Hawaii senate panel shelves bill on access to public water

A Senate committee Thursday killed a bill that would have allowed an assortment of utilities, landowners, ranchers and farmers to continue accessing public water under revocable permits while they worked to satisfy stringent state requirements for obtaining long-term leases.

The move by Sen. Donovan Dela Cruz, who chairs the Senate Ways and Means Committee, jeopardizes the continuation of hydroelectric plants on Kauai and Hawaii island, as well as ranchers’ access to water for cattle operations, while also satisfying staunch critics of Alexander &Baldwin, which was allowed by the state to divert hundreds of millions of gallons of water annually from streams in East Maui for its sugar cane operations.

It’s not clear why Dela Cruz shelved the bill. But Sen. Kai Kahele, chairman of the Water and Land Committee, who tried to amend the bill Thursday to allow all users except for A&B to maintain their water use, said it could be “catastrophic” for small ranchers and farmers.

“If you interpret the law as DLNR has been interpreting it and the deputy attorney general has been interpreting it for the last three years, the Land Board does not have statutory authority to issue a revocable permit … for 2020 for water, which has major ramifications for small farmers, small ranchers, small businesses, the island of Kauai, the utility company, its ability to generate hydroelectric power,” Kahele told the Honolulu Star-Advertiser after the hearing. “It’s very disappointing. It’s a sad day.”

“I think we had an opportunity today to turn a new chapter on water use and the public trust in the state of Hawaii, and unfortunately, that chapter, we are not going to see it. It is very disappointing.”

The bill had sparked strong opposition from groups such as the Native Hawaiian Legal Corp. and Hawaii Sierra Club which argued it benefited A&B to the tune of $62 million.

A&B recently sold extensive tracts of land in Central Maui to Mahi Pono LLC, a farming venture that is hoping to replace the company’s former sugar cane fields with diversified agriculture. A&B stands to lose $62 million if water to the land is disrupted, according to the sale agreements.

Opponents argued that A&B was essentially trying to profit off of public-trust water resources and labeled House Bill 1326 the “water theft bill.” The Native Hawaiian Legal Corp., on behalf of taro farmers and other residents of East Maui, spent nearly two decades battling A&B over its water diversions.

Dela Cruz’s decision to shelve the bill came as a shock to people who packed a hearing room in the state Capitol on Thursday afternoon for a joint hearing before the Senate Ways and Means Committee and Senate Water and Land Committee.

Kahele had just put forward a proposed compromise. The Board of Land and Natural Resources could continue allowing entities to access public water under short-term revocable permits, unless those permits or water rights had been prohibited or invalidated by the courts. The compromise meant all the water users could continue having their permits renewed annually, except for A&B.

In 2016 an Oahu Circuit judge invalidated A&B’s permits that allowed them to divert East Maui stream water, saying that the temporary permits, which dated back years, shouldn’t have been renewed annually.

Hawaii law stipulates that water permits should not be extended beyond a year.

The ruling, which is under appeal, highlighted problems with all of the department’s water permits.

In addition to A&B, others accessing water under the short-term permits include Kuahiwi Ranch, East Kauai Users Cooperative, Hawaii Electric Light Co., Kapalala Ranch, Kauai Island Utility Cooperative, Jeffrey Linder, Edmund Olsen Trustee and Wood Valley Water &Farm Cooperative.

In 2016, in response to the court ruling, A&B and other water users successfully lobbied legislators to pass Act 126, which gave them three years to convert their water permits into leases. But that end-of-the-year deadline is now fast approaching, and none of the water users affected have successfully converted their revocable permits into leases.

That process includes conducting environmental reviews, a watershed conservation plan, consulting with Native Hawaiians as to their potential water needs and, for many, bidding on the water at a public auction. The water also must be appraised.

A&B and others hoped that the Legislature would extend this year’s deadline. Earlier this year the House moved House Bill 1326 over to the Senate, which would have extended it by seven years — which is the same length of time that A&B could be on the hook to pay Mahi Pono $62 million if a certain amount of water wasn’t accessible for its operations.

The bill drew heated protest earlier this week when it was heard by the joint Senate committees with testimony lasting for nearly six hours. The committees reconvened Thursday to make a decision on the measure. Dela Cruz didn’t explain why he killed the bill, but his move elicited confusion and gasps from the people in the hearing room.

Kahele’s proposed version of the bill, which would have excluded A&B, had just narrowly passed his Water and Land Committee.

Kahele’s proposed amendments to House Bill 1326 had gained the support of the Office of Hawaiian Affairs earlier in the day when trustees voted in favor of it.

“For far too long, our state has managed Hawai‘i’s water in favor of for-profit enterprises at the expense of our environment and the rights of Native Hawaiians and kalo farmers, including our beneficiaries in East Maui,” said OHA Chairwoman Colette Machado, OHA Maui trustee Hulu Lindsey and OHA Chief Executive Officer Kamana‘opono Crabbe in a joint statement issued prior to the hearing.

Marti Townsend, executive director of the Hawaii Sierra Club, said after the hearing that it was disappointing that Kahele’s proposal didn’t pass.

“Our concern has always been the excessive diversion of streams for private profit,” she said, adding that Kahele’s measure “was a perfect balance.”

A&B spokesman Darren Pai said in a statement after the hearing that the company is “extremely disappointed” the bill didn’t pass and criticized opponents for focusing on A&B when others would be affected as well.

“It’s confounding how our state policymakers can say they are supportive of local food production and increasing Hawaii’s food and energy self-sufficiency, then cut off the water from the farmers and ranchers who fulfill these mandates,” said Pai. “This bill was about Hawaii’s future, not Hawaii’s past.”