Report Title:

Agriculture; State Agricultural Land Protection Program

Description:

Establishes the state agricultural land protection program; makes appropriation to Hawaii Farm Bureau Federation for research and marketing. Makes an appropriation for University of Hawaii for development of new agricultural products, revitalization of Hawaii cattle industry, and bioremediation programs. (SB3051 HD1)

THE SENATE

S.B. NO.

3051

TWENTY-SECOND LEGISLATURE, 2004

S.D. 2

STATE OF HAWAII

H.D. 1


 

A BILL FOR AN ACT

 

relating to Agriculture.

 

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

PART I

Section 1. The legislature finds that article XI, section 3 of the Hawaii state constitution requires the State to conserve and protect agricultural lands and assure the long-term availability of agriculturally suitable lands. These lands are critical to the long-term viability of agriculture as a major export industry and as a means to increase Hawaii's self-sufficiency and diversification in agriculture.

The purpose of this Act is to establish a state agricultural land protection program for the voluntary acquisition of agricultural easements on lands identified as important agricultural lands to the State.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

STATE AGRICULTURAL LAND PROTECTION PROGRAM

§   -1 Purpose. The legislature finds that the quality of life of the people of Hawaii is dependent in many ways upon the vitality and viability of the agricultural industry. The sustainability of agriculture in Hawaii will depend on factors related to agricultural business viability and affordable access to productive agricultural lands. The State has a compelling interest in ensuring a strategic agricultural land base that is affordable to farmers and the industry as a whole for current and future agricultural entrepreneurs.

The voluntary acquisition of easements that require lands identified as important agricultural lands to be restricted to agricultural use is an important tool in the State’s efforts to ensure that agricultural land remains affordable to farmers and that the State’s important agricultural lands are protected for long-term agricultural use. Thus, the legislature finds and declares that the use of moneys for the acquisition of agricultural easements on important agricultural lands is in the public interest and will promote the public health, safety, and general welfare of the people of this State.

§   -2 Definitions. As used in this chapter, unless the context otherwise requires, "Agricultural easement" is defined in section 198-1. "Department" means the department of agriculture.

§   -3 Agricultural land protection board. (a) There is established within the department for administrative purposes the agricultural land protection board consisting of five members appointed by the governor pursuant to section 26-34, except as otherwise provided in this section. Two of the members shall be appointed from a list of nominees submitted by the speaker of the house of representatives and two shall be appointed from a list of nominees submitted by the president of the senate. The members of the agricultural land protection board shall include at a minimum one farmer, and shall include but not be limited to members with expertise in agriculture, agricultural economics, and real property appraisal.

(b) The members of the agricultural land protection board shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(c) The agricultural land protection board shall evaluate and accept proposals for the acquisition of agricultural easements on land identified as important state agricultural land pursuant to article XI, section 3 of the Hawaii Revised Statutes. In so evaluating, the board shall consider at a minimum the following:

(1) The standards and criteria which led to the land’s identification as important agricultural land pursuant to article XI, section 3 of the Hawaii state constitution;

(2) The suitability of the land for agricultural use, based on soil classification and other criteria, such as those criteria determined by the agricultural lands of importance to the State of Hawaii (ALISH) classification system adopted by the board of agriculture on January 28, 1977, or similar agricultural productivity rating systems;

(3) The fair market value of the land compared with the fair market value of the land when used for agricultural purposes as determined by independent appraisals;

(4) The degree to which the acquisition would result in the protection of a critical mass or contiguous blocks of agriculturally productive land; and

(5) The degree to which the acquisition would serve to sustain the agricultural potential of the State.

§   -4 Agricultural land protection program. (a) The chairperson of the board of agriculture shall establish a program to assist the State in the acquisition of agricultural easements on land identified as important agricultural land to the State pursuant to article XI, section 3 of the Hawaii state constitution. The chairperson may pay from funds appropriated to carry out this chapter or received from other sources any owner of agricultural land identified as important agricultural land to the State and as approved by the agricultural land protection board, an amount determined to be equitable in consideration of the benefits to the public, but not to exceed the difference between the fair market value of the land and the fair market value of the land restricted to agricultural purposes.

(b) Title to the agricultural easement shall be held in the name of the State; provided that the county in which the land is located may hold title to the agricultural easement jointly with the State if the county provides assistance or a portion of the funds required for the purchase.

§   -5 Rules and procedures. The board of agriculture shall adopt rules pursuant to chapter 91 necessary for the purposes of this chapter. The rules shall include but not be limited to criteria and procedures for:

(1) Identifying evaluation and selection criteria for the acquisition of agricultural easements on important agricultural land;

(2) Acquisition of agricultural easements;

(3) Guidelines for county programs that would be eligible for state matching funds;

(4) Management of easements by the State, counties, or other nonprofit entities;

(5) Monitoring and evaluation of the agricultural land protection program; and

(6) Administration of the agricultural land protection fund.

§    -6 State matching of county agricultural land protection purchases; guidelines. The board of agriculture shall adopt guidelines and procedures for county purchases of agricultural easements that are matched by state agricultural land protection funds. State funds requested as a match for county or other sources of funding shall only be used by entities participating in an agricultural land protection program adopted by each county that meets these guidelines.

§   -7 Funding for acquisition; dedicated funding source. The purchase of agricultural easements shall be financed by funds from state, federal, or private grants and appropriations, any funds received pursuant to section   -9, and by           . Funds collected from the             shall be deposited into the state agricultural land protection fund established under section    -10, and shall be used for the acquisition of agricultural easements pursuant to this chapter.

§   -8 Eligibility for tax incentives. A landowner who sells or donates an agricultural easement on important agricultural lands to the State or counties pursuant to this chapter, shall be eligible for tax incentives enacted to promote the protection of important agricultural land, to the extent allowable. An agricultural business with agricultural operations on important agricultural lands with an agricultural easement that is acquired pursuant to this chapter shall be eligible for tax incentives enacted to promote long-term agricultural use of important agricultural lands.

§   -9 Use of land for which easement acquired. Uses on lands subject to an agricultural easement acquired pursuant to this chapter shall be restricted to agricultural uses and normal agricultural operations as set forth in chapter 205 and applicable county zoning ordinances, including but not limited to the sale of farm products produced on the land.

§   -10 Termination of easement. (a) It is the intent of the legislature that the agricultural easement acquired pursuant to this chapter be held by the State in perpetuity. If circumstances have changed and it is determined that farming is no longer feasible on the land under easement, then the agricultural easement may be terminated only in the manner and at the time specified in this section. Notwithstanding any other law to the contrary, any agricultural easement acquired pursuant to this chapter with matching funds from the federal farm and ranch lands protection program pursuant to title 7 Code of Federal Regulations part 1491, as amended, shall be held by the State in perpetuity.

(b) At any time after thirty years from the date of acquisition of an agricultural easement, the landowner may request that the easement be reviewed for possible termination. Upon a request for review of the termination of an agricultural easement, an inquiry shall be conducted by the agricultural land protection board to determine whether conditions on the land with the easement have changed so significantly that agricultural production is no longer viable and and it has become impossible to fulfill the purpose of the easement. The inquiry shall be concluded and a decision reached by the agricultural land protection board within one hundred eighty days after the request for termination, and shall include:

(1) An onsite inspection of the land with the agricultural easement; and

(2) A public hearing conducted by the agricultural land protection board within the county in which the land with the agricultural easement is situated after adequate public notice.

(c) An agricultural easement may be terminated only with the approval of the legislative body of the county in which the land with the easement is situated. In deciding whether to approve the request for termination, the county legislative body shall receive the recommendations of farming organizations on the island on which the land with the easement is situated and the person or agency responsible for administering the county’s agricultural land protection program, if one is established. The decision of the county legislative body shall be made after the public hearing required in subsection (b). The county legislative body shall notify the agricultural land protection board of its decision within thirty days after the conclusion of the public hearing required in subsection (b).

