STAND. COM. REP. NO. 3348

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 1632
                                        H.D. 3
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 1632, H.D. 3, entitled: 

     "A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

     The purpose of this bill is to appropriate funds for fiscal
year 1999-2000 to develop new markets and expand existing markets
for Hawaii's papaya industry.

     Your Committee has deleted the contents of this bill and
replaced it with language that appropriates funds to finance the
major sugar cane operations on the island of Kauai to encourage
the continuation of sugar production on that island.

     In particular, this bill appropriates $5,000,000 in fiscal
year 2000-2001 to be expended by the Department of Agriculture to
finance sugar cane operations on Kauai.  Half of that amount is
to be appropriated out of the general fund to be deposited into
the agricultural loan revolving fund, and the other half is to be
appropriated out of the agricultural loan revolving fund for that
purpose.

     In addition, this bill allows the Board of Agriculture to
waive statutory requirements for loans, except that interest
charged is not to be less than three per cent per year simple

 
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                                   STAND. COM. REP. NO. 3348
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interest; the term of the loan is not to exceed ten years; and
collateral is to consist of a first lien position in rolling
stocks and crops and the pledging of other assets as deemed
reasonable by the Board.  This bill also waives the "credit
elsewhere" requirement.

     Your Committee finds that although the sugar cane industry
remains a vital component of Kauai's economic base, that industry
is struggling to survive and is in need of financial assistance
to continue operations.  Because of the large scale of sugar cane
operations, additional funding is urgently needed for the
Department of Agriculture to carry out appropriate loan programs.

     This bill will further that goal by financing major sugar
cane operations on Kauai and encouraging the continuation of
sugar production, thereby assisting not only Kauai but the entire
State in the form of energy, agricultural, environmental, and
economic benefits.

     Your Committee finds this measure should also enhance the
possibilities of developing a local ethanol industry.

     Your Committee further finds that the appropriations made by
this bill are the first necessary appropriations for this
program, and that additional funding in the amount of $5,000,000
will also be needed for the succeeding fiscal year.

     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 H.B. No.
1632, H.D. 3, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 1632, H.D.
3, S.D. 1.

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



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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