SCR15

WHEREAS, the Department of Hawaiian Home Lands ("DHHL" or "the Department") administers approximately two hundred thousand acres of land held in trust pursuant to the Hawaiian Homes Commission Act, 1920, as amended, and is responsible for issuing, managing, and enforcing homestead leases for native Hawaiian beneficiaries; and

WHEREAS, in addition to individual lot leases, DHHL utilizes an undivided lease system, commonly referred to as “paper leases” or “project leases,” under which beneficiaries are awarded leasehold interests in a larger parcel or project area prior to the subdivision, surveying, or conveyance of individual lots; and

WHEREAS, under the undivided lease system, beneficiaries may hold lease rights for extended periods without assignment to a specific lot, dwelling, or legal description, pending project development, infrastructure completion, or other administrative actions; and

WHEREAS, the undivided lease system is intended to facilitate project planning, accelerate beneficiary awards, and support future homestead development; however, the system may also present challenges related to lease clarity, beneficiary understanding, recordkeeping, accountability, and long-term administration; and

WHEREAS, concerns have been raised regarding the duration of undivided lease status, the tracking and conversion of undivided leases into subdivided lot leases, the consistency of records, and the transparency of beneficiary rights and obligations during the undivided lease period; and

WHEREAS, the Office of the Auditor is authorized to conduct performance audits to evaluate the effectiveness, efficiency, and internal controls of government programs and operations, including compliance with applicable laws, rules, and trust responsibilities; and

WHEREAS, a performance audit of the Department’s undivided lease system would assist the Legislature, beneficiaries, and the public in assessing whether the system is functioning as intended and in accordance with the fiduciary obligations of the Hawaiian home lands trust; now, therefore,

BE IT RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2026, the House of Representatives concurring, that the Office of the Auditor is requested to conduct a performance audit of the Department of Hawaiian Home Lands’ undivided lease system, commonly referred to as “paper leases” or “project leases,”; and

BE IT FURTHER RESOLVED that the audit should include, but not be limited to, an evaluation of the following:

(1) Effectiveness of the undivided lease system in advancing timely homestead development and transitioning beneficiaries to subdivided, lot-specific leases;

(2) Duration and management of undivided leases, including the average length of time beneficiaries remain in undivided lease status and factors contributing to delays;

(3) Administrative efficiency, including staffing, workflows, and coordination among planning, land management, and infrastructure functions;

(4) Internal controls and record integrity, including tracking of undivided leaseholders, project status, and conversion to individual lot leases;

(5) Beneficiary impacts, including clarity of rights, obligations, expectations, and access to information while under an undivided lease;

(6) Compliance with applicable statutes, administrative rules, commission policies, and fiduciary obligations under the Hawaiian Homes Commission Act; and

(7) Alternatives and improvements, including best practices and the feasibility of statutory, administrative, or technological changes to improve transparency, accountability, and timeliness within the undivided lease system; and

BE IT FURTHER RESOLVED that the Office of the Auditor is requested to submit its findings and recommendations to the Legislature no later than twenty days prior to the convening of the Regular Session of 2027; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor, the Chairperson of the Hawaiian Homes Commission, the Director of the Department of Hawaiian Home Lands, and the Office of Hawaiian Affairs.

	OFFERED BY:	_____________________________

Report Title:

Department of Hawaiian Home Lands; Auditor; Audit; Undivided Leases; Project Leases; Paper Leases

THE SENATE	S.C.R. NO.	15
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII