Clarifies that obtaining a loan shall not be a prerequisite to modifying or extending the term of a lease.

A BILL FOR AN ACT

SECTION 1. The legislature finds that current law is being interpreted to require lessees of public lands to obtain a loan in order to be granted an extension to their lease. This has resulted in lessees, particularly farmers, unnecessarily obtaining financing and making improvements to their leased public lands when no improvement is necessary.

The purpose of this Act is to clarify that a lease extension is not predicated upon the lessee obtaining a loan.

SECTION 2. Section 171-36, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The board, from time to time, upon the issuance or during the term of any intensive agricultural, aquaculture, commercial, mariculture, special livestock, pasture, or industrial lease, may:

Among other purposes, a lease may be modified or extended to the extent necessary to qualify the lease for mortgage lending or guaranty purposes, if the lessee desires a mortgage or loan, with the Federal Housing Administration, Federal National Mortgage Association, Department of Veterans Affairs, Small Business Administration, United States Department of Agriculture, Federal Land Bank of Berkeley, Federal Intermediate Credit Bank of Berkeley, Berkeley Bank for Cooperatives, or any other federal mortgage lending agency qualified to do business in the State, and their respective successors and assignees, or to qualify the lessee for any state or private lending institution loan, private loan guaranteed by the State, or any loan in which the State and any private lender participates; provided that the private lender shall be qualified to do business in the State; provided further that the approval of any extension shall be subject to the following:

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.