Briefly, my background includes 20 years of providing direct social services and the administration of social service programs to the children and families of predominantly Hawaiian homestead communities. In working and interacting with Hawaiian families, you cannot help but come to know and understand the struggles that they face daily-struggles that are so often antiseptically portrayed in the reams and volumes of statistics and studies done on the condition of the Native Hawaiians in terms of their health problems, education, employment, and lack of housing.

We all know about these very important statistics and often too easily accept it at face value. These statistics to us represent people, many of whom are our families and friends. What isn't so apparent to most is that despite these "statistics," the Hawaiian families have endured, and in the process they have not lost their identity or their soul.

It is this capacity that enabled our Native Hawaiians to endure and deal with the issues arising out of the administration of the Hawaiian Home Act of 1920 for the past 60 years-issues and concerns I'm sure this committee will hear of throughout these hearings.

There are many old hurts existing amongst us Hawaiians that need to be acknowledged. It is our struggle and our responsibility to deal with these hurts of the past in regards to the Hawaiian Homes Lands program. We must and will do it in our own way with the spirit of 'oia'i'o ame ka ho'oponopono, through truthfulness, through sincerity, and with a sense of setting things right. By adhering to this cultural concept and believe, we then can continue to forge ahead to meet our goals.

It has been said that the system has worked against the Hawaiian people for many years and it is time to turn the system around and make it work for us. I believe that that time is here.

Not to take away from the progress achieved thus far, we have, at present, a system that I believe is responsive to the housing needs of our Native Hawaiians. Governor John Waihe'e and our State legislature have provided significant amount of monies for infrastructure and operating cost for the Department of Hawaiian Homelands. Together with the Hawaiian Homes Commission, the Director of the Department of Hawaiian Home Lands and staff, we are committed toward working with and meeting the needs of our Native Hawaiians. We will continue to do so to the best of our abilities and with the resources at hand.

We welcome this opportunity and invite you, Senator, and this committee, to join us in this commitment and endeavor to better the conditions of the native Hawaiian.

Mahalo nui loa for this opportunity to testify.

The CHAIRMAN. Thank you very much, Mr. Kauahi. [Applause.]

[The prepared statement of Mr. Kauahi appears in appendix.]

STATEMENT OF ILIMA PI’IANAIA, CHAIRMAN, HAWAIIAN HOMES COMMISSION, HONOLULU, HI

Ms. PI'IANAIA. Thank you. Chairman Inouye, Congressman Akaka, Delegate Blaz, Delegate Faleomavaega.

My name is Ilima Pi'ianaia. Since January 1, 1987, I have been chairman of the Hawaiian Homes Commission and of the Department of Hawaiian Home Lands.

Along with Governor Waihe'e and my fellow cabinet members, and on behalf of everyone at the Department of Hawaiian Home Lands, I welcome you here. I appreciate this historical opportunity to address the future of the Hawaiian Home Lands program.

During this week we will share with you the status of the program, some history of the Hawaiian Homes Commission Act of 1920, the obstacles that have faced the department, as well as the opportunities we have to better carry out our mission.

Our mission is to manage the Hawaiian Homes Trust effectively and to deliver land to Native Hawaiians on a continuing basis. This trust, which began as an idea in the minds of a Hawaiian prince and a Hawaiian scholar, one of whom went to the United States Congress and the other who served his people in the territorial legislature as a Senator, was given life 68 years ago. It has been a long and rocky road, but there has been constant progress. We are confident today that we are adding to that record of progress.

Governor John Waihe'e, our first Hawaiian homestead governor, has lead a long and concerted effort to take this program into new waters. The governor's commitment to this effort is most vividly illustrated and reflected in his biennium budget for this and next year. The governor requested, and the State legislature approved, over $50 million for capital improvement projects. While this appropriation-which is more than double the previous appropriation for the previous biennium-is unprecedented in the history of the Hawaiian Homes Commission Act, it is only a fraction of what we need.

