Report Title:

SPRB, Ocean Engineering and Energy System

 

Description:

Authorizes the issuance of SPRBs for Ocean Engineering and Energy Systems, Inc.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1553

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE ISSUANCE OF SPECIAL PURPOSE REVENUE BONDS TO ASSIST INDUSTRIAL ENTERPRISES.

 

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

SECTION 1. The legislature finds that the use of renewable energy resources on the island of Hawaii will reduce the dependence on imported fossil fuel and reduce the environmental impact associated with burning fossil fuel. The Natural Energy Laboratory of Hawaii Authority (NELHA) was created to develop the natural energy available in the ocean around Hawaii and to develop related industries such as aquaculture. In furthering these developments the State of Hawaii is now supporting the installation of a fifty-five inch cold seawater supply pipe. The energy required to pump the cold water through that pipeline to the upstream users and to supply other electric power demands within NELHA can be supplied by a Kalina cycle OTEC plant, thereby saving more than 1.2 megawatts of power.

Ocean Engineering and Energy Systems Inc. and its partner, Exergy Inc. have a preliminary design for the patented Kalina cycle OTEC plant with a capital cost of $10,000,000. Exergy, Inc. will provide $3,000,000 in equity investment which will leave $7,000,000 in required funding from revenue bonds. The Kalina cycle technology is proven by five functioning plants , some with more than eighteen months of continuous operation. The Kalina cycle OTEC at NELHA will be designed for continuous operation and will avoid the intermittent operation that is associated with most renewable energy systems such as wind, photovoltaics, and direct solar. The Kalina cycle OTEC plant at NELHA will constitute the first economically viable commercial scale OTEC plant in the world and promises to be the beginning of a new trend for Hawaii in the global economy.

For the foregoing reasons, the legislature finds and declares that the issuance of special purpose revenue bonds under this Act is in the public interest and is beneficial to the public health, safety, and general welfare. The legislature further finds that part V, chapter 39A, Hawaii Revised Statutes, permits the State to financially assist industrial enterprises through the issuance of special purpose revenue bonds and that the issuance of special purpose revenue bonds under this Act is in the public interest and for the public health, safety, and general welfare of the State.

The legislature finds that Ocean Engineering and Energy Systems Inc. is an industrial enterprise meeting the qualifications for special purpose revenue bond assistance under chapter 39A, part V, Hawaii Revised Statutes. The special purpose revenue bonds authorized under this Act will provide low interest rate bond financing for the construction of a Kalina cycle OTEC at NELHA on the island of Hawaii.

SECTION 2. Pursuant to part V, chapter 39A, Hawaii Revised Statutes, the department of budget and finance, with the approval of the governor, is authorized to issue in one or more series special purpose revenue bonds in a total amount not to exceed $7,000,000 for the purpose of assisting Ocean Engineering and Energy Systems Inc. in the planning, design, construction, and operation of any and all elements of Kalina cycle OTEC at NELHA on the island of Hawaii. The legislature finds and determines that the activities and facilities of Ocean Engineering and Energy Systems Inc. constitute a project as defined in part V, chapter 39A, Hawaii Revised Statutes, and that the financing thereof is assistance to an industrial enterprise.

SECTION 3. The special purpose revenue bonds issued under this Act shall be issued pursuant to part V, chapter 39A, Hawaii Revised Statutes, relating to the power to issue special purpose revenue bonds to assist industrial enterprises serving the general public.

SECTION 4. The department of budget and finance is authorized to issue, from time to time, refunding special purpose revenue bonds authorized in such principal amounts as the department shall determine to be necessary to refund the special purpose revenue bonds authorized in section 2.

SECTION 5. The authorization to issue special purpose revenue bonds issued under this Act shall Act shall lapse on June 30, 2005.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:

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