SB941

SECTION 1. The legislature finds that climate change is an urgent matter of public concern. In 2021, Hawaii became the first state to declare a climate emergency. That same year, lawmakers passed Act 178, which directs the State's agencies to collaborate toward identifying state facilities that are vulnerable to sea-level rise, flooding, and natural hazards. The legislature additionally finds that mitigating and adapting to climate change will require additional public resources. Some states, including California, have begun exploring the use of green bonds as a means of financing projects and programs related to the advance of climate change mitigation and adaption, clean energy, and conservation goals.

The legislature further finds that green bonds are specifically designed to support sustainable and socially responsible projects, including investments in renewable energy, energy efficiency, clean transportation, waste management, natural resource conservation, water system preservation, marine ecosystem restoration, and green infrastructure.

The legislature also finds that the International Capital Market Association (ICMA) has developed green bond principles, which promote integrity and transparency in the development and deployment of green bond programs. According to the ICMA, "The principles outline best practices when issuing bonds serving social and/or environmental purposes through global guidelines and recommendations that promote transparency and disclosure, thereby underpinning the integrity of the market. The principles also raise awareness of the importance of environmental and social impact among financial market participants, which ultimately aims to attract more capital to support sustainable development".

The purpose of this Act is to establish a working group to develop recommendations for creating a green bond financing program for the State.

SECTION 2. (a) There is established a green bonds working group within the department of business, economic development, and tourism for administrative purposes.

(b) The working group shall:

(1) Develop recommendations for a green bonds program that assists in financing projects related to climate change mitigation and adaptation, environmental conservation, and sustainability;

(2) Evaluate opportunities for increasing investment in projects related to climate change mitigation, conservation, and sustainability through a green bonds program, including through coordination between the public and private sectors;

(3) Determine the types of projects and programs that may qualify for funding through a green bonds initiative, including eligibility criteria for funding;

(4) Collaborate with and gather information from other stakeholders and agencies within and outside of the State that are working to implement green bonds programs;

(5) Conduct an analysis of the International Capital Market Association's "Green Bonds Principles: Voluntary Process Guidelines for Issuing Green Bonds" as it relates to the possible establishment of a green bonds program for the State; and

(6) Estimate the cost of creating a green bonds program facilitated by the State.

(1) The director of business, economic development, and tourism or the director's designee, who shall serve as chairperson;

(2) The director of budget and finance or the director's designee;

(3) The chairperson of the board of land and natural resources or the chairperson's designee;

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

(5) A member from the senate, to be appointed by the senate president;

(6) A member from the house of representatives, to be appointed by the speaker of the house of representatives;

(7) A representative from a nonprofit public interest organization specializing in environmental conservation;

(8) A representative from a nonprofit public interest organization specializing in climate change mitigation and adaptation; and

(9) Other interested parties with experience that the chairperson deems relevant to the purposes of the working group who the chairperson may invite.

(d) The members of the working group shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(e) No member of the working group shall be subject to chapter 84, Hawaii Revised Statutes, solely because of the member's participation in the working group.

(f) The working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026.

(g) The working group shall dissolve on June 30, 2026.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	941
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII