§10-13.6  Public land trust conveyed
for the development of housing projects.  (a)  This section applies to the
revenue derived from land of the public land trust as designated in subsection
(e) that is conveyed by the department of land and natural resources to the
Hawaii housing finance and development corporation for the development of
housing projects as defined under section 201H-1. The amount due to the office
shall be determined by multiplying the fair market value of the land by twenty
per cent.  For the purpose of this section:



"Fair market value" means the amount
of money that a purchaser willing but not obliged to buy the land would pay to
an owner willing but not obliged to sell it, taking into consideration the
highest and best use of the land.



"Highest and best use" means the most
profitable, probable, and legal use to which the land can be put.



(b)  Fair market value shall be determined on a
per acre basis pursuant to appraisals performed in conformance with the uniform
standards of professional appraisal practice as adopted by the department of
commerce and consumer affairs, not more than ninety days before the conveyance
of the land to the Hawaii housing finance and development corporation.  The
appraisals shall be performed by two disinterested appraisers each of whose
services shall be contracted by the department of land and natural resources
and the office, respectively.  If the land is of the public land trust and
sugarcane lands, as defined by article XII, section 1 of the state constitution,
the office and the department of Hawaiian home lands shall contract the
services of one appraiser.  The parties shall contract the services of the
appraisers within thirty business days after the department of land and natural
resources gives written notice to the office, together with the department of
Hawaiian home lands if the land is of the public land trust and sugarcane
lands, of the proposed conveyance of the land to the Hawaii housing finance and
development corporation.



If any party fails or refuses to contract the
services of an appraiser, then the other party may petition the circuit court
in the county where the land is located to appoint the other of the two
appraisers.  If the two appraisers are unable to agree on a fair market value,
then within thirty days thereafter, the department of land and natural
resources and the office, together with the department of Hawaiian home lands
if the land is of the public land trust and sugarcane lands, shall contract for
the services of a mutually agreed upon third appraiser and the decision of the
majority of the appraisers shall be final with respect to determination of the
fair market value of the land.  If the department of land and natural resources
and the office, together with the department of Hawaiian home lands if the land
is of the public land trust and sugarcane lands, are unable to agree on the
selection of the third appraiser, any party may petition the circuit court in
the county where the land is located to appoint the third appraiser.



(c)  The amount due to the office shall be due
and payable by the State on the date of conveyance of the land to the Hawaii
housing finance and development corporation.  Payment to the office may be in
the form of public lands or moneys.  If payment is to be in the form of public
lands, the lands shall be mutually agreed upon by the department of land and
natural resources and the office, and shall be of value comparable to the
amount due to the office.  Any monetary payment shall be an obligation of the
Hawaii housing finance and development corporation.  Any portion of that amount
that is not paid on the date of conveyance shall be subject to simple interest
annually, established pursuant to the fifteen year treasury rate at the time of
the conveyance and payable annually by the State to the office.



(d)  Twenty per cent of the revenue received by
the Hawaii housing finance and development corporation from commercial,
industrial, or other nonresidential use of the land shall be paid annually to
the office; provided that:



(1)  The office shall not receive payment under this
subsection until the Hawaii housing finance and development corporation
recovers all moneys previously paid to the office for that portion of land used
for commercial, industrial, or other nonresidential purposes;



(2)  If borrowed moneys are used to finance the
development of land for commercial, industrial, or other nonresidential
purposes, annual payments due to the office under this subsection shall be made
pursuant to the following order of priority:



(A)  The Hawaii housing finance and development
corporation satisfies as a first priority the amount computed annually on the
pro rata portion (not the total debt service over the life of the debt) of its
total debt service on the borrowed moneys;



(B)  The Hawaii housing finance and development
corporation satisfies as a second priority its operating expense obligations
directly incurred from the development and operation of land used for
commercial, industrial, or other nonresidential purposes in an amount not
exceeding one per cent of the revenues for the project; and



(C)  After the first and second priorities are
satisfied, the Hawaii housing finance and development corporation shall make
annual payments due to the office under this subsection from any remaining
revenues; and



(3)  In the event of a sale of land used for
commercial, industrial, or other nonresidential purposes, the office shall
receive twenty per cent of the revenue received by the Hawaii housing finance
and development corporation.



(e)  This section shall only apply to the
Hawaii housing finance and development corporation's developments known as the
villages of Leali‘i, Maui, and villages of La‘i‘opua, Hawaii. [L 1992, c
318, §1; am L 1997, c 350, §§14, 15; am L 2005, c 196, §26(b); am L 2006, c
180, §16; am L 2007, c 249, §2]