STAND. COM. REP. NO 231

Honolulu, Hawaii

RE:    S.B. No. 433

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committees on Agriculture and Environment and Transportation and Energy, to which was referred S.B. No. 433 entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

beg leave to report as follows:

     The purpose and intent of this measure is to allocate a portion of the environmental response, energy, and food security tax (barrel tax) to the Hawaii agricultural development revolving fund.

     Your Committees received testimony in support of this measure from the Department of Agriculture; Agribusiness Development Corporation; Hawai‘i Farm Bureau; Hawaii Farmers Union United; Hawaii Cattlemen's Council, Inc.; and three individuals.  Your Committees received comments on this measure from the Department of Taxation, Department of Budget and Finance, and Tax Foundation of Hawaii.

     Your Committees find that the Agribusiness Development Corporation is tasked with the priority of transitioning Hawaii's agriculture industry from an industry dominated by sugar and pineapple to one based on a greater diversity of crops.  Hawaii's environmental response, energy, and food security tax, also known as the barrel tax, provides a funding source for energy and food security initiatives; however only forty-three percent of the barrel tax is allocated to support environmental response, energy, and food security.  Your Committees find that this measure aligns the allocation of portions of the barrel tax with the original intent of the $1.00 per barrel increase in the barrel tax enacted by Act 73, Regular Session of 2010, to fund, among other things, the acquisition of agricultural land and to assist with food sustainability in the State.

     Your Committees have amended this measure by inserting an effective date of July 1, 2050, to encourage further discussion.

     As affirmed by the records of votes of the members of your Committees on Agriculture and Environment and Transportation and Energy that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 433, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 433, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Agriculture and Environment and Transportation and Energy,

________________________________ LORRAINE R. INOUYE, Chair

________________________________ MIKE GABBARD, Chair