HOUSE OF REPRESENTATIVES
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE DEPARTMENT OF LAND AND NATURAL RESOURCES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 171, Hawaii Revised Statutes, is amended by adding a new section to subpart D of part II to be appropriately designated and to read as follows:
"§171- Disposition of water rights; exemptions. Notwithstanding any other law to the contrary, the provisions of this chapter relating to the disposition of water rights shall not apply to any person practicing the traditional production of wetland kalo."
SECTION 2. Section 171-58, Hawaii Revised Statutes, is amended to read as follows:
"§171-58 Minerals and water rights. (a) Except as provided in this section the right to any mineral or surface or ground water shall not be included in any lease, agreement, or sale, this right being reserved to the State; provided that the board may make provisions in the lease, agreement, or sale, for the payment of just compensation to the surface owner for improvements taken as a condition precedent to the exercise by the State of any reserved rights to enter, sever, and remove minerals or to capture, divert, or impound water.
(b) Disposition of mineral rights shall be in accordance with the laws relating to the disposition of mineral rights enacted or hereafter enacted by the legislature.
(c) Disposition of water rights may be made by
lease at public auction as provided in this chapter or by permit for temporary
use on a month-to-month basis under those conditions [
will best serve the interests of the State and subject to a maximum term of one
year and other restrictions under the law; provided that:
(1) Where an application has been made for a lease
under this section to continue a previously authorized disposition of water
rights, a holdover may be authorized annually until the pending application for
the disposition of water rights is finally resolved or for a total of [
ten consecutive one-year holdovers, whichever occurs sooner; provided
that the total period of the holdover for any applicant shall not exceed [ three]
ten years; provided further that the holdover is consistent with the
public trust doctrine; provided further that any holdover authorization that
allows or has the effect of allowing the use of over two million gallons per
(A) Be issued pursuant to a final written decision that explicitly considers and includes conditions to minimize any potential impacts to the public trust purposes of any affected water source, including the ecological, natural, recreational, and aesthetic values of affected surface waters in their natural state; and
(B) Limit the total aggregate quantity of any surface water allowed to be received under all holdovers issued pursuant to an application to the applicant's demonstrated actual, reasonable, beneficial needs for the holdover period;
(2) If a contested case pursuant to chapter 91 is requested on a one-year holdover, any provision of law notwithstanding, the holdover shall be continued without any action of the board pending completion of the proceedings;
(2)] (3) Any disposition by lease shall
be subject to disapproval by the legislature by two-thirds vote of either the
senate or the house of representatives or by majority vote of both in any
regular or special session next following the date of disposition; and
(3)] (4) After a certain land or water
use has been authorized by the board subsequent to public hearings and
conservation district use application and environmental impact statement
approvals, water used in nonpolluting ways, for nonconsumptive purposes because
it is returned to the same stream or other body of water from which it was
drawn, and essentially not affecting the volume and quality of water or biota
in the stream or other body of water, may also be leased by the board with the
prior approval of the governor and the prior authorization of the legislature
by concurrent resolution.
(d) Any lease of water rights shall contain a covenant on the part of the lessee that the lessee shall provide from waters leased from the State under the lease or from any water sources privately owned by the lessee to any farmer or rancher engaged in irrigated pasture operations, crop farming, pen feeding operations, or raising of grain and forage crops, or for those public uses and purposes as may be determined by the board, at the same rental price paid under the lease, plus the proportionate actual costs, as determined by the board, to make these waters available, so much of the waters as are determined by the board to be surplus to the lessee's needs and for that minimum period as the board shall accordingly determine; provided that in lieu of payment for those waters as the State may take for public uses and purposes the board may elect to reduce the rental price under the lease of water rights in proportion to the value of the waters and the proportionate actual costs of making the waters available. Subject to the applicable provisions of section 171-37(3), the board, at any time during the term of the lease of water rights, may withdraw from waters leased from the State and from sources privately owned by the lessee so much water as it may deem necessary to:
preserve] Preserve human life;
preserve] Preserve animal life,
in that order of priority; and that from waters leased from the State the board, at any time during the term of the lease of water rights, may also withdraw so much water as it may deem necessary to preserve crops; provided that payment for the waters shall be made in the same manner as provided in this section.
(e) Any new lease of water rights shall contain a covenant that requires the lessee and the department of land and natural resources to jointly develop and implement a watershed management plan. The board shall not approve any new lease of water rights without the foregoing covenant or a watershed management plan. The board shall prescribe the minimum content of a watershed management plan; provided that the watershed management plan shall require the prevention of the degradation of surface water and ground water quality to the extent that degradation can be avoided using reasonable management practices.
(f) Upon renewal, any lease of water rights shall contain a covenant that requires the lessee and the department of land and natural resources to jointly develop and implement a watershed management plan. The board shall not renew any lease of water rights without the foregoing covenant or a watershed management plan. The board shall prescribe the minimum content of a watershed management plan; provided that the watershed management plan shall require the prevention of the degradation of surface water and ground water quality to the extent that degradation can be avoided using reasonable management practices.
(g) The department of land and natural resources shall notify the department of Hawaiian home lands of its intent to execute any new lease, or to renew any existing lease of water rights. After consultation with affected beneficiaries, these departments shall jointly develop a reservation of water rights sufficient to support current and future homestead needs. Any lease of water rights or renewal shall be subject to the rights of the department of Hawaiian home lands as provided by section 221 of the Hawaiian Homes Commission Act.
(h) The department shall retain a certified appraiser who has a sufficient understanding of real property and water law to determine the valuation of water for the purposes of this section.
(i) Prior to the approval of any holdover authorization after January 1, 2020, the board shall hold a public hearing pursuant to chapter 91 on the adoption of proposed administrative rules on the disposition of water rights by lease at public auction and water valuation process."
SECTION 3. Act 126, Session Laws of Hawaii 2016, is amended as follows:
1. By amending section 2 to read:
"SECTION 2. The department of land and natural
resources shall prepare and submit an annual [
to the legislature no later than twenty days before the convening of each [ of
the] regular [ sessions] session of [ 2017, 2018, 2019, and
2020.] the legislature for the years 2017-2027. The reports shall
(1) The status of applications to continue previously-authorized dispositions of water rights;
(2) Actions taken on the applications during the [
period of July 1, 2016, to November 30, 2016, fiscal year 2016–2017, fiscal year
2017–2018, and fiscal year 2018–2019, respectively;] immediately
preceding fiscal year; and
(3) Any relevant recommendations for legislative action or appropriation."
2. By amending section 4 to read:
"SECTION 4. This Act shall take effect
upon its approval, and shall apply to applications for a lease to continue a
previously authorized disposition of water rights that are pending before the
board of land and natural resources on the effective date of this Act or filed
with the board of land and natural resources on or after the effective date of
this Act, but prior to June 30, [
2019;] 2026; provided that:
(1) This Act shall be repealed on June 30, [
2026, and section 171-58(c), Hawaii Revised Statutes, shall be reenacted
in the form in which it read on the day prior to the effective date of this
(2) Any holdovers first applied for under this Act
prior to June 30, [
2019,] 2026, may be reauthorized, as provided
in section 1 of this Act, beyond June 30, [ 2019.] 2026."
SECTION 4. (a) The board of land and natural resources, in consultation with the commission on water resources management, shall:
(1) Conduct an analysis of the effectiveness of the State's long-term water disposition laws, including section 171-58, Hawaii Revised Statutes, and whether that section is appropriate to guide the board of land and natural resources on the issuance of long-term leases for the disposition of water rights; and
(2) Recommend any changes to the State's laws, rules, and procedures relating to the issuance of long-term leases for the disposition of water rights.
(b) The board of land and natural resources shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular sessions of 2020.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2050.
DLNR; Disposition of Water Rights; Exemptions; Report
Allows for a total of ten consecutive one-year holdovers of water permits under section 171-58(c), HRS. Places conditions on holdovers that authorize the use of over two million gallons of water per day. Requires holdovers to continue without Board of Land and Natural Resources action while a contest case hearing is pending. Requires the Board of Land and Natural Resources to hold a public hearing on the adoption of proposed administrative rules on the disposition of water rights by lease at public auction and water valuation process. Requires the Department of Land and Natural Resources to retain a certified appraiser to determine water valuation. Exempts the traditional production of wetland kalo from provisions of chapter 171, HRS, relating to disposition of water rights. Extends the repeal and reenactment provision for Act 126, SLH 2016, from June 30, 2019, to June 30, 2022. Requires the Board of Land and Natural Resources and the Commission on Water Resource Management to report to the legislature on the effectiveness of the State's long-term water disposition laws. Effective 7/1/2050. (SD2 Proposed)
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