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 S.B. No. 623 entitled:

beg leave to report as follows:

The purpose of this measure is to clarify that obtaining a loan shall not be a prerequisite to modifying or extending the term of a lease.

Your Committees received testimony supporting this measure from the Hawaii Farm Bureau Federation. Opposing testimony was received from the Department of Land and Natural Resources (DLNR).

Your Committees find that many agricultural land lessees currently face an uncertain future as the expiration of their leases nears. 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 agricultural lessees should have the opportunity to renegotiate and extend their leases. Thus, your Committees have amended this measure by replacing its provisions with provisions authorizing the Board of Land and Natural Resources to extend or enter into a new agricultural, aquaculture, mariculture, silviculture, livestock, or pasture lease with a lessee under certain circumstances and without a public auction.

Your Committees understand that Hawaii's agricultural industry is at a pivotal point. Therefore, the land administrator and other representatives of the DLNR land division are encouraged to be more responsive to agricultural lessees.

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 S.B. No. 623, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 623, S.D. 1, and be placed on the calendar for Third Reading.