Bill Text: HI SB2863 | 2010 | Regular Session | Amended
Bill Title: Tax Lien and Encumbrance Record
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2010-04-23 - (S) The conference committee deferred the measure. [SB2863 Detail]
Download: Hawaii-2010-SB2863-Amended.html
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THE SENATE |
S.B. NO. |
2863 |
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TWENTY-FIFTH LEGISLATURE, 2010 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 2 |
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A BILL FOR AN ACT
RELATING TO THE TAX LIEN AND ENCUMBRANCE RECORD.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that there is a need to expand the ability of state and county agencies to pursue reimbursement of outstanding debts since many debtors ignore payment obligations and recovery efforts by state and county agencies. The legislature finds that encumbrances on real property and motor vehicles are an effective mechanism to significantly increase the likelihood of recovering outstanding debts. This Act clarifies that judgments payable to the State or a county are also valid claims for purposes of encumbrances recorded in the county motor vehicle tax lien and encumbrance record.
Currently, agencies may record liens or claims with the director of finance of each county, but are required to pay a statutory fee that is deposited into the general fund. The legislature finds that the fee is hindering some agencies from using the tax lien and encumbrance record to assist in the recovery of outstanding debts owed by the agency. This Act also clarifies that state and county agencies are not required to pay a fee for the recording of an entry in the tax lien and encumbrance record for which a county would only be required to search their vehicle registration computer files.
Further, the legislature also finds that there may have been extenuating circumstances or reasons as to why debtors failed to pay the initial amount of such claims or failed to make timely payment or take timely action. Such debtors, in spite of such reasons or circumstances, are now faced with having to pay higher amounts, penalties, and other fees or charges over and above the initial amount owed by the debtor. Mindful of such circumstances and the additional problems and new burdens this Act will place on such debtors whose amounts owed on a particular claim do not exceed $500, this Act as a measure of fairness, to expedite matters and to avoid time-consuming and costly procedures further provides that for a period of eighteen months from the effective date of this Act, the State or county holding such claims and to whom moneys may be owed shall have the sole and absolute discretion to collect in full satisfaction a lesser amount; provided that such amount is at least what the debtor would have owed if timely payment had been made or action taken by the debtor, and provided the present amount owed as to any individual judgment, claim, lien, or encumbrance is not more than $500.
SECTION 2. Section 286-46, Hawaii Revised Statutes, is amended to read as follows:
"§286-46 Tax lien and encumbrance record. (a) The director of finance shall keep a book or record to be known as the "tax lien and encumbrance record" in which the following information shall be entered:
(1) Notices of liens for internal revenue taxes payable to the United States and certificates of release thereof;
(2) Notices of liens [or], taxes, or
judgments payable to the State or county and certificates of release
thereof;
(3) Notices of seizure in accordance with law of any registered motor vehicle upon any writ of attachment, execution, or other process issued under authority of law;
(4) Notices of restraining order or other order affecting the registration of any registered motor vehicle;
(5) Notice of any proceeding or action affecting the title of a registered motor vehicle or the interest of the owner or legal owner thereof; and
(6) Notice of release of any of the foregoing.
(b) With the exception of delinquent taxes and penalties imposed by section 249-10, the record shall show the year, month, day, hour, and minute at which the notice has been filed with the director of finance, shall show the nature and kind of lien or encumbrance claimed, the amount of tax or other claim, with interest, penalties, and costs, and shall identify the registered motor vehicles affected by the lien or encumbrance, and shall contain such further information as the director of finance may require. The record shall be a public record and may be arranged in such manner as the director of finance determines.
The interest of the owner or the legal owner in
the motor vehicle shall not be deemed to be affected until the notice referred
to in subsection (a)(1) to (5) has been filed with the director of finance in
such form as the director of finance shall prescribe for entry in the tax lien
and encumbrance record; provided the director of finance [may] shall
require the payment of delinquent taxes and penalties or judgments payable
to the State or county as a condition precedent to the vehicle's renewal,
registration, or transfer of ownership[.]; and provided further that
the director of finance shall waive such required payment and shall record the
transfer of ownership if the existing owner or prospective new owner for such
vehicle provides evidence, satisfactory to the director of finance, that at the
time the existing owner or prospective new owner took ownership of the vehicle
there were no notices of liens or judgments as to the vehicle on the motor
vehicle registration computer file. The director of finance shall charge a
fee of $5 for each entry made in the tax lien and encumbrance record, [which]
that shall be deposited in the general fund. Neither the State,
county, nor any political subdivision shall be charged a fee for any entry made
in the tax lien and encumbrance record if the search for the vehicle is limited
to and found on the motor vehicle registration computer file.
Nothing in this section shall be deemed to alter or amend any statute relating to tax liens or the enforcement thereof."
SECTION 3. Notwithstanding the provisions contained in Section 2 of this Act or any law to the contrary, for a period of eighteen months from the effective date of this Act and as to the State or any county to whom a debtor may be responsible for any judgment, claim, lien or encumbrance under section 286-46, Hawaii Revised Statutes, as amended in section 2 of this Act, the State and county shall have the absolute right, power, and authority to settle, discharge, release, and resolve in its sole and absolute discretion any and all such judgments, claims, liens and encumbrances for an amount not less than what the debtor would have paid the State or county had the debtor made timely payment or taken appropriate action prior to such judgment, claim, lien, or encumbrance; provided that the outstanding amount as to any single violation, judgment, claim, lien, or encumbrance settled in accordance with this Act shall not exceed $500 as of the effective date of this Act.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on December 21, 2058.
Report Title:
Tax Lien and Encumbrance Record
Description:
Enables encumbrance of motor vehicle titles for outstanding judgments payable to the State or a county by allowing recordation in a county director of finance's "tax lien and encumbrance record" with an exemption for state or county agencies from paying the statutory fee. Provides certain exceptions. (SB2863 HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
