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[House Report 105-16]
[From the U.S. Government Publishing Office]

105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     105-16
_______________________________________________________________________

  TO CONSENT TO CERTAIN AMENDMENTS ENACTED BY THE LEGISLATURE OF THE 
 
       STATE OF HAWAII TO THE HAWAIIAN HOMES COMMISSION ACT, 1920

                                _______
                                

 March 11, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________

  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                      [To accompany H.J. Res. 32]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the joint 
resolution (H.J. Res. 32), to consent to certain amendments 
enacted by the Legislature of the State of Hawaii to the 
Hawaiian Homes Commission act, 1920 having considered the same, 
report favorably thereon without amendment and recommend that 
the joint resolution do pass.

                          PURPOSE OF THE BILL

    The purpose of H.J. Res. 32 is to consent to certain 
amendments enacted by the Legislature of the State of Hawaii to 
the Hawaiian Homes Commission Act, 1920.

                  BACKGROUND AND NEED FOR LEGISLATION

    Congress enacted the Hawaiian Homes Commission Act of 1920 
to designate approximately 200,000 acres within the islands of 
the then Territory of Hawaii for the exclusive use of native 
Hawaiians. The Act defined native Hawaiians as descendants with 
at least one-half blood quantum of individuals inhabiting the 
Hawaiian Islands prior to 1778. The primary purpose of the Act 
was to provide rural homesteads for native Hawaiians. However, 
this was expanded in 1923 to include residential lots and the 
demand for parcels for that purpose has continued to the 
present.
    The role of the Federal Government in the Hawaiian Homes 
Commission became limited at the time of Hawaii Statehood in 
1959. The responsibility for the Hawaiian Homes Commission was 
largely devolved to the new State in the admissions act of 
March 18, 1959, ``An Act to provide for the admission of the 
State of Hawaii into the Union.'' However, Section 4 of the 
admissions act requires Congressional consent to any changes to 
the Hawaiian Homes Commission Act. Additionally, the Secretary 
of the Interior's function became primarily ministerial, 
involving the approval of land exchanges for private or public 
lands of equal value, as permitted under the Hawaiian Homes 
Commission Act.
    In 1993 the State of Hawaii passed Act 339 to create a 
Hawaii hurricane relief fund after the devastation of Hurricane 
Iniki and included amendments to the Hawaiian Homes Commission 
Act for native Hawaiians affected on Hawaiian Home Lands. This 
first amendment will facilitate certain disaster relief 
insurance and bonds for homeowners on Hawaiian Home lands. In 
1994 the State of Hawaii enacted Act 37 to permit grandchildren 
of a Native Hawaiian leaseholder to assume the remainder of a 
home lease should that individual die. These proposed changes 
have not taken effect as Congress has yet to approve these 
measures.
    Following is a summary of Act 339 of 1993 and Act 37 of 
1994 which would change certain provisions of the Hawaiian 
Homes Commission Act of 1920 (the full text of both measures 
appear in the Appendix):
    Act 339 of the Session Laws of Hawaii, 1993: This statute 
establishes the Hawaiian Hurricane Relief Fund. Section 7 of 
Act 339 authorizes the Department of Hawaiian Home Lands to 
issue hurricane insurance coverage for lessees of Hawaiian Home 
lands and revenue bonds to establish the necessary reserves for 
payment of claims in excess of reserves. Section 15 provides 
that consent requirement, if any, that applies to the Hawaiian 
Home Lands provisions of the act shall not be deemed to affect 
the validity of the other provision of the act.
    Act 37 of the Session Laws of Hawaii, 1994: This statute 
allows homestead lessees to designate as a successor to the 
lease a grandchild who is at least 25 percent native Hawaiian. 
Under the current law, as adopted by Hawaii in 1982, a lessee 
may designate his or her spouse or children as a successor 
under the lease if they are 25 percent native Hawaiian; the 
bill would thus allow a similar designation with respect to 
grandchildren.
    The House of Representatives approved a measure identical 
to H.J. Res. 32 as part of H.R. 1332 in the 104th Congress, 
which was not acted on by the Senate prior to adjournment.

                            COMMITTEE ACTION

    H.J. Res. 32 was introduced on January 21, 1997, by 
Congressman Neil Abercrombie (D-HI) and cosponsored by 
Congressman Eni F.H. Faleomavaega (D-AS) and Congressman Elton 
Gallegly (R-CA). The bill was referred to the Committee on 
Resources for consideration. On March 5, 1997, the Full 
Resources Committee met to consider H.J. Res. 32. No amendments 
were offered and the joint resolution was ordered favorably 
reported to the House of Representatives by voice vote.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Article I, section 8, and Article IV, section 3 of the 
Constitution of the United States grants Congress the authority 
to enact H.J. Res. 32.

                        COST OF THE LEGISLATION

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in H.J. Res. 32. 
However, clause 7(d) of that Rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     COMPLIANCE WITH HOUSE RULE XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.J. 
Res. 32 does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.J. Res. 32.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.J. 
Res. 32 from the Director of the Congressional Budget Office.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 7, 1997.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.J. Res. 32, a joint 
resolution to consent to certain amendments enacted by the 
Legislature of the State of Hawaii to the Hawaiian Homes 
Commission Act, 1920.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Victoria V. 
Heid.
            Sincerely,
                                         June E. O'Neill, Director.
    Enslosure.

H.J. Res. 32--A joint resolution to consent to certain amendments 
        enacted by the Legislature of the State of Hawaii to the 
        Hawaiian Homes Commission Act, 1920

    H.J. Res. 32 would grant the consent of the United States 
to a number of amendments to the Hawaiian Homes Commission Act, 
1920, already adopted by the state of Hawaii. These amendments 
generally concern the administration of the Hawaiian home 
lands.
    CBO estimates that enacting this resolution would have no 
effect on the federal budget. Because the resolution would not 
affect direct spending or receipts, pay-as-you-go procedures 
would not apply. H.J. Res. 32 contains no intergovernmental or 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act of 1995 and would impose no costs on state, local, 
or tribal governments.
    The CBO staff contact for this estimate is Victoria V. 
Heid. This estimate was approved by Robert A. Sunshine, Deputy 
Assistant Director for Budget Analysis.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    H.J. Res. 32 contains no unfunded mandates.

