Hawaii Senate Bill SR13

Hawaii 2026 Regular Session

• Introduced: 1/28/26
• Refer: 2/13/26

Caption

Requesting The Office Of The Auditor To Conduct A Performance Audit Of The Department Of Hawaiian Home Lands Paper Lease System.

Impact

The proposed audit will evaluate several critical aspects of the undivided lease system, particularly focusing on its effectiveness in aiding timely homestead development. Key areas of scrutiny will include the duration of beneficiaries' lease statuses, administrative efficiency, internal controls, and the clarity of beneficiary rights and obligations. The audit aims to assess whether the current system is functioning properly and fulfilling its fiduciary responsibilities under the Hawaiian Homes Commission Act, thereby ensuring that the interests of the beneficiaries are adequately protected.

Summary

Senate Resolution 13 (SR13) requests the Office of the Auditor to undertake a performance audit of the Department of Hawaiian Home Lands' (DHHL) undivided lease system, known as paper leases or project leases. The resolution highlights the importance of this system, which allows beneficiaries to receive leasehold interests in land that has not yet been subdivided or developed. The intent of the undivided lease system is to expedite homestead development and support project planning for native Hawaiian beneficiaries. However, the resolution notes several challenges in lease clarity, beneficiary understanding, and administrative accountability that may arise in the current system.

Conclusion

The results of the audit are expected to be vital for ascertaining the effectiveness of the DHHL in managing the lease system and in meeting its obligations to the beneficiaries. The Office of the Auditor will be required to submit its findings and recommendations prior to the 2027 Legislative session, allowing for the possibility of reforms to enhance the undivided lease system's performance.

Contention

Several concerns have been raised regarding the operational integrity of the undivided lease system, especially regarding the transparency of the process and the effective management of records. The audit is set not only to address these concerns but also to explore potential alternatives and improvements, including statutory, administrative, or technological changes that may enhance the system's accountability and clarity. The resolution emphasizes the necessity for recommendations to the Legislature, ensuring that they can make informed decisions moving forward.