Report Title:

Public Trust Lands Settlement

 

Description:

Resolves claims and disputes relating to the portion of income and proceeds from the lands of the public land trust for use by the office of Hawaiian affairs between 11/7/1978 and 7/1/2008; fixes prospectively the minimum amount of income and proceeds from the lands of the public land trust that are to be paid to the office of Hawaii affairs at $15,100,000 each fiscal year.  Effective 07/01/08.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2701

TWENTY-FOURTH LEGISLATURE, 2008

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

relating to the public trust lands settlement.

 

 

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

 


     SECTION 1.  In 1978, the Constitution of the State of Hawaii was amended to include article XII, sections 4, 5, and 6, which established the office of Hawaiian affairs and its board of trustees.

     Sections 4, 5, and 6 of article XII of the state constitution provide:

     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.

     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.  The board members shall be Hawaiians.  There shall be not less than nine members of the board of trustees; provided that each of the following islands have one representative:  Oahu, Kauai, Maui, Molokai and Hawaii.  The board shall select a chairperson from its members.

     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.

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 what constitutes the portion of the income and proceeds derived from the public land trust for the office of Hawaiian affairs pursuant to article XII, section 6 of the state constitution, 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 State's obligation to provide a portion of the funds derived from the public land trust to the office of Hawaiian affairs.

On September 12, 2001, the Hawaii supreme court ruled in Office of Hawaiian Affairs v. State of Hawai‘i, 96 Haw. 388, 31 P.3d 901 (2001), that Act 304 was effectively repealed by its own terms, so that once again, it was necessary for the legislature to specify what portion of which funds, from which lands the office of Hawaiian affairs was to receive under the State Constitution.

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. . . .

. . . we 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 Hawai‘i, 96 Haw. at 401, 31 P.3d at 914 (citations omitted).

     The purpose of this Act is to:

     (1)  Finally and completely resolve any and all claims and disputes relating to the portion of income and proceeds from the lands of the public land trust for use by the office of Hawaiian affairs, including under sections 4 and 6 of article XII of the State Constitution and any relevant statute or act, between November 7, 1978 and July 1, 2008; and

     (2)  Fix, prospectively, the minimum amount of income and proceeds from the lands of the public land trust that are to be paid to the office of Hawaiian affairs to use under section 6 of article XII of the Constitution at $15,100,000 each fiscal year.

     SECTION 2.  Chapter 10, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

     "§10‑    Payment and use of income and proceeds from public land trust lands.  (a)  Beginning July 1, 2008, $15,100,000 of the income and proceeds collected for the use of public land trust lands during any fiscal year shall be paid to the office in equal quarterly increments of $3,775,000, to use to implement the provisions of article XII, sections 4 and 6 of the state constitution regarding the income and proceeds of the public land trust.  The governor shall be expressly authorized to identify the income and proceeds from the public land trust lands from which the $15,100,000 is to be paid, and to fix, in the governor's discretion, the portion of each receipt that each state agency receiving the income and proceeds shall contribute toward the $15,100,000 payment, after giving due consideration to whether federal or state law prohibits any portion of the income and proceeds collected from being used by the office, or whether payment to the office of any portion of the income and proceeds collected will cause the agency to renege on any pre-existing pledge, rate covenant, or other pre-existing obligation to holders of revenue bonds or other indebtedness of the State or its agencies; provided that in no event shall the payment to the office for any fiscal year be less than $15,100,000.  The governor shall issue executive orders as necessary, to implement this provision.  Each quarterly payment shall be made to the office no later than thirty days after the close of each fiscal quarter.

     (b)  As long as the office retains the statutory right to receive an annual payment of income and proceeds from the public land trust lands of at least $15,100,000, no suit for damages or any other relief may be brought against the State, or its departments, agencies, officers, or employees, by the office or any other person or entity, with respect to any controversy, claim, cause of action, or right of action arising out of, or relating to any right the office or any other person or entity may have to income, proceeds, or any other tangible right, item, or benefit from the public land trust lands under sections 4 and 6 of article XII of the state constitution or any statute or act, and to the extent any waiver of sovereign immunity for such a suit, claim, cause of action, or right of action still exists, that waiver is withdrawn.

     (c)  For each and every fiscal year following June 30, 2008, during which the office retained the statutory right to receive an annual payment of income and proceeds from the public land trust lands of at least $15,100,000, each and every claim for damages or any other relief against the State, or its departments, agencies, officers, or employees, by the office or any other person or entity, with respect to any controversy, claim, cause of action, or right of action arising out of, or relating to any right the office or any other person or entity may have to income, proceeds, or any other tangible right, item, or benefit from the public land trust lands under sections 4 and 6 of article XII of the state constitution or any statute or act is forever barred, and to the extent any waiver of sovereign immunity for such a suit, claim, cause of action, or right of action still exists, that waiver shall be withdrawn."

     SECTION 3.  Section 10‑2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Public land trust lands" mean those lands:

     (1)  That were ceded to the United States by the Republic of Hawaii under the joint resolution of annexation, approved July 7, 1898 (30 Stat. 750), or acquired in exchange for lands so ceded, and that were conveyed to the State by section 5(b) of the Admission Act; except for lands defined as "available lands" by section 203 of the Hawaiian Homes Commission Act, 1920, as amended;

     (2)  That were retained by the United States under sections 5(c) and 5(d) of the Admission Act, and later conveyed to the State under section 5(e) of the Admission Act; and

     (3)  That were ceded to and retained by the United States under sections 5(c) and 5(d) of the Admission Act and later conveyed to the State pursuant to Pub. L. 88-233 (77 Stat. 472)."

     SECTION 4.  Section 10-3, Hawaii Revised Statutes, is amended to read as follows:

     "§10-3  Purpose of the office.  The purposes of the office of Hawaiian affairs include:

     (1)  The betterment of conditions of native Hawaiians[.  A pro rata portion of all funds derived from the public land trust shall be funded in an amount to be determined by the legislature for this purpose, and shall be held and used solely as a public trust for the betterment of the conditions of native Hawaiians.  For the purpose of this chapter, the public land trust shall be all proceeds and income from the sale, lease, or other disposition of lands ceded to the United States by the Republic of Hawaii under the joint resolution of annexation, approved July 7, 1898 (30 Stat. 750), or acquired in exchange for lands so ceded, and conveyed to the State of Hawaii by virtue of section 5(b) of the Act of March 18, 1959 (73 Stat. 4, the Admissions Act), (excluding therefrom lands and all proceeds and income from the sale, lease, or disposition of lands defined as "available lands" by section 203 of the Hawaiian Homes Commission Act, 1920, as amended), and all proceeds and income from the sale, lease, or other disposition of lands retained by the United States under sections 5(c) and 5(d) of the Act of March 18, 1959, later conveyed to the State under section 5(e)];

     (2)  The betterment of conditions of Hawaiians;

     (3)  Serving as the principal public agency in this State responsible for the performance, development, and coordination of programs and activities relating to native Hawaiians and Hawaiians; except that the Hawaiian Homes Commission Act, 1920, as amended, shall be administered by the Hawaiian homes commission;

     (4)  Assessing the policies and practices of other agencies impacting on native Hawaiians and Hawaiians, and conducting advocacy efforts for native Hawaiians and Hawaiians;

     (5)  Applying for, receiving, and disbursing, grants and donations from all sources for native Hawaiian and Hawaiian programs and services; and

     (6)  Serving as a receptacle for reparations."

     SECTION 5.  Section 206E-3, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The authority shall consist of [thirteen] fourteen voting members.  The director of finance, the director of business, economic development, and tourism, the comptroller, and the director of transportation, or their respective designated representatives shall serve as ex officio, voting members.  One member of the authority shall be appointed by the chairperson of the office of Hawaiian affairs.  One member shall be appointed by the governor from a list of not less than three prospective appointees submitted by the president of the senate, and one member shall be appointed by the governor from a list of not less than three prospective appointees submitted by the speaker of the house of representatives.  Seven members shall be appointed by the governor for staggered terms pursuant to section 26-34; provided that four members shall be appointed at large and, initially, three members, hereinafter referred to as county members, shall be selected from a list of ten prospective appointees recommended by the local governing body of the county in which the initial designated district is situated; and provided further that when vacancies occur in any of the three positions for which the members were selected from a list of county recommendations, the governor shall fill such vacancies on the basis of one from a list of four recommendations, two from a list of seven recommendations, or three from a list of ten recommendations.  The list of recommendations shall be made by the local governing body of the county.  If an additional district is designated by the legislature, the total membership of the authority shall be increased as prescribed above by the appointment of three additional members, except as provided for in section 206E-191.  Notwithstanding section 92-15, a majority of all members shall constitute a quorum to do business, and the concurrence of a majority of all members shall be necessary to make any action of the authority valid; except that, on any matter relating solely to a specific community development district, the members representing districts other than that specific community development district shall neither vote, nor shall they be counted to constitute a quorum, and concurrence shall be required of a majority of that portion of the authority made up of all ex officio voting members, members at large, and county and district members representing the district for which action is being proposed in order for such action to be valid.  All members shall continue in office until their respective successors have been appointed and qualified.  Except as herein provided, no member appointed under this subsection shall be an officer or employee of the State or its political subdivisions."

     SECTION 6.  Section 206E-8, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§206E-8[]]  Use of public lands; acquisition of state lands.  (a)  Any provision of chapter 171 to the contrary notwithstanding, the governor may set aside public lands located within community development districts to the authority for its use.

     (b)  If state lands under the control and management of other public agencies are required by the authority for its purposes, the agency having the control and management of those required lands [shall], upon request by the authority and with the approval of the governor, shall convey, or lease such lands to the authority upon such terms and conditions as may be agreed to by the parties.

     (c)  Notwithstanding the foregoing, no public lands shall be set aside, conveyed, or leased to the authority as above provided if such setting aside, conveyance, or lease would impair any covenant between the State or any county or any department or board thereof and the holders of bonds issued by the State or such county, department, or board.

     (d)  The provisions of this section shall not apply to the land conveyed in fee simple to the office of Hawaiian affairs by this Act, except that the authority may acquire by condemnation pursuant to chapter 101 easements, rights-of-way, rights of entry, or other rights of access in favor of lands adjoining the property conveyed that is under the control and management of public agencies where the office of Hawaiian affairs is paid just compensation for the same."

     SECTION 7.  Section 206E-10, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§206E-10[]]  Condemnation of real property.  The authority, upon making a finding that it is necessary to acquire any real property for its immediate or future use for the purposes of this chapter, may acquire the property by condemnation pursuant to chapter 101, including property already devoted to a public use.  Such property shall not thereafter be taken for any other public use without the consent of the authority.  No award of compensation shall be increased by reason of any increase in the value of real property caused by the designation of a community development district or plan adopted pursuant to a designation, or the actual or proposed acquisition, use or disposition of any other real property by the authority.  The provisions of this section shall not apply to the land conveyed in fee simple to the office of Hawaiian affairs by this Act; except that the authority may acquire by condemnation pursuant to chapter 101 easements, rights‑of‑way, rights of entry, or other rights of access in favor of lands adjoining the property conveyed that is under the control and management of public agencies where the office of Hawaiian affairs is paid just compensation for the same."

     SECTION 8.  Section 206E-34, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§206E-34  Cultural public market.[]]  (a)  There shall be established within the Hawaii community development authority a state cultural public market.

     (b)  The cultural public market shall be located on state land within the Kakaako Makai area and developed pursuant to sections 206E-31, 206E-32, and 206E-33.  A public parking lot shall be included.

     (c)  The Hawaii community development authority shall:

     (1)  Designate and develop the state-owned land for the cultural public market;

     (2)  Accept, for consideration, input regarding the establishment of the cultural public market from the following departments and agencies:

         (A)  The department of agriculture;

         (B)  The department of business, economic development, and tourism;

         (C)  The department of land and natural resources;

         (D)  The department of labor and industrial relations; and

         (E)  The Hawaii tourism authority;

     (3)  Consider and determine the propriety of using public-private partnerships in the development and operation of the cultural public market;

     (4)  Develop, distribute, and accept requests for proposals from private entities for plans to develop and operate the cultural public market; and

     (5)  Ensure that the Hawaiian culture is the featured culture in the cultural public market.

     (d)  Requests for proposals for the cultural public market shall contemplate but not be limited to the inclusion of the following types of facilities and services:

     (1)  Retail outlets for ethnically diverse products;

     (2)  Venues for businesses with ethnic themes, including restaurants and other service-related businesses;

     (3)  Theaters, stages, and arenas designed to showcase cultural performing artists as well as community performing arts;

     (4)  Exhibition space or museums that showcase artwork created by international and local artists; and

     (5)  Museums or other educational facilities focusing on the history and cultures of the various ethnic groups within Hawaii, including Hawaiian history.

     (e)  The provisions of this section shall not apply to the land conveyed in fee simple to the office of Hawaiian affairs by this Act."

     SECTION 9.  Section 10-13.3, Hawaii Revised Statutes, is repealed.

     ["[§10-13.3]  Interim revenue.  Notwithstanding the definition of revenue contained in this chapter and the provisions of section 10-13.5, and notwithstanding any claimed invalidity of Act 304, Session Laws of Hawaii 1990, 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 of fiscal year 1997-1998 and fiscal year 1998-1999 shall be $15,100,000."]

     SECTION 10.  Section 10-13.5, Hawaii Revised Statutes, is repealed.

     ["§10-13.5  Use of public land trust proceeds.  Twenty per cent of all funds derived from the public land trust, described in section 10-3, shall be expended by the office, as defined in section 10-2, for the purposes of this chapter."]

     SECTION 11.  Act 178, Session Laws of Hawaii 2006, is amended by repealing section 3.

     ["SECTION 3.  Notwithstanding the provisions of chapter 10, Hawaii Revised Statutes, or the requirements of Executive Order No. 03-03, beginning in fiscal year 2005-2006, the departments of agriculture, accounting and general services, business, economic development, and tourism, education, land and natural resources, and transportation (for its harbors division), and any other department or agency that collects receipts from the lands within the public land trust, shall determine and transfer to the office of Hawaiian affairs that portion of their receipts from the use of lands within the public land trust collected during each fiscal quarter, necessary to ensure that a total of $3,775,000 of revenues generated by the public land trust is transferred to the office of Hawaiian affairs, within thirty days of the close of each fiscal quarter; provided that for fiscal year 2005-2006, the departments shall have until thirty days after the close of the fiscal year to transfer a total of $15,100,000 from their receipts from the use of lands within the public land trust collected during fiscal year 2005-2006, to the office of Hawaiian affairs whether by the procedures set out in Executive Order No. 03-03 or this Act.

     The governor is expressly authorized to fix the amounts each agency shall transfer to the office of Hawaiian affairs in each quarter by executive order to implement the provisions of this section."]

SECTION 12.  (a)  Notwithstanding any law to the contrary, the fee simple interest to the following parcels of land with the existing improvements thereon, except for submerged land, accreted land, or any land makai of the shoreline, shall be conveyed to the office of Hawaiian affairs:

     (1)  Kaka‘ako Makai: (Lots 2, 3, 4, 5, and 9 as identified on the final Kakaako park subdivision map dated October 15, 2007 and approved by the city and county of Honolulu department of planning and permitting on November 9, 2007);

     (2)  Kalaeloa Makai: (TMK: (1)-9-1-31:1); and

     (3)  Hilo Banyan drive: Bayview Banyan Corp. (TMK: (3)-2-1-5:21); country club condo hotel (TMK: (3)-2-1-5:20); Hilo Hawaiian hotel (TMK: (3)-2-1-3:5); Naniloa hotel and golf course (TMK: (3)-2-1-1:12; TMK: (3)-2-1-5:13, 14, 16, 17, 27, 32, 39, 41, 42, 46); Reed's bay resort hotel (TMK: (3)-2-1-5:22); Uncle Billy's Hilo Bay Hotel Inc. (TMK: (3)-2-1-5:9, 12, 33, 34, 35, 45, 47).

(b)  As directed by the attorney general, the appropriate boards, agencies, officers, and employees of the State shall:

     (1)  Execute instruments of conveyance as may be necessary and proper to the office of Hawaiian affairs, as grantee, to convey the interest and title of the State and its boards and commissions to these lands and improvements in fee simple; and

     (2)  Record the instruments in the land court or bureau of conveyances, as appropriate.

     As these are conveyances in which the State and its agencies are the only parties, the tax imposed by section 247-1, Hawaii Revised Statutes, shall not apply to them.

     The conveyances made by this section shall not include any of the State's rights to minerals, or surface or ground water.

     The property conveyed shall be and remain subject to all encumbrances, whether or not of record, rights of native tenants, leases, contracts, agreements, permits, easements, profits, licenses, rights-of-way, or other instruments applicable to any land conveyed by this section effective or on‑going on the effective date of this Act, which shall remain in full force and effect.  These encumbrances may be set forth in the deeds conveying the property to the office or set forth in a license or similar agreement, a memorandum of which may be recorded concurrently with the deeds conveying the property to the office.  Beginning July 1, 2008, every reference to the present title-holder or the head of the department or agency in each such instrument, if the title-holder is a department or an agency, shall be construed as a reference to the office of Hawaiian affairs or its board of trustees.

     After the conveyances are made and while the office of Hawaiian affairs owns the property, the office shall cooperate with the State to designate and grant such access rights and easements to the State as may be reasonably necessary for the benefit and use of adjoining properties owned by the State.  The office shall not be required to approve any access rights or grant any access easements to the State that would materially diminish the value of the servient property or that would materially interfere with the use of the servient property by the office or any lessee, tenant, licensee, concessionaire, or other occupant of the property.  Each of the instruments creating such access rights or granting such easements shall provide that the office, or any successor owner of the servient property, shall have the right to reasonably relocate any such access areas or easements so granted.  The cost of initially identifying such access areas or designating and granting any such easements shall be paid by the State.  The cost of relocating any such access areas or easements shall be paid by the office or any such successor owner, as the case may be.  Each of the instruments creating such access rights or granting such easements also shall provide that the State shall be responsible for a reasonable share of the cost of maintaining any such access areas and easement areas, as the case may be, and that the State shall indemnify the office, its tenants, licensees, concessionaires, successors, and assigns, from any liability arising from the use of such access areas or easement areas by the State or its invitees.

     Except as set forth in this Act, beginning on July 1, 2008, the State shall not impose new leases, contracts, agreements, permits, or other instruments upon any land conveyed by this section.

     SECTION 13.  The passage of this Act shall be in full satisfaction and resolution of all controversies at law and in equity, known or unknown, now existing or hereafter arising, established or inchoate, arising out of or in any way related to any right the office of Hawaiian affairs or any other person or entity may have to income, proceeds, or any other tangible right, item, or benefit, from the public land trust lands under sections 4 and 6 of article XII of the state constitution or any statute or act, which arose between November 7, 1978 and July 1, 2008; thus, upon the passage of this Act, each and every claim or suit that is predicated in any way upon an act or omission that arises out of or is in any way related to any right the office of Hawaiian affairs or any other person or entity may have to the income, proceeds, or any other tangible right, item, or benefit from the public land trust lands under sections 4 and 6 of article XII of the state constitution or any statute or act, that occurred between November 7, 1978 and July 1, 2008, shall be forever barred and may not be brought by the office of Hawaiian affairs or by any other person or entity.

     The passage of this Act shall have the effect of res judicata as to all persons, claims, and issues that arise and defenses that have been at issue, or that could have been, or could in the future be, at issue, that arose between November 7, 1978 and July 1, 2008, whether brought against the State or its departments, agencies, officials, and employees, directly or indirectly, by subrogation, derivative or third party action, tender, federal action, or by any other means whatsoever arising out of or in any way related to any right the office of Hawaiian affairs or any other person or entity may have to the income, proceeds, or any other tangible right, item, or benefit from the public land trust lands under sections 4 and 6 of article XII of the state constitution or any statute or act.

     SECTION 14.  The State, while not admitting the validity of any claim, hereby resolves and satisfies all controversies and claims described in section 13 of this Act by:

     (1)  The payment of $13,189,860, for which general obligation bond funds are authorized and appropriated in section 15 of this Act; and

     (2)  The conveyance of the land and improvements made in section 12 of this Act.

 

     SECTION 15.  The director of finance is authorized to issue general obligation bonds in the sum of $13,189,860 or so much thereof as may be necessary and the same sum or so much thereof as may be necessary is appropriated for fiscal year 2008-2009 for the purpose of making the payment described in section 14 of this Act.

