Honolulu, Hawaii



RE:    H.B. No. 501

       H.D. 1

       S.D. 1




Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii




     Your Committee on Ways and Means, to which was referred H.B. No. 501, H.D. 1, S.D. 1, entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to support the local agricultural industry by expanding the types of utility services for which agricultural ratepayers may qualify for preferential rates.


     This measure also requires the Public Utilities Commission to define the terms "qualified agricultural activities" and "bona fide agribusinesses" for purposes of the preferential rates.


     Your Committee received written comments in support of this measure from the Department of Agriculture, Land Use Research Foundation of Hawaii, Hawaii Farm Bureau, and Ulupono Initiative.  Your Committee received written comments on this measure from the Hawaii Public Utilities Commission.


     Your Committee finds that the local agricultural industry is vitally important to Hawaii's efforts to attain self-sufficiency.  In order for farmers and ranchers to remain competitive and self-sustaining, the State must provide incentives and mechanisms to ensure that all means of supporting the agricultural industry are implemented.  Your Committee further finds that providing preferential rates for certain public utility services such as water, interisland shipping, and electricity, to ratepayers engaged in agricultural activity will help to protect the local agricultural industry.


     Your Committee notes that the Public Utilities Commission must define "qualified agricultural activities" and "bona fide agribusinesses" to implement the preferential rate program.  As guidance, your Committee refers the Commission to the definition of "farming operation" under section 165-2, Hawaii Revised Statutes.  Your Committee requests that the Commission consider using similar language under "farming operation," applied appropriately, to define "qualified agricultural activities" and "bona fide agribusinesses."


     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. 501, H.D. 1, S.D. 1, and recommends that it pass Third Reading.


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