STAND. COM. REP. NO.455

Honolulu, Hawaii

, 2001

RE: H.B. No. 503

H.D. 1

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Water and Land Use and Agriculture, to which was referred H.B. No. 503, entitled:

"A BILL FOR AN ACT RELATING TO STATE LEASES,"

beg leave to report as follows:

The purposes of this bill are to lessen the severity of the impact that certain aspects of the state leasehold system have upon small farmers.

Specifically, this bill:

(1) Grants an agricultural lessee on state lands, the right of first preference to continue the lease at the time of expiration;

(2) Provides the current lessee a credit for certain infrastructure improvements which shall be applied toward the price the current lessee must match in exercising the lessee's right of first preference; and

(3) Upon expiration of a lessee's one-year extension allow the board to enter into an agricultural lease of not fewer than fifteen years but not more than fifty-five years with any person.

Testimony in opposition to this measure was received from the Department of Land and Natural Resources, the Hawaii Forest Industry Association and two private citizens. The Hawaii Farm Bureau Federation and a farmer from the Big Island voiced support of the measure.

While acknowledging the conditions under which a farmer initially assumed a state lease, including its auction upon expiration, your Committees believe that it may be appropriate and in the State's best interest, under certain conditions, to allow the Departments of Agriculture and Land and Natural Resources to negotiate lease renewals.

Accordingly, your Committees, following much deliberation and discussion, have amended this bill by:

(1) Permitting an agricultural lessee to petition the Board of Land and Natural Resources or the Department of Agriculture, as the case may be, to renew the lease;

(2) Allowing the board or the department to renew the lease upon consideration of the following:

(a) Clear evidence that the leased land is and has been well utilized by the lessee for agricultural purposes;

(b) Sales or tax documents indicate that agricultural production is such that the agricultural operation is and has been viable;

(c) Infrastructure and other improvements on the land confirm that the agricultural operation is, has been, and in all likelihood will continue to be viable and the failure to renew the lease would result in a substantial loss of time, effort, and capital to the lessee to construct similar infrastructure improvements to achieve equivalent agricultural production results; and

(d) The availability of other agricultural land in proximity to the leased land, which would satisfy the needs of interested persons who may otherwise bid on the leased land.

(3) Requiring public notice upon the board's or department's intent to renegotiate a lease renewal;

(4) Limiting the extension of such negotiated lease renewals to not more than ten-year periods; and

(5) Subjecting the negotiated renewal to legislative disapproval.

As affirmed by the records of votes of the members of your Committees on Water and Land Use and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 503, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 503, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Water and Land Use and Agriculture,

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FELIPE P. ABINSAY, Chair

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EZRA KANOHO, Chair