Report Title:

Agriculture; Lease Extensions

Description:

Generally, enhances the law regulating agriculture leases on state land.

HOUSE OF REPRESENTATIVES

H.B. NO.

1559

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO STATE AGRICULTURAL LEASES.

 

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

 

SECTION 1. The legislature finds that article XI, section 10 of the state constitution mandates that "the public lands shall be used for the development of farm...ownership on as widespread a basis as possible".

Therefore, certain public lands with or without lease encumbrances classified for agricultural use by the State shall be transferred to the department of agriculture, with the approval of the board of agriculture, in a manner consistent with article XI, section 10 of the state constitution.

The purpose of this Act is to ensure the long-term productive utilization of state agricultural parks and other public lands classified for agricultural use under the jurisdiction of the department of agriculture.

SECTION 2. Section 166-2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Other agricultural lands" means public lands leased by an agency of the state other than the department of agriculture for the purpose of agricultural activities."

SECTION 3. Chapter 166, Hawaii Revised Statutes is amended by adding two new sections to be appropriately designated and to read as follows:

"§166- Acquisition and management of existing agricultural leases on public lands. (a) Upon mutual agreement and approval of the board and any other agency of the state holding title to agricultural leases on public lands, the department may acquire and manage certain qualifying existing agricultural leases on public lands and administer a program under rules adopted by the board pursuant to chapter 91.

(b) Notwithstanding any other law to the contrary, rules regulating existing agricultural leases shall be adopted by the board, pursuant to chapter 91, and shall include the following:

(1) The lessee shall perform in full compliance with the existing lease;

(2) The lessee shall not be in arrears in the payment of taxes, rents, or other obligations owed to the state or any county; and

(3) The lessee's agricultural operation shall be economically viable as specified by the board."

§166- Extension of existing agricultural leases on public lands acquired and managed by the department. (a) Notwithstanding chapter 171, upon acquisition of qualified existing agricultural leases on public lands, the lessees may petition the department to extend the terms of their leases, pursuant to rules adopted by the board under chapter 91. The petition shall be made no sooner than five years before or three years after the expiration of the lease and in a manner to be determined by the board.

(b) Extension of existing leases under this section shall be for a period to be determined by the board and without regard to the provisions of chapter 171.

(c) The department shall consider the following in determining whether an extension shall be granted:

(1) In the case of an agricultural operation requiring extensive infrastructure and other improvements on the land, confirmation by the department that the agricultural operation is, has been, and in all likelihood will continue to be viable and the failure to extend the term of the existing lease would result in a substantial loss of time, effort, and capital to the lessee to reconstruct similar infrastructure improvements to achieve equivalent agricultural production results elsewhere;

(2) There are other substantially comparable lands available for lease to interested and qualified bidders. For the purpose of this section, "substantially comparable lands" means lands that are in the same geographic area, of similar size, and are suitable for similar purposes; and

(3) The board has not determined that the public interest dictates that the land should be converted to other uses.

(d) In negotiating and executing an extension of an existing lease without regard to chapter 171, the board shall require the payment of a premium, computed at twenty-five per cent of the appraised value of the demised property, with the premium to be added to the annual lease rent for a period of not more than four years. The cost of appraisal and other related and necessary costs shall be borne by the petitioner for the lease extension."

SECTION 4. The title of Chapter 166, Hawaii Revised Statutes is amended to read as follows:

"AGRICULTURAL PARKS AND OTHER AGRICULTURAL LANDS"

SECTION 5. Section 166-1, Hawaii Revised Statutes, is amended to read as follows:

"[[]§166-1[]] Legislative findings. The legislature finds that important agricultural lands should be preserved for productive purposes; the contribution of diversified agriculture and aquaculture to export and local markets should be expanded, thereby increasing its importance in the State's economy; and continued use of the State's agricultural land resources should be ensured by providing lands to new farmers, displaced farmers, [and] other qualified farmers[.], and existing state agricultural lessees in good standing. In order to meet these goals, the objectives of the State shall include the provision of: lands of appropriate size and productive potential, with an adequate supply of water, to ensure economically viable farm operations; lands at reasonable cost with long term tenure and security from urbanization pressure; [and] lands with common facilities and activities to encourage farm production and distribution economies[.]; and to accommodate existing agricultural lessees of other public lands classified for agricultural use."

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2003-2004, to carry out the purposes of this Act.

SECTION 7. The sum appropriated shall be expended by the department of agriculture for the purposes of this Act.

SECTION 8. The department of agriculture shall adopt rules pursuant to chapter 91 to effectuate the provisions of section 3.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect upon its approval; provided that section 6 shall take effect on July 1, 2003.

INTRODUCED BY:

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