Report Title:

Disaster relief fund

Description:

Establishes an emergency disaster relief fund and transfers monies from the Hawaii Hurricane Relief Fund (HHRF)to this newly created fund; repeals the HHRF.

HOUSE OF REPRESENTATIVES

H.B. NO.

98

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

Relating to emergency disaster relief.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII

SECTION 1. Having fulfilled its purpose of providing Hawaii homeowners with hurricane insurance after Hurricane Iniki, the Hawaii hurricane relief fund has been suspended and is no longer offering coverage. Over the years, the fund has collected over $200,000,000 in reserves.

The legislature finds that while hurricanes continue to pose a threat to Hawaii's well-being, other dangers exist that also have the potential to do great harm to Hawaii's people and property. For example, recent seismic and volcanic activity at Mauna Loa has raised concerns of a possible eruption that could imperil thousands of residents in Hilo and West Hawaii. With the recent outbreaks of terror directed against Americans and their allies, the potential for a terrorist attack occurring in Hawaii is also very real. Dispersal of smallpox or other biological agents, chemical weapons such as nerve gas, and poisoning of our water and food sources are just some examples of the potential types of dangers that our State and our nation faces. The legislature believes that money currently retained in the Hawaii hurricane reserve fund should be used to address the devastating effects of any kind of disaster, not only hurricanes.

The purpose of this Act is to establish the emergency disaster relief fund and to transfer all of the funds in the Hawaii hurricane reserve fund to this newly created fund.

SECTION 2. Chapter 128, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§128- Emergency disaster relief fund. (a) There is created in the state treasury the emergency disaster relief fund. There shall be deposited into the emergency disaster relief fund any legislative appropriations and all of the net funds available to the Hawaii hurricane relief fund. Interest or other earnings on moneys in the emergency disaster relief fund shall be credited to the emergency disaster relief fund.

(b) Following the occurrence of a disaster in the State and the declaration of an emergency by both the governor and the legislature by majority vote, moneys in the emergency disaster relief fund may be used by the governor, not subject to chapter 103D, to mitigate the impact of the damage caused by the disaster and to assist the recovery, repair, and rehabilitation of property, persons, businesses, or institutions following the disaster. Moneys may be provided to any person, business, or governmental agency or body in the form of aid, assistance, grants, or loans. Moneys in the emergency disaster relief fund may also be used to pay the costs and expenses of administering and operating the emergency disaster relief fund."

SECTION 3. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

"§36-27 Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Convention center enterprise special fund under section 201B-8;

(6) Special funds established by section 206E-6;

(7) Housing loan program revenue bond special fund;

(8) Housing project bond special fund;

(9) Aloha Tower fund created by section 206J-17;

(10) Domestic violence prevention special fund under section 321-1.3;

(11) Spouse and child abuse special account under section 346-7.5;

(12) Spouse and child abuse special account under section 601-3.6;

(13) Funds of the employees' retirement system created by section 88-109;

(14) Unemployment compensation fund established under section 383-121;

(15) [Hawaii hurricane relief fund established under chapter 431P;] Emergency disaster relief fund;

(16) Hawaii health systems corporation special funds;

(17) Boiler and elevator safety revolving fund established under section 397-5.5;

(18) Tourism special fund established under section 201B-11;

(19) Department of commerce and consumer affairs' special funds;

(20) Compliance resolution fund established under section 26-9;

(21) Universal service fund established under chapter 269;

(22) Integrated tax information management systems special fund under section 231-3.2;

(23) Hawaii tobacco settlement special fund under section 328L-2;

(24) Emergency and budget reserve fund under section 328L-3;

(25) Probation services special fund under section 706-649;

(26) High technology special fund under section 206M-15.5;

(27) Public schools special fees and charges fund under section 302A-1130(f);

(28) Cigarette tax stamp enforcement special fund established by section 28-14;

(29) Cigarette tax stamp administrative special fund established by section 245-41.5;

(30) Tobacco enforcement special fund established by section 28-15;

(31) Sport fish special fund under section 187A-9.5;

(32) Neurotrauma special fund under section 321H–4;

(33) Deposit beverage container deposit special fund under section 342G-104; and

(34) Glass advance disposal fee special fund established by section 342G-82

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All

officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue

base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service

assessments made during the preceding fiscal year."

