STAND. COM. REP. NO.  308-16

Honolulu, Hawaii

                , 2016

RE:   H.B. No. 2117

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Agriculture, to which was referred H.B. No. 2117 entitled:

"A BILL FOR AN ACT RELATING TO FARMS,"

begs leave to report as follows:

The purpose of this measure is to encourage and support the growth of new, small, and diversified farming businesses by excluding from income tax a portion of a farmer's income; provided that the farmer's annual gross income does not exceed a certain amount.

The Cattlemen's Council, Hawaii Farm Bureau, and several concerned individuals supported this measure.  The Department of Agriculture supported the intent of this measure.  The Department of Taxation and Tax Foundation of Hawaii submitted comments on this measure.

     Your Committee has amended this measure by:

     (1)  Leaving unspecified, the amount of the farmer's income that would be excluded from income taxes and the cap on the farmer's annual gross income applicable to qualifying for the income tax exclusion;

     (2)  Changing its effective date to January 20, 2050, to encourage further discussion; and

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

     Should your Committee on Finance deliberate on the measure further, your Committee on Agriculture respectfully requests that it consider excluding from incomes taxes the first $50,000 of income earned by a farmer whose annual gross income does not exceed $200,000.

     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. 2117, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2117, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

CLIFT TSUJI, Chair