STAND. COM. REP. NO.1132-02

Honolulu, Hawaii

, 2002

RE: S.B. No. 706

S.D. 1

H.D. 1




Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Finance, to which was referred S.B. No. 706, S.D. 1, entitled:


begs leave to report as follows:

The purpose of this bill as received by your Committee, is to extend the sunset date of part IV of Act 230, Session Laws of Hawaii 1998, relating to the effect of Konno v. County of Hawaii, from 6/30/01 to 6/30/03.

Your Committee held a hearing on a proposed draft of this bill that would:

(1) Establish a three-year pilot program to provide grants to certain property owners for installation of wind-resistive devices that reduce the severity of property loss from strong winds;

(2) Authorize the issuance of $100,000,000 in general obligation bonds as needed to re-capitalize the Hurricane Reserve Trust Fund (HRTF) after a covered event;

(3) Appropriate $100,000,000 from the HRTF for deposit into the general fund; and

(4) Appropriate funds for important state programs and capital improvement projects that cannot be funded due to the $300,000,000 shortfall in projected state revenues for fiscal biennium 2001-2003.

Testimony in support of the proposed draft was received from the Department of Education, University of Hawaii, Department of Human Services, Department of Public Safety, Department of the Prosecuting Attorney of the City and County of Honolulu, Office of Information Practices, Hawaii Hotel Association, Volunteer Legal Services Hawaii, Blueprint for Change, Neighborhood Place of Kona, and a concerned individual.

Testimony in support of specific portions of the proposed draft was provided by the Department of the Attorney General, Department of Taxation, Department of Agriculture, Department of Accounting and General Services, Hawaii State Ethics Commission, Good Beginnings Alliance, Hurricane Hazard Mitigation Ad Hoc Task Force, Office of Elections, and several concerned individuals.

The Department of Budget and Finance, Department of Land and Natural Resources, Department of Business, Economic Development, and Tourism, and a concerned individual supported the intent of the proposed draft. The Hawaii Hurricane Relief Fund and the Hawaii Association of Realtors submitted testimony in opposition to the proposed draft. The Judiciary, Department of Health, Department of Human Resources Development, and Hawaii Youth Services Network commented on the proposed draft.

Your Committee finds that unprecedented circumstances have left few options to address the current budget shortfall and prevent further funding losses in education, public health, social services, public safety, and environmental protection programs. Without access to additional resources, many of these programs would be devastated. Your Committee recommends that a portion of the money in the HRTF be transferred to the general fund in order to maintain services important to the people of Hawaii.

However, your Committee finds it is also important to maintain the integrity of the Hawaii Hurricane Relief Fund and ensure that homeowners are prepared when not if the next hurricane hits the islands. To that end, your Committee has authorized the issuance of general obligation bonds to recapitalize the HRTF should the need arise.

Additionally, strengthening homes is an effective way of reducing hurricane losses, and has the added benefit of reducing insurance costs. Your Committee has provided for the establishment of a loss mitigation grant program to assist homeowners acquire loans to strengthen their homes against hurricanes.

Your Committee has amended this bill by deleting its contents and replacing them with the provisions of the proposed draft heard by your Committee. The new contents of this measure have been amended to:

(1) Correct the appropriation amounts in section 47 of the bill for one item in EDN 100 and 1 item in EDN 300;

(2) Add an appropriation to section 31 of the bill to correct an inadvertent deletion in EDN 300;

(3) Clarify that the immunity provisions apply to the Loss Mitigation Grant Fund;

(4) Clarify other provisions of the Loss Mitigation Grant Fund; and

(5) Make other technical, nonsubstantive amendments for purposes of clarity, consistency and style.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 706, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 706, S.D. 1, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,