SECTION 4. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) Transportation use special fund established by section 261D-1;

(2) Special out-of-school time instructional program fund under section 302A-1310;

(3) School cafeteria special funds of the department of education;

(4) Special funds of the University of Hawaii;

(5) State educational facilities improvement special fund;

(6) Special funds established by section 206E-6;

(7) Aloha Tower fund created by section 206J-17;

(8) Domestic violence prevention special fund under section 321-1.3;

(9) Spouse and child abuse special account under section 346-7.5;

(10) Spouse and child abuse special account under section 601-3.6;

(11) Funds of the employees' retirement system created by section 88-109;

(12) Unemployment compensation fund established under section 383-121;

(13) [Hawaii hurricane relief fund established under chapter 431P;] Emergency disaster relief fund;

(14) Convention center enterprise special fund established under section 201B-8;

(15) Hawaii health systems corporation special funds;

(16) Tourism special fund established under section 201B-11;

(17) Compliance resolution fund established under section 26-9;

(18) Universal service fund established under chapter 269;

(19) Integrated tax information management systems special fund under section 231-3.2;

(20) Hawaii tobacco settlement special fund under section 328L-2;

(21) Emergency and budget reserve fund under section 328L-3;

(22) Probation services special fund under section 706-649;

(23) High technology special fund under section 206M-15.5;

(24) Public schools special fees and charges fund under section 302A-1130(f);

(25) Cigarette tax stamp enforcement special fund established by section 28-14;

(26) Cigarette tax stamp administrative special fund established by section 245-41.5;

(27) Tobacco enforcement special fund established by section 28-15;

(28) Sport fish special fund under section 187A-9.5; and

(29) Neurotrauma special fund under section 321H-4;

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."

SECTION 5. Section 39-51, Hawaii Revised Statutes, is amended as follows:

1. By amending the definitions of "revenue" and "revenue bonds" to read:

""Revenue" means the moneys collected, including any moneys collected from the State or any department, or any county or board, agency, or instrumentality thereof, from the rates, rentals, fees, and charges prescribed for the use and services of, and the facilities and commodities furnished by, an undertaking or the use and services and benefits of a loan program[; provided that the term shall include all insurance premium payments, assessments, surcharges, investment earnings, and all other income of the Hawaii hurricane relief fund].

"Revenue bonds" means all bonds payable solely from and secured by the revenue, or user taxes, or any combination of both, of an undertaking or loan program or any loan made thereunder for which bonds are issued and as otherwise provided in this part[; provided that the term shall include all bonds issued by the director of finance under the authority of section 10(a), Act 339, Session Laws of Hawaii 1993, as amended, for the purposes of the hurricane bond loan fund]."

2. By deleting the definition "policy of hurricane property insurance".

[""Policy of hurricane property insurance" means a policy or endorsement of insurance issued by the Hawaii hurricane relief fund under section 431P-10."]

SECTION 6. Section 39-52, Hawaii Revised Statutes, is amended to read as follows:

"§39-52 Declaration of policy. It is declared to be the policy of the State that any department acquiring, purchasing, constructing, reconstructing, improving, bettering, or extending an undertaking or establishing or administering a loan program pursuant to this chapter [or providing policies of hurricane property insurance to the general public,] shall manage the undertaking[,] or loan program[, or the Hawaii hurricane relief fund] in the most efficient manner consistent with sound economy and public advantage, and consistent with the protection of bondholders."

SECTION 7. Section 39-54, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The issuance of revenue bonds for the acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of any undertaking[;] or the establishment and administration of any loan program authorized by law[; or the coverage of policies of hurricane property insurance issued by the Hawaii hurricane relief fund] shall be authorized:

(1) By a resolution or resolutions of the governing body of the department, which may be adopted at the same meeting at which the same are introduced by a majority of all the members of the governing body of the department then in office, and shall take effect immediately upon filing with the director of finance; or

(2) By a certificate or certificates of a department head, which shall take effect immediately upon filing with the director of finance."

SECTION 8. Section 39-60, Hawaii Revised Statutes, is amended to read as follows:

"§39-60 Covenants in resolution or certificate authorizing issuance of revenue bonds. Any resolution or certificate authorizing the issuance of revenue bonds pursuant to this part may contain covenants as to:

(1) The purpose or purposes to which the proceeds of sale of the revenue bonds shall be applied and the use and disposition thereof;

(2) The use and disposition of the revenue of the undertaking[, the Hawaii hurricane relief fund,] or the loan program for which the revenue bonds are to be issued, or the user taxes derived therefrom, or both revenue and user taxes, to the extent pledged to the payment of the revenue bonds, including the priority of payments from the revenue and the creation and maintenance of reserves and the investment thereof;

(3) The issuance of other or additional revenue bonds payable from the revenue of the loan program[, the Hawaii hurricane relief fund,] or of the undertaking, or the user taxes derived therefrom, or both revenue and user taxes, to the extent pledged to the payment of the revenue bonds;

(4) The operation, maintenance, and repair of the undertaking or the administration, operation, and maintenance of the loan program[, or the Hawaii hurricane relief fund];

(5) The insurance to be carried on an undertaking [or on the security for the Hawaii hurricane relief fund,] or a loan program and the use and disposition of insurance proceeds, the insurance policies being by this section authorized to be carried, and no undertaking shall have recourse to the state insurance fund for the repair or replacement of any property in the undertaking, or for payment of claims under chapter 386 (relating to workers' compensation);

(6) Books of account and the inspection and audit thereof; and

(7) The terms and conditions upon which the holders of the revenue bonds or any proportion of them or any trustee therefor shall be entitled to the appointment of a receiver by any court of competent jurisdiction, which court shall have jurisdiction in the proceedings, and which receiver may enter and take possession of the undertaking, operate, maintain, and repair the same, enforce or foreclose loans made under a loan program, impose and prescribe rates, rentals, fees, or charges, collect, receive, and apply all revenue, and receive and apply all user taxes, thereafter arising therefrom in the same manner and to the same extent as the department itself might do;

provided that all covenants shall be subject to review by the governor; and provided further that the provisions of this section with respect to user taxes shall be applicable only if the legislature in the specific act or acts authorizing the issuance of the revenue bonds has provided that the revenue bonds may be paid from and secured by the user taxes derived from an undertaking.

The provisions of this part and any resolution or certificate shall be a contract with the holder or holders of the revenue bonds. The duties of the department, its governing body and department head, pursuant to this part, and any resolution or certificate shall be enforceable by any bondholder, by mandamus or other appropriate suit, action, or proceeding in any court of competent jurisdiction."

SECTION 9. Section 39-62, Hawaii Revised Statutes, is amended to read as follows:

"§39-62 Use of revenue and user taxes by any undertaking, loan program, or the Hawaii hurricane relief fund. Whenever any revenue bonds have been issued pursuant to this part for an undertaking[,] or a loan program, [or the Hawaii hurricane relief fund,] the revenue, or the user taxes, or combination of both, of the undertaking, loan program, or fund from which the revenue bonds are payable and by which they are secured shall be deposited in a special fund and shall be appropriated, applied, or expended in the amount necessary therefor for the following purposes and in the order of priority as the department shall provide in the resolution or certificate authorizing the issuance of revenue bonds pursuant to this part:

(1) To pay when due all revenue bonds and interest thereon issued for the undertaking[,] or loan program[, or the Hawaii hurricane relief fund] for the payment of which the revenue, or user taxes, or combination of both, is or shall have been pledged, charged, or otherwise encumbered, including reserves therefor;

(2) To pay or provide for the payment of the cost of operation, maintenance, and repair of the undertaking, or to pay or provide for the payment of administering, operating, and maintaining the loan program, including reserves therefor;

(3) For such purposes, within the jurisdiction, powers, duties, and functions of the department, including the creation and maintenance of reserves, as shall have been covenanted in any resolution or resolutions or certificate or certificates of the department providing for the issuance of revenue bonds;

(4) To reimburse the general fund of the State for all bond requirements for general obligation bonds which are or shall have been issued for the undertaking[,] or loan program, or [the Hawaii hurricane relief fund, or] to refund any general obligation bonds, except insofar as the obligation of reimbursement has been or shall be canceled by the legislature, the bond requirements being the interest on term and serial bonds, sinking fund for term bonds, and principal of serial bonds maturing the following year;

(5) To provide for betterments and improvements to the undertaking or expansion of the loan program [or the Hawaii hurricane relief fund] including reserves therefor; and

(6) To provide special reserve funds and other special funds as are or may be created by law.

The appropriation, application, or expenditure of amounts deposited in the special fund pursuant to this section shall be accounted for on a fiscal year basis. Unless and until adequate provision has been made for the foregoing purposes, the State shall not have the right to transfer to its general fund or any special fund or to apply to any other purposes any part of the revenue or user taxes pledged to the payment of revenue bonds of the undertaking or loan program."

SECTION 10. Section 431:14A-103, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) Notwithstanding any other law to the contrary, the company shall be excluded from the surplus requirements of domestic mutual insurers from January 1, 1997, through December 31, 2007. [The company is also excluded during this time period from any assessments by the Hawaii hurricane relief fund otherwise required by section 431P-5(b)(8); provided that the exclusion shall apply to the first $25,000,000 of written premiums in each calendar year; and provided further that annual written premiums in excess of $25,000,000 shall be assessed in accordance with section 431P-5(b)(8)]."

SECTION 11. Chapter 431P, Hawaii Revised Statutes, is repealed.

SECTION 12. There is appropriated out of the hurricane reserve trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2003-2004 to be deposited into the general fund of the State.

The sums appropriated shall be expended by the Hawaii hurricane relief fund for the purposes of this Act.

SECTION 13. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2003-2004 to be deposited into the emergency disaster relief fund.

The sums appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect on July 1, 2003.

INTRODUCED BY:

_____________________________