Ka Wai Ola - Office of Hawaiian Affairs, Volume 7, Number 3, 1 March 1990 Edition 02 — Entitlement Formula Distinguishes Between Two Types of State Income [ARTICLE+ILLUSTRATION]

Entitlement Formula Distinguishes Between Two Types of State Income

The formula contained in the agreement between the Office of Hawaiian Affairs and the state of Hawai'i regarding ineome due OHA under Hawai'i law distinguishes between two types of ineome: proprietary and sovereign. Proprietary ineome is that whieh is generated from use or disposition of those public lands described in Sectiun 5(b) and (e) of the Admissions Act, and those described in P.L. 88-233 (also known as "Z" lands). Examples of proprietary ineome include rents, leases, licenses, mineral rights and airport landing fees. By law, OH A is entitled to 20 percent of all revenue received under this category. ineome derived from sovereign powers over these lands — those generated as an exercise of govemment —

are not included under the agreement. Examples include personal and corporate ineome taxes associated with use of the land, fines collected for violations of state law, and federal grants and subsidies received by the state for publie programs. Also exempted are such community necessities as school luneh payments.

WATER COLLECTION IN EAST MAUl The state Department of Land and Natural Resources has jurisdiction over several hundred thousand acres of ceded land retumed by the federal <jovernment at statehood and now designated for conservation or similar use. The department manages state licenses for water rights on this property, the largest being those licenses held by East Maui Irrigation Company (pictured). ineome from such licenses — including water, logging and grazing — is proprietary, and subject to the agreement. Since 1980, the department has been forwarding to the Office of Hawaiian Affairs the statutory 20-percent pro rata share of this ineome.

HONOLULU HARBOR AND CONTAINER FACĪLTTIES Most of the land under and around Honolulu Harbor is ceded land returned to the state at Statehood, or later through P.L. 88-233. This includes both the Matson Navigation Company and Sea Land Service container yards at Sand Island, the Young Brothers terminal at Pier 24, and part of the Aloha Tower complex. As a result, OHA is entitled to 20-percent of all state ineome derived from gross commercial shipping operations on these facilities, but not to a portion of taxes or other similar ineome.

FACULTY HOUSEMG AT UH MANOA Parts of the University of Hawaii campus in Manoa Valley occupy ceded land subject to the agreement. As spelled out in the formula, University ineome from faculty housing rentals is proprietary, while ineome from tuition, fees and books at the campus are not.

HONOLULU INTERNATIONAL AIRPORT AND TERMINAI. Because the runways of Honolulu International Airport (above) sit on ceded land turned over to the state at Statehood, the Office of Hawaiian Affairs is entitled to 20-percent of all landing fees at the airport. However, the terminal building and parking structure do not occupy these lands, and ineome from those concessions (below) are not included.

ALOHA TOWER DEVELOPMENT PLAN About one-quarter of the planned redevelopment of Aloha Tower will involve ceded lands covered by the announced agreement. OHA will receive 20-percent of the ineome from all lease rents, fees and licenses derived from project activities on the 5(b) lands. In addition, 20-percent of the negotiated premium — money paid for development rights — also will be part of the entitlement.