SB3034

SECTION 1. The legislature finds that accelerating coastal erosion, sea level rise, and chronic coastal flooding threaten public safety, public trust resources, and coastal infrastructure throughout the State. Certain shoreline properties and structures have become vulnerable to collapse from the effects of these hazards and may impose substantial public costs through emergency response, infrastructure damage, beach loss, and environmental harm.

The legislature further finds that existing regulatory and enforcement tools are insufficient to proactively address chronically threatened coastal properties and structures before they collapse or cause irreversible harm. The legislature believes that voluntary acquisition paired with time-limited occupancy may reduce public risk while allowing for an orderly transition of ownership and for permanent hazard reduction.

Accordingly, the purpose of this Act is to establish a low-cost, voluntary coastal resilience acquisition and leaseback program that prioritizes public safety and public trust protection, limits State liability, and ensures permanent risk reduction through removal and restoration.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

Hawaii coastal resilience acquisition and leaseback program

§ -1 Definitions. As used in this chapter:

"Board" means the board of land and natural resources.

"Department" means the department of land and natural resources.

"Hazard-adjusted residual value" means the appraised land value of a property minus the estimated costs required to remediate hazards, remove structures, restore the site, monitor conditions, and permanently restrict redevelopment.

"Leaseback" means a voluntary arrangement in which an owner conveys a vulnerable coastal property to the State or a qualified third party and leases the property back for a limited period, subject to a safety-based termination.

"Program" means the Hawaii coastal resilience acquisition and leaseback program.

"Vulnerable coastal property" means real property located in the coastal zone that is subject to chronic erosion, flooding, shoreline retreat, or structural instability within a foreseeable planning horizon and that poses a risk to public safety, public trust resources, or repeated public expenditure.

§ -2 Hawaii coastal resilience acquisition and leaseback program; established. (a) By July 1, 2028, the department, subject to the approval and oversight of the board, shall establish and administer the Hawaii coastal resilience acquisition and leaseback program.

(b) Under the program, the department may:

(1) Voluntarily acquire vulnerable coastal property by purchase, bargain sale, nominal conveyance, or other lawful means;

(2) Authorize leaseback occupancy under short-term, renewable leases subject to safety-based conditions;

(3) Determine when a property or structure is deemed unsafe and require termination of occupancy;

(4) Order removal or demolition of structures and restore sites for hazard reduction and public trust purposes;

(5) Record and enforce deed restrictions, conservation easements, or similar instruments prohibiting redevelopment;

(6) Delegate interim property management, inspections, monitoring, lease administration, and site maintenance to counties, qualified nonprofit organizations or land trusts, or contracted third-party managers with coastal hazard experience; provided that the delegation of interim management shall not limit the department's or board's authority to terminate occupancy, order removal, or enforce permanent restrictions; and

(7) Adopt rules pursuant to chapter 91, necessary for the purposes of this chapter.

(c) All properties acquired under the program shall be subject to recorded deed restrictions or conservation easements prohibiting redevelopment.

(d) Structures determined to be unsafe shall be removed or demolished as early as possible to protect public safety or public trust resources.

(e) Restored sites shall be managed for open space, coastal buffer, or public trust purposes.

(f) The department shall not be required to perform day-to-day property management functions. Nothing in this section shall be construed to require the department to operate as a landlord or to extend occupancy beyond safety-based limits.

§ -3 Coastal resilience revolving fund. (a) There is established in the state treasury the coastal resilience revolving fund, into which may be deposited:

(1) Legislative appropriations;

(2) Bond proceeds;

(3) Settlement or penalty revenues where legally permissible;

(4) State, federal, or private grants;

(5) County contributions; and

(6) Lease or rental payments received during interim occupancy.

(b) Moneys in the coastal resilience revolving fund shall be used for:

(1) Property acquisition and closing costs;

(2) Relocation assistance for income-qualified households;

(3) Inspections, monitoring, and program administration;

(4) Interim property management, including hazard monitoring and safety inspections;

(5) Demolition, removal, hazard reduction activities, and site restoration; and

(6) Legal costs associated with deed restrictions, conservation easements, and enforcement.

§ -4 Acquisition value. (a) The acquisition price for vulnerable coastal property shall be based on the hazard-adjusted residual value of the property.

(b) In calculating the hazard-adjusted residual value, the department shall deduct estimated costs, including but not limited to:

(1) Demolition and removal of structures;

(2) Site restoration and stabilization;

(3) Monitoring, inspections, and hazard assessment;

(4) Legal and administrative costs; and

(5) Environmental or contamination cleanup;

provided that where estimated costs equal or exceed land value, the acquisition price may be nominal.

§ -5 Leaseback conditions. (a) Leaseback occupancy may be authorized only under leases not exceeding two years and may be renewable solely upon a determination by the department that the property remains safe for occupancy; provided that leaseback occupancy creates no right to continued tenancy.

(b) Leaseback conditions shall include:

(1) Rent sufficient to cover inspections, insurance gaps, and interim management costs;

(2) Prohibition on expansion, armoring, or capital improvements;

(3) Mandatory hazard disclosure and acknowledgment of risk; and

(4) Automatic termination upon a determination that the property is unsafe.

§ -6 Liability. Under the program, the department shall serve solely in the capacity of hazard mitigation and public trust protection. Nothing in this chapter shall be construed to create a duty to maintain, improve, or extend the life of hazardous structures or to assume liability beyond that required by law."

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3034
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII