REPORT TITLE:
Hawaii Hurricane Relief Fund


DESCRIPTION:
Repeals  the  Hawaii  hurricane   relief  fund.  Establishes  the
hurricane relief loan fund  to  provide loans to strengthen homes
at risk for  hurricane  damage.    Establishes the hurricane loss
projection methodology commission  to  improve the reliability of
hurricane loss projections.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           499
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                                   
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                   A  BILL  FOR  AN  ACT

RELATING TO INSURANCE.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1                              PART I
 
 2      SECTION 1. (a)   Hurricane  relief loan fund; establishment.
 
 3 Notwithstanding any other  provision  to  the  contrary, there is
 
 4 established a special fund within  the state treasury to be known
 
 5 as the hurricane relief  loan  fund  into  which may be deposited
 
 6 moneys from the hurricane reserve trust fund.
 
 7      (b)    Hurricane   relief administrative  procedures  loan
 
 8 committee; establishment.  The fund  shall be administered by the
 
 9 hurricane relief administrative  procedures loan committee, which
 
10 shall be composed of seven members as follows:
 
11      (1)  The director  of  business,  economic  development, and
 
12           tourism, or designee, as an ex officio member;
 
13      (2)  The  insurance  commissioner,  or  designee,  as  an ex
 
14           officio member; and
 
15      (3)  Five members of  financial  institutions  in the State,
 
16           who shall  be  appointed  by  the  governor pursuant to
 
17           section 26-34.
 
18 The loan committee shall elect a chair from their voting members,
 
19 and establish procedures, subject to the approval of the director 
 

 
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                                     S.B. NO.           499
                                                        
                                                        
 1 of business, economic development,  and tourism and the insurance
 
 2 commissioner, under which financial institutions shall access the
 
 3 economic development  loan  fund,  including  fees,  charges, the
 
 4 amount  and  form  of  security,  and  loan  terms  for  loans to
 
 5 homeowners to  strengthen  or  otherwise  "hurricane-proof" homes
 
 6 that are at risk either because  of  the type of structure or the
 
 7 location of the structure in an area prone to hurricane damage.
 
 8      Members shall serve without pay  but shall be reimbursed for
 
 9 their actual and  necessary  expenses,  including travel expenses
 
10 incurred in carrying out their duties.
 
11      (c)  Application; inspection.  (a)    Any person having an
 
12 interest in real property who has been unable to obtain a loan to
 
13 hurricane-proof the property may apply to a financial institution
 
14 for a loan pursuant to this  chapter.  A person shall be presumed
 
15 to be unable to otherwise obtain  a  loan if that person has been
 
16 turned  down  for  a  loan  application  by  two  other financial
 
17 institutions.
 
18      Within ten days of  receiving  an application, the financial
 
19 institution shall determine,  based  on information received from
 
20 the hurricane loss projection methodology commission, whether the
 
21 property is located in an  area  of projected hurricane loss.  If
 
22 the property  is  found  to  be  located  in  such  an  area, the
 

 
 
 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 financial institution may provide  a  loan  to the property owner
 
 2 pursuant to this chapter.
 
 3      SECTION 2.    (a)    Hurricane  loss  projection methodology
 
 4 commission; establishment.  There  is established the hurricane
 
 5 loss  projection  methodology  commission  to  be  placed  in the
 
 6 department of commerce  and  consumer  affairs for administrative
 
 7 purposes only.
 
 8      (b)    Members  of   the  methodology  commission  shall  be
 
 9 appointed by the  governor  pursuant  to  section 26-34 and shall
 
10 consist of eleven members:
 
11      (1)  The insurance commissioner;
 
12      (2)  The chair of the fund;
 
13      (3)  A representative from the Hawaii Insurers Council;
 
14      (4)  A representative from the civil defense division of the
 
15           department of defense;
 
16      (5)  The Hawaii state insurance actuary;
 
17      (6)  A fund reinsurer;
 
18      (7)  A hazard mitigation  specialist  from the University of
 
19           Hawaii;
 
20      (8)  A   representative   from   the   Structural  Engineers
 
21           Association of Hawaii;
 
22      (9)  A statistical modeling  expert  from  the University of
 
23           Hawaii;
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1     (10)  An  oceanographer   who   is   an   expert  in  climate
 
 2           variability from the University of Hawaii; and
 
 3     (11)  An expert in meteorology  who  is a full-time member of
 
 4           the faculty of the University of Hawaii.
 
 5      The governor  shall  select  a  chairperson  from  among the
 
 6 members.
 
 7      Members of the  methodology  commission  shall serve without
 
 8 compensation,  but  may  be  reimbursed  for  necessary expenses,
 
 9 including travel expenses, incurred  in  the performance of their
 
10 duties.
 
11      There shall be no liability on  the part of, and no cause of
 
12 action of any  nature  shall  arise  against,  any  member of the
 
13 methodology  commission  or  any   officer  or  employee  of  the
 
14 department of commerce and consumer affairs, for any action taken
 
15 in the performance of their duties under this section.
 
16      The  methodology  commission  may,  in  writing,  waive  any
 
17 potential  cause  of  action  for  negligence  of  a  consultant,
 
18 contractor,  or   contract   employee   engaged   to  assist  the
 
19 methodology commission.
 
20      (b)    Hurricane  loss  projection standards and guidelines.
 
21 The methodology commission shall  consider any actuarial methods,
 
22 principles, standards, models,  or  output  ranges  that have the
 
23 potential for improving the  accuracy or reliability of hurricane
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 loss projections  used  in  residential  property  insurance rate
 
 2 filings.  Hurricane projections shall be based on the most recent
 
 3 scientific information available  in  Hawaii and other hurricane-
 
 4 prone areas of the world.  The methodology commission shall, from
 
 5 time to time, adopt findings as to the accuracy or reliability of
 
 6 particular  methods,  principles,  standards,  models,  or output
 
 7 ranges.
 
 8      In establishing  reimbursement  premiums  for  the fund, the
 
 9 commission  shall,  to  the  extent  feasible,  employ  actuarial
 
10 methods, principles, standards, models, or output ranges found by
 
11 the methodology commission to be accurate or reliable.
 
12      With  respect  to  a  rate  filing,  an  insurer  may employ
 
13 actuarial  methods,  principles,  standards,  models,  or  output
 
14 ranges found by  the  methodology  commission  to  be accurate or
 
15 reliable to determine hurricane  loss  factors  for use in a rate
 
16 filing which findings and factors  are admissible and relevant in
 
17 consideration  of  a   rate   filing   or   in  any  arbitration,
 
18 administrative review, or judicial review.
 
19      The methodology  commission  shall  adopt  initial actuarial
 
20 methods, principles, standards, models, or output ranges no later
 
21 than July  1,  2000.    The  methodology  commission  shall adopt
 
22 revisions  to  the   actuarial  methods,  principles,  standards,
 
23 models, or output ranges at least annually thereafter.
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1      No later than December  31, 2000, the methodology commission
 
 2 shall adopt  revised  actuarial  methods,  principles, standards,
 
 3 models, or output models that include specification of acceptable
 
 4 computer models or output ranges derived from computer models.
 
 5      (c)   Annual  reports.  The  methodology  commission shall
 
 6 submit a report of its  activities, including status of hurricane
 
 7 loss projection standards and  guidelines,  to the legislature at
 
 8 least  twenty  days   before   the   convening  of  each  regular
 
 9 legislative session.
 
10      SECTION 3.  Definitions. As  used in this part, unless the
 
11 context requires otherwise:
 
12      "Fund" means the hurricane relief loan fund.
 
13      "Hurricane proofing" means any  improvement to real property
 
14 in an area  prone  to  hurricane  damage  which will increase the
 
15 property's ability to withstand hurricane force winds.
 
16      "Loan committee" means  the  hurricane relief administrative
 
17 procedures loan committee established in section    -3.
 
18      "Methodology commission" means the hurricane loss projection
 
19 methodology commission established in this part.
 
20                              PART II
 
21      SECTION 4.   All  fund  balances  for  the hurricane reserve
 
22 trust fund remaining unencumbered  and  unexpended as of June 30,
 
23 1999, shall be  transferred  to  the  general fund; provided that
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 $10,000,000 of the fund  balance  in  the hurricane reserve trust
 
 2 fund shall be transferred to  the  hurricane relief loan fund for
 
 3 use  by  the  hurricane  relief  administrative  procedures  loan
 
 4 committee pursuant to this Act.
 
 5      SECTION 5.    Section  36-27,  Hawaii  Revised  Statutes, is
 
 6 amended to read as follows:
 
 7      "36-27  Transfers  from  special  funds for central service
 
 8 expenses.   Except   as   provided   in   this   section,  and
 
 9 notwithstanding any other law to  the contrary, from time to time
 
10 the  director  of  finance,  for  the  purpose  of  defraying the
 
11 prorated estimate of  central  service  expenses of government in
 
12 relation to all special funds, except the:
 
13      (1)  Special  summer  school  and  intersession  fund  under
 
14           section 302A-1310;
 
15      (2)  School cafeteria  special  funds  of  the department of
 
16           education;
 
17      (3)  Special funds of the University of Hawaii;
 
18      (4)  State educational facilities improvement special fund;
 
19      (5)  Convention center  capital  special  fund under section
 
20           206X-10.5 and the  convention center operations special
 
21           fund under section 206X-10.6;
 
22      (6)  Special funds established by section 206E-6;
 
23      (7)  Housing loan program revenue bond special fund;
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1      (8)  Housing project bond special fund;
 
 2      (9)  Aloha Tower fund created by section 206J-17;
 
 3     (10)  Domestic violence prevention special fund under section
 
 4           321-1.3;
 
 5     (11)  Spouse and child  abuse  special  account under section
 
 6           346-7.5;
 
 7     (12)  Spouse and child  abuse  special  account under section
 
 8           601-3.6;
 
 9     (13)  Funds of the  employees'  retirement  system created by
 
10           section 88-109;
 
11     (14)  Unemployment   compensation   fund   established  under
 
12           section 383-121;
 
13    [(15)  Hawaii hurricane relief  fund established under chapter
 
14           431P;
 
15     (16)] (15) Hawaii health systems corporation special funds;
 
16    [(17)] (16)    Boiler  and   elevator  safety  revolving  fund
 
17           established under section 397-5.5;
 
18    [(18)] (17)  Tourism  special  fund  established under section
 
19           [[]201B-11[]]; and
 
20    [(19)] (18)   Department  of  commerce  and  consumer affairs'
 
21           special funds;
 
22 shall deduct five per cent  of  all receipts of all other special
 
23 funds, which deduction shall  be  transferred to the general fund
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 of the State and become  general  realizations of the State.  All
 
 2 officers of the State and  other persons having power to allocate
 
 3 or disburse any special  funds  shall cooperate with the director
 
 4 in effecting these transfers.    To  determine the proper revenue
 
 5 base  upon  which  the  central   service  assessment  is  to  be
 
 6 calculated, the director shall adopt rules pursuant to chapter 91
 
 7 for the purpose of suspending  or limiting the application of the
 
 8 central service assessment of  any  fund.    No later than twenty
 
 9 days prior  to  the  convening  of  each  regular  session of the
 
10 legislature,  the  director  shall  report  all  central  service
 
11 assessments made during the preceding fiscal year."
 
12      SECTION 6.    Section  36-30,  Hawaii  Revised  Statutes, is
 
13 amended by amending subsection (a) to read as follows:
 
14      "(a)  Each special fund, except the:
 
15      (1)  Transportation use special  fund established by section
 
16           261D-1;
 
17      (2)  Special  summer  school  and  intersession  fund  under
 
18           section 302A-1310;
 
19      (3)  School cafeteria  special  funds  of  the department of
 
20           education;
 
21      (4)  Special funds of the University of Hawaii;
 
22      (5)  State educational facilities improvement special fund;
 
