The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the House Committee on Finance on Feb. 24, 2025.
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Feb. 24, 2025, 2 p.m.
Hawaii State Capitol
Conference Room 308 and Videoconference
To: House Committee on Finance
Rep. Kyle T. Yamashita, Chair
Rep. Jenna Takenouchi, Vice-Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: COMMENTS ON HB29 HD2 — RELATING TO THE COUNTIES
Aloha Chair Yamashita, Vice-Chair Takenouchi and other members of the Committee,
The Grassroot Institute of Hawaii would like to offer its comments on HB29 HD2, which would allow Hawaii’s counties to sell private property — after the adoption of an ordinance and exhaustion of all notices, orders and appeals — and use the revenues to satisfy any unpaid civil fines related to the property.
First, we would like to emphasize the importance of the bill’s proposed requirement that the counties remit any amounts in excess of the unpaid fines to the property owners. This provision would ensure that Hawaii’s four counties do not violate the intent of Tyler v. Hennepin County, in which the U.S. Supreme Court held that retention by Minnesota’s Hennepin County of the excess value of the plaintiff’s home above her tax debt violated the U.S. Constitution’s takings clause.[1]
However, we are concerned that the sales envisioned in this bill are ripe for corruption. Without a provision requiring the property be sold promptly at or near market value, it is possible for a bad actor to deprive the owner of his or her equity interest in the property.
For example, in Michigan, corruption at the local level resulted in some foreclosed properties being sold far below market price to friends and families of local officials.[2]
We suggest that the Committee amend the bill to require that any properties seized under this section must be subject to a timely and competitive sale to the highest bidder.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Tyler v. Hennepin County, Minnesota, et al., Supreme Court of the United States, October Term, 2022.
[2] “Ending Home Equity Theft,” Pacific Legal Foundation, accessed Feb. 4, 2025.
