SECTION 1. The legislature finds that the department of land and natural resources has the responsibility of planning for the disposition of commercial, industrial, hotel, and resort classes of public lands to determine: specific use or uses; minimum size of parcels; required building construction or improvements; and lease terms and requirements.

The legislature also finds that because of the policies guiding the management of public lands with commercial, industrial, resort, and hotel uses, there has been little incentive for lessees to make major improvements to their infrastructure, resulting in the deterioration of infrastructure and facilities. The lack of improvement to property in many of these areas has resulted in dilapidation, deterioration, age, or obsolescence of the buildings and structures in those areas.

The legislature further finds that the rejuvenation of areas of public lands that have become dilapidated, obsolete, or have deteriorated over time is in the public interest and constitutes a valid public purpose.

The purpose of this Act is to establish, within the department of land and natural resources, a four-year redevelopment pilot project for the Kanoelehua industrial area and adjacent public lands in south Hilo, Hawaii, to:

(1) Define the policies for the management of public lands in the Kanoelehua industrial area and adjacent public lands in south Hilo;

(2) Establish a plan for the designated area, including district-wide improvements, that is coordinated with state and county land use and planning policies; and

(3) Implement asset and property management concepts that can optimize income from the properties and evolve in response to changing principles of property administration.

SECTION 2. Definitions. As used in this Act, unless the context requires otherwise:

"Board" means the board of land and natural resources.

"Chairperson" means the chairperson of the board of land and natural resources.

"Department" means the department of land and natural resources.

"Designated redevelopment district" means the district designated by the department pursuant to this Act.

"Pilot project" means the Kanoelehua redevelopment pilot project for the Kanoelehua industrial area.

"Plan" or "redevelopment plan" means the redevelopment plan for the designated redevelopment district prepared by the committee pursuant to this Act.

"Planning committee" or "committee" means the policy-advising committee for the designated redevelopment district.

"Public facilities" means streets and highways, storm drainage systems, water systems, street lighting systems, off-street parking facilities, and sanitary sewerage systems.

SECTION 3. Kanoelehua redevelopment pilot project. (a) There is established within the department a four-year pilot project to be known as the Kanoelehua redevelopment pilot project. The purpose of the pilot project is to:

(1) Define policies for the management of public lands in the Kanoelehua industrial area and adjacent public lands in south Hilo, Hawaii;

(2) Establish a plan for the designated redevelopment district in the Kanoelehua industrial area and adjacent public lands in south Hilo, Hawaii, including district-wide improvements, that is coordinated with state and county land use and planning policies; and

(3) Implement asset and property management concepts that can optimize income from the properties and evolve in response to changing principles of property administration.

(b) The department shall:

(1) Establish a planning committee to prepare the redevelopment plan and determine the boundaries of the redevelopment district within the Kanoelehua industrial area and adjacent public lands in south Hilo, Hawaii;

(2) Designate an area of public lands in the Kanoelehua industrial area and adjacent public lands in south Hilo, Hawaii, to serve as the designated redevelopment district; provided that lands designated by the department shall fall under the following categories:

(A) Industrial park lands under section 171-132, Hawaii Revised Statutes; or

(B) Commercial, industrial, hotel, or resort use lands under section 171-10, Hawaii Revised Statutes; and

(3) To the extent feasible, implement the recommendations of the planning committee in the designated district.

SECTION 4. Planning committee. (a) Upon designation of the boundaries of the designated redevelopment district pursuant to this Act, the chairperson shall establish a planning committee for the Kanoelehua industrial area and adjacent public lands in south Hilo, Hawaii, to be placed in the department for administrative purposes.

(b) The committee shall be a policy-advising committee for the designated redevelopment district and shall consist of the following nine members:

(1) The chairperson;

(2) The director of planning for the county of Hawaii or the director's designee; and

(3) Seven public members, three of whom shall be selected by the chairperson from a list of not fewer than six names submitted by the mayor of the county of Hawaii; provided that all seven public members shall be residents of the county of Hawaii and shall be selected on the basis of their knowledge, experience, and expertise in:

(A) Small or large business management;

(B) Economics, banking, investment, or finance;

(D) Real estate management;

(E) Marketing; or

(F) Hotel and resort management.

(d) The members of the committee shall serve without compensation but shall be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.

(e) The committee shall prepare and provide recommendations to the board on the following:

(1) Preparation of a redevelopment plan for the designated redevelopment district;

(2) Renewal or renegotiation of any lease in connection with any project contained in the redevelopment plan for the designated redevelopment district, on terms and conditions as it deems advisable;

(3) Preparation and, from time to time, modification of plans, design criteria, landscaping, and estimates of costs for the construction, rehabilitation, or repair of any project contained in the redevelopment plan for the designated redevelopment district;

(4) Studies to be conducted in conjunction with county and state agencies necessary to determine the appropriate activities for development in the designated redevelopment district;

(5) Reduction or waiver of rental leases on any lease of public land for any project in the designated redevelopment district that requires substantial improvements;

(6) Creation or execution of contracts and instruments necessary to accomplish the purpose of the redevelopment district, including obtaining the services of consultants to provide professional and technical assistance and advice; and

(7) The need for development agreements with a developer or developers for any project contained in the proposed redevelopment plan; provided that the development agreement recommendations shall contain:

(A) The location, area, and size of the parcel to be developed;

(B) The use or uses to which the parcel shall be put in conformance with the redevelopment plan and with applicable state and county laws and ordinances;

(D) Other terms and conditions that the committee deems necessary.

(f) The committee shall prepare a redevelopment plan for the designated redevelopment district, including proposed district development policies, district improvement programs, necessary public facilities, infrastructure needs, and proposed development guidelines and rules. Specifically, the committee shall prepare a redevelopment plan that includes but is not limited to the following:

(1) Establishing within the designated redevelopment district, if applicable, areas principally for:

(A) Commercial activities;

(B) Processing, construction, manufacturing, transportation, wholesaling, storage, and similar industrial activities;

(D) Public and recreational facilities with detailed standards for height, bulk, size, and location of buildings;

(2) A district-wide improvement program for necessary district-wide public facilities within the designated redevelopment district;

(3) Plans, specifications, and estimates of the costs for the development, construction, reconstruction, or improvement of any project in the designated redevelopment district, and from time to time modify the plans, specifications, or estimates;

(4) Identification of specific uses for areas in the designated redevelopment district and the required parceling of land into minimum size areas related to the specific uses;

(5) Identification of lease rentals that should be established for the specific uses and the terms and conditions of the leases; and

(6) Recommendations for interim development controls to be implemented during the transition to the execution of the provisions of the redevelopment plan, such as recommending the holdover of a lessee pursuant to section 171-40, Hawaii Revised Statutes, or issuance of permits pursuant to section 171-55, Hawaii Revised Statutes, to existing lessees upon the expiration of their lease terms.

(g) The district redevelopment plan may provide recommendations for the withdrawal or taking of public land, or portions of the public land, for public purposes under a lease, including suggested lease terms.

(h) The committee shall hold a public hearing on a proposed redevelopment plan for the designated redevelopment district, and shall consider the comments received and incorporate any revisions to the plan that may be necessary.

SECTION 5. Reports to the legislature. (a) The department shall submit:

(1) A progress report of the pilot project, including analysis of the pilot project and recommendations on whether similar projects should be expanded to other counties, no later than twenty days prior to the convening of the regular session of 2017; and

(2) A final report on the operations and findings and recommendations on the pilot project, including any proposed legislation, no later than twenty days prior to the convening of the regular session of 2019.

(b) The legislative reference bureau shall review commercial leases and recommend changes to state leasing laws to modernize and update these laws to incorporate current best practices in these property categories.

SECTION 6. 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 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 for the purposes of this Act, including any necessary staffing costs.

The sums appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

SECTION 7. This Act shall take effect on July 1, 2030.

THE SENATE	S.B. NO.	544
TWENTY-EIGHTH LEGISLATURE, 2015		S.D. 1
STATE OF HAWAII		H.D. 1