RELATING TO COASTAL ZONE MANAGEMENT.

SB3034

THE SENATE

S.B. NO.

3034

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

Relating
to coastal zone management
.

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 accelerating coastal erosion, sea level rise, and
chronic coastal flooding threaten public safety, public trust resources, and
coastal infrastructure throughout the State.
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Certain shoreline properties and structures have
become vulnerable to collapse from the effects of these hazards and may impose substantial
public costs through emergency response, infrastructure damage, beach loss, and
environmental harm.

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The legislature further finds that existing
regulatory and enforcement tools are insufficient to proactively address
chronically threatened coastal properties and structures before they collapse
or cause irreversible harm.
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The
legislature believes that voluntary acquisition paired with time-limited
occupancy may reduce public risk while allowing for an orderly transition of
ownership and for permanent hazard reduction.

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Accordingly, the purpose of this Act is to
establish a low-cost, voluntary coastal resilience acquisition and leaseback
program that prioritizes public safety and public trust protection, limits
State liability, and ensures permanent risk reduction through removal and
restoration.

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

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Chapter

Hawaii
coastal resilience acquisition and leaseback program

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Definitions.
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As used in this chapter:

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"Board" means the board of land
and natural resources.

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"Department" means the department
of land and natural resources.

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"Hazard-adjusted residual value" means
the appraised land value of a property minus the estimated costs required to
remediate hazards, remove structures, restore the site, monitor conditions, and
permanently restrict redevelopment.

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"Leaseback" means a voluntary
arrangement in which an owner conveys a vulnerable coastal property to the
State or a qualified third party and leases the property back for a limited
period, subject to a safety-based termination.

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"Program" means the Hawaii
coastal resilience acquisition and leaseback program.

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"Vulnerable coastal property"
means real property located in the coastal zone that is subject to chronic
erosion, flooding, shoreline retreat, or structural instability within a
foreseeable planning horizon and that poses a risk to public safety, public
trust resources, or repeated public expenditure.

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Hawaii coastal resilience acquisition and
leaseback program; established.
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(a)
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By July 1, 2028, the department, subject to
the approval and oversight of the board, shall establish and administer the
Hawaii coastal resilience acquisition and leaseback program.

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(b)
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Under
the program, the department may:

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(1)
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Voluntarily
acquire vulnerable coastal property by purchase, bargain sale, nominal
conveyance, or other lawful means;

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(2)
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Authorize
leaseback occupancy under short-term, renewable leases subject to safety-based
conditions;

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(3)
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Determine
when a property or structure is deemed unsafe and require termination of
occupancy;

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(4)
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Order
removal or demolition of structures and restore sites for hazard reduction and
public trust purposes;

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(5)
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Record
and enforce deed restrictions, conservation easements, or similar instruments
prohibiting redevelopment;

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(6)
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Delegate
interim property management, inspections, monitoring, lease administration, and
site maintenance to counties, qualified nonprofit organizations or land trusts,
or contracted third-party managers with coastal hazard experience; provided
that the delegation of interim management shall not limit the department's or
board's authority to terminate occupancy, order removal, or enforce permanent
restrictions; and

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(7)
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Adopt
rules pursuant to chapter 91, necessary for the purposes of this chapter.

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(c)
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All properties acquired under the program shall be subject to recorded
deed restrictions or conservation easements prohibiting redevelopment.

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(d)
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Structures
determined to be unsafe shall be removed or demolished as early as possible to
protect public safety or public trust resources.

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(e)
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Restored
sites shall be managed for open space, coastal buffer, or public trust
purposes.

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(f)
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The
department shall not be required to perform day-to-day property management
functions.
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Nothing in this section shall
be construed to require the department to operate as a landlord or to extend
occupancy beyond safety-based limits.

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Coastal resilience revolving fund.
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(a)
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There is established in the state treasury the coastal resilience
revolving fund, into which may be deposited:

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(1)
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Legislative
appropriations;

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(2)
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Bond
proceeds;

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(3)
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Settlement
or penalty revenues where legally permissible;

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(4)
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State,
federal, or private grants;

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(5)
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County
contributions; and

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(6)
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Lease
or rental payments received during interim occupancy.

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(b)
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Moneys
in the coastal resilience revolving fund shall be used for:

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(1)
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Property
acquisition and closing costs;

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(2)
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Relocation
assistance for income-qualified households;

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(3)
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Inspections,
monitoring, and program administration;

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(4)
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Interim
property management, including hazard monitoring and safety inspections;

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(5)
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Demolition,
removal, hazard reduction activities, and site restoration; and

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(6)
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Legal
costs associated with deed restrictions, conservation easements, and
enforcement.

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Acquisition value.
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(a)
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The acquisition price for vulnerable coastal property shall be based on
the hazard-adjusted residual value of the property.

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(b)
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In calculating the hazard-adjusted residual value, the department shall
deduct estimated costs, including but not limited to:

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(1)
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Demolition
and removal of structures;

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(2)
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Site
restoration and stabilization;

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(3)
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Monitoring,
inspections, and hazard assessment;

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(4)
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Legal
and administrative costs; and

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(5)
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Environmental
or contamination cleanup;

provided
that where estimated costs equal or exceed land value, the acquisition price
may be nominal.

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(c)
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Nothing in this section shall require the payment of fair market value
for hazardous structures.

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Leaseback conditions.
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(a)
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Leaseback occupancy may be authorized only under leases not exceeding
two years and may be renewable solely upon a determination by the department that
the property remains safe for occupancy; provided that leaseback occupancy
creates no right to continued tenancy.

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(b)
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Leaseback conditions shall include:

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(1)
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Rent
sufficient to cover inspections, insurance gaps, and interim management costs;

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(2)
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Prohibition
on expansion, armoring, or capital improvements;

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(3)
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Mandatory
hazard disclosure and acknowledgment of risk; and

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(4)
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Automatic
termination upon a determination that the property is unsafe.

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Liability.
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Under the program, the department shall serve
solely in the capacity of hazard mitigation and public trust protection.
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Nothing in this chapter shall be construed to
create a duty to maintain, improve, or extend the life of hazardous structures
or to assume liability beyond that required by law."

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SECTION 3.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

DLNR;
Hawaii Coastal Resilience Acquisition and Leaseback Program; Revolving Fund;
Public Safety; Vulnerable Coastal Property; Liability; Conditions; Rules

Description:

Requires the
Department of Land and Natural Resources, by 7/1/2028, to establish the Hawaii
Coastal Resilience Acquisition and Leaseback Program.
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Establishes the Coastal Resilience Revolving
Fund.
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Clarifies the calculation of
acquisition price for coastal properties, the conditions of leasebacks, and the
limitation to liability assumed by the Department of Land and Natural Resources
under the Hawaii Coastal Resilience Acquisition and Leaseback Program.

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