S.B. NO.



S.D. 2


H.D. 1














SECTION 1. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"201-    Geothermal energy resources development special fund. (a) There is established in the state treasury a geothermal energy resources development special fund, into which shall be deposited:

(1) Any geothermal royalties to be deposited into the special fund pursuant to section 182-7;

(2) Moneys appropriated by the legislature;

(3) All interest attributable to the investment of moneys deposited into the special fund; and

(4) Moneys allotted to the special fund from other sources.

(b) Subject to legislative appropriation, moneys in the special fund may be expended by the Hawaii state energy office to support projects that promote and advance geothermal energy resources development, including projects that contribute to offsetting developmental risk associated with Hawaii's indigenous resources.

(c) The department of business, economic development, and tourism shall submit a report to the legislature, no later than twenty days prior to the convening of each regular session, on the revenue and expenditures of the special fund."

SECTION 2. Section 182-7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The payments to the State as fixed by the board shall be specified; provided that:

(1) In the case of bauxite, bauxitic clay, gibbsite, diaspore, boehmite, and all ores of aluminum, the amount of royalties for each long dry ton of ore as beneficiated shall not be less than twenty-five cents or the equivalent of the price of one pound of virgin pig aluminum, whichever is higher, nor shall it exceed the equivalent of the price of three pounds of virgin pig aluminum;

(2) The rate of royalty for ore processed into aluminous oxide in the State shall be set at eighty per cent of the rate of royalty for ore not processed to aluminous oxide in the State; and

(3) The royalty shall be fixed at a rate that will tend to encourage the establishment and continuation of the mining industry in the State.

The prices of virgin pig aluminum for the purpose of determining the royalties under this section shall be the basic price on the mainland United States market for virgin pig, not refined, f.o.b. factory. The royalties shall be in lieu of any severance or other similar tax on the extracting, producing, winning, beneficiating, handling, storing, treating, or transporting of the mineral or any product into which it may be processed in the State, and shall not be subject to reopening or renegotiating for and during the first twenty years of the lease term.

If the lessee desires to mine other minerals, the lessee, before mining the minerals, shall notify the board in writing, and the board and the lessee shall negotiate and fix the royalties for the minerals.

Any other law to the contrary notwithstanding, [thirty per cent of] all royalties received annually by the State from geothermal resources shall be [paid] distributed as follows: twenty per cent, or $450,000, whichever is greater, shall be paid to the county in which mining operations covered under a state geothermal resource mining lease are situated; provided that the county funds shall be used for relocation funding and community benefits in the areas directly surrounding the geothermal project that is paying the royalties; provided further that the county receiving geothermal royalties shall submit detailed annual reports to the legislature outlining the expenditure of funds; ten per cent shall be deposited into the geothermal energy resources development special fund established by section 201-   ; fifty per cent shall be paid to the department; and twenty per cent shall be paid to the office of Hawaiian affairs, subject to Act 178, Session Laws of Hawaii 2006; provided further that if the geothermal resources are located on lands under the jurisdiction of the department of Hawaiian home lands, one hundred per cent of royalties received by the State shall be paid to the department of Hawaiian home lands."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on June 30, 3000.



Report Title:

Geothermal Resources; Royalties; Geothermal Energy Resources Development Special Fund; DLNR; DBEDT; Hawaii State Energy Office; OHA; Reports



Establishes the geothermal energy resources development special fund. Requires annual reports to the Legislature. Requires that, for royalties from geothermal resources, twenty per cent be paid to the county where the geothermal mining operations are situated, under certain conditions; fifty per cent be paid to the Department of Land and Natural Resources; twenty per cent be paid to the Office of Hawaiian Affairs; and ten per cent be deposited into the geothermal energy resources development special fund. Effective 6/30/3000. (HD1)




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