B-141312, AUGUST 12, 1964, 44 COMP. GEN. 76

B-141312, AUGUST 12, 1964, 44 COMP. GEN. 76

PUBLIC LANDS - RENT - STATE ENTITLEMENT - AS INCLUDING IMPROVEMENTS AND FILL THE PROVISION IN SECTION 91 OF THE HAWAII ORGANIC ACT, APPROVED APRIL 30, 1900, AS AMENDED, 48 U.S.C. 511, THAT WHEN PUBLIC LANDS CEDED TO THE UNITED STATES BY THE REPUBLIC OF HAWAII UNDER THE ANNEXATION TREATY OF 1897 ARE LEASED, RENTED, OR REVOCABLE PERMITS GRANTED, THE RENTALS SHALL BE COVERED INTO THE TREASURY OF THE TERRITORY OF HAWAII, DOES NOT EXTEND TO RENTALS ATTRIBUTABLE TO IMPROVEMENTS, INCLUDING FILL, PLACED ON THE LAND BY THE UNITED STATES WITH THE EXPENDITURE OF FEDERAL FUNDS, SECTION 42 OF THE HAWAII OMNIBUS ACT, APPROVED JULY 12, 1960, EXTENDING TO THE STATE OF HAWAII FOR A 5-YEAR PERIOD THE PRIVILEGES OF SECTION 91 OF THE ORGANIC ACT ENJOYED BY THE TERRITORY OF HAWAII RESPECTING THE INCOME RECEIVED BY THE FEDERAL GOVERNMENT FROM THE LEASING, TC., OF THE CEDED PUBLIC LANDS, NOT ENLARGING OR MODIFYING THE RIGHTS CONFERRED BY SECTION 91, BUT ONLY RECOGNIZING A RESIDUAL OR EQUITABLE INTEREST OF THE PEOPLE OF HAWAII IN THE PUBLIC LANDS THAT DOES NOT EXTEND TO THE IMPROVEMENTS OF FILL PLACED ON THE LAND.

TO THE SECRETARY OF THE ARMY, AUGUST 12, 1964:

FURTHER REFERENCE IS MADE TO THE LETTER DATED MARCH 5, 1964, FROM THE HONORABLE E. T. PRATT, ., ASSISTANT SECRETARY OF THE ARMY, SUBMITTING FOR OUR CONSIDERATION THREE QUESTIONS ON THE PROPRIETY OF COVERING INTO THE TREASURY OF THE STATE OF HAWAII, UNDER SECTION 42 OF THE HAWAII OMNIBUS ACT, APPROVED JULY 12, 1960 (74 STAT. 411, 422, 48 U.S.C. 486C NOTE), THE PORTION OF THE RENTAL COLLECTIONS ATTRIBUTABLE TO FEDERAL GOVERNMENT IMPROVEMENTS, INCLUDING FILL, ON HAWAIIAN PUBLIC LANDS WHICH HAD BEEN CEDED TO THE UNITED STATES OF AMERICA BY THE REPUBLIC OF HAWAII, WERE SET ASIDE FOR FEDERAL USE, AND SUBSEQUENTLY LEASED TO PRIVATE PARTIES BY THE SECRETARY OF THE ARMY OR THE SECRETARY OF THE AIR FORCE.

UNDER ARTICLE II OF THE TREATY OF 1897 BETWEEN THE REPUBLIC OF HAWAII AND THE UNITED STATES OF AMERICA, PROVIDING FOR THE ANNEXATION OF THE HAWAIIAN ISLANDS TO THE UNITED STATES, THE REPUBLIC OF HAWAII CEDED AND TRANSFERRED TO THE UNITED STATES THE ABSOLUTE FEE AND OWNERSHIP OF ALL PUBLIC, GOVERNMENT OR CROWN LANDS, AND OTHER PUBLIC PROPERTY BELONGING TO THE GOVERNMENT OF THE HAWAIIAN ISLANDS. THE TREATY, AND IMPLEMENTING JOINT RESOLUTION OF JULY 7, 1898 (30 STAT. 750, 48 U.S.C. 661), PROVIDED THAT EXISTING LAWS OF THE UNITED STATES RELATIVE TO PUBLIC LANDS SHALL NOT APPLY TO SUCH LANDS IN THE HAWAIIAN ISLANDS, BUT THE CONGRESS OF THE UNITED STATES SHALL ENACT SPECIAL LAWS FOR THEIR MANAGEMENT AND DISPOSITION.

SECTION 91 OF THE HAWAII ORGANIC ACT, APPROVED APRIL 30, 1900 (31 STAT. 141), ESTABLISHING A GOVERNMENT FOR THE TERRITORY OF HAWAII, PROVIDED THAT THE PUBLIC PROPERTY CEDED AND TRANSFERRED TO THE UNITED STATES BY THE REPUBLIC OF HAWAII SHALL REMAIN IN THE POSSESSION, USE, AND CONTROL OF THE GOVERNMENT OF THE TERRITORY OF HAWAII, AND SHALL BE MAINTAINED, MANAGED, AND CARED FOR BY IT, AT ITS OWN EXPENSE, UNTIL OTHERWISE PROVIDED FOR BY CONGRESS,"OR TAKEN FOR THE USES AND PURPOSES OF THE UNITED STATES BY DIRECTION OF THE PRESIDENT OR OF THE GOVERNOR OF HAWAII.' 48 U.S.C. 511. AN AMENDMENT OF JUNE 19, 1930 (46 STAT. 789) ADDED THE PROVISO---

* * * THAT WHEN ANY SUCH PUBLIC PROPERTY SO TAKEN FOR THE USES AND PURPOSES OF THE UNITED STATES, IF, INSTEAD OF BEING USED FOR PUBLIC PURPOSE, IS THEREAFTER BY THE UNITED STATES LEASED, RENTED, OR GRANTED UPON REVOCABLE PERMITS TO PRIVATE PARTIES, THE RENTALS OR CONSIDERATION SHALL BE COVERED INTO THE TREASURY OF THE TERRITORY OF HAWAII FOR THE USE AND BENEFIT OF THE PURPOSES NAMED IN THIS SECTION.

FOLLOWING THE ADMISSION OF HAWAII INTO THE UNION ON AUGUST 24, 1959, THERE WAS ENACTED THE HAWAII OMNIBUS ACT, APPROVED JULY 12, 1960 (74 STAT. 411). SECTION 42 OF THAT ACT PROVIDES THAT UNTIL AUGUST 21, 1964, THERE SHALL BE COVERED INTO THE TREASURY OF THE STATE OF HAWAII "THE RENTALS OR CONSIDERATION RECEIVED BY THE UNITED STATES WITH RESPECT TO PUBLIC PROPERTY TAKEN FOR THE USES AND PURPOSES OF THE UNITED STATES UNDER SECTION 91 OF THE HAWAII ORGANIC ACT AND THEREAFTER BY THE UNITED STATES LEASED, RENTED, OR GRANTED UPON REVOCABLE PERMITS TO PRIVATE PARTIES.'

THE AMOUNTS COLLECTED BY THE DEPARTMENT OF THE ARMY AND THE DEPARTMENT OF THE AIR FORCE UNDER LEASES INVOLVING CEDED LANDS SET ASIDE FOR FEDERAL USE HAVE BEEN PAID OVER TO THE TERRITORY OR THE STATE OF HAWAII EXCEPT FOR THE PORTION OF SUCH RENTALS ATTRIBUTABLE TO IMPROVEMENTS, INCLUDING FILL, PLACED ON THE LAND BY THE UNITED STATES GOVERNMENT WITH THE EXPENDITURE OF FEDERAL FUNDS. DURING THE PERIOD PRIOR TO JUNE 1962, WHEN THE STATE OF HAWAII APPARENTLY QUESTIONED THE ADMINISTRATIVE PRACTICE, THE AMOUNTS WITHHELD WERE DEPOSITED INTO THE TREASURY OF THE UNITED STATES. SINCE JUNE 1962, RENTALS ATTRIBUTABLE TO FEDERAL IMPROVEMENTS HAVE BEEN PLACED IN A SPECIAL DEPOSIT ACCOUNT PENDING A DETERMINATION OF THEIR PROPER DISPOSITION.

THE FIRST AND PRINCIPAL QUESTION SUBMITTED IS---

IS IT PROPER UNDER SECTION 42 OF THE HAWAII OMNIBUS ACT TO APPORTION RENTALS AS TO SET-ASIDE LAND AND IMPROVEMENTS, INCLUDING FILL, AND PAY OVER TO THE STATE OF HAWAII MONEY COLLECTED AS GROUND RENT AND DEPOSIT IN THE TREASURY OF THE UNITED STATES MONEY COLLECTED AS RENT FOR IMPROVEMENTS INCLUDING FILL?

