STAND. COM. REP. NO. 2919

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2835
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Water, Land, and Hawaiian Affairs, to
which was referred H.B. No. 2835, H.D. 2, entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to establish a dedicated
source of funds to protect, preserve, and enhance important
watershed areas.

     The Department of Land and Natural Resources, the Nature
Conservancy of Hawaii, the Hawaii Society of American Foresters,
and the Hawaii Audubon Society testified in support of the
measure.  The Maui County Department of Water Supply testified in
support of the intent of the measure.  The Honolulu Board of
Water Supply opposed the measure.  The Tax Foundation of Hawaii
and the Land Use Research Foundation of Hawaii submitted
comments.

     The measure accomplishes the objective of establishing a
dedicated source of funding by:

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


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

     (3)  Authorizing the Commission on Water Resource Management
          to assess all county water agencies and private water
          systems regulated by the Public Utilities Commission.

     Your Committee finds that the water assessment imposed under
the measure is an unspecified amount per one thousand gallons of
water consumed.  The proceeds of this assessment would be
deposited into a Watershed Protection Trust Fund and used to fund
projects or activities that manage and protect watershed
management areas.  Qualifying projects and activities include:

     (1)  Projects or activities that manage and protect
          watershed management areas including watershed
          maintenance and enhancement projects within watershed
          management areas, erosion prevention and control,
          reforestation, and exclusion of stock; and

     (2)  Water and watershed resources monitoring efforts,
          including but not limited to stream and rainfall
          gauging, monitoring of wells and ground-water, and
          aquatic resources studies.

     Your Committee recognizes that fresh water is not an
infinite resource and that its high quality, quantity, and
sustainability are essentially linked to the existence of
forested watersheds.  By establishing a dedicated source of funds
to protect, preserve, and enhance important watershed areas, your
Committee believes that the State will be better able to ensure
that these essential and sustainable sources of fresh water will
exist for future generations' use.

     Your Committee has amended the measure by:

     (1)  Changing references to "watershed management areas" to
          "water recharge and protection areas" to broaden the
          scope of protection of the State's water resources;

     (2)  Altering the composition of the Watershed Protection
          Trust Fund Review Board by deleting as a qualification
          to serve on the board that a potential board member
          possess a degree in forest management; and

     (3)  Replacing the water consumption assessment with a
          watershed protection tax of 5 cents per one thousand
          gallons of water used.

 
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     As affirmed by the record of votes of the members of your
Committee on Water, Land, and Hawaiian Affairs that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 2835, H.D. 2, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 2835, H.D. 2, S.D. 1, and be referred to the
Committee on Ways and Means.

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



                                   ______________________________
                                   COLLEEN HANABUSA, Chair

 
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