Hawaii-2011-SB984-Introduced

SECTION 1. In 1978, the Hawaii 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 and 6 of article XII of the Hawaii Constitution provide:

"PUBLIC TRUST

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 Hawaii 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."

"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 that the legislature established to implement article XII, sections 4 and 6, of the Hawaii Constitution.

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), ("OHA I") 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 . . . [W]e 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).

On April 28, 2006, the Hawaii supreme court ruled in Office of Hawaiian Affairs v. State of Hawaii, 110 Haw. 338, 366, 133 P.3d 767, 795 (2006) ("OHA II"), that consistent with its ruling in OHA I, the State remained obligated to pay the office of Hawaiian affairs for use of ceded lands including the "use of ceded lands upon which the airports sit", and noted that "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."

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 Hawaii Constitution), and July 1, 2010, 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, 2010.

The legislature also finds that the $200,000,000 will be provided to the office of Hawaiian affairs by the State as a monetary payment, except to the extent that the State and the office of Hawaiian affairs agree to substitute land for cash as set forth in this Act. The office of Hawaiian affairs will be entitled to interest on any balance of the $200,000,000 owed from July 1, 2010 at the rate of interest set forth in section 662-8, Hawaii Revised Statutes, which is currently at four per cent a year.

With regard to the future, the legislature finds that the public interest is best served by 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, for the time being, would continue to be set by Act 178, Session Laws of Hawaii 2006, which stated:

. . . 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.

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 that the office of Hawaiian affairs was to receive for the period between November 7, 1978, and July 1, 2008. However, the settlement agreement did not take effect because it was conditioned on certain legislative actions that did not occur.

This Act is an expression of legislative policy and not a settlement or a contract. This Act is without distinction from any other legislative act. As this Act 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 lead 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, 2010, by requiring the transfer of cash or land to the office of Hawaiian affairs.

SECTION 2. The State shall pay to the office of Hawaiian affairs the $200,000,000 in resources identified in section 1 of this Act in the following manner: for each fiscal year beginning with fiscal year 2015-2016 (July 1, 2015 through June 30, 2016), the State shall pay at least $30,000,000 to the office of Hawaiian affairs; provided that the obligation to make payments of at least $30,000,000 as specified in this section shall continue until the $200,000,000 and applicable interest has been paid to the office of Hawaiian affairs; provided further that the State shall pay the office of Hawaiian affairs interest on any remaining balance owed from July 1, 2010 at the rate provided for in section 662-8, Hawaii Revised Statutes, which is currently at four per cent a year; provided further that nothing in this Act shall bar the State from paying to the office of Hawaiian affairs, in a monetary payment or monetary payments, all or part of the $200,000,000 prior to July 1, 2015; provided further that beginning on July 1, 2011, the state executive branch, with the approval of the office of Hawaiian affairs, may substitute for all or any part of the cash payments, conveyances of land that are mutually agreed upon by the appropriate state agency and the office of Hawaiian affairs, and that the state executive branch and the office of Hawaiian affairs mutually agree has the fair market value of the cash for which the land is being substituted.

SECTION 3. The cash or land transfers to the office of Hawaiian affairs 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 state constitution, as if they had been paid out of the income and proceeds from trust lands pursuant to article XII, sections 4 and 6, of the state constitution.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________
	By Request

THE SENATE	S.B. NO.	984
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII