Lawyers this morning were to argue at the U.S. Supreme Court whether the state has the right to sell ceded lands before Native Hawaiian claims to those lands have been resolved.

Meanwhile, lawmakers in Hawai'i are debating which portions of those lands the Office of Hawaiian Affairs, the state agency tasked with promoting Hawaiian interests, should get.

Two proposals — Senate Bill 995 and House Bill 901 — take different approaches to resolving the question of which parcels OHA should own.

The Senate bill would make OHA the owner of parcels consisting nearly entirely of lands Native Hawaiians deem culturally significant, such as the Mauna Kea Scientific Reserve on the Big Island. The House bill is more vague, leaving some decisions on which land OHA would own to a later date.

OHA and the state have agreed that OHA is owed a portion of the proceeds generated by ceded lands. What's been in dispute is which lands OHA should receive as compensation.

At the beginning of this year's legislative session, OHA wanted lawmakers to transfer to the agency land totaling $200 million in value — industrial property in Kaka'ako makai, the resort area along Banyan Drive in Hilo and other parcels to be determined later. OHA also wanted to continue to receive $15.1 million annually in rent from the remaining ceded land, as it has in recent years.

The OHA proposal was similar to the settlement of land claims that the agency and the Lingle administration agreed to last year. The settlement would have given OHA title to the Kaka'ako and Banyan Drive properties, but the plan died late in last year's legislative session. This year, the OHA plan does not have the support of the Lingle administration.

Lawmakers are offering alternatives to last year's plan.

SB 995 was amended by the Senate Committee on Water, Land, Agriculture and Hawaiian Affairs to delete the Kaka'ako and Banyan Drive properties from the settlement, but instead puts together a group of culturally significant parcels.

The plan, devised by Hawaiian Affairs Chairman Clayton Hee, D-23rd (Kane'ohe, Kahuku), includes Kahana Valley and Beach Park, the so-called "La Mariana" property and surrounding marina known as Pier 60 at Sand Island, the peninsula between Kalihi Stream (Sand Island) and Moanalua Stream (Disabled Veterans of America Hall), the He'eia meadow lands, the Mauna Kea Scientific Reserve (including the telescope lands) and the National Area Reserve System lands that include Lake Waiau and a nearby quarry, and all state-owned fishponds across Hawai'i.

At least some of the lands were part of a failed settlement package originally proposed by former Gov. Ben Cayetano in the 1990s when Hee was an OHA trustee. The total value is less than $200 million, Hee said.

OHA Administrator Clyde Namu'o said OHA trustees may have some concern that "if we steward these properties, we need to make sure that we have the resources to maintain them in a manner in which the community would expect."

The latest version of HB 901 also takes out the Hilo lands from the original OHA proposal but leaves in the Kaka'ako lands. Approved by the Hawaiian Affairs Committee chaired by Rep. Mele Carroll, D-13th (E. Maui, Moloka'i, Lana'i), the bill asks that the balance of the $200 million be settled in lands to be determined later.

Carroll, who could not be reached for comment yesterday, had her committee hold hearings on all major islands on the settlement bill. Carroll said the Banyan Drive parcel was taken out of the proposal after Hilo residents said they didn't want it to be turned over to OHA as part of the plan.

Both the Senate and House versions also include a stipulation that OHA will transfer the lands to a Native Hawaiian governing entity upon its creation.

The Senate bill now goes to the Ways and Means Committee, while the House measure needs to be heard by the Finance Committee.

The 1959 Admission Act entrusted more than 1.2 million acres of "ceded" lands to the new state of Hawai'i as a "public" trust to be used for five purposes, including the betterment of Native Hawaiians.

OHA was designated the administrator of the Native Hawaiian share after the agency was established in 1980. That same year, the Legislature passed Act 173, which stipulated "20 percent of funds derived from the public land trust" is to be expended by OHA.

OHA, state administrations, the Legislature and the courts have grappled over the issue ever since.