Bill Text: HI HB2066 | 2024 | Regular Session | Introduced
Bill Title: Relating To Financing.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced) 2024-02-13 - The committee(s) on EEP/WAL recommend(s) that the measure be deferred. [HB2066 Detail]
Download: Hawaii-2024-HB2066-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2066 |
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THIRTY-SECOND LEGISLATURE, 2024 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to financing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the State's streams, groundwater, and ocean are being harmed by nonpoint contamination sources such as cesspools where the contaminants flow directly off the land, rather than through pipes or ditches. Cesspools are substandard systems consisting essentially of holes in the ground that do not treat wastewater but merely dispose of polluted wastewater. There are almost eighty-three thousand cesspools in the State, with nearly fifty thousand, or sixty per cent, on Hawaii island; approximately fourteen thousand, or eighteen per cent, on Kauai; over eleven thousand, or fourteen per cent, on Maui; almost seven thousand five hundred, or nine per cent, on Oahu; and approximately one thousand four hundred, or two per cent, on Molokai. Collectively, the State's cesspools release more than fifty-three million gallons of untreated sewage into the ground each day. Hawaii relies on groundwater for ninety per cent of its drinking water.
In response to the State's cesspool pollution problem, legislation was enacted in 2017 that requires all cesspools not excluded by the director of health to be upgraded or converted to director of health-approved wastewater systems or connected to sewerage systems by January 1, 2050. However, cesspool conversions, which are estimated to cost some $1,300,000,000, have been lagging.
The legislature further finds the upfront costs of cesspool conversions are a barrier that prevents many cesspool owners from addressing systems that contribute to the daily release of untreated sewage into the ground. It is in the public interest to explore non-traditional financing mechanisms to accelerate cesspool conversions to provide Hawaii's homeowners additional financing options, especially for those not able to qualify for bank and credit union financing at reasonable rates and terms.
The legislature also finds that on-bill financing for renewable energy measures have proven to expand financing eligibility to underserved ratepayers while mitigating risks for capital providers in Hawaii and across the nation. Additionally, there are a number of successful on-bill financing for water programs on the continental United States.
The legislature finds that there are precedent and existing procedures on the billing and remittance of third-party fees through the counties' billing systems.
The purpose of this Act is to:
(1) Direct the Hawaii green infrastructure authority to create a cesspool conversion on-bill financing program to provide low-interest loans for low- and moderate-income homeowners to upgrade or convert existing cesspools in all counties to director of health-approved wastewater systems or connect properties with existing cesspools to sewerage systems, with loan repayments placed on the real property tax bill of the respective property owner;
(2) Allow the department of health, through a memorandum of agreement, to transfer funding available under section 342D-83, Hawaii Revised Statutes, on an annual basis to capitalize the cesspool conversion on-bill financing program; and
(3) Enable the counties to collaborate with the authority to implement the cesspool conversion on-bill financing program by including the principal and interest loan repayments for eligible borrowers on the real property tax bill of each respective county and transmit the collections to the authority.
SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:
"§196- Cesspool conversion loan special fund. (a) There is established in the state treasury the cesspool conversion loan special fund that shall be administered by the authority. Funds deposited into the cesspool conversion loan special fund shall include:
(1) Moneys
appropriated to the cesspool conversion loan special fund by the legislature;
(2) Funds from
federal, state, county, private, or other funding sources;
(3) Moneys received as repayment of loans and interest payments; provided that the repayment of loans and interest payments under this paragraph shall not include repayment of loans and interest collected as a result of funds advanced from proceeds of the green energy market securitization bonds, clean energy and energy efficiency revolving loan fund, or solar photovoltaic and energy storage loan program; and
(4) Any fees collected
by the authority under this section; provided that moneys collected as a result
of the funds advanced from proceeds of the green energy market securitization
bonds, clean energy and energy efficiency revolving loan fund, and solar
photovoltaic and energy storage loan program shall be kept separate from fees
collected as a result of funds advanced from proceeds of the cesspool
conversion loan special fund.
