Hawaii-2024-HB2594-Introduced

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

purchase or acquisition of real property

by the CHINESE COMMUNIST PARTY prohibited

§ -1 Definitions. As used in this chapter, unless the context otherwise requires:

"Department" means the department of the attorney general.

"Person affiliated with the Chinese Communist Party" means:

(1) The Chinese Communist Party or any official or member of the Chinese Communist Party;

(2) Any other political party or member of a political party or a subdivision of a political party in the People's Republic of China;

(3) A partnership, association, corporation, organization, or any other combination of persons organized under the laws of or having its principal place of business in the People's Republic of China;

(4) A subsidiary of an entity described in paragraph (3); or

(5) Any person, entity, or collection of persons or entities described in paragraphs (1) through (4) having a controlling interest in a partnership, association, corporation, organization, trust, or any other legal entity or subsidiary formed for the purpose of owning real property in the State.

"Real property" means lands, structures, and interests therein and natural resources including water, minerals, and all things connected with land, including lands under water and riparian rights, space rights, air rights, and any and all other things and rights usually included within the term.

§ -2 Chinese Communist Party; purchase or acquisition of real property; prohibited. (a) Notwithstanding any other law to the contrary, a person affiliated with the Chinese Communist Party shall not:

(1) Directly or indirectly own;

(2) Have a controlling interest in; or

(3) Acquire by purchase, grant, devise, or descent,

any interest, except a de minimus indirect interest, in real property in this State.

(b) A person has a de minimus indirect interest if the ownership is the result of the person's ownership of registered equities in a publicly traded company owning the real property and if the person's ownership interest in the company is either:

(1) Less than five per cent of any class of registered equities or less than five per cent in the aggregate in multiple classes of registered equities; or

(2) A noncontrolling interest in any entity controlled by a company that is both registered with the United States Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), as amended, and is not a foreign entity.

§ -3 Exceptions. (a) Notwithstanding section ‑2(a), a person affiliated with the Chinese Communist Party who is a natural person may purchase a single residential real property parcel that is not more than two acres in area if all of the following apply:

(1) The parcel is not on or within five miles of any military installation;

(2) The person has:

(A) A current, verified United States visa that is not limited to authorizing tourist-based travel; or

(B) Official documentation confirming that the person has been granted asylum in the United States,

and the visa or documentation authorizes the person to be legally present within this State; and

(3) The purchase is in the name of the person who holds the visa or official documentation described in paragraph (2).

(b) Notwithstanding section -2(a), a person affiliated with the Chinese Communist Party who directly or indirectly owns or acquires real property or an interest in real property in the State before July 1, 2024, may continue to own or hold that real property or interest, but shall not purchase or otherwise acquire by grant, devise, or descent any additional real property or interest in real property in the State except as provided in section -4.

§ -4 Divestment of real property. Notwithstanding section -2, a person affiliated with the Chinese Communist Party may acquire real property on or after July 1, 2024, by devise or descent, through the enforcement of security interests, or through the collection of debts; provided that the person affiliated with the Chinese Communist Party shall sell, transfer, or otherwise divest itself of the real property within three years of acquiring the real property.

§ -5 Ownership of real property by persons affiliated with the Chinese Communist Party; registration required. (a) A person affiliated with the Chinese Communist Party who directly or indirectly owns or acquires real property or any interest, other than a de minimus indirect interest, in real property in the State pursuant to section -3 or -4 shall register the ownership with the department on a form prescribed by the department. The form shall include, at a minimum:

(1) The name of the owner of the real property or the owner of the interest in the real property;

(2) The address of the real property, the real property's tax map key number, and the real property's legal description;

(3) The number of acres of the real property; and

(4) The date on which the real property or interest in the real property was acquired.

(b) A person affiliated with the Chinese Communist Party whose real property or interest in real property was owned or acquired before July 1, 2024, pursuant to section -3(b), shall register the real property or real property interest with the department by December 31, 2024.

(c) A person affiliated with the Chinese Communist Party whose real property or interest in real property is authorized pursuant to section -3(a) or -4 shall register the real property or real property interest with the department within thirty days after the real property or real property interest is acquired.

(d) A person affiliated with the Chinese Communist Party who fails to timely file a registration with the department shall be subject to a civil penalty of $1,000 for each day that the registration is late. The department may place a lien against the unregistered real property for the unpaid balance of any penalties assessed under this subsection.

§ -6 Purchase of real property; affidavit required. (a) At the time of purchase, a buyer of real property or an interest in real property shall provide an affidavit signed under penalty of perjury attesting that the buyer is:

(1) Not a person affiliated with the Chinese Communist Party; and

(2) In compliance with the requirements of this chapter.

(b) The failure to obtain or maintain the affidavit under subsection (a) shall not:

(1) Affect the title or insurability of the title for the real property; or

(2) Subject the closing agent to civil or criminal liability, unless the closing agent has actual knowledge that the transaction will result in a violation of this chapter.

(c) The real estate commission shall adopt rules to implement this section, including rules to establish the form for the affidavit.

§ -7 Forfeiture. (a) Real property or an interest in real property that is owned or acquired in violation of this chapter may be forfeited to the State.

(b) The department may initiate a civil action in the circuit court in the county in which the real property is located for the forfeiture of the real property or any interest therein. An action under this section shall be preferred over all other civil causes, except election cases, without respect to position on the calendar.

(c) Upon filing the action, the clerk of the court shall record a lis pendens concerning the real property with the bureau of conveyances.

(d) The defendant may at any time petition to modify or discharge the lis pendens based upon a finding that there is no probable cause to believe that the real property, or any portion thereof, is owned or held in violation of this chapter.

(e) If the court finds that the real property, or any portion thereof, is owned or held in violation of this chapter, the court shall enter a final judgment of forfeiture vesting title to the real property in the State, subject only to the rights and interests of bona fide lienholders. The final judgment shall be retroactive to the date the lis pendens was filed.

(f) The department may sell the real property subject to a final judgment of forfeiture. The proceeds from the sale, if any, shall be paid in the following priority:

(1) To any lienholders of the real property;

(2) To the department to pay any outstanding fines assessed pursuant to this chapter;

(3) To the department to reimburse the department for all costs related to the forfeiture civil action and any costs related to the sale of the real property; and

(4) To the real property owner.

(g) At any time during the forfeiture proceeding, the department may seek an ex parte order of seizure of the real property upon a showing that the defendant's control of the real property constitutes a clear and present danger to the State.

§ -8 Inapplicability to real property for diplomatic purposes. This chapter shall not apply to a person who acquires real property for a diplomatic purpose that is recognized, acknowledged, or allowed by the federal government.

§ -9 Criminal penalties. (a) A person affiliated with the Chinese Communist Party who purchases or acquires real property or any interest therein in violation of this chapter shall be guilty of a class C felony.

(b) A person who knowingly sells real property or any interest in real property in violation of this chapter shall be guilty of a misdemeanor.

§ -10 Rules. The department may adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this chapter."

SECTION 2. In accordance with section 9 of article VII, of the Constitution of the State of Hawaii and sections 37-91 and 37-93, Hawaii Revised Statutes, the legislature has determined that the appropriation contained in this Act will cause the state general fund expenditure ceiling for fiscal year 2024-2025 to be exceeded by $ , or per cent. The reasons for exceeding the general fund expenditure ceiling are that the appropriation made in this Act is necessary to serve the public interest and to meet the needs provided for by this Act.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2024-2025 for the department of the attorney general to perform the department's assigned duties under section 1 of this Act.

The sum appropriated shall be expended by the department of the attorney general for the purposes of this Act.

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 5. This Act shall take effect on July 1, 2024.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2594
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII