HHL Lessee Transfer Rights

Authorizes that a homestead lessee may transfer the leasehold
interest in a tract to a spouse, child, or grandchild who is at
least one-quarter Hawaiian.

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THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 208 of the Hawaiian Homes Commission
 2 Act, 1920, as amended, is amended to read as follows:
 3      "208.  Conditions of leases.  Each lease made under the
 4 authority granted the department by section 207 of this Act, and
 5 the tract in respect to which the lease is made, shall be deemed
 6 subject to the following conditions, whether or not stipulated in
 7 the lease:
 8      (1)  The original lessee shall be a native Hawaiian, not
 9           less than eighteen years of age.  In case two lessees
10           either original or in succession marry, they shall
11           choose the lease to be retained, and the remaining
12           lease shall be transferred, quitclaimed, or canceled in
13           accordance with the provisions of succeeding sections.
14      (2)  The lessee shall pay a rental of $1 a year for the
15           tract and the lease shall be for a term of ninety-nine
16           years; except that the department may extend the term
17           of any lease provided that the approval of any
18           extension shall be subject to the condition that the
19           aggregate of the initial ninety-nine year term and any

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 1           extension granted shall not be for more than one
 2           hundred ninety-nine years.
 3      (3)  The lessee may be required to occupy and commence to
 4           use or cultivate the tract as the person's home or farm
 5           or occupy and commence to use the tract for aquaculture
 6           purposes, as the case may be, within one year after the
 7           commencement of the term of the lease.
 8      (4)  The lessee shall thereafter, for at least such part of
 9           each year as the department shall prescribe by rules,
10           so occupy and use or cultivate the tract on the
11           person's own behalf.
12      (5)  The lessee shall not in any manner transfer to, or
13           otherwise hold for the benefit of, any other person or
14           group of persons or organizations of any kind, except a
15           native Hawaiian or Hawaiians, and then only upon the
16           approval of the department, or agree so to transfer, or
17           otherwise hold, the [person's] lessee's interest in the
18           tract[.]; except that the lessee may also, with the
19           approval of the department, transfer the lessee's
20           interest in the tract to the following qualified
21           relatives of the lessee who are at least one-quarter
22           Hawaiian: husband, wife, children, or grandchildren.
23           Such interest shall not, except in pursuance of such a

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 1           transfer to or holding for or agreement with a native
 2           Hawaiian or Hawaiians or qualified relative who is at
 3           least one-quarter Hawaiian approved of by the
 4           department, or for any indebtedness due the department
 5           or for taxes, or for any other indebtedness the payment
 6           of which has been assured by the department, including
 7           loans from other agencies where such loans have been
 8           approved by the department, be subject to attachment,
 9           levy, or sale upon court process.  The lessee shall not
10           sublet the [person's] lessee's interest in the tract or
11           improvements thereon; provided that a lessee may be
12           permitted, with the approval of the department, to rent
13           to a native Hawaiian or Hawaiians lodging either within
14           the lessee's existing home or in a separate residential
15           dwelling unit constructed on the premises.
16      (6)  Notwithstanding the provisions of paragraph (5), the
17           lessee, with the consent and approval of the
18           commission, may mortgage or pledge the lessee's
19           interest in the tract or improvements thereon to a
20           recognized lending institution authorized to do
21           business as a lending institution in either the State
22           or elsewhere in the United States; provided the loan
23           secured by a mortgage on the lessee's leasehold

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                                     S.B. NO.           

 1           interest is insured or guaranteed by the Federal
 2           Housing Administration, Department of Veterans Affairs,
 3           or any other federal agency and their respective
 4           successors and assigns, which are authorized to insure
 5           or guarantee such loans, or any acceptable private
 6           mortgage insurance as approved by the commission.  The
 7           mortgagee's interest in any such mortgage shall be
 8           freely assignable.  Such mortgages, to be effective,
 9           must be consented to and approved by the commission and
10           recorded with the department.
11                Further, notwithstanding the authorized purposes
12           of loan limitations imposed under section 214 of this
13           Act and the authorized loan amount limitations imposed
14           under section 215 of this Act, loans made by lending
15           institutions as provided in this paragraph, insured or
16           guaranteed by the Federal Housing Administration,
17           Department of Veterans Affairs, or any other federal
18           agency and their respective successors and assigns, may
19           be for such purposes and in such amounts, not to exceed
20           the maximum insurable limits, together with such
21           assistance payments and other fees, as established
22           under section 421 of the Housing and Urban Rural
23           Recovery Act of 1983 which amended Title II of the

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 1           National Housing Act of 1934 by adding section 247, and
 2           its implementing regulations, to permit the Secretary
 3           of Housing and Urban Development to insure loans
 4           secured by a mortgage executed by the homestead lessee
 5           covering a homestead lease issued under section 207(a)
 6           of this Act and upon which there is located a one to
 7           four family single family residence.
 8      (7)  The lessee shall pay all taxes assessed upon the tract
 9           and improvements thereon.  The department may pay such
10           taxes and have a lien therefor as provided by section
11           216 of this Act.
12      (8)  The lessee shall perform such other conditions, not in
13           conflict with any provision of this Act, as the
14           department may stipulate in the lease; provided that an
15           original lessee shall be exempt from all taxes for the
16           first seven years after commencement of the term of the
17           lease."
18      SECTION 2.  Statutory material to be repealed is bracketed.
19 New statutory material is underscored.
20      SECTION 3.  This Act shall take effect upon its approval by
21 the governor of the State of Hawaii with the consent of the
22 United States.
24                           INTRODUCED BY:  _______________________

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