HB2473 HD2

SECTION 1. The legislature finds that terrestrial conservation bank and conservation in-lieu fee mitigation programs restore, create, enhance, or preserve terrestrial habitats for Hawaii's indigenous species, including threatened, endangered, candidate, or proposed species. The federal government, in conjunction with as many as fourteen other states, has developed successful conservation bank and conservation in-lieu fee mitigation programs. Conservation bank and conservation in-lieu fee mitigation programs would serve as mechanisms to enhance the recovery and survival of threatened and endangered species and enhance conservation efforts for candidate, proposed, and other indigenous species or their habitats.

The purpose of this Act is to authorize the department of land and natural resources to operate and approve conservation bank and conservation in-lieu fee mitigation programs where a person or an entity is required to provide compensatory mitigation as part of an approved habitat conservation plan and incidental take license:

(1) For past damages to indigenous species or their habitats; and

(2) For unavoidable impacts to threatened, endangered, candidate, or proposed species.

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 BANK AND CONSERVATION IN-LIEU FEE

MITIGATION PROGRAMS

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

"Compensatory mitigation" means actions taken to fulfill, in whole or in part, mitigation requirements under state or federal law or a court mandate.

"Compensation planning framework" means a plan used to select, secure, and implement threatened species, endangered species, candidate species, or proposed species mitigation activities.

"Conservation bank" means a type of compensatory mitigation where a site or sites established under a site protection instrument is conserved and managed to provide ecological functions and services expressed as credits for threatened species, endangered species, candidate species, proposed species, or indigenous species.

"Conservation bank instrument" means an agreement establishing the conservation bank and describing the terms and conditions of operation, including provisions for the issuance of credits.

"Conservation in-lieu fee mitigation instrument" means the agreement for the establishment, operation, and use of a conservation in-lieu fee mitigation program.

"Conservation in-lieu fee mitigation program" means a type of compensatory mitigation where an incidental take licensee or person or entity required to provide mitigation pays a fee to the department- or nonprofit-approved sponsor to satisfy mitigation requirements in an approved habitat conservation plan, where the fee charged by a sponsor represents the expected cost of either:

(1) Increasing the likelihood that a threatened species or endangered species will survive and recover as a result of the incidental take licensee's project; or

(2) Enhancing the conservation of candidate species, proposed species, or indigenous species or their habitats.

"Credit" means a value based on defined units representing the accrual or attainment of ecological functions or services at the conservation bank or conservation in-lieu fee mitigation program and released as the conservation bank or conservation in-lieu fee mitigation program meets performance criteria.

"Qualified" means a person or an entity, including a government agency and nongovernmental organization, approved by the interagency review working group.

"Site protection instrument" means an interest in real property that protects a conservation bank or conservation in‑lieu fee mitigation site in perpetuity, such as a conservation easement in favor of the department or nongovernmental organization, deed restriction, condition, or covenant.

"Sponsor" means a qualified person or entity responsible for establishing or operating a conservation bank or conservation in-lieu fee mitigation program.

§195D- Conservation banking and conservation in-lieu fee mitigation programs. (a) The department may require a person or an entity to complete compensatory mitigation to offset environmental loss caused by past damages to indigenous species or their habitats.

(b) The department may operate or approve conservation bank and conservation in-lieu fee mitigation programs for the purpose of restoring, creating, enhancing, or preserving, or any combination thereof, threatened species, endangered species, candidate species, proposed species, or any indigenous species or their habitats where a person or an entity is required to provide compensatory mitigation either:

(1) For past damages to any indigenous species or their habitats where the use of conservation banking or conservation in-lieu fee mitigation is approved by the agency requiring mitigation; or

(2) To offset adverse impacts to a threatened species, endangered species, candidate species, or proposed species as part of an approved habitat conservation plan and incidental take license.

(c) Conservation banks shall be established and operated under a conservation bank instrument on public or private lands, protected in perpetuity under a site protection instrument, and approved by the board; provided that:

(1) The endangered species recovery committee shall review and recommend to the department all conservation banks before transfer or sale of credits; and

(2) The conservation bank instrument shall include financial assurances for the performance and completion of conservation bank construction, management, monitoring, and any remedial action. Financial assurances shall include an endowment fund or other similar financial tools adequate to ensure long‑term stewardship of the conservation bank.

(d) Conservation in-lieu fee mitigation programs shall be established and operated under a conservation in-lieu fee mitigation instrument with a compensation planning framework, protected in perpetuity under a site protection instrument, and approved by the board; provided that:

(1) The endangered species recovery committee shall review and recommend to the department all conservation in‑lieu fee mitigation programs before operation and transfer or sale of credits;

(2) Sponsors of conservation in-lieu fee mitigation programs shall only be qualified government agencies or nongovernmental organizations;

(3) The conservation in-lieu fee mitigation instrument shall include financial assurances for the performance and completion of conservation in-lieu fee mitigation program construction, management, monitoring, and any remedial action. Financial assurances shall include an endowment fund or other similar financial tools adequate to ensure long-term stewardship of the conservation in-lieu fee mitigation program; and

(4) The conservation in-lieu fee mitigation instrument shall include a schedule for implementing mitigation activities.

(e) Sponsors shall be responsible for performing all necessary work in accordance with the conservation bank instrument or conservation in-lieu fee mitigation program to establish, enhance, restore, monitor, and maintain threatened species, endangered species, candidate species, proposed species, or indigenous species or their habitats. Sponsors may sell or transfer credits to persons required to provide compensatory mitigation pursuant to subsections (a) and (b). Upon sale or transfer of credits, the sponsor shall assume responsibility for all mitigation obligations from the entity who purchased or transferred credits to the sponsor.

(f) The department may collect fees or payment for costs incurred, including but not limited to costs incurred by the department during:

(1) Its rulemaking process; and

(2) The approval, establishment, monitoring, and oversight of conservation bank and conservation in-lieu fee mitigation programs.

(g) The department shall work cooperatively with federal agencies in concurrently processing mitigation requirements pursuant to federal law.

(h) This section shall not apply to aquatic life or their habitats.

(i) Conservation bank instruments and conservation in-lieu fee mitigation instruments shall identify:

(1) The geographic area encompassed by the conservation bank or conservation in-lieu fee mitigation program;

(2) The ecosystems, natural communities, or habitat types within the conservation bank or conservation in-lieu fee mitigation program;

(3) The endangered species, threatened species, proposed species, and candidate species known or reasonably expected to occur in the ecosystems, natural communities, or habitat types in the conservation bank or conservation in-lieu fee mitigation program;

(4) The measures for property protection;

(5) A provision requiring that an annual report by the sponsor be submitted to the department within ninety days of each fiscal year ending June 30;

(6) A resource management plan approved by the department;

(7) An agreement between the landowner and the sponsor or qualified entity for long-term stewardship after all mitigation credits are satisfied; and

(8) A system for assessing conservation bank credits or conservation in-lieu fee mitigation program credits.

(j) The endangered species recovery committee shall review on an annual basis and make recommendations for any necessary changes to approved conservation bank and conservation in-lieu fee mitigation programs.

§195D- Conservation bank and conservation in-lieu fee mitigation programs; rules. The department may adopt rules pursuant to chapter 91 necessary to implement this part."

SECTION 3. This Act shall take effect on July 1, 3000.

HOUSE OF REPRESENTATIVES	H.B. NO.	2473
THIRTY-SECOND LEGISLATURE, 2024		H.D. 2
STATE OF HAWAII