Hawaii-2022-SB128-Amended

SECTION 1. The legislature finds that coffee is one of the largest agricultural crops in the State and is a highly valued commodity in Hawaii's economy, with an annual production of over $54,300,000 and representative of approximately nine hundred coffee farms over each of the islands, especially in the Kona and Kau regions of Hawaii island.

In November 2020, the United States Department of Agriculture confirmed the presence of the fungus Hemileia vasatrix (coffee leaf rust) in the Holualoa area of the Kona region. To date, coffee leaf rust has been identified in the United States only in the State of Hawaii, specifically in Holualoa, Hawaii; Haiku, Maui; and on Lanai. Coffee leaf rust can cause severe defoliation of coffee plants that greatly reduces the photosynthetic capacity of the plants. Vegetative and berry growth are reduced depending on the intensity of rust in the current year. Long-term effects of coffee leaf rust may include dieback, which would likely have a significant impact on the following year's yield, with some researchers estimating losses between thirty per cent and eighty per cent if left unchecked.

Research shows that subsidizing the cost of pesticides in an effective and necessary incentive to encourage farmers to adopt recommended pest management strategies. Currently, there are a limited number of contact fungicides available for crops with a low presence of coffee leaf rust. However, systemic fungicides are necessary to provide greater resistance and suppression for active infections for coffee leaf rust, thus curbing the spread of coffee leaf rust in the State.

The department of agriculture is seeking a pesticide emergency exemption from the Environmental Protection Agency under Section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) for the use of the fungicide Priaxor to assist in the coffee leaf rust mitigation effort. One gallon of Priaxor will cover twenty acres and can be sprayed a maximum of two times a year with a cost of $500 per gallon or roughly $25 per acre per spray.

The legislature finds that as the State addresses the fiscal implications of the coronavirus disease 2019 (COVID-19) pandemic, revenue streams that are not contingent on tourism will be essential to the State's recovery. Additionally, the legislature finds that ongoing efforts to control the coffee leaf rust pathogen are critical, and the State must take immediate action to support these efforts to protect coffee, a highly valued commodity in the economy.

The purpose of this Act is to appropriate moneys for the development and implementation of a pesticide subsidy program to assist coffee growers with offsetting the cost of purchasing fungicides, such Priaxor, that combat coffee leaf rust.

SECTION 2. Section 149A-13.5, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) There is established within the treasury of the State, a pesticide use revolving fund. The fund shall be administered by the department for the purposes of this section. The fund shall consist of:

(1) Licensing and registration fees and charges collected by the department under section 149A-13(b);

(2) All fees collected by the department through the collection of training fees in accordance with subsection (c);

(3) Funds appropriated for the pesticide subsidy program established under Act 105, Session Laws of Hawaii 2014; [~~and~~]

(4) Funds appropriated for the fungicide subsidy program established under Act , Session Laws of Hawaii 2021; and

[~~(4)~~] (5) All penalties and fines collected by the department under section 149A-41.

(b) Moneys in the pesticide use revolving fund shall be expended by the department:

(1) To support the pesticide program's registration and licensing, certification and education, and compliance monitoring activities;

(2) To establish pesticide training workshops and educational programs, including, but not limited to, eradication and control programs for pests designated in section 141-3, using the best available technology and best practices in a manner consistent with state and federal law;

(3) To develop integrated pest management strategies, the pesticide subsidy program created under Act 105, Session Laws of Hawaii 2014, and other services for pesticide users such as the agricultural pest control industry, the structural pest control industry, and consumer users of pesticides, which provide pesticide instruction in areas, including but not limited to the collection, disposal, and recycling of pesticide containers; and

(4) For all other pesticide services deemed necessary by the department.

Moneys from the revolving fund may be used for personnel, services, materials, and equipment for the purposes of this section[.], including the fungicide subsidy program created under Act , Session Laws of Hawaii, 2021.

Moneys expended by the department from the pesticide use revolving fund for training workshops, educational programs, and other services for the agricultural pest control industry, the structural pest control industry, and consumer groups shall be expended in a manner that appropriately addresses the needs of each category of pesticide user."

SECTION 3. (a) There is established in the department of agriculture a fungicide subsidy program to be administered by the department for five years beginning on July 1, 2021, and ending on June 30, 2026. The department shall grant subsidies to coffee growers to assist in offsetting the costs of purchasing any fungicide that is listed by the department of agriculture pursuant to subsection (f).

(b) Applications for subsidies shall be submitted on a form furnished by the department of agriculture and shall be filed with accompanying documentation of the costs of purchasing the fungicide; provided that:

(1) The applicant shall indemnify and hold harmless the State and its officers, agents, and employees from all claims arising out of or resulting from the fungicide purchased; and

(2) The department may request an applicant to provide necessary information for the purposes of verifying the size or sale weight, as applicable, and amount of the fungicide purchased.

(c) Documentation of pesticide purchase costs shall be filed for fungicides purchased within the immediately preceding fiscal year and shall be effective for pesticide purchase costs incurred after June 30, 2021, and before July 1, 2026.

(d) Funds shall be disbursed upon approval on an annual basis by the department of agriculture to the subsidy recipient for up to seventy-five per cent of the pesticide purchase costs incurred before July 1, 2023, and for up to fifty per cent of the pesticide purchase costs incurred after June 30, 2023, and before July 1, 2026.

(e) The department of agriculture shall aggregate the total subsidy applications pursuant to this section and divide and distribute the available subsidy funds on a pro rata basis; provided that:

(1) No single applicant shall receive subsidies that are more than $25 per year per acre of land in coffee production; and

(2) No single applicant shall receive subsidies that are more than $10,000 per year.

(f) The department of agriculture shall establish a list of pesticides that are registered with the Environmental Protection Agency and are licensed with the State that are compatible to eradicate coffee leaf rust.

(g) No later than twenty days prior to the convening of the regular session of 2026, the department of agriculture shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature on the results of the pesticide subsidy program and whether the program should be allowed to expire or be extended, and if extended, with or without modification.

(h) Actions taken by the department of agriculture pursuant to this section shall be exempt from the rulemaking requirements of section 91-3, Hawaii Revised Statutes.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $400,000 or so much thereof as may be necessary for fiscal year 2021-2022 and the same sum or so much thereof as may be necessary for fiscal year 2022-2023 for deposit into the pesticide use revolving fund established under section 149A-13.5, Hawaii Revised Statutes.

SECTION 5. There is appropriated out of the pesticide use revolving fund the sum of $500,000 or so much thereof as may be necessary for fiscal year 2021-2022 and the same sum or so much thereof as may be necessary for fiscal year 2022-2023 for the department of agriculture to develop, operate, and implement a pesticide subsidy program established under section 3 of this Act.

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

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2050; provided that section 3 shall be repealed on June 30, 2026.

THE SENATE	S.B. NO.	128
THIRTY-FIRST LEGISLATURE, 2021		S.D. 1
STATE OF HAWAII