Hawaii-2017-HB774-Amended

SECTION 1. The legislature finds that Hawaii is dangerously dependent on imported food. As the most geographically isolated state in the nation, Hawaii imports approximately ninety-two per cent of its food, according to the United States Department of Agriculture. Currently, Hawaii has a supply of fresh produce for no more than ten days. Ninety per cent of the beef, sixty-seven per cent of the fresh vegetables, sixty-five per cent of the fresh fruits, and eighty per cent of all milk purchased in the State are imported. Hawaii's reliance on out-of-state sources of food places residents directly at risk of food shortages in the event of natural disasters, economic disruption, and other external factors beyond the State's control.

The legislature further finds that increasing local production will ensure that Hawaii's food sources will be more resilient to global supply disruptions and will further diversify and stabilize Hawaii's economy, thereby creating jobs and boosting the food security of the State.

The purpose of this Act is to direct the board of agriculture, when negotiating and executing leases for agricultural and non-agricultural park lands, to establish a preference for farmers who produce food to be consumed locally and Hawaiian plants. This Act also appropriates moneys to the agricultural park special fund and the non-agricultural park lands special fund to account for these preferences.

SECTION 2. Section 166-8, Hawaii Revised Statutes, is amended to read as follows:

"§166-8 Preference right. Any person who is otherwise qualified to take an agricultural park lot, who [is]:

(1) Is a veteran with an honorable discharge[~~, or who qualifies~~];

(2) Qualifies as a displaced farmer[~~, or who operates~~];

(3) Operates a farm located in a zoning district where such use is a nonconforming use[~~, or who qualifies~~];

(4) Qualifies as a new farmer[,]; or

(5) Is a farmer who produces food to be consumed locally and Hawaiian plants,

shall be given preference in obtaining an agricultural park lot."

SECTION 3. Section 166-10, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is created in the state treasury a special fund to be designated as the agricultural park special fund. The proceeds in the fund shall be used for the following purposes:

(1) Payment of agricultural park lease rents of privately owned lands under lease to the State pursuant to sections 171-112 and 166-3;

(2) Establishing, operating, maintaining, and improving infrastructure improvements in agricultural parks designated by the department pursuant to section 166-3; [~~and~~]

(3) Any other purposes deemed necessary by the department for the purpose of maintaining and operating those agricultural parks and related facilities designated by the department pursuant to section 166-3[.]; and

(4) For preferences for farmers who produce food to be consumed locally and Hawaiian plants.

For the purpose of paragraph (2), infrastructure improvements may include, but shall not be limited to: irrigation water system projects, wind power or hydro power and pumping systems, waste disposal systems, domestic water systems, roads, street lights, land and roads drainage, and bridges."

SECTION 4. Section 166E-7, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Moneys in the special fund shall be used to [~~defray~~]:

(1) Defray the costs incurred in managing, administering, and overseeing non-agricultural park lands that are transferred, or in the process of being transferred, to the department under this chapter[.]; and

(2) For preferences for farmers who produce food to be consumed locally and Hawaiian plants."

SECTION 5. Section 166E-8, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) In all dispositions, the department shall be subject to the requirements set forth in rules adopted by the board consistent with section 166E-6 and subject to the following:

(1) All land and facilities shall be disposed of for purposes of agricultural or aquacultural activities only;

(2) Each lessee shall derive a major portion of the lessee's total annual income earned from the lessee's activities on the premises; provided that this restriction shall not apply if:

(A) Failure to meet the restriction results from mental or physical disability or the loss of a spouse; or

(B) The premises are fully used in the production of crops or products for which the disposition was granted;

(3) The lessee shall comply with all federal and state laws regarding environmental quality control;

(4) The board shall:

(A) Determine the specific uses for which the disposition is intended;

(B) Parcel the land into minimum size economic units sufficient for the intended uses;

(D) Set the upset price or lease rent based upon an appraised evaluation of the property value, adjustable to the specified use of the lot;

(E) Set the term of the lease that shall be not less than fifteen years nor more than sixty-five years, including any extension granted for mortgage lending or guarantee purposes; [~~and~~]

(F) In granting leases, establish a preference for farmers who produce food to be consumed locally and Hawaiian plants; and

[~~(F)~~] (G) Establish other terms and conditions it deems necessary, including but not limited to restrictions against alienation and provisions for withdrawal by the board; and

(5) Any transferee, assignee, or sublessee of a non-agricultural park lease shall first qualify as an applicant under this chapter. For the purpose of this paragraph, any transfer, assignment, sale, or other disposition of any interest, excluding a security interest, by any legal entity that holds a non-agricultural park lease shall be treated as a transfer of the non-agricultural park lease and shall be subject to the approval of the board and to reasonable terms and conditions, consistent with this chapter or rules of the board that the board may deem necessary. No transfer shall be approved by the board if the disposition of the stock or assets or other interest of the legal entity would result in the failure of the entity to qualify for a non-agricultural park land lease."

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019 to be deposited into the agricultural park special fund established by section 166-10, Hawaii Revised Statutes.

SECTION 7. There is appropriated out of the agricultural park special fund the sum of $ or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019.

The sums appropriated shall be expended by the department of agriculture to account for the preferences established pursuant to section 166-8(5), Hawaii Revised Statutes.

SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019 to be deposited into the non-agricultural park lands special fund established by section 166E-7, Hawaii Revised Statutes.

SECTION 9. There is appropriated out of the non-agricultural park lands special fund the sum of $ or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019.

The sums appropriated shall be expended by the department of agriculture to account for the preferences established pursuant to section 166E-8(b)(4)(F), Hawaii Revised Statutes.

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2017.

HOUSE OF REPRESENTATIVES	H.B. NO.	774
TWENTY-NINTH LEGISLATURE, 2017		H.D. 1
STATE OF HAWAII