Bill Text: HI HB1201 | 2025 | Regular Session | Introduced
Bill Title: Relating To Insurance.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Introduced) 2025-01-27 - Referred to ECD, CPC, FIN, referral sheet 4 [HB1201 Detail]
Download: Hawaii-2025-HB1201-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1201 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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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:
SECTION 1. The legislature finds that condominiums play a vital role in Hawaii's economy and housing. According to the department of commerce and consumers affairs, Hawaii had 1,826 condominium associations representing 173,036 units in 2021. Hundreds of condominium buildings are aged and in need of repair. Due to deferred maintenance, aged condominium buildings are rejected by standard insurers and choose insurers on the secondary market with more expensive premiums.
The legislature further finds that recent rate increases for hurricane insurance policies have caused the condominium associations to opt for less than full coverage. Because federally insured lending programs such as Fannie Mae and Freddie Mac require insurance with one hundred per cent of the insurable value coverage, people of Hawaii are unable to buy, sell, or obtain a mortgage for condominium units. Through incentivizing insurers to provide full coverage to condominiums, Hawaii residents would have better access to financing when buying a home in the State and gain homeownership in their communities.
The purpose of this Act is to establish tax credits for insurers providing full property coverage to owners and associations of condominiums in the amount equal to twenty per cent of the insurance premium, and to incentivize local insurers by providing additional ten per cent tax credits.
SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§431-_ Tax
credit for condominium insurance policies. (a) Each
insurer that provides full property coverage amounting to one hundred per cent
of the insurable value, to specifically include coverage for windstorm,
hurricane, hail, flood, fire and localized perils, to owners and associations
of condominiums as defined under section 514B-3 within the State, may claim as
a nonrefundable tax credit under this section against the tax imposed by
section 431:7-202. The tax credit shall
be an amount equal to twenty per cent of the insurance premium tax otherwise
due on the premium for the taxable year; and thirty per cent of the insurance
premium tax otherwise due on the premium written by insurers incorporated in
the State. The aggregate amount of all
tax credits in any tax year that may be claimed by insurers pursuant to this
section shall not exceed $50,000.
(b) The tax credit under this section is
available only to an insurer licensed or authorized to do business in the State
with respect to a property and casualty insurance policy providing full
coverage as defined in subsection (a).
(c) The tax credit allowed under this section for
a taxable year may be claimed only once for any one structure, regardless of
the number of policies written on the structure.
(d) An insurer who claims the tax credit under
this section shall provide information required by the commissioner to
demonstrate that the taxpayer is eligible for the tax credit and that the
amount paid for premiums for which the tax credit is claimed was not excluded
from the insurer's gross income for the taxable year. The commissioner shall establish a process
for which insurers may make an application for a tax credit certificate to
claim any tax credit provided for by this section. The tax credit certificate issued by the commissioner
shall reserve the appropriate allocation of tax credits for the insurer to
which a certificate is issued. An
insurer seeking such certificate for reservation of tax credits for the writing
of a policy pursuant to subsection (a) shall make application to the commissioner.
The commissioner shall review the
applications received and subsequently issue a tax credit certificate to the
insurer reserving the appropriate allocation of tax credits for the
insurer. The commissioner shall reserve
the tax credits provided for by this section in the order in which the commissioner
receives the application for tax credit certificates, and for the benefit of
the appropriate insurer, provided the application is approved by the commissioner.
(e) The commissioner shall prepare the forms
necessary to claim a tax credit under this section, may require proof of the
claim for the tax credit, and may adopt rules pursuant to chapter 91.
(f) All claims for the tax credit under this
section, including any amended claims, must be filed on or before the end of
the twelfth month following the close of the taxable year for which the tax credit
may be claimed. Failure to comply with
the foregoing provision shall constitute a waiver of the right to claim the tax
credit.
(g) The commissioner shall take the action
necessary to monitor and examine the use of the tax credit claims under this
section."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2025.
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INTRODUCED BY: |
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Report Title:
Condominiums; Insurer; Tax Credit; Hurricane Insurance
Description:
Establishes
tax credits for insurers providing full property coverage to owners and
associations of condominiums in the amount equal to twenty per cent of the
insurance premium. Provides additional
ten per cent tax credits to insurers incorporated in the State.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
