Market-based measures could provide critical funding for sustaining Hawai‘i’s freshwater supply

The Hawai‘i  legislature is currently reviewing measures that would provide reliable, dedicated  funding to protect the state’s important watershed areas, with the  long-term goal of ensuring a sustainable supply of freshwater for Hawai‘i ’s residents, agriculture, businesses, and ecosystems.  In this legislative session, the Hawai‘i  Department of Land and Natural Resources (DLNR) hopes to ensure funding for the next 10 years for actions that would double the area of protected watershed land in the state.  Two pieces of legislation currently on the table have the potential to move DLNR, and Hawai‘i, toward that goal.

The essentials

“Bag bill”

One proposed measure would establish a fee of 10 cents on each single-use check out bag (including paper and plastic) distributed in the state to directly support the DLNR’s watersheds plan.  A large portion of the collected fees would be deposited into the state’s Natural Areas Reserve Fund, specially designated for expanding watershed protection.[1] If passed, the “bag bill” would take effect on July 1, 2013. In the first six months, up to 20% of funds collected may be used by local businesses to cover the cost of implementing the bag fee, and thereafter businesses could retain up to 10% for this purpose.  Annually, an amount will be reserved for administering and enforcing the fee. The fee would take effect on July 1, 2013, and would provide near-term funding that is critically needed to begin implementing the state’s watershed protection plan while the DLRN actively develops long-term funding streams.  Meanwhile, the state would dramatically cut the number of single-use bags distributed.  If disposable bag use does not decrease by 75% by July 2017, the bill specifies an increase in the fee to 25 cents per bag beginning in 2018.

Conveyance tax bill

A second measure, relating to the real estate conveyance tax, presents another method to secure funding for critical watershed protection.  Senate Bill 1166 and its companion, House Bill 935, would raise the conveyance tax on sales of certain real estate valued at $2 million or more and would increase the portion of the tax going to DLNR watershed projects.  Specifically, the bill would raise the amount of tax revenue deposited into the Natural Area Reserve Fund from 25% to 35%.  Additionally, The bill expands the specified uses of conveyance tax funds to explicitly include invasive species control and projects undertaken in accordance with the DLNR’s watershed plans to protect and restore Hawai‘i’s source of water.

Why watersheds?

There is urgency to the DLNR’s push to secure funding in the 2013 legislative session that arises from concerns over declining freshwater availability and the effects of a changing climate on native forest ecosystems, and ultimately Hawai’i’s freshwater supply.

It is clear that healthy forests provide immense monetary benefits and essential services. Ground water is the main source of drinking water for Hawai‘i residents.  Hawai‘i ’s forests play an important role in recharging aquifers by intercepting rainwater and cloud fog and delivering that water into the ground. While native forest plants accomplish this effectively, increasingly widespread invasive species hinder the replenishment of groundwater.[2] In East Hawai‘i, for example, invasive plants have already decreased the amount of ground water recharge by an estimated 85 million gallons a day. Healthy forests also anchor the soil, preventing erosion and runoff.[3] Additionally, they capture and store carbon dioxide, reducing the amount of the climate change-causing greenhouse gas in the atmosphere.

Now is a critical time to take measures to ensure a sustainable freshwater supply, as climate change is already impacting Hawai‘i.  A downward trend in the amount of rainfall statewide over the last century has been documented, with an even steeper decline since 1980.[4]  Streamflow has decreased. Air temperature has increased significantly, especially at high elevations where many of the remaining native forests exist. The warming and drying trends mean that it is now more important than ever to make sure that when we do get rainfall, we are maximizing the amount of water reaching our aquifers.

Watershed protection has proven to be a cost-effective, efficient way to replenish ground water. And, investing in protecting watersheds is best when done early, before forests become degraded and require expensive and difficult restoration.

Bill status

To be successful, the bills must be reviewed by several legislative committees that will hear testimony and make recommendations to the legislature. If a bill makes it through all of its assigned committees and three votes on the floor of the chamber (House or Senate) in which it was introduced, it “crosses over.” It must then make its way through the other chamber before it goes for a final vote or to conference committees where differences between the House and Senate can be hashed out.  In the case of these two pieces of legislation, members of the legislature have introduced companion bills, allowing the measures to be reviewed in both chambers simultaneously, in hopes of promoting their survival and timely passage. At any point, a committee could defer the bill, neglect to schedule a hearing, or recommend non-passage. Public attention and testimony may strongly affect a measure’s chances of survival.

The “bag bill,” Senate Bill 1165, was assigned to Senate Committees on Water and Land; Energy and Environment; and Ways and Means. Its companion, House Bill 934, has been assigned to House Committees on Energy and Environmental Protection; Consumer Protection and Commerce; and Finance. At this time, no hearings have been scheduled.

House Bill 935, relating to the conveyance tax, was assigned to House Committees on Water and Land; Housing; and Finance. The Committee on Water and Land reviewed the bill and heard testimony on January 28, and ultimately recommended passage with amendments. The bill goes next to the Committee on Housing, where it will be heard today, February 11, at 10:00 a.m. in Conference Room 329. The Senate Committees on Water and Land and Energy and Environment have scheduled a hearing for the companion bill, Senate Bill 1166, on Tuesday, February 12, at 1:15 pm in Conference Room 225.

For updates on the status of these measures, see capitol.hawaii.gov.