STAND. COM. REP. NO.  422

Honolulu, Hawaii

                , 2011

RE:   H.B. No. 325

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Transportation, to which was referred H.B. No. 325, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

     The purpose of this bill is to assist local farmers in selling their produce by appropriating funds for the establishment of a refrigerated food storage facility at the Hilo International Airport.

     The Department of Transportation (DOT) supported the intent of this bill.  The Hawaii Farm Bureau Federation provided comments.

     As a large diversified agricultural farming industry continues to emerge on the island of Hawaii, facilities to maintain the integrity of these products prior to transportation are important to the viability of this industry.  Hilo International Airport is an ideal site for such a facility.

     However, the proposed facility is sited on lands under the primary jurisdiction of DOT.  DOT is supportive of this facility provided that there is adequate space for the facility in a location that will work with the airport master plan and the operators of the facility pay fair market value rent under a lease with DOT set by appraisal.  According to DOT, it must charge rent and cannot subsidize such a facility because federal law prohibits the use of airport funds for revenues unrelated to the capital and operating costs of the airport, the airport system, or facilities devoted to air transportation.

     Your Committee encourages DOT to continue discussions on this matter with the Department of Agriculture.

     As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 325, H.D. 1, and recommends that it be referred to the Committee on Finance.

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

____________________________

JOSEPH M. SOUKI, Chair