March 19, 2026, 3 p.m.
Hawaii State Capitol
Conference Room 224 and Videoconference
To: Senate Committee on Energy and Intergovernmental Affairs
Sen. Glenn Wakai, Chair
Sen. Stanley Chang, Vice Chair
Senate Committee on Water, Land, Culture and the Arts
Sen. Chris Lee, Chair
Sen. Lorraine R. Inouye, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: TESTIMONY IN OPPOSITION TO HB1990 HD2 — RELATING TO RESIDENTIAL REAL PROPERTY
Aloha Chairs, Vice Chairs and other Committee Members,
The Grassroot Institute of Hawaii opposes HB1990 HD2, which would allow counties to commence foreclosure procedures upon residential real property and use the revenues to satisfy unpaid civil fines for unaddressed zoning violations related to the property.
We sympathize with the desire of the counties to address nuisances and recoup fines. However, it is also necessary to protect the equity interests of homeowners. Otherwise, any actions taken to recoup fines via foreclosure sales would be vulnerable to legal challenge.
In Tyler v. Hennepin County, Minnesota, the Supreme Court held that the county’s retention of the excess value of the plaintiff’s home above her tax debt violated the U.S. Constitution’s takings clause. By treating the violation as a lien and then requiring that foreclosure proceedings be carried out pursuant to chapter 667, HB1990 HD2 does mitigate this issue to some degree. However, because of the special circumstances involved in this type of foreclosure, it would be helpful to explicitly state that the revenues from the sale after satisfaction of the lien should be remitted to the property owner.
Moreover, because of the government’s role in the foreclosure and sale of private property under this bill, we are concerned that such sales could be vulnerable to corruption. Without a provision requiring that 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 to friends and families of local officials at far below market value.[1]
There is currently a case before the U.S. Supreme Court, Pung v. Isabella County, that centers specifically on whether the Fifth Amendment requires compensation based on fair market value in foreclosure situations such as those envisioned by this bill.
If this bill were to move forward, we suggest that the Committee amend it to include the bolded section as follows:
(b) Within thirty days after the applicable county planning or permitting agency files the notice of violation at the bureau of conveyances, the bureau of conveyances shall refer the matter to the applicable county corporation counsel to foreclose the property pursuant to part IA or part II of chapter 667; 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 any and all liens be refunded to the property owner.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
1050 Bishop St. #508 | Honolulu, HI 96813 | 808-864-1776 | info@grassrootinstitute.org
[1] “Ending Home Equity Theft,” Pacific Legal Foundation, accessed Feb. 4, 2025.
