Senate Standing Committee on Agriculture and Environment

Aloha mai kakou.

Aloha.

Good afternoon and mahalo for joining today's AENHOU hearing. It's Wednesday, February 18, and we're convened in Room 224 and video conferencing, which includes the audio and video of remote participants. It's being streamed live on YouTube.

In the unlikely event that this hearing is cut short, the committee will reconvene to discuss any outstanding business on Friday, March 20, at 3:01 PM during AM's time slot here in Room 224. And a public notice will be posted on the legislature's website. And because of our 90-minute time limit for hearings, there will be a two-minute time limit for all testifiers, and we'll have a virtual countdown timer on the Zoom screen. So first up is HB 1737, clarifying the allowable uses within the Ag District with respect to farm dwellings and farm employee housing. First up is data.

Okay. Thank you. Next is OPSD. Mary Alice Evans. Not here in support. On Zoom, we have Mya Hunter from the Maui County Department of Ag. Is Maya with us? Or Maya?

Aloha. Are you able to hear me?

Is that Mia or Mya?

Mya.

Mya. Go ahead, Mya.

Aloha, Chairs. Mahalo for the opportunity to testify. I am Mya Hunter on behalf of the Maui County Department of Agriculture. We stand on our support testimony for this bill and are open for questions. Mahalo.

Thank you, Mya. Next is Brian Miyamoto, Hawaii Farm Bureau.

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

Thank you, Brian. Ted Kefalas from the Grassroots Institute of Hawaii. Is Ted here? In support on Zoom, Hunter Heaivilin from Hawaii Farmers Union.

Thank you, chair. All our chairs, vice chairs, committee members. Hunter Heaivilin here on behalf of Hawaii Farmers Union. We'll stand on our written testimony and support and the recommendation that there be an addition of a definition for affordable. Happy to answer any questions. Mahalo.

Thank you, Hunter. Anyone else wishing to testify on this measure? We had 44 in support, zero opposed, and two with comments. Any questions? Numbers. I got a question for you, Hunter.

Yes.

In your testimony, you talked about, you you mentioned what's a scenario where the workforce housing might be misused or be subject to speculative conversion? You mentioned that.

I think there was a language in here around preventing from CPRs, and I think that that's already well, well covered, if my memory serves. I think just the insurance of that, that affordability is defined as it's to be applied for agricultural housing as opposed to, I guess a, a misuse could be it's for agricultural housing, but we're taking 80% of your paycheck while providing you housing for that housing.

Right. So ensuring that there are some, some safeguards in there.

Okay. Thank you. Okay. No other questions. We'll move on to the next measure, HB 1604, HD 2, relating to ag workforce housing. Establishing an ag workforce housing working group within Department of Ag and Biosecurity to address the shortage and challenges of ag workforce housing in the state. And first up, we have DAB. Thank you. Brian Miyamoto, Hawaii Farm Bureau. Okay. And Richard Lazar with the Housing Hawaii's Future. Is he here? In person. He's in support. Hunter Heaivilin, Hawaii Farmers Union.

Thank you, Chair. Hunter Heaivilin here on behalf of Hawaii Farmers Union. We'll stand on our written testimony testimony in support of this measure. We view it as an important mechanism to bring together various parties from government and the agricultural sector to undertake, you know, what I think could be viewed as a planning effort to address the shortage of workforce housing. Mahalo for the opportunity to testify.

Thank you. Anyone else wishing to testify on this measure? Please.

Aloha mai kākou. Imiloa Borland with the Office of Hawaiian Affairs. OHA stands on our written testimony in support of HB 1604. We strongly support the work that the, the working group's comprehensive scope of the work and strongly recommends that all data collected and reported be disaggregated with specific identification of Native Hawaiian agricultural operators and workforce participants where feasible and appropriate.

Disaggregated data will identify disparities in access and ensure that Native Hawaiian farmers and agricultural workers are equitably benefiting from any future programs. Additionally, OHA respectfully requests to be invited to serve as a member of the working group.

OHA has long advocated for policies that expand opportunities for Native Hawaiian farmers, ranchers, and food producers. Through grant making, loans, and advocacy, OHA has supported initiatives that increases access to land, water, and funds for Native Hawaiian agricultural practitioners.

OHA has experience in housing policy, land use issues, and community based development, direct relationships with Native Hawaiian farmers, and a statutory and constitutional mandate to advocate for the betterment of the conditions of Native Hawaiians. So OHA's participation in the working group could ensure that agricultural workforce housing strategies are responsive to the needs of Native Hawaiian agricultural workers. Mahalo.

Thank you very much. Okay. We had nine in support on this measure and zero opposed. Any questions, Members?

Question, please.

Senator DeCoite.

Thank you for wanting to serve on the board. How many how many grants have you guys provided to farmers and ranchers from OHA?

I don't have that exact number with me, but we do have a specific Mahiʻai Loan Program for our farmers that ranges between $2,500 to a $100,000 for small farmers. And we also recently just partnered with UH to have a canoe, a new canoe crop program, cultivating program, and we're the the fiscal sponsor for that. But I can get back to you with specific figures from our grants department.

Can you get back to me on that island wide grants? Grants and loans that have been provided within the last three years.

Three years. Yes. I can do that for you, Senator.

Thank you. Thank you, Chair. Okay.

Follow-up, Chair.

Yes. Senator Richards.

On your loans, do you do construction loan as well?

I can get back to you on that. I'm not sure.

I appreciate that. Thank you.

Yes. Of course.

I got a question for DAB, Chair.

Okay. Senator DeCoite.

DAB, please. So just some quick question. Director, to what extent is the lack of agriculture workforce housing a barrier to hiring farm workers?

I'm sorry. Could you say to what extent is the lack? Well, subject matter is here, but I believe the barrier is... In our testimony, we say that the barriers only to the upper revenue reporting farms. It's not a barrier to 70% of the farms that we believe report less than 25,000 or less.

As we, as the assumption is, if you're reporting less than $25,000 a year in revenue, you probably don't need housing. But the housing, the lack of housing is hurting the expansion for the upper those that report like 100,000 or higher. Those are the lack of housing, but I will ask Earl to comment.

If they... Earl Yamamoto, Planner, Department of Agriculture. In the 2022 census for Hawaii, about 69% of the 6,569 farms reported annual income of $10,000 or less. And I use that as a like a floor to establish, you know, to give to give ourselves in the department as we look at this bill how much, what kind of demand of real demand there is or will be for farm worker housing.

And that's gonna be based on the on the number of employees that are possible with a farm, a farmer, a farm operator income of $10,000 and less. And I can't imagine that being a priority, housing. And then I bring this up because it's a way to better manage what the task is before us rather than just do a shotgun style, take a look at the entire state at each county level and do this and do that. We may end up, you know...

So so if we took a look at your properties. In this case, if we said, okay, your, ag subdivisions on the Department of Agriculture...

Ag parks.

I mean, yeah, ag parks, not subdivision. So those ag parks, if you looked at those ag parks and the leases that you have, how many of those leases, just them alone, are looking for workforce housing? Or is it that the workforce housing for agriculture is new farmer startups? Is there a correlation between both of them? Which, you know, ag parts as well as the new farmer style because this is geared toward farming in general.

I do not know.

I would mimic that, but it's a good question. Because if you ag park does not come with housing. So the new, right.

There was a bill proposed to do workforce housing, which is why you guys support and which is why I think we need to know that so we can kinda isolate down. And then we have partners like OHA that have also have loan programs and grant programs again to USDA. It also does homeownership loan programs and operating, which is why I'm trying to figure this out.

But, you know, let me add that the Kunia Ag Park, the new Kunia AG Park that we're trying to get through our CRP budget, that has 24 ag lots with houses. So that would take up... I think in Honolulu, Honolulu City and County our wait list for lots is nearing 200. So this 2024 lots would take about 20% off that list. But as Brian Kau, our administrator, mentioned, once we open it up, the wait list is the wait list. But then you open it up, it's probably gonna be quite a few more people.

And and what is the acreage in Kunia?

I think it was 150. 150.

Yeah. 150 acres total.

24 three to five acre lots.

Okay. And then just a quick follow-up. Is the lack of agricultural workforce housing the same as the need for affordable housing for all workers?

What would you say, Earl?

I don't know.

I don't know. But it's related. It's just simply the lack of housing, right? And it's whether it's for farming or for just living, we need more housing.

Would the housing be sufficient if it was a portable housing unit? Or we're talking housing like three bedroom housing farm worker. Or I mean, I've seen some really good portable units that we can use for workforce housing, and it's movable. So is that an option? Can be.

I think it it would be if it's a... It can be.

Well, I can't speak for the county, but I think that's a county call on that.

I think it would go by size and dimension. It could probably not be one if you know you need the essential services and it was just off the grid. Anyway, thank you. Thank you, Chair.

You talked about smaller farms. It's been my experience, Big Island, that the farmers that are larger are all clamoring for employees. And if they had housing, that's a non taxable benefit to agricultural workers. And so having the availability of housing is huge as far as it's a game changer. Because they can't pay real high wages, but they can offer housing and expense it. It makes all the difference in the world. Do you have any data on, you said 10,000, so over 10,000, farms gross income?

That's what this, that's what the research would uncover. We don't know what that, what the... Yeah. Income threshold is and how different it is between islands and between major, like you said, the larger farming operation. What is that threshold where where it it pencils out.

Versus being something that will be a pure subsidy situation where farming farmhouses are alleged to be needed by people who really who really can't afford farm workers. It would be nice, but, you know, at what point do we, what point do we stop? And that kind of distortion may not be looked kindly upon by other housing needs if you look at it with the same lens.

Senator, may I add?

Yeah. Please.

So in your, on your island, they've been very creative, as you know, with encouraging employee housing. The one that I can refer to is Hawaii Farming. The keiki, you know where I'm going. They've actually purchased warehouses and converted it into housing for their employees, and they're thriving.

I don't know if there's the tax incentives or what what how they were able to achieve that, but they've actually created housing for their employees in the nearby area. And I think it's because of the county accommodating their request for growth.

There's also been work on the wastewater systems and some of the legislation that you see is trying to help make the wastewater management septic systems more affordable by making gang septic systems that are measured on not necessarily households but bedrooms. So thereby there's a way to cut down, and Department of Health has been open to having that conversation. So, okay. Alright. Thank you.

Okay. Members, we're gonna go into decision making.

Clarify that agricultural tourism activities may be conducted on the same parcel as a farm dwelling, provided that such activities are secondary and incidental to a bona fide Ag operation, do not occur within farm employee housing units, and comply with applicable county ordinances adopted pursuant to section 205-5, HRS, and delete the provision establishing a square footage per acre ratio for farm dwellings and farm employee housing. And then we'll also defect the date to 07/01/2050.

So on the first measure, HB 1737, HD3 relating to farm employee housing, the chair's recommendation will be to pass with amendments to clarify that farm employee housing shall be occupied only by Ag employees and their immediate family members who are actively engaged in the farm operation. Establish a grandfathering provision to ensure that any farm employee housing for which a building permit or certificate of occupancy has been issued pursuant to county ordinance prior to the effective date of this act shall be deemed nonconforming use. Preserve county authority by specifying that nothing in this section shall be construed to supersede or limit the county's authority to regulate zoning, density, building size, setbacks, or other land use requirements within the Ag District.

Okay. So on this measure, any discussion or Chair votes aye. Vice chair?

Thank you, chair. On HB 1737 house draft three, passing with amendments. Chair votes aye. Vice chair votes aye. Senator DeCoite, aye. Senator Rhodes, aye. Senator Awa, aye. Chair, you have five in favor. Motion is adopted.

Thank you, members.

And for the committee on housing, we'll have the same recommendation to pass with amendments. And chair votes aye. Vice chair is excused. Senator Elefante is excused. Senator Rhodes. Aye. Senator Fevella. Aye. Recommendation is adopted.

And then on the second measure, HB 164 HD 2, renamed to Ag workforce housing. For AEN, the chair's recommendation will be to pass with amendments to add a representative of OHA and a representative of an organization working to address Hawaii's housing shortage to the working group. And we'd also like to expand the working group scope to include consideration of innovative housing models, such as modular homes, tiny homes, and container homes, and examine opportunities to streamline permitting and zoning processes. It will also defect the date to 07/01/2015. Any discussion.

Chair votes aye, vice chair.

On HB 164, House Draft 2, passing with amendments. Chair votes aye. Vice Chair votes aye. Senator DeCoite, aye. Senator Rhodes, aye. Senator Awa, aye. Chair, you have five in favor. Motion adopted. Thank you memebers.

For the Committee on Housing, same recommendation to pass with amendments for HB 164.

I just wanted to make sure, you know, if we're going for these, housing measures that we don't serpentine, safety by, electrical and plumbing too. You know what I'm saying. Making sure that we stay with the standard of the building code. Okay. Thank you.

You think we can move that chair and committee report? Sure. Great.

Thank you, chair.

Okay, so chair votes aye. Vice chair's excuse, Senator Elefante excuse, Senator Rhodes. Aye. Senator Fevella. Aye. Recommendations adopted.

Okay. And that concludes the 03:00 agenda for AEN and HOU.

Okay. Gavelling in the joint AEN/EIG 310 agenda. Just to let you know, due to the high volume of testimony received and time constraints, The oral testimony for this agenda will be limited to one minute.

Rest assured that we do have your written testimony and we've received it and carefully reviewed your your testimony. So let's start off with HB 1736 relating to animal control, establishing the spay and neuter special fund to reduce pet overpopulation, including the free roaming cat population. Authorizes an income tax designation to provide revenues into the special fund.

Requires cats over five months of age to be surgically sterilized unless covered by intact cat declaration, and conditions the importation of intact cats on state and county declaration requirements with certain exceptions. Starting off is DLNR. Patrick Chi.

Aloha, chairs, vice chairs, members of the committees. The Department of Land and Natural Resources and Hawaii Invasive Species Council. We support this bill, and we work. We have been working hard with the animal welfare interests in order to make a balanced bill possible. So we hope that this this will move forward and advance sterilization, etcetera, that is in this bill. So if you have any questions, I'm available for it.

Thank you, Patrick. Department of taxation. Good afternoon, chair, vice chair, community member, Garrison Court on behalf of

Good afternoon, chair, vice chair, community member, Garrison Court on behalf of the Department of Taxation. We'll stand on our written testimony providing comments.

Thank you, Garrison. Next is, Lynn Muramaru with Pacific Pet Alliance.

Good afternoon. I'm Lynn Muramaru. I represent the Pacific Pet Alliance, and you have my written testimony. But, basically, there are three parts to this bill. One is the mandatory sterilization of all cats over five months and an intact cat declaration and also the creation of a special standing nearby.

The Pacific Pet Alliance, we totally support the creation of the special fund, and we fully support that. The rest of it, we object to, and that's in my testimony. And the only other thing I'd like to point out is one of Mr. Chi said that all animal, welfare organizations were contacted, and the chat fancy was totally left out of this. And and the other thing is the proposed inclusion of dogs.

Okay. Thank you. Thank you, ma'am. Next is, Stephanie Kendrick from Hawaiian Humane Society on Zoom.

Not present on Zoom, chair.

You're in person. Even better. Aloha, Steph.

Aloha, chairs, vice chairs, members of the agriculture and energy committee. Stephanie Kendrick with the Hawaiian Humane Society. We've been working real hard on this measure. As Patrick said, this has been dealing with pet overpopulation and particularly the, thriving population of free roaming cats in Hawaii, is a is a joint interest of conservation and animal welfare. And we've been pleased to collaborate with our conservation partners on this measure.

We have also been respectful to the concerns of the pet breeding community. And I will say that all this measure demands of anyone who wants to bring in an intact animal is a $100 fee and the completion of a form. That is not a tough bar for people who are breeding animals for sale to meet. So, I strongly encourage the committee to pass this measure. We've, offered substantial amendments to address some ongoing concerns with stakeholders, and we hope it'll pass the measure with those amendments.

Grateful to the collaboration, particularly with the bill sponsor, and I'm available for questions.

Thank you, Stephanie. Next is Grant Sizemore from American Bird Conservancy Conservancy.

Aloha, chairs, vice chairs, and members of the committee. Grant Sizemore from American Bird Conservancy. You have our written testimony, in strong support of this bill as written. If we are ever to make meaningful progress on the existing cat overpopulation crisis, this bill, the required sterilization of pet cats and the associated resources are really a necessary first step. As has been mentioned, a great deal of discussion has gone into this bill from both conservation and animal welfare organizations, and I believe that this current version strikes a very good balance, a win for all.

I do want to add that while other pet animals, dogs, are similarly in need of sterilization services, and like cats can also harm Hawaii's native birds and other wildlife, we feel strongly that this bill should remain dedicated to cats exclusively. Cats are by far the biggest threat to Hawaii's vulnerable wildlife, presents significant human health risks, and exist at populations beyond other pet animals. Mahalo for the opportunity to testify, and I'm available for questions.

Thank you, Grant. Next is Bob Willing Smith from the American Kennel Club on Zoom.

Not present on Zoom, chair.

Offers comments. Greg Baker with the Hawaii Animal Advocacy on Zoom. You're with us, Greg.

Yes. I am with you. Hopefully, you can see me. Been having troubles with the with the with the camera. Aloha, chairs and members of the committees.

My name is Greg Pu'uwailoha Baker, founder of Hawaii Animal Advocacy. Our organization supports the goal of HB 1736 to expand spay and neuter services statewide, and we respectfully request one amendment to ensure the program can operate effectively. Sterilization programs must be able to return community cats to the territory after surgery to scale to the level needed to stabilize and reduce their populations. Cats are territorial animals, and when sterilized cats remain in place, they prevent new breeding and populations gradually decline over time. I respectfully request a small amendment so the program can work effectively.

For your time today.

Thank you, Greg. Next is Nancy Munden on Zoom. All the following ones are on Zoom. Nancy Lewis?

Currently unavailable on Zoom, chair.

Thank you. How about Vivian Toner?

I'm here. I'm here.

Okay. Chair members, thank you. I strongly oppose this bill. Hawaii does have a serious cat problem, but I do support spray and neuter. But this bill mandates sterilization of five month old Kittens, not addressing the real barrier of costs.

That care is out of reach of many people, and sometimes they have an impossible choice to make. They're sometimes they have an impossible choice to make. Their cats or getting them vaccinations and all that. So sometimes they just have to let their cats into the feral population. Feral population, people are there trying to do their job, trying to catch the cat.

Nobody else helps them. They have a very hard job. Granted, overpopulation of a cat will grow. You do the sterilization mandating it. The population will grow, shelters will overflow, and the problem will worsen. Because people do not have the can't afford affordable sterilization because the cost of vet bills is so high. And there's a supply and demand thing that's happening right now. So therefore you may ask you're gonna make yeah. I know. I'm done.

Thank you very much, Vivian.

Hello. Aloha all. I am Vivian Tollner, one of the many volunteers with Pet Fix Hawaii, a high volume, no cost dog and cat spay and neuter clinic on the island of Hawaii. This bill could simply provide much needed funds for free, low cost clinics across the state. Having items in the bill requiring sterilization, getting them fixed by a certain age, getting them fixed before moving here, etcetera, doesn't help get this service to the public.

The public already wants to do it and shows up in the hundreds to get their animals fixed. Already PetFix has done over 1,000 sterilizations this year. Why do we ask where you're going to live after you get fixed? Let's just fix them and it will be better no matter where they end up. Please keep it simple. Please do everything in your power to keep our dedicated hands and loving spirits busy fixing this overpopulation problem.

Most sincerely, thank you.

Thank you, Vivian.

Anela Joseph.

Not present on Zoom, chair.

Jenna Oda on Zoom?

Also not present on Zoom, chair.

Nicha Bull.

Not present on Zoom, chair.

And Renee Rabe.

Also not present on Zoom, chair.

Okay. Anyone else wishing to testify on this measure. Okay. Members, any questions.

Chair.

Yes. Senator Richards.

DLNR.

Yes, senator.

DLNR's position is you support this. Yes. How are we going to deal with the endangered species exposure to toxoplasmosis?

Well, this is just one of many, available things to to reduce the hopefully, reduce the, the the population of cats outdoors.

This doesn't directly, address the the issue, but, definitely having less cats on the landscape would mean that there's less, you know, toxoplasmosis.

Theoretically, that's accurate but the some of the proponents for trap neuter release does not work, and they all gonna argue it. I have yet to see a well peer reviewed paper that shows where it works. It works as long as no other cats come in.

Right. The issue with with having, you know, cats, you know, in Colonies on the landscape, is that even if a cat is sterilized, they're still going to kill. I mean.

And infect.

And in infect, Yes. So if we allow for the animals to be returned, that is that is an issue that most conservation interests are are not supportive of.

So DLNR does not support any trap neuter release. Is that accurate.

We support trapping and neutering, but not the release. Yes. Okay. Alright.

Thank you.

Okay. Thank you. Follow-up. So the recording?

I guess, since you do support trap, neuter release, would DLNR.

Not release.

Okay. I mean, the trap neuter. Would DLNR entertain the idea if we took some of your budget to help those that need to neuter their animals, help subsidize them with your budget.

I would have to go back to my leadership and see if that that is something that could be considered. But, definitely, the proposed tax checkoff is something that we do support, as well as, you know, if there is a potential funding, you know, to do trapping and neutering and getting, you know, cats off of the landscape, that would definitely be helpful. Yes.

Thank you. Check out Deb. Come on. Deb, please. Director, thank you all. Will you guys be able to enforce the provisions in this bill if it passed, and will you need additional funds.

I'm afraid I'm not familiar with the bill. We didn't submit testimony on it. But what is the provision you're referring to?

Basically, you guys would help with the enforcement of, this spade neuter program.

Okay. That's the case.

And and part of the enforcement is realizing that some of these pet owners that need to spade and neuter, if they don't have that funding mechanism, I'm more worried about them either leaving it open into population or choosing between whether I'm gonna take care of my family cat or I'm gonna abandon that cat. And this falls within the purview of you guys.

Okay. So, yes, the answer is yes. We will need additional funding, and we would probably be because of the lack of veterinarians and people that can actually perform the the the, perform the act, We would have to get agreement with the union to third party this so that we could have a steady stream of available veterinarians to take care of the enforcement.

So because I support, you know, the the bill, but you know, the fines and everything else that'll impact. I just can take Molokai Hana. We have challenges with getting a veterinary there, more so getting them on an airplane that is on time. How do I help those communities to meet their needs and, you know, get plenty pet lovers

That we care deeply for animals. Help me help them.

Yes. Senator, you have been a champion of extending our pesticide release or pesticide disposal program to the neighbor islands. We would probably do a program similar to that, where we would get a contractor do a lot of pre set a limit, and take and do the kind of the same. Procedure as we would for the pesticide disposal program, but it would involve the third party contractor on a specified day, specified location. So I think that kind of funding and we do have pesticides here, but that funding is is about if I'm wrong, Esther, it's about $600,000 we would need to conduct the

Where would I get that from?

Where would you get it from?

Where would I get that from?

Jeez. Maybe the Sierra Club?

That's a great idea. Thank you, director. Thank you, chair. Okay.

It's To answer my question.

Senator Richards?

Miss Muramaru.

Yes?

Thanks for being here. Expand a little bit more. I know you were cut off a little bit, and we only have a little bit of time. But, expand a little bit more on your comments concerning the, the fees and importation. Go ahead.

Oh, well, you know, Hawaiian Humane Society testified that it's just a $100 declaration fee. But it is written in the bill that the contractor can include other animals already existing in your household. You know, and then it's like, where where does it end. you know?

If we are breeders, you know, the the population of intact animals in our household is gonna vary. I mean, you know, we'll place older animals. We'll have younger animals. Sometimes, especially if we're gonna show animals, we keep them much longer than your typical, you know, pet breeder. And so how does how do they monitor and enforce that without an invasion in our pride you know, in our privacy?

Alright. Thank you.

Thank you.

Okay. We had one late testifier. Bob, are you still there, Rilling Smith? You've got one minute, Bob.

Awesome. Thanks so much for making time for me. Bob Rilling-Smith with the American Kennel Club. And, yeah, thanks, chair members in the committee for discussing this. Typically, we don't weigh in on bills that affect cats.

However, with the proposed amendments that could include dogs on language that's already been rejected multiple times this legislative session, We just, would like to let our comments stand that we've already submitted, but also just to reiterate that we don't think it's, the best time and place to reinsert the language applying to dogs. It's a very different issue from cats, and thank you for your time.

Okay. Thank you. Okay. So there were a 134 in favor in support of this measure, 84 opposed, and 8 with comments. Okay.

So we'll move on to the next measure. HB 1620 HD 2 relating to energy increases the environmental response energy and food security tax, and the amount collected from the tax that is deposited into the electrical vehicle charging system sub account. The card requires the TUC to transfer funds from the hydrogen cooling system sub account to the EV charging system sub account. First up, Department of Taxation.

Good afternoon. Garrison Court Department of Taxation will stand on our written comments for part of the testimony of credit comments under the questions. Thank you. Thank you, Garrison.

Hawaii State Energy Office.

Chris Yunker from the Hawaii State Energy Office. We stand on a written testimony provided John are available for questions. Thank you

John Itamura from the PUC.

You have your chance, miss Chairman. Could he?

You're not John.

Okay. And on Zoom, we have Ed Sniffen from DOT.

I am not John.

Aloha, chairs, vice chairs, members of the committees. Tammy Lee on behalf of the DOT. DOT stands on his written testimony and support.

Thank you. Chris Caulfield from Imua Alliance. Thank you, Chris. Next is Ted Kefalas from Grassroot Institute of Hawaii. In opposition, Doorae Shin from Our Children's Trust.

Oh. Aloha. Aloha, chairs, vice chairs, members of the committees. My name is Doorae Shin with Our Children's Trust testifying in strong support. The nominal settlement requires the state to achieve zero emissions in the transportation sector by 2045.

Electrification of the transportation system is a key component of that effort. This is a court enforced settlement, and the legislature shares responsibility for ensuring that the state meets this legally binding obligation. And this bill addresses one of the most significant barriers to EV adoption, which is charging infrastructure. Cost of living is the greatest hardship for most Hawaii families, and transportation is one of the largest health foot expenses. Electric vehicles offer family substantial savings in fuel and maintenance to the tune of several thousand dollars over the ownership lifetime of a vehicle.

Those savings are only attainable if residents can reliably charge, and we really support the access of charging for rural folks in rural areas, apartments and condos, and more. So thank you for the opportunity to testify.

Thank you, Doorae. Tom Yamachika from the Tax Foundation.

Good afternoon, chairs, vice chairs, members of the committees. Tom Yamachika from Tax Foundation. I wanted to point out two things. First, as you probably heard us before, we're not great fans of special funds funded by tax earmarks. We have not changed that position.

We think the legislature should be controlling these funds as opposed to whoever is running a special fund. Second, we wanted to point out that the barrel tax contains two pieces. One is, charging on petroleum products. It's a per barrel tax. And the other is a tax on non petroleum fossil fuels where there is a tax charge based on a BTU equivalent. You're hiking one but not the other. So I wanted to point out that disparity. Tap to answer any questions. Thank you for the opportunity.

Thank you, Tom. Anyone else wishing to testify on 1620, Members, any questions. Senator Decoy.

I thank you for being here. Why should we increase environmental response energy and food security tech to support installation of EV charging stations?

Well, mahalo for the opportunity to testify. I do

Could you speak your name again, please?

Oh, I'm sorry. Thank you. Ashley Norman with the PC. I think, per our written testimony, our support is in expanding the current program as it exists with, Hawaii Energy. If there is an increase to either the barrel tax or other funding to support, it would increase already successful program.

I think at this time, we just we defer to decision makers on what either the level of that tax increase would be or what the actual funding amount would be, but we do support the concept of expanding the program because it's been very successful.

What about the option that the burden should be shifted to EV owners and auto dealers, or why not pay individuals without EVs so they can purchase one.

Can you speak to where that's been addressed? Is that.

Well I am asking you.

Like as a concept.

Do do you believe that it should be an option? Because if you're looking at the barrel tax, the barrel tax increase basically is passed down on the gas prices, which for those that cannot afford any electric vehicle or in this case, senator Richards as a rancher trying to have his truck pull on trailer full of cattle does not have the type of torque that he would, expect. But now I'm passing it on somebody that lives in a rural area or so in those that have been socially and economically depressed, like the areas of Hana and Molokai.

Well, I respect the question. It's a good question. I think that, just given the nature of how the current, you know, structure of the funding is, I mean, we haven't really addressed alternate resources of funding. If that's something that, you know, the committees are interested in the commission explore. I'm sure I'm sure we could. That's just not the current structure of the of the funding mechanism.

Thank you, Ashley. Thank you, chair. Thank you.

Alright. Yes. I have a question. Chris Yonker.

I have a great heart heartache over the first part of this bill, which increases the the barrel tax. I mean, considering where we are in this global situation where we're already seeing a significant spike to gas prices. And then here we go to say to the consumers out there, we don't care. We're gonna just add on another 10¢per barrel. I mean, isn't that the wrong signal to be conveyed to the to the public at this point.

For our testimony, that's a good question. I can take it back. But for our testimony, we defer to budget and finance on whether increasing taxes right now is the appropriate means by which to fund the EV charging.

Lets talk about just capacity to even do this. HNEI had a report saying that and we saw the capacity issues this past weekend, right. Transmission and distribution had numerous failures. Almost half this island was black over the past weekend. So to have this expectation that somehow HECO is primed and ready to go and put more EV stations out in the community. How realistic is that?

I think the number of EV charging infrastructure right now is so low as relative to the overall load that any sort of uptake from the program as it currently exists, it shouldn't be a problem for HECO to absorb.

Okay. But the HNEI report indicated that HECO has less than 5% capacity to increase, you know, moving electrons around the state. And so how it goes back to, like, you know, we all want to see more deployment of EVs. But is our utility in a position to actually have all of this materialize with your limited capacity currently on the grid.

For the charging associated with this load I mean, the charging associated with the amount of funding that's available currently is really de minimis to the overall load on the island.

Okay. But we were

I'm not familiar with the HNEA study, but in terms of the amount of funding that would be directed through this program, it it wouldn't represent a level of load increase that shouldn't be able to be, dealt with by the utility.

But as a community, we want to see more EVs, more perhaps geothermal or or other, you know, renewables on the so those renewable opportunities are gonna chip away at the capacity. So that it could be eaten up if we're lucky by our other renewables being put on the grid, which will leave although de minimis would leave no capacity for HECO to put more EV chargers onto to be deployed.

I would have to defer to HECO on their, you know, estimations of how much renewable capacity additions would limit the EV charging additions. Is that what you're saying.

Right.

I think that those two maybe are separate issues because one is adding load and one is, providing generation to load. So, yeah, I would have to I think that would probably be location specific. And it would have to be a question directed at HECO in terms of what locations that would impact by adding generation. If it would create an issue with adding load in that location.

Okay. I just don't see that HECO has the capacity to take care of all of our needs currently. And in addition, have the expectation that they're gonna deploy a whole bunch of new EV charging stations. But I'm gonna move on with my question. How much does the EV charging station cost.

Depends on the type of charging station. Depends on the location. Typical level two. Level two, you know, adding in a per public, it could be between $10,000o $20,000.

The second part of this bill, to me, seems agreeable, right? We have this hydrogen fueling fund that, since its creation, has never been tapped. So last I understand, there's $2,600,000 sitting in that fund.

I mean, with $6,200,000 and and let's just say on the higher end of the equation, $20,000 for an EV charging station. That's a heck of a lot of money that we could use without having to raise taxes for our constituents to deploy and get to what this bill purports to wanted to do is to to get more deployment of EV charging stations. So 2,600,000 is more than enough money to get us to a better place with EV chargers.

Yes. $2,600,000 is a good addition. I think the amount of charging that we have out, that the amount of charging to meet the state policies is well in the hundreds of millions by 2030. Everything that you can do to support the EV charging is great. So adding 2,600,000.0 if that's what the legislature would like to do, would be a good step.

Okay. Thank you. Thank you, Mr. Chair. Okay. Anyone else?

Okay. On 1620, there were 37 in support, one opposed, and three with comments. At this time, I will turn it over to the chair of the Energy and Government Affairs Committee for the final measures on the agenda.

Thank you. That measure is HB 1695, HD 2, relating to renewable fuel. On our testifiers list, we have Gary Suganuma or someone from the Tax Department.

Good afternoon. Gary Suganuma from Department of Taxation. I will stand on our written testimony providing comments. Available for questions.

Thank you, Gary. Ed Sniffen or someone from DOT might be joining us via Zoom.

Aloha. DOT stands on its written testimony in support. Thank you.

Oh, thank you. Albert Chee, Island Energy Services, has indicated he was going to be here, but, Members, has submitted commentary. Brian Miyamoto, Farm Bureau. Thank you, Brian. Robert King.

Chair, Chair, and Members. Yeah, since I came from Maui, I should talk. Sorry. But, yeah, this is we've been investing in renewable fuel for 30 years now, and it's really tough to get an investment. And yet we have so far to go and so many things to do. So this, this is really important bill for us to keep moving forward.

You know, especially in with the current events that are going on right now. We haven't raised our price in over a year and don't intend to with this current situation, so it's one of the good things about having fuel made and grown here, as well as all the animal feed we're gonna make and food as well. So appreciate your moving this forward if you if you could. Mahalo.

Thank you, Mr. King. We have Tom Yamachika from the Tax Foundation.

Thank you, Chairs, Vice Chairs, Members of the Committees. Tom Yamachika from Tax Foundation. We have technical comments in our testimony. We are unsure as to how some of the mechanics in the bill work. And we'll stand on our comments and be available for questions. Thank you very much.

Thank you, Tom. Representative from Alaska or Hawaiian Airlines. Thank you, Alanna. Mike Ewall from Energy Justice Network might be joining us via Zoom.

Yes. I'm here, Chair. Good afternoon, Chairs, Vice Chairs, and Members of the Committees. I'm Mike Ewall, Executive Director of Energy Justice Network, speaking up for our members and member groups in Hawaii. I'd like to highlight two recommendations.

First, to recommend the eligibility of fuels produced, or sorry, remove the eligibility of fuels that are produced from trash or construction and demolition wastes unless it could be demonstrated that these feedstocks have no greater concentrations of toxic chemicals like arsenic than the conventional fuels that they would be, that they would replace.

This bill adds construction demolition waste as a renewable fuel, yet the Hawaii Natural Energy Institute has documented that construction demolition waste has 200 times as much arsenic as clean wood. The second point I'd like to highlight is that EIG Committee has been wisely questioning other alternative aviation fuels bills in part because there's not adequate land or water available to grow any meaningful amount of biofuel within the state.

It would be nearly all be imported, and so we recommend that you limit the bill to supporting only in state production of biofuels and only after demonstrating that land and water resources are unable to be used for in state food production. Mahalo.

Thank you, Mike. We have Ted Metrose.

Hello, Chairs, Committee Members. I'm Ted Metrose. I worked for Par Hawaii for 23 years before testifying on this bill two years ago. Predecessor, this one's just as bad as the original. I'd like to answer Senator DeCoite's question that can't seem to come to a head, and that is how much can be produced from biofuels.

Pono Pacific has been saying we're doing trials. The numbers are out. It's 63 gallons per acre. That translates into a mere 1.6 million gallons per year, less than 3% of what Par needs, less than one thousandth of 1% of what is needed for the state overall. You can't do it in Hawaii, and the studies have already been on that for a long time.

This bill is a big bill. Expands the tax by eight times for SAF, and there's other options for SAF that they don't want you to hear about. That SAF should be done through a low carbon fuel standard mandate for inter-island. That would address this problem. They want to merge it all together. Hope you have some questions because I got more.

Okay. Thank you very much. Okay. Eric Wright from Par.

Hello, Chairs, Vice Chairs, Members of the Committee. I'm Marc Inouye from Par Hawaii. We stand in support of this measure. Thank you for hearing it. I'll be here for any questions.

Thank you, Marc. Mark Glick from the State Energy Office. Thank you, Monique. And we have Nahelani Parsons.

Aloha, Chairs, Vice Chairs, Members of the Committee. Nahelani Parsons here on behalf of the Hawaii Renewable Fuels Coalition in support of this measure. We are asking for the public support in this private public partnership to grow and incentivize renewable fuels. I recognize that this measure uses taxpayer dollars, and I do not take that lightly.

The state has an obligation from the Navahine settlement to reduce greenhouse gas emissions for our future generations. This bill will help us innovate the renewable fuel industry so that we can do that, the benefit of which will go to the whole community as well as our future generations. Thank you for the opportunity to testify.

Thank you, Nahelani. Is there anyone else wishing to testify on House Bill 1695? If not, Members, any questions? Senator DeCoite.

State Energy Office, please. If you were given $20 million to support renewable fuel production, how would you, how would you distribute that money?

So right now as it, as we administer the renewable fuels production tax credit, it's based on the amount. So say there was, like, an exceedance. It's $25 million worth of credits that that we have to distribute. So it's proportional to the amount that is produced.

Okay. So based on that, does the State Energy Office have other options, realizing that after Mr. Metrose testified on 63 gallons per acre that can be processed? What other options are available?

You're gonna have to import, and I think that's, we know it. And with imports, you are exposed to potentially even worse fuels than petroleum. So that's where the life cycle accounting becomes so critical. And that's why we are supportive of the additional language within this particular bill that has us, you know, looking at the the life cycle greenhouse gas analysis.

But there's no question we're going to have to import. It doesn't mean we shouldn't encourage feedstock production on island. First, that lowers the transportation emissions. It likely lowers the emissions in greenhouse gases across the board. But there's options for import that are also lower carbon. But the cost differential is substantial.

So options for imports that these tax credits would be used for being grown elsewhere. Okay. Thank you. Chair, can I have a question for Mr. Metrose?

Sir, I I I appreciate your background Sure. In renewable fuels. What are some other options you see that can be used in regards to sustainable aviation fuel? And what are the impacts on the trade off of sustainable aviation fuel versus growing food, which we've imported 90% of our our produce? I mean, I

Yeah. Not many people have stretched their neck out to say what the alternatives are to sustainable aviation fuel. I think the play is that that would be introduced and hoped for advancements in the future with new technologies. With regard to food, I think there is, you know, the that issue has already been quantified, and we are at risk already for pushing the limit. The state energy office did a study for just power fuels and said to have 5% production, it would take 82,000 acres.

The state's whole agricultural base right now is only a 120. So you're talking about a three quarter increase over time. So that the notion that that could be done, we haven't done it for food. How are we gonna do it with for energy crops? And on top of that, the money that goes to the credit, there's none that's dedicated for them.

And even if they were to get it, let's say they got $2 per gallon. It's a $120 per acre. Is that extra amount gonna provide any incentive for any of the farmers that you know that would put crops into bio service or energy service? I don't think so. They all will be imported.

I mean, there's a few exceptions of the work that Pacific Biodiesel is doing, but, that is not scalable nor are the credits scalable, because the state has recognized we need 410,000,000 gallons of SAF to begin with. We cannot spend $2 per gallon. And this bill is calling for $2.56 per gallon, which is higher than the $2 per gallon. And to address your last point, what are other alternatives? The big one that's been pushed is the clean fuel standard and, you know, the quotes that they have, and I put it into some of my testimony, is 30 to 40¢.

Way far less than the $2.56 that's proposed in here. Why is that number so high? Where is it coming from? Eventually, we'll have a clean fuel standard and that's one of my recommended amendments. If this goes through, which well, I hope it doesn't.

But if it does go through, this should be phased out and replaced with the clean fuel standard and there's no reason that should not be applied to the most important thing we have which is interisland transportation, which by the way is 35% of the domestic production. The airlines have come in here a number of times and said it's only 10%. They've repeatedly testified before you it's 10%, but DOT has a published document saying 35. If you can address 35% of it through a administrative procedure that's not supposed to be a public subsidy, that's supposed to be the big benefit of this clean fuel standard, and people are all testifying that it works. Why wouldn't we adopt that and mandate it?

We're giving inter island aviation fuel a free pass on the basis of affordability, which they don't the airlines can't appear to quantify. However, since senator Sakai Wakai asked about it, if you put in 50%, it will bump up the price of your ticket 12 and a half percent. So you could do it, but airlines don't wanna do it in fifteen years. Add 1% for every fifteen over the fifteen years, and you'd be there.

Thank you. Thank you, chair.

Sure. You're welcome. Any other questions? Okay. No. Senator Richards?

Office of Energy. Has the office looked at the intention is to lower carbon.

Yes.

Has everything been compared against each other? And what I mean by that is importing food versus keeping crop lands and crops. And I'm I'm looking at the carbon footprint, the total production, not just the specific. Has that been done?

The framework exists. So we have done

That wasn't the question.

It depends on the the crop.

So we haven't looked at it globally, looking at all the different things we import from raspberries from Central America to corn from the Midwest to

We've looked at fuel feedstocks. So is there not food, but feedstocks? Different feedstocks.

Where I'm going with my question? The fuel versus food.

Not not fuel versus . Just the carbon. Where is the biggest bang for the buck? If we are going to produce something locally, which would have the biggest impact on our overall carbon footprint, what would that be?

It would have to be regenerative. So you would want it to be like a cover crop co planted with food. And then I would say that also the the trade off is lower yields for for if you're, you know, rotating crops.

It doesn't sound like we really know.

I mean, it's it's impossible to know without practice data from practices, and that just doesn't really I mean, there's crop trials for camelina, and we we've got their numbers. And, you know, those camelina trials are are certainly, you know, promising, but the yield's not high. But without data from crop trials, etcetera, it's really hard to to say. We can, you know, run numbers on on estimations of of yields for soy and corn, and we have that. But it it varies based on water availability, soil type.

There's so many different variables that have to be considered and even growing practice rotational cycles. Is it, you know, are you

I'm keenly aware of how agriculture works.

Yeah. Yeah. I I know you are. I'm just saying that's that's the stuff that does go have to go into the accounting. And and you're I think you're kinda asking me about the accounting. So with all of that variation

No. What I specifically asked was, have we compared the replacement of an energy crop versus a food crop and what the overall carbon emissions or footprint would be.

I think that would be really, really difficult to do.

So my pushback is so just because it's difficult doesn't mean we shouldn't try and figure it out.

Yes and no. But I think that the the question is, okay, what are are the scenarios, you know, you're looking looking at? And

Okay. So paraphrasing mayor Billy Canoy, you're telling me no can, but I'm gonna ask you how can how

do we actually get this stuff done? So okay. Thank you. Thank you, chair.

Any other questions? Mark from Park. So right now, as I read this bill, this tax credit would be available to you if you were to bring in feedstock from outside. Right?

Correct.

Why would we wanna do that?

It's just amount of feedstock needed that we would need to we have 60,000,000 gallons we can produce per year. If we wanted to reach that goal, for this you know, to amount of fuel in the state, we will need to at least start off with providing that import of feedstock. And then while other folks are trying to generate more local feedstock, we would supplement that within the imported feedstock.

But, essentially, we are gonna be subsidizing other agriculture. Like, if we get canola oil from Canada, we're gonna use Hawaii taxpayers' money to help the Canadian industry there. Right? Why why would that make sense to the people of Hawaii?

You know, it's it has to do with, you know, one thing we have done in our beginning settlement. Right? I mean, if we're really trying to push, you know, biofuels or these renewable fuels into the marketplace, we have to start somewhere. We we just don't have enough of the trials going on right now. Right?

And Bob King at, Pacific Biodesen is doing great job of showing the proof of concept, but we're looking at a different crop with, camelina, trying to grow that here as as well as, canola as well. So there is a local effort, you know, trying to grow this feedstock here. But, you know, the investment that we put into refinery was to make a lot of renewable fuels. I mean, it is a it's a it's a world market out there for those renewable fuels right now. We wanna keep it here in Hawaii, ideally.

But if can can?

Yeah. But can comes at the expense of local people. You're you part to to your credit made a bold decision to make the investment to be able to create SAF without any kind of enhanced tax credits. Right? From what I understand, your business model is you're gonna create SAF, feed stop from elsewhere, and then you're gonna ship the SAF off Ireland to places like Oregon and Washington that have generous tax credits. That's correct. Right? That's your business model right now.

Well, our business model, like, we signed a agreement with Hawaiian and Alaska. I mean, we wanna keep this SAF here. It's not gonna be we're not gonna make a 100% SAF. I can get make that clear. We're gonna have to make renewable diesel as well.

That's gonna help with ground transportation. The SAF that we do create, we can keep it here. With the tax incentives, really help us bridge that cost gap, keep as much here as possible. And then, you know, if we have more, then, yeah, we'll we can spread the spur it SAF into other marketplaces.

Right. But a majority of your SAF is gonna go to the mainland. So that causes me even more reason to pause about what's the value to the locals for this? We're gonna subsidize feedstock from outside of the state. You're gonna do your thing, change that into magical SAF, and then you're gonna ship it off. So what is the benefit to Hawaii?

I think Safia is one sector. Airlines industry is one sector. We're also looking at the, you know, utility sector, ground transportation sector. I mean, there's that need of those companies have been reaching out to us. We've been in discussion of trying to provide this type of renewable firm renewable fuel for all these different sectors. Safa is definitely for the aviation industry, but we're on the verge of making all these different renewable fuels. So it's not just one sector.

Okay. And then you're also asking in this bill to potentially dramatically increase the cap. Right now, the cap is $3,500,000 for an entity that creates SAF, and you want it to be your a testimony doesn't say it, but in previous testimony with the other iteration of the bill, you wanted it to go to, like, $15,000,000. 15 out of the $20,000,000 would go to par.

Correct. I mean, you know, it's it's really we're looking at the the the total amount of gallons we can provide, you know, from our facility. We're looking at also the marketplace. Who who else who are are the other producers? And does is there more room for other technology or production for renewable fuels?

And there should be. Even if we take, I think it's like 75%, there would still be enough for innovate more innovation, more producers to come online as well. And and there's guardrails on this. Right? I mean, it's not gonna it's not a forever it's not a forever in statute.

It's ten years. We're trying to just get this going. We we're gonna we put the investment into our facility. Right? We got if we start the clock this year, there should be ten years that we would have on incentivizing these renewable fuels for our state.

Any further questions? Senator Fevella?

So, the need for this you and for you guys to build a production up, when when did this come about? When did you guys think that you guys needed to bring this online and you guys needed this funding? When when was the process?

Several years ago, I'm probably before my time being at Par Hawaii, I I think, you know, while speaking with the airline industry several years ago, you know, there was technology in in SAF, sustainable aviation fuel. Then we also had to look at, you know, where refineries are are going, what, you know, is they're not making more refineries. So we had to also look at the vision of what what's ahead, you know. Do we have to transition and that that is this is becoming the transition for us.

The reason why I asked is because it was several years ago and going forward. . We already knew that these things was coming. So, again, to be proactive seven years ago, the process starting now, what kind of progress you guys made seven years ago coming up to this point that you guys are now in, having this big amount of money to help you guys build up what you guys need to provide these services?

It's it's a capital we had to really put in from the beginning, you know. So now it's over 100,000,000 into our refinery. And, you know, it's here right here in the state, we, you know, we we did everything here in Hawaii because this is it's a a great location. We looked at also the agriculture side, you know, can we help with that? I mean, is it then that's what the trial's all about with Pono Pacific, trying to generate other sectors of the economy to help that out.

Our refinery, we knew we couldn't make all the fuel from all you know, whatever we could get from Hawaii through ag, through our farming, through Puna Pacific and Camelina. That'd be great. But, you know, we knew we're gonna have to import a lot of this feedstock. And, you know, with the federal credits that you can you can get with 45 z production tax credit from them, and the local state credits if we can get, you know, some from that. It'll help bridge that cost gap that is sometimes two to four times more.

And, again, there's guardrails on this, you know, this incentive. It's not gonna get way out. I mean, there's a time set. Each pay each taxpayer, you know, has a certain amount as well.

Because this is a big number. Right? The cap going jump from 50,000,000, annually. You know? The state is ensuring that the tax, revenue as a result in budget cuts for other essential environmental and social programs. Right? So we we gotta look at that too. I mean, I understand you said the feeder. So for me, I don't know. We're saying feedstock. But what is the feed? What what is that feedstock?

So that would be, like, canola oil,

fat, oil, soybean oil. Is made by corn. Corn?

It's it's a different species of a plant. Okay. Not not it's not corn.

Because at one time, Monsanto, Kai Mohala .

Was raising corn. And guess how much of that corn stayed in Hawaii?

How much?

Zero. So again, the same thing as what senator Wakai is saying. We're investing in this, but we're making other states and other countries profitable on the taxpayers of Hawaii. That that's the part that I is a very hard sell for us to sell knowing that majority of this is gonna benefit other people, and it's not gonna really benefit the people of Hawaii. Oh, yeah.

We we knew renewable energy. Like how senator Wakai said too, we have other resources and other stuff that we're looking into now too. So, again, a lot of this is gonna be outsourced. Again, it's gonna be on the back back of the taxpayers, but we're already telling them that we might not be able to give them the tax breaks and everything because, again, we might not have the money. But then we're gonna give $50,000,000 for money that's not gonna stay in Hawaii, that's gonna go to other countries like Canada, like Senator Wakai said.

That that's a very tough sell. You know, there's other programs to be considered.

Members, AEN has another hearing after this. So if anybody has a burning question, I'm sorry. Okay. Burn away.

So I I guess my question is you talked earlier about, having farmers. The bill also talks about using farming, entities here. How many farms did you guys reach out to to try and grow camelina even at a, test plot?

Yeah. I I I cannot speak for Pono Pacific, but

You know what? I asked Pono Pacific this question, and it still couldn't give him a straight answer, which is why I'm asking you that question. They couldn't even give me the data on the amount of water used, yet they told me they was doing business with Mahi Pono, and they couldn't even and that was a complete lie when I called Mahi Pono.

I I don't have the information on how many farms that, Pono Pacific, you know, went out to solicit and see if the farmers are willing to, you know, plant and do trials with their organizations.

So so this is my problem, yeah, is that we're gonna invest in, but yet, well, this can also complement those farms. Like, we literally turn in our backs on trying to keep the farms alive, growing produce, using this as a side bumper crop for energy to also help them, and yet we've turned our business back to the Mainland while asking for the increase in the cap and the investment here, which I I'm a big supporter of energy. Whatever way we can do energy here, but to take this away from Hawaii and not allow agriculture industry to prosper on what we've always said, diversity, buy local. I'm waiting for Payamore if I can buy local, and it's grown local. But how do we sell that to our community when we push them to buy local and stay away from imports?

So that's my challenge with the bill. We're gonna take money from the taxpayers. We gotta do it here, and we figure our own way. And and I'm just gonna leave it at that chair. Thank you.

Thank you. Hopefully no further questions. The two chairs have conferred and we'd like to go straight into decision making on these three bills. And I'll hand it over to Senator Gabbard.

Yeah. HB 1736 HT2 relating to animal animal control. Based on what I've said earlier, over 226 testimonies, we're still working on this bill. So we need some more time. We're gonna defer decision making on this one until Wednesday, March 25 at 03:05PM here in Room 224.

For AEG, same recommendation that we will have decision making on this measure on Tuesday, March 24 at 03:02.

And then on HB 1620 HD two with energy and the barrel tax, the chair's recommendation for AEN will be to pass with an amendment to delete language that increases the environmental response energy and food security tax and defect the date to July. Any discussion? Sure.

Just discussion on this. Concerning the barrel tax, that's something we've worked on for agriculture. And so though I get where we're trying to have this conversation, And I don't like the transfer of the funds from the hydrogen system because I think that's actually for the future. I can understand in an urban corridor, but in rural, we need other source of energy. I think hydrogen may be the thing, so I'm gonna be voting no on this.

So just to make mention that the hydrogen fund, we've put it together about three years ago. And to this day, no one has ever passed. So I agree with you. Hydrogen has a great potential in the future, but no one's tapping the funds now.

I appreciate that.

Even when you talk to Servco, who's the only entity that provides hydrogen on this island, they have no plans to really you know, ratchet up their hydrogen deployment. So we're not saying that in perpetuity. This is good. We're gonna just say this one time siphoning out of the money will go to help with the EV charging stations.

Chair, discussion. You know, I I I support the fact of electric vehicles should come online. But when we look at basically robbing Peter for PayPal and we're having to fund those electric vehicle stations for those areas, and I can say with the rural areas of Molokaihana, those areas that do not have, that capabilities, again, to the barrel taxes on the table. And the barrel tax is supposed to help agriculture. We aren't in it anymore, and we should reinstate the Ag Development Food Security Special Fund.

But this will impact it, and for that reason, I I I gotta vote no on this bill. Thank you, chair.

But as rec as recommended, we're not touching the barrel tax.

No. But a portion up here, we'll also look at the overflow to use the barrel tax as asked.

In in the hydrogen fund, which is at $2,600,000. So it's not gonna increase the barrel tax. Our constituencies are not gonna see an increase in electricity cost nor gas cost.

But if we look at the EVs, looking at taxing, because somebody's gonna have to pay for it, and I don't want it to be on the backs of the other guys having to pay for the electric vehicle charging stations.

Shit. We're we're we're we're not expanding the impact to to the consumers.

We So So we're deleting that language.

Oh, so you guys are gonna take that language off.

Yeah. Yeah. Yeah. So all all this bill does is the second part, which is the $236,000,000 for hydrogen fueling stations that

So you guys removing the okay. If you guys go remove the okay. If you guys remove that, I know I I know more problem.

Okay. Okay.

Okay. So chair votes aye.

Okay. Given the conversation we just had on HB 1620 house draft two passing with amendments, chair votes aye. Vice chair will vote with reservations on this. Senator DeCoite.

Aye.

Senator Rhodes?

Aye.

Senator WaKAI?

No.

Chair, you have four in favor motion is adopted.

Thank you, members. For AEGC recommendation, any discussion? Now Senator Chang, I vote yes.

The recommendation for HB 1620 is to pass with amendments. Chair votes yes. Vice chair votes aye. Senator DeCoite? Aye. Senator Richards? Reservations. Senator Fevella? Reservation. Recommendation is adopted.

Members on the last member measure on the bill, item on the agenda is House bill 1695 HD one relating to renewable energy. This is giving a subsidy for SAF production. I'd like to make a number of amendments to this measure. We're adding language from, the Senate bill that we heard a few weeks back, Senate bill 2376 SD 2, that clarifies that renewable fuels production tax credit shall be claimed by taxpayers through which qualified renewable fuels production costs are incurred within the state. So we're not gonna be using any, credits to fund a feedstock that is brought in from elsewhere.

And also that, this tax credit will only go for SAF that is distributed within the state. So par wants to go sell it to some other locale. You can't take this tax credit. We will limit the taxpayer per taxpayer cap. Right now it's at 3,500,000.0.

We'll increase to $7,000,000, and we remove any language that allows taxpayers to claim the tax credit over subsequent years. We're not gonna make this refundable, and we will take those taxes suggested amendments to amend effective date to apply to taxable years beginning after 12/31/2026 to allow time for forms and and things that they need to take care of. So those are the four amendments to the measure. Any discussion?

Sure. Awesome. Has the cap ever been exceeded from the 20,000,000?

No. I think only mister King has been producing biofuels in the past and has tapped it.

So so it's never been exceeded. Then why why would we raise it?

Because Park wanted $15,000,000 at 1.0 out of the 20,000,000. So to give them a little bit of something other than because we've been chopping away at what they

wanted. Sure. Can we also add in that they do an expansion out on other farmers that might be interested in also trying to raise sustainable aviation fuel so that it really truly becomes local, and expand out one percentage of basically what the Department of Ag has labeled as, 8,000 something farms that exist in Hawaii.

Okay. We can put that in the committee report that it still goes on to WAM, and that at that time, maybe Mark and Park can answer senator DeCoite's questions as to what other entities outside of Portland Pacific can be contributory to giving you feedstock for SAF.

Thank you, Deputy Chair.

Any other discussion? If not, Senator Chang, I vote yes.

Chair's recommendation for HB 1695 is to pass with amendments. Chair Wakai votes yes. Vice Chair Chang, yes. Senator DeCoite? Aye. Senator Richards? Aye. Senator Fevella?

reservations

Recommendation is adopted. Thank you.

Same recommendation for AEN. Chair votes aye. Vice Chair?

On House Bill I gotta make sure

I got the right

paper. House bill 1695 house draft two passing with amendments. Chair votes aye. Vice chair votes aye. Senator DeCoite? Aye. Sarah Rhodes?

Aye.

Senator Wakai? No. Chair, you have four in favor. Motion is adopted.

Jeremy just one clarification on the first bill about the spay and neuter. I forgot to mention what room number we're gonna be meeting on on Tuesday, March 2002 in Room 224. Thank you. Okay

Okay. And that concludes the agenda.

Aloha and welcome to the 3:30 AEN hearing here in Room 224. AEN only. And due to time constraints, we have a hard stop at 5:00 PM, and so, we're gonna ask for oral testimony, will be limited to one minute, and we have received and reviewed your written testimony. First up is HB 1832 linked to aquaculture, requiring the establishment of a biological, aquatic, risk-based framework for assessment and approval of aquatic livestock importation and movement.

First up is K. E. Saboon with the DLNR. Thank you. Dad is next. Okay. Anyone else wishing to testify on 1832? Any questions? Okay. Moving on to HB 2207 HD two relating to invasive species species allowing the use of certain monofilament netting for the protection of plants against invasive species. First up is DAB. Thank you. Patrick Chi from DLNR.

Aloha chair, vice chair, and member of the the committee. We support this bill. The sale of the monofilament nets could significantly make it possible for people to protect their coconut trees, as well as other palm trees from the coconut rhinoceros beetle. Currently, there's a limit on some of those. Of course, some of that that limited comes from from our own department. But we would support this in order for the protection. So thank you.

Thank you, Patrick. Next is Maya Hunter from Maya County for Department of Ag.

Not present on Zoom, chair.

Thank you. Brian Miyamoto, Hawaii Farm Bureau.

Wait. Mark Wilson, I'm sorry to testimony and support.

Thank you. Hunter Hevelin, Hawaii Farmers Union.

Also not present on Zoom, chair.

Okay. Anyone else wishing to testify on this measure, hon? Any questions, members?

Quick one before we walk down.

Senator DeCoite.

Director, do you guys have any other alternatives, current alternatives to the fine mesh netting that would be permitted under this bill?

For CRB? Yep. We we do, but it's chemical.

Just the only other alternative? Yeah. K.

Do you have any other besides chemical?

Hi. IMS. Director with the Pesticides Branch, DAB. So most of the control methods are promoted by the CRB response team because they're responsible for conducting the research to determine what products out there are working. Currently, there's like steam treatment, heat treatments, fumigation, chemical products, netting.

So the mesh nets are currently being used. Is that correct?

So, there is research that nets are effective.

Are they currently being used now? Yes.

I guess they are.

Oh, they are. Okay. Not by us. How easy is it to get to import than bringing netting? Because I know they had a shortage of that. You don't wanna use it for, other, alternatives.

Yeah.

Oh, really?

You're right. That's a shortage, and it's Mainland. The only source right now is the Mainland. The Mainland sets it here. We have the person that receives it here has to register it because it's considered a pesticide.

i didn't Know that. So it's are we there yet?

So it it depends on how the netting is being distributed. So if the netting is being distributed with, like, a substance, right, and it claims to promote or control CRB, then at that point, it's a pesticide product and basically,

we're So just to be clear just to be clear, it's not just a netting on its own. It's a netting with a layer of pesticide.

It depends on who is providing the product. We are not manufacturing the netting.

No. No. I know that. But but the ones that are being used today to it needs some layer of pesticide or fumigant on it. No. No. No. So just can't be cleaned. Okay. Okay. Thank you. Take it, Chair.

Okay. Anyone else wishing to testify on this measure? Any questions? Moving on to HB 1929, requiring and appropriating funds to DAB to develop a Molokai biosecurity plan to prevent the spread of invasive species found elsewhere in the state to the Island of Molokai. First up, DAB. Okay. Patrick Chi from DLNR.

Hello. Hello, chair, vice chair, member. We definitely support this. In addition to the, the CRB interim rule that's in place, it—having a biosecurity plan, as well as having a biosecurity facility on Molokai, would definitely improve the ability for DAB to, to address these various invasive threats, and we support that. Thank you.

Thank you, Patrick. Brian Miyamoto, Hawaii Farm Bureau.

Hawaii Farm Bureau will stand on its testimony in support.

Thank you. Hunter Hevlin on Zoom.

Not present on Zoom, chair.

Anyone else wishing to testify on this measure? Any questions?

Quick question for DAB. So, Jonathan, if, if you, if you receive funding for 5,000,000 in Geo bonds and 500,000 for staffing to develop this plant and plant material quarantine inspection of facility on Moakai, how long do you estimate it would take?

To—so, Jonathan Ho, Department of Agriculture, Biosecurity, Plant Quarantine Branch Manager. To prevent—I, I do, do not know, like, how long it would take to build the facility.

Okay. So, you know, it, it—I, I see there's a lot of testimony. I see half of these guys not from Molokai, and I recall a board, board meeting that you did, in regards to Kalaupapa and the import of asphalt. I just wanna be clear that I think your solution, to movement of any type of plant—gravel, in this case of what Kalaupapa has asked for—was basically to prevent it is no movement.

Yeah. So, the initial interim rule that was created for Molokai stopped a large swath of things there with no exception. Generally, from a quarantine standpoint, bans can be effective, but they have very strong impacts to those folks that are utilizing that particular material, and I think particularly as it relates to gravel, it's used for a number of things. And so, at the board meeting, it was—anyhow, at the, at the most recent board meeting that, where that was brought up, there were a lot of questions about amending the interim rule to enable the use of fumigants to disinfest prior to movement, which is essentially the same process that we're using for green waste.

Let me narrow this down to this. So, I guess the, the beef was they didn't like the use of fumigants on being used because you had a company in Maui that was gonna treat, and the comment was we don't wanna use the fumigant or a chemical. But if we're putting one facility like this on Molokai, the only treatment would be to use fumigants or chemical, when, what I like allude to is prior to any plant entering into Molokai, I would assume that you have a quarantine facility here. Why not treat here, hold for reentry, retreat again, and then send that out, versus us looking at building a facility out?

I think from a—yeah, from a quarantine standpoint, particularly with the use of treatments, you wanna treat in the infested area, not in the non-infested area. You don't want to bring something that's potentially infested, take it to, for example, Molokai, and while you're taking it into the facility, things start flying over.

You want to deal with it in the infested, or in the infested area, you want to mitigate solid containers, tarpon, whatever it may be, to prevent reinfestation and tick. So, and I think as it relates to, I think there are some non-chemical treatments, they're not necessarily, I think, logistically feasible, like, sort of, for example, freezing would, would definitely not affect the gravel, but.

But would, would would, would, would probably entertain the idea of any product going into going to your facility here in Oahu. I mean, you know, we, we try to tighten our belt on.

Yeah, absolutely.

Believe me, this is my island. I, I, I would love to see this.

Yes.

But while we try to tighten our belt and figure it out, would you entertain the idea of us having a committee assess made up of farmers, homesteaders, non-homesteaders to evaluate and then say, okay, this is what the need should be, versus us just plunging one time.

Yeah. I, I think, as it relates to, I think, like, I guess a centralized facility to do a lot of quarantine stuff there, I guess there doesn't really necessarily have one. But as it relates to, I think that critical control point, Oahu is, you know, has the major ports, we have the majority of the air flight. So, managing it at the ports that have the majority of the goods prior to, you know, like hub and spoke, right, it makes—it would make more sense, if, if you're, if the, if there is going to be this very large investment, to do it in Honolulu.

And again, whether do that HNL or at the Harbor, but, to, to have those facilities there and manage it there, before you get out to whether it's on Oahu or anywhere else in the city.

No, thank you. And I know we're short on time. Sorry, chair. Thank you.

That's okay.

Alright. Anyway, you answered it, Jonathan. So.

Thank you. So on this measure, we have 57 in support, zero opposed, and zero comments. We'll move on to the next measure. SB, excuse me, HB 2119 relating to Coffee Pest Control temporarily reestablishes the coffee and coffee rethrust pesticide subsidy program and the program manager position, including the position civil service and collective bargaining laws exemption. First up is DAP.

Okay.

DAP, DAP.

Thank you. Patrick Chi, DLNR.

Department supports this bill. We believe that the use of a fungal pathogen, as well as potentially supporting a biological control, would be ideal. We do also point out that the word eradicate is somewhat misused in this bill. We would consider replacing that word on page five, line nine, with control, to be more accurate, because it is unlikely that the c r the, the coffee berry borer would be eradicated, completely eliminated. So thank you.

Thank you, Patrick. Next, Brian Miyamoto from Hawaii Farm Bureau.

Only 500 was down this week with testimony in support.

Hunter Hevelin.

Not present on Zoom, Chair.

Okay. Anyone else wishing to testify on this measure? Members, any questions?

No. Quick comment.

Senator Richard?

DLNR. No. No. No. You can stay. I was just gonna say swing for the fence. We go for eradication. I like your your term. We go for eradication.

We like to eradicate it. Okay.

Okay. Okay, just wanna clarify.

All right, so there are on this measure 10 in support, zero opposed with one comment. Moving on to the final measure on this 330 agenda, HB 2015 related to coffee labeling, clarifies the labeling and advertising requirements for roasted coffee, instant coffee, and ready to drink coffee beverages based on where they were grown and processed. First up is Dab. Bad. Bad. Bad. Other recent testimony we support. Thank you. Hawaii Farm Bureau, Brian? I'm not seeing all this one. Yep. Just joking at Hawaii Farm Bureau. Sit down.

Just kidding. Okay. I don't think I think Hunter's gone home for dinner or something. He's not on Zoom anymore. Anyone else wishing to testify on this measure? Any questions, members? Seeing none, there were six in support and zero opposed. And we'll just we'll go right into decision making on these. Okay. Members, starting off with HB 1832 relating to aquifer.

Okay. Chair's recommendation will be to pass with an amendment to include the manager of the aquaculture development program, ADP, as a member of the interagency working group to ensure that consistent industry development is there and then to defect the date to 07/01/2050. Any discussion? Chair votes aye. Vice chair?

On House Bill HB 81832 house draft two passing with amendments. Chair votes aye. Vice chair votes aye. Senator DeCoite? Aye. Senator Rhodes? Aye. Senator Aye. Chair, five in favor, motion is adopted.

Thank you, members. HB 2207 relating to invasive species having to do with monofilament netting for the protection of plants against invasive species. Chair's recommendation will be to pass with DAB's suggested amendments to strengthen Hawaii's biosecurity framework and technical amendments including defecting the date to 07/01/2015. Any discussion? Chair votes aye.

On House bill 2207 House graph two passing with amendments of all five members in attendance. Anybody voting with reservations? Any no votes? Chair, you have five in favor. Motion is adopted.

Thank you, members. HB 1929 relating to biosecurity, appropriating funds for the department to adapt to develop a modified biosecurity plan. And on this 11929. Chair's recommendation will be to, pass with amendments. Number one, we're gonna establish a biosecurity advisory board to advise the Department of Ag and Biosecurity in the development of a biosecurity plan and a plant and plant materials quarantine facility on Molokai.

Number two, we're gonna require that the advisory board be appointed by the governor and confirmed by the Senate. Number three, we're gonna provide that the advisory board shall consist of seven members who are residents of Molokai, including representatives of homesteaders, non homesteaders, and other organizations and individuals from Molokai's farming community. Number four, we're gonna appropriate an additional $150,000 in general funds to support the establishment and operation of the advisory board, provided that the amount may be left blank in the measure, and the committee report shall reflect the additional funding request for the advisory board. Number five will clarify that the funds appropriated may be used for the planning, design, construction, equipment, and the purposes of the facility and to expand the scope of the facility to include livestock and other domestic animal inspections. And number six, we'll go ahead and defect the effective date to 07/01/2050.

Any discussion? Chair votes aye.

Chair. Yes. Quick discussion. I like all the amendments. One thing I puzzle on is why we're gonna build a facility on Molokai because that's every pun intended shutting the barn door after the horse has left. So I think like, the concept of having a centralized at the highest area of concern, which would be Honolulu. And so for that reason, I was supportable with reservations.

Okay. Yes.

You know, first of all, thank you for the amendments. I think this also gives individuals on that island a seat at the table to have the discussion. And and like senator Richards, let's not let the horse out of the barn before we, like, make sure it has its vaccinations. So thank you.

Okay. Okay.

On House bill 1929 House draft one, passing with amendments, chair votes aye. Vice chair votes with reservations. Senator DeCoite? Aye. Senator Rhodes? Aye. Senator Aye. Chair, you have five in favor. Motion is adopted.

Thank you, Members. Moving on to, to HB 2119, reestablishing the coffee berry borer and coffee leaf rust and pesticide subsidy program. Chair's recommendation will be to pass with an amendment to replace the word, quote, unquote, eradicate on page five, line nine with, quote, unquote, the word control to be more accurate. And we will make technical amendments, including defecting the date of July 1, 2050. Any discussion? Chair votes aye.

On House Bill 2119, passing with amendments. I will support this, Chair. Regrettably, but I will support it. [Roll Call]