HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The cost of operating, maintaining, and managing
 2 state small boat harbors and other boating facilities, including
 3 the amortization (both principal and interest) of capital
 4 improvements, is paid from the boating special fund.  The primary
 5 sources of these special fund revenues are mooring and other
 6 harbor use fees, and other sources such as lease rent and the
 7 state marine fuel tax.  State small boat harbors and other
 8 boating facilities are centers of recreation and economic
 9 activity, and as such, must be managed in a manner that
10 facilitates recreation and commercial activity, and generates
11 sufficient revenue for this purpose.
12      The legislature finds that private management and operation
13 of public marina facilities is a common practice in many state
14 and local jurisdictions throughout the United States.  An
15 estimated cost of over $24,000,000 would be required to redevelop
16 both Ala Wai and Keehi small boat harbors to create "world class"
17 marina facilities to serve metropolitan Honolulu.  Redevelopment
18 of Ala Wai small boat harbor is considered a key element in
19 overall efforts to revitalize Waikiki, and redevelopment of Keehi

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 1 small boat harbor is a necessary first step in transforming Keehi
 2 Lagoon into a major water recreation area.
 3      The legislature also finds that funding in this amount for
 4 improvements at Ala Wai and Keehi small boat harbors exceeds the
 5 capability of present state resources, given the present
 6 financial condition of the State.  Leasing Ala Wai and Keehi
 7 small boat harbors to private interests is an alternative means
 8 of accomplishing the redevelopment of these facilities at no cost
 9 to the State.  The removal of Ala Wai and Keehi small boat
10 harbors from the State's responsibility for maintenance,
11 management, and operation, through the issuance of a lease
12 charging the lessee with these responsibilities, is expected to
13 provide a stable source of revenues to support the remaining
14 state boating facilities at a reasonable cost to users.
15      The purposes of this Act are to:  (1) authorize the board of
16 land and natural resources to lease by public auction or direct
17 negotiation Ala Wai and Keehi small boat harbors for
18 redevelopment, management, and operation by private firms; (2)
19 clarify that leases issued for Ala Wai and Keehi small boat
20 harbors may include uses, other than maritime-related activities,
21 that complement or support the purpose of the lease; (3) clarify
22 that the revenue due to the State from these leases shall be
23 deposited to the boating special fund; (4) provide for an orderly

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                                     H.B. NO.           H.D. 1

 1 transition from state operation, management, and control to
 2 private management and operation; and (5) provide job security
 3 for state employees presently assigned to those locations.
 4      SECTION 2.  Chapter 171, Hawaii Revised Statutes, is amended
 5 by adding a new section to be appropriately designated and to
 6 read as follows:
 7      "171-    Lease of small boat harbors.  (a)  Notwithstanding
 8 any law to the contrary, the board of land and natural resources
 9 may lease Ala Wai and Keehi small boat harbors, including
10 submerged lands within the harbors, by public auction or by
11 direct negotiation, to qualified private entities for
12 redevelopment, management, and operation for marina purposes on
13 terms and conditions approved by the board; provided the Board
14 complies with Section 171-53.  The lease term shall not be in
15 excess of fifty-five years.
16      (b)  The permissible uses under any lease disposed of under
17 this section shall be consistent with the purpose for which the
18 land was set aside by the governor pursuant to section 171-11.
19 Permissible uses may include any use that will complement or
20 support the purpose of the lease.
21      (c)  A lease issued pursuant to this section shall not be
22 subject to the provisions of part I of chapter 200 or
23 administrative rules adopted thereunder.  The lessee shall have
24 the authority to regulate the use of the premises through the

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                                     H.B. NO.           H.D. 1

 1 issuance of subleases and other permits to the extent permitted
 2 by the terms of the lease, provided that boat owners and
 3 operators and their boating activities on the waters within the
 4 leased premises shall be subject to chapter 200, parts II-VII,
 5 and administrative rules adopted thereunder.
 6      (d)  A lease issued pursuant to this section shall contain
 7 provisions reserving adequate public right of way or public
 8 access to adjacent public lands and waters over and across the
 9 premises encumbered by the lease.
10      (e)  For the purpose of this section "marina" means a dock
11 or basin providing secure moorings for motorboats and yachts, and
12 may offer supply, repair, fuel, and other facilities and
13 services.
14      (f)  All revenues due to the State derived from the leases
15 of Ala Wai and Keehi small boat harbors shall be deposited in the
16 boating special fund."
17      SECTION 3.  Section 200-9, Hawaii Revised Statutes, is
18 amended to read as follows:
19      "200-9  Purpose and use of state small boat harbors.(a)
20 State small boat harbors are constructed, maintained, and
21 operated for the purposes of:
22      (1)  Recreational boating activities;
23      (2)  Landing of fish; and

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                                     H.B. NO.           H.D. 1

