Nhsc-v1-438

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nhsc-v1-438

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been charged with the receipt and administration of the public land trust established by this section of the Admission Act. 17/ However, a 1979 audit of the DLNR indicated that the trust has not been administered in conformance with the Admission Act. 18/ The DLNR has failed to properly dispose of the revenue and income from the public land trust. Hawaii Revised Statutes, section 171-18, the implementation legislation for section 5(f) of the Admission Act, established a public land trust fund for the receipt of funds derived from the sale, lease, or other disposition of ceded lands. 19/ Hawaii Revised Statutes section 171-19, created a separate fund, the special land and development fund, for all proceeds from the disposition of non-ceded lands (lands which the State may have acquired by condemnation, purchase or other means). 20/ This second fund was established for the maintenance and development of all public lands. These two funds were intended to serve different purposes. Monies deposited in the public land trust fund were to come from the disposition of ceded lands and were to be expended in a manner consistent with the directions of section 5(f) of the Admission Act. Monies deposited in the special land and development fund were to come from the disposition of non-ceded lands (lands not subject to the section 5(f) trust) and were to be expended to maintain and develop all public lands.

However, since statehood, DLNR has failed to make this distinction between the two funds and instead has deposited monies from the leases of all public lands into the public land trust fund and monies from the sale of all public lands into the special land ana development fund. 21/ Thus, in depositing money in the two funds, the distinction between ceded lands (lands subject to the section 5(f) trust) and non-ceded lands (lands not subject to the 5(f) trust) has been ignored; instead, monies have been deposited on the basis of a lease/sale dichotomy.

The reason given for the failure to conform to the mandate of § 5(f) of the Admission Act is even more disturbing. No inventory of public lands exists and the DLNR has been unable to distinguish between ceded and non-ceded public lands. 22/ A recent article on Hawaii's ceded lands observed that:

In fact, between statehood and 1979, no attempt had been made by the Department to compile a comprehensive inventory of the state's public lands, much less one distinguishing between its ceded and non-ceded portions. Notwithstanding the difficulty of assembling such an inventory given the deficiencies in existing records, it is still curious, in light of the requirements of the section 5( f ) , that such an inventory does not exist at the present time. 23/

That same article concluded that the absence of an inventory and the confusion of funds have impeded the administration of the section 5(f) public trust in several ways. 24/ First, because the DLNR cannot use the ceded/non-ceded distinction in recording receipts, there is no way of knowing the accuracy of its figures for each fund or of determining which monies belong to which fund. Since most of the income from public lands is derived from ceded lands, this failure to distinguish ceded and non-ceded lands has probably worked to the disadvantage of the public land trust fund. Secondly, the wrongful deposits may have resulted in expenditures of public trust monies for the purposes of the special land and development fund and vice versa. However, it is impossible to know the extent to which the expenditures may have been wrongfully applied until a

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