House Standing Committee on Agriculture & Food Systems

Aloha, Kakahiaka Kakou. Welcome to the Joint Hearing for the House Committees on Agriculture & Food Systems and Tourism. Today is February 5th, 2025, at 8:45, a little after 8:45, and we're convening in Room 325 here at the Hawaii State Capital. I'm Kirsten Kahaloa, Chair of the Agriculture and Food Systems Committee.

Today on our Committee we have Vice Chair Kusch and Representative Perruso. Thank you for joining us, Committee on Tourism, if you'd like to introduce your members.

Thank you. Aloha. My name is-- I'm Representative Adrian Tam. I'm Chair of the Tourism Committee. Alongside me, I have my Vice Chair Shirley Templo and I have our members, Rep. Ilagan, Rep. Holt and Rep. Todd.

Thank you for joining us. Today we have a robust discussion on agricultural tourism. We're going to do a little bit of housekeeping before we start, focusing on our measures before us on agenda today.

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Thank you again for joining us today. Our first measure on the agenda is HB 1337. Just give me one moment. HB 13-- Oh no, this is not the right one.

HB 189, relating to agricultural tourism, requires the counties to adopt ordinance setting forth procedures and requirements for the review and permitting of agricultural tourism uses and activities as secondary uses in addition to accessory uses on a working farm or farm operation.

Requires the county ordinances to include requirements that the principal agricultural use on a working farm or farming operation preexist the issuance of any land use permit or building permit for any accessory or secondary use. Agricultural tourism includes only those activities that are allowed under existing zoning and land use regulations.

And agricultural tourism be allowed only on land on which productive agricultural use is occurring. First to testify today is the Hawaii Department of Agriculture.

Good morning, Chair, Vice Chair, Members of the Committee. Cedric Gates here on behalf of the Department of Agriculture. The Department stands on its written comments, here for any questions.

Thank you. We have testimony in person. Taylor Kellerman.

Hello. Good morning, Committee Members and Chair. Thank you so much for the opportunity to speak with you this morning. My name is Taylor Kellerman. I'm the Director of Diversified Agriculture and Land Stewardship for Kualoa Ranch. Born and raised on the windward side of Oahu.

I've worked in Hawaii's agriculture industry for the last 25 years and currently serve on multiple board affiliations.

I'm here this morning to testify in opposition against the bill and the negative consequences that the listed regulations would have on both our business as well as current and future endeavors that other farmers and ranchers could pursue to diversify their economies.

As an example, at Kualoa, our ag programs produce approximately 90,000 pounds of food annually and we offer over 60 different products. We operate an on-site market that services our surrounding community, which is a former food desert, as well as support other 20 other local producers. All of this is possible because of the economic engine that agritourism provides.

In short, limiting this portion of our business per the regulations outlined in this bill would mean a loss of over 350 jobs in our business and a loss of one of the only seven day a week sources of local food on the windward side of Oahu.

The state has a goal of increasing food security, but the reality is the majority of farming and ranching businesses in Hawaii operate with razor thin margins coupled with constant uncertainty resulting from being at the mercy of Mother Nature.

Assigning across the board limits and restrictions or changes to the way of which an agriculture operation can diversify its economy would have lasting negative effects on the future of food production in Hawaii. Our primary issue with this bill, Chair, is that it does list that the income for tourism cannot be surpassed by the income of agriculture.

And while I understand the intent is to curb loopholes and to basically disallow nefarious actors to enter into the space where there shouldn't be, we are an example of where this portion of the regulation would be incredibly detrimental to our business. So I appreciate your folks time today and thank you very much.

Thank You, Taylor. Next to testify is Hawaii Cattlemen's Council on Zoom.

Thank you, Chairs, Vice Chairs, members of the committees. My name is Nicole Galase on behalf of the Hawaii Cattlemen's Council.

HCC stands on its written testimony in opposition as well because we are concerned that this could negatively impact ranchers who are engaged in agriculture and providing substantial food to the community. This diversification in business is important for keeping our operations in business.

And legitimate ag tourism is an important tool for connecting people to where their food comes from, which is a growing disconnect these days. Thank you for the opportunity to testify.

Thank you for your testimony. Next we have Hawaii Farmers Union. I don't see that-- Oh, hi, Hunter.

Morning, Chairs, Vice Chairs. My name is Hunter Heaivilin here on behalf of Hawaii Farmers Union. We've submitted testimony in support of this measure, particularly highlighting that it addresses a concern I think statewide. We definitely support the counties to have the ability to define the juris-- the controls a little more closely.

I think to Taylor's point, maybe having conditional use permits should these thresholds not be met. But also I think support in the next measure having broader standards maybe related to the land use controls. We did suggest one amendment, maybe the modification for clarity that an agricultural dedication is what is required.

And that I think signals clearly that at least some form of agricultural production is underway to the extent that they've pursued an agricultural dedication. Happy to answer any questions and mahalo for the opportunity to testify.

Thank you for your testimony. Next we have Hawaii Farm Bureau.

Morning Chairs, Vice Chairs, members of the committees. Brian Miyamoto here on behalf of the Hawaii Farm Bureau. You have our written testimony. We support the intent of this measure. We 100% support agritourism. But as we said over and over again, agritourism is a privilege for actual farming or ranching.

Agricultural production needs to be and has to be the primary use on agricultural lands. Everything else is accessory, which agritourism is. Agritourism we consider value added. It helps our farmers and ranchers with their profitability. It helps with outreach and education. We agree that we believe agritourism is mostly a county home rule issue.

Different counties may have a desire for different types of agritourism. We do have concerns with some of the items that the previous testifiers from Cattlemen and the Kualoa branch did bring up. We worked over three years on the recent update of the land use ordinance in the city and county Honolulu, which ag tourism was one of the issues.

And one of the challenges is and what's in here is the requirement of how much of your land needs to be in-- or your parcel needs to be in actual farming.

And maybe if this bill moves forward, a consideration needs to be that not every acre, not every piece of your land on your property is farmable. So we changed the-- or the council changed the definition to farmable land. Now the challenge with that is who's going to make that determination?

Is it going to be Earl here at Department of Ag? Is it going to be DPP, the planning departments that have very little ag background and who's going to enforce it? And then secondly, on the threshold for income, it's not in there.

And again, if the income is even changed to a percentage, what happens if farmer/rancher maintains their ag production but their ag tourism income increases? Are they now in violation? So again, we are completely supportive of protecting our agricultural lands for ag production, ensuring that those who are doing ag tourism are truly farmers and ranchers.

But we don't want any additional burdens, any additional regulations that may limit the bona fide farmers and ranchers, which we still don't really have a definition for. But we also want to protect against those fake ag tourism operations that are operating.

And we all have it in-- or you probably all have it in front of your counties operating tourism activities under the guise of ag tourism. So thank you for the opportunity to provide testimony.

Thank you. We don't have anyone else who indicated they wish to testify. So overall we had six support testimony, four in opposition, one with comments. Would anyone else wish to testify on this measure? Seeing none. Members, questions? Ag Committee first. Representative Perruso.

Thanks. Quick question for Farm Bureau. So thank you for your testimony and the testimony of others as well. And I think that you clearly understand the intent and the context from which this piece of legislation was written. It was really a community bill.

And I think that, you know, we've been talking that about the variation on our islands, you know, so that not all counties are the same, not all islands are experiencing the same level of abuse. So the more rural counties or the counties that experience less intense tourism are seeing less abuse at this time.

But I think that, you know, if, if we look at that section that you mentioned briefly, you were alluding to other people's testimony as well.

But if we look at that section that has to do with the income, the relative income of the tourism activity and agricultural activity, I think we introduced that mechanism just as a talking point. But really I think what the community is concerned about is land use. They would like to see farmers prosper.

But are there-- besides working with the counties, is there language that we can put into state law that clearly prohibits activities that damage the land? So I'm thinking of, you know, for example, mud bogging and gondolas, of course, and restaurants on top of Mount Ka'ala. So for me, those are abusive kinds of interpretations of the statute.

So do you have ideas around that?

Brian Miyamoto, Hawaii Farm Bureau. Thank you, Representative, for the question.

Again, I would suggest that we look at-- and again it's sit-in county-- but look at the work that the stakeholder group did along with other agricultural groups as well as the community and Kualoa Ranch, Department of Agriculture, all part of that stakeholder group along with Ulupono, the cattlemen.

And again, what we want to do is protect our agricultural lands, not make it too restrictive for true farmers and ranchers. So finding that balance. So that would be somewhere that I would suggest. I don't have anything right now. Again, we want to allow agritourism. Let's be clear. Farm Bureau supports ag tourism 100%.

But we are also mindful that there are abuses out there. There are activities that are clearly not agriculture related or there's no agricultural production going on. What that number is, again, it took almost three years. And to be honest, there needs to be some cleanup also.

There are some, we believe potential unintended consequences to true ag producers, true farms and ranches like Kualoa Ranch. That's the last thing we want to see is those businesses impacted because without the ag tourism component, we may see the reduction of the actual agricultural production, right. Again, value added tends to support ag production.

We talk about it all the time. Farmers and ranchers, their margins are razor thin. So anything that can add value to their raw ag production we support.

Well, I guess I'm wondering-- Sorry, if I could ask one more question-- if you support the dedication language that Hunter suggested, so requiring an ag declaration, dedicating and committing to particular practices and I guess we'd have to talk more about that, but there are folks on Maui who have been working on really interesting language.

So I don't know if you had a chance to look at Hunter's testimony.

I didn't. Representative, are you talking about the county's ag dedication for the property tax, which dedication? I would need to take a look at--

Like strengthening that language. Is that something that we could-- What Mr. Heaivilin was suggesting is amending this language in Section 18C to clarify that properties must have received what is commonly known as agricultural dedication based on county rules.

So the real property of the working farm or farming operation as defined in Section 165-2 is taxed based on an agricultural dedication, so adding that language, and is current on its real property tax obligations. So just adding the requirement in state law that all counties be working with this commitment from folks who are on agricultural land and paying those tax rates, those property taxes, those water rates, to engaging in agriculture using a dedication form.

At this point, I would tend to say yes. Again, what farmer, rancher, what ag producer wouldn't want to dedicate in order to take advantage of the reduced property rates? Not all of them have ag water, ag county water. So I don't know if I'd have that in.

But as far as the ag dedication, legitimate farmers for the most part do. Hopefully there is some provision in the event that you do miss-- Sometimes our farmers do miss that, the ag dedication. But again, it's a policy of benefit for farmers and ranchers, bona fide farmers and ranchers.

So we don't see why they wouldn't want to take advantage of that and wouldn't have that at least done so that they can have those reduced property rates again to reduce the cost of their production. So I think it's something that we would consider. Again, we want safeguards.

We want to ensure that true farmers and ranchers, bona fide farmers and ranchers, are the ones that are able to do ag tourism. So, but again, we go back to where, you know, this is mostly a county-- it's a zoning issue.

And I want to allow the flexibilities with the counties, but not put additional burdens on farmers and ranchers, true farmers and ranchers that want to take advantage of being able to do ag tourism on their properties.

Thank you. Thank you so much. Thank you, Chair.

Kualoa Ranch. May I ask a question?

Thank you. Thank you for your testimony. On HB 189, there's a section on what defines via property taxes that it is a, you know, working farm.

So I'm just going to read it. "The real property of a working farm or farming operation as defined in Section 165-2 is taxed as agricultural and is current on its real property tax obligations." I think the intention is how do we measure what is a working farm?

And then that is a qualifier for being able to do ag tourism as defined in statute. And so I just wanted to get a sense that basically says that you're paying property taxes classified in ag for my understanding.

And we're considering that that's a light touch language to define a parcel and a farm that says they're doing tourism, basically ag. I don't know what you think about that particular piece or if there's other language that can kind of create these definitions of bona fide agriculture.

I know for years, I know this has been complex, so it may be hard to answer this question, but we're still trying to determine what does that bona fide agriculture mean, so we have a foundation to say then you can apply to do ag tourism. And I think that's the intention of both measures today.

So just, just with your experience and the Kualoa Ranch's experience, I thought are there any other ways either this or others? Because I know seeing how much percentage of land is under active cultivation hard, how much generated revenue, those pieces are difficult and don't work for every farm in every instance.

So what do you think of that third piece and/or is there another way we can better define this scope?

No, and I really appreciate that, Chair, and even Representative Perruso, I do appreciate your explanation of the true intent. And please note that that is clear to me that the intent is more around zoning and more around making sure that we have rules in place so that loopholes can't be used and that there isn't nefarious activity.

And to be clear, we're very supportive of that. The primary reason for our opposition was just because of that first section and how detrimental it would be. To your point, this is something that's been going on for years and years and years. And I think Brian did a good job of outlining how we did it, tried to do it at the county level with Bill 64, previously Bill 10.

You know, Chair, your point around income and acreage, it's almost impossible to use those two metrics. And so from that standpoint, when you look at how you're zoning and how you have different land use regulations as well as land use zonings.

So for, for example, at Kualoa Ranch, we are a dedicated agriculture zoning and we're dedicated conservation zoning. Obviously we do our agriculture and our agriculture zoning and our conservation management in those other zones. We are IAL, the majority of our property. We participated in that process five years ago, I know it's pre-Covid, I don't remember exactly.

And then also we do have other, what I would consider legitimate agricultural items that we run like conservation plans and things like that. For a commercial activity, it's all done on SMA and CUP provisions, if you will.

So just kind of giving that as context, you know, I feel like at some point, when you're trying to validate true producers, true ranchers, I don't have a clear answer for you, but I do think that what Brian was bringing up, and I think what you're alluding to, which is very valid, is finding those nexus points within existing regulations that you can then tickle that out.

I realize that that is a completely ambiguous term that can't be put into bill set. But what I mean by that is simply I don't think acreage or income is the platform. I don't.

I do think that counties, due to their dynamic nature, particularly when you look at how we managed with Bill 64, I think the best part that came out of that Bill 64 was we were able to engage as a industry, if you will, and we were able to then take that bill and then offer our amendments.

And with that, I think we came out with a much fairer representation. So in lack of a perfect example for you, which I don't have, I really do think that finding current legislation or slightly modified legislation to current laws will create a nexus point where there's some sort of prescribed evaluation that can happen.

What those items are, I think Hunter gave some good examples. I think that there are different ways, but really it comes down to accountability and who is the regulating body. So I realize I'm not giving a very straightforward answer, but I'm definitely just trying to implore that I completely understand what we're trying to do, but I also want to acknowledge that it's a very difficult metric to try to tickle out.

Thank you so much. Chair Tam.

Members of the Tourism Committee, any questions for the testifiers? Chair does have a question for the Department of Agriculture. So I guess my question is centered around the most controversial part of it, which is the revenue minimums that I see here. And if we were to move forward with something like this, how is that even--how is that feasible?

Does that mean that farmers and owners will have to set up two different accounts in terms of where their revenue is coming in, or the Department of Tax has to figure that out in a different way.

You mean who-- Earl Yamamoto, Department of Agriculture. Speaking of two separate ledgers, one for the ag tourism side and the other for the revenues from farm sales and who's going to keep track of it and that kind of stuff? Well, that's going to be a big concern for the counties.

The counties, I don't know if they submitted any testimony. The counties always want, well I shouldn't say always, but they prefer legislation that is not too burdensome, making more difficult for what they already do with respect to land use regulation or property tax adjudication when it comes to agricultural dedications and so forth and so on.

But by having them dig up possess additional metrics and I don't know if they really, how they see ag tourism as a problem.

If they really defined that or researched that and provided this Committee with that kind of information. That would be helpful to determine the amount of action by the committee, by the legislature with respect to controlling agricultural tourism activities that don't seem to comply with the legislative intent as expressed in statute.

So that other part of fear of making the regulation so onerous that it can't really be implemented and what is, the outcome is difficult a burden I guess upon both the farmer as well as the counties to find or to make their way in implementing and responding to overly burdensome state regulation.

So do the counties already have the authority to regulate ag tourism and to inspect abuses on ag lands, like you know, let's say the gondolas or an owner of a ranch is not using their property at all for agriculture?

Yes, they have the authority to create ordinances for-- or for them to say that they are in compliance with state law with Chapter 205, carrying out agricultural tourism and activities pursuant to Chapter 205, they would have to pass ordinances as such and in compliance with 205-2 and 205-4.5. But who would that--

I think Maui County is the closest to doing that, maybe right behind them is City/County of Honolulu. So there is an effort. I haven't seen anything that any information, and I do a lot of researching that shows what impact scoff laws taking advantage of agricultural tourism.

Maybe the poor definitions or inadequate definitions, they're taking advantage of that and having these anomalies, this anomalous activities appearing throughout the agricultural district. I don't know if there's something that you folks have or-- But I'm not aware of anything like that.

Okay, thank you. I don't have any further questions.

Thank you, Chair. Members of the Ag and Food Systems Committee, any questions? Seeing none, we're going to move on to the next measure, HB 966, relating to agricultural tourism.

Establishes statewide uniform standards to promote agricultural tourism activities in the state by establishing state agricultural tourism activity requirements that are applicable to all counties that have adopted an agricultural tourism ordinance. Requires agricultural tourism activities to be registered by the County Planning Commission.

Requires agricultural tourism activities to coexist with an agricultural activity on a farming operation and requires termination of the agricultural tourism activities upon cessation of the agricultural activity. Makes conforming amendments. First to testify on this measure, HB 966, is Hawaii Department of Agriculture.

Morning, Chair, Vice Chair, members of the committee. Cedric Gates, here on behalf of the Department of Agriculture. We stand on our written comments. Mahalo.

Thank you. We had comments from Hawaii Tourism Authority. Next, Kualoa Ranch.

Aloha. Good morning. Taylor Kellerman, again. Kualoa Ranch. I stand by my written and previous testimony. I did want to take one moment, though, just to offer a slight consideration.

One thing about agritourism that we are finding from our own business that I think might imply, since both committees are here, is that with our intent to try to--and forgive me if I'm speaking out of line--create a better visitor as we move forward in the State of Hawaii, which I do agree is a good incentive, we have found that agritourism is a terrific platform for getting folks to understand how special this place is and for getting folks to have that sensory experience that really relates to them but then it also allows us to be able to contribute and educate them on what we feel would really be the best way to move that forward. So I just did want to add that to my previous testimony. Thank you very much.

Thank you. Next we have Hawaii Cattlemen's Council on Zoom.

Thank you, chairs, vice chairs, members of the committees. Nicole Galase, on behalf of the Hawaii Cattlemen's Council. We stand on our written testimony in opposition. We want to ensure that gentleman farms are not misusing the land, but we also don't want this bill to negatively impact farms and ranches who use Ag tourism appropriately. Mahalo.

Thank you. Next we have Hawaii Farmers Union on Zoom.

Thank you, Chair. Aloha, members and chairs, vice chairs. Hunter Heaivilin, on behalf of Hawaii Farmers Union. We'll stand on our written testimony in support of this measure and particularly the intent.

I do think it's important to allow counties to have wide breadth, particularly because we found, at least in meeting with our membership across Hawaii County in particular, that there were very different perspectives and very different reliance on agricultural tourism to sustain agricultural activities.

And part of this is a function of the differences in residential--or rather of property tax, and so production on one side of an island can be very--require a lot of different tools than it may on another side of the island. So want to ensure that there's sufficient leeway for counties to make decisions that'll be sure to support true agricultural operations. Mahalo for the opportunity to testify and happy to answer any questions.

Thank you. We have Hawaii Farm Bureau.

Thank you, chairs, vice chairs, members of the committees. Brian Miyamoto, here on behalf of the Hawaii Farm Bureau. You have our written testimony. Again, we support the intent. Same testimony about Ag tourism as a previous bill; however, we do want to highlight and point out which isn't in our testimony and the discussion that we've had.

This is the bill that has the Ag production versus the Ag tourism production income. The previous bill actually set just a blank Ag income number. So that one--again that we had the discussion, acreage versus income, pretty hard. This is also tough.

What happens if a farmer/rancher is producing x amount of dollars in their Ag production and they start Ag tourism and their Ag tourism continues to increase to add value, add revenue, add income and profits to that farmer ranch, but their Ag production never goes down, but their Ag tourism at some point passes them up? We're getting the same Ag input. They could even be increasing it, but their Ag tourism could be increasing at a higher rate and now they're out of compliance.

Again, we understand the intent behind these measures to protect agriculture, but sometimes those unintended consequences are going to punish those true farmers and ranchers that are trying to do the right thing, and those that find the loopholes are going to find a way to again, as you heard, cattlemen, have those gentleman farms or those tourism operations on Ag land and calling it Ag tourism.

So again, we want to make sure that there are safeguards to protect the farmers and ranchers that are doing it properly, limit those or not allow those who are doing it illegally shouldn't be there, but also make sure that the registration requirements that are proposed in this bill don't create unnecessary administrative burdens on working farms and ranches, and once again, ensuring that producers, farmers, and ranchers have input either at the state level or, as with Bill 64 and Bill 10, at the county level to to make sure that these policies do protect true farmers and ranchers. Thank you for the opportunity to testify.

Thank you. Next we have Mahina Farms Maui, on Zoom.

Hi there. Thank you very much. I'm on my cell phone. Unfortunately, I'm in my truck at my farm because it started raining. So excuse the background. My name is Robert Horcajo. I live in Maui. We have a small family farm in the Iao Valley. I support the intended purposes of HB 966 and HB 189.

You know, mentioning what's happening, you know, throughout the nation is actually true. If not for Ag tourism, a lot of places would not be operating. But there was a couple changes, hopeful changes that I wouldn't mind talking about and these, many of these suggestions are based on my--our personal experience with our Maui County Planning Department for activities we want to do in terms of future Ag tourism as well as even selling our farm products.

The one issue has been brought up a couple times and that is the condition having to do with if the revenue exceeds the Ag--if the Ag tourism revenue exceeds the farming activity. I think that's kind of--whatever you want to call it--poison pill because it doesn't--if you're a natural farmer like us and you grow something for three to six to nine months and you're selling it at three bucks or two bucks a pound wholesale, it wouldn't take too many farm tours or a visitor getting well educated on cultural significance, plants, all that stuff paying 20, 50 bucks an hour is going to exceed what the farmer makes.

The plus side of it is that the farmer survives. He still provides farming products to the community that he lives in. He's part of the fabric of, you know--so there's a plus to the Ag tourism, but that part of the bill, I think, would be negative to what the intent of the bill is.

My second suggestion, I noticed somebody brought up--I'm not even sure who now--is--and by the way, I wrote to all of you last night late, so if you read it, thank you very much--the second part of it is, I know that Maui County is processing Ag tourism bill now.

It was sent out, it will be sent out to the Planning Commissions of the three islands soon, and it was not in the bill, but I know what's going to be coming up when it comes back to council and that is the worry that especially for, you know, plants that have traditional and cultural value to, you know, to us native Hawaiians, there is going to be some concern about who gets to talk about that and what can they talk about.

So if you read my email, my suggestion was potentially adding another condition, and I'm just going to tell you what I wrote and that is: 'agricultural tourism activities shall pertain to only farm products produced on the farm.' And I actually added: 'no discretionary permit shall be required.' We grow lei plants so we can talk about basically the plant itself. The culture is significant.

All the plants we grow are canoe crops--kalo, 'ulu, 'uala, mai'a--so we can talk about that, and Maui Colony, I think, what I've heard is the most advanced in terms of agricultural tourism, but we could talk about anything we want. But if we have a visitor make a lei, even go gather the lei products at our farm and make a lei, that we need is--we need a special use permit. And we are actually applying for this special use permit right now. We just submitted it last week.

I've heard consultants cost from 50 to $120,000 on Maui to process the special use permit. So back to the first point, it's going to make it unwieldy impossible for any farmer to make Ag tourism income if that's what they have to go through.

Thank you, Bob. Can you summarize your testimony please?

Yes. Thank you very much. And the third item has to do with farm stands. I realize it's a small part of this bill. It's really not even part of the bill, but I'm going to summarize there. If you read my email, you'll understand that we were asked to--we cannot put a farm stand on the trailer.

We have an 8 by 10 farm stand to--we actually need a building permit for that farm stand. So to summarize, I'm just saying that, you know, creating standards that make it more difficult for farmers to grow and even survive, I'm not sure that's really where we want to be as a society. Thank you for your time and accepting my Zoom call.

Mahalo for your testimony. We had nine testifiers in support, four in opposition, and five with comments, and we have no one else who registered to testify at this time. Would anyone else wish to testify on this measure? Seeing none. Members of the Ag Committee, any questions? Vice Chair.

Thank you, Chair. Department of Ag, I have two questions. Thank you again for coming out this morning. The first one was with--you guys had--in your testimony had raised the question about like the definition of commercial farming activities which we saw in the HR or under that 165-2 had that listed. What was your concern with wasn't clear in your testimony?

It's not defined. Commercial farming operation as is defined in 165-2, which is a Right to Farm Act. It just says farming operation that's worthy of protection under the Right to Farm Act has to be a commercial farming operation but it doesn't go further in defining what commercial means.

Okay, so your suggestion is to add that language into the bill to define the commercial portion or remove it?

Well, either or. It's that definition. It's inescapable that the committee has to make an effort to do that. If not, the language becomes as shaky as it is in 165.

Okay. Okay. Thank you. The other question I had was, I couldn't find any information on--and you guys didn't really address this, but I'm just asking you because we don't have anybody from a tourism background, I don't believe, here--is--there was a portion in here that included this 21 days of staying, but then 21 days, not more than 21 days per calendar year of any one individual.

And it kind of, I thought of, you know, just keeping you up here on that because you were speaking of these like onerous bills that are impossible to track or for the counties to keep track of. Did you have any insights on that or any thoughts where that came from?

I may have remembered it up until about ten years ago when that, when that legislation was actually passed and it had since been revised a bit, but, you know, 21 days, I'm not sure why it stops at that. Was there concern for something--it's becoming like a short-term rental. I think this may have preceded all the, all the hubbub about--

STVRs.

Yeah.

Yeah. Okay. So maybe it's just language from, prior to all the STVR language because I didn't recognize it from any of the current STVR language and I just wondered if you had any insight or if there's any other testifiers who had insight on that section just because it seemed like one of those onerous regulations, like, I think, you know, Kimo stayed here twice this year in 22 days. So I just--thank you. No further questions.

Thank you, Vice Chair. Thank you, Department of Agriculture. I failed to read a note that said we might have one more testimony. I'm not sure if the Agribusiness Development Corporation did want to testify in this measure. If I failed to call you, you can--you're okay? Okay. We are good. Members, any questions? Chair?

Members of the Tourism Committee, any questions? Seeing none. We don't have any questions.

Thank you, Chair. We're going to take a short recess before we do decision making. Thank you.

We're returning on the Joint Committee hearing on Agriculture and Food Systems and Tourism for decision making. First measure on the agenda for DM is HB189 relating to agricultural tourism. The recommendation is to defect the date to July 1st, 3000 to continue the conversation on this measure. We do want to keep this Bill going.

We know there's a lot of work on agricultural tourism, period, and it's years in the making to try to find the right definitions for bonafide agriculture. But we think we want to still work on both bills. We want to add technical amendments needed for clarity, consistency, and style.

We are removing subsection seven, lines 14 through 1616 on page two. And we are also removing subsections A and B, lines 1 through 6 on page 3. Again, in testimony, we found that it is really difficult to measure productivity by acreage and productivity as well as annual revenue generation on the Bill.

But we do see that right now I think one of the best definitions we have so far is saying that you're zoned in Agriculture, you're paying your property taxes as Ag zoned. And right now that is the language we're defining as potentially bona fide Ag at this time. Again, very complex.

We've been trying for years to narrow down the right language that works across all counties and for everyone. And that's where we stand at this time. And hoping as the, as we continue the conversation we can continue to strengthen language in this space. So that is my recommendation at this time. Questions, comments, Committee?

Chair, do you want me to vote first?

Members of the Tourism Committee our, we have the same recommendation. So any comments, questions or concern? Seeing none.

Again, Food Systems Committee, Vice Chair, we're ready to vote.

Copy that. Thank you. Chair, voting on HB 189. Chair's recommendation is pass with amendments. Chair and Vice Chair voting aye. [Roll Call] Chair, your recommendation is adopted.

Chair Tam.

Committee on Tourism, same recommendation, Vice Chair for the vote.

Voting on House Bill 189. Chair's recommendation is do pass with amendments. Chair and Vice Chair vote aye. [Roll Call] Noting the absence of Representative Hussy and Representative Matsumoto. Chair, your recommendation is adopted.

Thank you Members. Moving on to HB 966 relating to agricultural tourism, we do plan to continue the conversation on this Bill and do another House draft. We're going to defect the date to July 1st, 3000. We will do some non-substantive technical amendments needed for clarity, consistency, and style.

We are removing subsection C, line 7 through 9 on page 4. We do again acknowledge that saying that the, rhe agricultural valuation of your farm cannot exceed agricultural tourism. That's challenging. Does not work for all different types of farm operations and agricultural tourism.

So we are going to replace that with the new language with the language in HB 189. We're going to take that language on HB 189C, which will not be a subsection. It's only a subsection now.

The real property of a working farm or farming operation as defined in Section 165-2 is taxed as agricultural and is current on its real property tax obligations. We're going to take that language at this time and we are going to remove the one-year period limitation on, what page is that? What page is that?

4.

Page 4. Yep. On page 4. So the subsection D page lines 10 through 14. We're taking the one-year period limitation from that. We're also taking recommendations from Mahina Farms Maui, which I think goes along with some of the other testimony as well. In Section 2, page 4, subsection E.

The Planning Commission to Planning Department to give, make sure the counties understand that it's under county purview in that space.

And then we're also going to take section three of their recommendation 14 and add a new subsection G about adding a roadside stand or retail activity in an enclosed structure under 300 square feet, basically is exempt from a building permit notwithstanding the need for an electric plumbing, electric or plumbing per permit if appropriate.

So that language was in their testimony. And those are the amendments we are going to make at this time and move that measure for further consideration. Members of the Ag and Food System Committee. Comments, questions? Seeing none. We're going to move to the Tourism Committee.

Tourism Committee. Any comments, questions, or concerns? We're going to move forward with the same recommendations. Seeing none. Go ahead.

Ag Committee, Vice Chair for the vote.

Thank you. Chair. And I wanted to point out for HB 189, the prior Bill, I neglected to note that Representative Ward is excused absence.

Thank you. Moving on to decision making in the vote for HB 966. Thank you. Vice Chair.

Thank you. Voting on HB 966. Chair's recommendation is to pass with amendments. Chair and Vice Chair vote aye. And noting the absence of Representative Ward. [Roll Call} Chair, your recommendation is adopted.

Thank you. Vice Chair.

Tourism, same recommendation. Vice Chair for the vote.

Voting on House Bill 966. Chair's recommendation is to pass with amendments. Chair and Vice Chair vote aye. Noting the absence of the previously recognized Members. Are there any nos? Any reservations? Chair, your recommendation is adopted.

Thank you. Members. With no further discussion on the agenda for 8:45am for the Committee on Tourism and Ag and Food Systems, this hearing is adjourned. Yay. Good job. Thank you.

Aloha, kakou. Welcome to the hearing for the House Committee on Agriculture and Food Systems. Today is February 5, 2025, and this is the 9:30 a.m. agenda starting a little bit behind schedule, and we're convening here at the Hawaii State Capitol in Room 325. I am Kirstin Kahaloa, the Chair of the Agriculture and Food Systems Committee.

Today we have with us our Vice Chair, Vice Representative Kusch, and Representative Perruso. Before we get started, we have a few housekeeping rules. In order to allow as many people to testify as possible, we're requesting that testimony be limited to two minutes in order to allow as many testifiers to testify today.

Because we are a morning committee, we have to conclude our hearing by noon, and we want to make sure we can get through the entire agenda today. For those joining us via Zoom, please keep yourself muted and your video off while waiting to testify and after your testimony is complete.

The Zoom chat function will allow you to chat with the technical staff only and please use the chat function only for technical issues. If you are disconnected unexpectedly, you may attempt to rejoin the meeting. If you get disconnected while presenting testimony, we may allow you to continue if time permits.

Please note the House is not responsible for any bad internet connections from testifiers. In the event of a network failure, we may have to reschedule this hearing or schedule a meeting for decision making. In that case, an appropriate notice will be posted. Please avoid using any trademarked or copyright images and please refrain from profanity or uncivil behavior. Such behavior may be grounds for--from removal from this committee hearing without the ability to rejoin us. Thank you folks for being here today.

First on the agenda is HB 1337, relating to endemic plants. Requires the University of Hawaii to establish an endemic plant seed bank pilot program to preserve and promote the planting of plant species that are endemic to Hawaii. First to testify today on this measure is the University of Hawaii System joining us via Zoom.

Good morning, Chair Kahaloa and Vice Chair Kusch and members of the committee. I'm Don Drake, Interim Director of Lyon Arboretum, speaking for UH Manoa. We thank you for the opportunity to submit comments on this measure and we stand on our written testimony and we're available to answer any questions. Thank you.

Thank you very much. We had testimony from DLNR in support, but I don't believe they're here today, and we have Hawaii Farmers Union via Zoom.

Chair, Vice Chair, committee members, Hunter Heaivilin, here on behalf of Hawaii Farmers Union. We'll stand on our written testimony in support and like to add our--or highlight our comment that controlled environment agriculture is often a capital-intensive effort and we hope that the research that's pursued would be seeking lower cost mechanisms that could enable more producers across the state to benefit from the research. Thank you for the opportunity to testify.

Thank you. Hawaii Farm Bureau.

Thank you, Chair. The Hawaii Farm Bureau stands on its written testimony in support.

Thank you. We had several other individuals in support and that is the testimony we have today on this measure. Would anyone else wish to testify on HB 1337? Seeing none. Question, members? I have a question for the University of Hawaii on Zoom.

We--I think the intention of this bill is to just strengthen and stand up seed banking programs to help with wildfire mitigation, conservation, furthering agriculture. I guess one question is because they indicated a pilot program, we may not need a pilot program since we do have programs within the state. Are there any ways we could maybe amend this bill to support the current work that the University of Hawaii is doing for seed banking initiatives?

Thank you for your question. I think this is a, that's a great idea and this probably merits further discussion. Just in the short term, I can mention the seed banking at UH Manoa at Lyon Arboretum is focused primarily on threatened and endangered native Hawaiian plants, but also some agricultural species and its purpose is to provide a safe place to store species that are at risk in the wild and then someday, hopefully be able to grow them back out and put them back out in environments where they're going to be able to grow and survive.

So it's mostly focused on conservation of individual species and we deal with more than half of the native Hawaiian flora, at least so far. What we don't have the capacity to do is store the large amounts of the more common species that are needed to really revegetate areas on a large scale, for example following wildfires.

And so not only, I think, do we need to grow the facilities for conservation of the rare and threatened species, but it would be really valuable to have facilities to be able to bank species at scale so that we can restore areas on multi-acre or multi-square mile sort of scales. So we would, we would certainly be happy to talk to anyone about ways that we can move forward and we really appreciate your interest in efforts to conserve the native flora.

Thank you. And just one quick follow-up question, and I know this, the University of Hawaii System is very complex, but if we expanded that kind of extra storage seed banking work and gave Lyon Arboretum the tools to do so, is that the right area of the university to put that work, understanding there's so many different divisions and work and roles within the university?

Right. Yeah. So within the university system, I can only really speak for UH Manoa, and at the moment we probably wouldn't have the capacity to--we certainly have the capacity to expand what's happening with threatened and endangered species and we would welcome any further support that we could get for that.

Lyon Arboretum may not at the moment be the right place to be doing seed banking on sort of an industrial scale and it might be more appropriate maybe in one of the Ag experiment stations that CTAHR has, for example, somewhere across the state. It's, it's something that we would probably want to discuss more broadly with the folks within the UH system.

Thank you. May I ask the dean of CTAHR to address this question as well? Dean, I think the intention of this bill, a lot of testimony related to Lyon Arboretum, being the kind of collection of conservation, rare species, making sure we don't have species that die out, but in regards to greater seed banking, do you think that CTAHR would be maybe a mechanism to do the work indicated in this bill?

Absolutely. CTAHR would be probably the right place to do it, the reason being that we just hiring a fire mitigation expert who has received a grant in order to produce mixed plant seed of native plants to reforest, to replant the affected areas. So in aligning with that, he and his program, we have offered all CTAHR stations to increase the seed production for that purpose. So it would make sense to relate it with it.

Thank you, Dean. One follow-up question. If we were to strengthen this bill to not just say University of Hawaii and put CTAHR as the recipient to continue the conversation on this--there's no appropriation in this bill. It indicates a pilot. Would you need any appropriation or, or other support to execute a pilot program?

So I would have to get back to you on that because I would have to talk with the experts on that to see what we can do. We do have a seed production program which is agriculturally oriented. So we produce seed of the local varieties of vegetables, fruits that we provide in small quantities to people who need to get started. So it does align with that in some ways, but the focus is on agriculture right now. But I can't say whether they would need additional funds to do this or not.

We can make a notation and this measure does go to the Higher Education Committee and we can do some work behind the scenes to strengthen that and make adjustments in the Higher Ed Committee. One last quick program--the bill says pilot program.

Would you say you already have a seed bank program or is pilot the right language in the bill? I think because they assumed university-wide they were starting something new. Because you have a role already placed, would you say CTAHR already has a seed bank program?

We have never called it a seed bank program. That's what I would say. We do produce seed of certain varieties that people want, and those are locally adapted varieties, but we have not called a seed bank.

That is perfect. Thank you so much for answering those questions. Members, any further questions? Yes, Vice Chair.

Thank you. Thank you, Dean, for coming today. Do you have the facilities or the land to dedicate towards a program like this or would it be something you would have to just completely start from scratch or, you know, do you have kind of the infrastructure in place that we could just start expanding on your existing agricultural seed program?

As far as the land is concerned, we probably don't need additional land. In fact, some of the endangered species are currently being produced at CTAHR stations using certain greenhouse spaces and such. The land piece would be okay, but the personnel would be an issue if we are to take on, you know, much bigger program.

So primarily human capital would be the primary need, not facilities?

Correct.

Okay, thank you.

Yeah, thank you.

Thank you, Vice Chair. Any further questions? Thank you, Dean. We appreciate your responses. Seeing no other questions from members, we're going to move on to the next measure.

HB 1184, relating to controlled environment agriculture, authorizes the issuance of General Obligation bonds and appropriates funds for the development of a controlled environment agricultural research and demonstration facility at the Magoon research and teaching site in Manoa, Oahu. First to testify on this measure is the University of Hawaii. My apologies, Dean. Please, please join us.

Chair, Vice Chair, and the members of the committee, we are honored to be here. Thank you for enabling us to testify in support of this particular initiative. This particular program is absolutely essential and critical for Hawaii to build its resilience in food systems and also build its self-sufficiency in food and agriculture product development.

This is also essential for the state to meet its requirement of local food by 50% by 2050 and to meet the requirements for the Regional Kitchen Project that is running right now. So this project also has many additional benefits. It can stand up a new industry in this area. We are already land-limited.

This type of program does require less land, less water, less pesticides and such. So it's a clean way to produce food, certain types of food that can be produced, and under disastrous situation, this would be the only system functioning in order to meet the local food demand, and it could be then accelerated at that time as well and developing new workforce through this training program, and also we will actually produce food, so we're doing a kind of a unique program in which you could have production, you could train people, you could also do research simultaneously. Thank you for the opportunity.

Thank you. Next to testify is Hawaii Department of Agriculture.

Good morning, Chair, Vice Chair, members of the committee. Cedric Gates, here on behalf of the Department of Agriculture. We stand on our written comments offering support.

Thank you. Hawaii Farm Bureau.

Thank you, Chair. The Hawaii Farm Bureau will stand on its written testimony in support.

Thank you. Next we have Hawaii Farmers Union on Zoom.

Thank you, Chair, Vice Chair, as I will stand on my written and previously provided erroneous spoken testimony in support of this measure. I'd also like to avow our support for the seed bank in the previous measure as well. Happy to answer any questions.

Thank you very much. We also had two support testimony from LURF, Land Use Research Foundation of Hawaii, and the Hawaii Floriculture and Nursery Association in support, and one other individual testifier in support. Would anyone else wish to testify on HB 1184? Seeing none. Members, questions?

Actually, just one quick one. Dean, if I could ask you just quickly? You mentioned that during this research phase, you'd actually produce food. What would be the volumes that you might do during the research phase and what might you do with that?

So our goal is to actually get this program started as a working farm right from the start. So a significant portion of this facility would be dedicated to production so that actually we could do research at a production level so that--you know, many certain initiatives like that that business people got really excited about, some facilities failed.

They failed because we did not have enough research. They were ahead. They got entrusted too soon. So this way, this will be a production facility with research conducted at that scale and only a small portion dedicated to exclusively research because some research will occur at a smaller scale, smaller application, and that portion would be simultaneously held a bit. So we will be, as soon as this facility opens, we will be in production.

Do you have any ideas? Volumes?

Volume. We are hoping to create this facility from 3,000 to 5,000 square foot, depending upon what happens with all the, you know, how much money we have and all that. Yeah.

And I mean like your target species might be like, what, cucumbers, tomatoes, lettuce?

Correct. Correct. So target species would be lettuce, bok choy, cucumber, tomatoes.

Okay, and in that product, what would you--where would that be distributed? That's what I'm trying to figure out is like just as a side.

So our first goal would be to deliver that because students will be involved in the production and learning of this. So this would be a really a good way to deliver the product to the Regional Kitchens. That will be our first goal. If we produce more, we could send it to other places.

Okay, thank you.

One quick question, Dean, since you're here. Just to check in your testimony for the GO bond, the obligation needed is six million. Is that correct?

Correct.

Thank you. Thank you.

Thank you.

Any other questions, Members? We are good. Thank you, Dean. We are going to move on to the next measure. HB 1185 relating to agriculture establishes a plant based building material working group to study and report on how best to grow plants and develop plant based building materials in Hawaii appropriates funds.

First to testify on this measure is Hawaii Department of Agriculture. Thank you. Next to testify is the Attorney General's Office.

Good morning, Chair. Vice Chair, Members of the Committee, Michael Chambrella, Deputy Attorney General. The Department thanks you for the opportunity to present comments. You have our comments and we stand on those. And I'm available for questions.

Thank you. Thank you. Next we have Hawaii Farmers Union via Zoom.

Thank you, Chair. We'll stand on our Hawaii Farmers Union will stand on its written testimony and support.

Thank you, Hawaii Farm Bureau.

Thank you, Chair. The Hawaii Farm Bureau will stand on its written testimony in support.

Thank you. And next we have Hawaii Reef and Ocean Coalition and Climate Protectors Hawaii.

Aloha, Chair Kahaloa and Vice Chair Kusch. Thank you for the opportunity to testify on behalf of the Hawaii Reef and Ocean Coalition and the Climate Protectors Hawaii. And thank you, Representative Kusch, for introducing this Bill. This is, I think, an exciting opportunity for Hawaii because of our climate and our heavy rains.

In some areas we have the opportunity to grow building materials with plants. Currently, we import most of our building materials at great expense and at great harm to the environment. Steel and timber and things like that emit a lot of greenhouse gases.

So we have the opportunity to develop green jobs here within industry, growing the plants and producing the product and then shipping it to other places for profit. And I think this is an industry that can really grow and really work for Hawaii.

There are things like clumping bamboo that grow very rapidly and can be as strong as steel. And also hempcrete, which is another product that can be built for building blocks, bio cements that substitute for cement, which is another greenhouse gas emitting thing.

So between the greenhouse gases and the savings for Hawaii in terms of imports and the production value of this. I think it's a great opportunity and I urge the Committee to pass the Bill.

I would support the amendments of the Attorney General and the Department of Agriculture that I see in testimony stating that this is a Bill of statewide, a matter of statewide concern that any new materials be run by the plant quarantine branch and that we include farmers and agricultural stakeholders in a working group.

So let's get this working group going, get this industry going. Thank you for the opportunity to testify. I'm available for any questions.

Thank you for your testimony. We also received an additional four testimonies in support by individuals. Would anyone else wish to testify on this measure? Seeing none. Members, questions? Vice Chair?

Thank you. Chair, I have two questions. One is for CTAHR, Dean. Oh, did he go.

Oh, right here.

Oh, thank you.

I'm Felicia Mopokuro Geyser from CTAHR. I just wanted to say. Yes, he. I'm sorry, he had to leave.

Okay.

If you have any questions, I can take it back and have you. Yeah, I just respond.

There was a. A blank amount to what the cost might be to stand up this working group, what the cost might be on an annual basis or, you know, for the duration. So that's the one question mark we have.

Okay. All right, we'll get back to you.

Okay. And then for the Attorney General, I had a question.

Yes.

And I apologize. Not an attorney, so. And maybe this is obvious to everybody, but the section on that, Article 10, Section 6 of the Constitution, they talk about it, but then it says, this section shall not limit the power of the Legislature to enact laws of statewide concern.

And then you go on to recommend the amendment that it adds a statement identifying this Bill as a statewide concern. And so I'm just.

It's just essentially it's boilerplate language to appease the Constitution. So the Constitution requires the Legislature to define or define this particular measure as a measure of statewide concern. So that language just needs.

Okay. To be inserted in there. Okay. Super. Thank you. Thank you. Appreciate that. No further questions.

Thank you, Vice Chair. Members, any further questions? Seeing none, we're moving on to the next measure, HB 530, relating to the labeling of macadamia nuts. Specifies that the macadamia nut labeling requirements apply if the applicable products are produced in whole or in part from Hawaii grown and Hawaii processed macadamia nuts. Effective 1/2/2026. Bless you. First to testify on this measure is Hawaii Department of Agriculture.

Aloha, Chair. The Department of Agriculture stands on its written testimony in strong support of this measure. Mahalo.

Thank you. We have Hawaiian Host Group. I'm not sure who would like to go first.

Hi, Committee Chair and Vice Chair. I'm Ed Schultz, President and CEO of Hawaiian Host Group. Last year in session, you know, we supported a bill that eventually got passed and signed into law by the labeling of macadamia nuts.

I'm proud here to say we will this year be in compliance with that bill early with even beyond the requirements of the bill with front-of-pack labeling by summer of 2025. Through this process, we've realized that, you know, we are trying to get to a place where we can have a new processing facility in Hawaii.

Off session, we've worked together with the Governor's Office to find funds to, you know, design and eventually build a facility that can help everybody, but that's going to take, in our estimation, honestly, four to five years, and during this period of time, we need to ensure that, you know, we are supporting Hawaii jobs, Hawaii produced product.

And the current bill, we believe, has some, you know, a loophole in it that needs to be closed, and that is it allows people to grow nuts in Hawaii, process them in China, and bring them back labeled as 100% Hawaiian. And we don't feel that's the spirit of it, it doesn't support Hawaii jobs or Hawaii agriculture, and we stand in strong support of this bill. Thank you.

Thank you, Ed. Next, we also have Hawaiian Host. I don't know if it's Hali'a?

Aloha, Chair Kahaloa, Vice Chair Kusch, and members of the committee. My name is Hali'a Kealoha, and I serve as a corporate communications manager at Hawaiian Host Group. Growing up on the Big Island, I've seen firsthand how vital it is to protect local jobs, especially in our more rural communities.

This insight drives my support for HB 530, a bill promoting transparency and sustainability through accurate labeling of our macadamia nuts. Kind of piggybacking off of what Ed said, this legislation is crucial as it ensures that nuts grown and processed in Hawaii are recognized for their true origin. From the fields of Kapua orchards, the processing lines at Mauna Loa, we are committed to maintaining jobs in Hawaii and enhancing our community's economic health.

This bill underscores our commitment to local employment and consumer trust, which in turn, in turn, attracts more investment into our agricultural sectors. This bill is about more than labels, it's about livelihoods and ensuring that our children and communities have a future here. I appreciate your consideration of my testimony and mahalo.

Thank you. If you're in charge of the social media, it's excellent. I'm sure I'm not supposed to say that. Next, we have Hawaii Farmers Union on Zoom.

Chair, Vice Chair, members of the committee, Hunter Heaivilin, on behalf of Hawaii Farmers Union. We support additional--rather we support stringent labeling to ensure consumer clarity around both the origin and the processing of Hawaii grown products, and for that reason, we intended our support in this measure.

It seems like from the testimony that's been provided there may be some confusion around intent. I find myself maybe among that group, but wanted to clarify that our support is to enable clear labeling to support our local industries and local producers. Thank you for the opportunity to testify.

Thank you. Next we have Hamakua Macadamia Nut Company via Zoom.

Aloha Chair, Vice Chair, committee members. My name is Jeff Clark. I'm the President of Hamakua Macadamia Nut Company. We're part of the Edmund C. Olson Trust who also owns macadamia farms in the state as well. So Hamakua is 100% Hawaii grown processor and manufacturer.

We grow and we process, flavor, package our products all here in the state. We stand in opposition to this bill as written for a few reasons. Number one, there's existing laws on the books that govern products made in Hawaii as far as, you know, value add from a raw state.

So HRS 486-119 already spells out the rules on, you know, dictating labeling things made in Hawaii. The second reason being that currently with Mauna Loa closing their facility in Keio, there is not enough processing capability in the state to process all the macadamia nuts that are grown in the state.

So there's a supply and demand issue there in terms of being able to actually process everything in the state. As stated earlier, the industry is looking at ways to build a new facility to be able to process all the nuts that are grown here but it doesn't exist yet and seems premature to put a law on the books to try to limit growers' ability to process their nuts, especially given the restricted processing capability. I wanted to offer a few more--some changes to the bill as a matter of fact.

So as a chocolate producer, we see that there is in fact a loophole that we see in the current bill, the current labeling bill. Last year when the bill was going through, we were pushing to have all macadamia nut products included under the umbrella of having to be labeled for origin.

And so with that, chocolate was going to be included, chocolate covered products were going to be included under that umbrella. They were excluded at the last minute, and so one of the things that we noticed was that there continues to be a lot of macadamia nuts imported from foreign sources.

So looking at the last 12 months, there's about £1.5 million being imported from South Africa into Hawaii-based brands and most notably Hawaiian Host. If you were to extrapolate that out, that that equates to about 20 to 30% of what's grown in Hawaii is being imported from South Africa.

And so we would like to include language into the current bill to close that loophole and include chocolate covered macadamia nuts as a product that needs to be labeled for Hawaii origin. Thank you for listening, and I'm here for any questions you may have. Thank you.

Thank you for your testimony. Next we have Hawaii Farm Bureau.

Thank you, Chair, Vice Chair, Representative Perruso. Brian Miyamoto, here on behalf of the Hawaii Farm Bureau. You have our testimony. We respectfully oppose this measure. Hearing the previous testifier talking about processing capacity, we stand with the industry, with the sector and trying to build up a processing capacity so that we can process all our local mac nuts.

One of the concerns that we do have in the bill is the definition of process is not clearly defined. So we do request, if the bill does move forward, that that definition design--defined clearly so that there aren't any unintended consequences as far as this measure is concerned. Thank you for the opportunity to provide testimony.

