STAND. COM. REP. NO. 1207-22

Honolulu, Hawaii

, 2022

RE: S.B. No. 339

S.D. 2

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Agriculture, to which was referred S.B. No. 339, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE IMPORTANT AGRICULTURAL LAND QUALIFIED AGRICULTURAL COST TAX CREDIT,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Allow a taxpayer to claim the important agricultural land qualified agricultural cost tax credit in the third taxable year after application for first year certification of the credit, rather than in the taxable year following the taxable year in which qualified agricultural costs were incurred; and

(2) Extend the period during which the tax credit is available through the taxable year ending December 31, 2030.

Your Committee received testimony in support of this measure from the Department of Agriculture, Office of Planning and Sustainable Development, Hawai‘i Farm Bureau, Ulupono Initiative, Hawaii Crop Improvement Association, Kamehameha Schools, Land Use Research Foundation of Hawaii, and one individual. Your Committee received testimony in opposition to this measure from one individual. Your Committee received comments on this measure from the Department of Taxation and Department of Budget and Finance.

Your Committee finds that the important agricultural land qualified agricultural cost tax credit is intended to be an incentive and long-term commitment to promote agricultural viability, sustained growth of the agriculture industry, and long-term agricultural use and protection of important agricultural lands. Your Committee further finds that extending the tax credit will provide more time for landowners to voluntarily identify their lands for potential designation as important agricultural lands.

Your Committee has amended this measure by:

(1) Removing language that would have allowed the tax credit to be claimed in the third taxable year after application for first year certification of the credit; and

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

As affirmed by the record of votes of the members of your Committee on Agriculture that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 339, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 339, S.D. 2, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

MARK J. HASHEM, Chair