RELATING TO AGRICULTURE.

Agriculture Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: KAHALOA
Last action: 2026-03-30
Official status: Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
Effective date: Not listed

Plain English Breakdown

The bill does not specify the exact acreage requirement for planting orchard or fruit-bearing crops.

Agricultural Tax Credit for Hawaiian Home Lands

This bill establishes a nonrefundable income tax credit to encourage agricultural investment costs incurred on Hawaiian home lands after December 31, 2026.

What This Bill Does

Creates a nonrefundable income tax credit for certain agricultural investment costs incurred for agricultural activities conducted on Hawaiian home lands.
Expands the definition of 'important agricultural lands' to include Hawaiian home lands used for subsistence, supplemental, or pastoral farming.
Includes planting orchard and fruit-bearing crops as qualified agricultural costs.

Who It Names or Affects

Farmers who invest in agriculture on Hawaiian home lands.
The state government, which will manage the tax credit program.

Terms To Know

Nonrefundable income tax credit: A reduction in taxes that cannot be returned as a refund if it exceeds the amount of tax owed.
Important agricultural lands: Land identified by the state for its value to agriculture and conservation, including Hawaiian home lands designated for subsistence, supplemental, or pastoral farming.

Limits and Unknowns

The bill applies only to costs incurred after December 31, 2026.
It is unclear how many farmers will qualify for this tax credit.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HD1

Hawaii published version HD1

Plain English: This amendment creates a nonrefundable income tax credit for agricultural investment costs incurred by eligible taxpayers conducting activities on Hawaiian home lands.

Establishes a new section in Chapter 235, Hawaii Revised Statutes, to allow a nonrefundable tax credit against net income tax liability for qualified agricultural investment costs.
Defines 'qualified agricultural investment costs' as expenditures related to agricultural infrastructure and equipment, regulatory processing, feasibility studies, planting materials, soil preparation, and clearing former plantation lands.

The exact percentage of the credit and the maximum amount a taxpayer can claim are not specified in the provided text.
The effective date mentioned (July 1, 3000) seems unrealistic and likely contains an error.

HD2

Hawaii published version HD2

Plain English: This amendment establishes a nonrefundable income tax credit for agricultural investment costs incurred by eligible taxpayers conducting activities on Hawaiian home lands, effective from July 1, 3000.

Adds a new section to Chapter 235 of the Hawaii Revised Statutes allowing a nonrefundable tax credit against net income tax liability for qualified agricultural investment costs.
Specifies that the total credit claimed by any taxpayer in a taxable year shall not exceed an unspecified amount and cannot reduce the taxpayer's net income tax liability below zero.
Allows excess credits to be carried forward for up to five subsequent taxable years.

The exact percentage of qualified agricultural investment costs that qualify for the credit is not specified in the amendment text.
The maximum amount a taxpayer can claim under this section is left unspecified, which limits understanding of the full scope of the tax benefit.

HD3

Hawaii published version HD3

Plain English: This amendment establishes a nonrefundable income tax credit for agricultural investment costs incurred by eligible taxpayers conducting activities on Hawaiian home lands.

Adds a new section to Chapter 235, Hawaii Revised Statutes, allowing a tax credit for qualified agricultural investment costs up to a certain percentage and maximum amount.
Defines 'agricultural business', 'eligible taxpayer', and 'qualified agricultural investment costs' with specific criteria.
Specifies that the tax credit can be carried forward for up to five taxable years if it exceeds the current year's income tax liability.

The exact percentage of qualified agricultural investment costs eligible for the tax credit is not specified in the provided text.
The maximum amount of the tax credit allowed under this section is not detailed in the amendment text.

SD1

Hawaii published version SD1

Plain English: This amendment establishes a nonrefundable income tax credit for agricultural investment costs incurred by eligible taxpayers conducting activities on Hawaiian home lands.

Adds a new section to Chapter 235, Hawaii Revised Statutes, allowing an income tax credit for qualified agricultural investment costs up to a maximum amount.
Defines 'eligible taxpayer' as someone engaged in agriculture and holding valid leases or licenses from the department of Hawaiian home lands.
Specifies that claims for this tax credit must be filed within one year after the end of the taxable year, with failure to comply resulting in waiver of the right to claim the credit.

The exact percentage and maximum dollar amount for the tax credit are not specified.
Details on how the distribution and share of the credit will be determined by rule have not been provided.

Bill History

2026-03-30 S
Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
2026-03-30 S
Reported from AEN/HWN (Stand. Com. Rep. No. 3342) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
2026-03-24 S
The committee(s) on HWN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HWN were as follows: 3 Aye(s): Senator(s) Richards, Lamosao, DeCorte; Aye(s) with reservations: none ; 0 No(es): none; and 2 Excused: Senator(s) Ihara, Keohokalole.
2026-03-24 S
The committee(s) on AEN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in AEN were as follows: 3 Aye(s): Senator(s) Gabbard, Richards, Rhoads; Aye(s) with reservations: none ; 0 No(es): none; and 2 Excused: Senator(s) DeCoite, Awa.
2026-03-20 S
The committee(s) on AEN/HWN has scheduled a public hearing on 03-24-26 2:00PM; Conference Room 224 & Videoconference.
2026-03-12 S
Referred to AEN/HWN, WAM.
2026-03-12 S
Passed First Reading.
2026-03-12 S
Received from House (Hse. Com. No. 342).
2026-03-10 H
Passed Third Reading as amended in HD 3 with Representative(s) Alcos, Cochran, Garcia, Iwamoto voting aye with reservations; none voting no (0) and none excused (0). Transmitted to Senate.
2026-03-06 H
Forty-eight (48) hours notice Tuesday, 03-10-26.
2026-03-06 H
Reported from FIN (Stand. Com. Rep. No. 1026-26) as amended in HD 3, recommending passage on Third Reading.
2026-02-25 H
The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 16 Ayes: Representative(s) Todd, Takenouchi, Hartsfield, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lee, M., Miyake, Morikawa, Perruso, Templo, Yamashita, Alcos, Gedeon, Reyes Oda; Ayes with reservations: none; Noes: none; and Excused: none.
2026-02-23 H
Bill scheduled to be heard by FIN on Wednesday, 02-25-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE.
2026-02-20 H
Report adopted; referred to the committee(s) on FIN as amended in HD 2 with Representative(s) Alcos, Cochran, Garcia voting aye with reservations; none voting no (0) and Representative(s) Quinlan excused (1).
2026-02-20 H
Reported from JHA (Stand. Com. Rep. No. 748-26) as amended in HD 2, recommending referral to FIN.
2026-02-18 H
The committee on JHA recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 8 Ayes: Representative(s) Tarnas, Poepoe, Belatti, Kahaloa, Takayama; Ayes with reservations: Representative(s) Cochran, Garcia, Shimizu; Noes: none; and 2 Excused: Representative(s) Hashem, Sayama.
2026-02-13 H
Bill scheduled to be heard by JHA on Wednesday, 02-18-26 2:00PM in House conference room 325 VIA VIDEOCONFERENCE.
2026-02-11 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on JHA with none voting aye with reservations; none voting no (0) and Representative(s) Holt excused (1).
2026-02-11 H
Reported from AGR (Stand. Com. Rep. No. 174-26) as amended in HD 1, recommending passage on Second Reading and referral to JHA.
2026-02-06 H
The committee on AGR recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 6 Ayes: Representative(s) Chun, Kusch, Kahaloa, Perruso, Quinlan, Matsumoto; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Lowen.
2026-02-04 H
Bill scheduled for decision making on Friday, 02-06-26 9:01AM in conference room 325 VIA VIDEOCONFERENCE.
2026-02-04 H
The committee(s) on AGR recommend(s) that the measure be deferred until 02-06-26 9:01AM.
2026-02-02 H
Bill scheduled to be heard by AGR on Wednesday, 02-04-26 9:00AM in House conference room 325 VIA VIDEOCONFERENCE.
2026-01-28 H
Referred to AGR, JHA, FIN, referral sheet 3
2026-01-26 H
Introduced and Pass First Reading.
2026-01-23 H
Pending introduction.

Official Summary Text

RELATING TO AGRICULTURE.
Income Tax Credit; Hawaiian Home Lands; Agricultural Investment Costs
Establishes a nonrefundable income tax credit for certain agricultural investment costs incurred for agricultural activities conducted on Hawaiian home lands. Applies to costs incurred after 12/31/2026. Effective 7/1/3000. (SD1)

Current Bill Text

Read the full stored bill text

HB2017

HOUSE OF REPRESENTATIVES

H.B. NO.

2017

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to agriculture
.

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

����
SECTION
1
.
�
The legislature finds that article XI,
section 3, of the Hawaii State Constitution, sets out the framework for state
policies to promote agriculture and the conservation of productive agricultural
lands in the State.
�
To address the issue
of important agricultural lands, Act 183, Session Laws of Hawaii 2005 (Act 183),
established standards, criteria, and mechanisms to identify important
agricultural lands and directed the department of agriculture and biosecurity to
develop a program of incentives to promote agricultural viability.
�
Act 183 was further amended by Act 233,
Session Laws of Hawaii 2008, to provide for the designation of public lands as
important agricultural lands by requiring the department of agriculture and
biosecurity and department of land and natural resources to jointly identify
the state-owned lands that should be designated as important agricultural
lands.

����
The legislature further finds that section
204(a) of the Hawaiian Homes Commission Act, 1920, as amended, provides that
Hawaiian home lands shall be under the control of the department of Hawaiian
home lands requiring the use of lands in accordance with the Hawaiian Homes
Commission Act.

����
Accordingly, the purpose of this Act is to amend
the important agricultural land qualified agricultural cost tax credit to include
Hawaiian home lands designated for subsistence agriculture, supplemental
agriculture, or pastoral in the definition of "important agricultural
lands" and expand the definition of "qualified agricultural costs"
to include costs relating to the planting of orchard or fruit-bearing crops,
which typically take longer to yield or return and the improvement of former
sugar and pineapple plantation lands.

����
SECTION
2
.
�
Section 235-110.93, Hawaii Revised Statutes,
is amended by amending subsection (k) to read as follows:

����
"(k)
�
[
As used in
]
For the purposes of

this section:

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"Agricultural
business" means any person with a commercial agricultural, silvicultural,
or aquacultural facility or operation, including:

����
(1)
�
The care and production of livestock and
livestock products, poultry and poultry products, apiary products, and plant
and animal production for nonfood uses;

����
(2)
�
The planting, cultivating, harvesting, and
processing of crops; and

����
(3)
�
The farming or ranching of any plant or animal
species in a controlled salt, brackish, or freshwater environment;

provided that the principal place of
the agricultural business is maintained in the State and more than fifty per
cent of the land the agricultural business owns or leases, excluding land
classified as conservation land, is important agricultural land.

����
"Important
agricultural lands" means lands identified and designated as important
agricultural lands pursuant to part III of chapter 205[
.
]
, and Hawaiian
home lands designated for subsistence agriculture, supplemental agriculture, or
pastoral.

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"Net
income tax liability" means income tax liability reduced by all other
credits allowed under this chapter.

����
"Qualified
agricultural costs" means expenditures for:

����
(1)
�
The plans, design, engineering, construction,
renovation, repair, maintenance, and equipment for:

���������
(A)
�
Roads or utilities, primarily for agricultural
purposes, where the majority of the lands serviced by the roads or utilities,
excluding lands classified as conservation lands, are important agricultural
lands;

���������
(B)
�
Agricultural processing facilities in the
State, primarily for agricultural purposes, where the majority of the crops or
livestock processed, harvested, treated, washed, handled, or packaged are from
agricultural businesses;

���������
(C)
�
Water wells, reservoirs, dams, water storage
facilities, water pipelines, ditches, or irrigation systems in the State,
primarily for agricultural purposes, providing water for lands, the majority of
which, excluding lands classified as conservation lands, are important
agricultural lands; and

���������
(D)
�
Agricultural housing in the State, exclusively
for agricultural purposes; provided that:

�������������
(i)
�
The housing units are occupied solely by
farmers or employees for agricultural businesses and their immediate family
members;

������������
(ii)
�
The housing units are owned by the
agricultural business;

�����������
(iii)
�
The housing units are in the general vicinity,
as determined by the department of agriculture, of agricultural lands owned or
leased by the agricultural business; and

������������
(iv)
�
The housing units conform to any other
conditions that may be required by the department of agriculture;

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(2)
�
Feasibility studies, regulatory processing,
and legal and accounting services related to the items under paragraph (1);

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(3)
�
Equipment, primarily for agricultural
purposes, used to cultivate, grow, harvest, or process agricultural products by
an agricultural business; [
and
]

����
(4)
�
Regulatory processing, studies, and legal and
other consultant services related to obtaining or retaining sufficient water
for agricultural activities and retaining the right to farm on lands identified
as important agricultural lands[
.
]
;

����
(5)
�
Planting
of orchard or fruit-bearing crops on not less than
acres, including:

���������
(A)
�
The purchase of planting materials, including seeds,
transplants, cuttings, and grafted plants; and

���������
(B)
�
Tillage, including the preparation of the soil, planting, weed
control, fertilizing, irrigation, and pest management; and

����
(6)
�
The
clearing of, removal of trees and debris from, and soil restoration to correct
any nutrient deficiency that is present on former sugar and pineapple
plantation lands that have been out of agricultural use for more than five
years and are to be used primarily for agricultural purposes.
"

����
SECTION 3.
�

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

����
SECTION 4.
�
This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2026.

INTRODUCED
BY:

_____________________________

Report Title:

Important
Agricultural Land Qualified Agricultural Cost Tax Credit; Hawaiian Home Lands;
Important Agricultural Lands; Qualified Agricultural Costs

Description:

For taxable years beginning 1/1/2027, amends the Important
Agricultural Land Qualified Agricultural Cost Tax Credit to:
�
(1) include Hawaiian home lands designated
for subsistence agriculture, supplemental agriculture, or pastoral in the
definition of "important agricultural lands"; and (2) expand the
definition of "qualified agricultural costs" to include costs
relating to the planting of orchard or fruit-bearing crops, or expenditures
related to the clearing of former sugar and pineapple plantation lands.

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not legislation or evidence of legislative intent.