SB50 HD2.DOC

SECTION 1. Section 171-95, Hawaii Revised Statutes, is amended to read as follows:

"§171-95 Disposition to governments, governmental agencies, public utilities, and renewable energy producers. (a) Notwithstanding any limitations to the contrary, except as provided in subsection (d) with regard to leases for renewable energy producers, the board [~~of land and natural resources~~] may[,] without public auction:

(1) Sell public lands at [~~such~~] a price and on [~~such~~] other terms and conditions as the board may deem proper to governments, including the United States, city and county, counties, other governmental agencies authorized to hold lands in fee simple and public utilities;

(2) Lease to the governments, agencies, public utilities, and renewable energy producers public lands for terms up to, but not in excess of, sixty-five years at [~~such~~] rental and on [~~such~~] other terms and conditions as the board may determine;

(3) Grant licenses and easements to the governments, agencies, public utilities, and renewable energy producers on [~~such~~] terms and conditions as the board may determine for road, pipeline, utility, communication cable, and other rights-of-way;

(4) Exchange public lands with the governments and agencies;

(5) Execute quitclaim deeds to the governments and agencies, with or without consideration, releasing any claim to the property involved made upon disputed legal or equitable grounds, whenever the board in its discretion deems it beneficial to the State; and

(6) Waive or modify building and other requirements and conditions contained in deeds, patents, sales agreements, or leases held by the governments and agencies whenever [~~such~~] the waiver or modification is beneficial to the State.

(b) In any disposition to public utilities under this section:

(1) The sale price or lease rental shall be no less than the value determined in accordance with section 171‑17(b); provided that [~~such~~] the sale price or lease rental may be on a nominal basis, if the board finds that [~~such~~] an easement is required in connection with a government project;

(2) The board shall provide that in case the land ceases to be used at any future time for the use for which the disposition was made, the board shall have the right to repurchase the land at the original sale price or fair market value, whichever is lower, and to purchase improvements thereon at the depreciated value or fair market value, whichever is lower;

(3) Disposition shall not be made to any public utility if the utility has suitable lands of its own;

(4) The disposition to public utilities shall be subject to disapproval by the legislature by two-thirds vote of either the senate or the house of representatives or by majority vote of both, in any regular or special session next following the date of the disposition; and

(5) For the purposes of this section, the definition of "public utility" as defined in section 269-1 is hereby incorporated herein by reference.

(1) Any producer of electrical or thermal energy produced by wind, solar energy, hydropower, landfill gas, waste-to-energy, ocean thermal energy conversion, cold seawater, wave energy, biomass, including municipal solid waste, biofuels or fuels derived from organic sources, hydrogen fuels derived primarily from renewable energy, or fuel cells where the fuel is derived primarily from renewable sources that sell all of the net power produced from the demised premises to an electric utility company regulated under chapter 269 or that sells all of the thermal energy it produces to customers of district cooling systems; provided that up to twenty-five per cent of the power produced by a renewable energy producer and sold to the utility or to district cooling system customers may be derived from fossil fuels; or

(2) Any grower or producer of plant or animal materials used primarily for the production of biofuels or other fuels; provided that nothing herein is intended to prevent the waste product or byproduct of the plant or animal material grown or produced for the production of biofuel, other fuels, electrical energy, or thermal energy, from being used for other useful purposes.

(d) The board may lease or renew a lease of public lands to renewable energy producers under subsection (a)(2) only pursuant to a public process that includes public notice under section 1-28.5 providing other interested renewable energy producers opportunity to participate in the process; provided that nothing in this subsection shall be construed to prevent the board from conducting direct negotiations; provided further that the renewable energy producer shall be required to submit as part of the proposal for the board's evaluation, as assisted by the department of business, economic development, and tourism, the following:

(1) A timeline for completion of the project;

(2) A description of a financial plan for project financing;

(3) A description of the conceptual design of the project;

(4) A description of the business concept for the project; and

(5) A description of landscape and acreage requirements including public and private lands.

Upon completion of the board's evaluation and determination to award or not award a lease to a renewable energy producer, the board shall prepare a report outlining the reasons for the decision.

As to a lease of public land held by an existing lessee who is currently in compliance with the terms of the lease, a lease to a renewable energy producer under this subsection shall not result in the involuntary termination of the lease or the withdrawal of property from the lease resulting in a twenty-five per cent or more reduction from the previous year's production attributable to the leased land as evidenced by documents required to be submitted to the appropriate county. Nothing in this subsection shall authorize the board to terminate or impose new conditions on a lease of public land held by an existing lessee who is currently in compliance with the terms of the lease.

To inform the public prior to the lease of public land or the renewal of a lease of public land for a proposed renewable energy project under this subsection, the department of land and natural resources shall conduct at least one public hearing on the island where the public land to be leased for the proposed renewable energy project is located; provided that the notice of the hearing shall be published as provided in section 1-28.5. The board shall prepare and distribute an outline of the proposals for the renewable energy project and receive testimony from interested parties and the general public at any public hearing.

For any lease issued pursuant to this subsection, the renewable energy producer shall have the right of first refusal upon renewal of the lease."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect on July 1, 2020.

THE SENATE	S.B. NO.	50
TWENTY-FIFTH LEGISLATURE, 2009		S.D. 1
STATE OF HAWAII		H.D. 2