STAND. COM. REP. NO. 98-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 1997
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Agriculture, to which was referred H.B.
No. 1997 entitled: 

     "A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

     The purpose of this bill is to establish a credit against
income tax liability for taxpayers who install agricultural water
storage facilities.

     Your Committee finds that many agricultural areas have
limited agricultural production due to water availability
restrictions and the effects of draught.  However, the cost of
installing water storage tanks can adversely affect the cost of
operating a farm or ranch.  This tax credit will provide farmers
and ranchers a financial incentive to improve or build new water
storage facilities. 

     Testimony in support of this measure was submitted by the
Maui County Farm Bureau, Hawaii Farm Bureau Federation,
Ulupalakua Ranch, Inc., Kula Community Association, Maui Onion
Growers Association, and a concerned individual.  The Department
of Agriculture supported the intent of this bill.  The Pineapple
Growers Association of Hawaii supported the bill, but recommended
revisions.  The Department of Taxation submitted testimony in
opposition to this measure. 


 
 
 
                                 STAND. COM. REP. NO. 98-00
                                 Page 2

 
     Your Committee has amended this measure to allow the
Director of Taxation to adopt procedures needed to effectuate the
tax credit.

     As affirmed by the record of votes of the members of your
Committee on Agriculture that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1997, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 1997, H.D. 1, and
be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Agriculture,



                                   ______________________________
                                   FELIPE P. ABINSAY, JR., Chair