Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1277
                                        H.D. 1
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 1277, H.D. 1, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this measure is to exclude from the
definition of "public utility" any facility that reclaims
wastewater, provided that:

     (1)  At least ten per cent of the wastewater processed is
          used by the State or county under a service contract;

     (2)  The sole function of the facility is the processing and
          distribution of secondary treated wastewater;

     (3)  The facility is not processing food wastes; and

     (4)  The facility is not selling water to the residential

     Goodsill Anderson Quinn & Stifel presented testimony in
support of the measure.

     Your Committee finds that the City and County of Honolulu
has recently entered into a contract with U.S. Filter Operating
Services, Inc., to process the secondarily treated wastewater at

a                                                     HB1277 HD1
                                   STAND. COM. REP. NO. 1235
                                   Page 2

Honouliuli for distribution and use by both the city and county
and large commercial users in the Ewa plain.  This project, which
was the result of a Consent Degree entered by the U.S. District
Court in response to a suit filed by the U.S. Environmental
Protection Agency, will not provide reclaimed water to
residential users.

     Your Committee further finds that the purposes of this
project are to help meet the city and county's obligations to
find beneficial uses for wastewater that is currently discharged
in the ocean after treatment, and to return treated water to the
city and county for use at Honouliuli and for city and county
irrigation purposes.  As such, the project serves no broad public
purpose and should not be regulated as a public utility.

     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 H.B. No. 1277, H.D. 1, S.D. 1, and recommends that it
pass Third Reading.

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

                                   BRIAN KANNO, Co-Chair

                                   BRIAN T. TANIGUCHI, Co-Chair

a                                                     HB1277 HD1