HOUSE OF REPRESENTATIVES
THIRTY-FIRST LEGISLATURE, 2021
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE distribution of Leases UNDER THE HAWAIIAN HOMES COMMISSION ACT, 1920, AS AMENDED.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the United States Congress in 1920 created an Act entitled the Hawaiian Homes Commission Act. The Act was introduced by Prince Jonah Kuhio Kalanianaole to enable native Hawaiians to return to their lands in order to fully support self-sufficiency, self-determination, and the preservation of the values, traditions, and culture. Once it was established at the national level, the responsibility for implementing the Act was transferred to the newly created State of Hawaii in 1959 and the department of Hawaiian home lands.
The legislature finds that one hundred years later only 9,959 homesteads have been created on the 203,000 acres of land managed by the department of Hawaiian homelands. Over 28,000 native Hawaiian people with a blood quantum of fifty per cent or more are languishing on a waitlist where they are more likely to die than receive a homestead.
The legislature further finds that this delay in returning Hawaiians to their lands has contributed to an unacceptable state of affairs including homelessness, incarceration, diabetes and heart disease, low socio-economic indicators, and lack of political muscularity at the state and national levels.
Options to address deficiencies include, engaging the services of individuals to review and revise all DHHL leases to meet compliance with other landowners and State and Federal lending institutions, and adoption of policies for families facing evictions that fail to meet the quantum requirements on succession.
The purpose of this Act is to reform the department of Hawaiian home lands and fulfill the promises contained in the Act of Congress of 1920 by disbursing all remaining lands to native Hawaiians within fifteen years, removing financial consideration in awarding leases, and supporting alternative forms of housing such as communal or pu'uhonua models.
SECTION 2. Section 204.5 of the Hawaiian Homes Commission Act, 1920, as amended, is amended by amending subsection (a) to read as follows:"
Additional powers. In
addition and supplemental to the powers granted to the department by law, and
notwithstanding any law to the contrary, the department [
(1) With the approval of the governor, undertake
and carry out the development of [
any] all Hawaiian home lands
available for lease under and pursuant to section 207 of this Act by assembling
these lands in residential developments and providing for the construction,
reconstruction, improvement, alteration, or repair of public facilities
therein, including, without limitation, streets, storm drainage systems,
pedestrian ways, water facilities and systems, sidewalks, street lighting,
sanitary sewerage facilities and systems, utility and service corridors, and
utility lines, where applicable, sufficient to adequately service developable
improvements therein, sites for schools, parks, off-street parking facilities,
and other community facilities[ ;] in a manner that distributes all remaining
Hawaiian home lands to native Hawaiians within fifteen years;
(2) With the approval of the governor, undertake
and carry out the development of all available lands for homestead, pu'uhonua
or communal living arrangements, commercial, and multipurpose projects as
provided in section 220.5 of this Act, as a developer under this section or in
association with a developer agreement entered into pursuant to this section by
providing for the construction, reconstruction, improvement, alteration, or
repair of public facilities for development, including, without limitation,
streets, storm drainage systems, pedestrian ways, water facilities and systems,
sidewalks, street lighting, sanitary sewerage facilities and systems, utility
and service corridors, and utility lines, where applicable, sufficient to
adequately service developable improvements therein, sites for schools, parks,
off-street parking facilities, and other community facilities[
;] in a manner that distributes all remaining
Hawaiian home lands to native Hawaiians within fifteen years;
(3) With the approval of the governor, designate
by resolution of the commission all or any portion of a development or multiple
developments undertaken pursuant to this section an "undertaking"
under part III of chapter 39, Hawaii Revised Statutes[
;] in a manner
that distributes all remaining Hawaiian home lands to native Hawaiians within fifteen
(4) Exercise the powers granted under section 39-53, Hawaii Revised Statutes, including the power to issue revenue bonds from time to time as authorized by the legislature.
(5) With the approval of the governor, conduct an annual management audit and address structural management deficiencies.
(6) With the approval of the governor, conduct an annual financial audit of the department.
All provisions of part III of chapter 39, Hawaii Revised Statutes, shall apply to the department and all revenue bonds issued by the department shall be issued pursuant to the provisions of that part, except these revenue bonds shall be issued in the name of the department, and not in the name of the State.
As applied to the department, the term "undertaking" as used in part III of chapter 39 shall include a residential development or a development of homestead, commercial, or multipurpose projects under this Act. The term "revenue" as used in part III of chapter 39, shall include all or any portion of the rentals derived from the leasing of Hawaiian home lands or available lands, whether or not the property is a part of the development being financed."
SECTION 3. Section 205 of the Hawaiian Homes Commission Act, 1920, is amended to read as follows:
Sale] Transfer or lease, limitations on. Available lands shall be [ sold] transferred
or leased [ only]:
(1) In the manner and for the purposes set out in
this title; [
(2) In a manner that distributes all remaining Hawaiian home lands to native Hawaiians within fifteen years; and
(2)](3) As may be necessary to complete any valid [ agreement
of sale] transfer or lease in effect at the time of the passage of
except that such limitations shall not apply to the unselected portions of lands from which the department has made a selection and given notice thereof, or failed so to select and give notice within the time limit, as provided in paragraph (3) of section 204 of this title.
SECTION 4. Section 207 of the Hawaiian Homes Commission Act, 1920, as amended, is amended by amending subsection (a) to read as follows:
" §207. Leases to Hawaiians, licenses. (a) The department is authorized to and shall lease to native Hawaiians the right to the use and occupancy of a tract or tracts of Hawaiian home lands within the following acreage limits per each lessee: (1) not more than forty acres of agriculture lands or lands used for aquaculture purposes; or (2) not more than one hundred acres of irrigated pastoral lands and not more than one thousand acres of other pastoral lands; or (3) not more than one acre of any class of land to be used as a residence lot; provided that in the case of any existing lease of a farm lot in the Kalanianaole Settlement on Molokai, a residence lot may exceed one acre but shall not exceed four acres in area, the location of such area to be selected by the department; provided further that a lease granted to any lessee may include two detached farm lots or aquaculture lots, as the case may be, located on the same island and within a reasonable distance of each other, one of which, to be designated by the department, shall be occupied by the lessee as the lessee's home, the gross acreage of both lots not to exceed the maximum acreage of an agricultural, pastoral, or aquacultural lot, as the case may be, as provided in this section.
(b) The title to lands so leased shall remain in
the State. Applications for tracts shall
be made to and granted by the department, under such regulations, not in
conflict with any provisions of this title, as the department may
prescribe. The department shall,
whenever tracts are available, enter into such a lease with any applicant who,
in the opinion of the department, is qualified to perform the conditions of
.], however, financial ability to build a dwelling or
maintain the property or improvements, or qualify for a loan to build a
dwelling or maintain the property or improvements, may not be a consideration
by the department.
(c)(1) The department is authorized to grant licenses as easements for railroads, telephone lines, electric power and light lines, gas mains, and the like. The department is also authorized to grant licenses for lots within a district in which lands are leased under the provisions of this section, for:
(A) Churches, hospitals, public schools, post offices, and other improvements for public purposes; and
(B) Theaters, garages, service stations, markets, stores, and other mercantile establishments (all of which shall be owned by native Hawaiians or by organizations formed and controlled by native Hawaiians).
(2) The department is also authorized to grant licenses to the United States for reservations, roads, and other rights-of-way, water storage and distribution facilities, and practice target ranges.
(3) Any license issued under this subsection shall be subject to such terms, conditions, and restrictions as the department shall determine and shall not restrict the areas required by the department in carrying on its duties, nor interfere in any way with the department's operation or maintenance activities.
(d) The department shall file all leases with the bureau of conveyances. Leases executed prior to the effective date of this subsection shall be filed with the bureau of conveyances no later than January 1, 2026.
SECTION 5. Section 214 of the Hawaiian Homes Commission Act, 1920, as amended, is amended by amending subsection (a) to read as follows:
Purposes of loans; authorized actions. (a)
The department [
may] shall make loans from revolving funds
to any lessee or native Hawaiian to whom, or any cooperative association to
which, a lease has been issued, or would otherwise be issued, but for financial
reasons, under section 207[ (a)] of this Act or a license has been
issued under section 207(c)(1)(B) of this Act.
