Establishes an energy policy framework of integrated measures to encourage and support market-based development of reliable, cost-effective, more self-reliant energy systems.

A BILL FOR AN ACT

PART I

SECTION 1. This Act is intended to comprehensively address Hawaii's decades-long overdependence on imported oil for its energy by establishing a bold, strategic energy policy framework of integrated measures to encourage and support market-based development of reliable, cost-effective, more self-reliant energy systems. The Act's integrated, coordinated, and complementary measures constitute a network of policy pathways to achieve results over the near-, mid-, and long-term to enable Hawaii to attain a niche leadership role in the global hydrogen energy economy, by accelerating the development of the State's own indigenous, renewable energy resources to achieve this energy vision.

For years, Hawaii's addiction to oil has translated into high energy prices, and exposes its economy to grave vulnerability from sudden, severe oil price spikes, and now, heightening oil supply insecurity as Hawaii's oil refiners must increasingly import crude oil from the Middle East and politically unstable oil-producing countries.

The legislature enacted gasoline price controls under the presumption that such caps would protect the consumer. It is now apparent that cap-induced gasoline price volatility will continue to hit Hawaii's market, because of the volatility of the cap's benchmark markets. Refinery accidents and fires frequently occur in California, causing Los Angeles' gasoline prices to spike upwards. Hurricanes like Katrina and Rita in 2005 cause gasoline price spikes in the United States Gulf Coast.

There is serious concern that price volatility will directly impact consumers and continue to hit those in Hawaii's market who can least afford it.

In addition to numerous unintended consequences, regulating fuel prices neither encourages production or use of alternate fuels like ethanol and biodiesel, nor does it foster broad practices of greater fuel efficiency.

This Act provides such policy mechanisms as a state procurement preference for energy efficient building materials, equipment, and alternate fueled vehicles; an increase in the renewable energy tax credits and elimination of their "sunset" date; and establishment of a unique renewable fuel standard for 20 per cent of Hawaii's highway fuel demand to be provided by renewable fuels by 2020.

In addition, demand-side management programs, which encourage people to modify their energy use to maximize energy efficiency, in the context in which they are implemented and paid for by Hawaii ratepayers, have changed significantly since they were initiated nearly a decade ago. Ratepayers should no longer be required to pay Hawaii utilities for sales of electricity lost as a result of the success of the demand-side management programs. This Act would redirect those fees to provide more funds for other demand-side management programs.

This Act provides a leadership mechanism across all state agencies to ensure the achievement of ambitious energy efficiency standards for building construction and major renovations, as well as targets for energy conservation and efficiency in government-owned or leased facilities. This Act provides the necessary resources to offer the technical training and support for state agencies to attain these tough certification requirements.

The State's combination of abundant renewable resources, high fossil fuel prices, limited geographic area, and recognized expertise in hydrogen research and development, makes it an ideal location to lead the transition to a hydrogen economy over the long term.

To accomplish this vision, this Act establishes the Hawaii renewable hydrogen program within the department of business, economic development, and tourism, and creates the Hawaii hydrogen investment capital special fund.

SECTION 2. The legislature finds that gasoline price controls are neither an effective nor an efficient approach to lower Hawaii gasoline prices. In fact, gasoline price caps have brought unwanted and unwarranted volatility to the Hawaii market. Hawaii's price caps, benchmarked to gasoline spot prices in three volatile spot markets -- New York, United States Gulf Coast, and Los Angeles -- will also exhibit the seasonal pricing changes that have no factual nexus to Hawaii. In effect, the caps link Hawaii to external and unrelated markets with significantly more volatile gasoline prices. Such policies discourage potential competition, investment, and ability to be flexible and innovative in the inclusion of renewable fuels in Hawaii's transportation fuel mix.

Instead of gasoline price controls, the legislature has determined that the establishment and allocation of adequate resources to implement a vigorous state watchdog system to monitor and oversee the petroleum industry and gasoline market is less costly and less disruptive than price controls and provides an effective alternative to protect the consumer.

The legislature also finds no evidence that restrictions on the vertical integration of gasoline refiners with wholesalers and retailers, first instituted in Hawaii in 1991, have led to lowering Hawaii's gasoline prices. In 2000, a Federal Trade Commission staff analysis instead found evidence that these divorcement policies actually sacrifice market efficiencies and harm consumers, because they have raised gasoline prices. This econometric analysis examined the effects of divorcement policies in Hawaii, Connecticut, Delaware, Maryland, Nevada, Virginia, and the District of Columbia. The analysis concluded that divorcement added about 2.7 cents per gallon at retail (self-serve) on regular unleaded gasoline, costing consumers an estimated $100,000,000 annually.

The legislature finds that one possible means to slow the rapid increase in demand for petroleum products to fuel Hawaii's transportation sector is to transition to fuel-efficient and alternative fuel technologies, including enabling state vehicle fleets to use a variety of renewable fuels which comply with federal requirements, and establishing a renewable fuel standard that 20 per cent of the highway fuels be renewable by 2020.

The legislature finds that Hawaii has abundant renewable fuel potential and that a statewide multi-fuel biofuels production assessment would provide a comprehensive evaluation of potential feedstocks, technologies, and economics of the various renewable fuels pathways, thus facilitating the development of local fuels production capabilities.

The legislature finds that the energy objectives and policies for the State's facility systems is the responsibility of all state agencies and programs. To this end, energy and environmental awareness contribute to better resource management practices, which include reduced energy and water use.

The legislature finds that demand-side management and renewable energy programs will achieve greater energy and capacity savings if a greater percentage of the funds collected were applied directly to delivering programs to customers to increase energy efficient methods.

The public utility commission approved the first demand-side management programs in 1995. In 2004, the public utility commission approved Hawaiian Electric Company's request to impose a $.0027 per kilowatt-hour surcharge for residential customers and a $.0024 per kilowatt-hour surcharge for commercial and industrial customers, which raised approximately $19,213,000. Only $7,573,000 of this surcharge (about 40 per cent) was used for demand-side management programs, with the majority of the funds (about 60 per cent - $11,639,000) going to the electric company for lost sales recovery payments and shareholder incentives. Under the public benefits fund created by this Act, however, the majority of the surcharge would be dedicated to fund programs and initiatives to promote renewable energy products and services to reduce Hawaii's dependence on oil.

The legislature further finds that in order for the State to achieve its renewable energy goals, a concerted effort by all agencies is necessary, especially the departments of land and natural resources (to identify state assets that can be used to facilitate renewable energy development and investment), and of agriculture (to increase assistance to the agricultural community interested in developing energy projects, especially by the production of renewable energy from energy crops and agricultural waste streams).

The legislature finds that while Hawaii has abundant renewable energy resources, the use of these resources has been limited by separate island utility systems, intermittency of wind and solar, and site specific availability.

The legislature finds that emerging energy technologies can increase the use of renewable resources through conversion to hydrogen-rich liquid or gaseous fuels as energy carriers. With advanced hydrogen technologies, renewable resources can be stored, distributed, and used in a variety of clean, efficient power and transportation applications.

The legislature finds that the historic confluence of our State's desire for energy self-sufficiency with the global opportunity of the emerging hydrogen economy, calls for a major, far-sighted initiative, to transition Hawaii to an indigenous resource-based energy economy.

The legislature finds that Hawaii is well positioned to become a national leader in this initiative. The department of business, economic development, and tourism and the University of Hawaii's Hawaii natural energy institute have completed the State's hydrogen roadmap, convened public-private partnerships, and conducted nationally recognized hydrogen research, demonstration, and testing projects. Additionally, the high technology development corporation's Hawaii center for advanced transportation technologies is recognized for its excellence in hydrogen vehicle technologies at the Hickam Air Force Base National Demonstration Center.

Therefore, the purposes of this Act are as follows:

Part II is to:

Increase competition by increasing transparency of all fuel industry information with improved data collection and reporting requirements to establish an effective statewide system of "watchdog" monitoring. A statewide "watchdog" monitoring system is a more potent alternative to gasoline price controls and restrictions on refiners or wholesalers operating service stations.

Part III is to:

Reduce fuel costs and lessen Hawaii's future dependence on imported oil by directing state fleets to procure energy efficient vehicles and vehicles capable of operating on alternative fuels; establish, as a state objective, that by December 31, 2020, 20 per cent of highway fuel demand be provided by renewable fuels; provide purchasers of alternative fuel and energy efficient vehicles with special license plates and registration incentives; establish a preference in public contracts for the use of biofuels; extend the general excise tax exemption for alcohol fuels; and appropriate funds for a statewide biofuels assessment.

Part IV is to:

Promote energy efficiency and renewable energy use in state agencies while recognizing funding and staffing constraints and the need for flexibility in implementation; support and facilitate the use of renewable energy resources and technologies for public and private facilities, including residential dwellings, by amending various statutes pertaining to renewable energy tax credits, renewable portfolio standards, and other provisions related to the public utilities commission; streamline permitting of renewable energy projects; and fund efforts to support and promote the agriculture community and its economic development by supporting agricultural-based renewable energy.

Part V is to:

Establish a world-class, Hawaii renewable hydrogen program, sustainable over the longer-term, to attract significant public and private sector investment in research and development, testing, and commercialization projects; appropriate funds for program support; and establish three permanent full-time equivalent professional positions to organize, develop, and conduct program activities, including formation of private/public strategic partnerships.

PART II Petroleum Fuels

SECTION 3. Chapter 486J, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§486J-A Informational cost reports. (a) Each refiner, at such reporting dates as the director may establish, shall file with the director, on forms prescribed, prepared, and furnished by the director, a certified statement of operating and overhead costs for the refiner's Hawaii operations, which shall include, but shall not be limited to, the following:

(b) In addition to the reporting required under subsection (a), each distributor shall file with the director all Securities and Exchange Commission Forms 10-K, Form 10-Q, Annual Reports, Quarterly Reports, and Earnings Supplements published by the distributor.

(c) Each distributor, except a distributor who is so defined solely by criteria in paragraph (4) of the definition of distributor in section 486J-1, who sells liquid fuel only at retail, and who is not a refiner, shall file with the director, at such reporting dates as the director may establish, on forms prescribed, prepared, and furnished by the director, a certified statement of operating and overhead costs, which shall include but shall not be limited to the following:

(d) The director may require reports of additional information when the director deems it necessary."

SECTION 4. Chapter 486J, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§486J-B Petroleum and energy industry information reporting system. The department shall develop and maintain an automated petroleum and energy information reporting system that meets the requirements of government, industry, and the public while promoting sound policy making and providing for consumer information and protection. The purpose of the petroleum and energy industry information reporting system is to conduct and facilitate the efficient reporting and analysis of information described in section 486J-5. The department shall develop the petroleum and energy industry information reporting system in a manner that will result in greater market transparency and provide useful information to those agencies that are authorized to conduct oversight of the petroleum industry and ensure compliance with all relevant laws."

SECTION 5. Chapter 486J, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§486J-C Independent power producer informational reports. (a) Each independent power producer, which means a power production facility that sells electricity to a utility, excluding eligible customer generators as defined by section 269-11, shall submit to the director, in such form as the director shall prescribe, the following information where appropriate to its facility:

(b) The director may require reports of additional information when the director deems it necessary."

SECTION 6. Chapter 486J, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§486J-D Sharing and protection of confidential information by director and public utilities commission. (a) The director may acquire from and share with the public utilities commission all such petroleum and energy industry data and information that the department and commission may collect, obtain, purchase, or otherwise possess, pursuant to all relevant and applicable laws and rules, as well as work cooperatively with the commission, and the commission's staff and consultants to support and fulfill the purposes of this chapter.

(b) In addition to petroleum industry data and information pursuant to sections 486J-A, and 486J-B, other such energy industry data and information shall include, but not be limited to, data and information from and related to energy utility companies, independent power producers, renewable energy power producers, and other such private sector and government energy producers and consumers, which the department and commission may collect, obtain, purchase, or otherwise possess, which the department determines to be relevant and necessary pursuant to this chapter.

(c) The sharing of confidential and protected petroleum and energy industry data and information pursuant to this chapter by both the department and commission is expected and authorized. The department and commission are hereby authorized to preserve the confidentiality and protection of all such data and information by application and extension of each agency's respective safeguards and authority to protect and prevent the unauthorized release of such data and information. In the event of any difference in the level of each agency's respective authorized protection afforded to such confidential and protected data and information, the more stringent (i.e., that which provides the higher level of confidentiality and protection to data and information against unauthorized release) shall be authorized and applied by both agencies. The sharing and protection of all cooperative analytic and related work, and related papers, correspondence, electronic files, documents, and other products of such work conducted by the department and commission which contain such confidential and protected petroleum and energy industry data and information covered by this section are subject to all the requirements and afforded all the same protections as provided for herein."

SECTION 7. Section 486H-10.4, Hawaii Revised Statutes, is amended to read as follows:

"§486H-10.4 [Restrictions on manufacturers or jobbers in operating service stations; lease] Lease rent controls; definitions. [(a) Beginning August 1, 1997, no manufacturer or jobber shall convert an existing dealer retail station to a company retail station; provided that nothing in this section shall limit a manufacturer or jobber from:

(b) No new company retail station shall be located within one-eighth mile of a dealer retail station in an urban area, and within one-quarter mile in other areas.

(c)] (a) All leases as part of a franchise as defined in section 486H-1, existing on August 1, 1997, or entered into thereafter, shall be construed in conformity with the following:

The provisions of this subsection shall not apply to any existing contracts that may be in conflict with its provisions.

[(d)] (b) Nothing in this section shall prohibit a dealer from selling a retail service station in any manner."

SECTION 8. Section 486H-10.5, Hawaii Revised Statutes, is amended to read as follows:

"§486H-10.5 Violation; penalties. Any person who violates section [486H-10] 486H-10.4 shall be assessed a civil penalty of not more than $1,000 per day for each violation."

SECTION 9. Section 486H-11, Hawaii Revised Statutes, is amended to read as follows:

"§486H-11 Enforcement of prohibition. [(a) The attorney general shall commence a civil action to enforce section 486H-10, by seeking injunctive or any other appropriate relief. The civil action shall be brought in the circuit court of the circuit where the alleged violation occurred, or where the defendant resides or is doing business.

(b)] Any person who is injured in another person's business or property by the violation of section [486H-10,] 486H-10.4, may bring a civil action for damages or injunctive relief, or both, against the person violating section [486H-10.] 486H-10.4. If the plaintiff prevails, the plaintiff shall be awarded reasonable attorneys and expert witness fees[;], if applicable; provided that if a court awards only nominal damages to the plaintiff, those fees, in the court's discretion, need not be awarded to the plaintiff. Any action brought under this subsection shall be brought in the circuit court of the circuit where the alleged violation occurred[,] or where the defendant resides or is doing business."

SECTION 10. Section 486J-1, Hawaii Revised Statutes, is amended to read as follows:

"§486J-1 Definitions. As used in this chapter:

"Aviation fuel" means and includes all liquid substances of whatever chemical composition usable for the propulsion of airplanes.

"Class of retail trade" means each separate subdivision, or "class", of outlets or methods of retail sales of liquid fuels, including, but not limited to, gasoline and diesel for motor vehicles, and includes any:

"Competitively priced" means fuel-grade ethanol for which the wholesale price, minus the value of all applicable federal, state, and county tax credits and exemptions, is not more than the average posted rack price of unleaded gasoline of comparable grade published in the State.

"Corporate overhead expenses" means the expenses or costs allocated by the refiners that reflect their Hawaii business units' share of corporate staff costs such as legal, financial, accounting, and information technology.

"Department" means the department of business, economic development, and tourism.

"Director" means the director of business, economic development, and tourism.

"Distributor" means [and includes]:

"Energy" means work or heat that is, or may be, produced from any fuel or source whatsoever.

"Fuel" means [and includes fuels] fuel whether liquid, solid, or gaseous, commercially usable for energy needs, power generation, and fuels manufacture, that may be manufactured, grown, produced, or imported into the State or that may be exported therefrom[;], including petroleum and petroleum products and gases, coal, coal tar, vegetable ferments, and all fuel alcohols.

"Liquid fuel" means fuel in liquid form, commercially usable for energy needs, power generation, and fuel manufacture, that may be manufactured, produced, or imported into the State or that may be exported therefrom, including petroleum and petroleum products, biodiesel, and all fuel alcohols.

"Major marketer" means any person who sells natural gas, propane, synthetic natural gas, or oil in amounts determined by the department as having a major effect on energy supplies.

"Major oil producer" means any person who produces oil in amounts determined by the department as having a major effect on energy supplies.

"Major oil storer" means any person who stores oil or other petroleum products in amounts determined by the department as having a major effect on energy supplies.

"Major oil transporter" means any person who transports oil or other petroleum products in amounts determined by the department as having a major effect on energy supplies.

"Month" or "calendar month" means [each] a full month of the calendar year.

"Person"[,] means any [person,] individual, firm, association, organization, partnership, business trust, corporation, or company. "Person" also includes any city, county, public district or agency, the State or any department or agency thereof, and the United States to the extent authorized by federal law.

["Petroleum commissioner" or "commissioner" means the administrator of the energy, resources, and technology division of the department of business, economic development, and tourism.]

"Refiner" means any person who owns, operates, or controls the operations of one or more refineries[.] in Hawaii.

"Refinery" means any industrial plant, regardless of capacity, processing crude oil feedstock and manufacturing oil products.

"Wholesale liquid fuel prices" means the prices at which liquid fuels are sold at wholesale for resale at wholesale or retail, typically but not necessarily limited to gasoline and diesel for motor vehicles, and includes:

"§486J-2 Distributors to register. Every distributor, and any person before becoming a distributor, shall register as such with the [commissioner] director on forms to be prescribed, prepared, and furnished by the [commissioner.] director."

SECTION 12. Section 486J-3, Hawaii Revised Statutes, is amended to read as follows:

"§486J-3 Statements. (a) Each distributor [shall], at such reporting dates as the [commissioner] director may establish, shall file with the [commissioner,] director, on forms prescribed, prepared, and furnished by the [commissioner,] director, a certified statement showing, separately for each county and for the islands of Lanai and Molokai within which and whereon fuel is sold or used during the last preceding reporting period, the following:

[The commissioner shall prescribe by rule when the first report shall be submitted.

(b) In addition to the above reporting, each distributor shall file with the commissioner, Federal Form FEO-1000 or an equivalent state form to be prescribed, prepared, and furnished by the commissioner, showing the expected supply of fuel products for the coming month, and their intended distribution as categorized by Form FEO-1000 or the equivalent state form. The state form shall be supplied in the event that the Federal Mandatory Petroleum Allocation Regulations should expire, be revoked, or be amended to delete or substantially change the reporting requirements provided therein.

(c)] (b) Each major marketer shall submit to the [commissioner,] director, at a time and in a form as the [commissioner] director shall prescribe, information including petroleum and petroleum product receipts, exchanges, inventories, and distributions. [The commissioner shall prescribe by rule when the first report shall be submitted.]

[(d)] (c) The [commissioner] director may [request] require reports of additional information [as and] when [[the commissioner]] the director deems it necessary [to perform the commissioner's responsibilities under this chapter]."

SECTION 13. Section 486J-4, Hawaii Revised Statutes, is amended to read as follows:

"§486J-4 Informational reports. (a) Each major oil producer, refiner, marketer, oil transporter, and oil storer shall submit to the [commissioner,] director, in such form as the [commissioner] director shall prescribe, information [which] that includes the following:

[The commissioner shall prescribe by rule when the first report shall be submitted.]

(b) The [commissioner] director may [request] require reports of additional information [as and] when [[the commissioner]] the director deems it necessary [to perform [the commissioner's] responsibilities under this chapter]."

SECTION 14. Section 486J-5, Hawaii Revised Statutes, is amended to read as follows:

"§486J-5 Analysis of information; [audits and inspections;] summary reports. (a) The [petroleum commissioner,] director, with the [commissioner's] director's own staff and other [support staff with] persons with expertise and experience in, or with, the petroleum industry, shall gather, analyze, and interpret the information submitted to it pursuant to sections 486J-3 [and], 486J-4, and 486J-A, and other information relating to the supply and [price] prices of petroleum products, with particular emphasis on motor vehicle fuels, including, but not limited to, all of the following:

(b) The commissioner shall conduct random or periodic audits and inspections of any supplier or suppliers of oil or petroleum products to determine whether they are unnecessarily withholding supplies from the market or are violating applicable policies, laws, or rules. The commissioner may solicit assistance of the department of taxation in any such audit. The commissioner shall cooperate with other state and federal agencies to ensure that any audit or inspection conducted by the commissioner is not duplicative of the data received by any of their audits or inspections which is available to the commissioner].

[(c)] (b) The [commissioner] director shall analyze the impacts of state and federal policies, rules, and regulations upon the supply and pricing of petroleum products.

[(d)] (c) The [commissioner] director shall publish annually and submit to the governor and the legislature twenty days prior to the first day of [the current] each legislative session a summary, including any analysis and interpretation of the information submitted to it pursuant to this chapter, and any other activities taken by the [commissioner,] director, including civil penalties imposed and referrals of violations to the attorney general under section 486J-9. Any person may submit comments in writing regarding the accuracy or sufficiency of the information submitted. At the option of the director, this report may be combined with reporting required by section 196-4(11), in the director's role as state energy resources coordinator.

(d) The director may conduct energy analyses as requested by the chair of the public utilities commission or consumer advocate."

SECTION 15. Section 486J-6, Hawaii Revised Statutes, is amended to read as follows:

"§486J-6 Confidential information. (a) Confidential commercial information [presented] provided to the [commissioner] director pursuant to this chapter shall not be [held in confidence] publicly disclosed by the [commissioner or] director unless such disclosure is required by chapter 92F or is permitted by this chapter, or where the information is aggregated to the extent necessary to assure its confidentiality [as governed by chapter 92F, including its penalty provisions.

[(b) No data or information submitted to the commissioner shall be deemed confidential if the person submitting the information or data has made it public].

[(c)] (b) Unless otherwise provided by law, with respect to data provided pursuant to sections 486J-3 [and], 486J-4, and 486J-A, neither the [commissioner,] director, nor any employee of the department, may do any of the following:

SECTION 16. Section 486J-7, Hawaii Revised Statutes, is amended to read as follows:

"§486J-7 Confidential information obtained by another state agency. Any confidential information pertinent to the responsibilities of the [commissioner] director specified in this chapter that is obtained by another state agency, including the department of taxation, the public utilities commission, the attorney general, and the consumer advocate, shall be available to the attorney general, the attorney general's authorized representatives, and the [commissioner] director and shall be treated in a confidential manner."

SECTION 17. Section 486J-8, Hawaii Revised Statutes, is amended to read as follows:

"§486J-8 Sharing of information obtained by the [commissioner.] director. The [commissioner] director shall make all information obtained by the [commissioner] director under this chapter, including confidential information, available to the attorney general, the department of taxation, the public utilities commission, the consumer advocate, and the authorized representative of each, who shall safeguard the confidentiality of all confidential information received."

SECTION 18. Section 486J-9, Hawaii Revised Statutes, is amended to read as follows:

"§486J-9 Failure to timely provide information; failure to make and file statements; false statements; penalties; referral to the attorney general. (a) The [petroleum commissioner] director shall notify those persons who have failed to timely provide the information specified in section 486J-3 [or], 486J-4, 486J-A, or 486J-C or requested by the [commissioner] director under section 486J-3 [or], 486J-4[.] 486J-A, or 486J-C. If, within five business days after being notified of the failure to provide the specified or requested information, the person fails to supply the specified or requested information, the person shall be subject to a civil penalty of not less than $50,000 per day nor more than $100,000 per day for each day the submission of information is refused or delayed[, unless the person has timely filed objections with the commissioner regarding the information and the commissioner has held a hearing and, following a ruling by the commissioner, the person has properly submitted the issue to a court of competent jurisdiction for review].

(b) Any person who wilfully makes any false statement, representation, or certification in any record, report, plan, or other document filed with the [commissioner] director shall be subject to a civil penalty not to exceed $500,000, and shall be deemed to have committed an unfair or deceptive act or practice in the conduct of a trade or commerce and subject to the penalties specified in chapter 480.

(c) The [commissioner] director shall refer any matter under [this subsection] subsection (a) or (b) to the attorney general, who may exercise any appropriate legal or equitable remedies that may be available to the State.

[(c)] (d) For the purposes of this section, "person" means, in addition to the definition contained in section 486J-1, any responsible corporate officer."

SECTION 19. Section 486J-10, Hawaii Revised Statutes, is amended to read as follows:

"§486J-10 Ethanol content requirement. (a) The [commissioner] director shall adopt rules in accordance with chapter 91 to require that gasoline sold in the State for use in motor vehicles contain ten per cent ethanol by volume. The amounts of gasoline sold in the State containing ten per cent ethanol shall be in accordance with rules as the [commissioner] director may deem appropriate. The [commissioner] director may authorize the sale of gasoline that does not meet these requirements as provided in subsection (d).

(b) Gasoline blended with an ethanol-based product, such as ethyl tertiary butyl ether, shall be considered to be in conformance with this section if the quantity of ethanol used in the manufacture of the ethanol-based product represents ten per cent, by volume, of the finished motor fuel.

(c) Ethanol used in the manufacture of ethanol-based gasoline additives, such as ethyl tertiary butyl ether, may be considered to contribute to the distributor's conformance with this section; provided that the total quantity of ethanol used by the distributor is an amount equal to or greater than the amount of ethanol required under this section.

(d) The [commissioner] director may authorize the sale of gasoline that does not meet the provisions of this section:

(e) Each distributor, at such reporting dates as the [commissioner] director may establish, shall file with the [commissioner,] director, on forms prescribed, prepared, and furnished by the [commissioner,] director, a certified statement showing:

(f) Provisions with respect to confidentiality of information shall be the same as provided in section [486J-7.] 486J-6.

(g) Any distributor or any other person violating the requirements of this section shall be subject to a fine of not less than $2 per gallon of nonconforming fuel, up to a maximum of $10,000 per infraction.

(h) The [commissioner,] director, in accordance with chapter 91, shall adopt rules for the administration and enforcement of this section.

(i) All rights, powers, functions, and duties of the petroleum commissioner as set forth in title 15, chapter 35, Hawaii Adminstrative Rules (ethanol content in gasoline), are hereby transferred to the director."

SECTION 20. Section 486H-13, Hawaii Revised Statutes, is repealed.

["§486H-13 Maximum pre-tax wholesale price for the sale of gasoline; civil actions. (a) Notwithstanding any law to the contrary, no manufacturer, wholesaler, or jobber may sell regular unleaded, mid-grade, or premium gasoline to a dealer retail station, an independent retail station, or to another jobber or wholesaler at a price above the maximum pre-tax wholesale prices established pursuant to subsection (b). The commission shall publish the maximum pre-tax wholesale prices by means that shall include the Internet website for the State of Hawaii.

(b) On a weekly basis, the commission shall determine the maximum pre-tax wholesale price of regular unleaded, mid-grade, and premium gasoline as follows: the maximum pre-tax wholesale price of regular unleaded gasoline shall consist of the baseline price for regular unleaded gasoline, plus the location adjustment factor, the marketing margin factor, and the zone price adjustment, and for mid-grade and premium gasoline, the applicable mid-grade and premium adjustment factor, such that the maximum pre-tax wholesale gasoline prices reflect and correlate with competitive market conditions.

(c) The baseline price for regular unleaded gasoline referred to in subsection (b) shall be determined on a weekly basis and shall be equal to the average of:

(d) The location adjustment factor referred to in subsection (b) shall be $.04 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(e) The marketing margin factor referred to in subsection (b) shall be $.18 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(f) The mid-grade adjustment factor shall be $.05 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(g) The premium adjustment factor shall be $.09 per gallon or as otherwise determined by the commission and shall be thereafter be subject to adjustment pursuant to section 486H-16(a).

(h) For purposes of this chapter, the State shall be divided into the following zones:

(i) The commission shall establish zone price adjustments to the maximum pre-tax wholesale regular unleaded, mid-grade, and premium gasoline prices on a zone by zone basis.

(j) Every manufacturer, wholesaler, or jobber, upon the request of the commission, shall furnish to the commission, in the form requested, all documents, data, and information the commission may require to make its determination on zone price adjustments. Any person who refuses or fails to comply with a request for information by the commission shall be subject to a fine of up to $50,000 per day. Each day a violation continues shall constitute a separate offense.

(k) The maximum pre-tax wholesale gasoline price imposed by this section shall take effect on September 1, 2005, notwithstanding the lack of the adoption of rules pursuant to this section.

(l) Any manufacturer, wholesaler, or jobber who knowingly violates any requirement imposed or rule adopted under this section, except for subsection (j), shall be subject to a civil penalty, for each violation, equal to three times the amount of the overcharge or $250,000, whichever is greater, and shall be liable for the costs of the action and reasonable attorney's fees as determined by the court. Within two years from the date the commission obtains actual knowledge of the violation, the commission may institute a civil action in a court of competent jurisdiction to collect the civil penalty, the costs, and attorney's fees. In the case of ongoing violation, the two-year period shall start from the date of the last violation. The commission may refer any such action to the attorney general as it deems appropriate. As used in this subsection, "overcharge" means the number of gallons of gasoline sold, times the wholesale price at which the manufacturer or jobber sold regular unleaded, mid-grade, or premium gasoline to a dealer retail station, an independent retail station, or another jobber or wholesaler, less taxes assessed, less the maximum pre-tax wholesale price established pursuant to subsection (b).

(m) The commission shall have the power to determine the extent to which a manufacturer, wholesaler, or jobber is complying with any requirement imposed or rule adopted under this section, including the power to compel a manufacturer, wholesaler, or jobber to submit documents, data, and information necessary and appropriate for the commission to determine such compliance. The commission may use data collected by the department of business, economic development, and tourism pursuant to chapter 486J, as well as obtain the assistance of that department in determining such compliance.

(n) The commission shall report to the governor and the legislature, in a timely manner, on any significant aberrations, trends, or conditions that may adversely impact the gasoline consumers in the State.

(o) The commission shall adopt rules pursuant to chapter 91 as may be necessary to implement this section and section 486H-16."]

SECTION 21. Section 486H-15, Hawaii Revised Statutes, is repealed.

["§486H-15 Governor's emergency powers. (a) Notwithstanding any law to the contrary, the governor may suspend, in whole or in part, section 486H-13 or any rule adopted pursuant to that section whenever the governor issues a written determination that strict compliance with the section or a rule will cause a major adverse impact on the economy, public order, or the health, welfare, or safety of the people of Hawaii. In the written determination, the governor shall state the specific provision of the section or rule that strict compliance with will cause a major adverse impact on the economy, public order, or the health, welfare, or safety of the people of the State, along with specific reasons for that determination. The governor shall publish this determination in accordance with section 1-28.5. The suspension shall take effect upon issuance of the written determination by the governor.

(b) Except as provided in subsection (c), the suspension under subsection (a) shall remain in effect until the earlier of:

(c) If the written determination is issued while the legislature is in session, the suspension under subsection (a) shall remain in effect until the earlier of:

provided that if the legislature has passed legislation to address the major adverse impact, and the governor vetoes the presented legislation, the suspension shall terminate on the date of that veto, and the maximum pre-tax wholesale gasoline prices in effect immediately prior to the issuance of the written determination by the governor shall take effect on the day after the date of the veto; and provided further that if no action is taken by the legislature during the regular or special session to address the major adverse impact, then the maximum pre-tax wholesale gasoline prices in effect immediately prior to the issuance of the written determination by the governor shall take effect on the day after adjournment sine die of the regular or special session."]

SECTION 22. Section 486H-16, Hawaii Revised Statutes, is repealed.

["§486H-16 Adjustments. (a) A manufacturer, wholesaler, or jobber may petition the commission to adjust the maximum pre-tax wholesale price of regular unleaded, mid-grade, or premium gasoline in the event of a change in the value of the baseline price for regular unleaded gasoline, the location adjustment factor, the marketing margin factor, the mid-grade adjustment factor, the premium adjustment factor, or a zone price adjustment. The petitioner shall bear the burden of proof to establish by clear and convincing evidence the need for and the amount of any adjustment. The adjustments shall be determined as follows:

(b) If the commission adjusts the maximum pre-tax wholesale gasoline prices, the commission shall publish its findings and the adjusted prices by means that shall include the Internet website for the State of Hawaii.

(c) Regardless of whether a petition has been filed and notwithstanding a determination of the adjustments made pursuant to subsection (a), the commission, in its discretion, may make such other and further adjustments deemed necessary and appropriate to establish maximum pre-tax wholesale gasoline prices that reflect and correlate with competitive market conditions."]

SECTION 23. Section 486J-12, Hawaii Revised Statutes, is repealed.

["§486J-12 Rules. The commissioner shall adopt, amend, or repeal such rules as the commissioner may deem proper to fully effectuate this chapter."]

PART III. Alternate Transportation Fuels and Vehicles

SECTION 24. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§103D-A Biofuel preference. (a) Notwithstanding any other law to the contrary, contracts for the purchase of diesel fuel or boiler fuel shall be awarded to the lowest responsible and responsive bidders, with preference given to bids for biofuels or blends of biofuel and petroleum fuel.

(b) When purchasing fuel for use in diesel engines, the preference shall be cents per gallon of 100 per cent biodiesel. For blends containing both biodiesel and petroleum based diesel, the preference shall be applied only to the biodiesel portion of the blend.

(c) When purchasing fuel for use in boilers, the preference shall be cents per gallon of 100 per cent biofuel. For blends containing both biofuel and petroleum based boiler fuel, the preference shall be applied only to the biofuel portion of the blend.

(d) As used in this section, "biodiesel" means a vegetable oil based fuel, produced in Hawaii, which meets ASTM International Standard D6751, "Specification for Biodiesel Fuel Blend Stock (B100) for Distillate Fuels", as amended.

(e) As used in this section, "biofuel" means fuel produced in Hawaii from non-petroleum sources, such as natural vegetable oil, waste cooking oils, fats, greases, or grease trap waste, that can be used for the generation of heat or power."

SECTION 25. Chapter 286, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§286-A Energy efficient and alternative fuel vehicles. For the purposes of this section, an "energy-efficient" light duty vehicle is a new or used vehicle, of less than 8500 pounds gross vehicle weight rating, which is on the list of "Most Energy Efficient Vehicles" in its class, as shown by vehicle fuel efficiency lists, rankings, or reports maintained by the United States Environmental Protection Agency. An "alternative fuel vehicle" is a vehicle capable of operating on an alternative fuel, as such is described in 10 Code of Federal Regulations part 490.

The counties of Hawaii shall establish and issue a special license plate, in accordance with section 249-9, to designate that the vehicle to which the license plate is affixed is an energy-efficient or alternative fuel vehicle.

The department of transportation shall establish that a vehicle on which an energy-efficient or alternative fuel license plate is affixed shall, for a period of five years from the effective date of this Act, be exempt from the motor vehicle registration fee."

SECTION 26. Section 103D-412, Hawaii Revised Statutes, is amended to read as follows:

"§103D-412 [Highly energy-efficient] Energy-efficient vehicles. (a) The procurement policy for all agencies purchasing or leasing motor [fleets] vehicles shall be to obtain [alternative fuel] energy-efficient vehicles. [Beginning January 1, 2006, all state agencies] All covered fleets are directed to procure increasing percentages of [alternative fuel] energy-efficient vehicles as part of their annual vehicle acquisition plans, which shall be as follows:

(b) For purposes of this section:

"Agency" means a state agency, office, or department.

"Alternative fuel" has the same meaning as contained in 10 Code of Federal Regulations part 490.

"Covered fleet" has the same meaning as contained in 10 Code of Federal Regulations part 490 subpart C.

["Alternative fuel] "Energy-efficient vehicle" means a vehicle that:

(1) Is capable of using an alternative fuel;

"Excluded vehicles" has the same meaning as contained in 10 Code of Federal Regulations part 490.

"Light duty vehicle" has the same meaning as contained in 10 Code of Federal Regulations part 490.

(c) Agencies may offset the purchase requirements for [alternative fuel] energy-efficient vehicles by successfully demonstrating percentage improvements in overall light-duty vehicle fleet mileage economy. The offsets shall be measured against the fleet average [mileage economy] miles per gallon of petroleum-based gasoline and diesel fuel, using [calendar year 2004] the fiscal year beginning July 1, 2006, as a baseline, on a percentage-by-percentage basis.

(d) Agencies which use biodiesel fuel may offset the vehicle purchase requirements of this section at the rate of one vehicle for each four hundred fifty gallons of neat biodiesel fuel used. Neat biodiesel fuel is 100 per cent biodiesel (B100) by volume.

(e) Agencies may apply to the procurement officer for exemptions from the requirements of this section to the extent that the vehicles required by this section are not available or do not meet the specific needs of the agency.

(f) Vehicles acquired from another state agency, and excluded vehicles, are exempt from the requirements of this section.

(g) Nothing in this section is intended to interfere with an agency's ability to comply with federally-imposed vehicle purchase mandates such as those required by 10 Code of Federal Regulations part 490 subpart C."

SECTION 27. Section 226-18, Hawaii Revised Statutes, is amended to read as follows:

"§226-18 Objectives and policies for facility systems--energy. (a) Planning for the State's facility systems with regard to energy shall be directed toward the achievement of the following objectives, giving due consideration to all:

(b) To achieve the energy objectives, it shall be the policy of this State to ensure the provision of adequate, reasonably priced, and dependable energy services to accommodate demand.

(c) To further achieve the energy objectives, it shall be the policy of this State to:

SECTION 28. Section 237-27.1, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) This section shall be repealed on December 31, [2006.] 2009."

SECTION 29. There is appropriated out of the general revenues of the State of Hawaii the sum of $200,000, or so much thereof as may be necessary for fiscal year 2006-2007, for a statewide multi-fuel biofuels production assessment of potential feedstocks, technologies, and economics of the various renewable fuels pathways and the potential for ethanol, biodiesel, and renewable hydrogen production to contribute to Hawaii's near-, mid-, and long-term energy needs. The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this part.

PART IV. Energy Efficiency and Renewable Energy

SECTION 30. Chapter 226- , Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§226- Energy efficiency for state facilities and vehicles. (a) Each agency is directed to implement, to the extent possible, the following goals during planning and budget preparation and during program implementation.

(b) With regard to buildings and facilities, each agency shall comply with the following:

(c) With regard to transportation fuel, each agency shall comply with the following:

SECTION 31. There is appropriated out of the general revenues of the State of Hawaii the sum of $630,000, or so much thereof as may be necessary for fiscal year 2006–2007, to provide two full-time permanent positions and to provide technical and other assistance to state agencies and programs under section 30 of this Act. The sum appropriated shall be expended by the department of business, economic development, and tourism.

SECTION 32. Section 196-8, Hawaii Revised Statutes, is repealed.

["[§196-8] Energy-efficiency policy review and evaluation. (a) the energy resources coordinator shall ensure that review and evaluation comparable to those accomplished by the energy-efficiency policy task force established pursuant to Act 163 Session Laws of Hawaii 1998, are undertaken, and that the findings and recommendations of the review and evaluation are reported to the legislature no later than twenty days prior to the convening of the regular session of 2007. (b) The review and evaluation shall include:

(c) The energy resources coordinator, in undertaking the review and evaluation, shall consult with representatives from:

SECTION 33. Sections 196-12 through 196-29, Hawaii Revised Statutes, are repealed.

"[[§196-12] Greenhouse gases reduction goal. Through life-cycle cost-effective energy measures, each agency shall reduce its greenhouse gas emissions attributed to facility energy use by thirty per cent by January 1, 2012, compared to emission levels in calendar year 1990. In order to encourage optimal investment in energy improvements, agencies may count greenhouse gas reductions from improvements in non-facility energy use toward this goal to the extent that these reductions are approved by the coordinator.

[§196-13] Energy efficiency improvement goals. (a) Through life-cycle cost-effective measures, each agency shall reduce energy consumption per gross square foot of its facilities, excluding laboratory facilities, by twenty per cent by January 1, 2007, and thirty per cent by January 1, 2012, relative to calendar year 1990. No facility shall be exempt from these goals unless it meets criteria for exemptions established by the coordinator.

(b) Through life-cycle cost-effective measures, each agency shall reduce energy consumption per square foot, per unit of production, or per other unit as applicable, of its laboratory facilities by fifteen per cent by January 1, 2007, and twenty-five per cent by January 1, 2012, relative to calendar year 1995. No facility shall be exempt from these goals unless it meets criteria for exemptions established by the coordinator.

(c) Each agency shall strive to expand the use of renewable energy within its facilities and in its activities by implementing renewable energy projects and by purchasing electricity from renewable energy sources. Through life-cycle cost-effective measures, each agency shall provide twenty per cent of its remaining energy requirements, after energy efficiency improvement goals have been achieved, with renewable energy resources.

(d) Through life-cycle cost-effective measures, each agency shall reduce the use of petroleum generated energy within its facilities. Agencies may accomplish this reduction by switching to less greenhouse gas-intensive or renewable energy sources, by eliminating unnecessary fuel use, or by other appropriate methods. Where alternative fuels are not practical or life-cycle cost-effective, agencies shall strive to improve the efficiency of their facilities.

(e) The State shall strive to reduce total energy use and associated greenhouse gas and other air emissions, as measured at the source. To that end, agencies shall undertake life-cycle cost-effective projects in which source energy decreases, even if site energy use increases. In those cases, agencies shall receive credit toward energy reduction goals through guidelines established by the coordinator.

(f) Through life-cycle cost-effective measures, agencies shall reduce water consumption and associated energy use in their facilities to reach the goals set under this part. Where possible, water cost savings and associated energy cost savings shall be included in energy-savings performance contracts and other financing mechanisms.

(g) Each agency's biennial budget submission shall include funding necessary to achieve the goals of this part. Budget submissions shall include the costs associated with encouraging the use of, administering, and fulfilling agency responsibilities under energy-savings performance contracts, utility energy-efficiency service contracts, and other contractual provisions for achieving conservation goals implementing life-cycle cost-effective measures, procuring life-cycle cost-effective products, and constructing sustainably designed new buildings, among other energy costs.

The director of finance shall issue guidelines to assist agencies in developing appropriate requests that support sound investments in energy improvements and energy-using products, and shall consider establishing a fund that agencies may draw on to finance exemplary energy management activities and investments with higher initial costs but lower life-cycle costs.

(h) Each agency shall develop an annual implementation plan for fulfilling the requirements of this part. The plans shall be included in the annual reports to the coordinator

[§196-14] Annual report. Beginning January 1, 2004, each agency shall measure and report annually to the coordinator on its progress in meeting the requirements of this part. The report shall include:

[§196-15] Senior agency official. Each agency shall designate a senior official to be responsible for meeting the goals and requirements of this part, including preparation of the annual report. Designated officials shall participate in the interagency energy policy committee established under section 196-17(c)

[§196-16] Agency energy teams. Each agency shall form a technical support team consisting of appropriate procurement, legal, budget, management, and technical representatives to expedite and encourage the agency's use of appropriations, energy-savings performance contracts, and other alternative financing mechanisms necessary to meet the goals and requirements of this part. Agency energy team activities shall be undertaken in collaboration with each agency's representative to the interagency energy policy committee.

[§196-17] Interagency coordination; policy committee. (a) The coordinator shall be responsible for evaluating each agency's progress in improving energy management and for submitting agency energy scorecards to the governor and the legislature to report progress.

The coordinator, in consultation [with] other agencies, shall develop the agency energy scorecards and scoring system to evaluate each agency's progress in meeting the goals of this part. The scoring criteria shall include:

(4) Use of other innovative energy efficiency practices.

(b) The coordinator shall be responsible for working with agencies to ensure that they meet the goals of this part and report their progress. The coordinator shall develop and issue guidelines for agencies' preparation of their annual reports to the coordinator on energy management. The coordinator shall also have primary responsibility for collecting and analyzing the data and shall ensure that agency reports are received in a timely manner.

(c) There is established within the department of business, economic development, and tourism, an interagency energy policy committee consisting of senior agency officials, to be chaired by the coordinator. The committee shall be responsible for encouraging implementation of energy efficiency policies and practices. The major energy-consuming agencies, as designated by the coordinator, shall participate on the committee. The committee shall communicate its activities to all designated senior agency officials to promote coordination and achievement of the goals of this part.

[§196-18] Public-private advisory committee. (a) The coordinator shall appoint an advisory committee consisting of representatives from:

(b) The committee shall provide input on state energy management, including how to:

(c) The committee shall be placed in the department of business, economic development, and tourism for administration purposes.

[§196-19] Life-cycle cost analysis. Agencies shall use life-cycle cost analysis in making decisions about their investments in products, services, construction, and other projects to lower the State's costs and to reduce energy and water consumption. Where appropriate, agencies shall consider the life-cycle costs of combinations of projects, particularly to encourage bundling of energy efficiency projects with renewable energy projects.

Agencies shall retire inefficient equipment on an accelerated basis where replacement results in lower life-cycle costs. Agencies that minimize life-cycle costs with efficiency measures shall be recognized in their scorecard evaluations established under section 196-17(a).

[§196-20] Facility energy audits. Agencies shall conduct energy and water audits for approximately ten per cent of their facilities each year, either independently or through energy-savings performance contracts or utility energy-efficiency service contracts.

[§196-21] Financing mechanisms. (a) Agencies shall maximize their use of available alternative financing contracting mechanisms, including energy-savings performance contracts and utility energy-efficiency service contracts, when life-cycle cost-effective, to reduce energy use and cost in their facilities and operations. Energy-savings performance contracts and utility energy-efficiency service contracts shall provide significant opportunities for making state facilities more energy efficient at no net cost to taxpayers.

(b) Agencies that perform energy efficiency and renewable energy system retrofitting may continue to receive budget appropriations for energy expenditures at an amount that will not fall below the pre-retrofitting energy budget but will rise in proportion to any increase in the agency's overall budget for the duration of the performance contract or project payment term. A portion of the moneys saved through efficiency and renewable energy system retrofitting shall be set aside to pay for any costs directly associated with administering energy efficiency and renewable energy system retrofitting programs incurred by the agency.

(c) Notwithstanding any law to the contrary relating to the award of public contracts, any agency desiring to enter into an energy performance contract shall do so in accordance with the following provisions:

[§196-22] State energy projects. State energy projects may be implemented under this chapter with the approval of the comptroller and the director of finance. Notwithstanding section 36-41 or 196-21, the comptroller or the senior agency official of the department of accounting and general services, along with the director of finance, may exempt a state energy project from the advertising and competitive bidding requirements of section 36-41 or 196-21 and chapter 103, if the comptroller deems exemption appropriate for energy projects with proprietary technology or necessary to meet the goals of the legislature. In addition, this section shall be construed to provide the greatest possible flexibility to agencies in structuring agreements entered into so that economic benefits and existing energy incentives may be used and maximized and financing and other costs to agencies may be minimized. The specific terms of energy performance contracting under section 36-41 may be altered if deemed advantageous to the agency and approved by the director of finance and the senior agency official.

[§196-23] Energy efficient products. (a) Agencies shall select, where life-cycle cost-effective, ENERGY STAR and other energy efficient products when acquiring energy-using products. For product groups where ENERGY STAR labels are not yet available, agencies may select products that are in the upper twenty-five per cent of energy efficiency as designated by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, Federal Energy Management Program.

Agencies shall incorporate energy efficient criteria consistent with designated energy efficiency levels into all guide specifications and project specifications developed for new construction and renovation, as well as into product specification language developed for all purchasing procedures.

The State shall also consider the creation of financing agreements with private sector suppliers to provide private funding to offset higher up-front costs of efficient products. (b) Agencies shall strive to meet the ENERGY STAR building criteria for energy performance and indoor environmental quality in their eligible facilities to the maximum extent practicable by December 31, 2005. Agencies may use energy-savings performance contracts, utility energy-efficiency service contracts, or other means to conduct evaluations and make improvements to facilities. Facilities that rank in the top twenty-five per cent in energy efficiency relative to comparable commercial and state buildings shall receive the ENERGY STAR building label or its equivalent as determined by the coordinator. Agencies shall integrate this rating tool into their general facility audits.

(c) The State shall employ sustainable design principles and agencies shall apply the principles to the siting, design, and construction of new facilities. Agencies shall optimize life-cycle costs, pollution, and other environmental and energy costs associated with the construction, life-cycle operation, and decommissioning of the facility. Agencies shall consider using energy-savings performance contracts or utility energy-efficiency service contracts to aid them in constructing sustainably designed buildings.

(d) Agencies entering into leases, including the renegotiation or extension of existing leases, shall incorporate lease provisions that encourage energy and water efficiency wherever life-cycle cost-effective. Build-to-suit lease solicitations shall contain criteria encouraging sustainable design and development, energy efficiency, and verification of facility performance. Agencies shall include a preference for facilities having an ENERGY STAR building label in their selection criteria for acquiring leased facilities. .In addition, all agencies shall encourage lessors to apply for an ENERGY STAR building label and to explore and implement projects that will reduce costs to the State, including projects carried out through the lessors' energy-savings performance contracts or utility energy-efficiency service contracts.

(e) Agencies shall implement energy reduction systems, and other highly efficient systems, in new construction or retrofit projects when life-cycle cost-effective. Agencies shall consider combined cooling, heat, and power systems when determined to be the most cost-effective when measured against other alternatives on a life-cycle cost basis. Agencies shall survey local natural resources to optimize use of available solar, ocean thermal, biomass, bio-energy, geothermal, or other naturally occurring energy sources.

(f) Agencies shall use off-grid generation systems, including solar hot water, solar electric, solar outdoor lighting, small wind turbines, fuel cells, and other off-grid alternatives, where such systems are life-cycle cost-effective and offer benefits including energy efficiency, pollution prevention, source energy reductions, avoided infrastructure costs, or expedited service.

[§196-24] Electricity use. To advance the greenhouse gas and renewable energy goals of this part, and reduce source energy use, each agency shall strive to use electricity from clean, efficient, and renewable energy sources. An agency's efforts in purchasing electricity from efficient and renewable energy sources shall be taken into account in assessing the agency's progress and formulating its scorecard under section 196-17(a).

[§196-25] Competition. Agencies shall take advantage of competitive opportunities in the electricity and natural gas markets to reduce costs and enhance services. Agencies are encouraged to aggregate demand across facilities or agencies to maximize their economic advantage.

[§196-26] Reduced greenhouse gas intensity of electric power. When selecting electricity providers, agencies shall purchase electricity from sources that use high efficiency electric generating technologies when life-cycle cost-effective. Agencies shall consider the greenhouse gas intensity of the source of the electricity and strive to minimize the greenhouse gas intensity of purchased electricity.

[§196-27] Purchasing electricity from renewable energy sources. Each agency shall evaluate its current use of electricity from renewable energy sources and report this level in its annual report to the coordinator. Based on this review, each agency shall adopt policies and pursue projects that increase the use of such electricity. Agencies shall include provisions for the purchase of electricity from renewable energy sources as a component of their requests for bids whenever procuring electricity. Agencies may use savings from energy efficiency projects to pay additional incremental costs of electricity from renewable energy sources.

In evaluating opportunities to comply with this section, agencies shall consider any renewable portfolio standard specified in the restructuring guidelines for the State and the United States Environmental Protection Agency guidelines on crediting renewable energy power.

[§196-28] Mobile equipment. Each agency shall seek to improve the design, construction, and operation of its mobile equipment, and shall implement all life-cycle cost-effective energy efficiency measures that result in cost savings while improving mission performance. To the extent that such measures are life-cycle cost-effective, agencies shall consider enhanced use of alternative or renewable-based fuels.

[§196-29] Management strategies. Agencies shall use the following management strategies in meeting the goals of this part:

SECTION 34. Act 207, Session Laws of Hawaii 2003, is amended by amending section 4 to read as follows:

"SECTION 4. This Act shall take effect on July 1, 2003[, and shall be repealed January 1, 2008]".

SECTION 35. Chapter 235-12.5, Hawaii Revised Statutes, is amended to read as follows:

"§235-12.5 Renewable energy technologies; income tax credit. (a) When the requirements of subsection (c) are met, each individual or corporate resident taxpayer that files an individual or corporate net income tax return for a taxable year may claim a tax credit under this section against the Hawaii state individual or corporate net income tax. The tax credit may be claimed for every eligible renewable energy technology system that is installed and placed in service by a taxpayer during the taxable year. This credit shall be available for systems installed and placed in service after June 30, 2003. The tax credit may be claimed as follows:

provided that multiple owners of a single system shall be entitled to a single tax credit; and provided further that the tax credit shall be apportioned between the owners in proportion to their contribution to the cost of the system.

In case of a partnership, S corporation, estate, or trust, the tax credit allowable is for every eligible renewable energy technology system that is installed and placed in service by the entity. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined pursuant to section 235-110.7(a).

(b) For the purposes of this section:

"Actual cost" means costs related to the renewable energy technology systems under subsection (a), including accessories and installation, but not including the cost of consumer incentive premiums unrelated to the operation of the system or offered with the sale of the system and costs for which another credit is claimed under this chapter.

"Renewable energy technology system" means a new system that captures and converts a renewable source of energy, such as wind, heat (solar thermal), or light (photovoltaic) from the sun into:

"Solar or wind energy system" means any identifiable facility, equipment, apparatus, or the like that converts insolation or wind energy to useful thermal or electrical energy for heating, cooling, or reducing the use of other types of energy that are dependent upon fossil fuel for their generation.

(c) [The]For taxable years beginning after December 31, 2005,the dollar amount of [any new federal energy tax credit similar to the credit provided in this section that is established after June 30, 2003, and] any utility rebate[,] shall be deducted from the cost of the qualifying system and its installation before applying the state tax credit.

(d) The director of taxation shall prepare any forms that may be necessary to claim a tax credit under this section, including forms identifying the technology type of each tax credit claimed under this section, whether for solar thermal, photovoltaic from the sun, or wind. The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(e) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims for the tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with this subsection shall constitute a waiver of the right to claim the credit.

(f) By or before December, 2005, to the extent feasible, using existing resources to assist the energy-efficiency policy review and evaluation, the department shall assist with data collection on the following:

SECTION 36. Chapter 269 , Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269-A Establishing a public benefits fund. The public utilities commission shall by order or rule redirect the current demand-side management surcharge collected by Hawaii's electric utilities to establish a public benefits fund. A volumetric charge to customers shall be used for the support of demand-side management and renewable energy programs and services that meet the requirements of section 269-92. The charge shall be known as the public benefits fee and shall be shown separately on each customer's bill, and shall be paid to a fund administrator appointed by the public utilities commission. The public benefits fee shall be deposited into the fund. Balances in the fund shall be ratepayer funds, shall be used to support the activities authorized in this Act, and shall be carried forward and remain in the fund at the end of each fiscal year. These moneys shall not be available to meet any current or past general obligations of the State. Interest earned shall accrue to the fund. The public utilities commission shall annually provide the legislature a report twenty days prior to the start of the legislative session, which details the revenues collected and the expenditures made for demand side management and renewable energy programs and services under this Act."

SECTION 37. Chapter 269 , Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269-B Establishing funding for a public benefits fund. The public utilities commission shall by order or rule redirect the current demand-side management surcharge to establish a non-bypassable customer charge on electricity purchases, which shall not exceed $0.0025 per kilowatt hour. The fund shall be used to support all demand-side management and renewable energy programs for residents of Hawaii authorized by the public utilities commission by order or rule pursuant to section 269-C in any fiscal year. Once established, the amount of this charge in any fiscal year shall not increase by more than the consumer price index, but in no event shall be reduced below the amount authorized in the immediately prior fiscal year. The amount authorized in this section shall supplement and not supplant funding already in place as of the end of fiscal year 2007-2008 for demand-side management and renewable energy programs implemented by utilities or any other state agency."

SECTION 38. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269-C Establishing a fund administrator for the public benefits fund. The public utilities commission shall select a fund administrator to operate and manage the programs established in section 269-A. The fund administrator shall not expend more than 10 per cent of the fund in any fiscal year for administration of the programs established by section 269-A. The fund administrator shall report to the public utilities commission on a regular basis. The fund administration shall be delegated to a third party based upon the requirements imposed upon the public utilities commission in section 269-D. Notwithstanding any other provision of law, the fund administrator shall not be a utility or a utility affiliate."

SECTION 39. Chapter 269 , Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269-D Requirements for the public benefits fund administrator. The fund administrator shall:

SECTION 40. Chapter 269 , Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269-E Transitioning from utility demand-side management programs to the public benefits fund. The public utilities commission shall:

SECTION 41. Section 269-91, Hawaii Revised Statutes, is amended to read as follows:

"§269-91 Definitions. For the purposes of this part:

"Cost-effective" means the ability to produce or purchase electric energy or firm capacity, or both, from renewable energy resources at or below avoided costs consistent to the extent possible with the methodology set by the public utilities commission in accordance with section 269-27.2.

"Electric utility company," means a public utility as defined under section 269-1, for the production, conveyance, transmission, delivery, or furnishing of power.

"Incentive" means a financial reward established by the public utilities commission for meeting or exceeding the renewable portfolio standard in a particular year. The incentive may be paid on a per kilowatt-hour basis for renewable energy purchased from a non-utility generator for sale to utility customers, or may be an added return on capital for utility-owned renewable generation systems.

"Penalty" means a financial disincentive established by the public utilities commission for failing to meet the renewable portfolio standard in a particular year. Any penalty shall be paid from utility profits and shall not be passed on to the ratepayers.

"Renewable energy" means electrical energy produced by wind, solar energy, hydropower, landfill gas, waste to energy, geothermal resources, ocean thermal energy conversion, wave energy, biomass, including municipal solid waste, biofuels, or fuels derived from organic sources, hydrogen fuels derived from renewable energy, or fuel cells where the fuel is derived from renewable sources. Where biofuels, hydrogen, or fuel cell fuels are produced by a combination of renewable and nonrenewable means, the proportion attributable to the renewable means shall be credited as renewable energy. Where fossil and renewable fuels are co-fired in the same generating unit, the unit shall be considered to produce renewable electricity in direct proportion to the percentage of the total heat value represented by the heat value of the renewable fuels. ["Renewable energy" also means electrical energy savings brought about by the use of solar and heat pump water heating, seawater air-conditioning district cooling systems, solar air-conditioning and ice storage, quantifiable energy conservation measures, use of rejected heat from co-generation and combined heat and power systems excluding fossil-fueled qualifying facilities that sell electricity to electric utility companies, and central station power projects.]

"Renewable portfolio standard" means the percentage of electrical energy sales that is represented by renewable energy."

SECTION 42. Section 269-92, Hawaii Revised Statutes, is amended to read as follows:

"§269-92 Renewable portfolio standards. Each electric utility company that sells electricity for consumption in the State shall establish a renewable portfolio standard of:

[The public utilities commission shall determine if an electric utility company is unable to meet the renewable portfolio standards in a cost-effective manner, or as a result of circumstances beyond its control which could not have been reasonably anticipated or ameliorated. If this determination is made, the electric utility company shall be relieved of responsibility for meeting the renewable portfolio standard for the period of time that it is unable to meet the standard.]

If it is determined that an electric utility company failed to meet the renewable portfolio standard, the utility shall be subject to penalties to be established by the public utilities commission."

SECTION 43. Section 269-94, Hawaii Revised Statutes, is repealed.

["[§269-94 Waivers, extensions, and incentives.] Any electric utility company not meeting the renewable portfolio standard shall report to the public utilities commission within ninety days following the goal dates established in section [269-92], and provide an explanation for not meeting the renewable portfolio standard. The public utilities commission shall have the option to either grant a waiver from the renewable portfolio standard or an extension for meeting the prescribed standard.

The public utilities commission may provide incentives to encourage electric utility companies to exceed their renewable portfolio standards or to meet their renewable portfolio standards ahead of time, or both."]

SECTION 44. Section 269-95, Hawaii Revised Statutes, is amended to read as follows:

"§269-95 Renewable portfolio standards study. The public utilities commission shall:

SECTION 45. Section 269-27.2, subsection c, Hawaii Revised Statutes, is amended to read as follows:

"§269-27.2 Utilization of electricity generated from nonfossil fuels. (c) The rate payable by the public utility to the producer for the nonfossil fuel generated electricity supplied to the public utility shall be as agreed between the public utility and the supplier and as approved by the public utilities commission; provided that in the event the public utility and the supplier fail to reach an agreement for a rate, the rate shall be as prescribed by the public utilities commission according to the powers and procedures provided in this chapter.

In the exercise of its authority to determine the just and reasonable rate for the nonfossil fuel generated electricity supplied to the public utility by the producer, the commission shall establish that the rate for purchase of electricity by a public utility shall not be more than one hundred per cent of the cost avoided by the utility when the utility purchases the electrical energy rather than producing the electrical energy.

The ratemaking structure shall also include a methodology to establish what the fifteen and twenty-year fixed price for renewable energy power or renewable fuel for power production shall be. The methodology shall:

SECTION 46. Section 269-1, Hawaii Revised Statutes, is amended by adding additional definitions as follows:

§269-1 Definitions. As used in this chapter:

"Automatic adjustment clause" means a provision of a rate, charge, or practice which provides for increases and decreases (or both) which adjustment clause has been previously approved by the commission.

"Carrier of last resort" means a telecommunications carrier designated by the commission to provide universal service in a given local exchange service area determined to be lacking in effective competition.

"Designated local exchange service area" means an area as determined by the commission to be best served by designating a carrier of last resort pursuant to section 269-43.

"Enforcement officer" means any person employed and authorized by the commission to investigate any matter on behalf of the commission. The term also means a motor vehicle safety officer employed and assigned, pursuant to section 271-38, by the department of transportation to enforce sections 271-8, 271-12, 271-13, 271-19, and 271-29 through assessment of civil penalties as provided in section 271-27(h), (i), and (j).

"Fuel adjustment clause" means a provision of a rate schedule which provides for increases or decreases or both, without prior hearing, in rates reflecting increases or decreases or both in costs incurred by an electric or gas utility for fuel and purchased energy due to changes in the unit cost of fuel and purchased energy.

"Fuel oil" shall include all petroleum-based fuels, including, but not limited to, residual fuel oil, diesel fuel oil, naphtha, and other fuels refined from petroleum.

"Public highways" has the meaning defined by section 264-1, including both state and county highways, but operation upon rails shall not be deemed transportation on public highways.

"Public utility":

If the application of this chapter is ordered by the commission in any case provided in paragraphs (2)(C), (2)(D), (2)(H), and (2)(I), the business of any public utility that presents evidence of bona fide operation on the date of the commencement of the proceedings resulting in the order shall be presumed to be necessary to public convenience and necessity, but any certificate issued under this proviso shall nevertheless be subject to such terms and conditions as the commission may prescribe, as provided in sections 269-16.9 and 269-20.

"Taxicab" means and includes:

"Telecommunications carrier" or "telecommunications common carrier" means any person that owns, operates, manages, or controls any facility used to furnish telecommunications services for profit to the public, or to classes of users as to be effectively available to the public, engaged in the provision of services, such as voice, data, image, graphics, and video services, that make use of all or part of their transmission facilities, switches, broadcast equipment, signalling, or control devices.

"Telecommunications service" or "telecommunications" means the offering of transmission between or among points specified by a user, of information of the user's choosing, including voice, data, image, graphics, and video without change in the form or content of the information, as sent and received, by means of electromagnetic transmission, or other similarly capable means of transmission, with or without benefit of any closed transmission medium, and does not include cable service as defined in section 440G-3."

SECTION 47. Section 269-16, Hawaii Revised Statutes, is amended to read as follows:

"§269-16 Regulation of utility rates; ratemaking procedures. (a) All rates, fares, charges, classifications, schedules, rules, and practices made, charged, or observed by any public utility, or by two or more public utilities jointly, shall be just and reasonable and shall be filed with the public utilities commission. The rates, fares, classifications, charges, and rules of every public utility shall be published by the public utility in such manner as the public utilities commission may require, and copies furnished to any person on request.

To the extent the contested case proceedings referred to in chapter 91 are required in any rate proceeding in order to ensure fairness and to provide due process to parties which may be affected by rates approved by the commission, such evidentiary hearings shall be conducted expeditiously and shall be conducted as a part of the ratemaking proceeding.

(b) No rate, fare, charge, classification, schedule, rule, or practice, other than one established pursuant to an automatic rate adjustment clause previously approved by the commission, shall be established, abandoned, modified, or departed from by any public utility, except after thirty days' notice as prescribed in section 269-12(b) to the commission and prior approval by the commission for any increases in rates, fares, or charges. The commission may, in its discretion and for good cause shown, allow any rate, fare, charge, classification, schedule, rule, or practice to be established, abandoned, modified, or departed from upon notice less than that provided for in section 269-12(b). A contested case hearing shall be held in connection with any increase in rates and such hearing shall be preceded by a public hearing as prescribed in section 269-12(c) at which the consumers or patrons of the public utility may present testimony to the commission concerning the increase. The commission, upon notice to the public utility, may suspend the operation of all or any part of the proposed rate, fare, charge, classification, schedule, rule, or practice or any proposed abandonment or modification thereof or departure therefrom and after a hearing by order regulate, fix, and change all such rates, fares, charges, classifications, schedules, rules, and practices, so that the same shall be just and reasonable and prohibit rebates and unreasonable discrimination between localities, or between users or consumers, under substantially similar conditions, regulate the manner in which the property of every public utility is operated with reference to the safety and accommodation of the public, prescribe its form and method of keeping accounts, books, and records, and its accounting system, regulate the return upon its public utility property, the incurring of indebtedness relating to its public utility business, and its financial transactions and do all things in addition which are necessary and in the exercise of such power and jurisdiction, all of which as so ordered, regulated, fixed, and changed shall be just and reasonable, and such as shall provide a fair return on the property of the utility actually used or useful for public utility purposes.

(c) The commission may in its discretion and after public hearing, upon showing by a public utility of probable entitlement and financial need, authorize temporary increases in rates, fares, and charges; provided that the commission shall by order require the public utility to return in the form of an adjustment to rates, fares, or charges to be billed in the future any amounts, with interest at a rate equal to the rate of return on such public utility's rate base found to be reasonable by the commission, received by reason of such continued operation which are in excess of the rates, fares, or charges finally determined to be just and reasonable by the commission. Interest on any such excess shall commence as of the date that any rate, fare, or charge goes into effect which results in any such excess and shall continue to accrue on the balance of any such excess until returned.

(d) By December 31, 2007, to share the risks of reliance on oil fired generation, the commission shall determine whether the fuel adjustment clause shall be eliminated, or the commission shall establish ratemaking provisions that amend the fuel adjustment clause to share oil cost increases and decreases between utility shareholders and utility customers.

(e) If the commission determines that the fuel adjustment clause shall not be eliminated, it shall be amended. Ratemaking shall set the percentage of changes in fuel prices that may be automatically passed through the fuel adjustment clause.

(f) Should the commission conduct ratemaking to amend the fuel adjustment clause, the long-term price for fossil fuels that is used to define base rates shall be consistent with the long-term price of fossil fuels that is used to determine the long-term price for renewables as defined in section 269-27.2.

[(d)] (g) The commission shall make every effort to complete its deliberations and issue its decision as expeditiously as possible and before nine months from the date the public utility filed its completed application; provided that in carrying out this mandate the commission shall require all parties to a proceeding to comply strictly with procedural time schedules which it establishes. If a decision is rendered after the nine-month period, the commission shall in writing report the reasons therefor to the legislature within thirty days after rendering the decision.

Notwithstanding subsection (c), if the commission has not issued its final decision on a public utility's rate application within the nine-month period stated in this section, the commission shall within one month after the expiration of the nine-month period render an interim decision allowing the increase in rates, fares, and charges, if any, to which the commission, based on the evidentiary record before it, believes the public utility is probably entitled. The commission may postpone its interim rate decision thirty days if the commission considers the evidentiary hearings incomplete. In the event interim rates are made effective, the commission shall by order require the public utility to return in the form of an adjustment to rates, fares, or charges to be billed in the future any amounts, with interest at a rate equal to the rate of return on such public utility's rate base found to be reasonable by the commission, received under such interim rates which are in excess of the rates, fares, or charges finally determined to be just and reasonable by the commission. Interest on any such excess shall commence as of the date that any rate, fare, or charge goes into effect which results in any such excess and shall continue to accrue on the balance of any such excess until returned.

The nine-month period in this subsection shall begin only after a completed application has been filed with the commission and a copy served on the consumer advocate. The commission shall establish standards concerning the data required to be set forth in the application in order for it to be deemed a completed application. The consumer advocate may within twenty-one days after receipt object to the sufficiency of any application and the commission shall hear and determine any such objection within twenty-one days after the same is filed. If the commission finds that the objections are without merit, the application shall be deemed to have been completed upon original filing. If the commission finds the application to be incomplete, it shall require the applicant to submit an amended application consistent with its findings and the nine-month period shall not commence until the amended application is filed.

[(e)] (h) In any case of two or more organizations, trades, or businesses (whether or not incorporated, whether or not organized in the State of Hawaii, and whether or not affiliated) owned or controlled directly or indirectly by the same interests, the commission may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among the organizations, trades, or businesses, if it determines that the distribution, apportionment, or allocation is necessary in order to adequately reflect the income of any such organizations, trades, or businesses to carry out the regulatory duties imposed by this section.

[(f)] (i) Notwithstanding any law to the contrary, for public utilities having annual gross revenues of less than $2,000,000, the commission may make and amend its rules and procedures which will provide the commission with sufficient facts necessary to determine the reasonableness of the proposed rates without unduly burdening the utility company and its customers. In the determination of the reasonableness of the proposed rates, the commission shall:

SECTION 48. There is appropriated out of the general revenues of the State of Hawaii the sum of $200,000, or so much thereof as may be necessary for fiscal year 2006-2007, to complete a comprehensive inventory of state lands available for renewable energy, and establish renewable energy resource development sub-zones, consider streamlining the permitting for said sub-zones, to encourage and facilitate renewable energy development and attract private investment. The sum appropriated shall be expended by the department of land and natural resources.

SECTION 49. There is appropriated out of the general revenues of the State of Hawaii the sum of $150,000, or so much thereof as may be necessary, for fiscal year 2006-2007 to provide assistance to the agricultural community interested in developing energy projects, especially by the production of renewable energy from energy crops and agricultural waste streams, and in seeking funding available from the U.S. Departments of Agriculture and Energy, and other external sources. The sum appropriated shall be expended by the department of agriculture for the purposes of this part.

PART V. Hawaii Renewable Hydrogen Program

SECTION 50. The Hawaii Revised Statutes is amended by adding a new section to be appropriately designated and to read as follows:

"§___-1. Hawaii renewable hydrogen program. (a) There is established within the department of business, economic development, and tourism, a Hawaii renewable hydrogen program, to coordinate the State's transition to a renewable hydrogen economy. Towards this goal, the program shall plan, implement, and conduct activities including but not limited to:

SECTION 51. The Hawaii Revised Statutes is amended by adding a new section to be appropriately designated and to read as follows:

"§211-F. Hydrogen investment capital special fund. (a) There shall be established the hydrogen investment capital special fund into which shall be deposited:

(b) Moneys in the fund shall be used to:

(c) Investment of the hydrogen investment capital special fund in hydrogen projects shall be made with the advice and assistance of an advisory board of experts and knowledgeable individuals, who shall be appointed by the director of the department of business, economic development, and tourism, to help the State develop projects and partnerships with industry and the federal government.

SECTION 52. (a) There is appropriated out of the general revenues of the State of Hawaii the sum of $750,000, or so much thereof as may be necessary, for fiscal year 2006–2007 to carry out the purposes of this part, of which $250,000 shall be allocated to three permanent full-time equivalent (3.0 FTE) professional positions including a hydrogen program manager, hydrogen program specialist, and hydrogen project specialist. The sum appropriated shall be expended by the department of business, economic development, and tourism.

(b) There is appropriated out of the general revenues of the State of Hawaii the sum of $10,000,000 for fiscal year 2006-2007 to be paid into the hydrogen investment capital special fund to carry out the purposes of section 51. The sum appropriated shall be expended by department of business, economic development, and tourism.

SECTION 53. (a) There is appropriated out of the hydrogen investment capital special fund the sum of $10,000,000, or so much thereof as may be necessary, for fiscal year 2006–2007 to be used for the purposes of the hydrogen investment capital special fund.

PART VI.

SECTION 54. The director of business, economic development, and tourism, in the director's role as both Hawaii's chief business advocate and the state energy resources coordinator, shall be responsible to facilitate and coordinate the State's efforts to implement and effectuate the purposes of this Act. Accordingly, the director of business, economic development, and tourism, supported by relevant department staff, shall develop and establish formal and informal procedures and mechanisms for efficient and effective coordination and collaboration with, and among the departments of taxation, transportation, land and natural resources, agriculture, budget and finance, and accounting and general services, and other relevant federal, state, and county government agencies and stakeholders for this purpose. State agencies named herein and those involved at the request of the director of business, economic development, and tourism shall cooperate and provide support to the fullest possible extent to effectuate the purposes of this Act.

SECTION 55. In codifying the new sections added by this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 56. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 57. This Act shall take effect upon its approval.