REPORT TITLE:
Public lands


DESCRIPTION:
Authorizes the board of land and natural resources to offer a
successional generation a lease option without having to comply
with the public auction process, on property taken over by an
adult child.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            558         
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC LANDS.



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

 1      SECTION 1.  The legislature finds that there is need to
 
 2 encourage the development of the family farm by facilitating and
 
 3 expediting the process in which successional generations of
 
 4 farmers and ranchers can qualify for agricultural and pasture
 
 5 leases.
 
 6      The purpose of this Act is to allow adult children who are
 
 7 engaged in family farming and ranching operations on state leased
 
 8 lands to be allowed to enter into new lease agreements for the
 
 9 subject parcels, without going through the public auction
 
10 process.
 
11      SECTION 2.  Section 171-36, Hawaii Revised Statutes, is
 
12 amended by amending subsection (a) to read as follows:
 
13      "(a)  Except as otherwise provided, the following
 
14 restrictions shall apply to all leases:
 
15      (1)  Options for renewal of terms are prohibited; provided
 
16           that at the close of a lease term that was subsequently
 
17           taken over by an adult child pursuant to paragraph (5),
 
18           the board may offer a successional generation a lease
 
19           option on the same property without requiring the party
 

 
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 1           to comply with the public auction process required
 
 2           under part I of this chapter; and provided further that
 
 3           the party shall meet the auction pre-qualification
 
 4           requirements under section 171-14.5;
 
 5      (2)  No lease shall be for a longer term than sixty-five
 
 6           years, except in the case of a residential leasehold
 
 7           which may provide for an initial term of fifty-five
 
 8           years with the privilege of extension to meet the
 
 9           requirements of the Federal Housing Administration,
 
10           Federal National Mortgage Association, Federal Land
 
11           Bank of Berkeley, Federal Intermediate Credit Bank of
 
12           Berkeley, Berkeley Bank for Cooperatives, or Veterans
 
13           Administration requirements; provided that the
 
14           aggregate of the initial term and extension shall in no
 
15           event exceed seventy-five years;
 
16      (3)  No lease shall be made for any land under a lease which
 
17           has more than two years to run;
 
18      (4)  No lease shall be made to any person who is in arrears
 
19           in the payment of taxes, rents, or other obligations
 
20           owing the State or any county;
 
21      (5)  No lease shall be transferable or assignable, except by
 
22           devise, bequest, or intestate succession; provided that
 
23           with the approval of the board of land and natural
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           resources, the assignment and transfer of a lease or
 
 2           unit thereof may be made if:
 
 3           (A)  It contains the personal residence of the lessee;
 
 4           (B)  In the case of commercial, industrial, hotel,
 
 5                resort, apartment, and other business uses, the
 
 6                lessee was required to put in substantial building
 
 7                improvements;
 
 8           (C)  The lessee becomes mentally or physically
 
 9                disabled;
 
10           (D)  Extreme economic hardship is demonstrated to the
 
11                satisfaction of the board;
 
12           (E)  It is to the corporate successor of the lessee; or
 
13           (F)  In the case of agricultural uses, the assignee
 
14                meets the qualifications of a bona fide individual
 
15                farmer or a nonindividual farm concern pursuant to
 
16                section 171-14.5, in addition to or
 
17                notwithstanding the other conditions of this
 
18                paragraph;
 
19           provided further that prior to the approval of any
 
20           assignment of lease, the board shall have the right to
 
21           review and approve the consideration to be paid by the
 
22           assignee and may condition its consent to the
 
23           assignment of the lease on payment by the lessee of a
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           premium based on the amount by which the consideration
 
 2           for the assignment, whether by cash, credit, or
 
 3           otherwise, exceeds the depreciated cost of improvements
 
 4           and trade fixtures being transferred to the assignee;
 
 5           provided further that with respect to state
 
 6           agricultural leases, in the event of foreclosure or
 
 7           sale, the premium, if any, shall be assessed only after
 
 8           the encumbrances of record and any other advances made
 
 9           by the holder of a security interest are paid;
 
10      (6)  The lessee shall not sublet the whole or any part of
 
11           the demised premises except with the approval of the
 
12           board; provided that prior to the approval, the board
 
13           shall have the right to review and approve the rent to
 
14           be charged to the sublessee; provided further that in
 
15           the case where the lessee is required to pay rent based
 
16           on a percentage of its gross receipts, the receipts of
 
17           the sublessee shall be included as part of the lessee's
 
18           gross receipts; provided further that the board shall
 
19           have the right to review and, if necessary, revise the
 
20           rent of the demised premises based upon the rental rate
 
21           charged to the sublessee including the percentage rent,
 
22           if applicable[,]; and provided that the rent may not be
 
23           revised downward;
 

 
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 1      (7)  The lease shall be for a specific use or uses and shall
 
 2           not include waste lands, unless it is impractical to
 
 3           provide otherwise;
 
 4      (8)  Mineral and metallic rights and surface and ground
 
 5           water shall be reserved to the State; and
 
 6      (9)  No lease of public lands, including submerged lands,
 
 7           nor any extension of any such lease, shall be issued by
 
 8           the State to any person to construct, use, or maintain
 
 9           a sunbathing or swimming pier or to use the lands for
 
10           such purposes, unless such lease, or any extension
 
11           thereof, contains provisions permitting the general
 
12           public to use the pier facilities on the public lands
 
13           and requiring that a sign or signs be placed on the
 
14           pier, clearly visible to the public, which indicates
 
15           the public's right to the use of the pier.  The board,
 
16           at the earliest practicable date, and where legally
 
17           possible, shall cause all existing leases to be amended
 
18           to conform to this paragraph.  The term "lease", for
 
19           the purposes of this paragraph, includes month-to-month
 
20           rental agreements and similar tenancies."
 
21      SECTION 3.  Statutory material to be repealed is bracketed.
 
22 New statutory material is underscored.
 

 
 
 
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 1      SECTION 4.  This Act shall take effect upon its approval.
 
 2 
 
 3                           INTRODUCED BY:  _______________________