Business-Favored Law Over State Land Leases Signed in Hilo

A bill strongly supported by a wide variety of businesses operating on land leased from the state was signed into law Tuesday by Gov. Neil Abercrombie.

The bill was one of five signed into law at a ceremony Tuesday morning at the Hilo Yacht Club.

Abercrombie’s office said it was the first time a Hawaii governor had ever held a bill-signing on the Big Island.

House Bill 1823 requires that disputes over increases in rent for state leases be resolved through mediation. If that is not successful, the matter would go to binding arbitration.

The bill had the support of the Hawaii Farm Bureau, which testified that increases in the cost of state leases have had a “devastating effect” on farmers.

“The current process for contesting a state lease appraisal is cumbersome and expensive,” said Hawaii Farm Bureau President Christopher Manfredi. “This process is not compatible with the state’s goal of promoting and encouraging local food production.”

The Hawaii Cattlemen’s Council said farmers and ranchers sometimes find that lease reopenings by the Department of Land and Natural Resources put the cost of the leases out of reach.

“We have found that in some lease ‘negotiations’ with DLNR, ‘fair market value’ is not fair when applied to agricultural land,” the organization testified.

Also in favor of the bill was the Japanese Chamber of Commerce & Industry, which said the legislation “will improve the state leasing process and make it fair to both lessors and lessees.”

The DLNR testified in opposition to the bill, saying that existing state law already provides a fair process.

The agency was critical of the bill’s process using an attorney instead of a real estate appraiser in the binding arbitration, saying the result may be “less than fair-market rents.”

Other bills signed Tuesday by Abercrombie included:

• Senate Bill 2953, which provides that all royalties from geothermal activities on Department of Hawaiian Home Lands property shall be paid to that agency. The bill’s first draft called for DHHL to receive just 20% of the royalties.
• Senate Bill 3093, which appropriates $200,000 for the RISE 21st Century After School Program for disadvantaged native Hawaiian youth at the University of Hawaii at Hilo.
• House Bill 2152 and Senate Bill 2583, which provide funding for the Pacific International Space Center for Exploration Systems, also known as PISCES, for operations and for studies of a laser optical communication ground station, respectively.