Much ink has been spilled over the results of the 1998 Hawai`i Legislature. Several leading environmentalists, including David Frankel, executive director of the Hawai`i Chapter of the Sierra Club, have described it as the worst on record.
Here, we take a look at two of the bills whose passage helped shape that impression.
Automatic Approvals
Senate Bill 2204, nicknamed the automatic approval bill, grew out of an idea popular with the state Economic Revitalization Task Force, appointed by the governor, the speaker of the House and the president of the Senate last summer. The idea, namely, was that the hurdles that developers must jump through to see their projects through to completion constitute a barrier to development: to stimulate development, therefore, one need only remove the barriers.
As stated in the legislative findings section of the bill, the changes are needed to quicken the state’s “lengthy and indeterminate” time required for business and development-related regulatory approvals. At one point during the bill’s progress through the two legislative chambers, it set a specific, 90-day deadline for agency action. By the time it was passed, it had been amended to require regulatory agencies to adopt rules by December 31, 1999, that establish a maximum time frame for application approvals. Once those rules are in place, applications for all business and development-related government permits, licenses, etc., will be automatically approved if they are not decided on by the deadlines set in the rule.
Many environmentalists fear that the regulations that affect the quality of Hawai’i’s air, water, public health and due process rights will be weakened if Governor Benjamin Cayetano signs the bill (he had not done so by press deadline).
Some also say the bill will complicate the regulatory process, instead of streamlining it.
Conflicting Language
The actual impacts of the bill are impossible to determine, because, for one, it interacts with about a dozen other laws, says Sierra Club Director Frankel. Also, language within the bill itself that spells out which business and development-related applications are covered is contradictory.
The Department of Health repeatedly expressed its desire to exclude federally delegated programs from the bill’s scope. According to testimony provided by Health Director Lawrence Miike on February 17, several of the department’s permits involve interaction with the U.S. Environmental Protection Agency.
“These federal reviews cannot by law be limited by state-designated time frames. Automatic approvals by the state may also be prohibited by federal laws and regulations. For example, default issuance of covered-source permits is prohibited by the federal Clean Air Act; the Clean Water Act does not limit federal review periods for NPDES permits [permits needed to discharge water into streams or coastal areas] or allow for automatic approvals; and due to the dangerous nature of hazardous wastes, the hazardous waste laws require that EPA review and approve all permits covering treatment, storage and disposal of these wastes.”
The DOH’s recommendation to exempt federally delegated programs was included in the bill’s final draft. However, according to Frankel, this may have fundamentally altered the bill. In a letter asking Cayetano to veto the bill, Frankel raises the issue of conflicting language in the bill that seems to thwart the bill’s purpose.
According to paragraph (e) of the bill, “‘application for a business or development-related permit, license, or approval,’ means any state or county application, petition, permit, license, certificate, or any other form of a request for approval required by law to be obtained prior to the formation, operation, or expansion of a commercial or industrial enterprise, or for any permit, license, certificate, or any form of approval required under sections 46-4 [county zoning], 46-4.2 [non-significant zoning], 46-4.5 [historical, cultural, scenic districts], 46-5 [planning, traffic commissions], and chapters 183C [conservation district], 205 [Land Use Commission], 205A [coastal zone management], 340A [solid waste], 340B [wastewater treatment], 340E [safe drinking water], 340F [water treatment plants], 342B [air pollution], 342C, 342D [water pollution], 342E, 342F [noise], 342G [integrated solid waste management], 324H [solid waste pollution], 342I, 342J [hazardous waste], 342L [underground storage tanks], and 342P [asbestos].”
Many of these programs participate in federal programs, however, and thus would seem to be, by the bill’s own language, excluded from the requirement. Recognizing that federal programs may not allow such a foreshortened approval process, legislators included an exemption, which appears in paragraph (a) of the bill for applications “subject to state-administered programs delegated, authorized, or approved under federal law.”
This exemption, Frankel says, makes the bill both more and less than what legislators have said it is. Legislators pretended to give developers a break, but took it away with the federal law exception, Frankel says. He adds:
“We fear, however, that developers will argue that the proviso found in paragraph (a) does not apply to paragraph (e) and that the Legislature specifically intended to include these provisions within this bill. We fear that such arguments will undermine the most important programs that protect our beaches, water, and air.”
Agency Opposition
While supporting the intent of the bill, the departments of Land and Natural Resources and Health opposed its passage unless modifications were made.
The DLNR related its experiences with imposed time frames in testimony given February 17 to the Senate’s Commerce, Consumer Protection and Information Technology and Health and Environment committees. The department is required by statute to process Conservation District Use Applications (CDUAs) within 180 days, either by the Land Board or the Chairman, depending on the circumstances.
In his April 27 testimony to the Conference Committee, Wilson expressed a preference that the bill allow that as long as a timely vote is taken, an application should require a majority vote in favor to be passed.
No language relating to voting requirements made it into the bill. However, the Conference Committee report acknowledges concerns with the “interplay” between automatic approval and board and quorum requirements. The committee stated in its report that it had deleted quorum amendment sections of the bill “because the various quorum possibilities appeared to require further deliberation and … the 1999 legislative session should address this issue as the automatic permit approval rules come into effect.”
Miike said his department was not about to lose potentially dangerous projects on the public simply because of automatic approval. He added that the bill could actually backfire should it result in his staff adopting a more conservative attitude toward pending projects.
“If a time limit is likely to be exceeded due to unexpected delays in the application review process, our staff will be forced to deny the application rather than allow automatic approval of a defective permit,” Miike stated, “with the result that the applicant will be slowed down by the need to reapply. The automatic approval requirement may also threaten federal program delegation to the state; if EPA takes back processing of certain permits, the review and approval process will become even longer than at present.”
Rights of the Public
Frankel testified that the automatic approvals violate the Constitution’s Due Process clause and that no project could be automatically approved if it impairs constitutionally protected Native Hawaiian rights or abridges the rights of citizens engaged in contested case hearings when the maximum time period expires.
The Department of Business, Economic Development and Tourism as well as the DLNR proposed that for contested cases, the maximum time period established by the bill not apply, provided that the agency showed good cause for extension.
Language to accomplish this did not make it into the bill.
Waiahole Ditch Purchase
Leeward farmers would seem to be ensured a steady source of cheap water now that the state is going to take the Waiahole Ditch water system off Amfac/JMB Hawai’i Inc.’s hands, a move that project supporters say promotes diversified agriculture and protects the Pearl Harbor aquifer in one fell swoop. The bill specifically exempts the purchase from the requirements of Chapter 343, the state’s environmental disclosure law. Thus, the purchase may proceed — indeed, is proceeding apace — without the state having to prepare an environmental impact statement or environmental assessment.
Governor Cayetano signed the bill to acquire the ditch on June 5, 1998, making it Act 109 of the 1998 legislative session.
The act allows the state to spend $9.7 million in reimbursable general obligation bonds to acquire and operate the ditch system through the state Agribusiness Development Corporation (ADC).
Eight-and-a-half million dollars would be used to purchase the ditch, $1.2 million would be spent on improvements to the 80-year-old system, and $550,000 in general funds would be appropriated to operate the system in the first year. After that, operation and maintenance costs would come from user fees.
The measure is neither justified nor wise, according to environmental and Hawaiian groups who testified against the measure.
“By bailing out a mainland corporation and providing subsidized water to large landowners, this bill constitutes corporate welfare,” the Sierra Club’s Frankel told the House Finance Committee. “Since there is no other potential buyer for the Waiahole Ditch, the state should not have to spend millions to buy it.”
Almost all of the testimony pro and con on the bill had been aired during the two-year-plus contested case hearing that the state Water Commission held on the Waiahole Ditch.
Supporters contended that Waiahole Ditch water is the only affordable option for farming operations on the Leeward side. As Bill Paty, trustee with the Mark A. Robinson Trusts (which owns 2,000 acres in Kunia), put it, “Our farmers are really concerned that the present owners of the ditch will not provide adequate maintenance and that water costs will rise. If the state controls the system, the farmers can proceed with long-term plans for infrastructure and added planting that will enable them to pay for the water to provide the funding necessary to retire the bonds.”
