| 47 | | - | SECTION 1. The department of land and natural resources shall review the final report of the house of representatives' investigative committee established under House Resolution No. 164, Regular Session of 2021, for the purpose of: (1) Conducting a policy analysis considering the State's land lease policy. This report shall include expert analysis from the University of Hawaii, including the Ka Huli Ao center for excellence in Native Hawaiian law, and a national organization of state legislatures and a comparison of best practices in comparable states. The policy analysis shall include analysis of: (A) The conditions under which lease extensions are in the best interest of the State, including monetary and non-monetary costs and benefits associated with extending a lease and with a lease reverting back to the State for lease re-opening; (B) An analysis of the costs and revenue estimates for the State to offer space leases rather than ground leases; and (C) An analysis of potential statutory or procedural improvements that would allow the department of land and natural resources to derive just compensation, such as fines or fees, from lessees when lessees fail to maintain the parcel or fail to complete the improvements that were promised as a condition of the extension, including any proposed legislation; and (2) Developing proposed legislation to: (A) Regularize and make consistent the various lease extension statutory provisions in chapter 171, Hawaii Revised Statutes. The proposed legislation shall specifically: (i) Allow all types of leases to be extended but require that all lease extensions, regardless of whether those leases were obtained through direct negotiation or the public auction process, use the most current lease form and leasing practices and policies, including provisions to allow the State to be paid its fair share of sublease income; (ii) Allow the State to charge rent premiums on extended leases to compensate the State for forgoing the reversionary interest and incorporate the value of the improvements on the property; and (iii) Require a lessee to pay for the appraisal required for the reopening of rent in the extended lease term and be precluded from protesting the rent so determined; (B) Explore the potential for using a request for interest process as a prior condition of all lease dispositions (e.g., auctions, extensions, or direct negotiations); and (C) Allow the department of land and natural resources to negotiate direct leases for five to ten years with a basic appraisal process for those properties where there is no interest in the public auction as determined by responses to a request for interest solicitation or by holding a public auction. SECTION 2. 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 2022-2023 for the department of land and natural resources to conduct the policy analysis required in section 1 of this Act and implement the recommendations made in the final report of the house of representatives' investigative committee established under House Resolution No. 164, Regular Session of 2021. The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act. SECTION 3. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable. SECTION 4. This Act shall take effect on July 1, 2050. |
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| 47 | + | SECTION 1. The department of land and natural resources shall review the final report of the house of representatives' investigative committee established under House Resolution No. 164, Regular Session of 2021, for the purpose of developing proposed legislation to: (1) Regularize and make consistent the various lease extension statutory language in chapter 171, Hawaii Revised Statutes. The proposed legislation shall specifically: (A) Allow all types of leases to be extended, but require that all lease extensions, regardless of whether those leases were obtained through direct negotiation or the public auction process, use the most current lease form and leasing practices and policies, including provisions to allow the State to be paid its fair share of sublease income; (B) Allow the State to charge rent premiums on extended leases to compensate the State for foregoing the reversionary interest and incorporate the value of the improvements on the property, except any improvements mandated by the State; and (C) Require a lessee to pay for the appraisal required for the reopening of rent in the extended lease term and be precluded from protesting the rent so determined; and (2) Allow the department of land and natural resources to negotiate direct leases for five to ten years with a basic appraisal process for those properties where there is no interest in the public auction as determined by responses to a request for interest solicitation or by holding a public auction. SECTION 2. 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 2022-2023 for the department of land and natural resources to implement the recommendations made in the final report of the house of representatives' investigative committee established under House Resolution No. 164, Regular Session of 2021. The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act. SECTION 3. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable. SECTION 4. This Act shall take effect upon its approval. INTRODUCED BY: _____________________________ |
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