REPORT TITLE:


DESCRIPTION:


 
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                                                        984
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO OCEAN LEASING.




BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 171-2, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "171-2 Definition of public lands."Public lands" means
 
 4 all lands or interest therein in the State classed as government
 
 5 or crown lands previous to August 15, 1895, or acquired or
 
 6 reserved by the government upon or subsequent to that date by
 
 7 purchase, exchange, escheat, or the exercise of the right of
 
 8 eminent domain, or in any other manner; including submerged
 
 9 lands, and lands beneath tidal waters which are suitable for
 
10 reclamation, together with reclaimed lands which have been given
 
11 the status of public lands under this chapter, except:
 
12      (1)  Lands designated in section 203 of the Hawaiian Homes
 
13           Commission Act, 1920, as amended;
 
14      (2)  Lands set aside pursuant to law for the use of the
 
15           United States;
 
16      (3)  Lands being used for roads and streets;
 
17      (4)  Lands to which the United States relinquished the
 
18           absolute fee and ownership under section 91 of the
 
19           Hawaiian Organic Act prior to the admission of Hawaii
 

 
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 1           as a state of the United States unless subsequently
 
 2           placed under the control of the board of land and
 
 3           natural resources and given the status of public lands
 
 4           in accordance with the State Constitution, the Hawaiian
 
 5           Homes Commission Act, 1920, as amended, or other laws;
 
 6      (5)  Lands to which the University of Hawaii holds title;
 
 7      (6)  Lands to which the housing and community development
 
 8           corporation of Hawaii in its corporate capacity holds
 
 9           title;
 
10      (7)  Lands to which the Hawaii community development
 
11           authority in its corporate capacity holds title;
 
12 [[](8)[]] Lands to which the department of agriculture holds
 
13           title by way of foreclosure, voluntary surrender, or
 
14           otherwise, to recover moneys loaned; [and]
 
15 [[](9)[]] Lands which are set aside by the governor to the Aloha
 
16           Tower development corporation; lands leased to the
 
17           Aloha Tower development corporation by any department
 
18           or agency of the State; or lands to which the Aloha
 
19           Tower development corporation holds title in its
 
20           corporate capacity[.]; and
 
21     (10)  Economic units as defined in section 190D-3."
 
22      SECTION 2.  Section 171-53, Hawaii Revised Statutes, is
 
23 amended by amending subsection (c) to read as follows:
 

 
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 1      "(c)  The board, with the prior approval of the governor and
 
 2 the prior authorization of the legislature by concurrent
 
 3 resolution, may lease submerged lands and lands beneath tidal
 
 4 waters under the terms, conditions, and restrictions provided in
 
 5 this chapter; provided that the authorization of the legislature
 
 6 shall not be required for leases issued under Chapter 190D; and
 
 7 provided further that the approval of the governor and
 
 8 authorization of the legislature shall not be required for any
 
 9 grant of easement or lease of submerged lands or lands beneath
 
10 tidal waters used for moorings, cables, or pipelines[; provided
 
11 further], except  that this exemption shall not apply to
 
12 easements for cables used for interisland electrical transmission
 
13 or slurry pipelines used for transportive materials, mined at
 
14 sea, or waste products from the processing of the same.
 
15      The lease shall provide that the lands shall be reclaimed at
 
16 the expense of the lessee.  Title to the reclaimed lands shall
 
17 remain in the State."
 
18      SECTION 3.  Section 190D-2, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "[[]190D-2[]]  Findings and purpose.  Article XI of the
 
21 Constitution of the State of Hawaii relating to the conservation,
 
22 control, and development of resources, provides in section 6 that
 
23 the State shall have the power to manage and control the marine,
 

 
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 1 seabed, and other resources located within the boundaries of the
 
 2 State, including its archipelagic waters, and reserves to the
 
 3 State all such rights outside state boundaries not specifically
 
 4 limited by federal or international law.
 
 5      The legislature finds that the State's marine waters [and
 
 6 submerged lands] offer the people of Hawaii sources of energy,
 
 7 minerals, food, and usable space.  The legislature further finds
 
 8 that the proper management and development of these ocean
 
 9 resources require defined rights of usage and tenure.
 
10      The purpose of this chapter is to establish procedures for
 
11 the leasing of state marine waters [and submerged lands] and to
 
12 guarantee property rights and protection for any activities
 
13 approved under these procedures."
 
14      SECTION 4.  Section 190D-3, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      1.  By adding a new definition to be appropriately inserted
 
17 and to read:
 
18      ""Economic unit" means the water column, submerged lands
 
19 beneath the water column, and water surface above the water
 
20 column which shall be treated as one economic unit."
 
21      2.  By amending the definitions of "mariculture", "marine
 
22 activities", "noncommercial lease", and "state marine waters" to
 
23 read:
 

 
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 1      ""Mariculture" means the aquaculture, cultivation and
 
 2 production for research, development, [and] demonstration, and
 
 3 commercial purposes of aquatic plants and animals within [the
 
 4 State's] state marine [environment.] waters, but excludes
 
 5 floating structures that are not anchored.
 
 6      "Marine activities" means ocean thermal energy conversion
 
 7 (OTEC); mariculture; and other energy or water[,] research,
 
 8 scientific, and educational activities in, on, or under state
 
 9 marine waters [or submerged lands.], which are exclusive, non-
 
10 transient in nature, and which occupy a discrete area of state
 
11 marine waters.
 
12      "Noncommercial lease" means a lease of state marine waters
 
13 [or submerged lands] for marine activities not designed for
 
14 profit.  [The maximum size of the lease for mariculture shall not
 
15 exceed four acres.]
 
16      "State marine waters" means all waters of the State,
 
17 including the water column [land], water surface, and submerged
 
18 lands, extending from the upper reaches of the wash of the waves
 
19 on shore seaward to the limit of the State's police power and
 
20 management authority, including the United States territorial
 
21 sea, notwithstanding any law to the contrary."
 
22      SECTION 5.  Section 190D-11, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
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 1      1.  By amending subsections (a), (b), (c), and (e) to read:
 
 2      "(a)  Any person desiring to lease state marine waters [or
 
 3 submerged lands] shall submit to the board [a conservation
 
 4 district use] an application for specific activities in any
 
 5 specific area or areas.  Applications made pursuant to this
 
 6 chapter shall contain:
 
 7      (1)  An environmental assessment or, if required, an
 
 8           environmental impact statement which shall be prepared
 
 9           and accepted in compliance with the rules adopted under
 
10           chapter 343;
 
11      (2)  A description of the location and boundaries of the
 
12           state marine waters [and submerged lands] to be used
 
13           and a description of the nature of the use desired;
 
14      (3)  A statement of the reasons for selecting the proposed
 
15           location;
 
16      (4)  A description of the activities to be conducted,
 
17           including a specification as to whether such activities
 
18           are commercial or noncommercial, a timetable for
 
19           construction, deployment, and operation of facilities,
 
20           and planned levels of production;
 
21      (5)  Where the application is for mariculture, a description
 
22           of the species to be cultivated and produced;
 

 
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 1      (6)  A statement on the extent to which the proposed
 
 2           activities will interfere with the use of the state
 
 3           marine waters for the purposes of navigation, fishing,
 
 4           and public recreation;
 
 5      (7)  A description of any enclosure, fences, stakes, buoys,
 
 6           or monuments proposed to mark off the desired area; and
 
 7      (8)  Other information which the board determines to be
 
 8           necessary or appropriate, including financial and
 
 9           technical information.
 
10      (b)  The department shall process the [conservation district
 
11 use] application pursuant to chapter 183C [and rules adopted
 
12 under this chapter].  Within sixty days after the submission of
 
13 [a conservation district use] a complete application with a
 
14 request for a lease for marine activities in state marine waters
 
15 [or submerged lands] and the receipt of the related environmental
 
16 assessment or environmental impact statement, the department
 
17 shall issue a public notice that the application has been
 
18 received.  The public notice shall describe [the]:
 
19      (1)  The state marine waters [or submerged lands, or both,]
 
20           for which application has been made[, the];
 
21      (2)  The nature of the exclusive use sought[,]; and [the]
 
22      (3)  The purpose for which the application has been made.
 
23 The notice shall be given on three separate days statewide and in
 

 
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 1 the county nearest the state marine waters [or submerged lands]
 
 2 for which application has been made.  The public notice shall
 
 3 invite public comment.
 
 4      (c)  Notice of hearings shall be provided and hearings shall
 
 5 be conducted in accordance with department rules regarding
 
 6 [conservation district use] applications.  If the area described
 
 7 in the application adjoins any private property or adjoins or
 
 8 overlaps, above or below, any leased state marine waters [or
 
 9 submerged lands], or if the proposed activity will affect the
 
10 property or property rights of private property owners or lessees
 
11 of state marine waters [or submerged lands], the department also
 
12 shall notify the owners or lessees of the adjoining, overlapping,
 
13 or affected property.  Notice shall be given in writing, by
 
14 personal service or by registered or certified mail, and shall
 
15 describe:
 
16      (1)  The state marine waters [or submerged lands, or both,]
 
17           for which application has been made[, the];
 
18      (2)  The nature of the exclusive use sought[,]; and [the]
 
19      (3)  The purpose for which the application has been made."
 
