Report Title:

Rental reopenings; DLNR

HOUSE OF REPRESENTATIVES

H.R. NO.

108

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 
   


HOUSE RESOLUTION

 

REQUESTING THE state auditor to study the DEPARTMENT OF LAND AND NATURAL RESOURCES' FAILure TO DETERMINE THE FAIR MARKET RENTAL OF LEASES DURING SCHEDULED REOPENING PERIODS IN A TIMELY MANNER and the retroactive raising of lease rents resulting from such failure.

 

 

WHEREAS, agricultural subdivisions are administered by State agencies, including the Department of Land and Natural Resources (DLNR); and

WHEREAS, DLNR leases agricultural land to many farmers, nurserymen, and others who choose to make their living off the land; and

WHEREAS, these leases include a term that allows DLNR to periodically reopen the lease for the purpose of adjusting the lease rent paid to DLNR; and

WHEREAS, these periods of reopening are specifically laid out in the terms of the lease, giving adequate notice to DLNR and to the lessees as to the scheduling of such periods; and

WHEREAS, state law provides that the fair market rental at the time of rental reopening will be the rent a lessee pays to DLNR for the ensuing period, and that this determination of fair market rental shall be made at least six months prior to the scheduled reopening; and

WHEREAS, in the past, DLNR has failed to appraise the fair market rental of leases scheduled for reopening in a timely manner, causing unconscionable financial inequities to lease holders and litigation; and

WHEREAS, delinquent fair market rental determinations and imposition of retroactive rents is not only an unconscionable business practice, but also creates a situation where private lending institutions authorized to provide mortgages on state agricultural land decline to give farmers, nurserymen, and others on state leasehold land mortgages because of the uncertainty of Land Management administered leases; and

WHEREAS, DLNR has the means to prevent delinquent fair market rental determinations and the inequitable situation where retroactive rent is imposed on farmers, nurserymen, and other lessees; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-first Legislature of the State of Hawaii, Regular Session of 2001, that the State Auditor is requested to study the Department of Land and Natural Resources' failure to determine a fair market rental appraisal in a timely manner and the practice of imposing retroactive rent on lessees as a result of the untimely appraisal; and

BE IT FURTHER RESOLVED that the State Auditor is requested to submit a report of its findings, conclusions, and recommendations to the Legislature no later than twenty days prior to the convening of the Regular Session of 2002; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the State Auditor and the Board of the Department of Land and Natural Resources.

 

 

 

OFFERED BY:

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