STAND. COM. REP. NO. 447

Honolulu, Hawaii

RE:    S.B. No. 761

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committees on Water and Land and Judiciary and Labor, to which was referred S.B. No. 761 entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC LANDS,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require the Board of Land and Natural Resources and an opposing party to mutually agree to resolve disputes regarding the fair market value or fair market rental of public lands through binding mediation or binding arbitration;

     (2)  Specify that if either party in a dispute cannot agree on binding mediation or binding arbitration, the dispute shall be determined by binding arbitration; and

     (3)  Require the Board and an opposing party, when reopening a rental, to resolve disputes through binding mediation or as provided in the lease.

     Your Committees received testimony in support of this measure from the Hawaii Chapter of the Appraisal Institute.  Your Committees received testimony in opposition to this measure from the Hawaii Farm Bureau, HPM Building Supply, Hawaii Cattlemen's Council, and four individuals.  Your Committees received comments on this measure from the Department of Land and Natural Resources.

     Your Committees find that Act 168, Session Laws of Hawaii 2014 (Act 168), has caused some confusion regarding situations where a tenant may prefer to proceed directly to arbitration.  Your Committees find that amendments to this measure are necessary to authorize tenants to opt out of mediation and proceed directly to arbitration.

     Your Committees have amended this measure by:

     (1)  Deleting the proposed amendments to section 171-17, Hawaii Revised Statutes;

     (2)  Inserting language to require that in cases of determining the fair market value or fair rental value of public land in sale, lease, or repurchase transactions involving the Board of Land and Natural Resources, the parties shall proceed by mandatory mediation, unless the tenant opts out of mediation and prefers to proceed directly to arbitration;

     (3)  Amending the purpose section accordingly;

     (4)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (5)  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 Water and Land and Judiciary and Labor that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 761, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 761, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Water and Land and Judiciary and Labor,

________________________________ GILBERT S.C. KEITH-AGARAN, Chair

____________________________ LAURA H. THIELEN, Chair