Approval of Criteria, Process and Next Steps to Remove the Moratorium on Subdivisions and Transfer of Agriculture and Pastoral Leases

Hawaii State Seal



May 20, 2013

To: Chairman and Members, Hawaiian Homes Commission

Through: Darrell Yagodich, Planning Program Manager

From: Bob Freitas, Planner

Subject: Approval of Criteria, Process and Next Steps to Remove the Moratorium on Subdivisions and Transfer of Agriculture and Pastoral Leases



That the Hawaiian Homes Commission:

1) Approve Criteria to allow Subdivisions and Transfer of Agriculture and Pastoral Leases pursuant to HAR 10-3-26(f) (see section “C” of submittal);

2) Accept Beneficiary Consultation Report (see appendix);

3) Approve Next Steps to implement HAR 10-3-26(f) (see section “F” of submittal) .


A. HHC ACTION – January 15, 2013 The Hawaiian Homes Commission (HHC) approved submittal Item G-1 to remove the moratorium on subdivisions of agricultural and pastoral leases as authorized under section 10-3-26 of the Department of Hawaiian Home Lands (DHHL) Administrative Rules, subject to the following:

(1) DHHL shall develop an implementation plan to implement section 10-3-26. This plan shall include:

(a) The criteria for reviewing subdivision requests for recommended approval by the HHC;

(b) The information required of lessees in the application;

(c) The internal process and proposed time frame to review applications received;

(d) and other information that may be needed to help clarify the process;

(2) The target date to present this implementation plan to the HHC for discussion is the April 2013 HHC meeting with final approval expected in May 2013;

(3) DHHL shall conduct outreach meetings across the state to discuss the implementation plan prior to the April 2013 HHC meeting.

B. LEGAL AUTHORITY – Hawaii Administrative Rule §10-3-26

(f) Subdivision and transfer of a portion of agricultural or pastoral lot lease may be permitted upon commission approval for the remaining term of the lease to any individual who qualifies under the act, subject to the following conditions:

(1) Upon such transfer, each resultant subdivided lot meets department criteria for designation as agricultural or pastoral;

(2) The department shall not be obliged to finance the construction of a residence on any transferred portion;

(3) Plans for all residences to be constructed on transferred portions of leases shall be submitted to and approved by the department before construction thereof;

(4) The department shall not be obliged to pay for any costs incurred in the processing and obtaining of the subdivision;

(5) The department shall not be liable for expenses incurred by the lessee for amenities brought to the lot. The department shall not provide nor be required to provide any amenities except as it may determine in the planned development of its lands; and

(6) A farm plan may be required by transferees for all transfers involving the subdivided agricultural or pastoral lots. Where required, the farm plan shall be submitted to, reviewed and accepted by the department. (Eff 7/30/81;am9/24/83; am11/17/84;am and comp 10/26/98] (Auth:HHCAct §222) (Imp:HHC Act §208)


Farm and Ranch homesteaders who are currently utilizing their homesteads for agricultural or pastoral purposes are eligible to apply for a subdivision and transfer of a portion of their lease subject to the following criteria:

1. Application is for an area with available water resources. Water is a vital criteria necessary to determine if a subdivision should be approved, if there is insufficient water DHHL should not approve the subdivision request. Homesteaders subdividing their property must pay for the water credit cost and other costs associated with water development pursuant to HAR Section 10-3-26(f)4&5.

2. Subdivision meets DHHL Land Use requirements. DHHL has defined homestead land uses as subsistence, supplemental, and pasture it created the original homestead lots by developing the necessary infrastructure in its planning process. There may be areas that are blacked out due to lack of infrastructure capacity. If the homesteader’s subdivision application is in a blacked out area then the application must be denied due to insufficient infrastructure to support the subdivision.

3. Homesteader is actively cultivating or has developed at least two-thirds use of the agricultural or pastoral tract at all times pursuant to HAR 10-3-39.

HAR Section §10-3-39 Occupancy and other requirements:

(a) The time period by which a lessee is required to occupy a residential lot or to commence to use or to cultivate an agricultural or pastoral lot shall be stipulated in the lease.

(b) Except as otherwise provided in the lease, the department may require a lessee of an agricultural or pastoral lot to have under development, cultivation, or use at least two thirds of the useable acreage at all times.

(c) Lessees shall be responsible for maintaining their premises secure from fire, theft, and vandalism and shall comply with the requirements of their lease at all times.

(d) A lessee who does not have a house on the lot shall provide the department with a current mailing address and such other information as the department may require. [Eff 7/30/81; am 1/20/86; comp 10/26/98] (Auth: HHC Act §222) (Imp: HHC Act §208) §10-3-40 (Reserved)

4. Homesteader must be in good standing and in compliance with the terms and conditions of their Homestead lease. This means there are no outstanding issues in terms of delinquent mortgages, delinquent taxes, water bills, illegal structures (lack of building permits) or other items that are required in the lease. (HHCA Section 208(8; HAR 10-3-24 & 26 and Sections 10, 20, 21 and 29 of the Homestead Lease)

5. Acknowledgement of financial capacity to complete subdivision. It is important that the homesteader understand the full financial impact of processing a subdivision request, there are a number of fees for engineering, design, survey, environmental review and legal document preparation that will be required to create the subdivision. HAR Section 10-3-26(f)4&5

6. Avoidance of Nuisance, the new subdivided lot may enable a residence to be built and the homesteader may be advised to locate the house near a collector street fronting the lot and it may include a buffer zone to avoid nuisances such as dust and odors from surrounding agricultural activities. An addendum to the new lease is required to insure that future lessees understand that the newly subdivided homestead is located in an agricultural area and they fully understand that agricultural activities have priority.

7. Identification of family member, the application shall identify the family member who will receive a portion of the lease after the subdivision is approved to insure they are qualified under the Hawaiian Homes Commission Act. Section 209 provides guidance on who is considered a family member for the purposes of this criteria.

§209. Successors to lessees. (a) Upon the death of the lessee, the lessee’s interest in the tract or tracts and the improvements thereon, including growing crops and aquacultural stock (either on the tract or in any collective contract or program to which the lessee is a party by virtue of the lessee’s interest in the tract or tracts), shall vest in the relatives of the decedent as provided in this paragraph. From the following relatives of the lessee who are (1) at least one-quarter Hawaiian, husband, wife, children, grandchildren, brothers, or sisters, or (2) native Hawaiian, father and mother, widows or widowers of the children, widows or widowers of the brothers and sisters, or nieces and nephews, — the lessee shall designate the person or persons to whom the lessee directs the lessee’s interest in the tract or tracts to vest upon the lessee’s death.

8. Acknowledgement of Farm or Ranch plan Acknowledgement that after the subdivision is approved the new lessee must submit a farm or ranch plan. A farm plan shall be required by transferees for all transfers involving the subdivided agricultural or pastoral lots. Where required, the farm plan shall be submitted to, reviewed and accepted by the department for the newly subdivided property, the original farm plan must also be amended to reflect the reduced size of the original farm or ranch plan. HAR Sections 10-3-26(f)6 and 10-3-24(c)

9. Acknowledgement of Environmental Requirements – On October 18, 1982 the State Environmental Quality Commission approved a comprehensive list of exemptions for the Department of Hawaiian Home Lands. Pursuant to EIS Regulation 1:33 certain classes of action are exempt from the requirements regarding the preparation of an environmental assessment.

Exemption Class #6 (2) involving minor subdivisions, these are single lot subdivisions where one lot is subdivided into two lots.

Single lot simple subdivisions do not require an environmental review. These subdivisions involve cutting out one lot out of an already subdivided property resulting in the creation of two lots.

Subdivisions that have multiple lots (one lot is subdivided into three or more lots) are considered complex subdivisions and will require an environmental review in addition to obtaining county subdivision approval. Complex subdivisions will significantly increase the cost to the homesteader and extend the time for preliminary and final subdivision review by the county and other approving agencies.


Homesteaders who meet the DHHL criteria for subdividing their lot may submit a request to subdivide and transfer of a portion of a homestead lease by filing the appropriate forms and presenting a copy of their farm or ranch plan to the Department. These documents will be used to evaluate the subdivision request and process the request for Hawaiian Homes Commission action pursuant to Hawaii Administrative Rule 10-3 26(f).

