SB2807

Report Title:

Public Land Leases

Description:

Allows lessees of public lands to extend their leases to the extent necessary to amortize the cost of major improvements to demised premises.

THE SENATE	S.B. NO.	2807
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

 

RELATING TO EXTENSION OF PUBLIC LAND LEASES.

 

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

SECTION 1. Section 171-36, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The board, from time to time, upon the issuance or during the term of any intensive agricultural, aquaculture, commercial, mariculture, special livestock, pasture, or industrial lease, may:

(1) Modify or eliminate any of the restrictions specified in subsection (a);

(2) Extend or modify the fixed rental period of the lease; or

(3) Extend the term of the lease

to the extent necessary to qualify the lease for mortgage lending or guaranty purposes with [the Federal Housing Administration, Federal National Mortgage Association,

Department of Veterans Affairs, Small Business Administration, United States Department of Agriculture, Federal Land Bank of Berkeley, Federal Intermediate Credit Bank of Berkeley, Berkeley Bank for Cooperatives, or any other] any federal mortgage lending agency [qualified to do business in the State, and their respective successors and assignees], or to qualify the lessee for any state or private lending institution loan, private loan guaranteed by the State, or any loan in which the State and any private lender participates[; provided that the private lender shall be qualified to do business in the State;], or to amortize the cost of substantial improvements to the demised premises that are paid for by the lessee without institutional financing, such extension being based on the economic life of the improvements as determined by staff or independent appraiser; provided [further] that the approval of any extension shall be subject to the following:

(1) The demised premises have been used substantially for the purpose for which they were originally leased;

(2) The aggregate of the initial term and any extension granted shall not be for more than fifty-five years;

(3) In the event of a reopening, the rental for any ensuing period shall be the fair market rental at the time of reopening; [and]

(4) Any federal or private lending institution shall be qualified to do business in the State;

(5) Proceeds of any such mortgage or loan shall be used solely for the operations or improvements on the demised premises;

(6) Where improvements are financed by the lessee, the lessee shall submit receipts of expenditures within a time period specified by the board, otherwise the lease extension shall be canceled; and

[(4)] (7) The rules of the board, setting forth any additional terms and conditions, which shall ensure and promote the purposes of the demised lands."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________