STAND. COM. REP. NO. 861
RE: S.B. No. 837
Honorable Ronald D. Kouchi
President of the Senate
Thirtieth State Legislature
Regular Session of 2019
State of Hawaii
Your Committee on Ways and Means, to which was referred S.B. No. 837, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO FARMS,"
begs leave to report as follows:
The purpose and intent of this measure is to encourage and support the growth of new, small, and diversified farming businesses.
More specifically, this measure excludes from the income tax the lesser of fifty-one percent or $50,000 of gross annual income earned by a farmer.
Your Committee received written comments in support of this measure from the Department of Agriculture, Hawaii Farm Bureau, Oahu County Committee on Legislative Priorities of the Democratic Party of Hawaii, and Ulupono Initiative.
Your Committee received written comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.
Your Committee finds that Hawaii imports far more goods and services than it exports, resulting in a significant negative trade flow. Your Committee also finds that the two largest trade imbalances are in the areas of energy and agriculture. Your Committee further finds that more efforts are needed to address the imbalance in agricultural trade and significantly expand food production in the State.
Your Committee has amended this measure by:
(1) Clarifying the entities to which the income tax exclusion applies;
(2) Replacing the term "farming activities" with "agricultural activities";
(3) Defining the term "value-added";
(4) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and
(5) Making technical nonsubstantive amendments for purposes of consistency, clarity, and style.
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 S.B. No. 837, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 837, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
DONOVAN M. DELA CRUZ, Chair