RELATING TO AGRICULTURE.

SB3256

THE SENATE

S.B. NO.

3256

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 the State'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 continental United States, the State
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 2021 survey by
the department of agriculture and biosecurity, thirty-nine per cent of farmers,
ranchers, and allied operators identified shipping costs as a significant
barrier to expanding their operations, particularly on the islands of Maui,
Kauai, and Hawaii.
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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 (RTCP) 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
RTCP 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 the State.

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The legislature additionally finds that
establishing a state-level program modeled on the RTCP 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, the
State 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 the
State'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 the State by:

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(1)
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Establishing
the Hawaii agricultural transportation assistance program, to consist of:

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(A)
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A
reimbursement program for geographically disadvantaged farmers and livestock
producers to mitigate the high costs of transportation for agricultural
products, inputs, and supplies; and

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(B)
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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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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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(3)
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Appropriating
funds to implement the program.

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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
within the department the 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, an 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 a minimum, state:

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(1)
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The
name of the farmer, rancher, 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 in the state treasury
the
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. 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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Reports to the legislature.
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Beginning with the regular session of 2027, the
department
shall submit a report to the legislature no later than twenty
days prior to the convening of each regular session, which shall include:

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(1)
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The
number of program participants and the 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 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.

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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 implementation of the
Hawaii agricultural transportation assistance program.

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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:

DAB; Hawaii
Agricultural Transportation Assistance Program; Agricultural Transportation
Reimbursement Program; Agricultural Transportation Grant Program; Hawaii
Agricultural Transportation Assistance Special Fund; Reports; Appropriation

Description:

Establishes
the
Hawaii Agricultural
Transportation Assistance Program, to consist of a reimbursement program and a
grant program within the Department of Agriculture and Biosecurity, to assist
certain farmers and livestock producers with transportation costs for
agricultural products, inputs, supplies, and 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.