SB151 SD1 PROPOSED

SECTION 1. (a) The legislature finds that House Concurrent Resolution No. 193, House Draft 1 ("H.C.R. 193" or "the resolution"), adopted by the legislature in its 2006 regular session, declared that Hawaii's biological resources are assets of the public land trust that are culturally, spiritually, medicinally, and otherwise significant to Hawaiians and the general public. The resolution also declared that Hawaii runs the risk of losing its biological resources as natural habitat is developed, natural environment is degraded, and non-sustainable consumptive practices are perpetuated. Additionally, the resolution stated that Hawaii's unique biological resources are assets of a public trust established in Article XI, section 1 of the state constitution, which states:

"For the benefit of present and future generations, the State and its political subdivisions shall conserve and protect Hawaii's natural beauty and all natural resources, including land, water, air, minerals and energy sources, and shall promote the development and utilization of these resources in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State.

All public natural resources are held in trust by the State for the benefit of the people."

Furthermore, H.C.R. 193 stated that Hawaii's biological resources are of great potential economic benefit in the areas of medicine, scientific research, biotechnology, and commercial development. The resolution identified a need to develop public policy to balance development and commercialization with scientific research and conservation of Hawaii's fragile bio-resources, and fair and equitable benefit-sharing with the general public and Hawaiians, who are the beneficiaries of the public land trust.

(b) The legislature also finds that regulations governing prospecting would assist researchers in understanding the rules and the process for bioprospecting in Hawaii, thereby making it easier for researchers to understand all the aspects of pursuing such a venture. Furthermore, the absence of such regulations may be depriving the State of what could potentially be large monetary returns or other benefits from the use of its resources.

(c) The resolution asked the governor to establish a temporary advisory commission on bioprospecting (the commission), placed it within the office of Hawaiian affairs (OHA) for administrative purposes, and tasked it with making recommendations for policy development in the areas of:

(1) Prior informed consent;

(2) Equitable benefit sharing;

(3) Bio-safety protocols;

(4) A permitting and licensing process; and

(5) Cultural rights for the use of Hawaii's biodiversity.

(d) The governor completed her appointments to the commission in January 2007 and the commission held its first meeting on March 16, 2007. On February 5, 2008, the commission issued a report containing recommendations for legislation concerning bioprospecting. This Act is intended to implement these recommendations.

The purpose of the Act is to:

(1) Establish ownership of biological resources;

(2) Define bioprospecting;

(3) Establish a permanently funded commission on prospecting; and

(4) Require the department of land and natural resources to adopt administrative rules pursuant to chapter 91, Hawaii Revised Statutes, establishing requirements for obtaining a permit to conduct bioprospecting activities.

SECTION 2. Chapter 171, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . BIODIVERSITY AND BIOPROSPECTING

§ ‑1 Definitions. As used in this part, unless the context otherwise requires:

"Access to genetic resources" or "access" means to obtain samples of biological or genetic materials within the State's jurisdiction for purposes of research on conservation, management, commercial application, or industrial use.

"Benefit sharing" means equitable sharing of benefits, on agreed terms, arising from the use of biological or genetic materials with the providers of the material.

"Biodiversity" means the total variety of life on earth, including genes, species, and ecosystems and the complex interactions among them.

"Bioprospecting" means any activity undertaken to harvest or exploit, for any purpose, samples or derivatives, in situ or ex situ, of genetic or biochemical resources from plants, animals, or microorganisms; provided that "bioprospecting" does not include the taking of:

(1) Biological resources from an area of land or water by Hawaiians and other peoples who have traditionally used the area of land or water in accordance with traditional customary practices;

(2) Any biological material of living human origin;

(3) Biological samples that are part of usual practices in crop cultivation, animal husbandry, and aquaculture; and

(4) Biological resources for any commercial or related noncommercial activity such as fishing for commerce or recreation, collecting broodstock for, and harvesting of trees, plants, and flowers.

"Commercial use" means any use of biodiversity or genetic resources, their products, or their derivatives for monetary gain that includes selling in the market.

"Commission" means the commission on bioprospecting established by this part.

"Department" means the department of land and natural resources.

"Hawaiians" means persons defined as "Hawaiian" in section 10-2.

"Material transfer agreements" means agreements executed between the individual who has recovered the biological resource and another individual who wants to have access to the material for the access seeking individual's own purposes, which may be solely for research or commercial purposes.

"Prior informed consent" means a set of administrative procedures for deciding on whether to grant access to genetic resources on defined terms.

"State lands" includes all public and other lands, including but not limited to submerged lands, owned or in possession, use, and control of the then Territory of Hawaii or the State of Hawaii, or any of its agencies.

§ ‑2 Biodiversity ownership and rights. (a) Except as provided in this part, the ownership of, and right to, any biodiversity in, on, or under any lands located in the State of Hawaii, regardless of whether the lands are government lands or private lands, shall:

(1) Rest with the State; and

(2) Not be transferred by any lease, sale, right of entry, or other agreement, the ownership of and right to biodiversity being held by, and reserved to, the State.

(b) Disposition of biodiversity rights shall be in accordance with the laws relating to the disposition of biodiversity rights enacted or hereinafter enacted by the legislature.

(c) Subject to subsection (a), all land patents, leases, grants, or other conveyances of any lands located in the State of Hawaii, regardless of whether the lands are government lands or private lands, shall be subject to, and contain a reservation to the State of, all the biodiversity.

§ ‑3 Authority and responsibility of State. The State shall have the authority and responsibility to regulate bioprospecting and the subsequent commercial use of the State's biodiversity and to protect the knowledge, innovations, and traditional and customary practices of Hawaiians and other peoples.

§ ‑4 Establishment of the commission on bioprospecting. There shall be a commission on bioprospecting, hereinafter called the commission. The commission shall consist of eleven members. The membership shall consist of the following:

(1) The chairperson of the board of trustees of the office of Hawaiian affairs or a designee;

(2) The president of the University of Hawaii or a designee;

(3) The director of business, economic development, and tourism or a designee;

(4) The chairperson of the board of land and natural resources or a designee;

(5) Five members of the native Hawaiian community, residing in the State of Hawaii, who have a demonstrated background in:

(A) Traditional and customary use of biological and genetic resources;

(B) Indigenous and traditional technologies;

(D) Legal procedures nationally and internationally, in connection with the protection or commercialization of biological and genetic resources; and

(E) Native Hawaiian cultural rights as contained in the Hawaii State Constitution and Hawaii Revised Statutes;

who are appointed by the governor from lists of nominees submitted by the president of the senate, speaker of the house of representatives, and Hawaiian organizations; and

(6) Two representatives from the biotechnology industry, whose principal place of business is in the State of Hawaii, who are appointed by the governor from lists of nominees submitted by the president of the senate and the speaker of the house of representatives, and members of the biotechnology industry based in Hawaii.

The commission shall elect its chairperson from among its own membership. The members shall receive no compensation for their services on the commission, but shall be reimbursed for actual expenses incurred in the performance of their duties.

The commission shall be a part of the department of land and natural resources for administration purposes, as provided for in section 26‑35.

The commission may engage employees necessary to perform its duties, including administrative personnel and an executive officer. The executive officer shall be appointed by the commission and the executive officer's position shall be exempt from chapter 76. Departments of the state government shall make available to the commission such data, facilities, and personnel as are necessary for it to perform its duties. The commission may receive and utilize donations and any funds from the federal or other governmental agencies. It shall adopt rules guiding its conduct, maintain a record of its activities and accomplishments, and make recommendations to the governor and to the legislature through the governor.

§ ‑5 Duties of commission. The commission's duties shall include but not be limited to the following:

(1) To enter into and enforce access and benefit sharing agreements related to proposed bioprospecting ventures; and

(2) As the initial task after its formation, to establish procedures governing an access and benefit sharing agreement process to include identification of stakeholders, prior informed consent, equitable benefit sharing, and biosafety encompassing the following considerations:

(A) Priority for participation in the process shall be given to the following stakeholders to be engaged in the discussion of every aspect of every component of the agreement: landowners, Hawaiians, community from where the resources are sampled, researchers, university, and the biotechnology industry; provided that the discussion shall not necessarily be limited to these priority stakeholders;

(B) Prior informed consent is given by the requisite stakeholders, as determined by the regulatory process, prior to the commencement of a prospective bioprospecting venture;

(C) Benefit sharing should provide for the distribution of monetary and nonmonetary benefits to the aforementioned stakeholders that may result from the exploration activities;

(D) Biosafety protocols as applicable should be addressed in all access and benefit sharing agreements; and

(E) The knowledge, innovations, traditional and customary practices of Hawaiians and other peoples will be protected.

§ ‑6 Administrative rules. The department, in consultation with the commission, shall adopt administrative rules pursuant to chapter 91 establishing requirements for obtaining a permit to conduct bioprospecting activities. The regulations shall include, but not be limited to, provisions:

(1) Establishing a two-track system for determining whether or not to approve the permit and allow a venture to proceed. Under the two-track system, all permit applications would be reviewed at the outset to determine whether the proposed activity (i) involves any intent to use and sample to produce a commercial product or process, or (ii) is for the purpose of conducting academic or scientific research that does not infringe on the knowledge, innovations, traditional or customary practices of Hawaiians. Applications in (i) above would be referred to the commission for review and recommendation prior to the department deciding whether to issue a permit; applications in (ii) would go directly on a fast track to the department for a decision on whether to issue a permit;

(2) Requiring the permittee to submit all proposed material transfer agreements to the commission to ensure that the legal requirements are being observed;

(3) Requiring the owners of the ex situ collections to refer any requests for transfer of the specimens in their possession or control to the commission;

(4) Requiring all bioprospecting permits to require the permittee to periodically report the use and location of any samples collected under the authority of the permit;

(5) Requiring all permittees to obtain the commission's permission before transferring any samples to another party, for any reason;

(6) Establishing an efficient tracking system relating to the samples;

(7) Requiring all permittees to inform the department and the commission when a discovery is made so that the commission may negotiate terms of any licensing agreements that might follow;

(8) Requiring the permit applicant to meet with all parties in the community who are interested in the project and attempt to arrive at an agreement that will allow the project to proceed;

(9) Protecting proprietary information that an applicant might be required to reveal during the access and benefit sharing agreement proceedings;

(10) Requiring the commission to establish advisory groups to engage in the access and benefit sharing process;

(11) Requiring that when and if the commission has determined that all stakeholders have signed on to an access and benefit sharing agreement, the permit shall be referred back to the department for appropriate processing within its internal organization; and

(12) Requiring that in the event that a permit is granted for an exploration that, at the outset, was not classified as commercial bioprospecting, for example if the application is intended to be for an academic or pure research project, but a subsequent discovery leads to development of a commercially valuable product, the permittee shall immediately resubmit an application for a bioprospecting permit that would be referred to the commission for its further processing."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 for the establishment of the commission on bioprospecting as set forth in section 2 of this Act.

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

SECTION 4. This Act shall take effect upon its approval; provided that section 3 shall take effect on July 1, 2008.

THE SENATE	S.B. NO.	151
TWENTY-FOURTH LEGISLATURE, 2007		S.D. 1
STATE OF HAWAII