SB2702

SECTION 1. The legislature finds that thousands of qualified native Hawaiian beneficiaries remain on the department of Hawaiian home lands waitlist for residential, agricultural, and pastoral leases, in some cases for decades, due in part to the limited availability of developable land and the high cost and complexity of land acquisition.

The legislature further finds that county real property tax sales regularly result in the disposition of parcels that are suitable for housing, infrastructure, or community uses, including parcels located within or adjacent to existing communities where access to roads, utilities, and public services already exists. When these properties are acquired by private bidders or remain idle following auction, opportunities to expand housing availability for native Hawaiian beneficiaries are lost.

The legislature recognizes that enabling the department of Hawaiian home lands to strategically acquire tax-delinquent properties through a right of first refusal can be transformational in accelerating housing production, reducing the number of beneficiaries on the waitlist, and leveraging existing infrastructure to deliver homes more efficiently and cost-effectively.

Accordingly, the purpose of this Act is to:

(1) Establish a limited right of first refusal for the department of Hawaiian home lands with respect to county real property tax sales;

(2) Require advance notice of qualifying properties from the counties to the department of Hawaiian home lands; and

(3) Amend the Hawaiian Homes Commission Act, 1920, as amended, to authorize the conveyance of certain tax-delinquent properties in a manner that advances the State's trust responsibilities for native Hawaiians.

SECTION 2. The Hawaiian Homes Commission Act, 1920, as amended, is amended by adding a new section to be appropriately designated and to read as follows:

"§ Acquisition of property; delinquent taxes. (a) The department of Hawaiian home lands may acquire real property conveyed pursuant to section 46- , Hawaii Revised Statutes, and hold, manage, or designate the property as Hawaiian home lands.

(b) The department of Hawaiian home lands may adopt rules pursuant to chapter 91, Hawaii Revised Statutes, necessary to implement this section."

SECTION 3. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§46- Right of first refusal; department of Hawaiian home lands. (a) Notwithstanding any law to the contrary, before a public auction of any real property for delinquent real property taxes, each county shall provide written notice to the department of Hawaiian home lands of any parcel that may be suitable for use consistent with the Hawaiian Homes Commission Act, 1920, as amended.

(b) The written notice required under subsection (a) shall be provided no later than sixty days before the scheduled auction date and shall include, at a minimum:

(1) The tax map key number;

(2) Property location and acreage;

(3) Minimum upset price or amount of delinquent taxes owed; and

(4) Any known encumbrances or environmental conditions of record.

(1) Matching the highest bid received at public auction; or

(2) Acquiring the property directly from the county if no bids are received at auction.

(d) The department of Hawaiian home lands shall exercise its right of first refusal no later than thirty days following the public auction, or within the time as may be agreed upon by the county and the department.

(e) Any conveyance of property pursuant to this section shall be subject to:

(1) Approval by the Hawaiian homes commission;

(2) Compliance with all applicable environmental review laws; and

(3) A determination by the department of Hawaiian home lands that the acquisition serves the interests of native Hawaiian beneficiaries.

(f) Nothing in this section shall be construed to:

(1) Require the department of Hawaiian home lands to acquire real property;

(2) Impair the authority of a county to conduct real property tax sales; or

(3) Limit the ability of a county and the department of Hawaiian home lands to enter into memoranda of agreement or other intergovernmental arrangements for the transfer of property."

SECTION 4. The provisions of the amendments made by this Act to the Hawaiian Homes Commission Act, 1920, as amended, are declared to be severable, and if any section, sentence, clause, or phrase, or the application thereof to any person or circumstances is held ineffective because there is a requirement of having the consent of the United States to take effect, then that portion only shall take effect upon the granting of consent by the United States and effectiveness of the remainder of these amendments or the application thereof shall not be affected.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval; provided that section 2 shall take effect on either the date of the Secretary of the interior's notification letter to the Congressional Committee Chairmen that the Act meets none of the criteria in 43 Code of Federal Regulations section 48.20, or on the date that the United States Congress approval becomes law.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2702
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII