STAND. COM. REP. NO. 383

Honolulu, Hawaii

RE: S.B. No. 1064

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Water and Land, to which was referred S.B. No. 1064 entitled:

"A BILL FOR AN ACT RELATING TO DAM AND APPURTENANCE SAFETY,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish the dam and appurtenance loan and grant programs for plans, design, construction, and equipment that is used to improve deficient dams and appurtenances as determined by the Department of Land and Natural Resources and approved by the Board of Land and Natural Resources;

(2) Specify eligibility requirements for dam and appurtenance improvement grants; and

(3) Establish the dam and appurtenance improvement tax credit for expenditures for dam and appurtenance improvements that bring dams and appurtenances up to code.

Your Committee received testimony in support of this measure from the Hawai‘i Farm Bureau. Your Committee received comments on this measure from the Department of Land and Natural Resources, Department of Taxation, and Department of Budget and Finance.

Your Committee finds that some plantation era reservoirs across the State, including locations in Maui County, are on lands sold by plantation landowners to developers. Your Committee further finds that following the sale, developers constructed subdivisions and often included the existing dams and appurtenances within the deeds to the homeowners. However, these dams and appurtenances are often not properly maintained and, during periods of extreme weather, the surrounding neighborhoods face significant risks from flooding. Your Committee also finds that despite the potential hazards posed by these dams and appurtenances, the Department of Land and Natural Resources consider them to be privately owned and therefore the responsibility of the homeowners to maintain. Your Committee further finds that due to the costly nature of repairing dams and appurtenances, many remain in an unsafe condition. Therefore, this measure establishes the dam and appurtenance loan and grant programs and the dam and appurtenance tax credit to help private homeowners improve deficient dams and appurtenances.

Your Committee has heard the testimony of the Department of Land and Natural Resources, expressing concern that a loan program would not be feasible because: (1) the typical dam owner affected by this measure will unlikely have a consistent revenue stream to qualify for a loan or service the debt on a loan; (2) the issuance of special purpose revenue bonds would eliminate the need to create a redundant loan program; and (3) a loan program would be costly to administer. As for the tax credit program, the Department testified that it has no expertise in issuing tax credits.

Therefore, your Committee has amended this measure by:

(1) Eliminating the proposed dam and appurtenance improvement loan program and tax credit, and eliminating the associated business loan officer full-time equivalent (1.0 FTE) position;

(2) Allowing grant applicants to use grant proceeds for either the remediation or the removal of a deficient dam or appurtenance, and amending the name of the grant program to reflect its amended purpose;

(3) Providing a one-time appropriation for seed funding for the dam and appurtenance improvement or removal grant program;

(4) Amending section 1 to reflect its amended purpose;

(5) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(6) 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 S.B. No. 1064, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1064, 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,

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LORRAINE R. INOUYE, Chair