STAND. COM. REP. NO.  1215-14

Honolulu, Hawaii

                , 2014

RE:   S.B. No. 2758

      S.D. 1

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Sir:

     Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 2758, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE HURRICANE RESERVE TRUST FUND,"

begs leave to report as follows:

The purpose of this measure is to require the interest and other moneys earned on the principal of the Hurricane Reserve Trust Fund to be deposited into the Hurricane Reserve Trust Fund instead of being diverted to the general fund.

The Department of Budget and Finance, Department of Defense, and the Hawaii Association of REALTORS provided testimony in support of this measure.

     Your Committee finds that the recent growth in general fund revenues has brought stability to the health of the general fund, reducing the necessity for the diversion of the interest earned from the principal of the Hurricane Reserve Trust Fund into the general fund.  Your Committee further finds that the reallocation of interest and other moneys will ensure proper growth of the Hurricane Reserve Trust Fund.  Your Committee believes that this is a prudent strategy to help the State meet its targeted objective of funding the state reserves available for hurricane reinsurance.

     Your Committee has amended this measure by:

(1)  Deleting the June 30, 2019, sunset date; and

(2)  Changing the effective date to December 21, 2112, to facilitate further discussion on the measure.

     Your Committee respectfully requests that the House Committee on Finance advance this measure but consider the reallocation of funding to the Hurricane Reserve Trust Fund for fiscal year 2015, due to the Council on Revenues' recent forecast of zero per cent growth for the upcoming fiscal year.  Your Committee recognizes the importance of restoring the balance of the Hurricane Reserve Trust Fund, especially given that the likelihood of the State experiencing a hurricane increases with each passing year.  However, your Committee believes that the $187,000,000 allocated in fiscal year 2015 to the Hurricane Reserve Trust Fund, in H.B. No. 1700, H.D. 1, may be better utilized to partially augment the general fund, given the zero per cent growth forecast.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2758, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2758, S.D. 1, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ANGUS L.K. McKELVEY, Chair