Report Title:

Renewable Energy Project; Subdivisions



Exempts leases and easements for renewable energy projects from subdivision requirements; defines "subdivision requirements"; requires agencies to accept instruments for recording and filing.  (SD1)



H.B. NO.




H.D. 1



S.D. 1

















     SECTION 1.  The legislature finds that Hawaii's dependence on petroleum for over ninety per cent of its energy needs is greater than any other state in the nation.  This makes the State extremely vulnerable to any oil embargo, supply disruption, international market dysfunction, and many other factors beyond the control of the State.  Furthermore, the continued consumption of conventional petroleum fuel and price volatility can negatively impact the environment and economic health of the people of Hawaii.  At the same time, Hawaii has among the most abundant renewable energy resources in the world, in the form of solar, geothermal, wind, biomass, and ocean energy assets.

     The legislature further finds that increased energy efficiency and use of renewable energy resources would increase Hawaii's energy self-sufficiency, achieving broad societal benefits, including increased energy security, resistance to increases in oil prices, environmental sustainability, economic development, and job creation.

     To shape Hawaii's energy and environmental future and achieve the goal of energy- and self-sufficiency for the State, efforts must continue on all fronts, integrating new and evolving technologies, seizing upon opportunities to become more economically diversified, and providing incentives and assistance to address barriers.

     To develop and finance renewable energy facilities, a site for the facilities and access to the site must often be leased, granted as an easement, or mortgaged to provide financing for the project.  Renewable energy projects may require site acreage or configurations that do not coincide with existing, already subdivided lot boundaries.  For instance, land required for a project may constitute only a portion of a large legal lot, and it may be impractical or undesirable to lease or convey the entire legal lot for the renewable energy project or to encumber the entire legal lot with a mortgage that provides financing for the project.  Currently, however, subdivision laws and county ordinances generally prohibit the transfer of an interest in land that is not an entire subdivided lot or easement that has been approved by the applicable county.  With respect to land in the land court system, the additional step of obtaining land court approval is required. 

     Reported Hawaii supreme court cases, including Whitlow v. Jennings, 40 Haw. 523 (1954), have recognized that transactions involving lots that have not been approved by the county pursuant to subdivision laws or county ordinances may be unenforceable.  Unfortunately, the process of obtaining county, state, and land court approval of subdivision and easement maps is relatively time-consuming and often requires more than one year to complete.

     As recognized by the court in the Whitlow v. Jennings case, the purpose of laws and ordinances requiring county subdivision approval is to protect the consumer purchasing interests in land from substandard subdivisions.  However, these laws, ordinances, and court rulings have placed in question the validity of leases of parcels that are less than an entire legal lot, and easements without subdivision approval.  This prevents or discourages the use or financing of leases and easements for renewable energy projects.  The consumer protection purposes of subdivision laws and ordinances are not applicable or compelling with respect to sites for renewable energy projects and sophisticated parties developing renewable energy projects.  Those subdivision purposes are also outweighed by the State’s compelling interests in facilitating, encouraging, and expediting renewable energy projects for the health, safety, and welfare of the residents of Hawaii.

     Accordingly, the purpose of this Act is to facilitate the financing and development of renewable energy projects by allowing leases and easements pertaining to renewable energy projects, together with mortgages and other conveyances as security for finance, to be created, enforceable, and recordable, without requiring the landowner to obtain formal subdivision approval from the applicable county or other approving agency.

     SECTION 2.  Chapter 201N, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§201N-    Exemption from subdivision requirements.  (a)  Notwithstanding any other law or ordinance to the contrary:

(1)  Lands within the agricultural, conservation, or rural state land use district may be leased; and

(2)  Easements may be created and granted over lands within the agricultural, conservation, or rural state land use district,

for the purpose of developing and financing a renewable energy project or access to a renewable energy project that is a permitted use in the district, even though the lease land or easement area has not been subdivided as a separate subdivided lot or easement.  Leases and easements authorized by this section shall be valid leases and easements for all purposes, but the exemption from subdivision requirements authorized by this section shall be subject to the requirements and limitations set forth in subsection (d).

     (b)  Without limiting the generality of subsection (a), the following may be performed without complying with subdivision requirements:

(1)  All or a portion of a legal lot may be leased as a site for a renewable energy project or access to such project;

(2)  Easements or other possessory interests, whether exclusive or nonexclusive, may be granted to use all or a portion of the legal lot as a renewable energy project site or access to such project;

(3)  Maps, leases, licenses, grants of easements, or other instruments providing for the right to use all or a portion of a legal lot as delineated on a map for a renewable energy project site or access to such project may be recorded; and

     (4)  Mortgages and other security interests may be granted with respect to any lease or easement created pursuant to this section, and the holders of such mortgages or other security interests may foreclose upon the lease or easement covered and otherwise enforce the terms of such mortgage and security documents, subject to compliance with applicable laws other than subdivision requirements.

     (c)  The land court, bureau of conveyances, and other governmental agencies shall accept for filing and recording all instruments and maps pertaining to leases, easements, mortgages, and other security documents authorized pursuant to this section.

     (d)  The exemption from subdivision requirements authorized by this section shall only apply to leases and easements that meet the following requirements and shall be subject to the following limitations:

     (1)  The principal use of the leased land or easement area shall be the development and operation of a renewable energy project;

     (2)  The lease shall have an initial term of at least twenty years;

     (3)  Except for the exemption from subdivision requirements for leases and easements meeting the requirements of this section, nothing in this section shall exempt the actual development, construction, or operation of any use, project, or improvement from applicable state or county laws, ordinances, restrictions, permits, or approvals, including, without limitation, restrictions on allowable uses or conditions and requirements for adequate infrastructure or mitigation measures;

     (4)  Nothing in this section shall exempt from subdivision requirements the conveyance of any fee interest in land; and

     (5)  The exemption from subdivision requirements provided by this section shall terminate with respect to any lease or easement upon the first to occur of the following: 

         (A)  The termination or abandonment of the renewable energy project; or

         (B)  The termination or expiration of the lease or easement."

     SECTION 3.  Section 201N-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read:

     ""Subdivision requirements" means all state laws or county ordinances and permits setting forth standards or requirements for improvements and approvals applicable to the subdivision or consolidation of land, changes in legal boundaries, or the creation or consolidation of parcels, easements, or other interest in land."

     SECTION 4.  New statutory material is underscored.

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