RELATING TO TRANSPORTATION OF AGRICULTURE.

SB3221

THE SENATE

S.B. NO.

3221

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO TRANSPORTATION OF 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 increasing local agricultural production is essential to
the long-term sustainability and food security of the State.
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However, local agricultural producers face
significant economic challenges, particularly with the high costs of
transporting agricultural products and necessary supplies across the
State.
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In a recent survey report on
Hawaii commercial agricultural expansion, thirty-nine per cent of participating
local ranchers and farmers cited shipping and transportation costs as a leading
barrier to the expansion of their agricultural production.
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These transportation costs place undue strain
and financial burdens on farmers and ranchers, limiting their ability to
compete in local markets and reducing the overall productivity of Hawaii's
agricultural sector.
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Additionally, in
response to the economic tariffs being implemented by the Trump administration,
the Hawaii department of transportation harbors division, reported that
effective July 1, 2025, the tariff for wharfage and pipeline toll rates will
reflect a 4.1 per cent increase, further adding to the strain on local
producers.

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The legislature recognizes that, to
successfully scale up local production, the establishment of a cost
reimbursement program that offsets the increased transportation costs of
agricultural producers is necessary to ensure growth in the agricultural
sector.
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The financial relief provided by
a cost reimbursement program would help strengthen local agriculture, encourage
greater self-sufficiency, support the State's broader efforts to diversify its
economy, and promote sustainable agricultural practices.

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Accordingly, the purpose of this Act is to establish
a local agriculture transportation cost reimbursement program to ensure that
certain local agricultural producers, including those that manage livestock and
produce essential commodities, and those engaged in floriculture and nursery
production, receive support to offset the high costs of transporting goods to
market and to obtain necessary supplies.

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SECTION 2.
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Chapter 145, Hawaii Revised Statutes, is amended by adding a new section
to part II to be appropriately designated and to read as follows:

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"
�145-
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Local
agriculture transportation cost reimbursement program; rules.
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(a)
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There is established within the
department of transportation a local agriculture transportation cost
reimbursement program to reimburse eligible agricultural producers for a
portion of the producer's costs to transport agricultural commodities.

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(b)
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To be eligible to receive
reimbursement payments pursuant to this section, an agricultural producer shall:

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(1)
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Be an owner of livestock or a
producer of agricultural commodities in the State, a cooperative aggregator or
food hub, or a start-up or small-scale farmer demonstrating commercial intent
that earns below the threshold of gross receipts under paragraph (3);

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(2)
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Incur costs for transporting

in a covered motor vehicle or through air cargo, parcel, or water cargo carrier
services:

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(A)
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Livestock, livestock products, or agricultural commodities to
market within the State; or

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(B)
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Supplies for the use of the agricultural producer; and

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(3)
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Provide to the department of transportation
proof that the agricultural producer has annual gross receipts totaling $
or more.

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(c)
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The total amount of reimbursement
payments disbursed pursuant to this section shall not exceed $
in any year; provided that no single producer shall receive more than $25,000
or fifty per cent of their eligible transportation costs per fiscal year,
whichever is less; provided further that no single cooperative aggregator or
food hub shall receive more than $50,000 or fifty per cent of their eligible
transportation costs per fiscal year, whichever is less.

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(d)
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The department of transportation shall
submit
an annual report to the legislature no later than twenty days prior to the
convening of each regular session.
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The
report shall include:

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(1)
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The
total number of producers reimbursed;

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(2)
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The
total amount of funds disbursed; and

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(3)
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Any
recommendations for improvements or modifications to the program.

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(e)
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For the purposes of this section:

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"Agricultural
commodity" has the same meaning as defined in section 145-21, including
nursery production.

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"Covered
motor vehicle" means a motor vehicle:

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(1)
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Registered
and owned by an owner of livestock or a producer of agricultural commodities in
the State; and

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(2)
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Used
for the transport of livestock, livestock products, agricultural commodities,
and supplies within the State.
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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 for the department
of transportation to fund and administer the local agriculture transportation
cost reimbursement program established pursuant to this Act.

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The sum appropriated shall be expended by
the department of transportation for the purposes of this Act.

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SECTION 4.
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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 establish and fund one full-time equivalent (1.0 FTE)
position within the department of transportation to administer the local
agriculture transportation cost reimbursement program established pursuant to
this Act
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The sum appropriated shall be expended by
the department of transportation for the purposes of this Act.

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SECTION 5.
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New statutory material is underscored.

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

INTRODUCED BY:

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Report Title:

DOT; Agriculture
Transportation; Shipping Costs; Reimbursements; Position; Appropriations

Description:

Establishes
a Local Agriculture Transportation Cost Reimbursement Program within the
Department of Transportation to reimburse eligible ranchers and farmers a
portion of their costs to transport livestock, livestock products, agricultural
commodities, and certain supplies, under certain conditions.
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Establishes a position to administer the
Program.
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Appropriates funds.
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