SB1541 HD1

SECTION 1. The legislature finds that the Waiahole water system transports water from the Koolau mountain range on the windward side of Oahu to Kunia on the leeward side of the island. Construction began in 1912, and the finished system began delivering water by May 27, 1916. The total system length is 26.4 miles, consisting of fifteen miles of tunnels, ten miles of open ditches, and 1.4 miles of siphons. The system travels from Kahana to Kunia entirely by gravity flow. The Waiahole water system includes development tunnels, built to collect water from the Koolau mountains, that are connected to the main transmission tunnel. Seven siphons carry the water across gulches on the leeward side of the system. The Waiahole water system also includes two reservoirs. The first, reservoir 225, is on the east side of Kunia highway and holds 9,500,000 gallons. The second, reservoir 155--renamed the Nakatani reservoir--is at the end of the system and holds 14,010,000 gallons. Throughout the system, gauging stations are installed and designed to measure water collected in the Koolau mountains. One of the gauging stations is called adit 8 and is in critical need of repair.

Until the demise of the sugar industry on Oahu during the mid-1990s, the system was continuously owned and operated by Waiahole Irrigation Company, Limited, a wholly owned subsidiary of Oahu Sugar Company, Limited. Pursuant to Act 111, Session Laws of Hawaii 1998 (Act 111), the agribusiness development corporation purchased the assets of the Waiahole Irrigation Company, Limited, from Amfac/JMB Hawaii, Limited, for $8,500,000 in July 1999. Furthermore, pursuant to Act 111, the legislature appropriated $1,200,000 in reimbursable general obligation bonds to replace the system's three deteriorated redwood siphons. Today, the ditch is known as the Waiahole water system and is actively managed and operated by the agribusiness development corporation.

The Waiahole water system serves approximately 5,600 acres of land in central and leeward Oahu, of which approximately eighty-six per cent is in active agricultural use at any given time. In addition to state-owned lands, Waiahole water system users occupy land owned by Kamehameha Schools; Castle & Cooke Land Company, Ltd.; M.A. Robinson Trusts; and the James Campbell Company. Currently, agricultural users include Aloun Farms, the Hawaii Agriculture Research Center, Larry Jefts Farm, Mililani Nursery, Mililani Agricultural Park, Sugarland Farms, Waiawa Nursery, Waikele Farms, and livestock ranchers. Non-agricultural users include Mililani Memorial Park. Other users include Waiawa correctional facility, and its uses are approximately twenty-five per cent agricultural and seventy-five per cent non-agricultural.

In 2000, the Waiahole water system contributed $95,000,000 to and created roughly two thousand jobs for the state economy. This figure accounted for fifty-one per cent of total crops, livestock, and aquaculture sales for the city and county of Honolulu. It was concluded that directly and indirectly, for every $1 increase in final demand for Hawaii's agriculture products from the Waiahole water system, the output in Hawaii's overall economy increased by $1.94. According to the department of agriculture's report in October 2012 titled "Assessment of Irrigation Systems in Hawaii", the Waiahole water system contributed $135,000,000 and two thousand jobs to the state economy in 2012.

Waiahole water system users have gradually increased the efficiency with which they use water, so water usage has decreased over time. Moreover, users were severely affected by the COVID-19 pandemic. The current agricultural water rate is 99.850 cents per 1,000 gallons. Comparable area rates for agricultural water include the board of water supply's and department of agriculture's average agricultural rate of 50 cents per 1,000 gallons. As of October 2024, the farmers using the Waiahole water system had paid $9,754,417.90 toward the $8,500,000 bond, totaling thirteen per cent more than the original bond amount. These costs are passed on to consumers, resulting in higher food prices. Currently, forty per cent of all revenue is used to service the principal and interest debt. The balance to pay off the debt is $4,500,000 and would result in farmers and consumers paying $14,000,000 in debt service fees.

The legislature further finds that repairs to the adit 8 tunnel have been delayed as long as possible and have reached a critical point in needing $2,000,000 in design and construction of deferred maintenance repairs. All water from the Waiahole water system must pass through the adit 8 tunnel.

Therefore, the purpose of this Act is to appropriate funds to the agribusiness development corporation to fully pay off the bond debt service on the Waiahole water system and repair the adit 8 tunnel.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 to pay the bond debt service on the Waiahole water system.

The sum appropriated shall be expended by the agribusiness development corporation for the purposes of this Act.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 for the repair of the adit 8 tunnel of the Waiahole water system.

The sum appropriated shall be expended by the agribusiness development corporation for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 3000.

THE SENATE	S.B. NO.	1541
THIRTY-THIRD LEGISLATURE, 2025		S.D. 1
STATE OF HAWAII		H.D. 1