STAND. COM. REP. NO. 455-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2800

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Water, Land Use, and Hawaiian Affairs and Agriculture, to which was referred H.B. No. 2800 entitled:

"A BILL FOR AN ACT RELATING TO IMPORTANT AGRICULTURAL LANDS,"

beg leave to report as follows:

The purpose of this bill is to implement Article XI, section 3, of the State Constitution, that mandates the Legislature to identify important agricultural lands (IALs) by:

(1) Establishing policies and procedures for the identification and management of IALs;

(2) Providing a process to develop state and county incentives to promote:

(A) Agricultural viability;

(B) Sustained growth of the agricultural industry; and

(C) The long-term use and protection of IALs for agricultural use;

(3) Providing grants-in-aid of $500,000 to each county to defray the cost of identifying and mapping IALs; and

(4) Appropriating $100,000 to the Agribusiness Development Corporation to convene a task force to develop and implement a package of incentives and other measures that promote sustained agricultural activities on IALs and ensure the protection and availability of IALs for agricultural use.

Your Committees in an effort to take a comprehensive approach to the implementation of the State's constitutional mandate held a public hearing on February 7, 2004, and took consolidated testimony on the following bills relating to IALs: H.B. No. 1956, H.B. No. 2271, H.B. No. 2339, H.B. No. 2656, H.B. No. 2787, and H.B. No. 2800. Your Committees then prepared and circulated a proposed House draft of H.B. No. 2800 prior to the public hearings on that bill.

The Board of Agriculture (BOA), Board of Land and Natural Resources, Office of Planning, Land Use Commission (LUC), Hawaii Leeward Planning Conference, Big Island Business Council and Dr. Andrew Hashimoto testified in support of this bill. The Hawaii Farm Bureau Federation and the Maui County Farm Bureau, supported the intent of this bill. The Sierra Club, Hawaii Chapter testified in support of this measure with amendments. The Hawaii County Planning Department and a Kauai County council member generally supported the bill with concerns. The Office of Hawaiian Affairs, Land Use Research Foundation of Hawaii, Alexander & Baldwin, Inc., Dole Food Company Hawaii, Inc., Kamehameha Schools, Hawaii's Thousand Friends, Protect Keopuka Ohana, and the Native Hawaiian Legal Corporation opposed this bill. W.H. Shipman, Limited, and the Hawaii Audubon Society commented on this measure.

Deserving tribute was accorded the Agricultural Working Group (AWG) by your Committees for its dedicated and outstanding work in this complex and long standing issue. The AWG was formally recognized by H.C.R. No. 157, H. D. 1, Regular Session 2003, and requested to continue its work to, among other things, recommend standards and criteria by which IALs can be identified. The AWG consist of approximately one hundred twenty statewide participants, including representatives from state and county governments, private organizations, and farm groups, and landowners, conservationists, and individual farmers. Monthly AWG meetings, with forty to fifty participants, alone accounted for about 2,400 hours, in addition to substantial time expended in subcommittee sessions and by AWG facilitators in monthly planning sessions. Without any legislative appropriation, the AWG incurred significant costs, including inter-island travel and the expenses associated with mainland experts brought to Hawaii to share their successful experiences. Your Committees in particular recognize the following individuals for their oustanding leadership and facilitator roles in this collaborative and unprecedented effort in producing this bill: Dr. Andrew Hashimoto, Dean and Director, University of Hawaii at Manoa, College of Tropical Agriculture and Human Resources; BOA Chairperson Sandra Kunimoto; LUC Executive Officer Anthony Ching; Deputy Director Dan Davidson, Department of Land and Natural Resources; and Ruby Edwards, Planner, Department of Business, Economic Development, and Tourism.

The earlier unsuccessful attempts to identify IALs and establish standards and criteria have resulted in the loss of valuable agricultural land to nonagricultural uses. Your Committees recognize that agricultural profitability is an essential component to successfully implementing the constitutional mandate. Commodity prices, the availability of water for irrigation, agricultural research and outreach, application of production technology, marketing, and the availability and cost of transportation services must be addressed in any measure that seeks the consensus of the numerous stakeholders. This bill, as received by your Committees, provides for the development of incentives for agricultural viability in Hawaii in addition to identifying IALs and establishing IALs policies.

Although the proposed H.D. 1 is intended to be the manifestation of the State's fulfillment of its constitutional mandate, your Committees anticipate that as this measure courses through the legislative process and its subsequent subjection to the real-world, it will become apparent that it is in fact a work in progress. This measure will not only profoundly impact the agricultural lands in the State and the agricultural industry, it will ripple down through to the core of the State and influence the quality of life of all Hawaii residents.

Recognizing the need for county flexibility and input into the implementation of this bill and the uncertainty of the synchronization of the IAL identification process and the legislative process to enact incentives for IALs, your Committees, after careful consideration, have amended this bill to incorporate the certain amendments in the proposed H.D. 1, in addition to other amendments. These amendments:

(1) Expand the standards and criteria for identification of IALs to include:

(A) Land producing sustained high agricultural yields for crops, livestock, or timber, when treated and managed according to accepted farming methods and technology;

(B) Land identified under agricultural productivity rating systems, such as the land study bureau's detailed land classification as overall (master) productivity rating class A or B; and

(C) Land types associated with traditional native Hawaiian agricultural uses such as aquaculture;

(2) With respect to the incentive program:

(A) Clarify that to achieve long-term agricultural viability and utilization of IALs, state and county actions, including regulatory, taxing, and land protection policies must enable and promote the economic stability of agriculture in general, rather than agriculture on IALs;

(B) Add the purchase of development rights as a means of promoting investments in agricultural businesses or agricultural land protection;

(C) Clarify the expectations, rather than intentions, of this bill with respect to the IAL incentives; and

(D) Clarify that the identification of IALs is not contingent upon the enactment of incentives for IALs;

(3) Add landowners and the Office of Planning as parties that the counties must consult and cooperate with in developing maps of IALs;

(4) Clarify that the county planning department's report on its IALs recommendations to the county council shall show how its map relates to, supports, and is consistent with:

(A) The comments received from government agencies and other participants in the county IALs designating process;

(B) The viability of existing and emerging agribusinesses; and

(C) The county's adopted land use plans, as applied to both the identification of and exclusion of IALs from the IAL designation;

(5) Lengthen the time from 90 days to 120 days that the Land Use Commission (LUC) has to act upon a county's IALs map and report;

(6) Require the LUC to include in its report of maps adopted, a finding relating to the availability of IALs incentives enacted by the Legislature, among other matters;

(7) With respect to LUC's adoption or a county's revision of a county's IALs recommendation and maps:

(A) Clarify that LUC must first conduct a public hearing on the matter, that must be held in the applicable county when a county's revision is being considered;

(B) Delete the requirement that a county council must approve revisions by resolution;

(D) Delete the condition that maps adopted by the LUC shall not be effective until IALs incentive programs are enacted by the Legislature; and

(E) Authorize LUC to designate other IALs in accordance with established standards and criteria, if the LUC finds that the county has failed:

(i) To identify IALs using the IALs criteria;

(ii) To follow public process requirements; and

(iii) To make its IALs recommendations in a timely manner;

(8) Require the county to refer any special permit application involving IALs to the Department of Agriculture (DOA) and the Office of Planning for review and comment;

(9) Revise standards and criteria relating to land use district boundary amendments or rezoning actions that involve IALs, including:

(A) Limiting the harmful or adverse effect an action will have on productivity and the viability on existing rather than future agricultural activity;

(B) Deleting:

(i) Whether the action involves lands no longer in agriculture production or for which a supply of nonpotable water is not readily available;

(ii) The degree to which the action adversely impacts IALs use policies and growth patterns reflected in the county general plan and development or community plans; and

(iii) Whether the proposed action that removes agricultural lands, is justified by a need for additional land for nonagricultural purposes;

and

(C) Requiring the action to cause, rather than contribute to, fragmentation of agricultural lands, or creation of parcels of a size that precludes viable agricultural use;

(10) Specify that in the periodic review of IALs maps, the removal of IAL designation must be seriously considered for lands where sufficient water is no longer available;

(11) Require the LUC to:

(A) Process district boundary amendments involving IALs;

(B) Approve county special permits for IALs-designated land; and

(C) Consider the established standards and criteria for IALs in reviewing a petition for reclassification of district boundaries;

(12) Clarify that the county has jurisdiction over land less than 15 acres in the agriculture district that is not designated IALs;

(13) Require the county to transmit to the LUC a copy of special permit records involving an IAL;

(14) Provide that IALs may be subdivided into leasehold lots for solely agricultural uses and are exempted from county subdivision ordinances;

(15) Replace the $500,000 county grant-in-aid for the cost of identifying IALs with a new payment process whereby the DOA will disburse funds to each county upon receipt of a proposed work order plan for the identification of IALs;

(16) Require DOA, rather than the Agribusiness Development Corporation task force, to develop and implement an incentive program, and change the related appropriation to an unspecified amount; and

(17) Change the effective date of the Act to July 1, 2010, to facilitate further discussion and review of this bill.

Your Committees have also amended this bill by making technical, nonsubstantive amendments for purposes of style, clarity, and consistency.

Lastly, your Committees recognizing the lands in the agricultural district as a valuable resource and realizing that lands in the agricultural district will be designated IALs, find it imperative to declare that it is the intent of this bill that the lands remaining in the agricultural district after the designation of IALs remain in the agricultural district.

As affirmed by the records of votes of the members of your Committees on Water, Land Use, and Hawaiian Affairs and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2800, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2800, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committees on Water, Land Use, and Hawaiian Affairs and Agriculture,

 

____________________________

FELIPE P. ABINSAY, JR., Chair

____________________________

EZRA R. KANOHO, Chair