REPORT TITLE:
Real Property Appraisals


DESCRIPTION:
Requires use of Uniform Standards of Professional Appraisal
Practice (USPAP)to determine property's fair market value for
condemnation and lease renegotiation purposes.  Allows reopening
of lease renegotiations concluded within last five years for
reconsideration under USPAP standards. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           873
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO REAL PROPERTY APPRAISALS. 


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

 1      SECTION 1.  Section 101-23, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§101-23  Damages assessed, how.  In fixing the compensation
 
 4 or damages to be paid for the condemnation of any property, the
 
 5 value of the property sought to be condemned with all
 
 6 improvements thereon shall be assessed[,]; provided that fair
 
 7 market value shall be determined in conformance with the Uniform
 
 8 Standards of the Professional Appraisal Practice by the procedure
 
 9 set forth in section 10-13.6(b) and the first sentence of section
 
10 171-18.5(b); and if any of the improvements are separately owned,
 
11 the value thereof shall be separately assessed.  If the property
 
12 sought to be condemned constitutes only a portion of a larger
 
13 tract, the damages which will accrue to the portion not sought to
 
14 be condemned by reason of its severance from the portion sought
 
15 to be condemned, and the construction of the improvements in the
 
16 manner proposed by the plaintiff shall also be assessed, and also
 
17 how much the portion not sought to be condemned will be
 
18 specifically benefited, if at all, by the construction of the
 
19 improvement proposed by the plaintiff.  If the benefit shall be
 

 
Page 2                                                     
                                     S.B. NO.           873
                                                        
                                                        

 
 1 equal to the amount of 
 
 2 compensation assessed for the property taken, and for damages by
 
 3 reason of its severance from another portion of the same tract,
 
 4 then the owner shall be allowed no compensation, but if the
 
 5 benefits shall be less than the amount so assessed as damages or
 
 6 compensation, then the former shall be deducted from the latter
 
 7 and the remainder shall be the amount awarded as compensation or
 
 8 damages.  In case of the exercise of the power of eminent domain
 
 9 by the city and county of Honolulu in furtherance of any
 
10 governmental power under section 46-74.2 and the improvement
 
11 ordinance of the city, the amount of damages or compensation
 
12 assessed, or awarded, or agreed upon in any compromise approved
 
13 by motion of the city council shall in no case be construed as
 
14 limiting or affecting the power of the city council to distribute
 
15 any portion of the cost upon any property found to be benefited
 
16 thereby proportioned as provided by law in the exercise of their
 
17 judgment whether under an improvement district or frontage
 
18 improvement created before or after the acquisition of any such
 
19 land.  If condemnation is for the purpose of widening or
 
20 realigning any existing highway or other public road, the owner
 
21 of the property condemned shall be entitled to full compensation
 
22 for the property actually taken and special benefits shall be
 
23 considered only insofar as the value of the benefits shall not
 

 
Page 3                                                     
                                     S.B. NO.           873
                                                        
                                                        

 
 1 exceed the damages which will accrue to the portion not sought to
 
 2 be condemned by reason of its severance from the portion sought
 
 3 to be condemned and the construction of the improvements in the
 
 4 manner proposed by the plaintiff.  That is, if the special
 
 5 benefits shall be equal to the severance damages, then the owner
 
 6 of the parcel shall be allowed no compensation except the value
 
 7 of the portion taken, but if the special benefits shall be less
 
 8 than the severance damages, then the former shall be deducted
 
 9 from the latter and the remainder shall be the only damages
 
10 allowed in addition to the value of the land taken."
 
11      SECTION 2.  Section 519-1, Hawaii Revised Statutes, is
 
12 amended by amending subsection (a) to read as follows:
 
13      "(a)  Whenever any agreement or document for the lease of
 
14 private lands provides for the renegotiation of the rental amount
 
15 or other recompense during the term of the lease and such
 
16 renegotiated rental amount or other recompense is based,
 
17 according to the terms of the lease, in whole or in part upon the
 
18 fair market value of the land, or the value of the land as
 
19 determined by its highest and best use, or words of similar
 
20 import, such value, for the purposes of determining the amount of
 
21 rental or other recompense, shall be calculated upon the use to
 
22 which the land is restricted by the lease document[.]; provided
 
23 that:
 

 
Page 4                                                     
                                     S.B. NO.           873
                                                        
                                                        

 
 1      (1)  Fair market value shall be determined in conformance
 
 2           with the Uniform Standards of the Professional
 
 3           Appraisal Practice by the procedure set forth in
 
 4           section 10-13.6(b) and the first sentence of section
 
 5           171-18.5(b);
 
 6      (2)  Fair market value that is determined to be less than
 
 7           the rental amount currently being paid shall prevail
 
 8           over any existing contract provision which bars the
 
 9           lowering of lease rent upon renegotiation; and
 
10      (3)  Any lease renegotiations concluded within five years
 
11           prior to the effective date of this Act may be reopened
 
12           for reconsideration under the procedures set forth in
 
13           this subsection, within one year of the effective date
 
14           of this Act at the initiation of either party.
 
15 Any other provision or remedy afforded any class of lessee in
 
16 this chapter or in any other law or ordinance relating to the
 
17 lease of real property shall be equally available to all lessees;
 
18 and no provision, right, benefit, or remedy afforded to any class
 
19 of lessee or tenant by this chapter or in any other law,
 
20 ordinance, or regulation shall be denied to any other class,
 
21 lessee, or tenant."
 
22      SECTION 3.  Statutory material to be repealed is bracketed.
 
23 New statutory material is underscored.
 

 
Page 5                                                     
                                     S.B. NO.           873
                                                        
                                                        

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