Hawaii-2011-SB687-Introduced

SECTION 1. Chapter 171, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . STATE agricultural leases without public auction

-1 State agricultural leases without public auction. In addition to the lease requirements set forth in chapter 171, part III, the department shall enter into enter into leases with qualified farmers, as defined under section 155-1, for public lands to be used exclusively for agricultural activities, pursuant the procedures set forth in this part. The department shall exercise incidental powers as are deemed necessary or requisite to fulfill its duty in carrying out the purposes of this part.

-2 Lessee qualifications. To be eligible for leases under this part, an applicant shall meet the requirements of section 171-68 and shall be:

(1) A qualified farmer as defined under section 155-1;

(2) A citizen of the United States who has resided in the State for at least three years, or any permanent resident alien who has resided in the State for at least three years;

(3) A sound credit risk with the ability to fulfill the lease terms; and

(4) Willing to carry out recommended farm management practices.

-3 Lease application procedures. (a) Any qualified farmer desiring to lease public land shall submit to the department a lease application. Lease applications made pursuant to this part shall contain:

(1) A description of the location and boundaries of the public land to be leased and a description of the nature of the use desired;

(2) A statement of the reasons for selecting the proposed location;

(3) A description of the agricultural activities to be conducted, including a timetable for farming activities on the property;

(4) A description of the plants to be cultivated and produced and any animals that will occupy the land;

(5) A statement on the extent to which the proposed activities will interfere with the use of the public land for purposes other than farming after the lease expires;

(6) A description of any enclosure, fences, stakes, or monuments proposed to mark off the leased property; and

(7) Other information that the department determines to be necessary or appropriate, including financial and technical information.

(b) Within sixty days after the submission of a completed lease application, the department shall issue a public notice that the lease application has been received. The public notice shall describe:

(1) The public land for which the lease application has been made;

(2) The nature of the use sought; and

(3) The purpose for which the lease application has been made.

The notice shall be given on three separate days statewide and in the county nearest the public land for which application has been made. The public notice shall invite public comment.

(c) Notices of hearings shall be provided and hearings shall be conducted in accordance with department rules regarding lease applications. If the area described in the lease application adjoins any private property or adjoins or overlaps, above or below, any leased public land, or if the proposed activity will affect the property or property rights of private property owners or lessees of public land, the department shall also notify the owners or lessees of the adjoining, overlapping, or affected property. Notice shall be given in writing, by personal service or by registered or certified mail, and shall describe:

(1) The public land for which application has been made;

(2) The nature of the use sought; and

(3) The purpose for which the lease application has been made.

(d) The department shall consider in its evaluation of each lease application:

(1) The extent to which the proposed agricultural activity may have a significant adverse effect upon any existing private industry or public activity;

(2) Whether the proposed agricultural activity may have an adverse or permanent effect upon the wildlife, aquatic life, or environment of the surrounding area; and

(3) Other potential uses of the area, including competing uses, which may be in the public interest.

(e) The department shall not approve a lease application unless it finds that:

(1) The applicant has the capacity to carry out the proposed agricultural activity; and

(2) The proposed agricultural activity is clearly in the public interest upon consideration of the overall economic, social, and environmental impacts.

-4 Lease terms and conditions. (a) Upon approval of the lease application, the department may negotiate with and grant a lease to the applicant. Leases issued by the department shall be drawn up in accordance with the following requirements, in addition to any other applicable requirements provided in chapter 171, part III, and section 171-36, or as otherwise determined by the department:

(1) Each lease shall specify the term of the lease and the nature of the exclusive use of the area being granted;

(2) Each lease shall specify the plants or animals which may be cultivated, produced, harvested, raised, removed, or used pursuant to the lease;

(3) Each lease shall specify an annual rent set by the department for the leased area;

(4) Leases may specify that failure of the lessee to perform substantially the agricultural activity or activities for which the lease was granted shall constitute grounds for revocation of the lease and forfeiture to the State of all structures and all plants or animals cultivated in and upon the leased area;

(5) Each lease shall require that the lessee execute a bond conditioned upon the substantial performance of the agricultural activity or activities described in the lease. The amount of the bond so executed shall be appropriate to the size, scale, and risk of the agricultural activity for which the lease is granted and shall be sufficient to protect the public interest in the removal of all structures, plants, or animals cultivated, as well as to restore or remediate the public lands to the satisfaction of the department;

(6) Each lease shall specify that if a lessee abandons a leased area, the department may order the removal or sale at public auction of all improvements, assets, plants or animals, and equipment remaining in and upon the leased area, and shall transmit to the state general fund the entire amount received from any public auction and any proceeds received from the lessee's performance bond. Alternatively, the department may permit the use of the improvements, assets, plants or animals, and equipment for purposes that benefit the general public;

(7) Each lease shall specify that the plants or animals described in the lease to be cultivated or raised and contained within the leased area are the exclusive harvest of the lessee; provided that any plant or animal that escapes from the leased area and is not clearly identifiable as the property of the lessee shall become common property and may be taken or caught by any person, subject to the laws of the State, without violating the rights of the lessee;

(8) Each lease shall specify that:

(A) The lessee is responsible for the removal of any cultivated plants or animals found outside the leased area but within public land if removal is required to protect the environment or public health and safety, and removal is demanded by the department;

(B) The lessee is solely responsible for all costs of removal of such plants or animals; and

(C) If action must be taken by the department to eradicate escaped plants or animals, all costs of eradication shall be borne by the lessee;

(9) Leases may specify that the lessee shall construct and maintain gates, openings, or lanes at reasonable distances from one another throughout a leased area;

(10) Leases may require, where necessary, that:

(A) All lessees mark off the areas under lease by appropriate ranges, monuments, stakes, fences, or any other devices;

(B) All lessees identify the area under lease and the names of the lessees on signs appropriately placed pursuant to specifications established by the department; and

(C) All limitations upon the use by the public of the area under lease shall be clearly posted by the lessee pursuant to specifications established by the department;

(11) Leases shall specify that if the department finds or has reasonable cause to believe that an activity conducted by the lessee in or upon the area described in the lease is causing an immediate danger to human, animal, or marine life or the environment of the State, the department may direct a temporary or permanent suspension of the agricultural activity activities in the affected area. The department shall immediately order the lessee or lessees affected by the suspension to show cause as to why their activities should not be terminated or why any structures, cultivated plants or animals, or equipment should not be removed from the affected area. The department shall proceed to hold a public hearing and issue its order with respect to that hearing within a reasonable period. In its order following such hearing, the department may direct a temporary or permanent suspension of agricultural activities in the affected area, removal of equipment, plants, or animals, or other measures as may be deemed necessary for the protection of human, animal, or marine life and the environment of State, including forfeiture to and destruction by the State of any plant or animal species;

(12) Each lease shall specify that the lease may be assigned in whole, in part, or as amended, only if the department determines that such assignment or amendment is in the public interest and meets the provisions of this part and consents to the assignments;

(13) Each lease shall specify that the lease may be revoked by the department for violation of any lease provision. The department shall deliver a written notice of the breach or default of any lease agreement by registered or certified mail to the party in default and to each holder of record having any security interest in the public land covered by or subject to the lease, making demand upon the party to cure or remedy the breach or default within sixty days from the date of receipt of the notice. Upon failure of the party to cure or remedy the breach or default within sixty days from the date of receipt of the notice, or within such additional period the department may allow for good cause, the department may revoke the lease; and

(14) Each lease shall contain a statement describing the degree of exclusivity or access to the site by the public, which shall be based on an analysis of the user listing and descriptions provided in the application, and comments made by the public and in consideration of but not limited to compatibility of the operation with existing uses, perceived liability to the lessee and the public, and perceived risk to the lessee's investment.

(b) The department or its authorized agents shall have the authority to enter and inspect any and all areas leased by the department for the purpose of determining compliance with the terms and provisions of any lease.

(c) The department shall not revoke or modify its approval of a lease application in such a way as to invalidate, impair, limit, or affect, directly or indirectly, in whole or in part, the rights of a lessee as set forth in the lease granted to the lessee pursuant to this part.

-5 Administrative rules. The department shall adopt rules pursuant to chapter 91 necessary for the purpose of this part and shall collaborate with the department of agriculture to effectuate this part."

SECTION 2. Section 163D-4, Hawaii Revised Statutes, is amended to read as follows:

"§163D-4 Powers; generally. (a) Except as otherwise limited by this chapter, the corporation may:

(1) Sue and be sued;

(2) Have a seal and alter the same at its pleasure;

(3) Make and alter bylaws for its organization and internal management;

(4) Adopt rules under chapter 91 necessary to effectuate this chapter in connection with its projects, operations, and properties;

(5) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter;

(6) Carry out surveys, research, and investigations into technological, business, financial, consumer trends, and other aspects of agricultural production in the national and international community;

(7) Acquire or contract to acquire by grant or purchase any real, personal, or mixed property or any interest therein for its immediate or future use for the purposes of this chapter; own, hold, improve, and rehabilitate any real, personal, or mixed property acquired, and sell, assign, exchange, transfer, convey, lease, or otherwise dispose of, or encumber the same;

(8) By itself, or in partnership with qualified persons, acquire, construct, reconstruct, rehabilitate, improve, alter, or repair any infrastructure or accessory facilities in connection with any project; own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of, or encumber any project;

(9) In cooperation with the department of agriculture, pursuant to chapter 167, or otherwise through direct investment or coventure with a professional investor or enterprise or any other person, or otherwise, to acquire, construct, operate, and maintain water facilities for conveying, distributing, and transmitting water for irrigation and agricultural uses at rates or charges determined by the corporation; provided that:

(A) This chapter shall not be construed to permit or allow the department of agriculture or any agribusiness development corporation to:

(i) Amend or modify rights or entitlements to water as provided for by article XI, section 7, of the Constitution of the State of Hawaii, or the Hawaiian Homes Commission Act, 1920, as amended, and chapter 168;

(ii) Diminish or abridge the traditional and customary rights of ahupua`a tenants who inhabited the Hawaiian Islands prior to 1778 under sections 1-1 and 7-1; and

(iii) Impair, abridge, or terminate the legal rights or interests to water and its uses, whether by lease, easement, or other means, which are possessed or held by organizations whose primary purpose is to benefit people of Hawaiian ancestry; and

(B) All usage of water shall be in accordance with chapter [[]174C[]] and other applicable laws in the State;

(10) Assist agricultural enterprises by conducting detailed marketing analysis and developing marketing and promotional strategies to strengthen the position of those enterprises and to better exploit local, national, and international markets;

(11) Carry out specialized programs designed to develop new markets for Hawaii agricultural products;

(12) Receive, examine, and determine the acceptability of applications of qualified persons for allowances or grants for the development of new crops and agricultural products, the expansion of established agricultural enterprises, and the altering of existing agricultural enterprises;

(13) Coordinate its activities with any federal or state farm credit programs;

(14) Grant options to purchase any project or to renew any lease entered into by it in connection with any of its projects, on the terms and conditions it deems advisable;

(15) Provide advisory, consultative, training, and educational services, technical assistance, and advice to any person, partnership, or corporation, either public or private, in order to carry out the purposes of this chapter, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;

(16) Procure insurance against any loss in connection with its property and other assets and operations in such amounts and from such insurers as it deems desirable;

(17) Accept gifts or grants in any form from any public agency or any other source; and

(18) Do all things necessary or proper to carry out the purposes of this chapter.

(b) The corporation shall develop, promote, assist, and market export crops and other crops for local markets.

(c) Except as otherwise limited by this chapter, the corporation shall provide assistance to lessees of public land under chapter 171, part by providing services including marketing analysis, promotional strategies, technical training and assistance services, or other corporate business solutions, which shall assist or enable the lessee to carry out the terms of a lease authorized under chapter 171, part ."

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

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	687
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII