STAND

STAND. COM. REP. NO.615-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2245

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 2245, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO LEASEHOLD,"

begs leave to report as follows:

The purpose of this bill is to:

(1) Reform the leasehold renegotiation process by requiring that:

(A) The Uniform Standards of Professional Appraisal Practice (USPAP) be used to calculate fair market value in any lease renegotiation in which lease rental is based in whole or in part on the fair market value of the land, or the value of the land as determined by its highest and best use, or words of similar import; and

(B) Renegotiation disputes shall be settled by a procedure selected by the lessee and not by arbitration;

and

(2) Provide that any lease in existence on the effective date of this bill that has been renegotiated after January 1, 1990, should be allowed a one-time adjustment, upon application of the lessee, to reflect fair market rental value in conformance with the USPAP.

Testimony in support of this measure was submitted by the Hawaii Council of Associations of Apartment Owners, Wholesale Motors, Inc., and two concerned citizens. A representative from University Plaza, Windward Town & Country Plaza, Moiliili Plaza, Waiakamilo Shopping Center, and King University Associates supported the intent of this measure.

The Housing and Community Development Corporation of Hawaii, Land Use Research Foundation of Hawaii, Estate of James Campbell, Institute of Real Estate Management Hawaii, Hawaii Bankers Association, A&B Properties, Inc., Kamehameha Schools, Hawaii Association of Realtors, Hawaii Chapter of the Appraisal Institute, Small Landowners of Oahu, Small Landowners Association, Howell & Associates, George Hao & Associates, Hallstrom Group, Inc., and five concerned citizens opposed this bill. Several concerned citizen commented on this bill.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2245, H.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

		____________________________ DWIGHT Y. TAKAMINE, Chair