STAND. COM. REP. NO. 893

Honolulu, Hawaii

RE: S.B. No. 1259

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Water and Land and Ways and Means, to which was referred S.B. No. 1259 entitled:

"A BILL FOR AN ACT RELATING TO MANDATORY VESSEL INSURANCE COVERAGE,"

beg leave to report as follows:

The purpose and intent of this measure is to require vessel owners operating a vessel in or on state ocean waters that is required to be registered with the State or required to be documented by the United States Coast Guard to obtain marine insurance coverage.

Your Committees received testimony in support of this measure from the Department of Land and Natural Resources and Ocean Tourism Coalition. Your Committees received testimony in opposition to this measure from three individuals.

Your Committees find that, in addition to environmental damage from grounded vessels, uninsured vessels that run aground, are derelict, or are abandoned in waters of the State cause the State to sometimes incur all costs involved in removing the vessel. The Division of Boating and Ocean Recreation has required insurance for vessels moored in state small boat harbors as a condition of obtaining a mooring permit since 2009 but has no existing mechanism for addressing insurance concerns for the numerous other vessels located in the State but not stored on state facilities. This measure establishes marine insurance requirements to address these vessels.

Your Committees have amended this measure by:

(1) Applying the mandatory marine insurance requirement only to vessels originally manufactured at a length of twenty-six feet or more, or under twenty-six feet if the vessel is grounded in the State;

(2) Setting the mandatory vessel insurance minimum at $100,000;

(3) Allowing a vessel owner to obtain an alternative insurance acceptable to the Department of Land and Natural Resources;

(4) Amending the Board of Land and Natural Resources' authority to grant exemptions from the marine insurance coverage requirement for certain transient vessels under certain circumstances;

(5) Inserting a definition for "grounded vessel";

(6) Inserting an effective date of December 31, 2050, to encourage further discussion; and

(7) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Water and Land and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1259, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1259, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committees on Water and Land and Ways and Means,

________________________________ DONOVAN M. DELA CRUZ, Chair

________________________________ KAIALI'I KAHELE, Chair