Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committees on Energy, Environment, and International Affairs and Judiciary and Hawaiian Affairs, to which was referred S.B. No. 2345 entitled:

beg leave to report as follows:

The purpose of this measure is to provide for environmental covenants for contaminated property to assure long-term compliance with requirements needed to protect the public and environment when complete removal of contaminants is not feasible, practical, or necessary.

The Hawaii Commission to Promote Uniform Legislation submitted testimony in support of this measure. The Department of Health testimony in support of the measure with amendments. The Land Use Research Foundation of Hawaii and three individuals submitted testimony in opposition. The Hawaiian Electric Company, Hawaii Electric Light Co., and Maui Electric Co. submitted comments.

The Department of Health testified that there is a growing reliance on practical, cost-effective, risk-based site remedies that allow some contamination to remain on property if public health and the environment are adequately protected. Land use restrictions, mandated environmental monitoring requirements, and common engineering management tools are designed to control the potential environmental risk of contamination and protect human health. These measures should be reflected on the land records as a valid real property servitude so they can be effectively monitored and enforced over time. This enables previously contaminated property that may otherwise remain vacant, blighted, and unproductive, to return to the stream of commerce.

Your Committees find that this measure establishes a process for creating and tracking environmental covenants and provides enforcement authority to assure that owners of contaminated property observe the required management controls placed on the property by the Department of Health.

Upon further consideration, your Committees amended this measure by:

Your Committees considered testimony from the Hawaiian Electric Company that the measure as written may affect the normal operation and maintenance of public utilities and other providers of essential public services that historically have located facilities on real property but have no recorded interest in the property, and its proposed amendment to remedy this. However, your Committees question whether its proposed amendment circumvents the rights of property owners by creating an interest that the public utilities or other providers currently do not have or may not be entitled to in the real property.

As affirmed by the records of votes of the members of your Committees on Energy, Environment, and International Affairs and Judiciary and Hawaiian Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2345, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2345, S.D. 1, and be placed on the calendar for Third Reading.