Such loans may be made for the following purposes:
(1) The repair or maintenance or purchase or erection of dwellings on any tract, and the undertaking of other permanent improvements thereon;
(2) The purchase of livestock, swine, poultry, fowl, aquaculture stock, and farm and aquaculture equipment;
(3) Otherwise assisting in the development of tracts and of farm, ranch, and aquaculture operations, including:
(A) The initial and on-going development, improvement, operation, and expansion of homestead farms, ranches, and aquaculture enterprises;
(B) The liquidation of indebtedness incurred for any of the foregoing purposes relating to farm loans aged less than five years;
(C) The payment of normal and reasonable living expenses of a full-time farmer;
(D) The planning, layout, and installation of soil and water conservation practices; and
(E) Providing relief and rehabilitation to homestead farmers and ranchers due to damage by rain and windstorms, droughts, tidal wave, earthquake, volcanic eruption, and other natural catastrophes, and for livestock disease, epidemics, crop blights, and serious effects of prolonged shipping and dock strikes;
(4) The cost of breaking up, planting, and cultivating land and harvesting crops, the cost of excavating or constructing aquaculture ponds and tanks, the purchase of seeds, fertilizers, feeds, insecticides, medicines, and chemicals for disease and pest control for animals, fish, shellfish, and crops, and the related supplies required for farm, ranch, and aquaculture operations, the erection of fences and other permanent improvements for farm, ranch, and aquaculture purposes and the expense of marketing; and
(5) To assist licensees in the operation or erection of theaters, garages, service stations, markets, stores, and other mercantile establishments, all of which shall be owned by native Hawaiians or by organizations formed and controlled by native Hawaiians.
(b) In addition the department may:
(1) Use moneys in the Hawaiian home operating fund, with the prior approval of the governor, to match federal, state, or county funds available for the same purposes and to that end, enter into an undertaking, agree to conditions, transfer funds therein available for expenditure, and do and perform other acts and things, as may be necessary or required, as a condition to securing matching funds for the department's projects or works;
(2) Loan or guarantee the repayment of or otherwise underwrite any authorized loan or portion thereof to lessees in accordance with section 215;
(3) Loan or guarantee the repayment of or otherwise underwrite any authorized loan or portion thereof to a cooperative association in accordance with section 215;
(4) Permit and approve loans made to lessees by government agencies or private lending institutions, where the department assures the payment of these loans; provided that upon receipt of notice of default in the payment of the assured loans, the department may, upon failure of the lessee to cure the default within sixty days, cancel the lease and pay the outstanding balance in full or may permit the new lessee to assume the outstanding debt; and provided further that the department shall reserve the following rights:
(A) The right of succession to the lessee's interest and assumption of the contract of loan;
(B) The right to require that written notice be given to the department immediately upon default or delinquency of the lessee; and
(C) Any other rights enumerated at the time of assurance necessary to protect the monetary and other interests of the department;
(5) Secure, pledge, or otherwise guarantee the repayment of moneys borrowed by the department from government agencies or private lending institutions and pay the interim interest or advances required for loans; provided that the State's liability, contingent or otherwise, either on moneys borrowed by the department or on departmental guarantees of loans made to lessees under this paragraph and paragraphs (2), (3), and (4) of this subsection, shall at no time exceed $100,000,000; the department's guarantee of repayment shall be adequate security for a loan under any state law prescribing the nature, amount, or form of security or requiring security upon which loans may be made;
(6) Use available loan fund moneys or other funds specifically available for guarantee purposes as cash guarantees when required by lending agencies;
(7) Exercise the functions and reserved rights of a lender of money or mortgagee of residential property in all direct loans made by government agencies or by private lending institutions to lessees the repayment of which is assured by the department. The functions and reserved rights shall include but not be limited to, the purchasing, repurchasing, servicing, selling, foreclosing, buying upon foreclosure, guaranteeing the repayment, or otherwise underwriting, of any loan, the protecting of security interest, and after foreclosures, the repairing, renovating, or modernization and sale of property covered by the loan and mortgage;
(8) Pledge receivables of loan accounts outstanding as collateral to secure loans made by government agencies or private lending institutions to the department, the proceeds of which shall be used by the department to make new loans to lessees or to finance the development of available lands for purposes permitted by this Act; provided that any loan agreement entered into under this paragraph by the department shall include a provision that the money borrowed by the department is not secured directly or indirectly by the full faith and credit or the general credit of the State or by any revenues or taxes of the State other than the receivables specifically pledged to repay the loan; provided further that in making loans or developing available lands out of money borrowed under this paragraph, the department may establish, revise, charge, and collect fees, premiums, and charges as necessary, reasonable, or convenient, to assure repayment of the funds borrowed, and the fees, premiums, and charges shall be deposited into the Hawaiian home trust fund; and provided further that no moneys of the Hawaiian home loan fund may be pledged as security under this paragraph; and
(9) Notwithstanding any other provisions of this Act to the contrary, transfer into the Hawaiian home trust fund any available and unpledged moneys from any loan funds, the Hawaiian loan guarantee fund, or any fund or account succeeding thereto, except the Hawaiian home loan fund, for use as cash guarantees or reserves when required by a federal agency authorized to insure or guarantee loans to lessees.
SECTION 6. Section 219.1 of the Hawaiian Homes Commission Act, 1920, as amended, is amended by amending subsection (a) to read as follows:
" §219.1. General assistance. (a) The department is authorized to and shall carry on any activities it deems necessary to assist the lessees in obtaining maximum utilization of the leased lands, including taking any steps necessary to develop these lands for their highest and best use commensurate with the purposes for which the land is being leased as provided for in section 207, and assisting the lessees in all phases of farming, ranching, and aquaculture operations and the marketing of their agricultural [or] aquacultural produce and livestock.
(b) Notwithstanding any law to the contrary, the department either alone or together with any other governmental agency, may:
(1) Form an insurance company, association (nonprofit or otherwise), pool, or trust;
(2) Acquire an existing insurance company;
(3) Enter into arrangements with one or more insurance companies; or
(4) Undertake any combination of the foregoing; upon such terms and conditions and for such periods, as the commission shall approve, to provide homeowner protection, including hurricane coverage, for lessees participating in such undertaking. Such undertaking shall be subject to the provisions of chapter 431P, including but not limited to section 431P-10(b), and chapter 431.
(c) The department, if experiencing any of the power as authorized under subsection (b) may:
(1) Issue revenue bonds under and pursuant to part III of chapter 39, Hawaii Revised Statutes, to establish necessary reserves to provide for the payment of claims in excess of reserves and for other related purposes; or to pay any liability incurred that is self-insured or uninsured by the commission including without limitations, liabilities for damage to property, comprehensive liability, environmental, or other losses; and
(2) Invest funds held in reserve, which are not required for immediate disbursement, in property or securities in which savings banks may legally invest funds subject to their control or as the commission may authorize by resolution. "
SECTION 7. The department shall conduct an actuarial study on the size of the current and projected future populations of Native Hawaiians, as defined by §201(a) of the Hawaiian Homes Commission Act, 1920, as amended, eligible to lease Hawaiian home lands. The department shall further prepare a report that includes the actuarial study's findings and recommendations and submit the report to the Legislature no later than twenty days prior to the convening of the Regular Session of 2023.
SECTION 8. There is appropriated out of the general revenues of the State $200,000 or so much thereof as may be necessary for fiscal year 2021-2022 for the department of Hawaiian home lands to perform an actuarial study on the size of the current and projected future populations of Native Hawaiians, as defined by §201(a) of the Hawaiian Homes Commission Act, 1920, as amended, eligible to lease Hawaiian home lands.
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect upon the approval of the Governor of the State of Hawaii and with the consent of the United States.
Hawaiian Home Lands; Lease Distribution
Requires Hawaiian Homes Commission to distribute leases to all beneficiaries within 10 years. Removes financial consideration in obtaining a lease. Requires the construction of pu'uhonuas or communal living arrangements by the department. Requires an actuarial study. Appropriates funds for the study.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.