WASHINGTON, D.C. -- United States Senator Daniel K. Inouye announced that the Senate Appropriations Committee approved a provision to "forgive" the State of Hawaii from its obligation to repay $30 million owed to the Airport Revenue Fund for ceded land payments to the Office of Hawaiian Affairs (OHA). This provision is included in the Fiscal Year 1998 Department of Transportation Appropriations Bill.

Current law states that airport revenues can only be used for airport purposes. The U.S. Department of Transportation's Inspector General found in September of 1996 that the approximately $30 million in ceded lands payments made from the Hawaii Airport Revenue Fund were not in compliance with the law, and is seeking the repayment of those monies.

Senator Inouye prevailed on his colleagues and the airlines to allow the forgiveness of the debt. There was no malice involved, but rather the good faith belief on the part of the State of Hawaii that these funds were part of the airport's operating expenses. Additionally, in light of the unique history of Hawaii's ceded lands and the obligations that flow from these lands for the betterment of the Native Hawaiian people, the provision was accepted to ensure that OHA would not be required to return funds already in its possession.

In addition, the provision also codifies the Inspector General's ruling, and requires that no further or future airport revenues be used for ceded land payments, whether characterized as operating expenses or rent, to OHA. This provision does not in any way affect the State of Hawaii's obligation to compensate OHA pursuant to state law.

Senator Inouye commented, "The Inspector General's ruling was very clear, and the State's failure to repay the funds and comply with its mandate would have resulted in penalties, and the withholding of federal aviation funding which it needs to operate the Hawaii airport system. I am pleased that my colleagues understood the sensitivity of the matter and allowed for the forgiveness of the approximately $30 million already in OHA's possession."

"A continuation of the status quo -- continued ceded land payments from the Airport Revenue Fund -- was not possible. It was counter to the U.S. Department of Transportation's position and policy. I was not able to muster support for such a proposition. However, if there comes a time when the policies on the diversion of airport funds should change, I would be prepared to take another look at the issue. At this time, forgiveness of the $30 million debt was possible and achievable. To have done otherwise and failed, would have resulted in a lose-lose' situation for all concerned," Senator Inouye stated.

The measure will now go to the full Senate for consideration. It will then face a joint House-Senate Conference and final Senate vote before its transmittal to the White House.