House Panel Adopts Report Aimed at Improving Public Land Stewardship – And Auditor’s Office

A House investigative committee tasked with improving management of stand land funds and the agencies who handle them adopted its report on Friday that outlines a way to better shepherd those monies and departments.

It also recommends that the state auditor, who audited those departments, exercise sharper oversight when conducting its business. The 11 recommendations it crafted in that regard were not the specific task assigned to the committee chaired by Rep. Della Au Belatti, the House majority leader, but included in the work as the panel began looking into the matter more thoroughly.

It calls for a third party to to conduct a performance evaluation of the auditor’s office and asks the state’s attorney general’s office to investigate some of the findings in the report.

The House Investigative Committee to Investigate Compliance with Audits Nos. 19-12 and 21-01 approved the findings 6 votes to 2.

“We are presenting that information out there and I think it’ll only improve those state agencies and departments,” said Rep. Linda Ichiyama, the committee vice chair who represents the 32nd District and voted in favor of the adoption.

The full report will be available on the panel’s website here as of noon Saturday, Jan. 29.

The committee, formed in April of 2021, was tasked with following up on the audits which focused on the management and operations of the Department of Land and Natural Resources’ Special Land Development Fund and the Agribusiness Development Corporation. The committee reviewed the recommendations made in those audits for the purposes of improving the operations and management of those state agencies, their funds, “and any other matters,” according to the report’s summary.

The “any other matters” turned out to be the state auditor’s office, which had audited the agencies, due to the nature of the evidence that the committee began to come across, committee members said.

Hawai‘i Island Rep. David Tarnas, of North Hawai‘i, a member of the investigative committee, commended his colleagues for the diligent fact-finding effort they led that included 19 public briefings and more than 20 subpoenaed witnesses.

He said it was also the job of the panel to look into the auditing process, which other states do regularly.

“I appreciate the good work we’ve done,” Tarnas said.

Rep. Dale Kobiyashi voted against the report. The District 23 representative said the mission the committee undertook – “auditing the auditor” – went too far outside the committee’s original scope of work, and went out of its way to put the auditor’s’ office in a bad light.

“I don’t stand by much of what’s in here,” he said of the report. “I think it’s really gone down the wrong road.”

In a press conference following the adoption, Au Belatti didn’t elaborate about the “omissions” she believed the auditor’s office committed.

State Auditor Leslie Kando, however, took issue with the committee’s report late Friday. The office issued a statement on its website denouncing the group’s findings.

“These allegations could have easily been addressed and disproved if the auditor had been asked to testify again,” the statement read. “Some allegations were even refuted by the committee’s own witnesses, but chair Belatti ignored those details. She wasn’t interested in answers, just raising more questions and expressing ‘serious concerns.'”

The report, meanwhile, has 14 recommendations for the DLNR and 27 recommendations for the ADC.

The committee’s dive into the operations of DLNR and ADC revealed common themes and challenges in the management of public lands, the report’s executive summary states.

“Among the committee’s recommendations that apply to both agencies are the needs for strategic planning, changes to statutory authority, publishing of written policies and procedures, and updates to lease agreements,” it reads. “The committee drafted proposed legislation for both DLNR and ADC to provide clear legislative intent and authority to assist each agency in carrying out their statutory functions.”

For the DLNR, the report recommends that the Legislature make consistent the various lease extension statutory language by allowing all types of leases to be extended using the most current lease form and leasing practices, including provisions to allow the state to be paid its fair share of sublease income.

It also calls for allowing the state to charge rent premiums on extended leases to compensate the state for forgoing the reversionary interest and incorporate the value of the improvements on the property.

It goes on to specify that a lessee should pay for the appraisal required for the reopening of rent in the extended lease term and precluding the lessee from protesting the rent so determined. It also asks for allowing the DLNR to negotiate direct leases for five to 10 years with a basic appraisal process for those properties where there is no interest in the public auction.

The four bills that were introduced Friday as a result of the committee’s work are:

HB 2417

HB 2418

HB 2419:

HB 2420:

As for the ADC, the recommendations include amendments to refocus and streamline ADC’s authorizing statute to reflect the current state of agriculture and focus on Hawai‘i’s needs for local agricultural products in addition to exports.

Those recommendations are for the ADC to prioritize lease agreements designed to increase the production of local agricultural products for local consumption and supporting small farmers; align plans and projects with recently set goals for the purchase of local agriculture products for local consumption; deemphasize marketing and emphasize production for local consumption; and to “amend ADC’s powers, duties, and responsibilities to repeal duplicative functions performed by other agencies,” the report states.