In the film classic Chinatown, hard-bitten but good-hearted detective Jake Gittes (played by Jack Nicholson) confronts the politics of water in 1930s Los Angeles. By film’s end, Gittes’ personal devastation by power and perfidy is summed up in two words, “It’s Chinatown.” In 2019’s Honolulu, the same elements seem to be swirling around the State Legislature, where a recent surge of backroom maneuvers has rivaled any movie plot twist.
Late Friday night, HB1326, the so-called Corporate Water Theft Bill, was suddenly joined by a separate but almost identical piece of legislation, HB1171. Let’s call it the New Sneakier Corporate Water Theft bill. It’s a distasteful bit of legislative sausage-making that surfaced late Friday: a power grab by a powerful lawmaker that also will placate Alexander & Baldwin – one of the state’s most powerful corporations.
And it all comes back to Maui and its water.
HB1326, for those wonky enough to be following the issue, has been making its way through the Legislature – and making waves in the process – since the 2019 session began in January. The bill extends the controversial use of state-issued one-year “holdover permits” to allow companies (one on Maui, four on Kaua‘i and seven on the Big Island) to keep diverting stream water while they fulfill the legal environmental requirements for obtaining permanent long-term water leases – which they keep postponing.
The worst offender was A&B, which was finally court-ordered last year to stop diverting from a number of East Maui streams. Although it stopped some of the water diversions, A&B still hadn’t complied with the long-term lease application process, leaving that to Mahi Pono, which bought 41,000 A&B acres in December for $267 million. The current law regulating holdover permits is due to expire in June.
Buried in the A&B/Mahi Pono purchase and sales agreement is a condition that many believe led to the creation of HB1326. If Mahi Pono is unable to get the water it needs within eight years of its purchase, A&B must rebate $62 million to Mahi Pono. So it seems clear that A&B would need to flex its considerable lobbying muscle with state lawmakers to extend the practice holdover permits for another seven years to ensure it won’t owe Mahi Pono a cent.
HB1326 was introduced at the very beginning of the session, and extended temporary holdover permitting for another seven years, to 2026, neatly coinciding with A&B’s need for that window. That version, said to be strongly supported by legislative leaders, moved quickly through the House to the Senate. But opposition grew more strident and the bill’s progress during the last few weeks had come to a halt. A hearing by the five-member Land and Water committee, chaired by Big Island senator Kaiali‘i Kahele, was cancelled. Instead, the bill was sent to a joint committee: Land and Water, and the 13-member Ways and Means Committee, but no hearing had actually been scheduled. Last week the Hawai‘i Democratic Party urged lawmakers to kill HB1326, stating in a letter that companies such as A&B “should no longer be allowed to rely on one-year holdover permits to steal public water resources for their own purposes,” adding, “halt this bill immediately.”
Strong stuff. And that’s when things became very murky indeed. MauiTime talked to a number of people familiar with Hawai‘i politics, the Legislature, and individual lawmakers to make sense of what happened next.
Given the unpopularity of HB1326, Land and Water Chairman Kahele strove to make the bill more palatable. The bill was amended to include a lengthy introduction full of flowery language about the State’s responsibility to maintain “ecological balance and scenic beauty” of protected natural resources, like water, “for various uses in the public interest.” But the big change was that Kahele shortened the expiration date for holdover permits from 2026, to 2022, just three years. Even with that shortened lifespan, the bill continued to be opposed by the same groups that didn’t like it in the first place.
However, that new three-year expiration date probably didn’t sit well with Alexander & Baldwin either, for about 62-million reasons.
That’s where Sen. Donovan Dela Cruz enters the picture. The powerful head of the Ways and Means Committee is the master of a maneuver that’s as ugly as its title: “Gut and Replace.” When legislators “gut and replace,” they remove the entire contents of a bill that has already cleared a number of voting hurdles (and public input) and insert completely new language. The only thing left of the original is its number. Gut and replace is despised by good government groups for preventing the public from participating in the legislative process.
Here’s a fanciful example: HB123 is a bill that protects butterflies. The public has offered testimony about the bill, it passes all committee and floor votes in the House, and has now moved to the Senate. Sen. Backroom Deal gets it in committee and performs a gut and replace. Now HB123 is a bill authorizing the construction of a 10-foot wall around Waikiki – something that had never been voted upon or opened to public input, until it hit Sen. Deal’s committee.
Does this sound sleazy? Common Cause and The League of Women Voters thought so and sued the State over the practice, calling it unconstitutional. Gut and replace defenders (represented by former U.S. Rep. Colleen Hanabusa) called it necessary to protect bills from dying due to legislative deadlines. A judge ruled against Common Cause and The League of Women Voters in January, calling the practice legal; and the groups plan to appeal that decision to the Hawai‘i Supreme Court.
In the meantime, Sen. Dela Cruz’s Ways and Means Committee has become a kind of gut and replace factory. Honolulu Civil Beat’s Chad Blair reported in early March that Dela Cruz had already gutted and replaced three bills this session, less than two months after the judge’s ruling.
Last week, Dela Cruz turned his attention to holdover water permits. He couldn’t really touch HB1326, which remains under the control of Land and Water Committee Chairman Kahele. Instead, Dela Cruz gutted a Department of Land and Natural Resources funding bill, HB1171, and replaced its contents with language similar to HB1326, only this bill restores the expiration date for holdover permits back to 2026, the date supported by A&B.
And if all this bill scrambling wasn’t enough, a joint committee hearing on both bills has now been set for Tuesday April 2. Insiders say the hearing was deliberately scheduled at a time that gives committee members only 45 minutes to hear both versions of the bill, plus testimony, before they are called to the Senate floor for a vote on an unrelated matter. With confusion reigning over the contents of HB1326 and HB1171, the general consensus is that at least one of them will successfully pass out of the joint committee. And if it’s the one with a three-year extension on holdover permits, look for that time limit to change.
That wasn’t the only drama over the weekend. Back on Maui, MauiTime finally got an answer from the mayor’s office about our question last week. It arose after the surprising testimony from Department of Water Supply director Jeff Pearson at a meeting of the Board of Water Supply. Contradicting the mayor’s drumbeat of doom for Upcountry water supplies if HB1326 doesn’t pass, Pearson told the committee, “I don’t think it’s a panic” and “I am quite confident we are going to still have water available.”
Saturday, county spokesman Brian Perry sent MauiTime the following statement: “Department of Water Supply Director Jeff Pearson has affirmed Mayor Victorino’s statements about Upcountry water, including that more than 80 percent of Upcountry water comes from streams in the East Maui watershed.
“Director Pearson says that without passage of House Bill 1326, water may not be diverted to the Kamole Water Treatment Facility, and, without water there, the Department of Water Supply would experience water shortages and have unreliable delivery of water to Upcountry residents and farmers.”
Community activist Lucienne de Naie, author of the 2005 report “Maui’s Water Future,” attended the Board of Water Supply meeting. She was surprised by Pearson’s sudden turnaround. “I heard Director Pearson make some very logical statements that were based on reports that the County had released about where our water comes from,” she said Sunday. “He was correct that day when he said that a great majority of our water does not come from [Mahi Pono land] in the East Maui watershed.
I wrote to Perry, asking about Pearson’s seeming about-face since his testimony before the Board of Water Supply. Perry said he had nothing to add to his statement and could not reach Pearson for clarification. I also asked which water bill – HB1326 or HB1171 – Victorino is now supporting. Perry says it’s still HB1326.
It’s Maui, Jake.
Image courtesy flickr/wscullin