SB1718 HD2 CD1
Report Title: SPRB; Renewable Energy; Biodiesel; BlueEarth Maui
Biodiesel LLC
Description: Authorizes special purpose revenue bonds to BlueEarth Maui
Biodiesel, LLC, for construction of a biodiesel refinery on Maui.
(CD1)
A BILL FOR AN ACT RELATING TO THE ISSUANCE OF SPECIAL PURPOSE REVENUE
BONDS FOR ELECTRICAL GENERATION ON THE ISLAND OF MAUI. BE IT ENACTED BY
THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that support for the development
of renewable energy systems and efficient energy systems in the State,
which is geographically isolated from sources of oil, continues to be
in the public interest.
The legislature further finds that BlueEarth Maui Biodiesel, LLC,
proposes to build biodiesel transesterification plants on the island of
Maui. BlueEarth Maui Biodiesel, LLC, is engaged in the planning,
design, and construction of a biodiesel refinery on Maui to supply a
renewable source of electrical generation fuel replacing a portion of
the petroleum-based feedstocks presently being used. The legislature
notes that special purpose revenue bonds are available to entities
other than BlueEarth Maui Biodiesel, LLC.
SECTION 2. (a) The legislature finds and declares 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. The legislature further finds that the issuance of
special purpose revenue bonds and refunding of special purpose revenue
bonds under this Act to assist BlueEarth Maui Biodiesel, LLC, in the
planning, design, and construction of a biodiesel refinery on Maui will
make the generation of electricity with renewable biofuels economically
feasible and provide numerous benefits.
Electrical generation with biodiesel fuel will: (1) Reduce dependence
on imported fossil fuels for electrical generation, increasing Hawaii's
energy security; (2) Help to meet Hawaii's renewable energy goals by
using existing generation assets with on-island produced renewable
biodiesel; (3) Reduce greenhouse-gas emissions via a renewable
closed loop carbon system; (4) Provide significant reductions of
hydrocarbon, sulfur, toxic compounds, and particulate matter emissions
compared to burning petroleum diesel; and (5) Eliminate,
with the completion of phase one of the project, the need to purchase
and import up to forty million gallons of diesel per year. This
amount will increase as phases two and three are completed.
(b) Benefits from the BlueEarth Maui Biodiesel, LLC,
project will include: (1) Encouraging local agricultural
research, development, and cultivation of renewable energy feedstock
crops on Hawaii to be used by the project that will stimulate locally
grown biodiesel feedstock crops, such as palm and jatropha, bringing
fallow agricultural lands back into production; (2)
Providing biodiesel at competitive prices as compared to importation
alternatives; (3) Stimulating locally produced ethanol for
use as a renewable component in the transesterification of vegetable
oils into biodiesel; (4) Generating substantial moneys in
construction project spending over a period of multiple years as each
of the three phases (approximately forty-million-gallon capacity added
with each phase) is built; and (5) Assisting the State, county of
Maui, and the federal government to meet their goals and mandates for
energy efficiency and renewable energy use.
SECTION 3. 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 special purpose revenue bonds in a
total amount not to exceed $59,000,000, in one or more series, for the
purpose of assisting BlueEarth Maui Biodiesel, LLC, with the
construction of a biodiesel refinery on Maui with primary production
volumes designated as fuel for electrical generation. The
legislature finds and determines that BlueEarth Maui Biodiesel, LLC's
planning, design, and construction of a biodiesel refinery to supply a
renewable source of electrical-generation fuel constitutes a project as
defined in part V, chapter 39A, Hawaii Revised Statutes, and the
financing thereof is assistance to an industrial enterprise.
SECTION 4. The special purpose revenue bonds and the refunding
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.
SECTION 5. The department of budget and finance is authorized,
from time to time, including times subsequent to June 30, 2012, to
issue special purpose revenue bonds in whatever principal amounts the
department shall determine to be necessary to refund the special
purpose revenue bonds authorized in section 3 and to refund special
purpose revenue bonds authorized in this section, regardless of whether
the outstanding special purpose revenue bonds or refunding special
purpose revenue bonds have matured or are the subject of redemption or
whether the refunding special purpose revenue bonds shall be bonds for
the multi-project programs described in section 3.
SECTION 6. As a condition precedent to the issuance of special
purpose revenue bonds under this Act, BlueEarth Maui Biodiesel, LLC, or
its affiliates shall give priority to utilizing Hawaii grown fuel stock
when available and shall not import fuel stock that is the product of
growth on farms where forests have been cleared to accommodate the
growing of such crops. To receive bond financing under this Act,
BlueEarth Maui Biodiesel, LLC, shall be required to import fuel stock
produced only from sustainable sources; provided that BlueEarth Maui
Biodiesel, LLC, and its affiliates shall document that sustainable
sources are utilized; provided further that the documentation shall be
transmitted or otherwise made available to the department of business,
economic development, and tourism. The department of business,
economic development, and tourism shall certify the documentation
submitted and shall notify the department of budget and finance in
writing as to whether BlueEarth Maui Biodiesel, LLC, and its affiliates
are in compliance with this section prior to the issuance of any
special purpose revenue bonds being issued pursuant to this Act.
SECTION 7. Notwithstanding any law to the contrary, the interest
in bonds issued under this Act shall be subject to state and federal
income tax laws.
SECTION 8. The authorization to issue special purpose revenue
bonds under this Act shall lapse on June 30, 2012.
SECTION 9. This Act shall take effect on July 1, 2007.