Lā 166: OHA funds for TMT lease in holding

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By TOM CALLIS Hawaii Tribune-Herald - Photo A view of Mauna Kea. (J.R. DEGROOTE/WEST HAWAII TODAY)

Lease payments from the TMT International Observatory are rolling in, but that won’t necessarily mean more funds for the Office of Hawaiian Affairs, which receives a share of revenue from Mauna Kea and other ceded lands.

While construction remains on hold due to protests, the nonprofit corporation behind the controversial Thirty Meter Telescope has paid $429,041 since July 2014 to the University of Hawaii as required by its sublease covering 6 acres below the mountain’s summit.

Eighty percent of the payments benefit UH’s Office of Mauna Kea Management, tasked with protecting natural and cultural resources, while the remaining 20 percent is sent to OHA as its pro rata share of ceded lands established by the state in 1980. Ceded lands are former crown and government properties the United States took control of following annexation in 1898.

Despite those payments, the state agency established to benefit Native Hawaiians will not receive a boost in its budget because of a 2006 state law and executive order that set OHA’s revenue from these lands at a fixed $15.1 million each year.

State agencies still are required to send 20 percent of their ceded land revenue to OHA, as the university has done quarterly, but the office must transfer payments exceeding the amount set by lawmakers into a holding account managed by the state Department of Budget and Finance.

If payments come in below $15.1 million, then OHA receives the difference out of the same account, assuming it’s not empty, or other sources, such as the Department of Land and Natural Resources’ general fund.

This was meant to resolve, at least temporarily, the issue of ceded land payments, which has been the subject of several lawsuits and multimillion-dollar settlements.

From 2006-12, that appears to have worked in OHA’s favor as the transfers from other agencies ranged between $10.6 million and $14.5 million per year, yet the office still received $15.1 million annually, according to OHA.

But during the past three years, OHA says it has returned nearly $7 million as ceded land payments rise, which it attributes to better reporting from other departments.

It expects that trend to continue.

“It is clear from the public land trust revenue reporting in the last few years that $15.1 million is less than 20 percent of the total public land trust revenue; therefore, it is likely that OHA will need to return excess funds to the state this fiscal year,” the agency said in an email to the Tribune-Herald.

The state is required to manage ceded lands for five public purposes, including for the benefit of Hawaiians, which is where the 20 percent figure came from.

Unless the 2006 law is changed, OHA could see no benefit from the first telescope on Mauna Kea — considered sacred by many Hawaiians — to pay more than $1 a year in rent.

Asked if it thought this arrangement is fair, the office said in a statement that it “continues to evaluate the situation.”

To date, OHA’s pro rata share of TMT’s lease payments would equal $85,808.

That will reach $216,000 a year in a decade as TMT’s annual lease payments max out at $1.08 million, assuming the telescope is built. Payments will be adjusted for inflation.

With OHA having to return some ceded land payments, Budget and Finance is considering proposing that the “20 percent benchmark” other agencies initially pay be reduced, said Neal Miyahara, the department’s budget division chief.

Remaining funds in the holding account might then be redistributed to the departments’ special funds.

Asked why not increase the amount OHA keeps, Miyahara said that would have to be done by the Legislature, which has yet to take additional action on the issue.

For at least some TMT opponents, the issue isn’t whether OHA benefits financially from the project, but where it stands on the telescope itself.

“The issue is about the mountain, not about the money,” said Kealoha Pisciotta, who is one of six people or groups appealing TMT’s conservation district land use permit in the state Supreme Court.

OHA previously endorsed the project but took a neutral stance after removing its support in April. That followed large protests against further construction on the mountain, and activists say they were disappointed the agency hasn’t taken a stronger position against additional telescopes on Mauna Kea.

Email Tom Callis at tcallis@hawaiitribune-herald.com.

TMT annual lease payment schedule

Years 1-3: $300,000

Years 4-5: $400,000

Years 6-7: $600,000

Years: 8-9: $700,000

Year 10: $900,000

Years 11+: $1.08 million

Ceded land revenue transfers to OHA

Fiscal years:

2006 — $11,098,214

2007 — $11,252,558

2008 — $11,619,267

2009 — $13,169,154

2010 — $10,597,513

2011 — $12,368,904

2012 — $14,528,439

2013 — $16,130,416

2014 — $17,308,365

2015 — $18,810,883

Source: Office of Hawaiian Affairs