Hawaii Contemplates Funding Clean Energy Bank

The state of Hawaii is considering using federal stimulus money to create a "clean economy bank" that would make low-interest rate loans to clean energy companies.

The state's Senate Energy and Environment Committee has passed a measure to establish the bank, which would be the first of its kind in the country, and the bill is now headed to the Ways and Means Committee, the Honolulu Civil Beat reported Tuesday.

Hawaii has roughly $13 million from the American Recovery and Reinvestment Act designated for energy projects that has not been used and that it could lose if it is not spent by the end of the year, the Honolulu Civil Beat reported. Under the proposed legislation, those funds would be used to fund the bank and all revenues generated would be returned to the state's general fund.

Supporters of the bill say that energy bank would create jobs and help the state become more energy independent. But opponents, including the Hawaii Bankers Association, argue that the state does not have the expertise to run a bank and could wind up making loans that might put taxpayer dollars at risk. Others also question whether $13 million is enough to fund the bank and are concerned that the state would need to tap additional funds to get it up and running.

Aside from proposing an energy bank, Hawaii is also one of 17 states considering legislation to create state-owned banks or to give banking powers to existing government agencies.

In most cases, these state banks would be modeled after the country's only state-owned bank, the Bank of North Dakota, which uses state funds that would otherwise be parked in conventional banks to make loans to small businesses.