STAND. COM. REP. NO. 682

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 984
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committees on Agriculture and Economic Development and
Business Concerns and Ocean Recreation and Marine Resources, to
which was referred H.B. No. 984 entitled: 

     "A BILL FOR AN ACT RELATING TO OCEAN LEASING,"

beg leave to report as follows:

     The purpose of this bill is to facilitate and support
research and development of open ocean aquaculture or mariculture
by, among other things:

     (1)  Exempting economic units as defined in chapter 190D,
          Hawaii Revised Statutes from the definition of public
          lands;

     (2)  Allowing the processing of ocean leases under chapter
          190D without gubernatorial and legislative approval;

     (3)  Allowing commercial mariculture as a permitted use
          under chapter 190D;

     (4)  Removing size restrictions on mariculture leases; and

     (5)  Depositing revenues obtained from the leasing of state
          marine waters into the Special Land and Development
          Fund for aquaculture planning, research, and
          development.


 
 
 
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     The Department of Agriculture (DOA), the Department of
Business, Economic Development, and Tourism, the Director of the
Sea Grant College Program of the University of Hawaii, Black
Pearls, Inc., the Hawaii Aquaculture Association, and Pacific
Pearl Appraisal Service submitted testimony in support of this
measure.  The Department of Land and Natural Resources (DLNR)
also testified in support of the measure, provided the amendments
and recommendations of DOA are incorporated into the measure.
The Board of Trustees of the Office of Hawaiian Affairs and
several individuals submitted testimony in opposition to the
measure.

     Your Committees find that no application or leases have been
processed under chapter 190D (Ocean and Submerged Lands Leasing)
since its inception in 1986.  While your Committees recognize
that streamlining and clarifying the law is critical to encourage
investment in the research and development of aquaculture and
mariculture in the State, your Committees are aware that due
consideration must be made to the following factors, including
rights of tenure to ocean space, ocean use, and other
environmental and community concerns.  

     After lengthy deliberation and upon careful consideration,
your Committees have amended this bill by deleting its substance
and inserting new provisions that facilitate research and
development of open ocean aquaculture or mariculture in the
State.  As amended, this bill:

     (1)  Provides funds to establish two pilot projects relating
          to open aquaculture in Hawaii, and to identify two
          pilot ocean aquaculture project zones, which are to be
          determined by detailed environmental and operational
          assessments after consultation with the appropriate and
          affected members of the community;

     (2)  Requires DLNR, in cooperation with DOA, the University
          of Hawaii, and the private sector, to establish two
          pilot ocean aquaculture project zones for research or
          commercial projects for open ocean aquaculture;

     (3)  Specifies that the pilot projects are to address the
          submerged hanging bag culture of endemic black pearl
          oysters for pearls and wild stock recovery, and utilize
          a native fish species for cage culture in surface
          waters;

     (4)  Authorizes DLNR to grant a lease of state marine waters
          and submerged lands for the two zones; and


 
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     (5)  Requires DLNR, in conjunction with DOA, to submit a
          report of the actions and progress undertaken with
          regard to this bill, to the Legislature prior to the
          2000 Regular Session.

     As affirmed by the records of votes of the members of your
Committees on Agriculture and Economic Development and Business
Concerns and Ocean Recreation and Marine Resources that are
attached to this report, your Committees are in accord with the
intent and purpose of H.B. No. 984, as amended herein, and
recommend that it pass Second Reading in the form attached hereto
as H.B. No. 984, H.D. 1, and be referred to the Committee on
Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Agriculture and
                                   Economic Development and
                                   Business Concerns and Ocean
                                   Recreation and Marine
                                   Resources,

                                   
                                   
                                   
                                   
                                   ______________________________
                                   FELIPE P. ABINSAY, JR., Chair
                                   
                                   
                                   
                                   
______________________________     ______________________________
ROY M. TAKUMI, Chair               ROBERT N. HERKES, Chair