REPORT TITLE:
Agri. Bus. Dev. Corp.


DESCRIPTION:
Extends composition of agribusiness development corporation (ADC)
board by 5 years; appropriates unspecified sums to board for 4
ADC positions and for the Hamakua district agricultural
subdivision; directs ADC to provide for the planning, design, and
construction of an agricultural subdivision in the Hamakua
district; requires annual reports to the legislature.  (SD1)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        576
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO AGRICULTURE.
 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1                              PART I
 
 2      SECTION 1.  The legislature finds that agriculture, for
 
 3 decades a mainstay of Hawaii's economy, continues to face a
 
 4 significant period of transition.  While the downsizing of the
 
 5 sugar and pineapple industries presents an unprecedented
 
 6 opportunity for the conversion of agriculture into a dynamic
 
 7 growth industry, it also represents a considerable challenge for
 
 8 the industry.
 
 9      In response, the legislature approved Act 176, Session Laws
 
10 of Hawaii 1998, to ensure that the department of agriculture is
 
11 equipped with adequate powers and resources to enable it to
 
12 effectively take advantage of these current opportunities.  As
 
13 part of this restructuring and consolidation, Act 176 changed the
 
14 composition of the agribusiness development corporation board of
 
15 directors, by replacing its current membership with that of the
 
16 board of agriculture, effective July 1, 1999.
 
17      The legislature finds that while this is a worthy goal, it
 
18 neither allows time for an effective transition of the current
 
19 work of the two separate boards, nor does it give the corporation
 

 
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 1 a reasonable opportunity to meet its original goals of
 
 2 redevelopment of Hawaii's agriculture industry.
 
 3      In addition, the legislature finds that hundreds of acres of
 
 4 former sugarcane land along the Hamakua coast represent
 
 5 significant opportunities for agricultural endeavors.  With a
 
 6 master lease from the department of agriculture, the Hamakua,
 
 7 North Hilo agricultural cooperative has subleased all of its one
 
 8 thousand four hundred acres to over one hundred seventy-eight
 
 9 farmers and ranchers.  The department of land and natural
 
10 resources also has begun to issue a number of leases.  Yet there
 
11 remains a strong demand for additional parcels, particularly
 
12 smaller ones of ten acres or less with good soil, gentle slopes,
 
13 adequate road access, and irrigation water for the production of
 
14 vegetable and root crops.  This represents an opportunity for the
 
15 agribusiness development corporation.
 
16      The purpose of this Act is to support the continued
 
17 redevelopment of Hawaii's $2,900,000,000 agricultural industry,
 
18 by:
 
19      (1)  Extending the composition of the current agribusiness
 
20           development corporation board of directors for an
 
21           additional five years, and appropriating funds for four
 
22           staff positions and for operating expenses; and
 
23      (2)  Directing the agribusiness development corporation to
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           allot the necessary financial and human resources
 
 2           necessary to plan, design, and construct an
 
 3           agricultural subdivision in the Hamakua district in the
 
 4           island of Hawaii.
 
 5                              PART II
 
 6      SECTION 2.  Act 176, Session Laws of Hawaii 1998, is amended
 
 7 by amending section 19 to read as follows:
 
 8      "SECTION 19.  This Act shall take effect on July 1, 1998;
 
 9 provided that section 5 shall take effect on July 1, [1999.]
 
10 2004."
 
11      SECTION 3.  There is appropriated out of the general
 
12 revenues of the State of Hawaii the sum of $          , or so
 
13 much thereof as may be necessary for fiscal year 1999-2000, and
 
14 the same sum, or so much thereof as may be necessary for fiscal
 
15 year 2000-2001.  This sum shall be expended by the agribusiness
 
16 development corporation for four positions and other current
 
17 expenses.
 
18                             PART III
 
19      SECTION 4.  The agribusiness development corporation shall
 
20 allot the necessary financial and human resources necessary to
 
21 plan, design, and construct an agricultural subdivision in the
 
22 Hamakua district of the island of Hawaii, and shall take all
 
23 necessary actions for this purpose, including the following:
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1      (1)  Seek a fifty-five year lease from the landowners of
 
 2           affected lands in the Hamakua district and from the
 
 3           State, in order to allow qualified tenants to hold
 
 4           long-term subleases under the agribusiness development
 
 5           corporation;
 
 6      (2)  Establish a partnership with financial institutions to
 
 7           be responsible for all financial transactions on behalf
 
 8           of the agribusiness development corporation, including
 
 9           collecting from tenants and making payments for:
 
10           (A)  Maintenance fees;
 
11           (B)  Lease rents;
 
12           (C)  Assessments for common infrastructure
 
13                improvements;
 
14           (D)  Master lease rent;
 
15           (E)  Property taxes;
 
16           (F)  Insurance; and
 
17           (G)  Agribusiness development corporation management
 
18                fees;
 
19      (3)  Provide for infrastructure improvements sufficient to
 
20           support optimal agricultural production;
 
21      (4)  Serve as master lessor and marketing coordinator of the
 
22           project;
 
23      (5)  Assist tenants in seeking applications for agricultural
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           loans from private lenders and applicable federal loan
 
 2           guarantee programs;
 
 3      (6)  Assist new farmers in developing detailed business
 
 4           plans, provide entrepreneurial training, and assistance
 
 5           in effective marketing in order to reduce the high
 
 6           business failure rate for small, start-up farming
 
 7           operations.
 
 8      The legislature finds that success in this partnership will
 
 9 encourage private landowners to make available agricultural lands
 
10 for farming, increase banks' agricultural loan activity, offer
 
11 new farmers an opportunity to start, and increase the
 
12 contribution of agriculture to the diversification of Hawaii's
 
13 economy.
 
14      SECTION 5.  The board shall submit to the legislature an
 
15 annual report on the revenue and expenditures, progress in
 
16 meeting the overall goals, and a discussion of any problems
 
17 encountered in the development of the Hamakua agricultural
 
18 subdivision.
 
19      SECTION 6.  There is appropriated out of the general
 
20 revenues of the State of Hawaii the sum of $         , or so much
 
21 thereof as may be necessary for fiscal year 1999-2000, for the
 
22 planning, design, and construction of an agricultural subdivision
 
23 in the Hamakua district of the island of Hawaii.  The sum
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 appropriated shall be expended by the agribusiness development
 
 2 corporation for the purposes of section 4 of this Act.
 
 3                              PART IV
 
 4      SECTION 7.  In addition, the board shall submit to the
 
 5 legislature an annual report to include the following:
 
 6      (1)  An evaluation of the effectiveness and practical
 
 7           applications of any technical support to small, start-
 
 8           up farming operations, with an emphasis on diversified
 
 9           agricultural operations;
 
10      (2)  An evaluation of the need for and the availability of
 
11           farm credit from private and public sources;
 
12      (3)  An evaluation of the effects of regulation on new,
 
13           start-up farming operations, with recommendations for
 
14           ways to streamline the process or cut "red tape";
 
15      (4)  An evaluation of the effectiveness of tax incentives,
 
16           with an emphasis on their effects on diversified
 
17           agricultural operations; and
 
18      (5)  An evaluation of the transport and distribution
 
19           programs assisted by the department of agriculture, the
 
20           department of transportation, and regulated by the
 
21           public utilities commission.
 
22                              PART V
 
23      SECTION 8.  Statutory material to be repealed is bracketed.
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 New statutory material is underscored.
 
 2      SECTION 9.  This Act shall take effect on July 1, 1999,
 
 3 provided that section 2 of this Act shall take effect on June 30,
 
 4 1999.