Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 426, H.D. 1, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to direct the Department of Land and Natural Resources to issue new long-term leases for certain parcels of public lands on Kauai.

Your Committee finds that certain lessees of public lands used for hotel and other uses on Kauai have been severely impacted by prevailing economic conditions, including the devastating results of Hurricane Iniki and the September 11 tragedy.

Certain lessees are prepared to make substantial improvements to their leasehold properties, but are precluded from obtaining the financing to do so due to the short terms that are left on their leases. This measure will permit the Board of Land and Natural Resources to cancel existing leases and issue new long-term leases, thereby permitting the lessees to finance the proposed improvements and providing a greater economic benefit to the State. This measure will also delete the shared appreciation assignment premium for certain new leases to encourage the new investment by the lessees.

Your Committee has amended this measure by making the following technical changes for purposes of clarity:

Your Committee has also made a few technical nonsubstantive corrections.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 426, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 426, H.D. 1, S.D. 2.