Fact Sheet: Nelson v Hawaiian Homes Commission (HHC) Case Ruling

From Rep. Beth Fukumoto Chang, House Minority Leader January 27, 2016

Many members of the Legislature, including the Republican caucus, support increased funding and reducing the waiting list for the Department of Hawaiian Home Lands (DHHL) and have signed on to bills to support it and its mission.

The Legislature is currently involved in contesting the decision in Nelson v HHC, which has been confused with contesting funding for DHHL. The case, however, is about the constitutional powers of co-equal branches of government. In the Nelson v HHC decision, the state Judiciary ordered the Legislature to appropriate at least a certain amount of general fund money to DHHL for its administrative and operating budget. The Legislature considers this an encroachment on its constitutional power to appropriate state funds.

Furthermore, the state has significant concerns over the broad reaching implications of this decision on the state budgeting process. If the state Judiciary has the ability to dictate spending on one state department, we could be facing perpetual judicial mandates to spend money in other departments regardless of the state's financial situation. For these reasons, the Legislature submitted a motion seeking to file an amicus brief (attached to the motion) asking the courts to reconsider its ruling on Nelson v HHC.

The Judiciary's Ruling

"The State of Hawaii must fulfill its constitutional duty by appropriating sufficient general funds to the DHHL ... Although what is 'sufficient' will change over the years, the sufficient sums that the legislature is constitutionally obligated to appropriate in general funds for DHHL's administrative and operating budget (not including significant repairs) is more than $28 million for FY 2015-16 ... The defendants shall prospectively fulfill their constitutional duties and trust responsibilities. They are enjoined from violating these obligations." - Declaratory Judgment 07-1-1663-08, pg. 39

The Legislature's Position

• The Constitution assigned the Legislature the power to make laws, including the budget. Hawaii's Constitution also essentially requires the Legislature's budget to be balanced (except in certain limited circumstances).

• Hawaii's Constitution requires the Legislature to "make sufficient sums available" to DHHL for certain purposes, including administrative and operating expenses. However, the determination of what constitutes "sufficient funds" is appropriately made by the elected representatives of the people rather than by the Judiciary.

• The court's opinion could theoretically be that the Legislature is not meeting its Constitutional obligations. However, the Legislature believes that a court determining that the Legislature must appropriate any specific amount of money exceeds the limit of the Judiciary's power.

• The Legislature is concerned with the broader-reaching effects if the ruling stands. It may open the door for the Judiciary to exercise control that it constitutionally does not have and was never meant to have over the state budget.

History of DHHL Funding

• In FY 1991-1992, the Legislature appropriated approximately $4.2 million in general funds for the administrative and operating budget of DHHL. This dropped to $1.57 million by FY 1996-1997 and to $817,559 in FY 2005-2006

• In the FYs covering 2009 to 2013, the Legislature did not appropriate any general funds for the administrative and operating budget of DHHL.

• Starting in FY 2013-2014, the Legislature began appropriating approximately $9.6 million in general funds for the administrative and operating budget of DHHL .

• DHHL also used its own funds, including revenues from leases, to pay for its administrative and operating costs.

History of Nelson v HHC

• In 2007, the plaintiffs sued the defendants, including for failing to adequately fund DHHL as plaintiffs said was mandated by article XII, section 1 of the State Constitution.

• In 2009, the trial court found in favor of the defendants, summarily without any trial. The plaintiffs appealed.

• In 2012, the Hawaii Supreme Court determined that the plaintiffs were legally able to sue over the question of what constitutes “sufficient sums” for DHHL’s administrative and operating expenses.

• In 2015, a non-jury trial was held and a judge's court order declared that the state failed to provide sufficient funds to DHHL. The court ordered the state to appropriate sufficient funds so that DHHL wouldn't need to use lease revenues to pay for its administrative and operating expenses. This included at least $28 million for fiscal year 2015-2016, which DHHL said it needed.

• In 2016, the Legislature filed a motion seeking to file an amicus (“friend of the court”) brief to protect its interests over its constitutional responsibility to produce the budget and determine the amount of funds to appropriate to DHHL.

For a PDF version of this fact sheet, click here.

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Rep. Ward, Tupola, McDermott and Senator Slom- Hawaiian Home Lands

Representatives Gene Ward, Andria Tupola, Bob McDermott and Senator Sam Slom address issues of Hawaiian Home Lands, state infrastructure and good governance after the State of the State on January 25, 2016.