Bill Text: HI HB2064 | 2018 | Regular Session | Introduced

Hawaii House Bill 2064 (Prior Session Legislation)

HI State Legislature page for HB2064

Introduced

Bill Title: Relating To Biofuels.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-01-26 - Referred to EEP, EDB, FIN, referral sheet 6 [HB2064 Detail]

Download: Hawaii-2018-HB2064-Introduced.html

HOUSE OF REPRESENTATIVES	H.B. NO.	2064
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII

A BILL FOR AN ACT

relating to biofuels.

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

SECTION 1. The legislature finds that the State of Hawaii has set a goal of achieving one hundred per cent clean energy by the year 2045. Hawaii is the most fossil fuel dependent state in the nation, which can be explained in large part by the State's economic dependence on tourism and the military, as well as its reliance on the shipping industry to deliver consumer goods and industrial materials. Reducing Hawaii's reliance on fossil fuels and getting one hundred per cent of the State's energy from renewable resources will help Hawaii's economy by keeping an estimated $3,000,000,000 in the State that would otherwise be spent on imported oil.

The legislature further finds that biofuels could significantly advance the State's clean energy goals. Biofuels use organic matter to produce a predictable supply of green energy that can be stored in presently used power plants and consumed locally by air, marine, and ground transportation. Additionally, biofuels can be locally produced, directly creating job growth in Hawaii's energy, farming, and manufacturing industries. In May of 2016, the Sustainable Biodiesel Alliance provided a Pacific biodiesel plant with the first United States-based certification of sustainability for a biodiesel plant. This certification demonstrates that investing in biofuel technology will lead to increases in the technology's efficiency, profitability, and sustainability as a renewable energy source.

In 2016, the legislature passed and the governor signed into law Act 202, Session Laws of Hawaii 2016, which created a nonrefundable tax credit for the production of renewable fuels, including biodiesel, to be implemented over the next five years. According to Pacific Biodiesel, the measure will encourage investment in renewable fuel production in Hawaii, create jobs, provide clean energy security, and fight climate change. In 2017, the legislature unanimously adopted Senate Concurrent Resolution No. 121, calling for a Hawaii green fuels initiative to increase jobs and local food and biofuel feedstock production across the State.

The legislature further finds that increasing biofuel production will increase food security for Hawaii. Currently, nearly ninety per cent of Hawaii's food is imported, making Hawaii's population especially vulnerable to shipping and food supply disruptions resulting from natural disasters and other global events. Research conducted by the World Bank in 2010 and ABF Economics in 2013 found no direct correlation between biofuels and elevated food prices. Investing in biofuel production will improve agricultural development and crop yields that are important to Hawaii's food security without increasing costs for consumers.

The legislature further finds that the barrel tax may be used to fund biofuel production to develop a more robust biofuel supply chain that includes feedstock growth, harvesting and transport, feedstock pre-conversion and conversion technologies, and inclusion of biofuels into the statewide fuel distribution network.

The purpose of this Act is to expand the use of biofuels in achieving Hawaii's goal of becoming one hundred per cent clean energy dependent by 2045 and concurrently increase local food production.

SECTION 2. Section 196-2, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Biofuels" has the same meaning as in section 269-91.

"Feedstock" means any renewable biological material that can be used directly as a fuel or converted to another form of fuel or energy product, including, but not limited to, tropical and subtropical agricultural crops."

SECTION 3. Chapter 196, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§196-A Hawaii biofuel production loan program. (a) There is established a Hawaii biofuel production loan program, which shall be a loan program as defined under section 39-51. The program shall be administered by the Hawaii technology development corporation in a manner consistent with part III of chapter 39. This loan program may include loans made to public or private entities, whether corporations, partnerships, limited liability companies, or other persons; provided that such entities produce renewable fuels at a level of at least fifteen billion British thermal units per year.

(b) Loans from the Hawaii biofuel production loan program may be made for:

(1) Developing biofuel production on vacant commercial and agricultural land, whether publicly or privately owned;

(2) Increasing renewable feedstock production;

(3) Purchasing, repairing, modernizing, or optimizing biofuel technology, including biofuel conversion technology;

(4) Improving the efficiency of biofuel refinement;

(5) Delivering biofuels to businesses, refineries, or consumers;

(6) Providing start-up capital for new renewable feedstock, biofuel refinement, or biofuel production programs, which may be operated by public or private entities; and

(7) Streamlining permitting processes for biofuel production, refinement, or distribution projects.

(c) No later than July 1, 2020, the Hawaii technology development corporation shall provide loans to establish biofuel projects in at least two counties of the State. Projects established pursuant to this subsection shall advance the State's goal of achieving one hundred per cent renewable energy consumption by 2045.

(d) The Hawaii technology development corporation may contract with any governmental or nongovernmental organization, including the state energy office and department of agriculture, for the purpose of implementing this section.

§196-B Hawaii biofuel production special fund. (a) There is established the Hawaii biofuel production special fund to be administered by the Hawaii technology development corporation, and into which shall be deposited:

(1) Allocation of funds from the environmental response, energy, and food security tax pursuant to section 243-3.5(a)(5);

(2) Private contributions;

(3) Interest earnings on all amounts in the Hawaii biofuel production special fund;

(4) Moneys received from federal grants, loans, and loan guarantees for the purpose of biofuel production, including, but not limited to, grants and loans received from the United States Department of Agriculture; and

(5) All other funds received by the corporation and legally available for the purposes of the Hawaii biofuel production special fund.

(b) Moneys on balance in the special fund at the close of each fiscal year shall remain in the special fund and shall not lapse to the credit of the general fund.

(c) Not more than five per cent of the total amount of funds in the Hawaii biofuel production special fund may be used by the Hawaii technology development corporation for administrative expenses incurred in administering the special fund.

(d) Moneys in the Hawaii biofuel production special fund shall be used for the purposes of making loans in accordance with the Hawaii biofuel production loan program established pursuant to section 196-A.

(e) The Hawaii technology development corporation may invest funds held in the Hawaii biofuel production special fund in investments as permitted by law. All amounts in the Hawaii biofuel production special fund shall be exempt from all taxes and surcharges imposed by the State or the counties."

SECTION 4. Section 206M-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established the Hawaii technology development corporation, which shall be a public body corporate and politic and an instrumentality and agency of the State. The development corporation shall be placed within the department of business, economic development, and tourism for administrative purposes, pursuant to section 26-35. The purpose of the development corporation shall be to facilitate the growth and development of the commercial technology industry in Hawaii. Its duties shall include, but not be limited to:

(1) Developing and encouraging industrial parks as technology innovation centers and developing or assisting with the development of projects within or outside of industrial parks, including participating with the private sector in such development;

(2) Providing financial and other support and services to Hawaii-based technology companies;

(3) Collecting and analyzing information on the state of commercial technology activity in Hawaii;

(4) Promoting and marketing Hawaii as a site for commercial technology activity; [~~and~~]

(5) Providing advice on policy and planning for technology-based economic development[.]; and

(6) Developing and funding projects that support the goal of the State to achieve one hundred per cent renewable energy consumption by 2045."

SECTION 5. Section 243-3.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) In addition to any other taxes provided by law, subject to the exemptions set forth in section 243-7, there is hereby imposed a state environmental response, energy, and food security tax on each barrel or fractional part of a barrel of petroleum product sold by a distributor to any retail dealer or end user of petroleum product, other than a refiner. The tax shall be $1.05 on each barrel or fractional part of a barrel of petroleum product that is not aviation fuel; provided that of the tax collected pursuant to this subsection:

(1) 5 cents of the tax on each barrel shall be deposited into the environmental response revolving fund established under section 128D-2;

(2) 15 cents of the tax on each barrel shall be deposited into the energy security special fund established under section 201-12.8;

(3) 10 cents of the tax on each barrel shall be deposited into the energy systems development special fund established under section 304A-2169.1; [~~and~~]

(4) [15] 10 cents of the tax on each barrel shall be deposited into the agricultural development and food security special fund established under section 141-10[.]; and

(5) 10 cents of the tax on each barrel shall be deposited into the Hawaii biofuel production special fund established under section 196-B.

The tax imposed by this subsection shall be paid by the distributor of the petroleum product."

SECTION 6. No later than twenty days prior to the convening of the regular sessions of 2019 and 2020, the Hawaii technology development corporation shall submit a report to the legislature regarding the implementation of this Act. The report shall include information on:

(1) The establishment of biofuel projects in at least two counties in the State that advance Hawaii's goal of becoming one hundred per cent renewable energy dependent by 2045;

(2) Contracts and partnerships entered into by the corporation to implement the Hawaii biofuel production loan program;

(3) The impact of biofuel projects on clean energy production and carbon emissions reduction in the State;

(4) Identification of production and economic connections between the biofuel and farming industries;

(5) Identification of possible vacant commercial and agricultural land that may be used to increase biofuel production;

(6) Best practices for modernizing and optimizing biofuel technology;

(7) Appropriate methods of pricing, valuing, and delivering biofuels to businesses and consumers;

(8) The potential number of jobs created by increasing investment in biofuel production; and

(9) The role of biofuels in meeting the specifications of the Hawaii bioenergy master plan.

SECTION 7. In codifying the new sections added by section 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

Report Title:

Hawaii Technology Development Corporation; Biofuel Production

Description:

Requires the Hawaii Technology Development Corporation to establish the Hawaii Biofuel Production Loan Program to make loans that further increases local food production and Hawaii's goal of becoming 100% renewable energy dependent by 2045. Requires the Corporation to report to the Legislature on the implementation of the Hawaii Biofuel Production Loan Program.

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