The state would allocate $15 million a year to the Office of Hawaiian Affairs and pay a one-time sum of $17.5 million, under a partial settlement of the issue of revenues from ceded lands.

The agreement between OHA and the Lingle administration was announced yesterday. It still must be approved by the OHA board of trustees, which is expected to vote on it Thursday, and the Legislature.

Ceded lands are 1.4 million acres of former crown and government lands — once part of the Hawaiian kingdom — held in trust by the state. OHA is due a share of the revenues derived from those lands under the Hawai'i Constitution.

OHA, in recent years, has been receiving about $10 million annually as its pro rata share of revenues derived from the public land trust. That amount would be increased to $15.1 million under the proposed partial settlement. Also, the agency would receive $17.5 million as back payment for the period from July 1, 2001, to June 30, 2005, reflecting additional receipts from the use of the lands.

Clyde Namu'o, OHA administrator, said the state currently collects about $50 million annually from the revenues derived from ceded lands, including harbor fees, leases from a portion of the land under the jurisdiction of the Department of Transportation, parking revenues from 'Iolani Palace and other ceded lands, and leases from a portion of land in Kaka'ako under the jurisdiction of the Hawai'i Community Development Authority.

The settlement does not include additional state revenues that OHA believes it is entitled to. A decision in a lawsuit over that revenue dispute is pending before the Hawai'i State Supreme Court. These so-called "disputed revenues" include payment for use of a portion of the land under Hilo Hospital and University of Hawai'i at Manoa, airport landing fees, concession fees, and the state's share of revenues from DFS Hawai'i, the state's duty-free store contractor.

The state and OHA are continuing discussions on the disputed revenues. And the Supreme Court has agreed to reconsider its decision last year to dismiss OHA's legal claim to the disputed revenues.

OHA has never received any revenues from the sources under dispute. The amount at stake ranges from $150 million to hundreds of millions of dollars, according to estimates by state and OHA lawyers.

The proposed partial settlement was reached following more than a year of discussions between OHA and administration officials.

PAYMENTS HALTED

All payments to OHA were stopped by former Gov. Ben Cayetano in 2001 but Gov. Linda Lingle resumed those payments in 2003, shortly after she entered office. Cayetano halted payments after a Hawai'i Supreme Court decision that threw out the formula used to calculate how much OHA should receive. Before that ruling, OHA received about 20 percent of revenues from "undisputed" ceded lands.

OHA returned to court in 2003 in another bid to collect money in connection with the disputed revenues.

OHA Chairwoman Haunani Apoliona, in a press release, said she was pleased with the proposed partial settlement and commended Lingle for her work.

"With the work of the OHA negotiating team and concurrence of the OHA board of trustees, we acknowledge that this is only the first phase of work to be completed relating to the ceded land revenues," Apoliona wrote.

Lingle, in the same release, praised OHA officials and said the agreement is "the right and fair thing to do."

BROAD SUPPORT

Leaders in both houses of the Legislature indicated they see support for the agreement.

"The Legislature needs to take this proposal very seriously because we have a constitutional obligation to make these payments," said Rep. Scott Saiki, D-22nd (McCully, Pawa'a), chairman of the House Hawaiian Affairs Committee.

"I would hope there will be an attempt in this legislative session to address the disputed amounts and attempt to find a resolution to that issue."

Senate Majority Leader Colleen Hanabusa, D-21st (Nanakuli, Makaha), said, "I don't see why it wouldn't go through." Hanabusa, who also serves as chairwoman of the Senate Judiciary and Hawaiian Affairs Committee, added, "This is something that we've tried to resolve in one way or another."

State Rep. Ezra Kanoho, D-15th (Lihu'e, Koloa), the chairman of the House Water, Land Use and Ocean Resources Committee, said he too was pleased.

"This is something that won't go away. This is an obligation," Kanoho said.

Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com.