Bill Text: HI SB3325 | 2022 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating To Carbon Sequestration Incentives.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Enrolled) 2022-05-06 - Enrolled to Governor. [SB3325 Detail]

Download: Hawaii-2022-SB3325-Introduced.html

THE SENATE

S.B. NO.

3325

THIRTY-FIRST LEGISLATURE, 2022

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO CARBON SEQUESTRATION INCENTIVES.

 

 

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

 


     SECTION 1.  The legislature finds that climate change has led to an increase in the frequency of extreme weather events that serve to only complicate increased risks associated with the Hawaiian islands which are already the most isolated populated land mass.  Such extreme weather events can put greater stress on an already vulnerable food supply chain as well as water supplies.  The potential for shortages highlights the need for greater food and water security, which can be achieved through increased local food production.

     The legislature further finds that Hawaii needs to reduce its contribution to climate change, increase local food production, improve soil health, and secure resilient water sources.  Furthermore, in addition to cutting emissions from burning carbon, Hawaii needs to mitigate climate change by sequestering greenhouse gases through regenerative agriculture and forest preservation.  Incentivizing nature-based actions that are soil health and carbon positive provide rich, diverse co-benefits such as restoring, maintaining, and improving landscape soil health and water security through payment for services programs.  This would allow small farmers, ranchers, foresters, and landowners to be compensated for taking measures to help Hawaii reach its climate readiness goals.

     The purpose of this Act is to establish a farmland and forest soil health carbon smart incentive program that will promote keeping forests and farmlands intact and sequester additional carbon on those lands.

     SECTION 2.  Chapter 196, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part    .  HAWAII FARMLAND AND FOREST SOIL HEALTH CARBON SMART INCENTIVE PROGRAM

     "§196-A  Definitions.  As used in this part:

     "Authority" means the Hawaii green infrastructure authority established pursuant to section 196-63.

     "Eligible land" means land in the State that is privately owned or public land that is leased to a private citizen at the time of initiation of an incentives contract.

     "Eligible practices" means practices that increase soil health and reduce carbon emissions and carbon sequestration and storage over a designated period on eligible land.

     "Incentives contract" means a contract that specifies the following:

     (1)  The eligible practices to be undertaken;

     (2)  The acreage of eligible land;

     (3)  The established rate of compensation;

     (4)  A schedule to verify that the terms of the contract have been fulfilled; and

     (5)  Other terms determined to be necessary by the authority.

     "Phase I activities" means activities identified as having a high likelihood of effectively achieving durable sequestration benefits at reasonable compensation rates across eligible land types, including:

     (1)  One time establishment and yearly monitoring that include:

          (A)  Reforestation;

          (B)  Windbreaks;

          (C)  Conservation tillage and reduced field pass intensity;

          (D)  Improved forages; and

          (E)  Control of invasive species; and

     (2)  Yearly investments that include:

          (A)  Efficient nutrient management;

          (B)  Crop diversity through rotations and cover crops;

          (C)  Manure management;

          (D)  Rotational grazing and improved forages;

          (E)  Waste-stream derived amendment application, such as compost, biochar, and anaerobic digest;

          (F)  Improved cropping and organic systems; and

          (G)  Feed management.

     "Phase II activities" means activities identified as those that support significant sequestration potential but require additional technical work to estimate sequestration potential or identify appropriate eligible land types, including:

     (1)  Perennial biofuel feedstocks;

     (2)  Methane capture;

     (3)  Improved forest management;

     (4)  Conservation easements; and

     (5)  Other renewable energy options that involve blended food and energy systems.

     "Program" means the Hawaii farmland and forest soil health carbon smart incentive program established by this part.

     §196-B  Hawaii farmland and forest soil health carbon smart incentive program; established.  (a)  There is established within the authority the Hawaii farmland and forest soil health carbon smart incentive program to incentivize carbon sequestration activities through incentives contracts that provide for compensation for eligible practices by program participants.

     (b)  The authority shall administer the program and shall:

     (1)  Administer or enter into an agreement or agreements for the administration of the program;

     (2)  Coordinate with relevant agencies to provide owners and lessees of eligible land financial incentive payments for eligible practices over a designated period, with appropriate crediting for soil health and carbon benefits as specified through an incentives contract;

     (3)  Establish and implement protocols that provide monitoring and verification of compliance with the term of incentives contracts;

     (4)  Make available to the public any modeling, methodology, or protocol resources developed to estimate sequestration rates of potential projects;

     (5)  Identify, evaluate, and distribute dedicated funds to accomplish the purposes of the program;

     (6)  Coordinate collaborations for soil health and carbon sequestration modeling, methods, and inventory improvements; and

     (7)  Directionally correct movement:  heading in the right direction for climate, focusing on multiple co-benefits, and overcoming barriers to entrance into implementation of practices of interest.

     §196-C  Program assistance; contract terms and compensation rates.  (a)  The authority, with assistance from relevant agencies, shall establish compensation rates and incentives contract terms for phase I activities within one year of the date of receipt of a program application.  An incentives contract shall be for a term of no less than one year and no more than thirty years as determined by the owner or lessee; provided that the length of the contract term shall directly correlate with the rate of compensation paid pursuant to the contract.

     (b)  The authority shall coordinate with relevant agencies to assist the authority in carrying out the purposes of the program, including:

     (1)  Estimating sequestration rates for phase I and phase II activities;

     (2)  Conducting research to develop technical underpinning of compensation rates for phase II activities;

     (3)  Conducting community and landowner outreach activities; and

     (4)  Establishing the reviewing committee established under section 196-D for project applications and reports.

     §196-D  Reviewing committee; report.  (a)  The chairperson of the authority, or the chairperson's designee, shall establish and serve as the chairperson of a reviewing committee to review program applications.

     (b)  The reviewing committee shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2023 and each regular session thereafter that contains:

     (1)  An estimate of annual and cumulative reductions achieved as a result of the program, determined using standardized measures, including measures of economic efficiency;

     (2)  A summary of any changes to the program made as a result of program measurement, monitoring, and verification; and

     (3)  The total number of acres enrolled in the program.

     §196-E  Eligibility.  Landowners and lessees of eligible land shall be eligible for the program upon submission of a program application prepared by the authority, to enter into an incentives contract.  An owner of eligible land currently engaged in eligible practices shall not be barred from entering into an incentives contract under this part to continue carrying out eligible practices.  An owner or lessee shall not be prohibited from participating in the program due to participation of the owner or lessee in other federal or state conservation assistance programs.  Conservation easements shall not be required for eligibility in the program.

     §196-F  Priority of carbon positive activities; benefits.  (a)  Priority eligibility shall be given to phase I and phase II activities that:

     (1)  Are cost effective;

     (2)  Provide co-benefits to the State and owner or lessee of eligible land;

     (3)  Have the potential to create jobs in the forestry or agriculture sectors, and in rural communities; and

     (4)  Achieve community priorities including food security or watershed protection.

     (b)  On an annual basis, the department of land and natural resources shall:

     (1)  Identify and prioritize selected soil health and carbon positive activities;

     (2)  Recommend compensation rates and contract terms for eligible phase I activities;

     (3)  Assist in estimating sequestration rates for carbon positive practices;

     (4)  Serve on the reviewing committee for project applications and reports;

     (5)  Research to develop technical underpinning of compensation rates for phase II eligible practices; and

     (6)  Conduct community and landowner outreach activities.

     (c)  The department of land and natural resources shall also identify co-benefits that may include:

     (1)  Job creation;

     (2)  Food security and agriculture for local consumption;

     (3)  Water security;

     (4)  Increased biodiversity;

     (5)  Soil health; and

     (6)  Invasive species reduction and removal."

     SECTION 3.  Section 196-64, Hawaii Revised Statutes, is amended by amending subsection (a) read as follows:

     "(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)  Administer the Hawaii farmland and forest soil health carbon smart incentive program; and

    [(8)] (9)  Perform all functions necessary to effectuate the purposes of this part."

     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 2022-2023 for:

     (1)  Administration of the Hawaii farmland and forest soil health carbon smart incentive program; and

     (2)  Five full-time equivalent (5.0 FTE) permanent positions for the Hawaii green infrastructure authority, as follows:

          (A)  One full-time equivalent (1.0 FTE) permanent position for administering the Hawaii farmland and forest soil health carbon smart incentive program established by this Act; and

          (B)  Four full-time equivalent (4.0) permanent positions to provide program expertise and technical assistance to each of the counties.

The sum appropriated shall be expended by the Hawaii green infrastructure authority established under section 196-63, Hawaii Revised Statutes, for the purposes of this Act.

     SECTION 5.  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 2022-2023 for one full-time equivalent (1.0 FTE) permanent position to support soil health and carbon sequestration actions on state lands and provide technical and research assistance to the Hawaii farmland and forest soil health carbon smart incentive program established by this Act.

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

SECTION 6.  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 2022-2023 for one full-time equivalent (1.0 FTE) permanent position to support soil health and carbon sequestration actions on state lands and provide technical and research assistance to the Hawaii farmland and forest soil health carbon smart incentive program established by this Act.

     The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

     SECTION 7.  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.

     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; provided that sections 4, 5, and 6 shall take effect on July 1, 2022.

 

    

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Report Title:

Carbon Sequestration; Hawaii Farmland and Forest Soil Health Carbon Smart Incentive Program; Hawaii Green Infrastructure Authority; Appropriations

 

Description:

Establishes the Hawaii farmland and forest soil health carbon smart incentive program (program) to incentivize carbon sequestration activities through incentives contracts that provide for compensation for eligible practices by program participants.  Appropriates funds for positions and for administering the program.

 

 

 

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

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