Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 796
                                     H.D. 2

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Water and Land Use, to which was referred
H.B. No. 796, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to provide additional security
to lenders on land or interest covered by a lease, patent,
license, agreement or other instrument, and provide flexibility
to the Department of Land and Natural Resources to assign or
transfer leases based on current industry standards.  

     Your Committee received testimony in support of this bill
from the Board of Land and Natural Resources, and the Board of

     Your Committee finds that reducing the restrictions on
agricultural leasehold land used as security for a loan will
address deficiencies in the state leases.  In addition,
adjustments to the public lands law by allowing assignment of
leases without public auction will facilitate the management of
public lands and enable the Board of Land and Natural Resources
to maximize their efforts to fulfill the public land trust.  

     Your Committee revised the bill by:  

     1.   Adding definitions of "institutional lender," "making a
          loan" and "security interest" to the agricultural parks

     2.   Adding closer oversight by the Board of Agriculture for
          transfers of leases in agricultural parks; and 

                                 STAND. COM. REP. NO. 467
                                 Page 2

     3.   Making technical, non-substantive changes for the
          purposes of style and clarity.  

     As affirmed by the record of votes of the members of your
Committee on Water and Land Use that is attached to this report,
your Committee is in accord with the intent and purpose of H.B.
No. 796, H.D. 1, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 796, H.D.
2, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Water and Land

                                   Romy M. Cachola, Chair