Report Title:

Kailua Waterways; Studies; Appropriation

 

Description:

Requires the city and county of Honolulu to conduct, and appropriates funds for, various studies and measures relating to improvements to the Kailua waterways system.  Appropriates funds for the department of transportation to plan, design, and construct measures to address water quality, siltation, and other waterway problems in Kailua.  Adds a member to the Molokai irrigation system water users advisory board.  Creates a sub-account in the irrigation system revolving fund to enhance transparency.  Requires board to develop definition of "homestead farmer" and report progress of roadmap meetings with homesteaders.  (SD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1898

TWENTY-FOURTH LEGISLATURE, 2007

H.D. 1

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO WATER.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

     SECTION 1.  House Concurrent Resolution No. 261, H.D. 1 (2006) requested the department of health, with the assistance of the department of land and natural resources and the department of facilities maintenance of the city and county of Honolulu, to report to the legislature on the relationship between the various Kailua waterways, including the Kaelepulu pond, and the water quality and natural resources of Kailua beach and Kailua bay.  This system consists of interconnected brackish estuarine waters, including Kawainui stream, Hamakua marsh, Kaelepulu canal, Kaelepulu pond, and Kaelepulu wetlands.

     In the 1960s, the United States Army Corps of Engineers directed the natural flow to the Kawainui stream to be blocked by the construction of the flood control levee to reduce the threat of flooding to Kailua town.  The city and county of Honolulu manages the Kawainui stream and Kaelepulu canal for drainage and flood control.  The Hamakua wetlands are managed for endangered Hawaiian waterfowl habitat by the department of land and natural resources.  The Kaelepulu pond and Kaelepulu wetland are private property, recognized historically as a Hawaiian fish pond and a habitat for at least three endangered native Hawaiian waterfowl.  While it is private land, both the State and the city and county of Honolulu dump runoff into Kaelepulu pond, as well as other waterways including Kailua beach, Kailua bay, Hamakua marsh, and Kawainui marsh.

     The Kailua waterways are listed on the State's Clean Water Act 303(d) list of impaired waters not meeting water quality standards for nutrients, turbidity, and bacteria load.  As a result, the Kailua waterways are presently being studied by the department of health.  Since the time of the removal of the natural water flow from Kawainui marsh, the large majority of the water entering the Kailua waterways does so through storm drains under main separate storm sewer system four.  Water flows from the Kailua waterways across the sand berm at Kailua beach and adversely impacts the quality of the near shore waters.  The near shore waters are predominantly used for resident and tourist recreation.

     The department of health's 2008 report to the legislature lists eleven reasonable approaches that may improve the water quality and natural resources of the estuary system and its residual impact on the beaches and waters in Kailua bay.

     The purpose of this part is to appropriate funds to address water quality and other issues facing Kailua waterways as follows:

     (1)  For the city and county of Honolulu to implement three of the eleven aforementioned approaches; and

     (2)  For the department of transportation to plan, design, and construct measures to address water quality, siltation, and other waterway problems described in this part.

     SECTION 2.  The city and county of Honolulu shall:

     (1)  Conduct an engineering study and an environmental assessment for the preliminary design and specification of measures to restore adequate water flow from Kawainui marsh to Kawainui stream using siphons, tunnels, pumps, or other appropriate measures;

     (2)  Conduct a study in consultation with the department of health to maximize the efficiency of the monthly stream mouth opening procedures, as well as to improve procedures to respond to threats of flooding due to a blocked canal mouth.  This study shall track the effluent plume from the stream mouth and elucidate the fate of state standard water quality parameters, such as turbidity, nutrients, and bacteria, within Kailua bay recreational waters; and

     (3)  Design and implement measures in consultation with the department of health to reduce the amount of polluted runoff delivered to Kaelepulu pond by redesigning and restoring the function of the Keopu flood basin, which receives waters from main separate storm sewer system four, and report to the legislature on those measures.

     All studies and report directed by this section shall be transmitted to the legislature no later than twenty days prior to the convening of the regular session of 2009.

     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 2008-2009 for the city and county of Honolulu to carry out the purposes described in section 2 of this Act.

     The sum appropriated shall be expended by the city and county of Honolulu for the purposes of this Act.

     SECTION 4.  There is appropriated out of the state highway fund the sum of $           or so much thereof as may be necessary for fiscal year 2008-2009 for the department of transportation to plan, design, and construct measures to address water quality, siltation, and other waterway problems mentioned in this Part; provided that the department of transportation shall:

     (1)  Work in consultation with the department of health, the department of land and natural resources, and the city and county of Honolulu; and

     (2)  Request that the city and county of Honolulu match any funds expended for these purposes considering the city and county of Honolulu contributes to the road run‑off into the Kailua waterways.

     The sum appropriated shall be expended by the department of transportation for the purposes of this part.

PART II

     SECTION 5.  The purpose of this part is to address the findings and conclusions of the state auditor's February 19, 2008 financial and management audit of the Molokai irrigation system.

     The Molokai irrigation system was designed to fulfill the policy of the Hawaiian Homes Commission Act, 1920, which, pursuant to section 101 of that Act, is "to enable native Hawaiians to return to their lands in order to fully support self-sufficiency for native Hawaiians and the self-determination of native Hawaiians . . . and the preservation of values, traditions, and culture of native Hawaiians."

     The purpose of the Molokai irrigation system was to bring under irrigation an area of 13,650 irrigable acres of land, which was dry farmed, thereby increasing and stabilizing the crop yield and economy of the island of Molokai.  As originally conceived, the system was designed to serve irrigation water to 13,250 acres of pineapple and four hundred acres of diversified crops.  With the completion of the tunnel and supply conduit, an additional 3,150 acres of pineapple and six hundred sixty acres of irrigable diversified cropland were added. 

     Although the department of land and natural resources was the designated sponsoring agency for the construction, operation, and maintenance of the Molokai irrigation system, the department of Hawaiian home lands and the Molokai ranch benefited.

     In 1989, the department of agriculture assumed its duties as custodian of the State's irrigation systems, including the Molokai irrigation system. 

     The state auditor found the department of agriculture to be remiss in its oversight of the Molokai irrigation system.  The auditor stated, "The Department of Agriculture's flawed management endangers agriculture in Molokai."  The auditor also found that "[w]hile the department inherited a deteriorating system, it has done little to learn about the system and its contentious history. . . .  The department is unable to balance its responsibilities in promoting agriculture, while guaranteeing Hawaiian homesteaders' rights to two-thirds of the water within the MIS ... it also has an obligation to Hawaiian homesteaders as expressed in the Hawaiian Homes Commission Act, 1920.  The latter obligation has been set aside to promote agriculture among non-homestead farmers.  The growth of agriculture among non-homestead farmers has come at the high cost of exhausting the water resources of the MIS."  (emphasis added)

     On January 31, 2008, the Hawaii Supreme Court reaffirmed in OHA v. HCDCH No. 25570, the State's fiduciary duty as a trustee of the Hawaiian Homes Commission Act.  The court stated:  "Moreover, we have previously indicated in an analogous case dealing with the Hawaiian Homes Commission Act that the State, as trustee, must adhere to high fiduciary duties normally owed by a trustee to its beneficiaries."  Ahuna, 64 Haw. at 338, 640 P.2d at 1168.  In describing the scope of the State's relevant fiduciary duties, this court, in Ahuna, analogized such duties to the fiduciary duties of the United States to Native Americans by quoting, with approval, the words of the United States Supreme Court and stated:

     Under a humane and self imposed policy which has found expression in many acts of Congress and numerous decisions of this Court, [the Government] has charged itself with moral obligations of the highest responsibility and trust.  Its conduct, as disclosed in the acts of those who represent it in dealings with the Indians, should therefore be judged by the most exacting fiduciary standards.  (emphasis added)  Id. at 339, 640 P.2d at 1169 (quoting Seminole Nation v. United States, 316 U.S. 286, 296-97 (1942)) (brackets and emphases in original) (format altered).  In Ahuna, we held that "[t]he use of the term 'most exacting fiduciary standards' imports the notion that [this] court will strictly scrutinize the actions of the government."  Id. at 339, 640 P.2d at 1169.  Moreover, we observed that "the nature of the trust obligations of the [State] toward beneficiaries . . . may be determined by examining well-settled principles enunciated by the federal courts regarding lands set aside by Congress in trust for the benefit of other native Americans[.]"  Id. at 339, 640 P.2d at 1168.  In particular, we cited three specific trust duties applicable to the State as trustee:  (1) "the obligation . . . to administer the trust solely in the interest of the beneficiary"; (2) the obligation that the trustee "deal impartially when there is more than one beneficiary"; and (3) the "obligation to use reasonable skill and care to make trust property productive[.]"  Id. at 340, 604 P.2d at 1169-70 (citations omitted)."

     The State has a fiduciary duty to native Hawaiians under the Hawaiian Homes Commission Act, 1920 and should therefore be judged by the most exacting fiduciary standards.  When one of its state departments breaches the State's fiduciary duty, the State as trustee is liable to its beneficiaries.  In addressing the State's fiduciary duty to the Hawaiian Molokai irrigation system user, the state auditor recommended that the State should "consider adding additional homestead farmer seat(s) and develop procedural guidelines on how seats are filled."

     The findings of the state auditor confirm that for nineteen years, the department of agriculture has continually breached its fiduciary duty to the native Hawaiians who are the users of the Molokai irrigation system.  In addition, the deputy administrator of the department of agriculture recently stated in a legislative hearing that the Molokai irrigation system is the only state irrigation system that generates a profit.  All of the other state irrigation systems operate with deficits.  This means that the State depends on the Molokai irrigation system to fund the operations of the other state irrigation systems to the Molokai irrigation system's detriment.

     The legislature cannot allow the State to continue to breach its fiduciary duty to the native Hawaiian users of the Molokai irrigation system for in doing so the legislature may also be liable for the breach of fiduciary duty.  Allowing the Molokai irrigation system user revenue funds to continue to be commingled with other non-trust funds and to be used for non- Molokai irrigation system operations and maintenance fails to comport with fiduciary standards.

     Therefore, the intent of this part is to end the breach of fiduciary duty and to implement the findings, conclusions, and recommendations of the state auditor.  The auditor recommends in Section 5(c) and 5(d) of her report:  "c.  Develop the ability to segregate financial information on a system by system basis, for use as a planning tool and d.  Review receivables collection process, and if necessary consider employing more aggressive tactics."  (emphasis added)  In response to these recommendations, this part creates a separate subaccount in the irrigation system revolving fund to provide greater transparency and accountability, adds an additional homestead farmer seat to the advisory board, and appropriates funds to further needed repairs and maintenance of the Molokai irrigation system.

     SECTION 6.  Section 167-22, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established the irrigation system revolving fund, into which shall be deposited:

     (1)  All legislative appropriations to the irrigation system revolving fund; and

     (2)  All or any portion of the receipts and revenues collected under this chapter, as determined by the board of agriculture, exclusive of the receipts and revenues deposited into the irrigation water development special fund.

There shall be created a sub-account within the revolving fund to facilitate increased transparency to assure the appropriate operation of the revolving fund as it relates to deposits and expenditures for the Molokai irrigation system."

     SECTION 7.  Section 167-23, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established a Molokai irrigation system water users advisory board, to be appointed by the governor under section 26-34.  The advisory board shall consist of [six members, as follows:] seven members, of whom two-thirds shall be Hawaiian homestead farmers who are Molokai irrigation system users, Molokai residents, and active general excise tax licensees.  To the extent possible, the board shall be comprised of the following:

     (1)  [A] Two homestead farmer [user] users on Molokai;

     (2)  A nonhomestead farmer user on Molokai;

     (3)  The [designee (by name rather than office)] nominee of the Molokai Farm Bureau;

     (4)  The [designee (by name rather than office)] nominee of Hikiola Cooperative, Inc.;

     (5)  The [designee (by name rather than office)] nominee of the Molokai-Lanai soil and water conservation district; and

     (6)  The [designee (by name rather than office)] nominee of the department of Hawaiian home lands.

     The members of the advisory board shall serve without compensation, but shall be entitled to reimbursement for necessary expenses while attending meetings and while in the discharge of their duties.  For administrative purposes, and pursuant to section 26-35, the advisory board shall be placed within the department of agriculture."

     SECTION 8.  The Molokai irrigation system water users advisory board, in conjunction with the board of agriculture, shall develop a definition of "homestead farmer".  The advisory board shall report to the legislature, no later than twenty days prior to the convening of the regular session of 2009, on the progress made toward implementing the objectives outlined in the "Roadmap to Improvement" document generated as a result of meetings between the board of agriculture and the Molokai community.  The report shall include a timeline for implementation.  The advisory board shall also post its report on the appropriate website of the department of agriculture.

     SECTION 9.  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 2008-2009 to further address the repair and maintenance needs of the Molokai irrigation system.

     The sum appropriated shall be expended by the department of agriculture for the purposes of this part.

PART III

     SECTION 10.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 11.  This Act shall take effect on July 1, 2050.