On January 31, 2007, about 1540 Hawaiian standard time, a Bombardier DHC-8-103, N979HA, encountered severe turbulence while descending near Kaunakakai, Hawaii. Hawaii Island Air, d.b.a. Island Air, was operating the airplane as a positioning flight under the provisions of 14 CFR Part 91. The airline transport pilot licensed captain, first officer, one flight attendant, and two deadheading pilot crew members were not injured; one deadheading pilot sustained serious injuries. The airplane was not damaged. The cross-country repositioning flight departed Honolulu, Hawaii, about 1515, with a planned destination of Kahului, Hawaii. Visual meteorological conditions prevailed, and an instrument flight rules (IFR) flight plan had been filed. The approximate global positioning system (GPS) coordinates of the event were 21 degrees 09.02 minutes north latitude and 157 degrees 05.8 minutes west longitude. In the operator's written report, the company reported that the purpose of the flight was to position the airplane to Kahului. A second airplane crew was deadheading on the flight. The flying captain noted an anomaly in the airspeed for the existing power setting. He also observed that the flap indicator showed a "slight" deployment of the flaps. He requested that the deadheading captain look out a cabin window, visually note the physical setting of the flap position, and report the findings. The deadheading captain observed that the flaps were in the fully retracted position, and reported that information to the flying captain. About this time, ATC personnel requested that a descent be initiated. The flight crew began the descent by reducing the power to slow the airplane. The deadheading captain left the cockpit to return to his cabin seat. While the deadheading captain was walking back to his seat, the airplane encountered a severe turbulence event, which lasted about 5 to 10 seconds. The deadheading captain was thrown about the cabin area, and was injured. The flying captain declared an emergency, and received priority handling by ATC. The flight landed and taxied to the gate without incident. The deadheading captain was transported to the hospital via ambulance. A medical examination reveled he had sustained a compression fracture to his L-1 vertebrae. The FAA accident coordinator reviewed the ATC recordings between Maui approach control (APCON), Sunami 4 (Cessna 208), C-FBCN (Beech King-Air), and the accident airplane Moku 979. Prior to Moku 979 checking into APCON, Sunami 4 reported moderate turbulence at 4,000 feet about 15 miles east of Maui. The King Air reported moderate and occasional severe turbulence at 2,000 to 2,500 feet 15 miles east of Maui. APCON contacted FSS and advised them of the PIREP's. About 75 seconds after APCON contacted FSS, Moku 979 reported in. APCON told them to "expect lower in 5 miles." APCON did not advise Moku 979 of the reported turbulence in the area. Ninety-five seconds later, APCON said, "Moku 979 turn right to 170, descend to 1,500 feet." Fifteen seconds later Moku 979 declared an emergency.