HAR §4-159-8. Conversion of qualified and encumbered lands

(a) The board may offer to convert existing encumbrances on transferred lands into new long-term leases. These leases include those persons who: (1) Hold a revocable permit for agricultural purposes; (2) Have 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) Are determined by the department to have a beneficial impact on agriculture. In addition, a "bona fide operator" must be named and included in all applications. The "bona fide operator" or qualified representative must be at the enterprise during operational hours. Prior to the board making an offer to convert an existing encumbrance to a long-term lease, the board shall determine that it is in the public interest to assist those holding encumbrances, who presently operate or operated a viable agricultural enterprise. Further, by allowing conversion of existing encumbrances into new long-term leases, the State would realize greater returns and reduce disruptions to current ongoing farming operations. The lessee may request conversion of the lease if the remaining term is less than ten years, but more than five years. For land with encumbrances, conversion shall be limited to those lands: (1) Not needed by any state or county agencies for any other public purpose; and (2) Zoned, classified, or leased for agricultural activity or agricultural enterprise operation. (b) The board may negotiate and enter into a new lease of no less than fifteen years and not more than sixty-five years. In issuing the new leases the 159-17 3620 4-159-9 department shall: (1) Require appraisal of the parcel in accordance with section 4-159-21; (2) Impose other lease terms, provisions, restrictions, and conditions as provided in this chapter as may be required to protect the State's interests; (3) Recover from the new lessees the costs of subdividing the parcel as may be required; (4) Require the payment of annual lease rent by appraisal and a premium computed at twenty-five per cent of annual base rent, with the premium to be added to the lease rent for each year of lease equal to the number of years that person occupied the land, but not to exceed seven years. For example, if land is occupied for ten years, the twenty-five per cent premium shall be paid for seven years, the maximum term; and (5) The department may negotiate the conversion into the new lease without regard to section 4-159-30. [Eff JAN 23 2026] (Auth: SLH 2022, HRS §141D-7, §7) (Imp: SLH 2022, HRS §141D-7, §5)