REQUESTING THE OFFICE OF THE AUDITOR TO CONDUCT A PERFORMANCE AUDIT OF THE DEPARTMENT OF HAWAIIAN HOME LANDS’ PAPER LEASE SYSTEM.

SR13

THE SENATE

S.R. NO.

13

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

SENATE RESOLUTION

REQUESTING THE OFFICE OF THE AUDITOR TO CONDUCT A
PERFORMANCE AUDIT OF THE DEPARTMENT OF HAWAIIAN HOME LANDS� PAPER LEASE SYSTEM
.

����
WHEREAS, the
Department of Hawaiian Home Lands ("DHHL" or "the
Department") administers approximately 200,000 acres of land held in trust
pursuant to the Hawaiian Homes Commission Act, 1920, as amended, and is
responsible for issuing, managing, and enforcing homestead leases for native
Hawaiian beneficiaries; and

����
WHEREAS, in
addition to individual lot leases, DHHL utilizes an
undivided lease system
,
commonly
referred to as

�paper leases� or
�project leases,�

under which beneficiaries are awarded
leasehold interests in a larger parcel or project area prior to the
subdivision, surveying, or conveyance of individual lots; and

����
WHEREAS, under
the undivided lease system, beneficiaries may hold lease rights for extended
periods without assignment to a specific lot, dwelling, or legal description,
pending project development, infrastructure completion, or other administrative
actions; and

����
WHEREAS, the
undivided lease system is intended to facilitate project planning, accelerate
beneficiary awards, and support future homestead development; however, the
system may also present challenges related to lease clarity, beneficiary
understanding, recordkeeping, accountability, and long-term administration; and

����
WHEREAS, concerns
have been raised regarding the duration of undivided lease status, the tracking
and conversion of undivided leases into subdivided lot leases, the consistency
of records, and the transparency of beneficiary rights and obligations during
the undivided lease period; and

����
WHEREAS, the
Office of the Auditor is authorized to conduct performance audits to evaluate
the effectiveness, efficiency, and internal controls of government programs and
operations, including compliance with applicable laws, rules, and trust
responsibilities; and

����
WHEREAS, a
performance audit of the Department�s undivided lease system would assist the
Legislature, beneficiaries, and the public in assessing whether the system is
functioning as intended and in accordance with the fiduciary obligations of the
Hawaiian home lands trust; now, therefore,

����
BE IT
RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii,
Regular Session of 2026, that the Office of the Auditor is requested to conduct
a
performance audit of the Department of Hawaiian Home Lands�
undivided lease system
,
commonly referred to as

�paper leases� or �project leases,�
;

and

����
BE IT FURTHER
RESOLVED that the audit should include, but not be limited to, an evaluation of
the following:

����
(1) Effectiveness of the undivided lease system in advancing
timely homestead development and transitioning beneficiaries to subdivided,
lot-specific leases;

(2)
Duration and management
of undivided
leases, including the average length of time beneficiaries remain in undivided
lease status and factors contributing to delays;

(3)
Administrative efficiency
,
including
staffing, workflows, and coordination among planning, land management, and
infrastructure functions;

(4)
Internal controls and record integrity
,

including tracking of undivided leaseholders, project status, and conversion to
individual lot leases;

(5
)
Beneficiary impacts
,
including
clarity of rights, obligations, expectations, and access to information while
under an undivided lease;

(6)
Compliance
with applicable statutes,
administrative rules, commission policies, and fiduciary obligations under the
Hawaiian Homes Commission Act; and

(7)
Alternatives and improvements
,

including best practices and the feasibility of statutory, administrative, or
technological changes to improve transparency, accountability, and timeliness
within the undivided lease system; and

����
BE IT FURTHER
RESOLVED that the Office of the Auditor is requested to submit its findings and
recommendations to the Legislature no later than twenty days prior to the
convening of the Regular Session of 2027; and

����
BE IT FURTHER
RESOLVED that certified copies of this Resolution be transmitted to the
Auditor, the Chairperson of the Hawaiian Homes Commission, the Director of the
Department of Hawaiian Home Lands, and the Office of Hawaiian Affairs.

OFFERED BY:

_____________________________

Report Title:
�

Department
of Hawaiian Home Lands; Auditor; Audit; Undivided Leases; Project Leases; Paper
Leases