STAND. COM. REP. NO.  862-08

 

Honolulu, Hawaii

                , 2008

 

RE:   H.B. No. 1075

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Sir:

 

     Your Committee on Economic Development & Business Concerns, to which was referred H.B. No. 1075 entitled:

 

"A BILL FOR AN ACT RELATING TO REAL PROPERTY,"

 

begs leave to report as follows:

 

     The purpose of this bill is to correct inequities in long-term commercial and industrial ground leases through the imposition of certain conditions increasing the fairness of the lease to lessees who undertake the lease for the purpose of developing, improving, operating, and subletting the properties.

 

     Your Committee received testimony in support of this bill from the Hawaii Council of Associations of Apartment Owners and several concerned individuals.  The Chamber of Commerce of Hawaii, and the Land Use Research Foundation testified in opposition to the measure.  Kamehameha Schools submitted comments.

 

     Your Committee heard testimony that some of the lease holders that would be provided relief under this measure are required to invest substantial amounts of money into infrastructure improvements with insufficient time left on the lease to recoup their investment.  Your Committee notes that this bill was introduced to address this, and other inequities in the leases of commercial and industrial lease holders that can negatively affect business and our economy.

 

     However, there are concerns that this measure could violate the Contracts Clause of the United States Constitution, as it would affect the terms of leases already in effect.  To encourage further discussion of the issues raised by this bill, your Committee has changed its effective date to July 1, 2034.

 

     As affirmed by the record of votes of the members of your Committee on Economic Development & Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1075, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1075, H.D. 1, and be placed on the calendar for Third Reading.

 

Respectfully submitted on behalf of the members of the Committee on Economic Development & Business Concerns,

 

 

 

 

____________________________

KYLE T. YAMASHITA, Chair