SB1943

SECTION 1. The legislature finds that Hawaii's dependence on petroleum for about ninety per cent of its energy needs is more than any other state in the nation. This makes the State extremely vulnerable to any oil embargo, supply disruption, international market dysfunction, and many other factors beyond the control of the State. Furthermore, the continued consumption of conventional petroleum fuel negatively impacts the environment. At the same time, Hawaii has among the most abundant renewable energy resources in the world, in the form of solar, geothermal, wind, biomass, and ocean energy assets.

The legislature also finds that increased energy efficiency and use of renewable energy resources would increase Hawaii's energy self-sufficiency, achieving broad societal benefits, including increased energy security, resistance to increases in oil prices, environmental sustainability, economic development, and job creation.

To shape Hawaii's energy future and achieve the goal of energy self-sufficiency for the State of Hawaii, our efforts must continue on all fronts, integrating new and evolving technologies, seizing upon economic opportunities to become more energy efficient and economically diversified, and providing incentives and assistance to address barriers.

The purpose of this Act is to encourage further production and use of biofuels in Hawaii by:

(1) Establishing biofuel processing facilities as a permitted use in designated agricultural districts under chapter 205, Hawaii Revised Statutes;

(2) Establishing an energy feedstock program within the department of agriculture to encourage the production of energy feedstock in Hawaii and establish a baseline percentage of energy feedstock to be grown in the State to meet the its energy requirements

(3) Establishing a baseline price of $2 per gallon for the purchase of ethanol from an ethanol production facility;

(4) Requiring rental car companies in Hawaii with fleets of fifty cars or more to purchase flexible or alternative fuel vehicles beginning January 1, 2008; and

(5) Requiring the department of transportation to include biofuel storage and transmission infrastructure in all harbor improvement master plans.

PART I. BIOFUEL PROCESSING FACILITIES

SECTION 2. Section 205-2, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) Agricultural districts shall include:

(1) Activities or uses as characterized by the cultivation of crops, orchards, forage, and forestry;

(2) Farming activities or uses related to animal husbandry, and game and fish propagation;

(3) Aquaculture, which means the production of aquatic plant and animal life within ponds and other bodies of water;

(4) Wind generated energy production for public, private, and commercial use;

(5) Biofuel production as described in section 205‑4.5(a)(15) for public, private, and commercial use;

[~~(5)~~] (6) Bona fide agricultural services and uses that support the agricultural activities of the fee or leasehold owner of the property and accessory to any of the above activities, whether or not conducted on the same premises as the agricultural activities to which they are accessory, including but not limited to farm dwellings as defined in section 205-4.5(a)(4), employee housing, farm buildings, mills, storage facilities, processing facilities, vehicle and equipment storage areas, roadside stands for the sale of products grown on the premises, and plantation community subdivisions as defined in section 205‑4.5(a)(12);

[~~(6)~~] (7) Wind machines and wind farms;

[~~(7)~~] (8) Small-scale meteorological, air quality, noise, and other scientific and environmental data collection and monitoring facilities occupying less than one‑half acre of land; provided that these facilities shall not be used as or equipped for use as living quarters or dwellings;

[~~(8)~~] (9) Agricultural parks;

[~~(9)~~] (10) Agricultural tourism conducted on a working farm, or a farming operation as defined in section 165-2, for the enjoyment, education, or involvement of visitors; provided that the agricultural tourism activity is accessory and secondary to the principal agricultural use and does not interfere with surrounding farm operations; and provided further that this paragraph shall apply only to a county that has adopted ordinances regulating agricultural tourism under section 205-5; and

[~~(10)~~] (11) Open area recreational facilities.

Agricultural districts shall not include golf courses and golf driving ranges, except as provided in section 205-4.5(d). Agricultural districts include areas that are not used for, or that are not suited to, agricultural and ancillary activities by reason of topography, soils, and other related characteristics."

SECTION 3. Section 205-4.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Within the agricultural district, all lands with soil classified by the land study bureau's detailed land classification as overall (master) productivity rating class A or B shall be restricted to the following permitted uses:

(1) Cultivation of crops, including but not limited to flowers, vegetables, foliage, fruits, forage, and timber;

(2) Game and fish propagation;

(3) Raising of livestock, including but not limited to poultry, bees, fish, or other animal or aquatic life that are propagated for economic or personal use;

(4) Farm dwellings, employee housing, farm buildings, or activities or uses related to farming and animal husbandry. "Farm dwelling", as used in this paragraph, means a single-family dwelling located on and used in connection with a farm, including clusters of single-family farm dwellings permitted within agricultural parks developed by the State, or where agricultural activity provides income to the family occupying the dwelling;

(5) Public institutions and buildings that are necessary for agricultural practices;

(6) Public and private open area types of recreational uses, including day camps, picnic grounds, parks, and riding stables, but not including dragstrips, airports, drive-in theaters, golf courses, golf driving ranges, country clubs, and overnight camps;

(7) Public, private, and quasi-public utility lines and roadways, transformer stations, communications equipment buildings, solid waste transfer stations, major water storage tanks, and appurtenant small buildings such as booster pumping stations, but not including offices or yards for equipment, material, vehicle storage, repair or maintenance, treatment plants, corporation yards, or other similar structures;

(8) Retention, restoration, rehabilitation, or improvement of buildings or sites of historic or scenic interest;

(9) Roadside stands for the sale of agricultural products grown on the premises;

(10) Buildings and uses, including but not limited to mills, storage, and processing facilities, maintenance facilities, and vehicle and equipment storage areas that are normally considered directly accessory to the above mentioned uses and are permitted under section 205-2(d);

(11) Agricultural parks;

(12) Plantation community subdivisions, which as used in this paragraph means a subdivision or cluster of employee housing, community buildings, and acreage established on land currently or formerly owned, leased, or operated by a sugar or pineapple plantation and in residential use by employees or former employees of the plantation; provided that the employees or former employees shall have a property interest in the land;

[[](13)[]] Agricultural tourism conducted on a working farm, or a farming operation as defined in section 165-2, for the enjoyment, education, or involvement of visitors; provided that the agricultural tourism activity is accessory and secondary to the principal agricultural use and does not interfere with surrounding farm operations; and provided further that this paragraph shall apply only to a county that has adopted ordinances regulating agricultural tourism under section 205-5; [or]

[[](14)[]] Wind energy facilities, including the appurtenances associated with the production and transmission of wind generated energy; provided that [~~such~~] the wind energy facilities and appurtenances are compatible with agriculture uses and cause minimal adverse impact on agricultural land[.]; or

(15) Biofuel processing facilities, including the appurtenances associated with the production, collection, or cultivation of biomass crops, agricultural residues, and oil crops; provided that "biofuel processing facility" means a facility that produces liquid or gaseous fuels from organic sources such as biomass crops, agricultural residues, and oil crops, including palm, canola, soybean, and waste cooking oils; grease; food wastes; and animal residues and wastes that can be used to generate energy."

PART II. ENERGY FEEDSTOCK PRODUCTION

SECTION 4. The legislature finds that there is considerable interest in producing biofuels in Hawaii to meet alternative energy mandates. Current law requires a ten per cent ethanol content for gasoline. The demand for biofuel production in Hawaii is steadily increasing, which has been the catalyst for the creation of private entities to produce biofuels in this State. However, there is a lack of feedstock in Hawaii to produce biofuels, which means that private entities must import feedstock. Because of the State's remoteness, it is imperative for the State to be energy self-sufficient. Feedstock is necessary to produce biofuels in order to attain energy self-sufficiency. There are many crops that can grow in tropical environments that may be ideal feedstock for bioenergy production.

The purpose of this part is to develop an energy feedstock program within the department of agriculture to encourage the production of energy feedstock in Hawaii and establish a baseline percentage of energy feedstock to be grown in the State to meet its energy requirements.

SECTION 5. Chapter 141, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§141- Energy feedstock program. (a) There is established within the department of agriculture an energy feedstock program that shall:

(1) Maintain cognizance of actions taken by industry and by federal, state, county, and private agencies in activities relating to the production of energy feedstock, and promote and support worthwhile energy feedstock production activities in the State;

(2) Serve as an information clearinghouse for energy feedstock production activities;

(3) Coordinate development projects to investigate and solve biological and technical problems involved in raising selected species with commercial energy generating potential;

(4) Actively seek federal funding for energy feedstock production activities;

(5) Undertake activities required to develop and expand the energy feedstock production industry; and

(6) Perform other functions and activities as may be assigned by law.

(b) The chairperson of the board of agriculture shall consult and coordinate with the energy resources coordinator under chapter 196 to establish objectives for the production of energy feedstock. The chairperson and the coordinator shall establish a baseline percentage of energy feedstock to be grown in the State to provide for its energy needs.

(c) The chairperson of the board of agriculture shall also consult and coordinate with research programs and activities at the University of Hawaii that will assist in the further growth and promotion of the energy feedstock production industry in Hawaii.

(d) The chairperson of the board of agriculture may employ temporary staff exempt from chapter 76. The board may adopt rules pursuant to chapter 91 to effectuate the purposes of this section."

PART III. BASELINE PRICE FOR ETHANOL

SECTION 6. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269- Establishment of baseline price for ethanol. (a) The baseline price for the purchase of ethanol from an ethanol production facility shall be established by the commission at not more than $2 per gallon; provided that the distributor of ethanol shall resell a portion of the ethanol at not more than a ten per cent mark-up, or $2.20 per gallon, whichever is less.

(b) The prices in subsection (a) shall be subject to cost of living adjustments as determined by the commission. The commission may adjust the baseline price to reflect changes in the economy and cost of living.

PART IV. ALTERNATIVE FUEL RENTAL CAR FLEET

SECTION 7. The legislature finds that Brazil was the first country to become energy independent, in large part by taking actions necessary for ethanol market development to occur. Brazil thus provides Hawaii with examples of government actions necessary to create an interim level of demand sufficient to jump-start the State's ethanol industry, which would in turn assist the ethanol industry in providing an indispensable transitional fuel pending the development of a hydrogen-fuel economy.

The legislature further finds that energy independence is a national security issue and that Hawaii cannot become energy independent without the development of an in-state market for ethanol. To this end, the conversion of rental car fleets to E85 flexible or alternative fuel vehicles could stimulate demand for ethanol, speed the distribution of flexible fuel vehicles among the general population in Hawaii, and reduce fuel costs for consumers.

The purpose of this part is to create a demand for ethanol by increasing the number of flexible or alternative fuel vehicles in Hawaii.

SECTION 8. Chapter 437D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§437D- Flexible or alternative fuel vehicles. (a) Beginning January 1, 2008, and thereafter, any lessor with fifty or more rental motor vehicles shall purchase only flexible or alternative fuel vehicles when purchasing replacement or additional vehicles.

(b) For the purposes of this section:

"Flexible or alternative fuel vehicle" means any vehicle designed to run on E85 ethanol fuel, which is a mixture of approximately eighty-five per cent ethyl alcohol and gasoline."

PART V. BIOFUEL STORAGE FOR HARBORS

SECTION 9. Chapter 266, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§266- Biofuel storage and transmission infrastructure. The department of transportation shall include biofuel storage and transmission infrastructure in all harbor improvement master plans. For purposes of this section, "biofuel" means fuel from non-petroleum plant or animal based sources that can be used for the generation of power or heat."

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1943
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII