Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Water, Land Use, and Hawaiian Affairs, to which was referred H.C.R. No. 124 entitled:

begs leave to report as follows:

The purpose of this concurrent resolution is to authorize the Board of Land and Natural Resources (Board) to issue a direct lease of water rights to the Kauai Island Utility Cooperative (KIUC) for the use of the "Blue Hole" diversion and portions of a water transmission system for hydropower production.

KIUC testified in support of this measure. The Department of Land and Natural Resources (DLNR) commented on this measure but took no position on this measure since they are working to resolve the issues noted in this report.

Your Committee finds that DLNR has been working with KIUC regarding its request for a long-term water lease, but has not acted upon the request due to certain outstanding issues. These issues revolve around various parties and interests involved, including the amount and affordability of water flowing to the downstream parcels of East Kauai Water Users Cooperative and Lihue Land Company who owns the majority of ditches and streams that transport the water from the "Blue Hole" diversion.

As an interim measure, the Board approved a revocable permit to allow KIUC to use state-owned water emanating from the "Blue Hole" diversion and part of the existing state-owned water transmission infrastructure system for use by hydroelectric power plants.

As affirmed by the record of votes of the members of your Committee on Water, Land Use, and Hawaiian Affairs that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 124 and recommends that it be referred to the Committee on Finance.