STAND. COM. REP. NO. 428

Honolulu, Hawaii

RE: S.B. No. 1322

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committees on Hawaiian Affairs and Housing, to which was referred S.B. No. 1322 entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION,"

beg leave to report as follows:

The purpose and intent of this measure is to designate a seat for the Department of Hawaiian Home Lands on the board of the Hawaii Housing Finance and Development Corporation.

Your Committees received testimony in support of this measure from the Department of Hawaiian Home Lands, Office of Hawaiian Affairs, Hawaiian Community Development, and three individuals. Your Committees received testimony in opposition to this measure from the Hawaii Housing Finance and Development Corporation; Mutual Housing Association of Hawai‘i, Inc.; and one individual.

Your Committees find that the constitutional mandate and mission of the Department of Hawaiian Home Lands trust is to effectively develop and deliver lands to native Hawaiians. The Hawaii Housing Finance and Development Corporation is tasked with developing low- and moderate-income housing projects and administering homeownership programs. This measure is intended to further enhance the partnerships and collaboration between the Department of Hawaiian Home Lands and Hawaii Housing Finance and Development Corporation. As a voting member of the Hawaii Housing Finance and Development Corporation Board, the Chairperson of the Hawaiian Homes Commission can bring new perspectives and ideas developed through the Department of Hawaiian Home Land's activities and experiences to the Hawaii Housing Finance and Development Corporation Board's deliberations.

Your Committees have heard testifiers' concerns that having the Chairperson of the Hawaiian Homes Commission on the Hawaii Housing Finance and Development Corporation Board could possibly constitute a conflict of interest. The Hawaii Housing Finance and Development Corporation testified that there would be a concern as to whether the Chairperson of the Hawaiian Homes Commission would be focusing on providing housing for native Hawaiians rather than production of housing for all residents of the State of Hawaii.

In response to those concerns, the Department of Hawaiian Home Lands noted that the Director of Business, Economic Development, and Tourism and the Director of Finance also are provided seats on the Hawaii Housing Finance and Development Corporation Board. Additionally, in Ahuna v. Department of Hawaiian Home Lands, 640 P.2d 1161 (1982), the Hawaii Supreme Court recognized the State's fiduciary responsibility to facilitate the Hawaiian Homes Commission Act. Because the ruling was not specified to one individual state agency, the State of Hawaii shares the responsibility among all agencies for fulfilling the mandates of the Hawaiian Homes Commission Act. Your Committees find that these concerns warrant further consideration and may require the issuance of an opinion from the Department of the Attorney General.

As affirmed by the records of votes of the members of your Committees on Hawaiian Affairs and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1322 and recommend that it pass Second Reading and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committees on Hawaiian Affairs and Housing,

________________________________ STANLEY CHANG, Chair

________________________________ MAILE S.L. SHIMABUKURO, Chair