REPORT TITLE:
Kaneohe Bay; Private Piers


DESCRIPTION:
Grandfathers unpermitted piers in Kaneohe Bay.  Eliminates
requirement that residential piers built on submerged lands be
open to the public.  Exempts private residential noncommercial
pier leases from obtaining legislative and governor approval.
Established a residential pier lease rent moratorium.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1711
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                S.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO KANEOHE BAY.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature has determined that the State
 
 2 has an interest in regulating submerged lands to protect and
 
 3 preserve the environment and ecosystem that exists there.  There
 
 4 are more than two hundred piers on state submerged land in the
 
 5 Kaneohe and Kahaluu area, of which only approximately twenty are
 
 6 paying rent to the State.
 
 7      Many piers in the affected area were built prior to October
 
 8 1, 1964, the effective date of the first regulatory measures
 
 9 concerning piers.  Other piers built after this date were built
 
10 in compliance with other regulations that were in effect at the
 
11 time of construction.  Piers constructed before October 1, 1964,
 
12 and those built subsequent to that date in compliance with
 
13 regulations adopted after that date are nonconforming uses
 
14 pursuant to section 183C-5, Hawaii Revised Statutes, and the
 
15 legislature has previously stated that no rules may be adopted,
 
16 which shall prohibit the continued use of such structures.
 
17      Some piers, however, were built without complying with any
 
18 permitting requirements whether at the time of construction or
 
19 any time thereafter.  These piers are illegal.  The legislature
 

 
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 1 finds, however, that official records that would help to identify
 
 2 nonconforming piers and illegal piers are scattered among various
 
 3 state and federal departments and agencies or have been
 
 4 destroyed.  
 
 5      The legislature finds that pier owners have overwhelmingly
 
 6 expressed their desire to pay a reasonable amount to the State
 
 7 for their continued use of submerged lands.  The legislative
 
 8 auditor has previously found that the cost to account for monthly
 
 9 rent for piers has exceeded the revenues realized to the State.
 
10      The legislature finds that the State has already sold more
 
11 than fifty easements for the use of submerged lands, many of
 
12 which are for piers in the same area.  The legislature finds that
 
13 the issuance of easements for a period of not less than fifty-
 
14 five years, pursuant to section 171-36(a)(2), Hawaii Revised
 
15 Statutes, would result in a substantial return to the State while
 
16 significantly reducing the accounting costs to the State as
 
17 provided in sections 171-13 and 190D-21, Hawaii Revised Statutes.
 
18      Lessees of state land are required pursuant to chapter 171,
 
19 Hawaii Revised Statutes, to indemnify the State against
 
20 liability.  Section 171-36(a)(9), Hawaii Revised Statutes, as now
 
21 constructed, requires lessees to open their piers to the public
 
22 at large.  This provision creates a problem for pier lessees
 
23 because it makes obtaining liability insurance prohibitively
 

 
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                                     H.B. NO.           H.D. 2
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 1 expensive and difficult to obtain and moreover interferes with
 
 2 pier owners' ability to maintain their structures and implied
 
 3 right to quiet enjoyment.  The legislature, therefore, finds that
 
 4 repealing this requirement as to private residential
 
 5 noncommercial piers is in the best interests of the State.
 
 6      The purpose of this Act is to protect the piers in the
 
 7 Kaneohe and Kahaluu area by:
 
 8      (1)  Requiring any unpermitted pier in Kaneohe Bay existing
 
 9           in whatever form on the effective date of this Act to
 
10           be considered a nonconforming use in the conservation
 
11           district;
 
12      (2)  Eliminating the requirement in section 171-36(a)(9),
 
13           Hawaii Revised Statutes, that lessees open their piers
 
14           to the public at large;
 
15      (3)  Expediting the issuance of easements for piers by
 
16           including private residential noncommercial piers as
 
17           items not requiring prior legislative and gubernatorial
 
18           approval on easement dispositions;
 
19      (4)  Establishing a lease rent moratorium on the submerged
 
20           lands and the private residential noncommercial piers
 
21           thereon in Kaneohe Bay, located offshore of property
 
22           between Kealohi Point and Nuupia Pond, until the
 
23           department of land and natural resources adopts a
 

 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 1
                                                        

 
 1           residential pier lease rent formula; and
 
 2      (5)  Requiring the department of land and natural resources
 
 3           to establish an equitable solution for lessees who have
 
 4           been paying lease rent on submerged lands and the
 
 5           private residential noncommercial piers thereon in
 
 6           Kaneohe Bay, located offshore of property between
 
 7           Kealohi Point and Nuupia Pond, which may include the
 
 8           issuance of a lease rent credit.
 
 9      SECTION 2.  Section 171-36, Hawaii Revised Statutes, is
 
10 amended by amending subsection (a) to read as follows:
 
11      "(a)  Except as otherwise provided, the following
 
12 restrictions shall apply to all leases:
 
13      (1)  Options for renewal of terms are prohibited;
 
14      (2)  No lease shall be for a longer term than sixty-five
 
15           years, except in the case of a residential leasehold
 
16           which may provide for an initial term of fifty-five
 
17           years with the privilege of extension to meet the
 
18           requirements of the Federal Housing Administration,
 
19           Federal National Mortgage Association, Federal Land
 
20           Bank of Berkeley, Federal Intermediate Credit Bank of
 
21           Berkeley, Berkeley Bank for Cooperatives, or Veterans
 
22           Administration requirements; provided that the
 
23           aggregate of the initial term and extension shall in no
 

 
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                                     H.B. NO.           H.D. 2
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 1           event exceed seventy-five years;
 
 2      (3)  No lease shall be made for any land under a lease which
 
 3           has more than two years to run;
 
 4      (4)  No lease shall be made to any person who is in arrears
 
 5           in the payment of taxes, rents, or other obligations
 
 6           owing the State or any county;
 
 7      (5)  No lease shall be transferable or assignable, except by
 
 8           devise, bequest, or intestate succession; provided that
 
 9           with the approval of the board of land and natural
 
10           resources, the assignment and transfer of a lease or
 
11           unit thereof may be made if:
 
12           (A)  It contains the personal residence of the lessee;
 
13           (B)  In the case of commercial, industrial, hotel,
 
14                resort, apartment, and other business uses, the
 
15                lessee was required to put in substantial building
 
16                improvements;
 
17           (C)  The lessee becomes mentally or physically
 
18                disabled;
 
19           (D)  Extreme economic hardship is demonstrated to the
 
20                satisfaction of the board;
 
21           (E)  It is to the corporate successor of the lessee; or
 
22           (F)  In the case of agricultural uses, the assignee
 
23                meets the qualifications of a bona fide individual
 

 
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                                     H.B. NO.           H.D. 2
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 1                farmer or a nonindividual farm concern pursuant to
 
 2                section 171-14.5, in addition to or
 
 3                notwithstanding the other conditions of this
 
 4                paragraph;
 
 5           provided further that prior to the approval of any
 
 6           assignment of lease, the board shall have the right to
 
 7           review and approve the consideration to be paid by the
 
 8           assignee and may condition its consent to the
 
 9           assignment of the lease on payment by the lessee of a
 
10           premium based on the amount by which the consideration
 
11           for the assignment, whether by cash, credit, or
 
12           otherwise, exceeds the depreciated cost of improvements
 
13           and trade fixtures being transferred to the assignee;
 
14           provided further that with respect to state
 
15           agricultural leases, in the event of foreclosure or
 
16           sale, the premium, if any, shall be assessed only after
 
17           the encumbrances of record and any other advances made
 
18           by the holder of a security interest are paid;
 
19      (6)  The lessee shall not sublet the whole or any part of
 
20           the demised premises except with the approval of the
 
21           board; provided that prior to the approval, the board
 
22           shall have the right to review and approve the rent to
 
23           be charged to the sublessee; provided further that in
 

 
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                                     H.B. NO.           H.D. 2
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 1           the case where the lessee is required to pay rent based
 
 2           on a percentage of its gross receipts, the receipts of
 
 3           the sublessee shall be included as part of the lessee's
 
 4           gross receipts; provided further that the board shall
 
 5           have the right to review and, if necessary, revise the
 
 6           rent of the demised premises based upon the rental rate
 
 7           charged to the sublessee including the percentage rent,
 
 8           if applicable, and provided that the rent may not be
 
 9           revised downward;
 
