STAND. COM. REP. NO. 692

Honolulu, Hawaii

RE:    S.B. No. 98

       S.D. 2

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 98, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WATER CARRIERS,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require the Public Utilities Commission to hold public hearings, subject to specified notice requirements, before approving a water carrier's application for a certificate of public convenience and necessity; and

     (2)  Specify the findings required to support the issuance of a certificate of public convenience and necessity to a water carrier.

     Your Committee received testimony in support of this measure from Young Brothers, Limited.  Your Committee received comments on this measure from the Public Utilities Commission of the Department of Budget and Finance.

     Your Committee finds that water carrier service is vital to the economy of this State, particularly to the economic growth and sustainability of the neighbor islands.  Your Committee further finds that reliable water carrier service is essential to the State's goal of developing diversified, sustainable agriculture by enabling farm-to-market transportation of agricultural products among the islands.  Your Committee also finds that the current approval process for new water carrier service lacks transparency and the opportunity for participation by the resident individuals and businesses affected by proposed new services and changes to existing services.  Accordingly, your Committee finds that the changes to the approval process for water carriers' certificates of public convenience and necessity contained in this measure increase transparency and provide opportunities for public participation in the process.

     Your Committee has amended this measure by:

     (1)  Specifying that notice of a public hearing regarding a water carrier's application for a certificate of public convenience and necessity shall be effective upon the provision of notice on each island affected by the proposed water carrier service as specified by statute;

     (2)  Specifying that a water carrier shall demonstrate that a proposed service will provide quantifiable benefits with respect to reliability, affordability, and security of the service line in order to qualify for a certificate of public convenience and necessity;

     (3)  Removing a requirement that a water carrier demonstrate in an application for a certificate of public convenience and necessity whether a proposed service will diminish an existing water carrier's ability to realize its allowable rate of return;

     (4)  Adding a new provision to require that the Public Utilities Commission (Commission) post a link on the Commission's website to a publicly accessible electronic version of each application for a certificate of public convenience and necessity submitted by a water carrier and each order of the Commission related to the posted applications and to specify requirements for the type, method, and duration of postings; and

     (5)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 98, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 98, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

____________________________

ROSALYN H. BAKER, Chair