(d) Upon the affirmative vote of a majority of the agricultural land protection board, and upon the approval of the chairperson of the board of agriculture and the state comptroller, the request for termination shall be approved, and the landowner shall be notified.

(e) If the request for termination is approved, an appraisal of the land with the easement shall be ordered by the agricultural land protection board at the expense of the landowner requesting termination of the agricultural easement. No more than one hundred eighty days following the appraisal, the landowner may repurchase the agricultural easement by paying the difference between the fair market value and the agricultural value of the subject land, as determined by the appraisal, to the agricultural land protection board. For purposes of this subsection, the agricultural value is the price as of the valuation date which a vendor, willing but not obligated to sell, would accept, and which a purchaser, willing but not obligated to buy, would pay for comparable land that is restricted to agricultural use.

(f) In the case of the termination of an agricultural easement that was originally acquired with matching funds, the agricultural land protection board shall deposit the state portion of the repurchase payment received under subsection (e) into the agricultural land protection fund. The state portion of the repurchase payment shall be the percentage of the repurchase payment that is equal to the percentage of the original easement purchase price contributed by the State. The agricultural land protection board shall also distribute to the contributing county the portion of the repurchase payment that is equal to the percentage of the original easement purchase price contributed by the county. The county shall deposit these funds in a county special account established solely for the purchase of agricultural easements.

(g) If any of the funds deposited in the county's special account pursuant to this section have not been expended or committed within three years from the date of deposit into the special account, the county collector shall remit those funds to the state comptroller for deposit in the state agricultural land protection fund.

(h) If the request for termination of the agricultural easement is denied, or if the landowner fails to repurchase the

easement within one hundred eighty days of the appraisal, the

landowner shall not again request termination of the agricultural easement until five years after the landowner's last request for termination.

§   -11 Agricultural land protection fund. (a) There is established in the state treasury the agricultural land protection fund, into which shall be deposited:

(1) Funds from state, federal, or private grants and appropriations;

(2) Funds received pursuant to section -9; and

(3) Funds from                     , which shall be a permanent source of funds to be restricted to program expenditures as authorized in this part.

(b) Moneys in the agricultural land protection fund shall be used to acquire agricultural easements or to provide matching funds for the acquisition of agricultural easements pursuant to this chapter, as part of the state agricultural land protection program pursuant to section -2 or county programs established for the purchase of agricultural easements.

(c) The fund shall be administered by the department. Appropriations or authorizations from the fund shall be expended by the department. The department may contract with other public or private entities for the provision of all or a portion of the services necessary for the administration and implementation of the fund. The department may set fees or charges for fund management or technical assistance provided under this section.

(d) All interest earned on the deposit or investment of the moneys in the fund shall become a part of the fund.

§   -12 Annual report. The department shall submit to the governor and the legislature, at least twenty days prior to the convening of each regular session, a complete report describing the activities of the state agricultural land protective program, agricultural easements acquired, and fund administration pursuant to this chapter."

SECTION 3. Section 198-1, Hawaii Revised Statutes, is amended to read as follows:

"§198-1 Conservation easement defined. For the purposes of this chapter, a "conservation easement" is an interest in real property created by deed, restrictions, covenants, or conditions, the purpose of which is to:

(1) Preserve and protect land predominantly in its natural, scenic, forested, or open-space condition;

(2) Preserve and protect the structural integrity and physical appearance of cultural landscapes, resources, and sites [which] that perpetuate indigenous native Hawaiian culture; [or]

(3) Preserve and protect historic properties as defined in section 6E-2, and traditional and family cemeteries[.]; or

(4) In the case of agricultural land, restrict use of the affected land to agricultural use and forbid or limit activities and uses that would adversely affect the land’s current and future use for agriculture. A conservation easement on agricultural land shall be known as an "agricultural easement" for the purposes of this chapter and other programs and incentives enacted by the legislature for agricultural easements."

PART II

SECTION 4. The legislature finds that research and market development are critical for the continued growth of Hawaii's agricultural industry. To provide the necessary support for the transition of Hawaii's agricultural industry, more resources must be directed towards agricultural research and market development.

Agricultural research is the basic foundation of Hawaii's agricultural industry. For the past few years, funding for agricultural research has declined dramatically. It is critical to maintain and increase the level of funding to keep Hawaii's agricultural industry competitive in the global marketplace.

Market development is another key component to expanding opportunities for Hawaii's agricultural businesses. Hawaii's small size and isolated location provide challenges to the farmer in the global marketplace. Considerable effort and funds are needed to increase crop production by developing new markets and expanding existing markets.

The legislature finds that it is in the public interest to support and foster the growth of Hawaii's agricultural industry. Therefore, the purpose of this measure is to provide the necessary funds for agricultural research and market development.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2004-2005 as a grant-in-aid to the Hawaii Farm Bureau Federation for agricultural research and development. The money shall be disbursed to the Hawaii Agriculture Research Center to be allocated as follows:

(1) $         for research; and

(2) $         for market development.

The sum appropriated shall be expended by the department of agriculture for the purposes of sections 4 and 5 of this Act.

PART III

SECTION 6. The University of Hawaii college of tropical agriculture and human resources is committed to the preparation of students and all citizens of Hawaii for life in the global community through research and educational programs supporting tropical agricultural systems that foster viable communities, a diversified economy, and a healthy environment.

The legislature finds that Hawaii must diversify its economic base beyond a reliance on tourism. A revived and revitalized state agricultural industry promises not only to diversify Hawaii's economy, but also to sustain and stabilize Hawaii's food supply and protect the open space and lifestyle that Hawaii residents and visitors value.

Hawaii's agriculture and value-added products contribute $2,400,000,000 to the State's economy and employ more than thirty-eight thousand people. During the past twenty years, the value of diversified agriculture in Hawaii more than doubled, reaching a record $370,900,000 in farm-level revenues in 2002. The prime agricultural lands released from sugar and pineapple production present a rare window of opportunity to further agricultural development. Currently, about one hundred thousand acres of former sugar and pineapple land lie fallow, awaiting economically viable agribusinesses. If all this land could be put to productive use in successful agricultural ventures, an additional $1,700,000,000 to $4,400,000,000 could be added to the State's economy.

Also during the past two decades, the Hawaii beef cattle industry has experienced structural shifts that have led to a significant decline in the market share of locally produced beef, from an estimated thirty per cent to less than ten per cent, and to a thirty-seven per cent decrease in the farm value of cattle and calf sales. At present, the majority of calves born in the State are exported to various markets on the United States mainland and Canada. Keeping fifty thousand of these calves in Hawaii could potentially increase the farm gate value of the beef cattle industry by $25,000,000. Both forage-based and feedlot finished beef hold great promise as grown-in-Hawaii import substitution products.

The legislature finds that for Hawaii agriculture to take advantage of current opportunities, it must generate high quality, market-driven products that offset Hawaii's high costs of land, labor, water, and transportation. This requires that agriculture have access to state-of-the-art research and outreach programs.

The college of tropical agriculture and human resources is engaged in several areas of research and outreach that have already contributed to the resurgence of agriculture in Hawaii. Among the college's contributions to the State's agricultural industry are:

(1) Identification and development of high-value plant- and animal-based food and fiber products to help Hawaii stay competitive in a global market;

(2) Development of effective and environmentally sound pest, disease, nutrient, and resource management systems; and

(3) Research that advances agricultural biotechnology, an industry that has the potential to bring billions of dollars to the State's economy.

The legislature finds that work in these areas must be expanded to develop and promote high-value products, including:

(1) New and improved plant varieties that resist disease and environmental stress and tolerate pesticides;

(2) Plants and plant cell culture systems that produce high-value chemicals, fragrances, vaccines, or specific nutrients;

(3) Biotechnological innovations that permit rapid analysis to screen for valuable molecular products, evaluate environmental and process chemistry, and identify pest species; and

(4) Resource- and herd-management approaches and market research that maximize the yield and profitability of, and expand demand for, Hawaii-finished beef.