In opposition, Earthjustice Legal Defense Fund attorney Paul Achitoff questioned whether cheap water for Leeward farmers was a good thing:
“Farmers throughout Hawai’i currently pay much more for their irrigation water than the Kunia farmers receiving subsidized Ditch water. Big Island and Maui farmers pay four or five times more. They also pay more than it would cost to pump ground water in Kunia. The artificially cheap ditch water gives Kunia farmers a competitive advantage over Neighbor Island farmers, who must also incur the cost of shipping their product to Honolulu. This subsidy is already eroding small family farming throughout the state, particularly on the Neighborhood Islands, and will continue to do so.”
Pearl Harbor Protections
One of the act’s purposes, as stated in its bill’s Conference Committee report, was to protect the Pearl Harbor aquifer. On this point, as well, testimony by supporters and opponents of the bill followed closely the arguments presented during the contested case hearing that was held before the state Water Commission, over the division of water carried by the ditch.
Raymond Sato, manager and chief engineer of the Honolulu Board of Water Supply, testified that ditch water is needed to maintain the quality of Honolulu’s drinking water, because BWS’s wells are located immediately down gradient of the agriculture lands that receive ditch water.
Achitoff, however, described the idea that Waiahole Ditch recharges the aquifer as a myth perpetuated by the Board of Water Supply. He cited findings by William Meyer of the United States Geological Survey, who testified in the Waiahole Ditch contested case hearing on behalf of the Navy, the Office of Hawaiian Affairs (OHA), and the Waiahole/Waikane Community Association. Meyer stated that, based on an average flow of 32.3 mgd, Waiahole water contributes a maximum of only 4 percent of the total recharge to the Pearl Harbor aquifer.
Achitoff noted, “Since leeward [O`ahu] has been allocated about 14 mgd at this time, the amount of water from the Ditch that is available for recharge is actually less than 2 percent of the aquifer’s total recharge. Mr. Meyer testified repeatedly and without qualification that the impact of losing this amount of recharge on the chloride levels in wells in the Pearl Harbor aquifer as well as the Barber’s Point Shaft would be ‘insignificant,’ ‘minimal,’ and ‘probably not measurable.'”
Water Commission Independence
Act 109 does not amend the state Water Code in any way or interfere with the ability of the state Water Commission to allocate water in the ditch. Nonetheless, many windward parties fear that the act will undermine the commission’s already suspect appearance of impartiality in weighing future requests from leeward parties for more Waiahole water. With the state having invested so heavily in the infrastructure required to keep water being delivered to the leeward side, they say, it will be difficult if not impossible for the Water Commission to turn off the leeward tap.
Previously, the commission held a protracted contested case hearing on Waiahole water allocation, which was concluded on December 25, 1997. On that date, the commission ordered that of the system’s 27 million gallons of water a day, about half was to go to the Leeward side, with the remainder being allowed to flow into windward streams. However, the windward side received an assured allocation of just six mgd. The remaining 9 mgd is up for grabs if leeward agriculture can demonstrate a need for it in the future.
(This decision has been appealed to the Supreme Court by the Waiahole/Waikane Community Association, Hakipu’u ‘Ohana, and Ka Lahui Hawai’i to the Hawai’i Supreme Court. The deadline for submitting opening briefs was July 1.)
Leeward farmer Larry Jefts, who has a 15-year lease to farm on 1,400 acres of Robinson Trust land, claims he is ready to double the acreage under cultivation at his farm, but can’t if he is “not pretty certain” that the Water Commission’s decision will remain intact.
On the flip side, Haunani Apoliona, vice-chair of the Board of Trustees of OHA, questioned whether expending funds to improve the Waiahole ditch is “prudent and fiscally responsible” in the event that the appeal is in favor of the windward residents.
As a reminder, she added, that ownership of the ditch should not be confused with the power to allocate the water flowing within it.
Whatever the outcome of the appeal, Frankel’s testimony pointed out that purchasing the ditch system gives the state a financial incentive to continue to divert water from natural streams.
Volume 9, Number 1 July 1998
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