The state Land Use Commission yesterday approved Kamehameha Investment Corp.'s application to reclassify 487 acres of agricultural land in Keauhou to a rural classification.

Kamehameha Schools' for-profit corporation plans to build a residential subdivision on the land south of Kailua, Kona. The master plan for the 2,400-acre resort area also includes cultural and educational centers, a golf course and additional commercial development.

The rural classification means home plots would be a minimum of a half acre and a maximum of three acres. Kamehameha Investment President Greg Chun said the company has yet to choose a master developer, which would determine how many single-family homes would be built. That announcement is due within three months.

FRUIT GROWERS TO GATHER IN HILO

Tropical fruit growers from Hawai'i, the Mainland and abroad will gather in Hilo Oct. 21-23 for the 15th Annual Tropical Fruit Conference sponsored by the Hawaii Tropical Fruit Growers.

The keynote speaker will be Surmsuk Salakpetch from the Chanthabui Horticultural Research Center in Thailand. Salakpetch will speak on post-harvest handling of tropical fruits in Thailand, with an emphasis on rambutan, lychee and longan. The conference is sponsored in part by a grant from the Hawai'i County Department of Research and Development. For more information, call (808) 966-6444, or e-mail htfghawaii@verizon .net.

BILL EXEMPTS AIR TOURS FROM TAX

Air tour operators would be exempt from paying the air transportation tax, under legislation approved by the U.S. House and Senate yesterday.

The provision, authored by U.S. Sen. Dan Inouye, D-Hawai'i, would take effect Sept. 30. It will save air tour operators nationwide an estimated $79 million over 10 years.

The legislation, which now goes to President Bush, amends the Internal Revenue Code so that helicopters and certain categories of fixed-wing aircraft conducting sightseeing flights are exempted from the air transportation tax.

The Internal Revenue Service issued a private ruling that exempted one Hawai'i-based air tour operator from paying the tax. Inouye said the IRS should be consistent in applying the tax and that it was Congress' intent that the tax be levied on passengers traveling on scheduled commercial airlines, not air tour operators.

NATION WORLD

CHEVRON PROFIT TOPS PREDICTIONS

SAN RAMON, Calif. — Chevron Corp.'s second-quarter profit topped analysts' expectations, but it wasn't enough to impress investors as the second-largest U.S. oil company jousts with a Chinese rival in a battle to buy Unocal Corp.

San Ramon-based Chevron said it earned $3.68 billion, or $1.76 per share, for the three months ended June 30. That represented an 11 percent decline from net income of $4.13 billion, or $1.94 per share, at the same time last year, when the company got an $800 million lift from asset sales and a tax benefit.