§10-13.6  Public land trust conveyedfor the development of housing projects.  (a)  This section applies to therevenue 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 theHawaii housing finance and development corporation for the development ofhousing projects as defined under section 201H-1. The amount due to the officeshall be determined by multiplying the fair market value of the land by twentyper cent.  For the purpose of this section:

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

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

(b)  Fair market value shall be determined on aper acre basis pursuant to appraisals performed in conformance with the uniformstandards of professional appraisal practice as adopted by the department ofcommerce and consumer affairs, not more than ninety days before the conveyanceof the land to the Hawaii housing finance and development corporation.  Theappraisals shall be performed by two disinterested appraisers each of whoseservices shall be contracted by the department of land and natural resourcesand the office, respectively.  If the land is of the public land trust andsugarcane lands, as defined by article XII, section 1 of the state constitution,the office and the department of Hawaiian home lands shall contract theservices of one appraiser.  The parties shall contract the services of theappraisers within thirty business days after the department of land and naturalresources gives written notice to the office, together with the department ofHawaiian home lands if the land is of the public land trust and sugarcanelands, of the proposed conveyance of the land to the Hawaii housing finance anddevelopment corporation.

If any party fails or refuses to contract theservices of an appraiser, then the other party may petition the circuit courtin the county where the land is located to appoint the other of the twoappraisers.  If the two appraisers are unable to agree on a fair market value,then within thirty days thereafter, the department of land and naturalresources and the office, together with the department of Hawaiian home landsif the land is of the public land trust and sugarcane lands, shall contract forthe services of a mutually agreed upon third appraiser and the decision of themajority of the appraisers shall be final with respect to determination of thefair market value of the land.  If the department of land and natural resourcesand the office, together with the department of Hawaiian home lands if the landis of the public land trust and sugarcane lands, are unable to agree on theselection of the third appraiser, any party may petition the circuit court inthe county where the land is located to appoint the third appraiser.

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

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

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

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

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

(B)  The Hawaii housing finance and developmentcorporation satisfies as a second priority its operating expense obligationsdirectly incurred from the development and operation of land used forcommercial, industrial, or other nonresidential purposes in an amount notexceeding one per cent of the revenues for the project; and

(C)  After the first and second priorities aresatisfied, the Hawaii housing finance and development corporation shall makeannual payments due to the office under this subsection from any remainingrevenues; and

(3)  In the event of a sale of land used forcommercial, industrial, or other nonresidential purposes, the office shallreceive twenty per cent of the revenue received by the Hawaii housing financeand development corporation.

(e)  This section shall only apply to theHawaii housing finance and development corporation's developments known as thevillages of Leali‘i, Maui, and villages of La‘i‘opua, Hawaii. [L 1992, c318, §1; am L 1997, c 350, §§14, 15; am L 2005, c 196, §26(b); am L 2006, c180, §16; am L 2007, c 249, §2]