Hawaii-2021-HB947-Amended

SECTION 1. The legislature finds that Hawaii is susceptible to property loss due to hurricanes, tropical storms, and strong winds. The best long-term solution for reducing potential damage is the statewide use of wind resistive devices. The legislature also finds that residents in the State must inspect, repair, and reinforce their residences every year to prepare for the possibility of a hurricane making landfall. The inspection, repair, and reinforcement of residences consume needed resources from homeowners' budgets but result in homeowners having more hurricane-resistant residences. This, in turn, contributes to reduced hurricane damage repair costs and may qualify homeowners for much-needed hurricane insurance premium credits.

The legislature desires to establish a program to provide grants to certain property owners for the installation of wind resistive devices, approved by the insurance commissioner_, that will lessen the severity of property loss from strong winds.

The legislature further finds that the program will serve a public purpose by protecting the health, safety, and welfare of Hawaii residents. The installation of wind resistive devices will help reduce the incidence and severity of personal injury and property damage in the event of a hurricane, thereby preserving human life and property values and minimizing disruptions to the State's economy, business activity, and delivery of public services. The program will also serve the public purpose of stimulating economic growth and activity in the State by creating business and employment opportunities for the sale and installation of wind resistive devices.

The legislature additionally finds that the hurricane reserve trust fund was part of a new, creative, and flexible mechanism to provide hurricane insurance to Hawaii residents in the aftermath of Hurricane Iniki. After its inception, the fund helped stabilize Hawaii's weak hurricane insurance market, yielded the hurricane insurance market to the private sector, and entered a state of dormancy ready to be reactivated when needed.

The legislature also finds that the hurricane reserve trust fund has assets that currently generate approximately $3,000,000 annually in interest, which is deposited into the general fund and subject to appropriations by the legislature.

The purpose of this Act is to:

(1) Develop a new, creative, and flexible mechanism that will increase hurricane preparedness in Hawaii through a grant program;

(2) Financially assist qualified homeowners with the installation of approved wind resistive devices for hurricane preparedness of their homes; and

(3) Allocate a portion of the moneys earned through interest from the hurricane reserve trust fund's assets to provide grants under a safe home program.

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

"PART . SAFE HOME PROGRAM

§431P-A Definitions. As used in this part:

"Mitigation" means actions undertaken to reduce losses that may result from a hazard.

"Wind resistive devices" means devices and techniques, as identified and determined in accordance with section 431P-F(b), that increase a building's or structure's resistance to damage from wind forces.

§431P-B Establishment of safe home program. (a) The commissioner shall develop and implement a program to be designated as the safe home program to encourage the installation of wind resistive devices. The program may award matching or nonmatching grants to eligible applicants based upon the availability of funds.

(b) This part shall not create an entitlement for property owners or obligate the State in any way to fund the inspection or retrofitting of residential property in the State.

§431P-C Safe home program trust fund. (a) There is established a fund to be designated as the safe home program trust fund. Moneys transferred to the safe home program trust fund may be expended by the commissioner to carry out the commissioner's duties and obligations under this part.

(b) The safe home program trust fund may be used by the commissioner to make grants authorized under this part. Matching and nonmatching grants awarded under section 431P-E from the safe home program trust fund shall not be subject to chapter 42F, 91, 103D, or 103F.

(c) The safe home program trust fund may also be used by the commissioner to pay for any administrative, personnel, operational, and marketing costs associated with the safe home program.

(d) Upon termination of the safe home program, any balances in the safe home program trust fund shall revert to the general fund.

§431P-D Eligibility for safe home program. To be eligible for the safe home program, a residential property shall be:

(1) The applicant's primary legal residence;

(2) Owned and occupied by the applicant;

(3) A single-family, owner-occupied residential property; and

(4) A residential property covered by a current homeowners or dwelling insurance policy that:

(A) Is issued by an insurer licensed in the State or a surplus lines insurer, and is lawfully placed by a broker authorized to do business in the State; and

(B) Provides insurance coverage of the residential property equal to or greater than the fair market value of the residential property.

§431P-E Matching and nonmatching grants. (a) The commissioner may award matching or nonmatching grants based upon the availability of funds.

(b) To be eligible for a nonmatching grant award, the applicant shall have an annual adjusted gross household income not exceeding eighty per cent of the median annual adjusted gross income for households within the county in which the applicant resides, as determined by the applicant's most recent federal income tax return. The nonmatching grant award shall not exceed $6,500.

(c) An applicant with an annual adjusted gross household income that exceeds eighty per cent of the median annual adjusted gross income for households within the county in which the applicant resides, as determined by the applicant's most recent federal income tax return, may be eligible for a matching grant award. The matching grant award shall not exceed $5,200 and shall be matched on a dollar-for-dollar basis by the applicant.

(d) The commissioner shall issue an annual bulletin that sets forth the maximum grant award amounts based on the total annual adjusted gross household income of the applicant and adjusted for the applicant's family size relative to the county area median income or the state median family income, whichever is higher, as published annually by the United States Department of Housing and Urban Development.

(e) No grant issued by the safe home program shall exceed a total of $5,200 for matching grants or a total of $6,500 for nonmatching grants. Any cost of the mitigation project that exceeds the amount of the grant award shall be the responsibility of the applicant.

§431P-F Standards for the award of grants. (a) Subject to the availability of funds and the standards in this part, grants for wind resistive devices shall be awarded by the commissioner:

(1) On a first-come, first-served basis, as determined by the commissioner; and

(2) For a wind resistive device or devices installed only in a single-family residential dwelling.

(b) Grants shall be awarded for the installation of the following:

(1) Roof deck attachment;

(2) Secondary water barrier;

(3) Roof covering;

(4) Brace gable ends;

(5) Reinforced roof-to-wall connections;

(6) Opening protection;

(7) Exterior doors, including garage doors;

(8) Tie downs;

(9) Improvements that mitigate problems associated with weakened trusses, studs, and other structural components; and

(10) Any other wind resistive devices approved by the commissioner.

The commissioner, in the commissioner's sole discretion, may amend, narrow, or expand by rule the definitions, descriptions, specifications, and requirements of the wind resistive devices.

(1) Undergone an acceptable wind certification and hurricane mitigation inspection in accordance with the safe home program requirements;

(2) Filed a completed application form, as determined solely by the commissioner, together with all supporting documentation required by the commissioner;

(3) Installed the wind resistive device or devices in accordance with the safe home program requirements;

(4) Provided any other information deemed necessary by the commissioner; and

(5) Met all additional requirements needed to comply with the safe home program as determined by the commissioner.

§431P-G Annual report. The commissioner shall prepare an annual report to the director, governor, and legislature on the use of the safe home program trust fund that includes statistical information on program participation. The report shall be submitted to the director, governor, and legislature no later than twenty days prior to the convening of each regular session.

§431P-H Rules. The commissioner may adopt rules pursuant to chapter 91 to carry out the purposes of this part."

SECTION 3. Section 431P-16, Hawaii Revised Statutes, is amended by amending subsection (i) to read as follows:

"(i) Moneys in the hurricane reserve trust fund may be disbursed upon dissolution of the Hawaii hurricane relief fund; provided that:

(1) The net moneys in the hurricane reserve trust fund shall revert to the state general fund after payments by the fund on behalf of licensed property and casualty insurers or the State that are required to be made pursuant to any federal disaster insurance program enacted to provide insurance or reinsurance for hurricane risks are completed; and

(2) If [~~such~~] the moneys are paid on behalf of licensed property and casualty insurers, payment shall be made in proportion to the premiums from policies of hurricane property insurance serviced by the insurers in the twelve months [~~prior to~~] before dissolution of the fund;

provided that [~~all~~] interest earned from the principal in the hurricane reserve trust fund shall be transferred and deposited into the general fund each year that the hurricane reserve trust fund remains in existence[.]; provided further that, for fiscal year 2021-2022, the first $ in interest shall be deposited into the safe home program trust fund established pursuant to section 431P-C."

SECTION 4. Section 431P-16.5, Hawaii Revised Statutes, is amended to read as follows:

"§431P-16.5 Immunity. There shall be no cause of action, claim for damages or relief, charge, or any other liability [~~of any kind whatsoever~~] created against the State, the Hawaii hurricane relief fund, the commissioner, or their respective agents, employees, or board, by[,] or relating to the loss mitigation grant program[.] or the safe home program."

SECTION 5. There is appropriated out of the hurricane reserve trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2021-2022 for the purposes of funding the safe home program trust fund established under section 2 of this Act.

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

SECTION 6. There is appropriated out of the safe home program trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2021-2022 for purposes of the:

(1) Establishment and implementation of the safe home program established under this Act; and

(2) Establishment of one temporary full-time equivalent (1.0 FTE) position, not subject to chapter 76, Hawaii Revised Statutes, within the insurance division of the department of commerce and consumer affairs to implement and administer the safe home program.

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

SECTION 7. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on January 1, 2050.

HOUSE OF REPRESENTATIVES	H.B. NO.	947
THIRTY-FIRST LEGISLATURE, 2021		H.D. 2
STATE OF HAWAII