There are other ways in which the governor and his administration have expressed their commitment to this program. We bring to the Hawaiian Homes program the resources of the entire State of Hawaii. We work as a team. The sister agencies of the State have given my department's project the highest priority.

This partnership of State agencies has lead to joint developments, from the drilling of water wells to planning for the future of Hawaii's fastest-growing harbor. And, although it is not set, also to the expeditious processing of contracts through the bureaucracy. While our commitment to this program is beginning to show tangible results, there is still so much for us to do. And, as you will surely hear over the next 5 days, we would like to do our job better and faster.

What is it that we have to do? Our most immediate, pressing, and highest priority is to develop homestead lots that have been awarded to Native Hawaiians implementing the recommendations that were made to Hawaii's governor and the United States Secretary of the Interior. These recommendations were made by a Federal task force in 1983.

The Hawaiian Homes Commission accelerated the distribution of homestead lots over an approximately 2-year period. The result was a distribution of just over 2,500 lots. As recommended by the task force, distribution occurs whether or not there were infrastructure improvements available such as roads, water systems, and utilities.

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Of the 2,500 lots, about 2,100 lots lack any improvement. As also recommended by the task force, our resources are allocated now to construct improvements on these lots rather than on home construction undertaken by the department.

As you will hear over the next five days, there are many more Native Hawaiians awaiting a homestead lot. The historically slow but steady distribution of homestead lots had discouraged people from expecting to ever receive one. The acceleration program, however, was seen as a bold and positive move within the Hawaiian Homes program. In some areas leases were awarded to Native Hawaiians who had made application in the early 1980s. In fact, on the Island of Molokai we ran out of applicants who were willing to take lots.

This rekindled hope and lead to an acceleration of applications by Native Hawaiians for homestead lease since they could now realistically look forward to a lease award. While the acceleration of awards made a significant dent in the 8,000 applications for homestead leases in the early 1980's, it added to the list thousands-I should really say tens of thousands-of new applications.

During acceleration, the department received about 3,000 applications per month. This has now slowed to about 200 applications a month. Today we have over 19,000 applications for homestead leases.

Our job has thus become a two-pronged effort. While we construct improvements for awarded lots, we must also find the means-including new means-for developing additional lots. A homestead lot without a home doesn't do the job. There must be means for lessees to get their homes built. Significant opportunities have come about for home financing through partnerships with the Federal Government.

The initial partnership was with the United States Department of Agriculture's Farmers Home Administration a decade ago. The second partnership began in late 1987 with the Department of Housing and Urban Development's Federal Housing Administration.

In both of these partnerships, the Department of Hawaiian Home Lands guarantees loans that are available through these Federal programs. These partnerships have lifted the burden from the department as the sole source of home building financing. This is ground-breaking, because Hawaiian home lands are inalienable and liens cannot be placed on homestead leases.

Previously to these partnerships, lenders would not provide loans. We can now begin to use our own loan funds for those lessees who are not served by these programs.

While avenues outside the department for financing home construction have been opened, they need to be opened wider. To get the job done, there are two more things that we in the department see as critical. The first is financial stability and growth. With this State's fiscal biennium appropriations we are on a new course. Not only did we receive funds for capital improvements; we also received, as Speaker Kihano pointed out-and this, too, is historical-State general funds to cover a portion of our operating budget. Prior to receiving general funds, the department's operating costs were covered by income that it generated from its lands. With

general funds provided to us, we can now use income that we generate directly for homestead purposes. This begins a new era in our financial picture.

The new era requires that we improve our financial planning and management. The magnitude of financial resources that we need is great. We must first seek stability in the resources available. If our income is stable and assured, then we can carry out plans and projects with predictability. At the same time, we must make wise investments so that our assets continue to grow.

The second thing that is critical is our organization of our department's human resources. This new era for the program, which brought an acceleration of both leases and applications, as well as increased financing of this program, mandates the need for an organization that can meet the challenge. We have undertaken an organizational and operational analysis, the results of which show what the department needs to do to carry out its various and increased functions.

This analysis looked at what we need to be as a department and what human resources are needed to get the job done. In the very near future the department will restructure itself so that we can be an organization that meets the needs of Native Hawaiians effectively, as well as efficiently.

The authors of the Hawaiian Homes Commission Act were committed to improving the lives of Native Hawaiians. We, today, are equally committed and must focus on the priorities that I have just outlined; namely: Constructing homestead lots, increasing sources of financing for construction of homes on these lots, stabilizing and maximizing the financial assets of the trust, and making sure that we have a department that is organized to meet the challenges of this new era.

To meet these challenges in this new era, Federal cooperation and support is welcome.

Senator and committee members, I have submitted for this day's testimony a very lengthy-I believe it is over 200 pages long-written testimony. That testimony includes a history of the Hawaiian Homes Commission Act. It includes various attachments and exhibits. What I'd like to do is focus on certain parts of that written testimony.

The CHAIRMAN. Ms. Pi'ianaia, you may be assured that the full statement will be made part of the record.

Ms. PI'IANAIA. I have been assured of that, and I appreciate that very much.

The problems that we face today for the Hawaiian Homes program really go back to the inception of the act. Our real goal is to resolve those problems, because once we resolve those we can move faster and with a stronger base.

To really understand those problems I really need to discuss the act and its major provisions, parts of the history of the program, and then I'd like to use that in terms of discussing specific issues. The act, as we have heard, was originally an initiative of Territorial Legislature. The Senator that I referred to was also an incredible Hawaiian scholar, Senator John Wise. It was with three other members of Territorial Legislature that Senator Wise and other

members went to Congress as a Territorial Legislative Committe to urge passage of the act.

Senator Wise especially worked very closely with the prince to make sure that the act got passed. It was signed into law on July 9, 1921.

What the act really did-and still does-is link together Hawaiian people, lands, and financial support. The way it does this is through the provision of leases for homesteading purposes and through the setting aside of lands within the Territory's public lands inventory, and also in establishing a fund for financial purposes.

We have to remember that at its very beginning the homesteading program was set up as an experiment on a 5-year probationary basis, and only for certain lands.

The commission at that time-at the inception of the act-was a five-member commission. We heard testimony this morning-which many people do not know-that the Governor of the Territory was also the chairman of the commission.

This commission was really hung out there. It was not attached to either the Federal Government or the Territorial Government's structures. So basically it was like an independent authority.

The act also provided initially a Hawaiian home loan fund. The loan fund was to be-the source of moneys for the loan fund was to come out of a percentage of the revenues from public lands that were leased out for sugar, and also from water receipts for water licenses. The loan fund was also to receive moneys that were for leases of "Hawaiian home lands," but lands not under the control of the commission.

The loan fund was set to have a ceiling of $1 million, and throughout this week as I talk about ceilings and certain funds, the ceilings meant that once $1 million was deposited into the fund, no more money could be put into it. So even if the commission spent a half million dollars and even if they had rental leases from Hawaiian home lands, once the ceiling was reached that was it. And there is an exhibit in our testimony that shows what happened over that time.

The basic entitlement that the act provided was a 99-year homestead lease, and originally only homestead leases for agriculture and pasture uses were included in the act. There are conditions for homestead leases that were laid out. The first was that the lessee must be Native Hawaiian, and the act defined a Native Hawaiian of any descendant of not less than one half part of the blood quantum of the races inhabiting the Hawaiian Islands previous to 1778. This condition, as you know, is what we call the "blood quantum requirement." And today that condition remains for original les

sees.

As Congressman Akaka referred earlier to the amendments that were finally sent up to Congress for consent, the major amendment had to do with successorship to lease-hold interests. The community discussed long and hard lowering the blood quantum for people to succeed to homestead leases. Eventually, the State Legislature passed an amendment to the Hawaiian Homes Commission Act that says that a spouse or children of a lessee must be at least 25 percent Hawaiian. This is a successorship amendment. The basic