SECTION 1. The legislature finds that taxpayers paid $34,900,000 last year for the University of Hawaii's annual electric bill. Together with the rest of the University of Hawaii system, the energy expenses for university facilities exceed $40,000,000 per year. The rising cost of energy has resulted in increasing costs and repeated tuition increases for students.

The legislature also finds that the University of Hawaii system has many crumbling buildings and a deferred maintenance backlog nearing $1,000,000,000, which has left many facilities long out-of-date and, in some cases, unusable.

The legislature finds that Hawaii leads the nation in the creation of pioneering models of energy and infrastructure financing to save taxpayers money. In 2013, the legislature established the green energy market securitization program, which uses private investment dollars to pay for the upfront costs of energy infrastructure retrofits for both public and private purposes, which is paid back using the savings realized from the reduction in energy costs generated by the new energy-efficient infrastructure while also producing an additional net savings to the end user.

By using energy-savings financing mechanisms such as the green energy market securitization fund to pay for a large portion of any renewable energy project, the university can reduce its electrical consumption at a fraction of the cost to taxpayers. Furthermore, the use of energy-savings financing mechanisms such as the green energy market securitization fund to pay for the renewable energy portion of any deferred maintenance project can help the university reduce its deferred maintenance backlog and lower its electrical consumption at a fraction of the cost to taxpayers.

The purpose of this Act is to maximize taxpayer savings by establishing long-term commitments to reduce energy use at the University of Hawaii and by appropriating funds through a special fund that incentivizes the use of energy-savings financing mechanisms to complete renewable energy and deferred maintenance projects at a fraction of the cost to taxpayers.

SECTION 2. Chapter 304A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§304A-A Energy use; net-zero goal. (a) The University of Hawaii shall establish a collective goal of becoming net-zero with respect to energy use, producing as much energy as the system consumes across all campuses, by January 1, 2035.

(b) The University of Hawaii shall establish a benchmark for the amount and value of energy consumed during the 2014-2015 fiscal year, against which it shall measure its progress toward the goal set forth in subsection (a)."

SECTION 3. Chapter 304A, Hawaii Revised Statutes, is amended by adding a new section to part V to be appropriately designated and to read as follows:

"§304A-B University of Hawaii net-zero special fund. (a) There is established the University of Hawaii net-zero special fund, into which shall be deposited:

(1) Appropriations from the legislature;

(2) Moneys from the University of Hawaii, pursuant to subsection (c);

(3) Moneys from other sources.

(b) The special fund shall be used:

(1) For renewable energy and efficiency capital improvement projects that advance the net-zero energy goal set forth in section 304A-A(a); and

(2) For deferred maintenance capital improvement projects with a renewable energy or efficiency component that advances the net-zero goal set forth in section 304A-A(a); and

(3) In conjunction with financing that meets the requirements of subsection (c), whose debt service shall not exceed energy savings as approved through:

(A) The green energy market securitization program of the state energy office of the department of business, economic development, and tourism; or

(B) Comparably-priced energy-savings financing mechanisms to pay for facility upgrades that advance the goal set forth in section 304A-A(a).

(c) For each capital improvement project funded through the special fund, the University of Hawaii shall annually deposit into the special fund the current value of the energy saved or offset by the project during the preceding fiscal year, excluding any debt service costs for the project, until the debt service costs for the project have been paid in full.

(d) The University of Hawaii shall submit an annual report to the legislature by November 30 of each year that includes the following information:

(1) The total debt service in the prior fiscal year for capital improvement projects funded through the special fund;

(2) The current value of the energy saved in the prior fiscal year through capital improvement projects with outstanding debt service funded through the special fund;

(3) The status of each capital improvement project funded through the special fund, if the project is not yet complete;

(4) Recommendations for the next phase of capital improvement projects to be funded through the special fund; and

(5) Overall progress toward the net-zero goal set forth in section 304A-A(a).

(e) As used in this section, "special fund" means the University of Hawaii net-zero special fund."

SECTION 4. The director of finance is authorized to issue general obligation bonds in the sum of $ or so much thereof as may be necessary and the same sum or so much thereof as may be necessary is appropriated for fiscal year 2015-2016 for the purpose of capital improvement projects to be funded through the University of Hawaii net-zero special fund.

SECTION 5. The appropriation made for the capital improvement project authorized by this Act shall not lapse at the end of the fiscal biennium for which the appropriation is made; provided that all moneys from the appropriation unencumbered as of June 30, 2018, shall lapse as of that date.

SECTION 6. 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 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 into the University of Hawaii net-zero special fund.

SECTION 7. There is appropriated out of the University of Hawaii net-zero special fund the sum of $ or so much thereof as may be necessary for fiscal year 2015-2016 for the following purposes:

(1) University of Hawaii at Manoa:

(A) $ for plans, design, construction, and equipment for the retrofit of Kuykendall hall; provided that $ of this sum shall be funded through the green energy market securitization program of the state energy office of the department of business, economic development, and tourism or a comparably lower-priced financing mechanism; and

(B) $ for plans, design, construction, and equipment for the retrofit of Klum gym, with new athletics-support functions; provided that $ of this sum shall be funded through the green energy market securitization program of the state energy office of the department of business, economic development, and tourism or a comparably lower-priced financing mechanism.

(2) University of Hawaii at Hilo:

(A) $ for plans, design, construction, and equipment for the retrofit of the learning resources center and central plant; provided that $ of this sum shall be funded through the green energy market securitization program of the state energy office of the department of business, economic development, and tourism or a comparably lower-priced financing mechanism; and

(B) $ for plans, design, construction, and equipment for the retrofit of the university classroom building; provided that $ of this sum shall be funded through the green energy market securitization program of the state energy office of the department of business, economic development, and tourism or a comparably lower-priced financing mechanism.

The sums appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 8. 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 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 to fund two positions within the University of Hawaii system to provide the necessary financial, technical, and other support to advance the goal set forth in section 304A-A, Hawaii Revised Statutes.

The sums appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 9. In codifying the new sections added by sections 2 and 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 10. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2015.

HOUSE OF REPRESENTATIVES	H.B. NO.	1509
TWENTY-EIGHTH LEGISLATURE, 2015		H.D. 1
STATE OF HAWAII