Bill Text: HI SB3038 | 2020 | Regular Session | Amended


Bill Title: Relating To Taro.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Engrossed - Dead) 2020-03-16 - This measure has been deleted from the meeting scheduled on Wednesday 03-18-20 8:35AM in conference room 312. [SB3038 Detail]

Download: Hawaii-2020-SB3038-Amended.html

THE SENATE

S.B. NO.

3038

THIRTIETH LEGISLATURE, 2020

S.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TARO.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that Hawaii imports eighty-five per cent of its food and is considered highly vulnerable in issues of food security as a State.  Climate change significantly increases this vulnerability with sea level rise and intensified weather patterns in the Pacific, such as droughts, hurricanes, and floods.  In 2016, at the International Union for Conservation of Nature World Conservation Congress, the governor pledged to double food production in Hawaii by 2030 as part of Hawaii's commitments to the world and the State, and in order to begin to address this import inequity.

     Small farms on ten acres or less in Hawaii produce a significant portion of our locally grown, locally consumed food on each island.  The small farm sector of agriculture is growing, yet the 2017 census of agriculture reports the average small-scale farmer in Hawaii makes less than $40,000 per year, with losses of almost $10,000 annually due to the high costs of farming, including land and water.  To accomplish the State's 2030 goal for local food production, there is an urgent need to better support small farmers, including through economic incentives.

     The legislature further finds that the department of agriculture has pointed out that the State is most at risk for staple starches.  Taro is a hypoallergenic complex carbohydrate that plays a critical role in the health of the family, particularly Native Hawaiians.  Yet, the cost of poi remains inaccessible to families most in need of this important staple starch food.

     Taro is one of Hawaii's highest yielding staple starch food crops, producing ten thousand pounds and twenty thousand pounds per acre per annum under wet and dry cultivation, respectively.  However, taro is severely underproduced in the State.  The 2017 census of agriculture reported two hundred seven farms and four hundred ninety-five acres of taro in wetland and dryland production.  An estimated two hundred to three hundred additional acres are unreported or in subsistence taro cultivation.  Annual reported production averages four million tons.  However, taro imports are estimated to exceed local production in 2019.

     Loi kalo, or wetland taro systems, are also recognized for their potential to mitigate other impacts of climate change by functioning as riparian buffers and soil capture basins.  Underground foods, such as taro, can often survive hurricane or flood events and be harvested to address immediate food shortages where the capacity to store and cook food can be retained.

     The legislature also finds that, in its report to the 2010 legislature, the taro security and purity task force made a number of recommendations to make taro farming affordable, including improving access to land, water, mentoring, and economic incentives.  Maui and Kauai counties have enacted ordinances that exempt kuleana lands in active taro production from county taxes.  These ordinances provide limited relief to some taro farms, but do not cover all counties, are insufficient in encouraging young farmers, and do not offset the typically low incomes experienced by taro growers or competition from imports.

     In 1901, the senate of the very first legislature of the Territory of Hawaii recognized the role that taro played in feeding the nation by passing S.B. No. 87, the intent of which was to encourage the cultivation of taro by exempting taro and the cultivation of taro from all state taxes.  While S.B. No. 87 was never signed into law, its intentions were clear in encouraging the production of more taro.

     In recognition of the critical importance of protecting and perpetuating the traditional practice of taro farming as part of Hawaii's cultural identity and its role in local food security, there is a compelling interest in enacting a law similar to S.B. No. 87 in the present day.

     Additionally, the legislature finds that an acreage and income cap is a more effective threshold than a timeframe for a tax benefit where one of the goals is to increase overall local taro production.

     The purpose of this Act is to create stronger economic incentives for new taro farmers, improve the livelihoods of existing taro farmers, and reduce the cost of poi for local families by excluding up to $100,000 of income derived from taro production from the state income tax.

     SECTION 2.  Section 235-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There shall be excluded from gross income, adjusted gross income, and taxable income:

     (1)  Income not subject to taxation by the State under the Constitution and laws of the United States;

     (2)  Rights, benefits, and other income exempted from taxation by section 88-91, having to do with the state retirement system, and the rights, benefits, and other income, comparable to the rights, benefits, and other income exempted by section 88-91, under any other public retirement system;

     (3)  Any compensation received in the form of a pension for past services;

     (4)  Compensation paid to a patient affected with Hansen's disease employed by the State or the United States in any hospital, settlement, or place for the treatment of Hansen's disease;

     (5)  Except as otherwise expressly provided, payments made by the United States or this State, under an act of Congress or a law of this State, which by express provision or administrative regulation or interpretation are exempt from both the normal and surtaxes of the United States, even though not so exempted by the Internal Revenue Code itself;

     (6)  Any income expressly exempted or excluded from the measure of the tax imposed by this chapter by any other law of the State, it being the intent of this chapter not to repeal or supersede any such express exemption or exclusion;

     (7)  Income received by each member of the reserve components of the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States of America, and the Hawaii National Guard as compensation for performance of duty, equivalent to pay received for forty-eight drills (equivalent of twelve weekends) and fifteen days of annual duty, at an:

          (A)  E-1 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2004;

          (B)  E-2 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2005;

          (C)  E-3 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2006;

          (D)  E-4 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2007; and

          (E)  E-5 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2008;

     (8)  Income derived from the operation of ships or aircraft if the income is exempt under the Internal Revenue Code pursuant to the provisions of an income tax treaty or agreement entered into by and between the United States and a foreign country[;] provided that the tax laws of the local governments of that country reciprocally exempt from the application of all of their net income taxes, the income derived from the operation of ships or aircraft that are documented or registered under the laws of the United States;

     (9)  The value of legal services provided by a legal service plan to a taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

    (10)  Amounts paid, directly or indirectly, by a legal service plan to a taxpayer as payment or reimbursement for the provision of legal services to the taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

    (11)  Contributions by an employer to a legal service plan for compensation (through insurance or otherwise) to the employer's employees for the costs of legal services incurred by the employer's employees, their spouses, and their dependents; [and]

    (12)  Amounts received in the form of a monthly surcharge by a utility acting on behalf of an affected utility under section 269-16.3; provided that amounts retained by the acting utility for collection or other costs shall not be included in this exemption[.]; and

    (13)  Any income up to $100,000 derived from the direct sale of taro products, land used for taro farming, or any activity directly related to taro farming; provided that this paragraph shall not apply if at any time during the year the total amount of land for locally grown taro in the State surpasses thirty thousand acres, as determined by the department of land and natural resources."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050, and shall apply to taxable years beginning after December 31, 2019.


 


 

Report Title:

Taro Production; Income Tax; Exclusion

 

Description:

Excludes up to $100,000 of income derived from taro production from the state income tax.  Effective 7/1/2050.  (SD2)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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