RELATING TO HOUSING.

HB1732

HOUSE OF REPRESENTATIVES

H.B. NO.

1732

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO HOUSING
.

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

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SECTION 1.
�
The legislature finds that Hawaii is in the
midst of a crisis as a substantial number of residents are unable to secure
attainable housing to rent or own.
�
The
exorbitant cost of real estate renders homeownership unattainable for many
local families, with the average price of a home in Hawaii surpassing $800,000,
an amount considerably beyond the financial reach of most local working
residents.

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The legislature further finds that
Hawaii has been struggling with outmigration as local working residents are
compelled to leave the islands in search of more affordable living
situations.
�
The department of business,
economic development, and tourism reported that between July 1, 2022, and July
1, 2023, Hawaii's population decreased by twelve people each day.
�
As a result, for the first time in history, a
greater number of Native Hawaiians reside outside of Hawaii than in it.
�
This exodus signifies a loss not only of
population but also of cultural heritage.

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A 2025
Holomua Collective survey of more than three thousand two hundred local working
residents found that seventy-five per cent of respondents are either planning
to leave Hawaii or are unsure they can stay due to the high cost of living.
�
Among those who expect to move, about
one-third said they plan to leave within five years, while many others were
unsure of their timeline.

����
The legislature also finds that
another crucial aspect of Hawaii's housing crisis is the shortage of attainable
workforce housing for essential workers like teachers, police officers, health
care providers, and others who serve the community.
�
With limited attainable workforce housing
options and high building costs, it is becoming increasingly difficult to find
suitable places for these workers to live, driving crucial workers to relocate
to the mainland United States.
�
Allowing
people to live closer to where they work will help preserve infrastructure,
reduce greenhouse gas emissions, improve workers' mental health, and help
businesses by reducing commute times.

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The legislature additionally finds
that like Hawaii, the town of Vail, Colorado has a tourism-based economy in
which local working residents struggle to find attainable housing in part due
to the large percentage of vacant homes owned by non-residents.
�
In 2018, in an attempt to provide for local
workforce housing and invest in the future of its town, the town of Vail
implemented "Vail InDEED", a voluntary program that allowed the town
to buy and place deed restrictions in perpetuity on local homes from willing buyers
that limited occupancy to owner-occupants or resident tenants who live and work
in the town of Vail.
�
In conjunction with
other government efforts, this program has resulted in the establishment of
over one thousand deed-restricted residences for local working residents,
helped provide more attainable housing options for local working residents, and
created a culture in which Vail residents want to live in and support deed-restricted
residences.

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The legislature believes Hawaii can
learn from the town of Vail, and that a program similar to Vail InDEED could
develop a stock of homes in Hawaii that are dedicated to locals.
�
This program could be effective in helping
local families buy homes by bringing together the needs of employers, workers,
and the community.
�
Prioritizing
workforce housing that ensures occupants live or work in the vicinity of their
home will help alleviate the shortage of workforce housing, reduce traffic and
emissions of greenhouse gases, mitigate adverse impacts from new development,
and build stronger communities.
�

Additionally, this program would not only aid people in securing housing
but would also contribute to the preservation of Hawaii's distinctive culture
by ensuring that local families remain in the State.

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The legislature emphasizes the
importance of responsible stewardship of public funds.
�
One means of fulfilling this responsibility is
ensuring that public investments in housing result in a retained public equity
interest.

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Deed restrictions on real property
have a quantifiable financial value for the holder of the deed restriction, and
this value tends to grow and appreciate over time.
�
Deed restrictions may also be bought and sold.
�
Any deed restriction purchased by a county creates
an equity interest in the underlying property, which may be sold in the future
if doing so serves the public interest.

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Accordingly, the purpose of this Act
is to establish the kamaaina homes program as an investment in the future of
Hawaii and keep local working families in the State by securing a dedicated
housing supply specifically for locals.

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SECTION 2.
�
Chapter 201H, Hawaii Revised Statutes, is
amended by adding a new subpart to part III to be appropriately designated and
to read as follows:

"

.
�
Kamaaina
Homes Program

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�
201H-A
�
Definitions.
�
As used in this subpart, unless the context
otherwise requires:

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"Appreciated value of the
property" means the most recent county-appraised value of the property minus
the county-appraised value of the property at the time the deed restriction was
placed on the property.

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"Eligible homebuyer" means
a person or family, without regard to race, creed, national origin, or sex,
who:

����
(1)
�
Is a citizen of
the United States or a resident alien;

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(2)
�
Is a resident
domiciled in the State;

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(3)
�
Is at least
eighteen years of age;

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(4)
�
Agrees to sell to
the county and place a deed restriction on the property that complies with
section 201H-C;

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(5)
�
Agrees to comply
with annual reporting requirements pursuant to section 201H-F;

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(6)
�
Owns no other real
property with a deed restriction pursuant to this subpart; and

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(7)
�
Meets any other
qualifications established by rules adopted by the corporation or county.

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"Qualified business" means
a corporation, partnership, sole proprietorship, trust, or foundation, or any
other individual or organization carrying on a business, whether or not
operated for profit, that:

����
(1)
�
Has a physical
office or other owned or leased real estate within the State;

����
(2)
�
Has a current and
valid business license to operate in the State; and

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(3)
�
Pays state income
taxes pursuant to chapter 235.

"Qualified business" includes state and
county departments and agencies.

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�201H-B
�
Kamaaina homes program; established; general
provisions.

�
(a)
�
There shall be established within the
corporation the kamaaina homes program to provide counties with funding through
the dwelling unit revolving fund established pursuant to section 201H-191 to
purchase voluntary deed restrictions on property from eligible homebuyers.

����
(b)
�

Upon application by a county, in a form prescribed by the corporation,
the corporation may allocate an annual lump sum, in an amount to be determined
by the corporation, necessary for a county to carry out subsection (a);
provided that:

����
(1)
�
The corporation shall not distribute funds
solely based on the population size of a county;

����
(2)
�
A county shall not purchase a deed restriction
with funds allocated pursuant to this subpart unless the property is located in
a neighborhood identified in the plan approved pursuant to subsection (c);

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(3)
�
The total amount contributed by a county to an
eligible homebuyer shall not exceed eight per cent of the appraised value of
the property;

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(4)
�
No funds shall be made available to a county
under this subpart unless the county provides funding in the amount of no less
than one dollar for every three dollars distributed by corporation; and

����
(5)
�
The corporation shall not allocate more than
$20,000,000 per year under this subpart.

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A county may use up to
per cent of allocated funds for administrative costs.

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(c)
�

The corporation shall not allocate funding to a county pursuant to this
subpart until it has a received and approved a plan from the applicant county
that identifies neighborhoods within the county that data show are primarily
occupied by persons who work in the county and properties located within those
neighborhoods are at risk of being sold to persons who will not work in the
county.

����
(d)
�

A county may deposit funds received from the corporation pursuant to
subsection (b) into an escrow account until the purchase of a deed restriction
is finalized.

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(e)
�

Applications for funds in exchange for the purchase of equity in the
form of a deed restriction shall be made to the counties and contain the
information required by rules adopted under this subpart.
�
At a minimum, the applicant shall:

����
(1)
�
Be an eligible
homebuyer under this subpart who owns no other real property with a deed
restriction pursuant to this subpart;

����
(2)
�
Agree to use state
funds exclusively for the purposes described in subsection (g);

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(3)
�
Indicate
capability to properly use the funds for the purposes described in subsection (g);

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(4)
�
Agree not to use
state funds for any unauthorized purpose, including entertainment or
perquisites;

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(5)
�
Comply with any other
requirements the county may prescribe;

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(6)
�
Comply with all
applicable federal, state, and county statutes, rules, and ordinances,
including all applicable federal and state laws prohibiting discrimination
against any person on the basis of race, color, national origin, religion,
creed, sex, age, sexual orientation, disability, or any other characteristic
protected under applicable federal or state law;

����
(7)
�
Agree to indemnify
and hold harmless the State and county, and their officers, agents, and
employees, from and against all claims arising out of or resulting from
activities carried out or projects undertaken with funds provided under this
subpart, and procure sufficient insurance to provide this indemnification if
requested by the corporation; and

����
(8)
�
Agree to make
available to the county all records relating to the purchase of equity, to
allow state agencies to monitor the applicant's compliance with this subpart.