10      (7)  The lease shall be for a specific use or uses and shall
 
11           not include waste lands, unless it is impractical to
 
12           provide otherwise; and
 
13      (8)  Mineral and metallic rights and surface and ground
 
14           water shall be reserved to the State[; and
 
15      (9)  No lease of public lands, including submerged lands,
 
16           nor any extension of any such lease, shall be issued by
 
17           the State to any person to construct, use, or maintain
 
18           a sunbathing or swimming pier or to use the lands for
 
19           such purposes, unless such lease, or any extension
 
20           thereof, contains provisions permitting the general
 
21           public to use the pier facilities on the public lands
 
22           and requiring that a sign or signs be placed on the
 
23           pier, clearly visible to the public, which indicates
 

 
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                                     H.B. NO.           H.D. 2
                                                        S.D. 1
                                                        

 
 1           the public's right to the use of the pier.  The board,
 
 2           at the earliest practicable date, and where legally
 
 3           possible, shall cause all existing leases to be amended
 
 4           to conform to this paragraph.  The term "lease", for
 
 5           the purposes of this paragraph, includes month-to-month
 
 6           rental agreements and similar tenancies]."
 
 7      SECTION 3.  Section 171-53, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (c) to read as follows:
 
 9      "(c)  The board, with the prior approval of the governor and
 
10 the prior authorization of the legislature by concurrent
 
11 resolution, may lease submerged lands and lands beneath tidal
 
12 waters under the terms, conditions, and restrictions provided in
 
13 this chapter; provided that the approval of the governor and
 
14 authorization of the legislature shall not be required for any
 
15 grant of easement or lease of submerged lands or lands beneath
 
16 tidal waters used for private residential noncommercial piers,
 
17 docks, moorings, cables, or pipelines; provided further that this
 
18 exemption shall not apply to easements for cables used for
 
19 interisland electrical transmission or slurry pipelines used for
 
20 transportive materials, mined at sea, or waste products from the
 
21 processing of the same.
 
22      The lease shall provide that the lands shall be reclaimed at
 
23 the expense of the lessee.  Title to the reclaimed lands shall
 

 
Page 9                                                     1711
                                     H.B. NO.           H.D. 2
                                                        S.D. 1
                                                        

 
 1 remain in the State."
 
 2      SECTION 4.  Notwithstanding any law to the contrary, any
 
 3 existing private residential noncommercial pier in Kaneohe Bay,
 
 4 located offshore of property between Kealohi Point and Nuupia
 
 5 Pond, on the effective day of this Act, shall be considered
 
 6 nonconforming for the purposes of chapter 183C, Hawaii Revised
 
 7 Statutes; provided that the owner of the pier obtains all
 
 8 necessary approvals and land disposition from the department of
 
 9 land and natural resources.  Any penalties assessed under section
 
10 183C-7(b), Hawaii Revised Statutes, for violations under section
 
11 183C-5, Hawaii Revised Statutes, prior to the effective day of
 
12 this Act shall be expunged.
 
13      SECTION 5.  (a)  Notwithstanding any law to the contrary,
 
14 upon the effective date of this Act, there is established a lease
 
15 rent moratorium on all leases of submerged lands and the private
 
16 residential noncommercial piers thereon in Kaneohe Bay, located
 
17 offshore of property between Kealohi Point and Nuupia Pond.  The
 
18 moratorium shall remain in force until such time that the
 
19 department of land and natural resources, in accordance with
 
20 chapter 91, Hawaii Revised Statutes, adopts a private residential
 
21 noncommercial pier lease rent formula.
 
22      (b)  The department of land and natural resources shall
 
23 establish an equitable solution for lessees who have been paying
 

 
Page 10                                                    1711
                                     H.B. NO.           H.D. 2
                                                        S.D. 1
                                                        

 
 1 lease rent on submerged lands and the private residential
 
 2 noncommercial piers thereon in Kaneohe Bay, located offshore of
 
 3 property between Kealohi Point and Nuupia Pond, while the
 
 4 moratorium established under subsection (a) is in effect.  In
 
 5 developing a solution under this subsection, the department of
 
 6 land and natural resources may consider the issuance of a lease
 
 7 rent credit to qualified lessees affected by the moratorium
 
 8 established under subsection (a).
 
 9      SECTION 6.  Statutory material to be repealed is bracketed.
 
10 New statutory material is underscored.
 
11      SECTION 7.  This Act shall take effect upon its approval.