SB1718

SECTION 1. The legislature finds that support for the development of renewable energy systems and efficient energy systems in the State, which is geographically isolated from sources of oil, continues to be in the public interest.

The legislature further finds that BlueEarth Maui Biodiesel, LLC, proposes to build biodiesel transesterification plants on the island of Maui. BlueEarth Maui Biodiesel, LLC, is engaged in the planning, design, and construction of a biodiesel refinery on Maui to supply a renewable source of electrical generation fuel replacing a portion of the petroleum based feedstocks presently being used.

SECTION 2. (a) The legislature finds and declares that the issuance of special purpose revenue bonds under this Act is in the public interest and for the public health, safety, and general welfare. The legislature further finds that the issuance of special purpose revenue bonds and refunding of special purpose revenue bonds under this Act to assist BlueEarth Maui Biodiesel, LLC, in the planning, design, and construction of a biodiesel refinery on Maui will make the generation of electricity with renewable biofuels economically feasible and provide numerous benefits. Electrical generation with biodiesel fuel will:

(1) Reduce dependence on imported fossil fuels for electrical generation increasing Hawaii's energy security;

(2) Help to meet Hawaii's renewable energy goals by utilizing existing generation assets with on-island produced renewable biodiesel;

(3) Reduce green house gas emissions via a renewable closed loop carbon system;

(4) Provide significant reductions of hydrocarbon, sulfur, toxic compounds, and particulate matter emissions compared to burning petroleum diesel; and

(5) Eliminate with the completion of phase one of the project the need to purchase and import up to forty million gallons of diesel per year. This amount will increase as phases two and three are completed.

(b) Benefits from the BlueEarth Maui Biodiesel, LLC, project will include:

(1) Encouraging local agricultural research, development, and cultivation of renewable energy feedstock crops on Hawaii to be used by the project that will stimulate locally grown biodiesel feedstock crops, such as palm and jatropha, bringing fallow agricultural lands back into production;

(2) Providing biodiesel at competitive prices as compared to importation alternatives;

(3) Stimulating locally produced ethanol for use as a renewable component in the transesterification of vegetable oils into biodiesel;

(4) Generating substantial moneys in construction project spending over a period of multiple years as each of the three phases (approximately forty million gallon capacity added with each phase) is built; and

(5) Assisting the State, county of Maui, and the federal government to meet their goals and mandates for energy efficiency and renewable energy use.

SECTION 3. Pursuant to part V, chapter 39A, Hawaii Revised Statutes, the department of budget and finance, with the approval of the governor, is authorized to issue special purpose revenue bonds in a total amount not to exceed $59,000,000, in one or more series, for the purpose of assisting BlueEarth Maui Biofuels, LLC, or a partnership in which BlueEarth Maui Biofuels, LLC, is a general partner, or a newly formed LLC in which BlueEarth Maui Biofuels, LLC, is a managing member or the successor in interest or assignee of BlueEarth Maui Biofuels, LLC, with the construction of a biodiesel refinery on Maui with primary production volumes designated as fuel for electrical generation.

SECTION 4. The special purpose revenue bonds and the refunding special purpose revenue bonds issued under this Act shall be issued pursuant to part V, chapter 39A, Hawaii Revised Statutes, relating to the power to issue special purpose revenue bonds to assist industrial enterprises.

SECTION 5. The department of budget and finance is authorized, from time to time, including times subsequent to June 30, 2011, to issue special purpose revenue bonds in whatever principal amounts the department shall determine to be necessary to refund the special purpose revenue bonds authorized in section 3 and to refund special purpose revenue bonds authorized in this section, regardless of whether the outstanding special purpose revenue bonds or refunding special purpose revenue bonds have matured or are the subject of redemption or whether the refunding special purpose revenue bonds shall be bonds for the multi-project programs described in section 2.

In making this determination, the department shall comply with federal law relating to the exemption from federal income taxation of the interest on bonds of the nature authorized by this section.

SECTION 6. The authorization to issue special purpose revenue bonds under this Act shall lapse on June 30, 2012.

SECTION 7. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1718
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII