RELATING TO CONSERVATION BANKING.

HB651

HOUSE OF REPRESENTATIVES

H.B. NO.

651

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to conservation banking
.

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 Hawaii's threatened, endangered, candidate, and
proposed species.

����
The
purpose of this Act is to authorize the department of land and natural
resources to operate and approve conservation banks to provide 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.

����
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:

����
"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 chapter.

����
"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
individuals of a listed species or attainment of enhanced ecological functions
or services essential for 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.

����
"Long-term
management plan" means a bank sponsor
'
s long‑term plan of how a conservation bank will
be managed after performance standards have been achieved to ensure long-term
sustainability of the species identified in section 195D‑B(b)(2).
�
Long-term management plans may include
descriptions of actions and monitoring, annual cost estimates for those needs,
and funding mechanisms used to meet those needs.

����
"Maintenance
plan" means a bank sponsor's short-term plan to ensure the conservation
bank remains viable after construction and throughout the monitoring
period.
�
A maintenance plan may include
infrastructure and ecological management components within the conservation
bank and identify regular or recurring actions needed for the upkeep of the conservation
bank site until the conservation bank transitions into long-term management
according to the long-term management plan.

����
"Monitoring
requirements" means a description of parameters to be monitored from
actions described in the maintenance plan to determine if the conservation bank
is on track to meet performance standards or if adaptive management is needed.

����
"Performance
standards" means ecologically based standards that are used to determine
whether the conservation bank is achieving objectives in the resource
management plan.
�
Each performance
standard shall describe the attribute to be measured, the level that
constitutes success, and the time‑period to achieve success.

����
"Site
protection instrument" means an interest in real property that protects a
conservation bank for either long-term stewardship or in perpetuity, such as a
conservation easement, deed restriction, condition, or covenant.

����
�195D-B
�
Conservation banking.
�
(a)
�

The department or other bank sponsor may seek board approval 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 to provide 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.

����
(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 endangered, threatened, proposed, or
candidate 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)
�
Baseline information that includes a review of
the presence or absence of any endangered or threatened species on the property
including the species identified in section 195D-B(b)(2);

���������
(C)
�
Performance standards;

���������
(D)
�
Monitoring requirements;

���������
(E)
�
A maintenance plan;

���������
(F)
�
A long-term management plan;

���������
(G)
�
An adaptive management strategy that specifies the actions to
be taken if the resource management plan is not achieving its goals; and

���������
(H)
�
Any other information that the department requires
in a rule adopted pursuant to section 195D-C;

����
(4)
�
A
system for assessing and releasing credits; and

����
(5)
�
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 section 195D-B(b)(2);

����
(2)
�
Financial assurances necessary to ensure the successful
completion of habitat construction, management, monitoring, and remedial
actions;

����
(3)
�
A site protection instrument that prohibits
incompatible uses; and

����
(4)
�
A provision requiring the bank sponsor to
submit to the department within ninety days of each fiscal year ending June 30
an annual report on the current status of the conservation bank.

����
(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 other
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 any
uncertainty about what constitutes the best available science, 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 competence 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 is adequate to ensure the successful completion of habitat
construction, management, monitoring, and 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
the requirements in subsection (b) and, for applications from bank sponsors
other than the department, subsection (c).

����
Board
approval shall require an affirmative vote of not 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 bank 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) prior to causing take of any
endangered or threatened 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
identified in an approved habitat conservation plan and satisfies incidental
take license requirements in section 195D-4(g) and habitat conservation plan
requirements in section 195D-21(b);

����
(2)
�
Credit stacking shall be prohibited;

����
(3)
�
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

����
(4)
�
Once a credit is transferred or sold, that
credit shall be 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 is to diminish the
likelihood that the conservation bank will achieve its goals within the time
frames or in the 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, until such time as the conservation bank instrument is
reinstated.
�
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 as follows:

����
(1)
�
Administrative amendments shall be for changes
to the bank sponsor's name, address, or contact information.
�
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 for changes that are
not administrative amendments.
�
Major
amendments include, but are not limited to, changes to the bank sponsor, the
species that the conservation bank is established to protect, the resource
management plan, the financial assurances, the system for assessing and
releasing credits, or the site protection instrument.
�
Major amendments shall be reviewed and
recommended for approval by the endangered species recovery committee and
approved by the board pursuant to the procedure set forth in subsection (d).

����
(i)
�
The department may collect from bank sponsors
fees or payment for costs incurred, including but not limited to costs included
by the department during:

����
(1)
�
Its rulemaking process;

����
(2)
�
Application processing; and

����
(3)
�
The 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
�
Conservation banking; rules.
�
The department may adopt rules pursuant to
chapter 91 necessary to implement this part."

����
SECTION
3
.
�
Section 195D-25, Hawaii Revised Statutes, is
amended to read as follows:

����
"
�195D-25
�

Endangered species recovery committee.
�

(
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 associate director's designee,
the dean
of the [
University
]
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 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
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.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 5.
�
This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

DLNR;
Conservation Banks

Description:

Authorizes
the Department of Land and Natural Resources to operate and approve
conservation banks and amends the Endangered Species Recovery Committee's
membership and scope of authority.
�

Effective upon approval.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.