STAND. COM. REP. NO. 3245

Honolulu, Hawaii

RE: S.B. No. 3114

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 3114, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURAL LEASES,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Give preference rights for an agricultural park lot and a non-agricultural park land lease to lessees who have made a significant improvement to the land that furthers commercial agricultural operations;

(2) Add the same preference for a non-agricultural park land lease as those for agricultural park lot lease; and

(3) Require the Department of Agriculture to define "significant improvement" in administrative rules.

Your Committee received testimony in support of this measure from the Hawai‘i Farm Bureau, Hawaii Aquaculture and Aquaponics Association, and two individuals. Your Committee received comments on this measure from the Department of Agriculture.

Your Committee finds that an emerging trend in modern agriculture is controlled environmental production, as well as on-site cold storage and value-added processing, to address environmental sustainability and consumer demands. The maximization of production and revenue potential of local farms can require significant reinvestments in the property. However, when the time comes to submit applications to renew a lease, these self-financed improvements made by current lessees are given no preference rights over other applicants, which discourages lessees from using their own funds to make improvements near the end of a lease term.

Your Committee notes that allowing a preference for current state agricultural leases is important for Hawaii's farmer-lessees who want to renew their leases of state agricultural lands as many have invested substantial funds and efforts over their lease term to make improvements on the property for purposes of establishing and growing their businesses. This measure provides important preference rights to support Hawaii's goal of increased local food production and food security.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3114, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

________________________________

KARL RHOADS, Chair