SB1531

Report Title:

Public Agriculture Lands Administered by Dept. of Agriculture

Description:

Transfers the administration of public lands within an agricultural district to the department of agriculture.

THE SENATE	S.B. NO.	1531
TWENTY-FIRST LEGISLATURE, 2001
STATE OF HAWAII

A BILL FOR AN ACT

relating to agricultural lands.

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

SECTION 1. The legislature finds that the Hawaii's agriculture industry has unique concerns and needs with respect to public lands. Currently, Hawaii public agricultural land is treated much like any other public land when it comes to disposition. Although agricultural leases are afforded some special restrictions and requirements under current law, the current administration and management of public agricultural lands does not reflect adequate synergy with the concerns and needs of Hawaii's agriculture industry. The legislature finds that the department of agriculture is charged with the responsibility of servicing, improving, and promoting Hawaii's agriculture industry. Therefore, the department of agriculture, due to its unique insight into Hawaii's agriculture industry, should also be responsible for administering and managing agricultural lands.

The purpose of this Act is to transfer the powers, duties, and authority relating to the administration and management of agricultural lands from the department of land and natural resources to the department of agriculture.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

AGRICULTURAL LANDS

PART i. GENERAL PROVISIONS

§ -1 Definitions. As used in this chapter, unless otherwise provided:

"Agriculture or agricultural" means the planting, cultivating, harvesting, and processing of crops, including those planted, cultivated, harvested, and processed for food, ornamental, grazing, or forestry purposes, and including aquatic life farmed or ranched as aquaculture as defined by section 187A-1.

"Agricultural lands" or "lands" means all state public lands within an agricultural district classified pursuant to section 205-2.

"Board" means the board of agriculture.

"Department" means the department of agriculture.

§ -2 Department of agriculture. The department of agriculture shall manage, administer, and exercise control over agricultural lands.

§ -3 Powers and authority. The department of agriculture and the board of agriculture shall have the same functions, powers, authority, and duties with respect to agricultural lands and their disposition as the board of land and natural resources has with respect to other public lands in sections 171-6, 171-6.5, 171-7, 171-8, 171-12, 171-13, 171-14, 171-15, 171-16, 171-17, 171-18, 171-19, 171-20, 171-21, 171-22, 171-24, 171-25, 171-26, 171-27, 171-28, 171-29, 171-30, 171-31.5, 171-32, 171-33, 171-35, 171-36, 171-38, 171-39, 171-40, 171-50, 171-50.1, 171-50.2, 171-51, 171-52, 171-53, 171-54, 171-55, 171-55.5, 171-57, 171-58, 171-58.5, and 171-59.

§ -4 Classes of lands. The board of agriculture shall classify all agricultural lands and in doing so be guided by the following classifications:

(1) Intensive agricultural use

(A) First class--Lands highly productive of intensive crops such as sugarcane, pineapples, truck crops, and orchard crops.

(B) Second class--Lands having medium productivity for intensive crops.

(2) Special livestock use

(A) First class--Lands highly suitable for special livestock uses such as swine, dairy, and poultry production. In making the determination, consideration shall be given to drainage, climate, topography, proximity to market, and transportation and compatibility to adjoining land use, among other considerations. "Dairy" as used for disposition purposes means a "dry lot" dairy without allowance for grazing.

(B) Second class--Lands suitable for special livestock uses, but inferior to those of first class.

(3) Pasture use

(A) First class--Lands having a potentially high economic animal unit carrying capacity and capable of correspondingly high liveweight gains per acre per year, such as, less than five acres per animal unit per year and more than one hundred pounds live beef gains per animal unit per acre per year.

(B) Second class--Lands having a potentially medium economic animal unit carrying capacity and capable of moderate liveweight gains per acre per year, such as, five to twenty acres per animal unit per year and twenty to one hundred pounds live beef gains per animal unit per acre per year.

(C) Third class--Lands having a relatively low animal unit carrying capacity and producing correspondingly low liveweight gains per acre per year, such as, more than twenty acres per animal unit per year and less than twenty pounds average live beef gains per animal unit per acre per year.

(4) Commercial timber use

(A) First class--Lands of high suitability for growth of merchantable timber having mean annual growth potential under normal forest management practices with yields exceeding amounts such as one thousand board feet per acre, and with location and terrain presenting favorable logging, transportation, and marketing conditions.

(B) Second class--Lands of high suitability for growth of merchantable timber having mean annual growth potential under normal forest management practices with yields exceeding amounts such as one thousand board feet per acre, and with location and terrain presenting less favorable logging, transportation, and marketing conditions.

(C) Third class--Lands of medium suitability for growth of merchantable timber having mean annual growth potential in amounts such as five hundred to one thousand board feet per acre under normal forest management practices, and with location and terrain presenting favorable logging, transportation, and marketing conditions.

(D) Fourth class--Lands of medium suitability for growth of merchantable timber having mean annual growth potential in amounts such as five hundred to one thousand board feet per acre under normal forest management practices, and with location and terrain presenting less favorable logging, transportation, and marketing conditions.

(E) Fifth class--Lands of relatively low suitability for growth of merchantable timber having mean annual growth potential less than an amount such as five hundred board feet per acre, and with location and terrain presenting favorable logging, transportation, and marketing conditions.

(F) Sixth class--Lands of relatively low suitability for growth of merchantable timber having mean annual growth potential less than an amount such as five hundred board feet per acre, and with location and terrain presenting less favorable logging, transportation, and marketing conditions.

(5) Watershed use

Lands suitable for the use and development as watersheds or for the development of water, and requiring necessary restrictions on other uses.

(6) Unclassified uses

Lands not otherwise classifiable under the foregoing sections.

§ -5 Sugarcane lands conveyed for the development of housing projects. (a) This section applies to the amount to which the department of Hawaiian home lands is entitled pursuant to Article XII, Section 1, of the State Constitution from land previously cultivated as sugarcane land under any provision of law which is conveyed by the department to the housing and community development corporation of Hawaii for the development of housing projects as defined under section 201G-1. The amount to which the department of Hawaiian home lands is entitled shall be determined by multiplying the fair market value of the land by thirty per cent. For the purpose of this section, "fair market value" means the amount of money which a purchaser willing but not obliged to buy the land would pay to an owner willing but not obliged to sell it, taking into consideration the highest and best use of the land. For the purpose of this section, "highest and best use" means the most profitable, probable, and legal use to which the land can be put.

(b) Fair market value shall be determined on a per acre basis pursuant to appraisals performed in conformance with the uniform standards of professional appraisal practice as adopted by the department of commerce and consumer affairs, not more than ninety days before the conveyance of the land to the housing and community development corporation of Hawaii. The appraisals shall be performed by two disinterested appraisers each of whose services shall be contracted by the department and the department of Hawaiian home lands, respectively. If the land is of sugarcane lands and the public land trust, as defined in section 10-2, the department of Hawaiian home lands and the office of Hawaiian affairs shall contract the services of one appraiser. The parties shall contract the services of the two appraisers within thirty days after the department gives written notice to the department of Hawaiian home lands, together with the office of Hawaiian affairs if the land is of sugarcane lands and the public land trust, of the proposed conveyance of the land to the housing and community development corporation of Hawaii.

If any party fails or refuses to contract the services of an appraiser, then the other party may petition the presiding judge of the circuit court of the State in the county where the land is located to appoint the other of the two appraisers. If the two appraisers are unable to agree on a fair market value, then within thirty days thereafter, the department and the department of Hawaiian home lands, together with the office of Hawaiian affairs if the land is of sugarcane lands and the public land trust, shall contract for the services of a mutually selected third appraiser and the decision of the majority of the appraisers shall be final with respect to determination of the fair market value. If the department and the department of Hawaiian home lands, together with the office of Hawaiian affairs if the land is of sugarcane lands and the public land trust, are unable to agree on the selection of the third appraiser, any party may petition the presiding judge of the circuit court of the State in the county where the land is located to appoint the third appraiser.

(c) The amount due to the department of Hawaiian home lands shall be due and payable by the State on the date of conveyance of the land to the housing and community development corporation of Hawaii. Payment to the department of Hawaiian home lands may be in the form of public lands or moneys. If payment is to be made in the form of public lands, the lands shall be mutually agreed upon by the department and the department of Hawaiian home lands, and shall be of value comparable to the amount due to the department of Hawaiian home lands. Any monetary payment shall be an obligation of the housing and community development corporation of Hawaii. Any portion of that amount that is not paid on the date of conveyance shall be subject to simple interest annually, established pursuant to the fifteen year treasury rate at the time of the conveyance and payable annually by the State to the department of Hawaiian home lands.

(d) Thirty per cent of the revenue received by the housing and community development corporation of Hawaii from commercial, industrial, or other non-residential land shall be paid annually to the department of Hawaiian home lands, provided that:

(1) The department of Hawaiian home lands shall not receive payment under this subsection until the housing and community development corporation of Hawaii recovers all moneys previously paid to the department of Hawaiian home lands for that portion of land used for commercial, industrial, or other nonresidential purposes;

(2) If borrowed moneys are used to finance the development of land for commercial, industrial, or other nonresidential purposes, annual payments due to the department of Hawaiian home lands under this subsection shall be made pursuant to the following order of priority:

(A) The housing and community development corporation of Hawaii satisfies as a first priority the amount computed annually on the pro rata portion (not the total debt service over the life of the debt) of its total debt service on the borrowed moneys;

(B) The housing and community development corporation of Hawaii satisfies as a second priority its operating expense obligations (directly incurred from the development and operating of land used for commercial, industrial, or other nonresidential purposes) in an amount not exceeding one per cent of revenues;

(C) After the first and second priorities are satisfied, the housing and community development corporation of Hawaii shall make annual payments due to the department of Hawaiian home lands under this subsection from any remaining revenues; and

(3) In the event of a sale of land used for commercial, industrial, or other nonresidential purposes, the department of Hawaiian home lands shall receive thirty per cent of the revenue received by the housing and community development corporation of Hawaii.

§ -6 Planning; intensive agricultural and pasture uses. In addition to the requirements set forth in section 171-33, if the intended disposition is for intensive agricultural or pasture uses, the board of agriculture shall:

(1) Make or cause to be made an on-the-ground inspection of the land;

(2) Secure data or information from the land study bureau relating to such parcel;

(3) Review any other pertinent information with respect to the land and the surrounding area; and

(4) Based upon information obtained, prepare a written report on the land, which report shall include the following:

(A) The class of the land within the specific use for which disposition is intended;

(B) The condition of the land with respect to its state of development;

(D) Extent of uncontrolled erosion if any;

(E) Nature of forage; and

(F) Extent of infestation with noxious weeds.

§ -7 Acquisition. The board of agriculture is authorized to acquire by lease, exchange, direct purchase, or eminent domain private property for disposition for agricultural purposes, including but not limited to agricultural parks. After June 30, 1986, any lands acquired for the foregoing purposes shall be designated and set aside under section 171-11 to the department of agriculture upon its request for use as an agricultural park.

§ -8 Molokai forest lands, management program established. (a) There is established in the department of agriculture a Molokai forest lands management program to accelerate improved management of Molokai forest lands, including improved management in the following areas:

(1) Internal access;

(2) Scheduling of tree harvesting; and

(3) Scheduling of new plantings and replantings by designated areas with priority to harvesting and replanting for sustained yields of fast growing species suitable for energy production known to thrive in this State. The new planting and replanting shall not include the use of native forest and watershed land.

(b) The board of agriculture shall adopt rules under chapter 91 to implement this section.

§ -9 Public lands; agricultural park lands. (a) Public lands may be used for agricultural parks under this part.

(b) Public lands designated or in use as agricultural parks on June 30, 1986, shall be set aside under section 171-11 to the department of agriculture upon its request for use as agriculture parks. Notwithstanding any lease term to the contrary, after June 30, 1986, revenues from the rent, use, or maintenance of leased lots in agricultural parks set aside under this subsection shall be deposited into the agricultural park special fund established under section 166-10.

PART II. AGRICULTURAL LAND DISPOSITIONS

§ -21 Lease restrictions; intensive agricultural and pasture uses. In addition to the restrictions provided in section 171-36, the following restrictions shall apply to all leases for intensive agricultural and pasture uses:

(1) The lease term shall be not less than fifteen years nor more than thirty-five years, except that if the type of disposition requires the lessee to occupy the premises as the lessee's own personal residence, it may be longer than thirty-five years, but not in excess of seventy-five years, and except in the case of a tree-crop orchard lease the term of which shall not be in excess of forty-five years.

(2) If the land being leased is not immediately productive and requires extensive expenditures for clearing, conditioning of the soil, the securing of water, the planting of grasses, or the construction of improvements, as the result of which a longer term is necessary to amortize the lessee's investment, then the lease term may be longer than thirty-five years, but not in excess of fifty-five years.

(3) The land leased hereunder, or any portion thereof, shall be subject to withdrawal by the board of agriculture at any time during the term of the lease with reasonable notice and without compensation, except as provided herein, for public uses or purposes, including residential, commercial, industrial, or resort developments, for constructing new roads or extensions, or changes in line or grade of existing roads, for rights-of-way and easements of all kinds, and shall be subject to the right of the board to remove soil, rock, or gravel as may be necessary for the construction of roads and rights-of-way within or without the demised premises; provided that upon the withdrawal, or upon the taking which causes any portion of the land originally demised to become unusable for the specific use or uses for which it was demised, the rent shall be reduced in proportion to the value of the land withdrawn or made unusable, and if any permanent improvement constructed upon the land by the lessee is destroyed or made unusable in the process of the withdrawal or taking, the proportionate value thereof shall be paid based upon the unexpired term of the lease; provided further that no withdrawal or taking shall be had as to those portions of the land which are then under cultivation with crops until the crops are harvested, unless the board pays to the lessee the value of the crops; and provided further that upon withdrawal any person with a long-term lease shall be compensated for the present value of all permanent improvements in place at the time of withdrawal that were legally constructed upon the land by the lessee to the leased land being withdrawn. In the case of tree crops, the board shall pay to the lessee the residual value of the trees taken and, if there are unharvested crops, the value of the crops also.

"Tree-crop", as used in this section, shall be exclusive of papaya and banana.

§ -22 Auction pre-qualification; agricultural and pasture leases. (a) Whenever used in this section, unless otherwise apparent from the context:

"Farm" also means "ranch" and "farmer" also means "rancher".

"Individual" means a natural person who is not a part of a partnership, corporation, or joint venture which is a potential bidder under this section.

"Nonindividual concern" means a partnership, corporation, or joint venture properly formed under law and which is a potential bidder under this section.

(b) Any other law to the contrary notwithstanding, to be eligible to bid in an auction for agricultural or pasture leases, a potential bidder shall be a bona fide individual farmer or a nonindividual farm concern:

(1) Who has spent not less than two years, full-time, in farming operations;

(2) Who is an owner-operator of an established farm conducting a substantial farming operation;

(3) Who for a substantial period of the individual's adult life resided on a farm and depended on farm income for a livelihood;

(4) Who is an individual who has been a farm tenant or farm laborer or other individual, who has for the two years last preceding the auction obtained the major portion of their income from farming operations;

(5) Is an individual with a college degree in agriculture;

(6) Is an individual who by reason of ability, experience, and training as a vocational trainee is likely to successfully operate a farm;

(7) Who has qualified for and received a commitment for a loan under the Bankhead-Jones Farm Tenant Act as amended, or as may hereafter be amended, for the acquisition of a farm;

(8) Who is an individual who is displaced from employment in an agricultural production enterprise;

(9) Who is a member of the Hawaii Young Farmer Association or a Future Farmer of America graduate with two years of training with farming projects;

(10) Who possesses the qualifications under the new farmer program pursuant to section 155-1; or

(11) Who possesses other qualifications that the board of agriculture may prescribe pursuant to section 171-6 and this section.

PART III. SPECIAL DISPOSITIONS; SALES AND LEASES PERMITTED

WITHOUT PUBLIC AUCTION

§ -31 Leases, leases with option to purchase, sales permitted; when. Land intended for disposition as farm lot for truck crops or for horticultural, pasture, or special livestock use, may be disposed of by lease, lease with option to purchase, or in fee simple. The disposition may be by drawing of lot, without recourse to public auction, notwithstanding any other provision in this chapter to the contrary; provided that the right to any values in the land not attributable to these agricultural uses shall be reserved to the State.

Dispositions under this section shall be made only to individuals who satisfy the requirements established by the board and then only if the individual, either oneself or whose spouse, or both, does not already own lands of comparable use in the State; provided that the ownership by the individual or the individual's spouse of lands of comparable use shall not be a disqualification in applying for a lease within an agricultural park.

§ -32 Planning. In addition to the requirements set forth in sections 171-33 and 171-34, prior to making these dispositions, the board of agriculture shall:

(1) Determine the economic feasibility and need for proposed disposition;

(2) Determine the minimum economic unit required for the successful undertaking of the specific use intended, taking into consideration soil fertility, soil condition, and availability of water; and

(3) Subdivide the land into economic units and make such improvements as are necessary in conformity with applicable county or city and county zoning and subdivision requirements, including the construction of necessary roads and irrigation facilities.

§ -33 Restrictions; conditions. In addition to any other restrictions or conditions that may be established by the board of agriculture to carry out the purpose of this chapter and of the provisions of the state constitution, all sale, lease, or lease with option to purchase, of a farm lot shall be subject to the following conditions, which shall be covenants running with the land:

(1) The lot shall be used for farm purposes only;

(2) The purchaser or lessee shall reside on the premises granted; provided that with the consent of the board, the purchaser or lessee may live off the premises if the purchaser's or lessee's residence is within a reasonable distance therefrom;

(3) The purchaser or lessee shall derive the major portion of the purchaser's or lessee's total annual income from the production of the crops or products for which production the land is granted to the purchaser or lessee; provided that this restriction shall not apply if the purchaser or lessee becomes enfeebled or is widowed;

(4) In the case of a lease, those provisions set forth in sections 171-35, 171-36, and 171-37, unless otherwise specifically provided in this section;

(5) In the case of a fee simple sale, the improvement required and the specific use or uses intended;

(6) For a period of five years after the issuance of a patent or lease, the purchaser or lessee shall not sell, sublet, assign, transfer, or in other manner dispose or encumber the whole or any part of the farm lot to any person not qualified to take a farm lot except by way of mortgage, testamentary bequest or devise, intestate succession, or except to a purchaser at or after sale upon the foreclosure of a mortgage.

The violation of any of these restrictions or conditions shall be sufficient for the board, upon failure of the purchaser or lessee within a reasonable period of time to remedy the default after notice thereof as provided in section 171-20 to take possession of the premises without demand or previous entry and with or without legal process and thereby determine the estate, subject to section 171-21.

§ -34 Applicants; qualifications of. (a) A person shall be eligible to apply for a farm if the person has the qualifications as follows:

(1) The person has been a resident in the State at any time for at least three years;

(2) The person is a bona fide farmer:

(A) Who has not less than two years' experience as a full-time farmer;

(B) Who was an owner-operator of an established farm conducting a substantial farming operation and who for a substantial period of the person's life resided on a farm or depended on farm income for the person's livelihood;

(C) Who has been a farm tenant or farm laborer or other individual, who has for the two years last preceding the person's application obtained the major portion of the person's income from farming operations;

(D) Who has a college degree in agriculture;

(E) Who by reason of ability, experience, and training as a vocational trainee is likely to successfully operate a farm;

(F) Who has qualified for and received a commitment for a loan under the Bankhead-Jones Farm Tenant Act as amended, or as may hereafter be amended, for the acquisition of a farm;

(G) Who is displaced from employment in an agricultural production enterprise; or

(H) Who is a member of the Hawaii Young Farmer Association or a Future Farmer of America graduate with two years of training with farming projects; or

(3) The person meets such other qualifications as the board of agriculture may prescribe pursuant to section 171-6.

(b) No person shall be entitled to apply for a farm:

(1) Who, or whose husband or wife, has previously taken or held land for farm or homesteading under any certificate, lease, or agreement or under any homestead lease or patent based thereon; or

(2) Who, or whose husband or wife, or both of them, owns in fee simple other land in the State, the combined area of which with the land in question exceeds eighty acres; provided that:

(A) The ownership of a residence lot or tract, not exceeding three acres in area, shall not disqualify any person otherwise qualified from applying for and receiving any form of farm;

(B) Any person who would otherwise qualify to take a farm lot shall not be disqualified by reason of taking, holding or owning land for farm or homesteading or otherwise, if the land so taken, held or owned becomes unusable for the purpose of farming as defined in section -31.

(c) The terms "farm" and "farmer" as used herein also mean ranch and rancher respectively for the purposes of this section.

§ -35 Preference right. Any person otherwise qualified to take a farm lot shall have preference in any drawing for farm lots, if the person:

(1) Is a veteran (defined herein as a person who served in the military forces of the United States during any war between the United States and any other nation and who was discharged or released therefrom under conditions other than dishonorable); or

(2) Has, within a period of not longer than five years prior to the filing of the person's application, been an owner in possession, or a lessee in possession having an unexpired lease term of more than one year, of farm premises which were taken by any governmental authority for any public purpose and who was displaced by reason of the taking or which became unusable for farm purposes because the use was declared a public nuisance or was displaced by reason of a natural disaster."

SECTION 3. Section 26-15, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The department shall manage and administer the public lands of the State and minerals thereon and all water and coastal areas of the State except the commercial harbor areas of the State, including the soil conservation function, the forests and forest reserves, aquatic life, wildlife resources, state parks, including historic sites, and all activities thereon and therein including, but not limited to, boating, ocean recreation, and coastal areas programs[.]; provided that all public lands within an agricultural district classified pursuant to section 205-2 shall be managed and administered by the department of agriculture."

SECTION 4. Section 26-16, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The department shall:

(1) Manage and administer the public lands of the State that are within agricultural districts classified pursuant to section 205-2;

[~~(1)~~] (2) Promote the conservation, development, and utilization of agricultural resources in the State;

[~~(2)~~] (3) Assist the farmers of the State and any others engaged in agriculture by research projects, dissemination of information, crop and livestock reporting service, market news service, and any other means of improving the well-being of those engaged in agriculture and increasing the productivity of the lands;

[~~(3)~~] (4) Administer the programs of the State relating to animal husbandry, entomology, farm credit, development and promotion of agricultural products and markets, and the establishment and enforcement of the rules on the grading and labeling of agricultural products; and

[~~(4)~~] (5) Administer the aquaculture program under section 141-2.5."

SECTION 5. Section 141-1, Hawaii Revised Statutes, is amended to read as follows:

"§141-1 Duties in general. The department of agriculture shall:

(1) Gather, compile, and tabulate, from time to time, information and statistics concerning:

(A) Entomology and plant pathology: Insects, scales, blights, and diseases injurious, or liable to become injurious, to trees, plants, or other vegetation, and the ways and means of exterminating pests and diseases already in the State and preventing the introduction of those not yet here; and

(B) General agriculture: Fruits, fibres, and useful or ornamental plants and their introduction, development, care, and manufacture or exportation, with a view to introducing, establishing, and fostering new and valuable plants and industries;

(2) Encourage and cooperate with the agricultural extension service and agricultural experiment station of the University of Hawaii and all private persons and organizations doing work of an experimental or educational character coming within the scope of the subject matter of chapters 141, 142, and 144 to 150A, and avoid, as far as practicable, duplicating the work of those persons and organizations;

(3) Enter into contracts, cooperative agreements, or other transactions with any person, agency, or organization, public or private, as may be necessary in the conduct of the department's business and on such terms as the department may deem appropriate; provided that the department shall not obligate any funds of the State, except the funds that have been appropriated to the department. Pursuant to cooperative agreement with any authorized federal agency, employees of the cooperative agency may be designated to carry out, on behalf of the State the same as department personnel, specific duties and responsibilities under chapters 141, 142, 150A, and rules adopted pursuant to those chapters, for the effective prosecution of pest control, and animal disease control, and regulation of import into the State and intrastate movement of regulated articles;

(4) Secure copies of the laws of other states, territories, and countries, and other publications germane to the subject matters of chapters 141, 142, [~~and~~] 144 to 150A, and , and make laws and publications available for public information and consultation;

(5) Provide buildings, grounds, apparatus, and appurtenances necessary for the examination, quarantine, inspection, and fumigation provided for by chapters 141, 142, and 144 to 150A; for the obtaining, propagation, study, and distribution of beneficial insects, growths, and antidotes for the eradication of insects, blights, scales, or diseases injurious to vegetation of value and for the destruction of injurious vegetation; and for carrying out any other purposes of chapters 141, 142, [~~and~~] 144 to 150A[;], and ;

(6) Formulate and recommend to the governor and legislature additional legislation necessary or desirable for carrying out the purposes of chapters 141, 142, [~~and~~] 144 to 150A[;], and .

(7) Publish at the end of each year a report of the expenditures and proceedings of the department and of the results achieved by the department, together with other matters germane to chapters 141, 142, [~~and~~] 144 to 150A[,], and , and which the department may deem proper;

(8) Administer a program of agricultural planning and development, including the formulation and implementation of general and special plans, including but not limited to the functional plan for agriculture; administer the planning, development, and management of the agricultural park program; plan, construct, operate, and maintain the state irrigation water systems; review, interpret, and make recommendations with respect to public policies and actions relating to agricultural land and water use; assist in research, evaluation, development, enhancement, and expansion of local agricultural industries; and serve as liaison with other public agencies and private organizations for the above purposes. In the foregoing, the department of agriculture shall act to conserve and protect agricultural lands and irrigation water systems, promote diversified agriculture, increase agricultural self-sufficiency, and ensure the availability of agriculturally suitable lands[.];

(9) Pursuant to chapter , manage, administer, and exercise control over state lands within agricultural districts classified pursuant to section 205-2."

SECTION 6. Section 141-2, Hawaii Revised Statutes, is amended to read as follows:

"§141-2 Rules. Subject to chapter 91 the department of agriculture shall adopt, amend, and repeal rules not inconsistent with law, for and concerning:

(1) The introduction, transportation, and propagation of trees, shrubs, herbs, and other plants;

(2) The quarantine, inspection, fumigation, disinfection, destruction, or exclusion, either upon introduction into the State, or at any time or place within the State, of any nursery-stock, tree, shrub, herb, vine, cut-flower, cutting, graft, scion, bud, seed, leaf, root, or rhizome; any nut, fruit, or vegetable; any grain, cereal, or legume in the natural or raw state; any moss, hay, straw, dry-grass, or other forage; any unmanufactured log, limb, or timber; or any other plant growth or plant product unprocessed or in the raw state; any sand, soil, or earth; any live bird, reptile, insect, or other animal, in any stage of development, that is in addition to the so-called domestic animals, which are provided for in section 142-2; and any box, barrel, crate, or other containers in which the articles, substances, or objects have been transported or contained, and any packing material used in connection therewith, which is or may be diseased or infested with insects or likely to assist in the transmission or dissemination of any insect or plant disease injurious, harmful, or detrimental, or likely to become injurious, harmful, or detrimental to the agricultural or horticultural industries or the forests of the State, or which is or may be in itself injurious, harmful, or detrimental to the same (included therein may be rules governing the shipping of any of the articles, substances, or objects enumerated above in this section between different localities on any one of the islands within the State);

(3) The prohibition of importation into the State, from any or all foreign countries, or from other parts of the United States, or the shipment from one island within the State to another island therein, or the transportation from one part or locality of any island to another part or locality of the same island, of any specific article, substance, or object or class of articles, substances or objects, among those enumerated above in this section, which is diseased or infested with insects or likely to assist in the transmission or dissemination of any insect or plant disease injurious, harmful, or detrimental or likely to be injurious, harmful, or detrimental to the agricultural or horticultural industries, or the forests of the State, or which is or may be in itself injurious, harmful, or detrimental to the same;

(4) The manner in which agricultural product promotion and research activities may be undertaken, after coordinating with the agribusiness development corporation[.];

(5) The management and administration of agricultural lands as provided by chapter .

All rules adopted under this section shall have the force and effect of law."

SECTION 7. Section 171-2, Hawaii Revised Statutes, is amended to read as follows:

"§171-2 Definition of public lands. "Public lands" means all lands or interest therein in the State classed as government or crown lands previous to August 15, 1895, or acquired or reserved by the government upon or subsequent to that date by purchase, exchange, escheat, or the exercise of the right of eminent domain, or in any other manner; including submerged lands, and lands beneath tidal waters which are suitable for reclamation, together with reclaimed lands which have been given the status of public lands under this chapter, except:

(1) Lands designated in section 203 of the Hawaiian Homes Commission Act, 1920, as amended;

(2) Lands set aside pursuant to law for the use of the United States;

(3) Lands being used for roads and streets;

(4) Lands to which the United States relinquished the absolute fee and ownership under section 91 of the Hawaiian Organic Act prior to the admission of Hawaii as a state of the United States unless subsequently placed under the control of the board of land and natural resources and given the status of public lands in accordance with the State Constitution, the Hawaiian Homes Commission Act, 1920, as amended, or other laws;

(5) Lands to which the University of Hawaii holds title;

(6) Lands to which the housing and community development corporation of Hawaii in its corporate capacity holds title;

(7) Lands to which the Hawaii community development authority in its corporate capacity holds title;

(8) Lands to which the department of agriculture holds title by way of foreclosure, voluntary surrender, or otherwise, to recover moneys loaned or to recover debts otherwise owed the department under chapter 167;

(9) Lands which are set aside by the governor to the Aloha Tower development corporation; lands leased to the Aloha Tower development corporation by any department or agency of the State; or lands to which the Aloha Tower development corporation holds title in its corporate capacity; [~~and~~]

(10) Lands to which the agribusiness development corporation in its corporate capacity holds title[.]; and

(11) Lands within an agricultural district classified pursuant to section 205-2."

SECTION 8. Section 171-3, Hawaii Revised Statutes, is amended to read as follows:

"§171-3 Department of land and natural resources. The department of land and natural resources shall be headed by an executive board to be known as the board of land and natural resources. The department shall manage, administer, and exercise control over public lands, the water resources, ocean waters, navigable streams, coastal areas (excluding commercial harbor areas), and minerals and all other interests therein and exercise such powers of disposition thereof as may be authorized by law[.]; provided that public lands within an agricultural district classified pursuant to section 205-2 shall be managed and administered by the department of agriculture. The department shall also manage and administer the state parks, historical sites, forests, forest reserves, aquatic life, aquatic life sanctuaries, public fishing areas, boating, ocean recreation, coastal programs, wildlife, wildlife sanctuaries, game management areas, public hunting areas, natural area reserves, and other functions assigned by law."

SECTION 9. Section 171-10, Hawaii Revised Statutes, is amended to read as follows:

"§171-10 Classes of lands. The board of land and natural resources shall classify all public lands and in doing so be guided by the following classifications:

[~~1. Intensive agricultural use~~

~~(A) First class--Lands highly productive of intensive crops such as sugarcane, pineapples, truck crops, and orchard crops.~~

~~(B) Second class--Lands having medium productivity for intensive crops.~~

~~(C) Third class--Lands having fair to marginal productivity for intensive crops.~~

~~2. Special livestock use~~

~~(B) Second class--Lands suitable for special livestock uses, but inferior to those of first class.~~

~~3. Pasture use~~

~~4. Commercial timber use~~

5.] 1. Quarry use

Lands having sufficient quantity and quality of rock, gravel, and sand for purpose of commercial use.

[6.] 2. Mining use

Lands bearing sufficient quantity and quality of mineral products for purpose of commercial mining and use.

[7.] 3. Recreational use

Lands suitable for use and development as parks, playgrounds, historical sites, natural area, camp grounds, wildlife refuge, scenic sites, and other such uses.

[8.] 4. Watershed use

Lands suitable for the use and development as watersheds or for the development of water, and requiring necessary restrictions on other uses.

[9.] 5. Residential use

Lands suitable and economically feasible for residential development and use.

[~~10.~~] 6. Commercial and industrial use

Lands suitable and economically feasible for commercial and industrial development and use.

[~~11.~~] 7. Hotel, apartment, and motel use

Lands suitable and economically feasible for hotel, apartment, and motel development and use.

[~~12.~~] 8. Resort use

Lands suitable and economically feasible for resort development and use.

[~~13.~~] 9. Unclassified uses

Lands not otherwise classifiable under the foregoing sections."

SECTION 10. Section 171-14.5, Hawaii Revised Statutes, is repealed.

["~~§171-14.5 Auction pre-qualification; agricultural and pasture leases.~~ ~~(a) Whenever used in this section, unless otherwise apparent from the context:~~

~~"Farm" also means "ranch" and "farmer" also means "rancher".~~

~~"Individual" means a natural person who is not a part of a partnership, corporation, or joint venture which is a potential bidder under this section.~~

~~"Nonindividual concern" means a partnership, corporation, or joint venture properly formed under law and which is a potential bidder under this section.~~

~~(1)~~ ~~Who has spent not less than two years, full-time, in farming operations;~~

~~(2)~~ ~~Who is an owner-operator of an established farm conducting a substantial farming operation;~~

~~(3)~~ ~~Who for a substantial period of the individual's adult life resided on a farm and depended on farm income for a livelihood;~~

~~(4)~~ Who is an individual who has been a farm tenant or farm laborer or other individual, who has for the two years last preceding the auction obtained the major portion of their income from farming operations;

~~(5)~~ ~~Is an individual with a college degree in agriculture;~~

~~(6)~~ ~~Is an individual who by reason of ability, experience, and training as a vocational trainee is likely to successfully operate a farm;~~

~~(7)~~ ~~Who has qualified for and received a commitment for a loan under the Bankhead-Jones Farm Tenant Act as amended, or as may hereafter be amended, for the acquisition of a farm;~~

~~(8)~~ ~~Who is an individual who is displaced from employment in an agricultural production enterprise;~~

~~(9)~~ ~~Who is a member of the Hawaii Young Farmer Association or a Future Farmer of America graduate with two years of training with farming projects;~~

~~(10)~~ ~~Who possesses the qualifications under the new farmer program pursuant to section 155-1; or~~

~~(11)~~ ~~Who possesses other qualifications as the board of land and natural resources may prescribe pursuant to section 171-6 and this section.~~"]

SECTION 11. Section 171-18.5, Hawaii Revised Statutes, is repealed.

["~~§171-18.5~~ Sugarcane lands conveyed for the development of housing projects. (a) This section applies to the amount to which the department of Hawaiian home lands is entitled pursuant to Article XII, Section 1 of the State Constitution from land previously cultivated as sugarcane land under any provision of law which is conveyed by the department to the housing and community development corporation of Hawaii for the development of housing projects as defined under section 201G-1. The amount to which the department of Hawaiian home lands is entitled shall be determined by multiplying the fair market value of the land by thirty per cent. For the purpose of this section, "fair market value" means the amount of money which a purchaser willing but not obliged to buy the land would pay to an owner willing but not obliged to sell it, taking into consideration the highest and best use of the land. For the purpose of this section, "highest and best use" means the most profitable, probable, and legal use to which the land can be put.

(c) The amount due to the department of Hawaiian home lands shall be due and payable by the State on the date of conveyance of the land to the housing and community development corporation of Hawaii. Payment to the department of Hawaiian home lands may be in the form of public lands or moneys. If payment is to be made in the form of public lands, the lands shall be mutually agreed upon by the department of land and natural resources and the department of Hawaiian home lands, and shall be of value comparable to the amount due to the department of Hawaiian home lands. Any monetary payment shall be an obligation of the housing and community development corporation of Hawaii. Any portion of that amount that is not paid on the date of conveyance shall be subject to simple interest annually, established pursuant to the fifteen year treasury rate at the time of the conveyance and payable annually by the State to the department of Hawaiian home lands.

~~(1)~~ The department of Hawaiian home lands shall not receive payment under this subsection until the housing and community development corporation of Hawaii recovers all moneys previously paid to the department of Hawaiian home lands for that portion of land used for commercial, industrial, or other non-residential purposes;

~~(2)~~ If borrowed moneys are used to finance the development of land for commercial, industrial, or other non-residential purposes, annual payments due to the department of Hawaiian home lands under this subsection shall be made pursuant to the following order of priority:

~~(A)~~ The housing and community development corporation of Hawaii satisfies as a first priority the amount computed annually on the pro rata portion (not the total debt service over the life of the debt) of its total debt service on the borrowed moneys;

~~(B)~~ The housing and community development corporation of Hawaii satisfies as a second priority its operating expense obligations (directly incurred from the development and operating of land used for commercial, industrial, or other non-residential purposes) in an amount not exceeding one per cent of revenues;

~~(C)~~ After the first and second priorities are satisfied, the housing and community development corporation of Hawaii shall make annual payments due to the department of Hawaiian home lands under this subsection from any remaining revenues; and

~~(3)~~ In the event of a sale of land used for commercial, industrial, or other non-residential purposes, the department of Hawaiian home lands shall receive thirty per cent of the revenue received by the housing and community development corporation of Hawaii."]

SECTION 12. Section 171-34, Hawaii Revised Statutes, is repealed.

["~~§171-34 Planning; intensive agricultural and pasture uses.~~ ~~In addition to the requirements set forth in section 171-33, if the intended disposition is for intensive agricultural or pasture uses, the board of land and natural resources shall:~~

~~(1)~~ ~~Make or cause to be made an on-the-ground inspection of the land;~~

~~(2)~~ ~~Secure data or information from the land study bureau relating to such parcel;~~

~~(3)~~ ~~Review any other pertinent information with respect to the land and the surrounding area; and~~

~~(4)~~ ~~Based upon information obtained, prepare a written report on the land, which report shall include the following:~~

~~(A)~~ ~~The class of the land within the specific use for which disposition is intended;~~

~~(B)~~ ~~The condition of the land with respect to its state of development;~~

~~(C)~~ ~~Existing improvements, if any;~~

~~(D)~~ ~~Extent of uncontrolled erosion if any;~~

~~(E)~~ ~~Nature of forage; and~~

~~(F)~~ ~~Extent of infestation with noxious weeds.~~"]

SECTION 13. Section 171-37, Hawaii Revised Statutes, is repealed.

