Hawaii 2022 Regular Session

Hawaii Senate Bill SB2978 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	THE SENATE S.B. NO. 2978 THIRTY-FIRST LEGISLATURE, 2022 STATE OF HAWAII A BILL FOR AN ACT Relating to Carbon Sequestration Incentives. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
2	2
3	3	THE SENATE S.B. NO. 2978
4	4	THIRTY-FIRST LEGISLATURE, 2022
5	5	STATE OF HAWAII
6	6
7	7	THE SENATE
8	8
9	9	S.B. NO.
10	10
11	11	2978
12	12
13	13	THIRTY-FIRST LEGISLATURE, 2022
14	14
15	15
16	16
17	17	STATE OF HAWAII
18	18
19	19
20	20
21	21
22	22
23	23
24	24
25	25
26	26
27	27
28	28
29	29
30	30
31	31	A BILL FOR AN ACT
32	32
33	33
34	34
35	35
36	36
37	37	Relating to Carbon Sequestration Incentives.
38	38
39	39
40	40
41	41
42	42
43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
44	44
45	45
46	46
47	47	SECTION 1. The legislature finds that climate change has led to an increase in the frequency of extreme weather events, which increases the risk of the Hawaiian islands being isolated and make the islands more vulnerable to food and water shortages. The potential for shortages highlights the need for greater food and water security, which can be achieved through increased local food production. The legislature further finds that Hawaii needs to reduce its contribution to climate change. In addition to cutting emissions from burning carbon, Hawaii needs to mitigate climate change by sequestering greenhouse gases through regenerative agriculture and preserving forests. Incentivizing carbon sequestration actions through a payment of services program would allow small farmers, ranchers, and landowners to be compensated for taking actions to help Hawaii reach its climate goals. The purpose of this Act is to establish a farmland and forest carbon smart incentive program that will promote keeping forests and farmlands intact and sequester additional carbon on those lands. SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows: "Part . Hawaii farmLAND and forest carbon smart incentive program §196- Definitions. As used in this part: "Authority" means the Hawaii green infrastructure authority established pursuant to section 196-63. "Carbon incentives contract" means a contract that specifies the following: (1) The eligible practices to be undertaken; (2) The acreage of eligible land; (3) The established rate of compensation; (4) A schedule to verify that the terms of the contract have been fulfilled; and (5) Other terms determined to be necessary by the authority. "Eligible land" means farmland or forest land in the State that is privately owned, or public land leased to a private citizen at the time of initiation of a carbon incentives contract. "Eligible practices" means practices that increase carbon sequestration and storage over a designated period on eligible land. "Phase I activities" means activities identified as having a high likelihood of effectively achieving durable sequestration benefits at reasonable compensation rates across eligible land types, including: (1) Any regenerative annual cropping system that includes at least four of the following practices: (A) Compost application; (B) Cover crops; (C) Crop rotation; (D) Green manure; (E) No-till or reduced tillage; and (F) Organic production; (2) Improved pasture; (3) Agroforestry; (4) Reforestation; (5) Protection of forests and shrublands from disturbance; and (6) Rotational grazing and improved forage. "Phase II activities" means activities identified as those that support significant sequestration potential but require additional technical work to estimate sequestration potential or identify appropriate eligible land types, including: (1) Biofuel production; (2) Methane capture; (3) Improved forest management; (4) Grazing intensity; (5) Mixed production systems; and (6) Efficient nutrient and waste management. "Program" means the Hawaii farmland and forest carbon smart incentive program established by this part. §196- Hawaii farmland and forest carbon smart incentive program; established. There is established within the authority the Hawaii farmland and forest carbon smart incentive program to incentivize carbon sequestration activities through carbon incentives contracts that provide for compensation for eligible practices by program participants. The authority shall administer the program and shall: (1) Conduct program evaluations; (2) Coordinate with the department of agriculture and department of land and natural resources; (3) Provide owners and lessees of eligible land financial incentive payments for eligible practices over a designated period, with appropriate crediting for carbon benefits as specified through a carbon incentives contract; (4) Establish and implement protocols that provide monitoring and verification of compliance with the term of carbon incentives contracts; (5) Make available to the public any modeling, methodology, or protocol resources developed to estimate sequestration rates of potential projects; and (6) Identify, evaluate, and distribute dedicated funds to accomplish the purposes of the program. §196- Program assistance; contract terms and compensation rates. (a) The authority, with assistance from the department of agriculture and department of land and natural resources, shall establish compensation rates and carbon incentives contract terms for phase I activities within one year of the date of receipt of a program application. A carbon incentives contract shall be for a term of no less than one year and no more than thirty years, as determined by the owner or lessee; provided that the length of the contract term shall directly correlate with the rate of compensation paid pursuant to the contract. (b) The department of agriculture and the department of land and natural resources shall assist the authority in carrying out the purposes of the program, including: (1) Estimating sequestration rates for phase I and phase II activities; (2) Conducting research to develop technical underpinning of compensation rates for phase II activities; and (3) Conducting community and landowner outreach activities. §196- Reviewing committee; report. (a) The chairperson of the authority, or the chairperson's designee, shall establish and serve as the chairperson of a reviewing committee to review program applications. The chairpersons of the boards of agriculture and land and natural resources, or their respective designees, shall participate on the reviewing committee. (b) The reviewing committee shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2023 and each regular session thereafter that contains: (1) An estimate of annual and cumulative reductions achieved as a result of the program, determined using standardized measures, including measures of economic efficiency; (2) A summary of any changes to the program made as a result of program measurement, monitoring, and verification; and (3) The total number of acres enrolled in the program. §196- Eligibility. Landowners and lessees of eligible land shall be eligible for the program upon submission of a program application, prepared by the authority, to enter into a carbon incentives contract. An owner of eligible land currently engaged in eligible practices shall not be barred from entering into a carbon incentives contract under this part to continue carrying out eligible practices. An owner or lessee shall not be prohibited from participating in the program due to participation of the owner or lessee in other federal or state conservation assistance programs. Conservation easements shall not be required for eligibility in the program. §196- Priority of carbon positive activities; benefits. (a) Priority eligibility shall be given to phase I and phase II activities that are: (1) Cost effective; (2) Provide co-benefits to the State and owner or lessee of eligible land; (3) Have the potential to create jobs in the forestry or agriculture sectors, and in rural communities; and (4) Achieve community priorities including food security or watershed protection. (b) On an annual basis, The Hawaii greenhouse gas sequestration task force, established by section 225P-4, shall identify and prioritize selected carbon positive activities. The Hawaii greenhouse gas sequestration task force shall also identify co-benefits, which may include but are not limited to: (1) Job creation; (2) Food security and agriculture for local consumption; (3) Water security; (4) Increased biodiversity; (5) Soil health; and (6) Invasive species reduction and removal." SECTION 3. Section 196-64, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows: "(a) In the performance of, and with respect to the functions, powers, and duties vested in the authority by this part, the authority, as directed by the director and in accordance with a green infrastructure loan program order or orders under section 269-171 or an annual plan submitted by the authority pursuant to this section, as approved by the commission for the green infrastructure loan program, may: (1) Make loans and expend funds to finance the purchase or installation of green infrastructure equipment for clean energy technology, demand response technology, and energy use reduction and demand side management infrastructure, programs, and services; (2) Hold and invest moneys in the green infrastructure special fund in investments as permitted by law and in accordance with approved investment guidelines established in one or more orders issued by the commission pursuant to section 269‑171; (3) Hire employees necessary to perform its duties, including an executive director. The executive director shall be appointed by the authority, and the employees' positions, including the executive director's position, shall be exempt from chapter 76; (4) Enter into contracts for the service of consultants for rendering professional and technical assistance and advice, and any other contracts that are necessary and proper for the implementation of the loan program; (5) Enter into contracts for the administration of the loan program, without the necessity of complying with chapter 103D; (6) Establish loan program guidelines to be approved in one or more orders issued by the commission pursuant to section 269-171 to carry out the purposes of this part; (7) Be audited at least annually by a firm of independent certified public accountants selected by the authority, and provide the results of this audit to the department and the commission; [and] (8) Administer the Hawaii farmland and forest carbon smart incentive program established by part ; and [(8)] (9) Perform all functions necessary to effectuate the purposes of this part." SECTION 4. Section 225P-4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows: "(a) The greenhouse gas sequestration task force is established within the office of planning and sustainable development for administrative purposes only. The task force shall [have the following objectives]: (1) Work with public and private stakeholders to establish a baseline for greenhouse gas emissions within Hawaii and short- and long-term benchmarks for increasing greenhouse gas sequestration in the State's agricultural and natural environment; (2) Identify appropriate criteria to measure baseline levels and increases in greenhouse gas sequestration, improvements in soil health, increases in agricultural and aquacultural product yield and quality attributable to greenhouse gas sequestration and improvements in soil health, and other key indicators of greenhouse gas benefits from beneficial agricultural and aquacultural practices that may be used to create a certification program for promoting agricultural and aquacultural practices that generate greenhouse gas benefits and agricultural and aquacultural production benefits; (3) Identify land and marine use policies, agricultural policies, agroforestry policies, and mitigation options that would encourage agricultural and aquacultural practices and land use practices that would promote increased greenhouse gas sequestration, build healthy soils, and provide greenhouse gas benefits; (4) Identify ways to increase the generation and use of compost in Hawaii to build healthy soils; (5) Identify practices and policies that add trees or vegetation to expand the urban tree canopy in urban areas to reduce ambient temperatures, increase climate resiliency, and improve greenhouse gas sequestration in Hawaii; [and] (6) Make recommendations to the legislature and governor regarding measures that would increase climate resiliency, build healthy soils, provide greenhouse gas benefits, or cool urban areas[.]; and (7) Identify and prioritize activities eligible for the Hawaii farmland and forest carbon smart incentive program established by part of chapter 196 on an annual basis." SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2022-2023 to administer the Hawaii farmland and forest carbon smart incentive program. The sum appropriated shall be expended by the Hawaii green infrastructure authority for the purposes of this Act. SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 7. This Act shall take effect on July 1, 2022. INTRODUCED BY: _____________________________
48	48
49	49	SECTION 1. The legislature finds that climate change has led to an increase in the frequency of extreme weather events, which increases the risk of the Hawaiian islands being isolated and make the islands more vulnerable to food and water shortages. The potential for shortages highlights the need for greater food and water security, which can be achieved through increased local food production.
50	50
51	51	The legislature further finds that Hawaii needs to reduce its contribution to climate change. In addition to cutting emissions from burning carbon, Hawaii needs to mitigate climate change by sequestering greenhouse gases through regenerative agriculture and preserving forests. Incentivizing carbon sequestration actions through a payment of services program would allow small farmers, ranchers, and landowners to be compensated for taking actions to help Hawaii reach its climate goals.
52	52
53	53	The purpose of this Act is to establish a farmland and forest carbon smart incentive program that will promote keeping forests and farmlands intact and sequester additional carbon on those lands.
54	54
55	55	SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
56	56
57	57	"Part . Hawaii farmLAND and forest carbon smart incentive program
58	58
59	59	§196- Definitions. As used in this part:
60	60
61	61	"Authority" means the Hawaii green infrastructure authority established pursuant to section 196-63.
62	62
63	63	"Carbon incentives contract" means a contract that specifies the following:
64	64
65	65	(1) The eligible practices to be undertaken;
66	66
67	67	(2) The acreage of eligible land;
68	68
69	69	(3) The established rate of compensation;
70	70
71	71	(4) A schedule to verify that the terms of the contract have been fulfilled; and
72	72
73	73	(5) Other terms determined to be necessary by the authority.
74	74
75	75	"Eligible land" means farmland or forest land in the State that is privately owned, or public land leased to a private citizen at the time of initiation of a carbon incentives contract.
76	76
77	77	"Eligible practices" means practices that increase carbon sequestration and storage over a designated period on eligible land.
78	78
79	79	"Phase I activities" means activities identified as having a high likelihood of effectively achieving durable sequestration benefits at reasonable compensation rates across eligible land types, including:
80	80
81	81	(1) Any regenerative annual cropping system that includes at least four of the following practices:
82	82
83	83	(A) Compost application;
84	84
85	85	(B) Cover crops;
86	86
87	87	(C) Crop rotation;
88	88
89	89	(D) Green manure;
90	90
91	91	(E) No-till or reduced tillage; and
92	92
93	93	(F) Organic production;
94	94
95	95	(2) Improved pasture;
96	96
97	97	(3) Agroforestry;
98	98
99	99	(4) Reforestation;
100	100
101	101	(5) Protection of forests and shrublands from disturbance; and
102	102
103	103	(6) Rotational grazing and improved forage.
104	104
105	105	"Phase II activities" means activities identified as those that support significant sequestration potential but require additional technical work to estimate sequestration potential or identify appropriate eligible land types, including:
106	106
107	107	(1) Biofuel production;
108	108
109	109	(2) Methane capture;
110	110
111	111	(3) Improved forest management;
112	112
113	113	(4) Grazing intensity;
114	114
115	115	(5) Mixed production systems; and
116	116
117	117	(6) Efficient nutrient and waste management.
118	118
119	119	"Program" means the Hawaii farmland and forest carbon smart incentive program established by this part.
120	120
121	121	§196- Hawaii farmland and forest carbon smart incentive program; established. There is established within the authority the Hawaii farmland and forest carbon smart incentive program to incentivize carbon sequestration activities through carbon incentives contracts that provide for compensation for eligible practices by program participants. The authority shall administer the program and shall:
122	122
123	123	(1) Conduct program evaluations;
124	124
125	125	(2) Coordinate with the department of agriculture and department of land and natural resources;
126	126
127	127	(3) Provide owners and lessees of eligible land financial incentive payments for eligible practices over a designated period, with appropriate crediting for carbon benefits as specified through a carbon incentives contract;
128	128
129	129	(4) Establish and implement protocols that provide monitoring and verification of compliance with the term of carbon incentives contracts;
130	130
131	131	(5) Make available to the public any modeling, methodology, or protocol resources developed to estimate sequestration rates of potential projects; and
132	132
133	133	(6) Identify, evaluate, and distribute dedicated funds to accomplish the purposes of the program.
134	134
135	135	§196- Program assistance; contract terms and compensation rates. (a) The authority, with assistance from the department of agriculture and department of land and natural resources, shall establish compensation rates and carbon incentives contract terms for phase I activities within one year of the date of receipt of a program application. A carbon incentives contract shall be for a term of no less than one year and no more than thirty years, as determined by the owner or lessee; provided that the length of the contract term shall directly correlate with the rate of compensation paid pursuant to the contract.
136	136
137	137	(b) The department of agriculture and the department of land and natural resources shall assist the authority in carrying out the purposes of the program, including:
138	138
139	139	(1) Estimating sequestration rates for phase I and phase II activities;
140	140
141	141	(2) Conducting research to develop technical underpinning of compensation rates for phase II activities; and
142	142
143	143	(3) Conducting community and landowner outreach activities.
144	144
145	145	§196- Reviewing committee; report. (a) The chairperson of the authority, or the chairperson's designee, shall establish and serve as the chairperson of a reviewing committee to review program applications. The chairpersons of the boards of agriculture and land and natural resources, or their respective designees, shall participate on the reviewing committee.
146	146
147	147	(b) The reviewing committee shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2023 and each regular session thereafter that contains:
148	148
149	149	(1) An estimate of annual and cumulative reductions achieved as a result of the program, determined using standardized measures, including measures of economic efficiency;
150	150
151	151	(2) A summary of any changes to the program made as a result of program measurement, monitoring, and verification; and
152	152
153	153	(3) The total number of acres enrolled in the program.
154	154
155	155	§196- Eligibility. Landowners and lessees of eligible land shall be eligible for the program upon submission of a program application, prepared by the authority, to enter into a carbon incentives contract. An owner of eligible land currently engaged in eligible practices shall not be barred from entering into a carbon incentives contract under this part to continue carrying out eligible practices. An owner or lessee shall not be prohibited from participating in the program due to participation of the owner or lessee in other federal or state conservation assistance programs. Conservation easements shall not be required for eligibility in the program.
156	156
157	157	§196- Priority of carbon positive activities; benefits. (a) Priority eligibility shall be given to phase I and phase II activities that are:
158	158
159	159	(1) Cost effective;
160	160
161	161	(2) Provide co-benefits to the State and owner or lessee of eligible land;
162	162
163	163	(3) Have the potential to create jobs in the forestry or agriculture sectors, and in rural communities; and
164	164
165	165	(4) Achieve community priorities including food security or watershed protection.
166	166
167	167	(b) On an annual basis, The Hawaii greenhouse gas sequestration task force, established by section 225P-4, shall identify and prioritize selected carbon positive activities. The Hawaii greenhouse gas sequestration task force shall also identify co-benefits, which may include but are not limited to:
168	168
169	169	(1) Job creation;
170	170
171	171	(2) Food security and agriculture for local consumption;
172	172
173	173	(3) Water security;
174	174
175	175	(4) Increased biodiversity;
176	176
177	177	(5) Soil health; and
178	178
179	179	(6) Invasive species reduction and removal."
180	180
181	181	SECTION 3. Section 196-64, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
182	182
183	183	"(a) In the performance of, and with respect to the functions, powers, and duties vested in the authority by this part, the authority, as directed by the director and in accordance with a green infrastructure loan program order or orders under section 269-171 or an annual plan submitted by the authority pursuant to this section, as approved by the commission for the green infrastructure loan program, may:
184	184
185	185	(1) Make loans and expend funds to finance the purchase or installation of green infrastructure equipment for clean energy technology, demand response technology, and energy use reduction and demand side management infrastructure, programs, and services;
186	186
187	187	(2) Hold and invest moneys in the green infrastructure special fund in investments as permitted by law and in accordance with approved investment guidelines established in one or more orders issued by the commission pursuant to section 269‑171;
188	188
189	189	(3) Hire employees necessary to perform its duties, including an executive director. The executive director shall be appointed by the authority, and the employees' positions, including the executive director's position, shall be exempt from chapter 76;
190	190
191	191	(4) Enter into contracts for the service of consultants for rendering professional and technical assistance and advice, and any other contracts that are necessary and proper for the implementation of the loan program;
192	192
193	193	(5) Enter into contracts for the administration of the loan program, without the necessity of complying with chapter 103D;
194	194
195	195	(6) Establish loan program guidelines to be approved in one or more orders issued by the commission pursuant to section 269-171 to carry out the purposes of this part;
196	196
197	197	(7) Be audited at least annually by a firm of independent certified public accountants selected by the authority, and provide the results of this audit to the department and the commission; [and]
198	198
199	199	(8) Administer the Hawaii farmland and forest carbon smart incentive program established by part ; and
200	200
201	201	[(8)] (9) Perform all functions necessary to effectuate the purposes of this part."
202	202
203	203	SECTION 4. Section 225P-4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
204	204
205	205	"(a) The greenhouse gas sequestration task force is established within the office of planning and sustainable development for administrative purposes only. The task force shall [have the following objectives]:
206	206
207	207	(1) Work with public and private stakeholders to establish a baseline for greenhouse gas emissions within Hawaii and short- and long-term benchmarks for increasing greenhouse gas sequestration in the State's agricultural and natural environment;
208	208
209	209	(2) Identify appropriate criteria to measure baseline levels and increases in greenhouse gas sequestration, improvements in soil health, increases in agricultural and aquacultural product yield and quality attributable to greenhouse gas sequestration and improvements in soil health, and other key indicators of greenhouse gas benefits from beneficial agricultural and aquacultural practices that may be used to create a certification program for promoting agricultural and aquacultural practices that generate greenhouse gas benefits and agricultural and aquacultural production benefits;
210	210
211	211	(3) Identify land and marine use policies, agricultural policies, agroforestry policies, and mitigation options that would encourage agricultural and aquacultural practices and land use practices that would promote increased greenhouse gas sequestration, build healthy soils, and provide greenhouse gas benefits;
212	212
213	213	(4) Identify ways to increase the generation and use of compost in Hawaii to build healthy soils;
214	214
215	215	(5) Identify practices and policies that add trees or vegetation to expand the urban tree canopy in urban areas to reduce ambient temperatures, increase climate resiliency, and improve greenhouse gas sequestration in Hawaii; [and]
216	216
217	217	(6) Make recommendations to the legislature and governor regarding measures that would increase climate resiliency, build healthy soils, provide greenhouse gas benefits, or cool urban areas[.]; and
218	218
219	219	(7) Identify and prioritize activities eligible for the Hawaii farmland and forest carbon smart incentive program established by part of chapter 196 on an annual basis."
220	220
221	221	SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2022-2023 to administer the Hawaii farmland and forest carbon smart incentive program.
222	222
223	223	The sum appropriated shall be expended by the Hawaii green infrastructure authority for the purposes of this Act.
224	224
225	225	SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
226	226
227	227	SECTION 7. This Act shall take effect on July 1, 2022.
228	228
229	229
230	230
231	231	INTRODUCED BY: _____________________________
232	232
233	233	INTRODUCED BY:
234	234
235	235	_____________________________
236	236
237	237
238	238
239	239
240	240
241	241	Report Title: Hawaii Farmland and Forest Carbon Smart Incentive Program; Hawaii Green Infrastructure Authority; Appropriation Description: Establishes the Hawaii farmland and forest carbon smart incentive program. Appropriates funds to the Hawaii Green Infrastructure Authority. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
242	242
243	243
244	244
245	245
246	246
247	247	Report Title:
248	248
249	249	Hawaii Farmland and Forest Carbon Smart Incentive Program; Hawaii Green Infrastructure Authority; Appropriation
250	250
251	251
252	252
253	253	Description:
254	254
255	255	Establishes the Hawaii farmland and forest carbon smart incentive program. Appropriates funds to the Hawaii Green Infrastructure Authority.
256	256
257	257
258	258
259	259
260	260
261	261
262	262
263	263	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.