STAND. COM. REP. NO. 2389

Honolulu, Hawaii

RE: S.B. No. 2705

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Agriculture and Environment, to which was referred S.B. No. 2705 entitled:

"A BILL FOR AN ACT RELATING TO THE IMPORTANT AGRICULTURAL LAND QUALIFIED AGRICULTURAL COST TAX CREDIT,"

begs leave to report as follows:

The purpose and intent of this measure is to extend the important agricultural land qualified agricultural cost tax credit that will expire at the end of the 2021 tax year.

Your Committee received testimony in support of this measure from the Department of Agriculture; Office of Planning; Kamehameha Schools; Hawaii Cattlemen's Council, Inc.; Land Use Research Foundation of Hawaii; Hawai‘i Farm Bureau; Ulupono Initiative; and one individual. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that article XI, section 3, of the Hawaii Constitution provides:

The State shall conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self sufficiency and assure the availability of agriculturally suitable lands. The legislature shall provide standards and criteria to accomplish the foregoing.

Lands identified by the State as important agricultural lands needed to fulfill the purposes above shall not be reclassified by the State or rezoned by its political subdivisions without meeting the standards and criteria established by the legislature and approved by a two-thirds vote of the body responsible for the reclassification or rezoning action.

Your Committee further finds that to address the issue of important agricultural lands, Act 183, Session Laws of Hawaii 2005, established standards, criteria, and mechanisms to identify important agricultural lands and to implement the intent and purpose of article XI, section 3, of the Hawaii Constitution. Act 233, Session Laws of Hawaii 2008, subsequently established incentives under the requirements of Act 183, including the important agricultural land qualified agricultural cost tax credit. Your Committee finds that the tax credit should be extended to allow landowners and farmers to claim the tax credit as their agricultural lands are identified as potential important agricultural lands and designated as such by the Land Use Commission.

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. 2705 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