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Committees pass amendment to expand ag tax credit to certain Hawaiian homelands, adopt Farm Bureau technical changes
Summary
Senate committees voted to pass SB2887 with amendments that would make specified Hawaiian homelands eligible for the important-ag land qualified agricultural cost tax credit and expand qualified costs; DHHL supported the measure with amendments while Farm Bureau urged a separate tax-credit structure.
On Feb. 12 the Agriculture/Environment (AEN) and Hawaiian Affairs committees advanced SB2887, which would amend Hawaii’s important agricultural lands (IAL) qualified agricultural cost tax credit to include some Hawaiian homelands and to broaden eligible costs to planting orchard/fruit or berry crops and clearing former plantation lands.
Oriana Leau, testifying for the Department of Hawaiian Home Lands (DHHL), said the department "stands on its written testimony in support with amendments" and requested the committee adopt the technical amendments noted in its filing. Brian Miyamoto of the Hawaii Farm Bureau told the committees he supports the bill’s intent but questioned whether the IAL tax-credit mechanism is the correct vehicle. "A simple solution is what DHHL recommended…create under chapter 235 a brand new tax credit," Miyamoto said, arguing a separate statutory credit would better mirror the unique status of Hawaiian homelands.
Several committee members pressed for data on the scope and fiscal impact. Department of Taxation staff said claims for the credit have been rare (likely one or two taxpayers in 2022–23) and that the department could not publicly identify claimants; DOTAX officials said they would prepare a revenue estimate if requested. Department of Agriculture staff said fewer than 10 landowners have been certified to receive the credit historically and that the program’s $7 million annual cap has not been approached.
During decision making, chairs said they would adopt amendments reflecting the Farm Bureau’s proposed structure and make technical fixes, then recommended passing the measure. Committees recorded 'aye' votes and passed SB2887 with amendments; the record shows the committee will also defect the effective date per the amendments read into the record.
Supporters and some members urged including county officials in future discussions to address permitting and property-tax interactions, and one remote testifier suggested a task force to ensure coordination among DHHL, counties and other stakeholders.
The committees’ action moves SB2887 forward with amendments but leaves outstanding technical and fiscal questions for staff to resolve in subsequent drafting and fiscal analysis.
