STAND. COM. REP. NO. 974

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 718
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Water, Land, and Hawaiian Affairs, to
which was referred H.B. No. 718, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE HAWAII COMMUNITY
     DEVELOPMENT AUTHORITY,"

begs leave to report as follows:

     The purpose of this measure is to enhance the Hawaii
Community Development Authority's (HCDA) capabilities to
implement its redevelopment objectives, including development of
the Kakaako Makai Area, by:

     (1)  Consolidating HCDA's three separate bonding
          capabilities -- district-wide improvement bonds,
          reserved housing loan bonds, and public facilities
          revenue bonds -- into one new comprehensive bonding
          capability;

     (2)  Authorizing the issuance of $250,000,000 in revenue
          bonds for the purposes set forth under HCDA's powers;
          and

     (3)  Authorizing the issuance of $10 million in revenue
          bonds to assist the Food Distribution Center in its
          relocation from the Kakaako Community Development
          District.


 
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     HCDA testified in support of the intent of this measure.
The Department of Budget and Finance provided comments on the
measure.

     Your Committee has amended this measure by deleting its
substance and substituting therefor, provisions that:

     (1)  Change the boundaries of the Kakaako Community
          Development District to exclude Pier 1 and Pier 2 at
          Fort Armstrong; and

     (2)  Authorize the appropriation of funds from the Harbor
          Special Fund for the planning, design, and construction
          of a cruise ship passenger terminal at Pier 2, Honolulu
          Harbor.

     Your Committee finds that Piers 1 and 2 at Fort Armstrong
include vital and unique cargo facilities that cannot be
relocated and would be prohibitively expensive to duplicate.
Piers 1 and 2 must be protected and preserved as a maritime
facility.  By excluding Piers 1 and 2, the amended measure
returns them to the jurisdiction of the Department of
Transportation which would be more effective for protection and
preservation of the maritime function of Piers 1 and 2.

     Your Committee further finds that cruise ship services to
the Hawaiian Islands are undergoing rapid expansion and the
capacity of the newly constructed ships is continuing to grow.
It should be anticipated that within the next five years,
Honolulu Harbor will regularly see three or more passenger
vessels per day and as many as thirty-five to forty times per
year.

     Additionally, foreign flag operators will continue to
increase their port calls in the Hawaiian Islands, and Honolulu
in particular, over the next three to four years.  Presently,
their total contribution to the State's economy is in excess of
$50,000,000 per year, and by the year 2004, this figure could
possibly double or triple.

     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. 718, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 718, H.D. 1, S.D. 1, and be referred to the
Committee on Ways and Means.


 
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                                   STAND. COM. REP. NO. 974
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Water, Land, and
                                   Hawaiian Affairs,



                                   ______________________________
                                   COLLEEN HANABUSA, Chair

 
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