For the first time in nearly 100 years, the U.S. government may soon have formal rules for the federal law designed to put eligible Native Hawaiians onto homestead lots.
The U.S. Department of the Interior on Monday notified the state Department of Hawaiian Home Lands of its intent to establish rules related to the Hawaiian Homes Commission Act of 1920, which set up a trust comprising roughly 200,000 acres throughout the islands for homesteading purposes.
The notification comes in the wake of recent unflattering publicity for DHHL.
The Star-Advertiser in May published a three-day series highlighting mismanagement of the agency’s troubled revocable permit program. Among other things, the newspaper detailed problems of lax oversight and selective enforcement involving month-to-month leases of mostly undeveloped trust land.
Also, the state auditor in April released a critical report on DHHL’s home loan programs, concluding that a growing loan delinquency problem poses a solvency risk to the department. The audit found that more than $80 million of roughly $588 million in homestead loans were delinquent as of June 2012.
Interior official Rhea Suh, in a letter to DHHL Director Jobie Masagatani dated Monday, called the allegations in the Star-Advertiser articles "most concerning" and asked for a detailed summary on how DHHL was responding to issues raised. She also asked for more information about the audit’s findings.
Suh, the Interior assistant secretary for policy, management and budget, closed her letter by informing Masagatani that the federal agency intends to "move forward with proposed limited rule-making" to clarify DHHL’s responsibilities when exercising certain statutory obligations under the 1920 act and two other federal laws dealing with Hawaiian homelands.
The proposed rules will cover land exchange issues and the process for the state to seek amendments of the 1920 act, according to Suh.
If adopted, the administrative rules would be the first at the federal level for the act meant to get those at least 50 percent Hawaiian onto residential, ranching or farming lots.
Advocates say establishing rules will address a 93-year-old gap, clarify Interior’s oversight responsibility for the trust and enhance the level of accountability to which the state is held in meeting trust obligations. Interior and DHHL share in those obligations.
"This is absolutely significant," said Ian Lee Loy, a member of the Hawaiian Homes Commission, which oversees DHHL.
Masagatani said in a statement to the Star-Advertiser that "DHHL looks forward to continuing its ongoing discussions and productive working relationship with U.S. Department of the Interior Assistant Secretary Rhea Suh and her staff.
"In the next few days, we will transmit our formal response to the assistant secretary’s letter to address her specific issues related to our loan portfolio, revocable permits and federal rule-making."
U.S. Sen. Brian Schatz, whose office provided the Star-Advertiser with a copy of Suh’s letter, said he has been meeting with her to discuss how the federal government can best deal with issues at DHHL, and "we are off to a good start." The Hawaii Democrat said the Interior Department is moving forward on several measures to provide more aggressive oversight and assistance to DHHL.
"We understand that these problems are long-standing and challenging," Schatz said in a statement to the newspaper. "However, these are the first steps forward toward providing transparency and accountability on behalf of Hawaiian families."
The lack of federal rules is seen by Lee Loy, Native Hawaiian advocate Robin Danner and others as a major contributing factor to the enduring problems that have plagued DHHL, including some highlighted in the Star-Advertiser articles.
In a May meeting with President Barack Obama at the White House, Danner, representing the Council for Native Hawaiian Advancement, asked him to authorize the Interior Department to start the process for rule-making.
The council for the past two years has identified the establishment of federal rules as a top public policy priority and specifically called for regulations in the two areas Suh mentioned in her letter.
Interior’s request for information and the move to establish rules indicates that the Obama administration — unlike previous ones — intends to become more engaged with oversight of the trust, Danner said.
"This is fantastic," she said. "I couldn’t be happier. Who is in the White House really does matter."
An Interior spokeswoman said the specific process for initiating rules has yet to be defined but that the public will have an opportunity — usually 60 to 90 days — to comment on any proposals. She said the process likely will begin in the next couple of months.
Asked about the timing of the rule-making notification, the Interior spokeswoman said the determination that the department needs to develop a clear process for carrying out its responsibilities for the trust is nothing new. For almost five years the department has been working with the state and the Native Hawaiian community to clarify how the commission act can be amended and how to pursue property exchanges involving Hawaiian homelands, the spokeswoman said.
"The only real question has been to identify the best tool to clarify the process, and at this point the department believes the best tool is rule-making," she said.
Danner said public scrutiny stemming from the Star-Advertiser series helped move along the issue.
Letter to DHHL from Dept. of Interior
