HOUSE OF REPRESENTATIVES	H.B. NO.	2634
TWENTY-SEVENTH LEGISLATURE, 2014		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO CHAPTER 171, HAWAII REVISED STATUTES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Many of the leases for commercial, industrial, hotel, and resort properties on state land are nearing the end of the lease terms.  Faced with the uncertainty of continued tenancy, lessees have little incentive to make major investments in improvements to their infrastructures and ensure the long-term maintenance of their facilities.  As a result, the infrastructures on these properties have been deteriorating.

     A 2003 study by the legislative reference bureau found that, for commercial and industrial zoned lands, much of the existing industrial inventory is old, dilapidated, and in need of renovation or development.  The study also found that the State is the largest landowner of leasehold commercial and industrial parcels in Hawaii.

     Improvements to commercial, hotel, resort, and industrial infrastructures are important to the growth and expansion of Hawaii businesses.  Moreover, the enhancement of Hawaii's tourism infrastructure will help to accommodate the anticipated influx of visitors, particularly to east Hawaii, resulting from the direct mainland flights that started in the summer of 2011.

     Act 219, Session Laws of Hawaii 2011, authorized the board of land and natural resources to extend certain hotel and resort leases for lessees who commit to substantial improvements to the existing improvements.  However, Act 219 did not authorize the extension of commercial or industrial leases.

     The purpose of this Act is to amend Act 219, Session Laws of Hawaii 2011, by:

     (1)  Authorizing the board of land and natural resources to extend, in addition to hotel and resort leases, commercial and industrial leases;

     (2)  Authorizing the extension of leases for substantial improvements to the leased premises; and

     (3)  Extending the repeal date to December 31, 2017.

     SECTION 2.  Act 219, Session Laws of Hawaii 2011, is amended as follows:

     1.  By amending the title and subsection (a) of section 171-   , Hawaii Revised Statutes, in section 2 of the Act, to read:

     ""§171-    [Hotel] Commercial, industrial, hotel, or resort leases; extension of term.  (a)  Notwithstanding section 171-36, the board may extend the rental period of a lease of public lands for commercial, industrial, hotel, or resort use upon the approval by the board of a development agreement proposed by the lessee or by the lessee and developer to make substantial improvements to the leased premises or existing improvements."

     2.  By amending section 4 to read:

     "SECTION 4.  This Act shall take effect on July 1, 2011; provided that this Act shall be repealed on December 31, [2015.] 2017."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050.

Report Title:

BLNR; Public Land; Industrial; Commercial; Industrial; Extension

Description:

Authorizes the BLNR to extend, in addition to hotel and resort leases, commercial and industrial leases for the purpose of substantial improvements to the leased premises.  Extends BLNR's authority to extend leases until December 31, 2017.  Effective July 1, 2050.  (HB2634 HD1)

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