 1      (3)  Commercial vessel activities.
 2 For the purpose of this section, "recreational boating
 3 activities" means the utilization of watercraft for sports,
 4 hobbies, or pleasure, and "commercial vessel activities" means
 5 the utilization of vessels for activities or services provided on
 6 a fee basis.  To implement these purposes, only vessels in good
 7 material and operating condition that are regularly navigated
 8 beyond the confines of the small boat harbor, and which are used
 9 for recreational activities, the landing of fish, or commercial
10 vessel activities shall be permitted to moor, anchor, or berth at
11 such harbor or use any of its facilities.
12      [(b)  Vessels used for purposes of recreational boating
13 activities which are also the principal habitation of the owners
14 shall occupy no more than one hundred twenty-nine berths at Ala
15 Wai boat harbor and thirty-five berths at Keehi boat harbor,
16 which is equal to fifteen per cent of the respective total
17 moorage space that was available as of July 1, 1976, at the Ala
18 Wai and Keehi boat harbors.  Notwithstanding the purposes of
19 small boat harbors, moorage for commercial vessels and commercial
20 vessel activities is not permitted in the Ala Wai and Keehi boat
21 harbors; provided that commercial catamarans, for which valid
22 permits or registration certificates have been issued by the
23 department which allow the catamarans to operate upon Waikiki

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                                     H.B. NO.           H.D. 1

 1 shore waters for hire, may be permitted to moor in Ala Wai boat
 2 harbor at facilities leased for commercial purposes.  The
 3 department shall allow a sole proprietor of a catamaran operating
 4 with a valid commercial registration certificate issued by the
 5 department for a commercial catamaran to land its commercial
 6 catamaran on Waikiki beach and to operate upon Waikiki shore
 7 waters for hire, to transfer the ownership of the vessel from
 8 personal ownership to corporate or other business ownership
 9 without terminating the right to operate under the commercial
10 registration certificate.  The existing commercial registration
11 certificate shall be reissued in a timely manner in the name of
12 the transferee corporation or other business entity.  No
13 commercial registration issued to an owner of a commercial
14 catamaran operating in the Waikiki area shall be denied or
15 revoked without a prior hearing held in accordance with chapter
16 91.
17      (c)] (b)  Notwithstanding any limitations on commercial
18 permits for Lahaina small boat harbor, vessels engaging in inter-
19 island ferry service between the islands of Maui and Molokai
20 shall be afforded preferential consideration for both ferry
21 landings and other commercial purposes, including the issuance of
22 a commercial operating permit and the waiver of any applicable
23 fees, at Lahaina small boat harbor; provided that:

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                                     H.B. NO.           H.D. 1

 1      (1)  The vessel operator has been issued a certificate of
 2           public convenience and necessity for the purpose of
 3           engaging in inter-island ferry service between the
 4           islands of Maui and Molokai;
 5      (2)  The design and performance characteristics of the
 6           vessel will permit safe navigation within the Lahaina
 7           harbor entrance channel and safe docking along the
 8           north face of the Lahaina pier;
 9      (3)  The vessel operations will not result in unreasonable
10           interference with the use of Lahaina harbor by other
11           vessels; and
12      (4)  All preferential consideration and waivers, including
13           any commercial permits issued under this section, shall
14           cease upon the vessel operator's termination of inter-
15           island ferry service between the islands of Maui and
16           Molokai.
17      [(d)] (c)  The chairperson may adopt rules pursuant to
18 chapter 91 to further implement this section."
19      SECTION 4.  Any lease issued for Ala Wai or Keehi small boat
20 harbors shall provide a period of not less than one year and not
21 more than two years to accomplish an orderly transition from
22 state management, operation, and control to private management,
23 operation and control.  Upon the board's approval of a qualified

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                                     H.B. NO.           H.D. 1

 1 lessee to lease Ala Wai or Keehi boat harbor, the department
 2 shall assist the lessee to develop a transition plan to schedule
 3 the transfer of equipment, facility plans, permit files, and
 4 other applicable administrative functions, including financial,
 5 accounting, and billing records, by the end of the transition
 6 period.  The transition period shall commence on the effective
 7 date of the lease and shall be completed on or before July 1,
 8 2002.  Any permit issued by the department for moorage or other
 9 uses that is in effect on the effective date of the lease shall
10 remain in effect until the expiration date of the permit.
11 Issuance of new permits for moorage and other harbor uses,
12 including principal habitation permits, to existing permittees by
13 the lessee shall be in accordance with procedures specified in
14 the transition plan.  All provisions of Hawaii administrative
15 rules adopted by the department of land and natural resources
16 pursuant to chapter 91, Hawaii Revised Statutes, implementing the
17 provisions of part I of chapter 200 that specifically pertain to
18 either Ala Wai small boat harbor, or Keehi small boat harbor,
19 shall be repealed as to that harbor on the date that the lease
20 for the premises becomes effective.
21      SECTION 5.  No officer or employee of the State shall suffer
22 any loss of salary, seniority, prior service credit, vacation,
23 sick leave, or other employee benefit or privilege as a

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                                     H.B. NO.           H.D. 1

 1 consequence of this Act.
 2      In the event that an office or position held by an employee
 3 having tenure is abolished, the officer or employee shall remain
 4 in the employment of the State with the same pay and shall be
 5 placed into another position within the current department or
 6 another state department, provided the individual meets the
 7 minimum qualifications of the position and all other public
 8 employment requirements.  In the event an appropriate placement
 9 cannot be made, the employee shall be retained by the department.
10      SECTION 6.  Statutory material to be repealed is bracketed.
11 New statutory material is underscored.
12      SECTION 7.  This Act shall take effect upon its approval;
13 provided that section 3 of this Act shall take effect on July 1,
14 2002.