                        CHANGES IN EXISTING LAW

    If enacted, H.J. Res. 32 would make no changes in existing 
law.
                            A P P E N D I X

                              ----------                              

             1. Act 339 of the Session Laws of Hawaii, 1993

    ACT 339.--A Bill For an act relating to laws affecting insurance

Be It Enacted by the Legislature of the State of Hawaii:
    Section 1. The legislature finds that new, creative, and 
flexible mechanisms are necessary to insure against hurricane 
losses in Hawaii in the aftermath of the devastation caused by 
Hurricane Iniki and the worldwide insurance crisis. The 
economic welfare of this State is dependent on the availability 
of property insurance including coverage for catastrophic 
losses in the event of another hurricane.
    The legislature finds that without property insurance the 
orderly growth and development of the State would be severely 
impeded; that adequate insurance upon property is necessary to 
enable homeowners and commercial owners to obtain financing for 
the purchase and improvement of their property; and that while 
the need for such insurance is increasing, the market for such 
insurance is not adequate and is likely to become less adequate 
in the future.
    The purpose of this Act is to create the Hawaii hurricane 
relief fund. The Hawaii hurricane relief fund will assess the 
availability of insurance from all sources and be empowered to 
take steps to provide coverage should the private market prove 
unreliable.
    The establishment of the Hawaii hurricane relief fund 
serves a public purpose and is an essential government 
function.
    Section 2. The Hawaii Revised Statutes is amended by adding 
a new chapter to be appropriately designated and to read as 
follows:

               ``CHAPTER   --HAWAII HURRICANE RELIEF FUND

                     ``PART I.--GENERAL PROVISIONS

    ``Sec.   -1. Definitions. As used in this chapter, unless 
the context otherwise requires:
    `` `Board' means the board of directors of the Hawaii 
hurricane relief fund.
    `` `Commissioner' means the insurance commissioner as 
defined in section 431:2-102.
    `` `Covered event' means each hurricane that directly 
causes windstorm damage in the State.
    `` `Deductible' or `mandatory deductible' means the amount 
of loss assumed by the policyholder that is not included in the 
coverages provided by the fund.
    `` `Department' means the department of commerce and 
consumer affairs.
    `` `Director' means the director of finance.
    `` `Eligible property' means:
          ``(1) Real property of one to four units used for 
        residential purposes and which is in insurable 
        condition, and tangible personal property located 
        therein or thereon as provided in the plan of operation 
        or any manual of rules and rates adopted under the plan 
        of operation; and
          ``(2) Real property used for business, commercial, or 
        industrial purposes which is in insurable condition 
        located therein or thereon as provided in the plan of 
        operation or any manual of rules and rates adopted 
        under the plan of operation.
    `` `Fund' means the Hawaii hurricane relief fund 
established by this chapter.
    `` `Hurricane' means a storm that has been declared and 
defined by the Central Pacific Hurricane Center of the National 
Weather Service to be a hurricane.
    `` `Plan of operation' means the plan for providing 
hurricane property insurance as adopted by the board of 
directors of the Hawaii hurricane  relief  fund,  and  any  
amendments  thereto,  under  section   -7.
    `` `Policy of hurricane property insurance' means a policy 
or endorsement of insurance issued by the fund insuring only 
against damage or loss to eligible property caused by a covered 
event in excess of the deductible and up to $750,000 per risk 
on real property of one to four units used for residential 
purposes and up to $500,000 per risk on real property used for 
business, commercial or industrial purposes, subject to the 
limits defined by the plan of operation; provided that this 
policy shall not include coverage for business interruption.
    `` `Policy of property insurance' means a policy providing 
`property insurance' as defined in section 431:1-206. For 
purposes of this chapter, it includes `basic property 
insurance' as provided under article 21 of chapter 431.
    `` `Property insurance' means policies, riders, or 
endorsements of insurance that provide indemnity, in whole or 
in part, for the loss, destruction, or damage of eligible 
property.
    `` `Servicing facility' means any insurer engaged in 
writing direct property insurance in this State and licensed in 
this State, and any other party authorized to act in like 
capacity on behalf of the fund.
    ``Sec.   -2. Establishment of Hawaii hurricane relief fund. 
There shall be a Hawaii hurricane relief fund to be placed 
within the department of commerce and consumer affairs for 
administrative purposes. The fund shall be a public body and a 
body corporate and politic.
    ``Sec.   -3. Board of directors. (a) The board of directors 
of the fund shall consist of the insurance commissioner as an 
ex officio voting member and six members appointed by the 
governor in accordance with section 26-34. The board shall be 
the policy making body of the fund. As such, the board shall be 
responsible for establishing policies for the administration 
and operation of the fund and the performance of other duties 
and functions assigned to the fund.
    ``(b) Two members shall, by and with the advice and consent 
of the senate, be appointed by the governor for a term of four 
years; provided that of the initial appointees, one shall be 
appointed for a two-year term. A vacancy on the authority of a 
seat subject to this subsection shall be filled in accordance 
with Article V, section 6, of the Constitution of the State of 
Hawaii.
    ``(c) Two members shall, by and with the advice and consent 
of the senate, be appointed by the governor from a list of 
nominations submitted by the president of the senate. The 
members appointed from a list of nominations of the president 
of the senate shall serve for a term of four years; provided 
that of the initial appointees, one shall be appointed for a 
two-year term.
    ``(d) Two members shall, by and with the advice and consent 
of the senate, be appointed by the governor from a list of 
nominations submitted by the speaker of the house of 
representatives. The members appointed from a list of 
nominations of the speaker of the house of representatives 
shall serve for a term of four years; provided that of the 
initial appointees, one shall be appointed for a two-year term.
    ``(e) The governor shall select a chairperson and vice-
chairperson from among the members.
    ``(f) The board shall meet as often as necessary to 
formulate and implement strategies and plans of operations in 
furtherance of this chapter. Upon its appointment, the board 
shall adopt an interim plan of operation within ninety days.
    ``(g) The appointed directors shall receive no compensation 
for services, but shall be entitled to reimbursement of 
necessary expenses, including travel expenses, incurred in the 
performance of their duties.
    ``(h) The board may appoint, not subject to chapters 76 and 
77, and executive director of the fund whose salary shall be 
set by the board. The board may employ, not subject to chapters 
76 and 77, technical experts and officers, agents and 
employees, permanent or temporary, as required. The board may 
also contract with persons, not subject to chapters 76, 77, and 
78 when in the determination of the board, the services to be 
performed are unique and essential to the execution of the 
functions of the fund; provided that no individual contract 
shall be for a period longer than two years per term.
    ``Sec.   -4. Planning and assessment functions of the fund; 
discretion to provide insurance. (a) The fund shall be 
responsible for monitoring the availability of property 
insurance, including insurance for covered events, in this 
State. If at any time the board determines, in its sole 
discretion, that the private insurance market is not making 
such insurance reasonably available to consumers in this State, 
the fund may offer policies of hurricane property insurance for 
sale in accordance with this chapter.
    ``(b) Nothing in subsection (a) shall prohibit the board 
from exercising its powers to develop plans and procedures for 
the operation and management of the fund without regard to the 
determination of the board as to the availability of insurance 
in the private market.
    ``Sec.   -5. Powers, duties, and functions. (a) The Hawaii 
hurricane relief fund shall have the following general powers:
          ``(1) To sue and be sued;
          ``(2) To make and alter policies for its organization 
        and internal administration;
          ``(3) To adopt rules in accordance with chapter 91 to 
        effectuate the purposes of this chapter;
          ``(4) To borrow moneys; including but not limited to 
        moneys from state or federal sources and to issue notes 
        or other obligations of the fund for the purposes of 
        providing funds for any of its purposes as authorized 
        by the legislature from time to time;
          ``(5) To pledge or assign all or any part of the 
        moneys, rents, charges, or other revenue and any 
        proceeds derived by the fund; and
          ``(6) Enter into contracts as necessary to effectuate 
        the purposes of this chapter.
    ``(b) In addition to the general powers under subsection 
(a), the fund shall have the specific power to:
          ``(1) Adopt and administer a plan of operation in 
        accordance with section  -7, and a manual of rules and 
        rates to provide persons having an insurable interest 
        in eligible property with insurance coverage provided 
        by the fund;
          ``(2) Authorize the provision of hurricane coverage 
        by the fund for tangible personal property located in 
        or on real property used for business, commercial, or 
