Bill Text: HI HB1025 | 2019 | Regular Session | Amended
Bill Title: Relating To Lease Extensions On Public Land.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2019-04-26 - Received notice of change in conferees (Hse. Com. No. 870). [HB1025 Detail]
Download: Hawaii-2019-HB1025-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1025 |
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THIRTIETH LEGISLATURE, 2019 |
H.D. 1 |
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STATE OF HAWAII |
S.D. 2 |
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A BILL FOR AN ACT
RELATING TO LEASE EXTENSIONS ON PUBLIC LAND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature
finds that many of the leases for commercial, industrial, resort, and
government properties on public land statewide may be nearing the end of the
lease term. Faced with the uncertainty
of continued tenancy, lessees have little incentive to make major investments
in infrastructural improvements and to ensure the long-term maintenance of the
facilities. As a result, the
infrastructure on these properties has been deteriorating.
The legislature finds that business
lessees typically sell or assign their leases that are nearing the end of the
lease terms at a discount. The
legislature further finds that it would be unfair to the prior assignors of the
leases if the State granted extensions of leases that previously could not be
extended under existing law or lease terms to the newly assigned lessees who
acquired their leases at a discount due to short remaining lease terms.
The purpose of this Act is to authorize
the board of land and natural resources to extend commercial, industrial,
resort, or governmental leases, other than those to which the University of
Hawaii is a party, that have not been sold or assigned within the last ten years,
for lessees who commit to substantial improvement to the existing improvements.
SECTION 2. Chapter 171, Hawaii Revised Statutes, is
amended by adding a new section to part II to be appropriately designated and
to read as follows:
"§171- Commercial,
industrial, resort, or government leases; extension of term. (a) Notwithstanding section 171-36, for leases that
have not been assigned or transferred within ten years prior to receipt of an
application for a lease extension submitted pursuant to this section, the board
may extend the rental period of a lease of public lands for commercial use,
industrial use, resort use, or government use upon approval by the board of a
development agreement proposed by the lessee or by the lessee and developer to
make substantial improvements to the existing improvements; provided that this
section shall not apply to public lands controlled by the department of
Hawaiian home lands and leased pursuant to the Hawaiian Homes Commission Act of
1920, as amended.
(b) Prior to entering into a development
agreement, the lessee or the lessee and developer shall submit to the board the
plans and specifications for the total development proposed. The board shall review the plans and
specifications and determine:
(1) Whether the development proposed in the development agreement is of sufficient worth and value to justify the extension of the lease;
(2) The
estimated period of time to complete the improvements and expected date of
completion of the improvements; and
(3) The
minimum revised annual rent based on the fair market value of the lands to be
developed, as determined by an appraiser for the board, and if deemed
appropriate by an appraiser, the appropriate percentage of rent where gross
receipts exceed a specified amount.
No lease extension shall be approved until the board and the
lessee or the lessee and developer mutually agree to the terms and conditions
of the development agreement.
(c) No construction shall commence until the
lessee or the lessee and developer have filed with the board a sufficient bond
conditioned upon the full and faithful performance of all the terms and conditions
of the development agreement.
(d) Any extension of a lease pursuant to this
section shall be based upon the substantial improvements to be made and shall
be for a period not longer than forty years. No lease shall be transferable or assignable
throughout the first ten years of the extended term, except by devise, bequest,
or intestate succession. The prohibition
on assignments and transfer of leases includes a prohibition on conveyances of
leases and a prohibition on the sale or change in ownership, by more than
twenty per cent, of a lessee that is a company or entity. During subsequent periods of the extended
term of the lease, the lease may be subleased, subject to approval by the
board.
(e) The applicant for a lease extension shall pay
all costs and expenses incurred by the department in connection with
processing, analyzing, or negotiating any lease extension request, lease
document, or development agreement under this section.
(f) As used in this section:
"Government
use" means a development undertaken under a lease held by any agency or
department of the State or its political subdivisions other than the University
of Hawaii or any department, agency, or administratively attached entity of the
University of Hawaii system.
"Resort use"
means a development that provides transient accommodations as defined in
section 237D-1 and related services, which may include a front desk,
housekeeping, food and beverage, room service, and other services customarily
associated with transient accommodations; provided that no development shall
qualify as a resort use under this section unless at least seventy-five per
cent of the living or sleeping quarters in the development are used solely for
transient accommodations for the term of any lease extension.
"Substantial
improvements" means any renovation, rehabilitation, reconstruction, or
construction of existing improvements, including minimum requirements for
off-site and on-site improvements, the cost of which equals or exceeds thirty
per cent of the market value of the existing improvements, that the lessee or
the lessee and developer installs, constructs, and completes by the date of
completion of the total development."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval and shall be repealed
on June 30, 2024.
Report Title:
BLNR; Public Lands; Lease Extension; Development Agreement
Description:
Authorizes the Board of Land and Natural Resources to extend certain leases of public lands for commercial, industrial, resort, or government use upon approval of a proposed development agreement to make substantial improvements to the existing improvements. Sunsets on 6/30/2024. (SD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
