Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs, and Government Operations, to which was referred S.B. No. 1468 entitled:

begs leave to report as follows:

The purpose of this measure is to reduce from two acres to one acre the maximum size of a parcel of land that qualifies for mandatory lease-to-fee conversion under the Residential Leaseholds Law, and to clarify that the land shall be zoned for residential use.

Testimony in support of this measure was received from the Housing and Community Development Corporation of Hawaii, Kamehameha Schools, and two individuals. The Hawaii Association of Realtors testified in opposition to the measure.

The Land Reform Act of 1967, codified in Chapter 516, Hawaii Revised Statutes (Chapter 516), authorizes the mandatory lease-to-fee conversion of residential leaseholds. However, since the law was enacted, the nature of residential housing has evolved and led to the construction of developments in which residential housing is a component of a commercially zoned mixed use project or agriculturally zoned project.

Your Committee finds that Chapter 516 was not intended to apply to nonresidential leasehold properties. Therefore, this measure effects the intent of the law by reducing the qualifying size of lots under Chapter 516 from two acres to one acre, and by requiring that the lots be zoned for residential use.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs, and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1468 and recommends that it pass Second Reading and be referred to the Committee on Commerce, Consumer Protection and Housing.