RELATING TO AGRICULTURAL LANDS.

SB1

THE SENATE

S.B. NO.

1

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 it is an objective of the State to ensure that the
agricultural industry 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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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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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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"Foreign government" means any
government other than:

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(1)
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The
United States; or

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(2)
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A
state or political subdivision of the United States.

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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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"International Traffic in Arms
regulations" means regulations under title 22 Code of Federal Regulations
section 126.1.

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"Prohibited foreign party" means:

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(1)
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A
person subject to International Traffic in Arms regulations;

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(2)
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A
foreign government formed within a country subject to International Traffic in
Arms regulations;

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(3)
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A
person other than an individual or government that is created or organized
under the laws of a foreign government within a country subject to
International Traffic in Arms regulations;

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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 described in paragraph (1) or (3);

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(ii)
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A foreign government described in paragraph (2); or

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(iii)
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Any combination of the persons or foreign governments described in
paragraphs (1), (2), and (3);

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(5)
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An
entity of particular concern designated by the United States Department of
State; or

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(6)
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An
agent, trustee, or other fiduciary of a person or entity described in
paragraphs (1) through (5).

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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 the provisions of 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 lien holders, 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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� -11
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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:

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

Description:

Prohibits
certain foreign parties 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.

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