Hawaii legislative leaders have agreed to fully fund the state’s share of Maui wildfire damage claims slated to be paid out over four years.
A select group of lawmakers in the House and Senate agreed Tuesday to terms for a bill that would deposit about half of the state’s $807.5 million obligation into a trust fund next fiscal year followed by the balance a year later.
State attorneys in August agreed with five other defendants in mass litigation over the Aug. 8, 2023, wildfires to settle all loss claims for about $4 billion, with payments spread over four years.
The fire killed 102 people, destroyed around 3, 500 homes along with other property and resulted in more than 650 lawsuits seeking damages. The total number of loss claims subject to settlement payments is expected to be over 17, 000.
House Bill 1001 was sought by Gov. Josh Green to fund the state’s portion of the settlement, and essentially would prefund much of the payout intended to be made in four annual installments.
During one public hearing on the bill last month, Sen. Glenn Wakai, chair of the Senate Committee on Energy and Intergovernmental Affairs, expressed concern over other defendants possibly not being able to pay their share.
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Wakai singled out Hawaiian Electric, which agreed to pay about $2 billion, representing the single biggest share.
“So it looks like you are in good shape to cover your first two payments, so about half of the $2 billion, ” Wakai said to Scott Seu, president and CEO of the utility’s parent company, Hawaiian Electric Industries Inc., during a March 18 hearing. “How are you going to pay the last billion dollars ?”
Seu told Wakai that HEI anticipates raising the sum by issuing debt and by selling new shares of stock in the company.
The committee led by Wakai (D, Kalihi-Salt Lake-Pearl Harbor ) amended HB 1001 in part to require that other settlement payers have a plan for making their payments approved by the state Department of the Attorney General and to make their payments a little ahead of state contributions.
Subsequently, the Senate Ways and Means Committee eliminated those new proposed terms in its own draft of HB 1001 after the Department of the Attorney General raised concerns about the terms conflicting with the settlement agreement overseen by a state court judge.
On Tuesday, a joint House-Senate committee made agreed-upon tweaks to the bill before a Friday deadline to hash out differences.
“This is a very important measure, ” Rep. David Tarnas, chair of the House Judiciary and Hawaiian Affairs Committee, said during the committee meeting after an agreement with Senate negotiators was announced. “We have a bill, a very important bill.”
Final legislative approval still depends on votes by the 51-member House and 25-member Senate before the end of this year’s legislative session on May 2.
If the Legislature balks at funding the state’s share of the wildfire settlement, it could delay or derail the resolution of costly litigation and getting financial help to victims.
“By resolving these claims quickly, victims and their families can begin rebuilding their lives much sooner than if litigation were to drag on for years, ” the Department of the Attorney General said in written testimony on the bill.
Other contributors to the settlement are Kamehameha Schools, which is responsible for $872.5 million, and Spectrum Oceanic LLC, Hawaiian Telcom and affiliates of West Maui Land Co., collectively responsible for about $300 million.
Most or all of settlement payers previously contributed $175 million to a victim-compensation fund led by the state that recently began paying personal injury and death claims detached from the litigation, though this sum is being credited to the $4 billion settlement deal.
If the settlement receives final court approval, a settlement administrator will decide how much to distribute to each claim holder. Attorneys representing plaintiffs in the litigation are also expected to receive a significant share of settlement proceeds.
Seu said in February that the utility company anticipates making its first wildfire settlement payment toward the end of this year or in early 2026.
If HB 1001 becomes law, $400 million would be deposited into a trust account overseen by the Department of the Attorney General during the fiscal year starting July 1, and then the $407.5 million balance would follow in the following fiscal year. The department would be in charge of using the fund to make the planned four annual installment payments compensating fire victims.