20      2.  By amending subsection (e) to read:
 
21      "(e)  The board shall not approve an application unless it
 
22 finds that:
 
23      (1)  [the] The applicant has the capacity to carry out the
 

 
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 1           entire project; and
 
 2      (2)  [the] The proposed project is clearly in the public
 
 3           interest upon consideration of the overall economic,
 
 4           social, and environmental impacts."
 
 5      SECTION 6.  Section 190D-21, Hawaii Revised Statutes, is
 
 6 amended by amending subsections (a), (b), (c), (d), and (e) to
 
 7 read as follows:
 
 8      "(a)  The board may lease state marine waters [and submerged
 
 9 lands] for marine activities upon compliance with section 171-53
 
10 and with the concurrence of the director of transportation.
 
11 Leases may be issued only for marine activities which are allowed
 
12 pursuant to an approved [conservation district use] application.
 
13 The board shall make a determination that each lease is a
 
14 commercial or noncommercial lease.
 
15      (b)  The board shall not lease state marine waters [or
 
16 submerged lands] when existing programs of the department, such
 
17 as the marine life conservation district program, shoreline
 
18 fisheries management area program, or the natural area reserve
 
19 program will suffer adverse [impact] impacts as a consequence of
 
20 the proposed activities; provided [further] that no lease shall
 
21 be awarded within state marine waters designated as being
 
22 necessary for national defense purposes, as determined by the
 
23 department in consultation with the appropriate federal agencies.
 

 
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 1      (c)  The board shall not lease state marine waters [or
 
 2 submerged lands] unless the board finds that a lease for the
 
 3 proposed activity is clearly in the public interest upon
 
 4 consideration of the overall economic, social, and environmental
 
 5 impacts and consistent with other state policy goals and
 
 6 objectives.
 
 7      (d)  The board shall not lease state marine waters [or
 
 8 submerged lands] unless the board finds that the applicant for a
 
 9 lease has complied with applicable federal, state, and county
 
10 statutes, ordinances, and rules.
 
11      (e)  The board may require any person who has obtained
 
12 approval of [a conservation district use] an application for
 
13 marine activities or the operation of an OTEC facility in state
 
14 marine waters [or submerged lands] to enter into a lease for the
 
15 conduct of those activities."
 
16      SECTION 7.  Section 190D-22, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "[[]190D-22[]]  Leasing procedure.(a)  Any person who
 
19 wants to obtain a lease for marine activities in state marine
 
20 waters [or submerged lands] shall request a lease from the board
 
21 at the time of filing [a conservation district use] an
 
22 application.
 
23      (b)  Upon [approval of a conservation district use] receipt
 
24 of a complete application[,] and authorization of a lease, the
 

 
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 1 board [may either:] shall:
 
 2      (1)  Negotiate with and grant a lease to the applicant; or
 
 3      (2)  Conduct a public auction and grant the lease to the
 
 4           highest qualified bidder.
 
 5      Public auctions shall be conducted in accordance with
 
 6 chapter 171.  If an auction is held and the applicant [who has
 
 7 gone through the conservation district use] submitting a complete
 
 8 application is not the highest qualified bidder, the board shall
 
 9 require the highest qualified bidder to indemnify the applicant
 
10 for all legitimate costs incurred [by the applicant to obtain
 
11 approval of the conservation district use application.] in the
 
12 preparation of any environmental assessment or environmental
 
13 impact statement included in the application pursuant to chapter
 
14 343 and the rules adopted thereunder.  In establishing and
 
15 following internal procedures for lease applications, the board
 
16 shall attempt to minimize costs to those applicants submitting
 
17 complete applications.
 
18      (c)  The board shall not revoke or modify its approval of [a
 
19 conservation district use] an application in such a way as to
 
20 invalidate, impair, limit, or affect, directly or indirectly, in
 
21 whole or in part, the rights of a lessee as set forth in the
 
22 lease granted to the lessee pursuant to this chapter."
 
23      SECTION 8.  Section 190D-23, Hawaii Revised Statutes, is
 

 
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 1 amended by amending subsection (a) to read as follows:
 
 2      "(a)  Leases issued by the board shall be drawn up in
 
 3 accordance with the following requirements, in addition to any
 
 4 [others] other requirements determined by the board:
 
 5      (1)  Each lease shall specify the term of the lease and the
 
 6           nature of the exclusive use of the area being
 
 7           granted[.];
 
 8      (2)  Each lease shall specify the marine activities or other
 
 9           resources which may be cultivated, produced, harvested,
 
10           removed, or used pursuant to the lease[.];
 
11      (3)  Each lease shall specify an annual rent set by the
 
12           board for the leased [marine waters or submerged
 
13           lands.] area.  The basic rental charged in a commercial
 
14           lease may be supplemented by royalty payments.  No
 
15           royalty shall be charged in a noncommercial lease[.];
 
16      (4)  Leases may specify that failure of the lessee to
 
17           perform substantially the activities for which the
 
18           lease was granted shall constitute grounds for
 
19           revocation of the lease and forfeiture to the State of
 
20           all structures and, in the case of mariculture
 
21           activities, all plants or animals cultivated, in and
 
22           upon the leased [marine waters and submerged lands.]
 
23           area;
 
24      (5)  Each lease shall require that the lessee execute a bond
 

 
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 1           conditioned upon the substantial performance of the
 
 2           activities described in the lease.  The amount of the
 
 3           bond so executed shall be appropriate to the size,
 
 4           scale, and risk of the activity for which the lease is
 
 5           granted, and shall be sufficient to protect the public
 
 6           interest in the removal of all structures and, in the
 
 7           case of mariculture activities, all marine plants or
 
 8           animals cultivated, as well as to restore or remediate
 
 9           the water and submerged lands to the satisfaction of
 
10           the department in and upon the leased state marine
 
11           waters [and submerged lands], if the lease is forfeited
 
12           for nonperformance or the board requires the removal or
 
13           eradication of marine plants or animals pursuant to
 
14           paragraph (11)[.];
 
15      (6)  Each lease shall specify that if a lessee abandons a
 
16           leased area, the board may order the removal or sale at
 
17           public auction of all improvements, assets, marine
 
18           plants or animals, and equipment remaining in and upon
 
19           the leased area, and shall transmit to the state
 
20           general fund the entire amount received from any public
 
21           auction and any proceeds received from the lessee's
 
22           performance bond.  Alternatively, the board may permit
 
23           the use of the improvements, assets, marine plants or
 

 
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 1           animals, and equipment for purposes which benefit the
 
 2           general public[.];
 
 3      (7)  Each lease for mariculture shall specify that the
 
 4           marine plants or animals described in the lease to be
 
 5           cultivated and contained within the leased area are the
 
 6           exclusive harvest of the lessee; provided that any
 
 7           marine plant or animal which escapes from the leased
 
 8           area and is not clearly identifiable as the property of
 
 9           the lessee, shall become common property and may be
 
10           taken or caught by any person, subject to the fishing
 
11           laws of the State, without violating the rights of the
 
12           lessee[.];
 
13      (8)  Each lease for mariculture shall specify that [the]:
 
14           (A)  The lessee is responsible for the removal of any
 
15                cultivated marine plants or animals found outside
 
16                the leased area but within state marine waters [or
 
17                submerged lands] if removal is required to protect
 
18                the environment or public health and safety, and
 
19                removal is demanded by the board; [that the]
 
20           (B)  The lessee is solely responsible for all costs of
 
21                removal of such marine plants or animals; and
 
22                [that if]
 
23           (C)  The action must be taken by the department to
 

 
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 1                eradicate escaped marine plants or animals, all
 
 2                costs of eradication shall be borne by the lessee;
 
 3                provided that the costs borne by the lessee shall
 
 4                be no greater than the amount of the bond required
 
 5                under paragraph (5)[.];
 
 6      (9)  Leases may specify that the lessee shall construct and
 
 7           maintain gates, openings, or lanes at reasonable
 
 8           distances from one another throughout a leased area
 
 9           which includes surface waters and in which any type of
 
10           enclosure is an obstacle to free navigation, unless
 
11           public transit in or through the enclosed waters will
 
12           cause undue interference with the operation being
 
13           conducted by the lessee within the leased area[.];
 
14     (10)  Leases may require, where necessary, that [all]:
 
15           (A)  All lessees mark off the areas under lease by
 
16                appropriate ranges, monuments, stakes, buoys, [or]
 
17                fences, or any other devices placed so that they
 
18                do not interfere unnecessarily with navigation and
 
19                other traditional uses of the water surface; [that
 
20                all]
 
21           (B)  All lessees identify the area under lease and the
 
22                names of the lessees on signs appropriately placed
 
23                pursuant to [rules of] specifications established
 

 
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 1                by the board; and [that all]
 
 2           (C)  All limitations upon the use by the public of an
 
 3                ocean area under lease shall be clearly posted by
 
 4                the lessee pursuant to [rules] specifications
 
 5                established by the board[.];
 
 6     (11)  Leases shall specify that if the chairperson finds or
 
 7           has reasonable cause to believe that an activity
 
 8           conducted by the lessee in or upon the area described
 
 9           in the lease is causing an immediate danger to human or
 
10           marine life or the environment of the state marine
 
11           waters [or submerged lands], the chairperson may direct
 
12           a temporary or permanent suspension of commercial or
 
13           research activities in the affected area.  The
 
14           chairperson shall then notify the board.  The board
 
15           shall immediately order the lessee or lessees affected
 
16           by such notice to show cause why their activities
 
17           should not be terminated, or why any structures,
 
18           cultivated marine plants or animals, or equipment
 
19           should not be removed from state marine waters [or
 
20           submerged lands].  The board shall proceed to hold a
 
21           public hearing and issue its order with respect to such
 
22           hearing within a reasonable period.  In its order
 
23           following such hearing the board may direct a temporary
 
24           or permanent suspension of commercial or research
 

 
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 1           activities in the affected area, removal of equipment
 
 2           or cultivated marine plants or animals, or such other
 
 3           measures as shall be deemed necessary for protection of
 
 4           human or marine life and environment of state marine
 
 5           waters [and submerged lands], including forfeiture to
 
 6           and destruction by the State of any marine plant or
 
 7           animal species[.];
 
 8     (12)  Each lease shall specify that the lease may be assigned
 
 9           in whole or in part, or amended, only if the board
 
10           determines that such assignment or amendment is in the
 
11           public interest and meets the provisions of this
 
12           chapter[.] and consents to the assignments.  The board
 
13           may consent to the mortgage of a lease pursuant to
 
14           section 171-22[.]; and
 
15     (13)  Each lease shall specify that the lease may be revoked
 
16           by the board for violation of any lease provision.  The
 
17           board shall deliver a written notice of the breach or
 
18           default of any lease agreement by registered or
 
19           certified mail to the party in default and to each
 
20           holder of record having any security interest in the
 
21           state marine waters [and submerged lands] covered by or
 
22           subject to the lease, making demand upon the party to
 
23           cure or remedy the breach or default within sixty days
 

 
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 1           from the date of receipt of the notice.  Upon failure
 
 2           of the party to cure or remedy the breach or default
 
 3           within sixty days from the date of receipt of the
 
 4           notice, or within such additional period the board may
 
 5           allow for good cause, the board may revoke the lease."
 
 6      SECTION 9.  Section 190D-32, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "[[]190D-32[]]  Rules.  The board [shall] may adopt such
 
 9 rules as are necessary and appropriate to carry out the purposes
 
10 and provisions of this chapter.  The adoption of these rules
 
11 shall be in accordance with chapter 91."
 
12      SECTION 10.  Section 190D-33, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "[[]190D-33[]]  Revenues.  The revenues obtained from the
 
15 leasing of state marine waters [and submerged lands] pursuant to
 
16 this chapter shall be deposited into the [general fund;] special
 
17 land and development fund to be used for planning, research and
 
18 development of the aquaculture industry[; provided that the
 
19 portion of revenues subject to chapter 10, shall be deposited
 
20 into the public land trust fund as provided by law]."
 
21      SECTION 11.  Section 190D-34, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 

 
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 1      "[[]190D-34[]]  Penalties.  Any person who conducts any
 
 2 mariculture or OTEC activities prohibited by a lease granted by
 
 3 the board, or who conducts these activities in or upon state
 
 4 marine waters [or submerged lands] without having obtained the
 
 5 approval of the board, shall be fined not more than $10,000 for
 
 6 each separate offense.  Each day of violation shall constitute a
 
 7 separate offense.  Any action taken to impose or collect the
 
 8 penalty provided for in this section shall be considered a civil
 
 9 action."
 
10      SECTION 12.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 13.  This Act shall take effect upon its approval.
 
13 
 
14 
 
15                           INTRODUCED BY:  _______________________
 

 
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