STAND. COM. REP. NO. 951

Honolulu, Hawaii

RE: S.B. No. 341

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 341, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TARO,"

begs leave to report as follows:

The purpose and intent of this measure is to exclude up to $100,000 of income derived from taro production from the state income tax.

Your Committee received written comments in support of this measure from the Office of Hawaiian Affairs; Office of the Mayor, County of Maui; Office of Climate Change, Sustainability and Resiliency, City and County of Honolulu; Department of Research and Development, County of Hawaii; Ai Pohaku; Aina Momona; Environmental Caucus of the Democratic Party of Hawaii; Hawaii Alliance for Progressive Action; Hawaii Farm Bureau; Hawaii Food Industry Association; Hawaii SEED; Hooulu Aina Farms; Living Pono Project; Malama Kauai; Our Revolution Hawaii; Supersistence; and numerous individuals.

Your Committee received written comments on this measure from the Department of Agriculture, Department of Taxation, Tax Foundation of Hawaii, and one individual.

Your Committee recognizes that taro farming is important to the State's cultural identify and food security. Your Committee believes that reasonable tax relief facilitates the ability of farmers to reinvest in their farms and provides incentives for future generations to enter into taro farming.

Your Committee has amended this measure by:

(1) Clarifying that the tax relief provided is an exclusion from the state income tax of a portion of a qualified taxpayer's income derived from taro production;

(2) Clarifying the reference to qualified taxpayers who are eligible for an exclusion;

(3) Changing from $100,000 to an unspecified amount the amount that is excluded from the state income tax;

(4) Simplifying the definitions of "qualified taxpayer", "taro corm", and "taro huli";

(5) Deleting the definition of "poi mill" as it is no longer used in the measure;

(6) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(7) Making technical nonsubstantive amendments for purposes of clarity, consistency, and style.

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. 341, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 341, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair