The following testimony was presented Feb. 24, 2023, by the Grassroot Institute of Hawaii to the Senate Committee on Judiciary.
February 24, 2023
Conference Room 430 and via videoconference
To: Senate Committee on Judiciary
Senator Karl Rhoads, Chair
Senator Mike Gabbard, Vice Chair
From: Grassroot Institute of Hawaii
Joe Kent, Executive Vice President
RE: SB875 — RELATING TO THE COUNTIES
Dear Chair and Committee Members:
The Grassroot Institute of Hawaii would like to offer comments on SB875, which would allow counties to sell private property in order to pay unpaid civil fines related to that property after all notices, orders and appeals have been exhausted, provided that counties adopt an ordinance governing the process of such sales.
The issue of uncollected civil fines has been front and center on Oahu. The Honolulu Department of Planning and Permitting estimates that the city is owed more than $130 million in unpaid fines related to building violations, zoning violations, overgrown weeds and vacant, unkept property.
In effect, SB875 would allow counties to sell such problem properties without going through the normal legal process.
We are concerned that the counties might abuse the power that this measure would grant them. Numerous corruption scandals have been uncovered in county departments across the state, with several Honolulu county permitting officials pleading guilty to bribery charges in the past year and a Maui wastewater official being sentenced just this month to 10 years in prison for accepting bribes.
With favoritism and corruption so commonplace, what safeguards would exist to prevent counties from selectively using nonjudicial foreclosure against certain property owners, while allowing others to keep their properties?
This measure’s effects might also fall most heavily on older individuals living on fixed incomes who do not have the resources to pay their fines, hire an attorney or otherwise navigate complicated legal and financial matters. According to the AARP, “tax authorities’ seizure of all of their home equity is nothing short of catastrophic” for older individuals.
Further, we suggest the committee consider the effect that a pending U.S. Supreme Court case, Tyler v. Hennepin County, Minnesota, might have on the constitutionality of this measure.
In that case, Hennepin County sold Geraldine Tyler’s condominium for $40,000 to settle unpaid property tax debts. After settling the $15,000 debt, the county refused to pay the difference back to Tyler.
She filed a lawsuit against the county alleging violations of the Fifth and Eighth amendments. The case is currently slated to be heard by the court this session, likely sometime this spring.
At the very least, SB875 should be amended to require that the counties must refund profits from the sale of the properties to the property owners. We recommend the following language be added to the bill:
“After all notices, orders, and appeal proceedings are exhausted, a county may satisfy all unpaid civil fines through the power of sale on the real property subject to a recorded lien. A power of sale shall become fully effective within a county upon the enactment or adoption by the county of appropriate and particular laws, ordinances, or rules establishing the power of sale; provided that the county sell the property at no less than the market value of similarly situated properties and that all revenues received from the sale that exceed the amount of the unpaid civil fines be refunded to the property owner.”
This amendment would at least ensure that property owners are not unduly punished for their failure to pay county fines — especially since lands, buildings and homes are many property owners’ most valuable personal assets.
Hawaii is currently one of a large number of states that wisely prohibit “home equity theft.” Should this bill pass as currently written, Hawaii would join a handful of outlier states that do not adequately protect private property, and the most vulnerable would feel its effects the hardest.
Thank you for the opportunity to testify.
Executive vice president
Grassroot Institute of Hawaii
 Ashley Mizuno, “Oahu problem properties owe $130 million in building fines to city,” Honolulu Star-Advertiser, Nov. 13, 2022.
 Christina Jedra, “Honolulu’s Former Top Permit Inspector Pleads Guilty To Bribery,” Honolulu Civil Beat, Oct. 17, 2022.
 “Former Maui official sentenced for ‘outrageous’ role in state’s largest-ever bribery scheme,” Hawaii News Now, Feb. 8, 2022.
 Brief of Amici Curiae AARP and AARP Foundation Supporting Petition for Writ of Certiorari, Tyler v. Hennepin County, Minnesota, Sept. 22, 2022, p. 4.
 Christina Martin, “Government-sponsored home equity theft robs the elderly and poor of millions of dollars,” The Hill, Dec. 5, 2022; “Tyler v. Hennepin County, Minnesota,” Oyez, accessed Feb. 22, 2023.