23      (6)  Special funds established by section 206E-6;
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1      (7)  Aloha Tower fund created by section 206J-17;
 
 2      (8)  Domestic violence prevention special fund under section
 
 3           321-1.3;
 
 4      (9)  Spouse and child  abuse  special  account under section
 
 5           346-7.5;
 
 6     (10)  Spouse and child  abuse  special  account under section
 
 7           601-3.6;
 
 8     (11)  Funds of the  employees'  retirement  system created by
 
 9           section 88-109;
 
10     (12)  Unemployment   compensation   fund   established  under
 
11           section 383-121;
 
12    [(13)  Hawaii hurricane relief  fund established under chapter
 
13           431P;
 
14     (14)] (13)      Convention   center   capital   special  fund
 
15           established under section  206X-10.5 and the convention
 
16           center  operations   special   fund  established  under
 
17           section 206X-10.6;
 
18    [(15)] (14)  Hawaii health  systems corporation special funds;
 
19           and
 
20    [(16)] (15)  Tourism  special  fund  established under section
 
21           [[]201B-11[]];
 

 
 
 
 
 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 shall be responsible for its pro rata share of the administrative
 
 2 expenses  incurred  by   the   department   responsible  for  the
 
 3 operations supported by the special fund concerned."
 
 4      SECTION 7.    Section  39-51,  Hawaii  Revised  Statutes, is
 
 5 amended as follows:
 
 6      1.  By amending  the  definitions  of "revenue" and "revenue
 
 7 bonds" to read:
 
 8      ""Revenue" means the moneys  collected, including any moneys
 
 9 collected from the  State  or  any  department,  or any county or
 
10 board,  agency,  or  instrumentality  thereof,  from  the  rates,
 
11 rentals, fees, and charges  prescribed  for  the use and services
 
12 of,  and  the  facilities   and   commodities  furnished  by,  an
 
13 undertaking or  the  use  and  services  and  benefits  of a loan
 
14 program[; provided  that  the  term  shall  include all insurance
 
15 premium payments,  assessments,  surcharges, investment earnings,
 
16 and all other income of the Hawaii hurricane relief fund]."
 
17      "Revenue bonds"  means  all  bonds  payable  solely from and
 
18 secured by the  revenue,  or  user  taxes,  or any combination of
 
19 both,  of  an  undertaking  or  loan  program  or  any  loan made
 
20 thereunder for which bonds  are  issued and as otherwise provided
 
21 in this part[; provided  that  the  term  shall include all bonds
 
22 issued by the director of  finance under the authority of section
 

 
 
 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 10(a), Act 339, Session Laws of  Hawaii 1993, as amended, for the
 
 2 purposes of the hurricane bond loan fund]."
 
 3      2.  By  repealing  the  definition  of  "policy of hurricane
 
 4 property insurance":
 
 5      [""Policy of hurricane property insurance" means a policy or
 
 6 endorsement of insurance  issued  by  the Hawaii hurricane relief
 
 7 fund under section 431P-10."]
 
 8      SECTION 8.    Section  39-52,  Hawaii  Revised  Statutes, is
 
 9 amended to read as follows:
 
10      "39-52  Declaration of policy.  It  is declared to be the
 
11 policy of the  State  that  any department acquiring, purchasing,
 
12 constructing, reconstructing, improving,  bettering, or extending
 
13 an undertaking or  establishing  or  administering a loan program
 
14 pursuant to  this  chapter  [or  providing  policies of hurricane
 
15 property insurance  to  the  general  public,]  shall  manage the
 
16 undertaking[,] or loan program[,  or  the Hawaii hurricane relief
 
17 fund] in the most efficient  manner consistent with sound economy
 
18 and public  advantage,  and  consistent  with  the  protection of
 
19 bondholders."
 
