A bill that would allow the Hokuli'a luxury home project on the Big Island to proceed and to recognize the legality of other housing already built on agricultural land was passed by the state Finance Committee yesterday.

The bill now heads to the full House for a vote and, if approved, will cross over to the Senate.

The Finance Committee voted 16-2 for the bill, although half of the committee members who supported it did so with reservations. Lawmakers gave the bill an effective date of 2020 — an intentional monkey wrench to ensure continued discussions on the measure.

Work on the Hokuli'a project was stopped in 2003 after Big Island Circuit Judge Ronald Ibarra ruled that developers should have sought approval from the state Land Use Commission to build the $1 billion housing and golf course project on agricultural land. The developers, who had obtained approval from Hawai'i County, have appealed to the state Supreme Court.

The bill approved by the committee yesterday would declare single-family homes already built on the lowest four classifications of agricultural lands to be permissible under state law. It also covers projects on those lands that have been approved by county zoning ordinance where the developer obtained final subdivision approval, began construction and sold individual lots.

In the meantime, the Senate Committee on Water, Land and Agriculture and the Committee on Judiciary and Hawaiian Affairs decided to wait for the House measure to cross over and shelved a Senate Bill that would have allowed Hokuli'a to proceed and give counties more discretion over housing on marginal agricultural lands.

Water, Land and Agriculture Committee Chairman Russell Kokubun said developers of Hokuli'a are close to a settlement with community and environmental activists who sued to halt the project, and that he will use the House bill passed yesterday as a vehicle to address the issue of housing on agricultural land.

"We'd look at (the House bill) as a vehicle to insert our concern about prospectively addressing the (ag homes) issue," Kokubun said. "Only looking at it retroactively is inappropriate; it only gets you halfway there.

"Twenty, 25 years down the road I don't want to have to be dealing with this grandfathering issue again. And I think on behalf of the state ... we need to clarify language regarding dwellings on ag land."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.