Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Consumer Protection & Commerce and Judiciary, to which was referred H.B. No. 393 entitled:

beg leave to report as follows:

The purpose of this bill is to provide that unpaid civil fines and unpaid administratively imposed civil fines shall not constitute a lien in favor of the counties on the debtor's real or personal property.

Testimony in support of this bill was received from the Hawaii Financial Services Association, the Mortgage Bankers Association of Hawaii, and the Hawaii Bankers Association. The City and County of Honolulu Department of Planning and Permitting testified in opposition to this bill.

Your Committees recognize that the present law has a negative impact on mortgage lenders. The law allows the counties to add unpaid civil fines plus interest to real property taxes owed the county, superseding other liens that may have been recorded prior to the assessment of the civil fines. Your Committees find that depending on the amount of the fine and the daily accrual, the mortgage lender may potentially be undersecured or unsecured.

As affirmed by the records of votes of the members of your Committees on Consumer Protection & Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 393 and recommend that it pass Second Reading and be referred to the Committee on Finance.