§431P-16  Establishment of trust funds. (a)  The fund shall establish outside the state treasury a hurricane reservetrust fund and any accounts thereunder and any other trust fund or accountnecessary to carry out the purposes of this chapter.  Moneys deposited in thehurricane reserve trust fund and any accounts thereunder or any other trustfund or account shall be held by the fund, as trustee, in a depository asdefined in section 38-1 or according to a similar arrangement at the discretionof the board, including, but not limited to, trust or custodial accountscreated for the benefit of the fund's secured parties under contractual claimsfinancing arrangements.  These moneys may be invested and reinvested inaccordance with the plan of operation.  Disbursements from the trust fundsshall not be subject to chapter 103D and shall be made in accordance withprocedures adopted by the board.

(b)  The hurricane reserve trust fund shallreceive deposits of the special mortgage recording fee established by thischapter.  Except as determined by board order, the special mortgage recordingfee shall be imposed on each mortgage and each amendment to a mortgage which,in each case, increases the principal amount of the secured debt and which isrecorded in the bureau of conveyances of the State under chapter 502 or filedwith the assistant registrar of the land court of the State under chapter 501.

The special mortgage recording fee shall be anamount equal to one-tenth of one per cent of the stated principal amount of thedebt secured by the mortgage or, in the case of an amendment or refinancing ofa mortgage, an amount equal to one-tenth of one per cent of the amount of theincrease of the stated principal amount of the secured debt; provided that theboard may establish a lower special mortgage recording fee amount pursuant tosection 431P-5(b)(14).  With respect to an open end revolving loan, theprincipal amount of the debt on which the special mortgage recording fee iscalculated shall be the maximum amount which may be outstanding under the loanat any one time.  With respect to a mortgage securing a nonmonetary or inchoateobligation, the principal amount of the debt on which the special mortgagerecording fee is calculated shall be the monetary amount which the mortgageeattributes to the obligation.  If the debt is stated in a foreign currency, itshall be converted to U.S. dollars using an exchange rate published in anewspaper of general circulation in this State within one week prior torecordation of the mortgage or amendment of mortgage.

The special mortgage recording fee shall be inaddition to any applicable fees under chapter 501 or 502.  The special mortgagerecording fee shall be submitted to and collected by the bureau of conveyancesor the assistant registrar of the land court of the State and shall bedeposited into the hurricane reserve trust fund.  The special mortgagerecording fee shall be submitted at the time the mortgage or amendment ofmortgage is recorded together with any related forms or certifications requiredby the bureau of conveyances or the assistant registrar of the land court ofthe State.

(c)  The Hawaii hurricane relief fund shallimplement the assessments of all property and casualty insurers as authorizedby section 431P-5(b)(8)(A) and (B) and the proceeds from the assessments shallbe deposited into the hurricane reserve trust fund or into trust or custodialaccounts, created for the benefit of the fund's secured parties, that are heldinside or outside the hurricane reserve trust fund.

(d)  If the Hawaii hurricane relief fund offersto issue policies of hurricane property insurance, the premiums for thepolicies shall be deposited into the hurricane reserve trust fund.

(e)  After each covered event, if the boardshall determine that the moneys in the hurricane reserve trust fund, excludingmoneys determined by the board to be needed to continue fund operationsfollowing that covered event, will be insufficient to pay claims and otherobligations of the fund arising out of that covered event, the Hawaii hurricanerelief fund is authorized to levy a surcharge not to exceed seven and one-halfper cent a year on premiums charged for all property and casualty insurancepolicies issued for risks insured in this State.  These moneys may be depositedinto the hurricane reserve trust fund or into trust or custodial accounts,created for the benefit of the fund's secured parties, that are held inside oroutside the hurricane reserve trust fund.  The formula to calculate the amountand period of the surcharge for each covered event and the procedures andmethodology for payment of claims and other obligations of the fund shall beprovided in the plan of operation and the surcharge may remain in effect untilall claims and other obligations of the fund, including but not limited toclaims financing transactions, bonds, notes, and other obligations arising outof that covered event, shall have been fully discharged.  The amount and reasonfor any surcharge made pursuant to this subsection shall be separately statedon any billing sent to an insured.  The surcharge shall not be consideredpremiums for any other purpose, including the computation of gross premium taxor the determination of producers' commissions.

(f)  Any proceeds, experience refunds, or otherreturn funds under reinsurance shall be deposited into the hurricane reservetrust fund.

(g)  Any proceeds from loans or other moneysfrom the federal government, any proceeds from bonds issued pursuant to thischapter loaned by the director to the Hawaii hurricane relief fund, and othermoneys as the State may make available from time to time shall be depositedinto the hurricane reserve trust fund.

(h)  Moneys in the hurricane reserve trust fundor in trust or custodial accounts, created for the benefit of the fund'ssecured parties, shall be expended by the Hawaii hurricane relief fund or itsauthorized designee and used solely for the purposes of this chapter.

(i)  Moneys in the hurricane reserve trust fundmay be:

(1)  Disbursed upon dissolution of the Hawaiihurricane relief fund; provided that:

(A)  The net moneys in the hurricane reservetrust fund shall revert to the state general fund after payments by the fund onbehalf of licensed property and casualty insurers or the State that arerequired to be made pursuant to any federal disaster insurance program enactedto provide insurance or reinsurance for hurricane risks are completed; and

(B)  If such moneys are paid on behalf oflicensed property and casualty insurers, payment shall be made in proportion tothe premiums from policies of hurricane property insurance serviced by theinsurers in the twelve months prior to dissolution of the fund; or

(2)  Deposited to the loss mitigation grant fundestablished under section 431:22-102;

provided that all interest earned from the principalin the hurricane reserve trust fund shall be transferred and deposited into thegeneral fund each year that the hurricane reserve trust fund remains inexistence. [L 1993, c 339, pt of §2; am L Sp 1995, c 17, §6; am L 1996, c 307,§8; am L 1998, c 106, §7; am L 1999, c 151, §1; am L 2001, c 153, §2; am L2002, c 155, §102 and c 179, §5]

 

Note

 

  L 1993, c 339, §§10 and 11, as amended by L Sp 1995, c 17,§7; L 1996, c 307, §9; L 1997, c 222; L 1999, c 151, §2; and L 2001, c 153, §3,provide:

  "SECTION 10.  (a)  The director may establish a loanprogram to assist the Hawaii hurricane relief fund in carrying out the plan ofoperation, and may make loans to the Hawaii hurricane relief fund.  There is herebycreated in the treasury of the State a separate and special fund to bedesignated as the hurricane bond loan fund of this Act.

  (b)  The department of budget and finance, with the approvalof the governor, is authorized to issue in the name of the department revenuebonds at such times and in such amount or amounts not to exceed $200,000,000 inaggregate principal as may be requested and deemed necessary by thecommissioner for the purposes of the Hawaii hurricane relief fund.  All suchbonds shall be issued pursuant to part III of chapter 39, except as provided inthis section.

  (c)  The resolution or certificate providing for the issuanceof the bonds may provide that all or part of the proceeds may be held andinvested in the hurricane bond loan fund until needed for the purposes of theHawaii hurricane relief fund.  For the purposes of providing a source ofrevenue or security for these bonds, the director may pledge funds deposited orto be deposited in the hurricane bond loan fund to the payment or security ofthe bonds, and the pledge shall constitute a lien and security interest on themoneys in the hurricane bond loan fund to the extent and with the priority setforth in the document establishing the pledge, without the necessity for physicaldelivery, recording, or other further act.  No revenue bonds may be issuedpursuant to this section unless the director of finance shall first make adetermination based on information provided by the commissioner that there aresufficient revenues and other assets to pay debt service on the revenue bonds.

  (d)  The director of finance is authorized to issuereimbursable general obligation bonds in the principal amount of $200,000,000,or so much thereof as may be requested and deemed necessary by the commissionerfor the purposes of the Hawaii hurricane relief fund, and the same sum isappropriated for each of the fiscal years 2000-2001 and 2001-2002 for depositinto the hurricane reserve trust fund.  The commissioner, upon thecommissioner's determination that it is advisable to transfer funds from thehurricane reserve trust fund, shall reimburse the state general fund forpayment of debt service on reimbursable general obligation bonds authorized andissued under this section.

  SECTION 11.  The state supreme court shall have exclusive andoriginal jurisdiction over any actual controversy or dispute concerning theapplicability of article VII of the state constitution to the financing of theHawaii hurricane relief fund and the hurricane reserve trust fund through theissuance of revenue bonds or reimbursable general obligation bonds, and thesecurity provisions thereof and the imposition and collection of any rates andcharges to repay or provide security for the bonds."

  L 2001, c 153, §4 provides:

  "SECTION 4.  The special mortgage recording feeestablished under section 431P-16, Hawaii Revised Statutes, shall be suspendedas of July 1, 2001, and shall remain suspended until reactivated by the Hawaiihurricane relief fund's board of directors."