Thank you. Next we have Hawaii Macadamia Nut Association via Zoom.

Aloha, Chair Kahaloa, Vice Chair Kusch, and members of the committee. Thank you for hearing our testimony in opposition of HB 530. We appreciate the intent of the bill to encourage manufacturing here in the state and that's something that we're working forward to as an industry. We feel like the current processing infrastructure is inadequate, not just the capacity of our processing facilities, but the efficiency and quality of our processing facilities isn't at the level that it needs to be to support our growers.

Unfortunately, that means that in some cases there needs to be other avenues, including some minimal processing outside of the state for certain growers and we feel like they should still be able to do that and label their macadamia nuts as Hawaiian grown Hawaiian macadamia nuts. Available for any questions. Thank you.

Thank you for your testimony. We've received 12 testifier testimony from organizations and individuals in support, 17 in opposition, and no one else is registered to testify. Would anyone else wish to testify on this measure? Seeing none. Questions, members? I will ask a question. Hawaiian Host, Ed, can I ask you a question?

Yes.

I think the intention for all with the previous macadamia labeling legislation and this one is to grow the industry. So that would support the growth of more farmers producing more macadamia nuts and have more processing. Do you think at this time, passing this measure, we're able to grow the industry if we pass this bill this session?

I think that if we pass this bill this session, I believe that the industry will become 100% aligned to move in that path forward. Today, I don't necessarily see that happening. We've been very instrumental in continuing dialogue since last session. What happens today is if nuts leave the state and they can be processed for lower cost somewhere else, they still can be sold anywhere in the world.

But if we bring them back here and we can continue to do that, even if there is a new processing facility someday and that is part of it, there's always going to be this lower cost outlet to process. To be honest, we can go do that. We haven't.

We've committed 400 plus jobs in the state to food and agriculture. We continue to farm 4,000 acres. We raised prices this year from independent growers, so I would say that grew the industry. The price is higher on the market, or at least that's what we're paying and we feel like we are committed to doing the best that we can and we've done that since last year's bill signing.

Like I said, we're going to be in compliance early and we hope that the consumer feels they can pay more for a bag that says 100% Hawaiian and then that grows everybody's--the GDP surrounding this product. But if we go on as we know, it's just going to take a while to get there and we have to be 100% aligned that the goal is to process 100% of our grown macadamias here in Hawaii, whether that's Big Island grown, Maui grown. Mahipono's planted about 1,500 acres, so I think it is encouraging growth and we just need to make sure we continue down that path.

One follow-up question is, you know, for the last piece of legislation we made the effective date with enough time for the industry to be prepared to effectuate the legislation. So if we're effectuating this legislation this session, what is an appropriate timeframe for the sector to be ready to move forward if this bill were to pass this session?

So each harvest season starts approximately August, September, ends April, May, and so everybody sort of resets for the next harvest where they process that starts in September. I think part of what we, as we look at what is happening since passing the last bill, the nuts that were leaving the state were not previously coming back for sale as a retail product.

That is something new that happened in the fourth quarter for the first time ever that, you know, those nuts generally left the state and then were sold into markets elsewhere. So we didn't have this issue a year ago either whereas today in the fourth quarter, now they're coming back.

So I think that the global market is doing well. I think the local market is doing well from macadamias and there is an outlet. I just think it's, it's dangerous to allow stuff especially to go to China and not trace origin and then come back here and be still labeled 100% Hawaii macadamias.

You know, you brought up China and we know that we--some have, do their cracking of macadamia nuts in China. With the president really trying to support local economics and tariffs are on the rise, do you think that tariffs will impact those cracking macadamia nuts in China?

So in China exists about eight bonded regions, and in the end, that is not subject to--so if anything is made in these bonded regions that moves around the world tax free, China doesn't even recognize it as being received by China. It's like a neutral territory in the world and so that, it would not be subject to tariffs.

Thank you for clarifying that. I think that's an important point. Members, any other questions? No? Thank you. I have one further question for Hawaii Farm Bureau. My apologies, Brian. You have to speak on behalf of many farmers.

You know in the testimony from Hawaiian Host, they did bring up Mahipono as you know, planting macadamia nuts as we speak that have not been processed yet and the plants are not developed to where we can pick macadamia nuts yet.

Do you have any idea of what the timeframe for them needing processing and what that might look like? And if we effectuated this bill--it's trying to get at what's an appropriate effectuation date because I think the committee would want to ensure that we have greater capacity before pushing a bill forward without greater capacity presently.

Brian Miyamoto, here on behalf of the Hawaii Farm Bureau. Can I be like the Farmers Union and start talking about another bill? You know, we support endemic seed banks. Thank you, Chair. I'm not entirely familiar with the timelines and the operations of Mahipono so I would be hesitant to speak on their behalf.

A consideration of a later enactment date again would be something. I think as previous testimony testifiers said, we want to be aligned. We want to grow the production of local mac nuts, and ideally, yes, process in here but we, we face that challenge with other value-added products. We just don't have the infrastructure and sometimes even the capital investment to build those facilities.

So again, you know, be hesitant. Would gladly reach out to Mahipono, but I don't--I prefer not to speak on a private business and private operations we have on what their operations are and their timelines as far as their production of mac nuts.

That's the right call. I should have called the Hawaii Macadamia Nut Association to ask that question, Brian. So thank you. Oh, you have a question? I'm going to ask--if Nathan can respond to if we're putting new macadamia nut plants in the ground like Mahipono as an example, others may be outplanting as well, but how do we effectuate, if this bill were to move forward, what a fair timeline would be? If we're growing the industry, when would we need to have processing in place before we would effectuate a bill like this?

Yeah, I can't--I was going to speak on behalf of Mahipono, but then Brian warned me that I probably shouldn't, so, I think from, from the last reports, rumors that I heard, they have about 500 acres in the ground with more planning to be planted, and so they'll probably need some significant processing capacity about five years from now.

Most of those trees won't be really producing a lot for another ten years, according to, you know, what we've seen in our industry based on previous plantings. So, you know, we are, you know, generally opposed to the bill moving forward, but if it does move forward, I think a change to the effective date to somewhere five years from now, like 2030, might be appropriate.

But I don't want to, you know, if we're growing our industry and we're growing more macadamia nuts in the state, whether it's on Maui or Hawaii Island, we're going to need to put some significant spending into infrastructure to make that happen and so far, I don't know of any plans for Maui.

Right now I do know that we're working with Synergistic Hawaii Agriculture Council as well as HDOA to begin the design, planning, and feasibility study for a macadamia nut facility that brings all of the industry together and really supports growers.

So I think, you know, giving us a little bit of time to do that before putting in requirements on labeling processed macadamia nuts would be helpful. So my best guess would be, yeah, 2030.

Thank you. No further questions for me. Members, anything? Okay. Thank you, Nathan, and thank you for those who answered on behalf of others who are not with us today. We are going to move on to the next measure, pivoting away from agriculture to animals. So we are moving to HB 547, relating to the spaying and neutering of animals.

Establishes the Spay and Neuter Special Fund to reduce pet overpopulation and the reproduction of free roaming cats in various revenue and fundraising sources for the special Fund. First, we have waiting patiently the Department of Budget and Finance. Thank you for gracing us with your presence.

Good morning Chair, Vice Chair, Representative Perruso. Luis Salaveria, Director of Finance. You know you have our testimony providing comments if you would indulge me just for a few moments, just to say we are, we absolutely understand that there is an issue.

You know, our concerns with the Bill right now primarily is whether or not the Department of Budget and Finance is the most appropriate Department to handle this, this very important issue going forward. So thank you. We do, we do have a recommendation in our testimony a possible way forward. So for your consideration.

Thank you.

Thank you. Thank you Chair and I'll be happy to answer any questions.

Thank you. We may have some. Next we have DOTAX. They provided testimony with comments. DLNR. Thank you so much. Next we have Hawaii Humane Society Stephanie Kendrick.

Chair, Vice Chair, Representative Perruso. Stephanie Kendrick with the Hawaiian Humane Society. We are in strong support of this measure. There's a desperate need statewide for increased funding for spay neuter for pet animals and free roaming cats. I'm particularly heartened to see the support from BISC for this measure.

We've been a member of a group of wildlife and animal welfare organizations who've been meeting for several years now. And one of the things that we all agree on is that we need fewer cats on the landscape. And this measure is absolutely designed to address that need and that mission.

I do respect the director's reservations about Budget and Finance as the most appropriate home for this. I know he is an animal lover and I would just say that, you know, the counties are willing to take this on. My concern is for the equitable distribution of funds.

And I know this is going to sound like a weird thing for an Oahu organization to say, but larger population doesn't necessarily represent the greatest need for funding on this issue. Some of our neighbor islands are more lightly resourced than Oahu is.

So we just really the reason we wanted to do a statewide Fund is to make sure that the funds go to where they're most needed, regardless of geography. But we are open to other ideas for hosting the Fund and we just really would appreciate your support for this measure. Mahalo.

Thank you. Next to testify is the Tax Foundation of Hawaii.

Good morning, Chair and Members of the Committee, this is Jade McMillen on behalf of Tom Yamachika for the Tax Foundation of Hawaii. We've submitted some comments on the measure.

Our comments are directed at the Special Fund, noting that at least two of the criteria are violated because there's no nexus between the purpose of the Fund and the source of revenue. Purpose being reducing the feral cat population and source of revenue being income tax check offs and license plate fees.

Additionally, we feel in the long run, the cost of administering the income tax check-off could take resources away that could be used for other public services. Thank you.

Thank you. Next we have Vivian Tolner via Zoom. Not present. Would anyone else wish to testify in this measure? We had 30, 31 in support, one in opposition. 4 Comments. See none. Members questions? Go ahead. Vice Chair.

Thank you. For Humane Society. So this working group would have the power to dictate how the funds are allocated on, you know, as needed, you know, hotspot basis and with an annual report to budget and finance with the use of the funds.

Right. So the way the panel is composed, there would be animal experts, including veterinarians, and they would evaluate grant applications and decide where the funds were most most highly needed.

I know Hawaii County has recently put animal control under an agency.

Yes.

Before it was, you know, probably grant funded by organizations like Humane Society.

Yea.

There was others. I don't know how the rest of the state is. So would this provide the flexibility to kind of navigate those different situations in each island?

Yeah. So the funds are available to nonprofits, not to county departments. But I'm fairly familiar with the way things are working on Hawaii Island. And my understanding is the county is only doing spay and neuter for the animals, that it's to taking in as strays from the public.

The rest of the spay neuter is still being done for by nonprofits on Hawaii Island.

So the county is a Member of the Hawaii Animal Welfare alliance and could potentially have a seat on this panel, but I don't know that they would have a use for the funds since most of that work's being still being done by the nonprofits.

Copy that. Thank you.

Of course.

Oh, yeah, no, I think we're going to ask someone else a question.

Okay, thank you.

Thank you, Stephanie. Next question for Budget and Finance. Since there are no other departments here, I feel like we have.

I can take one.

Well, CTAHR is here, but we, we might, we might need to pick on you a little bit?

Sure.

Is there. We read your testimony. I guess one recommendation could be to have someone else facilitate the program via the state or, you know, how is there a mechanism then to get funding to the counties with, cause I think one of.

There's the appropriation and then there's the license plate, and all of that goes into the Special Fund and then goes out. Is there a better mechanism that is not in your testimony presently that could do what we need to do to effectuate this? Or would we just. Or is the only other way to do a grants program?

I didn't want to say that out loud, but is there other alternatives to still supporting the intention of this Bill? But I understand the mechanism is a little bit challenging in the way that it's written.

Sure. And Stephanie's right. I mean, I do understand the importance of trying to address this particular issue. I think that, you know, the concept as written with, with a working group of volunteers that were willing to kind of take a look at the, you know, how the money would be distributed if you did have a Fund established.

I think, you know, and again, not to pick on other departments. I mean, there may be other departments that have a little bit more expertise when it comes to dealing with animals per se. You know, I deal with different kind of animals in the financial industry.

Department of Agriculture has some animal regulatory work under their purview.

They do. But I think, you know, to the point is, you know, the distribution of the resources as they come in.

I, I think a grant aid process, although a mechanism, is a little bit of a kind of fire and forget kind of process and doesn't have kind of the efficacy of having, you know, kind of a sustained programmatic addressing of, you know, feral cat populations.

So, you know, I'm open, you know, to looking for a path forward on this whole thing. You know, if the Department of Budget and Finance were, you know, we're tasked with it, you know, I would ask, you know, if there would be some consideration for some kind of resources in order to address it.

But, you know, with the multitude of things that my Department is dealing with right now, maybe there is another Department that it's more appropriately housed.

Thank you, Members. Any other questions? And thank you for all you do to support the state. No other questions. Okay. See? None. We're going to move on to our final measure on our agenda.

HB719 relating to animal fur products prohibits the sale, offer, position with intent to sell, display, distribution or trade of fur products in the state with certain exceptions. Establishes civil penalties for violations. Effective 6/30/2025. First to testify on this measure is Hawaii Humane Society. Thank you. Tina Yamaki, Retail Merchants of Hawaii on Zoom.

Aloha and good morning chair and Members of the Committee. I'm Tina Yamaki with the Retail Merchants of Hawaii. We are opposed to this measure. We do not feel that it's necessary. As stores in Hawaii are already phasing out or have phased out the items, fur items or trying to liquidate their current inventory.

And we recognize that many top designer brands have already ceased the use of fur in their designs. We also wanted to point out and make you aware that many of the animals that are humanely raised on farms and their byproducts are used for other things.

They're kind of raised like how chickens and pigs and cows end up in grocery stores and the rest of their personal things are used for fertilizer and other things. So it's not just going to waste or just taking the fur. And Hawaii's average temperature is 80 degrees here. So there's not a large demand for fur in Hawaii and it's mostly purchased by visitors who live in colder settings.

But we don't see that as much anymore. We also wanted to point out that. For resellers it's hard for them to determine if it's real fur or not. And not all things donated to resellers are used items. Some of them are still new with tags still considered new. Our industry is.

We don't feel that this measure is going to be helpful. It's just another added on regulation for our business. And as you know, Hawaii is already boggled down with a lot of regulations and not a friendly place to do business. And it is going to be hard for resellers or any retailer to comply with the June 2025,

I'm sorry, in my testimony I put 2026. You know we can't afford any more hardships. This is just a Bill that's not really needed in our industry right now. And then we also hope that you hold it and I'll be around for questions. Mahalo.

Thank you for your testimony. Next we have Fur Commission USA on Zoom.

Yep. hey, hi Chair, Vice Chair and and Members of the Committee. So I'm Challis Hobbs. I'm the Executive Director of the Fur Commission USA which represents the U.S. mink farmers of which 100% are family. family run and owned businesses and are oftentimes multigenerational. So we're extremely opposed to HB 719.

Two, two points I wanted just to make real quick was the first, no one cares about the wellbeing of the animals more than the farmers who work with them every day. And this is why over 96% of U.S. mink pelts come from these certified family farms that follow science-based welfare standards. This isn't just talked, it's backed.

U.S. mink farms are certified through a program that's been peer reviewed and accredited by PAACO. So it's the same organization that certifies the major U.S. livestock industries certification programs. Our farms undergo regular third-party inspections ensuring compliance with high standards. And those standards are developed by scientists, veterinarians and welfare experts.

So these, our mink farms follow strict nutrition, housing, biosecurity and veterinary care guidelines. Humane euthanasia follows American Veterinary Medical Association guidelines using carbon monoxide. It's a painless and odorless harvest method. And this Bill in my opinion is based on misinformation, painting an unfair or unfair picture of us.

And to the other point, Meek farming is a zero waste operation. Every single part of the animals used. We consume over a million or a billion pounds of food industry byproducts that are turned into feed, materials that would otherwise go into landfills.

And then the last point that's really concerning for us about this is that so this Bill puts us mink farmers at risk and emboldens extremist attacks. Across the country, activists have trespassed, destroyed property and harassed farmers their, their children, their wives and their extended family members.

These attacks have cost mink farmers millions in damages in recent years and continue to threaten these rural families. So this Bill helps these extremists feel justified reinforcing their belief that farmers are doing something wrong when they're simply earning a livelihood in a legal certified way.

So that, that's, those are the points I wanted to make and we just, we urge you to reject this Bill. And yeah, you know, thank you for your time. Happy to answer any questions.

Thank you for your testimony. Next we have Anamoda Inc.

Yes, hello everyone. As a lifelong furrier, Aloha and thank you Chairs and Members of this Committee for the time to explain how fur ban bills like HB 719 are biased and misinformed and why they need to be opposed. My name is Kim Salvo. I manage one of New York's premier fur companies, Anamoda.

This is a 33-year career and profession that I love and I do not have any accounts in the State of Hawaii. But I would like to bring your attention to four key components that make this particular ban devastating on many fronts.

First, as Members of the AG Committee, you must understand the difference between animal abuse and neglect, which no one ever wants to see, and animal husbandry, which all animal usage industries are responsible for.

We use pelts coming from fur ranches and through regulated trapping. The farms operate 365 days a year under third-party control regulations with constant veterinary care. And they are never skinned alive.

And the pelts are trapped through controlled state by state regulations through trapping. And these are conservation measures. And you all know that conservation does not mean saving. Conservation is the best use practices of the natural resources available to you.

And since trappers do not trap for fun, by limiting the pelts of harvesting through trapping, government would have to step in and exterminate those populations at the cost of the taxpayer. This would leave those skins wasted and this would affect wildlife habitats and populations all across North America.

Next, you need to understand how all of the fur-free fashion designers, design houses, clothing brands and retail department stores who publicly announced their decision to stop using or selling selective fur products did not do so over ethical concerns.

They made this detrimental decision because it is impossible to operate a business that is constantly under attack by the terrorist tactics and extreme animal activists who harass, harm and threaten and destroy their businesses, their employees, their customers, their property. Sadly, we have limited protection from this illegal and obscene activity, thus forcing the products off the shelf.

Number three, the exclusions in this Bill allow for picking and choosing animals that no one cares about. The sponsors of this Bill designated five separate animal families as acceptable to sell as fashion items. This certifies that no one really cares about the animals.

What makes a mink more coveted and loved than a cow because cowhide products are are still allowed? And what makes a fox more favorable than a sheep because sheepskin products would still be permitted? I think you get the point. The carve outs prove that there is no justification in passing this Bill.

And lastly, I will leave you with a very profound statement. I work in the fashion industry and I have to look at the larger picture when it comes to the fur bands. If you are looking to kill animals, then you should pass this act.

Because every time restrictions or outright stoppage of products or services from animal industries come to pass, the one thing that they do for certain is kill the animals. We see this from circuses who were stopped from using animals in their shows. What happened to all those circus animals? They died.

When the dog races were forced to close. What happened to all those greyhound dogs? They died. When the protesters demanded that foie gras stop being sold in markets and restaurants. What happened to all those Geese? They died. And so when fur bans like this come up, we are looking that the responsible wasteful death will happen from passing this act.

I hope this brings a rational perspective and knowledgeable vision to the impact of fur bans and the terror placed on animal usage industries. And please do not fall for the false pretense that synthetic microfiber-based fabrications are the perfect substitute for natural fur. And last year when I testified before another Committee, I explained this.

If someone came to Hawaii and told you cook tofu in the ground because it's going to taste just like the kalua pig, you would not accept that at all. And so the substitutes are not acceptable for the fur industry as well. So I implore this Committee to vote no.

Please oppose this, make it legal to sell fur products that we use in the Great Aloha State. I'll take any questions that you have. Thank you so much for allowing me to testify.

Thank you for your testimony. Next we have Natural Fibers Alliance on Zoom.

Hey, good morning everyone. Can you hear me?

Yes.

Yes, my name is Mike Brown. I'm with the Natural Fibers Alliance. Excuse me.

Thank you so much Members of the Committee for allowing me the opportunity to speak in opposition today regarding HB 719, a Bill that seeks to prohibit the sale, offer for sale, display for sale, trade or distribution of certain animal fur products.

As a representative of the Natural Fibers Alliance, a coalition dedicated to promoting natural sustainable materials and fashion, we stand in opposition to this Bill for several key reasons. First, it's important to note that there are no fur farms in State of Hawaii.

This Bill does not address the production of fur which is one of the most highly regulated industries in the world. Instead of letting the market drive demand for legally sourced materials, HB719 aims to restrict consumer choice.

