SECTION 1. In Act 340, Session Laws of Hawaii 1993, the legislature found that "the Island of Kaho‘olawe is of significant cultural and historic importance to the native people of Hawaii." The legislature also found that due to extensive erosion and other ecological problems, the presence of unexploded ordnance, archaeological and other cultural and historic sites, and the presence of native and endangered flora and fauna, that a new management regime was needed to effectively meet the unique challenges of restoring, preserving and determining the appropriate use of Kaho‘olawe.

The Kaho‘olawe island reserve commission is funded predominantly by a dwindling trust fund created in 1994 during the federal unexploded ordnance cleanup of Kaho‘olawe. Though considerable, the federal appropriation totaling approximately $44,000,000 over a period of several years was not substantial enough to establish a sustainable endowment for the long-term restoration of Kaho‘olawe.

As stated in the federally mandated Kaho‘olawe island conveyance commission final report to Congress in 1993, "in the short term, federal funds will provide the bulk of the program support for specific soil conservation projects and related activities. In the longer term, however, state revenues will be needed to continue and enhance those activities initiated with federal funds." For the past twenty-one years, federal funding has allowed the Kaho‘olawe island reserve commission to establish many of its innovative programs that emphasize ancestral and traditional knowledge, utilize a cultural approach of respect and connectivity to the environment, and integrate ancient and modern resource management techniques.

In 2004, the management and control of the Kaho‘olawe island reserve was transferred from the United States Navy to Hawaii, with the Kaho‘olawe island reserve commission being the State's designated agency tasked with overseeing the use and restoration of the reserve. During the past ten years, the Kaho‘olawe island reserve commission has been able to develop innovative restoration projects that work in the extremely harsh conditions of Kaho'olawe and will serve as the foundation for the future restoration of the island.

A 2013 fiscal audit of the Kaho‘olawe rehabilitation trust fund performed by the office of the auditor reported two key findings: first, and more importantly, that the trust fund will be depleted by 2016; and secondly, that the Kaho‘olawe island reserve commission lacks a comprehensive and quantifiable restoration plan with performance measures to gauge whether objectives are being met.

As Hawaii's natural resource managers work to maintain the balance between the pressure of urbanized land use and preserving and restoring natural resources, there still needs to be remote intact ecosystems that will serve to counteract this growth and provide a means of recovery, in case the State's other main ecosystems collapse. Kaho‘olawe's rich marine ecosystem is a buffer that will serve to support and, if necessary, repopulate neighboring waters. The Kaho‘olawe island reserve commission's ocean and land based programs serve to ensure, protect, and restore the rich natural biodiversity and biomass of the Kaho‘olawe reserve, which one day may be the key to Hawaii's survival. Therefore, it is necessary to consider the expected increase in population and corresponding housing development and the benefit from maintaining a large portion of Hawaii intact for future generations.

In 2013, the Kaho‘olawe island reserve commission began developing a strategic plan for the use and management of the Kaho‘olawe island reserve through 2026, which will mark fifty years of occupation of Kaho‘olawe by the people of Hawaii. After a two-year effort that engaged Hawaii's residents through numerous community meetings and focus groups sessions held on each island, the multi-organization Kaho‘olawe strategic planning working group developed an island-wide, community-based strategic plan entitled I Ola Kanaloa, or "Life to Kanaloa." The plan addresses the future restoration, management, and uses of Kaho‘olawe for the State and a potential future sovereign native Hawaiian entity. The plan was developed in accordance with section 6K-9, Hawaii Revised Statutes, which requires the State to transfer management and control of the island and its waters to the sovereign native Hawaiian entity upon its recognition by the State and federal governments. Recognition of a sovereign native Hawaiian entity is anticipated to occur within the timeframe of the 2026 strategic plan.

Without additional funding, the Kaho‘olawe island reserve commission will not be able to continue its innovative management regime beyond fiscal year 2015. The Kaho‘olawe island reserve commission's management and control of Kaho‘olawe entails not only restoring its ecosystems and protecting its endangered and rare flora and fauna, but also ensuring meaningful and safe use by people who visit the reserve.

The purpose of this Act is to utilize a portion of the state conveyance tax to replenish the Kaho‘olawe rehabilitation trust fund:

(1) For the long-term rehabilitation and maintenance of the Kaho‘olawe island reserve;

(2) To protect and safeguard visitors; and

(3) To implement the innovative programs that are guided by I Ola Kanaloa.

SECTION 2. Section 6K-9.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is created in the state treasury a trust fund to be designated as the Kaho‘olawe rehabilitation trust fund to be administered by the department with the prior approval of the commission. Subject to Public Law 103-139, and this chapter:

(1) All moneys received from the federal government for the rehabilitation and environmental restoration of the island of Kaho‘olawe or other purposes consistent with this chapter;

(2) A portion of the conveyance tax, pursuant to section 247-7;

[~~(2)~~] (3) Any moneys appropriated by the legislature to the trust fund;

[~~(3)~~] (4) Any moneys received from grants, donations, or the proceeds from contributions; and

[~~(4)~~] (5) The interest or return on investments earned from moneys in the trust fund,

shall be deposited in the trust fund and shall be used to fulfill the purposes of this chapter."

SECTION 3. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"§247-7 Disposition of taxes. All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year:

(1) [~~Ten~~] 10 per cent shall be paid into the land conservation fund established pursuant to section 173A-5;

(2) [~~Twenty-five~~] 25 per cent from July 1, 2009, until June 30, 2012; [~~thirty~~] 30 per cent from July 1, 2012, until June 30, 2014; and [~~fifty~~] 50 per cent in each fiscal year thereafter shall be paid into the rental housing trust fund established by section 201H-202; [~~and~~]

(3) [~~Twenty~~] 20 per cent from July 1, 2009, until June 30, 2012, and [~~twenty-five~~] 25 per cent in each fiscal year thereafter shall be paid into the natural area reserve fund established by section 195-9; provided that the funds paid into the natural area reserve fund shall be annually disbursed by the department of land and natural resources in the following priority:

(A) To natural area partnership and forest stewardship programs after joint consultation with the forest stewardship committee and the natural area reserves system commission;

(B) Projects undertaken in accordance with watershed management plans pursuant to section 171-58 or watershed management plans negotiated with private landowners, and management of the natural area reserves system pursuant to section 195-3; and

(4) 7.5 per cent shall be paid into the Kaho‘olawe rehabilitation trust fund established by section 6K-9.5."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2015.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1235
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII