STAND. COM. REP. NO. 1236

Honolulu, Hawaii

RE: H.B. No. 616

H.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Agriculture and Environment, to which was referred H.B. No. 616, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to exempt amounts received by a producer of locally grown produce and locally raised livestock food products from the general excise tax.

Your Committee received testimony in support of this measure from the Department of Agriculture, Ulupono Initiative, Hawaii Cattlemen's Council, Hawaii Food Industry Association, Honolulu County Republican Party, Hawai‘i Farm Bureau, Maui Chamber of Commerce, and three individuals. Your Committee received comments on this measure from the Department of Taxation, Department of the Attorney General, and Tax Foundation of Hawaii.

Your Committee finds that this measure offers a tax exemption for farmers and ranchers of local produce and livestock for consumption within the State. Your Committee further finds that this measure would support food producers by making local products more competitive and less costly to produce. Additionally, the cost savings for producers can have a trickle-down effect and reduce the cost of locally produced food products for consumers.

Your Committee also finds that this measure supports the State's goals of food security and self-sufficiency with direct benefits to farmers and ranchers who locally grow agricultural products. Your Committee believes that this measure will help produce more local food and support an economically-robust, homegrown agricultural industry that can benefit the community with fresh, healthy food.

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 H.B. No. 616, H.D. 1, and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

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

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MIKE GABBARD, Chair