STAND. COM. REP. NO.  1307-16

Honolulu, Hawaii

                , 2016

RE:   S.B. No. 2660

      H.D. 2

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 2660, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO BUREAU OF CONVEYANCES,"

begs leave to report as follows:

The purpose of this measure is to make permanent section 501‑261.5, Hawaii Revised Statutes, which authorizes owners of registered non-time share interests to deregister those interests from the Land Court system.

     Specifically, this measure removes the sunset date of December 31, 2016, set forth in section 13 of Act 119, Session Laws of Hawaii 2013, as amended by Act 47, Session Laws of Hawaii 2014.

The Department of Land and Natural Resources and the American Resort Development Association Hawaii submitted testimony in support of this measure.

     Your Committee finds that, during the Regular Session of 2013, the Legislature required that all time share interests be deregistered from recordation in the Land Court system and, instead, be recorded in the Bureau of Conveyances' system.  The Legislature also authorized the voluntary deregistration of non-time share interests from recordation in the Land Court system, which is codified as section 501-261.5, Hawaii Revised Statutes.  However, the Legislature established a sunset date for section 501-261.5, Hawaii Revised Statutes, which is currently set as December 31, 2016.

     Your Committee believes that allowing section 501-261.5, Hawaii Revised Statutes, to sunset will cause the recordation of fee interests to become unnecessarily complex.  For example, a single development project that contains both time share and non-time share units would be required to record some parts of the project in the Land Court system and other parts of the project in the Bureau of Conveyances' system.  Repealing the sunset date of section 501-261.5, Hawaii Revised Statutes, will permanently allow developers to withdraw entire projects from the Land Court system and record the ownership of each unit in the Bureau of Conveyances' system, which will help to avoid needless complexity in legal documentation.

     Your Committee has amended this measure by changing the effective date from July 1, 2051, to upon approval.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2660, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as S.B. No. 2660, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ANGUS L.K. McKELVEY, Chair