STAND. COM. REP. NO. 406
Honolulu, Hawaii
RE: S.B. No. 1562
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committees on Agriculture and Environment and Housing, to which was referred S.B. No. 1562 entitled:
"A BILL FOR AN ACT RELATING TO AGRICULTURE,"
beg leave to report as follows:
The purpose and intent of this measure is to establish:
(1) The
Combined Housing Operational Agriculture Mobilization Program (Program) to
provide both housing and farming opportunities to people engaged in bona fide
agricultural activities; and
(2) A Land Combined Housing Operational Agriculture Mobilization Tax Credit (Tax Credit) for taxpayers who donate land to the Program.
Your Committees received testimony in support of this measure from the Office of the Mayor of the County of Maui and Hawaiʻi Farmers Union United.
Your Committees received comments on this measure from the Department of Agriculture, Department of the Attorney General, Department of Taxation, Tax Foundation of Hawaii, Hawaiʻi Farm Bureau, and one individual.
Your Committees find that the lack of agricultural workforce housing is an overlooked and longstanding problem that inhibits the growth of Hawaii's agricultural industry. This measure offers an innovative approach to address two of the most pressing challenges faced by Hawaii's agricultural community: access to affordable housing and productive use of agricultural lands. By establishing a program that allows bona fide farmers to live and work on the land they cultivate and encourages land donations to this program through a tax credit, this measure will help improve local food production and promote long-term access to land and affordable housing while supporting a new generation of farmers.
According to testimony received by your Committees, although this measure is comprehensive in outlining the structure and intent of the Program, several areas may benefit from further clarification to ensure robust oversight, financial sustainability, and alignment with the intended goals of the Program. Amendments to this measure are therefore necessary to clarify these provisions.
Your Committees have
amended this measure by:
(1) Clarifying
the Department of Agriculture's (Department's) authority to acquire
agricultural lands under the Program;
(2) Requiring
the Department to determine the term of the leases to the participants of the
Program to serve long‑term viability of agriculture;
(3) If
the Department determines that the Program shall utilize midterm leases,
requiring the Department to specify a process to compensate participants for
any improvements on the leased agricultural lands;
(4) Clarifying
the establishment of an Advisory Committee, rather than an Oversight Committee,
to periodically review and evaluate the Program's lease structure and perform
other duties;
(5) Inserting
language that specifies the composition of the Advisory Committee;
(6) Requiring
the Department of establish certain administrative rules regarding the Program;
(7) Inserting language that caps the Tax Credit
at the lesser of the appraised value of the agricultural lands validly donated
or an unspecified amount in the aggregate for all donated parcels for the
Program in a single taxable year;
(8) Allowing
the Department of Taxation to adopt rules to determine the amount of Tax Credit
to be claimed based on the productivity rating on the agricultural land and any
existing agricultural infrastructure;
(9) Inserting
language setting deadlines for which the Tax Credit may be claimed and
exhausted;
(10) Extending the effective date of the Tax Credit
to apply to taxable years beginning January 1, 2026;
(11) Inserting an effective date of July 1, 2050,
to encourage further discussion; and
(12) Making technical, nonsubstantive amendments
for the purposes of clarity and consistency.
Your Committees note that this measure contains an unspecified appropriation amount. According to testimony from the Department of Agriculture, the initial funding for the first year of this Program is estimated at approximately $750,000 to procure a study of available land that satisfies the intent of this measure and to hire one permanent full-time equivalent (1.0 FTE) property manager V position (SR-24) to oversee the establishment of the Program. The funding for the second year to procure lands and operational funds to manage the Program is reliant upon the completion of the study procured. Should your Committee on Ways and Means choose to deliberate on this measure, your Committees respectfully request that it consider inserting an appropriation amount of $750,000 for the first year of the biennium to procure a study of available land that satisfies the intent of this measure and to hire one permanent full-time equivalent (1.0 FTE) property manager V position (SR-24) to oversee the establishment of the Program.
As affirmed by the records of votes of the members of your Committees on Agriculture and Environment and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1562, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1562, S.D. 1, and be referred to your Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Agriculture and Environment and Housing,
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________________________________ STANLEY CHANG, Chair |
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________________________________ MIKE GABBARD, Chair |
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