Kovacs: Bill could do more harm than hurricane
Texas coastal officials on Tuesday, April 7, virtually stormed a committee hearing on bills that would impact windstorm insurance rates on the coast.
At the end of the day, all bills were left pending, and that will require vigilance, according to Port Aransas City Manager Michael Kovacs.
Bills introduced by State Rep. John Smithee, R-Amarillo would have made it next to impossible for coastal residents and businesses to buy windstorm insurance, a move opponents say would be the ruin of tourism and port industries along the Texas coast. That would negatively impact the economy throughout the state, opponents say.
The City of Port Aransas has retained former State Rep. Hugo Berlanga to lobby on the city's behalf, specifically with regard to windstorm insurance.
House Bill 4733, a milder version of the original bill, HB 911, was on the table at Tuesday's House Committee on Insurance hearing. Also discussed were two bills by Dist. 32 State Rep. Todd Hunter, R-Corpus Christi, HB 3640 and HB 3648, and another by State Rep. Craig Eiland, R-Galveston.
Hurricanes Ike, Katrina and Rita depleted funds in the Texas Catastrophic Windstorm Insurance pool, the insuror of last resort for coastal properties. Finding a means of restoring those funds is the challenge faced by the Legislature.
Smithee's proposals involve coastal residents bearing the full financial burden of restoring those funds and any future losses.
HB 911 is all but dead, according to Kovacs, but HB 4733 could "do more damage than a hurricane in the long term," he said.
The committee held a hearing on the initial bill, HB 911, on Tuesday morning, April 7.
"The coast packed the room," Kovacs said. Attendees sign cards indicating that they are for or against the bill being deliberated.
Kovacs said he looked around the room and didn't see many marked "for."
Tuesday afternoon, HB 4733 and the bills put on the table by Hunter and Eiland were considered - for about seven-anda half hours.
Port Aransas Mayor Pro-tem Keith McMullin, Charlie Zahn and Kovacs each spoke, as did Nueces County Judge Loyd Neal.
Kovacs addressed tourism and the global impact HB 4733 would have on tourism and second home ownership, as well as the public use of the coast.
Kovacs said he reminded the committee that coastal residents stand to lose their homes if they are unable to insure them.
"Loans are based on (the ability to get) insurance," he said.
By the end of the hearing, the focus turned from measures that are considered by opponents as punitive to coastal residents and businesses, to ideas for funding mechanisms, Kovacs said.
However, with all bills pending, keeping a close eye on them is critical, he added.
"It would be very easy to substitute provisions of HB 911 into 4733," Kovacs said.
The insurance committee meets weekly, but can convene at anytime, including while on the House floor. No hearings or notices are required, Kovacs said.
"They could move quickly," he said.
However, Kovacs left with the sense that there is an interest in working on a long-term solution.
"It was very encouraging. There was talk about (selling) bonds, combinations of different ideas," Kovacs said.
The mood changed, he said, from punitive to problem-solving.
"There was humor, there were arguments," Kovacs said.
"Todd Hunter was amazing, and Craig Eiland did a good job," he added.
"Smithee is still adamant, but the committee is not going along with him. They're being reasonable," Kovacs said.
A final solution is not expected until May, closer to the end of the session, so Berlanga will be the watchdog for Port Aransas in the interim.
Among provisions of HB 911 that could be added to HB 4733 (if the bill is approved) are:
• Residential property would be insurable through the Texas Windstorm Insurance Association only if the property is a residential homestead property or is the primary home of a tenant of the policyholder. That means vacation homes could not be insured by the association.
• Condominiums, apartments, duplexes and other multi-family homes would not be insurable, and neither would hotels or resort facilities.
• Homes with building permits or plats filed on or after June 11, 2003, would not get insurance through the association.
• Homes not covered by flood insurance would not get new or renewal policies from the windstorm association.
• Homes and their furnishings could not be insured for more than $250,000.
• Government buildings could not be insured for more than $2.192 million.
• Windstorm policies would not become effective until after a 60-day waiting period.