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(f)
�

No eligible homebuyer shall receive funds under this subpart if a deed
restriction that satisfies section 201H-C already runs with the land of the
property.

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(g)
�

An eligible homebuyer shall use the entirety of the funds provided by
the county pursuant to this subpart as a portion or the entirety of a down
payment on the property that the eligible homebuyer intends to purchase and on
which a deed restriction shall be placed pursuant to this subpart.

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(h)
�
The county shall prioritize eligible
homebuyers who work in a profession that is facing a labor shortage as defined
by the corporation, including government workers, health care workers,
educators, law enforcement officers, correctional facility staff, and
agricultural field workers.

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(i)
�

Any initial lease for tenancy offered at a property with a deed
restriction pursuant to this subpart shall be for a minimum term of six
months.
�
An initial lease may convert to
a month-to-month lease upon completion of the original term.

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(j)
�

The deed restriction placed and owned by the county pursuant to this
subpart shall take first priority over other restrictions on the property, if
applicable; provided that for a planned community under chapter 421J, a deed
restriction may be secondary only to covenants, conditions, and restrictions
with a requisite first position.

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(k)
�
The deed restriction placed and owned by the
county pursuant to this subpart shall be automatically extinguished and shall
not attach in subsequent transfers of title when a mortgage holder or other
party becomes the owner of the property pursuant to a foreclosure by action,
power of sale foreclosure, or conveyance in lieu of foreclosure after commencement
of a foreclosure action.

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Any law to the contrary
notwithstanding, a mortgagee under a mortgage covering property that is deed
restricted pursuant to this subpart, before commencing foreclosure proceedings,
shall notify the corporation and county in writing of:

����
(1)
�
Any default by the
mortgagor within ninety days after the occurrence of the default; and

����
(2)
�
Any intention of
the mortgagee to foreclose the mortgage under chapter 667 at least forty-five
days before commencing foreclosure proceedings;

provided that failure to provide notice to the
corporation shall not affect the mortgage holder's rights under the mortgage.

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(l)
�

Counties shall be responsible for validating evidence and ensuring
compliance with this subpart.
�
Counties
may contract with nongovernmental persons or entities to ensure
compliance.
�
Counties shall report any
property not in compliance with this subpart to the corporation.

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(m)
�

If a county does not expend moneys allocated by the corporation pursuant
to this section within one year of receipt, the moneys shall be returned to the
corporation and placed in the dwelling unit revolving fund established pursuant
to section 201H-191.

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(n)
�

A county may sell its equity in the form of a deed restriction:

����
(1)
�
For fair market
value if the county finds that the sale is in the public interest; or

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(2)
�
To the owner of a
deed-restricted property for an amount equal to the original amount provided by
the corporation and county to purchase equity in the form of a deed restriction
plus eight per cent of the appreciated value of the property;

provided that the moneys from a sale under this
subsection shall be returned to the corporation and county at a ratio
proportionate with the respective amounts provided to the eligible homebuyer
for the original deed restriction pursuant to this subpart; provided further
that the moneys returned to the corporation shall be placed in the dwelling
unit revolving fund established pursuant to section 201H-191.

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(o)
�

The corporation and each county may establish, revise, charge, and
collect fees and premiums and impose costs as necessary, reasonable, or
convenient to effectuate the purposes of this subpart.

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(p)
�

The corporation may adopt rules pursuant to chapter 91 for the purposes
of this subpart.
�
Each county may adopt
rules pursuant to chapter 91 for purposes of this subpart; provided that the
rules shall not conflict with rules adopted by the corporation.

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�201H-C
�
Deed restriction; requirements.
�
(a)
�

Notwithstanding any other law to the contrary, and except as otherwise
provided in section 201H-B(k), a deed restriction placed pursuant to this
subpart shall be recorded against the property and shall run with the land in
perpetuity, binding all future owners, successors, and assigns.

����
(b)
�
Notwithstanding any other law to the contrary,
a deed restriction placed on the property shall require that the property be
occupied by at least one owner-occupant or tenant who:

����
(1)
�
Works an average
of thirty hours or more per week at a qualified business;

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(2)
�
Previously worked
an average of thirty hours or more per week at a qualified business, was an
occupant of a deed-restricted property pursuant to this subpart, and:

���������
(A)
�
Is retired;

���������
(B)
�
Is involuntarily
unemployed; or

���������
(C)
�
Has a disability,
as defined in section 515-2; or

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(3)
�
Is a relative, by
blood, marriage, or adoption, of an owner-occupant or tenant of the property
who satisfies paragraph (1) or (2).

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�201H-D
�
Remedies.
�

(a)
�
A county that reasonably
believes a property subject to a deed restriction under this subpart is not in
compliance with this subpart may bring action against the owner of the property
for civil remedies based in contract or real property law, including but not
limited to claiming a lien or obtaining specific performance.

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(b)
�

In addition to the remedies available under subsection (a), if a
property subject a deed restriction under this subpart is sold and it is
determined that the property was occupied in a manner not in compliance with
this subpart, the corporation or a county may bring an action against the
homeowner in the appropriate circuit court and shall be entitled to fifty per
cent of the appreciated value of the property at the time of sale, to be
collected by the corporation or county, as applicable.

����
(c)
�

Any financial remedy owed to the corporation and county pursuant to this
section shall be allocated to the corporation and county at a ratio
proportionate with the respective amounts provided to the eligible homebuyer
for the original deed restriction pursuant to this subpart; provided that all
financial remedies owed to the corporation shall be placed in the dwelling unit
revolving fund established under section 201H-191.

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�201H-E
�
Environmental impact statement; conveyance
tax; procurement code; exemptions.
�

(a)
�
Any action on property subject
to a deed restriction under this subpart shall be exempt from chapter 343.

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(b)
�

Property sold for which a county has purchased a deed restriction
pursuant to this subpart shall be exempt from chapter 247.

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(c)
�

Any contract entered into by a county pursuant to this subpart shall be
exempt from chapter 103D.

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�201H-F
�
Annual compliance reporting.
�
No later than
of each year, beginning in the year following the first year of occupancy of
the property after the deed restriction has been entered into, the property owner
shall submit to the county a written statement with accompanying evidence
verifying that the property was occupied by a qualified owner-occupant or
tenant during all of the prior calendar year; provided that, if applicable, a
copy of the lease form currently used for the property shall be submitted with
the statement."

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SECTION
3
.
�
Section
46-15.2, Hawaii Revised Statutes, is amended to read as follows:

����
"
�46-15.2
�
Housing; additional
county powers.
�
In addition and
supplemental to the powers granted to counties by section 46-15.1, a county
shall have and may exercise any of the following powers:

����
(1)
�
To provide
assistance and aid to persons of low- and moderate-income in acquiring housing
by:

���������
(A)
�
Providing loans
secured by a mortgage;

���������
(B)
�
Acquiring the
loans from private lenders where the county has made advance commitment to
acquire the loans; and

���������
(C)
�
Making and
executing contracts with private lenders or a public agency for the origination
and servicing of the loans and paying the reasonable value of the services;

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(2)
�
In connection with
the exercise of any powers granted under this section or section 46-15.1, to
establish one or more loan programs and to issue bonds under chapter 47 or 49
to provide moneys to carry out the purposes of this section or section 46-15.1;
provided that:

���������
(A)
�
If bonds are
issued pursuant to chapter 47 to finance one or more loan programs, the county
may establish qualifications
for
the program or programs
as it deems appropriate;

���������
(B)
�
If bonds are
issued pursuant to chapter 49 to finance one or more loan programs, the loan
program or programs shall comply with part III, subpart B of chapter 201H
, to the extent applicable
;

���������
(C)
�
If bonds are
issued pursuant to section 47-4 or chapter 49, any loan program established
pursuant to this section or any county-owned dwelling units constructed under
section 46-15.1 shall be and constitute an "undertaking" under
section 49‑1 and chapter 49 shall apply to the loan program or
county-owned dwelling units to the extent applicable;

���������
(D)
�
In connection with
the establishment of any loan program pursuant to this section, a county may
employ financial consultants, attorneys, real estate counselors, appraisers,
and other consultants as may be required in the judgment of the county and fix
and pay their compensation from funds available to the county therefor;

���������
(E)
�
Notwithstanding
any limitation otherwise established by law, with respect to the rate of
interest on any loan made under any loan program established pursuant to this
section, the loan may bear a rate or rates of interest per year as the county
shall determine; provided that no loan made from the proceeds of any bonds of
the county shall be under terms or conditions that would cause the interest on
the bonds to be deemed subject to income taxation by the United States;

���������
(F)
�
Notwithstanding
any limitation otherwise established by law, with respect to the amount of
compensation permitted to be paid for the servicing of loans made under any
loan program established pursuant to this section, a county may fix any
reasonable compensation as the county may determine;

���������
(G)
�
Notwithstanding
the requirement of any other law, a county may establish separate funds and
accounts with respect to bonds issued pursuant to chapter 47 or 49 to provide
moneys to carry out the purposes of this section or section 46-15.1 as the
county may deem appropriate;

���������
(H)
�
Notwithstanding
any provision of chapter 47 or 49 or of any other law, but subject to the
limitations of the state constitution, bonds issued to provide moneys to carry
out the purposes of this section or section 46-15.1 may [
be
]
:

�������������
(i)
�
Be

sold at public or private sale at a price; [
may bear
]

������������
(ii)
�
Bear

interest at a rate or rates per year; [
may be
]

�����������
(iii)
�
Be

payable at a time or times; [
may mature
]

������������
(iv)
�
Mature

at a time or times; [
may be
]

�������������
(v)
�
Be

made redeemable before maturity at the option of the county, the holder, or
both, at a price or prices and upon terms and conditions; and [
may be
]

������������
(vi)
�
Be

issued in coupon or registered form, or both, as the county may determine;

���������
(I)
�
If deemed
necessary or advisable, the county may designate a national or state bank or
trust company within or without the State to serve as trustee for the holders
of bonds issued to provide moneys to carry out the purposes of this section or
section 46-15.1, and enter into a trust indenture, trust agreement, or
indenture of mortgage with the trustee whereby the trustee may be authorized to
receive and receipt for, hold, and administer the proceeds of the bonds and to
apply the proceeds to the purposes for which the bonds are issued, or to
receive and receipt for, hold, and administer the revenues and other receipts
derived by the county from the application of the proceeds of the bonds and to
apply the revenues and receipts to the payment of the principal of, or interest
on the bonds, or both.
�
Any trust
indenture, trust agreement, or indenture of mortgage entered into with the
trustee may contain any covenants and provisions as may be deemed necessary,
convenient, or desirable by the county to secure the bonds.
�
The county may pledge and assign to the
trustee any agreements related to the application of the proceeds of the bonds
and the rights of the county thereunder, including the rights to revenues and
receipts derived thereunder.
�
Upon
appointment of the trustee, the director of finance of the county may elect not
to serve as fiscal agent for the payment of the principal and interest, and for
the purchase, registration, transfer, exchange, and redemption, of the bonds;
or may elect to limit the functions the director of finance performs as a
fiscal agent; and may appoint a trustee to serve as the fiscal agent; and may
authorize and empower the trustee to perform the functions with respect to
payment, purchase, registration, transfer, exchange, and redemption, as the
director of finance deems necessary, advisable, or expedient, including without
limitation the holding of the bonds and coupons that have been paid and the
supervision and conduction or the destruction thereof in accordance with law;

���������
(J)
�
If a trustee is
not appointed to collect, hold, and administer the proceeds of bonds issued to
provide moneys to carry out the purposes of this section or section 46-15.1, or
the revenues and receipts derived by the county from the application of the proceeds
of the bonds, as provided in subparagraph (I), the director of finance of the
county may hold the proceeds or revenues and receipts in a separate account in
the treasury of the county, to be applied solely to the carrying out of the
ordinance, trust indenture, trust agreement, or indenture of mortgage, if any,
authorizing or securing the bonds; and

���������
(K)
�
Any law to the
contrary notwithstanding, the investment of funds held in reserves and sinking
funds related to bonds issued to provide moneys to carry out the purposes of
this section or section 46-15.1 shall comply with section 201H-77; provided
that any investment that requires approval by the county council pursuant to
section 46-48 or 46-50 shall first be approved by the county council;

����
(3)
�
To acquire
policies of insurance and enter into banking arrangements as the county may
deem necessary to better secure bonds issued to provide money to carry out the
purposes of this section or section 46-15.1, including without limitation
contracting for a support facility or facilities as may be necessary with
respect to bonds issued with a right of the holders to put the bonds and
contracting for interest rate swaps; [
and
]

����
(4)
�
To enter into
negotiations for, and purchase deed restrictions on, properties from eligible
homebuyers pursuant to subpart , part III of chapter 201H;
and

���
[
(4)
]

(5)
�
To do any and all other things
necessary or appropriate to carry out the purposes and exercise the powers
granted in section 46-15.1 and this section."

����
SECTION
4
.
�
Section
103D-102, Hawaii Revised Statutes, is amended by amending subsection (b) to
read as follows:

����
"
(b)
�
Notwithstanding subsection (a), this chapter
shall not apply to contracts by governmental bodies:

����
(1)
�
Solicited or
entered

into before July 1, 1994, unless the parties agree to its application to a
contract solicited or entered into [
prior to
]
before
July 1,
1994;

����
(2)
�
To disburse funds, irrespective of their
source:

���������
(A)
�
For grants as defined in section 42F-101, made
by the State in accordance with standards provided by law as required by
article VII, section 4, of the state constitution; or by the counties pursuant
to their respective charters or ordinances;

���������
(B)
�
To make payments to or on behalf of public
officers and employees for salaries, fringe benefits, professional fees, or
reimbursements;

���������
(C)
�
To satisfy obligations that the State is
required to pay by law, including paying fees, permanent settlements,
subsidies, or other claims, making refunds, and returning funds held by the
State as trustee, custodian, or bailee;

���������
(D)
�
For entitlement programs, including public
assistance, unemployment, and workers' compensation programs, established by
state or federal law;

���������
(E)
�
For dues and fees of organizations of which
the State or its officers and employees are members, including the National
Association of Governors, the National Association of State and County
Governments, and the Multi-State Tax Commission;

���������
(F)
�
For deposit, investment, or safekeeping,
including expenses related to their deposit, investment, or safekeeping;

���������
(G)
�
To governmental bodies of the State;

���������
(H)
�
As loans, under loan programs administered by
a governmental body; [
and
]

���������
(I)
�
For contracts awarded in accordance with
chapter 103F;
and

���������
(J)
�
For the purchase of deed restrictions for
the kamaaina homes program established under subpart , part
III of chapter 201H;

����
(3)
�
To procure goods, services, or construction
from a governmental body other than the university of Hawaii bookstores, from
the federal government, or from another state or its political subdivision;

����
(4)
�
To procure the following goods or services
that are available from multiple sources but for which procurement by
competitive means is either not practicable or not advantageous to the State:

���������
(A)
�
Services of expert witnesses for potential and
actual litigation of legal matters involving the State, its agencies, and its
officers and employees, including administrative quasi-judicial proceedings;

���������
(B)
�
Works of art for museum or public display;

���������
(C)
�
Research and reference materials including
books, maps, periodicals, and pamphlets, which are published in print, video,
audio, magnetic, or electronic form;

���������
(D)
�
Meats and foodstuffs for the Kalaupapa
settlement;

���������
(E)
�
Opponents for athletic contests;

���������
(F)
�
Utility services whose rates or prices are
fixed by regulatory processes or agencies;

���������
(G)
�
Performances, including entertainment,
speeches, and cultural and artistic presentations;

���������
(H)
�
Goods and services for commercial resale by
the State;

���������
(I)
�
Services of printers, rating agencies, support
facilities, fiscal and paying agents, and registrars for the issuance and sale
of the State's or counties' bonds;

���������
(J)
�
Services of attorneys employed or retained to
advise, represent, or provide any other legal service to the State or any of
its agencies, on matters arising under laws of another state or foreign
country, or in an action brought in another state, federal, or foreign
jurisdiction, when substantially all legal services are expected to be
performed outside the State;

���������
(K)
�
Financing agreements under chapter 37D;

���������
(L)
�
Educational
materials and related training for direct student instruction in career and
technical education programs as defined in section 302A-101, including
supplies, implements, tools, machinery, electronic devices, or other goods
purchased by the department of education; provided that:

�������������
(i)
�
T
he department of education
shall acquire three written quotes for purchases that exceed $100,000 made
pursuant to this subparagraph;

������������
(ii)
�
Awards over $2,500 shall comply
with section 103D-310(c); and

�����������
(iii)
�
Awards over $500,000 shall be
approved by the superintendent of education
; and

���������
(M)
�
Any other goods or services that the policy
board determines by rules or the chief procurement officer determines in
writing is available from multiple sources but for which procurement by
competitive means is either not practicable or not advantageous to the State;
and

����
(5)
�
That are specific procurements expressly
exempt from any or all of the requirements of this chapter by:

���������
(A)
�
References in state or federal law to
provisions of this chapter or a section of this chapter, or references to a
particular requirement of this chapter; and

���������
(B)
�
Trade agreements, including the Uruguay Round
General Agreement on Tariffs and Trade (GATT), that require certain
non-construction and non-software development procurements by the comptroller
to be conducted in accordance with its terms.
"

����
SECTION
5
.
�
Section
201H-191, Hawaii Revised Statutes, is amended by amending subsection (a) to
read as follows:

����
"(a)
�
There [
is
]
shall be
created a
dwelling unit revolving fund.
�
The funds
appropriated for the purpose of the dwelling unit revolving fund and all moneys
received or collected by the corporation for the purpose of the revolving fund
shall be deposited in the revolving fund.
�

The proceeds in the revolving fund shall be used:

����
(1)
�
To reimburse the
general fund to pay the interest on general obligation bonds issued for the
purposes of the revolving fund;

����
(2)
�
For necessary
expenses in administering housing development programs, regional state
infrastructure programs, and the government employee housing program pursuant
to part V; [
and
]

����
(3)
�
To carry out the
purposes of housing development programs, regional state infrastructure
programs, and the government employee housing program pursuant to part V,
including but not limited to the expansion of community facilities and regional
state infrastructure constructed in conjunction with housing and mixed-use
transit-oriented development projects, permanent primary or secondary
financing, and supplementing building costs, federal guarantees required for
operational losses, and all things required by any federal agency in the
construction and receipt of federal funds or low-income housing tax credits for
housing projects[
.
]
; and

����
(4)
�
The
administration and purchase of equity in the form of deed restrictions as part
of the kamaaina homes program under subpart ; provided that
there shall be no area median income requirements for moneys expended for the
purposes of this program.
"

����
SECTION
6
.
�
Section 247-3,
Hawaii Revised Statutes, is amended to read as follows:

����
"
�247-3
�
Exemptions.
�
The tax imposed by section 247-1 shall not
apply to:

����
(1)
�
Any document or
instrument that is executed [
prior to
]
before
January 1, 1967;

����
(2)
�
Any document or
instrument that is given to secure a debt or obligation;

����
(3)
�
Any document or
instrument that only confirms or corrects a deed, lease, sublease, assignment,
transfer, or conveyance previously recorded or filed;

����
(4)
�
Any document or
instrument between [
husband and wife,
]
spouses,
reciprocal
beneficiaries, or parent and child, in which only a nominal consideration is
paid;

����
(5)
�
Any document or
instrument in which there is a consideration of $100 or less paid or to be
paid;

����
(6)
�
Any document or
instrument conveying real property that is executed pursuant to an agreement of
sale, and where applicable, any assignment of the agreement of sale, or
assignments thereof; provided that the taxes under this chapter have been fully
paid upon the agreement of sale, and where applicable, upon [
such
]
assignment or assignments of agreements of sale;

����
(7)
�
Any deed, lease,
sublease, assignment of lease, agreement of sale, assignment of agreement of
sale, instrument or writing in which the United States or any agency or
instrumentality thereof or the State or any agency, instrumentality, or
governmental or political subdivision thereof are the only parties thereto;

����
(8)
�
Any document or
instrument executed pursuant to a tax sale conducted by the United States or
any agency or instrumentality thereof or the State or any agency,
instrumentality, or governmental or political subdivision thereof for
delinquent taxes or assessments;

����
(9)
�
Any document or
instrument conveying real property to the United States or any agency or
instrumentality thereof or the State or any agency, instrumentality, or
governmental or political subdivision thereof pursuant to the threat of the
exercise or the exercise of the power of eminent domain;

���
(10)
�
Any document or
instrument that solely conveys or grants an easement or easements;

���
(11)
�
Any document or
instrument whereby owners partition their property, whether by mutual agreement
or judicial action; provided that the value of each owner's interest in the
property after partition is equal in value to that owner's interest before
partition;

���
(12)
�
Any document or
instrument between marital partners or reciprocal beneficiaries who are parties
to a divorce action or termination of reciprocal beneficiary relationship that
is executed pursuant to an order of the court in the divorce action or termination
of reciprocal beneficiary relationship;

���
(13)
�
Any document or
instrument conveying real property from a testamentary trust to a beneficiary
under the trust;

���
(14)
�
Any document or
instrument conveying real property from a grantor to the grantor's revocable
living trust, or from a grantor's revocable living trust to the grantor as
beneficiary of the trust;

���
(15)
�
Any document or
instrument conveying real property, or any interest therein, from an entity
that is a party to a merger or consolidation under chapter 414, 414D, 415A,
421, 421C, 425, 425E, or 428 to the surviving or new entity;

���
(16)
�
Any document or
instrument conveying real property, or any interest therein, from a dissolving
limited partnership to its corporate general partner that owns, directly or
indirectly, at least a ninety per cent interest in the partnership, determined
by applying section 318 (with respect to constructive ownership of stock) of
the federal Internal Revenue Code of 1986, as amended, to the constructive
ownership of interests in the partnership; [
and

�
[
]
(17)[
]
]
���
Any
document or instrument that conforms to the transfer on death deed as
authorized under chapter 527[
.
]
; and

���
(18)
�
Any document or
instrument conveying real property with a county-owned deed restriction
pursuant to subpart , part III of chapter 201H, including any
document or instrument conveying the county-owned deed restriction.
"

����
SECTION
7
�
Section 525-4,
Hawaii Revised Statutes, is amended to read as follows:

����
"
�525-4
�
Exclusions from statutory
rule against perpetuities.
�
Section
525-1 shall not apply to:

����
(1)
�
A fiduciary's
power to sell, lease, or mortgage property, and the power of a fiduciary to
determine principal and income;

����
(2)
�
A discretionary
power of a trustee to distribute principal before termination of a trust;

����
(3)
�
A nonvested
property interest held by a charity, government, or governmental agency or
subdivision, if the nonvested property interest is preceded by an interest held
by another charity, government, or governmental agency or subdivision;

����
(4)
�
A property
interest in or a power of appointment with respect to a pension,
profit-sharing, stock bonus, health, disability, death benefit, income
deferral, or other current or deferred benefit plan for one or more employees,
independent contractors, or their beneficiaries or spouses;

����
(5)
�
A property
interest, power of appointment, or arrangement that was not subject to the
common-law rule against perpetuities or is excluded by any other applicable law;
[
or
]

����
(6)
�
A trust described
in chapter 554G[
.
]
; or

����
(7)
�
A property
interest in property with a county-owned deed restriction in place pursuant to
subpart , part III of chapter 201H.
"

����
SECTION 8.
�
The Hawaii housing finance and development
corporation shall submit a report of its evaluation of the kamaaina homes
program established in section 2 of this Act, including any proposed
legislation, to the legislature no later than twenty days prior to the
convening of the regular session of 2032.

����
SECTION 9.
�
In codifying the new sections added by
section 2 of this Act, the revisor of statutes shall substitute appropriate
section numbers for the letters used in designating the new sections in this
Act.

����
SECTION 10.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 11.
�
This Act shall take effect on July 1, 2026;
provided that:

����
(1)
�
Section 6 shall take effect on January 1, 2027;

����
(2)
�
The amendments made to section 103D-102(b),
Hawaii Revised Statutes, by section 4 of this Act shall not be repealed when
that section is reenacted on July 1, 2027, pursuant to section 4 of Act 150,
Session Laws of Hawaii 2024; and

����
(3)
�
On January 1, 2032, this Act shall be repealed
and sections
46-15.2, 103D-102, 201H-191, 247-3, and
525‑4
, Hawaii Revised Statutes, shall be reenacted in the form in
which they read on the day before the effective date of this Act.

INTRODUCED BY:

_____________________________

Report Title:

HHFDC;
Counties; Kamaaina Homes Program; Voluntary Deed Restrictions

Description:

Establishes
the Kamaaina Homes Program within the Hawaii Housing Finance and Development
Corporation to provide funding to the counties to purchase voluntary deed
restrictions from eligible homebuyers.

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