STAND. COM. REP. NO. 999-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 35
                                     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
S.B. No. 35 entitled: 

     "A BILL FOR AN ACT MAKING AN APPROPRIATION TO MATCH FEDERAL
     FUNDS FOR THE HAWAII FORESTRY AND COMMUNITIES INITIATIVE,"

begs leave to report as follows:

     The purpose of this bill is appropriate State funds to match
federal funds to continue the work of the Hawaii Forestry and
Communities Initiative (HFCI).

     Testimony in support of this bill was received by the
Department of Land and Natural Resources (DLNR), the Department
of Agriculture, the Nature Conservancy of Hawaii, the Hawaii Farm
Bureau Federation, the Hawaii Society of American Foresters, and
the Hawaii Forest Industry Association.

     No testimony in opposition to this bill was received.

     Your Committee finds that Hawaii's current forest industry
is productive, ranking sixth on the list of diversified
agricultural lands products in a study conducted by the
University of Hawaii.  The forest industry generates net revenues
of $30 million, employs over 800 people, and pays an average wage
of $14.00 per hour.  Since 1995, over 35,000 acres of private
land have been committed to forestry.  Over 80 new private sector
jobs have been created by forestry in the last three years alone.

     State support is needed for HFCI for the following reasons:

 
 
                                 STAND. COM. REP. NO. 999-00
                                 Page 2

 
     1)   The HFCI is the State's focal point for forest industry
          expansion and community capacity-building in Hawaii;

     2)   HFCI is going into the fourth year of its work; it has
          not received matching funds from the State since its
          first year.  The program has no cash with which to work
          and has primarily relied on in-kind services leveraged
          by the original $200,000 legislative appropriation in
          1997;

     3)   The Federal funds for HFCI are credits, not cash; the
          State must pay cash up front and be reimbursed;

     4)   Hawaii's congressional delegation loses the ability to
          secure funds in Congress without matching State funds.
          This specific Federal appropriation for HFCI has
          decreased annually; and

     5)   There are insufficient program resources overall.
          Without matching State funds, program effectiveness
          will be lost.

     Your Committee amended this bill by:

     (1)  Appropriating $200,000 and

     (2)  Changing the effective date of this Act to July 1,
          2000.

     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 S.B.
No. 35, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as S.B. No. 35, 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