HAR §4-159-22. Negotiation

(a) A lease of 159-37 3620 4-159-22 agricultural enterprise lands may be disposed of through negotiation with any person who: (1) Holds a revocable permit for agricultural purposes; (2) Has formerly held an agricultural lease or a holdover lease of public land that expired within the last ten years and has continued to occupy the land; or (3) Is determined by the department to have a beneficial impact on agriculture, per 141D HRS. (b) After a determination is made to negotiate the disposition of a lease, the administrator shall: (1) Give notice to eligible applicants in writing pursuant to section 141D-11, HRS, of the department's intention to lease agricultural enterprise lands through negotiation, setting forth the terms, conditions, and restrictions. (2) Interested eligible applicants shall apply for a lease by submitting a written application within thirty days from the date of receipt of the notification; provided that the department may require documentary proof from any applicant to determine that the applicant meets eligibility and qualification requirements for a lease. (3) Determine the applicants who meet the criteria for selection set by sections 4-159-8 or 4-159-18, as applicable, and the department shall notify all applicants of the administrator's determination. Any applicant may examine the basis of the determination, which shall be in writing, to ascertain whether or not the conditions and criteria established by the board were followed; provided that if any applicant does not notify the administrator of the applicant's objections, and the grounds therefor, in writing, within twenty days of the receipt of the notice, the applicant shall be barred from proceeding to seek 159-38 3620 4-159-22 legal remedy for any alleged failure of the department to follow the conditions and criteria. (c) If only one applicant meets the criteria for selection of the lessee, the board may, after notice as provided in subsection (b)(2), dispose of the lease by negotiation. (d) If two or more applicants meet the criteria for the selection of the lessee, the department shall select the lessee who submits the highest offer contained in a sealed bid deposited with the administrator. (e) Disposition of agricultural enterprise lands set aside for common use or for the processing of agricultural products may be negotiated without regard to the limitations set forth in this section and section 4-159-29; provided that the disposition encourages competition within the agricultural processing industry and shall not exceed a maximum term of sixty-five year. (f) The lease shall be issued when conditions of the award of lease are fulfilled. (g) Notwithstanding the provisions of this section and section 4-159-29, the board may renegotiate leases as provided in section 4-159-2. (h) Upon negotiating and executing a lease pursuant to this section, the board shall: (1) require the appraisal of the parcel using the Uniform Standards of Professional Appraisal Practice to determine the rental amount, including percentage of rent; (2) Require a payment of a premium, computed as twenty-five per cent of the annual lease rent; provided that the premium to be added to the annual lease rent for each year of the lease shall be equal to the number of years the lessee has occupied the land; provided that the premium period shall not exceed seven years; and (3) recover from the lessee the costs of expenditures required by the department to convert the parcel into a leasehold. [Eff 159-39 3620 4-159-23 JAN 23 2026] (Auth: SLH 2022, HRS §141D-7, §7) (Imp: SLH 2022, HRS §141D-7, §11)