§431P-16 - Establishment of trust funds.

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

(b)  The hurricane reserve trust fund shall
receive deposits of the special mortgage recording fee established by this
chapter.  Except as determined by board order, the special mortgage recording
fee 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 is
recorded in the bureau of conveyances of the State under chapter 502 or filed
with the assistant registrar of the land court of the State under chapter 501.

The special mortgage recording fee shall be an
amount equal to one-tenth of one per cent of the stated principal amount of the
debt secured by the mortgage or, in the case of an amendment or refinancing of
a mortgage, an amount equal to one-tenth of one per cent of the amount of the
increase of the stated principal amount of the secured debt; provided that the
board may establish a lower special mortgage recording fee amount pursuant to
section 431P-5(b)(14).  With respect to an open end revolving loan, the
principal amount of the debt on which the special mortgage recording fee is
calculated shall be the maximum amount which may be outstanding under the loan
at any one time.  With respect to a mortgage securing a nonmonetary or inchoate
obligation, the principal amount of the debt on which the special mortgage
recording fee is calculated shall be the monetary amount which the mortgagee
attributes to the obligation.  If the debt is stated in a foreign currency, it
shall be converted to U.S. dollars using an exchange rate published in a
newspaper of general circulation in this State within one week prior to
recordation of the mortgage or amendment of mortgage.

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

(c)  The Hawaii hurricane relief fund shall
implement the assessments of all property and casualty insurers as authorized
by section 431P-5(b)(8)(A) and (B) and the proceeds from the assessments shall
be deposited into 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 or outside the hurricane reserve trust fund.

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

(e)  After each covered event, if the board
shall determine that the moneys in the hurricane reserve trust fund, excluding
moneys determined by the board to be needed to continue fund operations
following that covered event, will be insufficient to pay claims and other
obligations of the fund arising out of that covered event, the Hawaii hurricane
relief fund is authorized to levy a surcharge not to exceed seven and one-half
per cent a year on premiums charged for all property and casualty insurance
policies issued for risks insured in this State.  These moneys may be deposited
into 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 or
outside the hurricane reserve trust fund.  The formula to calculate the amount
and period of the surcharge for each covered event and the procedures and
methodology for payment of claims and other obligations of the fund shall be
provided in the plan of operation and the surcharge may remain in effect until
all claims and other obligations of the fund, including but not limited to
claims financing transactions, bonds, notes, and other obligations arising out
of that covered event, shall have been fully discharged.  The amount and reason
for any surcharge made pursuant to this subsection shall be separately stated
on any billing sent to an insured.  The surcharge shall not be considered
premiums for any other purpose, including the computation of gross premium tax
or the determination of producers' commissions.

(f)  Any proceeds, experience refunds, or other
return funds under reinsurance shall be deposited into the hurricane reserve
trust fund.

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

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

(i)  Moneys in the hurricane reserve trust fund
may be:

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

(A)  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

(B)  If such 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 dissolution of the fund; or

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

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. [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 L
2002, 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 loan
program to assist the Hawaii hurricane relief fund in carrying out the plan of
operation, and may make loans to the Hawaii hurricane relief fund.  There is hereby
created in the treasury of the State a separate and special fund to be
designated as the hurricane bond loan fund of this Act.

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

  (c)  The resolution or certificate providing for the issuance
of the bonds may provide that all or part of the proceeds may be held and
invested in the hurricane bond loan fund until needed for the purposes of the
Hawaii hurricane relief fund.  For the purposes of providing a source of
revenue or security for these bonds, the director may pledge funds deposited or
to be deposited in the hurricane bond loan fund to the payment or security of
the bonds, and the pledge shall constitute a lien and security interest on the
moneys in the hurricane bond loan fund to the extent and with the priority set
forth in the document establishing the pledge, without the necessity for physical
delivery, recording, or other further act.  No revenue bonds may be issued
pursuant to this section unless the director of finance shall first make a
determination based on information provided by the commissioner that there are
sufficient revenues and other assets to pay debt service on the revenue bonds.

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

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

  L 2001, c 153, §4 provides:

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