STAND. COM. REP. NO. 1218-26

Honolulu, Hawaii

, 2026

RE: S.B. No. 2005

S.D. 1

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Energy & Environmental Protection, to which was referred S.B. No. 2005, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CONSERVATION BANKING,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Authorize the Department of Land and Natural Resources and certain public or private entities to operate conservation banks, subject to approval from the Board of Land and Natural Resources, 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;

(2) Add the Associate Director of the United States Geological Survey, Ecosystems Mission Area, to the membership of the Endangered Species Recovery Committee; and

(3) Require the Endangered Species Recovery Committee to review applications and proposals for conservation banks and conduct subsequent reviews and oversight.

Your Committee received testimony in support of this measure from the Department of Land and Natural Resources; Earthjustice; Tawhiri Power LLC; Hawaiʻi Reef and Ocean Coalition; The Nature Conservancy Hawaiʻi and Palmyra; Sierra Club of Hawaiʻi; and one individual. Your Committee received comments on this measure from the Kauaʻi Island Utility Cooperative and one individual.

Your Committee finds that conservation banks sell credits to developers, construction companies, and other entities to offset environmental harm those entities have caused or may cause. Your Committee further 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 completed, expedites project review, and makes project costs more predictable for incidental take licensees. This measure provides another method for addressing certain environmental harms by authorizing the operation of conservation banks.

Your Committee has amended this measure by:

(1) Clarifying the protection status of species whose presence or absence must be reviewed under a resource management plan;

(2) Changing the effective date to July 1, 3000, to encourage further discussion; and

(3) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Energy & Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2005, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2005, S.D. 1, H.D. 1, and be referred to your Committee on Water & Land.

Respectfully submitted on behalf of the members of the Committee on Energy & Environmental Protection,

____________________________

NICOLE E. LOWEN, Chair