HB 781: RELATING TO THE WAIAHOLE WATER SYSTEM.

A BILL FOR AN ACT

RELATING TO THE WAIAHOLE WATER SYSTEM.

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

     SECTION 1.  The legislature finds that the Waiahole water system transports water from the Koolau mountain range on the windward side of Oahu to Kunia on the leeward side of the island.  Construction began in February 1916, and the finished system began delivering water by May 27, 1916.  The total system length is 26.4 miles, consisting of fifteen miles of tunnels, ten miles of open ditches, and 1.4 miles of siphons.  The system travels from Kahana to Kunia entirely by gravity flow.  The Waiahole water system includes development tunnels, built to collect water from the Koolau mountains, that are connected to the main transmission tunnel.  Seven siphons carry the water across gulches on the leeward side of the system.  The Waiahole water system also includes two reservoirs.  The first, reservoir 225, is on the east side of Kunia highway and holds 9,500,000 gallons.  The second, reservoir 155--renamed the Nakatani reservoir--is at the end of the system and holds 14,010,000 gallons.  Throughout the system, gauging stations are installed and designed to measure water collected in the Koolau mountains.  One of the gauging stations is called adit 8 and is in critical need of repair.

     Until the demise of the sugar industry on Oahu during the mid-1990s, the system was continuously owned and operated by Waiahole Irrigation Company, Limited, a wholly owned subsidiary of Oahu Sugar Company, Limited.  Pursuant to Act 111, Session Laws of Hawaii 1998 (Act 111), the agribusiness development corporation purchased the assets of the Waiahole Irrigation Company, Limited, from Amfac/JMB Hawaii, Limited, for $8,500,000 in July 1999.  Furthermore, pursuant to Act 111, the legislature appropriated $1,200,000 in reimbursable general obligation bonds to replace the system's three deteriorated redwood siphons.  Today, the ditch is known as the Waiahole water system and is actively managed and operated by the agribusiness development corporation.

     The Waiahole water system serves approximately 5,600 acres of land in central and leeward Oahu, of which approximately eighty-six per cent is in active agricultural use at any given time.  In addition to state-owned lands, Waiahole water system users occupy land owned by Kamehameha Schools; Castle & Cooke Land Company, Ltd.; M.A. Robinson Trusts; and the James Campbell Company.  Currently, agricultural users include Aloun Farms, the Hawaii Agriculture Research Center, Larry Jefts Farm, Mililani Nursery, Mililani Agricultural Park, Sugarland Farms, Waiawa Nursery, Waikele Farms, and livestock ranchers.  Non-agricultural users include Mililani Memorial Park.  Other users include Waiawa correctional facility, and its uses are approximately twenty-five per cent agricultural and seventy-five per cent non-agricultural.

     In 2000, the Waiahole water system contributed $95,000,000 to and created roughly 2,000 jobs for the state economy.  This figure accounted for fifty-one per cent of total crops, livestock, and aquaculture sales for the city and county of Honolulu.  It was concluded that directly and indirectly, for every $1 increase in final demand for Hawaii's agriculture products from the Waiahole water system, the output in Hawaii's overall economy increased by $1.94.  According to the department of agriculture's report in October 2012 titled "Assessment of Irrigation Systems in Hawaii", the Waiahole water system contributed $135,000,000 and 2,000 jobs to the state economy in 2012.

     Waiahole water system users have gradually increased the efficiency with which they use water, so water usage has decreased over time.  Moreover, users were severely affected by the COVID-19 pandemic.  The current agricultural water rate is 99.850 cents per 1,000 gallons.  Comparable area rates for agricultural water include the board of water supply's and department of agriculture's average agricultural rate of 50 cents per 1,000 gallons.  As of October 2024, the farmers using the Waiahole water system had paid $9,754,417.90 toward the $8,500,000 bond, totaling thirteen per cent more than the original bond amount.  These costs are passed on to consumers, resulting in higher food prices.  Currently, forty per cent of all revenue is used to service the principal and interest debt.  The balance to pay off the debt is $4,500,000 and would result in farmers and consumers paying $14,000,000 in debt service fees.

     The legislature further finds that repairs to the adit 8 tunnel have been delayed as long as possible and have reached a critical point in needing $2,000,000 in design and construction of deferred maintenance repairs.  All water from the Waiahole water system must pass through the adit 8 tunnel.

     Therefore, the purpose of this Act is to appropriate funds to the agribusiness development corporation to fully pay off the bond debt service on the Waiahole water system and repair the adit 8 tunnel.

     SECTION 2.  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 2025-2026 to pay the bond debt service on the Waiahole water system.

     The sum appropriated shall be expended by the agribusiness development corporation for the purposes of this Act.

     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 2025-2026 for the repair of the adit 8 tunnel of the Waiahole water system.

     The sum appropriated shall be expended by the agribusiness development corporation for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 3000.

Report Title:

Waiahole Water System; Bond Debt Service; Tunnel Repair; Appropriations

Description:

Appropriates funds for the Waiahole Water System for bond debt service and tunnel repair.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to the Waiahole Water System.

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

     SECTION 1.  The legislature finds that the Waiahole water system transports water from the Koolau mountain range on the windward side of Oahu to Kunia, on the leeward side of the island.  Construction began in February 1916, and the finished system began delivering water by May 27, 1916.  The total system length is 26.4 miles, consisting of fifteen miles of tunnels, ten miles of open ditches, and 1.4 miles of siphons.  The system travels from Kahana to Kunia entirely by gravity flow.  The Waiahole water system includes development tunnels, built to collect water from the Koolau mountains, that are connected to the main transmission tunnel.  Seven siphons carry the water across gulches on the leeward side of the system.  The Waiahole water system also includes two reservoirs.  The first, reservoir 225, is on the east side of Kunia highway and holds 9,500,000 gallons.  The second, reservoir 155 -- renamed the Nakatani reservoir, is at the end of the system and holds 14,010,000 gallons.  Throughout the system, gauging stations are installed and designed to measure water collected in the Koolau mountains.  One of the gauging stations is called adit 8 and is in critical need of repair.

     Until the demise of the sugar industry on Oahu during the mid-1990s, the system was continuously owned and operated by Waiahole Irrigation Company, Limited, a wholly owned subsidiary of Oahu Sugar Company, Limited.  Pursuant to Act 111, Session Laws of Hawaii 1998 (Act 111), the agribusiness development corporation purchased the assets of the Waiahole Irrigation Company, Limited, from Amfac/JMB Hawaii Limited for $8,500,000 in July 1999.  Furthermore, pursuant to Act 111, the legislature appropriated $1,200,000 in reimbursable general obligation bonds to replace the system's three deteriorated redwood siphons.  Today, the ditch is known as the Waiahole water system and is actively managed and operated by the agribusiness development corporation.

     The Waiahole water system serves approximately 5,600 acres of land in central and leeward Oahu, of which approximately eighty-six per cent is in active agricultural use at any given time.  In addition to state-owned lands, Waiahole water system users occupy land owned by Kamehameha Schools; Castle & Cooke Land Company, Ltd.; M.A. Robinson Trusts; and the James Campbell Company.  Currently, agricultural users include Aloun Farms, the Hawaii Agriculture Research Center, Larry Jefts Farm, Mililani Nursery, Mililani Agricultural Park, Sugarland Farms, Waiawa Nursery, Waikele Farms, and livestock ranchers.  Non-agricultural users include Mililani Memorial Park.  Other users include Waiawa correctional facility, and its uses are approximately twenty-five per cent agricultural and seventy-five per cent non-agricultural.

     In 2000, the Waiahole water system contributed $95,000,000 to and created roughly two thousand jobs for the state economy.  This figure accounted for fifty-one per cent of total crops, livestock, and aquaculture sales for the city and county of Honolulu.  It was concluded that directly and indirectly, for every $1 increase in final demand for Hawaii's agriculture products from the Waiahole water system, the output in Hawaii's overall economy increased by $1.94.  According to the department of agriculture's report in October 2012 titled "Assessment of Irrigation Systems in Hawaii", the Waiahole water system contributed $135,000,000 and two thousand jobs to the state economy in 2012.

     Waiahole water system users have gradually increased the efficiency with which they use water, so water usage has decreased over time.  Moreover, users were severely affected by the COVID-19 pandemic.  The current agricultural water rate is 99.850 cents per 1,000 gallons.  Comparable area rates for agricultural water include the board of water supply's and department of agriculture's average agricultural rate of 50 cents per 1,000 gallons.  As of October 2024, the farmers using the Waiahole water system had paid $9,754,417.90 toward the $8,500,000 bond, totaling thirteen per cent more than the original bond amount.  These costs are passed on to consumers, resulting in higher food prices.  Currently, forty per cent of all revenue is used to service the principal and interest debt.  The balance to pay off the debt is $4,500,000 and would result in farmers and consumers paying $14,000,000 in debt service fees.

     The legislature further finds that repairs to the adit 8 tunnel have been delayed as long as possible and have reached a critical point in needing $2,000,000 in design and construction of deferred maintenance repairs.  All water from the Waiahole water system must pass through the adit 8 tunnel.

     Therefore, the purpose of this Act is to appropriate funds to the agribusiness development corporation to fully pay off the bond debt service on the Waiahole water system and repair the adit 8 tunnel.

     SECTION 2.  There is appropriated out of the general revenues of the State of Hawaii the sum of $4,500,000 or so much thereof as may be necessary for fiscal year 2025-2026 to pay the bond debt service on the Waiahole water system.

     The sum appropriated shall be expended by the agribusiness development corporation for the purposes of this Act.

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2025-2026 for the repair of the adit 8 tunnel of the Waiahole water system.

     The sum appropriated shall be expended by the agribusiness development corporation for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 2025.

Report Title:

Waiahole Water System; Bond Debt Service; Tunnel Repair; Appropriations

Description:

Appropriates funds for the Waiahole Water System for bond debt service and tunnel repair.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  357

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 781

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Water & Land, to which was referred H.B. No. 781, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE WAIAHOLE WATER SYSTEM,"

begs leave to report as follows:

     The purpose of this measure is to appropriate funds for the Waiahole Water System for bond debt service and tunnel repair.  

     Your Committee received testimony in support of this measure from the Agribusiness Development Corporation; Ulupono Initiative; Hawaii Agriculture Research Center; Kunia Village Title Holding Corporation; Bayer; Larry Jefts Farms, LLC; Land Use Research Foundation of Hawaii; Hawaiʻi Farm Bureau; Hawaii Crop Improvement Association; Hawaiʻi Farmers Union; and two individuals.  Your Committee received testimony in opposition to this measure from one individual.

     Your Committee finds that the Waiahole Water System (System) plays an essential role in supporting agriculture on Oahu through the delivery of a reliable source of irrigation water to local farming operations in the central and leeward regions of the island.  Your Committee further finds that while the System's water users have grown more efficient with their use, users pay significantly more for water from the System than others pay for agricultural water from comparable systems, due in large part to existing debt owed on general obligation bonds issued in 1999 to enable the Agribusiness Development Corporation to purchase the System and replace the System's three deteriorated redwood siphons.  Additionally, crucial repairs are needed to the System's infrastructure.  Your Committee believes that appropriating funds to pay off the remaining debt service on bond obligations and perform necessary repairs will reduce water costs and ensure all users who depend on the System continue to have reliable access to water.

     Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider an appropriation amount of $4,500,000 to pay the bond debt service on the Waiahole Water System and $2,000,000 for the repair of the adit 8 tunnel of the Waiahole Water System.

     As affirmed by the record of votes of the members of your Committee on Water & Land that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 781, H.D. 1, and recommends that it be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Water & Land,

STAND. COM. REP. NO.  24

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 781

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Agriculture & Food Systems, to which was referred H.B. No. 781 entitled:

"A BILL FOR AN ACT RELATING TO THE WAIAHOLE WATER SYSTEM,"

begs leave to report as follows:

     The purpose of this measure is to appropriate funds for the Waiahole water system for bond debt service and tunnel repair.

     Your Committee received testimony in support of this measure from the Agribusiness Development Corporation; Kunia Village Title Holding Corporation; Bayer; Hawaii Agriculture Research Center; Ulupono Initiative; Hawai‘i Farm Bureau; Hawaii Crop Improvement Association; Land Use Research Foundation of Hawaii; Hawaii Cattlemen's Council; Kunia Agriculture Park, LLC; Aloun Farm, Inc.; Larry Jefts Farms, LLC; Hawai‘i Farmers Union United; and one individual.  Your Committee received testimony in opposition to this measure from one individual.

     Your Committee finds that the Waiahole water system transports water from the windward side of Oahu to the leeward side of the island, serving approximately five thousand six hundred acres of land in central and leeward Oahu, of which approximately eighty-six percent is in active agricultural use at any given time.  The current agricultural water rate for users of the Waiahole water system is more than double that of comparable area rates for agricultural water.  These costs are passed on to consumers, resulting in higher food prices.  Therefore, as the debt service fees continue to escalate and deferred maintenance repairs need to be addressed, it is critical to appropriate funds to the Agribusiness Development Corporation to fully pay off the bond debt service on the Waiahole water system and repair critical infrastructure.

     Your Committee has amended this measure by:

     (1)  Changing the appropriations to unspecified amounts;

     (2)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider an appropriation amount of $4,500,000 to pay the bond debt service on the Waiahole water system and $2,000,000 for the repair of the adit 8 tunnel of the Waiahole water system.

     As affirmed by the record of votes of the members of your Committee on Agriculture & Food Systems that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 781, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 781, H.D. 1, and be referred to your Committee on Water & Land.

Respectfully submitted on behalf of the members of the Committee on Agriculture & Food Systems,