SECTION 42 OF THE HAWAII OMNIBUS ACT EXTENDED TO THE STATE OF HAWAII FOR A 5-YEAR PERIOD THE PRIVILEGES UNDER SECTION 91 OF THE HAWAII ORGANIC ACT ENJOYED BY THE TERRITORY OF HAWAII WITH RESPECT TO INCOME RECEIVED BY THE FEDERAL GOVERNMENT FROM LEASING OR RENTING OF THE PUBLIC PROPERTIES WHICH HAD BEEN CEDED AND TRANSFERRED TO THE UNITED STATES BY THE REPUBLIC OF HAWAII. IN REPORTING ON H.R. 11602 WHICH BECAME THE HAWAII OMNIBUS ACT THE SENATE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS STATED THAT IN A FEW INSTANCES IT HAD BEEN FOUND DESIRABLE, NOTWITHSTANDING HAWAII'S ADMISSION TO STATEHOOD, TO MAINTAIN EXISTING ARRANGEMENTS IN HAWAII: "* * * THE PROVISIONS OF SECTION 91 OF THE HAWAIIAN ORGANIC ACT RESPECTING PAYMENT INTO THE TREASURY OF THE TERRITORY OF RENTALS RECEIVED FOR CERTAIN PROPERTIES WILL REMAIN IN FORCE FOR THE STATE UNTIL 1964 UNDER SECTION 42 * * *.' S.REPT. NO. 1681, 86TH CONG., 2D SESS. 5.

TAKING COGNIZANCE OF THE LEGISLATIVE INTENT TO CONTINUE THE EXISTING ARRANGEMENT OF SECTION 91 OF THE HAWAII ORGANIC ACT, WE SEE NO SUBSTANTIVE BASIS FOR VIEWING SECTION 42 OF THE OMNIBUS ACT AS ENLARGING OR MODIFYING, EXCEPT FOR THE TIME LIMITATION, THE RIGHTS CONFERRED BY SECTION 91 OF THE ORGANIC ACT, OR AS CONSTITUTING A LEGISLATIVE INTERPRETATION OF THE LATTER SECTION.

SECTION 91 OF THE ORGANIC ACT, PARTICULARLY THE PROVISO THEREOF, CALLS FOR THE TRANSFER OF RENTALS OR CONSIDERATION RECEIVED BY THE UNITED STATES FROM "THE PUBLIC PROPERTY CEDED AND TRANSFERRED TO THE UNITED STATES BY THE REPUBLIC OF HAWAII UNDER THE JOINT RESOLUTION OF ANNEXATION * * *.' AT THE TIME OF THE ADDITION OF THE PROVISO, IN 1930, APPROXIMATELY 900 ACRES OF LAND WERE LEASED AND THE TOTAL YEARLY RENTAL WAS $7,649.77. SEE H.REPT. NO. 1193, 71ST CONG., 2D SESS., AND S.REPT. NO. 866, 71ST CONG., 2D SESS. THE CONGRESSIONAL COMMITTEE REPORTS ON THE SUBSEQUENTLY ENACTED PROVISO WERE COUCHED IN TERMS OF "PUBLIC LANDS OF HAWAII.' FEDERAL IMPROVEMENTS OR FILL ON SUCH LANDS DOES NOT APPEAR TO HAVE BEEN CONTEMPLATED. THE PROVISO, READ IN THE CONTEXT OF THE JOINT RESOLUTION AND ORGANIC ACT, REFLECTS THE CONGRESSIONAL POLICY OF RECOGNIZING A RESIDUAL OR EQUITABLE INTEREST OF THE PEOPLE OF HAWAII IN THE PUBLIC LANDS CEDED TO THE UNITED STATES BY THE REPUBLIC OF HAWAII. WE PERCEIVE NO JUSTIFICATION, IN TERMS OF APPARENT PURPOSE OR LEGISLATIVE HISTORY, FOR EXTENDING THE PROVISO TO FEDERAL IMPROVEMENTS OR FILL. MOREOVER, WE VIEW AS MISPLACED ANY LEGALISTIC ARGUMENT THAT SUCH IMPROVEMENTS AND FILL ARE INTEGRAL PARTS OF THE CEDED LANDS. SEE IN THIS CONNECTION PUBLIC LAW 88- 233, APPROVED DECEMBER 23, 1963, 77 STAT. 472. CONSEQUENTLY, OUR ANSWER TO THE FIRST QUESTION IS IN THE AFFIRMATIVE.

THE REMAINING TWO QUESTIONS SUBMITTED ARE PREDICATED ON THE CONTINGENCY OF A NEGATIVE ANSWER TO THE FIRST QUESTION AND CONSEQUENTLY NEED NOT BE DEALT WITH.