STAND. COM. REP. NO. 2402

Honolulu, Hawaii

RE: S.B. No. 2431

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Agriculture and Environment, to which was referred S.B. No. 2431 entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURAL LOANS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish the Agricultural Emergency Loan Revolving Fund to fund Class "D" loans; and

(2) Appropriate an unspecified amount of funds into and out of the Agricultural Emergency Loan Revolving Fund.

Your Committee received testimony in support of this measure from the Department of Agriculture and Hawaiʻi Farm Bureau.

Your Committee received comments on this measure from the Department of the Attorney General and Department of Budget and Finance.

Your Committee finds that the Agricultural Loan Revolving Fund funds all loans made by the Agricultural Loan Program (Program), resulting in competition for its limited funds. Your Committee recognizes that natural and economic disasters now occur with greater frequency, increasing the need for the Program to extend Class D loans or emergency loans to agricultural enterprises. However, your Committee notes that because the Program does not reserve funds for any specific purpose, the issuance of these loans has decreased the availability of funding for other agricultural uses, such as loans to encourage agricultural development and expand local food production. Your Committee believes that a dedicated source of emergency funding, as proposed by this measure, will allow the Department of Agriculture to offer financial assistance for the rapid recovery of farms and ranches from agricultural emergencies without diverting funding necessary for other statutorily mandated uses.

Your Committee recognizes the concerns raised by the Department of the Attorney General as the measure is unclear as to why Class D emergency loans cannot be issued successfully through funds obtained through the general fund appropriation process. Your Committee respectfully requests that the Department of Agriculture address this concern as this measure moves forward in the legislative process.

As affirmed by the record of votes of the members of your Committee on Agriculture and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2431 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

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

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MIKE GABBARD, Chair