REPORT TITLE:
Hawaiian Home Lands Trust


DESCRIPTION:
Extends the Hawaiian Home Lands Trust Individual Claims Review
Panel until December 31, 2001.  Establishes that the value of
lands (Villages at Laiopua and Kapolei) transferred to DHHL for
settlement of claims under Chapter 673, HRS, shall be instead
credited and used to resolve claims under Chapter 674, HRS.
(SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        571
THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HAWAIIAN HOME LANDS TRUST INDIVIDUAL CLAIMS. 


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

 1                              PART I.
 
 2      SECTION 1.  Section 674-1, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "674-1 Purpose.  The purpose of this chapter is to
 
 5 establish a process under which individual beneficiaries under
 
 6 the Hawaiian home lands trust may resolve claims for actual
 
 7 damages arising out of or resulting from a breach of trust, which
 
 8 occurred between August 21, 1959, and June 30, 1988, and was
 
 9 caused by an act or omission of an employee of the State in the
 
10 management and disposition of trust resources:
 
11      (1)  By establishing a Hawaiian home lands trust individual
 
12           claims review panel which shall:
 
13           (A)  Receive, review, and evaluate the merits of an
 
14                individual beneficiary's claim;
 
15           (B)  Render findings and issue an advisory opinion
 
16                regarding the merits of each claim filed with the
 
17                panel, including an estimate of the probable award
 
18                of actual damages or recommended corrective action
 
19                that may be implemented to resolve each claim;
 

 
Page 2                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1           (C)  Prepare and transmit a report to the governor and
 
 2                legislature, at least twenty days prior to the
 
 3                convening of each regular legislative session, and
 
 4                a final report, at least twenty days prior to the
 
 5                convening of the [1997] 2002 regular legislative
 
 6                session, on the activities of the panel including
 
 7                a summary of each claim brought before the panel,
 
 8                the panel's findings and advisory opinion
 
 9                regarding the merits of each claim, and an
 
10                estimate of the probable compensation or any
 
11                recommended corrective action for legislative
 
12                action;
 
13           (D)  Disburse any compensation awarded by the
 
14                legislature in regular session or undertake other
 
15                actions as provided by law which are acceptable to
 
16                a claimant; and
 
17      (2)  By providing an individual beneficiary claimant the
 
18           right to bring an action to recover actual damages for
 
19           a breach of trust, in the circuit courts of the State
 
20           of Hawaii, if the action taken by the legislature in
 
21           regular session on each claim brought before the panel
 
22           is not acceptable to an individual beneficiary
 
23           claimant."
 

 
Page 3                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1      SECTION 2.  Section 674-4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "674-4 Tenure and compensation of members.  The term of
 
 4 office of each member of the panel shall be until December 31,
 
 5 [1999.] 2001.  Any member appointed to fill a vacancy shall be
 
 6 appointed by the governor for the remainder of the term.  A
 
 7 vacancy in the panel shall not affect its powers.
 
 8      Each member of the panel shall be compensated at the rate of
 
 9 $100 per day for each day's actual attendance to the member's
 
10 duties; provided that the compensation shall not exceed a maximum
 
11 of $10,000 per year.  The members of the panel shall be paid
 
12 their necessary traveling and subsistence expenses incurred in
 
13 the discharge of their duties.  Expenses incurred under this
 
14 section shall be paid by the department of commerce and consumer
 
15 affairs."
 
16      SECTION 3.  Section 674-14, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "674-14  Annual report.  The panel shall prepare a report
 
19 to be transmitted to the governor and to the legislature, at
 
20 least twenty days prior to the convening of the regular session
 
21 of [1998,] 2001, and a final report to be transmitted to the
 
22 governor and to the legislature, at least twenty days prior to
 
23 the convening of the regular session of [1999,] 2002, which
 

 
Page 4                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 summarizes its activities in furtherance of this chapter, and
 
 2 shall include a summary of each claim brought before the panel,
 
 3 the panel's findings and advisory opinion regarding the merits of
 
 4 each claim, and an estimate of the probable compensation or
 
 5 recommended corrective action by the State, for action by the
 
 6 legislature in regular session."
 
 7      SECTION 4.  Section 674-17, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "674-17  Right to sue, individual claims.(a)  An
 
10 aggrieved individual claimant shall have the right to bring an
 
11 action, in accordance with this part, in the circuit courts of
 
12 the State for recovery of actual damages suffered by the claimant
 
13 arising out of or resulting from a breach of trust which occurred
 
14 between August 21, 1959, to June 30, 1988; provided that [no
 
15 action shall be filed until after] claimants may file an action
 
16 no earlier than October 1, 1997[.], but no later than October 1,
 
17 2001.
 
18      (b)  "Aggrieved individual claimant", as used in this
 
19 section, means an individual claimant whose claim was reviewed by
 
20 the panel under this chapter and who has filed, no later than
 
21 October 1, [1999,] 2001, a written notice with the panel that the
 
22 claimant does not accept the action taken by the legislature in
 
23 regular session upon the claim.  Any claimant who fails to file a
 

 
Page 5                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 written notice rejecting the action of the legislature upon the
 
 2 claim shall be deemed to have accepted the action taken by the
 
 3 legislature."
 
 4      SECTION 5.  Section 674-19, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "674-19  Limitation on actions.  Every claim cognizable
 
 7 under this part shall forever be barred unless the action is
 
 8 commenced by December 31, [1999.] 2001."
 
 9                             PART II.
 
10      SECTION 6.  The legislature finds that Act 323, Session Laws
 
11 of Hawaii 1991, later codified as chapter 674, Hawaii Revised
 
12 Statutes, provided a mechanism by which individual beneficiaries
 
13 of the Hawaiian home lands trust may resolve claims for actual
 
14 damages arising out of or resulting from a breach of trust, which
 
15 occurred between August 21, 1959, and June 30, 1988, and was
 
16 caused by an act or omission of an employee of the State in the
 
17 management and disposition of trust resources.  Chapter 674,
 
18 Hawaii Revised Statutes, sought to accomplish this goal by:
 
19      (1)  Establishing a Hawaiian home lands trust individual
 
20           claims review panel which would:
 
21           (A)  Receive, review, and evaluate the merits of an
 
22                individual beneficiary's claim;
 
23           (B)  Render findings and issue an advisory opinion
 

 
Page 6                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1                regarding the merits of each claim filed with the
 
 2                panel, including an estimate of the probable award
 
 3                of actual damages or recommended corrective action
 
 4                that may be implemented to resolve each claim;
 
 5           (C)  Prepare and transmit a report to the governor and
 
 6                legislature, at least twenty days prior to the
 
 7                convening of each regular legislative session, and
 
 8                a final report, at least twenty days prior to the
 
 9                convening of the 1997 regular legislative session,
 
10                on the activities of the panel including a summary
 
11                of each claim brought before the panel, the
 
12                panel's findings and advisory opinion regarding
 
13                the merits of each claim, and an estimate of the
 
14                probable compensation or any recommended
 
15                corrective action for legislative action;
 
16           (D)  Disburse any compensation awarded by the
 
17                legislature in regular session or undertake other
 
18                actions as provided by law which are acceptable to
 
19                a claimant; and
 
20      (2)  Providing an individual beneficiary claimant the right
 
21           to bring an action to recover actual damages for a
 
22           breach of trust, in the circuit courts of the State of
 
23           Hawaii, if the action taken by the legislature in
 

 
Page 7                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1           regular session on each claim brought before the panel
 
 2           is not acceptable to an individual beneficiary
 
 3           claimant.
 
 4      Subsequent acts passed by the legislature further
 
 5 established the legislature's commitment to resolving past
 
 6 breaches of trust with native Hawaiian beneficiaries by extending
 
 7 the time period allowed to file and process a claim with the
 
 8 Hawaiian home lands trust individual claims review panel and by
 
 9 attempting to clarify the claims compensation process.
 
10      Unfortunately, since the enactment of chapter 674, Hawaii
 
11 Revised Statutes, the State has fallen on hard financial times.
 
12 Although the legislature remains committed to resolving past
 
13 breaches of trust with individual claimants, general revenues to
 
14 fund such a compensation package are virtually nonexistent.
 
15      In order to compensate successful claimants who have been
 
16 awarded monetary judgments by the Hawaiian home lands trust
 
17 individual claims review panel established pursuant to section
 
18 674-3, Hawaii Revised Statutes, without adversely impacting on
 
19 the State's general fund, the legislature is forced to establish
 
20 an innovative funding mechanism that involves leveraging of the
 
21 cash value of lands transferred to the department of Hawaiian
 
22 home lands.
 
