by not later than October 1, 2009, or six months after the State has provided the office with access to all the documents and property described in subsections (a) and (b).

(e) Upon receipt of written notice from the office of Hawaiian affairs as and by the date provided in subsection (d) that any or all of the property, including but not limited to any one or more lot or tax map key parcel, to be conveyed to the office is rejected, then the property identified by the office of Hawaiian affairs shall not be conveyed to the office pursuant to this Act and the value of real property to be conveyed to the office of Hawaiian affairs in 2010, as described in section 1 of this Act, shall be increased by the city and county of Honolulu tax assessed value for 2008-2009 for property identified in section 3 of this Act but not conveyed to the office of Hawaiian affairs located in Kakaako Makai or by the county of Hawaii tax assessed value for 2007-2008 for property identified in section 3 of this Act but not conveyed to the office of Hawaiian affairs located in the Banyan Drive area of Hilo, county of Hawaii.

(f) The State shall convey to the office any property which has not been rejected by the office as provided in subsection (d) by not later than thirty days after the date by which the office of Hawaiian affairs was required to notify the State of such rejection as provided in subsection (d).

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2009.

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