HB589.DOC

SECTION 1. The legislature has previously found that Hawaii's dependence on petroleum for over 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 and price volatility can negatively impact the environment and economic health of the people of Hawaii. 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 further found 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 and environmental future and achieve the goal of energy- and self-sufficiency for the State, efforts must continue on all fronts, integrating new and evolving technologies, seizing upon opportunities to become more economically diversified, and providing incentives and assistance to address barriers.

In order to develop and finance renewable energy facilities, a site for the facilities and access to the site must often be leased, granted as an easement, or mortgaged to provide financing for the project. Renewable energy projects may require site acreage or configurations that do not coincide with existing, already subdivided lot boundaries. For instance, land required for a project may be only a portion of a large legal lot, and it may be impractical or undesirable to lease or convey the entire legal lot for the renewable energy project or to encumber the entire legal lot with a mortgage that provides financing for the project. Currently, however, subdivision laws generally prohibit the transfer of an interest in land that is not an entire subdivided lot or easement that has been approved by the applicable county. With respect to land in the land court system, the additional step of obtaining land court approval is required.

Reported Hawaii supreme court cases, including Whitlow v. Jennings, 40 Haw. 523, have recognized that transactions involving lots that have not been approved by the county pursuant to subdivision laws may be unenforceable. Unfortunately, the process of obtaining county, state, and land court approval of subdivision and easement maps is relatively time consuming and often requires more than one year to complete.

As recognized by the court in the Whitlow v. Jennings case, the purpose of laws requiring county subdivision approval is to protect the consumer purchasing interests in land from substandard subdivisions. However, these laws and court rulings have placed in question the validity of leases of parcels that are less than an entire legal lot, and easements without subdivision approval. This prevents or discourages utilization of or financing on leases and easements for renewable energy projects. The consumer protection purposes of subdivision laws are not applicable or compelling with respect to sites for renewable energy facilities and sophisticated parties developing renewable energy projects. Those subdivision purposes are also outweighed by the State’s compelling interests in facilitating, encouraging, and expediting renewable energy projects for the health, safety, and welfare of the residents of Hawaii.

Accordingly, the purpose of this Act is to facilitate the financing and development of renewable energy facilities by allowing leases and easements pertaining to renewable energy facilities, together with mortgages and other conveyances as security for finance, to be created, enforceable, and recordable, without requiring the landowner to obtain formal subdivision approval from the applicable county or other approving agency.

SECTION 2. Section 201N-1, Hawaii Revised Statutes, is amended as follows:

1. By adding a new definition to be appropriately inserted and to read:

""Subdivision requirements" means any state law, county law, state permit, or county permit setting forth standards or requirements for improvements, and approvals applicable to the subdivision or consolidation of land, changes in legal boundaries, or the creation or consolidation of lots, easements, or other interest in land."

2. By amending the definition of "permit" to read as follows:

""Permit":

(1) Means any approval, no matter the nomenclature, necessary for the siting, development, construction, or operation of a renewable energy facility; except that the term shall not include:

(A) Acceptance by an accepting authority of an environmental impact statement on a facility;

(B) Issuance by a county agency of a building or grading permit; [or]

(C) Approval by the public utilities commission of a power purchase agreement between a renewable energy facility and a public utility; [~~and~~] or

(D) Approval of any subdivision requirements; and

(2) Includes:

(A) A state land use reclassification;

(B) A county development, community, or community development plan amendment;

(D) A state conservation district use permit;

(E) A state special use permit for an agricultural or rural district;

(F) A special management area permit;

(G) A shoreline setback variance; and

(H) A grant of an easement on state or county real property."

SECTION 3. Chapter 201N, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201N- Exemption from subdivision requirements. Anything to the contrary notwithstanding, the siting, development, construction, or operation of any renewable energy facility shall be exempt from any subdivision requirements."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	589
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII