SB2460 SD1.DOC

SECTION 1. The Kaho‘olawe island reserve consists of the island of Kaho‘olawe plus the waters extending two nautical miles seaward from the coastline. The island is situated approximately six miles southwest of Maui and approximately four and a half miles west of Molokini. The forty-five square mile island of Kaho‘olawe and its ninety square miles of waters are managed and controlled by the Kaho‘olawe island reserve commission, which is responsible for environmental protection and conservation, revegetation, habitat restoration, the preservation of archaeological and historical resources, and the promotion of traditional and cultural practices.

The island was once inhabited by native Hawaiian subsistence farmers and fisherman. After the arrival of Europeans, Kaho‘olawe was used as a penal colony and ranch. From 1947 to 1990, the United States Navy used Kaho‘olawe for military training and bombing exercises. In 1994, the federal government appropriated $400 million for the clean-up of unexploded ordnance. The same federal appropriation provided $45 million to the State for long-term planning and environmental restoration; these funds were deposited in the State's Kaho‘olawe rehabilitation trust fund in annual increments over several years. However, the trust fund principal was never substantial enough to be a sustainable endowment where the Kaho‘olawe island reserve commission could operate solely from its interest.

Today, the trust fund balance is approximately $15 million, which is the only statutory source of revenue for the administration and operation of the Kaho‘olawe island reserve commission and its personnel and program activities.

The waters of the Kaho‘olawe island reserve are off-limits except to boaters who register with the Kaho‘olawe island reserve commission and who are then permitted to troll on two published weekends each month in waters thirty fathoms deep or greater. This regulation is due to the presence of unexploded ordnance in the reserve waters, as well as to allow the reserve waters to function as a sanctuary and nursery for all marine species managed by the Kaho‘olawe island reserve commission.

The reserve waters support a variety of listed marine species, including the green sea turtle, Hawaiian monk seal, and humpback whale, as well as some of the healthiest fish populations in the main Hawaiian islands.

The purpose of this Act is to provide a permanent statutory revenue source for the management of the Kaho‘olawe island reserve.

SECTION 2. Chapter 6K, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§6K-A Molokini shoal marine life conservation district; authority; permits for commercial use. (a) Notwithstanding any other law to the contrary, the commission shall exercise sole authority over the Molokini shoal marine life conservation district and its waters. The commission may issue permits for the commercial use of the Molokini shoal marine life conservation district and its waters, subject to any conditions deemed appropriate by the commission, including collecting fees and a percentage of gross receipts.

(b) The commission may adopt rules pursuant to chapter 91 for the management and maintenance of the Molokini shoal marine life conservation district and its waters.

§6K-B Molokini shoal marine life conservation district; user fee. (a) Each permit holder shall collect a user fee of $ from each customer for each activity tour provided to the customer.

(b) Each permit holder may retain two per cent of the amount of user fees collected to offset administrative expenses associated with collecting the user fee.

(c) The permit holder shall remit to the Kaho‘olawe rehabilitation trust fund sub-account, established pursuant to section 6K‑9.5(b), within sixty days after the end of the calendar month in which the user fee is collected, an amount that represents the total user fees collected during the calendar month less amounts retained for administrative expenses incurred by the permit holder, as provided in subsection (b).

(d) The user fees collected by the permit holder pursuant to this section shall not be subject to any tax, fee, or assessment, and shall not be considered revenue of the permit holder.

(e) Each customer who is subject to this section shall be liable to the State for the user fee until the user fee has been paid to the permit holder. A permit holder shall have no obligation to take any legal action to enforce the collection of the user fee for which any customer is billed. However, the commission may initiate a collection action against the customer. If the commission prevails in a collection action, reasonable attorney's fees and costs shall be awarded.

(f) For the purposes of this section, "permit holder" means any person who operates any commercial enterprise or establishment, including sole proprietorships, joint ventures, partnerships and corporations, or any other legally cognizable entity, whether for profit or not for profit, which holds a permit issued by the commission to operate commercial activities within the Molokini shoal marine life conservation district."

SECTION 3. Chapter 10, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§10- Kaho‘olawe rehabilitation trust fund; Molokini shoal marine life conservation district fees and gross receipts; matching funds. The Kaho‘olawe island reserve commission shall submit quarterly reports including the total amount of revenues derived from fees and the percentage of gross receipts collected pursuant to sections 6K-A and 6K-B from the Molokini shoal marine life conservation district to the office of Hawaiian affairs. The office of Hawaiian affairs shall deposit no less than a matching amount to the Kaho‘olawe rehabilitation trust fund, established pursuant to section 6K-9.5."

SECTION 4. Section 6K-2, Hawaii Revised Statutes, is amended by amending the definition of "island reserve" to read as follows:

""Island reserve" or "Kaho‘olawe" or "island" means the area designated as the island of Kaho‘olawe and the submerged lands and waters extending seaward two miles from its shoreline[.], and the Molokini shoal marine life conservation district and the waters extending seaward two miles from its boundaries."

SECTION 5. Section 6K-3, Hawaii Revised Statutes, is amended to read as follows:

"[[]§6K-3[]] Reservation of uses. (a) The [~~Kaho~~‘~~olawe~~] island reserve shall be used [~~solely and exclusively~~] for the following purposes:

(1) Preservation and practice of all rights customarily and traditionally exercised by native Hawaiians for cultural, spiritual, and subsistence purposes;

(2) Preservation and protection of its archaeological, historical, and environmental resources;

(3) Rehabilitation, revegetation, habitat restoration, and preservation; [~~and~~]

(4) Education[.]; and

(5) Commercial uses.

(b) The island reserve shall be reserved in perpetuity for the uses enumerated in subsection (a). [~~Commercial uses shall be strictly prohibited.~~]"

SECTION 6. Section 6K-9.5, Hawaii Revised Statutes, is amended to read as follows:

"§6K-9.5 Kaho‘olawe rehabilitation trust fund. (a) There is created in the state treasury a trust fund to be designated as the Kaho‘olawe rehabilitation trust fund to be administered by the department with the prior approval of the commission. Subject to Public Law 103-139, and this chapter:

(1) All moneys received from the federal government for the rehabilitation and environmental restoration of the island of Kaho‘olawe or other purposes consistent with this chapter;

(2) Any moneys appropriated by the legislature to the trust fund;

(3) Any moneys received from the office of Hawaiian affairs pursuant to section 10- ;

(4) Any fees and percentage of gross receipts collected pursuant to sections 6K-A and 6K-B determined by the commission to be excess funds in accordance with subsection (b);

(5) Any moneys received from grants, donations, or the proceeds from contributions; and

[~~(4)~~] (6) The interest or return on investments earned from moneys in the trust fund,

shall be deposited in the trust fund and shall be used to fulfill the purposes of this chapter.

(b) There is established within the trust fund, a Molokini shoal marine life conservation district sub-account, into which shall be deposited all proceeds collected from user fees pursuant to section 6K-B and any other fees and percentage of gross receipts pursuant to section 6K-A for the use of the Molokini shoal marine life conservation district and its waters. The commission shall expend the moneys from the sub-account for costs incurred in the management of the Molokini shoal marine life conservation district and its waters. Any interest or return on investments earned from the moneys in this sub-account shall be deposited in the trust fund and shall be used to fulfill the purposes of this chapter. If the fees deposited into the sub-account exceed the annual expenditures of the commission for the management of the Molokini shoal marine life conservation district, the commission may deposit the excess funds in the trust fund and use those funds to fulfill the purposes of this chapter.

[~~(b)~~] (c) The commission may use moneys in the trust fund to carry out the purposes of this chapter, including hiring employees, specialists, and consultants necessary to complete projects related to the purposes of this chapter.

[~~(c)~~] (d) Moneys deposited into or appropriated to the trust fund shall remain available until they are obligated or until the trust fund is terminated.

[~~(d)~~] (e) If the trust fund is terminated, all funds shall be transferred to the general fund; provided that all unexpended or unencumbered balances shall be disbursed in accordance with any requirements set by funding sources and for purposes consistent with this chapter.

[~~(e)~~] (f) The commission shall submit an annual report on the status of the Kaho‘olawe rehabilitation trust fund to the legislature, no later than twenty days prior to the convening of each regular session of the legislature. The annual report shall include the total number of and amount of grants, donations, and contributions received, including information on the amount in the Molokini shoal marine life conservation district sub-account, and balances remaining on June 30 of each year."

SECTION 7. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of land and natural resources, division of aquatic resources relating to the functions transferred to the Kaho‘olawe island reserve commission shall be transferred with the functions to which they relate.

SECTION 8. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 9. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	2460
TWENTY-FIFTH LEGISLATURE, 2010		S.D. 1
STATE OF HAWAII