HB 1802

HOUSE OF REPRESENTATIVES
H.B. NO.
1802
THIRTY-THIRD LEGISLATURE, 2026
H.D. 1
STATE OF HAWAII
S.D. 1
C.D. 1
A BILL FOR AN ACT
RELATING TO CONSERVATION MITIGATION BANKS.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION 1.�
The legislature 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 complete, expedites
project review, and makes project costs more predictable for incidental take
licensees.� Conservation banks provide
long-term, landscape-scale protection to the State's threatened, endangered,
candidate, and proposed species.
���� Accordingly, the purpose of this Act is to:
���� (1)� Authorize the department of land and natural
resources and certain public or private entities to seek the approval of the
board of land and natural resources to operate conservation banks 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, Ecosystem 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
conservation bank instruments and conduct subsequent reviews and oversight.
���� 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 banking
���� �195D-A�
Definitions.� As used in this part:
���� "Adaptive management strategy"
means the actions to be taken if the resource management plan is not
achieving its goals.
���� "Administrative amendments" means
changes to the bank sponsor's name, address, or contact information.
���� "Bank sponsor" means any public
or private entity responsible for establishing or operating a conservation
bank.
���� "Compensatory mitigation" means
actions taken to fulfill, in whole or in part, mitigation requirements pursuant
to this part.
���� "Conservation bank" means a site
or suite of sites established under a conservation bank instrument for the
purposes of restoring, creating, enhancing, or protecting populations of
threatened, endangered, candidate, or proposed species and their habitats
expressed as credits.
���� "Conservation bank instrument"
means an agreement between the board and a bank sponsor that establishes a
conservation bank and describes the terms and conditions of its operation,
including a system for assessing and releasing credits to be used for
compensatory mitigation.
���� "Credit" means a value based on
defined units representing the increase in numbers of a listed species or
attainment of enhanced ecological functions or services essential to the
survival of a listed species at a conservation bank and released as the
conservation bank meets performance criteria included in its conservation bank
instrument.
���� "Credit bundling" means a single
unit of a conservation bank that provides two or more spatially overlapping
ecosystem functions or services that are grouped together into a single credit
type and used as a single commodity to compensate for a single permitted
action.
���� "Credit stacking" means a single
unit of a conservation bank that provides two or more credit types representing
spatially overlapping ecosystem functions or services that can be unstacked and
used as separate commodities to compensate for different permitted actions.
���� "Maintenance plan" means a bank
sponsor's plan to ensure the conservation bank remains viable after
construction and throughout the life of the conservation bank, including a
description of management requirements and a schedule for their implementation.� "Maintenance plan" includes
infrastructure and ecological management components within the project area and
an identification of regular or recurring actions needed for upkeep of the
conservation bank site.
���� "Major amendments" means changes
that are not administrative amendments.�
"Major amendments" includes changes to the bank sponsor,
species that the conservation bank is established to protect, resource
management plan, financial assurances, system for assessing and releasing
credits, or site protection instrument.
���� "Monitoring requirements" means a
description of parameters to be monitored and a methodology to monitor those
requirements to determine if the conservation bank is on track to meet
performance standards or if an adaptive management strategy is needed.
���� "Performance standards" mean
ecologically based standards that are used to determine whether the
conservation bank is achieving objectives in the resource management plan and
that describe the attribute to be measured, the level that constitutes success,
and the time period to achieve success.
���� "Resource management plan" means
the plan identified by a conservation bank instrument and described in section
195D-B.
���� "Site protection instrument"
means an interest in real property that protects a conservation bank for
long-term stewardship or in perpetuity, such as a conservation easement, deed
restriction, condition, or covenant.
���� �195D-B�
Conservation banking.� (a)� The department or bank sponsor may seek the approval of
the board of a conservation bank instrument to operate a conservation bank for
the purposes of restoring, creating, enhancing, or protecting populations of
threatened, endangered, candidate, or proposed species and their habitats for
situations in which 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.
���� (b)�
Applications to establish and operate a conservation bank shall include
a proposed conservation bank instrument that identifies:
���� (1)� The geographic area encompassed by the
conservation bank and the ecosystems, natural communities, or habitat types
within the conservation bank;
���� (2)� The threatened,
endangered, candidate, or proposed species that the conservation bank is
established to protect;
���� (3)� A resource management plan for long-term
stewardship that includes:
��������� (A)� Goals and objectives;
��������� (B)� A review of the presence or absence of any threatened,
endangered, candidate or proposed species on the property, including the
species identified in paragraph (2);
��������� (C)� Performance standards;
��������� (D)� Monitoring requirements;
��������� (E)� A maintenance plan; and
��������� (F)� An adaptive management strategy;
���� (4)� Any other information that the department
requires in rules adopted pursuant to section 195D-C;
���� (5)� A system for assessing and releasing credits;
and
���� (6)� The measures for property protection.
���� (c)� In addition to the requirements set forth in
subsection (b), for applications from bank sponsors other than the department,
the proposed conservation bank instrument shall contain:
���� (1)� Assurances that the bank sponsor has the
scientific and technical competence required to perform the necessary
conservation actions for the species identified in subsection (b)(2);
���� (2)� Financial assurances necessary to ensure the
successful completion of habitat construction, management, monitoring, and
remedial actions;
���� (3)� A site protection instrument; and
���� (4)� A provision requiring the bank sponsor to
submit an annual report on the current status of the conservation bank to the
department within ninety days after the end of each fiscal year ending June 30.
���� (d)� After consultation with the endangered
species recovery committee, the board may approve a conservation bank
instrument for the operation of a conservation bank by the department or bank
sponsor if the board determines that:
���� (1)� The conservation bank will further the
purposes of this chapter by restoring, creating, enhancing, or protecting
populations of threatened, endangered, candidate, or proposed species and their
habitats;
���� (2)� The system for assessing and releasing credits
is based on the best available scientific information, and where there is
uncertainty about what constitutes the best available scientific information,
the rationale used for developing the system for assessing and releasing
credits gives the benefit of the doubt to the species;
���� (3)� For a conservation bank operated by a bank
sponsor other than the department:
��������� (A)� The bank sponsor has the scientific and
technical competencies required to perform the necessary conservation actions
for the species identified in subsection (b)(2);
��������� (B)� The bank sponsor's funding source is adequate
to ensure the successful completion of habitat construction, management,
monitoring, and remedial actions;
��������� (C)� The nature and duration of the site protection
instrument are adequate to ensure the successful completion of habitat
construction, management, monitoring, or remedial actions; and
��������� (D)� The conservation bank instrument shall run
with the land for the term specified in the site protection instrument and
shall not be assignable or transferable separate from the land;
���� (4)� For a conservation bank operated by the
department, the conservation bank shall be established on land managed by the
department; and
���� (5)� The conservation bank instrument satisfies all
requirements in subsections (b) and (c).
Board approval shall require an
affirmative vote of no less than two-thirds of the authorized membership of the
board.� The board shall not approve a
conservation bank instrument that the majority of the endangered species
recovery committee recommended for disapproval.
���� (e)� The board's approval of a conservation bank
instrument for a conservation bank operated by a sponsor other than the
department does not relieve the bank sponsor of its obligation to secure a
temporary license pursuant to section 195D-4(f) or (g) before causing take of
any threatened, endangered, candidate,
or proposed species.
���� (f)� After a conservation bank has created a
credit following the system for assessing and releasing credits identified in
the conservation bank instrument, the bank sponsor may transfer or sell the
credit to an incidental take licensee for use of an approved conservation bank
as compensatory mitigation; provided that:
���� (1)� The use of the credit as compensatory
mitigation for incidental take of threatened or endangered species is part of a
habitat conservation plan and satisfies incidental take license requirements
pursuant to section 195D-4(g) and habitat conservation plan requirements in
section 195D-21(b);
���� (2)� A majority of the endangered species recovery
committee approves the use of the credit as compensatory mitigation;
���� (3)� Credit stacking is prohibited;
���� (4)� Credit bundling may be used to compensate for
all or a subset of the functions or services included in the credit type but
shall be used only once; and
���� (5)� Once a credit is transferred or sold, that
credit is retired and cannot be used again.
���� (g)� Notwithstanding any other law to the
contrary, the board shall suspend or revoke the approval of any conservation
bank instrument approved under this section if the board determines that:
���� (1)� The bank sponsor or its successor has breached
its obligations under the conservation bank instrument and has failed to cure
the breach in a timely manner, and the effect of the breach will diminish the
likelihood that the conservation bank will achieve its goals within the time
frame or manner set forth in the conservation bank instrument;
���� (2)� For a conservation bank operated by a bank
sponsor other than the department, the conservation bank no longer has the
funding source specified in subsection (d)(3)(B) or another sufficient funding
source to ensure the successful completion of the habitat construction,
management, monitoring, and remedial actions in accordance with the
conservation bank instrument; or
���� (3)� Continued operation of the conservation bank
would appreciably reduce the likelihood of survival or recovery of any
threatened or endangered species in the wild.
If approval of a conservation bank instrument is
suspended, then the bank sponsor shall not sell or transfer any credits from
that conservation bank.� Any bank sponsor
whose conservation bank instrument has been revoked shall not be eligible to
apply to operate another conservation bank.
���� (h)� An approved conservation bank instrument may
be amended through administrative amendment or major amendment; provided that:
���� (1)� The department may process administrative
amendments without recommendation from the endangered species recovery
committee and without approval from the board; and
���� (2)� Major amendments shall be reviewed and
recommended for approval by the endangered species recovery committee and
approved by the board pursuant to an affirmative vote of no less than
two-thirds of the authorized membership of the board; provided that the board
shall not approve a major amendment that the majority of the endangered species
recovery committee recommended for disapproval.
���� (i)� The department may collect from bank sponsors
fees or payment for costs incurred by the department during:
���� (1)� Its rulemaking process;
���� (2)� Application processing; and
���� (3)� Establishment, monitoring, and oversight of
the bank sponsor's conservation bank.
���� (j)� This part shall not apply to aquatic life or
their habitats.
���� �195D-C�
Rulemaking.� The department may adopt rules pursuant to
chapter 91 necessary to implement this part."
���� SECTION 3.� Section 195D-25, Hawaii Revised Statutes, is
amended by amending subsections (a) and (b) to read as follows:
���� "(a)�
There is established within the department for administrative purposes
only, the endangered species recovery committee, which shall serve as a
consultant to the board and the department on matters relating to endangered,
threatened, proposed, and candidate species.�
The committee shall consist of two field biologists with expertise in
conservation biology, the chairperson of the board or the chairperson's
designee, the ecoregion director of the United States Fish and Wildlife Service
or the director's designee, [[the director of the United States Geological
Survey, Biological Resources Division or the director's designee,]] the
associate director of the United States Geological Survey, Ecosystem Mission
Area, or the associate director's designee, the dean of the University of
Hawaii at Manoa college of natural sciences or the dean's designee, and a
person possessing a background in native Hawaiian
traditional and customary practices, as evidenced by:
���� (1)� A
college degree in a relevant field, such as Hawaiian studies, native Hawaiian law, native
Hawaiian traditional and customary practices, or related subject area;
���� (2)� Work
history that demonstrates an appropriate level of knowledge in native Hawaiian
traditional and customary practices; or
���� (3)� Substantial
experience in native Hawaiian traditional and customary practices.
���� Nongovernmental members shall be
appointed by the governor pursuant to section 26-34.� Nongovernmental members shall not serve for
more than two consecutive terms.�
Nongovernmental members shall serve for four-year staggered terms,
except that one of the members first appointed shall serve for two years.
���� Governmental members from the
federal agencies are requested but not required to serve on the committee.� The ability of the committee to carry out its
functions and purposes shall not be affected by the vacancy of any position
allotted to a federal governmental member.
���� (b)� The endangered species recovery committee
shall:
���� (1)� Review all applications and proposals for
habitat conservation plans, safe harbor agreements, [[and]] incidental
take licenses, and conservation banks and conservation bank instruments
and make recommendations, based on a full review of the best available
scientific and other reliable data and at least one site visit to each property
that is the subject of the proposed action, and in consideration of the
cumulative impacts of the proposed action on the recovery potential of the
endangered, threatened, proposed, or candidate species, to the department and
the board as to whether or not they should be approved, amended, or rejected;
���� (2)� Review all habitat conservation plans, safe
harbor agreements, [[and]] incidental take licenses, and conservation
banks and conservation bank instruments on an annual basis to ensure
compliance with agreed to activities and, on the basis of any available
monitoring reports[[,]] and scientific and other reliable data, make
recommendations for any necessary changes;
���� (3)� Consider and recommend appropriate incentives
to encourage landowners to voluntarily engage in efforts that restore and
conserve endangered, threatened, proposed, and candidate species;
���� (4)� Perform [[such]] other duties as provided
in this chapter;
���� (5)� Consult with persons possessing expertise in [[such]]
areas [[as]] the committee may deem appropriate and necessary in the
course of exercising its duties; and
���� (6)� Not conduct more than one site visit per year
to each property that is the subject of a habitat conservation plan [[or]]
safe harbor agreement[[.]], or conservation bank instrument."
���� SECTION 4.� In codifying the new sections added by
section 2 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 5.� Statutory material to be repealed is
bracketed and stricken.� New statutory
material is underscored.
���� SECTION 6.� This Act shall take effect upon its approval.
Report Title:
DLNR;
BLNR; Conservation Banks
Description:
Authorizes the Department of Land and Natural Resources
and certain public or private entities to seek the approval of the Board of
Land and Natural Resources to operate conservation banks 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.� Adds the associate director of the United
States Geological Survey, Ecosystem Mission Area, to the membership of the
Endangered Species Recovery Committee.�
Requires the Endangered Species Recovery Committee to review
applications and proposals for conservation banks and conservation bank
instruments conduct subsequent reviews and oversight.� (CD1)
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