Relating To The Hawaiian Homes Commission Act, 1920, As Amended.
Summary
HB1351 would amend the Hawaiian Homes Commission Act to raise the State’s liability cap for certain Department of Hawaiian Home Lands (DHHL) borrowing and loan guarantees from $100 million to $500 million. The bill is framed as a response to the large DHHL waitlist, higher mortgage interest rates, rising construction costs, inflation, and the effects of the 2023 Maui wildfires, all of which have made it harder for Hawaiian home lands lessees to finance turnkey homes or vacant-lot construction.
The measure also updates the department’s authority to support housing finance for lessees and cooperative associations, including guaranteeing, underwriting, and otherwise securing loans made by government agencies or private lenders. It preserves DHHL’s rights in the event of default, including notice requirements, succession rights, lease cancellation after a cure period, and the ability to assume or pay off outstanding debt. The bill includes severability language tied to federal approval and is structured to take effect only after the necessary federal consent process is completed or Congress approves it.
Impact
If enacted, HB1351 would directly amend Section 214(b) of the Hawaiian Homes Commission Act, 1920, increasing the ceiling on the State’s contingent liability for DHHL-related borrowing and loan guarantees to $500 million. This would expand DHHL’s financing capacity for housing development and lessee mortgage support, while leaving in place existing restrictions on how funds may be pledged and requiring that certain loan-related receivables, not the State’s full faith and credit, secure the borrowing. The bill would primarily affect DHHL, Hawaiian home lands lessees, lending institutions, and the State’s exposure to guarantee obligations.
Sentiment
The overall sentiment reflected in the bill text is supportive of expanding DHHL’s financing tools to address a severe housing need. The findings emphasize urgency, describing a large waitlist, market pressures, and the need to sustain the housing pipeline created by prior appropriations. No committee transcripts or recorded votes were provided, so there is no documented floor or committee debate to indicate broader political division or support beyond the bill’s stated rationale.
Contention
The main policy issue is the size of the increase in the State’s liability cap, which rises fivefold from $100 million to $500 million. Supporters would view that increase as necessary to keep DHHL housing projects and lessee financing viable under current market conditions, while any opposition would likely focus on the expanded contingent fiscal exposure to the State and the risks associated with guaranteeing more loans. Another potential point of concern is the bill’s dependence on federal approval, since the amendments are conditioned on compliance with federal requirements governing Hawaiian home lands.