Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1282
                                        S.D. 1

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


     Your Committee on Economic Development, to which was
referred H.B. No. 1282 entitled: 


begs leave to report as follows:
     The purpose of this measure is to extend the existing
operation and maintenance contract of the lower Hamakua ditch for
six months or until the irrigation district administrative rules
become effective, and authorize the Department of Agriculture to
establish and collect water tolls to cover the cost of the
irrigation district operation until the administrative rules are

     Your Committee received testimony in support of this measure
from the Department of Agriculture (DOA), the Hawaii Farm Bureau
Federation, the Big Island Farm Bureau, Kamehameha Schools Bishop
Estate, and one individual.

     Your Committee finds that the DOA is co-sponsoring a
watershed project with the U.S. Department of Agriculture Natural
Resources Conservation Service, which will restore the lower
Hamakua ditch to its pre-plantation condition.  When this is
completed, the ditch will then be the water source and conveyance
system for the irrigation district.

     Your Committee further finds that this measure is very
important to all the farmers and ranchers in the Hamakua area,

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who currently depend on irrigation water from the ditch.  These
businesses span a range of farming operations, including
vegetables, nurseries, taro, orchard crops, awa, ranching, and
aquaculture, and any interruption in the flow of water to these
operations would have a severe impact on the economic recovery of
the Hamakua area.

     Your Committee strongly supports these provisions to restore
the ditch and provide a consistent water source for the farmers
of the area.  Your Committee believes that adequate and
affordable water is a key component to the success of these
operations, and as such is a critical stimulus factor in the
further economic development of Hamakua.

     In order to provide an additional incentive for the
successful development of agriculture in Hamakua, your Committee
believes the mandate that irrigation districts function in a
self-supporting manner should be suspended for two years.  Your
Committee has amended this measure accordingly to:

     (1)  Change the appropriation from an unspecified amount to

     (2)  State that the provisions of section 167-5, Hawaii
          Revised Statutes, relating to irrigation projects being
          self-supporting shall not apply to the irrigation
          district operation covered by this Act between the
          effective date of this Act to July 1, 2001; and

     (3)  Make technical, nonsubstantive amendments.

     As affirmed by the record of votes of the members of your
Committee on Economic Development that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 1282, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 1282,
S.D. 1, and be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic

                                   LORRAINE R. INOUYE, Chair

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