23      The legislature finds that Act 95, Session Laws of Hawaii
 

 
Page 8                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 1996, authorized the transfer of certain real property
 
 2 developments contained in the Villages at Kapolei on Oahu and the
 
 3 Villages at Laiopua on Hawaii to the department of Hawaiian home
 
 4 lands so that the State would obtain credit for its settlement
 
 5 with the department of Hawaiian home lands authorized under Act
 
 6 14, Special Session Laws of Hawaii 1995.  As background, a part
 
 7 of the settlement agreed to under Act 14, Special Session Laws of
 
 8 Hawaii 1995, required the State to pay the department of Hawaiian
 
 9 home lands $30 million annually for twenty years.  This cash
 
10 payment could be offset by the prepayment of excess amounts over
 
11 the annual $30 million payment, or by the transfer of real
 
12 property from the State to the department of Hawaiian home lands.
 
13 Act 95, Session Laws of Hawaii 1996, specifically transferred the
 
14 real property to gain credit under section 6(1) of Act 14,
 
15 Special Session Laws of Hawaii 1995.
 
16      The legislature further finds however, that the cash value
 
17 of the lands conveyed to the department of Hawaiian home lands,
 
18 which are estimated at $14,498,565, have not yet been credited to
 
19 the State's benefit by the department of Hawaiian home lands.  In
 
20 essence, the lands conveyed have not served any purpose towards
 
21 resolving claims under chapter 673 or 674, Hawaii Revised
 
22 Statutes.
 
23      Based on these findings, the legislature believes that the
 

 
Page 9                                                     571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 lands conveyed by the State to the department of Hawaiian home
 
 2 lands pursuant to Act 95, Session Laws of Hawaii 1996, should not
 
 3 "lie fallow" with regard to the credit the State may be able to
 
 4 receive for the settlement of past claims against it and that the
 
 5 cash value of the lands should be immediately credited for the
 
 6 benefit of native Hawaiian beneficiaries.
 
 7      To this end, the legislature also finds that there exists a
 
 8 class of native Hawaiian beneficiaries that have successfully
 
 9 engaged the process established under chapter 674, Hawaii Revised
 
10 Statutes, to resolve their individual claims of breach of the
 
11 Hawaiian home lands trust.  These beneficiaries' awards have been
 
12 documented in the Hawaiian home lands trust individual claims
 
13 review panel's 1997 annual report.  The approximate cost of
 
14 compensating these beneficiaries is estimated at $16.4 million.
 
15      The legislature believes that rather than let the cash value
 
16 of the lands conveyed pursuant to Act 95, Session Laws of Hawaii
 
17 1996, go uncredited under the State's settlement agreement for
 
18 breaches of the Hawaiian home lands trust brought under chapter
 
19 673, Hawaii Revised Statutes, the cash value should be credited
 
20 in the State's favor toward compensating native Hawaiian
 
21 beneficiaries that have successfully asserted claims against the
 
22 State under chapter 674, Hawaii Revised Statutes.  This would be
 
23 accomplished by requiring the department of Hawaiian home lands
 

 
Page 10                                                    571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 to expend funds from the Hawaiian home lands trust fund, the fund
 
 2 in which the $30 million dollar annual settlement payments are
 
 3 deposited, to compensate successful claimants.
 
 4      The purpose of this Part is to provide a funding mechanism
 
 5 to compensate native Hawaiian beneficiaries that have
 
 6 successfully asserted claims against the State under chapter 674,
 
 7 Hawaii Revised Statutes.
 
 8      SECTION 7.  Act 95, Session Laws of Hawaii 1996, is amended
 
 9 by amending sections 1 and 2 to read as follows:
 
10      "SECTION 1.  The purpose of this Act is to authorize the
 
11 transfer of certain parcels of land from the housing finance and
 
12 development corporation's developments known as the Villages of
 
13 Kapolei on Oahu, and the Villages of Laiopua in Kealakehe,
 
14 Hawaii, to the department of Hawaiian home lands to [satisfy the
 
15 requirement of section 6(1) of Act 14, Special Session Laws of
 
16 Hawaii 1995.] provide a collateral funding mechanism for
 
17 individual trust claims resolved under chapter 674, Hawaii
 
18 Revised Statutes.
 
19      SECTION 2.  All present title-holders of the lands of the
 
20 public land trust, as defined in section 10-2, Hawaii Revised
 
21 Statutes, and sugarcane lands referred to in article XII, section
 
22 1 of the constitution of the State of Hawaii, covering proposed
 
23 development of housing projects known as the Villages of Laiopua
 

 
Page 11                                                    571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 (TMK: (3)-7-4-8:17 (portion) (Village 3)) in Kealakehe, Hawaii,
 
 2 and the Villages of Kapolei (TMK: 9-1-16:61, 62, 65, 66, 67, and
 
 3 68) on Oahu under section 10-13.6, Hawaii Revised Statutes,
 
 4 shall, as grantors, within one year of the effective date of this
 
 5 Act, execute instruments of conveyance as may be necessary and
 
 6 proper to the department of Hawaiian home lands in trust, as
 
 7 grantee, to convey full title to these lands and improvements in
 
 8 fee simple, in consideration of which the department of Hawaiian
 
 9 home lands shall [pay just compensation to the grantors at]
 
10 deposit the fair market cash value[.] equivalent into a special
 
11 account in the Hawaiian home lands trust fund established
 
12 pursuant to section 213.6 of the Hawaiian Home Commission Act of
 
13 1920, as amended, for the purpose of compensating successful
 
14 claimants who have been awarded monetary judgments by the
 
15 Hawaiian home lands trust individual claims review panel
 
16 established pursuant to section 674-3, Hawaii Revised Statutes."
 
17      SECTION 8.  (a)  There is established a special account
 
18 within the Hawaiian home lands trust fund established pursuant to
 
19 section 213.6 of the Hawaiian Homes Commission Act of 1920, as
 
20 amended, into which shall be deposited by the department of
 
21 Hawaiian home lands, the cash value of the lands transferred
 
22 under Act 95, Session Laws of Hawaii 1996, in the amount of
 
23 $14,498,565.  Any interest accrued on amounts deposited into the
 

 
Page 12                                                    571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 special account shall become part of the account.  The funds in
 
 2 the special account established under this Act shall be expended
 
 3 by the department of Hawaiian home lands to compensate successful
 
 4 claimants who have been awarded monetary judgments by the
 
 5 Hawaiian home lands trust individual claims review panel
 
 6 established pursuant to section 674-3, Hawaii Revised Statutes.
 
 7      (b)  The special account established in subsection (a) shall
 
 8 cease to exist on June 30, 2004, and all unencumbered moneys
 
 9 remaining in the account on that date shall lapse into the
 
10 Hawaiian home lands trust fund.
 
11      SECTION 9.  There is appropriated out of the special account
 
12 of the Hawaiian home lands trust fund established pursuant to
 
13 section 8 of this Act, the sum of $14,498,565, or so much thereof
 
14 as may be necessary for fiscal year 1999-2000, for the purpose of
 
15 compensating successful claimants who have been awarded monetary
 
16 judgments by the Hawaiian home lands trust individual claims
 
17 review panel established pursuant to section 674-3, Hawaii
 
18 Revised Statutes.
 
19      The sum appropriated shall be expended by the department of
 
20 Hawaiian home lands for the purpose of this Act.
 
21      SECTION 10.  The director of finance is authorized to issue
 
22 general obligation bonds in the sum of $1,936,111, or so much
 
23 thereof as may be necessary, and the same sum, or so much thereof
 

 
Page 13                                                    571
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 as may be necessary, is appropriated for fiscal year 1999-2000,
 
 2 for the purpose of compensating successful claimants who have
 
 3 been awarded monetary judgments by the Hawaiian home lands trust
 
 4 individual claims review panel established pursuant to section
 
 5 674-3, Hawaii Revised Statutes.
 
 6      The sum appropriated shall be expended by the department of
 
 7 Hawaiian home lands for the purposes of this Act.
 
 8      SECTION 11.  Any claim submitted in the Hawaiian home lands
 
 9 trust individual claims review panel's 1997 or 1998 report to the
 
10 legislature which has been awarded a monetary judgment and
 
11 compensated by funds appropriated under this Act shall not be
 
12 considered a precedent for any other claims under chapter 674,
 
13 Hawaii Revised Statutes.
 
14      SECTION 12.  Statutory material to be repealed is bracketed.
 
15 New statutory material is underscored.
 
16      SECTION 13.  This Act shall take effect upon its approval;
 
17 provided that sections 9 and 10 shall take effect on July 1,
 
18 1999.