STAND. COM. REP. NO. 799

Honolulu, Hawaii

RE:    S.B. No. 612

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 612, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

     The purpose and intent of this measure is to assist the State's livestock and aquaculture industries by reducing the cost of feed.

     More specifically, the measure:

(1)  Makes a housekeeping amendment to harmonize a qualified feed developer grant program requirement with a qualified producer grant program requirement;

(2)  Appropriates funds to reimburse qualified producers of certain products for their feed costs; and

(3)  Appropriates funds to reimburse qualified feed developers for their feed development costs.

     Your Committee received written comments in support of this measure from the Department of Agriculture, Ulupono Initiative, Hawaii Farm Bureau, Hawaii Cattlemen's Council, Meadow Gold Dairies, Hawaii Farmers and Ranchers United, and thirty-eight individuals.

Written comments in opposition were received from one individual.

     Your Committee finds that feed costs are identified as the single most expensive component of animal agriculture operations.  Hawaii's lack of local feed mills means that the livestock and aquaculture industries must use imported animal feed.  Continued reliance on imported feed is untenable, due to ever-changing market forces and rising shipping costs.  In contrast, the State has the potential to develop and produce feedstock locally, and feed development projects are underway.  The Hawaii Department of Agriculture has initiated a feed development process to identify, assess, and validate available local feed ingredients.  Your Committee finds that the feed subsidy provided by this measure to qualified producers of certain products and qualified feed developers will support the Department's efforts and promote the long-term viability of the State's livestock and aquaculture industries.

     Your Committee has amended this measure by:

(1)  Extending the appropriation to include both fiscal year 2017-2018 and fiscal year 2018-2019;

(2)  Changing the appropriation amounts to unspecified amounts; and

(3)  Changing the effective date to March 9, 2092, to facilitate further discussion on the measure.

     Your Committee notes that the measure previously contained a general fund appropriation of $2,000,000 in fiscal year 2017-2018 for the Department of Agriculture's livestock revitalization program.  Of this amount, $1,000,000 was to be allocated to reimburse qualified producers of milk, pork, eggs, poultry, beef, sheep, lamb, goats, and seafood for their feed costs; the remaining $1,000,000 was to be allocated to reimburse qualified feed developers for their feed development costs.

     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. 612, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 612, S.D. 2.

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

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JILL N. TOKUDA, Chair