Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 596, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the suspension and reactivation of the special mortgage recording fee and the issuance of reimbursable general obligation bonds for purposes of the Hawaii Hurricane Relief Fund (HHRF) for an additional fiscal year.

Testimony in support of this measure was received from the Insurance Commissioner, Board of Land and Natural Resources, Hawaii Insurers Council, and Hawaii Association of Realtors. The HHRF, Mortgage Bankers Association of Hawaii, and Hawaii Independent Insurance Agents Association testified in support of this measure with amendments.

When the State's hurricane insurance program was created, the special mortgage recording fee assessment was established as one of the funding mechanisms for the program. Since the HHRF is expected to terminate on December 1, 2001, this assessment is no longer necessary, and this measure authorizes suspension of the fee by administrative rule.

Since it would be prudent to retain HHRF's authority to collect the fee in the event of a hurricane before the Fund's termination, this measure also authorizes the HHRF to reactivate the fee by administrative rule. Additionally, authorization for the issuance of reimbursable general obligation bonds has been extended to include the fiscal year 2001-2002 to preserve the Fund's federal tax-exempt status.

Your Committee has amended this measure by replacing its contents with the language of a similar measure, S.B. No. 1072, S.D. 2. As amended, this measure additionally specifies that the suspension of the special mortgage recording fee assessments shall be for the period from July 1, 2001, to December 31, 2001.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 596, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 596, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.