A bill that would have the state negotiating to transfer nearly 20 percent of its land inventory to the Office of Hawaiian Affairs in exchange for giving up all future claims to ceded lands appeared dead last night at the Legislature.

Conferees from the House and Senate had until midnight to find an agreement on Senate Bill 995 which may end up settling, once and for all, how much OHA should receive as its share of the revenues generated from the use of ceded lands. But key House members declined to support the bill, effectively killing it.

OHA and the state have long agreed that the agency is owed a portion of money generated by lands once owned by the Hawaiian monarchy and that are now part of the state's inventory. In fact, the state in recent years has paid OHA $15.1 million annually.

What's been in dispute is how much OHA should receive, and should have received over the past three decades.

But what really had people raising eyebrows was a new wrinkle in the plan that allows OHA the option of settling all ceded land issues involving OHA. The proposal was introduced by Sen. Clayton Hee, D-23rd (Kane'ohe, Kahuku), chairman of the Senate Water, Land, Agriculture and Hawaiian Affairs.

By offering OHA $251 million in cash and 20 percent of the 1.8 million acres of ceded lands to be determined in negotiations between the agency and the Lingle administration, OHA would need to agree to no longer make any claims to "income or proceeds of any kind or nature whatsoever" stemming from ceded lands. It would also no longer receive $15.1 million annually.

While those in favor of a larger settlement see it as a way of resolving the ceded land dispute with the state once and for all, opponents say it is not enough to resolve the so-called "global" issue of the overthrow and worry that it could extinguish any of their claims.

Hee said such a settlement would make it difficult for OHA to "assert other entitlements" but he does not think it would stop others from filing claims if they wished.

"This doesn't preclude or prevent others from asserting their rights to other issues," Hee said.

The full houses of the House and Senate would still need to have approved House Bill 995. The bill would allow OHA the option to accept either a settlement to resolve revenues from past years only, or a broader package for both past and future revenues. OHA would have until Jan. 1, 2010, just before the state of next year's legislative session, to decide if it wants either option, or neither.

The past-revenue-only settlement option would allow OHA to accept a $200 million package of cash and/or land, with the properties expected to include lands in Kaka'ako Makai, Kahana Valley, La Mariana and Pier 60 at Sand Island, the He'eia Meadlowlands, the upper reaches of Mauna Kea, Waikiki Yacht Club, state-owned fishponds, the Ala Wai Boat Harbor and Kalaeloa Makai. OHA would still receive $15.1 million annually until the future revenues issue is resolved.

Rep. Mele Carroll, D-13th (E. Maui, Moloka'i, Lana'i), chairwoman of the House Hawaiian Affairs Committee, said yesterday afternoon while she was supporting the plan, she was trying to get key colleagues to agree.

OHA's board members discussed the bill at its board meeting on Thursday, but chose not to formally approve it. However, according to administrator Clyde Namu'o, attorney William Meheula was asked to make suggestions to lawmakers on how to make the language more palatable.