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[Senate Report 113-76]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 133
113th Congress                                                   Report
                                 SENATE
 1st Session                                                     113-76

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                       HAWAIIAN HOMES COMMISSION

                                _______
                                

                 July 15, 2013.--Ordered to be printed

                                _______
                                

    Mr. Wyden, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                      [To accompany S.J. Res. 12]

    The Committee on Energy and Natural Resources, to which was 
referred the joint resolution (S.J. Res. 12) to consent to 
certain amendments enacted by the legislature of the State of 
Hawaii to the Hawaiian Homes Commission, Act, 1920, having 
considered the same, reports favorably thereon without 
amendment and recommends that the joint resolution do pass.

                                PURPOSE

    The purpose of S.J. Res. 12 is to consent to certain 
amendments to the Hawaiian Homes Commission Act, 1920, enacted 
by the legislature of the State of Hawaii.

                          BACKGROUND AND NEED

    In 1921, Congress enacted the Hawaiian Homes Commission Act 
(HHCA) to provide a homesteading program for native Hawaiians 
on approximately 200,000 acres of land. The HHCA is 
administered by the Department of Hawaiian Home Lands (DHHL), 
an agency of the State of Hawaii, but with certain oversight 
responsibilities exercised by the U.S. Department of the 
Interior and the U.S. Congress.
    In 1959, the State of Hawaii adopted the HHCA as a 
provision of the State Constitution pursuant to section 4 of 
the Hawaii Statehood Admissions Act, Public Law 86-3. Section 4 
of the Admission Act allows the State of Hawaii to amend or 
repeal the HHCA only with the consent of the United States, and 
provides a process by which the State may propose amendments to 
the HHCA. In 1995 this process was clarified by the Hawaiian 
Home Lands Recovery Act, which requires the State of Hawaii to 
notify the Secretary of the Interior of any amendment it 
proposes and requires the Secretary to determine whether 
Congress must approve the proposed amendment for it to become 
effective.
    On November 11, 2006 and November 3, 2009, Assistant 
Secretaries of the Interior wrote to the Chairman of the 
Committee on Energy and Natural Resources with a determination 
that three amendments to the HHCA enacted by the State of 
Hawaii require Congressional consent and approval to become 
effective.

                          LEGISLATIVE HISTORY

    S.J. Res. 12 was introduced on March 21, 2013, by Senator 
Schatz and Senator Hirono, and was referred to the Committee on 
Energy and Natural Resources. On April 16, 2013 the 
Subcommittee on Water and Power held a hearing on S.J. Res. 12. 
On May 16, 2013, the Committee on Energy and Natural Resources 
ordered S.J. Res. 12 favorably reported without amendment.

                        COMMITTEE RECOMMENDATION

    The Committee on Energy and Natural Resources, in open 
business session on May 16, 2013, by voice vote of a quorum 
present, recommends that the Senate pass S.J. Res.12 without 
amendment.

                      SECTION-BY-SECTION ANALYSIS

    S.J. Res. 12 gives consent to three amendments to the 
Hawaiian Homes Commission Act made by the State of Hawaii. The 
three amendments are:
    Act 107, Session Laws of Hawaii, 2000, which amends section 
215(2) of the HHCA by allowing the Hawaiian Homes Commission to 
establish by administrative rule, the interest rate on loans 
from the Hawaiian home-loan fund and the Hawaiian home general 
loan fund.
    Act 12, Session Laws of Hawaii, 2002, which amends section 
208(5) of the HHCA by authorizing a homestead lessee who is at 
least one-quarter Native Hawaiian and who has received an 
interest in the tract through succession or transfer, to 
transfer his or her leasehold interest to a brother or sister 
who is at least one-quarter Native Hawaiian.
    Act 16, Session Laws of Hawaii, 2005, which amends section 
209(1)(a) of the HHCA by authorizing a homestead lessee to 
designate a brother or sister who is at least one-quarter 
Native Hawaiian to succeed to the leasehold interest upon the 
death of the lessee.

                    COST AND BUDGETARY CONSIDERATION

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

S.J. Res. 12--A joint resolution to consent to certain amendments 
        enacted by the legislature of the State of Hawaii to the 
        Hawaiian Homes Commission Act, 1920

    Under the State of Hawaii Admission Act and later clarified 
under the Hawaiian Home Lands Recovery Act of 1995, the state 
of Hawaii must notify the Secretary of the Interior of any 
amendment it proposes to the Hawaiian Homes Commission Act and 
obtain the consent of the Congress before an amendment becomes 
effective. S.J. Res. 12 would provide that consent for 
amendments to expand eligibility and succession authority for a 
homesteading program to individuals who are at least 25 percent 
Native Hawaiian and allow the Hawaiian Homes Commission to set 
interest rates on home loans based on market conditions.
    CBO estimates that enacting this joint resolution would 
have no impact on the federal budget. Enacting S.J. Res. 12 
would not affect direct spending or revenues; therefore, pay-
as-you-go procedures do not apply.
    S.J. Res. 12 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
and would impose no costs on state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Susanne S. 
Mehlman. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                         REGULATORY EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S.J. Res. 12.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals or businesses.
    No personal information would be collected by the Federal 
government. Therefore, there would be no impact on personal 
privacy.
    Little, if any additional paperwork would be required by 
the Federal government from the enactment of S.J. Res. 12.

                   CONGRESSIONALLY DIRECTED SPENDING

    S.J. Res. 12, as reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        EXECUTIVE COMMUNICATIONS

    The letter of Assistant Secretary Thomas Weimer to Chairman 
Domenici, dated November 22, 2006, relating to Act 16, Session 
Laws of Hawaii, 2005; the letter of Assistant Secretary Rhea 
Suh to Chairman Bingaman, dated November 3, 2009, relating to 
Act 12, Session Laws of Hawaii, 2002, and Act 107, Session Laws 
of Hawaii, 2000; and a statement for the record provided by the 
Department of the Interior for the April 16, 2012 hearing 
before the Subcommittee on Water and Power follow:

        U.S. Department of the Interior, Office of the 
            Assistant Secretary Policy, Management and 
            Budget,
                                 Washington, DC, November 22, 2006.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman:  In 1959, Hawaii became a State in 
accordance with the Hawaii Admission (or Statehood) Act, 73 
Stat. 4. In section 4 of the Act, Congress required ``the 
consent of the United States'' to certain State enactments 
amending the Hawaiian Homes Commission Act (HHCA), 42. Stat. 
108. Congress enacted the HHCA in 1921 to provide a 
homesteading program on approximately 200,000 acres of land, 
called the ``available lands,'' for native Hawaiians. In 
accordance with section 4 of the Hawaii Admission Act, 73 Stat. 
4, and section 204 of the Hawaiian Homelands Recovery Act 
(HHLRA) of November 2, 1995, the Department of the Interior 
reviews State enactments amending the HHCA to determine whether 
Congressional consent is required.
    By letter of August 2, 2005, (Enclosure 1), the Chairman of 
the Hawaiian Homes Commission, Micah Kane, forwarded two State 
enactments, Acts 16 (Enclosure 2) and 53 (Enclosure 3) of the 
Session Laws of Hawaii, 2005, to the Department for review. By 
letter of May 3, 2006, Enclosure (4), the Department advised 
Chairman Kane of the result of its preliminary review of the 
two State enactments and invited the Hawaiian Homes Commission 
to comment. Chairman Kane replied in a July 31, 2006, letter 
(Enclosure 5). Based upon our review of the State enactments 
and the comments from Chairman Kane, I am forwarding Act 16 for 
Congressional consent together with a draft joint resolution 
(Enclosure 6) approving the State enactment.
    Session Laws 2005, Statutes of Hawaii, Act 16, amends 
section 209(a) of the HHCA by authorizing a homestead lessee to 
designate a brother or sister who is at least one-quarter 
native Hawaiian to succeed to the leasehold interest in the 
tract upon the death of the lessee. The State of Hawaii 
maintains Congressional consent is unnecessary because Act 16 
will advance the interest of HHCA beneficiaries by helping to 
ensure the homestead lease remains in the family of the 
original lessee. We disagree. Section 4 of the Hawaii Statehood 
Act provides that ``the qualifications for lessees shall not be 
changed except with the consent of the United States.'' The 
HHCA defined native Hawaiian as ``any descendent of not less 
than one-half part blood of the races inhabiting the Hawaiian 
Islands previous to 1778,'' 42 Stat. 108. Current Federal law 
does not authorize brothers and sisters of lessees of less than 
50 percent Hawaiian descent to acquire leases. Thus, we believe 
Congressional consent is required for Act 16.
    The second statute submitted to the Department by the State 
of Hawaii is Session Laws 2005, Statues of Hawaii, Act 53. This 
enactment amends section 208 of the HHCA by authorizing lending 
institutions to make mortgage loans on Hawaiian home lands that 
are insured or guaranteed by private mortgage insurance 
approved by the Hawaiian Homes Commission. The State of Hawaii 
maintains that Congressional consent is unnecessary because Act 
53 will advance the interests of HHCA beneficiaries by 
expanding the number of private lenders available to offer 
mortgage financing for Hawaiian home lands. We agree. Section 4 
of the Hawaii Statehood Act provides that ``the encumbrances 
authorized to be placed on Hawaiian home lands by officers 
other than those charged with the administration of [the HHCA] 
shall not be increased, except with the consent of the United 
States.'' Chairman Kane's letter of August 17, 2006, clarified 
that lenders must assign a defaulted loan secured by Department 
of Hawaiian Homelands (DHHL) property to DHHL after the lender 
has exhausted available collection options. Thus, the 
Department determined that no additional encumbrances on 
Hawaiian home lands were authorized by Act 53. In accordance 
with section 4 of the Hawaii Admission Act and section 204 of 
the HHLRA, Session Laws 2005, Statues of Hawaii, Act 53 need 
not be submitted to Congress for review.
    The Administration takes no positions on the merits of Act 
16 by the State of Hawaii. Should you have any questions, 
please feel free to contact me.
            Sincerely,
                                          R. Thomas Weimer,
                                               Assistant Secretary.
    Enclosures.
                                ------                                

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                  Washington, DC, November 3, 2009.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: In accordance with the Hawaiian Homes 
Commission Act (HHCA), 42 Stat. 108, of 1921, and the Hawaiian 
Home Lands Recovery Act (HHLRA) of November 2, 1995, 109 Stat. 
361, the United States Department of the Interior (Department) 
is submitting for congressional review and consent, Act 12, 
2002 Haw. Sess. Laws, and Act 107, 2000 Haw. Sess. Laws. Both 
Acts require congressional consent before taking on the force 
of law.
    Congress enacted the HHCA in 1921 to provide a homesteading 
program on approximately 200,000 acres of land, called the 
``available lands'' for native Hawaiians. In section 4 of the 
Hawaii Statehood Admissions Act, 73 Stat. 4, Congress required 
``the consent of the United States'' to certain State of Hawaii 
enactments amending the HHCA. In section 204 of the HHLRA, 
Congress formalized the role of the Department in securing any 
required congressional consent to State enactments. The HHLRA 
provides that the Department is to review State enactments to 
determine whether congressional consent is required under 
section 4 of the Hawaii Statehood Admissions Act. If the 
Department deems that congressional consent is not required, it 
so notifies the State of Hawaii and Congress. If the Department 
deems that congressional consent is required, the Department is 
to submit a draft joint resolution approving the amendment to 
Congress together with a recommendation on whether it should be 
approved. In general, congressional consent is required for 
State enactments that:
    (i) amend HHCA sections 202, 213, 219, 220, 222, 224 and 
225 and other provisions relating to administration, and 
paragraph (2) of section 204, sections 206 and 212 and other 
provisions relating to the powers and duties of officers other 
than those charged with the administration of the HHCA, without 
providing an increase in benefits to the lessees of Hawaiian 
home lands;
    (ii) reduce or impair the Hawaiian home-loan fund, the 
Hawaiian home-operating fund, and the Hawaiian home-development 
fund;
    (iii) allow for additional encumbrances to be placed on 
Hawaiian home lands by officers other than those charged with 
the administration of the HHCA; or
    (iv) change the qualifications for lessees.
    The Department also must determine if the proposed 
amendments to the HHCA increase the benefits to current and 
future lessees of Hawaiian Home Lands. To assist us in making 
this determination when we reviewed the enclosed State of 
Hawaii enactments, we obtained input from participants during a 
Beneficiary Forum with the Department's Office of Hawaiian 
Relations. The forum was held on May 22, 2008, in Honolulu, 
Hawaii, to discuss with leaders of the Native Hawaiian 
Beneficiaries Community, State enactments proposing to amend 
the Hawaiian Homes Commission Act. The consultation comment 
period for this forum ended July 30, 2008. However, due to 
public request, an electronic consultation with the Native 
Hawaiian community remained open until December 31, 2008. The 
final meeting report (enclosure 1) is enclosed with this 
letter.
    The Department reviewed the 13 State enactments submitted 
to us to determine whether congressional consent is required. 
Based upon our review and the criteria listed in Section 4 of 
the State of Hawaii Admissions Act of 1959, it is the opinion 
of the Department that Act 177, 2006 Haw. Sess. Laws; Act 117, 
2002 Haw. Sess. Laws; Act 110, 2001 Haw. Sess. Laws; Act 122, 
2001 Haw. Sess. Laws; Act 119, 2000 Haw. Sess. Laws; Act 27, 
1998 Haw. Sess. Laws; Act 196, 1997 Haw. Sess. Laws; Act 197, 
1997 Haw. Sess. Laws; Act 232, 1996 Haw. Sess. Laws; and Act 
14, 1995 Haw. Sess. Laws, do not require the consent of 
Congress and as of August 7, 2009, have the full effect of law. 
Please refer to enclosure (2) to see the Department's 
individual reviews of each of these state enactments.
    Based upon the Department's review and the criteria listed 
in section 4 of the State of Hawaii Admissions Act of 1959, it 
is the opinion of the Department that Act 12, 2002 Haw. Sess. 
Laws, and Act 107, 2000 Haw. Sess. Laws, require congressional 
consent before either proposed amendment takes on the force of 
law. In accordance with Section 204(c) of the HHLRA, enclosed 
are two draft joint resolutions approving each of the 
respective proposed amendments.
    The first proposed amendment requiring review by Congress, 
Act 12, 2002 Haw. Sess. Laws, seeks to change section 208 of 
the HHCA by authorizing a homestead lessee to designate a 
brother or sister who is at least one-quarter native Hawaiian 
to succeed to the leasehold interest in the tract upon the 
death of the lessee. Section 4 of the Hawaii Statehood 
Admissions Act provides that ``the qualifications for lessees 
shall not be changed except with the consent of the United 
States.'' Although Congress has authorized certain other 
changes to the blood quantum requirement, it has not authorized 
brothers and sisters of lessees of less than 50 percent 
Hawaiian descent to acquire leases. The State of Hawaii 
enactment changes ``the qualifications for lessees''; 
therefore, we conclude it requires congressional consent. 
However, the Department remains neutral on the advisability of 
passing Act 12.
    The second proposed amendment, Act 107, 2000 Haw. Sess. 
Laws, seeks to modify the HHCA by allowing the Hawaiian Homes 
Commission to establish by administrative rule, the interest 
rate on loans from the Hawaiian home-loan fund and the Hawaiian 
home general loan fund. The intent of this amendment being to 
provide the Hawaiian Homes Commission with the flexibility to 
adjust the interest rate on loans from the Hawaiian home-loan 
fund based on current market conditions or the financial needs 
of the successor lessee. Section 4 of the Hawaii Statehood 
Admissions Act provides that ``the Hawaiian home-loan fund . . 
. shall not be reduced or impaired by any such amendment, 
whether made in the constitution or in manner required for 
state legislation . . ., except with the consent of the United 
States.'' Act 107, by allowing the Hawaiian Homes Commission to 
set the interest rate below 2.5 percent, may provide a benefit 
to a limited number of successor lessees of surrendered or 
cancelled leases, but only until the fund's resources are 
depleted. This ability to deplete the fund clearly qualifies as 
a reduction or impairment of the Hawaiian home-loan fund and 
thus requires congressional consent. However, the Department 
supports passage of Act 107 because it also provides the 
Hawaiian Homes Commission the ability to adjust the rates above 
2.5 percent and manage the fund in a way that protects its 
solvency.
    The last statute the Department reviewed, Act 302, 2001 
Haw. Sess. Laws, proposes to amend the HHCA by calling for 
federal reaffirmation and community governance. Based strictly 
upon the requirements of section 4, congressional consent is 
not required. However, the Act is not self-executing. The State 
Legislature recognized the State's lack of authority to bind 
the Federal Government and required congressional consent 
before the State enactment could take on the force of law. As 
such, the Department is forwarding Act 302 to your Committee 
without position or comment. In keeping with the spirit of the 
HHLRA, legislative drafting services will be made available 
should they be requested.
    Thank you for your time and effort in reviewing Acts 12, 
107 and 302. If you have any comments or questions, please do 
not hesitate to contact me or Mr. Kaiini Kaloi, at 202-208-
7462.
            Sincerely,
                                                  Rhea Suh,
                Assistant Secretary, Policy, Management and Budget.
    Enclosures.

