STAND. COM. REP. NO. 453-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2575
                                     




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Water and Land Use, to which was referred
H.B. No. 2575 entitled: 

     "A BILL FOR AN ACT RELATING TO DISPOSITION OF WATER RIGHTS,"

begs leave to report as follows:

     The purpose of this bill is to allow for the disposition of
water rights by direct negotiation, in addition to public
auction.  This bill also authorizes the Department of Land and
Natural Resources (DLNR) to extend month-to-month water permits
for additional one-year periods.

     The Department of Land and Natural Resources (DLNR)
testified in support of this bill.

     Your Committee finds that the State reserves the right to
any surface or ground water. Any lease, grant, or deed conveying
public lands from the State to a private entity after 1962,
expressly reserves the water rights to the State.  Therefore, it
is illogical to auction off a water lease since the only bidder
with the ability to enter onto the lands to access the water is
the private landowner. 

     Public auctions are detrimental to the State's ability to
determine the judicious disposition of water, since the auction
method awards water rights to the highest bidder without
consideration of other factors.  This is a concern in light of
the continuing shift from large plantations to smaller,
diversified agricultural users.

 
 
                                 STAND. COM. REP. NO. 453-00
                                 Page 2

 
     Your Committee further finds that extending month-to-month
water permits for additional one-year periods will make the
issuance of water permits consistent with the issuance of permits
for land and other interests.

     As affirmed by the record of votes of the members of your
Committee on Water and Land Use that is attached to this report,
your Committee is in accord with the intent and purpose of H.B.
No. 2575 and recommends that it pass Second Reading and be
referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Water and Land
                                   Use,



                                   ______________________________
                                   ROMY M. CACHOLA, Chair