“Gift to Landowners”

Controversial Senate Bill 2646 passed the Senate last Thursday in a 14-10 vote. Supporters claim the bill is designed to preserve important agricultural lands and promote agricultural production. But opponents say the bill is a major “Gift to Landowners” that paves the way for development through expedited land reclassification, tax credits, and other incentives.

The bill now awaits the Governor’s approval which would put it into effect in July.

SB 2646 has drawn particular criticism for its reclassification incentive which allows landowners to swap classification of 15% of its acreage from agricultural to urban, rural, or conservation as long as they designate 85% of their acreage to “important-ag.”

A 2008 Senate report states that the bill’s explicit intent is “to create incentives that balance the State's interest and desire for the designation of important-ag with the landowners' need and desire for more development opportunities.”

Hawaiian Homestead farmer Adolph Helm, who has worked in agrobusiness for 12 years said that the bill provides needed broad-scale support for agriculture.  “Designating important-ag is good in the context that it drives the state to focus on agriculture and agriculture sustainability as well as opportunities for people who want to work in agriculture,” he said.
Critics believe the 85/15 incentive promotes development of agricultural lands more than it protects them.  Hui Ho`opakele `Aina advocate Steve Morgan said, “[It]has far more to do with creating legal loopholes for urban and rural development than it has to do with preserving agricultural lands.”
Senator Jill Tokuda defended the bill’s merits in a recent Honolulu Advertiser article. "I did everything I could to strengthen these provisions," Tokuda said. "My main goal was to tighten it so there is no potential for abuse."

However, opponents of the bill say the legislation, backed by large landowners, tips the land-use balance in favor of more development with less red tape.

“This bill is flawed because it cuts out most of the community's input in a development,” said Glenn Teves, Hawaiian Homesteader and UH Agricultural Extension Agent.

Helm also recognizes the need to mitigate potentially negative aspects of the bill. “We can’t always have the cake and the frosting in some of the policy issues that help to drive Hawaii to a better future.  Some negative aspects, such as minimizing proper community input, need to be recognized and mitigated on the political level.  If this bill prevents the community from being properly involved in land use decisions, I would have some concerns. A healthy community should be involved in the process.”

Because the bill alters the process of land reclassification needed for future development on ag lands, many Molokai residents question how it could affect future land use for Molokai Properties Limited (MPL), the island’s largest landowner.

MPL is a member of the Land Use Research Foundation of Hawaii (LURF), a primary lobbyist for the bill that advances development interests for landowners. MPL, which shut down operations in March, owns approximately 40% of the island (over 60,000 acres) and could petition for an 85/15 reclassification for some or all of its landholdings.

Opponents of the stalled La`au Point development express concern that SB 2646 will facilitate land reclassification that could help allow La`au to be developed. However, many development opponents claim the lack of a sustainable water supply, a primary restriction for La`au development, would continue to present major obstacles if MPL petitioned for 85/15 designation.

While earlier versions of the bill mandated three or more criteria for land eligible as important-ag, under this version, eligible land must meet only the following two criteria: “land with sufficient quantities of water to support viable agricultural production;” and ”land that contributes to maintaining a critical land mass important to agricultural operating productivity.”

“This may be the vehicle that resurrects the La`au development, but they [MPL] still haven't addressed the water issue,” said Teves. “The problem on Molokai is the lack of water precludes the use of these lands to agriculture for the long term.”

MCSC Executive Director Karen Holt expressed doubt that MPL could make the 85/15 important-ag formula work. “Without water it will be hard to prove that [the lands]are usable, let alone Important Agricultural Lands,” she said.

Native Hawaiian Legal Corporation attorney Alan Murakami, one of the bill’s primary critics, described water as a potential “Achilles heel for [an] attempt at facilitated reclassification for La`au, which has always been the obstacle its promoters could not clearly overcome, given the rights of homesteaders and subsistence gatherers.”

The bill has left some community members wondering how the legislation would affect the Land Use Commission reclassification process in cases like La`au Point, and whether an Environmental Impact Statement (EIS) would still be needed for the development. Murakami says the existing EIS process is unchanged: “I don't see any special exemption or processing for going through the 85/15 scheme. The EIS law still applies,” and is subject to the EIS criteria mandated by HRS 343 he said.

The bill is silent on whether reclassification from ag to rural must conform with existing county plans, and it is unclear how the legislation will affect proposed community plan amendments. Murakami notes that lands reclassified to rural are “not explicitly subject to conformance with community plans.”

Former Planning Commissioner DeGray Vanderbilt says the required environmental review process for community plan amendment still applies. “No development can take place on Molokai unless the county and the state zoning are consistent,” he said.  Vanderbilt also cited the importance of important-ag designation in Molokai’s upcoming community plan review.

In the wake of recent economic troubles and impending land sales for some of the state’s largest landowners, including Maui Land & Pineapple, Dole, and MPL, Teves expressed the skepticism of many who view the bill as a brazen political power play designed to benefit landowners, but who are ultimately unsure how it will affect future land use. “Landowners will be cautious because they're still looking for highest and best use, and this means lining your pockets with a lot of kala,” he said. 

Helm noted that beyond legislation, a comprehensive community plan is the key to ensuring balance for agriculture on Molokai. “The important-ag designation is a good plan, but for agriculture to work on an island like Molokai, I think it requires a collaborative effort among all current stakeholders to make a comprehensive plan in terms of how we’re able to balance the land, the water, and the people to make agriculture work, to be economically viable, and to maintain the rural lifestyle that we aloha here.  This is where we’re currently lacking.”