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The Honolulu Advertiser
Posted on: Saturday, January 23, 2010

OHA would let state pay debt later

By Curtis Lum
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Clyde Nāmu'o

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The Office of Hawaiian Affairs is proposing a bill that would allow the state to delay until 2015 payment on a $200 million debt resulting from unpaid public land trust revenues.

The $200 million is the amount OHA said is its share of the revenues generated from the use of lands once owned by the Hawaiian monarchy.

OHA and the state agree that the agency is owed a portion of the revenues generated by the ceded lands and has paid the agency $15.1 million annually in recent years. But there has been a dispute over how much is owed to OHA since 1978.

A bill introduced in the Legislature last year would have called for cash and land transfers totaling $251 million to be made to OHA to retire the debt. But that measure did not make it out of a conference committee.

Although the bill is still alive, OHA yesterday said it will introduce a new measure that would call for cash only and that payments be deferred until July 1, 2015. The proposal calls for $30 million, plus 4 percent interest, to be paid annually until the $200 million debt is satisfied.

Clyde Nāmu'o, OHA chief executive officer, said the deferred payment schedule recognizes the state's current "dire financial circumstances." He said OHA believes that the state's economy "will be well on its way to recovery within three to five years and the state will be able to begin retiring the debt."

"Given the state of the economy, my guess is that the Legislature would be reluctant to do a land transfer, especially if the land that is being transferred is generating income for the state," Nāmu'o said yesterday.

"We felt that this new approach of simply codifying the amount that is owed and scheduling the satisfaction of the amount in the future was the more prudent approach."

He added that the start of the payments to OHA would be timed with the end of the state's $300 million obligation to the Department of Hawaiian Home Lands for lands transferred out of the Hawaiian Home Lands Trust.

The state is paying $30 million annually to DHHL and that money can be shifted to OHA once the payments to DHHL are concluded, Nāmu'o said.

Nāmu'o said OHA has asked Rep. Mele Carroll, D-13th (E. Maui, Moloka'i, Lāna'i), and Sen. Clayton Hee, D-23rd (Kāne'ohe, Kahuku), to introduce the measure. The two head their respective house's committees on Hawaiian affairs.