Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 913 entitled:

begs leave to report as follows:

The purpose of this measure is to appropriate funds to implement the loss mitigation grant program.

In particular, this measure appropriates funds from the general fund into the loss mitigation grant fund, as authorized in section 431P-16, Hawaii Revised Statutes, and further appropriates these funds out of the loss mitigation grant fund for the development and implementation of the loss mitigation grant program.

Your Committee finds that the loss mitigation grant program, as enacted by Act 179, Session Laws of Hawaii 2002, and codified as article 22 of chapter 431, Hawaii Revised Statutes, was designed to encourage the installation of wind resistive devices by providing grants to certain property owners for the installation of these devices, as approved by the Insurance Commissioner, that lessen the severity of property loss from strong winds.

Your Committee finds, however, that although Act 179, originally contained an appropriation to implement the loss mitigation grant program, the appropriation was line-item vetoed. This measure returns to the public the amounts that were vetoed for the previous year, plus the authorized amounts for years two and three of the program. Your Committee agrees with the intent of this measure to implement the program to provide grants as an incentive for homeowners to protect their homes from hurricanes.

In 1992, property and casualty insurers stopped offering hurricane coverage after Hurricane Iniki. The Legislature established the Hawaii Hurricane Relief Fund and program in response to property and casualty insurers withdrawing from the market. The Hawaii Hurricane Relief Fund remains intact in case two contingencies occur. First, a hurricane must strike Hawaii and cause extensive damage. Second, property and casualty insurers must withdraw from the market again. While your Committee recognizes it cannot stop property and casualty insurers from withdrawing from the market, your Committee finds that the hazard mitigation program can prevent extensive damage. That is the main reason your Committee is once again attempting to fund this important program.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 913 and recommends that it pass Third Reading.