Opinion ID: 2514143
Heading Depth: 2
Heading Rank: 1

Heading: History of Dispute

Text: This suit arises out of the longstanding dispute between OHA and the State [3] over the disposition of revenues generated from certain lands held in trust by the State for the benefit of, inter alia, native Hawaiians. [4] Before being overthrown, Hawai`i was recognized as an independent monarchy. See S.J. Res. 19, 103rd Cong., 1st Sess. (1993) (apologizing to Native Hawaiians on behalf of the people of the United States for the overthrow of the Kingdom of Hawai`i). In 1898, approximately five years following the overthrow, Hawai`i, which had become the Republic of Hawai`i, was annexed to the United States. See J. Res. 55, 30 Stat. 750 (1898) (Joint Resolution to Provide for Annexing the Hawaiian Islands to the United States). In addition to its sovereignty, the Republic ceded and transferred to the United States the absolute fee and ownership of all public, Government, or Crown lands belonging to the Government of the Hawaiian Islands together with every right and appurtenance thereunto appertaining. Yamasaki, 69 Haw. at 159, 737 P.2d at 449. Following annexation and until 1959, Hawaii's seat of power was vested in a Territorial Government. See Organic Act § 3, Act of April 30, 1900, c. 339, 31 Stat. 141, reprinted in 1 HRS 43, 44 (1993) (establishing the government of the Territory of Hawai`i). In 1959, Hawai`i became a state. As a condition of its admission into the Union, the State of Hawai`i agreed to hold certain lands granted to the State by the United States in a public land trust for five purposes [hereinafter, the ceded lands or the public land trust]. See Admission Act of March 18, 1959, Pub.L. No. 86-3, § 5, 73 Stat. 4, reprinted in, 1 HRS 90, 91-92 (1993). Section 5(b) of the Admission Act defined the trust lands as follows: Except as provided in subsection (c) and (d) of this section, the United States grants to the State of Hawaii, effective upon its admission into the Union, the United States' title to all the public lands and other property, and to lands defined as available lands by section 203 of the Hawaiian Homes Commission Act, 1920, as amended, within the boundaries of the State of Hawaii, title to which is held by the United States immediately prior to its admission into the Union. The grant hereby made shall be in lieu of any and all grants provided for new States by provisions of law other than this Act, and such grants shall not extend to the State of Hawaii. Id. Section 5(f) of the Admission Act delineated the purposes for which the ceded lands were to be used: 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 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 public 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 said 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[.] Id. (emphasis added). In the absence of more specific guiding mandates, public education became the primary beneficiary of the trust. Yamasaki, 69 Haw. at 161-62, 737 P.2d at 451. However, in 1978, the State held a Constitutional Convention, at which time the State's trust obligation to native Hawaiians was clarified in article XII, entitled Hawaiian Affairs. Article XII, section 4 of the Hawai`i constitution provides: 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 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. Haw. Const. art. XII, § 4. Article XVI, section 7, provides: Compliance With Trust Section 7. Any trust provisions which the Congress shall impose, upon the admission of this State, in respect of the lands patented to the State by the United States or the proceeds and income therefrom, shall be complied with by appropriate legislation. Such legislation shall not diminish or limit the benefits of native Hawaiians under Section 4 of Article XII. Haw. Const. art. XVI, § 7. Article XII, section 5 created OHA and charged it with managing the funds designated for the benefit of native Hawaiians: 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. Haw. Const. art. XII, § 5. [5] A board of trustees of OHA was also established: 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. Haw. Const. art. XII, § 6. Pursuant to the mandates of the Hawai`i Constitution, legislation was enacted in 1979 that set forth the purposes of OHA and described the powers and duties of the Board of Trustees. See 1979 Haw. Sess. L. Act 196, at 406 (codified at HRS chapter 10). However, the 1979 legislative action did not represent the final word on the matter[.] Yamasaki, 69 Haw. at 165, 737 P.2d at 453. It was understood that there was much work left to be completed by subsequent legislatures in order to determine the appropriate boundaries of the public trust. Id. (citing Stand. Comm. Rep. No. 784, in 1979 Senate Journal at 1353). In 1980, the legislature amended chapter 10 by adding HRS § 10-13.5, which provided that [t]wenty per cent of all funds derived from the public land trust . . . shall be expended by [OHA] for the purposes of this chapter. 1980 Haw. Sess. L. Act 273, at 525. However, this too was not the final legislative word on OHA's pro rata share of funds from the trust. Yamasaki, 69 Haw. at 165, 737 P.2d at 453. Between 1980 and 1983, OHA became increasingly dissatisfied with the State's lack of progress in fulfilling its obligations. In 1983, because OHA felt the State was not allocating twenty per cent of all funds derived from the public land trust to OHA[,] OHA sued the State and various officers thereof, seeking declaratory and injunctive relief. Id. The defendants moved to dismiss, but the circuit court denied the motions. On interlocutory appeal, this court reversed the circuit court's ruling and remanded for entry of an order dismissing the case as involving a nonjusticiable political question. Essentially, this court held that it was unable to determine the parameters of HRS § 10-13.5 because the seemingly clear language of HRS § 10-13.5 actually provide[d] no `judicially discoverable and manageable standards' for resolving the dispute[d] [issues in the case]. Yamasaki, 69 Haw. at 173, 737 P.2d at 457 (citation omitted). In response, the legislature enacted Act 304. 1990 Haw. Sess. L. Act 304, at 947. Section 7 of Act 304 amended HRS § 10-13.5 to provide: Twenty per cent of all revenue derived from the public land trust shall be expended by [OHA] for the betterment of the conditions of native Hawaiians. 1990 Haw. Sess. L. Act 304, § 7 at 951; HRS § 10-13.5 (1993) (as amended) (emphasis added). The legislature then defined revenue in section 3 of Act 304 to include all proceeds, fees, charges, rents, or other income ... derived from any ... activity[] that is situated upon and results from the actual use of ... the public land trust ..., but excluding any income, proceeds, fees, charges, or other moneys derived through the exercise of sovereign functions and powers including [12 enumerated descriptions of sources of revenue that are excluded from the term revenue under the statute]. 1990 Haw. Sess. L. at 304, § 3 at 948; HRS § 10-2. Section 8 of Act 304 provided a mechanism whereby the State, through the Department of Budget and Finance (B & F), and OHA were to determine the amounts owed to OHA for the period June 16, 1980 through June 30, 1991. 1990 Haw. Sess. L. Act 304, § 8, at 951. On April 16, 1993, the legislature appropriated funds for payment of approximately 130 million dollars to OHA pursuant to Act 304. 1993 Haw. Sess. L. Act 35, at 41. In a memorandum dated April 28, 1993, OHA and the State memorialized the results of their negotiations and noted that [the Office of State Planning (]OSP[)] and OHA recognize and agree that the amount specified in section 1 hereof does not include several matters regarding revenue which OHA has asserted is due OHA and which OSP has not accepted and agreed to. With respect to the matters agreed upon and in satisfaction thereof, the State, on June 4, 1993, tendered two warrants to OHA totaling $129,584,488.85.