President Barack Obama pushed for a national version of it back in 2008, but it went nowhere.

Now, Hawaii is considering the creation of a “clean economy bank.” And it’s attracted the attention of Obama’s former green energy czar.

Van Jones, who oversaw $80 billion in green recovery spending for the Obama administration in 2009, was in Honolulu Tuesday and testified in favor of House Bill 1033 before the Senate Energy and Environment Committee, calling it a “path-breaking proposal.”

The bank would allow clean energy companies to take out low interest loans. And the revenue generated would go back to the state, as opposed to being retained by private banks, supporters say. Start-up funding could come from more than $10 million in federal stimulus money for energy projects that the state has yet to disburse.

“You don’t control a lot of things in this world,” Jones told senators. “You don’t control the weather, you don’t control the global economy, you can’t control the unwanted impacts of climate change. But you do have something that you can control — the leftover (American Recovery and Reinvestment Act) funds are within your control, and the ongoing revenues you collect in taxes, and where you choose to put those revenues are within your control.”

The bill passed 3-1. Sen. Slam Slom, the lone Republican senator, opposed it. The measure now goes to the Ways and Means Committee.

If it passes, the bank will be the first of its kind in the country, Jones told Civil Beat.

State Recovery Funds Unspent

The bank’s start-up funding would come from unused stimulus money which the state is in danger of losing if the energy office doesn’t allocate it by the end of the year. About $13 million, or one-third, of $37 million given to the state for energy projects has yet to be spent, according to data from the state energy office.

Rick Daysog, a spokesman for the office, said that the funds have been committed, but he couldn’t say why it hasn’t been passed on to recipients. The original deadline for using the funds was April 30 — the federal government has approved an extension until the end of December, he said.

Beyond that, energy advocates worry the Senate may try to undo ARRA programs if the Republicans win political control in the November elections.

“One of the first things they will do is claw back every recovery act available,” said Colin Bishopp, deputy director of the Washington D.C.-based Clean Energy Development Center during testimony.

Daysog said the energy office was not taking a position on the bill, and said he “wouldn’t comment on hypotheticals” when asked if passage of the bank legislation would mean that the companies or projects that have been promised the funds would no longer receive it.

Bank Has National Scope

Hawaii is not alone in having unused ARRA funds. Nationally, $2.6 billion was allocated to the states in the form of energy conservation bonds that has yet to be used, according to testimony from Pacific Biodiesel, a Maui-based company. Supporters of the bill are hoping that other states will invest their unused funding in the bank as well.

“Why should they opt in?” asked Sen. Mike Gabbard, who chairs committee, during Tuesday’s hearing.

According to supporters, states will not only be able to protect stimulus money, but by aggregating the funding, state energy projects can achieve greater economies of scale.

Whether other states will take an interest if the legislation is passed remains to be seen, but one state representative from Oregon dropped by to testify that he was interested.

According to Rep. Jules Bailey, Oregon could “potentially use it as a tool for our own infrastructure development and green job creation.”

Not Everyone is On Board

The clean economy bank is drawing similar criticism as other proposals this year to establish a state bank. HB 1840 HD3 and HB 2103 HD2 would create panels to study a state bank, a concept similar to one established by North Dakota years ago.

Both the Department of Budget and Finance and the Department of Commerce and Consumer Affairs have raised significant concerns about the clean economy bank bill, and how such a bank would work.

Given the state’s “current financial condition, the bill would over-extend the state’s financial resources in such a way that it could have a detrimental effect on the state’s credit rating,” wrote Kalbert Young, the state budget director in testimony.

Some opponents are concerned that general fund money would need to be tapped, in addition to stimulus money.

The Hawaii Bankers Association also testified against the bill. Gary Fujitani who represents the trade group said that the “industry is not opposed to the intent of the bill — everyone wants to have energy independence.”

But he said he was concerned that the state lacked experience in running such a bank and that public funds could be in jeopardy.

Jones told Civil Beat that while it made sense to review individual complaints about the bill on their own merit, “the volume of the complaints should be taken with a grain of salt.”

“I think most people love competition in the abstract, but hate it in their own field of endeavor,” he said.

Jones said that the stimulus program was supposed to have long-term economic benefits, as opposed to being a one-time cash infusion, and that the bank would help accomplish this.

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