STAND. COM. REP. NO. 740-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 1732

H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Judiciary & Hawaiian Affairs, to which was referred H.B. No. 1732, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose of this measure is to establish the Kamaaina Homes Program within the Hawaii Housing Finance and Development Corporation to provide funding to the counties to purchase voluntary deed restrictions on properties from eligible homebuyers.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation; one member of the Hawaiʻi County Council; AARP Hawaiʻi; Kapolei Chamber of Commerce; Tradewind Group; Aloha United Way; Holomua Collaborative; Hawaii Appleseed Center for Law & Economic Justice; Housing Hawaiʻi's Future; Hawaiʻi YIMBY; Hope Services Hawaii; Title Guaranty of Hawaiʻi; Mana Up; aio; Tori Richard; and three individuals. Your Committee received comments on this measure from the Department of Taxation and Hawaiʻi Association of REALTORS.

Your Committee finds that Hawaii's housing crisis has contributed to the displacement of Native Hawaiians and local families. Your Committee further finds that the Kamaaina Homes Program establishes a voluntary, market-based framework that uses deed restrictions to preserve housing for local working residents while protecting property rights and ensuring responsible stewardship of public funds. Your Committee believes that authorizing the counties to acquire and enforce these deed restrictions advances the State's goal of preserving housing for local residents.

Your Committee has amended this measure by:

(1) Clarifying that the failure of a mortgagee to provide notice to the county of any default of the mortgagor and intention to foreclose shall not affect the mortgage holder's rights under the mortgage;

(2) Changing the repeal date to June 30, 2032; and

(3) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider a cap of ten percent of allocated funds under the Kamaaina Homes Program to be used for administrative costs.

As affirmed by the record of votes of the members of your Committee on Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1732, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as H.B. No. 1732, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,

____________________________

DAVID A. TARNAS, Chair