REPORT TITLE: 
Insurance


DESCRIPTION:
Requires the insurance commissioner to provider for the internal
restructuring and scaling back of the Hawaii hurricane relief
fund by June 30, 2001.  Establishes the hurricane relief loan
fund to strengthen homes at risk for hurricane damage.
Transfers all unencumbered and unexpended fund balances from the
hurricane reserve trust fund as of June 30, 2001, to the natural
disaster loss mitigation fund, provided that $30,000,000 in the
hurricane reserve trust fund is transferred to the hurricane
relief loan fund on June 30, 1999.  Establishes the hurricane
relief administrative procedures loan committee.  Establishes
the hurricane loss projection methodology commission to improve
the reliability of hurricane loss projections.  (HB665 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        665
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO INSURANCE.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1                              PART I
 
 2      SECTION 1.  Hurricane relief loan fund; establishment.
 
 3 Notwithstanding any other provision to the contrary, there is
 
 4 established a special fund within the state treasury to be known
 
 5 as the hurricane relief loan fund into which may be deposited
 
 6 moneys from the hurricane reserve trust fund.
 
 7      SECTION 2.  Hurricane relief administrative procedures loan
 
 8 committee; establishment.(a)  The hurricane relief loan fund
 
 9 shall be administered by the hurricane relief administrative
 
10 procedures loan committee, which shall be composed of seven
 
11 members as follows:
 
12      (1)  The director of business, economic development, and
 
13           tourism, or designee, as an ex officio member;
 
14      (2)  The insurance commissioner, or designee, as an ex
 
15           officio member; and
 
16      (3)  Five members of financial institutions in the State,
 
17           who shall be appointed by the governor pursuant to
 
18           section 26-34.
 

 
Page 2                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (b)  The loan committee shall elect a chair from their
 
 2 members, and establish procedures, subject to the approval
 
 3 of the director of business, economic development, and tourism
 
 4 and the insurance commissioner, under which financial
 
 5 institutions shall access the hurricane relief loan fund,
 
 6 including fees, charges, the amount and form of security, and
 
 7 loan terms for loans to homeowners to strengthen or otherwise
 
 8 "hurricane-proof" homes that are at risk either because of the
 
 9 type of structure or the location of the structure in an area
 
10 prone to hurricane damage.
 
11      (c)  Members shall serve without compensation but shall be
 
12 reimbursed for their actual and necessary expenses, including
 
13 travel expenses, incurred in carrying out their duties.
 
14      SECTION 3.  Application; inspection.  Any person having an
 
15 interest in real property who has been unable to obtain a loan to
 
16 hurricane-proof the property for the purpose of obtaining
 
17 homeowners' insurance may apply to a financial institution for a
 
18 loan pursuant to this Act.  Any person applying for a loan from
 
19 the fund shall submit plans, specifications, and standards for
 
20 the work to be performed on the real property to the methodology
 
21 commission for review and approval of the plans, specifications,
 
22 and standards.  The loan committee may offer grants up to fifty
 
23 per cent of the applicant's requested loan amount and shall
 

 
Page 3                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 process the requested loan based on the applicant's financial
 
 2 need.  Upon approval by the loan committee, the applicant's
 
 3 lending institution may process the loan.  Upon completion of the
 
 4 work performed on the property, a completion report shall be
 
 5 submitted to the methodology commission.
 
 6      The methodology commission shall determine whether the
 
 7 property is located in an area of projected hurricane loss or is
 
 8 at risk because of the type of structure of the property.  If the
 
 9 property is found to be located in such an area or at risk
 
10 because of the type of structure, the loan committee may provide
 
11 a loan to the property owner pursuant to this Act.  The
 
12 methodology commission shall adopt standards for building loss
 
13 mitigation to be used as the basis for loan approval.
 
14      SECTION 4.  Hurricane loss projection methodology
 
15 commission; establishment.(a)  There is established the
 
16 hurricane loss projection methodology commission to be placed in
 
17 the department of commerce and consumer affairs for
 
18 administrative purposes only.  Members of the methodology
 
19 commission shall be appointed by the governor pursuant to section
 
20 26-34 and shall consist of nine members:
 
21      (1)  The insurance commissioner;
 
22      (2)  The chair of the fund;
 
23      (3)  A representative from the Hawaii Insurers Council;
 

 
Page 4                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (4)  A representative from the civil defense division of the
 
 2           department of defense;
 
 3      (5)  A hurricane loss methodology specialist;
 
 4      (6)  A hazard mitigation specialist from the University of
 
 5           Hawaii;
 
 6      (7)  A representative from the Structural Engineers
 
 7           Association of Hawaii;
 
 8      (8)  A statistical modeling expert; and
 
 9      (9)  An expert in meteorology who is a full-time member of
 
10           the faculty of the University of Hawaii.
 
11 The governor shall select a chairperson and vice-chairperson from
 
12 among the members.
 
13      (b)  The methodology commission may appoint, not subject to
 
14 chapters 76 and 77, an executive director of the fund whose
 
15 salary shall be set by the methodology commission.  The
 
16 methodology commission may employ, not subject to chapters 76 and
 
17 77, technical experts and officers, agents and employees,
 
18 permanent or temporary, as required.  The methodology commission
 
19 may also contract with persons, not subject to chapters 76, 77,
 
20 and 78 when in the determination of the methodology commission,
 
21 the services to be performed are unique and essential to the
 
22 execution of the functions of the fund; provided that no
 
23 individual contract shall be for a period longer than two years
 
24 per term.
 

 
Page 5                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (c)  Members of the methodology commission shall serve
 
 2 without compensation but shall be reimbursed for their actual and
 
 3 necessary expenses, including travel expenses, incurred in
 
 4 carrying out their duties.
 
 5      (d)  There shall be no liability on the part of, and no
 
 6 cause of action of any nature shall arise against, any member of
 
 7 the methodology commission or any officer or employee of the
 
 8 department of commerce and consumer affairs, for any action taken
 
 9 in the performance of their duties under this section.  The
 
10 methodology commission may, in writing, waive any potential cause
 
11 of action for negligence of a consultant, contractor, or contract
 
12 employee engaged to assist the methodology commission.
 
13      SECTION 5.  Hurricane loss projection standards and
 
14 guidelines.  The methodology commission shall consider any
 
15 actuarial methods, principles, standards, models, or output
 
16 ranges that have the potential for improving and mitigating
 
17 potential losses from hurricanes to residential properties in the
 
18 State.
 
19      The methodology commission shall adopt standards for
 
20 building loss mitigation to be used as the basis for loan
 
21 approval.
 
22      Any person applying for a loan from the fund shall submit
 
23 plans, specifications, and standards for the work to be performed
 
24 on the real property to the methodology commission for approval.
 

 
Page 6                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 The loan committee may offer grants up to fifty per cent of the
 
 2 applicant's requested loan amount and shall process the requested
 
 3 loan based on the applicant's financial need.  Upon approval by
 
 4 the loan committee, the applicant's lending institution may
 
 5 process the loan.  Upon completion of the work performed on the
 
 6 property, a completion report shall be submitted to the
 
 7 methodology commission.
 
 8      SECTION 6.  Definitions.  As used in this part, unless the
 
 9 context requires otherwise:
 
10      "Fund" means the hurricane relief loan fund.
 
11      "Hurricane proofing" means any improvement to real property
 
12 in an area prone to hurricane damage which will increase the
 
13 property's ability to withstand hurricane force winds.
 
14      "Loan committee" means the hurricane relief administrative
 
15 procedures loan committee established in section 2.
 
16      "Methodology commission" means the hurricane loss projection
 
17 methodology commission established in section 4.
 
18      SECTION 7.  All fund balances for the hurricane reserve
 
19 trust fund remaining unencumbered and unexpended as of June 30,
 
20 2001, shall be transferred to the natural disaster loss
 
21 mitigation fund; provided that $30,000,000 of the fund balance in
 
22 the hurricane reserve trust fund shall be transferred to the
 
23 hurricane relief loan fund on June 30, 1999, for use by the
 
24 methodology commission pursuant to this Act.
 

 
Page 7                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 8.  Natural disaster loss mitigation fund.  There is
 
 2 created in the state treasury a special fund to be designated the
 
 3 natural disaster loss mitigation fund.  The proceeds of the fund
 
 4 shall be used to mitigate losses incurred from natural disasters
 
 5 in the State as deemed necessary by the department of commerce
 
 6 and consumer affairs.
 
 7                              PART II
 
 8      SECTION 9.  Section 36-27, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§36-27  Transfers from special funds for central service
 
11 expenses.  Except as provided in this section, and
 
12 notwithstanding any other law to the contrary, from time to time
 
13 the director of finance, for the purpose of defraying the
 
14 prorated estimate of central service expenses of government in
 
15 relation to all special funds, except the:
 
16      (1)  Special summer school and intersession fund under
 
17           section 302A-1310;
 
18      (2)  School cafeteria special funds of the department of
 
19           education;
 
20      (3)  Special funds of the University of Hawaii;
 
21      (4)  State educational facilities improvement special fund;
 
22      (5)  Convention center capital special fund under section
 
23           206X-10.5 and the convention center operations special
 
24           fund under section 206X-10.6;
 

 
Page 8                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (6)  Special funds established by section 206E-6;
 
 2      (7)  Housing loan program revenue bond special fund;
 
 3      (8)  Housing project bond special fund;
 
 4      (9)  Aloha Tower fund created by section 206J-17;
 
 5     (10)  Domestic violence prevention special fund under section
 
 6           321-1.3;
 
 7     (11)  Spouse and child abuse special account under section
 
 8           346-7.5;
 
 9     (12)  Spouse and child abuse special account under section
 
10           601-3.6;
 
11     (13)  Funds of the employees' retirement system created by
 
12           section 88-109;
 
13     (14)  Unemployment compensation fund established under
 
14           section 383-121;
 
15    [(15)  Hawaii hurricane relief fund established under chapter
 
16           431P;
 
17     (16)] (15) Hawaii health systems corporation special funds;
 
18    [(17)] (16)  Boiler and elevator safety revolving fund
 
19           established under section 397-5.5;
 
20    [(18)] (17)  Tourism special fund established under section
 
21           [[]201B-11[]]; and
 
22    [(19)] (18)  Department of commerce and consumer affairs'
 
23           special funds;
 

 
Page 9                                                     665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 shall deduct five per cent of all receipts of all other special
 
 2 funds, which deduction shall be transferred to the general fund
 
 3 of the State and become general realizations of the State.  All
 
 4 officers of the State and other persons having power to allocate
 
 5 or disburse any special funds shall cooperate with the director
 
 6 in effecting these transfers.  To determine the proper revenue
 
 7 base upon which the central service assessment is to be
 
 8 calculated, the director shall adopt rules pursuant to chapter 91
 
 9 for the purpose of suspending or limiting the application of the
 
10 central service assessment of any fund.  No later than twenty
 
11 days prior to the convening of each regular session of the
 
12 legislature, the director shall report all central service
 
13 assessments made during the preceding fiscal year."
 
