HB2238

Report Title:

Hydrogen fuel authority; UH-Hilo

Description:

Creates the hydrogen fuel authority to be attached to the UH-Hilo to oversee the research and development of geothermal energy into hydrogen energy. Appropriates funds.

HOUSE OF REPRESENTATIVES	H.B. NO.	2238
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

 

relating to THE HYDROGEN FUEL AUTHORITY.

 

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

SECTION 1. Scientists have long recognized hydrogen as a potential source of fuel. Currently, hydrogen is used in industrial processes, rocket fuel, and spacecraft propulsion. With further research and development, hydrogen could be a competitive alternative energy source for fueling vehicles and generating electricity.

The legislature finds that Hawaii is the ideal place to develop hydrogen technology. Hawaii's major advantages include:

(1) The availability of indigenous renewable resources, including geothermal energy;

(2) The excellent research capabilities at the University of Hawaii (UH);

(3) Hawaii's central location for trade opportunities with Pacific Rim nations; and

(4) Hawaii's high transportation fuel costs.

There has been significant progress in hydrogen research and development in Hawaii. For example, in 1999, UH chemists discovered a new way to produce hydrogen energy that may result in more economical, pollution-free vehicles. Tackling one of hydrogen's major challenges, the team found a catalyst that will release hydrogen from lightweight materials at a moderate temperature. This has major implications for developing effective fuel cells for vehicles. As a result of these accomplishments, the Hydrogen Technical Advisory Panel and the United States Department of Energy named the Hawaii team leader as the "1999 Research Success Story."

The legislature requested a study in 2000 to recommend options that could result in making hydrogen fuel a key component of the State's energy economy. The Hawaii natural energy institute of the UH concluded that large-scale hydrogen use for transportation can be competitive this decade. The study also determined that fleet and military transportation on Oahu has the largest potential for hydrogen and fuel cell use.

On the national level, many advancements are taking place to develop hydrogen fuel technologies. Major companies are investing in the development of fuel cells for both stationary and mobile power. Automakers are projecting the commercial availability of fuel cell-powered vehicles that could be fueled by hydrogen within this decade. Significant amounts of investments are being made to develop fuel cells and other distributed generation technologies.

With its traditional high fuel costs and a wealth of renewable energy resources, Hawaii could attract these advanced technology development companies for research and development, testing, and deployment. The UH is already recognized as a "center for excellence in hydrogen research" by the United States Department of Energy. These factors can lead to the development of a hydrogen fuel-based economy where Hawaii produces more of its own environmentally clean fuels, thus reducing its dependence on fossil fuels and resulting in job growth, reduced pollution, and a more robust state economy.

The legislature finds that the State must continue efforts to enhance hydrogen energy use in Hawaii. Accordingly, the purpose of this Act is to establish the hydrogen fuel authority to facilitate the research, development, and commercialization of hydrogen fuel technology, including overseeing the development of geothermal energy into hydrogen energy.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER . HYDROGEN FUEL AUTHORITY

§ -1 Definitions. As used in this chapter, unless the context requires otherwise:

"Authority" means the hydrogen fuel authority established by this chapter.

"Board" means the board of directors of the authority.

"Bond" means special purpose bonds issued under this chapter and shall include notes, other instruments of indebtedness, and refunding bonds.

"Cost" means the total cost in carrying out all undertakings that the authority deems reasonable and necessary for the development of a project or research and technology park, including but not limited to the cost of studies, surveys, plans, and specifications, architectural, design, engineering, or any other special related services; the cost of site preparation and development, demolition, construction, reconstruction, rehabilitation, and improvement; the cost of financing the project or research and technology park from the date thereof to the estimated date of completion of the project or research and technology park as determined by the board; the cost of an allocable portion of the administrative and operating expenses of the authority related to the development of the project or research and technology park; and the cost of indemnity and surety bonds, premiums on policies of insurance, legal fees, and fees and expenses of trustees, depositories, and paying agents for the bonds, and for the issuance of letters of credit or other banking arrangements whether for the authority credit or a qualified person; all as the authority shall deem necessary.

"Project" means any combination of land and buildings and other improvements thereon for use in, but not limited to research, development, demonstration, processing, or manufacturing activities or enterprises using or in support of the use of hydrogen fuel, which are located in a research and technology park and acquired, constructed, reconstructed, rehabilitated, improved, altered, or repaired by or on behalf of the authority.

"Project agreement" means any lease, sublease, loan agreement, conditional sale agreement, or other similar financing contract or agreement, or any combination thereof entered into under this chapter by the authority, including the financing from the proceeds of bonds of a project or a research and technology park.

"Public agency" means any office, department, board, commission, bureau, division, public corporation, agency, or instrumentality of the federal, state, or county government.

"Qualified person" means any individual, partnership, corporation, public agency, or any combination or association of the foregoing, possessing the competence, expertise, experience, and resources, including financial, personnel, and tangible resources, required for the purposes of a project and other qualifications as may be deemed desirable by the authority in administering this chapter and that enters into a project agreement with the authority.

"Real property" means lands, structures, and interests therein, and natural resources including water, minerals, and all things connected with land, including lands under water and riparian rights, space rights, air rights, and any and all other things and rights usually included within the term. "Real property" also means any and all interests in property less than fee title, such as leasehold interests, easements, incorporeal hereditaments, and every estate, interest, or right, legal or equitable, including terms for years and liens thereon by way of judgments, mortgages, or otherwise.

"Research advisory committee" means the research committee that is advisory to the board.

"Research and technology park" means a tract of real property determined by the board as being suitable for use as building sites for projects engaged in research, development, demonstration, processing, or manufacturing activities or retail or commercial enterprises using or in support of the utilization of hydrogen fuel. This includes, but is not limited to, research, commercialization, training, education, technical analyses, pilot plant, or prototype product development, and may include the installation of improvements to tracts incidental to the use of real property as a research and technology park, such as water, sewer, sewage and waste disposal, and drainage facilities, sufficient to adequately service projects in the research and technology park, and provision of incidental transportation facilities, power distribution facilities, and communication facilities.

§ -2 Establishment of the hydrogen fuel authority; purpose. (a) There is established the hydrogen fuel authority, which shall be a body corporate and politic and an instrumentality and agency of the State. The authority shall be placed within the University of Hawaii at Hilo for administrative purposes, pursuant to section 26-35. The purpose of the authority shall be to facilitate research, development, and commercialization of hydrogen fuel technology in Hawaii and to engage in retail, commercial, or tourism activities that will financially support that research, development, and commercialization at facilities at the University of Hawaii at Hilo. Its duties shall include:

(1) Establishing, managing, and operating facilities that provide sites for:

(A) Research and development, such as the development of hydrogen energy by removing the caps off two geothermal wells in Puna, Hawaii; and

(B) Commercial projects and businesses using hydrogen fuel technology, such as the use of hydrogen energy to process agricultural products, such as flash freezing for export;

(2) Providing support, utilities, and other services to facility tenants and government agencies;

(3) Maintaining the physical structure of the facilities;

(4) Promoting and marketing these facilities;

(5) Promoting and marketing the reasonable use of available hydrogen fuel;

(6) Supporting hydrogen fuel technology projects that support national and state interests, use facilities and infrastructure in Hawaii, and foster potential commercial development; and

(7) Engaging in retail, commercial, and tourism activities that are not related to facilitating research, development, and commercialization of hydrogen fuel technology in Hawaii; provided that all income derived from these activities shall be deposited in the hydrogen fuel authority special fund.

(b) The governing body of the authority shall consist of a board of directors having nine voting members. Three members from the general public shall be appointed by the governor for staggered terms pursuant to section 26-34, except that one of these members shall be a resident of the county of Hawaii. The members shall be selected on the basis of their knowledge, interest, and proven expertise in, but not limited to, one or more of the following fields: finance, commerce and trade, corporate management, marketing, economics, engineering, energy

management, and hydrogen fuel technology. The chairperson and secretary of the research advisory committee shall serve on the board. The director of business, economic development, and tourism, the president of the University of Hawaii, the mayor of the county of Hawaii, and an appointed member from the board of the high technology development corporation, or their designated representatives, shall serve as ex officio, voting members of the board. The president of the University of Hawaii shall serve as the chairperson until such time as a chairperson is elected by the board from the membership. The board shall elect other officers as it deems necessary.

(c) The members of the board appointed under subsection (b) shall serve without compensation, but may be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.

(d) The board shall appoint an executive director, who shall serve at the pleasure of the board and shall be exempt from chapter 76. The board shall set the salary and duties of the executive director.

§ -3 Powers of the authority. The authority may:

(1) Sue and be sued;

(2) Have a seal and alter the same at its pleasure;

(3) Promote the use of the hydrogen energy resources for the purposes provided by law;

(4) Through its executive director appoint officers, agents and employees without regard to chapter 76 and to establish the salaries therefor;

(5) Adopt rules under chapter 91 necessary to effectuate this chapter in connection with its operation, facilities, parks, properties, and projects;

(6) Make, execute, enter into, amend, supplement, and carry out contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter with any private person, firm, partnership, association, company, or corporation only as it may be necessary in the conduct of its business and on such terms as it may deem appropriate; provided that the authority shall not obligate any funds of the State except as have been appropriated to it. Notwithstanding the foregoing, the authority may enter into and perform such contracts, leases, cooperative agreements, or other transactions with any agency or instrumentality of the United States, a foreign nation, a state, a territory, or a possession, or with any political subdivision thereof;

(7) Accept, hold, or expend gifts or grants in any form from any public agency or private source, or from any other source;

(8) Impose and collect fees pertaining to the use of properties and facilities of the authority;

(9) Formulate budgets to provide for the operation of the facilities of the authority;

(10) Submit an annual report to the governor and the legislature at least twenty days prior to the convening of each regular session;

(11) Acquire, own, lease, hold, clear, improve, and rehabilitate real, personal, or mixed property and assign, exchange, transfer, convey, lease, sublease, or encumber any project including by way of easements;

(12) Construct, reconstruct, rehabilitate, improve, alter, or repair, or provide for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project and designate a qualified person as its agent for this purpose, and own, hold, assign, transfer, convey, exchange, lease, sublease, or encumber any project;

(13) Arrange or initiate appropriate action for the planning, replanning, opening, grading, or closing of streets, roads, roadways, alleys, easements, or other places, the furnishings or improvements, the acquisition of property or property rights, or the furnishing of property or services in connection with a research and technology park;

(14) Prepare or cause to be prepared plans, specifications, designs, and estimates of cost for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project or research and technology park, and from time to time, modify these plans, specifications, designs, or estimates;

(15) Engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;

(16) Procure insurance against any loss in connection with its properties and other assets and operations in amounts and from insurers as it deems desirable;

(17) Issue bonds pursuant to this chapter in principal amounts as may be authorized from time to time by law to finance the cost of a project, including the repair or addition to its parks and facilities as authorized by law and to provide for the security thereof as permitted by this chapter;

(18) Lend or otherwise apply the proceeds of the bonds issued for a project or a research and technology park either directly or through a trustee or a qualified person for use and application in the acquisition, construction, installation, or modification of a project or research and technology park, or agree with the qualified person whereby any of these activities shall be undertaken or supervised by that qualified person or by a person designated by the qualified person;

(19) With or without terminating a project agreement, exercise any and all rights provided by law for entry and re-entry upon or to take possession of a project at any time or from time to time upon breach or default by a qualified person under a project agreement;

(20) Create an environment that supports appropriate hydrogen energy use and results in economic development, including: supporting research projects and facilitating the transition from research and development to pilot scale and then to full commercial operation of companies using hydrogen fuel; developing educational and conservation programs; supporting commercialization of the hydrogen energy available at the research and technology parks, if the commercialization is compatible with the research, development, and other retail, commercial, and tourism activities of the research and technology parks; identifying issues and impediments to the development of hydrogen energy use; and providing policy analysis and information important to the development of hydrogen energy use in Hawaii;

(21) Develop programs that support projects and companies which locate at the research and technology parks;

(22) Attract appropriate new uses of the hydrogen fuel in Hawaii, including retail, commercial, and tourism activities; and

(23) Do any or all other acts reasonably necessary to carry out the purposes of the authority.

§ -4 Research advisory committee. The authority shall appoint a research advisory committee for the purpose of obtaining expert and specialized counsel and advice on matters relating to scientific research and may include as members of the committee officers and employees of any government department or agency or members of the scientific community; provided that at least two members of the board shall be appointed to the committee. Members of the advisory committee shall elect the chairperson and secretary of the committee, who shall serve as members of the board. The authority may assign its own staff to aid and assist the committee and may reimburse any member of the committee for necessary expenses incurred in the performance of the member's work for the authority.

§ -5 Hydrogen fuel authority special fund. There is established in the state treasury a fund to be known as the hydrogen fuel authority special fund, into which shall be deposited all moneys and fees from tenants or other users of the authority's parks, projects, other leased facilities, and other services and publications as well as any appropriations, grants, or gifts received by the authority. All moneys in the hydrogen fuel authority special fund are appropriated for the purposes of and shall be expended by the authority for the operation, maintenance, and management of its parks, projects, facilities, services, and publications, and for the design and construction of new facilities and the renovation of or addition to existing facilities.

§ -6 Meetings of the board. (a) The meetings of the board shall be open to the public as provided in section 92-3, except that when it is necessary for the board to receive information that is proprietary to a particular enterprise that seeks entry into or use of one of its facilities or the disclosure of which might be harmful to the business interest of the enterprise, the board may enter into an executive meeting that is closed to the public.

(b) The board shall be subject to the procedural requirements of section 92-4, and this authorization shall be in addition to the exceptions listed in section 92-5, to enable the authority to respect the proprietary requirements of enterprises with which it has business dealings.

§ -7 Exemption of authority from taxation and competitive bidding. (a) All revenues and receipts derived by the authority from any project or research and technology park or under a project agreement or other agreement pertaining thereto shall be exempt from all state taxation. Any right, title, and interest of the authority in any project or research and technology park shall also be exempt from all state taxation. Except as otherwise provided by law, the interest of a qualified person or other user of a project or research and technology park under a project agreement or other agreements related to a project or research and technology park shall not be exempt from taxation to a greater extent than it would be if the costs of the project or research and technology park were directly financed by the qualified person or user.

(b) The authority shall not be subject to any requirement of law for competitive bidding, including the requirements of chapters 103 and 103D for project agreements, construction contracts, retail concession or tour-related contracts, or other contracts unless a project agreement with respect to a project or research and technology park shall require otherwise.

§ -8 Assistance by state and county agencies. Every state or county agency may render services to the authority upon request of the authority.

§ -9 Court proceedings; preferences. Any action or proceeding to which the authority, the State, or a county may be a party, in which any question arises as to the validity of this chapter, shall be preferred over all other civil causes, except election cases, without respect to position on the calendar. The same preference shall be given upon application of counsel for the authority in any action or proceeding questioning the validity of this chapter in which the authority has duly intervened."

SECTION 3. 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 2002-2003 to be deposited into the hydrogen fuel authority special fund to effectuate the hydrogen fuel authority established by this Act.

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

SECTION 4. This Act shall take effect on July 1, 2002.

INTRODUCED BY:

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