RELATING TO CONSERVATION BANKS.

SB3147

THE SENATE

S.B. NO.

3147

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO CONSERVATION BANKS.

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

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SECTION 1.
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The
legislature finds that the use of conservation banks to satisfy mitigation
obligations 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.
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Conservation banks provide
long-term, landscape-scale protection to Hawaii's threatened, endangered, candidate,
and proposed species ("protected species").

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The purpose of this Act is to authorize the
board of land and natural resources to approve the operation of public and
private conservation banks that are established for the purpose of increasing
numbers of protected species and protecting and enhancing protected species
habitat, which then creates mitigation credits for purchase by incidental take
licensees to satisfy their mitigation obligations.

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SECTION 2.
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Chapter 195D, Hawaii Revised Statutes, is amended by adding a new part
to be appropriately designated and to read as follows:

"
PART
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.
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CONSERVATION
BANKING

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�195D-A
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Definitions.
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As used in this
part:

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"Bank sponsor" means any public
or private entity responsible for establishing or operating a conservation
bank.

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"Compensatory mitigation" means
actions taken by an incidental take licensee to fulfill mitigation requirements
pursuant to this chapter, or funding provided by an incidental take licensee
for conservation, restoration, or preservation efforts carried out by others at
a conservation bank.

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"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.

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"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.

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"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 standards included in its conservation bank
instrument.

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"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.

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"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.

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"Long-term management plan" means
a bank sponsor
'
s long-term plan of how a
conservation bank will be managed, including after performance standards have
been achieved, to ensure long-term sustainability of the species identified in
section 195D-B(b)(3).
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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.

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"Maintenance plan" means a bank
sponsor's short-term plan to ensure the conservation bank remains viable after
construction and throughout the monitoring period.
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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.

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"Mitigation" means actions taken
or funding provided by an incidental take licensee to offset unavoidable
negative impacts to threatened, endangered, candidate, or proposed species that
meet the biological goals of a habitat conservation plan.
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Mitigation may include, but is not limited
to, restoration of degraded habitat, land preservation, creation of new
habitat, reducing threats to affected species, translocation, repatriation, and
compensatory mitigation.

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

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

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"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.

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�195D-B
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Conservation banks.
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(a)
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The department or other bank sponsor may seek
board approval of a conservation bank instrument to establish and operate a
conservation bank to provide for situations where a person or entity is
required to provide mitigation to offset adverse impacts to threatened,
endangered, candidate, or proposed species as part of an approved incidental
take license and habitat conservation plan.

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(b)
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Applications to establish and operate a conservation bank shall include
a proposed conservation bank instrument that identifies:

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(1)
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The
geographic area encompassed by the conservation bank and the ecosystems,
natural communities, or habitat types within the conservation bank;

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(2)
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The
endangered, threatened, proposed, or candidate species that the conservation
bank is established to restore, create, enhance, or protect;

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(3)
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A
resource management plan that includes:

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(A)
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Goals
and objectives;

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(B)
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Baseline
information of the presence or absence of any endangered or threatened species
on the property including the species identified in paragraph (2);

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(C)
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Performance
standards;

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(D)
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Monitoring
requirements;

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(E)
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A
maintenance plan;

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(F)
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A
long-term management plan;

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

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

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

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(5)
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The
measures for property protection.

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(c)
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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:

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(1)
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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);

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

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

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(4)
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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.

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(d)
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After consultation with the endangered species recovery committee, the
board may approve a conservation bank instrument if the board determines that:

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(1)
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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;

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(2)
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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;

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(3)
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For
a conservation bank operated by a bank sponsor other than the department:

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(A)
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The
bank sponsor has the scientific and technical competence required to perform
the necessary conservation actions for the species identified in subsection
(b)(2);

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(B)
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The
bank sponsor's funding source is adequate to ensure the successful completion
of habitat construction, management, monitoring, and remedial actions;

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(C)
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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

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(D)
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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;

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(4)
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For
a conservation bank operated by the department, the conservation bank shall be
established on land managed by the department; and

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(5)
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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.
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The
board shall not approve a conservation bank instrument that the majority of the
endangered species recovery committee recommended for disapproval.

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(e)
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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 any applicable temporary license pursuant to section
195D-4, if applicable to its operation or other activities.

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(f)
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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:

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(1)
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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);

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(2)
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Credit
stacking is prohibited;

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(3)
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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

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(4)
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Once
a credit is transferred or sold, that credit is retired and cannot be used
again.

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(g)
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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:

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(1)
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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;

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(2)
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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

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(3)
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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.
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Any bank sponsor whose conservation bank instrument has been revoked
shall not be eligible to apply to operate another conservation bank.

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(h)
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An approved conservation bank instrument may be amended through
administrative amendment or major amendment.

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(1)
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Administrative
amendments are changes to the bank sponsor's name, address, or contact
information.
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The department may process
administrative amendments without recommendation from the endangered species
recovery committee and without approval from the board.

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(2)
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Major
amendments are changes that are not administrative amendments.
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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.
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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).

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

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(1)
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Its
rulemaking process;

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(2)
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Application
processing; and

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(3)
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The
establishment, monitoring, and oversight of the bank sponsor's conservation
bank.

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(j)
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This part shall not apply to aquatic life or their habitats.

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�195D-C
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Conservation banks; rules.
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The
department may adopt rules pursuant to chapter 91 necessary to implement this
part."

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

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�195D-25
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Endangered species recovery committee.
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(a)
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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.
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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:

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(1)
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A
college degree in a relevant field, such as Hawaiian studies, native Hawaiian
law, native Hawaiian traditional and customary practices, or related subject
area;

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(2)
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Work
history that demonstrates an appropriate level of knowledge in native Hawaiian
traditional and customary practices; or

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(3)
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Substantial
experience in native Hawaiian traditional and customary practices.

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Nongovernmental members shall be appointed
by the governor pursuant to section 26-34.
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Nongovernmental members shall not serve for more than two consecutive
terms.
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Nongovernmental members shall
serve for four-year staggered terms, except that one of the members first
appointed shall serve for two years.

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Governmental members from the federal
agencies are requested but not required to serve on the committee.
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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.

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(b)
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The endangered species recovery committee shall:

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(1)
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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;

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(2)
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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;

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(3)
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Consider
and recommend appropriate incentives to encourage landowners to voluntarily
engage in efforts that restore and conserve endangered, threatened, proposed,
and candidate species;

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(4)
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Perform
such other duties as provided in this chapter;

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(5)
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Consult
with persons possessing expertise in such areas as the committee may deem
appropriate and necessary in the course of exercising its duties; and

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(6)
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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.
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In codifying the new sections added
by section 2 and referenced in section 2 of this Act, the revisor of statutes
shall substitute appropriate section numbers for the letters used in
designating new sections in this Act.

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SECTION 5.
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Statutory material to be repealed is bracketed and stricken.
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New statutory material is underscored.

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SECTION 6.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

BY REQUEST

Report Title:

Department of Land and Natural Resources; Conservation
Banks

Description:

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