SB2743.DOC

SECTION 1. The Kaho‘olawe island reserve commission is funded predominantly by a trust fund created in 1994 during the federal unexploded ordnance cleanup of Kaho‘olawe. Though considerable, the federal appropriation totaling approximately $44,000,000 over a period of several years was not substantial enough to establish a sustainable endowment for the long-term restoration of Kaho‘olawe.

As stated in the federally mandated Kaho‘olawe Island Conveyance Commission final report to Congress in 1993, "[I]n the short term, federal funds will provide the bulk of the program support for specific soil conservation projects and related activities. In the longer term, however, state revenues will be needed to continue and enhance those activities initiated with federal funds." For the past twenty years, federal funding has allowed the Kaho‘olawe island reserve commission to establish many of its innovative programs that emphasize ancestral and traditional knowledge, utilize a cultural approach of respect and connectivity to the environment, and integrate ancient and modern resource management techniques.

In 2004, the management and control of the Kaho‘olawe island reserve was transferred from the Navy to the State of Hawaii with the Kaho‘olawe island reserve commission as the State's designated agency tasked to oversee the use and restoration of the reserve. In the past ten years, the commission has been able to develop innovative restoration projects in the extremely harsh conditions of Kaho‘olawe that will serve as the foundation for the future restoration of the reserve.

Auditor's Report No. 13-06, Audit of the Kaho‘olawe Rehabilitation Trust Fund, reported two key findings: first, and more importantly, that the trust fund will be depleted by 2016, and secondly, that the commission lacks a comprehensive and quantifiable restoration plan with performance measures to gauge whether objectives are being met.

Also in 2013, the Kaho‘olawe island reserve commission embarked on the development of a 2026 strategic plan for Kaho‘olawe, thus marking fifty years of occupation of Kaho‘olawe by the people of Hawaii. This strategic plan will address the future restoration, management, and uses of Kaho‘olawe for the State, the people of Hawaii, and possibly a future sovereign Native Hawaiian entity. Pursuant to section 6K-9, Hawaii Revised Statutes, the management and control of the reserve shall be transferred to the sovereign Native Hawaiian entity upon its recognition by the state and federal governments, which is presently anticipated to occur within the time frame of the 2026 strategic plan.

The purpose of this Act is to utilize a portion of state conveyance tax revenue to replenish the Kaho‘olawe rehabilitation trust fund to be used for the long-term rehabilitation and maintenance of the island reserve.

SECTION 2. Section 6K-9.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(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[:], moneys in the trust fund shall consist of:

(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) A portion of the conveyance tax under section 247-7, to be used for the long-term rehabilitation and maintenance of the island reserve;

[~~(2)~~] (3) Any moneys appropriated by the legislature to the trust fund;

[~~(3)~~] (4) Any moneys received from grants, donations, or the proceeds from contributions; and

[~~(4)~~] (5) 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."

SECTION 3. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"§247-7 Disposition of taxes. All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year:

(1) Ten per cent shall be paid into the land conservation fund established pursuant to section 173A-5;

(2) Twenty-five per cent from July 1, 2009, until June 30, 2012, and thirty per cent in each fiscal year thereafter shall be paid into the rental housing trust fund established by section 201H-202; [~~and~~]

(3) Twenty per cent from July 1, 2009, until June 30, 2012, and twenty-five per cent in each fiscal year thereafter shall be paid into the natural area reserve fund established by section 195-9; provided that the funds paid into the natural area reserve fund shall be annually disbursed by the department of land and natural resources in the following priority:

(A) To natural area partnership and forest stewardship programs after joint consultation with the forest stewardship committee and the natural area reserves system commission;

(B) Projects undertaken in accordance with watershed management plans pursuant to section 171-58 or watershed management plans negotiated with private landowners, and management of the natural area reserves system pursuant to section 195-3; and

(4) Ten per cent shall be paid into the Kaho‘olawe rehabilitation trust fund established by section 6K‑9.5 in an amount not to exceed $3,500,000 annually."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval and shall be repealed on June 30, 2026, or upon the recognition of the sovereign Native Hawaiian entity by the State of Hawaii and the United States, whichever occurs sooner; provided that sections 6K-9.5(a) and 247-7, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day before the approval date of this Act.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2743
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII