A trio of state House committees yesterday wrestled with an 11th-hour version of a proposed settlement of ceded land claims by the Office of Hawaiian Affairs against the state.

The new House Bill 266 would revise an agreement reached last month by the Office of Hawaiian Affairs and Attorney General Mark Bennett in the emotional issue which has vexed the state for decades, although fundamental aspects would essentially remain the same. Still in place would be a package of four parcels of state lands said to be worth $187 million, as well as a one-time cash payment of $13 million.

The new bill differs from the draft introduced by the Lingle administration in a couple of substantial ways. For instance, instead of fixing the amount of annual funds distributed to OHA for its share of ceded land revenues at $15.1 million, HB 266 allows the Legislature to adjust the figure over time.

"We wrote it as a formula that would adjust, given the revenue income that came in," explained Majority Leader Kirk Caldwell. "As a portion of the whole, that amount should grow over time."

Also, HB 266 gets away from the word "settlement," used in the earlier version, which cast that bill into the legal arena, according to OHA board counsel Robert Klein — leaving the state and OHA subject to potential lawsuits. That prospect is effectively eliminated by the wording of HB 266, which doesn't include the term settlement, but still ends up honoring the terms and conditions of the agreement reached by the state and OHA, Klein said.

"The bill that they have is not a settlement," he said. "It's just another legislative act."

Regardless of the wording, what could be finalized by the legislation is the decades-long dispute about how much OHA should receive for revenues derived on ceded lands and how the process should be implemented.

CREATION OF OHA

The so-called ceded lands are those that once supported the Hawaiian Monarchy and government before the overthrow in 1893. Those lands were subsequently ceded to the U.S. government until statehood in 1959, when 1.4 million acres were transferred from the federal government to America's newest state to be held in trust.

While a portion of the money generated by the lands was supposed to go to "the betterment of Native Hawaiians," none of the revenues were directly used for that purpose. OHA was thus created at the 1978 Constitutional Convention to correct the situation. A plan was ratified by Hawai'i voters by which the Legislature would allocate a share of ceded land revenues to go to OHA for the Hawaiian people.

Since that time, because of an ambiguously worded law, OHA and the state have been in dispute over OHA's share. Attorney General Bennett told the joint committees — Finance, Judiciary, and Water, Land, Ocean Resources and Hawaiian Affairs — that the legislation before them is a chance to finally end the conflict.

"This has been a history of missed opportunities," he said. "One of the reasons we settled this dispute and presented it to the Legislature was so that our successors in five, or 10 or 30 years will not look back on 2008 and say, 'There went one more in a long line of missed opportunities.' "

Although those who favored the new measure outnumbered those in opposition, several who spoke in support took the opportunity to lambaste those involved in the settlement process. Former OHA trustee Mililani Trask thanked the House members for the measure and praised HB 266 as a "legislative policy recommendation and not a settlement that waives Hawaiian rights to the trust."

But she went on to question the value and revenue potential of the settlement lands, called for a fiscal and management audit of OHA, and urged that all lands and revenues referred to in HB 266 be placed in receivership or escrow until such audits are completed.

BAFFLING FIGURE

Former OHA trustee Moanikeala Akaka, who also supported HB 266 and agreed with Trask about the lack of OHA accountability, wanted to know how the approximately $200 million settlement figure was decided upon.

Based on past agreements and formulas reached between the state and OHA, she said, "It baffles me that the value figure owed us Hawaiians went from $1.2 billion in 1996 to $200 million in 2008."

However, William Burgess, who opposed the measure, said ceded land revenues are intended to be for everyone, not just for the minority of Hawaiians, and asked the committee, "Where is the pro rata portion for all the rest of us?"

By his calculations, the unpaid sum owed the majority totals $7.6 billion.

And activist Leon Siu, a Hawaiian Kingdom National, opposed the legislation by calling it the latest insult in 115 years since the Hawaiian lands were stolen and the spoils of the theft "were passed down to ensuing puppet governments ... a smoke screen to justify the fact that this was ill-gotten, stolen, property."

Still, Caldwell said the potential for a history-making outcome is better now than it's been since OHA was created in 1978.

"There's opportunity here," he said. "I'm very hopeful. This is as good as it's ever been. Right now, the discussion is good. There's emotion behind it, but it's not name-calling and shouting."

A decision on the legislation will be reached this week.

Reach Will Hoover at whoover@honoluluadvertiser.com.