Authorizes the department of land and natural resources to issue a new lease to existing lessee at Makapuu, subject to certain conditions.

A BILL FOR AN ACT

SECTION 1. The legislature recognizes the importance of fundamental scientific marine research in the State's quest for its economic future. The Oceanic Institute is one of the world's premier applied research organizations involving marine aquaculture and its various disciplines. It is the largest organization of its kind in the United States. The Oceanic Institute's mission is a critical one, and one which is in turn critical to our State.

One recent major accomplishment of the Institute is the revitalization of the moi fishery and the production of moi in offshore cages. In addition, the Oceanic Institute has developed techniques for cost effective recirculating shrimp aquaculture systems. This new technology will guide the world in an environmentally sustainable product. These accomplishments and others help to establish Hawaii's place as not only a leading edge research center for aquaculture but also provides local entrepreneurs the ability to build new and exciting businesses for our State.

The Oceanic Institute also is home to the Center for Tropical and Subtropical Aquaculture, one of just five regional aquaculture centers in the United States. The Center is broadly charged with aquaculture research, development, demonstration and extension education to enhance viable and profitable U.S. aquaculture. Hawaii is thus the base for all of the tropical and subtropical species research for the United States, unlimited by any geographical boundaries.

The Oceanic Institute is a private, not-for-profit 501(c)(3) research and development organization, which has a lease on state lands at Makapuu, Oahu. This site is the location of the new Center for Applied Aquaculture and Marine Biotechnology, which is a $23,600,000 expansion of the Institute's campus designed to position the Oceanic Institute as the world center for advanced aquaculture, coastal resource management, and marine biotechnology. The lease of the site with the department of land and natural resources is about to expire, and the Institute is facing uncertainty of its continued tenancy.

In part, the issue concerning the Institute's tenancy stems from the revenues derived from Sea Life Park, a for-profit activity operated under a sublease from the Oceanic Institute. A portion of the revenues derived from this enterprise, approximately $500,000 in calendar year 1999, form a crucial part of the revenue stream used by the Oceanic Institute for operations not covered by grants. This is just over 6.5 per cent of the Institute's total revenue for 1999. Common infrastructure supports both the Institute and Sea Life Park. Sea Life Park's commercial activity threatens the Institute's ability to secure a long-term lease from the State, and may force the State to place the entire complex, including the research and development facilities, up for a bid at the end of the current lease term. This is not in the public interest.

The Legislature finds that fundamental research performed at the Institute should not be threatened because a portion of the property is used to fund the operations of a non-profit activity. Forcing this Makapuu property to be subject to an auction is not in the best interests of the State of Hawaii or the generations of citizens to come. It is the Legislature's intention to encourage the Institute's activities to advance aquaculture in Hawaii and the United States and recognize the Institute's commitment to non-profit activities under a new lease.

The purpose of this Act is to promote the growth and continuation of the research and development activities of the Oceanic Institute and to authorize the board of land and natural resources to issue a new lease to the Oceanic Institute.

SECTION 2. Notwithstanding any law to the contrary, the department of land and natural resources is authorized to issue new leases to the existing lessee of that certain property located at                       , subject to the following:

SECTION 3. It is the expressed intent of this Act that the legislature not interfere with market forces by subsidizing these uses to ensure that the State is receiving a fair return from public lands and that investment is made into the infrastructure associated with the lease.

SECTION 4. The lands eligible for lease under section 2 of this Act shall be limited to the existing lease with infrastructure located in the Makapuu area.

SECTION 5. All costs for the issuance of a new lease, including determining the current fair market value and the request for proposals, shall be paid for by the lessee interested in acquiring the new lease.

SECTION 6. This Act shall take effect on July 1, 2001.