RELATING TO AGRICULTURE.

HB2496

HOUSE OF REPRESENTATIVES

H.B. NO.

2496

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:

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SECTION
1.
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The legislature finds that Hawaii's
geographic isolation presents unique challenges for farmers, ranchers, and
local food producers, particularly in the form of high transportation costs.
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Located thousands of miles from the mainland,
Hawaii relies heavily on shipping for the import and export of goods,
significantly increasing the cost of transporting agricultural inputs such as
feed, fertilizer, and equipment, as well as the export of locally grown and
produced products.
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According to a 2020 survey
by the department of agriculture, thirty-nine per cent of farmers, ranchers,
and allied operators identified shipping costs as a significant barrier to
expanding their operations, particularly on Maui, Kauai, and Hawaii island.
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These findings illustrate the persistent
economic pressure transportation expenses place on the State's agricultural
sector.

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The
legislature further finds that the United States Department of Agriculture's
Reimbursement Transportation Cost Payment Program has successfully supported
geographically disadvantaged farmers and ranchers by offsetting high
transportation costs and improving market competitiveness.
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In 2022, the Reimbursement Transportation Cost
Payment Program provided approximately $3,000,000 in reimbursements nationwide,
and in fiscal year 2025, the program remains active with approximately
$3,500,000 in federal funds available to support eligible producers.
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The continued federal investment demonstrates
both the necessity and effectiveness of transportation-cost-mitigation programs
in geographically isolated regions such as Hawaii.

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The
legislature additionally finds that establishing a state-level program modeled
on the Reimbursement Transportation Cost Payment Program would further
alleviate the high transportation costs faced by local farmers, ranchers, and
food producers, enabling them to operate more sustainably and remain
competitive in local and export markets.
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According to the United States Department of
Agriculture's latest agricultural census, Hawaii has approximately seven
thousand farms.
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Although not all farms
may qualify under the United States Department of Agriculture's "geographically
disadvantaged" criteria, a significant proportion would likely qualify at
the state level.
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A state program would
complement federal assistance by expanding eligibility, addressing unmet
transportation needs, bolstering local food security, and reducing the State's
dependence on imported goods.
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Additionally, such a program would stimulate
economic growth by allowing producers to reinvest savings into expanding
operations, creating jobs, and enhancing the resilience of Hawaii's
agricultural sector and rural communities.

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Accordingly,
the purpose of this Act is to support the agriculture industry and economic
growth in Hawaii by:

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(1)
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Establishing the Hawaii agricultural
transportation assistance program, to consist of a reimbursement program for
geographically disadvantaged farmers and livestock producers to mitigate the
high costs of transportation for agricultural products, inputs, and supplies,
and a grant program to assist small-scale farmers, ranchers, food hubs, and
agricultural producers in rural or underserved areas with transportation costs
directly related to the production and distribution of agricultural
commodities;

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(2)
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Establishing the Hawaii agricultural
transportation assistance special fund;

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(3)
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Requiring the department of agriculture and
biosecurity to submit annual reports to the legislature on the progress and
outcomes of the programs; and

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(4)
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Appropriating funds.

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SECTION
2.
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Chapter 141, Hawaii Revised Statutes,
is amended by adding a new part to be appropriately designated and to read as
follows:

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Part .
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Hawaii AGRICULTURAL transportation assistance
program

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�141-A
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Definitions.
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As used in this part:

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"Department"
means the department of agriculture and biosecurity.

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"Eligible
transportation costs" means expenses incurred for the intra-island,
inter-island, and out-of-state transportation of agricultural products, inputs,
and supplies, including but not limited to:

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(1)
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Fertilizers, seeds, and other agricultural
inputs;

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(2)
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Equipment and machinery;

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(3)
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Livestock and feed; and

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(4)
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Finished agricultural goods to same-island,
inter-island, national, or international markets.

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"Geographically
disadvantaged farmer or livestock producer" means a farmer or livestock
producer located and operating in the State who:

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(1)
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Is a producer of an eligible agricultural
commodity in substantial commercial quantities; and

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(2)
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Incurs transportation costs for the
transportation of the agricultural commodity or input used to produce the
agricultural commodity.

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�141-B
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Hawaii agricultural transportation assistance
program; established.
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There is
established in the department a Hawaii agricultural transportation assistance
program, which shall consist of:

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(1)
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The agricultural transportation reimbursement
program; and

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(2)
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The agricultural transportation grant program.

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�141-C
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Agricultural transportation reimbursement
program; established.
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(a)
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There is established within the department,
as part of the Hawaii agricultural transportation assistance program, the
agricultural transportation reimbursement program, which shall provide
reimbursements for the eligible transportation costs of geographically
disadvantaged farmers or livestock producers.

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(b)
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Reimbursement rates for the agricultural
transportation reimbursement program shall be determined by the department and
may vary based on the type of agricultural product, input, or supply
transported.

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(c)
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Reimbursements shall not exceed $
for a single applicant in a single year.

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(d)
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To be eligible for reimbursement, the
applicant shall:

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(1)
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Be an individual, corporation, or organization
domiciled in the State;

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(2)
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Provide documentation demonstrating that the
costs incurred were eligible transportation costs; and

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(3)
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Provide documentation of expenses, including
invoices, receipts, or any other required supporting documents.

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(e)
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The department shall prepare any forms
necessary to meet the requirements of this section.

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(f)
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The department shall publish on its website
the reimbursement rate schedule as well as any forms required by the department
for application for reimbursement.

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�141-D
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Agricultural transportation grant program;
established.
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(a)
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There is established within the department,
as part of the Hawaii agricultural transportation assistance program, the
agricultural transportation grant program, which shall provide grants to assist
small-scale farmers, ranchers, food hubs, and agricultural producers in rural
or underserved areas with transportation costs directly related to the
production and distribution of agricultural commodities.

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(b)
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The program shall provide grants to subsidize
transportation costs for the movement of raw or processed agricultural
products, agricultural inputs, and agricultural equipment within the State or
to and from markets, ports, or other destinations necessary for the applicant's
agricultural operations.

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(c)
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The department shall develop standards,
policies, and procedures for administration of the agricultural transportation
grant program.

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(d)
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Requests for grants shall be submitted to the
department in accordance with administrative rules adopted by the department.
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Each request shall, at minimum, state:

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(1)
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The name of the farmer, rancher, food hub, or
agricultural producer requesting grant funds;

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(2)
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The expenses necessary for the transport of
raw or processed agricultural products, agricultural inputs, and equipment; and

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(3)
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The size and location of the agricultural
operation.

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(e)
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Each applicant shall provide proof that the
applicant:

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(1)
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Has United States citizenship or lawful
permanent resident alien status and is a resident or domiciliary of the State;

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(2)
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Grows or produces raw or processed
agricultural products in the State;

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(3)
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Complies with applicable federal, state, and
county statutes, rules, and ordinances;

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(4)
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Complies with applicable nondiscrimination
laws;

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(5)
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Does not use state funds for entertainment or
lobbying;

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(6)
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Allows access for monitoring, evaluation, and
auditing;

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(7)
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Satisfies any other standards required by the
source of funding; and

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(8)
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Meets all standards in rules adopted by the
department.

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(f)
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The department shall prepare any forms
necessary to meet the requirements of this section.

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�141-E
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Hawaii agricultural transportation assistance
special fund; established.
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(a)
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There is established within the state
treasury a Hawaii agricultural transportation assistance special fund, to be
administered by the department, into which shall be deposited:

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(1)
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Appropriations made by the legislature;

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(2)
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Federal funds received for purposes aligned
with this part;

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(3)
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Private contributions, grants, or donations;
and

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(4)
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Any other revenues received.

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(b)
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Moneys in the fund shall be used for the
agricultural transportation reimbursement program under section 141-C and the
agricultural transportation grant program under section 141-D.
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Expenditures may be made without appropriation
or allotment.

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�141-F
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Rulemaking.
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The department shall adopt rules pursuant to
chapter 91 necessary to implement this part.

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�141-G
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Report to the legislature.
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The department shall submit a report to the
legislature no later than twenty days prior to the convening of each regular
session, including:

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(1)
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The number of program participants and amount
of reimbursements and grants;

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(2)
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A breakdown of inter-island and out-of-state
transportation costs;

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(3)
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An assessment of program impacts on
agricultural productivity and competitiveness;

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(4)
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An evaluation of program effectiveness;

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(5)
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The sources and expenditures of Hawaii
agricultural transportation assistance special fund moneys; and

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(6)
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Findings, recommendations, and proposed
legislation."

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SECTION 3.
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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 2026-2027 to be deposited into the
Hawaii agricultural transportation assistance special fund, established
pursuant to section 141-E, Hawaii Revised Statutes.

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SECTION 4.
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There is appropriated out of the Hawaii
agricultural transportation assistance special fund the sum of
or so much thereof
as may be necessary for fiscal year 2026-2027 for the purposes of the fund.

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The sum
appropriated shall be expended by the department of agriculture and biosecurity
for the purposes of this Act.

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SECTION 5.
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In codifying the new sections added by
section 2 of this Act, the revisor of statutes shall substitute appropriate
section numbers for the letters used in designating the new sections in this
Act.

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SECTION 6.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Hawaii
Agricultural Transportation Assistance Program; Reimbursement Program; Grant
Program; New Special Fund; Report; Appropriation

Description:

Establishes
the Hawaii Agricultural Transportation Assistance Program, to consist of a
reimbursement program for geographically disadvantaged farmers and livestock
producers to mitigate the high costs of transportation for agricultural
products, inputs, and supplies, and a grant program to assist small-scale
farmers, ranchers, food hubs, and agricultural producers in rural or
underserved areas with transportation costs directly related to the production
and distribution of agricultural commodities.
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Establishes the Hawaii Agricultural Transportation Assistance Special Fund.
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Requires reports to the Legislature.
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Appropriates funds.

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