Senate Bill 2070 (now Act 197) calls for the issuance of up to $50 million in special purpose revenue bonds to the Hawaiian Legacy Reforestation Initiative, LLC. The purpose is to assist the company in a host of worthy endeavors, including the generation of \u201ca sustainable model of endemic reforestation, ecosystem revitalization, endangered species recovery, [and] carbon credit sequestering,\u201d with its \u201cmission to proliferate a sustainable model of endemic reforestation, ecosystem revitalization, endangered species recovery, and carbon credit sequestering.\u201d<\/p>\n\n\n\n
So what\u2019s wrong with that?<\/p>\n\n\n\n
According to most of the individuals who submitted testimony to the Legislature, nothing at all. Those individuals included the Brother Christopher D. Hall, assistant head of Damien School; Susanne Kurisu, the executive producer of Menpachi Video Productions; her husband, Maverick Fernandes, information security officer for Kamehameha Schools; Terri Orton, the general manager of the Hawai\u02bbi Convention Center; Tom Cross, manager of the Hapuna Beach Resort; Joe Ibarra, manager of the Kahala Hotel and Resort; Matt Grauso, general manager of \u02bbAlohilani Resort Waikiki Beach; Simeon Miranda, manager of the Embassy Suites Waikiki; Reid Yoshida, manager of the Embassy Suites Kapolei; Nicole Kilantang, sales director, Embassy Suites Kapolei; officers of several wood-working enterprises; and many apparently unaffiliated individuals. They praised the efforts of HLRI to restore native forests and its plans to expand those efforts significantly, as the special purpose bonds would allow it to do.<\/p>\n\n\n\n
Jason Ho\u02bbopai, who identified himself as the \u201cacting executive director\/Finance Committee\u201d of HLRI, said the special purpose revenue bonds would enable the company to plant two million trees while expanding HLRI\u2019s \u201csustainable model of endemic reforestation, carbon neutral timber exporting, ecosystem revitalization, endangered species recovery, and internationally certified carbon offset creation.\u201d<\/p>\n\n\n\n
Testimony in opposition was submitted by Deborah Ward of the Big Island, who noted that company lacked a \u201ctrack record that would indicate the proposal would be successful, nor does its record indicate expertise in these areas.\u201d She added, \u201cThose of us who have watched this company for years see the whole operation as a thinly veiled scam to generate investment money, enjoy the proceeds, and make virtually no impact on the environment of Hawai\u02bbi, while collecting over $100 per seedling tree in exchange for a digital certificate. The land area reforested in the last decade reportedly totals 73 acres according to the GuideStar website.\u201d<\/p>\n\n\n\n
Sherry Pollack, representing the Hawai\u02bbi chapter of 350.org, also opposed the measure. Reforestation and carbon sequestration \u201care important to help mitigate global warming,\u201d she testified. \u201cHowever, we believe advancing efforts for carbon credit sequestering is ill-advised. The state has already studied the feasibility and implications for establishing a carbon offset program in Hawai\u02bbi. Findings from this study strongly recommended against such a pursuit.\u201d<\/p>\n\n\n\n
Mary Alice Evans, director of the Office of Planning and Sustainable Development, which authored that study, also advised against passage of the bill. While supporting the practice of planting trees to mitigate stresses of climate change, she referred to the OPSD study released in December 2019 on the feasibility of a carbon offset program in the state.<\/p>\n\n\n\n
Evans noted that the carbon crediting\/carbon offsetting measures to be conducted by HLRI would be \u201cadministered privately by that business.\u201d However, she continued, OPSD \u201chas concerns about the state\u2019s consideration to provide Special Purpose Revenue Bond loan financing to assist qualifying private capital improvement projects in relation to carbon offsetting.\u201d<\/p>\n\n\n\n
Not until April 6, the date of the last hearing on the bill, did HLRI reveal the full extent of its ambitious plans in a 20-page, glossy, four-color booklet<\/a>. In addition to various reforestation projects, HLRI also announced its intention to develop the \u201cHamakua Center for Sustainability,\u201d which, among other things, would build workforce housing. Its focus on eco-tourism would foster \u201cthe gowth [sic] of sustainable tourism.\u201d Its SPARC program \u2013 \u201cSectoral Partnerships for Advancing Resilient Cross-Cutting\u201d \u2013 would involve collaborations, it says, with \u201cKamehameha Schools, the Pacific Center for High Technology Research, Lanakila Pacific, Hawai\u02bbi Unified, and Hawaiian Legacy.\u201d One of its first projects would be starting up a lumber mill; its budget calls for spending $10,000 a month for equipment rental for the Hamakua mill and $2,500 a month in rental payments to Ecotech Nursery Systems, a company owned by Jeff Dunster, the founder of HLRI.<\/p>\n\n\n\n Not least, there is a line item for renting four 480-square-foot units from the Four Seasons for nearly $300,000 a year.<\/p>\n\n\n\n The standing committee reports from both House and Senate were, if not effusive, at least positive enough to push the bill through to passage. Governor Ige signed it into law on June 27.<\/p>\n\n\n\n A Ghost Company<\/em><\/strong><\/p>\n\n\n\n While the law allows SPRBs to be issued to Hawaiian Legacy Reforestation Initiative, LLC, \u201ca Hawai\u02bbi limited liability company,\u201d in fact, there is no such entity. As of late August, no LLC by that name was registered with the state Department of Commerce and Consumer Affairs. Over the course of five legislative hearings, involving seven committees and a House-Senate conference, no one apparently bothered to check into the bona fides of the proposed beneficiary of the bonds.<\/p>\n\n\n\n There is a non-profit by that name, however: Hawaiian Legacy Reforestation Initiative. Despite the similarity in their names, there is no equivalence in the way in which the federal and state governments treat non-profits versus for-profit LLCs.<\/p>\n\n\n\n HLRI principal Jeff Dunster first came to the attention of Environment Hawai\u02bbi <\/em>in 2012. The March edition of that year reported on Dunster\u2019s efforts to plant koa on land in the Big Island district of Hamakua. <\/p>\n\n\n\n Since then, Dunster established the non-profit Hawaiian Legacy Reforestation Initiative as a 501(c)(3) non-profit organization, which is required to file annual reports with the IRS disclosing income and expenditures. The most recent report available publicly (for 2020) shows that the organization took in $370,272, but had expenses of more than $1 million and more than $2 million in outstanding debt. At the end of the year, it reported assets totaling a negative $71,874, this despite holding what it reported as more than $700,000 worth of Hawaiian art, $37,667 in koa timber, and nearly $30,000 in \u201cwood art.\u201d <\/p>\n\n\n\n In 2020, the organization paid $329,952 to Ecotech Nursery Systems, LLC, identified in the IRS filing as an entity \u201cowned by Jeffrey Dunster, president\/director of HLRI.\u201d Ecotech, the filing states, \u201csupplies seedlings for plantings by the organization.\u201d <\/p>\n\n\n\n No Questions<\/em><\/strong><\/p>\n\n\n\n Environment Hawai\u02bbi <\/em>reached out to the bill\u2019s sponsor, Senator Lorraine Inouye, and to co-sponsor senators Gilbert Keith-Agaran, Lynn Decoite, and Bennette Misalucha, to ask if any of them had questions concerning the putative beneficiary of the bill.<\/p>\n\n\n\n Misalucha\u2019s spokesperson, Richard Mizusawa, stated, that although she had signed onto the bill, \u201cit was Senator Inouye who is the first primary introducer.\u201d He suggested that Inouye was the one who would know who provided language for the original measure.<\/p>\n\n\n\n Keith-Agaran responded as well. \u201cAs happens at the beginning of a session, bills are circulated by the principal sponsor \u2026 for consideration of adding our names to introduce the bill. The language of this particular measure is like most bills proposing SPRBs,\u201d adding that he did not look into whether the entity was registered to do business in Hawai\u02bbi at the time the bill was introduced.<\/p>\n\n\n\n He also addressed the issue of whether the SPRB authorized by the measure could actually be awarded to an entity when the wrong name appears on the bill. \u201cI can recall that when a grant-in-aid is awarded to the wrong name of an entity, then the Attorney General\u2019s office has generally not<\/em> allowed the execution and implementation of the grant agreement.\u201d<\/p>\n\n\n\n \u201cI would assume the same principle would apply in this instance,\u201d Keith-Agaran stated. \u201cRepresentatives of the entity did provide testimony and could have corrected the name in the measure and asked for an amendment during the course of the session. Now, whether the Legislature would amend the SPRB in a future session is a question, given the policy we implemented to favor third-party housing projects when using the public bond cap for the next several years.\u201d<\/p>\n\n\n\n At the bill\u2019s last hearing, on April 6, Craig Hirai, director of the state Department of Budget and Finance, warned about this. After reminding the Legislature that even if the bill were to pass into law, \u201capproval of the SPRB issuance and conduit loan will require further review of the financing proposal to ensure compliance with all federal, state, and credit underwriting requirements.\u201d<\/p>\n\n\n\n \u201cAdditionally,\u201d he wrote, \u201cthe Department would like to note that House Bill No. 1829 \u2026 and Senate Bill No. 2812 \u2026 specifies that no SPRBs requiring an allocation of annual state ceiling \u2026 shall be authorized after June 30, 2022, and before December 31, 2028, unless requested by the Governor and approved by the Legislature. To permit the issuance of SPRBs authorized during this session, may we suggest an effective date of June 29, 2022.\u201d<\/p>\n\n\n\n House Bill 1829 became Act 182 when the governor signed it on June 27. That is the law that gives preference to housing projects in the award of SPRBs.<\/p>\n\n\n\n The effective date of Act 197 is July 1.<\/p>\n\n\n\n \u2014 Patricia Tummons<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Senate Bill 2070 (now Act 197) calls for the issuance of up to $50 million in special purpose revenue bonds to the Hawaiian Legacy Reforestation Initiative, LLC. The purpose is to assist the company in a host of worthy endeavors, … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":8689,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,33,501],"tags":[7],"class_list":["post-14622","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-climate-change","category-legislation","category-september-2022","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/14622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14622"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/14622\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/8689"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}