STAND. COM. REP. NO. 2864

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 755
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Water, Land, and Hawaiian Affairs, to
which was referred H.B. No. 755, H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC LANDS,"

begs leave to report as follows:

     The purpose of this measure is to give more flexibility to
homestead lessees by:

     (1)  Allowing lenders to accept the leased property as
          security for loans by setting aside the succession
          provision of the lease for the duration of the loan;
          and

     (2)  Making the leases more freely available to members of
          the lessee's family other than the ones enumerated in
          the succession provision in section 171-99(e), Hawaii
          Revised Statutes.

     The Department of Land and Natural Resources and an
individual testified in support of the measure.  The Office of
Hawaiian Affairs testified in support of the intent of the
measure.

     Your Committee finds that lessees are required to reside on
the land, pay taxes as if the land was held in fee simple, and
meet the lease conditions regarding clearing and cultivation.

 
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                                   STAND. COM. REP. NO. 2864
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Because the leasehold cannot be used as collateral, lessees have
had difficulty financing home construction and repairs.

     Your Committee has amended the measure by:

     (1)  Allowing lessees to purchase the fee interest to
          homestead lease for $1;

     (2)  Eliminating cash freehold agreements with respect to
          homestead leases; and

     (3)  Reinstating the succession provision in section
          171-99(e), Hawaii Revised Statutes, which has been
          redesignated as subsection (c) in this measure, to
          ensure that the leased lands stay in the possession of
          the successors of the original lessees.

     As affirmed by the record of votes of the members of your
Committee on Water, Land, and Hawaiian Affairs that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 755, H.D. 2, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 755, H.D. 2, S.D. 1, and be referred to the
Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Water, Land, and
                                   Hawaiian Affairs,



                                   ______________________________
                                   COLLEEN HANABUSA, Chair

 
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