House Standing Committee on Finance

Good morning. We're going to convene the Committee on Finance for our first agenda. First up is House Bill 830, HD 1. Vice Chair.

First up, do we have DLNR, State Historic Preservation Division with comments?

Good morning, Chair, Vice Chair, Members of the Committee. My name is Jessica Puff. I'm the administrator with SHPD. We stand on our comments as submitted, but I did want to add one detail that we didn't add to our written comments. And that is this bill, though it would allow for third party administrators to be able, or third party administrators, third party consultants to review projects that are submitted to SHPD after 60 days, it's a requirement.

The language says that they shall be contracted or the project shall go to a third party administrator. I think that the language shall rather than may kind of creates a little bit of a complication for SHPD. There are certain projects that just because of the complicated nature of the project, it may just innately take more than 60 days to review or get through the review process.

There's also a concern that if a third party reviewer reviews a project and has a contract to review projects and their performance is inadequate or does not follow the rules, that we may still be required to move forward with that contract because they might be the only entity that has the ability or has bid on such a contract.

So I think SHPD therefore is asking that the the language shall be changed to may or some additional language be added to this bill that would allow SHPD the ability to terminate contracts or determine that this kind of agreement would not be feasible to continue to pursue. But that's all. Thank you.

Thank you. Next we have the Hawaii Realtors in support. Thank you. We have Hawaii Government Employees Association with comments.

Aloha, Chair, Vice Chair, Members. Nui Sabas here with HGEA. We'll stand on the written comments. We do want to emphasize that our records indicate that SHPD has vacancy rates, so we would implore SHPD and the state to really look into filling these vacant positions so that they have enough employees to meet the current and future review demand. Thank you. Available for any questions.

Thank you. We have NAIOP in support.

Aloha, Chair, Vice Chair, Members of the Committee. Evan Oue on behalf of NAIOP Hawaii. We stand in strong support of this bill, which will help, you know, the intent behind this is to really help expat the current backlog of reviews that the Department is currently experiencing, which is adding on to the cost of development throughout our state, and you know, including housing, including, you know, commercial projects as well. So, you know, time equal and delay equals, equals cost at the end of the day. And, you know, that this bill is seeking to resolve that at this point in time. So, you know, happy to answer any questions that you may have. Thank you for the opportunity.

Thank you. We also received testimony in opposition from the Historic Hawaii Foundation, support from Grassroots Institute of Hawaii, and comments from the Maui Chamber of Commerce, as well as support from two individuals. Is there anybody else in the room wishing to testify? Anybody on Zoom?

Okay, questions, Members? Representative Miyake.

Thank you, Chair. SHPD, please. Good morning, Jessica. Thank you for being here. Question. So I know you had concerns of shall versus may. So if SHPD were given discretion instead of a mandate, how would that impact overall efficiency given the 60 day timeline?

I think that... Well, I think this whole, the whole framework of this is somewhat complicated. I think that if we take into consideration that we can find a contractor that would take on this work and just assume that that's correct, we would be able to hold back any project that may, like I said, have some sort of larger complication.

For example, it could be an affordable housing project or project in the Kaka'ako Walmart settlement area that just due to the nature of the sensitivity, the project review process will likely take at least 60 days to get through. And because that assumption is that it will probably be at least 60 days to go through that process, we could determine that because it's this general area, it would not be appropriate to go to a third party reviewer because the liability is too high and we have a number of internal processes that we need to follow that we need to ensure that they are followed.

And so the liability needs to stay within SHPD itself rather than be delegated through a third party reviewer. So I foresee instances like that where if it's a simple permit or a simple project, it could still filter to the third party reviewer. If we decide, you know, we've just got too much of an inundation of permits, we need to utilize this third party reviewer option, so we're going to send this batch to the third party reviewer. But these complicated projects stay with SHPD.

So, sorry, Chair, one more follow up question. But that would, that is what is creating, that would create more delays. Right. So SHPD, this bill would allow the process to go through SHPD first, and then if SHPD cannot review it within the 60 day time frame, then it would be subject to a third party review, which SHPD will pick the third party consultant?

Yes. Yes. Yes. I think that, yes, SHPD would pick the third party consultant. The third party consultant would have to meet the state requirements for professional qualifications, all of that, and they would have to be in the work that they've done. A lot of this we could work out in the rules that need to be written in terms of their performance and what would happen in terms of terminating the contract.

I think that the bigger concern is that we might have a project proponent that says, well, I have a complicated project that I know is going to take longer than 60 days because of public consultation or the need for an AIS or a revised AIS or something like that, so I just want to jump to third party reviewer. But because of the complicated nature of the project, if it requires federal review as well, that type of a project would not be appropriate and should not be eligible for the third party reviewer program.

So as long as we had that kind of flexibility, I think that we could work with it. It's just having the mandate that anything that might take 61 days or longer would have to go to a third party reviewer. Something that we're, I think concerned about because not every project would be appropriate to do that.

I can agree with that, to have the flexibility. It's obvious that we have, like what we currently have is not working. Right. And this is like an olive branch to the Department that to allow the division to operate at an optimal level. So I'm also proposing, you know, I'm not trying to, like this bill is not trying to take away government jobs. I'm just trying to help, not help with the backlog and not have projects be any more delayed because delays cost money. Right. So this is just a measure to help the division be optimal at best, and you know, just one tool to help. So like let us, you know, work together to make this work.

Yeah. And I think, I think that we, I agree with all that. I think that all of that can be feasible. I just think that there's, it would be useful to have some constraints in order to be able to respond to some of the more complicated situations that don't fit so well within this box. So yes, absolutely.

Thank you, Jessica. Thank you, Chair.

Thank you. Further questions, Members? Okay, moving on to the next bill.

Moving on to the next bill. House Bill 741 HD1. Vice Chair.

We have the Hawaii Housing Finance and Development Corporation, HHFDC in support.

Morning, chair, vice chair, members. Hawaii Housing Finance Development Corporation.

We stand our testimony and support. Just want to note that most of our programs are subject to prevailing wage, but we feel that this carve out for the Affordable Homeownership Revolving Fund can be justified given the relatively small amount of the projects that might be funded under this proposal. It's $1.5 million. Thank you.

Thank you. We also received testimony in opposition from the Hawaii Regional Council of Carpenters and support from Maui Chamber of Commerce, Hawaii Habitat for Humanity Association, Hawaii Community Lending and one individual. Is there anybody else in the room wishing to testify? Anybody on zoom?

Thank you. Questions, Members, moving on to the next bill. House Bill 1428 HD1.

We have HHFDC in support. Thank you. We have the Council for Native Hawaiian Advancement in support.

Hi, alohaka Kahiaka. Madeline McCaig on behalf of the Council for Native Hawaiian Advancement, standing on our wrist and testimony in support of the bill. But just wanted to emphasize that we ourselves are a housing counseling agency and have been able to see firsthand the impact that housing counseling has made for different families.

We've seen people improve their credit scores, attain loans and successfully get houses from this program. Being able to pass this bill is a measure in investing in increased home ownership for families who it might otherwise not be possible. Mahalo.

Thank you. That's all the written testimony we've received on this measure. Is there anybody else in the room wishing to testify? Anybody on Zoom?

Question, Members? Okay, next bill, House Bill 286, HD 1.

First up, we have Department of Taxation with comments. Thank you. We have the Tax Foundation of Hawaii with comments on Zoom.

Good morning, Chair, Vice Chair, Members of the Committee. Tom Yamachika for Tax Foundation. We'll stand on our written testimony and be available for questions.

Thank you. We also received testimony in support from the Maui Chamber of Commerce and seven individuals. Is there anybody else in the room wishing to testify? Anybody on Zoom?

Okay. Thank you. Questions, Members, moving on to the next Bill. House Bill 432 HD1.

Okay, first up, we have HHFDC in support.

Yes, Chair, Vice Chair. Members, just wanted to. We stand in support of House Bill 432 as well as Hospital 417. Just want to clarify that we need a sub account for the Tier 2 funding because right now the rental housing revolving Fund is prioritized towards tier one, or it's called LIHTC funding, Low Income Housing Tax Credit funding.

So we need a separate sub account for workforce housing if we want to give equal priority to those type of projects.

Thank you.

Next up, we have Hawaii Community foundation in support. Thank you. We have Holomua Collaborative in support. Thank you. Also received comments from the Department of Budget and Finance and support from the County of Honolulu Office of Housing and four other organizations and four individuals. Anybody else in the room wishing to testify?

Any Please state your name and identify yourself for the record.

Hi Chair, Vice Chair Members, I'm Susan Le with Hawaii Appleseed and we stand on our written comments which I believe you should have received. But I just wanted to make a few points from our testimony. Is that like what HHFDC had said?

The sub account is to carve out specifically for this 60 to 140% of the area median income. Because otherwise the priority is for LIHTC buildings which is below 60% AMI, which is of course very much needed.

But just to reiterate that the median income home here in Hawaii, to be able to afford that, you have to make 200% the area median income. Our workforce is struggling.

That includes firefighters, teachers, healthcare workers and without subsidies these projects don't work out because we have the highest land costs, construction costs and strict dysregulatory process in the nation. So this account is very much needed. Thank you. And I'm here to answer any questions.

Thank you. We. We did receive your testimony. Sorry, I just didn't have you checked in. Thank you. Anybody else in the room wishing to testify? Anybody on zoom?

Questions? Members, Moving on to the next Bill.

Moving on to the next bill, House Bill 417, HD 1.

First up, we have HHFDC in support. Okay, thank you. We have Holomua Collaborative in support. Thank you. We also received testimony in support, or with comments, from the Department of Budget and Finance and testimony in support from three other organizations. Is there anybody else in the room wishing to testify? Anybody on Zoom?

Okay, thank you. Questions? Moving on to the next Bill.

House Bill 1318, HD 2.

First up, we have HHFDC in support. Thank you. And we have the Center for Restoring Sovereignty, in opposition.

Chair, Vice Chair, Members of the Committee. My name is Ramsey Tom. I'm with the Center for Restoring Sovereignty. And just a quick addition to our submitted testimony. We recognize the need for affordable housing, continue to support it. The Center really looking at concepts of food sovereignty, energy sovereignty, and of course, housing is part of that.

Our opposition is primarily because we're concerned about public lands being eroded and according to public trust, the requirement that we look at those lands for future use as well, in terms of making sure that for sustainability purposes for our people. Public lands are held in trust for future generations should not be classified for private development.

This Bill sets a dangerous precedent that prioritizes short-term economic concerns over long-term land protection. Granted, as we said, we are concerned about housing and our needs.

Equally important however, we recognize that the U.S. Congress, in 1993, acknowledged in the Apology Bill the status of the Hawaiian Kingdom and really the jurisdiction of being able to transfer lands that one does not own. The principles of no law arises from an injustice or one cannot give what one does not own.

These are legal principles that I think we would like to at least revisit. The alternatives, of course, do exist, rather than taking public lands. There are large, vacant private lands that are available. So, if this really is an issue of land being the response, then perhaps let's look at other alternatives rather than diluting the public land trust.

Thousands of acres of vacant private land exist that could be used for affordable housing without sacrificing public lands. The state must resolve legal uncertainties before transferring lands. I think there's still a question and while many of us have come to understand what the challenges may be, they are still out there.

And we're asking this Committee and other committees to consider the fact that these jurisdictional issues do need to be addressed before any further transfer, granting, or conveying of Hawaiian lands. In this case, the Crown Lands, Ceded Lands. We tend to lose sight of those definitions in these kinds of conversations.

So, that's a compression of our testimony that was submitted earlier. Thank you very much.

Thank you.

We have testimony from Alfred Medeiros with Malama Ka Aina.

Alfred Medeiros...1.8 million acres of land illegally seized from Kanakamole and Hawaiians. This Bill right here will continue the same things that we've been fighting for. I'm a Mahia, I'm a farmer on two different parcels of Aina and Waiana and Wahiawa. And every day, I hear bombing over Aina.

This Bill will continue that process. The guise of affordable housing is what this thing is being pushed for. Nothing is affordable for housing for us in Hawaii right now. We're one paycheck away from being displaced and having to move to Las Vegas, California, elsewhere, when this is our home, especially as Kanaka Maole.

I'm fighting for my Kuleanala land right now, which I shouldn't have to fight for. It's going to take about 10 years, the process, just to even get to that step where I need to be. But why is that? You heard about the Apology Bill.

How are you going to say sorry for something you've done and continue to do it again? Right? That's wrong. That's an abuser right there. That's the government abusing our people. You know, we go through PTSD as Kanaka Maoli, and it's inherited through life, you know, through our kupuna that have been fighting and fighting and fighting.

You see people in the galley right here—have been fighting for so long they're aging in this process, for us to just to get a piece of our aina back. You know, 99-year leases will open up once again from this.

Even if we do demilitarize Hawaii in 2029, it'll open up doors for other things to happen, more development that's not for us, for outsiders to come in, and everything's going to go up. Inflation is crazy right now. People who voted for the wrong side said that eggs doesn't get cheaper, gas doesn't get lower.

Look where we're at now—dollar an egg. This is the...we got to go through. And all we're talking about is land right here. But this is our Aina. You know, we steward this land. None of us own this land that we live on.

We steward it, we Malama it for the future generations to ensure that we can have a home to call Hawaii. I get sick in my stomach talking like this because we shouldn't have to. I got up 5 o'clock in the morning to Malama Aina, come straight over here to protect Aina.

But every time we speak, our voices are silenced it seems. I'm hoping that the Finance Committee listens to the people in the gallery today, especially to us Kanaka Mori that's been fighting front line, flying everywhere we gotta, just to protect the lands from being desecrated, for stopping the people from digging out our ancestors' bones. Enough is enough.

So, please. I'm in full opposition of this Bill and any Bill that is trying to go this way. Trying to put land and swapping lands and this and that, like this is not monopoly. You guys talking about livelihood of people, generational wealth of Aina. That's what we got to go back to, Aina-based.

If you guys would like to come to the Aina, I'll more than welcome all you guys to the farm so you guys can get grounded once again and see what is you guys fighting for. Why are you guys elected to office by the people?

Not by one person is trying to pass this, you know in a higher position, but by the people that voted you guys into you guys' seats. Mahalo for your guys' time.

Thank you. Apologies. We have the County of Kauai Housing Agency on Zoom.

Aloha, Chair Yamashita. Adam Roversi. I'm the Director of the Kauai County Housing Agency. Members of the Committee, we submitted written testimony. I did want to make myself available for any clarifying questions, as this legislation was largely crafted based on Kauai County's attempted efforts to develop land that was previously set aside to the county for affordable housing.

And I—and I did want to highlight just one thing from my testimony, but I won't regurgitate it. HRS 172, sorry, HRS 171-2, already contains 16 different exemptions from the definition of "public lands," which align with various public use purposes.

For example, state land set aside to the University of Hawaii, to the Department of Agriculture, to the Department of Education for schools, to the Department of Transportation for roads, and to DHHL for Hawaiian Homestead Properties are exempt from the definition of "public lands."

And as a practical matter, all that really means is that it's no longer directly overseen by the Board of Land and Natural Resources. Alternatively, it's overseen by the entity to which it is set aside, all of who which continue to have a fiduciary obligation to maintain the public land trust.

None of these lands can be sold or alienated. And the same would go to lands set aside for county public housing projects. So, thank you for the opportunity to testify.

Thank you. Next, we have Bronson Azama, in opposition.

I'm opposed to HB 1318 on the grounds of legal, historical, and jurisdictional issues. I have heard leaders in these halls speak to future generations about honesty, integrity, and leadership to serve communities. When it comes to governing Hawaiian Kingdom lands, honesty and integrity are thrown out the window.

I am opposed to allowing the Governor to reclassify public lands without addressing the unresolved title issues that plague this state. One cannot give, as Kumu Ramsey shared earlier, one cannot give what one does not own, and economic justifications to supersede legal obligations are dangerous, as shared early—earlier—to limit land use to one particular use amongst dramatically changing economic and environmental needs during these unprecedented times.

It amazes me that this Legislator, the first to call for a ceasefire in Gaza, but—and—still demonstrate here that we can support the Palestinians yet consider implementing similar policies against settling policies against Hawaiians.

To be clear, when I reference Hawaiian, I'm referencing not an ethnicity, not our race, but a national citizenry. We see now Hawaii's vulnerability to political upheaval with America's far right step and changing environmental conditions a reminder to the importance to be self-sustaining. State-sponsored solutions have gotten us in the problem and not produce the solutions.

So, maybe it's time to change the trajectory and to consider returning to legal authority. So, for these reasons I'm opposed to HB 1318. Let's really think about the future that we're setting, and let's not set it in stone for housing.

When we think about development, especially on limited land use, I'm pretty much opposed to the testimony that came before, that that's not alienating. I know it may not necessarily be the legal term, but when we start these developments, we know how hard it is to undo, especially when we think about the rail. Thank you. Mahalo.

Thank you.

We have Kaleiheana-A-Pohaku Stormcrow, in opposition, on Zoom. Not present. We have testimony from Willie in opposition.

Aloha, and good morning to everybody. This is first time for me, but, you know, being, being as it stands. I don't know how to say this in any other eloquent way other than Brother Madero said before. He hit on all the points that I wanted to stress myself.

But please remember, I'd love to speak to the brighter side of any and everyone in here that has been interacted with, in any way, with one Kanaka or one Hawaiian or somebody that's part...or as....as me, okay?

But I'm proud of my 12% and I believe I put more than enough aloha into this world than anything I've done. And I stand disheartened when I think about it, when people like to go, okay, Hawaii is a beautiful place, we love this about Hawaii. Look how beautiful it is. It's paradise.

This paradise that you all consider paradise is our home. Whether or not how beautiful it is, whether or not we live on the beach, it's our home. The ties we have to may seem simple to us, for, for us to ask so much of one community, such as yourselves, will do the right thing.

But I'm begging you, I'm pleading to you, whatever light you guys still have inside you, please do the right thing. Because as Madero said before, I believe it.

As for the future generation, for all our kanakas, for anybody that loves Hawaii, anybody that understands the aloha spirit, what it perpetuates and what it means to every kanaka in this room. It's not a small thing. Although what we contribute and what we give to the world in every way possible.

I'm disheartened a lot when I think about it...my boys. Aloha is an awesome thing. Aloha is a beautiful thing. But so little in my life I have seen and received aloha from other people. Everybody loves Hawaii, but what about Hawaiians? What about we people?

Easy to snuff and silence our voices when we stand for something that's out of our league. But I stand in serious opposition to this Bill. I know I'll never have enough Hawaiian blood for stand for Hawaiian homelands and be able to obtain myself or my sons. But I'm proud of what blood that coursed through my veins.

And I beg for each and every one of you to please, like Madero said, get grounded, go back to the Aina. Whether it be fishing, diving, as simplistic as it can be. I'm sure there'll be plenty brought us sisters.

Anybody else that would be dying for show you guys what we have in our...or deep in our...because a lot of the times for me, and I know my boys, it's disheartening to see what happens to our people, every day, every year, less and less. Again, I stand in serious opposition of this bill. I'm sorry, and I appreciate your time. Mahalo Nui.

Thank you. We have Kawehe Onolani Souza, in opposition, on Zoom. Not present. Do we have Clare Loprinzi in opposition on oom?

Yes, you do. Oh, let me see.

Oh, thank you. Please proceed.

Okay...I really hope that you—I'll introduce myself. I'm an indigenous practitioner. I've been helping babies be born for over 50 years. Mostly now, I work—I live—Honoka iki on Kukona, which is Kamehameha III's land. I'm honored to be here. I wouldn't say I own this land. I'm a steward here.

This land, if I have my say, will never be sold. It will go back to the people. It's, it's the principles of the great Mihele.

I will say that the importance of land for me, helping 1500 babies into this world, now basically moving only working with...descendants, just because I work—not just locally, but internationally—that the importance of land is crucial for the next generations.

The Iwi Kupuna, you know, the Iwi—I speak for the Iwi Kupuna and for our groups and the laws that we try to uphold here, and the corruption of the system is blatant, you know. Are you guys going to listen?

I hope so, because the land is so connected to the next many generations. Many women from Hailii that birthed over there in Kaululu on Ali'I Drive, and just to see what other organizations have done to that, even Kamehameha, you know, the organizations of Hawaiians have done is sad. These places are really, really important. They carry that message.

They carry—I know the birth of the last baby there shared with the women that I know why that baby didn't turn over. Because if it had turned over and done that natural dance that a baby does, that's what they do. They do a dance. They're deeply connected.

And when they turn over, when it turned, if it went back to the lateral on, back on the side, as it comes out, it booms and it turns into this blues dance, I call it. And when it—when it turns, when it hadn't turned, it stopped...up here. Its whole body was on the pohaku connecting.

Because as soon as it turned, the drum stopped his wife, because it was a female. So, I go way back because that area right there is the menhune walls there. It's old. So, these children, when your ayave is being made, it's the DNA, it's crucial. I've never used drugs or machines in birth ever.

And I will never stop. I still say I have 50 more years. I'm only 70. So, that connection to land is crucial for those that are waiting to come back in. Those that are coming back in. Being able to connect to the land, take your shoes off, your feet off, and connect your feet to the land. Crucial.

Us as indigenous practitioners, we do not have to tell you our ways. They are orally passed down. So, how many times in oral history have Hawaiians said in the...petitions in every single fight, how many times have they said, stop? I knew when I came here. I came here from a dream.

I knew when I came here. I'm an indigenous practitioner. I am Sicilian. I have dual citizenship. I'm deeply connected. That's the Moors. And probably, they say it's the first, first navigators over here. But I can tell you that that deep connection—when I came on here, I said to the kids, don't move any of the pohaku.

See this place right here? There's a burial there. Even asked Hawaiians, come over, is this a burial? They said, no. Not until years later did someone tell me. And I've helped all those mopuna of the last gardener right here, full blooded Hawaiian. I knew that was a place. Saved all the archaeological sites.

What they're doing right now, what you guys are allowing, this egg land, this to be just chopped up, chopped up, chopped up, is the same thing that you're doing. Stop. Stop. We need to grow the food. I am also, of course, a mahiai. So, I'm asking you to listen today, to rule today.

I am demanding that you rule today the right way, because it's enough. We don't have that much time. We will still be here. We will never compromise. We will still fight. But stop the generational trauma you are doing to the people, to the land, to all of those ancestors that come from the waters is deep.

Stop the bombing of the ocean. Stop the bombing of this land. And give this land—do the rules. We are still sovereign. The laws are still here that support us. And I'm glad to say us, because I loved who Queen Liliokalani was. She never went to war, and she never signed a contract.

It's not a time that I don't go down to Honolulu, that I don't sit under the window where she was held captive. Because she too, even though she's not my queen, my queens come from Northern Africa, but she's my queen. So, please, do the right thing. Do the Pono thing. There is no discussion about that.

Do the right thing or else resign—resign and get off. Because it gonna fall on your families too. So, that's all I'm gonna say. I appreciate everybody that's, that's giving testimonies. I listen to everybody. I learn more. Always be learning more. Like I said, 70 is young. And that's the truth.

How many 70-year-olds would be saying that? I go out there, I'm still using the chainsaw. How many? It's because I'm connected to the land. And I will not stop. So, big thanks. And do the right thing, huh?

Thank you. Oh, okay. Sorry. Yeah, it's what the staff generated as the list coming in.

Yeah, did you check in in the front? Oh, okay. Okay, go ahead.

Sure. Please come forward. Can just state your name for the record? Sorry about that.

Okay. Aloha, Chair Yamashita, Vice Chair Takenouchi, and Members of the Committee. My name is Helena Sonora-Pali. I'm from Kalahui, Hawaii. We're a native initiative for self-determination and self-governance formed in 1987 for and by Kanaka Maoli. We have over 20,000 citizens.

We stand in strong opposition to HB 1318, which proposes to shift control of seated lands Hawaiian Kingdom crown and government lands to the counties, under the guise of affordable housing. These lands, totaling over 1.8 million acres, were illegally seized from the Hawaiian kingdom following the 1893 overthrow, without the consent of Kanaka Maoli.

To this day, 98% of so-called state-owned lands are in fact stolen Hawaiian Kingdom lands. Public Law 103-150, the Apology Bill, acknowledges this historic injustice that has never been rectified.

Under the Admissions Act, these lands were held in public trust for five purposes, including for the betterment of small and native Hawaiians, as defined under the Hawaiian Homes Commission Act. Yet HB 1318 grants the Governor vast authority to transfer these lands to county control, with no clarity on how the trust will be upheld. This Bill also allows for 99-year leases.

And under DLNR. I will just say this, the county was wrong, the county representative. Under DLNR, the max—there's a maximum number of years that you can give out a lease. It's not 99 years. I believe it's 65 or 75 years. So, this—and so, I just wanted to point that out.

This Bill allows for 99-year leases, which effectively grants De Facto ownership to developers, severing Kanaka Maoli from our Ina for at least three generations. We won't even be alive when these leases are ended and undermining our collective struggle for land back.

The term "affordable" remains loosely defined, raising serious concerns that it will continue to justify sweetheart deals for private interests, rather than genuinely serving those in most any—in need.

We appreciate the most recent amendments to this measure, but if passed, this measure has still a long way to go, and there is no clear reason for these new powers and exemption from HRS 171. Why is it being allowed?

Kalahui, Hawaii has always maintained that the corpus of the Public Lands Trust, comprised mostly of stolen Hawaiian lands be kept intact until it can be rightfully returned to the Hawaiian Nation and its true title order—owner—holders.

We urge you to protect these lands from further alienation by rejecting HB 1318 and mahalo for the opportunity to testify and for considering our manao on this crucial issue. Thank you.

Thank you. Next, we have Cindy Freitas, in opposition, on Zoom.

Cindy Freitas.

Cindy is in an appointment, but she'll be right back out. So why don't you call her back and call her back into a few more people. Okay?

Okay. We'll try and circle back if possible.

And you can do it. She's like, almost 100% Hawaiian, so I think you can make sure she speaks. Okay, thanks.

We have Makanoe Hufana in opposition. Is there anybody else in the room wishing to testify? Please, could you come forward and identify yourself for the record?

Good morning. My name is Owana Kaʻōhelelani Salazar. I have been involved in many years, for many years now. And if you, I'd like to just remind this body to consider and remember, if you can, that we have been marching since the 70s and the generations before that have petitioned every possible way, living and dying for the cause of preserving our 'āina for the sake of the lands and the people and all of Hawaii Nei.

So these are tens of thousands of people and many who probably elected you all. And I want to stand in opposition, strong opposition to this. Because, as was spoken, land that does not belong to you cannot be given. We have received two strong testimonies against as well from our two mahi gentlemen back there who acknowledged and called it out that these lands are crown and ceded. No, ceded lands are made up of crown and government lands, and it's not paying any attention to those legal claims lawfully, agelessly, and the kuleana lands as well.

So I just wanted to bring those matters up while I can, while I'm here. I'm living in Hilo currently, and fortunately I'm here today to be able to speak to you and wishing you all a good day. May you stand with truth and goodness for our 'āina, Hawaii Nei, our people and the soul of what we call aloha. Mahalo.

Thank you. Makanoe Hufana? Yeah. You'd like to come up and testify?

I went to the bathroom. Okay. Aloha kākou. I'm here today to oppose HB 1318 proposed amendments to Section 1712. As a historian to my lāhui, I am as disappointed in whoever let this bill be created in the first place, just as I was disappointed in Kūhiō in giving the fake state access to our lands in the first place. The proposed amendments to define public lands in Hawaii, I'd like to remind you all, overlooks the history of Hawaii and the significance of crown lands. I'd like to also remind us all these lands were just...

They were not just given, but taken from the monarchy and the people of the Kingdom of Hawaii through the unconstitutional annexation, making any changes or classifications of these lands as an act of continuous historical and political injustices towards the kingdom and the people of Hawaii. The expansion of the term public lands to include lands through these methods neglects the Native Hawaiian community's rights to these lands. And the lands, as I said, are not the state's lands.

They're the kingdom's land and should be treated as such, which have and should be currently being held in a trust for the benefit of the people of Hawaii, which was established by the Hawaiian Homes Commission Act of 1920 that I mentioned that I was a bit disappointed of because the land didn't belong to the state in the first place. And then there was a bill that was created and established or an act in 1920 and established in 1921. And the trust that I was talking of also mentions the 1993 apology resolution as well.

Many of the lands being spoken about today are being used for cultural practices, such as fishing and diving and farming, and should not be subject to state control without respecting the rights of the people. One of the biggest issues I see in your document of the bill is the absence of consultation with Native Hawaiians. The amendment doesn't mention the need for consultation with either Kānaka Maoli or their organizations, as you have a couple that are here, before altering the status of usage of the land that were once kingdom lands and is also still kingdom lands.

The state asserting control over these lands without consultation goes against what the state says they are doing right by the people of Hawaii. The bill mentions giving the Governor discretion on land use, which further alienates lands from the people and Native Hawaiian stewardship and increases privatization of state lands that, again, do not belong to you.

As a historian, I obviously have concerns about cultural and environmental preservation, as a lot of things have happened. And SHPD, I know you're doing your best, but try a little bit harder, please. Because expanding the term of public lands to include lands beneath tidal waves opens opportunities for development that could harm Hawaii's very fragile environment as well as cultural spaces.

There seems to be a lack of transparency and accountability where the proposed amendments fail to establish clear mechanisms for ensuring the lands are returned to the public and are repurposed to better serve the interests of the Hawaiian community as well as the people who also live here as well.

These amendments also, might I add, violates existing legal frameworks that protects the interest of Kānaka Maoli, including state constitution's public trust doctrine and the federal recognition of Hawaiian rights as well. The proposal should be scrutinized for its potential undermine of the legal protections that were put in place from people before you.

To wrap up, I'd like to say we are, we are very tired. We are tired of coming to these meetings and not being heard. How many iwi kupuna do you need to dig up before you are satisfied? How many streams must you dry up and divert before you are satisfied?

And how many water sources must be contaminated before you hear us telling you no? Again, this land does not belong to you. I suggest you learn your history fast and figure out what kind of kupuna you want to be in the history books when they're being written.

The kupuna who listen to the people and stop the bill or the one who we will remember when they come looking for the criminals who let the illegal actions of this state continue to harm Hawaii and the natives of this nation who are still here. We are still here.

And as my Uncle Kaokaohu always says, kue the USA every day. And don't forget your homework of what kind of kupuna you want to be in this story. When we read about who said yes and who said no on this bill, remember what kind of kupuna you want to be when we go looking into that document. Until the last aloha 'āina. Mahalo for your time.

Thank you. Is there anybody else in the room who wishes to testify? Thank you. Please state your name and position for the record. Thank you.

Aloha, Chair, Vice Chair, Members of the Committee. My name is Ekini Lindsey. I strongly oppose House Bill 1318, as it disregards the crucial issue of kanaka land rights and compromises the commitment to provide reparations of thousands of kanaka. In lieu of ancestral lands and crown lands, ceded lands were specifically designated for kanaka.

And until the requisite land transactions with the Department of Hawaiian Homes Land access to housing as promised, lands should not be developed for alternative uses and purposes. These long standing obligations need to be fulfilled. How can you consider future development?

Allocating these lands for alternative uses would constitute a breach of the promise to support and uplift the kanaka community, thereby worsening the historical injustices we have endured. I implore your commitment to the historical injustices to first peoples of the land and look forward to your support regarding this measure. Mahalo.

Thank you. Anybody else in the room wishing to testify? Please come forward and state your name and position for the record, please.

Hello. My name is Kimmer Horsen. Good morning. Aloha. Just want to make it brief and to the point. You got my name. I said hello. Okay. I don't know who introduced this bill, but I didn't vote for any of you guys. I didn't vote for the Governor. I didn't vote for anybody.

I didn't vote for Democrats or Republicans. I did major in Hawaiian studies. I have an AA degree in Hawaiian studies. I have a political and history degree of Hawaiian art and history, political studies, yeah, from Chaminade and Hawaii Pacific University. All right, so this is, this is hewa, you know, plain and simple.

I don't know who keeps introducing these bills. The Governor is not going to be here for the seventh generation. You know, the Japanese. I don't know the Japanese people on the fiduciary Committee are not going to be. You guys aren't even from here. You know, you're not even of the, your ancestry is not here. Right?

So why do we keep prioritizing money and development? Over. Over. You guys are the occupier. You guys are the belligerent military occupier. You know, as a Hawaiian subject, I have more authority over you. This cannot go forward. You know, you're going to keep having, you know, marches in downtown. You're going to keep.

It's going to cause more and more conflict and division. It's not going to unite the state. We cannot keep doing this to Hawaiians. You know, do you guys study the history? You know, what happened to Hawaiians here? You know, about all the evictions, what happened at Sand island, what happened in Waimānalo, happened in Waianae.

And now everyone's homeless. Everybody's moving over there. My kumu are doing hula in California, you know, towards Hawaii, and they're crying. They're so sad and kaumaha, right. So depressed because they're separated from their land. You know how painful that is? This is, this is not right. And I know we're trying to make.

We're trying to provide housing for Hawaiians, but Hawaii is not, it's not about money and it's not about ownership like they said. So the status stays the same, we will never make one treaty or make one agreement with the United States saying, okay, you guys can live here and make money and then while we go and find a home somewhere else. That'll never be the answer. Okay, that's where I'm coming from. Mahalo.

Thank you. Anybody else in the room wishing to testify? Seeing none. Circling back to Cindy Freitas on Zoom. Not present? Okay. Anybody else on Zoom wishing to testify?

Okay. Members, we'll move to questions. Rep. Lee Loy.

Thank you, Chair. I'm hoping that Kauai County, I think, was on earlier.

Yes, I'm still here. Thank you.

Thank you for being here. You mentioned in your testimony, you know, you helped kind of carry the pen on this piece of legislation because of some of the issues you guys were having on Kauai. And the way that this bill is written, it's for 201H projects specifically. Under the 201H program for Kauai County, are there any deed restrictions for 201H program for housing?

So the Kauai County housing, Kauai County has a housing policy that restricts, defines affordable housing in much the exact same way as 201H does. So the Kauai County's policy in developing both single family and multifamily homes is that the homes are provided to tenants or tenants under long term ground leases so that we maintain the perpetual affordability of the homes. And we serve, broadly speaking, households, resident households who make 120% of area median income and below, with a focus primarily on 80% and below households. It is very similar to the same state restrictions in 201H.

Has there been any exploration of expanded deed restriction as far as meeting the constitutional mandate for the betterment of Native Hawaiians?

Well, I can offer that Kauai County was the first county, I believe, that entered into a memorandum of understanding with the Office of Hawaiian Affairs that spells out whenever county, whenever the county develops affordable housing on ceded lands, for example, which has not happened to date. But if it were, as spelled out I believe in the Constitution or Supreme Court precedent, 20% of the units developed would serve Native Hawaiians.

Just 20%?

I believe that's the constitutional mandate as defined by the Supreme Court.

Okay, thank you, Chair. I yield.

Thank you. Further questions? Okay. Representative Hussey.

Thank you. Mr. Roversi, can you stay on, please? So I'm sort of struck by the broad nature of this proposed statute, of this proposed measure for a very narrow purpose. And I'm curious if you've given any thought or in your conversations about this bill to other ways of achieving your stated policy goal of developing affordable housing that does not require just on a wholesale basis taking these lands out of the public trust.

Because the public trust, as you can tell from the testimony, is something that is a very important issue for Native Hawaiians. And in fact, I mean, if I had my way, frankly, I would go the other way and take all the other exemptions out of the current statute. Like you were mentioning.

There's 16 other exemptions for the public land trust. I would want to take those out and so that we can maintain the cohesiveness of the entire land trust. So I'm curious, Mr. Roversi, if you've thought about other ways of achieving your goal that doesn't require further removal of lands from the trust.

Well, respectfully, to clarify, I don't believe that this bill takes lands out of the public trust. The definition of public land within HRS 171 simply refers to the management of property by BLNR as opposed to another state entity like DOT or the Department of Education. The same fiduciary obligations remain and the land remains within the public trust.

It has to, broadly speaking, simply affects the entity that oversees the land and has to apply those same obligations. So I don't think, I don't necessarily agree that this would remove the land from the public trust. That said, there were some discussions within BLNR about trying to change lesser regulations simply to remove the procedural burdens that we ran into when we attempted to develop the lands that were set aside to the county. For a little backstory.

The the Governor did set aside already 10 single family lots in scattered subdivisions around Kauai that had been had been effectively abandoned. There's no, there's no homes on them. They're in existing subdivisions. Set them aside to the county in the hopes that the county could productively develop affordable housing on those lots because the state didn't have the capacity to do so or to manage them.

And procedurally, when we attempted to do so, the existing requirements for BLNR approval of every action that took place on the land, whether it was a building permit application or a right of entry agreement or an easement for a water line, make it procedurally impracticable for the county to develop the property as affordable housing if BLNR, if procedural BLNR approval is required at every step along the way.

So I think the goal of this was to assist in removing some of the red tape the BLNR level approvals, leaving in place, as I understand it, the same public trust obligation in the eventual use of the land. As I mentioned, it is never sold. It is never alienated. It is used for the public purpose of affordable housing for residents of Hawaii, including native Hawaiians.

Yeah. So I'm glad to hear that there at least is a conversation about addressing the kind of the red tape within BLNR. I would encourage you to please continue working on that angle. And because the part that I'm concerned about is the change in HRS 171-2, which is the definition of public lands.

That's the piece that I'm referring to about taking it out of the, about taking these affordable housing lands out of the trust. And thank you very much, Mr. Roversi. And then I just wanted to address some of the other testifiers who specifically brought up 103-150, Public Law 103150.

I'm really glad that you've done that because I'd like Hawaii, I would like our statutory body within Hawaii to get to the point where we think of Public Law 103150 the same way that our compatriots in Aotearoa think about the Waitangi Tribunal or the Waitangi Treaty, where it becomes like another constitutional document. So thank you very much. Thank you, Chair.

Okay. Thank you for the questions, Members. Okay, thank you. Going to move on to the next. Bill, House Bill 1410, HD2. Vice Chair.

First up, we have HHFDC in support. Thank you. We have DLNR providing comments.

Aloha. I'm David Penn, the Legacy Land Program Specialist in the Division of Forestry and Wildlife in dlnr. And you have the department's written testimony that encourages a return to the original formula of the 2005 act that created the Land Conservation Fund, which is 10% of conveyance tax revenue, straight up and uncapped.

The spotlight in housing is growing stronger. This is a housing Bill, and that's great. However, as noted by some of the other testifiers, there's a corresponding need for resource protection, open space, and public access. That is what our mission is about in the Legacy Land Conservation Program.

And underlying that testimony are three key realizations that may not have been completely evident in the written testimony and that we ask the Committee to consider. First, the current spending authorization for the Land Conservation Fund is around $9 million.

This is the highest ever, but it's still not enough and to accommodate statewide deeds and the program demands from our customers and constituents.

Second, however, the formula proposed in this Bill would not sustain the current spending ceiling in future years unless conveyance tax revenue went back to levels above $100 million, which has really only happened once in the last 20 years of our program that I've been tracking it.

And so without a substantial revenue boost, there's not much incentive for us to request a higher spending ceiling, even though we want to do that. And third, as it stands now, under the current formula in the statute, our program revenue will be Limited to $5.1 million.

And by 2027, we will only be receiving that revenue as it comes in during the year and even sometimes after the end of the fiscal year. And that is only about half of what our current appropriation is. And that's all that we would get in revenue wise.

And we will have spent down the rest of the unencumbered cash that's currently in the Fund. So I just wanted to make sure that you are clear on those points and mahalo for listening. Please review the situation carefully and I can provide more detailed information as necessary.

Thank you. We have the Office of Planning and Sustainable Development in support. Thank you. We have the Department of Taxation with comments. Thank you. We have Hawaii Children's Action Network speaks in support on zoom not present. We have the Hawaii Realtors in opposition. Thank you. We have Hawaii Applesee Center for Law and Economic justice and support.

Aloha Chair, Vice Chair and Members of the Committee. Susan Lei with Hawaii Appleseed and we are standing on our written testimony in support. But I just also wanted to highlight a couple things from our testimony here. Mostly it's that we really need to modernize our conveyance tax that hasn't been updated since 2009.

But the rates are completely outdated and the proposed rates that are in there now is a marginal tax rate. So it's very much structured like income tax and it prevents the cliff defect where a small increase in the sales price would not trigger a massive increase in the tax Bill that's required.

The rates that were developed were very thoughtful. For a majority of Hawaii residents and especially owner occupants, the sale of the home, the price of the tax for your sale of your home is going to remain quite neutral.

Whereas the proposed rates here really increase the rates for luxury properties and those that are for from non owner occupied residents. And that's I think at the mark of like the 2 million mark for the non owner occupied residents.

And with the proposed Bill, the funds are going 10% into the dwelling unit revolving Fund and then 8% into the supportive housing special Fund. And that's creating a direct link between increased market activity, potential inflation, housing price inflation because of luxury investment with the development of affordable housing.

So it is a good balance and something that we desperately need. And then on top of that with the rates. zero yes, in General we do see that these proposed rates increasing General revenue by one third of what it's creating now. Thank you.

Thank you. Next we have Catholic Charities Hawaii in support.

Chair, Vice Chair and Members of the Committee. I'm Betty Lou Larson with the Catholic Charities Hawaii. We support this Bill because conveyance tax is really the most valuable tool to create affordable housing in a Predictable manner since every year you more or less can predict what's going to come.

We feel at this time with our deep housing crisis to update. This hasn't been updated since 2009. And the reason why we really support it is because it leads to the creation. We think DERF is a real barrier. I'm sorry, the infrastructure is sometimes a real barrier to creation of more housing, especially affordable housing.

And so the 10% in this Bill that would go to DERF would lead that predictable funding to the infrastructure creation. We also support the 8% that goes for permits afforded housing. We know this is a new idea. You're probably, some of you might just be learning about it, but this is really in need of the state.

This would provide permanent housing for people who really can't live independently. Put some a homeless person in a housing. They may not be successful or they probably won't be successful. So that percentage permanent supportive housing has been, has shown to be very successful. What does that mean?

You need the development, of course, but you also need the operation, the rental subsidies and most importantly the social services that really keep the this successful.

And the only way to do that and not be a high risk project for counties and developers is to have some kind of a dedicated source that says okay, in five years, yes, there will be services there.

You don't have to go every year we do for other homeless services, say, well, give us the money for homeless services. That won't work when you have a project. No one's going to invest in a project if you don't know in five years you're going to be able to actually support those people.

So we feel that this 8% dedicated to the supportive housing special Fund is a great way and it goes along with other bills that are coming into the Legislature for this development of this supportive housing. So we appreciate your listening and I'd be happy to answer any questions if you have them. Thank you.

Thank you. Next we have Tax foundation of Hawaii with comments on zoom.

Good morning Chair, Vice Chair, Members of the Committee, Tom Yamachika from Tax foundation of Hawaii. We, we think that the restructuring of the conveyance tax system to become a marginal rate system like income tax is a, is a reasonably good idea. We are not happy with the cliffs that are there in the current system.

We also have concerns about the special funds that are being created and we do not subscribe generally to the idea that you need dedicated funding sources because it really takes away from the constitutional required rule of the Legislature. Happy to answer any questions. Thank you. For the opportunity to testify.

Thank you. We also received testimony with comments from Department of Budget and Finance, as well as five organizations and eight individuals in support, two organizations and two individuals providing comments, and one organization and one individual in opposition. Is there anybody else in the room wishing to testify? Anybody on Zoom questions?

Members? Okay. Representative grand for Appleseed.

Hello. You mentioned that we can expect to. See. Projected collections go up by a third. Do you have a dollar amount for.

Believe don't have that dollar amount on me, but we definitely do have it on hand. No, I'm sorry, I don't have the dollar amount on me, but I can get you the actual number afterward.

Thank you. Thank you.

Thank you for the questions.

For land conservation.

David Penn for the Division of Forestry and Wildlife.

Thank you for coming over today. Can you maybe explain how the Land Conservation Fund leverages its monies to create open spaces in perpetuity to the Finance Committee here? Can we just broaden that a bit?

Sure. Well, it's a grant program that provides grants to state agencies, counties, and nonprofit land conservation organizations. It's a hyper-competitive application process on an annual basis. And for the acquisitions by state agencies, matching funds are not required. But the matching funds are one of the factors that our Legacy Land Conservation Commission and the Board of Natural Land and Resources look at during the grant approval process.

And typically the state agency acquisitions, especially with DLNR, have the highest levels of leverage because of all of the federal funding that we've been able to access for big land acquisitions to create new sections of forest reserves and so on, and hopefully that will continue.

Then for the other counties and the nonprofits, there's a 25% matching fund requirement for the total project costs. And again, that's the floor. That's a minimum. But typically an applicant who really knows what they're doing will put together a deal that has much, much higher levels of matching funds.

I think this year we have one of our projects on the North Shore that's going to the board for approval that has over 70% matching funds for some open space over by the Marconi Point area. And so that can come from private donors or through pass throughs of federal grants that come through the Division of Forestry and Wildlife or another agency. And also the counties have parallel programs. Each county has its own open space fund, which then we can match each other on these transactions.

Am I correct that those lands are then, in perpetuity, kept as open space, or can they be developed?

Well, it depends on the nature of the transaction. There's deed restrictions at the federal level, there's deed restrictions at the state level, there's deed restrictions at the county level. And typically, if it's a county or nonprofit land acquisition, the board will also require that a conservation easement be conveyed from the new owner of the property to the county. And that's another big source of the matching funds from the county open space.

And so the terms of that conservation easement are negotiated between the landowner and the future easement holder. But generally they limit uses of the property beyond what would normally be legally available. So one of the most common ones is no further subdivision of the property or limitation on the number of structures, residential units, the footprint of those, and things like that.

Okay, thank you for kind of opening that up. Thank you. No further questions.

Thank you. Further questions? Okay, thank you. We're going to move on to the next bill, House Bill 1409, HD 1.

We have HHFDC in support. Thank you. We have the Office of Planning and Sustainable Development in support. Thank you. We have Hawaii Appleseed Center for Law and Economic Justice in support. Thank you. We have Holomua Collaborative in support. Thank you. We have Housing Hawaii's Future in support. Thank you. We also received comments from the County of Honolulu Department of Planning and Permitting, support from four other organizations and two individuals. Anybody else in the room wishing to testify? Anybody on Zoom?

Questions, Members? Okay, Vice Chair.

I think this is for Office of Planning and Sustainable Development, please. In this bill, for the City County of Honolulu, TOD as defined in this bill, is that only rail. Can it be interpreted as only rail?

It could be transit hubs such as Alapai Station, Kalihi transit station.

So hubs also. What about just bus stops? Like bus transit stations?

Not just bus stops because then everywhere would be TOD. Right?

Yeah. Okay. Do you see the County of Honolulu's testimony on cleaning up some of the language?

I did not see it. I can take a look once I get back.

Okay. But the current definition, even without any adjustments, only refers to the rail line, the rail transit stations, and the two bus transit stations. Or how many... How many... I guess how many transit stations with the bus on in Honolulu County-Ish?

There's a few more, you know, like Hawaii Kai has one. There's down in Waipahu.

Sorry, could you describe maybe what the, maybe I'm not understanding what constitutes a transit station when in relation to the bus system in on this island. Are these, what are the transit stations?

Transit stations. So similar to the rail stations is where you can get off, transfer into different multimodal transportations.

Okay. So like all the park and rides and those kind of situations and then I mean Alapai is obviously a bigger one. Okay, so those are all be included in this definition of TOD?

