HB1534

SECTION 1. The legislature finds that coffee is one of the largest agricultural crops in the State and is a highly valued commodity in Hawaii's economy. In recent years, the coffee berry borer, a small beetle, has infested coffee crops in the Kona and Kau regions of Hawaii island, and more recently has been detected on Oahu, Maui, Kauai, and Lanai. In 2020, coffee leaf rust was discovered for the first time on Maui and Hawaii island. These two pests threaten the viability of the State's coffee industry.

The legislature further finds that Act 105, Session Laws of Hawaii 2014 (Act 105), appropriated funds for the development and implementation of a pesticide subsidy program to assist coffee growers with offsetting the cost of purchasing pesticides containing Beauveria bassiana and was implemented at the end of 2016. Act 152, Session Laws of Hawaii 2015, established a pesticide subsidy program manager position as a full-time, temporary position exempt from chapters 76 and 89, Hawaii Revised Statutes.

The legislature additionally finds that the sunset dates of the pesticide subsidy program and pesticide subsidy program manager position, including the exemption from chapters 76 and 89, Hawaii Revised Statutes, were subsequently extended to June 30, 2023, and June 30, 2024, respectively.

The legislature also finds that tree health is a vital component in fighting the infestation and spread of coffee leaf rust. According to the Kona Coffee Farmers Association, the cost of fertilizer for the maintenance of coffee tree health is equal to the cost of pesticides used to control coffee leaf rust on organic farms. However, the subsidy program originally created by Act 105 does not currently cover the cost of fertilizer, which prevents coffee farmers from applying for and receiving financial assistance for fertilizers that strengthen coffee tree immunity.

The purpose of this Act is to assist coffee farmers in responding to coffee leaf rust by amending the subsidy program under Act 105 to include fertilizers.

SECTION 2. Act 105, Session Laws of Hawaii 2014, as amended by section 1 of Act 152, Session Laws of Hawaii 2015, as amended by section 2 of Act 65, Session Laws of Hawaii 2017, as amended by section 2 of Act 32, Session Laws of Hawaii 2018, as amended by section 43 of Act 111, Session Laws of Hawaii 2019, as amended by section 2 of Act 138, Session Laws of Hawaii 2021, is amended as follows:

"SECTION 3. (a) There is established in the department of agriculture a pesticide and fertilizer subsidy program to be administered by the department beginning on July 1, 2014, and ending on June 30, 2023. The department shall grant subsidies to coffee growers to assist the coffee growers in offsetting the costs of purchasing any pesticide or fertilizer that is listed by the department pursuant to subsection (f).

(b) Applications for subsidies by coffee growers shall be submitted on a form furnished by the department and shall be filed with accompanying documentation of the costs of purchasing the pesticide[;] or fertilizer; provided that:

(1) The applicant shall indemnify and hold harmless the State and its officers, agents, and employees from all claims arising out of or resulting from the pesticide or fertilizer purchased; and

(2) The department may request that an applicant provide necessary information for the purposes of verifying the size or sale weight, as applicable, and amount of the pesticide or fertilizer purchased.

(c) Documentation of pesticide or fertilizer costs, as requested by the department, shall be filed for pesticides or fertilizers purchased within the immediately preceding fiscal year of filing and shall be effective for pesticide or fertilizer costs incurred after June 30, 2014, and before July 1, 2023.

(d) Funds shall be disbursed upon approval on an annual basis by the department to the coffee grower for up to seventy-five per cent of the costs incurred for the purchase of the pesticide or fertilizer before July 1, 2016, and for up to fifty per cent of the costs incurred after June 30, 2016, and before July 1, 2023.

(e) The department shall aggregate the total subsidy applications pursuant to this section and divide and distribute the available subsidy funds on a pro rata basis; provided that [no]:

(1) No single coffee grower shall receive subsidies that are more than $600 per year for coffee berry borer control and more than $600 per year for coffee leaf rust control per acre of land in coffee production; [~~provided further that no~~]

(2) No single coffee grower shall receive subsidies that are more than $9,000 per year; [~~provided further that no~~]

(3) No single coffee grower shall receive subsidies that total more than $6,000 per year for the period after June 30, 2018, and before July 1, 2021; [~~provided further that no~~] and

(4) No single coffee grower shall receive subsidies that total more than $12,000 per year for the period after June 30, 2021, and before July 1, 2023.

(f) The department shall establish a list of pesticides that are registered with the United States Environmental Protection Agency and are licensed with the State that contain Beauveria bassiana, a fungus known to eradicate the coffee berry borer, as an active ingredient.

The department shall also establish a list of pesticides that are registered with the United States Environmental Protection Agency; are licensed with the State; and are contact and systemic fungicides that, when combined, are effective against coffee leaf rust.

The department shall also establish a list of fertilizers that are effective in strengthening coffee tree immunity against coffee leaf rust.

(g) There is established within the department a pesticide and fertilizer subsidy program manager position, which shall be a full-time, temporary position exempt from chapters 76 and 89, Hawaii Revised Statutes. The pesticide and fertilizer subsidy program manager shall possess a requisite level of knowledge and expertise in the area of program management necessary to carry out the duties of the position. The pesticide and fertilizer subsidy program manager shall:

(1) Facilitate the efficient division and distribution of available subsidy funds; and

(2) Manage the day-to-day coordination for the pesticide and fertilizer subsidy program.

The pesticide and fertilizer subsidy program manager shall receive a salary of not more than $50,000 per year. The pesticide and fertilizer subsidy program manager position, including the position's exemption from chapters 76 and 89, Hawaii Revised Statutes, shall expire on June 30, 2024.

(h) Not later than twenty days prior to the convening of the regular session of 2023, the department shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature on the results of the subsidy program and whether the program should be allowed to expire or be extended, and if extended, with or without modification.

(i) Actions taken by the department pursuant to this section shall be exempt from the rulemaking requirements of section 91-3, Hawaii Revised Statutes.

(j) As used in this Act, "department" means the department of agriculture."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1534
THIRTY-FIRST LEGISLATURE, 2022
STATE OF HAWAII