Bill Text: HI HB928 | 2024 | Regular Session | Introduced

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Bill Title: Relating To Public Land Trust Revenues.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2023-12-11 - Carried over to 2024 Regular Session. [HB928 Detail]

Download: Hawaii-2024-HB928-Introduced.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	928
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

 

 

Relating to public land trust revenues.

 

 

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

 

     SECTION 1.  The legislature finds that it must set right and fulfill its trust responsibilities to the indigenous people of Hawaii, consistent with governmental action across America to address injustices against indigenous peoples.  It is incumbent upon the legislature to enact legislation that upholds its trust responsibilities and duty of care to native Hawaiians to account for all ceded lands in the public land trust inventory, account for all income and proceeds derived from the public land trust, and transfer the full twenty per cent pro rata share of income and proceeds from the public land trust annually to the office of Hawaiian affairs for the betterment of the conditions of Native Hawaiians.

     The genesis and source of the State's public land trust responsibility to native Hawaiians are the historical events that led to the illegal overthrow of the Kingdom of Hawaii; the transfer of approximately 1,800,000 acres of crown, government, and public lands to the United States under the 1898 Joint Resolution of Annexation without the consent of and without compensation to the Native Hawaiian people or their sovereign government; the admission of Hawaii as a state of the Union in 1959, with the explicit trust responsibility and requirement in the Section 5(f) of the 1959 Admissions Act that one of the five purposes of the public land trust is that the income and proceeds from the public land trust are supposed to be used "for the betterment of the conditions of native Hawaiians"; and the 1978 constitutional convention's recognition that native Hawaiians are one of the beneficiaries of the public land trust and the creation of the office of Hawaiian affairs to manage and administer the specific allocation of "all income and proceeds from that pro rata portion of the [public land] trust for native Hawaiians" as stated in Article XII of the Hawaii State Constitution.  The United States and the courts have consistently affirmed the trust nature of the government and crown lands, including large tracts of ceded lands used for military or other purposes under federal control.

     In 1959, as a condition of its admission into the union, the State of Hawaii agreed to hold certain lands granted to the State by the United States in a public trust, the public land trust, for five purposes delineated in section 5(f) of the Admission Act, which provides in relevant part:

The lands granted to the State of Hawaii by subsection (b) of this section and public lands retained by the United States under subsections (c) and (d) and later conveyed to the State under subsection (e), together with the proceeds from the sale or other disposition of any such lands and the income therefrom, shall be held by said State as a public trust [(1)] for the support of the public schools and [(2)] other educational institutions, [(3)] for the betterment of the conditions of native Hawaiians, as defined in the Hawaiian Homes Commission Act, 1920, as amended, [(4)] for the development of farm and home ownership on as widespread a basis as possible for the making of public improvements, and [(5)] for the provision of lands for public use.  Such lands, proceeds, and income shall be managed and disposed of for one or more of the foregoing purposes in such manner as the constitution and laws of this State may provide, and their use for any other object shall constitute a breach of trust for which suit may be brought by the United States.

     In 1978, the people of Hawaii affirmed the State's trust obligation to native Hawaiians by ratifying constitutional amendments from the constitutional convention, including article XII, sections 4, 5, and 6, which established the office of Hawaiian affairs and charged it with managing income and proceeds from the public land trust for the benefit of native Hawaiians.  Article XVI, section 7 of the Hawaii constitution required the State to enact legislation to comply with its trust obligations.  Thus, in 1979, legislation, codified at chapter 10, Hawaii Revised Statutes, set forth the purposes of the office of Hawaiian affairs and described its duties of the trustees.

     In September 1981, an initial land inventory by the department of land and natural resources listed approximately 1,271,652 acres, falling woefully short of its duty to provide a complete inventory of the public land trust lands.  Additionally, the state land information management system does not include all lands held by all state entities.

     Act 273, Session Laws of Hawaii 1980, enacted section 10‑13.5, Hawaii Revised Statutes, to implement the office of Hawaiian affairs' pro rata share and required that the office of Hawaiian affairs receive "[t]wenty per cent of all funds derived from the public land trust."  This legislative directive addressing the constitutional mandate has led to a series of lawsuits and legislative enactments concerning the office of Hawaiian affairs' constitutional pro rata share of the public land trust.  The State and the office of Hawaiian affairs have labored to resolve the political question of the statutory pro rata share of income and proceeds derived from the public lands trust, and payment to the office of Hawaiian affairs.  Act 178, Session Laws of Hawaii 2006, affirmed the State's trust obligation under article XII, section 6, of the state constitution to native Hawaiians by requiring that the department of land and natural resources provide an annual accounting of revenue-generating public trust lands and the amounts derived from those lands to the legislature.  The interim measure also set a fixed amount of $15,100,000 from the pro rata share of the public land trust income and proceeds due to the office of Hawaiian affairs for the betterment of the conditions of native Hawaiians until further action is taken by the legislature for this purpose.

     Act 15, Session Laws of Hawaii 2012, was enacted to address past-due amounts, which accumulated during the period between November 7, 1978, up to and including June 30, 2012, of income and proceeds from the public land trust owed to the office of Hawaiian affairs by implementing an agreement between the State and the office of Hawaiian affairs for the State to convey certain lands in Kakaako, Oahu, to the office of Hawaiian affairs valued at approximately $200,000,000.  Act 15 did not, however, address the State's constitutional obligations relating to the office of Hawaiian affairs' twenty percent pro rata share of the income and proceeds from the public land trust generated after June 30, 2012.  Notably, a 2015-2016 financial review initiated by the office of Hawaiian affairs found that the minimum amount of total gross receipts from sources that the office of Hawaiian affairs has historically claimed was approximately $394,322,163 in the fiscal year 2015-2016.  Twenty per cent of this amount is approximately $78,900,000.

     The legislature finds that to uphold its constitutional trust obligation and duty to the indigenous people of Hawaii, it must enact another legislative measure in light of the information, data, and facts provided to the legislature by state agencies since the enactment of Act 178, Session Laws of Hawaii 2006, more than a decade ago.

     The purpose of this Act is to increase the amount of moneys transferred from the public land trust to the office of Hawaiian affairs.

     SECTION 2.  Section 10-13.3, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§10-13.3[]  Interim] Public land trust revenue.  (a)  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] shall be transferred to 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.] pursuant to this section.

     (b)  All departments and agencies that collect receipts for the use of ceded or public land trust land shall:

     (1)  Establish trust holding accounts to accumulate the office's portion of each receipt that would otherwise be deposited into the general fund or a special fund, and to accumulate the remainder of each receipt that would otherwise be deposited into the general fund for the rest of the fiscal year;

     (2)  Determine if:

          (A)  Any federal or state law precludes any portion of the receipt from being used to better the conditions of native Hawaiians; or

          (B)  The transfer of any portion of the receipt will cause the department or agency to renege on any pre-existing pledge, rate covenant, or other pre-existing obligation to holders of revenue bonds or other indebtedness of the State, department, or agency;

     (3)  If use of a receipt is not limited by the provisions of paragraph (2):

          (A)  Determine the office's share of the receipt by calculating the ceded and non-ceded fraction for the parcel that generated the receipt by area (square feet or acres), multiplying the receipt by the ceded and non-ceded fraction, and multiplying that result by twenty per cent; and

          (B)  Deposit the resulting amount into the appropriate trust holding account established pursuant to paragraph (1) to accumulate the office's portion; and

          (C)  Deposit the remaining portion of the receipt into the general fund if it would otherwise be deposited into the general fund, or deposit the remaining portion of the receipt into the appropriate special fund;

     (4)  If use of a receipt is limited by subparagraph (2)(A) or (B), report the receipt as a gross receipt in a manner as required by the department of land and natural resources, and deposit the entire amount to the credit of the general fund or special fund, as appropriate; and

     (5)  Within ten calendar days of the close of each fiscal quarter:

          (A)  Notify the department of budget and finance in a manner established by the department of budget and finance of the receipts collected and deposited in each of its trust holding accounts, and transferred to the office; and

          (B)  Transfer all receipts deposited in its trust holding accounts to the office, and transmit records of that transfer to the office and the department of budget and finance."

     SECTION 3.  Section 10-13.5, Hawaii Revised Statutes, is repealed.

     ["§10-13.5  Use of public land trust proceeds.  Twenty per cent of all funds derived from the public land trust, described in section 10-3, shall be expended by the office, as defined in section 10-2, for the purposes of this chapter."]

     SECTION 4.  Act 178, Section Session Laws of Hawaii 2006, is amended by repealing sections 2 and 3.

     ["SECTION 2.  Notwithstanding the provisions of chapter 10, Hawaii Revised Statutes, including section 10-13.5, Hawaii Revised Statutes, and until 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.

     SECTION 3.  Notwithstanding the provisions of chapter 10, Hawaii Revised Statutes, or the requirements of Executive Order No. 03-03, beginning in fiscal year 2005-2006, the departments of agriculture, accounting and general services, business, economic development, and tourism, education, land and natural resources, and transportation (for its harbors division), and any other department or agency that collects receipts from the lands within the public land trust, shall determine and transfer to the office of Hawaiian affairs that portion of their receipts from the use of lands within the public land trust collected during each fiscal quarter, necessary to ensure that a total of $3,775,000 of revenues generated by the public land trust is transferred to the office of Hawaiian affairs, within thirty days of the close of each fiscal quarter; provided that for fiscal year 2005-2006, the departments shall have until thirty days after the close of the fiscal year to transfer a total of $15,100,000 from their receipts from the use of lands within the public land trust collected during fiscal year 2005-2006, to the office of Hawaiian affairs whether by the procedures set out in Executive Order No. 03-03 or this Act.

     The governor is expressly authorized to fix the amounts each agency shall transfer to the office of Hawaiian affairs in each quarter by executive order to implement the provisions of this section."]

     SECTION 5.  Nothing in this Act shall resolve or settle, or be deemed to acknowledge the existence of, the claims of native Hawaiians to the income and proceeds of a pro rata portion of the public land trust under article XII, section 6, of the state constitution.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect on July 1, 2023.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

OHA; Ceded Lands; Pro Rata Share

 

Description:

Requires that all moneys in the pro rata portion of the Public Land Trust be transferred to the Office of Hawaiian Affairs.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.