["~~§171-37 Lease restrictions; intensive agricultural and pasture uses.~~ ~~In addition to the restrictions provided in section 171-36, the following restrictions shall apply to all leases for intensive agricultural and pasture uses:~~

~~(1)~~ The lease term shall be not less than fifteen years nor more than thirty-five years, except that if the type of disposition requires the lessee to occupy the premises as the lessee's own personal residence, it may be longer than thirty-five years, but not in excess of seventy-five years, and except in the case of a tree-crop orchard lease the term of which shall not be in excess of forty-five years.

~~(2)~~ If the land being leased is not immediately productive and requires extensive expenditures for clearing, conditioning of the soil, the securing of water, the planting of grasses, or the construction of improvements, as the result of which a longer term is necessary to amortize the lessee's investment, then the lease term may be longer than thirty-five years, but not in excess of fifty-five years.

~~(3)~~ The land leased hereunder, or any portion thereof, shall be subject to withdrawal by the board of land and natural resources at any time during the term of the lease with reasonable notice and without compensation, except as provided herein, for public uses or purposes, including residential, commercial, industrial, or resort developments, for constructing new roads or extensions, or changes in line or grade of existing roads, for rights-of-way and easements of all kinds, and shall be subject to the right of the board to remove soil, rock, or gravel as may be necessary for the construction of roads and rights-of-way within or without the demised premises; provided that upon the withdrawal, or upon the taking which causes any portion of the land originally demised to become unusable for the specific use or uses for which it was demised, the rent shall be reduced in proportion to the value of the land withdrawn or made unusable, and if any permanent improvement constructed upon the land by the lessee is destroyed or made unusable in the process of the withdrawal or taking, the proportionate value thereof shall be paid based upon the unexpired term of the lease; provided further that no withdrawal or taking shall be had as to those portions of the land which are then under cultivation with crops until the crops are harvested, unless the board pays to the lessee the value of the crops; and provided further that upon withdrawal any person with a long-term lease shall be compensated for the present value of all permanent improvements in place at the time of withdrawal that were legally constructed upon the land by the lessee to the leased land being withdrawn. In the case of tree crops, the board shall pay to the lessee the residual value of the trees taken and, if there are unharvested crops, the value of the crops also.

~~"Tree-crop", as used in this section, shall be exclusive of papaya and banana.~~"]

SECTION 14. Chapter 171, part I, subpart A, Hawaii Revised Statutes, is repealed.

SECTION 15. Chapter 171, part V, Hawaii Revised Statutes, is repealed.

SECTION 16. Chapter 171, part VI, Hawaii Revised Statutes, is repealed.

SECTION 17. The jurisdiction, functions, powers, duties, and authority heretofore exercised by the department of land and natural resources relating to public lands within agricultural districts classified pursuant to section 205-2, Hawaii Revised Statutes, shall be transferred to and conferred upon the department of agriculture by this Act and shall be performed and enforced in the same manner as previously authorized, entitled, or obligated except as otherwise authorized, directed, or instructed by this Act.

The department of agriculture shall succeed to all of the rights and powers previously exercised, and all of the duties and obligations incurred by the department of land and natural resources in the exercise of the functions, powers, duties, and authority transferred, whether such functions, powers, duties, and authority are mentioned in or granted by any law, contract, or other document.

All rules, policies, procedures, guidelines, and other material adopted or developed by the department of land and natural resources to implements provisions of the Hawaii Revised Statutes the substance of which are reenacted or made applicable to the department of agriculture by this Act, shall remain in full force and effect until amended or repealed by the chairperson of the board of agriculture pursuant to chapter 91.

All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the department of land and natural resources pursuant to the provisions of the Hawaii Revised Statutes, the substance of which are reenacted or made applicable to the department of agriculture by this Act, shall remain in full force and effect.

SECTION 18. All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department or the governor.

SECTION 19. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of land and natural resources relating to the functions transferred to the department of agriculture shall be transferred with the functions to which they relate.

SECTION 20. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 21. It is the intent of this Act not to jeopardize the receipt of any federal aid nor to impair the obligations of the State or any agency thereof to the holders of any bond issued by the State or by any state agency, and to the extent, and only to the extent, necessary to effectuate this intent, the governor is authorized and empowered to modify the strict provisions of this Act, but shall promptly report any such modifications with the reasons therefore to the legislature at its next session thereafter for review by the legislature. Nothing contained in this chapter shall affect the validity or the terms and provisions of any bond heretofore issued by the State, department of land and natural resources, or the department of agriculture.

SECTION 22. All acts passed by the legislature during this regular session of 2001, whether enacted before or after the effective date of this Act, shall be amended to conform to this Act unless such acts specifically provide that this Act is being amended. Amendments made to sections of the Hawaii Revised Statutes that are amended by this Act as of a future effective date shall include amendments made after the approval of this Act and before the effective date of the amendments made by this Act, to the extent that intervening amendments may be harmonized with the amendments made by this Act.

SECTION 23. The governor shall appoint a management team and may hire necessary staff without regard to chapters 76 and 77, Hawaii Revised Statutes to:

(1) Develop the appropriate transitions plans;

(2) Rework position descriptions;

(3) Revise personnel classifications;

(4) Develop and organizational structure; and

(5) Attend to other administrative details;

so that the transfer of functions can be implemented on July 1, 2002.

SECTION 24. The governor shall submit to the legislature no later than twenty days prior to the convening of the regular session of 2002, a detailed report on the status of the transition and any legislation recommended by the management team to further effectuate the purposes of this Act.

SECTION 25. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 26. This Act shall take effect on July 1, 2002; provided that sections 23 to 25 shall take effect upon approval.

INTRODUCED BY:	_____________________________