STAND. COM. REP. NO. 2727

Honolulu, Hawaii

RE: S.B. No. 2556

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2556 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 a special fund into which revenues from the industrial hemp pilot program may be deposited.

Specifically, this measure:

(1) Establishes the industrial hemp special fund for the fees collected by the Department of Agriculture in connection with the industrial hemp pilot program;

(2) Authorizes the Department of Agriculture to expend the moneys in the special fund;

(3) Specifies that the moneys in the special fund shall remain available until obligated or until the special fund is terminated; and

(4) Provides instructions on the disbursement of the moneys remaining in the special fund upon termination of the fund.

Your Committee received written comments in support of this measure from the Department of Agriculture; the Hawaii Farm Bureau Federation; Ho‘omanapono Political Action Committee; Ho‘omana Pono, LLC; OCC Legislative Priorities Committee of the Democratic Party of Hawaii; the Drug Policy Forum; and four individuals.

Your Committee received written comments on this measure from the Department of the Attorney General.

Your Committee finds that Part II of Chapter 141, Hawaii Revised Statutes, authorizes the Department of Agriculture to collect various fees and assess fines related to the industrial hemp pilot program. Requiring the department to deposit the fees into a special fund will promote transparency, help track revenues of the program, and guide the department in adjusting the fee amounts to ensure that the program is financially self-sustaining.

Your Committee has amended this measure by:

(1) Deleting the requirement that the moneys deposited into the industrial hemp special fund remain available until they are obligated or until the special fund is terminated, because that requirement could be interpreted to allow for the expenditure of the moneys without an appropriation in violation of Article VII, Section 5 of the Hawaii State Constitution; and

(2) Deleting the requirements regarding the transfer of funds and disbursement of balances if the special fund is terminated, since those requirements would be more appropriately established by an Act repealing the fund.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2556, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2556, S.D. 1.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair