WHEREAS, the State Constitution mandates that public lands be used for the development of farm and homeownership on a widespread basis; and

WHEREAS, it is in the best interest of the State that agricultural lands be used productively and in a reasonable way to emphasize sustainability and preservation of state agricultural lands; and

WHEREAS, the Uniform Standards of Professional Appraisal Practice allow appraisers to analyze all information applicable to the appraisal methodology, including sales comparison, cost, and income approaches; and

WHEREAS, determining lease rent rates by sales comparisons may dramatically increase lease rent rates during times when real estate market sales are high; and

WHEREAS, appraisers lack the knowledge or understanding necessary to use the income capitalization approach which factors in the agricultural yield of farmed land; and

WHEREAS, there is a shortage of appraisers who are capable of using the income capitalization approach; and

WHEREAS, there is an urgent need to train appraisers to use the income capitalization approach to establish reasonable lease rent rates for state agricultural lease rent reopenings; and

WHEREAS, the Department of Agriculture is encouraged to work with the Department of Land and Natural Resources to maintain the agricultural production statistics necessary to use the income capitalization approach which will stabilize state agricultural lease rent rates; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2006, that the Department of Agriculture is requested to study the feasibility and implementation of the income capitalization approach and other methodologies to stabilize and set lease rent rates for the Department of Agriculture's agricultural park lease reopenings; and

BE IT FURTHER RESOLVED that the report include examples of lease rent amounts resulting from using the income capitalization approach or other methodologies, the costs and training needs associated with implementation of the preferred practice, and the timeframe for implementation; and

BE IT FURTHER RESOLVED that the Department of Agriculture is requested to report its findings and recommendations to the Legislature no later than twenty days before the convening of the Regular Session of 2007; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Chairperson of the Board of Agriculture and the Chairperson of the Board of Land and Natural Resources.

Report Title:

Agricultural Parks; Appraisal Method; DOA Study for Reopenings