The legislature further finds that expansion of ongoing research and outreach efforts by the college in the areas of obesity prevention and children and family resources can improve the health and well-being of Hawaii residents.

The legislature recognizes that poor diet and physical inactivity diminish quality of life and exact huge financial costs. In 2000, the United States spent an estimated $117,000,000,000, nearly ten per cent of the United States health care expenditure, on obesity and its complications. Diseases related to obesity--heart disease, cancer, stroke, hypertension, and diabetes--are the main killers of our era. Obesity and its related diseases are very common among native Hawaiian and Pacific islander populations: the 2001 Hawaii Health Survey found almost sixty-five per cent of native Hawaiians to be obese, and a recent college of tropical agriculture and human resources nutritional assessment in American Samoa found that fifty-five per cent of children ages five to ten have elevated cholesterol and nine per cent have elevated blood sugar levels, a marker for Type II diabetes. The poor success rate of conventional weight loss programs has led health professionals to recognize the benefits of community-based lifestyle approaches that respect Pacific island cultures. There is evidence that modern lifestyles and diets contribute to obesity and that returning to cultural roots improves the diet and health of Pacific peoples.

The college is well positioned to address this critical public health issue. The college has a statewide network of research and agricultural facilities, works closely with colleges of agriculture throughout the United States-affiliated Pacific, and has active research and outreach programs in:

(1) Obesity prevention and weight management;

(2) Nutritional properties of tropical plants and foods of the Pacific region;

(3) New food products that can be grown locally and recipes; and

(4) Tropical food production.

A cornerstone of the college's expanded obesity prevention program will be the establishment of community gardens to grow tropical fruits, vegetables, and starchy root and tree crops important to Pacific peoples. The gardens will: be venues for physical activity to manage weight; provide sites for hands-on education and training programs that are often adjacent to Hawaiian homestead properties; and increase the availability for local schools of food that will improve children's dietary habits and prevent obesity. One benefit of this approach is the enhanced food security that will result from greater production and consumption of healthy, safe, locally grown food. Collaborations will be developed with schools and health centers to bring the college's expanded services to individuals with obesity and associated chronic diseases.

The legislature further finds that natural, noninvasive, and less costly clean up methods are needed to effectively and efficiently clean Hawaii's waterways of contaminants. The college is presently engaged in research to explore biological methods for cleaning contaminated waters and sediments ("bioremediation") by using the uptake processes of native plant species, natural microbial processes, and other natural remediation processes.

The legislature finds that the college of tropical agriculture and human resources has submitted a proposal to conduct research and small-scale testing for the treatment of contaminated sediment from local waterways. The proposal includes:

(1) A biotreatability evaluation;

(2) Additional research on the bioremediation of contaminated sediments;

(3) A twelve-month screening program for plant species to remediate polycyclic aromatic hydrocarbons, halogenated hydrocarbons, and heavy metals; and

(4) Small-scale field testing.

The legislature further finds that the successful completion of the above research and small-scale testing is essential to the development of full-scale commercial application of bioremediation technologies for the treatment of contaminated sediments in statewide waterways. Performance, operation, and maintenance factors and cost of various biological treatment processes will be identified in the research and small-scale testing phase. The United States Army Corps of Engineers will provide technical assistance in the testing and evaluation effort.

The purpose of this part is to appropriate funds to the University of Hawaii that will support the college of tropical agriculture and human resources research and instruction programs that will further its mission and actively help Hawaii diversify its economy and ensure a sustainable environment.

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2004-2005 for the purposes of this part; provided that the funds shall be added to the base budget of the University of Hawaii.

The sum appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 8. As a component of the bioremediation program, the University of Hawaii college of tropical agriculture and human resources shall submit an interim report of the findings from the research described in section 7 of this Act and an evaluation of the feasibility of scaling up the technology to the legislature, not later than twenty days prior to the convening of the 2005 regular session, and a final report upon the completion of the project or not later than twenty days prior to the convening of the 2006 regular session, whichever occurs first.

PART IV

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2010.