STAND. COM. REP. NO.1035

Honolulu, Hawaii

, 2001

RE: S.B. No. 623

S.D. 1

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 S.B. No. 623, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC LANDS,"

beg leave to report as follows:

The purpose of this measure is to waive the public auction requirement to enable deserving agricultural lessees who meet stipulated criteria in the bill to negotiate lease renewals with the Board of Land and Natural Resources. These criteria include:

(1) The lease has expired or will expire within five years. This shall include lease lands held under a revocable permit issued pursuant to section 171-55;

(2) The board has determined that:

(A) After following a reasonable process of advertising and solicitation, there are no other qualified bidders interested in submitting bids on the land; or

(B) There are other substantially comparable lands available for lease to interested and qualified bidders;

(3) The land is being actively and productively used for the purpose stated in the lease and at least half of the leased land shall be cultivated or in productive use, or the gross farm revenue from the leased land for each of the prior three years shall have been equal to or greater than three times the annual lease rent;

(4) The current lessee is not otherwise in default under the terms of the or permit; and

(5) The land should not be converted to other uses and should remain in agriculture.

Lease extensions granted under this bill shall be for periods of not less than ten years and not more than twenty years. Lease rent shall be based on fair market value and shall not consider the value of the improvements made to the land by the current lessee.

Supporting testimony was received from the Hawaii Farm Bureau Federation, the Hawaii Forest Industry Association, and the Hawaii Export Nurseryman Association.

The Department of Land and Natural Resources, Hawaii Audubon Society, Hawaii's Thousand Friends, Ahahui Malama I Ka Lokahi, and the Ocean Law & Policy Institute opposed this bill.

Your Committees believe that deserving farmers on designated public farm lands should be given the opportunity to renew their leases through negotiation, rather than public auction, particularly when other nearby farm lands of similar characteristics are available.

Accordingly, your Committees have replaced the entire contents of this measure with that of H.B. 503, H.D. 2.

H.B. 503, H.D. 2, provides for a lessee to petition for lease renewal through direct negotiation and for the board to consider the following criteria:

(1) There is clear evidence that the leased land is and has been well-utilized by the lessee for agricultural purposes;

(2) Agricultural production through sales or tax documents indicate that the agricultural operation is and has been viable;

(3) 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 in constructing similar infrastructure improvements to achieve equivalent agricultural production results; and

(4) 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.

H.B. 503, H.D. 1 also requires:

(A) A public notice in the county that the leased property is located inviting comments in support or opposition to the lease renewal application;

(B) Legislative notification, legislative review, and legislative disapproval;

(C) The Departments of Land and Natural Resources and Agriculture to identify all agricultural leases that will expire prior to July 1, 2011;

(D) Determine the availability of farmlands with appropriate infrastructure;

(E) Ascertain the projected need for agricultural lands; and

(F) Determine the ability of the state to meet the projected need.

It is the intent of your Committees to begin immediate deliberation on both House and Senate versions by designating selected members to confer with all stake holders and to develop agreement, or at least a consensus towards the resolution of this longstanding, controversial issue.

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 S.B. No. 623, S.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 623, S.D. 1, 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,

____________________________

FELIPE P. ABINSAY, Chair

____________________________

EZRA KANOHO, Chair