A new state agency tasked with developing public lands could be in trouble because the state may not have the authority to legally transfer the land to the Public Land Development Corporation.

The Department of Land and Natural Resources says the law creating the PLDC was passed by the Legislature earlier this year without a key provision that allows for the land transfer.

The attorney general’s office says at best the law is ambiguous and may need to be clarified in order to avoid litigation.

But Sen. Donovan Dela Cruz, who sponsored the legislation creating the PLDC, says the law is adequate and development projects can move ahead. He is pushing the PLDC to move more quickly after a series of missteps caused the cancelation of two of its three meetings.

The law establishing the PLDC doesn’t specify that the agency can hold the lease to the lands, according to Morris Atta, a special projects coordinator for the Hawaii Department of Land and Natural Resources.

“The statute talks about the transfer of development rights, but development rights without control of the underlying land interest is essentially useless,” said Atta.

Atta told lawmakers about the situation last week during a joint meeting of the Senate Committee on Water, Land and Housing and the House Committee on Water, Land and Ocean Resources.

Dela Cruz, who sponsored the legislation, and is chair of the senate committee, told Civil Beat after the meeting that that was the first time he’d heard about the problem with the law.

“It pissed me off,” Dela Cruz told Civil Beat.

He said he called the attorney general’s office right after the meeting and hoped to meet with Deputy Attorney General Donna Kalama to discuss the office’s interpretation. Dela Cruz said he didn’t agree with it.

Deputy Attorney General Linda Chow said that while no official opinion had been issued by the attorney general’s office, the law as it stands now is ambiguous and unless it was clarified it could lead to litigation if development of public lands proceeds.

Currently no lands have been transferred to the corporation except for boat harbors under DNLR’s control, as stipulated in the law. The corporation is supposed to identify lands suitable for development.

Dela Cruz has championed the legislation as “an out-of-the-box opportunity for businesses and entrepreneurs to partner with the state to get the economy going again.”

But the PLDC has attracted criticism from environmental groups, as well as the general public, who worry that the corporation has been given vast powers to develop state lands that bypass county permitting and zoning regulations. The text of the law is broad, suggesting that everything from hotels to parking lots can be developed by the corporation on state lands, which are controlled primarily by the Department of Land and Natural Resources. Ninety-seven percent of DLNR lands are ceded lands, which are held in trust for the benefit of Native Hawaiians, adding to the controversy.

Supporters of the law say that the board would come up with rules that restricted the corporation’s powers, and pointing out that the Board of Land and Natural Resources has to approve any land transfer to the corporation for private development. Revenues from private development would aid DLNR’s ailing budget.

But how the PLDC will proceed, if at all, remains unclear. The corporation’s board is in the process of trying to hire an executive director and craft rules for the corporation.

Guy Kaulukukui, deputy director of DLNR and a board member of the corporation, said that the law would have to be amended by the Legislature, which meets again beginning in January.

“My sense of what will have to happen, unless the AG reverses the opinion, is we will have to get this fixed in statute,” said Kaulukukui.

Dela Cruz disagrees that the PLDC is stalled.

The senator told Civil Beat that he believes the law has another mechanism for allowing the development of state lands. He said a memorandum of understanding could be signed between the PLDC and the Board of Land and Natural Resources, which would specify that the lands could be leased.

“If the corporation can enter into contracts with any other agency, then why can’t they enter into contracts with BLNR?” he said.

Rep. Jerry Chang, chair of the House Committee on Water, Land and Natural resources, doubts this.

“I don’t think an MOU would do it,” said Chang.

Atta said that there were differences of opinion, but that DLNR’s main concern was that the ambiguity in the language of the law could lead to lawsuits, particularly given the alarm that has been raised about the corporation.

“We do realize a lot of people are watching very carefully because of concerns they have, and rightly so,” said Atta. “So we thought let’s do it right, if we are going to do it.”

Dela Cruz is not happy with the stance, and he’s also not pleased with how slow the PLDC is proceeding – a point he hammered during the briefing, criticizing the corporation for not moving fast enough to hire an executive director, craft rules and develop a schedule of meetings.

“I’m disappointed to some extent because you have only met once,” Dela Cruz told members of the corporation’s board. “Nothing has been done for one whole month. I don’t want to re-hash why we are here. I just want you to fix it and move on.”

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