HB 884: RELATING TO AGRICULTURAL LANDS.

HOUSE OF REPRESENTATIVES	H.B. NO.	884
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to agricultural lands.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that, under the Hawaii State Planning Act, two major objectives and policies for Hawaii agriculture are the growth and development of diversified agriculture and ensuring that the agricultural sector continues to constitute a dynamic and essential component of Hawaii's strategic, economic, and social well-being.  To achieve this objective, the State must conserve, protect, and encourage the development and improvement of available agricultural lands and facilities to produce food and other agricultural products.

     The legislature further finds that data released by the United States Department of Agriculture in December 2024 indicates that the amount of the State's farmland owned by foreign entities has dramatically increased in recent years.  Specifically, foreign ownership of Hawaii agricultural land increased from 166,000 acres to 278,000 acres during the last five years, constituting a sixty-five per cent increase.

     The legislature is concerned that the increasing percentage of agricultural land owned by foreign entities may adversely impact the State's ability to achieve its agricultural goals.  Because foreign landowners are likely domiciled thousands of miles away from Hawaii, they may not be able to give this agricultural land the attention needed to maximize its productivity.  Foreign entities may also have different stakeholders whose interests they need to assuage; the interests of those stakeholders may not align with the interests of local stakeholders in Hawaii.  Finally, foreign ownership raises national and economic security concerns.

     The legislature finds that many states have laws that prohibit or restrict the ability of foreign persons, businesses, and governments from acquiring or owning an interest in agricultural land.  However, Hawaii currently does not have a similar restriction.

     Accordingly, the purpose of this Act is to promote the conservation, protection, and sustainable development of the State's agricultural resources by prohibiting certain foreign parties from owning, purchasing, or acquiring ownership of or an interest in agricultural lands.

     SECTION 2.  The Hawaii Revised Statutes is amended by adding a new chapter to title 11 to be appropriately designated and to read as follows:

"Chapter

PROHIBITION OF THE ACQUISITION OF

AGRICULTURAL LANDS BY CERTAIN FOREIGN PARTIES

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

     "Agricultural lands" means any real property within the agricultural district pursuant to section 205-2(d).

     "Interest in agricultural land" means all direct interest acquired, transferred, or held in agricultural land, including, without limitation, a lease of agricultural land:

     (1)  For a term of one year or longer; or

     (2)  That is renewable by option for terms that, if exercised, would be for a term of one year or longer.

     "Prohibited foreign party" means:

     (1)  The government or any official of the government of a foreign country;

     (2)  A partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country, or a subsidiary of that entity;

     (3)  Any person who is domiciled in a foreign country and is not a citizen or lawful permanent resident of the United States;

     (4)  Any person other than an individual or government:

          (A)  That is created or organized under the laws of any state; and

          (B)  In which a significant interest or substantial control is directly or indirectly held or is capable of being exercised by:

               (i)  A person or government described in paragraphs (1) through (3); or

              (ii)  Any combination of the persons or governments described in paragraphs (1) through (3); or

     (5)  Any agent, trustee, or other fiduciary of a person or government described in paragraphs (1) through (4).

     "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.

     "Residence" means a person's principal dwelling place where the person intends to remain permanently for an indefinite period of time.

     "Resident alien" means a person who:

     (1)  Is not a citizen of the United States; and

     (2)  Is a resident of a United States state, territory, trusteeship, or protectorate.

     "Significant interest" or "substantial control" means:

     (1)  An interest of thirty-three per cent or more held by a prohibited foreign party;

     (2)  An interest of thirty-three per cent or more held by more than one prohibited foreign party if the parties are acting in concert with respect to the interest, even if no single prohibited foreign party holds an interest of thirty-three per cent or more; or

     (3)  An interest of fifty per cent or more, in aggregate, held by prohibited foreign parties, regardless of whether the prohibited foreign parties are acting in concert.

     §   -2  Office of agricultural intelligence; established.  There is established within the department of agriculture an office of agricultural intelligence, which shall:

     (1)  Collect and analyze information concerning the unlawful scale or possession of agricultural land by prohibited foreign parties; and

     (2)  Administer and enforce this chapter, including the reporting of violations to the attorney general as provided in section    -5.

     §   -3  Restrictions on ownership of agricultural lands.  (a)  Notwithstanding any other law to the contrary, a prohibited foreign party shall not acquire by grant, purchase, devise, descent, or otherwise, any interest in agricultural land in the State, except as provided in section    -4.

     (b)  A person shall not hold agricultural land as an agent, trustee, or other fiduciary for a prohibited foreign party in violation of this chapter.

     (c)  A prohibited foreign party that acquires agricultural land in violation of this chapter remains in violation as long as the prohibited foreign party holds an interest in the agricultural land.

     §   -4  Exception; divestment.  (a)  Notwithstanding section    ‑3, a prohibited foreign party who is a resident alien of the United States may acquire and hold an interest in agricultural land in the State during the continuance of that prohibited foreign party's residence in the State.

     (b)  If a prohibited foreign party who previously held agricultural land pursuant to subsection (a) loses resident alien status, the prohibited foreign party shall sell, transfer, or otherwise divest their interest in agricultural land within two years of the date on which the prohibited foreign party ceased to have resident alien status.

     (c)  If a prohibited foreign party who is required to sell, transfer, or divest an interest in agricultural land under subsection (b) fails to do so, the attorney general shall initiate a civil action in the circuit court in the county in which the agricultural land is located for the forfeiture of the interest in agricultural land.

     (d)  If the circuit court determines that an interest in agricultural land is being held in violation of this chapter, the circuit court shall order that the interest in agricultural land be sold as provided in section    -7.

     §   -5  Enforcement.  (a)  If the office of agricultural intelligence determines a prohibited foreign party has acquired agricultural land in the State in violation of this chapter, the office shall report the violation to the attorney general.

     (b)  Upon receiving a report under subsection (a), the attorney general may investigate to determine if there is a violation of this chapter.  In conducting the investigation, the attorney general may issue subpoenas requiring the:

     (1)  Appearance of witnesses;

     (2)  Production of relevant records; and

     (3)  Giving of relevant testimony.

     (c)  Following the investigation, if the attorney general concludes that a violation of this chapter has occurred, the attorney general shall initiate a civil action in the circuit court in the county in which the agricultural land is located for the forfeiture of the interest in agricultural land.

     (d)  If the circuit court determines that the interest in agricultural land is being held in violation of this chapter, the circuit court shall order that the interest in agricultural land be sold as provided in section    -7.

     §   -6  Filings required.  The attorney general shall promptly record the following filings with the bureau of conveyances:

     (1)  Upon commencement of an action under this chapter, a notice of the pendency of the action; and

     (2)  An order for the sale of agricultural land under section    -4(d) or    -5(d).

     §   -7  Court-ordered sale of agricultural land.  If the court orders the sale of an interest in agricultural land under section    -4(d) or    -5(d), the agricultural land shall be sold subject only to the rights and interests of bona fide lienholders.  Proceeds from the sale, if any, shall be disbursed to lienholders, in the order of priority, except for liens that, under the terms of the sale, are to remain with the agricultural land.

     §   -8  Penalty.  A prohibited foreign party who violates this chapter shall be guilty of a class C felony.

     §   -9  Affirmative defense.  It shall be an affirmative defense to prosecution under this chapter that a prohibited foreign party is a resident alien.

     §   -10  Title to land not invalid.  Title to agricultural land is not invalid or subject to divesture due to a violation of this chapter by any:

     (1)  Former owner; or

     (2)  Other person holding or owning a former interest in the agricultural land.

     §   -11  No duty to inquire.  No person who is not subject to this chapter shall be required to determine or inquire whether another person is subject to this chapter.

     §   -12  Rules.  The department of agriculture may adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this chapter."

     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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to establish an office of agricultural intelligence, including the establishment of        full-time equivalent (    FTE) positions.

     The sums appropriated shall be expended by the department of agriculture 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, 2025.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

HDOA; AG; Agricultural Lands; Restrictions on Foreign Ownership; Appropriations

 

Description:

Prohibits certain foreign parties or their agents, trustees, and fiduciaries from owning, purchasing, or acquiring an interest in agricultural lands.  Establishes an Office of Agricultural Intelligence within the Department of Agriculture to investigate claims that land is unlawfully owned by a prohibited foreign party.  Requires the Attorney General to undertake enforcement activities.  Appropriates moneys.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.