HB651

HOUSE OF REPRESENTATIVES	H.B. NO.	651
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII

A BILL FOR AN ACT

relating to conservation banking.

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

SECTION 1. The legislature finds that the use of conservation banks as compensatory mitigation projects for incidental take licensees with habitat conservation plans increases certainty that the mitigation obligation is complete, expedites project review, and makes project costs more predictable for incidental take licensees. Conservation banks provide long-term, landscape-scale protection to Hawaii's threatened, endangered, candidate, and proposed species.

The purpose of this Act is to authorize the department of land and natural resources to operate and approve conservation banks to provide for situations where a person or entity is required to provide compensatory mitigation to offset adverse impacts to threatened, endangered, candidate, or proposed species as part of an approved incidental take license and habitat conservation plan.

SECTION 2. Chapter 195D, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part

CONSERVATION BANKING

§195D-A Definitions. As used in this part:

"Bank sponsor" means any public or private entity responsible for establishing or operating a conservation bank.

"Compensatory mitigation" means actions taken to fulfill, in whole or in part, mitigation requirements pursuant to this chapter.

"Conservation bank" means a site or suite of sites established under a conservation bank instrument for the purposes of restoring, creating, enhancing, or protecting populations of threatened, endangered, candidate, or proposed species and their habitats expressed as credits.

"Conservation bank instrument" means an agreement between the board and a bank sponsor that establishes a conservation bank and describes the terms and conditions of its operation, including a system for assessing and releasing credits to be used for compensatory mitigation.

"Credit" means a value based on defined units representing the increase in numbers of individuals of a listed species or attainment of enhanced ecological functions or services essential for the survival of a listed species at a conservation bank and released as the conservation bank meets performance criteria included in its conservation bank instrument.

"Credit bundling" means a single unit of a conservation bank that provides two or more spatially overlapping ecosystem functions or services that are grouped together into a single credit type and used as a single commodity to compensate for a single permitted action.

"Credit stacking" means a single unit of a conservation bank that provides two or more credit types representing spatially overlapping ecosystem functions or services that can be unstacked and used as separate commodities to compensate for different permitted actions.

"Long-term management plan" means a bank sponsor's long‑term plan of how a conservation bank will be managed after performance standards have been achieved to ensure long-term sustainability of the species identified in section 195D‑B(b)(2). Long-term management plans may include descriptions of actions and monitoring, annual cost estimates for those needs, and funding mechanisms used to meet those needs.

"Maintenance plan" means a bank sponsor's short-term plan to ensure the conservation bank remains viable after construction and throughout the monitoring period. A maintenance plan may include infrastructure and ecological management components within the conservation bank and identify regular or recurring actions needed for the upkeep of the conservation bank site until the conservation bank transitions into long-term management according to the long-term management plan.

"Monitoring requirements" means a description of parameters to be monitored from actions described in the maintenance plan to determine if the conservation bank is on track to meet performance standards or if adaptive management is needed.

"Performance standards" means ecologically based standards that are used to determine whether the conservation bank is achieving objectives in the resource management plan. Each performance standard shall describe the attribute to be measured, the level that constitutes success, and the time‑period to achieve success.

"Site protection instrument" means an interest in real property that protects a conservation bank for either long-term stewardship or in perpetuity, such as a conservation easement, deed restriction, condition, or covenant.

§195D-B Conservation banking. (a) The department or other bank sponsor may seek board approval of a conservation bank instrument to operate a conservation bank for the purposes of restoring, creating, enhancing, or protecting populations of threatened, endangered, candidate, or proposed species and their habitats to provide for situations where a person or entity is required to provide compensatory mitigation to offset adverse impacts to threatened, endangered, candidate, or proposed species as part of an approved incidental take license and habitat conservation plan.

(b) Applications to establish and operate a conservation bank shall include a proposed conservation bank instrument that identifies:

(1) The geographic area encompassed by the conservation bank and the ecosystems, natural communities, or habitat types within the conservation bank;

(2) The endangered, threatened, proposed, or candidate species that the conservation bank is established to protect;

(3) A resource management plan for long-term stewardship that includes:

(A) Goals and objectives;

(B) Baseline information that includes a review of the presence or absence of any endangered or threatened species on the property including the species identified in section 195D-B(b)(2);

(D) Monitoring requirements;

(E) A maintenance plan;

(F) A long-term management plan;

(G) An adaptive management strategy that specifies the actions to be taken if the resource management plan is not achieving its goals; and

(H) Any other information that the department requires in a rule adopted pursuant to section 195D-C;

(4) A system for assessing and releasing credits; and

(5) The measures for property protection.

(c) In addition to the requirements set forth in subsection (b), for applications from bank sponsors other than the department, the proposed conservation bank instrument shall contain:

(1) Assurances that the bank sponsor has the scientific and technical competence required to perform the necessary conservation actions for the species identified in section 195D-B(b)(2);

(2) Financial assurances necessary to ensure the successful completion of habitat construction, management, monitoring, and remedial actions;

(3) A site protection instrument that prohibits incompatible uses; and

(4) A provision requiring the bank sponsor to submit to the department within ninety days of each fiscal year ending June 30 an annual report on the current status of the conservation bank.

(d) After consultation with the endangered species recovery committee, the board may approve a conservation bank instrument for the operation of a conservation bank by the department or other bank sponsor if the board determines that:

(1) The conservation bank will further the purposes of this chapter by restoring, creating, enhancing, or protecting populations of threatened, endangered, candidate, or proposed species and their habitats;

(2) The system for assessing and releasing credits is based on the best available scientific information and, where there is any uncertainty about what constitutes the best available science, the rationale used for developing the system for assessing and releasing credits gives the benefit of the doubt to the species;

(3) For a conservation bank operated by a bank sponsor other than the department:

(A) The bank sponsor has the scientific and technical competence required to perform the necessary conservation actions for the species identified in subsection (b)(2);

(B) The bank sponsor's funding source is adequate to ensure the successful completion of habitat construction, management, monitoring, and remedial actions;

(C) The nature and duration of the site protection instrument is adequate to ensure the successful completion of habitat construction, management, monitoring, and remedial actions; and

(D) The conservation bank instrument shall run with the land for the term specified in the site protection instrument and shall not be assignable or transferable separate from the land;

(4) For a conservation bank operated by the department, the conservation bank shall be established on land managed by the department; and

(5) The conservation bank instrument satisfies all the requirements in subsection (b) and, for applications from bank sponsors other than the department, subsection (c).

Board approval shall require an affirmative vote of not less than two-thirds of the authorized membership of the board. The board shall not approve a conservation bank instrument that the majority of the endangered species recovery committee recommended for disapproval.

(e) The board's approval of a conservation bank instrument for a conservation bank operated by a bank sponsor other than the department does not relieve the bank sponsor of its obligation to secure a temporary license pursuant to section 195D-4(f) or (g) prior to causing take of any endangered or threatened species.

(f) After a conservation bank has created a credit following the system for assessing and releasing credits identified in the conservation bank instrument, the bank sponsor may transfer or sell the credit to an incidental take licensee for use of an approved conservation bank as compensatory mitigation, provided that:

(1) The use of the credit as compensatory mitigation for incidental take of threatened or endangered species is identified in an approved habitat conservation plan and satisfies incidental take license requirements in section 195D-4(g) and habitat conservation plan requirements in section 195D-21(b);

(2) Credit stacking shall be prohibited;

(3) Credit bundling may be used to compensate for all or a subset of the functions or services included in the credit type but shall be used only once; and

(4) Once a credit is transferred or sold, that credit shall be retired and cannot be used again.

(g) Notwithstanding any other law to the contrary, the board shall suspend or revoke the approval of any conservation bank instrument approved under this section if the board determines that:

(1) The bank sponsor or its successor has breached its obligations under the conservation bank instrument and has failed to cure the breach in a timely manner, and the effect of the breach is to diminish the likelihood that the conservation bank will achieve its goals within the time frames or in the manner set forth in the conservation bank instrument;

(2) For a conservation bank operated by a bank sponsor other than the department, the conservation bank no longer has the funding source specified in subsection (d)(3)(B) or another sufficient funding source to ensure the successful completion of the habitat construction, management, monitoring, and remedial actions in accordance with the conservation bank instrument; or

(3) Continued operation of the conservation bank would appreciably reduce the likelihood of survival or recovery of any threatened or endangered species in the wild.

If approval of a conservation bank instrument is suspended, then the bank sponsor shall not sell or transfer any credits from that conservation bank, until such time as the conservation bank instrument is reinstated. Any bank sponsor whose conservation bank instrument has been revoked shall not be eligible to apply to operate another conservation bank.

(h) An approved conservation bank instrument may be amended through administrative amendment or major amendment as follows:

(1) Administrative amendments shall be for changes to the bank sponsor's name, address, or contact information. The department may process administrative amendments without recommendation from the endangered species recovery committee and without approval from the board; and

(2) Major amendments shall be for changes that are not administrative amendments. Major amendments include, but are not limited to, changes to the bank sponsor, the species that the conservation bank is established to protect, the resource management plan, the financial assurances, the system for assessing and releasing credits, or the site protection instrument. Major amendments shall be reviewed and recommended for approval by the endangered species recovery committee and approved by the board pursuant to the procedure set forth in subsection (d).

(i) The department may collect from bank sponsors fees or payment for costs incurred, including but not limited to costs included by the department during:

(1) Its rulemaking process;

(2) Application processing; and

(3) The establishment, monitoring, and oversight of the bank sponsor's conservation bank.

(j) This part shall not apply to aquatic life or their habitats.

§195D-C Conservation banking; rules. The department may adopt rules pursuant to chapter 91 necessary to implement this part."

SECTION 3. Section 195D-25, Hawaii Revised Statutes, is amended to read as follows:

"§195D-25 Endangered species recovery committee. (a) There is established within the department for administrative purposes only, the endangered species recovery committee, which shall serve as a consultant to the board and the department on matters relating to endangered, threatened, proposed, and candidate species. The committee shall consist of two field biologists with expertise in conservation biology, the chairperson of the board or the chairperson's designee, the ecoregion director of the United States Fish and Wildlife Service or the director's designee, [~~the director of the United States Geological Survey, Biological Resources Division or the director's designee,~~] the associate director of the United States Geological Survey, Ecosystem Mission Area or associate director's designee, the dean of the [~~University~~] university of Hawaii at Manoa college of natural sciences or the dean's designee, and a person possessing a background in native Hawaiian traditional and customary practices, as evidenced by:

(1) A college degree in a relevant field, such as Hawaiian studies, native Hawaiian law, native Hawaiian traditional and customary practices, or related subject area;

(2) Work history that demonstrates an appropriate level of knowledge in native Hawaiian traditional and customary practices; or

(3) Substantial experience in native Hawaiian traditional and customary practices.

Nongovernmental members shall be appointed by the governor pursuant to section 26-34. Nongovernmental members shall not serve for more than two consecutive terms. Nongovernmental members shall serve for four-year staggered terms, except that one of the members first appointed shall serve for two years.

Governmental members from the federal agencies are requested but not required to serve on the committee. The ability of the committee to carry out its functions and purposes shall not be affected by the vacancy of any position allotted to a federal governmental member.

(b) The endangered species recovery committee shall:

(1) Review all applications and proposals for habitat conservation plans, safe harbor agreements, [~~and~~] incidental take licenses, and conservation banks and make recommendations, based on a full review of the best available scientific and other reliable data and at least one site visit to each property that is the subject of the proposed action, and in consideration of the cumulative impacts of the proposed action on the recovery potential of the endangered, threatened, proposed, or candidate species, to the department and the board as to whether or not they should be approved, amended, or rejected;

(2) Review all habitat conservation plans, safe harbor agreements, [~~and~~] incidental take licenses, and conservation banks on an annual basis to ensure compliance with agreed to activities and, on the basis of any available monitoring reports, and scientific and other reliable data, make recommendations for any necessary changes;

(3) Consider and recommend appropriate incentives to encourage landowners to voluntarily engage in efforts that restore and conserve endangered, threatened, proposed, and candidate species;

(4) Perform such other duties as provided in this chapter;

(5) Consult with persons possessing expertise in such areas as the committee may deem appropriate and necessary in the course of exercising its duties; and

(6) Not conduct more than one site visit per year to each property that is the subject of a habitat conservation plan or safe harbor agreement[.], or conservation bank instrument."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

Report Title:

DLNR; Conservation Banks

Description:

Authorizes the Department of Land and Natural Resources to operate and approve conservation banks and amends the Endangered Species Recovery Committee's membership and scope of authority. Effective upon approval.

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

HB 651: RELATING TO CONSERVATION BANKING.

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