Whew!

 

SOUTH JETTY FILE PHOTO BY DAN PARKER Clearing the way City workers make sure the storm sewer system is not clogged as winds whip their slickers as Hurricane Dolly approaches in July 2008. Port Aransas officials and residents are breathing a big sigh of relief now that the windstorm insurance bill awaiting Gov. Rick Perry’s signature has been stripped of punitive measures that once threatened coastal residents.

The Legislature was challenged with creating legislation that would provide a mechanism for replenishing the Texas Windstorm Insurance pool that was depleted by Hurricane Ike last year.

A compromise on the bill was reached Sunday, May 31, one day before the state Legislature adjourned and the day before hurricane season started.

House Bill 4409 unanimously passed the Texas House by a vote of 147-0. Perry is expected to sign the final version that was hammered out by a conference committee over the weekend.

State Rep. Todd Hunter, R-Corpus Christi, who served on a 10-member conference committee that crafted the final version of the bill, said the legislation saves Coastal Bend residents from unfair and unaffordable windstorm insurance.

“This bill will provide stability and relief for homeowners and businesses, many of whom feared that rising windstorm rates would force them to abandon the coast,” Hunter said. “It is one of the most important bills we could pass this session to ensure the future of Texas.”

Hunter said the content of the final legislation was much different from the punitive measures proposed in earlier bills such as HB 911 and SB 14.

“Since the Legislative session began, coastal residents have rallied around the theme ‘Save the Coast’,” Hunter said upon House passage of the measure. “I can say with confidence that the final outcome does just that.”

Hunter is getting the lion’s share of the credit for carving out punitive measures and getting approval of a bill that is palatable for coastal residents.

Georgia Neblett, former mayor of Port Aransas and a member of the Texas Windstorm Insurance Association board of directors, said, “From my experience serving on this board and dealing with the complex issues that face us, I am infinitely grateful to the effort that Rep. Hunter put in to provide TWIA and coastal residents with a workable bill.”

Neblett was initially appointed to the TWIA board in September 2006, and reappointed in March 2008.

The new bill will change the operating plan for TWIA, so an emergency meeting has been called for Monday, June 8, in Austin.

Whether Neblett continues to serve under the new guidelines is not known, she said.

Port Aransas Mayor Claude Brown also gave Hunter credit.

“I can’t tell you how much we appreciate Todd Hunter being our state representative and working for us,” Brown said.

The mayor also tipped his hat to Sen. Juan “Chuy” Hinojosa, State Rep. Solomon Ortiz Jr. “and the Port Aransas people who went to Austin. They were brave enough to ride in the van with me,” he said.

Brown said he knew coastal residents “wouldn’t get off scot-free, but 2.8 percent is not too bad in today’s economy.”

The 2.8 percent Brown refers to is the amount of surcharge that property owners insured under TWIA will be charged in the event of a major storm.

City Manager Michael Kovacs joined in singing Hunter’s praises.

“Todd Hunter and staff really deserve a lot of credit . . . Todd’s office was the leadership at the state level,” Kovacs said.

The windstorm bill is one “we can live with, and we won’t see the killer 10 to 30 percent rate hikes that were predicted,” Kovacs added.

The fight against bills considered punitive for coastal residents was “a good group effort” that included Hinojosa as well, Kovacs said.

Ann Bracher Vaughan, executive director of the Port Aransas Chamber of Commerce-Tourist Bureau, played a role in the effort to derail the harmful aspects of the proposed legislation. She wrote letters to non-resident property owners asking them to contact their legislators about the damaging aspects of some of the earlier bills introduced.

“How lucky for us that we had Todd Hunter, as our state representative, who is not only knowledgeable on the issue, but has the seniority and respect in the legislature to take the lead in protecting our interests,” Vaughan said.

“Through the efforts of not only local citizens, but hundreds of non-residents across the state who contacted their legislators, this team effort resulted in a bill that will continue to provide coverage at affordable and effective rates, and protect the economy of the Texas coast. Our thanks to all who fought so diligently during the session for an equitable outcome,” Vaughan said.

One of the arguments against bills considered punitive for coastal residents was that the coast belongs to, and has impact on, all Texans.

Hunter noted that a study by economist Ray Perryman showed that 44 percent of the state’s total income is linked to key Gulf Coast sectors.

“In Texas, a strong coast makes for a strong state,” Hunter said.

Meanwhile, Kovacs is keeping an eye out for a possible special session of the Legislature in which “anything can be added” to the windstorm bill.

“We’ll still be vigilant,” he said.

In addition to keeping tabs on the windstorm bill, Kovacs said he will be watching a bill that could incorporate Port Aransas into the Del Mar College junior college district, and another that would create a county-wide drainage district in Nueces County.

David Weber, senior attorney with Gardere Wynne Sewell, LLP, and former chief aid to Hunter during his first term as a state representative, summarized the provisions of the windstorm bill that impact those insured through TWIA:

• Structures will need to be built to the windstorm building code to insure they will be eligible for coverage during and after construction. Note that TWIA is the only entity providing a builder’s policy during construction, but this predates this legislation. All construction, alteration, remodeling, enlargement and repair of, or addition to, any structure located in the catastrophe area that is begun on or after the effective date of the bill must be performed in compliance with the applicable building code standards to ensure TWIA coverage. Even though purchasers may be able to obtain insurance coverage in the private market on their property, if that person ever losses that private coverage, TWIA cannot provide future coverage to that property unless it was built to code;

• If a structure is built on or after Sept. 1, 2009, and the structure is located in Zone V or another similar zone with an additional hazard associated with storm waves, as defined by the National Flood Insurance Program, and if flood insurance under the federal program is available, TWIA may not issue an insurance policy unless there is evidence the property is covered by a flood insurance policy;

• There are no coverage limitations or policy caps on TWIA policies;

• There is no waiting period to obtain TWIA coverage (except for rules that prevent issuance of a policy if a hurricane has passed 20N and 80W);

• Rate increases above 5 percent must be approved by the insurance commissioner;

• Rates may only increase more than 10 percent per year if approved by the insurance commissioner and catastrophic losses have occurred to TWIA from a tropical system(s) to justify the higher rates;

• The funding mechanism layer of $2.5 billion is sufficient to cover losses from a 100-year storm making landfall in the Coastal Bend; and

• If a hurricane’s landfall results in TWIA losses up to $2 billion, then coastal property and casualty policyholders will see up to a 2.8 percent increase in premiums. That is equivalent to $28 for every $1,000 in premiums, which is under $2.50 a month.