Report Title:

Food and Energy Security

 

Description:

Establishes the Hawaii energy and food security authority to plan, coordinate, and address Hawaii's energy and food security needs.  Repeals the state program for energy planning and conservation.  Imposes the environmental response and energy and food security tax.  Makes the executive director of the authority the energy resources coordinator.  Repeals the energy resources coordinator duties.  Abolishes the agribusiness development corporation on 7/1/2011.


HOUSE OF REPRESENTATIVES

H.B. NO.

1271

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

RELATING TO GOVERNMENT.

 

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

 


PART I

     SECTION 1.  Hawaii is at a crossroads.  As the most geographically isolated state in the country, we are dangerously dependent on external sources for basic food and energy needs.  We import about eighty-five per cent of our food and ninety-five per cent of our energy.  Each year, approximately fifty million barrels of crude oil valued at $7,000,000,000 are imported from foreign countries.  The mass consumption of fossil fuels contributes to global warming and the deterioration of the environment.  Although Hawaii is home to renewable energy resources like solar, wind, ocean, and geothermal, we as a community have not taken advantage of alternative energy and energy efficiency solutions to make our State more energy independent.  As an example, despite year-round sunshine, only thirty per cent of Hawaii's residents have solar water heaters.

     Similarly, the reliance on imported food leaves our citizenry with a fresh supply of produce for no more than ten days.  Currently, ninety per cent of the beef, sixty-seven per cent of fresh vegetables, and sixty-five per cent of fresh fruits consumed in this State are imported.  In 1984, Hawaii produced one hundred per cent of the milk consumed in the State, but today, local production only meets thirty per cent of our needs.  While it may be impracticable or unattainable for Hawaii to produce one hundred per cent of its food, the risks and costs to society cannot be ignored.  The rising cost of shipping and transportation associated with the price of oil create a highly inefficient local economy.  Comparatively, the production and consumption of local food keeps money in our community, reduces the demand for transportation energy, and decreases the vulnerability to food supply disruptions caused by natural disasters or worldwide economic events.

     Now is the time for bold action to squarely address Hawaii's energy and food requirements.  It will require the long-term commitment, dedication, and investment of government, the private sector, and Hawaii's citizenry to dramatically shift the course of direction towards a more energy independent and agriculturally sustainable society.  As a state and as a people, we must decide whether we will continue to be dependent on external sources for our basic needs, or whether we will build, invest, and develop the capacity to become food and energy independent.  The legislature believes that it is in the best interest of Hawaii's citizenry that we build the capacity to become energy and food self-sufficient.

     Hawaii has been at a crossroads before.  Three decades ago, Hawaii's government, business, and labor leaders chose to bolster our economy by making Hawaii a world-class tourism destination.  The Hawaii State Plan and tourism functional plan laid the policy and planning framework to move the State in that direction.  Hundreds of millions of dollars were invested in roads, airports, harbors, and infrastructure to develop tourism destinations throughout the State.  Lands were urbanized.  Government agencies were created.  Special funds and taxing authorities were established to provide financial resources to support marketing and promotional tourism activities that now make Hawaii one of the premier visitor destinations in the world, attracting over seven million visitors per year.

     Today, as Hawaii is engulfed by the realities of a global economy, we must take bold steps to control our destiny by ensuring that our basic energy and food security needs are locally produced and met.

     SECTION 2.  The legislature finds that if Hawaii is to truly realize its vision and desire for an energy independent and agriculturally sustainable society, government must lead the way.  A strategic and long-term commitment must be made to invest in infrastructure, incent and guide private action, and advance and accelerate energy and food security initiatives.

     The purpose of this Act is to create the Hawaii energy and food security authority to plan, coordinate, and address Hawaii's energy and food security needs.  The authority is provided with the power and ability to address the inter-relationships between energy and food production in developing an overall plan and policy to achieve, to the degree possible and practicable, food and energy independence and sustainability for the State.  In so doing, activities of of the authority should also include economic development, workforce, and consumer education issues relating to the production of food and energy.

     The legislature intends that the authority take an inter-disciplinary approach to obtaining solutions, working collaboratively with all levels of government and the private and nonprofit sectors to address and balance water, land, regulatory and natural resource issues intertwined with food and fuel production.  Such an inter-disciplinary approach ensures that energy and food policy development is integrated within the overall economic, social, environmental, and cultural aspects of society.  With an understanding of these overlapping goals and resources, our State can maximize the opportunities to ensure food and energy security for generations to come.

