STAND. COM. REP. NO.  904-08

 

Honolulu, Hawaii

                , 2008

 

RE:   H.B. No. 2357

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Sir:

 

     Your Committee on Finance, to which was referred H.B. No. 2357, H.D. 1, entitled:

 

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

 

begs leave to report as follows:

 

     The purpose of this bill is to provide incentives to establish and sustain viable agricultural operations on important agricultural lands.  Specifically, this bill, among other things:

 

     (1)  Excludes from gross income, adjusted gross income, and taxable income, rental income, up to an unspecified maximum amount, derived from agricultural leases on lands designated as important agricultural lands (IALs) under certain conditions;

 

     (2)  Exempts rental income, up to an unspecified maximum amount, derived from agricultural leases on lands designated as IALs from the general excise tax;

 

     (3)  Allows landowners to develop, construct, and maintain residential dwelling units for farmers, employees, and their families on IALs under certain conditions;

 

     (4)  Establishes an IAL Qualified Agricultural Cost Tax Credit;

 

     (5)  Allows the Chairperson of the Board of Agriculture to guarantee loans made by commercial lenders to agricultural producers for the development and implementation of agricultural projects located on land designated as IALs, under certain conditions;

 

     (6)  Requires the master irrigation inventory plan of the State Agricultural Water Use and Development Plan to include:

 

          (A)  Identification of sources of water used by agricultural operations, particularly those on lands designated as IALs; and

 

          (B)  Identification of current and future water needs for agricultural operations on lands designated as IALs;

 

          and

 

     (7)  Requires certain agencies that issue permits to implement a procedure for priority processing of permit applications and renewals for agricultural processing facilities that process crops or livestock from certain agribusinesses

 

     The Hawaii Farm Bureau Federation, Maui County Farm Bureau, Alexander & Baldwin, Inc., Hawaiian Commercial & Sugar Company, Kauai Coffee Company, Inc., Land Use Research Foundation of Hawaii, and a concerned individual supported this bill.  The Department of Budget and Finance and the Department of Planning and Permitting of the City and County of Honolulu opposed this measure.  The Department of Agriculture, Department of Taxation, Office of Planning, Tax Foundation of Hawaii, The Chamber of Commerce of Hawaii, Hawaii Association of REALTORS, Sierra Club, Hawaii Chapter, and Dole Food Company Hawaii submitted comments.

 

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2357, H.D. 1, and recommends that it pass Third Reading.

 

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

 

 

 

 

____________________________

MARCUS R. OSHIRO, Chair