HB 1622: SPRB; Bana Pacific Inc.; Biogas Production Facility

A BILL FOR AN ACT

RELATING TO THE ISSUANCE OF SPECIAL PURPOSE REVENUE BONDS TO ASSIST BANA PACIFIC INC.

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

     SECTION 1.  The legislature finds that the State faces critical challenges in energy security, waste management, and climate change mitigation.  As the most isolated population center in the world, the State is highly dependent on imported fossil fuels, which makes its energy system vulnerable to supply chain disruptions and price volatility.  Additionally, the State generates significant amounts of organic waste, much of which is directed to landfills, contributing to methane emissions and reducing landfill capacity.

     The legislature further finds that the proposed project by Bana Pacific Inc., a Hawaii corporation, to construct and operate a biogas production facility addresses these pressing challenges.  Specifically, the proposed facility will:

     (1)  Convert locally sourced biomass, agricultural byproducts, and organic waste into biogas and renewable natural gas;

     (2)  Incorporate advanced technologies to produce green hydrogen using renewable energy sources; and

     (3)  Provide a sustainable and renewable source of energy for power generation, transportation, and industrial applications.

     The legislature recognizes that the project will not only reduce the State's dependence on imported fossil fuels but also advance its climate and sustainability goals, including the reduction of greenhouse gas emissions and the transition to one hundred per cent renewable energy by 2045.

     Furthermore, the legislature acknowledges the wide-ranging benefits of the project.  For energy and fuel security, the proposed biogas production facility will produce reliable and renewable energy sources, reducing the State's vulnerability to global energy markets.  By diverting organic waste from landfills and producing renewable fuels, the project will substantially reduce methane emissions and the State's overall carbon footprint.  The project supports waste mitigation by providing an environmentally responsible solution to manage organic waste and residual biomass, alleviating pressure on the State's limited landfill capacity.  By converting agricultural byproducts into valuable energy resources, the facility will support local farmers and fosters sustainable agricultural practices.  In addition, the use of underutilized lands for biomass collection will reduce wildfire risks while improving land management practices.  Finally, the construction and operation of the facility will create significant job opportunities, stimulate local economic growth, and generate tax revenue for the State.

     Accordingly, the purpose of this Act is to authorize the issuance of special purpose revenue bonds to assist Bana Pacific Inc. in the construction of a biogas production facility that will convert local biomass and organic material into biogas, a clean, renewable source of fuel for power generation.

     SECTION 2.  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.

     SECTION 3.  Notwithstanding the provisions of Act 182, Session Laws of Hawaii 2022, as amended by Act 262, Session Laws of Hawaii 2023, the legislature authorizes the issuance of special purpose revenue bonds to assist Bana Pacific Inc. in building facilities pursuant to part V, chapter 39A, Hawaii Revised Statutes, relating to the power to issue special purpose revenue bonds to assist industrial enterprises that require the allocation of the annual state ceiling under section 39B-2, Hawaii Revised Statutes, for the period July 1, 2026, through December 31, 2028.

     SECTION 4.  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 $180,000,000, in one or more series, for the purpose of assisting Bana Pacific Inc., a Hawaii corporation, in the construction of a biogas production facility that will convert local biomass and organic material into biogas, a clean, renewable source of fuel for power generation.  The legislature hereby finds and determines that the construction of a biogas production facility to convert local biomass and organic material into biogas constitutes a project as defined in part V, chapter 39A, Hawaii Revised Statutes, and the financing thereof constitutes assistance to an industrial enterprise.

     SECTION 5.  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 6.  The department of budget and finance is authorized, from time to time, including times subsequent to June 30, 2031, 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 4 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 4.  In making this determination, the department of budget and finance shall comply with federal law relating to the exemption from federal income taxation of the interest on bonds of the nature authorized by this section.

     SECTION 7.  The authorization to issue special purpose revenue bonds under this Act shall lapse on June 30, 2031.

     SECTION 8.  This Act shall take effect on July 1, 2026.

Report Title:

SPRB; Bana Pacific Inc.; Biogas Production Facility

Description:

Authorizes the issuance of special purpose revenue bonds to assist Bana Pacific Inc. in constructing a biogas production facility.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.