STAND. COM. REP. NO. 1671
RE: S.B. No. 760
Honorable Scott K. Saiki
Speaker, House of Representatives
Thirtieth State Legislature
Regular Session of 2019
State of Hawaii
Your Committee on Agriculture, to which was referred S.B. No. 760, S.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO AGRICULTURE,"
begs leave to report as follows:
(1) Expanding the definition of "qualified agricultural costs" for purposes of qualifying for the Important Agricultural Land Qualified Agricultural Cost Tax Credit (Tax Credit) to include expenditures related to clearing, improving, and restoring qualifying former sugar and pineapple plantation lands; provided that the restored soil can only be used for agricultural uses and activities; and
(2) Extending through the 2029 tax year the time in which the Department of Agriculture may certify Tax Credits.
The Hawai‘i Farm Bureau, Kamehameha Schools, Hawaii Cattlemen's Council, and a few concerned individuals supported this measure. The Department of Agriculture, Department of Taxation (DOTAX), Land Use Commission, and Office of Planning (OP) submitted comments on this measure.
Your Committee has amended this measure by:
(1) Clarifying that the plantations lands are those designated as important agricultural lands;
(2) Deleting the requirement that the restored soil can only be used for agricultural uses and activities;
(3) Requiring that any cost incurred, including clearing, removal, and soil restoration costs, must be for agricultural business operations or facilities; and
(4) Changing its effective date to July 1, 2150, to encourage further discussion.
Your Committee has adopted the amendments proposed by OP, which decision has been reinforced by the concerns in the testimony of DOTAX. To avoid confusion, and in line with DOTAX's concern, expressly stating that the plantation lands must be designated as important agricultural lands to qualify for the Tax Credit was required. DOTAX also expressed concern that the language of the measure as received by your Committee, applied the requirement of agricultural uses and activities only to restored soil, and not to the clearing of or removal of debris from the plantation lands. OP's proposed amendment expressly and uniformly requires that all clearing, removal, and soil restoration costs must be for agricultural business operations or facilities.
As affirmed by the record of votes of the members of your Committee on Agriculture that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 760, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 760, S.D. 2, H.D. 1, and be referred to your Committee on Finance.
Respectfully submitted on behalf of the members of the Committee on Agriculture,
RICHARD P. CREAGAN, Chair