(b) Moneys in the cesspool conversion loan special
fund shall be used to provide low-interest loans or other authorized financial
assistance to eligible low and moderate-income households to upgrade or convert
existing cesspools in all counties to director of health-approved wastewater
systems or connect properties with existing cesspools to sewerage systems, with
loan repayments placed on the real property tax bill of the respective property
owner, on terms approved by the authority.
Moneys from the fund may be used to cover administrative and legal costs
of fund management and management associated with individual loans, which
include personnel, services, technical assistance, data collection and
reporting, materials, equipment, and travel for the purposes of this section.
(c) Funds appropriated or authorized from the
cesspool conversion loan special fund shall be expended by the authority. The authority may contract with other public
or private entities for the provision of all or a portion of the services
necessary for the administration and implementation of the cesspool conversion
on-bill financing program. The authority
may set fees or charges for fund management and technical site assistance
provided under this section.
(d) All interest earned on the loans, deposits,
or investments of the moneys in the fund shall become part of the cesspool
conversion loan special fund.
(e) The authority may establish subaccounts
within the cesspool conversion loan special fund as necessary.
(f) The authority may adopt rules pursuant to chapter 91 to carry out the purposes of this section."
SECTION 3. Section 196-64, Hawaii Revised Statutes, is amended to read as follows:
"§196-64 Functions, powers, and duties of the authority. (a) In
the performance of, and with respect to the functions, powers, and duties
vested in the authority by this part, the authority, as directed by the
director and in accordance with a green infrastructure loan program order or
orders under section 269-171 or an annual plan submitted by the authority
pursuant to this section, as approved by the commission for the green
infrastructure loan program, may:
(1) Make loans and expend funds to finance the
purchase or installation of green infrastructure equipment for clean energy
technology, demand response technology, and energy use reduction and demand
side management infrastructure, programs, and services;
(2) Hold and invest moneys in the green infrastructure special fund in
investments as permitted by law and in accordance with approved investment
guidelines established in one or more orders issued by the commission pursuant
to section 269-171;
(3) Hire employees necessary to perform its
duties, including an executive director.
The executive director shall be appointed by the authority, and the
employees' positions, including the executive director's position, shall be
exempt from chapter 76;
(4) Enter into contracts for the service of
consultants for rendering professional and technical assistance and advice, and
any other contracts that are necessary and proper for the implementation of the
loan program;
(5) Enter into contracts for the administration of
the loan program, without the necessity of complying with chapter 103D;
(6) Establish loan program guidelines to be approved in one or more
orders issued by the commission pursuant to section 269-171 to carry out the
purposes of this part;
(7) Be
audited at least annually by a firm of independent certified public accountants
selected by the authority, and provide the results of this audit to the department
and the commission; and
(8) Perform
all functions necessary to effectuate the purposes of this part.
(b) The authority shall submit to the commission an annual plan for the green infrastructure loan program for review and approval no later than ninety days prior to the start of each fiscal year. The annual plan submitted by the authority shall include the authority's projected operational budget for the succeeding fiscal year.
(c) In the performance of the functions, powers, and duties vested in the authority by this part, the authority shall administer the clean energy and energy efficiency revolving loan fund pursuant to section 196-65.5 and may:
(1) Make loans and expend funds to finance the purchase or installation of clean energy technology and services;
(2) Implement and administer loan programs on behalf of other state departments or agencies through a memorandum of agreement and expend funds appropriated to the department or agency for purposes authorized by the legislature;
(3) Utilize all repayment mechanisms, including the green energy money saver on-bill program, financing tools, servicing and other arrangements, and sources of capital available to the authority;
(4) Exercise powers to organize and establish special purpose entities as limited liability companies under the laws of the State;
(5) Acquire, hold, and sell qualified securities;
(6) Pledge unencumbered net assets, loans receivable, assigned agreements, and security interests over equipment financed, as collateral for the authority's borrowings from federal, county, or private lenders or agencies;
(7) Utilize the employees of the authority, including the executive director;
(8) Enter into contracts for the service of consultants for rendering professional and technical assistance and advice and any other contracts that are necessary and proper for the implementation of the loan fund program;
(9) Enter into contracts for the administration of the loan fund program exempt from chapter 103D;
(10) Establish loan fund program guidelines;
(11) Be audited at least annually by a firm of independent certified public accountants selected by the authority and provide the results of the audit to the department and legislature; and
(12) Perform all functions necessary to effectuate the purposes of this part.
(d) In the performance of the functions, powers,
and duties vested in the authority by this part, the authority shall administer
the cesspool conversion loan special fund pursuant to section 196-
and may:
(1) Make loans and
expend funds to finance the upgrade or conversion of existing cesspools in all
counties to director of health-approved wastewater systems or connection of properties
with existing cesspools to sewerage systems;
(2) Implement and
administer the cesspool conversion on-bill financing program with funding
available under section 342D-83 provided by the department of health on an
annual basis through a memorandum of agreement and expend funds appropriated to
the department for purposes authorized by the legislature;
(3) Coordinate with
each county real property tax department, through memorandums of agreement, to
implement the on-bill repayment mechanism for the cesspool conversion on-bill financing
program to have the principal and interest loan repayments collected on the real
property tax bill of eligible borrowers, and for each respective county to
transmit those collections to the authority;
(4) Utilize all
repayment mechanisms, financing tools, servicing and other arrangements, and
sources of capital available to the authority;
(5) Utilize the
employees of the authority, including the executive director;
(6) Enter into
contracts for the service of consultants for rendering professional and
technical assistance and advice and any other contracts that are necessary and
proper for the implementation of the cesspool conversion on-bill financing
program;
(7) Enter into
contracts for the administration of the cesspool conversion on-bill financing
program exempt from chapter 103D;
(8) Establish
guidelines for the cesspool conversion on-bill financing program;
(9) Be audited at
least annually by a firm of independent certified public accountants selected
by the authority and provide the results of the audit to the department and
legislature; and
(10) Perform all
functions necessary to effectuate the purposes of this part.
[(d)] (e) The authority shall submit an annual report
for [the]:
(1) The
clean energy and energy efficiency revolving loan fund; and
(2) The
cesspool conversion loan special fund,
to the legislature no later than twenty days prior to the convening of each regular session describing the projects funded and the projected energy impacts."
SECTION 4. 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 2024-2025 to be deposited into the cesspool conversion loan special fund.
SECTION 5. There is appropriated out of the cesspool conversion loan special fund the sum of $ or so much thereof as may be necessary for fiscal year 2024-2025 for:
(1) Re-programming of the counties' billing systems to add the cesspool conversion principal and interest payments due;
(2) Automation of the electronic transfer of loan data between the Hawaii green infrastructure authority's loan servicer and the counties' billing systems;
(3) The hiring of one full-time equivalent (1.0 FTE) program management position; and
(4) Provision of authorized financial assistance to eligible low and moderate-income households to upgrade, convert, or connect cesspools under the cesspool conversion on-bill financing program, to be allocated as follows:
(A) $ to the county of Hawaii;
(B) $ to the city and county of Honolulu;
(C) $ to the county of Kauai; and
(D) $ to the county of Maui;
provided that no county shall receive more than $100,000,000 per fiscal year, and no funds shall be released to a county unless matched on a $3 to $1 basis by that county.
The sum appropriated shall be expended by the Hawaii green infrastructure authority for the purposes of this Act.
SECTION 6. In accordance with section 9 of article VII of the Hawaii State Constitution and sections 37‑91 and 37‑93, Hawaii Revised Statutes, the legislature has determined that the appropriations contained in H.B. No. , will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. In addition, the appropriation contained in this Act will cause the general fund expenditure ceiling for fiscal year 2024‑2025 to be further exceeded by $ or per cent. The combined total amount of general fund appropriations contained in only these two Acts will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. The reasons for exceeding the general fund expenditure ceiling are that:
(1) The appropriation made in this Act is necessary to serve the public interest; and
(2) The appropriation made in this Act meets the needs addressed by this Act.
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect on July 1, 2024.
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INTRODUCED BY: |
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Report Title:
Cesspool Conversion Financing Program; Hawaii Green Infrastructure Authority; Special Fund; Appropriation; Expenditure Ceiling
Description:
Establishes a cesspool conversion on-bill financing program to be administered by the Hawaii green infrastructure authority to provide low-interest loans to eligible homeowners for the upgrade, conversion, or connection of cesspools.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
