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HB491
HOUSE OF REPRESENTATIVES
H.B. NO.
491
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO LAND LEASES
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds that most landlords require their tenants to be in
good standing, especially before renewing a lease.
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This includes ensuring that the tenant has
met all financial, contractual, and legal obligations.
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Standard lease agreements also allow a landlord
to terminate a lease when the tenant commits a crime on the property.
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Where the State leases out public lands,
lessees' obligations include paying all moneys owed to the State, carrying out
environmental maintenance and necessary remediations on the subject lands, and
refraining from criminal activity.
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The
legislature believes that, as a landlord, the State should ensure that all of
its lessees meet these obligations, whether the lessees are private
individuals, corporations, or the federal government.
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The legislature also believes that the State
should exercise its right to terminate a lease when a lessee engages in
criminal activity on the property.
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Accordingly, the purpose of this Act is to
prohibit the State from leasing any public lands, or extending the lease of any
public lands, to any individual, corporation, or federal agency that is not in
good standing with the State or that has not met all financial, contractual,
and legal obligations.
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SECTION
2
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Section 171-36,
Hawaii Revised Statutes, is amended by amending subsection (a) to read as
follows:
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"(a)
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Except as otherwise provided, the following
restrictions shall apply to all leases:
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(1)
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Options for
renewal of terms are prohibited;
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(2)
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No lease shall be
for a longer term than sixty-five years, except in the case of a residential
leasehold, which may provide for an initial term of fifty-five years with the
privilege of extension to meet the requirements of the Federal Housing
Administration, Federal National Mortgage Association, Federal Land Bank of
Berkeley, Federal Intermediate Credit Bank of Berkeley, Berkeley Bank for
Cooperatives, or Department of Veterans Affairs requirements; provided that the
aggregate of the initial term and extension shall in no event exceed
seventy-five years;
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(3)
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No lease shall be
made for any land under a lease that has more than two years to run;
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(4)
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No lease shall be
made to any person who is in arrears in the payment of taxes, rents, or other
obligations owed to the State or any county;
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(5)
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No lease shall be
transferable or assignable, except by devise, bequest, or intestate succession;
provided that with the approval of the board, the assignment and transfer of a
lease or unit thereof may be made in accordance with current industry standards,
as determined by the board; provided further that prior to the approval of any
assignment of lease, the board shall have the right to review and approve the
consideration to be paid by the assignee and may condition its consent to the
assignment of the lease on payment by the lessee of a premium based on the
amount by which the consideration for the assignment, whether by cash, credit,
or otherwise, exceeds the depreciated cost of improvements and trade fixtures
being transferred to the assignee; provided further that with respect to state
agricultural leases, in the event of foreclosure or sale, the premium, if any,
shall be assessed only after the encumbrances of record and any other advances
made by the holder of a security interest are paid;
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(6)
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The lessee shall
not sublet the whole or any part of the demised premises, except with the
approval of the board; provided that prior to the approval, the board shall
have the right to review and approve the rent to be charged to the sublessee;
provided further that in the case where the lessee is required to pay rent
based on a percentage of its gross receipts, the receipts of the sublessee
shall be included as part of the lessee's gross receipts; provided further that
the board shall have the right to review and, if necessary, revise the rent of
the demised premises based upon the rental rate charged to the sublessee,
including the percentage rent, if applicable, and provided that the rent may
not be revised downward;
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(7)
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The lease shall be
for a specific use or uses and shall not include waste lands, unless it is
impractical to provide otherwise;
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(8)
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Mineral and
metallic rights and surface and ground water shall be reserved to the State; [
and
]
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(9)
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No lease of public
lands, including submerged lands, or any extension of any lease of public lands
shall be issued by the State to any person to construct, use, or maintain a
sunbathing or swimming pier or to use the lands for those purposes, unless the lease,
or any extension thereof, contains provisions permitting the general public to
use the pier facilities on the public lands and requiring that a sign or signs
be placed on the pier, clearly visible to the public, that indicates the
public's right to the use of the pier.
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The board, at the earliest practicable date, and where legally possible,
shall cause all existing leases to be amended to conform to this
paragraph.
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The term "lease",
for the purposes of this paragraph, includes month-to-month rental agreements
and similar tenancies[
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]
; and
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(10)
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Notwithstanding the exceptions listed in paragraphs (1)
and (4) through (15) of section 171-2, n
o lease of public lands,
including submerged lands, or any extension of any lease of public lands, shall
be issued by the State
to
any individual, corporation, or federal agency that is:
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(A)
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In arrears in the payment of any moneys owed to the State,
including:
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(i)
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Impact
aid owed to the State pursuant to section 3 of Public Law 81-874, calculated
based on the full cost recovery methodology in compliance with Government
Accountability Office guidelines, in an amount determined by the office of the governor;
or
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(ii)
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Reimbursement
to the State for actual costs incurred by the State pursuant to any compact of
free association, in an amount determined by the office of the governor;
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(B)
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Noncompliant with any order, consent decree, or memoranda of
agreement requiring the individual, corporation, or federal agency to perform
environmental maintenance or remediation activities with regard to the subject
public lands; or
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(C)
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Convicted
of a crime;
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provided that the board
shall request and obtain certification from the office of the governor before
the issuance or extension of any lease to an individual, corporation, or
federal agency that the individual, corporation, or federal agency is in good standing
with the State pursuant to this section; provided further that, if the
individual, corporation, or federal agency is not in good standing with the
State, the governor shall not certify the lease or lease extension until the
individual, corporation, or federal agency has remitted full payment of any
unpaid balances owed to the State, carried out any required environmental
maintenance or remediation activities on the subject lands, or completed any
adjudicated penalties for any relevant criminal activity; provided further that
this paragraph shall not apply to leases and dispositions made by the
department of transportation.
"
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SECTION 3.
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If any existing lessee
of public lands is found not to be in good standing with the State as of the
effective date of this Act, the lessee shall have three years, or until the end
of the lease term, whichever is sooner, to correct the violation, including remitting
full payment of any unpaid balances owed to the State, carrying out any
required environmental maintenance or remediation activities on the subject
lands, or completing any adjudicated penalties for any relevant criminal
activity, or the lease shall be terminated.
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SECTION 4.
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This Act does not waive the right of the
State to terminate a lease at any time for any other grounds identified in the
lease.
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SECTION 5.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.
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SECTION 6.
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This Act shall take effect upon its approval.
INTRODUCED BY:
_____________________________
Report Title:
Office of
the Governor; Board of Land and Natural Resources; Impact Aid;
Public
Lands; Leases
Description:
Prohibits the State from leasing any public lands, or extending
the lease of any public lands, to any individual, corporation, or federal
agency that is in arrears in the payment of certain moneys to the State,
noncompliant with a consent decree or memoranda of agreement with the State
that requires environmental maintenance or remediation with regard to the
subject public lands, or convicted of a crime.
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Requires
certification by the Office of the Governor before the issuance or extension of
any federal lease that the individual, corporation, or federal agency is in
good standing with the State.
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Provides
that, i
f any existing lessee of public lands is found not to be in good
standing with the State as of the effective date of this Act, the lessee shall
have three years, or until the end of the lease term, whichever is sooner, to
correct the violation or the lease shall be terminated.
The summary description
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not legislation or evidence of legislative intent.