Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 3228 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the Governor, upon the declaration of an emergency due to a natural disaster, to release funds administered by the Hawaii Hurricane Relief Fund (HHRF) and moneys in the Emergency Budget and Reserve Fund.

Pacific Structural Consultants, Inc., and two individuals testified in support of this measure. The Hawaii Hurricane Relief Fund and Hurricane Risk Mitigation Task Force testified against the measure. The State Civil Defense Agency presented comments.

Your Committee finds that recent flooding in the Mapunapuna and Moanalua areas devastated homes and businesses, and flood victims were unable to obtain assistance under existing government programs. County and federal authorities declined to issue declarations of emergency that would have authorized the release of public funds and emergency repairs, and victims were unable to meet the criteria for assistance from the Small Business Administration and the State's disaster loan program.

This measure is intended to address shortcomings in the disaster relief network by authorizing the Governor, upon the declaration of an emergency, to release up to ten per cent of the HHRF reserves or Emergency and Budget Reserve Fund moneys, or both, to provide assistance to residents and businesses that sustain damage from a natural disaster.

Your Committee has concerns that authorizing the use of HHRF reserves may compromise the State's future ability to provide hurricane insurance should private insurers again withdraw from the market. Additionally, this measure authorizes assistance to policyholders, but HHRF has had no policyholders since coverage under its policies ended in 2001.

Therefore, your Committee has amended this measure by deleting provisions relating to the emergency release of HHRF reserve funds. Your Committee also made technical amendments for purposes of clarity, consistency, and style.

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 S.B. No. 3228, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3228, S.D. 1, and be referred to the Committee on Ways and Means.