STAND. COM. REP. NO. 549

Honolulu, Hawaii

, 2023

RE: H.B. No. 612

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Agriculture & Food Systems, to which was referred H.B. No. 612 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to establish an income tax credit to alleviate the high costs of production for Hawaii's farmers, ranchers, and fishers and incentivize growth in the agricultural sector.

Your Committee received testimony in support of this measure from the Department of Agriculture, Hawai‘i Farm Bureau, Hawaii Aquaculture & Aquaponics Association, Hawai‘i Farmers Union United, Ulupono Initiative, and five individuals. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that the agricultural industry needs more support to increase local food production for local consumption. High production costs are a major driver of narrow profit margins for those in the agricultural industry. Your Committee further finds that land, water, labor, taxes, utilities, and more are all costs of doing business that often result in some agricultural businesses barely breaking even. Your Committee believes that the State's farmers, fishers, and ranchers need support to alleviate the high costs associated with agricultural production, as proposed by this measure.

Your Committee has amended this measure by changing the effective date to June 30, 3000, to encourage further discussion.

As affirmed by the record of votes of the members of your Committee on Agriculture & Food Systems that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 612, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 612, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Agriculture & Food Systems,

____________________________

CEDRIC ASUEGA GATES, Chair