The Human Rights Commission says replacement legislation for the Foreshore and Seabed Act still discriminates against Maori.
The Maori Affairs Select Committee is hearing public submissions on the Marine and Coastal Area Bill, which will repeal the 2004 Act.
The bill will allow Maori to seek customary title to the foreshore, but only if they can prove exclusive and uninterrupted use of an area since 1840.
The Human Rights Commission says that test is too harsh and the bill has the potential to create continuing grievances.
It wants the legislation changed to remove the test of continuous connection to an area or leave the matter to the courts to decide, based on common law.
But Attorney-General Chris Finlayson says the test is based on the best available case law from Canada and New Zealand.