Historic Decision at the Land Use Commission; First IAL Designation

On March 9, 2009, the State Land Use Commission (Commission) granted Alexander & Baldwin its request to designate 3,773.1 acres of land on the island of Kauai to important agricultural lands (IAL). See Petition For Declaratory Order To Designate Important Agricultural Lands.

Agricultural Lands on the Island of Hawaii

The IAL is an additional state designation within the state land use framework that divides the state into four land use districts: urban, rural, agricultural, and conservation.  Approximately 95 percent of land in the state is designated conservation and agricultural, about equally split between the two.  Less than 5 percent and less than 1/2 a percent of land in the state are designated urban and rural, respectively.  Counties may zone land within its boundaries subject these state land use designations. The urban designation is regulated entirely by the counties through zoning. Counties have limited zoning authority in the rural and agricultural districts. Conservation districts are regulated by the state through the Department of Land and Natural Resources. See Hawaii Land Use Regulatory System.

The agricultural district restricts uses and structures to those enumerated under HRS §§ 205-2, 205-4.5, and 205-4.6. In particular, "[a]ctivities or uses as characterized by the cultivation of crops, crops for bioenergy, orchards, forage, and forestry" are allowed. See HRS § 205-2(d)(1). Non-agricultural uses are also allowed in the agricultural district, for example, wind farms and open area recreational facilities. Farm dwellings and employee housing are also allowed within the agricultural district.

The IAL designation is the state's attempt to preserve agricultural land above and beyond land already in the agricultural district.  IAL is governed by HRS § 205-41, et seq. The purpose of the statute is to fulfill the promise of Article XI, § 3 of the Hawaii Constitution, which provides as follows:

Section 3. The State shall conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands. The legislature shall provide standards and criteria to accomplish the foregoing.

Lands identified by the State as important agricultural lands needed to fulfill the purposes above shall not be reclassified by the State or rezoned by its political subdivisions without meeting the standards and criteria established by the legislature and approved by a two-thirds vote of the body responsible for the reclassification or rezoning action.

Before the Commission can designate land as IAL, it must consider eight criteria, which is above and beyond the criteria considered for the agricultural district. These criteria are enumerated under HRS § 205-44 as follows:

1. Land currently used for agricultural production;
2. Land with soil qualities and growing conditions that support agricultural production of food, fiber, or fuel- and energy-producing crops;
3. Land identified under agricultural productivity rating systems, such as the agricultural lands of importance to the State of Hawaii (ALISH) system adopted by the board of agriculture on January 28, 1977;
4. Land types associated with traditional native Hawaiian agricultural uses, such as taro cultivation, or unique agricultural crops and uses, such as coffee, vineyards, aquaculture, and energy production;
5. Land with sufficient quantities of water to support viable agricultural production;
6. Land whose designation as important agricultural lands is consistent with general, development, and community plans of the county;
7. Land that contributes to maintaining a critical land mass important to agricultural operating productivity; and
8. Land with or near support infrastructure conducive to agricultural productivity, such as transportation to markets, water, or power.

The legislature sets out specific criteria for when a farm dwelling or employee housing is allowed on IAL.  IAL dwellings or housing must meet several specific statutory requirements under HRS § 205-45.5, including the following: (1) the dwelling or housing must be used exclusively by farmers and their immediate family members who actively and currently farm on the parcel; (2) it cannot take up more than 5 percent of the total acreage of the parcel; (3) an owner of IAL cannot plan or develop a residential subdivision for the parcel; and (4) the construction of dwellings or housing must be supported by agricultural plans that are approved by the Department of Agriculture, State of Hawaii. State law also specifically circumscribes the sale of IAL parcels "solely for residential occupancy." See HRS § 205-51.

There are two processes by which the Commission designates IAL.  The first is voluntary by landowners, and the second is through maps prepared by the counties   There are incentives for seeking a voluntary IAL designation for private landowners, which include the following:

• Fast-tracked approval process for the designation of IAL 
• Simultaneous fast-tracked urban designation if 85 percent of the land in a petition is designated as IAL.  This is commonly referred to as the "85/15 incentive."
• Tax credits on investments in IAL infrastructure.  
• Voluntary designation allows landowners to select which or their lands will be designated IAL.   HRS § 205-49 provides that "if the majority of landowners' landholdings is already designated as important agricultural lands . . . the commission shall not designate any additional lands of that landowner as important agricultural."

In addition to the voluntary process described above, there is also a mandatory county designation process.  HRS § 205-47 requires that each county must develop maps of potential lands to be considered for designation as IAL. These maps must be adopted by a county council resolution and submitted to the Commission no later than 60 months from the date of county receipt of state funds appropriated for the identification process (so far, only the County of Kauai has received such funds). Upon receipt of the IAL map by the Commission, the Department of Agriculture and the Office of Planning will review the IAL map. See HRS § 205-48. Finally, the Commission will designate the IAL based on the IAL map. See HRS § 205-49.