Ka Wai Ola - Office of Hawaiian Affairs, Volume 22, Number 10, 1 October 2005 — State Supreme Court rejects OHA's airport lands elaim [ARTICLE]

State Supreme Court rejects OHA's airport lands elaim

By Derek Ferrar Public lnformation Specialist The Hawai'i Supreme Court has rejected OHA's elaim to as mueh as $300 million that the agency says it should have received in ceded lands revenue from Honolulu International Airport activities. In its Sept. 9 ruling, the court affirmed the 2003 dismissal of a lawsuit that OHA filed against the state to recover the funds. OHA said in the suit that the state should have done more to prevent the passage of a 1997 federal law that banned payments of airport revenue to OHA. In addition, the court affirmed the lower court's assertion that OHA must turn to the state Legislature to determine how mueh the agency may recover and to arrive at a final formula for calculating the total publie land trust revenue that is due to OHA on behalf of its Hawaiian beneficiaries. OHA's attorney in the case, former Hawai'i Supreme Court Iustice Robert Klein, told The Honolulu Advertiser on behalf of the agency's beneficiaries that they were "very disappointed" by the ruling. Klein said OHA would now draft new legislation and work with the Legislature and the governor to reach a settlement on ceded lands revenue. "The courts certainly aren't giving OHA any relief," he told the paper. OHA and the state have long been at odds over ceded lands issues, such as revenue from activities related to, but not directly on, ceded lands (see lawsuit timeline). One example is state revenue from the Waiklkl duty-free shop, whieh does not sit on ceded lands, but is an extension of the duty-free operation at the See CEDED LANDS on pagE 13

CEDED LANDS

CūntinuEd fram page 7 airport, whieh does. OHA tried, but failed, to recover its share of that revenue. A state judge ruled that the state did owe OHA a portion of those funds, but in 2001 the state Supreme Court overturned that decision and at the same time struck down a 1990 law, Act 304, whieh defined what puhlie land trust revenues OHA was entitled to. As a result of the ruling, thenGov. Ben Cayetano stopped all land revenue payments to OHA. Gov. Linda Lingle subsequently reinstated ceded-lands payments in 2003, and OHA now receives around $9.5 million in non-air-port payments a year. In 1996, the inspector general of the federal Department of Transportation detennined that airport revenues could only be used for airport purposes, and that the state had wrongfully paid OHA some $30 million in airport funds. In 1997, Congress passed the "Forgiveness Act," whieh prohibited further airport payments

to OHA, but also "forgave" the state from having to reimburse the federal government for about $28 million of the funds it had paid to OHA between 1992 and 1995. The suit that the high court ruled on last month began in July 2003, when OHA sued the state to recover an estimated $150 million to $300 million, whieh the agency said it had missed out on because the state did not do enough to prevent the 1997 Forgiveness Act or challenge the 1996 federal memo barring airport payments to OHA. In addition, OHA said that if the state had infonned it of the memo, OHA itself would have been able to do more to prevent the cessation of airport ceded lands payments. That suit was dismissed in state Circuit Court in 2003, and the Supreme Court in its September ruling affirmed that dismissal, saying in its ruling that "we believe that (OHA's) allegations are mere speculation, and, more importantly, it would be impossible for (OHA) to prove whether the state's actions or inactions led to Congress' passage of the (Forgiveness) Act."