SB1644

SECTION 1. The legislature finds that in March 2006, record-breaking heavy rains on Oahu caused recurring mudslides in the Round Top-Tantalus area, eventually forcing families in one small neighborhood to evacuate after residents at the end of the cul-de-sac watched mud rush down the hill between their homes. Within half an hour, an entire section of the hillside was gone – what was once a slope became a gorge in minutes.

After the slide, mud covered the road leading up to the last three homes in Maunalaha Valley where about twenty-five people live in the three houses. Down the hill on Maunalaha Road, several other neighbors faced erosion from the rushing water, mud, and debris.

While many of the immediate needs of the Maunalaha residents were met in the days and weeks following the flooding, the landslides created unstable conditions for some of the lessees, making repairs and rebuilding difficult, if not impossible.

The legislature further finds that the lessees of Maunalaha Valley have resided there for many decades, and the leases executed under Act 225, Session Laws of Hawaii 1981, as amended by Act 40, Session Laws of Hawaii 1982, are intended to meet a moral obligation to provide long-term stability and land tenure for these families.

The purpose of this Act is to continue that commitment by:

(1) Establishing two funds, the Maunalaha infrastructure development special fund and the Maunalaha housing revolving fund; and

(2) Authorizing the department of land and natural resources to transfer leases at Maunalaha, in the event of damage due to adverse acts of nature that occurred between January 1 and April 1, 2006.

SECTION 2. Chapter 171, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§171- Maunalaha infrastructure development special fund; establishment. (a) There is established in the state treasury the Maunalaha infrastructure development special fund to be administered by the department of land and natural resources. Funds transferred or appropriated by the legislature and moneys received or collected by the department of land and natural resources, as authorized by the legislature, shall be deposited into the Maunalaha infrastructure development special fund.

(b) The Maunalaha infrastructure development special fund shall be used to provide funding for infrastructure development in Maunalaha Valley on the island of Oahu to benefit residents of the leases located in tax map key plats 1-2-5-19 and 1‑2‑5‑20. Proceeds of this fund may be used for necessary expenses in the administration of the fund.

(c) Upon fulfillment of the purposes of this section, any unexpended or unencumbered funds appropriated by the legislature or remaining in the infrastructure development special fund as of the close of business on December 31, , shall not lapse into that fund or to the credit of the general fund, but shall be transferred to the credit of the Maunalaha housing revolving fund established in section 201G- as of that date; provided that any unexpended or unencumbered moneys that were provided by the office of Hawaiian affairs and deposited into the infrastructure development special fund for the purpose of infrastructure development shall be refunded on a prorated basis to the office of Hawaiian affairs upon the completion of the fund's intended purpose. No funds shall be transferred until all funding commitments entered into by the department of land and natural resources to complete the design and construction of infrastructure improvements have been executed."

SECTION 3. Chapter 201H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201H- Maunalaha housing revolving fund; established. (a) There is established in the state treasury the Maunalaha housing revolving fund to provide low interest loans for home construction for Maunalaha leaseholders who have been denied loans from traditional financial institutions. The revolving fund shall be administered by the corporation.

(b) The rate of interest on loans executed pursuant to this section shall not exceed three per cent per year and interest earnings on loans made pursuant to this section may be used for administrative and other expenses necessary for administering the loan program. Guidelines shall be established by the corporation with respect to loan terms and loan qualification criteria. Moneys appropriated or transferred for the purposes of this section shall be deposited into the Maunalaha housing revolving fund; provided that upon fulfillment of the purposes of this section, all unencumbered moneys shall lapse into the general fund.

SECTION 4. (a) Notwithstanding any law to the contrary, including chapter 171, Hawaii Revised Statutes, the department of land and natural resources may negotiate and enter into long term residential leases with any person who:

(1) Has executed a lease agreement with the department pursuant to Act 225, Session Laws of Hawaii 1981, as amended by Act 40, Session Laws of Hawaii 1982;

(2) Is still a party to the lease executed as provided in paragraph (1);

(3) Is in compliance, except as provided in subsection (d), with the terms of a lease executed as provided in paragraph (1); and

(4) Has suffered loss or damage to the property subject to a lease executed as provided in paragraph (1) due to flooding, erosion, or other adverse acts of nature that occurred between January 1, 2006, to April 1, 2006, the cumulative damage of which resulted in the leased property being rendered permanently uninhabitable or unsafe as determined by an appropriate state or county agency.

(b) The leases authorized under subsection (a) shall be for available and habitable vacant lots located in the area identified^-in section 3 of Act 225, Session Laws of Hawaii 1981.

(c) The duration of any lease executed under this section shall not exceed sixty-five years, or the remaining term on the lessee's lease executed under Act 225, Session Laws of Hawaii 1981, as amended by Act 40, Session Laws of Hawaii 1982, whichever is less, and shall include the same terms and conditions, as nearly as practicable, as those leases executed under Act 225, Session Laws of Hawaii 1981, as amended by Act 40, Session Laws of Hawaii 1982.

(d) Prior to executing any lease under this section, the department of land and natural resources shall review the lease executed under Act 225, Session Laws of Hawaii 1981, as amended by Act 40, Session Laws of Hawaii 1982, of any lessee who is applying for a new lease made available under this section.

(e) Upon the execution of a new lease authorized under this section, the department of land and natural resources shall nullify any previous lease held by the lessee executed pursuant to Act 225, Session Laws of Hawaii 1981, as amended by Act 40, Session Laws of Hawaii 1982.

(f) The authority to negotiate and execute long term lease agreements established under this section shall expire:

(1) When leases have been negotiated, executed, and recorded in the bureau of conveyances for all parcels meeting the requirements of subsections (a), (b), (c), (d), and (e); or

(2) On January 1, , whichever occurs first.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, to be paid into the Maunalaha infrastructure development special fund created in section 171- , Hawaii Revised Statutes.

SECTION 6. There is appropriated out of the Maunalaha infrastructure development special fund the sum of $ , or so much thereof as may be necessary for fiscal year 2007‑2008, for infrastructure development pursuant to section 171‑ (b), Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, for costs related to the transfer of any lease pursuant to section 4 of this Act.

The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

SECTION 8. The department shall report on any lease transfers made pursuant to this Act twenty days prior to the convening of the regular session of 2008, and annually thereafter until the authority shall expire pursuant to section 4 of this Act.

SECTION 9. This Act shall take effect on July 1, 2007.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1644
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII