STAND. COM. REP. NO. 44

Honolulu, Hawaii

RE:    S.B. No. 605

       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. 605 entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

     The purpose and intent of this measure is to expand the general excise tax exemption for amounts received from the loading, transportation, and unloading of agricultural commodities to include cattle, goats, lambs, sheep, hogs, and chickens; beef, pork, poultry, and lamb, goat, and sheep meat; milk and milk products; eggs; and products of aquaculture and aquaponics.

     Your Committee received testimony in support of this measure from the Department of Agriculture; Hawai‘i Farm Bureau; Maui County Farm Bureau; Hawaii Cattlemen's Council, Inc.; Hawaii Cattle Producers Cooperative Association; Ponoholo Ranch, Limited; Meadow Gold Dairies; and three individuals.  Your Committee received testimony in opposition to this measure from Animal Rights Hawaii and two individuals.  Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committee finds that Hawaii's livestock industry faces numerous challenges, which have been contributing factors to the decline of the State's livestock industry.  This measure seeks to assist Hawaii's livestock and aquaculture industries to reduce operating costs, and eventually reduce the cost of purchasing local livestock and aquaculture products by local consumers, to ensure the sustainability of Hawaii's livestock and aquaculture industries.

     Your Committee has amended this measure, as recommended by the Department of Taxation, by:

     (1)  Inserting a definition for "products of aquaculture or aquaponics"; and

     (2)  Changing the effective date to apply to taxable years beginning after December 31, 2017.

     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. 605, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 605, 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