TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE DEPARTMENT OF LAND AND NATURAL RESOURCES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
PUBLIC LAND DEVELOPMENT CORPORATION
SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
PUBLIC Land development corporation
§ -1 Findings and purpose. The legislature finds that certain public lands under the jurisdiction of the department of land and natural resources are not used effectively. Public lands in certain areas may serve the State and its people better if managed and developed into suitable recreational and leisure centers where residents can congregate and where visitors to our State can go as part of their holiday experience. However, the department of land and natural resources is hamstrung by its limited mission. Creating a development arm of the department of land and natural resources, similar to the agribusiness development corporation, and placing appropriate public lands into the new corporation's jurisdiction, may help to create these recreation and leisure areas, while also creating revenue-generating opportunities for the new corporation. In turn, revenues generated may be used to offset the costs of the regulatory functions of the department of land and natural resources.
The purpose of this chapter is to create a vehicle and process to make optimal use of public land for the economic, environmental, and social benefit of the people of Hawaii. This chapter establishes a public corporation to administer an appropriate and culturally-sensitive public land development program. The corporation shall coordinate and administer programs to make optimal use of public land, while ensuring that the public land is maintained for the people of Hawaii. The corporation shall:
(1) Identify the public lands that are suitable for development under this chapter;
(2) Carry on marketing analysis to determine the best revenue-generating programs for the public lands identified; and
(3) Enter into public-private agreements to:
(A) Appropriately develop the public lands identified; and
(B) Provide the leadership for the development, financing, improvement, or enhancement of the selected development opportunities.
§ -2 Definitions. As used in this chapter, unless the context clearly requires otherwise:
"Board" means the board of directors of the public land development corporation.
"Coordinating entrepreneur" means a qualified person capable of organizing, operating, and assuming the risk for enterprises, including securing land and seed capital, developing or managing commercial or recreational facilities or projects, arranging concession agreements, supplying materials, maintaining equipment and infrastructure, and providing for the processing and marketing of services or products.
"Corporation" means the public land development corporation.
"Coventure" means an investment by the corporation in qualified securities of an enterprise in which a substantial investment is also being made or has been made by a professional investor to provide seed capital to an enterprise. A guarantee by the corporation of qualified securities provided by a professional investor shall be classified as a coventure. An investment made by the corporation, which is a direct investment, may later be classified as a coventure upon an investment by a professional investor.
"Department" means the department of land and natural resources.
"Direct investment" means an investment by the corporation in qualified securities of an enterprise in which no investment is being or has been made by a professional investor to provide seed capital to the enterprise.
"Enterprise" means a business with its principal place of business in Hawaii, which is or proposes to be engaged in recreational and commercial area development, development of new value-added products, enhancement of existing recreational or commercial commodities, and the application of existing recreation or commercial areas and appurtenant facilities to productive uses.
"Fund" means the Hawaii public land development revolving fund.
"Private lender" includes banks, savings and loan associations, mortgage companies, and other qualified companies whose business includes the making of loans in the State.
"Professional investor" means any bank; bank holding company; savings institution; farm credit institution; trust company; insurance company; investment company registered under the federal Investment Company Act of 1940; financial-services loan company; pension or profit-sharing trust or other financial institution or institutional buyer; licensee under the federal Small Business Investment Act of 1958; or any person, partnership, or other entity from whose resources, a substantial amount is dedicated to investing in securities or debt instruments, and whose net worth exceeds $250,000.
"Project" means a specific undertaking, improvement, or system consisting of work or improvement, including personal property or any interest therein acquired, constructed, reconstructed, rehabilitated, improved, altered, or repaired by the corporation.
"Project cost" means the total of all costs incurred by the corporation in carrying out all undertakings that it considers reasonable and necessary for the development of a project, including studies; plans; specifications; architectural, engineering, or any other development-related services; acquisition of land and any improvement thereon; site preparation and development; construction; reconstruction; rehabilitation; the necessary expenses in administering this chapter; the cost of financing the project; and relocation costs.
"Project facilities" includes roads and streets, utility and service corridors, utility lines where applicable, water and irrigation systems, lighting systems, security systems, sanitary sewerage systems, and other community facilities where applicable.
"Qualified person" means any individual, partnership, corporation, or public agency possessing the competence, expertise, experience, and resources, including financial, personnel, and tangible qualifications, as may be deemed desirable by the corporation in administering this chapter.
"Qualified security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, preorganization certificate of subscription, transferable share, investment contract, certificate of deposit for a security, certificate of interest or participation in a patent or patent application, or in royalty or other payments under such a patent or application, or, in general, any interest or instrument commonly known as a "security" or any certificate for, receipt for, or option, warrant, or right to subscribe to or purchase any of the foregoing.
