HB20

SECTION 1. The legislature finds that homeowners residing in lava zones 1 and 2 face unique challenges caused by the inherent volcanic hazards associated with their properties. Based on these challenges, the legislature further finds that it is appropriate to help alleviate some of the financial burden of insurance premiums for these properties through the establishment of a dedicated lava zone insurance fund. The intent of the fund is to subsidize the cost of insurance premiums for properties in lava zones 1 and 2, thereby reducing the disproportionate burden placed upon homeowners because of the geographic location of their properties.

The legislature additionally finds that subsidizing the cost of insurance premiums for properties in these zones will promote fairness, affordability, and accessibility in the insurance market, encouraging homeownership and community resilience in these unique geographical areas.

Accordingly, the purpose of this Act is to ensure that people are not forced to lose their homes over a sudden rise in homeowners' insurance by establishing a fair and equitable resource to subsidize property insurance for homeowners residing in lava zones 1 and 2.

SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10E to be appropriately designated and to read as follows:

"§431:10E- Lava zone insurance fund. (a) There is established a lava zone insurance fund into which shall be deposited the following moneys:

(1) Appropriations by the legislature to the special fund;

(2) Gifts, donations, and grants from public agencies and private persons;

(3) Any proceeds collected by the department derived from fees charged to carry out the purposes of this section; and

(4) Civil, criminal, and administrative penalties, fines, and other charges, if any, collected under this chapter or any rule adopted pursuant to this chapter.

(b) All interest earned or accrued on moneys deposited in the fund shall become part of the fund.

(c) Moneys in the fund shall be expended by the commissioner to subsidize the cost of insurance premiums for homeowners in properties in lava zones 1 and 2; provided that:

(1) A homeowner does not own a real estate investment property;

(2) The homeowner is a part of a low-income household as determined by the United States Department of Housing and Urban Development; and

(3) No more than per cent of the moneys may be used to cover administrative and operational costs of the lava zone subsidy program.

(d) The subsidy amount for each homeowner shall not be more than $ and for a period of years.

(e) Moneys deposited in the fund shall not revert to the general fund.

(f) The department shall adopt rules in accordance with chapter 91 for the purposes of this section, including the establishment of any fees, penalties, fines, and other charges that may be needed to implement the lava zone subsidy program."

SECTION 3. Section 431:2-215, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) All assessments, fees, fines, penalties, and reimbursements collected by or on behalf of the insurance division under title 24, except for the commissioner's education and training fund (section 431:2-214), the patients' compensation fund (Act 232, Session Laws of Hawaii 1984), the drivers education fund underwriters fee (sections 431:10C-115 and 431:10G-107),[~~and~~] the captive insurance administrative fund (section 431:19-101.8) to the extent provided by section 431:19-101.8(b), and the lava zone insurance fund (section 431:10E- ), shall be deposited into the compliance resolution fund under section 26-9(o). All sums transferred from the insurance division into the compliance resolution fund may be expended by the commissioner to carry out the commissioner's duties and obligations under title 24."

SECTION 4. Section 431:10E-141, Hawaii Revised Statutes, is amended to read as follows:

"[[]§431:10E-141[] ~~Lava zone defined.~~] Definitions. As used in this article[~~, "lava~~]:

"Lava zone" means a volcanic hazard zone identified by the United States Geological Survey on the island of Hawaii.

"Lava zone 1" means the land area classified by the United States Geological Survey as lava flow hazard zone 1 and includes volcanic vents in the summits and rift zones of Kilauea and Mauna Loa where vents have been repeatedly active in historic time.

"Lava zone 2" means the land area classified by the United States Geological Survey as lava flow hazard zone 2 and includes areas adjacent to and downslope of zone 1."

SECTION 5. There is appropriated out of the general fund the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the lava zone insurance fund.

SECTION 6. There is appropriated out of the lava zone insurance fund the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to subsidize the cost of insurance premiums for properties in lava zones 1 and 2 pursuant to section 2 of this Act.

The sums appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2025.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	20
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII