Hawaii-2021-SB891-Amended

SECTION 1. The Hawaiian Homes Commission Act, 1920, as amended, is amended by adding a new section to title 2 to be appropriately designated and to read as follows:

"§ . Beneficiary consultations; applications; standards. (a) A beneficiary consultation conducted pursuant to this section shall be a meaningful and timely consultation with beneficiaries and shall promote trust, partnership, and civic engagement. The type of consultation conducted, whether comprehensive, place-based, or ad hoc, shall be appropriate to the potential impact of the relevant decision or action described in this section.

(b) A comprehensive consultation shall be conducted with respect to:

(1) The preparation and amendment of the department of Hawaiian home land's general plan, which shall establish statewide policies that guide land management and programs;

(2) The preparation and amendment of any program plan, which shall inform or carry out general plan statewide policies for specific functional areas, including affordable housing, native Hawaiian development, energy, disaster preparedness, community resiliency, agriculture, and water resources; and

(3) The adoption of rules.

A comprehensive consultation shall occur on a statewide basis. Notice shall be provided to all existing homesteaders, all native Hawaiians who have applied for leases of homestead lands and are waiting to be awarded leases, and other native Hawaiians who have registered with the department of Hawaiian home lands. The notice shall describe the proposed action and the date, time, and place of a public meeting to be held on each island.

(1) The preparation and amendment of any island plan, which shall be prepared for each island in which there are more than one hundred acres of Hawaiian home lands, and which, at minimum, shall apply criteria to identify lands for homestead use and non-homestead use, prioritize development or redevelopment, identify infrastructure requirements, and identify potential impacts on department land use and infrastructure;

(2) The preparation and amendment of any regional plan, which, within a region, at minimum, shall plan to build a sense of community and capacity, stimulate partnerships for development and improvements, facilitate beneficiary participation in issues and areas of concern, and identify priority projects within existing and planned homestead areas;

(3) The preparation and amendment of any area development plan, which, at minimum, shall provide more detail for specific projects in an island plan for purposes of establishing feasibility, budget, and schedule; and

(4) Proposed projects that require an environmental assessment or environmental impact statement.

A place-based consultation shall occur within the applicable geographic area. Notice shall be provided to all existing homesteaders, all native Hawaiians who have applied for leases of homestead lands and are waiting to be awarded leases, and other native Hawaiians who have registered with the department of Hawaiian home lands; provided that they are associated with the geographic area impacted by the proposed action. The chairperson of the commission shall determine the appropriate scope of the notice. The notice shall describe the proposed action and the date, time, and place of a public meeting to be held within the geographic area.

(d) An ad hoc consultation may be conducted for the preparation and amendment of any plan or implementing action described in this section. The chairperson of the commission may form an advisory body, subject to consultation and ratification by the commission, that provides input to the department of Hawaiian home lands for the preparation or amendment of any plan or implementation of an action. Any ad hoc consultation for the preparation and amendment of plans may supplement, but not replace, any comprehensive or place-based consultation required by this section. The chairperson of the commission may select an ad hoc body for an implementing action.

(e) The department of Hawaiian home lands shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session regarding the beneficiary consultations conducted pursuant to this section during the previous year and results from these consultations."

SECTION 2. Section 202, Hawaiian Homes Commission Act, 1920, as amended, is amended to read as follows:

"§202. Department officers, staff, commission, members, compensation[.]; quarterly reports; inter-agency council. (a) There shall be a department of Hawaiian home lands, which shall be headed by an executive board to be known as the Hawaiian homes commission. The members of the commission shall be nominated and appointed in accordance with section 26‑34, Hawaii Revised Statutes. The commission shall be composed of nine members, as follows: three shall be residents of the city and county of Honolulu; two shall be residents of the county of Hawaii, one of whom shall be a resident of east Hawaii and the other a resident of west Hawaii; two shall be residents of the county of Maui, one of whom shall be a resident from the island of Molokai; one shall be a resident of the county of Kauai; and the ninth member shall be the [~~chairman~~] chairperson of the Hawaiian homes commission. All members shall have been residents of the State at least three years [~~prior to~~] before their appointment and at least [~~four~~] five of the members shall be descendants of [~~not~~] no less than one-fourth part of the blood of the races inhabiting the Hawaiian Islands previous to 1778[.] or beneficiaries of the trust; provided that the beneficiary members shall be on the waitlist for Hawaiian home lands at the time of their appointment. The members of the commission shall serve without pay, but shall receive actual expenses incurred by them in the discharge of their duties as [~~such~~] members. The governor shall appoint the [~~chairman~~] chairperson of the commission from among the commission members [~~thereof~~].

The commission may delegate to the [~~chairman such~~] chairperson any duties, powers, and authority, or so much thereof, as may be lawful or proper for the performance of the functions vested in the commission. The [~~chairman~~] chairperson of the commission shall serve in a full-time capacity. [~~He shall, in such~~] In that capacity, the chairperson shall perform [~~such~~] duties[,] and exercise [~~such~~] powers and authority, or so much thereof, as may be delegated to [~~him~~] the chairperson by the commission as [~~herein~~] provided [~~above.~~] in this subsection.

(b) The provisions of section 76-16, Hawaii Revised Statutes, shall apply to the positions of first deputy and private secretary to the [~~chairman~~] chairperson of the commission. The department of Hawaiian home lands may hire temporary staff on a contractual basis not subject to chapters 76 and 78, Hawaii Revised Statutes, when the services to be performed will assist in carrying out the purposes of the Act. These positions may be funded through appropriations for capital improvement program projects and by the administration account, operating fund, or native Hawaiian rehabilitation fund. No contract shall be for a period longer than two years, but individuals hired under contract may be employed for a maximum of six years; provided that the six-year limitation shall not apply if the department, with the approval of the governor, determines that [~~such~~] these contract individuals are needed to provide critical services for the efficient functioning of the department. All other positions in the department shall be subject to chapter 76, Hawaii Revised Statutes.

All vacant and new civil service positions covered by chapter 76, Hawaii Revised Statutes, shall be filled in accordance with section 76-22.5, Hawaii Revised Statutes; provided that the provisions of these sections shall be applicable first to qualified persons of Hawaiian extraction.

(c) The department of Hawaiian homes lands shall distribute by email or its website a quarterly report to the beneficiaries, registered homestead associations, and the legislature. The report shall identify each land disposition and lease cancellation, including:

(1) The land instrument used;

(2) The amount of land, under which section of the Act the disposition or cancellation is authorized; and

(3) Whether the disposition or cancellation was made on behalf of a beneficiary or non-beneficiary.

The quarterly report shall also identify all trust fund receipts and expenditures.

(d) The commission may recommend that the governor establish an inter-agency council to address the purposes of this Act. The recommendation may address council membership and other specifics regarding the council. The governor may establish the inter-agency council based on the commission's recommendation. The inter-agency council, if established, shall meet at least three times per year."

SECTION 3. Section 216, Hawaiian Homes Commission Act, 1920, as amended, is amended to read as follows:

"§216. Insurance by borrowers; acceleration of loans; lien and enforcement thereof[.]; loan servicing manual; requirements. (a) The department of Hawaiian home lands may require the borrower to insure, in [~~such~~] an amount as the department may prescribe, any livestock, aquaculture stock, swine, poultry, fowl, machinery, equipment, dwellings, and permanent improvements purchased or constructed out of any moneys loaned or assured by the department; or, in lieu thereof, the department may directly take out [~~such~~] insurance and add the cost thereof to the amount of principal payable under the loan.

(b) Whenever the department of Hawaiian home lands has reason to believe that the borrower has violated any condition enumerated in paragraph (2), (4), (5), or (6) of section 215 of this Act, the department shall give due notice and afford opportunity for a hearing to the borrower or the successor or successors to [~~his~~] the borrower's interest, as the case demands. If upon [~~such~~] the hearing the department finds that the borrower has violated the condition, the department may declare all principal and interest of the loan immediately due and payable notwithstanding any provision in the contract of loan to the contrary[.], subject to the policies and procedures provided in the loan servicing manual developed pursuant to subsection (e).

(c) The department of Hawaiian home lands shall have a first lien upon the borrower's or lessee's interest in any lease, growing crops, aquacultural stock, either on [~~his~~] the borrower's or lessee's tract or share in any collective contract or program, livestock, swine, poultry, fowl, aquaculture stock, machinery, and equipment purchased with moneys loaned by the department, and in any dwellings or other permanent improvements on any leasehold tract, to the amount of all principal and interest due and unpaid and of all taxes and insurance and improvements paid by the department, and any other indebtedness of the borrower, the payment of which has been assured by the department. [~~Such~~] The lien shall have priority over any other obligation for which the property subject to the lien may be security.

(d) The department [~~may,~~] of Hawaiian home lands subject to this Act and procedures established by rule, may enforce any lien by declaring the borrower's interest in the property subject to the lien to be forfeited, any lease held by the borrower canceled, and shall thereupon order [~~such~~] leasehold premises vacated and the property subject to the lien surrendered within a reasonable time. The right to the use and occupancy of the Hawaiian home lands contained in [~~such~~] the lease shall thereupon revest in the department, and the department may take possession of the premises covered therein and the improvements and growing crops or improvements and aquaculture stock thereon; provided that the department shall pay to the borrower any difference which may be due [~~him~~] to the borrower after the appraisal provided for in section 209 has been made.

(e) The department of Hawaiian home lands shall develop and implement a loan servicing manual, subject to approval by the commission, that adopts loan mitigation policies, procedures, and methods, including financial counseling, loan loss mitigation analysis, loan modification, sale or transfer, and other options to ensure lessees and borrowers, or their successors, avoid default, cure delinquencies, and avoid cancellation or foreclosure; provided that the loan servicing manual shall incorporate all appropriate federal rules and regulations, including those that protect active military service members; provided further that the department shall document all loan loss mitigation activities between the borrower and the department pursuant to the loan servicing manual."

SECTION 4. Section 222, Hawaiian Homes Commission Act, 1920, as amended, is amended by amending subsection (a) to read as follows:

"(a) The department of Hawaiian home lands may make [~~such~~] expenditures and shall adopt rules in accordance with chapter 91, Hawaii Revised Statutes, as are necessary for the efficient execution of the functions vested in the department by this Act. All expenditures of the department and all moneys necessary for loans made by the department, in accordance with [~~the provisions of~~] this Act, shall be allowed and paid upon the presentation of itemized vouchers approved by the [~~chairman~~] chairperson of the commission or the [~~chairman's~~] chairperson's designated representative. The department shall make an annual report to the legislature of the State upon the first day of each regular session and [~~such~~] any special reports as the legislature may from time to time require. The [~~chairman~~] chairperson and members of the commission shall give bond as required by law. The sureties upon the bond and the conditions thereof shall be approved annually by the governor."

SECTION 5. Section 228 of the Hawaiian Homes Commission Act, 1920, as amended, is amended by amending subsection (b) to read as follows:

"(b) [~~Prior to~~] Before the disposition of available land through a request for proposals for an initial lease for a commercial or multipurpose project, the department of Hawaiian home lands shall consult with beneficiaries of the trust in the master planning of the available lands. The process of beneficiary consultation shall be as established by the department and shall:

(1) Engage beneficiaries and beneficiary-serving organizations;

(2) Provide for the timely dissemination of information about the proposed project and the gathering of input; [~~and~~]

(3) Allow for a reasonable time and reasonable access to relevant information for evaluation and consideration[.]; and

(4) Comply with section , to the extent applicable."