14      SECTION 10.  Section 36-30, Hawaii Revised Statutes, is
 
15 amended by amending subsection (a) to read as follows:
 
16      "(a)  Each special fund, except the:
 
17      (1)  Transportation use special fund established by section
 
18           261D-1;
 
19      (2)  Special summer school and intersession fund under
 
20           section 302A-1310;
 
21      (3)  School cafeteria special funds of the department of
 
22           education;
 
23      (4)  Special funds of the University of Hawaii;
 

 
Page 10                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (5)  State educational facilities improvement special fund;
 
 2      (6)  Special funds established by section 206E-6;
 
 3      (7)  Aloha Tower fund created by section 206J-17;
 
 4      (8)  Domestic violence prevention special fund under section
 
 5           321-1.3;
 
 6      (9)  Spouse and child abuse special account under section
 
 7           346-7.5;
 
 8     (10)  Spouse and child abuse special account under section
 
 9           601-3.6;
 
10     (11)  Funds of the employees' retirement system created by
 
11           section 88-109;
 
12     (12)  Unemployment compensation fund established under
 
13           section 383-121;
 
14    [(13)  Hawaii hurricane relief fund established under chapter
 
15           431P;
 
16     (14)] (13)  Convention center capital special fund
 
17           established under section 206X-10.5 and the convention
 
18           center operations special fund established under
 
19           section 206X-10.6;
 
20    [(15)] (14)  Hawaii health systems corporation special funds;
 
21           and
 
22    [(16)] (15)  Tourism special fund established under section
 
23           [[]201B-11[]];
 

 
Page 11                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 shall be responsible for its pro rata share of the administrative
 
 2 expenses incurred by the department responsible for the
 
 3 operations supported by the special fund concerned."
 
 4      SECTION 11.  Section 39-51, Hawaii Revised Statutes, is
 
 5 amended as follows:
 
 6      1.  By amending the definitions of "revenue" and "revenue
 
 7 bonds" to read:
 
 8      ""Revenue" means the moneys collected, including any moneys
 
 9 collected from the State or any department, or any county or
 
10 board, agency, or instrumentality thereof, from the rates,
 
11 rentals, fees, and charges prescribed for the use and services
 
12 of, and the facilities and commodities furnished by, an
 
13 undertaking or the use and services and benefits of a loan
 
14 program[; provided that the term shall include all insurance
 
15 premium payments, assessments, surcharges, investment earnings,
 
16 and all other income of the Hawaii hurricane relief fund]."
 
17      "Revenue bonds" means all bonds payable solely from and
 
18 secured by the revenue, or user taxes, or any combination of
 
19 both, of an undertaking or loan program or any loan made
 
20 thereunder for which bonds are issued and as otherwise provided
 
21 in this part[; provided that the term shall include all bonds
 
22 issued by the director of finance under the authority of section
 
23 10(a), Act 339, Session Laws of Hawaii 1993, as amended, for the
 
24 purposes of the hurricane bond loan fund]."
 

 
Page 12                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      2.  By repealing the definition of "policy of hurricane
 
 2 property insurance":
 
 3      [""Policy of hurricane property insurance" means a policy or
 
 4 endorsement of insurance issued by the Hawaii hurricane relief
 
 5 fund under section 431P-10."]
 
 6      SECTION 12.  Section 39-52, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "§39-52  Declaration of policy.  It is declared to be the
 
 9 policy of the State that any department acquiring, purchasing,
 
10 constructing, reconstructing, improving, bettering, or extending
 
11 an undertaking or establishing or administering a loan program
 
12 pursuant to this chapter [or providing policies of hurricane
 
13 property insurance to the general public,] shall manage the
 
14 undertaking[,] or loan program[, or the Hawaii hurricane relief
 
15 fund] in the most efficient manner consistent with sound economy
 
16 and public advantage, and consistent with the protection of
 
17 bondholders."
 
18      SECTION 13.  Section 39-54, Hawaii Revised Statutes, is
 
19 amended by amending subsection (a) to read as follows:
 
20      "(a)  The issuance of revenue bonds for the acquisition,
 
21 purchase, construction, reconstruction, improvement, betterment,
 
22 or extension of any undertaking[;] or the establishment and
 
23 administration of any loan program authorized by law[; or the
 

 
Page 13                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 coverage of policies of hurricane property insurance issued by
 
 2 the Hawaii hurricane relief fund] shall be authorized:
 
 3      (1)  By a resolution or resolutions of the governing body of
 
 4           the department, which may be adopted at the same
 
 5           meeting at which the same are introduced by a majority
 
 6           of all the members of the governing body of the
 
 7           department then in office, and shall take effect
 
 8           immediately upon filing with the director of finance;
 
 9           or
 
10      (2)  By a certificate or certificates of a department head,
 
11           which shall take effect immediately upon filing with
 
12           the director of finance."
 
13      SECTION 14.  Section 39-60, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "§39-60  Covenants in resolution or certificate authorizing
 
16 issuance of revenue bonds.  Any resolution or certificate
 
17 authorizing the issuance of revenue bonds pursuant to this part
 
18 may contain covenants as to:
 
19      (1)  The purpose or purposes to which the proceeds of sale
 
20           of the revenue bonds shall be applied and the use and
 
21           disposition thereof;
 
22      (2)  The use and disposition of the revenue of the
 
23           undertaking[, the Hawaii hurricane relief fund,] or the
 

 
Page 14                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           loan program for which the revenue bonds are to be
 
 2           issued, or the user taxes derived therefrom, or both
 
 3           revenue and user taxes, to the extent pledged to the
 
 4           payment of the revenue bonds, including the priority of
 
 5           payments from the revenue and the creation and
 
 6           maintenance of reserves and the investment thereof;
 
 7      (3)  The issuance of other or additional revenue bonds
 
 8           payable from the revenue of the loan program[, the
 
 9           Hawaii hurricane relief fund,] or of the undertaking,
 
10           or the user taxes derived therefrom, or both revenue
 
11           and user taxes, to the extent pledged to the payment of
 
12           the revenue bonds;
 
13      (4)  The operation, maintenance, and repair of the
 
14           undertaking or the administration, operation, and
 
15           maintenance of the loan program[, or the Hawaii
 
16           hurricane relief fund];
 
17      (5)  The insurance to be carried on an undertaking or on the
 
18           security for [the Hawaii hurricane relief fund, or] a
 
19           loan program and the use and disposition of insurance
 
20           proceeds, the insurance policies being by this section
 
21           authorized to be carried, and no undertaking shall have
 
22           recourse to the state insurance fund for the repair or
 
23           replacement of any property in the undertaking, or for
 

 
Page 15                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           payment of claims under chapter 386 (relating to
 
 2           workers' compensation);
 
 3      (6)  Books of account and the inspection and audit thereof;
 
 4           and
 
 5      (7)  The terms and conditions upon which the holders of the
 
 6           revenue bonds or any proportion of them or any trustee
 
 7           therefor shall be entitled to the appointment of a
 
 8           receiver by any court of competent jurisdiction, which
 
 9           court shall have jurisdiction in the proceedings, and
 
10           which receiver may enter and take possession of the
 
11           undertaking, operate, maintain, and repair the same,
 
12           enforce or foreclose loans made under a loan program,
 
13           impose and prescribe rates, rentals, fees, or charges,
 
14           collect, receive, and apply all revenue, and receive
 
15           and apply all user taxes, thereafter arising therefrom
 
16           in the same manner and to the same extent as the
 
17           department itself might do;
 
18 provided that all covenants shall be subject to review by the
 
19 governor; and provided further that the provisions of this
 
20 section with respect to user taxes shall be applicable only if
 
21 the legislature in the specific act or acts authorizing the
 
22 issuance of the revenue bonds has provided that the revenue bonds
 
23 may be paid from and secured by the user taxes derived from an
 
24 undertaking.
 

 
Page 16                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      The provisions of this part and any resolution or
 
 2 certificate shall be a contract with the holder or holders of the
 
 3 revenue bonds.  The duties of the department, its governing body
 
 4 and department head, pursuant to this part, and any resolution or
 
 5 certificate shall be enforceable by any bondholder, by mandamus
 
 6 or other appropriate suit, action, or proceeding in any court of
 
 7 competent jurisdiction."
 
 8      SECTION 15.  Section 39-62, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§39-62  Use of revenue and user taxes by any undertaking[,]
 
11 or loan program[, or the Hawaii hurricane relief fund].  Whenever
 
12 any revenue bonds have been issued pursuant to this part for an
 
13 undertaking[,] or a loan program, [or the Hawaii hurricane relief
 
14 fund,] the revenue, or the user taxes, or combination of both, of
 
15 the undertaking, loan program, or fund from which the revenue
 
16 bonds are payable and by which they are secured shall be
 
17 deposited in a special fund and shall be appropriated, applied,
 
18 or expended in the amount necessary therefor for the following
 
19 purposes and in the order of priority as the department shall
 
20 provide in the resolution or certificate authorizing the issuance
 
21 of revenue bonds pursuant to this part:
 
22      (1)  To pay when due all revenue bonds and interest thereon
 
23           issued for the undertaking[,] or loan program, [or the
 

 
Page 17                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           Hawaii hurricane relief fund] for the payment of which
 
 2           the revenue, or user taxes, or combination of both, is
 
 3           or shall have been pledged, charged, or otherwise
 
 4           encumbered, including reserves therefor;
 
 5      (2)  To pay or provide for the payment of the cost of
 
 6           operation, maintenance, and repair of the undertaking,
 
 7           or to pay or provide for the payment of administering,
 
 8           operating, and maintaining the loan program, including
 
 9           reserves therefor;
 
10      (3)  For such purposes, within the jurisdiction, powers,
 
11           duties, and functions of the department, including the
 
12           creation and maintenance of reserves, as shall have
 
13           been covenanted in any resolution or resolutions or
 
14           certificate or certificates of the department providing
 
15           for the issuance of revenue bonds;
 
16      (4)  To reimburse the general fund of the State for all bond
 
17           requirements for general obligation bonds which are or
 
18           shall have been issued for the undertaking[,] or loan
 
19           program, [or the Hawaii hurricane relief fund,] or to
 
20           refund any general obligation bonds, except insofar as
 
21           the obligation of reimbursement has been or shall be
 
22           canceled by the legislature, the bond requirements
 
23           being the interest on term and serial bonds, sinking
 

 
Page 18                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           fund for term bonds, and principal of serial bonds
 
 2           maturing the following year;
 
 3      (5)  To provide for betterments and improvements to the
 
 4           undertaking or expansion of the loan program [or the
 
 5           Hawaii hurricane relief fund], including reserves
 
 6           therefor; and
 
 7      (6)  To provide special reserve funds and other special
 
 8           funds as are or may be created by law.
 
 9 The appropriation, application, or expenditure of amounts
 
10 deposited in the special fund pursuant to this section shall be
 
11 accounted for on a fiscal year basis.  Unless and until adequate
 
12 provision has been made for the foregoing purposes, the State
 
13 shall not have the right to transfer to its general fund or any
 
14 special fund or to apply to any other purposes any part of the
 
15 revenue or user taxes pledged to the payment of revenue bonds of
 
16 the undertaking or loan program."
 
17      SECTION 16.  Section 431:13-104, Hawaii Revised Statutes, is
 
18 amended by amending subsection (g) to read as follows:
 
19      "(g)  Nothing in this section shall prevent a person who
 
20 lends money or extends credit from assisting a mortgagor,
 
21 borrower, or purchaser in obtaining homeowners insurance where
 
22 the borrower requests such assistance in writing.  [Nothing in
 
23 this section shall prevent a person who lends money or extends
 

 
Page 19                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 credit from referring a mortgagor, borrower, or purchaser to the
 
 2 Hawaii hurricane relief fund.]"
 
 3      SECTION 17.  Section 431:21-105, Hawaii Revised Statutes, is
 
 4 amended by amending subsection (a) to read as follows:
 
 5      "(a)  In addition to any other requirements imposed by law,
 
 6 the association shall:
 
 7      (1)  Formulate and administer a plan of operation to insure
 
 8           persons having an insurable interest in real or
 
 9           tangible personal property in the area designated by
 
10           the commissioner[;], which shall include areas subject
 
11           to windstorm damage by hurricanes;
 
12      (2)  Reimburse each servicing facility for obligations of
 
13           the association paid by the facility and for expenses
 
14           incurred by the facility while processing applications
 
15           and servicing policies on behalf of the association;
 
16           and
 
17      (3)  Collect and maintain statistical information and other
 
18           information required by the commissioner."
 
19      SECTION 18.  Section 219.1 of the Hawaiian Homes Commission
 
20 Act of 1920, as amended, is amended by amending subsection (b) to
 
21 read as follows:
 
22      "(b)  Notwithstanding any law to the contrary, the
 
23 department either alone or together with any other governmental
 
24 agency, may:
 

 
Page 20                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  Form an insurance company, association (nonprofit or
 
 2           otherwise), pool, or trust;
 
 3      (2)  Acquire an existing insurance company;
 
 4      (3)  Enter into arrangements with one or more insurance
 
 5           companies; or
 
 6      (4)  Undertake any combination of the foregoing; upon such
 
 7           terms and conditions and for such periods, as the
 
 8           commission shall approve, to provide homeowner
 
 9           protection, including hurricane coverage, for lessees
 
10           participating in such undertaking.  Such undertaking
 
11           shall be subject to the provisions of [chapter 431P,
 
12           including but not limited to section 431P-10(b), and]
 
13           chapter 431."
 
14      SECTION 19.  Chapter 431P, Hawaii Revised Statutes, is
 
15 repealed.
 
16      SECTION 20.  The insurance commissioner shall provide for
 
17 the internal restructuring and scaling back of the Hawaii
 
18 hurricane relief fund within a two-year period ending on June 30,
 
19 2001.  On July 1, 2001, all fund balances for the hurricane
 
20 reserve trust fund remaining unencumbered and unexpended as of
 
21 June 30, 2001, shall be transferred to the natural disaster loss
 
22 mitigation fund, provided that $30,000,000 of the fund balance in
 
23 the hurricane reserve trust fund shall be transferred to the
 

 
Page 21                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 hurricane relief loan fund on June 30, 1999, for use by the
 
 2 methodology commission pursuant to this Act.
 
 3      SECTION 21.  The provisions of the amendments made by this
 
 4 Act to the Hawaiian Homes Commission Act of 1920, as amended, are
 
 5 declared to be severable, and if any section, clause, or phrase,
 
 6 or the application thereof to any person or circumstance is held
 
 7 ineffective because there is a requirement of having the consent
 
 8 of the United States to take effect, then that portion only shall
 
 9 take effect upon the granting of consent by the United States and
 
10 the effectiveness of the remainder of this Act or the application
 
11 thereof shall not be affected.
 
12      SECTION 22.  Statutory material to be repealed is bracketed.
 
13 New statutory material is underscored.
 
14      SECTION 23.  This Act shall take effect on June 30, 1999;
 
15 provided that:
 
16      (1)  Part I of this Act shall be repealed on July 1, 2009;
 
17      (2)  Section 19 of this Act shall take effect on June 30,
 
18           2001; and
 
19      (3)  The amendments made to sections 36-27 and 36-30, Hawaii
 
20           Revised Statutes, by this Act shall not be repealed
 
21           when those sections are reenacted on July 1, 2000,
 
22           pursuant to:
 

 
 
 
Page 22                                                    665
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (A)  Section 13 of Act 216, Session Laws of Hawaii
 
 2                1997; or
 
 3           (B)  Section 9 of Act 142, Session Laws of Hawaii 1998.