STAND. COM. REP. NO.  1269-08

Honolulu, Hawaii

                , 2008

RE:   S.B. No. 2467

      S.D. 2

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Sir:

     Your Committees on Agriculture and Energy & Environmental Protection, to which was referred S.B. No. 2467, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO LOANS TO ASSIST AGRICULTURAL AND AQUACULTURAL INDUSTRIES,"

beg leave to report as follows:

     The purpose of this bill is to improve the financial viability of agricultural and aquacultural operations and encourage energy self-sufficiency by:

     (1)  Incorporating loans for farm sustainable projects into the existing agricultural loan program under Chapter 155, Hawaii Revised Statutes (HRS), and loans for aquacultural sustainable projects into the existing aquacultural loan program under Chapter 219, HRS; and

     (2)  Establishing specific permitted uses and eligibility requirements for the loans for farm sustainable projects and aquaculture sustainable projects.

     The Department of Agriculture, Hawaii Farm Bureau Federation, Hamakua Springs Country Farms, Hawaiian Electric Company, Maui Electric Company, Hawaii Electric Light Company, BlueEarth Biofuels, Hawaii Crop Improvement Association, and the Hawaii Aquaculture Association supported this bill.  Life of the Land offered comments.

     Your Committees recognize that concerns were raised regarding the fact that the farm and aquacultural sustainable projects are primarily intended to ensure the viability of farming and aquacultural operations, rather than environmental, health, or climate sustainability.  Concerns were also raised regarding the inclusion of biodiesel and ethanol projects, which are considered by some to be particularly harmful to the environment.  Your Committees support future legislative efforts to further address these concerns.

     Your Committees have amended this measure by:

     (1)  Reducing the interest rate for farm sustainable project loans from five to three percent per year;

     (2)  Changing its effective date to July 1, 2050, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for style, clarity, and consistency.

     As affirmed by the records of votes of the members of your Committees on Agriculture and Energy & Environmental Protection that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2467, S.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2467, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Agriculture and Energy & Environmental Protection,

____________________________ HERMINA MORITA, Chair

____________________________ CLIFT TSUJI, Chair