SB2367 SD1

SECTION 1. The legislature finds that the division of boating and ocean recreation of the department of land and natural resources is tasked with thirteen statutory mandates primarily relating to the operation and management of state small boat harbors and the administration of the ocean recreation program. However, the legislature recognizes that, due to statutory limitations, the division has been unable to meet its statutory mandate of administering the ocean recreation management program and has disproportionately devoted almost all of its staff and resources to the operation and management of the sixteen state small boat harbors, which include more than two thousand slips and numerous boat launch ramp facilities throughout the State, leaving very few resources available for major statutory responsibilities of regulating and managing ocean recreation.

The legislature notes that the division has historically been severely underfunded, understaffed, and unable to meet its statutory mandates to manage and maintain the sixteen small boat harbors. Due to inflation and increased construction costs, the division had approximately $1,100,000,000 in deferred maintenance costs as of 2024. With an annual operational budget of roughly $30,000,000, the division is unable to address this deferred maintenance backlog, leaving facilities in disrepair while awaiting capital improvement project funding from the legislature.

The legislature further finds that it is nearly impossible to quantify ocean recreation management program underfunding because ocean recreation activities are widespread throughout the ocean waters of the State. Furthermore, the division has not been able to adequately administer the ocean recreation management program for the reasons stated, resulting in increased user conflicts, ocean safety concerns, and illegal commercial ocean activities.

The legislature also finds that the Ala Wai small boat harbor is the "gateway to Waikiki". The harbor has significant potential to provide a positive and memorable welcome to residents and visitors as they enter Waikiki and to be a community space for gatherings and recreational activities, as envisioned by decades of community planning and summarized most recently in the 2022 University of Hawaii Community Design Center Ala Wai Small Boat Harbor Vision Report (2022 UH Report). Engaging in alternative management options for state small boat harbors, namely public‑private partnerships for management of small boat harbor operations, while preserving the jobs of public employees working in the area, could improve small boat harbor conditions, create a more inviting atmosphere for all users, and enable the division to better devote its time and resources to the administration of the ocean recreation management program.

However, the legislature also finds that it is important to ensure safe and meaningful public access and parking for residents and visitors heading to the shoreline for relaxation and recreation, including to a boat ramp. It is likewise critical to ensure safe and comfortable multimodal access across the shoreline between Ala Moana beach park and Waikiki beach, extending the lei of parks, and creating a place appropriate and aesthetically appropriate gateway to Waikiki, as envisioned by the 2022 UH Report.

The legislature further finds that a prime example of a state-owned harbor under private management is the Kewalo basin harbor under the Hawaii community development authority, which is leased to Howard Hughes Holdings, Inc., and managed by Almar Marinas. The public‑private partnership at Kewalo basin harbor has resulted in timely repairs and maintenance, as well as a regular staff presence to monitor harbor activities and assist users, enhancing public access to a more enjoyable space.

Accordingly, the purpose of this Act is to:

(1) Develop and implement a project to improve those portions of Ala Wai small boat harbor that provide for public access to the shoreline, including to a boat ramp, and safe and comfortable multimodal access across the shoreline between Ala Moana beach park and Waikiki beach, extending the lei of parks, and creating a place- and aesthetically-appropriate gateway to Waikiki, as envisioned by the 2022 UH Report; and

(2) Allow the board of land and natural resources to lease the management of the remaining portion of Ala Wai small boat harbor, including fast lands and submerged lands within its boundaries, by public auction, request for proposals, or direct negotiation for private development, management, and operation; provided that public employees at Ala Wai small boat harbor are retained.

SECTION 2. Chapter 200, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§200- State boating facility lease; authorized. (a) Upon completion of boundary amendments that segregate the portion of Ala Wai small boat harbor to be improved pursuant to section 5, Act , Session Laws of Hawaii 2026, the board may lease the remaining portion of Ala Wai small boat harbor, including fast lands and submerged lands within its boundaries, by public auction, request for proposals, or direct negotiation for private development, management, and operation; provided that any lease entered into pursuant to this section shall expire on or before June 30, 2046.

(b) The state boating facility lease made pursuant to subsection (a) shall be exempt from the notice and legislative authorization requirements of sections 171-53(c) and 171-60 (a).

(c) No later than twenty days prior to the convening of each regular session, the department shall submit to the legislature a report of its findings and recommendations, including any proposed legislation, and advise whether the state boating facility lease should be continued, modified, or terminated.

(d) For the purposes of this section, "state boating facility" has the same meaning as defined in section 200-2.5."

SECTION 3. Section 200-2.6, Hawaii Revised Statutes, is repealed.

["~~[§200-2.6] Ala Wai boat harbor; leases.~~ ~~The fast lands and submerged lands of the Ala Wai boat harbor that may be leased include the following:~~

~~(1)~~ ~~All fast lands and submerged lands described in the request for qualifications or request for proposals issued by the division of boating and ocean recreation of the department on November 25, 2008;~~

~~(2)~~ ~~The fast land described as a portion of tax map key: (1) 2-3-37-12, composed of approximately 112,580 square feet, presently used for harbor offices and permitted vehicular parking; and~~

~~(3)~~ ~~The fast land described as a portion of tax map key: (1) 2-3-37-12, which is a triangular area located Diamond Head of Mole B, presently used for permitted vehicular parking.~~"]

SECTION 4. The department of land and natural resources shall develop and implement a project to improve those portions of Ala Wai small boat harbor that provide for public access to the shoreline, and to improve safe and comfortable multimodal access across the shoreline between Ala Moana beach park and Waikiki beach, extending the lei of parks and creating a place‑ and aesthetically-appropriate gateway to Waikiki, as envisioned by the 2022 University of Hawaii Community Design Center Ala Wai Small Boat Harbor Vision Report.

SECTION 5. All employees of the division of boating and ocean recreation of the department of land and natural resources who occupy civil service positions and whose functions are replaced as a result of this Act shall retain their civil service status, whether permanent or temporary. Employees shall be reassigned within the division of boating and ocean recreation without loss of salary, seniority (except as prescribed by applicable collective bargaining agreements), retention points, prior service credit, any vacation and sick leave credits previously earned, and other rights, benefits, and privileges, in accordance with state personnel laws; provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the planning and design for improvements pursuant to section 5 of this Act.

The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

SECTION 7. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on January 28, 2081; provided that section 200- , Hawaii Revised Statutes, shall be repealed on June 30, 2046.

THE SENATE	S.B. NO.	2367
THIRTY-THIRD LEGISLATURE, 2026		S.D. 1
STATE OF HAWAII