SB640 SD1

SECTION 1. The legislature finds that local agriculture is essential to Hawaii. Eighty-five per cent of all food consumed in the State is imported, leaving Hawaii vulnerable to natural disasters and supply chain disruptions. Increasing the amount of food produced locally is key to reducing the need for imported foods.

The legislature further finds that, if left dependent on imports, Hawaii residents will experience greater volatility in the price and availability of food because of the impact of climate change on national and global food production. It can no longer be assumed that there will always be an unlimited supply of affordable food from outside the State to feed Hawaii's population.

The legislature also recognizes, however, that high costs in the State limit the competitiveness of local agriculture and have undermined efforts to expand local food production. Direct support for local agricultural producers can help overcome the high costs faced by Hawaii's agricultural sector.

Accordingly, the purpose of this Act is to establish the Hawaii agricultural investment program to provide a dedicated funding source for the local agricultural sector. Through the program, the department of agriculture can invest in agricultural producers to support the State's economy and alleviate financial strains on the local agricultural sector.

SECTION 2. Chapter 141, Hawaii Revised Statutes, is amended by adding two new sections to part I to be appropriately designated and to read as follows:

"§141- Hawaii agricultural investment program. (a) There is established within the department of agriculture the Hawaii agricultural investment program.

(b) Moneys in the program shall be awarded as matching grants to:

(1) Acquire or improve real property, irrigation systems, and transportation networks to promote agricultural production or processing activities;

(2) Purchase or improve equipment and technology for agricultural production or processing activities;

(3) Promote workforce development and labor solutions for agricultural production and processing;

(4) Conduct research on and testing of agricultural products and markets;

(5) Promote and market agricultural products grown or raised in the State;

(6) Promote food safety training and education to promote agricultural production and market development; and

(7) Any other immediate response activities intended to support agricultural production or processing that will lead to the reduced importation of food, fodder, or feed from outside the State.

(c) The department of agriculture shall submit a report to the legislature no later than twenty days prior to the convening of each regular session on the status and progress of existing programs and activities and the status of new programs and activities funded under the Hawaii agricultural investment program. The report shall also include:

(1) An accounting of all moneys expended by the Hawaii agricultural investment program;

(2) Descriptions of the markets targeted for expenditures, including the reasons for selecting those markets;

(3) A discussion of the persons who will be served by the expenditures; and

(4) The specific objectives of the expenditures, including measurable outcomes.

§141- Grants; conditions and qualifications. (a) Applications for grants shall be made to the department and contain such information as the department shall require. At a minimum, the application shall include:

(1) The name of the requesting organization or individual;

(2) The purpose of the grant;

(3) The service to be supported by the grant;

(4) The target group to be benefited;

(5) The cost of the grant; and

(6) A guaranty that the grant will be used for activities that are consistent with the purposes of this chapter.

(b) Grants shall only be awarded if:

(1) The applicant agrees to comply with applicable federal, state, and county laws;

(2) The grant shall not be used for purposes of entertainment or perquisites;

(3) All activities and improvements undertaken with funds received shall comply with all applicable federal, state, and county statutes and ordinances, including applicable building codes and agency rules; and

(4) The applicant will indemnify and hold harmless the department, the State of Hawaii, its officers agents, and employees from and against any and all claims arising out of or resulting from activities carried out or projects undertaken with funds provided hereunder, and procure sufficient insurance to provide this indemnification if requested to do so by the department.

(1) Be:

(A) A for-profit organization incorporated under the laws of the State;

(B) A nonprofit community-based organization determined to be exempt from federal income taxation by the Internal Revenue Service;

(D) An individual, who in the department's determination, is able to provide the services or activities proposed in the application for a grant;

(2) Agree to make available to the department all records the applicant may have relating to the operation of the applicant's activity, business, or enterprise, to allow the office to monitor the applicant's activity, business, or enterprise, to allow the office to monitor the applicant's compliance with the purpose of this chapter; and

(3) Establish, to the satisfaction of the department, that sufficient funds are available for the effective operation of the activity, business, or enterprise for the purpose for which the grant is awarded.

(d) Every grant shall be:

(1) Monitored by the department to ensure compliance with this chapter and the purposes and intent of the grant; and

(2) Evaluated annually to determine whether the grant attained the intended results in the manner contemplated."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $3,000,000 or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for the department of agriculture to establish the Hawaii agricultural investment program to support local agricultural producers; provided that no funds shall be made available under this Act unless the department of agriculture obtains twenty-five per cent matching funds from federal, private, or other sources.

The sums appropriated shall be expended by the department of agriculture for the purposes of this Act.

SECTION 4. The appropriations made in section 3 of this Act shall not lapse at the end of the fiscal years for which the appropriations were made; provided that all moneys from the appropriations unencumbered as of June 30, 2026, shall lapse as of that date.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2023.

THE SENATE	S.B. NO.	640
THIRTY-SECOND LEGISLATURE, 2023		S.D. 1
STATE OF HAWAII