SB3072 SD1

SECTION 1. The legislature finds that the State is in the midst of ongoing response efforts to address the heartbreaking aftermath of the August 8, 2023, wildfires in the counties of Hawaii and Maui, which caused extensive loss of life and damage to Lahaina. Initial estimates are that the State's share of the costs of recovery efforts could total several hundreds of millions of dollars over multiple fiscal years.

Under current law, federal reimbursement moneys, such as funds to be provided by the Federal Emergency Management Agency for the wildfire disaster, are generally deposited into a trust account of the major disaster fund and reimbursed to the originating fund of the expending agency incurring the cost. If the originating funds have lapsed by the time reimbursement is received, then they are reimbursed to the general fund. Only a small amount is allowed to roll over to the next fiscal year and remain available in the major disaster fund.

Due to the size and scope of the wildfire disaster, disaster recovery efforts are expected to continue for several years. However, the State has been informed that the Federal Emergency Management Agency reimbursements of amounts outlaid by the State via the major disaster fund are not expected to be paid on a predictable schedule during any given fiscal year regardless of when the State incurs the expense. Therefore, if current law is applied, critical recovery efforts and services could be interrupted due to lack of available funds until another legislative appropriation is made.

The legislature further finds that following the governor's seventh emergency proclamation relating to wildfires dated September 8, 2023, the governor issued executive memorandum no. 23-08 on October 10, 2023, amending executive memorandum no. 23‑05, the fiscal year 2023-2024 budget execution policies and instructions, to transfer $164,097,551, after adjustments, in funds appropriated in Act 164, Session Laws of Hawaii 2023, to the department of budget and finance for the State's response to the 2023 wildfires. The department established the 2023 wildfires general fund sub-account no. G-24-383-O (BUF101) to hold the transferred funds.

The legislature further finds that the governor provided $100,000,000 to the major disaster fund established in section 127A-16, Hawaii Revised Statutes, as authorized by emergency proclamations for wildfire recovery efforts, from the following sources:

(1) $5,000,000 pursuant to the appropriations in Act 164, Session Laws of Hawaii 2023, to satisfy section 127A‑16(a)(3), Hawaii Revised Statutes;

(2) $30,000,000 of the $200,000,000 appropriated to the department of budget and finance (BUF101) by section 5 of Act 164, Session Laws of Hawaii 2023; and

(3) $65,000,000 from the 2023 wildfires general fund sub-account no. G-24-383-O.

These funds were placed in major disaster fund account no. G-24‑324-G.

The legislature further finds that the remaining balance in the 2023 wildfires general fund sub-account no. G-24-383-O is $99,097,551. This balance has been set aside to cover the State's portion of wildfire response costs for debris removal and non-congregate housing, which is being paid for directly from Federal Emergency Management Agency funding and which the State will be billed for its cost-sharing requirements (ten per cent).

The purpose of this Act is to facilitate the continued uninterrupted provision of assistance to wildfire victims and ongoing wildfire recovery efforts by temporarily lifting various restrictions on the use of funds for these purposes and extending the lapse date of certain funds set aside for wildfire response.

SECTION 2. Section 127A-16, Hawaii Revised Statutes, is amended to read as follows:

"§127A-16 Major disaster fund. (a) The administrator shall submit requests to the legislature to appropriate from the general revenues of the State sufficient moneys as may be necessary for expenditure by or under the direction of the governor for immediate relief in response to an emergency or disaster in any part of the State; provided that:

(1) The governor has issued a proclamation of a state of emergency;

(2) The governor shall not expend in excess of $10,000,000 for immediate relief as a result of any single emergency or disaster; and

(3) In addition to the funds in paragraph (2), an additional $5,000,000 may be made available solely for the purpose of matching federal disaster relief funds when these funds become available to the State following a presidential disaster declaration.

In expending the moneys, the governor may allot any portion thereof to any agency, office, or employee of the State or a county for the most efficient relief for the population. Notwithstanding this subsection, the only exception to paragraphs (1), (2), and (3) is that the administrator may use up to $250,000 per year to support the emergency management reserve corps.

(b) No later than sixty days after any allotment by the governor or the expenditure of any fund moneys, the administrator shall report to the legislature on the purpose of the allotment or expenditure.

(c) Except as provided in [~~subsection (d),~~] subsections (d) and (e), federal reimbursement moneys for disaster relief shall be deemed to be trust moneys and shall be deposited into a trust account with and under the control of the Hawaii emergency management agency. Upon receipt by the Hawaii emergency management agency, these moneys shall be reimbursed to the originating fund of the expending agency; provided that if the original appropriation has lapsed, the funds shall be returned to the general fund.

(d) Federal reimbursement moneys for disaster relief for the Hawaii wildfires disaster that began on August 8, 2023, shall be deemed to be trust moneys and shall be deposited into a trust account with and under the control of the Hawaii emergency management agency. These moneys and any interest earned thereon shall be used for the recovery efforts from the Hawaii wildfires disaster that began on August 8, 2023, and shall not lapse to the general fund.

[~~(d)~~] (e) In cases in which the department of education expends the funds appropriated to the department for purposes deemed to be reimbursable by federal reimbursement moneys for disaster relief, the federal reimbursement moneys shall not lapse to the general fund and shall be credited directly to the department of education without regard to whether the original appropriation has lapsed. [~~Such~~] The funds shall carry over in accordance with section 37-41.5(c).

[~~(e)~~] (f) Any unspent funding under $2,500,000 shall be rolled over to the next fiscal year to support current and future emergencies and disasters.

[~~(f)~~] (g) Each state department and agency shall submit to the administrator no later than August 1 of each year a report of all funds expended, if any, for the prior fiscal year by the state department and agency for disaster response. The report shall include:

(1) The source of funds, including the name and account number of the funding source;

(2) The amount and purpose of each expenditure; and

(3) Whether any programs, activities, or contracts were reduced as a result of disaster response spending by the state department and agency.

[~~(g)~~] (h) The administrator shall submit an annual report to the legislature no later than September 1 of each year on:

(1) The amount of federal reimbursement moneys for disaster response that the State could have applied for during the prior fiscal year. The report shall indicate the amount of federal reimbursement moneys for disaster response broken down by department and agency;

(2) The amount of federal reimbursement moneys for disaster response that the State applied for and the amount received during the prior fiscal year. The report shall indicate the amount of federal reimbursement moneys for disaster response broken down by department and agency;

(3) The justification for any difference in the amount of federal reimbursement moneys for disaster response that the State was eligible for and the amount the State applied for;

(4) The average amount of time between the submittal of an application for a Federal Emergency Management Agency reimbursement and receipt of the funds;

(5) The number of disaster accounts opened for the prior fiscal year; and

(6) The information relating to the expenditure of funds that is reported by each state department and agency pursuant to subsection [~~(f).~~] (g)."

SECTION 3. Section 37-41.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) In addition to the five per cent retainage under subsection (a), the department of education may retain any appropriation received pursuant to section 127A-16(a) or as reimbursement for disaster relief pursuant to section [~~127A‑16(d)~~] 127A-16(e) at the close of the fiscal year in which the appropriation or reimbursement was received and the funds retained shall not lapse until June 30 of the first fiscal year of the next fiscal biennium. Such funds shall be considered as separate and distinct from the funds the department of education is authorized to retain pursuant to subsection (a)."

SECTION 4. Notwithstanding any other provision of law, any general fund appropriation amounts from Act 164, Session Laws of Hawaii 2023, transferred by the governor to the department of budget and finance's 2023 wildfires general fund sub-account no. G-24-383-O for the State's response to the 2023 wildfires pursuant to the governor's seventh emergency proclamation relating to wildfires dated September 8, 2023, and executive memorandum no. 23-08 dated October 10, 2023, and as amended by departmental allocations, shall not lapse at the end of the fiscal year for which the appropriations were made; provided that any such transferred funds that are unencumbered as of June 30, 2026, shall lapse as of that date.

SECTION 5. Notwithstanding any other provision of law, any unexpended funds for fiscal year 2023-2024 in major disaster fund account no. G-24-324-G, transferred into the account pursuant to section 127A-16(a), Hawaii Revised Statutes, by the department of budget and finance pursuant to section 5 of Act 164, Session Laws of Hawaii 2023, and from the department of budget and finance's 2023 wildfires general fund sub-account no. G-24-383-O for the State's response to the 2023 wildfires pursuant to the governor's seventh emergency proclamation relating to wildfires dated September 8, 2023, and executive memorandum no. 23-08 dated October 10, 2023, and as amended by departmental allocations shall not lapse at the end of the fiscal year for which the appropriations were made; provided that any funds from account no. G-24-324-G that are unencumbered as of June 30, 2026, shall lapse as of that date; provided further that the funds from account no. G-24-324-G shall be used for the recovery efforts for the Hawaii wildfires that began on August 8, 2023; and provided further that the requirements of section 127A-16(a) shall not apply to the funds in account no. G-24-324-G.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act, upon its approval, shall take effect on June 29, 2024; provided that on July 1, 2029, sections 2 and 4 of this Act shall be repealed and section 127A-16, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective day of this Act; and provided further that on July 1, 2029, any unencumbered trust account moneys retained in the account to be used for the recovery efforts from the Hawaii wildfires disaster that began on August 8, 2023, pursuant to this Act, shall lapse to the general fund.

THE SENATE	S.B. NO.	3072
THIRTY-SECOND LEGISLATURE, 2024		S.D. 1
STATE OF HAWAII