STAND. COM. REP. NO. 541

Honolulu, Hawaii

, 2005

RE: S.B. No. 1892

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Water, Land, and Agriculture, to which was referred S.B. No. 1892 entitled:

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

begs leave to report as follows:

The purpose of this measure is to amend the method of appraising agricultural lands.

Testimony in support of this measure was submitted by the Hawaii Agriculture Research Center, and Hawaii Farm Bureau. Testimony in opposition to this measure was submitted by the Department of Land and Natural Resources. Comments were also submitted by the Department of Agriculture.

Your Committee finds that lessees with scheduled rental re-openings are faced with significant increases in their lease rents because the appraisals performed are currently based on the land's fair market value. Your Committee further finds that to address this growing problem, the appraisals of lease rents for re-openings should be based on a method that encourages public lands to be used for agriculture, as mandated by article XI, section 10 of the Constitution of the State of Hawaii.

This measure provides that the method for calculating rental rates at re-opening for state agricultural leases shall be determined by adding the rental of the lease at inception to the product of the rental of the lease at inception and the non-compounded sum of inflation rates. However, your Committee notes that this method may need further consideration. Accordingly, your Committee has amended this measure by inserting an effective date of July 1, 2050 to ensure ongoing discussions on this issue.

Your Committee has also amended this measure by making technical, nonsubstantive changes.

As affirmed by the record of votes of the members of your Committee on Water, Land, and Agriculture that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1892, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1892, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.

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

____________________________

RUSSELL S. KOKUBUN, Chair