STAND. COM. REP. NO. 3251

Honolulu, Hawaii

RE: H.B. No. 1990

H.D. 2

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committees on Water, Land, Culture and the Arts and Energy and Intergovernmental Affairs, to which was referred H.B. No. 1990, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO RESIDENTIAL REAL PROPERTY,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish penalties, including fines and liens, for an owner of residential real property’s failure to remediate zoning violations;

(2) Require, under certain conditions, county planning or permitting agencies to record the notice of violation as a lien on the property with the Bureau of Conveyances; and

(3) Require referral to the applicable county corporation counsel for foreclosure if the owner fails to satisfy certain conditions.

Your Committees received testimony in opposition to this measure from the Grassroot Institute of Hawaii.

Your Committees received comments on this measure from Hawaiʻi Association of REALTORS.

Your Committees find that the owners of residential real property must comply with the zoning ordinances, rules, or regulations of the counties in which their property resides. However, existing law is ineffective at enforcing this compliance and punishing violations. By establishing severe penalties for these violations, this measure will deter future noncompliance and support the stability, consistency, and safety of county residential zones.

Your Committees acknowledge the recommendation raised in testimony by the Grassroot Institute of Hawaii to add a provision requiring that any residential real property foreclosed pursuant to the proposed measure be sold promptly at or near market value and that the revenues from the foreclosure sale after satisfaction of the lien should be remitted to the property owner. Your Committees agree with the Grassroot Institute of Hawaii that adding the provision will prevent potential legal challenges as well as the corrupt actions of bad actors that may deprive property owners of their equity interest in the foreclosed property. Amendments to this measure are therefore necessary to address these concerns.

Accordingly, your Committees have amended this measure by:

(1) Inserting language requiring that the county sell the foreclosed property at no less than the market value of similarly situated properties and that revenues received from the sale that exceed the amount of any liens, penalties, and costs to the county for related actions, be refunded to the property owner;

(2) Amending section 1 to reflect its amended purpose; and

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

As affirmed by the records of votes of the members of your Committees on Water, Land, Culture and the Arts and Energy and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1990, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1990, H.D. 2, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Water, Land, Culture and the Arts and Energy and Intergovernmental Affairs,

________________________________ GLENN WAKAI, Chair

________________________________ CHRIS LEE, Chair