Right. And then it kind of transfer to our neighbor islands as well because they don't have the rail obviously. So kind of try to do like a catch all where those transit hubs would be kind of defined into TOD areas.

Okay. Yeah. My concern is just where we're going to say we're going to build density on Oahu that may or may not be part of the county's plan.

Right. TOD as it stands today is generally just the rail stations, but it could expand into those transit hub stations.

Yeah, that's my concern.

But you know, each neighborhood is different, so.

And there's no... and I guess based on the definition. And since only Oahu has a rail station, that's why we can't limit it to rail for Oahu.

Right. We kind of want to see the bigger picture here. But it's all dependent on general plans. Right. And so each neighborhood characteristics are different. We're not trying to put high density where surrounded by low density.

Okay. Okay. I think that answers my question. Thank you. Thank you, Chair.

Thank you. Further questions. Thank you. Moving on to House Bill 1009, HD1.

First up, HHFDC in support. Thank you. We also received testimony from DBED in support. That's all the written testimony received. Anybody else in the room wishing to testify? Anybody on Zoom?

Okay, Members. Questions? Next, House Bill 1408, HD 1.

First up, we have HHFDC in support. Thank you. And we have the Office of the Attorney General with comments on Zoom or in person.

Aloha, Chair, Members of the Committee. Hokulei Lindsey, Deputy Attorney General, offering comments. In House Standing Committee Report 731, the Committee on the Judiciary and Hawaiian Affairs called attention to page 4, lines 19 and 20 of House Draft 1.

Specifically, the language or the phrase, and I quote, notwithstanding the provisions of the Hawaiian Homes Commission Act, as amended. The Committee suggested that the Department of Hawaiian Homelands provide this Committee with a legal opinion as to whether that language should be retained or not. In response to that report, we do not believe that the language should be retained.

There is no conflict created by this bill with the Hawaiian Homes Commission Act for three reasons. It does not encumber Hawaiian Homelands. It does not impact any of the loan funds or the trust funds in the Hawaiian Homes Commission Act. And finally, the Hawaiian Homes Commission Act does not limit DHHL's ability to use other funding sources. I'm available for questions. Thank you.

Thank you. Next we have the Department of Hawaiian Homelands in support.

Good morning, Chair and Vice Chair and Members of the Committee. I'm very supportive of this particular bill, primarily because of the challenges regarding all the different projects we're doing regarding the vertical construction. What's nice about this particular bill, it kind of solicits as well as encourages the private sector to put up their private funds through this 184A program.

So with the 75 million per year, that provides collateral that's required, as well as, more importantly, gives some security as well as assurances to the private sector that It'd be okay to participate. Unfortunately, the 184A program has been very minimal at best throughout the history of this particular program created in 2000.

By doing and making this change and the flexibility and the use of the funds, will be very, very, I guess, a good way to generate more money for the vertical construction, which really goes to home ownership for the people on our wait list. And as we all know, we have over 29,000 on our wait list, so this is something we really need. Thank you.

Thank you. That's all the written testimony we received on this measure. Is there anybody else in the room wishing to testify? Anybody on Zoom?

Questions, Members? Yeah, Representative Lee Loy.

Attorney General, I think you may have answered it, but I just want to walk it out one more time. You know, the mission of Hawaiian Homelands is to provide housing for Native Hawaiians. And here's a great opportunity, right, where we're braiding a lot of funds. I think you might have answered it. Because that's been my hiccup is how do we take funds to build housing for Native Hawaiians, like a very restrictive group.

Help walk that out for me, because that's constantly a concern that, we have general funds that are incredibly flexible, and then they kind of get sequestered for a very defined beneficiary list. And how we're not in conflict with Housing Act, just some of the other federal programs where we use money to braid for housing.

So the Hawaiian Homes Commission Act predates the federal Fair Housing Act, and so the Hawaiian Homes Commission Act is actually not subject to fair housing. But the DIRF fund, right, it pulls money for infrastructure and housing development specifically. And so this bill allows, would allow the Department of Hawaiian Homelands to use those funds, which in and of itself does not conflict with the parameters of the Hawaiian Homes Commission Act.

And then housing is complex, right? So if we took their funds and put it straight into infrastructure, we put sewer, you know, roads, stormwater. Great. But the housing unit can still be for beneficiaries of Hawaiian homes.

It would be... My understanding is that it would be, essentially the Department is using it as collateral. Right.

Got it. Thank you. Thank you, Chair.

Thank you. Further questions? Okay, thank you. We're going to move on to House Bill 606, HD 1.

First, we have the Department of Hawaiian Homelands in support.

You know, as I was sitting here. Excuse me. Kali Watson for the Department of Hawaiian Homelands. Chair, Vice Chair, Members of the Committee. I was going to start off by saying, you know, as I was sitting here and listening to the different speakers, it came to my thinking that I can appreciate the frustration and the anger and the, you know, just efforts to protect the land trust.

And as we all know, this land trust, especially as it relates to Hawaiian Homelands, is somewhat suspect in that how it was set up in relative to the various ranch as well as sugar plantations way back in 1920-21 was trying to limit homesteading. And so when we move forward, and thank God for Act 279, where the Legislature stepped up and really made, to me, a valid and appropriate and justified effort to try and address the wait list.

But the thing is, as I've testified previously, we have over 29,000, and that particular wait list is going to grow significantly in the coming years. And so I've met with several of you. I've met with the different finance as well as the different funders as well as banks, et cetera.

And it's a real, real challenge, especially in the environment we face, especially with the federal situation as well as, I guess, the challenges we have with the reduction in a lot of the funding for different social programs or what have you. But there remains one very blatant situation relative to this program is that we have, and the Hawaiians unfortunately make up a lot of the social ills as well as incarcerated. And, you know, we can just go on and on regarding the challenges facing the Native Hawaiians.

But this is a bright light in that we're taking valid steps to create housing for our beneficiaries. You know, with this initial $600 million, we have over 28 projects that we're moving forward on. We're looking at doing them in phases. We've changed the way we approach it with the paper leases, as well as leveraging the financing using tax credits, bonds, the Rental Housing Revolving Fund, the DIRF, and relative to the previous bill, trying to get innovative in trying to address the needs. But the fact is we need more funds. You know, and I've.

There's discussions regarding using the TAT and, you know, other funding sources as a steady source of income. That's great, but we still, we still need a whole ton of funds. You know, just 29,000, we need $6 billion. 600 is a nice step in the right direction, but it's not enough. So I truly implore you to consider this bill as one means of financing and addressing the needs of the people on our waiting list.

So with that, I'd, you know, suggest that you consider this as part of the various financing options that are available to you to use not only leveraging, but making a dedicated revenue stream as well as a one time or a fiscal approach where funding is project based. We did submit testimony regarding our phase two. We broke it down how we can use the 600 million for the second tranche of funding throughout the different projects in our list of projects that we're moving forward.

And let me just also say that, you know, the Department is moving forward in a very, very aggressive manner, and we're trying to address a situation that was reflective of the Kalima case where a lot of our beneficiaries have died waiting for a homestead 40 years, 50 years, and beyond. So this is one way to address the immediate needs. And I promise you that, if you continue to fund the Department, the Department will move forward in a very, very aggressive way to get these projects done.

We've entered into developer agreements with a variety of developers that are very familiar with the change in approach, where we're not just doing turnkeys, we're doing LIHTC, or low income housing tax credits, with option to purchase as well as owner build as well as working with Habitat.

So you know, the testimony regarding different funding approaches, the ADUs are very other approaches, they all work for the Department. So I'd just like to end by saying that, you know, this is an opportunity of one of many that can help move the program forward. Thank you.

Thank you. We have Ka Lahui Hawaii in support.

Aloha, Vice Chair. I'm sorry. Chair Yamashita and Vice Chair Takenouchi and Members of the House Committee. Ka Lahui Hawaii supports 100% House Bill 606, which allocates 600 million to the Department of Hawaiian Homelands providing long overdue housing for Kanaka Maoli.

Founded in 1987, Ka Lahui Hawaii is a Hawaii nation created to address Hawaii's long history of colonization and to ensure that Kanaka Maoli secure their rights of self determination. The State of Hawaii has a clear obligation to the Kanaka Maoli community.

When Hawaii became a state it accepted the Kuleana to administer the Hawaiian Homes Commission Act, which was meant to return Hawaiians to our ancestral lands. Yet today, 29,000 Kanaka Maoli remain on the wait list and many have waited for decades. People like my grandmother have died on the list.

This housing crisis is only worsening as the Kanaka Maoli population continues to grow. According to the 2020 US census, the total Kanaka Maoli population has already reached 680,000, with 53% now living outside of Hawaii. This number now exceeds earlier projections outlined in the 2008 Kamehameha Schools Report, underscoring the urgent need for housing solutions.

Our population is growing tremendously. Housing is going to be an issue for Kanaka Maoli. Without adequate housing, the DHHL wait list will continue to grow. 50. It is my understanding that 50 families are added every month to that list. So it continues to, it's just going to get longer.

And this ongoing failure to address the list historically for the Department of Hawaiian Homelands, and I'm not saying it's kali, it's been an ongoing issue since 1920 that Hawaiian lands and Hawaiian culture fuel the state's largest industries. According to the Department of Land and Natural Resources, approximately 90% of state owned lands are ceded lands.

So, you know, the state does have not just a responsibility legally, but also like a moral responsibility to address housing for Kanaka Maoli. And it's not just... Yeah, so it's not just about housing. It's about fully funding Department of Hawaiian Homelands and fulfilling the state's responsibility. Mahalo.

Thank you. Next we have Mālama ka 'aina, Alfred Medeiros, in opposition.

Aloha mai kākou. Alfred Medeiros. I'm in full support of this. Even though me and DHHL don't have the best terms, you know, I mean. I know, I know them from the Department of Hawaiian Homelands. Right. And I'm not too fond of leasing land to Kanaka Maoli and Hawaiians. You know, many of my ohana passed away on this list.

You know, the list would have been 29,005. You know what I mean? My grandparents passed away, my dad, and my two uncles passed away while waiting on this list. Because of the blood quantum and everything too. I've always head butt with this.

But I support this because what is Hawaii without Hawaiians? Would be like the rest of the place. It'd be California, New York, and everything else. People come to Hawaii because of us Hawaiians, not because of the paradise that they see around here. It's because of the aloha that we give because we are the head of this tourism industry, even though we get treated like peasants in around. You know what I mean? But we need to put our people into homes, you know, onto land.

You know, I'm not too fond of building buildings where, putting people inside where half the building going to developers or whatever it may be. I'd rather see Kanaka back on their land. You know, I had to move back to my home of Waianae two years ago because where I was living at was getting way too expensive.

Everything is going up, inflation everywhere. So we got pushed out of our nice places living in town, back to the countryside, which is better though, because 90% of us out there is Kanaka Maoli and Hawaiians. But that's what they do. They push us into areas where we cannot afford.

And hopefully with Kali Watson, you know, heading this nowadays, that we change the way we see things in Hawaii, that you only see Waimānalo, Waianae with Hawaiians, that you see Hawaiians around the urban areas as well, you know. In Kaneohe too, in Kailua because that's where we had plenty of Hawaiians before.

I know it's kind of different nowadays, but we had a lot of Kanaka that used to be in those areas, you know. And I would love to see our Hawaiians come back home to something, whether it's an apartment or a house or whatever it may be. Because like I said in the beginning, what is Hawaii without Hawaiians?

That's the main thing right there. We need our people here. We don't want to see us only in museums, only inside of these, you know, books and everything. We don't want to read about us. We want to be here. We want our families to continue to live here.

The traditions, the legacy of us to carry on that our kupuna instilled in us. So I support this. I don't know why the thing says opposition and why it says Mālama ka 'aina. It's Kuleana Ka Aina. I'm not too what's going on, but it is what it is. And I support HB 606 and I hope you guys support it too, as well. Mahalo.

Thank you. Apologies for the errors. Next, do we have Michele on Zoom in support? Not present. Okay. We also received testimony in support from two other organizations and 26 individuals, all in support. Anybody else in the room wishing to testify? Please come forward. Just state your name and position for the record.

My name is Shane Pale. I actually sent a letter requesting for the bill to be heard. So mahalo, Chair, Vice Chair. Thank you so much. You know, I don't want to read my testimony. I'll stand on my testimony. I just wanted to mention just one thing, is that, you know, I've been involved over the years in the sovereignty movement in the community. And at least 20 years ago, we had this discussion about the diaspora and what that would mean for Hawaiians in Hawaii.

And again, last, you know, we saw the Samoans, right? At one point, maybe 20 years ago, more Samoans outside of Samoa, living out of Samoa. You wonder, what is that all about? Right? Very different, though. Very different. The Tongans about 10 years ago, right. Now, Hawaiians last year.

So I think in terms of when you look at building a lahui or building a nation of Hawaiians. And again, with what brother said, it is true, without Hawaiians, you won't have a Hawaii. I think just looking at our culture, it's been exploited by the tourist industry and the way it becomes a commodification. The whole tourist industry is really built on Hawaiian identity culture. That's the way they lure tourists to Hawaii. They have done that since they started.

So I think just looking at the diaspora itself, it just really hurts when you think about Hawaiians having to leave, not having a choice at some point. I've interviewed a lot of Hawaiians who actually some of them did get some of the lots or Hawaiian Homelands on the Big Island.

Younger families who never, ever thought they could ever afford a house. They do have some issues right now with their management. But I did interview a few of them and, you know, young Hawaiian families, never thought they could ever afford a house.

And I think with a lot of the direction, the way the Department is going, I just really want to highlight that because it is something that I totally come to support. Over the years, I think the Department has been marred with historical things that has made it really impossible for Hawaiians to deal with. But I think the direction has changed.

You know, the old adage where Hawaiians coming off the list can't afford a mortgage, they've been put back on the list, and then they die on the list. That is no longer is what's going on. I think Kali has a very strong rubric, whatever he follows, and he's really putting these developers for the 20 or so developments that he does have going on under a tight rubric that they need to meet all these different criterion. One of the biggest one is that you can't turn Hawaiians away, right?

There's LIHTC monies, there's rent to own. I think a lot of these Hawaiians I talk to, the rent to own is really a big one. It's really helping a lot of younger Hawaiian families to stay here because, again, if not for that, they would be living elsewhere outside of Hawaii.

So I think just the diaspora, you think about it like, how do you address the diaspora of Hawaiians leaving Hawaii? I think that this bill, what that means for me and my family and people that I know is that this is one way you can truly meaningfully address that diaspora.

Because, you know, you feel very helpless and very overwhelming to even think about Just with the way the economic status and the economic climate is. So I think, again, this bill is very important in terms of keeping Hawaiians in Hawaii. So mahalo nui, and I hope you support this bill at the very end. Thank you very much.

Thank you. Anybody else in the room? Oh, please. Could you say your name and position for the record?

Hi. Aloha. Madelyn McKeague on behalf of the Council for Native Hawaiian Advancement. We submitted testimony in an earlier Committee, and it slipped my mind for this one. So just wanted to voice that exact same support for this bill on behalf of the Council. Mahalo.

Thank you. Sir, please come forward. Just state your name and position for the record.

Aloha. My name is Willie Keola Robello, and I stand in full support of this bill. To come after a few brothers and sister that came before me is an honor. And, you know, just for a chance myself would I believe as a light at the end of tunnel for be able to hold, to own or hold a piece of land myself. I feel it's still a dream that I'll never achieve in my lifetime. But I do, honestly, you know what? I beg for you guys just to hang on like what the brother said. No Hawaii, no Hawaiians. On top of that, think about it.

You're not going to have Hawaiians. What other people truly show aloha or embody that aloha spirit and live it? Not as a, not as a commodity, not as a thing to sell or to perpetuate in any other way to gain anything in return other than that same aloha or the love that we've tried to show to anyone.

I personally worked in the tourism industry for most of my life. 14 years out of my life. Right out of high school, I was a diver. I dove Japanese, Korean, and Chinese tourists. 14 years out of my life. I'm the only person that I know out of the area of my expertise.

And what I did in Kāneʻohe Bay, I never lost a customer. I never lost a customer. My challenge to myself was always to make, no matter who this person was, no matter how they looked at me, no matter what they understood or what they were looking at, I was gonna make them smile.

I don't care if it was a little old man that was upset or kids or somebody that never even would be able to understand what aloha spirit is or where I've come from. And that never sways my mind in any way. Because just like my grandmother, my great grandmother before me, my big grandpa and grandma, aloha is a lifestyle. You live it, love it, and no matter what, it has to be perpetuated, as well as pono. But again, I stand in full support of this bill. I think it'd be a beautiful thing.

I've had a lot of family members from Molokai. My family's originally from Big Island, Kohopis, and I hate for say it, just like the two brothers that came before me. I've known too many people that died waiting on that list. And again, I beg you guys, do the right thing.

If you guys see it as an opposition to do the right thing for the people, the land that we all, the island that we all share. Because we're all on an island, helping a little bit to anybody else that's in that need. Always comes back, always come back one way or another. But again, I won't take up any more of your time. Mahalo for hearing me out. And again, I stand in full support of this bill. Mahalo for your time.

Thank you. Anybody else in the room? Anybody on Zoom wishing to testify?

Okay, Members, questions? Okay, thank you. We're going to move on to the next Bill. House Bill 833 HD1.

We have HHFDC in support. Thank you. We have the Council for Native Hawaiian Advancement in support. Thank you. Do we have Lahaina Community Land Trust and support on Zoom? Autumn Ness.

Oops. Aloha, everybody. Thank you so much for the opportunity and for bringing this Bill up. I want to share some quick examples of why this is so important and a couple of details about how to ensure that this Bill is actually useful in practice. My name is Autumn Ness.

I'm the Executive Director of the Lahaina Community Land trust. In Lahaina CLT's case, a large portion of our startup funding was county funds. We got $15 million of a funding package from the County of Maui. But all of it is reimbursable, meaning we have to spend the money up front and then get the money reimbursed.

That means we had to spend months, literally months people piecing together an internal line of credit from private funders so that we don't have to pay market rate interest on a loan and negotiating a below market line of credit with a bank.

But that required us to find a larger partner to back our line of credit and buy the interest rate down for us, bringing our interest rate down to 2%, which is really low, but it's still money that won't go toward our work. And all of that equaled missed opportunities and parcels. While we were doing this.

It has taken so much time and effort and energy off of our critical work in Lahaina. In General, community land trusts, the work we do is really expensive.

The price per unit when you're talking about land and homes is so big that the cost of traditional capital to do even a short term loan is really prohibitive and has a significant impact on the funding we have to do our work. So this Bill is great.

A couple of details, because details matter for acquisition, if this line of credit is used to acquire land, depending on the end funding source, it may take months to get a reimbursement in funds. And for construction, the funds are normally returned to a CLT upon the sale of a home. So that can be over a year.

So if you can clarify that the terms of this repayment can be like two years plus some of these cases, that would really help. Also, land trusts need a clear path to access the money at the speed of real estate because real estate moves fast and the state moves slow.

So if there's like a pre approval process for organizations so that things can move quickly and give the organizations confidence to move. I just want to clarify that the beauty of community land trusts are that it's a one time investment for permanent affordability.

In the case of Lahaina Community Land Trust, if we do our work right, 20% of Lahaina someday, in 10 or 15 years, will be protected and affordable forever. I'm hearing all of the testifiers today talk about affordable housing.

The answer to this crisis lies in redefining the profit driven nature of housing itself and creating new and secondary regulated markets that protect our housing stock for our residents and are not available to investors ever.

We're not going to fix housing as long as we all are committed to upholding the idea that the purpose of housing itself is to build wealth. It's not a crazy thing. It's happening in communities across the nation and it's the foundation of why community land trusts work.

So thank you for supporting this Bill and any Bill that puts lands off of that speculative market.

And I would be remiss in not mentioning, in the spirit of solidarity that I, while I'm a huge housing advocate, a Bill to start transferring public crown lands to counties who have shown incapable of providing the kind of housing that our communities need is not the solution on so many levels, not the least of which is that's land that we don't even have rights to.

So thanks for your support. I'm here to answer any questions if you have them.

Thank You. We also received testimony and support from four other organizations and one individual. Anybody else in the room wishing to testify? Anybody on Zoom?

Okay, question Members. Okay, thank you. We'll move on to the next bill. House Bill 740 HD2.

First, we have HHFDC in support. Thank you. We have the Department of Taxation with comments. Thank you. We have the Hawaii Realtors with comments. Thank you. We have Hawaii Appleseed Center for Law and Economic justice in support.

Hello, Chair, Vice Chair, Committee Members Susan Le with Hawaii Appleseed. And we are standing on our written testimony in strong support of this measure. Just again, wanted to highlight a couple of things on our testimony for the Committee.

Largely the fact that these deed restriction programs, especially for accessory dwelling units, creates a secondary market which shields it from outside investment. Right. So these deed restricted homes that are built with this program through the ADU financing can only be rented or sold to local workforce. Local workforce. And that's incredibly important to really stabilize our housing market.

I just want to remind people that the median income for a home here in Hawaii is double. To be able to afford it requires double the median income here. And that's because the housing costs are driven by outside demand and wages that our local wages aren't keeping up with. And in addition, the competition gets even fiercer.

I believe in the two. Actually, I have it. In the 2019 Housing Planning and study that the state commissioned, it had shown that housing that non residents purchased in the state was at a cost that was 50% higher than what locals were paying. So essentially they're just driving up costs and outbidding our local market.

So to shield our residents through a program like this, and especially with adus that are usually smaller in nature, require less land, can be starter homes, allow for kupuna to age in place with people surrounding the area and preventing overcrowding of large families. This is a benefit to all of our community. Thank you.

Thank you. Next we have Hawaii Community foundation in support. Thank you. We have the Council for Native Hawaiian Advancement in support. Thank you. We have Holomua Collaborative in support.

Aloha Chair, Vice Chair, Committee Members Josh Wish for Holomua Collaborative. For anyone who doesn't know about our organization, our basic mission and focus is to advance public public policies that help keep all local working families in Hawaii by making sure they can afford to stay.

This bill is part of our 2025 policy agenda because it's innovative voluntary income blind initiative that we think will help keep local working families in Hawaii for all the reasons that Susan from Appleseed just laid out the mechanics of how the deed restrictions in this bill work are nearly identical to what's In House Bill 739, the combined homes program, which you're going to hear next.

The the key difference between the two bills is really that for anyone who receives funding in HB 740, that funding has to be used to build an ADU, whereas for 739, it's more flexible. So I'll Reserve most of the rest of my comments for 739. I'm here for any questions. And thanks so much for hearing this bill, I hope you support it.

Thank you. Next, we have AARP Hawaii in support. Thank you. We have Catholic Charities Hawaii in support. Thank you. We have Housing Hawaii's Future in support.

Thank you. We have the Tax Foundation of Hawaii, with comments, on Zoom.

Yes, good afternoon. This is Jade McMillan, on behalf of Tom Yamachika for the Tax Foundation of Hawaii. We will stand on our written comments, which are some technical comments with an amendment. Thank you.

Thank you. We have—we also received testimony from the City and County of Honolulu Office of Housing in support. Six other organizations in support, as well as six individuals, and one other organization providing comments. Is there anybody else in the room wishing to testify? Anybody on Zoom?

Questions, Members? Represent Kusch, followed by Grandinetti.

Thank you, Chair, maybe Dean—I'm sorry to pick on you. It's not bad. It's just a question. You're—about planning purposes, Realtor Board brought up, you know, a deed perpetuity on a single-family residence. I mean these all used to be single family residents out here.

And I'm just wondering how that plays out decades forward and how that might be mitigated in a perpetuity deed restriction.

Yes, good, good question. What would happen is, let's say in 50 years, the home were to rebuilt—to be rebuilt—an ADU, the homeowner, at the time, would have to abide by the restriction. So, they would have to abide by the restriction that it has to be occupied by someone who is working in Hawaii or meets the other criteria.

And of course, also precludes other uses of the land. It couldn't be converted to a commercial use, for example.

Yeah, I just thinking that like in Hilo, we've pushed some housing into industrial area, which is a natural course of the business expansion in town, but that would—this would—preclude that happening.

Yes. So, unless there's a mechanism to relieve the property of the deed restriction.

Okay, any, any suggestions you see in something like this? I know you haven't really.

Perhaps it could be a mechanism for the county to relieve the property of the deed restriction, if county feels that it's warranted.

Okay. Like under a rezone or something? Okay. Thank you. No further questions.

Thank you. Representative Grandinetti.

For Holomua Collective. I'm really supportive of this Bill and the, the next one coming up on the agenda, but I am wondering if—I know in last Committee, I asked you about the income blind part of the program.

This time I think on this, on the, on the opposite end, can you explain why or if there was any discussion about incorporating affordability requirements or maybe like resale limitations into the deed restriction program? Because I love it and I also think we are making a public investment in someone's private property.

So, I'm curious about, like, you know, squeezing a little bit more out of the program and whether there is some rationale behind not—choosing not to do that.

Absolutely, and thanks for telling me at the outset that you love both of us. I appreciate that. Great to hear. Let me share an answer that I think also might speak a little bit to Representative Kusch, your question too.

So, as I'll mention more when we talk about HB 739, a lot of this was inspired by the Vail Indeed Program in Vail, Colorado. And we spoke with them as we were working on this.

And one of the things where they found success was by keeping it as simple as possible, hence the voluntary, hence the income-blind, lowering as many barriers to entry as they could.

And if I'm remembering the numbers correctly, I think very often they were giving about 15 to 20% of the value of property, as the money that was given, in exchange for the county getting the deed restriction.

What they've seen over time is that you are, to one of the previous testifier's comments, essentially creating two parallel housing markets, as a result of that. And so, in a real way, you're creating that affordability, and through the market essentially, some income restrictions because the homes, as they get resold, typically the value drops by about 20%.

What they saw in Vail was about the amount they gave dropped pretty commensurate to the value of the home. And so, you ended up having, over here, the completely market-driven homes and over here, the ones in the deed restriction program.

And if I can, briefly, Representative Kusch, the way that the bills are structured currently notes that the county owns the deed restriction, which means that it is an asset that they own and there's nothing in the bills right now that actually prevents them from getting rid of it at some point in the future.

So, of course, the hope is that they would hold onto it for a long time and maintain it for a very long time.

But if something happened, whether it was sea level rise or some massive zoning change, under the current version of the Bill, they'd already be able to address that by saying, okay, this is a critical change. We need to release or sell the deed restriction.

Quick follow up question. Do you know how large Vail's secondary market is now?

I would have to check. Do you mean percentage? Let me—I'll check.

Thank you.

Okay.

Yeah.

I don't want to tell you off the cuff and be wrong.

I found a number for Mountain Village in Colorado which is really high. I think like 20%, which is exciting. So, I see the rationale there. Thank you.

Okay, thanks.

Representative Kusch.

Anyone, anybody else?

Go ahead.

Yeah, no, I, I just, I just think about in legislation and not knowing the particulars of if the county can supersede a state law, but just, I, I—just concerned that we have a house with an ADU and a half acre of land and then, in 20 years, multifamily would be a better use of that corner lot and you can't do anything about it.

And so, those are just the concerns. And I just wondered if there's triggers and I don't know if Vail has—I don't have a big background in this. I like the idea. I just worry about unintended consequences and.

If, let me do this if I can, Representative. I have an initial thought of I think what is the answer to that. So, let me give you my initial gut, which is then always a little dangerous and then, let me circle back with you once I confirm it.

But because the deed restriction runs with the land, I believe that even if you then convert the single-family home into like a multi-family lot later, the deed restriction would still be in place. I don't think the deed restriction would suddenly be voided as a result.

I think the only way it would be was if this county, which owns the deed restriction, chose to dispose of it in some way.

Got it. Thank you so much. Appreciate it.

Okay. Thank you. Vice Chair.

For HHFDC, please. How much money are we planning on setting aside for this program?

I don't think that's been discussed yet.

At all?

No.

Why not?

Because, I mean, this is not the only use—this is not the only program that we're using this Fund for. So, how much do you guys anticipate having—putting aside for the counties to run this program?

It depends on how many homes that they're looking at in the per unit subsidy that you'd have to entice someone to place a restriction on their property. And I'm not aware if that has been discussed with each of the counties yet.

Okay, how about just the cost of doing the grants for the ADUs?

A grant for an ADU, again, you know, the cost to construct an ADU can range from tens of thosands dollars if you're just converting a space within a home, to several hundred thousand dollars if you're building a new unit.

There have been proposals that it could be $50,000 to incentivize a homeowner to build an ADU to cover the permitting costs and pre-development work.

Okay, so, and then, also, it would be both costs, right? With this Bill, it would be the $50,000 or whatever grant for to build the ADU.

And then, the county would still need to negotiate the cost of purchasing the deed restriction, which I guess by the numbers that were given could be what, like $200,000, 20%, of the value of the property. And this is what—and all these costs are going to be coming from.

Right. The matter of determining the deed restriction value has not been settled. It could be a percentage of land value or potential of total assessed value, construction cost of the ADU.

Okay. But I guess none of that discussion has happened yet about how if we're going to cap what we're going to be able to do with this Fund, or like for this program, or how much we're going to allocate, or how many we're going to let counties do every year at this cost.

My understanding is that the funds will be given to the county for them to administer and we'd work with the counties on determining a standard methodology to determine the value of the deed restriction, so that it's consistent across the counties.

Okay. I think it would be more helpful for us to put some of that in statute and not just have this unknown program left up to the counties, where we're not going to be able to estimate how much money is going to be going to each of these programs, but.

Okay, I hope if the—I guess if this Bill continues on in the Senate, I hope some of those conversations can start happening with the counties. I know Honolulu County kind of said that they have no idea about what their program would look like or how much it would cost, which is kind of concerning. Okay. Thank you.

Representative Miyake.

Thank you. Holomua. Great to see you, Josh.

Good to see you, Rep. Miyake.

Vice Chair had a great question. And since you've been doing the study with Vail, is it like on a case by case, like the sale, the—purposely, there's no amount set, but is it because it's case by case for the county?

Yes. So, if I can, you're 100% right. Vail has done it on a case by case where the county negotiates with the home buyer or the homeowner. They have strongly recommended that they do think that's the best way to go because there's a large variety of options and they don't agree to everything.

And since the program has been in place in Vail for a few years, we do have some averages. So, if that might be helpful to address some of the concerns. Since they've started a program, the average deed restriction that they have paid for has been about $70,000 per deed restriction. That's about what it's come to.

And the information we have is a—and I think Appleseed even mentions this in their written testimony on the next Bill—was that I think around 150 or so deed restrictions were purchased for like $10.5 million, as a result.

And so, for example, if you wanted to say something like we want to be able to start with doing 50 deed restrictions, that'd probably be about $3.5 million. And the longer those homes stay in the program, the more efficient that becomes over time.

Okay. No, that's helpful. Thank you. Thank you, Chair. Thank you.

Okay. Vice Chair. Okay. Representative Loy, followed by Vice Chair.

Thank you. Josh. Since you're kind of you got homework, can you check with Vail and others on the sizes of the ADU? Because we know building a 900 square foot accessory dwelling unit, compared to a 1500 square foot accessory dwelling unit, is very different in cost.

And so, I would be really curious about the size of the Accessory Dwelling Unit and how that is comparable, as to the percentages for the program.

Thank you. Thank you, Chair.

Vice Chair.

Sorry, just quick follow up with that number, the 70,000 average in Vail, but we're assessing this based on, in some capacity, on the property, the value of the property in the home, right? So, what's the difference between average property value in Colorado versus here?

I mean, I think that's going to make a big difference in what the average of something here might cost us per property.

Completely fair question. So, in Vail, as hard as this is to believe, their median home value is actually higher than ours. It's about $1.8 million.

The information that I've got from Vail, and I'll go back and double check this, is that I think when they started the program, most of the acquisitions were for properties that actually ranged in like the $400,000 to $600,000 area. And that's why they were buying deed restrictions that I think have averaged out to closer to $70,000.

Which also gets to Rep. Grandinetti's question, a little bit of it, focusing on folks more in kind of middle-income areas is because the county got to choose with whom to negotiate. They were choosing to negotiate more with more middle-income homes.

Okay. Now, thank you for that additional information. I still would feel more comfortable knowing exactly what the process was to negotiate the cost ahead of just letting the counties come up with a random number that we're not even able to plan on funding.

I'll follow up with...also see if I can find some others to get some more details for you on that to share.

Thank you.

Okay. Thank you very much. Members, further questions?

Yeah, I have a question, I guess a question because—I'm sorry I was away—but this is kind of ringing the bell in my head because it was a request that came from, I believe my district, which is large properties that older people wanted to have some kind of a grant program so they could build a unit on that property for housing, for healthcare workers, for teachers, for firefighters, police officers.

I think that's where this started. And so, I'm—just to give a little bit heads up on this, but that would be what this does, right?

The next Bill actually might have more flexibility to do what you're talking about, Representative.

Okay. Thank you.

Thank you. Further questions, Members? Okay, I'll take a stab at it. Okay, so I've been to Vail and Vail is very different from us. It's a ski resort, right? So, it's very seasonal, during the summer months, there's, right, part of their problem is they need workers during the winter, so they need spaces.

They need all these kind of different things. And I can see why they would need the ADUs for that uptick. But it's very different from us, right? So, but in our case, so I'm thinking to Representative Kusch's earlier question about how does it play out long term, right?

So, when you put a deed restriction on it, and I guess it's partly my question has to do with the next Bill also.

Okay.

Okay. When you put a deed restriction on there, the assumption is that you're kind of holding value at a certain point. Okay. So, my assumption to that would be that then it would affect your property tax rate or what you pay because valuation would be held down, right. So, what you're paying would be lower than a market home.

At some point, it could affect the county revenue, right, going forward. The reason why I bring this up is because I'm thinking are we creating a long-term Proposition 13 California problem, right, where basically, you held valuation down and now, somebody's property taxes are much lower.

And so, in California's case, many times they stayed on that property even though they could afford a much larger home because it just made financial sense and then you create market distortion. Have you given any thought to that?

A couple of thoughts, and if it's okay, I'd also love to take a look and get back to you, as hopefully this proceeds. So, we—Vail did not indicate to us when we'd spoken with their folks that they had any problems with long term reductions

I would assume—how many years have they had it?

It's been about, I think seven years now. I think they started around 2018.

So, Proposition 13, right? The problems came out 20 years later, right?

Entirely possible, yeah. So, my initial—so, first, I'd love to go back and do a little bit more research and see if we could even try to run some numbers and see what it might look like over the long term. So, again, I'm always careful of not wanting to just mouth off and be wrong.

So, I'd love to get some numbers and come back to you. The initial thought I have of why I don't think it would be some long-term, catastrophic effort is that, one, where they have seen the value of the property go down—it hasn't plummeted, it's gone down about 20% and it's not like the bottom fell out.

So, it reduced a certain amount. And with the, and I know, Chair, that you've been taking a look at how we deal with property taxes and how much they should be and how they're used, but with the way they currently are, at the rates they are, it—we're already not paying a ton for that compared to some other jurisdictions. So, I don't know how much that drop would necessarily create a huge hole for the counties.

And the other piece that I think is important is that you're also giving the folks who then get into these homes the ability to contribute more to the economy because they're able to afford homes that they wouldn't otherwise have, which they're then putting back into the economy.

Last thing I'll mention, and this does get into the next Bill, is it's a little bit hard for me to say exactly just how the ADU portion would work because the next Bill, HB 739, is actually the one that's much more closely modeled on what happened in Vail than this one is.

So, and that brings me to the second part question that I have, right. So, a part of the Bill we passed last year to allow the counties to move on ADUs, and my general problem with those kind of policies are that we are increasing density without a master plan, right, without adequate infrastructure.