     Any funds remaining unexpended or unencumbered as of June 30, 2009, shall lapse as of such date.

     The sum appropriated shall be expended by the department of budget and finance by making the required payment to the office of Hawaiian affairs no later than June 30, 2009.

     SECTION 16.  The real property conveyances made under this Act, and the funds paid under this Act regardless of the means of financing, shall be deemed income and proceeds from the public land trust, as if they had been paid out of the income and proceeds from the public land trust pursuant to article XII, section 4 and article XII, section 6 of the state constitution.

     SECTION 17.  Notwithstanding any other law to the contrary, the State, and the state officials who may have participated in the preparation of the provisions or the enactment of this Act, including the office of Hawaiian affairs, each of the members of its board of trustees, and its staff, shall not be subject to suit because of their participation, except if an action is brought to enforce the provisions of this Act, in which case the action shall be brought only against the State and any official necessary to the enforcement of the provisions of this Act.

     SECTION 18.  If any provision of chapter 673, Hawaii Revised Statutes, is inconsistent with any provision of this Act, the provisions of this Act shall prevail.

     SECTION 19.  (a)  The provisions of this Act shall not be severable to the extent that if any one or more of sections 9, 10, 11, 13, or 15 of this Act, or the provisions of subsections (b) or (c) of the new section added to chapter 10, Hawaii Revised Statutes, by section 2 of this Act, or subsection (a) of section 12 of this Act, or the application of any one or more of said sections or subsections is held invalid or unenforceable, this Act in its entirety shall be invalid and:

     (1)  Sections 10-2, 10-3, 10-13.3, 10-13.5, 206E-3, 206E-8, 206E-10, and 206E-34, Hawaii Revised Statutes, and section 3 of Act 178, Session Laws of Hawaii 2006, shall be reenacted in the form in which they read on the day before the effective date of this Act;

     (2)  All interests in the lands and improvements conveyed by the provisions of section 12 of this Act, shall be conveyed back to their respective grantors by the office of Hawaiian affairs, but in such case:

         (A)  The State shall:

              (i)  Indemnify the office of Hawaiian affairs with regard to any environmental claims asserted by any third party against the office of Hawaiian affairs arising solely from time periods when the State held the fee title to the lands; and

             (ii)  Indemnify the office of Hawaiian affairs with regard to those portions of any environmental claims asserted by any third party against the office of Hawaiian affairs arising solely from time periods when the State held the fee title to the lands; and

         (B)  The office of Hawaiian affairs shall:

              (i)  Indemnify the State with regard to any environmental claims asserted by any third party against the State, arising solely from time periods when the office of Hawaiian affairs held the fee title to the lands; and

             (ii)  Indemnify the State with regard to those portions of any environmental claims asserted by any third party against the State solely from time periods when the office of Hawaiian affairs held the fee title to the lands; provided that at the option of the office of Hawaiian affairs, if in lieu of conveying back the lands and improvements conveyed by the provisions of section 12 of this Act to the State, the office of Hawaiian affairs opts not to reconvey the lands, the office shall pay the director of finance $186,810,140, of which the director shall deposit $94,090,725 into the special land and development fund of the department of land and natural resources for all of the property conveyed to the office other than at Kaka‘ako Makai, and pay $92,719,415 to the Hawaii community development authority for the property at Kaka‘ako Makai; and

     (3)  The $13,189,860 payment paid back to the director of finance by the office of Hawaiian affairs and deposited into the bond fund as defined in section 37-62, Hawaii Revised Statutes.

     (b)  There shall be no waiver of sovereign immunity to bring any suit, claim, cause of action, or right of action to invalidate sections 9, 10, 11, 13, or 15 of this Act, or the provisions of subsections (b) or (c) of the new section added to chapter 10, Hawaii Revised Statutes, by section 2 of this Act, or subsection (a) of section 12 of this Act, or the application of any one or more of said sections or subsections, and to the extent any waiver of sovereign immunity for such a suit, claim, cause of action, or right of action still exists, that waiver shall be withdrawn.

     SECTION 20.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 21.  This Act shall take effect on July 1, 2008.

 

INTRODUCED BY:

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