Maui landowners in agricultural districts could be in for a shorter permitting process to offer short-term rentals under a new state law.
Senate Bill 2341, which had been on Gov. Neil Abercrombie's potential veto list, became law without his signature Tuesday, which marked the deadline to sign or veto bills passed by lawmakers this session. The measure takes effect immediately.
The bill, sponsored by Maui Sen. J. Kalani English, is intended to eliminate state oversight of short-term rentals in agricultural districts so long as the rental "coexists with a bona fide agricultural activity," such as commercial farming.
Under current county ordinance, short-term rentals require county approval and a special use permit from the state to operate on lands zoned for agricultural use. Applying for that permit is a lengthy process that can take more than a year.
English said the law will help encourage agriculture while boosting ag tourism since any short-term rentals would be contingent on agricultural activities.
The bill points to agricultural tourism "as a means to provide not only additional income for farmers and ranchers but also serves as a learning experience."
While state laws typically can't be written to benefit any one county, SB 2341 was crafted to apply specifically to Maui.
The relevant part of the law says: "The purpose of this Act is to allow agricultural tourism activities, including overnight accommodations of 21 days or less, in agricultural districts for any one stay within a county, provided that the county includes at least three islands and has adopted an ordinance specifically allowing for such activity."
Gina Flammer, a staff planner with the county's Planning Department, said that she didn't think Maui's short-term rental rules, passed in May, met the new law's requirement of having an agricultural tourism ordinance in place.
County Council Member Don Couch, who requested the legislation, said it's unclear at this point but he is seeking an opinion from the county's attorneys.
"Depending on what Corporation Counsel says, our intent is that this will allow us to move short-term rentals on ag from being a special use to an accessory use so that operators don't have to seek a special use permit," Couch said.
If the existing ordinance doesn't cut it, Couch said: "If we come up with a definition of ag tourism, then it certainly applies to Maui."
Couch said allowing rentals as an accessory use means that agricultural activities would still need to be the main use on the property.
"It would be accessory to the main use, which is ag," he said. "They still have to have an ag use on their property and can have an accessory building like a barn or an ohana - that's an accessory use."
Thomas Crowley, a member of the Maui Vacation Rental Association, which supported an earlier version of the bill, said he doesn't think the bill as written will benefit many Maui landowners.
"Most people who are going to pursue this will still need to get a special use permit, because they're not engaged in commercial agriculture," Crowley said.
The portion of the law requiring a "bona fide agricultural activity" had been stricken and put back several times. Those bona fide activities need to comply with Hawaii Revised Statutes that govern agricultural tourism. It can include commercial agricultural, silvicultural or aquacultural facilities; the planting, harvesting and processing of crops; and marketed produce at roadside stands or farm markets.
"Maui County recently passed its short-term rental law that allows for up to 400 short-term rentals on the island," Crowley said. "Probably half of those in the process of applying are in an ag district and will have to go through that extra step of getting a special use permit," he said.
He estimates that more than half of Maui's approximately 60 permitted bed and breakfasts are on agricultural land with special use permits.
When identifying the bill as a potential veto, Abercrombie said that he was concerned the bill "would allow vacation rentals on agricultural land without sufficient definition of what constitutes minimal agricultural activity required for true agricultural tourism."
In allowing the bill to become law, he said that he will be asking the Legislature and the counties to review the law and propose appropriate restrictions to prevent abuse.
The bill's opponents included the state Department of Agriculture, the state Office of Planning, the Honolulu Department of Planning and Permitting, the Sierra Club and Hawaii's Thousand Friends.
Russell Kokubun, chairman of the state Board of Agriculture, testified against the bill.
"We believe the addition of overnight accommodations dramatically alters the concept of agricultural tourism as originally intended, and if not carefully regulated, may cause the agricultural tourism activity to be the primary, rather than secondary, use of the agricultural land," he said.
Honolulu Mayor Peter Carlisle - while acknowledging that Oahu wouldn't be directly impacted - said he believed the law could hurt other counties in the long run.
"By itself, SB 2341 has the potential to transform much of the agricultural district, particularly the scenic regions, into a vacation rental district," Carlisle wrote in testimony.
"Allowing tourism and vacation rentals as a primary use on agricultural lands will affect the valuation of these lands. Agricultural property will be valued for the new 'highest and best use,' primarily vacation rental and tourism, not the farming potential," he said. "This will increase agricultural property values, and subsequently the property taxes of bona fide farmers and retired farmers, and increase the sale and lease prices for agricultural lands to the point where they may no longer be affordable for farmers to buy or rent."
Abercrombie signed a total of 323 measures into law and vetoed 14 others Tuesday. Six measures became law without his signature.
The governor vetoed controversial legislation that sought to regulate Hawaii human resource firms by requiring companies be backed by a bond of up to $1 million.
Under Senate Bill 2424, companies would have been required to pay registration fees, produce audited financial statements and obtain larger bond amounts to do business in Hawaii. They also would have faced penalty fees for failure to register and to comply with the rules.
Local professional employment organizations, or PEOs, including several based on Maui, said the proposed rules would be so onerous that they would be forced to shut down.
Abercrombie said the bill was overly broad and would impose restrictions too difficult for all PEOs to comply with.
* Nanea Kalani can be reached at nkalani@mauinews.com.