We had a bill the other day without adequate EMS services, you know, all those kind of things, when you create these other things without a good master plan of how that's going to roll out, it creates problems in the long run. Have you given that some thought?

So, two thoughts. One, and I'm sorry because I probably sound like a broken record when I say "the next Bill," but the next Bill has ADUs as a component, but it's not the entirety of the Bill.

For this one, I think the main thing I could mention is I know with the Bill from last year, that you're talking about SB 3202, and full disclosure, Holomua worked on it and supported it as well—not trying to hide the ball.

One thing that we did try to also note to folks was even anyone who wanted to use that program, there were still requirements, such as adequate infrastructure, including water, power, sewer. And so, even if someone wanted to avail themselves of what's now Act 39, if it

For the state, it's also schools, social services, healthcare, right, all those kind of things that on the back end is our expense when you increase density without a master plan, right, so that's my concern.

I understand that. It is possible that the next Bill might be one that is more preferable to you, based on that. I would think that also there wouldn't be so many ADUs built with 740 overnight that it would create a huge surge of problems.

I understand, but you know and I know we're looking for solutions. So, you know, I'm open. That's why we are hearing these bills. But, but at the same time, we have to think about how it's going to play out beyond us.

Completely fair point, Chair. Thanks for raising it and I will take another look into that and follow up with you.

Thank you. Members, further questions? Okay, thank you. We're going to move on to the next Bill. House Bill 739 HD2.

Okay. First we have HHFDC in support. Thank you. We have the Department of Transportation in support on Zoom. Oh, Department of Transportation?1

Good afternoon Chair and Vice Chair. Casey Allen from the state DOT. We support House Bill 990, HD1 that authorized judgment and settlements for claims against the state. We want to thank the state Attorney General office for their all their support and hard work on completing these cases for HDOT. Thank you for this opportunity to provide testimony.

Thank you. Department of Taxation in person, or sorry, with comments. Thank you. We have AARP Hawaii in support. Thank you. Hawaii Realtors with comments. Thank you. Hawaii Appleseed Center for Law and Economic justice in support.

Hello Chair, Vice Chair, Committee Members Susan Le with Hawaii Appleseed and we stand on our written testimony in strong support.

Again, wanted to highlight a few things and I hope it's okay, but I wanted to address some of the questions that Josh explained very well, in the last Bill that I think also pertains to this Bill, one of your questions, Representative Grandinetti, was about the affordability and it being income-blind. I completely understand your position on that.

And Appleseed, we are very strong supporters of dedicated affordable housing. But what we've seen more and more is that the cost of just the median housing has increased so much that housing is out of reach for a majority of our families.

And so we see funds going into subsidizing the, the mixed income sub account in tier 2, like we heard earlier today, because we have to do everything we can to allow that median income bracket to be able to afford housing when the market should typically take care of something like that. Our market does not.

And that's largely because of our outside investment.

And so with a program like this where you're just doing deed restriction, we're hoping we can take care of that middle market and so that the dollars that get put into dedicated affordable units, which we do have programs for that are very, that work well, we have 201H, we have the LIHTC program, we have the Rental Housing Revolving Fund.

All of those programs can be used to create dedicated affordable housing. But we just have so many priorities right now to fix housing that this is what I can see working in the long term of just covering that median income so our subsidized dollars can go further for lower income tiers.

And then as for Vice Chair, your questions on kind of like this blind cost item for the state and county, I think that's completely fair.

What we've seen and what Josh has also stated is that the reason it works so well in Vail is because they're able to really adjust their priorities based on that housing, that area of our housing, and how important they're thinking that deed restriction might be for the community in the future.

So if we're looking at subsidizing,or providing these grants to receive the deed restriction in exchange, we can look at areas that need more increased density and award more dollars in that area to increase ADU production.

Or in the opposite vein of that, we have communities that have very, very limited infrastructure with no capacity to build and grow. And so you would offer more dollars for these deed restrictions in that area because, you know, the housing stock there is permanently limited. It will not be able to grow.

And so these dollars can, you know, they're funded through HHFDC. This can be made with a scoring and prioritization plan between the state and the county to kind of develop some sort of master plan where you can prioritize where you will need deed restrictions, knowing what might be in the case in the future.

But that is generally why it's kind of a blanket now, because this can be termed be determined between the state and county in a lot of ways, and by determining how valuable that property is in the future, which really does vary. In this program, all eligible homeowners are eligible, right. But it does not mean they're awarded.

It is, you know, dependent on the county to determine how valuable that property is to hold. And that's going to really largely based on, like, the needs of the community. So I think that flexibility is important, at least for now, to before just to understand how we can get this program going. Thank you.

And I'm available for any questions.

Thank you. We have Hawaii Community Foundation in support.

Good afternoon, Chair, Vice Chair, Members of the Committee, Matt Elliott from the Hawaii Community Foundation. We stand in support of this bill and just wanted to add that we see this as part of the solution to the broader issue.

And the reason why this could fit in is that one of our initiatives from the Hawaii Community foundation over the last few years has been the House Maui Initiative.

And the thought behind the House Maui Initiative is sort of looking at that as a model that if you can do some of what the chair was just saying, where you focus on infrastructure and you have the county really prioritize certain areas where they say this is a place where we can build new housing and bring it to market, we get the infrastructure in place to help drive down the cost of those units.

That what Hawaii Community foundation is also doing on the side is getting families ready, right? Getting local families in the workforce ready to buy these units and say, okay, we're prepared. We know what it's going to take to get to that step.

But this piece, the deed restriction, helps solve another one of the problems that goes along with that. If these homes do come to the market, what's to prevent them from going to the outside investors?

If we can kind of level that playing field with a deed restriction on these homes, you know, the ones that are coming onto the market for our workforce, for our local families, then we give them a chance to be able to purchase that home.

And over time, we start to create some inventory that in perpetuity will be protected and hopefully give us more opportunity to keep families, keep our workforce here. So that's what's really appealing to us, is it gives kind of a legal solution to kind of finish this process and get these homes in the.

In the family, in the hands of the families that we're hoping. And then the other specific thing about this bill that appeals to us is the breadth of how the funds could be used. So the funds could be used for that first down payment, which is really critical to get that family into the home.

Or it could be a family that already has a home, but they're struggling with the mortgage, and if they can't, they can't meet those mortgage payments, they can't stay and they may leave. Right? So we give them that and they're willing to negotiate for that deed restriction. And now that keeps another family here.

So those are some of the things that appeal to us about this bill. We see it as not the only solution. This isn't going to fix all of housing and all of our housing shortages and issues, but it's one piece and one creative solution that we think is worth trying.

So thank you for the opportunity to testify and be happy to answer questions.

Thank you. We have the Council for Native Hawaiian Advancement in support. Thank you. We have Holomua Collaborative in support.

Thank you. Chair, Vice Chair, I missed you. Thank you for laughing this late in the afternoon.

So one thing I didn't mention before, I'd just like to also mention for framing purposes because this is also one of the reasons why we're doing this is our related organization, Holomua Collective, released a cost of serving a cost of living survey late last year.

And for anyone here who's watching who hasn't seen it, one of the things we asked folks, and this was a survey of 1,500 locally employed residents. So exactly the kind of people who would stand to benefit from this was do you think you're going to need to move to a less expensive state?

And almost 70% of the people who responded said either yes or I'm unsure. Almost half of those said they're going to have to move within the next five years. And almost two thirds of those respondents said it was because of the cost of housing. And so nothing that anyone here doesn't know.

But I think one other thing that was interesting about that survey was because we were asking people who were employed by a number of local organizations, we had a feeling it might be a good compliment to the Alice survey. And it turns out that we think it was.

About 64% of the respondents in that survey make $100,000 a year or more in a median household size of three. So think two public school teachers with a kid. And so again, exactly the kind of people that we're focusing on here.

And one of the things that we like to do at is to do things that are evidence based, which is why we've looked at places like Vail that have done this. And it's also now beyond Vail, there are now about 26 jurisdictions or so that have done some version of this.

Other places in Colorado as well as Massachusetts, as well as I think Charlottesville, Virginia, and I think some locations in New York. So it's branching out into other places. They're doing some version of this. And thanks to Matt Elliott from Hawaii Community foundation, he's covered a good amount of this already.

But one of the things that has made the program so successful has been the flexibility that again, it's often been used by a home buyer who needs the down payment and can't otherwise get into the home has also been used by homeowners.

Also, I think a number of your districts probably have places that are having to do cesspool conversions. Someone, there's no saying they couldn't use the funding from this to do something like a cesspool conversion. And then whatever they use it for, what you do have is in perpetuity.

That home is now going to stay in vocal hands, whether it's for an owner or a renter. So it does immediate good for the person who is participating in the program initially and it does permanent good for everybody else in the state afterwards who can benefit from it.

Last two things I'll say is, and as a few people have mentioned, this is not the one be all solution. Chair, I completely agree with you. We're just looking at good solutions.

We think this is one of them and we think that this can help stabilize some of the local housing support as we're trying to do some other things as well. And then just the last thing I'll note, we do have in our testimony one suggested amendment.

There were a number of amendments that we are working on with the Judiciary and Hawaiian Affairs Committee. I spoke with Rep. Tarnas yesterday at their last Committee. They had meant to adopt all the amendments we had suggested and they think this one just got missed.

Rep. Tarnas said please double check with him, but he would grant prior concurrence. This amendment actually, maybe ironically, is an ADU component.

So this amendment would just specify that if someone does use the funds from this to build an adu, then the ADU itself is also deed restricted and that relatives of the primary homeowner could also live in the ADU without violating the program. With that, thank you so much for considering this.

I hope you'll support it and I'll be around for any questions.

Thank you. Next, we have Housing Hawaii's Future in support. Thank you. We have Tax foundation of Hawaii with comments on zoom.

Good afternoon, Chair, Members of the Committee, this is Kate Mcmillan. On behalf of the Tax Foundation. We've submitted some comments on the measure. These are typical comments where we suggest the amendment to the exemption. Thank you.

Thank you. We have testimony on zoom from Sam Dorios in support.

Hi. You have my written testimony. I don't know what else to add. This is a no brainer. I think everyone in this room and everyone on the council knows that, hey, something needs to be done about housing. It is really, really bad.

It is a huge drain on people's energy and time and they can't focus because they're so Worried about bills and it's always on top of mind of everything. I work for some called the Hawaii Leadership Forum. We do systems mapping. I do. This is mapping here where we map out different various social problems in Hawaii.

I've been doing this for nine years and housing is always on there. If we're doing education, if we're doing health, you know, people's housing affects their health and well being affects education.

People living in multi generational homes, you know, the student, the kids don't have the ability to study well because everyone's in the house or the parents don't have time to help the kids study. It affects everything in Hawaii. So something does need to be done and it's a huge brain drain.

We're losing a lot of talented people, a lot of professional talented people who are like Josh mentioned, are talking about going to different states just because it's too hard to be here.

And I think you all know the stats about native Hawaiians that I think now we have more native Haines on the continent than we do in Hawaii, which is ridiculous. So yeah, something needs to be done. This certainly isn't enough, but it is something. So yeah, I think it should strongly be considered.

And that amendment that Josh wish mentioned, the au, whatever, that sounds good. Plus one on that. Put that amendment in there. I like that. Thank you.

Thank you. And apologies if the County of Hawaii Housing Agency is still online. I skipped over you earlier. Maybe not. Okay.

Okay. Members, we also received testimony in support from the State Council on Developmental Disabilities, Office of Hawaiian Affairs, City and County of Honolulu Office of Housing, and the Kauai County Housing Agency, all in support, as well as support from 14 other organizations, about 20 individuals, and then one in one organization in opposition.

Is there anybody else in the room wishing to testify? Anybody on Zoom?

Okay, questions? Members? Yes. Okay. Vice Chair. You have one? Yeah, but no, go ahead, represent Kush.

Thank you. Dean Minakami. I'm sorry, I'm sorry. I'm just using you as a subject matter specialist here. Do you know how much is in the DIRF. Or dwelling or the. Yeah. Revolving Fund and that gets replenished as payments are made back into it.