Kaneohe Bay; Private Piers

Grandfathers unpermitted piers in Kaneohe Bay.  Eliminates
requirement that residential piers built on submerged lands be
open to the public.  Exempts private residential noncommercial
pier leases from obtaining legislative and governor approval.
Established a residential pier lease rent moratorium.  (HB 1711

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                S.D. 1
STATE OF HAWAII                                            C.D. 1

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature has determined that the State
 2 has an interest in regulating submerged lands to protect and
 3 preserve the environment and ecosystem that exists there.  There
 4 are more than two hundred piers on state submerged land in the
 5 Kaneohe and Kahaluu area, of which only approximately twenty are
 6 paying rent to the State.
 7      Many piers in the affected area were built prior to October
 8 1, 1964, the effective date of the first regulatory measures
 9 concerning piers.  Other piers built after this date were built
10 in compliance with other regulations that were in effect at the
11 time of construction.  Piers constructed before October 1, 1964,
12 and those built subsequent to that date in compliance with
13 regulations adopted after that date are nonconforming uses.   The
14 legislature has previously stated that no rules may be adopted,
15 which shall prohibit the continued use of such structures.
16      Some piers, however, were built without complying with any
17 permitting requirements whether at the time of construction or
18 any time thereafter.  These piers are illegal.  The legislature
19 finds, however, that official records that would help to identify

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 1 nonconforming piers and illegal piers are scattered among various
 2 state and federal departments and agencies or have been
 3 destroyed.  
 4      The legislature finds that pier owners have overwhelmingly
 5 expressed their desire to pay a reasonable amount to the State
 6 for their continued use of submerged lands.  The legislative
 7 auditor has previously found that the cost to account for monthly
 8 rent for piers has exceeded the revenues realized to the State.
 9      The legislature finds that the State has already sold more
10 than fifty agreements for the use of submerged lands, many of
11 which are for piers in the same area.  The legislature finds that
12 the issuance of leases for a period of not more than sixty-five
13 years, pursuant to sections 171-36(a)(2) and 171-53(c), Hawaii
14 Revised Statutes, would result in a substantial return to the
15 State while significantly reducing the accounting costs to the
16 State as provided in sections 171-13 and 190D-21, Hawaii Revised
17 Statutes.
18      Lessees of state land are required pursuant to chapter 171,
19 Hawaii Revised Statutes, to indemnify the State against
20 liability.  Section 171-36(a)(9), Hawaii Revised Statutes, as now
21 constructed, requires lessees to open their piers to the public
22 at large.  This provision creates a problem for pier lessees
23 because it makes obtaining liability insurance prohibitively

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                                                        S.D. 1
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 1 expensive and difficult to obtain and moreover interferes with
 2 pier owners' ability to maintain their structures and implied
 3 right to quiet enjoyment.  The legislature, therefore, finds that
 4 repealing this requirement as to private residential
 5 noncommercial piers is in the best interests of the State.
 6      The purpose of this Act is to protect the piers in the
 7 Kaneohe and Kahaluu area by:
 8      (1)  Requiring any unpermitted pier in Kaneohe Bay existing
 9           in whatever form on the effective date of this Act to
10           be considered a nonconforming use in the conservation
11           district;
12      (2)  Eliminating the requirement in section 171-36(a)(9),
13           Hawaii Revised Statutes, that lessees open their piers
14           to the public at large;
15      (3)  Expediting the issuance of leases for piers by
16           including private residential noncommercial piers as
17           items not requiring prior legislative and gubernatorial
18           approval on lease and easement dispositions;
19      (4)  Establishing a lease rent moratorium on the submerged
20           lands and the private residential noncommercial piers
21           thereon in Kaneohe Bay, located offshore of property
22           between Kealohi Point and Nuupia Pond, until the
23           department of land and natural resources adopts a
24           residential pier lease rent formula; and

Page 4                                                     1711
                                     H.B. NO.           H.D. 2
                                                        S.D. 1
                                                        C.D. 1

 1      (5)  Requiring the department of land and natural resources
 2           to establish an equitable solution for lessees who have
 3           been paying lease rent on submerged lands and the
 4           private residential noncommercial piers thereon in
 5           Kaneohe Bay, located offshore of property between
 6           Kealohi Point and Nuupia Pond, which may include the
 7           issuance of a lease rent credit.
 8      SECTION 2.  Section 171-36, Hawaii Revised Statutes, is
 9 amended by amending subsection (a) to read as follows:
10      "(a)  Except as otherwise provided, the following
11 restrictions shall apply to all leases:
12      (1)  Options for renewal of terms are prohibited;
13      (2)  No lease shall be for a longer term than sixty-five
14           years, except in the case of a residential leasehold
15           which may provide for an initial term of fifty-five
16           years with the privilege of extension to meet the
17           requirements of the Federal Housing Administration,
18           Federal National Mortgage Association, Federal Land
19           Bank of Berkeley, Federal Intermediate Credit Bank of
20           Berkeley, Berkeley Bank for Cooperatives, or Veterans
21           Administration [requirements]; provided that the
22           aggregate of the initial term and extension shall in no
23           event exceed seventy-five years;

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                                     H.B. NO.           H.D. 2
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 1      (3)  No lease shall be made for any land under a lease which
 2           has more than two years to run;
 3      (4)  No lease shall be made to any person who is in arrears
 4           in the payment of taxes, rents, or other obligations
 5           owing the State or any county;
 6      (5)  No lease shall be transferable or assignable, except by
 7           devise, bequest, or intestate succession; provided that
 8           with the approval of the board of land and natural
 9           resources, the assignment and transfer of a lease or
10           unit thereof may be made if:
11           (A)  It contains the personal residence of the lessee;
12           (B)  In the case of commercial, industrial, hotel,
13                resort, apartment, and other business uses, the
14                lessee was required to put in substantial building
15                improvements;
16           (C)  The lessee becomes mentally or physically
17                disabled;
18           (D)  Extreme economic hardship is demonstrated to the
19                satisfaction of the board;
20           (E)  It is to the corporate successor of the lessee; or
21           (F)  In the case of agricultural uses, the assignee
22                meets the qualifications of a bona fide individual
23                farmer or a nonindividual farm concern pursuant to

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                                                        S.D. 1
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 1                section 171-14.5, in addition to or
 2                notwithstanding the other conditions of this
 3                paragraph;
 4           provided further that prior to the approval of any
 5           assignment of lease, the board shall have the right to
 6           review and approve the consideration to be paid by the
 7           assignee and may condition its consent to the
 8           assignment of the lease on payment by the lessee of a
 9           premium based on the amount by which the consideration
10           for the assignment, whether by cash, credit, or
11           otherwise, exceeds the depreciated cost of improvements
12           and trade fixtures being transferred to the assignee;
13           provided further that with respect to state
14           agricultural leases, in the event of foreclosure or
15           sale, the premium, if any, shall be assessed only after
16           the encumbrances of record and any other advances made
17           by the holder of a security interest are paid;
18      (6)  The lessee shall not sublet the whole or any part of
19           the demised premises except with the approval of the
20           board; provided that prior to the approval, the board
21           shall have the right to review and approve the rent to
22           be charged to the sublessee; provided further that in
23           the case where the lessee is required to pay rent based

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 1           on a percentage of its gross receipts, the receipts of
 2           the sublessee shall be included as part of the lessee's
 3           gross receipts; provided further that the board shall
 4           have the right to review and, if necessary, revise the
 5           rent of the demised premises based upon the rental rate
 6           charged to the sublessee including the percentage rent,
 7           if applicable, and provided that the rent may not be
 8           revised downward;
 9      (7)  The lease shall be for a specific use or uses and shall
10           not include waste lands, unless it is impractical to
11           provide otherwise; and
12      (8)  Mineral and metallic rights and surface and ground
13           water shall be reserved to the State[; and
14      (9)  No lease of public lands, including submerged lands,
15           nor any extension of any such lease, shall be issued by
16           the State to any person to construct, use, or maintain
17           a sunbathing or swimming pier or to use the lands for
18           such purposes, unless such lease, or any extension
19           thereof, contains provisions permitting the general
20           public to use the pier facilities on the public lands
21           and requiring that a sign or signs be placed on the
22           pier, clearly visible to the public, which indicates
23           the public's right to the use of the pier.  The board,

Page 8                                                     1711
                                     H.B. NO.           H.D. 2
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 1           at the earliest practicable date, and where legally
 2           possible, shall cause all existing leases to be amended
 3           to conform to this paragraph.  The term "lease", for
 4           the purposes of this paragraph, includes month-to-month
 5           rental agreements and similar tenancies]."
 6      SECTION 3.  Section 171-53, Hawaii Revised Statutes, is
 7 amended by amending subsection (c) to read as follows:
 8      "(c)  The board, with the prior approval of the governor and
 9 the prior authorization of the legislature by concurrent
10 resolution, may lease submerged lands and lands beneath tidal
11 waters under the terms, conditions, and restrictions provided in
12 this chapter; provided that the approval of the governor and
13 authorization of the legislature shall not be required for any
14 grant of easement or lease of submerged lands or lands beneath
15 tidal waters used for private residential noncommercial piers,
16 docks, moorings, cables, or pipelines; provided further that this
17 exemption shall not apply to easements for cables used for
18 interisland electrical transmission or slurry pipelines used for
19 transportive materials, mined at sea, or waste products from the
20 processing of the same.
21      The lease shall provide that the lands shall be reclaimed at
22 the expense of the lessee.  Title to the reclaimed lands shall
23 remain in the State."

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                                     H.B. NO.           H.D. 2
                                                        S.D. 1
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 1      SECTION 4.  Notwithstanding any law to the contrary, any
 2 existing private residential noncommercial pier in Kaneohe Bay,
 3 located offshore of property between Kealohi Point and Nuupia
 4 Pond, on the effective date of this Act, shall be considered
 5 nonconforming for the purposes of chapter 183C, Hawaii Revised
 6 Statutes; provided that the owner of the pier obtains all
 7 necessary approvals and land disposition from the department of
 8 land and natural resources.  Any penalties assessed under section
 9 183C-7(b), Hawaii Revised Statutes, against an owner of a pier
10 deemed nonconforming under this section for violations under
11 section 183C-5, Hawaii Revised Statutes, prior to the effective
12 date of this Act shall be expunged.
13      SECTION 5.  (a)  Notwithstanding any law to the contrary,
14 upon the effective date of this Act, there is established a lease
15 rent moratorium on all leases of submerged lands and the private
16 residential noncommercial piers thereon in Kaneohe Bay, located
17 offshore of property between Kealohi Point and Nuupia Pond.  The
18 moratorium shall remain in force until such time that the
19 department of land and natural resources adopts a private
20 residential noncommercial pier lease rent formula.
21      (b)  The department of land and natural resources shall
22 establish an equitable solution for lessees who have been paying
23 lease rent on submerged lands and the private residential

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                                     H.B. NO.           H.D. 2
                                                        S.D. 1
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 1 noncommercial piers thereon in Kaneohe Bay, located offshore of
 2 property between Kealohi Point and Nuupia Pond, while the
 3 moratorium established under subsection (a) is in effect.  In
 4 developing a solution under this subsection, the department of
 5 land and natural resources may consider the issuance of a lease
 6 rent credit to qualified lessees affected by the moratorium
 7 established under subsection (a).
 8      SECTION 6.  Statutory material to be repealed is bracketed.
 9 New statutory material is underscored.
10      SECTION 7.  This Act shall take effect upon its approval.