RELATING TO AGRICULTURAL LANDS.

HB884

HOUSE OF REPRESENTATIVES

H.B. NO.

884

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to agricultural lands
.

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

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SECTION
1.
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The legislature finds that, under the
Hawaii State Planning Act, two major objectives and policies for Hawaii
agriculture are the growth and development of diversified agriculture and
ensuring that the agricultural sector continues to constitute a dynamic and
essential component of Hawaii's strategic, economic, and social well-being.
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To achieve this objective, the State must
conserve, protect, and encourage the development and improvement of available
agricultural lands and facilities to produce food and other agricultural
products.

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The
legislature further finds that data released by the United States Department of
Agriculture in December 2024 indicates that the amount of the State's farmland
owned by foreign entities has dramatically increased in recent years.
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Specifically, foreign ownership of Hawaii
agricultural land increased from 166,000 acres to 278,000 acres during the last
five years, constituting a sixty-five per cent increase.

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The
legislature is concerned that the increasing percentage of agricultural land
owned by foreign entities may adversely impact the State's ability to achieve
its agricultural goals.
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Because foreign
landowners are likely domiciled thousands of miles away from Hawaii, they may
not be able to give this agricultural land the attention needed to maximize its
productivity.
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Foreign entities may also
have different stakeholders whose interests they need to assuage; the interests
of those stakeholders may not align with the interests of local stakeholders in
Hawaii.
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Finally, foreign ownership raises
national and economic security concerns.

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The
legislature finds that many states have laws that prohibit or restrict the
ability of foreign persons, businesses, and governments from acquiring or
owning an interest in agricultural land.
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However, Hawaii currently does not have a similar restriction.

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Accordingly,
the purpose of this Act is to promote the conservation, protection, and
sustainable development of the State's agricultural resources by prohibiting
certain foreign parties from owning, purchasing, or acquiring ownership of or
an interest in agricultural lands.

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SECTION
2.
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The Hawaii Revised Statutes is
amended by adding a new chapter to title 11 to be appropriately designated and
to read as follows:

"
Chapter

PROHIBITION OF THE ACQUISITION OF

AGRICULTURAL LANDS BY CERTAIN FOREIGN PARTIES

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� -1
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Definitions.
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As used in this chapter, unless the context
otherwise requires:

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"Agricultural
lands" means any real property within the agricultural district pursuant
to section 205-2(d).

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"Interest
in agricultural land" means all direct interest acquired, transferred, or
held in agricultural land, including, without limitation, a lease of
agricultural land:

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(1)
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For a term of one year or longer; or

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(2)
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That is renewable by option for terms that, if
exercised, would be for a term of one year or longer.

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"Prohibited
foreign party" means:

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(1)
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The government or any official of the
government of a foreign country;

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(2)
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A partnership, association, corporation,
organization, or other combination of persons organized under the laws of or having
its principal place of business in a foreign country, or a subsidiary of that
entity;

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(3)
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Any person who is domiciled in a foreign
country and is not a citizen or lawful permanent resident of the United States;

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(4)
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Any person other than an individual or
government:

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(A)
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That is created or organized under the laws of
any state; and

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(B)
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In which a significant interest or substantial
control is directly or indirectly held or is capable of being exercised by:

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(i)
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A
person or government described in paragraphs (1) through (3); or

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(ii)
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Any combination of the persons or governments
described in paragraphs (1) through (3); or

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(5)
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Any agent, trustee, or other fiduciary of a
person or government described in paragraphs (1) through (4).

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"Real
property" means lands, structures, and interests therein and natural
resources including water, minerals, and all things connected with land,
including lands under water and riparian rights, space rights, air rights, and
any and all other things and rights usually included within the term.

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"Residence"
means a person's principal dwelling place where the person intends to remain
permanently for an indefinite period of time.

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"Resident
alien" means a person who:

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(1)
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Is not a citizen of the United States; and

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(2)
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Is a resident of a United States state,
territory, trusteeship, or protectorate.

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"Significant
interest" or "substantial control" means:

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(1)
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An interest of thirty-three per cent or more
held by a prohibited foreign party;

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(2)
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An interest of thirty-three per cent or more
held by more than one prohibited foreign party if the parties are acting in
concert with respect to the interest, even if no single prohibited foreign
party holds an interest of thirty-three per cent or more; or

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(3)
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An interest of fifty per cent or more, in
aggregate, held by prohibited foreign parties, regardless of whether the
prohibited foreign parties are acting in concert.

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Office of agricultural intelligence;
established.
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There is established within the department of
agriculture an office of agricultural intelligence, which shall:

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(1)
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Collect and analyze information concerning the
unlawful scale or possession of agricultural land by prohibited foreign
parties; and

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(2)
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Administer and enforce this chapter, including
the reporting of violations to the attorney general as provided in section
-5.

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Restrictions on ownership of agricultural
lands.
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(a)
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Notwithstanding any other law to the
contrary, a prohibited foreign party shall not acquire by grant, purchase,
devise, descent, or otherwise, any interest in agricultural land in the State,
except as provided in section -4.

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(b)
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A person shall not hold agricultural land as
an agent, trustee, or other fiduciary for a prohibited foreign party in
violation of this chapter.

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(c)
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A prohibited foreign party that acquires
agricultural land in violation of this chapter remains in violation as long as
the prohibited foreign party holds an interest in the agricultural land.

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Exception; divestment.
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(a)
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Notwithstanding section ‑3, a prohibited foreign
party who is a resident alien of the United States may acquire and hold an
interest in agricultural land in the State during the continuance of that
prohibited foreign party's residence in the State.

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(b)
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If a prohibited foreign party who previously
held agricultural land pursuant to subsection (a) loses resident alien status,
the prohibited foreign party shall sell, transfer, or otherwise divest their
interest in agricultural land within two years of the date on which the
prohibited foreign party ceased to have resident alien status.

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(c)
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If a prohibited foreign party who is required
to sell, transfer, or divest an interest in agricultural land under subsection
(b) fails to do so, the attorney general shall initiate a civil action in the
circuit court in the county in which the agricultural land is located for the
forfeiture of the interest in agricultural land.

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(d)
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If the circuit court determines that an
interest in agricultural land is being held in violation of this chapter, the
circuit court shall order that the interest in agricultural land be sold as
provided in section -7.

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Enforcement.
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(a)
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If
the office of agricultural intelligence determines a prohibited foreign party
has acquired agricultural land in the State in violation of this chapter, the
office shall report the violation to the attorney general.

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(b)
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Upon receiving a report under subsection (a),
the attorney general may investigate to determine if there is a violation of
this chapter.
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In conducting the
investigation, the attorney general may issue subpoenas requiring the:

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(1)
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Appearance of witnesses;

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(2)
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Production of relevant records; and

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(3)
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Giving of relevant testimony.

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(c)
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Following the investigation, if the attorney
general concludes that a violation of this chapter has occurred, the attorney
general shall initiate a civil action in the circuit court in the county in
which the agricultural land is located for the forfeiture of the interest in
agricultural land.

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(d)
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If the circuit court determines that the
interest in agricultural land is being held in violation of this chapter, the
circuit court shall order that the interest in agricultural land be sold as
provided in section -7.

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Filings required.
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The attorney general shall promptly record
the following filings with the bureau of conveyances:

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(1)
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Upon commencement of an action under this
chapter, a notice of the pendency of the action; and

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(2)
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An order for the sale of agricultural land
under section -4(d) or -5(d).

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� -7
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Court-ordered sale of agricultural land.
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If the court orders the sale of an interest
in agricultural land under section -4(d) or
-5(d), the agricultural land shall be sold subject only to
the rights and interests of bona fide lienholders.
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Proceeds from the sale, if any, shall be
disbursed to lienholders, in the order of priority, except for liens that,
under the terms of the sale, are to remain with the agricultural land.

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Penalty.
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A prohibited foreign party who violates this chapter shall be guilty of
a class C felony.

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Affirmative defense.
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It shall be an affirmative defense to
prosecution under this chapter that a prohibited foreign party is a resident
alien.

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Title to land not invalid.
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Title to agricultural land is not invalid or
subject to divesture due to a violation of this chapter by any:

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(1)
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Former owner; or

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(2)
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Other person holding or owning a former
interest in the agricultural land.

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No duty to inquire.
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No person who is not subject to this chapter
shall be required to determine or inquire whether another person is subject to
this chapter.

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Rules.
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The department of agriculture may adopt rules pursuant to chapter 91
necessary to effectuate the purposes of this chapter."

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SECTION
3.
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There is appropriated out of the
general revenues of the State of Hawaii the sum of
$ or so much
thereof as may be necessary for fiscal year 2025-2026 and the same sum or so
much thereof as may be necessary for fiscal year 2026-2027 to establish an
office of agricultural intelligence, including the establishment of
full-time equivalent (
FTE) positions.

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The sums

appropriated shall be expended by the
department of agriculture for the purposes of this Act.

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SECTION
4.
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This Act does not affect rights and
duties that matured, penalties that were incurred, and proceedings that were
begun before its effective date.

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SECTION 5.
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This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

HDOA; AG;
Agricultural Lands; Restrictions on Foreign Ownership; Appropriations

Description:

Prohibits
certain foreign parties or their agents, trustees, and fiduciaries from owning,
purchasing, or acquiring an interest in agricultural lands
.
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Establishes an Office of Agricultural Intelligence within the Department
of Agriculture to investigate claims that land is unlawfully owned by a
prohibited foreign party.
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Requires the
Attorney General to undertake enforcement activities.
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Appropriates moneys.

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not legislation or evidence of legislative intent.