STAND. COM. REP. NO. 796

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 873
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 873 entitled: 

     "A BILL FOR AN ACT RELATING TO REAL PROPERTY APPRAISALS,"

begs leave to report as follows:

     The purpose of this measure is to require the use of the
Uniform Standards of Professional Appraisal Practice (USPAP) to
determine real property fair market value for condemnation and
lease renegotiation purposes.  This measure also allows for the
reopening of lease renegotiations that were concluded within the
last five years for reconsideration under USPAP standards.

     Seventeen individuals, though not present at the hearing,
submitted written testimony in support of the measure.  The
Housing and Community Development Corporation of Hawaii and the
Hawaii Chapter of the Appraisal Institute presented testimony in
opposition to the measure.  The Land Use Research Foundation of
Hawaii and Kamehameha Schools Bishop Estate, though not present
at the hearing, presented testimony in opposition to the measure. 

     Your Committee finds that all real estate transactions
performed by real estate appraisers licensed or certified to
practice in this State must comply with USPAP.  This measure
would provide for consistency in the appraisal of a property's
fair market value by requiring the use of USPAP in condemnation
proceedings and lease renegotiations.     

     Your Committee has amended this measure by:

 
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                                   STAND. COM. REP. NO. 796
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     (1)  Deleting the requirement that USPAP be used in fixing
          the compensation or damages to be paid for property
          condemned under the power of eminent domain;

     (2)  Making optional the use of USPAP to determine the fair
          market value of real property for lease renegotiation
          purposes;

     (3)  Deleting the option of reopening lease negotiations
          concluded within the last five years for
          reconsideration under USPAP;

     (4)  Deleting the requirement that all lessees have equally
          available to them remedies relating to the lease of
          real property; 

     (5)  Postponing the measure's effective date to January 1,
          2004; and 

     (6)  Making technical, nonsubstantive amendments.

   
     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 873, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 873, S.D. 1, and be placed on the calendar for Third Reading.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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