STAND. COM. REP. NO. 174-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 2017

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Agriculture & Food Systems, to which was referred H.B. No. 2017 entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

The purpose of this measure is to amend the important agricultural land qualified agricultural cost tax credit to:

(1) Include Hawaiian home lands designated for subsistence agriculture, supplemental agriculture, or pastoral in the definition of "important agricultural lands"; and

(2) Expand the definition of "qualified agricultural costs" to include costs relating to the planting of orchard or fruit-bearing crops, which typically take longer to yield or return and the improvement of former sugar and pineapple plantation lands.

Your Committee received testimony in support of this measure from the Department of Hawaiian Home Lands; Hawaiʻi Farmers Union United; and two individuals. Your Committee received comments on this measure from the Department of Taxation; Department of Agriculture and Biosecurity; and Hawaiʻi Farm Bureau.

Your Committee finds that incentivizing investments in agricultural lands, especially on Hawaiian home lands will improve agricultural viability and strengthen agriculture on homestead lands. However, your Committee notes that the important agricultural land qualified agricultural cost tax credit was designed to incentivize landowners who accept long-term land-use restrictions by dedicating land in perpetuity for agricultural use. Your Committee believes that establishing an income tax credit for agricultural investment on Hawaiian home lands may better promote agricultural investments on Hawaiian home lands while preserving the integrity and clarity of the important agricultural land framework.

Your Committee has accordingly amended this measure by:

(1) Deleting language that would have amended the important agricultural land qualified agricultural cost tax credit to include certain Hawaiian home lands, costs associated with the planting of orchard or fruit-bearing crops, and expenditures related to the clearing of former sugar and pineapple plantation lands;

(2) Establishing a nonrefundable income tax credit for certain qualified agricultural investment costs incurred for agricultural activities conducted on Hawaiian home lands;

(3) Amending the preamble to reflect its amended purpose;

(4) Changing the effective date to July 1, 3000, to encourage further discussion; and

(5) 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 & Food Systems that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2017, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2017, H.D. 1, and be referred to your Committee on Judiciary & Hawaiian Affairs.

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

____________________________

CORY CHUN, Chair