STAND. COM. REP. NO. 2126

Honolulu, Hawaii

RE:    S.B. No. 2296

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committees on Agriculture and Economic Development, Government Operations and Housing, to which was referred S.B. No. 2296 entitled:

"A BILL FOR AN ACT RELATING TO THE DISPOSITION OF LANDS MANAGED BY THE STATE DEPARTMENT OF AGRICULTURE."

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Authorize the Department of Agriculture to select qualified applicants as back-up lessees when disposing of certain agricultural or non-agricultural park lands through the sealed bidding process; and

     (2)  Authorize the Department to negotiate with a back-up lessee in the event the highest offering bidder or lessee fails to finalize a lease with the Department for any reason.

     Your Committees received testimony in support of this measure from the Department of Agriculture.

     Your Committees find that it takes a significant amount of time and work for the Department of Agriculture to select awardees for its agricultural leases through the sealed bidding process.  Unfortunately, once an awardee is selected, awardees often cannot finalize the lease for various reasons and the Department must restart the sealed bidding process from the beginning.  This measure will save the Department significant time and energy by allowing the Department to select back-up lessees in the event the initial awardee fails to finalize a lease.

     Your Committees have amended this measure by:

     (1)  Clarifying that the purpose of this measure is to allow the Department of Agriculture to create an alternative list of qualified applicants to lease agricultural lands in the event an initial awardee fails to complete the lease process;

     (2)  Conforming the eligibility criteria for lessees of agricultural park lands with that of lessees of non‑agricultural park lands by, among other things:

          (A)  Removing the requirement that a lease applicant, or applicant's spouse, must not own agriculturally zoned land of twenty-five acres or more in the State; and

          (B)  Inserting the requirement that the lease applicant must be determined by the Department to have a beneficial impact on agriculture;

     (3)  Moving the language authorizing back-up lessees for non-agricultural park leases from section 166E-8, Hawaii Revised Statutes, to section 166E-11, Hawaii Revised Statutes, relating to lease negotiations; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Agriculture and Economic Development, Government Operations and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2296, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2296, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Agriculture and Economic Development, Government Operations and Housing,

____________________________ DONOVAN M. DELA CRUZ, Chair

____________________________ CLARENCE K. NISHIHARA, Chair