Report Title:
State Agricultural Leases; Extensions for Current Lessees
Description:
Provides that the current agricultural lessee has a right of first preference to re-lease the property on expiration; credits appraised value of specified infrastructure installed by the current lessee toward the price the current lessee must match in exercising the lessee's right of first preference; limits lessee's right of first preference within sixty days after auction; authorizes DLNR to negotiate long-term leases under specific terms, conditions, and restrictions with certain lessees of agricultural land; allows DLNR to adopt rules; specifies that within six months from the Act's effective date, DLNR shall notify all agricultural lessees of the Act.
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THE SENATE |
S.B. NO. |
605 |
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TWENTY-FIRST LEGISLATURE, 2001 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO STATE LEASES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Widespread development of farm ownership is one of several stipulated uses for proceeds from the public land trust. The continued growth and development of diversified agriculture throughout the State is an objective of the Hawaii state plan as stated in chapter 226, Hawaii Revised Statutes.
Certain lessees of agricultural lands have occupied state lands for long periods of time. However, these same lessees face an uncertain future as the expiration of their leases nears. Currently, upon expiration, if the leased land is not otherwise disposed of, the department of land and natural resources may allow the lessee to continue to hold the land for a period not exceeding one year. Upon expiration of the one-year extension, if the board has not yet decided upon the re-lease of the land or reservation for other purposes, the board may issue a temporary month-to-month permit to the lessee. The lessee is then left in a precarious position with the possibility of losing the land in a public auction.
The legislature finds that:
(1) It is in the public interest to assist qualifying lessees who depend on farming state land for a livelihood;
(2) This Act is consistent with objectives of the Hawaii state plan; and
(3) If the offer of assistance provided by this Act is accepted by qualifying lessees, the State would realize greater returns from the long-term dispositions of lands now under temporary leases.
The purpose of this Act is to authorize the department of land and natural resources to negotiate long-term leases under specific terms, conditions, and restrictions imposed by this Act with certain lessees of agricultural land.
SECTION 2. Chapter 171, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§171- Agricultural leases. Notwithstanding any other provisions of this chapter, at the time of expiration of an agricultural lease, the current lessee shall have a right of first preference to lease the property. The right shall lapse unless the department is notified in writing of the exercise of the right within sixty days after a public auction held pursuant to section 171-14. The fair market value of all infrastructure improvements installed by the current lessee, which are directly related to an agriculture operation, excluding residences, shall be credited toward the price the current lessee must match in exercising the lessee's right of first preference."
SECTION 3. Section 171-40, Hawaii Revised Statutes, is amended to read as follows:
"§171-40 Expired leases; holdover. (a) Upon expiration of the lease term, if the leased land is not otherwise disposed of, the board of land and natural resources may allow the lessee to continue to hold the land for a period not exceeding one year upon such rent, terms, and conditions as the board may prescribe; provided that if, immediately prior to the expiration of the lease, the land was cultivated with crops having ratoons for at least one cycle, as defined hereinafter, the board may permit the lessee to continue to hold the leased land until the crops from the last remaining cycle have been harvested. The term "cycle" as used in this section means the period required to plant and cultivate the original crop, including the harvesting of the first ratoon, being a period exceeding two years.
Upon expiration of the one-year extension, if the board has not yet decided upon the re-lease of the land or reservation for other purposes, the board may [issue] either:
(1) Issue a temporary permit to the lessee, subject to section 171-55 and the rent and such other terms and conditions as the board may prescribe[.]; or
(2) Enter into an agricultural lease of not fewer than fifteen years and not more than fifty-five years with any person who:
(A) On January 1, 2001, was holding a temporary permit for agricultural purposes issued in accordance with section 171-55; or
(B) Formerly held a state agricultural lease that expired within the last five years preceding January 1, 2001, and has continued to occupy the state land; provided that the lands eligible for lease negotiation under this subsection shall be lands zoned and used for agricultural purposes and not needed by any state or county agency for any other public purpose;
(C) Has continued to occupy the public land previously leased; and
(D) Has been deemed by the department to be a good steward of the public lands leased.
(b) In negotiating and executing a lease under subsection (a)(2), the board shall:
(1) Require appraisal of the parcel in accordance with section 171-17(b);
(2) Impose lease provisions, restrictions, and conditions provided by sections 171-35, 171-36, and 171-37 as may be required to protect the State's interests;
(3) Recover from the lessee the costs of surveying and subdividing the parcel incurred by the department; and
(4) Require the payment of annual lease rent based on the appraised value of the land; provided that the fair market value of all infrastructure improvements installed by the current lessee, which are directly related to an agriculture operation, excluding residences, is credited toward the lessee's annual lease rent."
SECTION 4. Within six months from the effective date of this Act, the department shall notify in writing all lessees of agricultural lands eligible for lease negotiations under this Act and shall inform the lessees of the terms, conditions, and restrictions provided by this Act. Any lessee may apply for a lease; provided that:
(1) The application shall be submitted to the department in writing within thirty days from the date or receipt of notification; and
(2) The department may require documentary proof of any applicant to determine that the applicant meets eligibility and qualification requirements for a lease as specified by this Act.
SECTION 5. The department may adopt rules, pursuant to chapter 91, Hawaii Revised Statutes, relating to appraisals, lease terms and duration, cost recovery, and other issues necessary to carry out the purposes of this Act.
SECTION 6. The department may hire temporary personnel and consultants without regard to the requirements of chapters 76 and 77, and section 78-1, Hawaii Revised Statutes, to carry out duties and responsibilities necessary in implementing this Act.
SECTION 7. There is appropriated out of general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2001-2002, to implement the purposes of this Act.
The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 2001.
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INTRODUCED BY: |
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