HB1801.DOC

SECTION 1. The legislature finds that agricultural sustainability and food self-sufficiency are an increasing concern for the people of Hawaii due to our overwhelming dependency on importing practically all of the food consumed in the State and the volatile nature of the international oil market and increasing costs of international transportation.

Further, the legislature notes that Hawaii's food self-sufficiency has principally been met in the past by small farmers and not by large-scale, fossil fuel-dependent, export oriented large agribusinesses.

The purpose of this Act is to grant small farmers incentives and preferences to allow them to expand and continue to contribute to the food self-sufficiency of the State.

SECTION 2. Chapter 166E, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§166E- Preference for small farmer. (a) In the disposition of public lands and facilities pursuant to this chapter, the department shall grant a preference to any person who otherwise qualifies to a disposition who is a small farmer.

(b) For purposes of this section, a "small farmer" is a person who:

(1) Is a natural individual or a cooperative or group of not more than five natural individuals;

(2) Owns or leases or has owned or leased land and has engaged in agricultural activities on the land;

(3) Has proven farming ability;

(4) Devotes at least seventy per cent of that person's time farming; and

(5) Grows and sells at least eighty per cent of the crops that person produces within the State.

(1) Prescribe application forms and require the submittal of information it deems necessary to qualify a person for the preferences provided in this section; and

(2) Adopt rules pursuant to chapter 91 to implement this section."

SECTION 3. Chapter 205, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§205- Agricultural land protection. (a) Notwithstanding any other law to the contrary, all land classified as agricultural under section 205-2, whether or not the land is designated as important agricultural lands pursuant to section 205-49, shall not be reclassified, except as provided in subsection (b); provided that the following criteria apply to the land:

(1) The primary use of the land is agricultural;

(2) The occupation of the owner or lessee of the land is a farmer on that land;

(3) At least eighty per cent of the crops produced on the land are sold and consumed within the State; and

(4) The agriculturally related annual gross income produced from the land is at least $50,000.

(b) The lands meeting the criteria of this section may only be reclassified to a classification other than agriculture if the standards and criteria set forth in section 205-50 are met.

(c) For the purposes of this section, the term "farmer" means a person of proven farming ability, as determined by the department of agriculture pursuant to rule, who operates a farm on land owned or leased by the person and devotes at least ninety per cent of the person's time farming land subject to this section.

(d) The department of agriculture shall administer this section. The department of agriculture and the land use commission may adopt rules pursuant to chapter 91 to effectuate this section."

SECTION 4. Section 166-8, Hawaii Revised Statutes, is amended to read as follows:

"§166-8 Preference right. (a) Any person who is otherwise qualified to take an agricultural park lot, who is [a]:

(1) A veteran with an honorable discharge[~~, or who~~];

(2) A person who qualifies as a displaced farmer[~~, or who~~];

(3) A person who operates a farm located in a zoning district where [~~such~~] that use is a nonconforming use[~~, or who qualifies as a new farmer,~~]; or

(4) A person who is a small farmer,

shall be given preference in obtaining an agricultural park lot.

(b) For purposes of this section, a "small farmer" is a person who:

(1) Is a natural individual or cooperative or group of not more than five natural individuals;

(2) Owns or leases or has owned or leased land and has engaged in agricultural activities on the land;

(3) Has proven farming ability;

(4) Devotes at least seventy per cent of that person's time farming; and

(5) Grows and sells at least eighty per cent of the crops the person produces for consumption within the State.

(1) Prescribe application forms and require the submittal of information it deems necessary to qualify a person for the preferences provided in this section; and

(2) Adopt rules pursuant to chapter 91 to implement this section."

SECTION 5. (a) The department of taxation is directed to investigate the impact on revenues of an exemption from chapter 237 on the gross income of:

(1) Small farmers as defined in section 2 of this Act; and

(2) Landowners that derive rents or other remuneration from small farmers as defined in section 2 of this Act.

(b) The department of taxation is directed to submit any findings and recommendations to the legislature not less than twenty days prior to the convening of the regular session of 2010.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1801
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII