What You Need to Know About Hawai‘i Constitutional Amendment 2

The amendment would support the local food industry and agriculture. Here’s how.


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Photo: Courtesy Local Food Coalition

 

Next Tuesday, voters statewide will face five constitutional amendments, two of which relate to agriculture. Get to know what these amendment questions mean before heading to the polls so you can choose either Yes or No, since a blank vote counts as a No. Here’s what you need to know about Amendment 2, which would support the local food industry and agriculture.

 

What it says:

CON AMEND: Relating to Agricultural Enterprises

“Shall the State be authorized to issue special purpose revenue bonds and use the proceeds from the bonds to assist agricultural enterprises on any type of land, rather than only important agricultural lands?”

 

What it means:

Special purpose revenue bonds are issued to allow private investors to give loans to borrowers—say, a farmer. The investor, not the state, is responsible for paying back the funds if the borrower falls short. These loans come with a lower interest rate, which benefits the borrower, and the interest is tax-free, which benefits the investor. The state does nothing other than facilitate, meaning no taxpayer money is spent, and the state’s credit is not affected if the borrower doesn’t make payments.

 

Right now, only 6 percent of Hawai‘i is designated as important agricultural lands. It’s a lengthy and complicated process to apply, says Brandon Lee of Ulupono Initiative, and the designation requires the lands must be used only as ag lands, never for any other purpose, such as development. Farmers on these lands are allowed to seek special purpose revenue bonds; though, according to Lee, none has been granted in the past four years.

 

“There is an allocation [of bonds],” Lee says. Because the state can’t allow the special bonds for every single project, there are designated categories, such as early childhood education and nonprofit healthcare facilities. “But, roughly, in four years, four or five projects have been approved as special purpose revenue bonds each year, and none of them under agriculture. Ag hasn’t gotten its fair share.”

 

Broadening the category from important agricultural lands to ag enterprises on any lands will increase the chances that farmers, ranchers and other ag businesses can get the money they need to update their operations, improve facilities and, ultimately, grow more food.

 

A Yes vote is a vote for local food

The Local Food Coalition, composed of Ulupono Initiative, the Hawai‘i Farm Bureau Federation, the Hawai‘i Food Industry Association and other agriculture groups, aims to increase Hawai‘i’s local food supply. “Local ag is important to grow our economy as well as to promote food security,” says Lauren Zirbel, executive director of HFIA. It’s undeniable Hawai‘i would be in trouble if we were cut off from the Mainland. “I support Amendment 2 because it will make the practice of farming more sustainable and help to encourage a new generation of farmers.”

 

The rewards outweigh the risks

Because the loan interest is exempt from state income tax, unlike interest on other loans, the state would suffer a loss. But, Lee says, over the period of the loan, the money lost from taxes would be more than made up for by money generated through the jobs created. More importantly, if it’s a project the state thinks is essential enough to qualify for these bonds, the state wants to see it completed regardless of who’s paying for it, Lee says.

 

A blank vote counts as a No

In order for the amendment to be adopted, more than 50 percent of all voters must vote Yes. “One of our concerns is that people are going to read the question, see all the technical language, think it’s complicated and leave it blank,” Lee says. Don’t let a blank speak for you, get educated: Visit voteyesforlocalfood.com for more information from the Local Food Coalition.

 

The other amendment relating to agriculture, Amendment 5, proposes that the state become authorized to issue special purpose revenue bonds to qualifying dam and reservoir owners. Water is a public safety issue and many farmers in the Local Food Coalition also need funds to improve their water facilities in order to operate.

 

Stay tuned to honolulumagazine.com/politics for more on the other proposed constitutional amendments.

 

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