Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Agriculture and Water, Land, Energy and Environment, to which was referred H.B. No. 503, H.D. 2, entitled:

beg leave to report as follows:

The purpose of this measure is to allow the Department of Land and Natural Resources and Department of Agriculture to renew certain agricultural leases through direct negotiation.

Your Committees received testimony in favor of this measure from the Hawaii Export Nursery Association, Hawaii Forest Industry Association, and Hawaii Agriculture Research Center. The Hawaii Farm Bureau submitted comments. The Department of Agriculture deferred to the testimony of the Department of Land and Natural Resources in opposition. Additional opposing testimony was received from the Ocean Law and Policy Institute, Hawaii's Thousand Friends, and five individuals.

Your Committees find that many agricultural land lessees currently face an uncertain future as their leases near expiration. Currently, extension of a lease is authorized only if the lessee obtains a loan for improvements. In addition, a new lease may not be issued to a current lessee except by public auction. Your Committees find that these limitations are inhibiting the growth and expansion of Hawaii's agriculture industry.

Your Committees believe that agriculture lessees should have the opportunity to extend or be issued a new lease without the threat of public auction. Therefore, your Committees have amended this measure by replacing its contents with the Senate version, S.B. No. 623, S.D. 1, which authorizes the Board of Land and Natural Resources to extend or enter into a new agricultural, aquacultural, mariculture, silviculture, livestock, or pasture lease with a lessee if:

In addition, this measure, as amended, provides that any lease extended or issued shall not be less than ten years or longer than twenty years of duration.

As affirmed by the records of votes of the members of your Committees on Agriculture and Water, Land, Energy and Environment that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 503, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 503, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.