A BILL FOR AN ACT

SECTION 1. The cost of operating, maintaining, and managing state small boat harbors and other boating facilities, including the amortization (both principal and interest) of capital improvements, is paid from the boating special fund. The primary sources of these special fund revenues are mooring and other harbor use fees, and other sources such as lease rent and the state marine fuel tax. State small boat harbors and other boating facilities are centers of recreation and economic activity, and as such, must be managed in a manner that facilitates recreation and commercial activity, and generates sufficient revenue for this purpose.

The legislature finds that private management and operation of public marina facilities is a common practice in many state and local jurisdictions throughout the United States. An estimated cost of over $18,000,000 would be required to redevelop Ala Wai small boat harbor, and over $10,000,000 to redevelop Keehi small boat harbor, to create "world class" marina facilities to serve metropolitan Honolulu. Redevelopment of Ala Wai small boat harbor is considered a key element in overall efforts to revitalize Waikiki, and redevelopment of Keehi small boat harbor is a necessary first step in transforming Keehi Lagoon into a major water recreation area.

The legislature also finds that funding in these amounts for improvements at Ala Wai and Keehi small boat harbors exceeds the capability of present state resources, given the present financial condition of the State. Leasing Ala Wai and Keehi small boat harbors to private interests is an alternative means of accomplishing the redevelopment of these facilities at no cost to the State.

The purposes of this Act are to: (1) authorize the board of land and natural resources to lease by public auction Ala Wai and Keehi small boat harbors for redevelopment, management, and operation by private firms; (2) clarify that leases issued for Ala Wai and Keehi small boat harbors are limited to uses that complement or support the purpose of the leases; (3) clarify that the revenue due to the State from these leases shall be deposited to the boating special fund; (4) provide for an orderly transition from state operation, management, and control to private management and operation; and (5) provide job security for state employees presently assigned to those locations.

SECTION 2. Chapter 171, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§171- Lease of Ala Wai and Keehi small boat harbors. (a) Notwithstanding any law to the contrary, the board may lease by public auction Ala Wai and Keehi small boat harbors, including submerged lands within the harbors, to qualified private entities for redevelopment, management, and operation for marina purposes on terms and conditions approved by the board. The lease term shall not be in excess of thirty-five years, except as provided by section 171-36.

(b) The permissible uses under any lease disposed of under this section shall be for marina purposes and consistent with the purpose for which the land was set aside by the governor pursuant to section 171-11. Permissible uses may include the offering of goods and services for the convenience of the users that complement or support the purpose of the lease.

(c) A lease issued pursuant to this section, upon the effective date of the lease, shall not be subject to the provisions of part I of chapter 200 or administrative rules adopted thereunder. The lessee shall have the authority to regulate the use of the premises through the issuance of subleases and other permits to the extent permitted by the terms of the lease; provided that boat owners and operators and their boating activities on the waters within the leased premises shall be subject to chapter 200, parts II-VII, and administrative rules adopted thereunder.

(d) A lease issued pursuant to this section shall contain provisions reserving adequate public right of way or public access to adjacent public lands and waters over and across the premises encumbered by the lease, and a lease for Ala Wai small boat harbor shall further provide that the parking area immediately adjacent to Duke Kahanamoku beach be retained for public parking and provide unencumbered vehicular access thereto.

(e) For the purpose of this section "marina" means a dock or basin providing secure moorings for vessels, and may offer supply, repair, fuel, and other facilities and services.

(f) All revenues due to the State, after any applicable twenty per cent entitlement to the office of Hawaiian affairs if the land is ceded land, derived from the leases of Ala Wai and Keehi small boat harbors shall be deposited in the boating special fund."

SECTION 3. Any lease issued for either Ala Wai or Keehi small boat harbor shall provide a period of not less than one year and not more than two years to accomplish an orderly transition from state management, operation, and control to private management, operation and control. Upon the board's approval of a qualified lessee to lease Ala Wai or Keehi boat harbor, the department shall assist the lessee to develop a transition plan to schedule the transfer of equipment, facility plans, permit files, and other applicable administrative functions, including financial, accounting, and billing records, by the end of the transition period. The transition period shall commence on the date of execution of the lease and shall be completed on or before July 1, 2003. Any permit issued by the department for moorage or other uses that is in effect on the effective date of the lease shall remain in effect until the expiration date of the permit. Issuance of new permits for moorage or other harbor uses, including principal habitation permits, to existing permittees by the lessee shall be in accordance with procedures specified in the transition plan.

All provisions of Hawaii administrative rules adopted by the department of land and natural resources pursuant to chapter 91, Hawaii Revised Statutes, implementing the provisions of part I of chapter 200, Hawaii Revised Statutes, that specifically pertain to either Ala Wai small boat harbor, or Keehi small boat harbor, shall be repealed as to that harbor on the date that the lease for the premises becomes effective.

SECTION 4. In the event that an office or position held by a permanent employee is abolished as a consequence of this Act, the officer or employee shall be permitted to:

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.