STAND. COM. REP. NO. 1026
Honolulu, Hawaii
H.D. 1
S.D. 1
President of the Senate
Thirty-First State Legislature
State of Hawaii
Sir:
Your Committee on Hawaiian Affairs, to which was referred H.B. No. 1124, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO THE HAWAIIAN HOMES COMMISSION ACT,"
begs leave to report as follows:
The purpose and intent of this measure is to amend the Hawaiian Homes Commission Act to:
(1) Require appraisals of mortgages and improvements to identify the replacement cost or the leasehold market value;
(2) Grant authority to the Department of Hawaiian Home Lands to authorize second position loans on homestead leases by approved lenders;
(3) Clarify that the Department of Hawaiian Home Lands shall not cancel a lease solely based on a loan default or delinquency unless all loan loss mitigation procedures are exhausted pursuant to the loan servicing manual; and
(4) Require the Department of Hawaiian Home Lands to develop and implement a loan servicing manual, subject to Commission approval, to standardize loan loss mitigation policies, procedures, and methods.
Your Committee received testimony in support of this measure from the Kūpuna for the Mo‘opuna and Sovereign Council of Hawaiian Homestead Associations. Your Committee received testimony in opposition of this measure from one individual. Your Committee received comments on this measure from the Department of Hawaiian Home Lands.
Your Committee notes that title 43 Code of Federal Regulations part 48, as amended, outlines the process for amendments to the Hawaiian Homes Commission Act and whether Congressional approval is necessary. Your Committee is of the opinion that this measure does not require Congressional approval.
Your Committee finds that in the Hawaiian Homes Commission Act, 1920, as amended, the United States Congress established the Hawaiian home lands trust, intending that it would enable its native Hawaiian beneficiaries to return to their land to improve and perpetuate their self-sufficiency and cultural preservation. Additionally, your Committee finds that the Department of Hawaiian Home Lands does not receive sufficient funding to develop house lots for all applicants on the waiting list, nor to reduce the waiting list by ninety percent over the next decade, leading to a lack of access resources for beneficiaries.
Your Committee finds
that the reforms proposed in this measure have the potential of providing access
to private capital to beneficiaries of the Department of Hawaiian Home Lands,
revolve interest earnings to deploy capital to farms, ranches, and businesses
on homesteads, and make significant strides to alleviate the waitlist. Your Committee further finds that these
clarifications seek to provide parity to residents where access to capital from
owned equity in an owned asset is available to native Hawaiian families,
especially where redlining has been historically used to deny capital and
financial information to certain citizens, leading to a loss of homes, business
assets, and even the unnecessary houselessness and families. This measure improves the governance and accountability entrusted
to the Department of Hawaiian Home Lands and Hawaiian Homes Commission to
fulfill their duty toward the preservation of values, traditions, culture, and
self-sufficiency for native Hawaiians.
Your Committee has heard the concerns of the Department of Hawaiian Home Lands that:
(1) The Department of Hawaiian Home Lands homestead leases refer to the lessee's right to exclusive use and possession of a tract of Department of Hawaiian Home Lands land for a term of years and can only be owned by qualified beneficiaries, thereby, limiting the market for leaseholds; therefore, requiring appraisals of the Department of Hawaiian Home Lands leaseholds may put private lenders and federal agencies at odds with the requirements of the Hawaiian Homes Commission Act and their underwriting requirements and may lead to financial burdens to successors of Hawaiian home leases;
(2) The proposed amendments to section 210 of the Hawaiian Homes Commission Act to prohibit lease cancellation based solely on a loan delinquency or default, unless all loan servicing procedures identified in the loan servicing manual have been exhausted, fails to consider the extensive lease cancellation process established with the Hawaiian Homes Commission; and
(3) Authorizing second position loans could require additional sources of loan financing to existing lessees while nearly three times that number are awaiting a lease and financing for their homestead award.
Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the record of votes of the members of your Committee on Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1124, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1124, H.D. 1, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Hawaiian Affairs,
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________________________________ MAILE S.L. SHIMABUKURO, Chair |
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