CONFERENCE COMMITTEE REP

CONFERENCE COMMITTEE REP. NO.17-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2443

H.D. 2

S.D. 1

C.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 2443, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE PREVENTION OF THE FILING OF FRIVOLOUS FINANCING STATEMENTS,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose of this bill is to remedy the filing of frivolous financing statements with the Bureau of Conveyances (Bureau) by assuring that the filing of the financing statements are authorized by the debtors.

Your Committee on Conference was concerned that under this bill, the government would also be subject to the provisions that allow a debtor to request the registrar of the Bureau to demand from a secured party a copy of the security agreement that purportedly authorized the filing of the financing statement. If the secured party does not answer the demand within thirty days, the financing statement is deemed unauthorized. Under these provisions, a debtor could conceivably have a legitimate financing statement that was filed by the government deemed unauthorized if the government fails to produce a copy of the security agreement within thirty days. It may be difficult for a government to respond within such a time period.

Accordingly, your Committee on Conference has amended this bill by:

(1) Exempting any instrument that is recorded by the United States, the State, or any county from the provisions preventing the filing of frivolous financing statements; and

(2) Making technical, nonsubstantive amendments to conform to standard drafting conventions.

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 2443, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 2443, H.D. 2, S.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE SENATE

ON THE PART OF THE HOUSE

____________________________ RON MENOR, Chair		____________________________ EZRA KANOHO, Co-Chair
____________________________ BRIAN KANNO, Co-Chair		____________________________ BLAKE K. OSHIRO, Co-Chair