20      SECTION 9.    Section  39-54,  Hawaii  Revised  Statutes, is
 
21 amended by amending subsection (a) to read as follows:
 
22      "(a)  The  issuance  of  revenue  bonds for the acquisition,
 
23 purchase, construction,  reconstruction, improvement, betterment,
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 or extension  of  any  undertaking[;]  or  the  establishment and
 
 2 administration of any  loan  program  authorized  by law[; or the
 
 3 coverage of policies  of  hurricane  property insurance issued by
 
 4 the Hawaii hurricane relief fund] shall be authorized:
 
 5      (1)  By a resolution or resolutions of the governing body of
 
 6           the  department,  which  may  be  adopted  at  the same
 
 7           meeting at which the same  are introduced by a majority
 
 8           of  all  the  members  of  the  governing  body  of the
 
 9           department  then  in  office,  and  shall  take  effect
 
10           immediately upon filing  with  the director of finance;
 
11           or
 
12      (2)  By a certificate or  certificates of a department head,
 
13           which shall take  effect  immediately  upon filing with
 
14           the director of finance."
 
15      SECTION 10.    Section  39-60,  Hawaii  Revised Statutes, is
 
16 amended to read as follows:
 
17      "39-60  Covenants in  resolution or certificate authorizing
 
18 issuance  of  revenue  bonds.  Any  resolution  or  certificate
 
19 authorizing the issuance of  revenue  bonds pursuant to this part
 
20 may contain covenants as to:
 
21      (1)  The purpose or purposes  to  which the proceeds of sale
 
22           of the revenue bonds shall  be  applied and the use and
 
23           disposition thereof;
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1      (2)  The  use  and  disposition   of   the  revenue  of  the
 
 2           undertaking[, the Hawaii hurricane relief fund,] or the
 
 3           loan program for  which  the  revenue  bonds  are to be
 
 4           issued, or the  user  taxes  derived therefrom, or both
 
 5           revenue and user taxes,  to  the  extent pledged to the
 
 6           payment of the revenue bonds, including the priority of
 
 7           payments  from  the   revenue   and  the  creation  and
 
 8           maintenance of reserves and the investment thereof;
 
 9      (3)  The  issuance  of  other  or  additional  revenue bonds
 
10           payable from  the  revenue  of  the  loan program[, the
 
11           Hawaii hurricane relief  fund,]  or of the undertaking,
 
12           or the user  taxes  derived  therefrom, or both revenue
 
13           and user taxes, to the extent pledged to the payment of
 
14           the revenue bonds;
 
15      (4)  The  operation,   maintenance,   and   repair   of  the
 
16           undertaking  or  the   administration,  operation,  and
 
17           maintenance  of  the  loan   program[,  or  the  Hawaii
 
18           hurricane relief fund];
 
19      (5)  The insurance to be carried on an undertaking or on the
 
20           security for [the Hawaii  hurricane  relief fund, or] a
 
21           loan program and the  use  and disposition of insurance
 
22           proceeds, the insurance policies  being by this section
 
23           authorized to be carried, and no undertaking shall have
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1           recourse to the state insurance  fund for the repair or
 
 2           replacement of any property  in the undertaking, or for
 
 3           payment  of  claims  under  chapter  386  (relating  to
 
 4           workers' compensation);
 
 5      (6)  Books of account and  the inspection and audit thereof;
 
 6           and
 
 7      (7)  The terms and conditions upon  which the holders of the
 
 8           revenue bonds or any proportion  of them or any trustee
 
 9           therefor shall  be  entitled  to  the  appointment of a
 
10           receiver by any court  of competent jurisdiction, which
 
11           court shall have  jurisdiction  in the proceedings, and
 
12           which receiver may  enter  and  take  possession of the
 
13           undertaking, operate,  maintain,  and  repair the same,
 
14           enforce or foreclose loans  made  under a loan program,
 
15           impose and prescribe rates,  rentals, fees, or charges,
 
16           collect, receive, and  apply  all  revenue, and receive
 
17           and apply all user  taxes, thereafter arising therefrom
 
18           in the  same  manner  and  to  the  same  extent as the
 
19           department itself might do;
 
20 provided that all covenants  shall  be  subject  to review by the
 
21 governor;  and  provided  further  that  the  provisions  of this
 
22 section with respect to  user  taxes  shall be applicable only if
 
23 the legislature  in  the  specific  act  or  acts authorizing the
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 issuance of the revenue bonds has provided that the revenue bonds
 
 2 may be paid from and  secured  by  the user taxes derived from an
 
 3 undertaking.
 
 4      The  provisions  of   this   part   and  any  resolution  or
 
 5 certificate shall be a contract with the holder or holders of the
 
 6 revenue bonds.  The duties  of the department, its governing body
 
 7 and department head, pursuant to this part, and any resolution or
 
 8 certificate shall be enforceable  by  any bondholder, by mandamus
 
 9 or other appropriate suit, action,  or proceeding in any court of
 
10 competent jurisdiction."
 
11      SECTION 11.    Section  39-62,  Hawaii  Revised Statutes, is
 
12 amended to read as follows:
 
13      "39-62  Use of revenue and user taxes by any undertaking[,]
 
14 or loan program[, or the Hawaii hurricane relief fund].  Whenever
 
15 any revenue bonds have been  issued  pursuant to this part for an
 
16 undertaking[,] or a loan program, [or the Hawaii hurricane relief
 
17 fund,] the revenue, or the user taxes, or combination of both, of
 
18 the undertaking, loan  program,  or  fund  from which the revenue
 
19 bonds  are  payable  and  by  which  they  are  secured  shall be
 
20 deposited in a special  fund  and shall be appropriated, applied,
 
21 or expended in the  amount  necessary  therefor for the following
 
22 purposes and in the  order  of  priority  as the department shall
 

 
 
 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 provide in the resolution or certificate authorizing the issuance
 
 2 of revenue bonds pursuant to this part:
 
 3      (1)  To pay when due all  revenue bonds and interest thereon
 
 4           issued for the undertaking[,]  or loan program, [or the
 
 5           Hawaii hurricane relief fund]  for the payment of which
 
 6           the revenue, or user taxes,  or combination of both, is
 
 7           or  shall  have  been  pledged,  charged,  or otherwise
 
 8           encumbered, including reserves therefor;
 
 9      (2)  To pay  or  provide  for  the  payment  of  the cost of
 
10           operation, maintenance, and  repair of the undertaking,
 
11           or to pay or provide  for the payment of administering,
 
12           operating, and maintaining  the loan program, including
 
13           reserves therefor;
 
14      (3)  For such  purposes,  within  the  jurisdiction, powers,
 
15           duties, and functions of  the department, including the
 
16           creation and  maintenance  of  reserves,  as shall have
 
17           been covenanted  in  any  resolution  or resolutions or
 
18           certificate or certificates of the department providing
 
19           for the issuance of revenue bonds;
 
20      (4)  To reimburse the general fund of the State for all bond
 
21           requirements for general obligation  bonds which are or
 
22           shall have been issued  for  the undertaking[,] or loan
 
23           program, [or the Hawaii  hurricane  relief fund,] or to
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1           refund any general obligation  bonds, except insofar as
 
 2           the obligation of  reimbursement  has  been or shall be
 
 3           canceled  by  the  legislature,  the  bond requirements
 
 4           being the interest  on  term  and serial bonds, sinking
 
 5           fund for  term  bonds,  and  principal  of serial bonds
 
 6           maturing the following year;
 
 7      (5)  To provide  for  betterments  and  improvements  to the
 
 8           undertaking or expansion  of  the  loan program [or the
 
 9           Hawaii  hurricane  relief   fund],  including  reserves
 
10           therefor; and
 
11      (6)  To provide  special  reserve  funds  and  other special
 
12           funds as are or may be created by law.
 
13 The  appropriation,  application,   or   expenditure  of  amounts
 
14 deposited in the special fund  pursuant  to this section shall be
 
15 accounted for on a fiscal year  basis.  Unless and until adequate
 
16 provision has been  made  for  the  foregoing purposes, the State
 
17 shall not have the right to  transfer  to its general fund or any
 
18 special fund or to apply  to  any  other purposes any part of the
 
19 revenue or user taxes pledged to  the payment of revenue bonds of
 
20 the undertaking or loan program."
 
21      SECTION 12.  Section 431:13-104, Hawaii Revised Statutes, is
 
22 amended by amending subsection (g) to read as follows:
 

 
 
 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1      "(g)  Nothing in  this  section  shall  prevent a person who
 
 2 lends  money  or  extends  credit  from  assisting  a  mortgagor,
 
 3 borrower, or purchaser  in  obtaining  homeowners insurance where
 
 4 the borrower requests such  assistance  in  writing.  [Nothing in
 
 5 this section shall prevent  a  person  who lends money or extends
 
 6 credit from referring a mortgagor,  borrower, or purchaser to the
 
 7 Hawaii hurricane relief fund.]"
 
 8      SECTION 13.  Section 431:21-105, Hawaii Revised Statutes, is
 
 9 amended by amending subsection (a) to read as follows:
 
10      "(a)  In addition to  any other requirements imposed by law,
 
11 the association shall:
 
12      (1)  Formulate and administer a  plan of operation to insure
 
13           persons  having  an  insurable   interest  in  real  or
 
14           tangible personal property  in  the  area designated by
 
15           the commissioner[;], which  shall include areas subject
 
16           to windstorm damage by hurricanes;
 
17      (2)  Reimburse each  servicing  facility  for obligations of
 
18           the association paid by  the  facility and for expenses
 
19           incurred by the  facility while processing applications
 
20           and servicing policies  on  behalf  of the association;
 
21           and
 
22      (3)  Collect and maintain  statistical information and other
 
23           information required by the commissioner."
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1      SECTION 14.  Section 219.1  of the Hawaiian Homes Commission
 
 2 Act of 1920, as amended, is amended by amending subsection (b) to
 
 3 read as follows:
 
 4      "(b)    Notwithstanding  any   law   to  the  contrary,  the
 
 5 department either alone or  together  with any other governmental
 
 6 agency, may:
 
 7      (1)  Form an  insurance  company,  association (nonprofit or
 
 8           otherwise), pool, or trust;
 
 9      (2)  Acquire an existing insurance company;
 
10      (3)  Enter into  arrangements  with  one  or  more insurance
 
11           companies; or
 
12      (4)  Undertake any combination  of  the foregoing; upon such
 
13           terms and  conditions  and  for  such  periods,  as the
 
14           commission   shall   approve,   to   provide  homeowner
 
15           protection, including  hurricane  coverage, for lessees
 
16           participating in  such  undertaking.   Such undertaking
 
17           shall be subject  to  the  provisions of [chapter 431P,
 
18           including but not  limited  to section 431P-10(b), and]
 
19           chapter 431."
 
20      SECTION 15.    Chapter  431P,  Hawaii  Revised  Statutes, is
 
21 repealed.
 
22      SECTION 16.  The provisions  of  the amendments made by this
 
23 Act to the Hawaiian Homes Commission Act of 1920, as amended, are
 

 
 
 
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                                     S.B. NO.           499
                                                        
                                                        
 1 declared to be severable, and  if any section, clause, or phrase,
 
 2 or the application thereof to  any person or circumstance is held
 
 3 ineffective because there is a  requirement of having the consent
 
 4 of the United States to take effect, then that portion only shall
 
 5 take effect upon the granting of consent by the United States and
 
 6 the effectiveness of the remainder of this Act or the application
 
 7 thereof shall not be affected.
 
 8      SECTION 17.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored.
 
10      SECTION 18.  This  Act  shall  take  effect on July 1, 1999;
 
11 provided that:
 
12      (1)  Part I of this Act shall be repealed on July 1, 2004;
 
13      (2)  The amendments made to sections 36-27 and 36-30, Hawaii
 
14           Revised Statutes, by  this  Act  shall  not be repealed
 
15           when those  sections  are  reenacted  on  July 1, 2000,
 
16           pursuant to:
 
17           (a)  Section 13  of  Act  216,  Session  Laws of Hawaii
 
18                1997; or
 
19           (b)  Section 9 of Act 142, Session Laws of Hawaii 1998.
 
20 
 
21                              INTRODUCED BY:______________________