HB2643 HD2.DOC

SECTION 1. The legislature finds that the initial capital investment required by property owners to install renewable energy systems and energy efficiency improvements on residential and commercial properties is a significant barrier to reaching the State’s clean energy targets. Increased activity in residential and commercial projects is essential for the State to reach energy efficiency and clean energy goals. Employing innovative financing to remove known barriers and stimulate enterprise in the clean energy sector is beneficial to the public.

A Hawaii clean energy bond is a federal taxable, state tax-exempt, reimbursable general obligation bond. The bond proceeds will be deposited into the clean energy bond loan revolving fund under the direction of the department of business, economic development, and tourism, which will make loans to commercial and residential property owners for energy efficiency improvements and small renewable energy systems. The loans will be repaid through a special assessment of real property taxes on the borrower's property by the participating counties and remitted to the department under cooperative agreements. The liability to repay the bonds is attached to the borrower's property, rather than to the borrower.

Assisting renewable energy projects and investments in Hawaii can provide jobs, as well as long-term energy, environmental, and economic benefits. Moreover, this Act is compatible with the goals and objectives of the Hawaii clean energy initiative.

The legislature finds and declares that the Hawaii clean energy bond loan program:

(1) Supports energy efficiency and renewable energy projects for residential and commercial structures;

(2) Provides another source of financing energy projects;

(3) Fosters energy savings;

(4) Stimulates job growth; and

(5) Is in the public interest and for the public health, safety, and general welfare of the state.

The purpose of this Act, therefor, is to establish a Hawaii clean energy bond loan program.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII CLEAN ENERGY BOND LOAN PROGRAM

§ -1 Definitions. As used in this chapter:

"Department" means the department of business, economic development, and tourism.

"Director" means the director of business, economic development, and tourism.

"Energy efficiency improvements":

(1) Means installation or physical modifications to property designed to reduce energy consumption;

(2) For the purposes of this chapter, do not include appliances such as washing machines, dryers, dishwashers, and all similar appliances;

(3) Shall include the following:

(A) Air sealing and ventilation;

(B) Insulation;

(D) Water heating;

(E) Hardwired lighting;

(F) Daylighting;

(G) Windows;

(H) Doors and skylights;

(I) Reflective roofs; and

(J) Energy efficiency improvements to pool equipment and landscaping.

"Loan program" means the Hawaii clean energy bond loan program.

"Renewable energy system" means a system that produces thermal or electrical energy from renewable sources, including units with an electrical back-up component, intended for use within the residential or commercial property on which it is located. The following systems qualify for inclusion:

(1) Solar hot water systems;

(2) Solar photovoltaic systems;

(3) Small wind systems; and

(4) Biogas systems.

§ -2 Hawaii clean energy bond loan program. There is established the Hawaii clean energy bond loan program which shall be administered by the director of business, economic development, and tourism.

§ -3 Hawaii clean energy bond loan revolving fund. (a) There is established in the state treasury the Hawaii clean energy bond loan revolving fund, into which shall be deposited:

(1) Proceeds from the issuance of general obligation bonds that are deposited into the revolving fund;

(2) Repayments of moneys loaned from the revolving fund and interest earned on those moneys;

(3) Moneys received from the operation of the loan program;

(4) Appropriations made by the legislature to the revolving fund; and

(5) Interest earned from the investment of moneys in the revolving fund.

(b) Moneys in the Hawaii clean energy bond loan revolving fund shall be used for the following purposes:

(1) To make loans to residential and commercial property owners for energy efficiency improvements and renewable energy systems;

(2) Repay the general fund for debt service on the general obligation bonds deposited into the revolving fund; and

(3) Administrative expenses relating to the operation of the fund and the Hawaii clean energy bond loan program.

§ -4 Powers. The director may:

(1) Enter into contracts relating to the operation of the loan program including administering the loan program; and

(2) Perform all functions necessary to effectuate the purposes of this chapter.

§ -5 Rules. The department shall adopt rules pursuant to chapter 91 to carry out the purposes of this chapter, including the following:

(1) Prescribing the qualifications for eligibility of applicants for loans;

(2) Establishing preferences and priorities in determining eligibility for loans;

(3) Establishing the conditions, consistent with the purposes of this chapter, for the granting of or for the continuance of a grant of a loan;

(4) Providing for inspection at reasonable hours of the facilities, equipment, books, and records of the entity that has applied for or has been granted a loan, and requiring the submission of reports as may be requested by the department; and

(5) Establishing rates and charges for the operation of the loan program.

§ -6 Loans. (a) The department may make loans to qualifying commercial and residential property owners for energy efficiency improvements and small renewable energy systems in a participating county. A participating county is a county within the State that has agreed to take part in the loan program by taking such legal action as is necessary under its real property tax system to levy upon a property benefited by the loan a special assessment of an amount necessary to repay each loan financed under the Hawaii clean energy bond loan program. The participating county shall remit the moneys to the Hawaii clean energy bond loan revolving fund and shall receive reasonable compensation for its services.

(b) The loan repayment charge may include the amount of the loan, interest on the loan, and the costs incurred by the department to implement and administer the loan program.

(d) The department shall record a lien on the property benefited by the loan. The lien shall attach to the property.

(e) Notwithstanding any law to the contrary, if the director determines that the department is unable to issue a sufficient number of loans to offset the reasonable cost to the department of operating the loan program, the director may delay or suspend the loan program in one or more participating counties or may delay or suspend any feature of the loan program."

SECTION 3. The director of finance is authorized to issue general obligation bonds in the sum of $ or so much thereof as may be necessary and the same sum or so much thereof as may be necessary is appropriated for fiscal year 2010-2011 for deposit into the Hawaii clean energy bond loan revolving fund.

The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 4. This Act does not limit or prevent the counties from instituting similar financing programs for energy efficiency improvements and renewable energy systems.

SECTION 5. This Act shall take effect on July 1, 2020.

HOUSE OF REPRESENTATIVES	H.B. NO.	2643
TWENTY-FIFTH LEGISLATURE, 2010		H.D. 2
STATE OF HAWAII