STAND. COM. REP. NO. 456

Honolulu, Hawaii

RE:    S.B. No. 580

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committees on Water and Land and Housing, to which was referred S.B. No. 580 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING AND MIXED-USE DEVELOPMENT,"

beg leave to report as follows:

     The purpose and intent of this measure is to authorize the Department of Land and Natural Resources to enter into housing, commercial, and mixed-use leases for terms in excess of sixty-five years but not exceeding ninety-nine years.

     Your Committees received testimony in support of this measure from the Chamber of Commerce Hawaii, Building Industrial Association of Hawaii, and one individual.  Your Committees received comments on this measure from the Department of Land and Natural Resources.

     Your Committees find that extending the maximum lease term for certain property to ninety-nine years supports efforts to increase the number of affordable housing units in the State.  Your Committees further find that granting the lessee the right of first refusal following public auction at the termination of the lease will incentivize lessees to continue to invest in improvements to the property throughout the length of the lease.

     Your Committees have amended this measure by:

     (1)  Transferring the lease negotiation authority from the Department of Land and Natural Resources to the Hawaii Housing Finance and Development Corporation;

     (2)  Clarifying that its applicability pertains only to residential leases that are for multi-family units;

     (3)  Making conforming amendments; 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 Water and Land and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 580, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 580, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________ WILL ESPERO, Chair

________________________________ KARL RHOADS, Chair