Applications may be submitted on January 31 or June 30 of the respective calendar year starting in 2014 generally the process will involve:

I. Phase One Eligibility Review (90 days)

1) Homesteader completes DHHL subdivision application and any other required DHHL forms and sends them to the department along with a copy of their farm or ranch plan;

2) Each subdivided lot must meet department criteria for designation as an agricultural or pastoral lot;

3) Homesteader identifies family member who will receive portion of the subdivided lot;

4) Within 90 days of determining the application is complete and has meet the Criteria the Homestead Services Administrator shall provide the list of homestead subdivision application requests to the Commission for preliminary approval to enable further review by the respective Counties.

5) Commission preliminary approval will start the design process and the necessary consultants may be retained by the homesteader to prepare the subdivision application for review by the respective county.

II. Phase Two Subdivision Review by County (180+ days)

1) A subdivision approval is required where land is divided in to two or more parcels. Subdivision requests may be made after getting Hawaiian Homes Commission approval. A preliminary map is prepared by a Hawaii licensed professional engineer or land surveyor and supplemental information is put in to an application and submitted to the respective county.

2) The county receives the initial submittal items and distributes them to various agencies for review. Comments are accumulated and a preliminary subdivision approval is issued consisting of a stamped plat, with any revisions to be made and a letter listing the conditions to be met to obtain final subdivision approval.

3) After preliminary subdivision approval is granted, the sub divider submits copies prepared by the Hawaii licensed land surveyor for Final Review by the county. If subdivision improvements are required then an agreement may be required to insure that the improvements are constructed and a bond may be required to provide acceptable surety covering 100% of the construction cost.

4) After receiving acceptable final maps, and upon completion of all other conditions of the preliminary approval letter, final subdivision approval can be granted by the county.

III. Phase Three Commission Final Approval (60+ days)

1) After all of the County’s Subdivision Approval conditions have been met the Lessee shall deliver the final approval letter to the department.

2) The Homestead Services Administrator shall prepare a submittal to the Commission for final approval and prepare the necessary transfer documents necessary to complete the transaction.


DHHL conducted outreach meetings across the state to discuss the implementation plan prior to the April 2013 HHC meeting. The meetings where organized as a consultation and invitation letters were mailed on February 15 1 2013 to all Agricultural and Pastoral Homesteaders inviting them to attend meetings pursuant to the consultation policy approved by the Commission on January 2009.

A DHHL website was created to provide homesteaders with full access to all of the materials that were provided at the meetings. The website provided beneficiaries with an opportunity to submit their comments to DHHL online.

The consultation meetings were held from 6:00 p.m. to 8:00 p.m. on the following dates:

  • Island, Dates, Location
  • Kauai March 4 1 2013 King Kaumualii School l Lihue
  • Maui March 7 I 2013 Queen Liliuokalani Children’s
  • Oahu March 8 I 2013 Hale Ponoi l Kapolei
  • Molokai March 11 1 2013 Lanikeha Community Hall l Ho’olehua
  • East Hawaii March 13 1 2013 Keaukaha Elementary School l Hilo
  • West Hawaii March 15 1 2013 DHHL District Office l Waimea

Final comments were received on April 30, 2013 and the Beneficiary Consultation report was prepared and is attached as an exhibit to this submittal.


1. Comprehensive Land Use/Infrastructure Plan must be developed to identify the areas that are capable of supporting expanded subdivision development. The plan will include Black out areas that lack the necessary infrastructure so that homesteaders and the various counties know what areas are eligible for subdivision development. The plan will also assess all of the homestead areas according to the planned and future land and water uses. Time required is approximately six months and will require a budget allocation.

2. Homesteader education out reach / disclosure program. Prepare materials to educate Homesteaders wishing to subdivide their agricultural and pastoral homesteads. Include DHHL process time lines, County subdivision process time lines, estimated costs and sample forms that will be required. The objective is to insure that the beneficiaries are fully informed when they make the decision to subdivide their lot. Time required is approximately three months and will require a budget allocation for printing and mailing.

3. Based on discussions with DHHL staff it is recommended that sufficient time be allowed to enable staff to develop forms and procedures to process the subdivision requests. The estimated time for DHHL staff to prepare is six months, additional staffing and a budget allocation may be required.


That the Hawaiian Homes Commission:

1) Approve Criteria to allow Subdivisions and Transfer of Agriculture and Pastoral Leases pursuant to HAR 10-3-26(f);

2) Accept Beneficiary Consultation Report;

3) Approve Next Steps to implement HAR 10-3-26(f).