THE SENATE	S.B. NO.	3282
THIRTY-SECOND LEGISLATURE, 2024		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO ENERGY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

PART I

SECTION 1. Section 196-71, Hawaii Revised Statutes, is amended to read as follows:

"[[]§196-71[]] [Hawaii state energy office;] Energy division; established. (a) There is established within the department of business, economic development, and tourism the [Hawaii state energy office, which shall be a public body politic and an instrumentality and agency of the State. The office shall be placed within the department of business, economic development, and tourism for administrative purposes, pursuant to section 26‑35.] energy division. The purpose of the [Hawaii state energy office] energy division shall be to promote energy efficiency, renewable energy, and clean transportation to help achieve a resilient and affordable clean energy economy.

(b) The [Hawaii state energy office] energy division shall:

(1) [Provide] Perform analysis and [planning] research to actively develop plans and inform policies to achieve energy efficiency, renewable energy, energy resiliency, grid reliability, and clean transportation goals that are established by statute or rule. The division shall perform its work in collaboration with the legislature[,]; public utilities commission[,]; other divisions within the department of business, economic development, and tourism; state agencies[,]; and other relevant stakeholders;

(2) Lead efforts to incorporate energy efficiency, renewable energy, energy resiliency, and clean transportation to reduce costs or lead by demonstration, and achieve clean energy goals across all public facilities;

[(3) Provide renewable energy, energy efficiency, energy resiliency, and clean transportation project deployment facilitation to assist private sector project completion when aligned with state energy goals; and]

(3) Assist private sector projects in renewable energy, energy efficiency, energy resiliency, and clean transportation that are aligned with statutorily mandated state energy goals, ensuring completion of those projects expeditiously and in compliance with guaranteed commercial operations dates;

(4) Engage the private sector to help lead efforts to achieve renewable energy and clean transportation goals through the Hawaii clean energy initiative[.] program pursuant to section 196-10.5; and

(5) Lease lands, grant licenses, and grant easements to private renewable energy producers or producers of renewable fuels, renewable gas, hydrogen fuels, hydrogen, or fuel cells; provided that any lease, license, or easement shall be made through a request for proposals or direct negotiation.

(c) The energy division may:

(1) Establish offtake agreements with private or utility buyers of renewable energy or renewable fuels, renewable gas, hydrogen, or fuel cells;

(2) Facilitate offtake agreements between producers and buyers of renewable energy or renewable fuels, renewable gas, hydrogen, or fuel cells; and

(3) Work through the public utilities commission to establish rules for purposes of paragraphs (1) and (2), as applicable.

[(c)] (d) The [Hawaii state energy office] energy division shall be the State's primary government entity for [supporting] implementation of the clean energy initiative[.] program under section 196-10.5.

[(d)] (e) No later than twenty days prior to the convening of each regular session, the [Hawaii state energy office] energy division shall submit a report to the legislature that includes:

(1) A description of the activities of the [Hawaii state energy office] energy division in response to the directives established pursuant to subsection (b) and section 196-72(d), along with progress in meeting [any] all of the [Hawaii] statutorily established state energy [office] goals [established in or pursuant to this part];

(2) Progress by the State in meeting its statutorily mandated energy efficiency, renewable energy, and clean transportation goals; [and]

(3) An annual updated energy plan to achieve those goals; and

[(3)] (4) Proposed legislation[,] to meet those goals, if any."

SECTION 2. Section 196-72, Hawaii Revised Statutes, is amended to read as follows:

"[[]§196-72[]] Chief energy [officer] administrator of the [Hawaii state energy office;] energy division; duties. (a) The [Hawaii state energy office] energy division shall be led by the chief energy [officer, who shall be nominated and, by and with the advice and consent of the senate, appointed by the governor; provided that the term of the chief energy officer shall be coterminous with the term of the governor.] administrator who shall be appointed by the director of business, economic development, and tourism.

(b) The chief energy [officer] administrator shall have:

(1) Experience, knowledge, and expertise in policy, programs, or services related to energy efficiency, renewable energy, clean transportation, [and] energy resiliency, and grid reliability related activities and development; and

(2) Experience in a supervisory or administrative capacity.

(c) The chief energy [officer] administrator shall hire staff necessary to carry out the purposes of this part. The chief energy [officer] administrator and employees of the [Hawaii state energy office] energy division shall be exempt from chapter 76 and shall not be considered civil service employees but shall be entitled to any employee benefit plan normally inuring to civil service employees.

(d) [Subject to the approval of the governor, the] The chief energy [officer] administrator and the energy division shall:

(1) Formulate, analyze, recommend, and implement specific policies, strategies, and plans, in coordination with public and private sector stakeholders, to cost-effectively and equitably achieve the [State's] statutorily established state energy goals;

(2) Identify, track, and report key performance measures and milestones related to the State's energy [and decarbonization] goals;

(3) Provide technical assistance to state and county agencies and the private sector to assess and implement projects and programs related to energy conservation and efficiency, renewable energy, clean transportation, energy resiliency, and related measures;

(4) Coordinate the State's energy programs with those of the federal government[, other territory and state governments, the political subdivisions of the State, departments of the State, and governments of nations with interest in common energy resources];

(5) Identify market gaps and innovation opportunities, collaborate with stakeholders, and facilitate public‑private partnerships to develop projects, programs, and tools to encourage private and public exploration, research, and development of energy resources, [distributed energy resources,] and data analytics that will support the State's energy [and decarbonization] goals;

(6) Create and review proposed state actions that may have a significant effect on the State's energy [and decarbonization] goals, report to the [governor their effect on the energy program,] legislature the effects of those actions, recommend further actions to increase the benefit or mitigate the effects of those actions, and perform other services as may be required;

(7) Evaluate, recommend, and participate in the development of incentives and programs that encourage the development of energy efficiency, renewable energy, energy resiliency, [distributed energy resources,] and clean transportation resources;

(8) Assess and evaluate the effectiveness and continued necessity of existing energy related incentives, tax credits, and programs, and provide recommendations and proposed changes;

(9) Develop and maintain a comprehensive and systematic quantitative and qualitative capacity to analyze the status of energy resources, systems, and markets, both in-state and in other states and countries, particularly in relation to the State's economy, and to recommend, develop proposals for, and assess the effectiveness of policy and regulatory decisions, and energy emergency planning;

(10) Develop and recommend programs for, and assist public agencies in the implementation of, energy assurance and energy resilience;

(11) Support the development, evaluation, revision, and adoption of energy-related codes and standards, land use, leasing of land practices, and permitting statutes and ordinances that advance the State's energy goals;

(12) Act as the State's energy data clearinghouse by identifying, collecting, compiling, analyzing, publishing, and where possible, monetizing energy and clean transportation data and analyses;

(13) Advocate for the State's energy and decarbonization goals at relevant venues and departments, including but not limited to the public utilities commission, legislature, and division of consumer advocacy, to ensure that state energy policies and regulations align with the state strategic goals and are data‑driven;

(14) Support economic development, jobs, and innovation initiatives related to and resulting from the State's renewable energy [and distributed energy resources] experience, capabilities, and data analyses;

(15) Facilitate the efficient, expedited [permitting of] completion of private-sector energy efficiency, renewable energy, clean transportation, and energy resiliency projects by:

(A) Coordinating and aligning state and county departments and agencies to support, expedite, and remove barriers to deployment of energy initiatives and projects; [and]

(B) Identify [and], evaluate, coordinate, eliminate, or resolve conflicting or onerous policies, processes, and rules that unreasonably impede project development and deployment and propose regulatory, legislative, or administrative[,] processes, or other solutions to applicable stakeholders;

(C) Facilitate the resolution of conflicts between state and county agencies, including engagement with other divisions and the director of business, economic development, and tourism; and

(D) Facilitate and expedite approvals and reviews for permits, including permits for land leases or to satisfy environmental or archeological requirements;

(16) Identify and recommend policies to align utility company goals and models with [those of ratepayers, including evaluating utility models that best support] state energy plans and goals;

(17) Develop a state energy plan that includes:

(A) The State's and the energy division's annual goals for achievement of state energy policies;

(B) Strategies and actions for the one-, five-, ten-, and fifteen-year forecasts for the state annual achievement of state energy policy goals;

(C) Strategies, tasks, and actions taken by the energy division for one-, five-, ten-, and fifteen-year forecasts for the state annual achievement of state energy policy goals;

(D) Annual reporting of the achievements made by the state and divisions, branches, and sections;

(E) Tasks taken in efforts to achieve state energy policy goals;

(F) Evaluation of causes, effects, improvements, and future actions necessary to compensate for the changes;

(G) Identification of barriers to achievement of state energy policy goals;

(H) Identification of policies needed to achieve state energy policy goals;

(I) Status of land acquisition and leasing for renewable energy projects and fuels;

(J) Reporting of how the divisions, branches, and sections have specifically achieved or not achieved goals and strategies; and

(K) Actions to assist the public and private sectors with projects toward the achievement of the state energy policy goals.

The state energy plan shall be completed by December 31, 2024, and updated annually. The state energy plan shall be submitted to the legislature and be publicly available on the energy division's website;

[(17)] (18) Prepare and submit an annual report on the achievements of the energy division as to the division's duties and energy plan and other reports as may be requested [to] by the governor [and to] or the legislature [on the implementation of this part;]. All reports by the energy division shall be publicly available on the energy division's website;

[(18)] (19) Contract for services in accordance with state procurement laws and rules when required for the implementation of this part; and

[(19)] (20) Adopt rules, pursuant to chapter 91, for the administration of this part."

PART II

SECTION 3. Section 196-81, Hawaii Revised Statutes, is amended by amending the definition of "chief energy officer" to read as follows:

"["Chief energy officer"] "Chief energy administrator" means the chief energy [officer] administrator of the [Hawaii state energy office.] energy division of the department of business, economic development, and tourism."

SECTION 4. Act 226, Session Laws of Hawaii 223, is amended by amending sections 3 and 4 to read as follows:

"SECTION 3. (a) There is established a clean ground transportation working group within the department of transportation for administrative purposes.

(b) The working group shall:

(1) Develop metrics, benchmarks, plans, and recommendations for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes;

(2) Coordinate with other groups, agencies, and programs within and outside of the State that are working to achieve zero-emissions transportation;

(3) Coordinate with the State and applicable stakeholders to pursue grants and other funding opportunities for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes;

(4) Consider reducing vehicle miles travelled and demand management; and

(5) Consider equity concerns, including economic and accessibility impacts to low-income communities.

(c) The working group shall comprise the following:

(1) The director of transportation, or the director's designee, who shall serve as co-chairperson of the working group;

(2) The chief energy [officer] administrator of the [Hawaii state energy office,] energy division of the department of business, economic development, and tourism, or the chief energy [officer's] administrator's designee, who shall serve as co-chairperson of the working group;

(3) The director of the office of planning and sustainable development, or the director's designee;

(4) The co-chairpersons of the commission, or the co-chairpersons' designees;

(5) The chairpersons of the senate and house of representatives standing committees having primary jurisdiction over transportation, or their designees;

(6) The mayor of each county, or their designees, who shall be invited by the working group to participate; and

(7) Other relevant stakeholders as recommended by the working group.

(d) The working group shall:

(1) Submit annual interim reports to the commission of the working group's activities performed, progress made, and recommendations for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes, twenty days prior to the convening of each regular session from 2024 to 2034; and

(2) Submit a final report on the progress made and recommendations for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2035.

(e) The working group shall cease to exist on January 1, 2035.

SECTION 5. (a) There is established an interisland clean transportation working group within the department of transportation for administrative purposes.

(b) The working group shall:

(1) Develop metrics, benchmarks, plans, and recommendations for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes;

(2) Coordinate with other groups, agencies, and programs within and outside of the State that are working to achieve zero-emissions interisland transportation;

(3) Coordinate with other groups, agencies, and programs within and outside of the State that are developing interim solutions to achieve long-haul zero-emissions transportation, which may include lower-carbon sustainable aviation fuels, hydrogen-based fuel, or other potential options;

(4) Coordinate with stakeholders to identify not less than fifteen possible transportation hubs throughout the State with at least two in each county to support innovative point-to-point or island-to-island transportation options, including options such as electric vertical takeoff and landing aircraft, electric sea gliders, and other similar forms of innovative zero-emissions technology;

(5) Develop recommendations for a coordinated package of environmental review, infrastructure planning, and other due diligence for fifteen sites throughout the State that shall enable innovative transportation operators to more easily deploy innovative options for zero-emissions transportation;

(6) Coordinate with the State and applicable stakeholders to pursue grants and other funding opportunities for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes;

(7) Consider reducing vehicle miles travelled and demand management; and

(8) Consider equity concerns, including economic and accessibility impacts to low-income communities.

(c) The working group shall comprise the following:

(1) The director of transportation, or the director's designee, who shall serve as co-chairperson of the working group;

(2) The chief energy [officer] administrator of the [Hawaii state energy office,] energy division of the department of business, economic development, and tourism, or the chief energy [officer's] administrator's designee, who shall serve as co-chairperson of the working group;

(3) The director of the office of planning and sustainable development, or the director's designee;

(4) The co-chairpersons of the commission, or the co-chairpersons' designees;

(5) The chairpersons of the senate and house of representatives standing committees having primary jurisdiction over transportation, or the chairpersons' designees;

(6) The mayor of each county, or the mayor's designees, who shall be invited by the working group to participate; and

(7) Other relevant stakeholders, as recommended by the working group.

(d) The working group shall:

(1) Submit annual interim reports to the commission of the working group's activities performed, progress made, and recommendations for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes, twenty days prior to the convening of each regular session from 2024 to 2034; and

(2) Submit a final report of the progress made and recommendations for the State to achieve the goals set forth in sections 225P-5 and 225P-8(a), Hawaii Revised Statutes, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2035.

(e) The working group shall cease to exist on January 1, 2035."

SECTION 6. Sections 125C-22, 125C-23, 125C-31, 141-9, 196‑5, 196-6.5, 196-11, 196-30, 196-63, 196-83, 206M-23, 235-110.32, 286-5, 286-172, 304A-1891, 304A-1892, and 304A‑1894.1, Hawaii Revised Statutes, are amended by substituting the term "chief energy administrator" wherever the term "chief energy officer" appears, as the context requires.

SECTION 7. Sections 107-22, 125C-22, 125C-23, 125C-31, 141-9, 196, 196-5, 196-6.5, 196-11, 196-30, 196-32, 196-63, 201-12.8, 206M-23, 206M-24, 225P-8, 235-110.32, 264-20.7, 269-72, 269-74, 286-5, 286-172, 291C-6, 304A-1891, 304A-1892, 304A-1894.1, and 304A-1969, Hawaii Revised Statutes, are amended by substituting the term "energy division" wherever the term "Hawaii state energy office" appears, as the context requires.

SECTION 8. All rights, powers, functions, and duties of the Hawaii state energy office are transferred to the energy division of the department of business, economic development, and tourism.

All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department or the governor.

SECTION 9. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii state energy office relating to the functions transferred to the energy division of the department of business, economic development, and tourism shall be transferred with the functions to which they relate.

SECTION 10. All rules, policies, procedures, guidelines, and other material adopted or developed by the Hawaii state energy office to implement provisions of the Hawaii Revised Statutes that are reenacted or made applicable to energy division of the department of business, economic development, and tourism by this Act shall remain in full force and effect until amended or repealed by the department of business, economic development, and tourism pursuant to chapter 91, Hawaii Revised Statutes.  In the interim, every reference to the Hawaii state energy office in those rules, policies, procedures, guidelines, and other material shall be amended to refer to energy division of the department of business, economic development, and tourism.

PART III

SECTION 11. In accordance with section 9 of article VII, of the Constitution of the State of Hawaii and sections 37-91 and 37-93, Hawaii Revised Statutes, the legislature has determined that the appropriation contained in this Act will cause the state general fund expenditure ceiling for fiscal year 2024-2025 to be exceeded by $ , or per cent. The reasons for exceeding the general fund expenditure ceiling are that the appropriation made in this Act is necessary to serve the public interest and to meet the needs provided for by this Act.

SECTION 12. There is appropriated out of the general revenues of the State of Hawaii the sum of $12,105,644 or so much thereof as may be necessary for fiscal year 2024-2025 for the energy division of the department of business, economic development, and tourism.

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

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect on July 1, 2024.

Report Title:

DBEDT; HSEO; Energy Division; Chief Energy Administrator; Repeal Transfer; Expenditure Ceiling; Appropriation

Description:

Repeals the Hawaii State Energy Office and establishes the Energy Division of the Department of Business, Economic Development, and Tourism. Renames the Chief Energy Officer as the Chief Energy Administrator. Requires the Energy Division to establish a State Energy Plan. Transfers functions and makes conforming amendments. Declares that the general fund expenditure ceiling is exceeded. Makes an appropriation. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.