        industrial purposes and establish limits of liability 
        for specific coverages within the range of authorized 
        coverage;
          ``(3) Adopt actuarially sound rates based on 
        reasonable assumptions relative to expectations of 
        hurricane frequency and severity for all coverage 
        provided under policies or endorsements issued by the 
        fund. Rates adopted shall be subject to approval by the 
        commissioner pursuant to article 14 of chapter 431. 
        Rates adopted shall provide for classification of risks 
        and shall include past and prospective losses and 
        expense experience in this State;
          ``(4) Adopt procedures, guidelines, and surcharges 
        applicable to hurricane policies issued in connection 
        with an underlying property policy issued by an 
        unauthorized insurer;
          ``(5) Adopt any form of insurance policy necessary 
        for providing hurricane property insurance by the fund, 
        with the approval of the commissioner;
          ``(6) Issue insurance policies and pay claims for 
        coverage over the mandatory deductible;
           ``(7) Require every licensed insurer transacting 
        direct property insurance business in this State to act 
        as a servicing facility, and by contract with such 
        insurer authorize such insurer to inspect eligible 
        properties, service policies and policyholders of 
        hurricane property insurance, provide claim services, 
        and perform any other duties as authorized by the fund 
        for applicants to the fund and those insured by it;
          ``(8)(A) Assess annually all licensed property or 
        casualty insurers the amounts which, together with the 
        other assets of the fund, are sufficient to meet all 
        necessary obligations of the fund. The assessment shall 
        be made on the insurer's gross direct written premiums 
        for property and casualty insurance in Hawaii for the 
        preceding calendar year. The rate of assessment in a 
        year in which a covered event has not occurred shall be 
        3.75 percent and shall not include the insurer's gross 
        direct written premiums for motor vehicle insurance in 
        Hawaii; provided that the rate of assessment may be 
        increased to an amount not to exceed five percent and 
        may include the insurer's gross direct written premiums 
        for motor vehicle insurance in Hawaii following a 
        covered event. An insurer authorized to provide 
        comparable coverage under section   -10(b) shall be 
        assessed an amount that excluded gross direct written 
        premiums for property insurance in Hawaii.
          ``(B) In the event of a loss from a covered event the 
        fund, in addition to the annual assessment in paragraph 
        (A), shall assess those insurers which wrote property 
        insurance coverage during the year immediately 
        preceding the year of the covered event in proportion 
        to each insurer's share of the total property premium 
        during that year. However, in no event shall the total 
        assessment exceed $500,000,000 in the aggregate; 
        provided that a separate assessment shall be made for 
        each covered event. An insurer authorized to provide 
        comparable coverage under section   -10(b) shall be 
        exempted from this subparagraph.
          ``(C) Each insurer shall be notified of any 
        assessment not later than thirty days before it is due. 
        The fund may exempt or differ, in whole or in part, the 
        assessment of any insurer if the assessment would cause 
        the insurer's financial statement to reflect amounts of 
        capital or surplus less than the minimum amounts 
        required for a certificate of authority by this 
        jurisdiction;
          ``(9) Develop a program of incentives to encourage 
        insurers to provide policies of hurricane property 
        insurance in the event the commissioner authorizes the 
        provision of comparable insurance pursuant to section   
        -10(b); which may include, but are not limited to, 
        exemption of the insurer's gross direct written premium 
        for property insurance from the annual assessment 
        pursuant to section   -5(b)(8)(A);
          ``(10) Develop a credit against the annual assessment 
        based on the difference between premiums written in 
        1993 and the premiums written in 1992 by each property 
        insurer;
          ``(11) Develop procedures regarding policies written 
        by unauthorized insurers comparable to the assessments, 
        and other contributions made by insurers authorized to 
        do business in this State;
          ``(12) Accumulate reserves or funds, including the 
        investment income thereon, to be used for paying 
        expenses, making loans, and paying valid claims for 
        covered events insured by the fund; and
          ``(13) Collect and maintain statistical and other 
        data as may be required by the commissioner.
    ``Sec.   -6. Advisory committee. To assist it in 
implementing this chapter the fund may appoint an advisory 
committee consisting of:
          ``(1) Not less than one individual who is employed or 
        trained as a meteorologist and possesses knowledge of 
        the history, trends, and nature of windstorms in the 
        Pacific Ocean;
          ``(2) Not less than one individual who is a member of 
        the American academy of actuaries; and
          ``(3) Not less than one individual who is a 
        structural engineer licensed to practice in the State 
        and is knowledgeable about local community building 
        codes.
    ``The fund may establish additional advisory committees as 
it may deem necessary in furtherance of this chapter.
    ``Sec.   -7. Plan of operation. (a) The fund shall adopt a 
plan of operation, and a manual of rules and rates necessary or 
suitable to ensure both the solvency and the reasonable and 
equitable administration of the fund.
    ``(b) If the fund fails to adopt a plan of operation, or 
the fund fails to adopt amendments to the plan of operation, 
the commissioner shall adopt a plan of operation or make 
amendments necessary to carry out the purposes of this chapter. 
Any plan of operation, or amendment, adopted by rule of the 
commissioner, shall continue in full force and effect until the 
rule is superseded by a plan of operation, or amendment, 
adopted by a majority vote of all members of the fund's board, 
and approved by the commissioner.
    ``(c) The plan of operation shall:
          ``(1) Establish procedures for performance of all 
        powers and duties of the fund;
          ``(2) Establish procedures for providing notice to 
        all persons with interests insurable by the fund in the 
        Sate of the type of insurance available from the fund 
        in the event the fund offers insurance;
          ``(3) Provide for and adopt all necessary forms, 
        including insurance policies to be used by and on 
        behalf of the fund, for use by the fund and servicing 
        facilities;
          ``(4) Adopt actuarially sound rates, based on 
        reasonable assumptions relative to expectations of 
        hurricane frequency and severity, to be charged for 
        insurance provided by the fund, in accordance with 
        article 14 of chapter 431;
          ``(5) Publish manuals of rules, rates, and rating and 
        classification plans, which shall address mandatory 
        deductibles, limits of coverage, and the classification 
        of risks and rate modifications based on the exposure 
        of insureds;
          ``(6) Establish procedures for receiving and 
        servicing applications to the fund;
          ``(7) Establish procedures for processing and 
        maintaining records of the fund relating to its 
        financial transactions, its agents, its employees, its 
        operations, and all transactions with any servicing 
        facility;
          ``(8) Establish procedures for the collection and 
        remittance of the premiums and return of unearned 
        premiums where applicable;
          ``(9) Establish procedures for the payment of valid 
        claims;
          ``(10) Establish procedures for prorating available 
        funds pursuant to section   -15;
          ``(11) Establish procedures for obtaining 
        reinsurance;
          ``(12) Establish procedures to borrow funds; and
          ``(13) Develop a plan for the investment of moneys 
        held by the fund subject to the limitations in article 
        6 of chapter 431.
    ``Sec.   -8. Annual statements. (a) The fund shall submit 
to the commissioner each year, not later than one hundred 
twenty days after the end of the fund's fiscal year, a 
financial report in a form approved by the commissioner.
    (b) The commissioner may require other reports concerning 
risks insured by the fund as the commissioner deems 
appropriate.
    ``Sec.   -9. Powers of the commissioner. (a) For the 
purpose of ascertaining the fund's condition or compliance with 
this chapter, the commissioner shall examine the accounts, 
records, documents, and transactions of the fund at least once 
every three years commencing at the time the fund starts 
issuing policies of hurricane property insurance or more often 
if the commissioner deems advisable. The fund shall pay all 
reasonable and actually incurred expenses of the examination in 
accordance with section 431:2-306(b).
    ``(b) The commissioner may exercise all of the 
commissioner's powers provided by law in the supervision and 
regulation of the fund, any servicing facility, and any other 
person or entity subject to the jurisdiction of the 
commissioner.
    ``Sec.   -10. Coverage available from the fund; deductible. 
(a) Policies issued by the fund shall provide a maximum 
aggregate coverage up to of $750,000 per risk on real property 
of one to four units used for residential purposes and $500,000 
per risk for real property used for business, commercial, and 
industrial purposes and shall provide for a mandatory 
deductible. The deductible amount for residential personal 
property policies shall be the greater of $1,000 or one per 
cent of the insured value or the greater of $2,000 or two per 
cent of the insured value; provided that the board may 
establish higher deductible limits. The deductible amount for 
commercial property policies shall be the greater of $5,000 or 
five per cent of the insured value or an amount equivalent to 
the all other perils deductible of the underlying policy of 
property insurance; provided that the board may establish 
higher deductible limits.
    ``(b) Upon the authorization of the commissioner, insurers 
may provided standard extended coverage endorsements, including 
coverage of hurricane risks, subject to the fund's program for 
incentives and credits; provided that in the absence of such 
authorization no other policy of property insurance or 
endorsement to a policy of property insurance on eligible 
property located in this State shall be issued to provide 
insurance for damages or losses caused by a covered event if 
such coverage is offered by the fund.
    ``Sec.   -11. Underlying policy required; hurricane 
coverage shall be provided. (a) Any eligible property for which 
coverage is sought from the fund shall already be insured by an 
underlying policy of property insurance as defined in section 
431:1-206 or article 21 of chapter 431 but excluding the 
covered event. Every underlying policy of property insurance 
provided by an unauthorized insurer shall be subject to the 
procedures, guidelines and surcharges as provided in the plan 
of operation.
    ``(b) The fund shall not deny any application for hurricane 
property insurance on any property eligible under subsection 
(a).
    ``(c) The fund shall renew any policy provided payment of 
the applicable renewal premium is received by the fund on or 
before the expiration date stated in the policy. The fund may 
nonrenew a policy on the grounds the property is no longer 
covered by an underlying policy of property insurance. The 
policy issued by the fund shall not provide coverage in the 
event that there is no underlying policy of property insurance 
at the time of loss. In such case, any unearned premiums shall 
be returned to the policyholder on a pro rata basis.
    ``Sec.   -12. Mitigation. The fund shall develop a 
comprehensive loss reduction plan for the hurricane peril. The 
plan shall include standards for new residential and commercial 
structures and separate standards for existing residential and 
commercial structures. The plan shall provide a timetable for 
implementation of mandatory loss mitigation measures for both 
new and existing structures.
    ``Sec.   -13. Appeals. (a) Any applicant or policyholder 
adversely affected by a decision of the fund shall have the 
right to appeal to the fund's board within thirty days after 
the decision. The application for an appeal shall specify how 
the person making the appeal was aggrieved and the grounds upon 
which relief is demanded. The decision of the board shall be 
deemed final.
    ``(b) Any final action, decision, or order of the board 
under this chapter shall be subject to judicial review by the 
circuit court.
    ``Sec.   -14. Immunity and limitation on liability. There 
shall be no liability on the part of, and no cause of action of 
any nature shall arise against, any servicing facility; the 
fund or its agents, employees, or its board; the State; the 
commissioner; or the commissioner's representatives for any 
action taken by them in the performance of their powers and 
duties under this chapter; provided that this section shall not 
be construed to prohibit any exercise of the commissioner's 
power pursuant to this chapter or any other law or rule adopted 
pursuant to law, chapters 661 and 662, and any other law to the 
contrary notwithstanding. Nothing in this chapter shall create 
an obligation, debt, claim, cause of action, claim for relief, 
charge, or any other liability of any kind whatsoever in favor 
of any person or entity without regard to whether that person 
or entity received any benefits under this chapter, against the 
State, or its officers and employees. The State and its 
officers and employees shall not be liable for the results of 
any application, denial of application, claim, loss, or other 
benefits provided by the fund pursuant to this chapter. Nothing 
in this chapter shall be construed as authorizing any claim 
against the State whatsoever, nor shall this chapter be 
construed as authorizing any claim against the fund in excess 
of any note, loan, liability, or other obligation incurred by 
the fund.
    ``Sec.   -15. Exemption from property and liability 
insurance guaranty association; insolvency of fund. 
Notwithstanding any other provision of law to the contrary, 
neither the fund nor its policyholders shall be subject to the 
provisions of or be eligible for, the benefits provided in 
sections 431:16-101 to 117 inclusive. If the total amount 
available at any time to the fund is insufficient to make all 
necessary payments, the moneys available shall be prorated and 
the unpaid portion shall be paid as soon thereafter as moneys 
become available.
    ``Sec.   -16. Establishment of hurricane reserve trust 
fund. (a) There is created in the treasury of the State the 
hurricane reserve trust fund to be administered by the Hawaii 
hurricane relief fund, into which shall be deposited the 
special mortgage recording fee established by this chapter. The 
special mortgage recording fee shall be imposed on each 
mortgage and each amendment to a mortgage which increases the 
principal amount of the secured debt which is recorded in the 
bureau of conveyances of the State under chapter 502 or filed 
with the assistance registrar of the land court of the State 
under chapter 501.
    ``The special fee shall be in 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 of a 
mortgage, an amount equal to one-tenth of one per cent of the 
amount of the increase of the stated principal debt.
    ``The special fee shall be in addition to any applicable 
fees under chapter 501 or 502. The special fees shall be 
collected by escrow depositories licensed under chapter 449, or 
financial institutions authorized to engage in the escrow 
business, or persons and companies permitted to engage in 
limited escrow transactions under section 449-3. The special 
mortgage recording fees shall be collected prior to recordation 
of the mortgage with 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 bureau of 
conveyances and the assistant registrar of the land court may 
also collect and transmit any special fees for deposit into the 
hurricane reserve trust fund.
    ``(b) The fund shall implement the annual assessment of all 
licensed property and casualty insurers as authorized by 
section -5(b)(8)(A) and the proceeds from the assessments shall 
be deposited into the hurricane reserve fund.
    ``(c) If the fund offers to issue policies of hurricane 
property insurance, the premiums for such policies shall be 
deposited into the hurricane reserve trust fund.
    ``(d) Should the moneys in the hurricane reserve trust fund 
be insufficient to pay claims arising out of a covered event, 
the fund is authorize to levy a surcharge not to exceed seven 
and one-half per cent a year on premiums charged for policies 
issued by all licensed property and casualty insurers. These 
moneys may be used for purposes as directed by the board, 
including but no limited to the payment of debt service and 
principal on a contract of financial reinsurance. The formula 
to calculate the amount and period of the surcharge and the 
procedures and methodology for payment of claims during periods 
of insufficiency of moneys for such purpose shall be provided 
in the plan of operation.
    ``(e) Any proceeds from loans or other moneys from the 
federal government, any proceeds from bonds issued pursuant to 
this Act loaned by the director of finance to the Hawaii 
hurricane relief fund, and such other moneys as the State may 
make available from time to time shall be deposited into the 
hurricane reserve trust fund.
    ``(f) Moneys in the hurricane reserve trust fund shall be 
expended by the fund and used solely for the purposes of this 
chapter.
    ``(g) Upon dissolution of the fund, the net moneys of the 
hurricane reserve trust fund shall revert to the state general 
fund.
    ``Sec.   -17. Additional notice requirement. Thirteen 
months prior to discontinuation of writing property insurance 
coverage, an insurer shall file an affidavit with the 
commissioner stating the reasons for the discontinuation.
    ``Sec.   -18. Exemption for Hawaiian home lands. Nothing in 
this chapter shall prohibit or limit any person from obtaining 
insurance for property subject to the Hawaiian Homes Commission 
Act of 1920, as amended, from any insurer other than the fund 
if such insurance is deemed sufficient by the commissioner.''.
    Section 3. Chapter 46, Hawaii Revised Statutes, is amended 
by adding a new section to be appropriately designated and to 
read as follows:
    ``Sec. 46-  . Homeowners insurance. (a) Notwithstanding any 
law to the contrary, a county, either alone or together with 
any other county or counties, may:
          ``(1) Form an insurance company, association 
        (nonprofit or otherwise), fund, or trust;
          ``(2) Acquire an existing insurance company;
          ``(3) Enter into arrangements with one or more 
        insurance companies; or
          ``(4) Any combination of the foregoing; upon such 
        terms and conditions and for such periods, as the 
        council of the county shall approve by ordinance or 
        resolution, or both, to provide homeowner insurance, 
        including hurricane coverage, for residents of the 
        county or counties participating in such undertaking. 
        Such undertaking shall be subject to the provision of 
        chapter   , including, but not limited to, section   -
        10(b), and chapter 431.
    ``(b) Any county participating in an undertaking as 
authorized under subsection (a) may:
          ``(1) Issue general obligation bonds under chapter 47 
        to establish necessary reserves to provide for the 
        payment of claims in excess of reserves and for other 
        related purposes;
          ``(2) Invest funds held in reserve, which are not 
        required for immediate disbursement, in property or 
        securities in which savings banks may legally invest 
        funds subject to their control or as the council of the 
        county may authorize pursuant to ordinance or 
        resolution; and
          ``(3) Issue general obligation bonds under chapter 47 
        to pay any liability incurred that is self-insured or 
        uninsured by that county, including without 
        limitations, liabilities for damage to property, 
        comprehensive liability, environmental, or other 
        losses.
    ``(c) If no homeowner insurance is provided pursuant to 
this section within two years of the effective date of this 
section, this section shall cease to be in effect; provided 
that any county participating in any undertaking to provide 
homeowner insurance under this section wihin that two year 
period may continue to do so thereafter.''.
    Section 4. Chapter 431, Hawaii Revised Statutes, is amended 
by adding to article 19 a new section to be appropriately 
designated and to read as follows:
    ``Sec. 431:19-  . Personal lines insurance. (a) 
Notwithstanding the provisions of section 431:19-102(a), a 
captive insurance company may be licensed to provide personal 
lines coverage for unrelated risks if the commissioner deems 
that extraordinary circumstances exist which make the provision 
of this coverage by a captive insurance company appropriate and 
in the best interest of the public. In determining whether such 
extraordinary circumstances exist, the commissioner shall 
consider the following factors:
          ``(1) The extent to which the particular coverage is 
        available in the voluntary market;
          ``(2) The existence of a relationship between the 
        parent of the captive insurance company and the 
        proposed policyholders other than that of insurer to 
        insured;
          ``(3) Whether the captive insurance company has 
        sufficient capitalization to insure the proposed risks; 
        and
          ``(4) Any other factors which the commissioner deems 
        appropriate.
    ``(b) Any captive insurance company formed pursuant to this 
section shall be subject to articles 5, 10, 10A, 10B, 10C, 10D, 
10E, 10F, 10G, 12, 15, and 17 of chapter 431 in addition to all 
other applicable law.''.
    Section 5. Section 39-51, Hawaii Revised Statutes, is 
amended to read as follows:
    1. By adding a new definition to be appropriately inserted 
and to read as follows:
    `` `System' means an organized plan or arrangement under 
which one or more undertakings are operated or implemented as a 
harmonious whole.''
    2. By amending the definition of ``undertaking'' to read as 
follows:
    `` `Undertaking' means any public works and properties, 
improvement, or system, tangible or intangible, owned or 
operated by the State or a department thereof, [and from which 
the State or department may derive revenues, or with respect to 
which the State or department may derive user taxes.] and any 
public activity, policy, or program undertaken by the State or 
a department thereof, and from which the State or department 
may derive revenues, or with respect to which the State or 
department may derive user taxes.''
    Section 6. Section 431:13-104, Hawaii Revised Statutes, is 
amended to read as follows:
    ``Sec. 431:13-104. Favored agent or insurer; coercion of 
debtors. (a) No person may require as a condition precedent to 
the lending of money or extension of credit, or any renewal 
thereof, that the person to whom such money or credit is 
extended or whose obligation a creditor is to acquire or 
finance, negotiate any contract of insurance, or renewal 
thereof, through a particular insurer or group of insurers or 
agent or broker or group of agents or brokers.
    ``(b) No person who lends money or extends credit may:
          ``(1) Solicit insurance for the protection of real 
        property, after a person indicates interest in securing 
        a first mortgage credit extension, until such person 
        has received a commitment in writing from the lender as 
        to a loan or credit extension;
          ``(2) Unreasonably reject a contract of insurance 
        furnished by the borrower for the protection of the 
        property securing the credit or lien. A rejection shall 
        not be deemed unreasonable if it is based on reasonable 
        standards, uniformly applied, relating to the extent of 
        coverage required and the financial soundness and the 
        services of an insurer. Such standards shall not 
        discriminate against any particular type of insurer, 
        nor shall such standards call for rejection of an 
        insurance contract because the contract contains 
        coverage in addition to that required in the credit 
        transaction;
          ``(3) Require that any borrower, mortgagor, 
        purchaser, insurer, broker or agent pay a separate 
        charge, in connection with the handling of any contract 
        of insurance required as a security for a loan on real 
        estate, or pay a separate charge to substitute the 
        insurance policy of one insurer for that of another. 
        This paragraph does not include the interest which may 
        be charged on premium loans or premium advancements in 
        accordance with the terms of the loan or credit 
        document;
          ``(4) Use or disclose, without the prior written 
        consent of the borrower, mortgagor or purchaser taken 
        at a time other than the making of the loan or 
        extension of credit, information relative to a contract 
        of insurance which is required by the credit 
        transaction, for the purpose of replacing the 
        insurance;
          ``(5) Require any procedures or conditions of duly 
        licensed agents, brokers or insurers not customarily 
        required of those agents, brokers or insurers 
        affiliated or in any way connected with the person who 
        lends money or extends credit.
          ``(c) Every person who lends money or extends credit 
        and who solicits insurance on real and personal 
        property subject to subsection (b) must explain to the 
        borrower in writing that the insurance related to such 
        credit extension may be purchased from an insurer or 
        agent of the borrower's choice, subject only to the 
        lender's right to reject a given insurer or agent as 
        provided in subsection (b)(2). Compliance with 
        disclosures as to insurance required by Truth-In-
        Lending laws or comparable state laws shall be in 
        compliance with this paragraph.
    ``This requirement for a commitment shall not apply in 
cases where the premium for the required insurance is to be 
financed as part of the loan or extension of credit involving 
personal property transactions.
    ``(d) The commissioner shall have the power to examine and 
investigate those insurance related activities of any person 
whom the commissioner believes may be in violation of this 
section. Any affected person may submit to the commissioner a 
complaint or material pertinent to the enforcement of this 
section.
    ``(e) Nothing in this section shall prevent a person who 
lends money or extends credit from placing insurance on real or 
personal property in the event the mortgagor, borrower or 
purchaser has failed to provide required insurance in 
accordance with the terms of the loan or credit document.
    ``(f) Nothing contained in this section shall apply to 
credit life or credit disability insurance.
    ``(g) Nothing in this section shall prevent a person who 
lends money or extends credit from assisting a mortgagor, 
borrower or purchaser in obtaining homeowners insurance where 
the borrower requests such assistance in writing. Nothing in 
this section shall prevent a person who lends money or extends 
credit from referring a mortgagor, borrower, or purchaser to 
the Hawaii hurricane relief fund.''.
    Section 7. Section 219.1 of the Hawaii Homes Commission Act 
of 1920, as amended, is amended to read as follows:
    ``Sec. 219.1 General assistance. (a) The department is 
authorized to carry on any activities it deems necessary to 
assist the lessees in obtaining maximum utilization of the 
leased lands, including taking any steps necessary to develop 
these lands for their highest and best use commensurate with 
the purposes for which the land is being leased as provided for 
in section 207, and assisting the lessees in all phases of 
farming, ranching, and aquaculture operations and the marketing 
of their agriculture of aquacultural produce and livestock.
    ``(b) Notwithstanding any law to the contrary, the 
department either alone or together with any other governmental 
agency, may:
          ``(1) Form an insurance company, association 
        (nonprofit or otherwise), pool, or trust;
          ``(2) Acquire an existing insurance company;
          ``(3) Enter into arrangements with one or more 
        insurance companies; or
          ``(4) Undertake any combination of the foregoing; 
        upon such terms and conditions and for such periods, as 
        the commission shall approve, to provide homeowner 
        protection, including hurricane coverage, for lessees 
        participating in such undertaking. Such undertaking 
        shall be subject to the provisions of chapter  , 
        including but not limited to section  -10(b), and 
        chapter 431.
    ``(c) The department, if experiencing any of the power as 
authorized under subsection (b) may:
          ``(1) Issue revenue bonds under and pursuant to part 
        III of chapter 39, Hawaii Revised Statutes, to 
        establish necessary reserves to provide for the payment 
        of claims in excess of reserves and for other related 
        purposes; or to pay any liability incurred that is 
        self-insured or uninsured by the commission including 
        without limitations, liabilities for damage to 
        property, comprehensive liability, environmental, or 
        other losses; and
          ``(2) Invest funds held in reserve, which are not 
        required for immediate disbursement, in property or 
        securities in which savings banks may legally invest 
        funds subject to their control or as the commission may 
        authorize by resolution.''.
    Section 8. Article 17 of chapter 431, Hawaii Revised 
Statutes, is repealed.
    Section 9. Chapter 479, Hawaii Revised Statutes, is 
repealed.
    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 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 fiscal year 1993-1994 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 general obligation bonds 
authorized and issued under this section.
    Section 11. The state supreme court shall have exclusive 
and original jurisdiction over any controversy or dispute 
regarding the financing of the Hawaii hurricane relief fund and 
the hurricane reserve trust fund through the issuance of 
revenue bonds or 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; 
provided that the jurisdiction be limited to the applicability 
of Article VII of the Constitution of the State of Hawaii to 
these matters.
    Section 12. All Acts passed by the legislature during this 
Regular Session of 1993, whether enacted before or after the 
effective date of this Act, shall be amended to conform to this 
act unless such acts specifically provide that this Act is 
being amended.
    Section 13. If any provision of this Act, or the 
application thereof to any person or circumstance is held 
invalid, the invalidity does not affect other provisions or 
applications of the Act which can be given effect without the 
invalid provision of application, and to this end the 
provisions of this Act are severable.
    Section 14. There is appropriated out of the general 
revenues of the State of Hawaii the sum of $100,000, or so much 
thereof as may be necessary for fiscal year 1993-1994, to carry 
out the purposes of this Act, including the hiring of necessary 
staff. The sum appropriated shall be expended by the director 
of commerce and consumer affairs.
    Section 15. The provisions of the amendments made by this 
Act to the Hawaiian Homes Commission Act of 1920, as amended, 
are declared to be severable and if any section, clause, or 
phrase, or the application thereof to any person or 
circumstance is held to be invalid or ineffective because there 
is a requirement of having the consent of the United States to 
take effect, then that portion only shall take effect upon the 
granting of consent by the United States and the effectiveness 
of the remainder of these amendments or the application thereof 
shall not be affected.
    Section 16. Statutory material to be repealed is bracketed. 
New statutory material is underscored.
    Section 17. This Act shall take effect upon its approval; 
provided that section   -16(a) of chapter  , Hawaii Revised 
Statutes, and sections 10 and 14 of this act shall take effect 
on July 1, 1993.

(Approved June 30, 1993.)

              37. Act of the Session Laws of Hawaii, 1994

 ACT 37.--A Bill for an act relating to the Hawaiian Homes Commission 
                         Act, 1920, as amended.

Be It Enacted by the Legislature of the State of Hawaii:
    Section 1. Section 209, Hawaiian Homes Commission Act, 
1920, as amended, is amended by amending subsection (a) to read 
as follows:
    ``(a) Upon the death of the lessee, the lessee's interest 
in the tract or tracts and the improvements thereon, including 
growing crops and aquacultural stock (either on the tract or in 
any collective contract or program to which the lessee is a 
party by virtue of the lessee's interest in the tract or 
tracts), shall vest in the relatives of the decedent as 
provided in this paragraph. From the following relatives of the 
lessee who are (1) at least one-quarter Hawaiian, husband, 
wife, [or] children, or grandchildren, or (2) native Hawaiian, 
father and mother, widows or widows of the children, 
[grandchildren,] brothers and sisters, widows or widowers of 
the brothers and sisters, or nieces and nephews,--the lessee 
shall designate the person or persons to whom the lessee 
directs the lessee's interest in the tract or tracts to vest 
upon the lessee's death. The Hawaiian blood requirements shall 
not apply to the descendants of those who are not native 
Hawaiians but who were entitled to the leased lands or under 
section 3 of the Act of May 16, 1934 (48 Stat. 777, 779), as 
amended, or under section 3 of the Act of July 9, 1952 (66 
Stat. 511, 513). In all cases that person or persons need not 
be eighteen years of age. The designation shall be in writing, 
may be specified at the time of execution of the lease with a 
right in the lessee in manner to change the beneficiary at any 
time and shall be filed with the department and approved by the 
department in order to be effective to vest the interests in 
the successor or successors so named.
    ``In case of the death of any lessee, except as hereinabove 
provided, who has failed to specify a successor or successors 
as approved by the department, the department may select from 
only the following qualified relatives of the decedent:
          ``(1) Husband or wife; or
          ``(2) If there is no husband and wife, then the 
        children; or
          ``(3) If there is no husband, wife, or child, then 
        the grandchildren; or
          ``[(3)] (4) If there is no husband, wife, [or] child, 
        or grandchild, then from the following relatives of the 
        lessee who are native Hawaiian: father and mother, 
        widows or widowers of the children, [grandchildren,] 
        brothers and sisters, widows or widowers of the 
        brothers and sisters, or nieces and nephews.
The rights to the use and occupancy of the tract or tracts may 
be made effective as of the date of the death of the lessee.
      ``In the case of the death of a lessee leaving no 
designated successor or successors, husband, wife, children, 
grandchildren, or relative qualified to be a lessee of Hawaiian 
home lands, the land subject to the lease shall resume its 
status as unleased Hawaiian home lands and the department if 
authorized to lease the land to a native Hawaiian as provided 
in this Act.
      ``Upon the death of a lessee who has not designated a 
successor and who leaves a spouse not qualified to succeed to 
the lease or children of qualified to the lease, or upon the 
death of a lessee leaving no relative qualified to be a lessee 
of Hawaii home lands, or the cancellation of a lease by the 
department, or the surrender of a lease by the lessee, the 
department shall appraise the value of all the improvements and 
growing crops or improvements and aquacultural stock, as the 
cases may be, and shall pay to the nonqualified spouse or the 
nonqualified children as the lessee shall have designated prior 
to the lessee's death, or to the legal representative of the 
deceased lessee, or to the previous lessee, as the case may be, 
the value thereof, less any indebtedness to the department, or 
for taxes, or for any other indebtedness to the department, or 
for taxes, or for any other indebtedness the payment of which 
has been assured by the department, owed by the deceased lessee 
or the previous lessee. These payments shall be made out of the 
Hawaiian home loan fund and shall be considered and advance 
therefrom and shall be repaid by the successor or successors to 
the tract involved. If available cash in the Hawaiian home loan 
fund is insufficient to make these payments, payments may be 
advanced from the Hawaiian home general loan fund and shall be 
repaid by the successor or successors to the tract involved; 
provided that any repayment for advances made from the Hawaiian 
home general loan fund shall be at the interest rate 
established by the department for loans made from the Hawaiian 
home general loan fund.
    ``The appraisal shall be made by three appraisers, one of 
whom shall be named by the department, one by the previous 
lessee or the legal representative of the deceased lessee, as 
the case may be, and the third shall be selected by the two 
appraisers aforementioned.''.
    Section 2. Statutory material to be repealed is bracketed. 
New statutory material is underscored.
    Section 3. This Act shall take effect upon approval by the 
governor of the State of Hawaii with the consent of the United 
States Congress.

(Approved April 28, 1994.)

                                
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