STAND

STAND. COM. REP. NO. 508

Honolulu, Hawaii

, 2005

RE: S.B. No. 1065

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Higher Education and Water, Land, and Agriculture, to which was referred S.B. No. 1065 entitled:

"A BILL FOR AN ACT MAKING AN APPROPRIATION FOR AGRICULTURAL RESEARCH AND MARKET DEVELOPMENT,"

beg leave to report as follows:

The purpose of this measure is to appropriate funds to the University of Hawaii to enable its College of Tropical Agriculture and Human Resources (CTAHR) to conduct crucial research and outreach to develop and promote high-value agricultural products, breeding programs, and related activities.

Your Committees received testimony in support of this measure from CTAHR, Department of Agriculture, Aloun Farms, Big Island Candies, Hawaii Crop Improvement Association, Hawaii Commercial & Sugar Company, Pineapple Growers Association of Hawaii, and one individual. Your Committees received testimony in opposition to this measure from four individuals.

Hawaii's agriculture and value-added products contribute $2,400,000,000 to the State's economy and employ more than thirty-eight thousand people. During the past twenty years, diversified agriculture in Hawaii has more than doubled. The prime agricultural lands released from sugar and pineapple production present a rare window of opportunity to further agricultural development.

Currently, about one hundred thousand acres of former sugar and pineapple land lie fallow, awaiting economically viable agribusinesses. If all of this land could be put to productive use in successful agricultural ventures, an additional $1,700,000,000 to $4,400,000,000 could be added to the State's economy.

From the mid-1990s to the beginning of the current decade, CTAHR lost $3.5 trillion in state appropriations and thirty six faculty positions, jeopardizing the college's efforts to assist the agribusiness community. In response, the Legislature passed Act 234, Session Law of Hawaii 2001, which provided $500,000 in funding for fiscal years 2002 and 2003. CTAHR used the Act 234 funds to fill nine faculty positions, including extension agents on Hawaii and Maui and professors at the University of Hawaii at Manoa. Act 234 expressed the Legislature's intent to add the $500,000 appropriation to the University of Hawaii base budget, but budgetary restrictions prevented the University from rolling these funds into the 2003-2005 budget. In 2004, the Legislature passed Act 223, which appropriated $500,000 for CTAHR research programs in fiscal year 2005.

By adding $500,000 to the University's base budget, this measure enables CTAHR to retain the nine faculty hired with Act 234 funds. This money will ensure that these faculty members can continue their important work by:

(1) Addressing the pest, disease, and nutrition issues faced by Hawaii growers;

(2) Introducing new products to the Hawaii market;

(3) Promoting Hawaii products in the State, on the mainland, and around the world;

(4) Creating cutting-edge technologies and developing new value-added goods; and

(5) Investigating how Hawaii's forests and watersheds can be managed to support industries while protecting natural resources.

Your Committees find that Hawaii must diversify its economic base beyond a reliance on tourism. A revived state agricultural industry holds the promise of not only diversifying Hawaii's economy, but also improving the food security of our isolated islands and preserving the green space and lifestyle that Hawaii's citizens and visitors value.

Your Committees further find that in order for Hawaii's agricultural industry to take advantage of this opportunity, it must produce high quality, market-driven products that offset Hawaii's high costs of land, labor, water, and transportation. This requires that the agricultural industry have access to the highest quality, state-of-the-art research and outreach programs. CTAHR is engaged in several areas of research and outreach that have already contributed to the resurgence of agriculture in Hawaii.

Your Committees have amended this measure by making an appropriation of $500,000 for the fiscal year 2005-2006 only and by removing the fiscal year 2006-2007.

As affirmed by the records of votes of the members of your Committees on Higher Education and Water, Land, and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1065, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1065, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Higher Education and Water, Land, and Agriculture,

____________________________ RUSSELL S. KOKUBUN, Chair		____________________________ CLAYTON HEE, Chair