Bill Text: HI SB1181 | 2015 | Regular Session | Introduced
Bill Title: Appraisals; Airports; Leases; Department of Transportation
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2015-01-28 - Referred to TRA/WTL, WAM. [SB1181 Detail]
Download: Hawaii-2015-SB1181-Introduced.html
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THE SENATE |
S.B. NO. |
1181 |
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TWENTY-EIGHTH LEGISLATURE, 2015 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to THE DEPARTMENT OF TRANSPORTATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that lessees of state airport lands benefit from the use of that land and contribute monetarily to the State through the payment of rent. It is a principal of sound fiscal practice that that rental rates are reasonable for the sake of the lessee and lessor.
The legislature further finds that rental rate increases at state airports may be necessary from time to time. However, for the sake of fairness and notice, increases in rental rates should not drastically increase, unless necessary for sound fiscal practice. Rental increases should instead steadily increase over time to allow lessees time to budget and adapt.
The legislature further finds that after years of significantly low rent rates, a recent appraisal may cause lessees of hangar space at airports to face sudden rental increases of up to four hundred thirty-nine per cent. Further, there is reasonable disagreement on whether rental rates should always reflect fair market value, since the rates needed to help sustain the airport system may be lower than fair market value.
The purpose of this Act is to advance fiscally sound, but fair reform regarding airport land rental rates by:
(1) Increasing the frequency of state airport property appraisals; and
(2) Allowing rentals and appraisals regarding the lease of state airport property to be based on any reasonable methodology.
SECTION 2. Section 171-17, Hawaii Revised Statutes, is amended to read as follows:
"§171-17 Appraisals. (a) The appraisal of public lands for sale or lease at public auction for the determination of the upset price may be performed by an employee of the board of land and natural resources qualified to appraise lands, or by one but not more than three disinterested appraisers whose services shall be contracted for by the board; provided that the upset price or upset rental shall be determined by disinterested appraisal whenever prudent management so dictates. No such lands shall be sold or leased for a sum less than the value fixed by appraisal; provided that for any sale or lease at public auction, the board may establish the upset sale or rental price at less than the appraisal value set by an employee of the board and the land may be sold or leased at that price. The board shall be reimbursed by the purchaser or lessee for the cost of any appraisal required to be made by a disinterested appraiser or appraisers contracted for by the board.
(b) The sale price or lease rental of lands to be disposed of by drawing or by negotiation shall be no less than the value determined by:
(1) An employee of the board qualified to appraise lands; or
(2) A disinterested appraiser or appraisers whose services shall be contracted for by the board, and the appraisal, and any further appraisal with the approval of the board, shall be at the cost of the purchaser;
provided that the sale price or lease rental shall be determined by disinterested appraisal whenever prudent management so dictates; provided further that if the purchaser does not agree upon the sale price or lease rental, the purchaser may appoint an appraiser who shall conduct an appraisal on behalf of the purchaser. If, after the purchaser's appraisal, the board and the purchaser do not agree on the sale price or lease rental, the parties shall make a good faith effort to resolve the dispute through nonbinding mediation by a single mediator, appointed by mutual agreement of the parties. The cost of mediation shall be borne equally by the parties. If mediation does not resolve the dispute, the purchaser's appraiser together with the board's appraiser shall appoint a third appraiser, and the sale price or lease rental shall be determined by arbitration as provided for in chapter 658A, which shall be final and binding. The purchaser shall pay for all appraisal costs, except that the cost of the third appraiser shall be borne equally by the purchaser and the board.
(c) In the repurchase of any land by the board, the board shall have the option to repurchase the land for the original sale price or the fair market value at the time of repurchase, whichever is the lower. Any improvements affixed to the realty shall be purchased at their fair market value. At the time of the repurchase, the fair market value of the land, and the improvements, if any, shall be determined by a qualified appraiser whose services shall be contracted for by the board; provided that if the owner does not agree upon the value, the owner may appoint the owner's own appraiser who shall conduct an appraisal on behalf of the owner. If, after the owner's appraisal, the board and the owner do not agree on the sale price, the parties shall make a good faith effort to resolve the dispute through nonbinding mediation by a single mediator, appointed by mutual agreement of the parties. The cost of mediation shall be borne equally by the parties. If mediation does not resolve the dispute, the owner's appraiser together with the board's appraiser shall appoint a third appraiser, and the value shall be determined by arbitration as provided in chapter 658A. The owner shall pay for all appraisal costs, except that the cost of the third appraiser shall be borne equally by the owner and the board.
(d) If a reopening of the rental to be paid on a lease occurs, the rental for any ensuing period shall be the fair market rental at the time of reopening. At least six months prior to the time of reopening, the fair market rental shall be determined by:
(1) An employee of the department qualified to appraise lands; or
(2) A disinterested appraiser whose services shall be contracted for by the board;
and the lessee shall be promptly notified of the determination and provided with the complete appraisal prepared by the board or the board's appraiser; provided that if the lessee does not agree upon the fair market rental, the lessee may appoint the lessee's own appraiser and the lessee shall provide the board with the complete appraisal prepared by the lessee's appraiser. Each party shall pay for its own appraiser. If the board's and the lessee's appraisers do not agree upon the lease rental, the lessee and the board shall in good faith attempt to resolve the dispute by nonbinding mediation by a single mediator mutually agreed upon by the parties. If the dispute is not resolved by the mediation, the fair market rental shall be determined by arbitration as provided in chapter 658A, which shall be final and binding. Either the board or the lessee may initiate arbitration by a written demand to the other party. The arbitration shall be conducted by a single arbitrator, who shall be an attorney licensed in the State, a person with experience in contracts and real estate valuation, or another qualified person, who shall be mutually agreed upon by the parties. If an arbitrator is not selected within fifteen days of the demand for arbitration, appointment of an arbitrator may be requested by either party by motion made to the circuit court in the circuit in which the land is located. The cost of mediation or arbitration shall be borne equally by the lessee and the board. Any language in present leases to the contrary notwithstanding, the provisions of this subsection, when possible and notwithstanding the six-month notice required, shall apply to leases with original lease rental reopening dates effective before and after July 1, 1996.
(e) Complete appraisal reports, including all comparables relied upon in the appraisal reports, shall be available for study by the public. All complete appraisal reports shall be provided to the opposing party prior to the commencement of mediation or arbitration, if applicable, of the valuation dispute.
(f) Notwithstanding the foregoing, all charges, rentals, and fees for the lease of any state airport land under the jurisdiction of the department shall be based on an appraisal that is supported by a fair market valuation, a historic valuation, or any other reasonable methodology."
SECTION 3. Section 261-7, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Except as otherwise provided in this section, in each case mentioned
in subsection (a)(1), (2), (3), and (4), the department may establish the terms
and conditions of the contract, lease, license, or other arrangement, and may
fix the charges, rentals, or fees for the privileges, services, or things
granted, conferred, or made available, for the purpose of meeting the
expenditures of the statewide system of airports set forth in section 261-5(a),
which includes expenditures for capital improvement projects approved by the
legislature. [Such] All charges, rentals, and fees shall
be reasonable and uniform for the same class of privilege, service, or thing.
All charges, rentals, and fees for the lease of land shall be consistent with the most recent disinterested appraisal obtained by the department pursuant to this subsection. Before July 1, 2018, and no less than every three years thereafter, the department shall obtain a disinterested appraisal supported by a fair market valuation, a historic valuation, or any other reasonable methodology; provided that if the board of land and natural resources approves of an appraisal of the land, pursuant to section 171-17 during any relevant time period, the department may use that appraisal for the purposes of this subsection."
SECTION 4. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2015.
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INTRODUCED BY: |
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Report Title:
Appraisals; Airports; Leases; Department of Transportation
Description:
Establishes a mandatory, periodic appraisal of airport lands that are leased to the public.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
