STAND. COM. REP. NO. 2548

Honolulu, Hawaii

RE: S.B. No. 3302

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committees on Energy, Economic Development, and Tourism and Agriculture and Environment, to which was referred S.B. No. 3302 entitled:

"A BILL FOR AN ACT RELATING TO GREEN INFRASTRUCTURE,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Require the Hawaii Green Infrastructure Authority to:

(A) Establish an at- or below-market interest loan program to provide financial assistance to certain parties for certain green infrastructure improvements; and

(B) Authorize property assessed financing through various mechanisms, including but not limited to non-ad valorem special tax assessments and property assessed financing assessment contracts;

(2) Creates the Environmental and Economic Development Revolving Loan Fund; and

(3) Appropriate funds to provide loans or other financial assistance to eligible property owners and for other allowable purposes of the Environmental and Economic Development Revolving Loan Fund, including implementation costs.

Your Committees received testimony in support of this measure from the Department of Business, Economic Development, and Tourism; Department of Health; Department of Hawaiian Home Lands; Hawaii Green Infrastructure Authority; CleanFund Commercial PACE Capital, Inc.; Hawaii Solar Energy Association; WAI: Wastewater Alternatives & Innovations; Hawai‘i Reef and Ocean Coalition; Surfrider Foundation; and Petros PACE Finance. Your Committees received testimony in opposition to this measure from one individual. Your Committees received comments on this measure from the Department of Budget and Finance, Department of the Attorney General, Department of Commerce and Consumer Affairs' Division of Consumer Advocacy, and the Department of Budget and Fiscal Services of the City and County of Honolulu.

Your Committees find that this measure seeks to attract private capital investments to help reduce the number of cesspools, increase the resiliency of residential homes and commercial property, and support the conversion to clean energy across the State.

Accordingly, your Committees have amended this measure by:

(1) Inserting amendments recommended by HGIA, which include:

(A) Clarifying:

(i) The counties' right to establish a similar property assessed financing program and their role in collecting non-ad valorem special tax assessments;

(ii) Provisions on the recordation and notice of the property assessed financing assessment contracts and lien parity; and

(iii) Various definitions;

(B) Specifying:

(i) The determinations that property assessed financing lenders must make before entering into assessed financing assessment contracts for commercial properties; and

(ii) The duties of lienholders prior to entering into assessed financing assessment contracts;

(C) Elaborating on the provisions that apply to commercial and residential properties; and

(D) Defining "property assessed financing program";

(2) Amending language to ensure that ratepayer funds are not used to fund or guarantee the Environmental and Economic Development Loan Program or Environmental and Economic Development Revolving Loan Fund;

(3) Replacing all references to upgraded or converted cesspools with Director of Health-approved wastewater systems;

(4) Inserting an effective date of July 1, 2024; and

(5) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Energy, Economic Development, and Tourism and Agriculture and Environment that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3302, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3302, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Energy, Economic Development, and Tourism and Agriculture and Environment,

________________________________ MIKE GABBARD, Chair

________________________________ GLENN WAKAI, Chair