STAND. COM. REP. NO. 748-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 2017

H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Judiciary & Hawaiian Affairs, to which was referred H.B. No. 2017, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AGRICULTURE,"

begs leave to report as follows:

The purpose of this measure is to, beginning January 1, 2027, establish a nonrefundable income tax credit for certain agricultural investment costs incurred for agricultural activities conducted on Hawaiian home lands.

Your Committee received testimony in support of this measure from the Department of Hawaiian Home Lands and Hawaiʻi Farm Bureau. Your Committee received comments on this measure from the Department of Taxation.

Your Committee finds that agricultural lessees on Hawaiian home lands face substantial upfront costs for infrastructure, land preparation, and crop establishment that can limit agricultural productivity and long-term viability. Your Committee further finds that providing a targeted income tax credit for qualified agricultural investment costs will support agricultural development, promote food security, and encourage sustained use of Hawaiian home lands for agricultural purposes.

Your Committee has amended this measure by:

(1) Clarifying the definitions of "eligible taxpayer" and "agricultural business";

(2) Limiting the ability to carry forward any excess credit to five taxable years;

(3) Preventing a taxpayer from obtaining a double benefit from claiming the same expenditures and costs for another tax credit or exemption;

(4) Clarifying how to calculate the credit for entities;

(5) Including a filing deadline to claim the credit; and

(6) 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 Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2017, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as H.B. No. 2017, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,

____________________________

DAVID A. TARNAS, Chair