Under a settlement proposal, the lawsuit over the sale of ceded lands would be dropped in exchange for an agreement by the Lingle administration to obtain a two-thirds vote of approval in both houses of the Legislature before it could move forward with any sale of the lands.

The proposal, being crafted by attorneys for the state, the Office of Hawaiian Affairs and four individual Native Hawaiians, would allow the dispute over the sale of ceded lands to go away — at least for now.

But the parties, as well as state lawmakers, must still agree to the plan.

Under the settlement, detailed by Attorney General Mark Bennett and attorney William Meheula at a House Hawaiian Affairs briefing yesterday:

• All parties would agree to have the current lawsuit, which was remanded to the state courts by the U.S. Supreme Court on March 31, dismissed with prejudice, meaning other parties could choose to raise the issue in the future.

• Gov. Linda Lingle would sign a bill requiring that any sale of ceded lands first obtain a two-thirds approval from each house of the Legislature. The bill would allow for continuance of the existing law on the exchange of ceded lands, which allows for a transfer to be disapproved if 50 percent of both houses, or two-thirds of one house, votes to reject it.

The proposal appears to be a way for the two sides to come to a compromise each can live with while taking away the uncertainty of an impending Hawai'i Supreme Court ruling.

The U.S. Supreme Court two weeks ago said the Hawai'i Supreme Court erred in relying on the Apology Resolution of 1993 as the legal basis for a moratorium on the sale of ceded lands, and sent the matter back to the state courts.

Bennett has disagreed with Meheula and OHA attorney Sherry Broder on what that means.

NO AGREEMENT YET

Bennett believes the Hawai'i Supreme Court now needs to lift the moratorium. But Meheula and Broder feel the Hawai'i court could choose to once again allow a moratorium, except this time using other state laws and actions as proof there is a need for a moratorium.

Bennett and Meheula made it clear that the clients — OHA and the four individuals in particular — had not yet agreed to the settlement.

Bennett, however, said, "It's my belief the governor would sign the bill I described for you."

The two attorneys also acknowledged the plan would need to be approved by the Legislature, which appears to be split on the subject of ceded lands.

Rep. Mele Carroll, D-13th (E. Maui, Moloka'i, Lana'i), chairwoman of the House Hawaiian Affairs Committee and the Legislature's Hawaiian Caucus, said she and others would still prefer a full moratorium against any sale of lands.

SENATE SUPPORT

Meheula said he'd prefer a moratorium, too, but "I can't base a settlement on something that's pie in the sky."

Bennett has stated the Lingle administration would be more amenable to a two-thirds approval rule than a blanket moratorium. The administration has also stressed there are no plans to sell ceded lands.

Senate President Colleen Hanabusa said she expects the Senate likely would support the proposal, noting that the Senate moved out a two-thirds approval bill.

A House version calls for a two-thirds vote to reject a ceded lands sale, and is pending before the full House.

At issue are 1.2 million acres that were under the jurisdiction of the Hawaiian government at the time of the 1893 overthrow.

In 1994, OHA and four individuals sued the state, seeking to temporarily halt the sale of affordable housing put up on ceded lands on Kaua'i, arguing that claims to those lands by Native Hawaiians should be resolved first. The Hawai'i Supreme Court in January 2008 overturned a lower court's opinion and imposed a moratorium on the sale or transfer of ceded lands until those claims are resolved.

OHA Administrator Clyde Namu'o would not comment, stating he wants to first discuss the issue with the agency's board of trustees. The board is expected to take up the issue at a meeting today.