Ceded lands, or public trust lands were lands owned by the monarchy prior to 1893 overthrow of the Hawaiian kingdom. These lands were given or ceded to the United States government at Hawaii's annexation. The ceded lands make up about 1.8 million acres, or about 43 percent of the land in Hawaii. They were given or ceded to the United States shortly after the 1893 overthrow of the Hawaiian kingdom.
Upon statehood, Hawaii became trustee for about 1.4 million acres, approximately 0.4 million acres were retained by the federal government.
The statehood act set aside five purposes for ceded lands use, one of them being the betterment of native Hawaiians. The 1978 Hawaii State Constitutional Convention proposed ammendments to create the Office of Hawaiian Affairs (OHA) and to fund it with ceded land revenue.
Funding of OHA
In 1980 the Legislature set the OHA funding from ceded lands at 20 percent.
In September 2001, the Hawaii State Supreme Court ruled the 1990 state law that calculated those payments moot.
In an editorial in the 'Honolulu Star-Bulletin dated February 7, 2008, the OHA trustees wrote:
A partial settlement was concluded successfully in 1993 between OHA and the state (Waihee administration) related to the "undisputed revenues due to OHA" from the income and proceeds of the public land trust. That negotiation and mediation took more than 30 months to complete.
On Jan. 18, (2008) OHA and the state of Hawaii announced a settlement aimed at resolving "disputed revenues due to OHA" from income and proceeds of the public land trust. This negotiation and mediation took four years to complete.
This 2008 agreement in the amount of $200 million is to be implemented by the transfer of land and cash to OHA. The land parcels include commercial and industrial properties on Oahu and the Big Island totaling 209 acres. The state also will pay OHA just over $13 million in cash, and agrees to continue paying OHA a minimum of $15.1 million annually.
Upon approval of this 2008 settlement by the Legislature, the payment to OHA for its share of the "disputed" revenues due from the public land trust will be settled for the period from 1978 to 2008.
This 2008 settlement brings to closure the issue of "undisputed and disputed" revenues, payments of income and proceeds due to OHA since OHA's creation in 1978.
In an article in the Honolulu Star-Bulletin dated July 9, 2005 and entitled, OHA seeks high-court action on ceded lands, comes the following excerpt:
Under the state Constitution, OHA must get a percentage of the revenues from the former monarchy lands held in trust by the state government.
The legislative and executive branches reached a 1990 settlement agreement that resulted in Act 304, by which OHA would get 20 percent of ceded-lands revenues.
But the Hawaii Supreme Court invalidated Act 304 in September 2001, saying it conflicted with federal law prohibiting the state, which receives federal grant moneys, from diverting airport revenues for non-airport uses.</p>
The state initially argued that the payments to OHA were for rent and did not violate federal laws. But in the summer of 1997, the state agreed to the language in a federal omnibus appropriations bill that said any future payments of airport revenues would be illegal under federal law, in exchange for "forgiveness" of past payments totaling $28 million. It was called the Forgiveness Act, which was passed later that year.
OHA sued the state in July 2003, saying the state should never have agreed to the Forgiveness Act because it breached both the 1990 agreement and its duties owed to OHA under the ceded-lands trust.
The fact that the statute was invalidated means OHA cannot get ceded-lands revenue under the statute, said former Associate Justice Robert Klein, one of three attorneys representing OHA.
Because the state wrongfully invalidated the statute by the actions of the state, "OHA should be able to get damages from the state based on that statute as if it existed today," he said. "But for the state's wrongful conduct, we would have that revenue source."
Deputy Attorney General Dorothy Sellers argued that the state did not have a conflict of interest when it agreed to the Forgiveness Act, because it was representing all five purposes of the trust, including the betterment of native Hawaiians. The only way OHA can sue for damages is if the state's actions violated its duty to manage and dispose of trust assets, she said.
OHA stopped getting payments after Act 304 was invalidated, and it was not until January 2003, shortly after she took office, that Gov. Linda Lingle resumed some payments on an agreement.
OHA continues to receive funding from sources other than the airport fees -- about $9 million to $10 million a year, Sellers said. "Eventually there will have to be a new law, but there isn't one, so we're paying them under an old, invalid law as best we can." 
- Barayuga, Debra. Court again rejects OHA’s claim to airport ceded-land rent Honolulu Star-Bulletin, 9-10-05.
- Kobayashi, Ken. Ceded-land decision stands Honolulu Advertiser, 9-10-05.
- Kobayashi, Ken. High court's intent to revisit decision revives OHA's hopes Honolulu Advertiser, 1-28-06.
- Associated press. OHA OKs $15.1M settlement -- The state deal on land trust payments awaits legislative approval Honolulu Star-Bulletin, 2-3-06.
- Pang, Gordon Y.K. House, Senate move bills for ceded lands deal Honolulu Advertiser, March 3, 2006.
2008 ceded lands revenue settlement
- Borreca, Richard. State and OHA make land deal Honolulu Star-Bulletin, January 19, 2008.
- Van Dyke, Jon M. Gathering Place: A fair and just settlement for unpaid ceded lands revenues Honolulu Star-Bulletin, January 20, 2008.
- Borreca, Richard. Deal draws debate -- Ceded lands: Benefits of OHA settlement proposal in question Honolulu Star-Bulletin, January 22, 2008.
- OUR OPINION: Ceded land settlement deserves fair hearing by legislators THE ISSUE: An agreement between the state and the Office of Hawaiian Affairs on ceded lands will need the approval of the Legislature. Honolulu Star-Bulletin, January 24, 2008.
- Apoliona, S. Haunani. Gathering Place: Ceded lands deal guards future c: laims Honolulu Star-Bulletin, February 2, 2008.
- Park, Gene. Senate panels to pass ceded land bill Honolulu Star-Bulletin, February 10, 2008.
- Fujimori, Leila. Ceded-lands session meets native distrust Honolulu Star-Bulletin, February 14, 2008.
- Borreca, Richard. Changed OHA bill prompts scrutiny Honolulu Star-Bulletin, February 29, 2008.
- RELATING TO THE PUBLIC TRUST LANDS SETTLEMENT Hawaii State Legislature.
- Wu, Nina. OHA goals for Kewalo unveiled to agency -- The 18.5 acres include the John Dominis restaurant Honolulu Star-Bulletin, March 6, 2008.
- OUR OPINION: Long dispute over ceded land revenues needs resolution THE ISSUE: Senate committees have put a hold on a bill to authorize a settlement between the state and the Office of Hawaiian Affairs. Honolulu Star-Bulletin, March 6, 2008.
sale of ceded lands
- Daranciang, Nelson. High court restricts sale of ceded lands Honolulu Star-Bulletin, February 1, 2008.
- OUR OPINION: High court decision adds urgency to Akaka Bill enactment THE ISSUE: The state Supreme Court has ruled that the Office of Hawaiian Affairs can't be forced to sell ceded lands while political questions remain. Honolulu Star-Bulletin, February 2, 2008.
- Da Silva, Alexandre. Sovereignty cited in ceded land case Honolulu Star-Bulletin, April 30,2008.
- OUR OPINION: State had no choice on ceded land appeal THE ISSUE: Hawaii is asking the U.S. Supreme Court to overturn a state Supreme Court ruling. Honolulu Star-Bulletin, May 1,2008.
- Reyes, B.J. 29 other states oppose ruling on ceded lands Honolulu Star-Bulletin, June 10,2008.
- Court should reverse freeze on land sales Honolulu Star-Bulletin, October 6, 2008.
- Borreca, Richard. Hawaiians rally to save ceded lands Honolulu Star-Bulletin, November 25, 2008.