SB 504: RELATING TO AGRICULTURE.

A BILL FOR AN ACT

RELATING TO AGRICULTURE.

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

     SECTION 1.  The legislature finds that increasing local agricultural production is essential to the long-term sustainability and food security of the State.  However, local agricultural producers face significant economic challenges, particularly with the high costs of transporting agricultural products and necessary supplies across the State.  In a recent survey report on Hawaii commercial agricultural expansion, thirty-nine per cent of local ranchers and farmers cited shipping and transportation costs as a leading barrier to the expansion of their agricultural production.  These transportation costs place undue strain and financial burdens on farmers and ranchers, limiting their ability to compete in local markets and reducing the overall productivity of Hawaii's agricultural sector.

     The legislature recognizes that, to successfully scale up local production, the establishment of a cost reimbursement program that offsets the increased transportation costs of agricultural producers is necessary to ensure growth in the agricultural sector.  The financial relief provided by a cost reimbursement program would help strengthen local agriculture, encourage greater self-sufficiency, support the State's broader efforts to diversify its economy, and promote sustainable agricultural practices.

     Accordingly, the purpose of this Act is to ensure that certain local agricultural producers, including those that manage livestock and produce essential commodities and those engaged in floriculture and nursery production, receive support to offset the high costs of transporting goods to market and to obtain necessary supplies by establishing a local agriculture transportation cost reimbursement program.

     SECTION 2.  Chapter 141, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§141-    Local agriculture transportation cost reimbursement program; rules.  (a)  There is established within the department of agriculture a local agriculture transportation cost reimbursement program to reimburse eligible agricultural producers for a portion of the producer's costs to transport agricultural commodities.

     (b)  To be eligible to receive reimbursement payments pursuant to this section, an agricultural producer shall:

     (1)  Be an owner of livestock or a producer of agricultural commodities in the State, a cooperative aggregator or food hub, or a start-up or small-scale farmer demonstrating commercial intent that earns below the threshold of gross receipts under paragraph (3);

     (2)  Incur costs for transporting in a covered motor vehicle or through air cargo, parcel, or water cargo carrier services:

          (A)  Livestock, livestock products, or agricultural commodities to market within the State; or

          (B)  Supplies for the use of the agricultural producer; and

     (3)  Provide to the department of agriculture proof that the agricultural producer has annual gross receipts totaling $          or more.

     (c)  The total amount of reimbursement payments disbursed pursuant to this section shall not exceed $           in any year; provided that no single producer shall receive more than $25,000 or fifty per cent of their eligible transportation costs per fiscal year, whichever is less; provided further that no single cooperative aggregator or food hub shall receive more than $50,000 or fifty per cent of their eligible transportation costs per fiscal year, whichever is less.

     (d)  The department shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session.  The report shall include:

     (1)  The total number of producers reimbursed;

     (2)  The total amount of funds disbursed; and

     (3)  Any recommendations for improvements or modifications to the program.

     (e)  The department may establish rules pursuant to chapter 91 necessary to carry out the purposes of this section.

     (f)  For purposes of this section:

     "Agricultural commodity" has the same meaning as in section 145-21, including nursery production.

     "Covered motor vehicle" means a motor vehicle:

     (1)  Registered and owned by an owner of livestock or a producer of agricultural commodities in the State; and

     (2)  Used for the transport of livestock, livestock products, agricultural commodities, and supplies within the State."

     SECTION 3.  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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the department of agriculture to fund and administer the local agriculture transportation cost reimbursement program established pursuant to this Act.

     The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.

     SECTION 4.  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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to establish and fund one full-time equivalent (1.0 FTE) position within the department of agriculture to administer the local agriculture transportation cost reimbursement program established pursuant to this Act.

     The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.

     SECTION 5.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2050.

Report Title:

DOA; Transportation Costs; Shipping Costs; Reimbursements; Position; Appropriations

Description:

Establishes a Local Agriculture Transportation Cost Reimbursement Program within the Department of Agriculture to reimburse eligible ranchers and farmers a portion of their costs to transport livestock, livestock products, agricultural commodities, and certain supplies, under certain conditions.  Establishes a position to administer the Program.  Appropriates funds.  Effective 7/1/2050.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to agriculture.

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

     SECTION 1.  The legislature finds that increasing local agricultural production is essential to the long-term sustainability and food security of the State.  However, local agricultural producers face significant economic challenges, particularly with the high costs of transporting agricultural products and necessary supplies across the State.  In a recent survey report on Hawaii commercial agricultural expansion, thirty-nine per cent of local ranchers and farmers cited shipping and transportation costs as a leading barrier to the expansion of their agricultural production.  These transportation costs place undue strain and financial burdens on farmers and ranchers, limiting their ability to compete in local markets and reducing the overall productivity of Hawaii's agricultural sector. 

     The legislature recognizes that, to successfully scale up local production, the establishment of a cost reimbursement program that offsets the increased transportation costs of agricultural producers is necessary to ensure growth in the agricultural sector.  The financial relief provided by a cost reimbursement program would help strengthen local agriculture, encourage greater self-sufficiency, support the State's broader efforts to diversify its economy, and promote sustainable agricultural practices.  

     Accordingly, the purpose of this Act is to ensure that certain local agricultural producers, particularly those that manage livestock and produce essential commodities, receive support to offset the high costs of transporting goods to market and to obtain necessary supplies by establishing a local agriculture transportation cost reimbursement program.

     SECTION 2.  Chapter 141, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§141-    Local agriculture transportation cost reimbursement program; rules.  (a)  There is established within the department of agriculture a local agriculture transportation cost reimbursement program to reimburse eligible agricultural producers for a portion of the producer's costs to transport agricultural commodities.

     (b)  To be eligible to receive reimbursement payments pursuant to this section, an agricultural producer shall:

     (1)  Be an owner of livestock or a producer of agricultural commodities in the State;

     (2)  Incur costs for transporting in a covered motor vehicle or through air cargo, parcel, or water cargo carrier services:

          (A)  Livestock, livestock products, or agricultural commodities to market within the State; or

          (B)  Supplies for the use of the agricultural producer; and

     (3)  Provide to the department of agriculture proof that the agricultural producer has annual gross receipts totaling $          or more.

     (c)  The total amount of reimbursement payments disbursed pursuant to this section shall not exceed $           in any year.

     (d)  The department may establish rules pursuant to chapter 91 necessary to carry out the purposes of this section.

     (e)  For purposes of this section:

     "Agricultural commodity" has the same meaning as in section 145-21.

     "Covered motor vehicle" means a motor vehicle:

     (1)  Registered and owned by an owner of livestock or a producer of agricultural commodities in the State; and

     (2)  Used for the transport of livestock, livestock products, agricultural commodities, and supplies within the State."

     SECTION 3.  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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the department of agriculture to fund and administer the local agriculture transportation cost reimbursement program established pursuant to this Act.

     The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.

     SECTION 4.  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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to establish and fund one full-time equivalent (1.0 FTE) position within the department of agriculture to administer the reimbursement local agriculture transportation cost reimbursement program established pursuant to this Act.

     The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.

     SECTION 5.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2025.

Report Title:

DOA; Transportation Costs; Shipping Costs; Reimbursements; Position; Appropriations

Description:

Establishes a Local Agriculture Transportation Cost Reimbursement Program within the Department of Agriculture to reimburse eligible ranchers and farmers a portion of their costs to transport livestock, livestock products, agricultural commodities, and certain supplies, under certain conditions.  Establishes a position to administer the Program.  Makes appropriations.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 180

Honolulu, Hawaii

RE:    S.B. No. 504

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Agriculture and Environment, to which was referred S.B. No. 504 entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Establish a Local Agriculture Transportation Cost Reimbursement Program (Program) within the Department of Agriculture to reimburse eligible ranchers and farmers a portion of their costs to transport livestock, livestock products, agricultural commodities, and certain supplies, under certain conditions; and

     (2)  Appropriate funds:

          (A)  For the Department of Agriculture to fund and administer the Program; and

          (B)  To establish and fund one full-time equivalent (1.0 FTE) position within the Department of Agriculture to administer the Program.

     Your Committee received testimony in support of this measure from the Department of Agriculture; Office of the Mayor of the County of Maui; Hawaiʻi Farmers Union United; Hawaii Cattlemen's Council, Inc.; Hawaiʻi Farm Bureau; Hawaii Food Industry Association; Ponoholo Ranch Limited; Kealia Ranch; Chamber of Commerce Hawaii; and five individuals.

     Your Committee received testimony in opposition to this measure from Animal Rights Hawaiʻi.

     Your Committee finds that because Hawaii is an island state, any increase in the cost of interisland transportation creates a barrier to market for many local ranchers and farmers.  Your Committee recognizes that shipping and transportation costs are a leading impediment to expansion for many local ranchers and farmers.  The Program proposed in this measure will offset high shipping and transportation costs for local food producers, incentivize more agricultural production in the State, and make locally grown food more competitive with imported products and more available and accessible to consumers and manufacturers on other islands.

     Your Committee has amended this measure by:

     (1)  Expanding the eligibility of the Program to include cooperative aggregators, food hubs, and beginning or small-scale farmers that demonstrate commercial intent but earning below a certain threshold;

     (2)  Establishing the following caps on reimbursement payments:

          (A)  For a single producer:  $25,000 or fifty percent of their eligible transportation costs per fiscal year, whichever is less; and

          (B)  For a single cooperative aggregator or food hub:  $50,000 or fifty percent of their eligible transportation costs per fiscal year, whichever is less;

     (3)  Amending the definition of "agricultural commodity" to include floriculture and nursery production to expand eligibility for the Program;

     (4)  Requiring the Department of Agriculture to submit annual reports to the Legislature before the convening of each Regular Session;

     (5)  Updating section 1 to reflect its updated purpose;

     (6)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (7)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Agriculture and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 504, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 504, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Agriculture and Environment,