STAND. COM. REP. NO. 1433

Honolulu, Hawaii

, 2005

RE: H.R. No. 193

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Agriculture and Water, Land, & Ocean Resources, to which was referred H.R. No. 193 entitled:

"HOUSE RESOLUTION REQUESTING THE DEPARTMENT OF LAND AND NATURAL RESOURCES TO ESTABLISH A TRAINING PROGRAM IN CONJUNCTION WITH THE LOCAL REAL ESTATE APPRAISER'S NATIONAL ORGANIZATION AS PART OF THEIR PROFESSIONAL EDUCATIONAL SEMINARS TO TRAIN REAL ESTATE APPRAISERS TO USE THE INCOME CAPITALIZATION APPROACH TO SET LEASE RENT RATES FOR STATE AGRICULTURAL LEASE REOPENING,"

beg leave to report as follows:

The purpose of this resolution is to stabilize state agricultural lease rents by requesting the Department of Land and Natural Resources (DLNR) to:

(1) Establish a training program, in conjunction with the local real estate appraiser's national organization, to train real estate appraisers to use the income capitalization approach to set lease rent rates for state agricultural lease reopening;

(2) Establish a pilot program implementing the income capitalization approach using the agricultural yield of the leased land to set lease rent rates for state agricultural lease reopening; and

(3) Report its findings and recommendations to the Legislature, including the lease rent amounts resulting from using this methodology, no later than 20 days prior to the convening of the Regular Session of 2006.

DLNR, Hawaii Farm Bureau Federation, and the Hawaii Association of REALTORS supported this measure.

Your Committees are cognizant of concerns regarding a potential conflict between the use of an income capitalization approach to appraising rental reopening and the provisions of section 171-17(d), Hawaii Revised Statutes. However, your Committees note that DLNR has indicated in the public hearing that the provisions in this measure will not violate current statutory requirements. In addition, it is the intent of your Committees that the income capitalization approach specified in this measure consider the income that can reasonably be derived from the quality of the soil and other production factors of the leased agricultural lands. Income derived from token farming operations or severe underuse of fertile agricultural land should not be used as the basis of the income capitalization approach.

Upon careful consideration, your Committees have amended this measure by:

(1) Changing the date of DLNR's report from no later than 20 days prior to the Regular Session of 2006 to no later than 20 days prior to the Regular Session of 2007; and

(2) Making technical, nonsubstantive amendments for style, clarity, and consistency.

As affirmed by the records of votes of the members of your Committees on Agriculture and Water, Land, & Ocean Resources that are attached to this report, your Committees concur with the intent and purpose of H.R. No. 193, as amended herein, and recommend that it be referred to the Committee on Finance, in the form attached hereto as H.R. No. 193, H.D. 1.

Respectfully submitted on behalf of the members of the Committees on Agriculture and Water, Land, & Ocean Resources,

 

____________________________

EZRA R. KANOHO, Chair

____________________________

FELIPE P. ABINSAY, JR., Chair