STAND. COM. REP. NO. 260

Honolulu, Hawaii

RE:    S.B. No. 1193

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Agriculture and Environment, to which was referred S.B. No. 1193 entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

     The purpose and intent of this measure is to establish an income tax credit for agricultural commodities produced in the State and sold directly to consumers, up to a limit of $5,000, for agricultural producers whose gross income from the sale of agricultural commodities totals no more than $50,000 per year.

     Your Committee received testimony in support of this measure from the Hawai‘i Farm Bureau; Hawaii Coffee Association; Malia Farms LLC; Kakalina Farms LLC; Vida Farm, LLC; and seven individuals.  Your Committee received comments on this measure from the Department of Agriculture, Department of Taxation, Department of the Attorney General, and Tax Foundation of Hawaii.

     Your Committee finds that the sale of agricultural commodities directly to consumers continues to grow in the State.  Your Committee also finds that additional support to Hawaii's agriculture industry, specifically, reducing the tax burden of farms that produce and sell agricultural commodities, such as fruits, vegetables, nuts, coffee, and honey, will help to promote the production of locally-grown food, reduce reliance on agricultural imports, and foster job growth in the State.

     Your Committee has amended this measure by, as recommended by the Department of the Attorney General, removing language that requires an "agricultural commodity" to be produced in the State.

     As affirmed by the record of votes of the members of your Committee on Agriculture and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1193, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1193, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________

MIKE GABBARD, Chair