REPORT TITLE:
ADC


DESCRIPTION:
Changes composition of the ADC board until June 30, 2001; deletes
sunset date of the board; appropriates unspecified sums to board
for 4 positions and Hamakua agricultural subdivision; ADC to
plan, design, and construct an ag subdivision in Hamakua; annual
reports to the legislature.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1280
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                S.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO AGRICULTURE.
 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1                              PART I
 
 2      SECTION 1.  The legislature finds that agriculture, for
 
 3 decades a mainstay of Hawaii's economy, continues to face a
 
 4 significant period of transition.  While the downsizing of the
 
 5 sugar and pineapple industries presents an unprecedented
 
 6 opportunity for the conversion of agriculture into a dynamic
 
 7 growth industry, it also represents a considerable challenge for
 
 8 the industry.
 
 9      In response, the legislature approved Act 176, Session Laws
 
10 of Hawaii 1998, to ensure that the department of agriculture is
 
11 equipped with adequate powers and resources to enable it to
 
12 effectively take advantage of these current opportunities.  As
 
13 part of this restructuring and consolidation, Act 176 changed the
 
14 composition of the agribusiness development corporation board of
 
15 directors, by replacing its current membership with that of the
 
16 board of agriculture, effective July 1, 1999.
 
17      The legislature finds that while this is a worthy goal, it
 
18 neither allows time for an effective transition of the current
 
19 work of the two separate boards, nor does it give the corporation
 

 
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 1 a reasonable opportunity to meet its original goals of
 
 2 redevelopment of Hawaii's agriculture industry.
 
 3      In addition, the legislature finds that hundreds of acres of
 
 4 former sugarcane land along the Hamakua coast represent
 
 5 significant opportunities for agricultural endeavors.  With a
 
 6 master lease from the department of agriculture, the Hamakua,
 
 7 North Hilo agricultural cooperative has subleased all of its one
 
 8 thousand four hundred acres to over one hundred seventy-eight
 
 9 farmers and ranchers.  The department of land and natural
 
10 resources also has begun to issue a number of leases.  Yet there
 
11 remains a strong demand for additional parcels, particularly
 
12 smaller ones of ten acres or less with good soil, gentle slopes,
 
13 adequate road access, and irrigation water for the production of
 
14 vegetable and root crops.  This represents an opportunity for the
 
15 agribusiness development corporation.
 
16      The purpose of this Act is to support the continued
 
17 redevelopment of Hawaii's $2,900,000,000 agricultural industry,
 
18 by:
 
19      (1)  Changing the composition of the board of the
 
20           agribusiness development corporation to include
 
21           expertise in banking, real estate, and promotion;
 
22      (2)  Extending the composition of the corporation's board of
 
23           directors by repealing the sunset date and
 

 
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 1           appropriating funds for four staff positions and for
 
 2           operating expenses; and
 
 3      (3)  Directing the agribusiness development corporation to
 
 4           allot the necessary financial and human resources
 
 5           necessary to plan, design, and construct an
 
 6           agricultural subdivision in the Hamakua district in the
 
 7           island of Hawaii.
 
 8                              PART II
 
 9      SECTION 2.  Section 163D-3, Hawaii Revised Statutes, is
 
10 amended by amending subsection (b) to read as follows:
 
11      "(b)  The board of directors of the corporation shall
 
12 consist of eleven voting members, of whom eight shall be
 
13 appointed by the governor for staggered terms.  These eight
 
14 members shall be selected on the basis of their knowledge,
 
15 experience, and proven expertise in small and large businesses
 
16 within the agricultural industry, agricultural economics,
 
17 banking, real estate, finance, promotion, marketing, and
 
18 management.  Of these eight members, four shall be selected by
 
19 the senate president and four shall be selected by the speaker of
 
20 the house of representatives; provided that [two] one shall be
 
21 from the city and county of Honolulu, [two] one shall be from the
 
22 county of Hawaii, [two] one shall be from the county of Maui,
 
23 [and two] one shall be from the county of Kauai[.], and four
 

 
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 1 shall be appointed at-large.  The director of business, economic
 
 2 development, and tourism; the chairperson of the board of
 
 3 agriculture; and the chairperson of the board of land and natural
 
 4 resources, or their designated representatives, shall be
 
 5 ex-officio, voting members of the board.  All members shall
 
 6 continue in office until their respective successors have been
 
 7 appointed and qualified.  The board shall annually elect its
 
 8 chairperson from among its members; provided that the chairperson
 
 9 shall not be an ex-officio member."
 
10                             PART III
 
11      SECTION 3.  Act 176, Session Laws of Hawaii 1998, is amended
 
12 by repealing section 5.
 
13      ["SECTION 5.  Section 163D-3, Hawaii Revised Statutes, is
 
14 amended by amending subsection (b) to read as follows:
 
15      "(b)  The board of directors of the corporation shall
 
16 consist of the members of the board of agriculture.""]
 
17      SECTION 4.  Act 176, Session Laws of Hawaii 1998, is amended
 
18 by amending section 19 to read as follows:
 
19      "SECTION 19.  This Act shall take effect on July 1, 1998[;
 
20 provided that section 5 shall take effect on July 1, 1999]."
 
21      SECTION 5.  There is appropriated out of the general
 
22 revenues of the State of Hawaii the sum of $           or so much
 
23 thereof as may be necessary for fiscal year 1999-2000 and the sum
 

 
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 1 of $          or so much thereof as may be necessary for fiscal
 
 2 year 2000-2001.  These sums shall be expended by the agribusiness
 
 3 development corporation for four positions and other current
 
 4 expenses.
 
 5                              PART IV
 
 6      SECTION 6.  The agribusiness development corporation shall
 
 7 allot the financial and human resources necessary to plan,
 
 8 design, and construct an agricultural subdivision in the Hamakua
 
 9 district of the island of Hawaii, and shall take all necessary
 
10 actions for this purpose, including the following:
 
11      (1)  Seek a fifty-five year lease from the landowners of
 
12           affected lands in the Hamakua district and from the
 
13           State, in order to allow qualified tenants to hold
 
14           long-term subleases under the agribusiness development
 
15           corporation;
 
16      (2)  Establish a partnership with financial institutions to
 
17           be responsible for all financial transactions on behalf
 
18           of the agribusiness development corporation, including
 
19           collecting from tenants and making payments for:
 
20           (A)  Maintenance fees;
 
21           (B)  Lease rents;
 
22           (C)  Assessments for common infrastructure
 
23                improvements;
 

 
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 1           (D)  Master lease rent;
 
 2           (E)  Property taxes;
 
 3           (F)  Insurance; and
 
 4           (G)  Agribusiness development corporation management
 
 5                fees;
 
 6      (3)  Provide for infrastructure improvements sufficient to
 
 7           support optimal agricultural production;
 
 8      (4)  Serve as master lessor and marketing coordinator of the
 
 9           project;
 
10      (5)  Assist tenants in seeking applications for agricultural
 
11           loans from private lenders and applicable federal loan
 
12           guarantee programs; and
 
13      (6)  Assist new farmers in developing detailed business
 
14           plans, provide entrepreneurial training, and assistance
 
15           in effective marketing in order to reduce the high
 
16           business failure rate for small, start-up farming
 
17           operations.
 
18      The legislature finds that success in this partnership will
 
19 encourage private landowners to make available agricultural lands
 
20 for farming, increase banks' agricultural loan activity, offer
 
21 new farmers an opportunity to start, and increase the
 
22 contribution of agriculture to the diversification of Hawaii's
 
23 economy.
 

 
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 1      SECTION 7.  The board shall submit to the legislature an
 
 2 annual report on the revenues and expenditures, progress in
 
 3 meeting the overall goals, and a discussion of any problems
 
 4 encountered in the development of the Hamakua agricultural
 
 5 subdivision.
 
 6      SECTION 8.  There is appropriated out of the general
 
 7 revenues of the State of Hawaii the sum of $         , or so much
 
 8 thereof as may be necessary for fiscal year 1999-2000, for the
 
 9 planning, design, and construction of an agricultural subdivision
 
10 in the Hamakua district of the island of Hawaii.  The sum
 
11 appropriated shall be expended by the agribusiness development
 
12 corporation for the purposes of section 7 of this Act.
 
13                              PART V
 
14      SECTION 9.  In addition, the board shall submit to the
 
15 legislature an annual report to include the following:
 
16      (1)  An evaluation of the effectiveness and practical
 
17           applications of any technical support to small, start-
 
18           up farming operations, with an emphasis on diversified
 
19           agricultural operations;
 
20      (2)  An evaluation of the need for and the availability of
 
21           farm credit from private and public sources;
 
22      (3)  An evaluation of the effects of regulation on new,
 
23           start-up farming operations, with recommendations for
 

 
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 1           ways to streamline the process or cut "red tape";
 
 2      (4)  An evaluation of the effectiveness of tax incentives,
 
 3           with an emphasis on their effects on diversified
 
 4           agricultural operations; and
 
 5      (5)  An evaluation of the transport and distribution
 
 6           programs assisted by the department of agriculture, the
 
 7           department of transportation, and regulated by the
 
 8           public utilities commission.
 
 9                              PART VI
 
10      SECTION 10.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 11.  This Act shall take effect on June 30, 1999;
 
13 provided that:
 
14      (1)  Section 2 shall be repealed on June 30, 2001; provided
 
15           that section 163D-3(b), Hawaii Revised Statutes, shall
 
16           be reenacted in the form in which it read on the day
 
17           before the effective date of this Act; and
 
18      (2)  Sections 5 and 8 shall take effect on July 1, 1999.