As of right now, we are seeing a cultural shift, especially among young women in the US who are increasingly embracing fur as a fashionable choice. Platforms like Instagram and the revived TikTok are amplifying this trend, showcasing fur on runways, fashion runways, indicating, excuse me, that indicates that consumers are actively choosing to wear natural fur products.

Secondly, the recent results from the Denver ballot initiative, which was set apart, excuse me, which was brought to voters in November of 2024, provides a clear example of the public sentiment regarding fur. In November, during that initiative, Denver residents voted overwhelmingly against the proposed fur ban.

Around 58% were in favor of keeping fur sales legal in the City of Denver. This reflects a strong desire for individual freedom and personal choice.

Many voters recognize that such a ban would not only impact fashion choices, but would also affect the use of materials in traditional items like cowboy hats made from beaver felt or rabbit hides, as well as fly fishing lures which were made from the pelts of mink.

Thirdly, if you notice, animal activists have begun to shy away from advocating for fake fur and vegan leather type alternatives, recognizing fully that the environmental impact of these alternatives is often worse than the natural fur and natural fiber products.

Research has shown time and time again that these materials, materials like vegan leather and synthetic fur have a larger environmental footprint. A study published in the Journal of Clean-, Cleaner Production found that producing synthetic fibers frequently results in higher greenhouse gas emissions. Additionally, microplastics released from these products significantly contribute to ocean pollution, harming marine life.

Lastly, I want to address the misinformation surrounding fur farming, particularly the unfounded claims that mink spread COVID-19. Mink farms have since achieved nearly 100% vaccination rates on their farms.

And the forced culling in Denmark that was based on recognized false narratives has resulted in a $3.1 billion compensation that has been committed from the folks, the government of Denmark to farmers in Denmark.

This Bill was proposed, has been proposed every year since 2019 and the reality is it's time that we shift our focus and put more emphasis on celebrating natural fibers instead of condemning them. Implementing this ban would have far reaching consequences beyond the fur industry, potentially impacting poultry and cattle farmers as well.

The increased scrutiny on animal products may lead to further restrictions on other natural materials, threatening the livelihood of farmers across various sectors. In this sense, the Bill almost acts as a Trojan horse, disguising its true intent as a simple fur band while posing a significant threat to the entire animal use industry.

In conclusion, this issue goes beyond just fur coats or mink farms. It represents an attack on farmers and ranchers from Hawaii to Idaho. We must stand together to protect the rights and ability to sell the product they harvest. Thank you so much for your time and consideration.

As was mentioned previously, we have submitted comment for the record and if there are any questions we we are perfect. We are here to answer them as needed. Thank you so much.

Thank you for your testimony. In total we had 18 in support, eight in opposition. Would anyone else wish to testify on this measure? See none. Members questions? See none. We're going to break for a short recess before decision making. Thank.

We are reconvening our hearing on the Committee on Agriculture and Food Systems for our 9:30am agenda. We are in decision making and we're going to start with HP 1337. We're going to move this Bill forward and continue the conversation. We want to defect the date to July 1, 3000.

To continue to move this measure forward, we're going to add technical amendments needed for clarity, consistency and style. We do want to amend the Bill to direct the University Division to CTAHR as the beneficiary within the University of Hawaii to steward this pilot program. Those are the only amendments.

So my recommendation is to move, move this Bill with amendments. Comments, Committee? Seeing none. Vice Chair for the vote.

Thank you, Chair. Voting on HB 1337. Chair's recommendation to pass with amendments. Chair, Vice Chair, vote aye. [Roll Call] Chair, your motion passes. I'm sorry. Your recommendation is adopted.

Thank you. Vice Chair. Moving on to the next measure, HB 1184 relating to controlled environment agriculture. We're going to create another House draft, defect the date to July 1, 3000, make technical amendments needed for clarity, consistency and style. We are taking UH's amendments in their testimony and we are going to.

I think the appropriations are blank, but we are going to blank them if they are not. And I have forgotten that. And we're going to notate that the GO Bond investment in the standing Committee report should reflect $6 million. Members, any questions or comments? Seeing none. Vice Chair for the vote.

Thank you. Chair. Voting on HB 1184. Chair's recommendation to pass with amendments. Noting the excused absence of Reps. Quinlan and Ward. Are there any no's or reservations? Chair, your recommendation is adopted.

Thank you. Vice Chair. Moving on to HB 1185 relating to agriculture.

My recommendation is to pass with amendments, defect the date to July 1, 3000, make technical amendments for clarity, consistency and style and also take the AG's recommendation to clarify the concerns in the Constitution. So that recommendation was reached related to the statement of statewide concern and to add language in the Bill to reflect that.

Members, any questions or comments? Seeing none. Vice Chair for the vote.

Okay, thank you, Chair. Voting on HB 1185. Chair's recommendation passed with amendments noting excused absences of Representative Quinlan and Ward. Are there any no's or WR's? Seeing none. Your recommendation is adopted.

Thank you. Vice Chair. Moving on to HB 530 relating to the labeling of macadamia nuts. This is a complicated topic that we worked on last session and we need to continue to work on. But I think the perspective of the Committee is that we really need to focus on increasing processing.

There's commitment by the Governor, there's commitment by the Ag committees in both the House and the Senate, that the priority right now for macadamia nuts and the industry is to increase processing and manufacturing in the State of Hawaii. The intent of this Bill is something I think we all believe in. We want processing in Hawaii.

We want a Hawaii first position, not just in planting and growing macadamia nuts, but also processing macadamia nuts. I think that's a goal of everyone for a high quality, the best quality made in Hawaii product.

But I think we're a little early on this Bill and there was a commitment at least by the committees to wait on moving a macadamia nut labeling adjustment until we waited for the sector to work together on processing.

So with the intention of waiting to see how the working group with the governor's funding that shock is moving forward. I think it's too early to move this Bill at this time.

So we're going to defer this measure until we are able to have a statewide plan and a plan with the whole sector to move private processing forward. Members, any comments? Seeing none. We're going to move on to the next measure, HB 547.

HB 547, we're going to move this Bill forward with a House draft 1, defect the date to July 1, 3000. We're going to add technical amendments needed for clarity, consistency and style.

We want to adopt the do tax amendment about the proposed checkoff option and then we want to make sure the blank, the appropriation is blanked and notated in the standing Committee report.

We also want to take the notation of Budget and Finance's recommendation on maybe looking at an alternative of who manages this funding mechanism and how does those funds get to the counties equitably. So we'll notate that in the Standing Committee report. Members, any questions or comments? Seeing none. Vice Chair for the vote.

Thank you, Chair. Voting on HB 547. Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Noting Representatives Quinlan and Ward, excused absences. Are there any no's or reservations? Seeing none. The recommendation is adopted.

Thank you, Vice Chair. Onto our final measure, HB 719 relating to animal fur products. We are going to create a House draft 1 defect the date to July 1, 3000 and make technical amendments needed for clarity, consistency and style. Members, any comments or questions? Seeing none. Vice Chair for the vote.

Thank you, Chair. Voting on HB 719. Chair's recommendation is to pass with amendments noting Representative Quinlan and Ward's absence. Is there any reservations or no's? Okay, Chair, your recommendation is adopted.

Thank you. Thank you everyone for your testimony today. Thank you, Members. We Have no other business on our agenda. We're close. We are finished. Thank you.

All right. Aloha.

We are back for decision making. It is 11:30am Wednesday, February 5th. We are in Conference Room 325. We're doing decision making on House Bill 982 relating to wildfires. This establishes the wildfire recovery fund and allows securitization for electric utilities. We have a number of amendments. I'll try to go through them relatively quickly.

So we're going to adopt all of Hico's suggested amendments, many of which are addressing concerns raised by the Administration from testimony, except for the suggestion to change the timeline for approval. There's a number of those, so I won't go through them. They're all available in the testimony that was submitted and released to the public before the hearing.

So some are kind of non substantive, technical amendments. But some of the main highlights of those amendments include clarifying that the only cost to be securitized are the fund contributions. So it narrows the definition of wildfire recovery costs. And then it also adds provisions for the Commission to engage a financial advisor, among other things. Additional amendments.

So on page 10, regarding the initial contributions, we're going to change the amount to be $500 million to be recovered from customers and $505 million to be funded by shareholders.

On page 38 at the bottom of the page, to the section addressing periodic true up adjustments to wildfire recovery charges, we will add a provision that the Commission shall also consider interest on ratepayer investment into the Fund.

On page nine, section A3, the eligibility provisions, we'll add something in there that a participating utility must be required to provide to the Commission a comparison of costs for commercial insurance coverage per concerns raised by the consumer advocate's testimony.

On page five to the definition of financing costs, we'll just add the word "reasonable"; so "reasonable costs" at the top of that definition. And then per the PUC's testimony on the the timeline, so that on page 33, regarding the timeline will delete but no later than one year after the application is filed.

And we will accept KIUC's suggested amendment to change to add to the definition of catastrophic wildfire just to address unique circumstances for Kauai. On section A11, we will add "and Commission". So we will include the Commission as a receiver of the report.

So there's a report to the Legislature that will also go to the Commission on the activities of the Fund.

We will add the word "economic" to the definition of qualifying damages on page six to clarify that, per the Hawaii Association for justice testimony and on page 13, lines 12 and 13, we will amend subsection B2 to read "unless that error resulted from the failure of a system processor program to prevent the error".

So this is also per Hawaii Association for justice testimony. And then we will also defect the date to July 1, 3000. And I think we have a long way to go on this Bill. Well, actually, before I start making speeches, we want to also note a couple things in the Committee report.

So also making notes in the Committee report that the Committee agrees with the consumer advocate testimony that we would like to see more quantitative justification for how that amount of $1 billion initial contribution was arrived at.

And also noting in the Committee report that the Committee has questions about how to address the question of when it would be appropriate for the Fund to end and, you know, should there be changes to the insurance market or to address, you know, liability for this kind of situation nationwide or something like that, you know, and the utilities credit rating is stabilized.

How would this Fund come to an end? And how would ratepayers get refunded? Because if a financing order is approved, they'll be locked in for 30 years regardless. So we need to talk about that question as we move this forward. So that's it.

There's, like I said, a long way to go and a lot, a lot of questions to address. But we're going to move this forward as an important measure to continue talking about. Members, any discussion, if not Vice Chair, please take the vote.

Chair's recommendation on House Bill 982 is to pass with amendments. [Roll Call] Chair, your recommendation has been adopted.

All right, thank you. And we're adjourned.