Provides for the development of infrastructure, including water infrastructure, at the Kikala-Keokea homestead area of the island of Hawaii. Establishes the infrastructure development fund and Kikala-Keokea housing revolving fund and appropriates moneys from these funds to carry out their respective purposes. (SD1)

A BILL FOR AN ACT

SECTION 1. The legislature finds that the destruction of Kalapana by lava flow displaced a tightly knit community with a truly Hawaiian lifestyle. In 1938, the United States Congress enacted Public Law 680, the Kalapana Extension Act, providing that native Hawaiian residents of the area were to be provided with leases for homesites and that fishing was to be permitted only by native Hawaiian residents of the area or adjacent villages, and by visitors under their guidance.

The continuation of the unique way of life of the Hawaiian residents of Kalapana was disrupted by volcanic eruptions and lava flows which began on January 3, 1983, destroying one of the last Hawaiian settlements on the island of Hawai'i.

The legislature recognized this tragedy by enacting Act 314, Session Laws of Hawai'i 1991, as amended, authorizing the department of land and natural resources to negotiate long-term leases with qualified, displaced Kalapana families to maintain their heritage in the Kikala-Keokea homestead area adjacent to the Kalapana-Kapoho Beach road. The site allows the Kalapana families to develop the land in a manner that will enable them to continue their traditional way of life by raising small animals, planting sustenance crops, growing herbal medicines and gathering additional food resources from the nearby ocean and uplands.

Act 314 also stipulated that the department of land and natural resources or its designated agency subdivide and create a residential subdivision in the Kikala-Keokea homestead area that will be exempt from all statutes, ordinances, charter provisions, and rules of any governmental agency relating to zoning and construction standards for subdivisions, the development and improvement of land, and the construction of units thereon; provided that it meets the minimum requirements of health and safety.

Prior to the expiration of Act 314, the department of land and natural resources entered into lease arrangements with forty-eight of the fifty-eight families who met both of the eligibility criteria set forth under the Act. However, the forty-eight Hawaiian families have not been able to use their leases since the project does not meet the minimum standards due to a lack of water.

The purposes of this Act are to:

SECTION 2. (a) There is established in the state treasury an infrastructure development fund to be administered by the department of land and natural resources. The funds transferred or appropriated under sections 4 and 5 of this Act and all moneys received or collected by the department of land and natural resources shall be deposited into the infrastructure development fund.

(b) The infrastructure development fund shall be used to provide funding for infrastructure development, including water infrastructure, in the Kikala-Keokea area on the island of Hawaii to benefit residents of Kalapana who have been dispossessed of their homes and lands as a result of the continued volcanic eruptions on the island of Hawaii which began on January 3, 1983.

(c) The proceeds may be used for the necessary expenses in administering this section. Upon fulfillment of the purposes of this section, all unexpended or unencumbered moneys remaining in the infrastructure development fund shall not lapse, but shall be transferred in accordance with section 6 of this Act to the credit of the Kikala-Keokea housing revolving fund established in section 3 of this Act; provided that no funds shall be transferred until all funding commitments entered into by the department of land and natural resources to complete the design and construction of infrastructure improvements have been executed.

SECTION 3. Chapter 201G, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201G-   Kikala-Keokea housing revolving fund; established. (a) There is established in the state treasury the Kikala-Keokea housing revolving fund to provide low interest loans for home construction for Kikala-Keokea leaseholders who have been denied loans from traditional financial institutions. The revolving fund shall be administered by the housing and community development corporation of Hawaii.

(b) The rate of interest on loans executed pursuant to this section shall not exceed three per cent per year and interest earnings on loans made pursuant to this section may be used for administrative and other expenses necessary for administering the loan program. Guidelines shall be established by the housing and community development corporation of Hawaii with respect to loan terms and loan qualification criteria. Moneys appropriated for the purposes of this section shall be deposited into the Kikala-Keokea housing revolving fund; provided that upon fulfillment of the purposes of this section, all unencumbered moneys shall lapse into the state general fund.

(c) The housing and community development corporation of Hawaii shall adopt rules in accordance with chapter 91 to effectuate the purposes of this section."

SECTION 4. Act 242, Session Laws of Hawaii 1991, appropriated funds to the housing finance revolving fund under the housing finance and development corporation, currently known as the housing and community development corporation of Hawaii. The director of finance shall transfer the unexpended balance, including encumbrances and accrued liabilities, of the funds appropriated to the housing finance revolving fund under Act 242, Session Laws of Hawaii 1991, as of the close of business on June 30, 2001, to the credit of the infrastructure development fund established in section 2 of this Act and administered by the department of land and natural resources. Encumbered moneys shall continue to be encumbered until paid out or released from prior encumbrances.

SECTION 5. There is appropriated out of the infrastructure development fund the sum of $1,750,000, or so much thereof as may be necessary for fiscal year 2001-2002, for the development of infrastructure, including water infrastructure, at the Kikala-Keokea subdivision on the island of Hawaii.

The sum appropriated shall be expended by the department of land and natural resources for the purposes of section 2 of this Act; provided that no funds shall be released unless matched on a dollar-for-dollar basis by the office of Hawaiian affairs.

SECTION 6. Any unexpended or unencumbered funds remaining in the infrastructure development fund as of the close of business on June 30, 2002, shall not lapse into that fund or to the credit of the general fund, but shall be transferred to the credit of the Kikala-Keokea housing revolving fund established in section 3 of this Act as of that date.

SECTION 7. There is appropriated out of the Kikala-Keokea housing revolving fund the amounts that have been transferred into that fund pursuant to section 6 of this Act, or so much thereof as may be necessary for fiscal year 2002-2003, for costs related to providing housing on Kikala-Keokea leasehold property for Kikala-Keokea residents, including those that were once Kalapana residents.

The sum appropriated shall be expended by the housing and community development corporation of Hawaii for the purposes of Kikala-Keokea housing revolving fund.

SECTION 8. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2001.