"Revenue bonds" means bonds, notes, or other evidence of indebtedness of the corporation issued to finance any project facility.
"Seed capital" means financing that is provided for the development, refinement, and commercialization of a product or process and other working capital needs.
"Trustee" means a national or state bank or trust company, within or outside the State, that enters into a trust indenture.
"Trust indenture" means an agreement by and between the corporation and a trustee that sets forth the duties of the trustee with respect to the revenue bonds, the security thereof, and other provisions as may be deemed necessary or convenient by the corporation to secure the revenue bonds.
"Value-added" means any activity that increases, by means of development or any other means, the value of public lands.
§ -3 Public land development corporation; established. (a) There is established the public land development corporation, which shall be a public body corporate and politic and an instrumentality and agency of the State. The corporation shall be headed by a board. The corporation shall be placed within the department for administrative purposes.
(b) The board shall appoint an executive director, who shall serve at the pleasure of the board and shall be exempt from chapter 76. The salary of the executive director shall be set by the board.
(c) The board, through its executive director, may appoint officers, agents, and employees; prescribe their duties and qualifications; and fix their salaries, without regard to chapter 76.
§ -4 Powers; generally. Except as otherwise limited by this chapter, the corporation may:
(1) Sue and be sued;
(2) Have a seal and alter the same at its pleasure;
(3) Make and alter bylaws for its organization and internal management;
(4) Adopt rules under chapter 91 necessary to effectuate this chapter in connection with its projects, operations, and properties;
(5) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter;
(6) Carry out surveys, research, and investigations into technological, business, financial, consumer trends, and other aspects of leisure or recreational land uses in the national and international community;
(7) Subject to section 171-30, acquire or contract to acquire by grant or purchase any real, personal, or mixed-use property or any interest therein for its immediate or future use for the purposes of this chapter; own, hold, improve, and rehabilitate any real, personal, or mixed property acquired; and sell, assign, exchange, transfer, convey, lease, or otherwise dispose of, or encumber the same;
(8) By itself, or in partnership with qualified persons or other governmental agencies, acquire, construct, reconstruct, rehabilitate, improve, alter, or repair any infrastructure or accessory facilities in connection with any project; own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of, or encumber any project; and develop or manage, by itself, or in partnership with qualified persons or other governmental agencies, any project that meets the purposes of this chapter;
(9) In cooperation with any other governmental agency, or otherwise through direct investment or coventure with a professional investor or enterprise or any other person, or otherwise, acquire, construct, operate, and maintain public land facilities at rates or charges determined by the corporation;
(10) Assist developmental, recreational, and visitor-industry related enterprises, or projects developed or managed by the corporation, by conducting detailed marketing analysis and developing marketing and promotional strategies to strengthen the position of those enterprises and to better exploit local, national, and international markets;
(11) Carry out specialized programs designed to develop new markets for recreation and visitor-industry-related products;
(12) Receive, examine, and determine the acceptability of applications of qualified persons for allowances or grants for the development of new recreation and visitor-industry-related products, the expansion of established recreation and visitor-industry or land-development enterprises, and the altering of existing recreational, visitor-industry-related, or land-development enterprises;
(13) Coordinate its activities with any federal or state programs;
(14) Grant options to purchase any project or to renew any lease entered into by the corporation in connection with any of its projects, on the terms and conditions it deems advisable;
(15) Provide advisory, consultative, training, and educational services, technical assistance, and advice to any person, partnership, or corporation, either public or private, to carry out the purposes of this chapter, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;
(16) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;
(17) Accept gifts or grants in any form from any public agency or any other source; and
(18) Do all things necessary or proper to carry out the purposes of this chapter.
§ -5 Hawaii public land optimization plan. (a) The corporation shall prepare the Hawaii public land optimization plan, which shall define and establish goals, objectives, policies, and priority guidelines for its public land optimization development strategy. The plan shall include:
(1) An inventory of public lands with suitable adequate development potential that are or will become available that can be used to meet present and future recreational, visitor-industry, or land-development needs;
(2) Measures to protect culturally sensitive areas;
(3) Feasible strategies for the promotion and marketing of any leisure or recreational projects in local, national, and international markets;
(4) Proposals to improve the gathering of data and the timely presentation of information on market demands and trends that can be used to plan future projects; and
(5) Strategies for federal and state legislative actions that will promote the development and enhancement of Hawaii's public lands.
(b) The corporation shall revise the Hawaii public land optimization plan from time to time and shall incorporate the plan in its annual report to the governor and the legislature as provided in section -20.
§ -6 Public land optimization projects; development plans. (a) The corporation may develop and implement public land optimization projects where appropriate public lands may be developed or managed to create appropriate leisure or recreational areas to create revenue-generating centers or where, through detailed analysis, opportunities exist to exploit potential local, national, and international markets.
(b) The corporation may initiate and coordinate the preparation of business and public land-development plans for its projects. The plans shall include a proposal for the organization of the enterprise; a marketing information and strategy; the impact on existing development or visitor-related industries throughout the State; and a recommendation for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any infrastructure or accessory facilities in connection with any project.
(c) The corporation may enter into cooperative agreements with coordinating entrepreneurs or public agencies when the powers, services, and capabilities of the persons or agencies are deemed necessary and appropriate for the development and implementation of the business and public land-development plans.
(d) Notwithstanding any provision of this chapter to the contrary, when leasing corporation-controlled public land, the corporation may contract with a financial institution chartered under chapter 412 or a federal financial institution, as defined under section 412:1-109, that transacts business in this State to provide lease management services. For the purposes of this subsection, "lease management services" includes the collection of lease rent and any other moneys owed to the corporation related to the lease of public land under the corporation's control.
(e) Subject to section -19, the public land-planning activities of the corporation shall be coordinated with the planning departments of the counties and the land-use plans, policies, and ordinances of the counties.
(f) The corporation may amend the business and public land-development plans as may be necessary or appropriate.
(g) Any undertaking by the corporation pursuant to this chapter shall be with the express written consent of the landowner or landowners directly affected.
§ -7 Project facility program. (a) The corporation may develop a project to identify necessary project facilities within a project area.
(b) Unless and except as otherwise provided by law, whenever the corporation undertakes, or causes to be undertaken, any project facility as part of a project, the cost of providing the project facilities shall be assessed against the real property in the project area specially benefiting from the project facilities. Subject to the express written consent of the landowners directly affected, the corporation shall determine the properties that will benefit from the project facilities to be undertaken and may establish assessment areas that include the properties specially benefiting from the project facilities. The corporation may issue and sell bonds in amounts as may be authorized by the legislature to provide funds to finance the project facilities. The corporation shall fix the assessments against the real property specially benefited.
(c) Unless and except as otherwise provided by law, the corporation may adopt rules pursuant to chapter 91 to establish the method of undertaking and financing project facilities in a project area.
(d) Unless and except as otherwise provided by law, bonds issued to provide funds to finance project facilities shall be secured solely by the real properties benefited or improved and the assessments thereon, or by the revenues derived from the project for which the bonds were issued, including reserve accounts and earnings thereon, insurance proceeds, and other revenues, or any combination thereof. The bonds may be additionally secured by the pledge or assignment of loans and other agreements or any note or other undertaking, obligation, or property held by the corporation. The bonds shall be issued according to and subject to the rules adopted pursuant to this section. Any other law to the contrary notwithstanding, in assessing real property for project facilities, the corporation shall assess the real property within a project area according to the special benefits conferred upon the real property by the project facilities. These methods may include an assessment on a frontage basis or according to the area of real property within a project area, or any other assessment method that assesses the real property according to the special benefit conferred, or any combination thereof. No assessment levied under this section against real property specially benefited under this chapter shall constitute a tax on real property within the meaning of any law.
(e) The rules adopted pursuant to this section may include:
(1) The methods of establishing assessment areas within a project area;
(2) The method of assessing real properties specially benefited;
(3) The costs to be borne by the corporation, the county in which the project facilities are situated, and the property owners;
(4) The procedures before the corporation relating to the creation of the assessment areas by the owners of real property therein, including provisions for petitions, bids, contracts, bonds, and notices;
(5) Provisions relating to assessments;
(6) Provisions relating to financing, such as bonds, the Hawaii public land development revolving fund, advances from available funds, special funds for the payment of bonds, the payment of principal and interest, and the sale and use of bonds;
(7) Provisions relating to funds and the refunding of outstanding debts; and
(8) Provisions relating to limitations on time to sue, and other related provisions.
(f) Any other provisions to the contrary notwithstanding, the corporation, at its discretion, may enter into any agreement with the county in which project facilities are located, to implement the purposes of this section.
(g) All sums collected under this section shall be deposited in the fund established by section -17, except that all moneys collected on account of assessments and interests thereon for any specific project facilities financed by the issuance of bonds, shall be set apart in separate subaccounts and applied solely to the payment of:
(1) The principal and interest on these bonds;
(2) The cost of administering, operating, and maintaining the program;
(3) The establishment of reserves; and
(4) Other purposes as may be authorized in the proceedings providing for the issuance of the bonds.
If any surplus remains in any subaccount after the payment of the bonds chargeable against that subaccount, the surplus shall be credited to and become a part of the subaccount. Notwithstanding any other law to the contrary, moneys in the fund may be used to make up any deficiencies in the subaccount.
(h) If all or a part of the project facilities to be financed through bonds by the corporation may be dedicated to the county in which the project facilities are to be located, the corporation shall ensure that the project facilities or applicable portions thereof are designed and constructed to meet county requirements.
§ -8 Approval of projects, plans, and programs. All public land optimization projects, public land-development plans, and project facility programs developed by the corporation shall be approved by the board.
§ -9 Bonds. (a) The corporation, with the approval of the governor, may issue, from time to time, revenue bonds in amounts not exceeding the total amount of bonds authorized to be issued by the legislature for the purpose of constructing, acquiring, remodeling, furnishing, and equipping any project facility, including the acquisition of the site of the facility to sustain and preserve leisure or recreational enterprises within a contiguous geographic area.
(b) All revenue bonds shall be issued pursuant to part III of chapter 39, except as provided in this chapter.
(c) The revenue bonds shall be issued in the name of the corporation and not in the name of the State. The final maturity date of the revenue bonds may be any date not exceeding thirty years from the date of issuance.
§ -10 Revenue bonds; payment and security. (a) The revenue bonds shall be payable from and secured by the real properties specially benefited or improved and the assessments thereon, or by the revenues derived from the project facility for which the revenue bonds were issued, including revenue derived from insurance proceeds and reserve accounts, and earnings thereon.
(b) The corporation may pledge revenues derived from the project facility financed from the proceeds of the revenue bonds to the punctual payment of the principal, interest, and redemption premiums, if any, on the revenue bonds.
(c) The revenue bonds may be additionally secured by the pledge or assignment of the loans and other agreements or any note or other undertaking, obligation, or property held by the corporation to secure the loans.
(d) Any pledge made by the corporation shall create a perfected security interest in the revenues, moneys, or property so pledged and thereafter received by the corporation, from and after the time that the financing statement with respect to the revenues, moneys, or property so pledged and thereafter received are filed with the bureau of conveyances. Upon the filing, the revenues, moneys, or property so pledged and thereafter received by the corporation shall immediately be subject to a lien of any pledge without any physical delivery thereof or having claims of any kind in tort, contract, or otherwise against the corporation, irrespective of whether the parties have notice thereof. This section shall apply to any financing statement heretofore or hereafter filed with the bureau of conveyances with respect to any pledge made to secure revenue bonds issued under this chapter.
§ -11 Revenue bonds; interest rate, price, and sale. (a) The revenue bonds issued pursuant to this chapter shall bear interest at a rate or rates and shall be payable on a date or dates, as the corporation shall determine.
(b) The corporation shall include the costs of undertaking the project facility for which the revenue bonds are issued in determining the principal amount of revenue bonds to be issued. In determining the cost of undertaking the project facility, the corporation may include:
(1) The cost of constructing, acquiring, remodeling, furnishing, and equipping the project facility, including the acquisition of the site of the facility;
(2) The cost of purchasing or funding loans or other agreements entered into for the project facility;
(3) The costs of studies and surveys;
(4) Insurance premiums;
(5) Underwriting fees;
(6) Financial-consultant, legal, accounting, and marketing services incurred;
(7) Reserve-account, trustee, custodian, and rating-agency fees; and
(8) Any capitalized interest.
(c) The revenue bonds may be sold at public or private sale, and for a price as may be determined by the corporation.
§ -12 Revenue bonds; investment of proceeds and redemption. Subject to any agreement with the holders of its revenue bonds, the corporation may:
(1) Invest its moneys not required for immediate use, including proceeds from the sale of revenue bonds, in any investment in accordance with procedures prescribed in a trust indenture; and
(2) Purchase its revenue bonds out of any fund or money of the corporation available therefor, and hold, cancel, or resell the revenue bonds.
§ -13 Revenue bonds; subaccounts. (a) A separate subaccount shall be established for each project facility financed from the proceeds of the revenue bonds secured under the same trust indenture. Each subaccount shall be designated "project facility revenue bond subaccount" and shall bear additional designation as the corporation deems appropriate to properly identify the fund.
(b) Notwithstanding any other law to the contrary, including section -17, all revenues, income, and receipts derived from the project facility for which the revenue bonds are issued shall be paid into the project facility revenue bond subaccount established for that project facility and applied as provided in the proceedings authorizing the issuance of the revenue bonds.
§ -14 Trustee; designation, duties. (a) The corporation shall designate a trustee for each issue of revenue bonds secured under the same trust indenture.
(b) The trustee shall be authorized by the corporation to hold and administer the project facility revenue bond subaccount established pursuant to section -13, to receive and receipt for, hold, and administer the revenues derived by the corporation from the project facility for which the revenue bonds were issued, and to apply these revenues to the payment of the cost:
(1) Of undertaking the project facility;
(2) Of administering and operating the proceedings providing for the issuance of the revenue bonds;
(3) To pay the principal or interest on these bonds;
(4) Of the establishment of reserves; and
(5) To other purposes as may be authorized in the proceedings providing for the issuance of the revenue bonds.
(c) Notwithstanding section 39-68 to the contrary, the director of finance may appoint the trustee to serve as fiscal agent for:
(1) The payment of the principal of and interest on the revenue bonds; and
(2) The purchase, registration, transfer, exchange, and redemption of the bonds.
(d) The trustee shall perform additional functions with respect to the payment, purchase, registration, transfer, exchange, and redemption of the bonds, as the director of finance may deem necessary, advisable, or expeditious, including the holding of the revenue bonds and coupons that have been paid and the supervision of the destruction thereof in accordance with applicable law.
(e) Nothing in this chapter shall limit or be construed to limit the powers granted to the director of finance in sections 36-3, 39-13, and 39-68(a), to appoint the trustee or others as fiscal agents, paying agents, and registrars for the revenue bonds or to authorize and empower those fiscal agents, paying agents, and registrars to perform the functions referred to in those sections.
§ -15 Trust indenture. (a) A trust indenture may contain covenants and provisions authorized by part III of chapter 39, and as may be deemed necessary or convenient by the corporation for the purposes of this chapter.
(b) A trust indenture may allow the corporation to pledge and assign to the trustee loans and other agreements related to the project facility, and the rights of the corporation thereunder, including the right to receive revenues thereunder and to enforce the provisions thereof.
(c) A trust indenture shall also contain provisions as to:
(1) The investment of the proceeds of the revenue bonds, the investment of any reserve for the bonds, the investment of the revenues of the project facility, and the use and application of the earnings from investments; and
(2) The terms and conditions upon which the holders of the revenue bonds or any portion of them or any trustee thereof may institute proceedings for the foreclosure of any loan or other agreement or any note or other undertaking, obligation, or property securing the payment of the bonds and the use and application of the moneys derived from the foreclosure.
(d) A trust indenture may also contain provisions deemed necessary or desirable by the corporation to obtain or permit, by grant, interest, subsidy, or otherwise, the participation of the federal government in the financing of the costs of undertaking the project facility.
§ -16 Transfer of public lands. Notwithstanding chapter 171 to the contrary, the department may transfer lands under its jurisdiction to the corporation for its use.
§ -17 Hawaii public land development revolving fund; established; use of corporation funds. (a) There is established the Hawaii public land development revolving fund, to which shall be credited any state appropriations to the fund or other moneys made available to the fund, to be expended as directed by the corporation.
(b) The corporation shall hold the fund in an account or accounts separate from other funds. The corporation shall invest and reinvest the fund and the income thereof to:
(1) Purchase qualified securities issued by enterprises for the purpose of raising seed capital; provided that the investment shall comply with the requirements of this chapter;
(2) Make grants, loans, and provide other monetary forms of assistance necessary to carry out the purposes of this chapter; and
(3) Purchase securities as may be lawful investments for fiduciaries in the State.
All appropriations, grants, contractual reimbursements, and other funds not designated for this purpose may be used to pay for proper general expenses and to carry out the purposes of the corporation.
(c) The corporation shall purchase qualified securities issued by an enterprise only after:
(A) An application from the enterprise containing a business plan, which is consistent with the business and public land-development plan, including a description of the enterprise and its management, product, and market;
(B) A statement of the amount, timing, and projected use of the capital required;
(C) A statement of the potential economic impact of the enterprise, including the number, location, and types of jobs expected to be created; and
(D) Any other information as the corporation shall require;
(2) Determining, based upon the application submitted, that:
(A) The proceeds of the investment will be used only to cover the seed-capital needs of the enterprise, except as authorized in this section;
(B) The enterprise has a reasonable chance of success;
(C) The enterprise has the reasonable potential to create employment within the State and offers employment opportunities to residents;
(D) The coordinating entrepreneur and other founders of the enterprise have already made or are prepared to make a substantial financial and time commitment to the enterprise;
(E) The securities to be purchased are qualified securities;
(F) There is a reasonable possibility that the corporation will recoup at least its initial investment; and
(G) Binding commitments have been made to the corporation by the enterprise for adequate reporting of financial data to the corporation, which shall include a requirement for an annual or other periodic audit of the books of the enterprise, and for control by the corporation that it considers prudent over the management of the enterprise, to protect the investment of the corporation, including membership on the board of directors of the enterprise, ownership of voting stock, input in management decisions, and the right of access to the financial and other records of the enterprise;
(3) Entering into a binding agreement with the enterprise concerning the manner of payback by the enterprise of the funds advanced, granted, loaned, or received from the corporation. The manner of payback may include the payment of dividends, returns from the public sale of corporate securities or products, royalties, and other methods of payback acceptable to the corporation. In determining the manner of payback, the corporation shall establish a rate of return or rate of interest to be paid on any investment, loan, or grant of corporation funds under this section.
(d) If the corporation makes a direct investment, it shall also find that a reasonable effort has been made to find a professional investor to make an investment in the enterprise as a coventure and that the effort was unsuccessful. The findings, when made by the corporation, shall be conclusive.
(e) The corporation shall make investments in qualified securities issued by an enterprise in accordance with the following limits:
(1) Not more than $500,000 shall be invested in the securities of any one enterprise, except that more than a total of $500,000 may be invested in the securities of any one enterprise if the corporation finds, after its initial investment, that additional investments in that enterprise are required to protect the initial investment of the corporation, and the other findings set forth in subsection (d) and this subsection are made as to the additional investment;
(2) The corporation shall not own securities representing more than forty-nine per cent of the voting stock of any one enterprise at the time of purchase by the corporation after giving effect to the conversion of all outstanding convertible securities of the enterprise, except that if a severe financial difficulty of the enterprise occurs, threatening the investment of the corporation in the enterprise, a greater percentage of those securities may be owned by the corporation; and
(3) Not more than fifty per cent of the assets of the corporation shall be invested in direct investments at any time.
(f) No investment, loan, grant, or use of corporate funds for the purposes of this chapter shall be subject to chapter 42F.
§ -18 Exemption from taxation. The corporation shall not be required to pay state taxes of any kind.
§ -19 Exemption from county requirements. Notwithstanding section 171-42 and except as otherwise provided in this chapter, the corporation shall not be required to comply with otherwise applicable county zoning, subdivision, and permitting requirements.
§ -20 Annual report. The corporation shall submit to the governor and the legislature, no later than twenty days prior to the convening of each regular session, a complete and detailed report of its plans and activities."
SECTION 2. 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 2011-2012 and the same sum or so much thereof as may be necessary for fiscal year 2012-2013 for:
(1) The establishment and operation of the public land development corporation; and
(2) The funding for two staff positions as follows:
(A) A planner; and
(B) A project-development specialist.
The sums appropriated shall be expended by the department of land and natural resources for the purposes of this Act.
REHABILITATION OF ALA WAI BOAT HARBOR
SECTION 3. The department of land and natural resources, through its division of boating and ocean recreation, operates and manages twenty-one harbors; fifty boat ramps; 2,122 moorings and berths; and nineteen piers spread throughout the various counties of the State. The legislature finds that these ocean-recreation facilities, in light of the present demand, are in short supply and, in most cases where they exist, are in dire need of long-overdue repair and maintenance. Some facilities are in such need of repair and replacement that they cannot be used and pose hazards to public safety.
One of these facilities, the Ala Wai boat harbor, badly needs repair and replacement of floating docks. However, the need for further maintenance remains unfulfilled. In spite of its problems, the Ala Wai boat harbor includes certain assets within its facilities that are underused and, if properly developed, can potentially generate revenue that can fund not only its continued improvement and maintenance but also the rest of the facilities now operated by the division of boating and ocean recreation.
The legislature finds that the State cannot afford to let the value of small boat harbors continue to decline.
The purpose of this part is to:
(1) Allow the limited issuance of commercial use permits for vessels with assigned moorings in Ala Wai and Keehi harbors;
(2) Provide for future moorage fees to be established by appraisal by a State-licensed appraiser; and
(3) Direct the department of land and natural resources to use the request-for-proposals process to enter into a public-private partnership for the development of portions of Ala Wai boat harbor facilities that are presently underused to maximize the revenue potential from such facilities.
SECTION 4. Section 200-2.5, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:
"(b) The permissible uses under any lease disposed of under this section shall be consistent with the purpose for which the land was set aside by the governor pursuant to section 171‑11. Permissible uses may include any use that will complement or support the ocean-recreation or maritime activities of state boating facilities.
(c) Disposition of public lands of state
boating facilities constructed, maintained, and operated in accordance with
this chapter shall not exceed a maximum term of [
SECTION 5. Section 200-8, Hawaii Revised Statutes, is amended to read as follows:
§200-8[ ]] Boating
program; payment of costs. The cost of administering a comprehensive
statewide boating program, including, [ but not limited to,] the cost of:
(1) Operating, maintaining, and managing all boating facilities under the control of the department;
(2) Improving boating safety;
(3) Operating a vessel registration and boating casualty investigation and reporting system; and
(4) Other boating program activities,
shall be paid from the boating special fund. The
amortization (principal and interest) of the costs of capital improvements for
boating facilities appropriated after July 1, 1975, including, [
limited to,] berths, slips, ramps, related accommodations, general
navigation channels, breakwaters, aids to navigation, and other harbor
structures, may be paid from the boating special fund or from general revenues
as the legislature may authorize in each situation. Revenues provided in this
chapter for the boating special fund shall be at least sufficient to pay the
special fund costs established in this section."
SECTION 6. Section 200-9, Hawaii Revised Statutes, is amended to read as follows:
"§200-9 Purpose and use of state small boat harbors. (a) State small boat harbors are constructed, maintained, and operated for the purposes of:
(1) Recreational boating activities;
(2) Landing of fish; and
(3) Commercial vessel activities.
For the purpose of this section, "recreational
boating activities" means the [
utilization] use of
watercraft for sports, hobbies, or pleasure, and "commercial vessel
activities" means the [ utilization] use of vessels for
activities or services provided on a fee basis. To implement these purposes,
only vessels in good material and operating condition that are regularly
navigated beyond the confines of the small boat harbor[ ,] and [ which]
that are used for recreational activities, the landing of fish, or
commercial vessel activities shall be permitted to moor, anchor, or berth at [ such]
a state small boat harbor or use any of its facilities.
(b) Vessels used for purposes of recreational
boating activities [
which] that are also the principal habitation
of the owners shall occupy no more than one hundred twenty-nine berths at Ala
Wai boat harbor and thirty-five berths at Keehi boat harbor, which is equal to
fifteen per cent of the respective total moorage space that was available as of
July 1, 1976, at the Ala Wai and Keehi boat harbors. [ Notwithstanding the
purposes of small boat harbors, moorage for commercial vessels and commercial
vessel activities is not permitted in the Ala Wai and Keehi boat harbors;
(c) The total number of valid commercial use permits that may be issued for vessels assigned mooring in Ala Wai boat harbor shall not exceed fifteen per cent of the total berths and shall not exceed thirty-five per cent of the total berths at Keehi boat harbor; provided that at Ala Wai boat harbor, vessels issued commercial use permits shall:
(1) Not exceed sixty-five feet in length;
(2) Occupy not more than fifty-six berths located along the row of berths furthermost mauka or adjacent to Holomoana street, with the remainder located throughout Ala Wai boat harbor, with a priority assigned to row seven hundred and row eight hundred;
(3) Be phased-in in a manner that does not displace any existing recreational boater or existing catamaran operator; and
(4) Include commercial catamarans, for
which valid commercial use permits or existing registration
certificates have been issued by the department [
allow the catamarans to operate upon Waikiki shore waters for hire[ , may be
permitted to moor in Ala Wai boat harbor at facilities leased for commercial
The department shall allow a sole proprietor of a catamaran operating with a valid commercial use permit or existing registration certificate, issued by the department, for a commercial catamaran to land its commercial catamaran on Waikiki beach and to operate upon Waikiki shore waters for hire, to transfer the ownership of the vessel from personal ownership to corporate or other business ownership without terminating the right to operate under the commercial use permit or existing registration certificate. The existing commercial use permit or existing registration certificate shall be reissued in a timely manner in the name of the transferee corporation or other business entity. No valid commercial use permit or existing registration certificate issued to an owner of a commercial catamaran operating in the Waikiki area shall be denied or revoked without a prior hearing held in accordance with chapter 91.
(c)] (d) Notwithstanding any
limitations on commercial permits for Maui county small boat facilities,
vessels engaging in [ inter-island] interisland ferry service
within Maui county shall be afforded preferential consideration for ferry
landings, including the issuance of a commercial operating permit and the
waiver of any applicable fees, at Maui county small
boat facilities; provided that:
(1) The vessel operator has been issued a certificate
of public convenience and necessity for the purpose of engaging in [
interisland ferry service that includes a route within Maui county;
(2) The design and performance characteristics of the vessel will permit safe navigation within the harbor entrance channel and safe docking within Maui county small boat facilities;
(3) The vessel operations will not result in unreasonable interference with the use of Maui county small boat facilities by other vessels; and
(4) All preferential consideration and waivers,
including any commercial permits issued under this section, shall cease upon
the vessel operator's termination of [
inter-island] interisland ferry
service within Maui county.
(d)] (e) The chairperson may
adopt rules pursuant to chapter 91 to further implement this section."
SECTION 7. Section 200-10, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) The permittee shall pay moorage fees
to the department for the use permit that shall be based on[
,] but not
limited to[ ,] the use of the vessel, its effect on the harbor, use of
facilities, and the cost of administering this mooring program; and,
Moorage] Except for commercial
maritime activities where there is a tariff established by the department of
transportation, moorage fees shall be established by appraisal by a State-licensed
appraiser approved by the department and shall be higher for nonresidents[ ;].
The moorage fees shall be set by appraisal categories schedule A and schedule
B, to be determined by the department, and may be increased annually by the
department to reflect a cost-of-living index increase;
(2) For commercial maritime activities where there is a tariff established by the harbors division of the department of transportation, the department may adopt the published tariff of the harbors division of the department of transportation, or establish the fee by appraisal by a State-licensed appraiser approved by the department; and
(2)] (3) An application fee shall be
collected when applying for moorage in state small boat harbors and shall thereafter
be collected annually when the application is renewed. The application fee
(A) Set by the department; and
(B) Not less than $100 for nonresidents;
(3)] (4) If a recreational vessel is
used as a place of principal habitation, the permittee shall pay, in addition
to the moorage fee, a liveaboard fee that shall be calculated at a rate of:
(A) $5.20 a foot of vessel length a month if the permittee is a state resident; and
(B) $7.80 a foot of vessel length a month if the permittee is a nonresident;
provided that the liveaboard fees established by
this paragraph may be increased by the department at the rate of the annual
cost-of-living index, but not more than five per cent in any one year,
January] July 1 of each year; [ and (4)] (5) If a vessel is used for
commercial purposes from its permitted mooring, the permittee shall pay, in
lieu of the moorage and liveaboard fee, a fee based on three per cent of the
gross revenues derived from the use of the vessel or two times the moorage fee
assessed for a recreational vessel of the same size, whichever is greater[ .];
(6) The department is authorized to assess and collect utility fees, including electrical and water charges, and common-area maintenance fees in small boat harbors."
SECTION 8. (a) Pursuant to section 200-2.5, Hawaii Revised Statutes, the department of land and natural resources is directed to lease certain fast lands at Ala Wai boat harbor using the request-for-proposals process for the public-private development, management, and operation of areas of Ala Wai boat harbor.
(b) The permissible uses under this lease shall include:
(1) A minimum of not less than one hundred twenty berths for vessels; provided that:
(A) Not more than forty berths shall be available for vessels used for purposes of recreational boating activities that are also the principal habitation of the owners;
(B) Not more than thirty berths, including those allowed pursuant to section 200-9(b), Hawaii Revised Statutes, shall be available for vessels issued commercial use permits; and
(C) All berths provided under this paragraph shall be made available to the public pursuant to the rules of the department of land and natural resources, with moorage fees to be determined by the developer;
(2) Office space, including a minimum of square feet for use by the division of boating and ocean recreation;
(3) Vehicular parking, including a minimum of parking stalls for use by the division of boating and ocean recreation and for public metered parking;
(4) Commercial uses, including [
but not limited to]
restaurants, retail shops, marine-supplies shops, and sundry stores, all made
available to the public;
(5) Residential, hotel, and timeshare uses; provided that the use is consistent with neighboring parcels with a developable height limit of three hundred fifty feet and a maximum floor-area ratio of four;
(6) The development of a seawater air conditioning district cooling facility designed to support the visitor industry in Waikiki in the vicinity of Ala Wai boat harbor;
(7) Vessel fueling facilities;
(8) Vessel haul-out and repair facilities; and
(9) Vessel haul-out and storage facilities.
(c) The lease shall not exceed a maximum term of sixty‑five years and shall provide for:
(1) A minimum lease rent that is the greater of a commercially acceptable percentage of the gross receipts of the lessee from the developed leased premises or a fair return on the fair market value of the vacant leased premises, as determined by appraisal by a State-licensed appraiser approved by the department, with reasonable periodic step-ups in the minimum lease rent over the term of the lease; and
(2) A three-year development period with a fixed reduced lease rent.
(d) Notwithstanding chapter 171 and section 190D-33, Hawaii Revised Statutes, all revenues from the lease shall be deposited in the boating special fund established pursuant to section 248-8, Hawaii Revised Statutes.
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect on July 1, 2030.
DLNR; Public Land Development Corporation; Ala Wai Boat Harbor
Establishes the Public Land Development Corporation to administer an appropriate and culturally-sensitive public land development program. Allows the limited issuance of commercial use permits for vessels with assigned moorings in Ala Wai and Keehi boat harbors. Provides for future moorage fees to be established by appraisal by a State-licensed appraiser. Directs the Department of Land and Natural Resources to use the request-for-proposals process to enter into a public-private partnership for the development of portions of Ala Wai Boat Harbor facilities that are presently underused to maximize the revenue potential from such facilities. Effective July 1, 2030. (SB1555 HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.