       Statement for the Record of the Department of the Interior

    Thank you for providing the Department of the Interior the 
opportunity to provide its views on Senate Joint Resolution 12 
which proposes to consent to and approve three amendments, Act 
107, 2000 Hawai`i Session Laws, Act 12, 2002 Haw. Sess. Laws, 
and Act 16, 2005 Haw. Sess. Laws., proposed by the legislature 
of the State of Hawai`i to the Hawaiian Homes Commission Act 
(HHCA), 1920, as amended. Specifically, S.J. Res. 12 seeks to 
amend the HHCA to allow the interest rate on loans from the 
Hawaiian home-loan fund and the Hawaiian home general loan fund 
to be set by the Hawaiian Homes Commission through an 
administrative rule, rather than by law. S.J. Res. 12 also 
changes the qualifications of homestead lessees by authorizing 
a Hawaiian Homes Commission Act homestead lessee to transfer, 
or designate a successor to, their leasehold interest to a 
brother or sister who is at least one-quarter Native Hawaiian.
    By way of background, Congress enacted the HHCA in 1921 to 
provide a homesteading program on approximately 200,000 acres 
of land, called the ``available lands,'' for native Hawaiians. 
In section 4 of the Hawai`i Admission Act, 73 Stat. 4, Congress 
required ``the consent of the United States'' to certain State 
of Hawai`i enactments amending the HHCA. In section 204 of the 
Hawaiian Home Lands Recovery Act (HHLRA) of November 2, 1995, 
109 Stat. 361, Congress formalized the role of the Department 
in securing any required congressional consent and approval to 
State enactments.
    The HHLRA provides that the Department is to review 
proposed state amendments to the HHCA to determine whether 
congressional approval is needed to effectuate the United 
States' consent required under Section 4 of the Hawai`i 
Admission Act. If the Department deems that congressional 
approval is not required, it so notifies the State of Hawai`i 
and Congress. If the Department deems that congressional 
approval is required, as the Department has for the three 
proposed amendments that are the subject of S.J. Res. 12, the 
Department is to submit a draft joint resolution approving the 
amendments to Congress, together with a recommendation on 
whether they should be approved. Here, we wish to acknowledge 
that the introduced bill was a product of close collaboration 
among the Committee on Energy and Natural Resources, the 
Department, and the Hawai`i Senate delegation.
    In carrying out the Department's statutory trust 
responsibilities to the beneficiaries of the HHCA, the 
Department obtained input from participants during a 
Beneficiary Forum with the Department's Office of Native 
Hawaiian Relations. The forum was held in May 2008 in Hawai`i 
to discuss with leaders of the Native Hawaiian beneficiary 
community the State enactments proposed to amend the HHCA. Due 
to public request, the Department extended the comment period 
and conducted an electronic consultation with the Native 
Hawaiian community.
    Based upon the Department's review and the criteria listed 
in section 4 of the Hawai`i Admission Act, the Department 
determined that Act 107, 2000 Haw. Sess. Laws, Act 12, 2002 
Haw. Sess. Laws, and Act 16, 2005 Haw. Sess. Laws, require 
congressional consent before such proposed amendments take on 
the force of law. The Department supports the United States 
consenting to and approving of Act 107 and remains neutral on 
the consenting to and approving of Acts 12 and 16.
    This concludes the Department's prepared testimony on S.J. 
Res. 12, and the Department would be happy to answer any 
questions the Subcommittee may have.

                        CHANGES IN EXISTING LAW

    S.J. Res. 12 would not make any changes to existing Federal 
law.

                                  
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