Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Water, Land, Energy and Environment, to which was referred S.B. No. 2804 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the Board of Land and Natural Resources (Board) to waive the requirement to obtain Board consent to subleases under public land leases.

Testimony in support of this measure was received from the Department of Land and Natural Resources.

Your Committee has heard that the current restriction on subletting all or portions of the demised premises without the approval of the Board is appropriate in most lease situations. However, where the intent is for the property to be leased to multiple subtenants (e.g., Natural Energy Laboratory of Hawaii Authority, Agribusiness Development Corporation, leases for shopping centers, strip malls, office buildings or other commercial complexes), it is appropriate for the lessor to permit the lessee to issue tenant subleases without the lessor's consent. The ability to issue subleases without the lessor's consent in these situations is critical to the lessee's ability to attract viable tenants for the property.

Your Committee is supportive of this means to provide the Board with the flexibility to determine appropriate situations in which subletting should be permitted under existing leases.

As affirmed by the record of votes of the members of your Committee on Water, Land, Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2804 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.