STAND. COM. REP. NO. 3186

Honolulu, Hawaii

RE: H.B. No. 2592

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Water and Land, to which was referred H.B. No. 2592, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WATER,"

begs leave to report as follows:

The purpose and intent of this measure is to establish a working group within the Department of the Attorney General to assess the viability and constitutionality of using tax increment financing at the county level as a means of incentivizing water-related infrastructure projects and other projects to protect water resources in the State.

Your Committee received testimony in support of this measure from the O‘ahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i, Ulupono Initiative, and one individual. Your Committee received comments on this measure from the Department of Land and Natural Resources, Department of Health, and Department of Budget and Fiscal Services of the City and County of Honolulu.

Your Committee finds that Hawaii's surrounding ocean waters, streams, groundwater, watersheds, and other sources of fresh water are vulnerable to pollution and contamination from cesspools, which discharge raw, untreated sewage into the ground, and nonpoint source pollution that flows off the land directly into the ocean. Your Committee further finds that in other jurisdictions, tax increment financing is an established means to finance infrastructure projects. However, in Hawaii, questions regarding whether the counties are constitutionally authorized to implement tax increment financing to fund projects have arisen, and whether tax increment financing would generate sufficient revenue to fund significant capital improvement projects. The working group established in this measure will address these issues.

Your Committee has amended this measure by:

(1) Changing the effective date to upon its approval; and

(2) 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 Water and Land that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2592, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2592, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Water and Land,

________________________________

KARL RHOADS, Chair