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Section 5(d) of the Act dealt with other exempted lands. It allowed the Federal Government to set aside, within five years, any ceded lands it was using under permit, license, or permission of the territory immediately prior to statehood. Once set aside those lands would also remain the property of the United States. 7/

Section 5(e) required each federal agency in Hawaii having control of land or property retained by the Federal Government under section 5(c) or 5(d) to:

...report to the President the facts regarding its continued need for such land or property, and if the President determined that the land or property is no longer needed by the United States, it shall be conveyed [sic] to the State of Hawaii. 8/

This provision, however, set a five-year deadline for reporting and conveying lands to the State. After August 21, 1964, five years from the date on which Hawaii formally entered the Union, title to ceded lands retained by the Federal Government would vest permanently in the United States.

The final major subsection of section 5 sets forth the State's responsibilities in connection with ceded lands. Section 5(f) requires the State to hold all ceded lands returned under Sections (b) and (e), together with the proceeds from their sale or other disposition and the income therefrom:

...as a public trust for the support of the public schools and other public educational institutions, for the betterment of the conditions of native Hawaiians, as defined in the Hawaiian Homes Commission Act, 1920, as amended, for the development of farm and home ownership on as widespread a basis as possible, for the making of public improvements, and for the provision of lands for public use. Such lands, proceeds, and income shall be managed and disposed of for one or more of the foregoing purposes in such manner as the constitution and laws of said State may provide, and their use for any other object shall constitute a breach of trust for which suit may be brought by the United States. 9/

Return of Federally Controlled Lands=

At the time of statehood, 287,078.44 acres of Hawaii's public lands had been set aside for the Federal Government. Although section 5(c) of the Admission Act allowed the Federal Government to retain set-aside lands, section 5(e) established a mechanism for conveying some of those lands to the new State. State officials had high hopes for return of substantial portions of federally-held lands, but as Section 5(e)'s five-year deadline approached, only 595.41 acres had been returned. 10/

Furthermore, section 5(d) of the Admission Act allowed the Federal Government to set aside, within five years, lands it was using under lease, permit, or license immediately prior to statehood. Prior to statehood, the Federal Government had permits and licenses on 117,412.74 acres of land. Virtually all of these lands were retained under the Federal Government's control. 87,236.557 acres of land were set aside pursuant to section 5(d) while another 30,176.18 acres were leased to the Federal Government for 65 years at nominal cost. 11/ A 1969 report on Hawaii's public lands described the situation as follows:

Soon after statehood it became apparent that the Defense Department had no intention of immediately giving up control of any of this land, and that this