Nhsc-v1-400

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nhsc-v1-400

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under such circumstances a general lease with lease payments based on operating revenues would be more appropriate. The other example involves a revocable permit for lands under sugar cane cultivation. The revocable permit covers 266 acres of land and contains a clause which is not compatible with the one-year period allowed under the State's statute applicable to revocable permits. The clause allows the lessee up to 25 months before surrendering the lands, so that the lessee would be assured of having a crop mature and be harvested. Thus, a general lease also appears more appropriate to this case.

DHHL personnel stated that these revocable permits were inherited from DLNR in about 1977. They stated that some of the land may be withdrawn for homesteading; therefore, DHHL will probably continue to use revocable permits. However, we did note that DHHL was in the process of obtaining an independent appraisal for the revocable permit involving the store.

Recommendation

In view of the corrective action taken by DHHL, our only recommendation involving leasing is that the two noted revocable permits be converted to general leases because of the stability they offer to the lessee, which in turn can result in increased revenue.

-p400-

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