SECTION 6. Section 28-8.3, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) No department of the State other than the attorney general may employ or retain any attorney, by contract or otherwise, for the purpose of representing the State or the department in any litigation, rendering legal counsel to the department, or drafting legal documents for the department; provided that the foregoing provision shall not apply to the employment or retention of attorneys:

(1) By the public utilities commission, the labor and industrial relations appeals board, and the Hawaii labor relations board;

(2) By any court or judicial or legislative office of the State; provided that if the attorney general is requested to provide representation to a court or judicial office by the chief justice or the chief justice's designee, or to a legislative office by the speaker of the house of representatives and the president of the senate jointly, and the attorney general declines to provide [~~such~~] representation on the grounds of conflict of interest, the attorney general shall retain an attorney for the court, judicial, or legislative office, subject to approval by the court, judicial, or legislative office;

(3) By the legislative reference bureau;

(4) By any compilation commission that may be constituted from time to time;

(5) By the real estate commission for any action involving the real estate recovery fund;

(6) By the contractors license board for any action involving the contractors recovery fund;

(7) By the office of Hawaiian affairs;

(8) By the department of commerce and consumer affairs for the enforcement of violations of chapters 480 and 485A;

(9) As grand jury counsel;

(10) By the Hawaii health systems corporation, or its regional system boards, or any of their facilities;

(11) By the auditor;

(12) By the office of ombudsman;

(13) By the insurance division;

(14) By the University of Hawaii;

(15) By the Kahoolawe island reserve commission;

(16) By the division of consumer advocacy;

(17) By the office of elections;

(18) By the campaign spending commission;

(19) By the Hawaii tourism authority, as provided in section 201B-2.5;

(20) By the division of financial institutions;

(21) By the office of information practices; [or]

(22) By the department of Hawaiian home lands; provided that:

(A) The department of Hawaiian home lands may use the services of the attorney general from time to time when the interests of the State and the department of Hawaiian home lands are aligned; and

(B) Legal fees owed to independent counsel shall be paid by the State; or

[~~(22)~~] (23) By a department, if the attorney general, for reasons deemed by the attorney general to be good and sufficient, declines to employ or retain an attorney for a department; provided that the governor waives the provision of this section."

2. By amending subsection (c) to read:

"(c) Every attorney employed by any department on a full-time basis, except an attorney employed by the public utilities commission, the labor and industrial relations appeals board, the Hawaii labor relations board, the office of Hawaiian affairs, the Hawaii health systems corporation or its regional system boards, the department of commerce and consumer affairs in prosecution of consumer complaints, the insurance division, the division of consumer advocacy, the University of Hawaii, the Hawaii tourism authority as provided in section 201B-2.5, the office of information practices, or the department of Hawaiian home lands, or as grand jury counsel, shall be a deputy attorney general."

SECTION 7. (a) The legislative reference bureau shall conduct a study on the potential consequences of creating a position for the director of Hawaiian home lands that is separate from the chairperson of the Hawaiian homes commission. In conducting the study, the bureau shall assume that:

(1) The governor shall appoint the director of Hawaiian home lands under section 26-17, Hawaii Revised Statutes;

(2) The director of Hawaiian home lands would be a member of the Hawaiian homes commission;

(3) The director of Hawaiian home lands would not be eligible to be considered as the chairperson of the Hawaiian homes commission;

(4) The members of the Hawaiian homes commission shall choose the chairperson amongst their own members; and

(5) The director of Hawaiian home lands would have the authority to veto major policy and budgetary decisions of the Hawaiian homes commission with written justification.

(b) The study shall consider the effectiveness; cost; potential conflicts of interests, such as in contested case hearings; and other issues that may arise from the proposed change in the governance structure of the department of Hawaiian home lands.

(c) The legislative reference bureau shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2022.

SECTION 8. Any sitting Hawaiian homes commission member whose term of office has not expired on the effective date of this Act and who does not qualify to be a member of the Hawaiian homes commission under the amendments made by this Act may continue to serve on the commission until that member's term expires.

SECTION 9. The provisions of the amendments made by this Act to the Hawaiian Homes Commission Act, 1920, as amended, are declared to be severable, and if any section, sentence, clause, or phrase, or the application thereof to any person or circumstances is held ineffective because there is a requirement of having the consent of the United States to take effect, then that portion only shall take effect upon the granting of consent by the United States and effectiveness of the remainder of these amendments or the application thereof shall not be affected.

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 3021.

THE SENATE	S.B. NO.	891
THIRTY-FIRST LEGISLATURE, 2021		S.D. 2
STATE OF HAWAII		H.D. 1