SECTION 1. The legislature finds that Hawaii leads the nation in the creation of pioneering models of energy and infrastructure financing to save money for taxpayers. 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.

The legislature further finds that by combining private investment capital in pioneering energy financing programs, such as the green energy market securitization program, with long-term commitments to reduce energy use in public facilities, aggregate energy savings can be used over time to pay for sorely needed public facility upgrades at a fraction of their usual cost to taxpayers and can save significant amounts of money annually by eliminating costly electric bills.

The University of Hawaii at Manoa alone has a $34,900,000 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. These rising costs are borne by taxpayers and tuition-paying students.

Furthermore, the legislature finds that the University of Hawaii system has many crumbling facilities and a deferred maintenance backlog that is estimated to cost hundreds of millions of dollars to clear and that is currently unable to be reduced in the near future given current limitations on the availability of state funding.

The legislature finds that energy efficiency and generation projects save money. However, the financial aggregation of energy efficiency and deferred maintenance projects can together save even more money and allow the State both to reduce energy costs and address the backlog of deferred maintenance.

The purpose of this Act is to establish a long-term goal for reducing energy consumption and energy bills to zero, aggregate energy efficiency and deferred maintenance projects to save capital improvement funding, upgrade the infrastructure of the University of Hawaii system, and use the energy savings to retrofit additional infrastructure and provide student scholarships.

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); and

(3) Moneys from other sources.

(b) The special fund:

(1) Shall be used for capital improvement projects that advance the goal set forth in section 304A-A; and

(2) May be used in conjunction with:

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

(B) Comparably lower-priced financing mechanisms to pay for facility upgrades that advance the goal set forth in section 304A-A and meet the requirements of subsection (c).

(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 by the project during the preceding fiscal year, as measured against the current value of the energy consumed during the fiscal year prior to the execution of the project, excluding any debt service costs for the project, until the debt service costs for the project have been paid in full; provided that:

(1) Fifty per cent of all moneys deposited into the special fund pursuant to this subsection shall be used annually to provide scholarships to students with the greatest demonstrated financial need; and

(2) Fifty per cent of all moneys deposited into the special fund pursuant to this subsection may be used for new projects that meet the criteria under subsection (b).

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

(1) The balance, deposits, and expenditures in the special fund;

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

(3) The energy savings and costs for each project funded through the special fund to date; and

(4) Recommendations for the next phase of projects to be funded through the special fund.

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

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $45,500,000 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 5. There is appropriated out of the University of Hawaii net-zero special fund the sum of $45,500,000 or so much thereof as may be necessary for fiscal year 2015-2016 for the following purposes:

(1) University of Hawaii at Manoa:

(A) $30,000,000 for plans, design, construction, and equipment for the retrofit of Kuykendall hall; provided that $10,000,000 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) $6,000,000 for plans, design, construction, and equipment for the retrofit of Klum gym, with new athletics-support functions; provided that $2,000,000 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) $6,000,000 for plans, design, construction, and equipment for the retrofit of the learning resources center and central plant; provided that $2,000,000 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) $3,500,000 for plans, design, construction, and equipment for the retrofit of the university classroom building; provided that $1,000,000 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 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $150,000 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 7. 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 8. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2015.

INTRODUCED BY:	_____________________________

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