STAND. COM. REP. NO. 398-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2835
                                     H.D. 1




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. 2835 entitled: 

     "A BILL FOR AN ACT RELATING TO WATERSHED PROTECTION,"

begs leave to report as follows:

     The purpose of this bill is to protect watershed areas by:

     (1)  Establishing a Watershed Protection Trust Fund (Fund)
          to fund public and private watershed management
          projects benefiting water quality, water quantity, and
          general watershed values within designated watershed
          areas;

     (2)  Establishing a Watershed Protection Trust Fund Review
          Board (Review Board) to, among other powers and duties,
          identify watershed management areas; and

     (3)  Imposing a watershed protection tax on all water from
          municipal and private water systems.

     The Department of Land and Natural Resources submitted
testimony in support of this bill, with recommendations.  The
Department of Environmental Services submitted testimony in
opposition to the bill as currently written.  The Tax Foundation
of Hawaii submitted comments.  Concerned citizens submitted
comments with recommendations.


 
 
 
                                 STAND. COM. REP. NO. 398-00
                                 Page 2

 
     Your Committee finds that Hawaii's forests function as
critical watersheds and are the primary source of fresh water for
the islands.  Since the turn of the century, public and private
investment in watershed protection and management has
increasingly diminished resulting in the degradation of the
forested uplands that affects the dependable supply of clean
fresh water.

     Fresh water is not an infinite resource and its high
quality, quantity, and sustainability are essentially linked to
the existence of forested watersheds.  This bill establishes the
infrastructure and a dedicated source of funds to protect,
preserve, and enhance important watershed areas.

     Your Committee has amended this bill by:

     (1)  Using the Fund to:

          (A)  Pay the cost to monitor various watershed
               resources, such as stream and rainfall gauging;
               and

          (B)  Pay administrative costs;

     (2)  Changing the professional qualifications of two members
          of the Review Board to fields such as biology, ecology,
          or forest management;

     (3)  Adding duties and powers to the Review Board relating
          to:

          (A)  The levy, assessment, and collection of the
               watershed protection tax;

          (B)  Identification of water users that are not
               contributing to the trust fund; and

          (C)  The equitable collection of the watershed
               protection tax;

     (4)  Imposing on the Public Utilities Commission the duty to
          collect the watershed protection tax from utility
          companies that the Commission regulates; and

     (5)  Making technical, nonsubstantive amendments for
          purposes of clarity, consistency, and style.


 
 
                                 STAND. COM. REP. NO. 398-00
                                 Page 3

 
     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. 2835, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 2835, H.D. 1, 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