     The legislature also intends that the authority emphasize public-private partnerships, at both the state and county levels.  It is recommended that the authority be comprised of twelve voting members from the general public, with expertise in energy, agriculture, transportation, and economic development.  To ensure that economic development issues related to energy and food security are addressed at the local level, the legislature recommends that each of the economic development boards situated in each of the counties be represented on the authority's board as well.

     The legislature finds that undertaking this important task of energy and food security requires substantial financial resources.  An investment and long-term commitment by the State must be made.  This Act provides expanded taxing powers and the establishment of a energy and food security fund which provides fiscal resources to meet the authority's duties and obligations provided by law.

PART II

     SECTION 3.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII ENERGY AND FOOD SECURITY AUTHORITY

     §   -1  Definitions  The following terms, whenever used in this chapter, shall have the following respective meanings, unless a different meaning clearly appears in the context:

     "Agency" means any agency, department, authority, board, commission, the University of Hawaii, or any other unit of the State or its political subdivisions.

     "Authority" means the Hawaii energy and food security authority established in section     -2.

     "Board" means the board of directors of the Hawaii energy and food security authority established in section     -3, and any successor thereto.

     "Public agency" means any office, department, board, commission, bureau, division, public corporation agency, or instrumentality of the federal, state, or county government.

     §   -2  Establishment of the Hawaii energy and food security authority; purpose.  (a)  There is established the Hawaii energy and food security authority, which shall be a body corporate and a public instrumentality of the State, for the purpose of implementing this chapter.  The authority shall be placed within the department of business, economic development, and tourism for administrative purposes only, pursuant to section 26-35.

     (b)  The purpose of the Hawaii energy and food security authority shall be to promote and achieve energy independence and food security in Hawaii.  Its duties shall include but not be limited to:

     (1)  Developing, implementing, and monitoring long-range plans to achieve energy independence and food security in Hawaii;

     (2)  Promoting and accelerating renewable energy, energy efficiency, and energy self-sufficiency initiatives to lead towards energy independence for Hawaii;

     (3)  Developing and promoting local agricultural markets, to achieve food self-sufficiency and security for Hawaii;

     (4)  Administering the Hawaii energy and food security fund, established in section     -9;

     (5)  Coordinating energy and food security activities and programs, including competitive grant programs, targeted tax credits, infrastructure development and other incentive programs; and

     (6)  Engaging in workforce development, and marketing and business development activities that promote energy and food self-sufficiency, to facilitate public-private partnerships with other public agencies, the private sector and non-governmental organizations.

     §   -3  Board of directors; establishment, functions, duties,  (a)     The governing body of the authority shall be a board of directors which consists of twelve voting members, and four ex officio nonvoting members; provided that:

     (1)  Twelve voting members shall be appointed by the governor as provided in section 26-34, except as otherwise provided by law;

     (2)  The twelve voting members shall be composed of at least one representative from each of the economic development boards of Honolulu, Hawaii, Kauai, and Maui; the remaining voting members shall be appointed at-large;

     (3)  Of the twelve voting members, three shall be appointed by the governor from a list of three names submitted for each appointment by the president of the senate, and three shall be appointed by the governor from a list of three names submitted for each appointment by the speaker of the house of representatives; provided that if fewer than three names are submitted for each appointment, the governor may disregard the list;

     (4)  At least six of the twelve voting members shall have knowledge, experience, and expertise in the area of energy, agriculture, transportation, or economic development; provided that no more than three members shall represent, be employed by, or be under contract to any sector of the industry represented on the board;

     (5)  The governor shall make appointments to ensure the fulfillment of all requirements; provided that any appointments made after July 1, 2009, shall be made to fulfill the requirements in place when the appointments are made;

     (6)  The director of business, economic development, and tourism, or a designated representative, shall be an ex officio nonvoting member;

     (7)  The director of transportation, or a designated representative, shall be an ex officio nonvoting member;

     (8)  The chairperson of the board of agriculture, or a designated representative, shall be an ex officio nonvoting member; and

     (9)  The chairperson of the board of land and natural resources, or a designated representative, shall be an ex officio nonvoting member.

     (c)  The voting members shall be appointed by the governor for terms of four years.  Each voting member shall hold office until the member's successor is appointed and qualified.  Section 26-34 shall be applicable insofar as it relates to the number of terms and consecutive number of years a member may serve on the board.

     (d)  The board shall elect a chairperson from among the voting members.  Ex officio members or their designated representatives shall not serve as chairperson of the board.

     (e)  Seven voting members shall constitute a quorum and a minimum of seven affirmative votes shall be necessary for all actions by the authority.  The members shall serve without compensation, but shall be reimbursed for expenses, including traveling expenses, necessary for the performance of their duties.

     (f)  The board shall appoint an executive director, exempt from chapters 76 and 89, who shall oversee the authority staff.

     §   -4  Meetings of the board.  (a)  The meetings of the board shall be open to the public as provided in section 92-3, except that when it is necessary for the board to receive information that is proprietary to a particular enterprise or the disclosure of which might be harmful to the business interests of the enterprise, the board may enter into an executive meeting that is closed to the public.  This authorization shall be in addition to the exceptions listed in section 92-5, to enable the board to respect the proprietary requirements of enterprises with which it has business dealings.

     (b)  The board shall be subject to the procedural requirements of section 92-4.

     §   -5  Powers and duties.  (a)  Except as otherwise limited by this chapter, the authority may:

     (1)  Sue and be sued;

     (2)  Have a seal and alter the same at pleasure;

     (3)  Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter;

     (4)  Make and alter bylaws for its organization and internal management;

     (5)  Unless otherwise provided in this chapter, adopt rules in accordance with chapter 91 with respect to its projects, operations, properties, and facilities;

     (6)  Through its executive director, represent the authority in communications with the governor and the legislature;

     (7)  Through its executive director, provide for the appointment of officers, agents, and employees, subject to the approval of the board, prescribing their duties and qualifications, and fixing their salaries, without regard to chapters 76 and 78;

     (8)  Engage the services of qualified persons to implement the State's energy and food security plan or portions thereof as determined by the authority; and

     (9)  Engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice.

     (b)  The authority shall:

     (1)  Formulate plans, including objectives, criteria to measure accomplishment of objectives, programs through which the objectives are to be attained, and financial requirements for the optimum development of Hawaii's energy resources;

     (2)  Conduct systematic analysis of existing and proposed energy resource programs, evaluate the analysis conducted by government agencies and other organizations, and recommend to the governor and to the legislature programs which represent the most effective allocation of resources for the development of energy sources;

     (3)  Formulate and recommend specific proposals, as necessary, for conserving energy and fuel, including the allocation and distribution thereof, to the governor and to the legislature;

     (4)  Assist public and private agencies in implementing energy conservation and related measures;

     (5)  Coordinate the State's energy conservation and allocation programs with that of the federal government, other state governments, governments of nations with interest in common energy resources, and the political subdivisions of the State;

     (6)  Develop programs to encourage private and public exploration and research of alternative energy resources that will benefit the State;

     (7)  Conduct public education programs to inform the public of the energy situation as may exist from time to time and of the government actions taken to address the energy situation;

     (8)  Serve as consultant to the governor, public agencies, and private industry on matters related to the acquisition, utilization, and conservation of energy resources;

    (9)  Review proposed state actions that the authority finds to have significant effect on energy consumption and report to the governor and legislature their effect on the energy conservation program, and perform other services as may be required by the governor and the legislature;

    (10)  Engage in public-private partnerships with the private sector and non-governmental organizations to facilitate workforce and economic development, marketing, and educational activities relating to energy and food security;

    (11)  Establish competitive grant programs to promote energy independence and food security, as appropriate;

    (12)  Support and fund energy and food security infrastructure programs, as appropriate; and

    (13)  Develop targeted tax credit and business incentives programs, as appropriate.

     (c)  The authority shall do any and all things necessary to carry out its purposes, to exercise the powers and responsibilities given in this chapter, and to perform other functions required or authorized by law.

     §   -6  State program for energy planning, conservation, and security.  The authority shall develop a state program for energy planning, conservation, and security.  The program shall consist of short- and long-range planning for the development and promulgation of methods to encourage voluntary conservation of gasoline, diesel oil, natural gas, propane, heating oils, other fuels, and electrical energy, and efficient development of new or alternative sources of fuels and energy.  The information resulting from development of the methods shall be disseminated to the people of Hawaii through all forms of mass communication media, public and private schools, private and civic organizations, and all other appropriate means.  Public information offices of other state and county agencies may be called upon for assistance in the development of the program.

     §   -7  State program for food security.  The authority shall develop a state program for food security.  The program shall consist of short- and long-range planning for the development and promulgation of methods to encourage local production, marketing, and consumption of food products resulting in food self-sufficiency and security.  The authority shall coordinate its activities with the department of agriculture.

     §   -8  Inter-relationship between energy and food security issues.  Notwithstanding any law to the contrary, the authority, in its planning and implementation activities, shall address the inter-relationships between energy and food security, including but not limited to issues relating to land, water, crop production, workforce, and infrastructure development.

     §   -9  Energy and food security fund.  (a)  There is established the energy and food security fund, into which shall be deposited:

     (1)  A portion of the revenues from the environmental response and energy and food security tax, as provided by section 243-3.5;

     (2)  Appropriations by the legislature to the energy and food security fund;

     (3)  Gifts, grants, and other funds accepted by the authority; and

     (4)  All interest and revenues or receipts derived by the authority from any project or project agreements.

     (b)  Moneys in the energy and food security fund may be:

     (1)  Placed in interest-bearing accounts; provided that the depository in which the money is deposited furnishes security as provided in section 38-3; or

     (2)  Otherwise invested by the authority until such time as the moneys may be needed; provided that the authority shall limit its investments to those listed in section 36-21.  All interest accruing from the investment of these moneys shall be credited to the energy and food security fund.

     (c)  Moneys in the energy and food security fund shall be used by the authority for the purposes of this chapter; provided that funds shall be used to address energy and food security issues.

     §   -10  Annual report; benchmarks and indicators; tax credits.  (a)  The authority shall submit a complete and detailed report of its activities, expenditures, and results to the governor and the legislature at least twenty days prior to the convening of each regular session of the legislature.  The annual report shall include benchmarks and indicators to measure the authority's progress in meeting the energy and food security plan goals and objectives.

     (b)  If the authority develops targeted tax credit and incentive programs to promote energy and food security activities, an annual review of the efficacy and results of those programs shall be conducted and reported to the governor and the legislature.

     §   -11  Audit.  The authority shall be subject to a financial audit once every five years by the auditor."

PART III

     SECTION 4.  Section 201-12, Hawaii Revised Statutes, is repealed.

     ["[§201-12]  State program for energy planning and conservation.  The department shall develop a state program for energy planning and conservation.  The program shall consist of short and long-range planning for the development and promulgation of methods to encourage voluntary conservation of gasoline, diesel oil, natural gas, propane, heating oils, other fuels, and electrical energy, and efficient development of new or alternative sources of such fuels and energy.  The information resulting from such methods is to be disseminated to the people of Hawaii through all forms of mass communication media, public and private schools, private and civic organizations, and all other appropriate means.  Public information offices of other state and county agencies may be called upon for assistance in the development of such program."]

     SECTION 5.  Section 243-3.5, Hawaii Revised Statutes, is amended as follows:

     1.  By amending its title and subsection (a) to read:

     "§243-3.5  Environmental response and energy and food security tax; uses.  (a)  In addition to any other taxes provided by law, subject to the exemptions set forth in section 243-7, there is hereby imposed [at times provided in section 128D-2] a state environmental response and energy and food security tax of [5 cents] $1 on each barrel or fractional part of a barrel of petroleum product sold by a distributor to any retail dealer or end user, other than a refiner, of petroleum product; provided that:

     (1)  5 cents of the tax on each barrel shall be used pursuant to section 128D-2 to address concerns relating to drinking water[.];

     (2)  47.5 cents of the tax on each barrel shall be used pursuant to section    -9 to address energy and food security issues; and

     (3)  47.5 cents of the tax on each barrel shall be used pursuant to section 163D-17 to address food security issues.

The tax imposed by this subsection shall be paid by the distributor of the petroleum product."

     2.  By amending subsection (c) to read:

     (c)  Notwithstanding section 248-8 to the contrary, the environmental response and energy and food security tax collected under this section shall be paid over to the director of finance for deposit into the environmental response revolving fund established by section 128D-2[.] and the energy and food security fund established by section    ‑9."

     SECTION 6.  Section 196-3, Hawaii Revised Statutes, is amended to read as follows:

     "§196-3  Energy resources coordinator.  The executive director of [business, economic development, and tourism] the Hawaii energy and food security authority shall serve as energy resources coordinator."

     SECTION 7.  Section 196-4, Hawaii Revised Statutes, is repealed.

     ["§196-4  Powers and duties.  Subject to the approval of the governor, the coordinator shall:

     (1)  Formulate plans, including objectives, criteria to measure accomplishment of objectives, programs through which the objectives are to be attained, and financial requirements for the optimum development of Hawaii's energy resources;

     (2)  Conduct systematic analysis of existing and proposed energy resource programs, evaluate the analysis conducted by government agencies and other organizations and recommend to the governor and to the legislature programs which represent the most effective allocation of resources for the development of energy sources;

     (3)  Formulate and recommend specific proposals, as necessary, for conserving energy and fuel, including the allocation and distribution thereof, to the governor and to the legislature;

     (4)  Assist public and private agencies in implementing energy conservation and related measures;

     (5)  Coordinate the State's energy conservation and allocation programs with that of the federal government, other state governments, governments of nations with interest in common energy resources, and the political subdivisions of the State;

     (6)  Develop programs to encourage private and public exploration and research of alternative energy resources which will benefit the State;

     (7)  Conduct public education programs to inform the public of the energy situation as may exist from time to time and of the government actions taken thereto;

     (8)  Serve as consultant to the governor, public agencies and private industry on matters related to the acquisition, utilization and conservation of energy resources;

     (9)  Contract for services when required for implementation of this chapter;

    (10)  Review proposed state actions which the coordinator finds to have significant effect on energy consumption and report to the governor their effect on the energy conservation program, and perform such other services as may be required by the governor and the legislature;

    (11)  Prepare and submit an annual report and such other reports as may be requested to the governor and to the legislature on the implementation of this chapter and all matters related to energy resources; and

    (12)  Adopt rules for the administration of this chapter pursuant to chapter 91, provided that the rules shall be submitted to the legislature for review."]

     SECTION 8.  Section 163D-4, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The corporation shall develop, promote, assist, and market export crops and other crops for local markets[.], including developing programs and policies to address food security issues in Hawaii."

     SECTION 9.  Section 163D-17, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The corporation shall hold the fund in an account or accounts separate from other funds.  The corporation shall invest and reinvest the fund and the income thereof to:

     (1)  Purchase qualified securities issued by enterprises for the purpose of raising seed capital; provided that the investment shall comply with the requirements of this chapter;

     (2)  Make grants, loans, and provide other monetary forms of assistance necessary to carry out the purposes of this chapter; and

     (3)  Purchase securities as may be lawful investments for fiduciaries in the State.

     All appropriations, grants, contractual reimbursements, and other funds not designated for this purpose may be used to pay for the proper general expenses and to carry out the purposes of the corporation[.]; provided that funds received from the environmental response and energy and food security tax imposed pursuant to section 243-3.5 shall be used to address food issues."

PART IV

     SECTION 10.  The authority shall coordinate with the department of agriculture to determine what functions of the department of agriculture, if any, required or authorized by this Act are duplicative or redundant of the powers and duties of the authority.  The authority shall provide a report to the legislature on its findings no later than twenty days prior to the convening of the regular session of 2010.

     SECTION 11.  The authority shall coordinate with the agribusiness development corporation to determine what functions of the corporation, if any, required or authorized by this Act are duplicative or redundant of the powers and duties of the authority.  The agency review shall include a plan to transfer all powers and authorities of the agribusiness development corporation to the authority no later than July 1, 2011.  The authority shall provide a report to the legislature on its findings no later than twenty days prior to the convening of the regular session of 2010.

     SECTION 12.  Chapter 163D, Hawaii Revised Statutes, is repealed.

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

     SECTION 14.  This Act shall take effect upon its approval; provided that section 12 shall take effect on July 1, 2011.

 

INTRODUCED BY:

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