A BILL FOR AN ACT

relating to administrative fees.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that a sound policy of cost recovery and user fees for public services for records management and conveyance in the State is crucial to ensure efficient and reliable services to the public.  With the unique and specialized work performed by the bureau of conveyances, and given its continuing workforce shortages, increasing automation and operational advancements are needed to support the staff and continue delivering quality service to the State.

     The legislature further finds that the establishment of user fees for document recordation services of the bureau of conveyances ensures the integrity of records of the regular system and land court system and sustains services provided by the bureau of conveyances and office of the assistant registrar of the land court for records management and delivery, while avoiding the need to establish additional revenue sources to fund these vital services.

     The legislature also finds that there is a fee discrepancy between the regular system and land court system, even though the work required to handle recordation services is identical.

     The purpose of this Act is to support efficient, equitable, and reliable services for conveyance transactions and records in the State by, beginning on January 1, 2027:

     (1)  Making permanent, rather than repealing upon the adoption of relevant administrative rules, the department of land and natural resources' authority to establish a transaction fee for certain services rendered by the bureau of conveyances for each recording in the bureau of conveyances and land court;

     (2)  Amending the authorized uses of moneys in the bureau of conveyances special fund; and

     (3)  Repealing language that required fees for the use of microfilms of documents recorded in the bureau of conveyances to be established by the department of land and natural resources by rules.

     SECTION 2.  Chapter 501, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§501-     Transaction fee; recordings in the office of the assistant registrar of the land court; services rendered by the bureau of conveyances.  (a)  The department of land and natural resources shall assess a transaction fee of $5 for each recording in the office of the assistant registrar of the land court for services rendered by the bureau of conveyances under this chapter.

     (b)  The transaction fees collected pursuant to this section shall be deposited to the credit of the bureau of conveyances special fund established under section 502-8 and shall be used to support purchases of hardware, software, design and implementation services, staff training, and other related support services for the improvement of daily operations and automation and the increased efficiency and productivity of the bureau of conveyances."

     SECTION 3.  Chapter 502, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§502-     Transaction fee; recordings in the bureau of conveyances.  (a)  The department of land and natural resources shall assess a transaction fee of $5 for each recording in the bureau of conveyances for services rendered under this chapter.

     (b)  The transaction fees collected pursuant to this section shall be deposited to the credit of the bureau of conveyances special fund established under section 502-8 and shall be used to support purchases of hardware, software, design and implementation services, staff training, and other related support services for the improvement of daily operations and automation and the increased efficiency and productivity of the bureau of conveyances."

     SECTION 4.  Section 502-8, Hawaii Revised Statutes, is amended to read as follows:

     "§502-8  Bureau of conveyances special fund.  (a)  There is established in the state treasury the bureau of conveyances special fund, into which shall be deposited the revenues remitted pursuant to sections 501-23.5 and 502-25[,]; transaction fees established pursuant to sections 501-    and 502-   ; interest earnings[,]; grants[,]; donations[,]; and appropriations from the legislature that shall be held separate and apart from all other moneys, funds, and accounts in the state treasury.

     (b)  Moneys in the bureau of conveyances special fund shall be used by the bureau of conveyances for the following purposes:

     (1)  Planning, design, construction, and acquisition of equipment, furnishings, and software necessary for the [development] enhancement and periodic replacement of the recording system described in this chapter and chapter 501;

     (2)  Operating, maintaining, and improving the recording system described in this chapter and chapter 501 or any other purpose deemed necessary by the bureau of conveyances for the purpose of planning, improving, developing, operating, maintaining the continuity of business operations, and maintaining of the recording [system] office operations described in this chapter and chapter 501;

     (3)  The secure and accessible digital preservation of all recorded documents and maps as well as the professional restoration of a select series of bound book records of historic and cultural value;

    [(3)] (4)  Permanent and temporary staff positions as well as the limited use of qualified contractors for the purposes of this chapter and chapter 501; and

    [(4)] (5)  Administrative costs for the purposes of this chapter and chapter 501[.];

provided that moneys collected from transaction fees pursuant to sections 501-    and 502-    for deposit into the special fund shall be used to support purchases of hardware, software, design and implementation services, staff training, and other related support services for the improvement of daily operations and automation of the bureau of conveyances.

     (c)  All moneys in excess of $500,000 remaining on balance in the bureau of conveyances special fund on June 30 of each year shall lapse to the credit of the state general fund; provided that any balance of funds collected pursuant to section 16 of Act 120, Session Laws of Hawaii 2009, as amended, until that section is repealed on December 31, 2026, and pursuant to sections 501-    and 502-    shall not lapse to the credit of the state general fund.  On July 1 of each year, the director of finance is authorized to transfer any excess funds in the bureau of conveyances special fund to the state general fund."

     SECTION 5.  Section 502-27, Hawaii Revised Statutes, is amended to read as follows:

     "§502-27  Charges.  [(a)  Except when otherwise provided, fees for the use of microfilms of documents recorded in the bureau of conveyances for the purpose of making duplicates shall be established by rules adopted by the department of land and natural resources pursuant to chapter 91.

     (b)]  Frame charges for duplicating microfilm shall not be assessed against any agency of the State or counties thereof."

     SECTION 6.  Act 120, Session Laws of Hawaii 2009, as amended by section 11 of Act 119, Session Laws of Hawaii 2013, is amended as follows:

     1.   By amending section 16 to read:

     "SECTION 16.  [As of July 1, 2009, the department of land and natural resources shall assess a transaction fee of $5 to be charged for each recording in the bureau of conveyances and in the office of the assistant registrar of the land court for services rendered by the bureau of conveyances pursuant to part II of chapter 501 and chapter 502, Hawaii Revised Statutes.  The transaction fees collected shall be deposited to the credit of the bureau of conveyances special fund established under section 502-8, Hawaii Revised Statutes, and shall be used to support purchases of hardware, system design, and staff training related to automation of the bureau of conveyances.] Repealed."

     2.  By amending section 21 to read:

     "SECTION 21.  This Act shall take effect on July 1, 2009; provided that section 2 of this Act shall take effect on July 1, 2011; provided further that section 16 of this Act shall take effect on July 1, 2009, and shall be repealed on [the effective date of administrative rules adopted by the department of land and natural resources that address the establishment of transaction fees for each recording in the bureau of conveyances and in the office of the assistant registrar of the land court;] December 31, 2026; provided further that section 17 of this Act shall take effect on January 1, 2012; and provided further that section 18 of this Act shall take effect upon its approval and shall be repealed on January 31, 2010."

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect on January 1, 2027, except that section 6 shall take effect on December 31, 2026.

Report Title:

DLNR; Bureau of Conveyances; Land Court; Transaction Fees

Description:

Makes permanent, rather than repealing upon the adoption of relevant administrative rules, the Department of Land and Natural Resources' authority to establish a transaction fee for certain services rendered by the Bureau of Conveyances for each recording in the Bureau of Conveyances and Land Court.  Amends the authorized uses of moneys in the Bureau of Conveyances Special Fund.  Repeals language that required the Bureau of Conveyances' microfilm fees to be established by rules.  Effective 1/1/2027.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 2511

Honolulu, Hawaii

RE:     S.B. No. 2306

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Water, Land, Culture and the Arts, to which was referred S.B. No. 2306 entitled:

"A BILL FOR AN ACT RELATING TO ADMINISTRATIVE FEES,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Make permanent the authority of the Department of Land and Natural Resources to establish a transaction fee for certain services rendered by the Bureau of Conveyances for each recording in the Bureau of Conveyances and the Land Court;

     (2)  Amend the authorized uses of moneys in the Bureau of Conveyances Special Fund; and

     (3)  Repeal language that required the Bureau of Conveyances' microfilm fees to be established by rules.

     Your Committee received testimony in opposition to this measure from the Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO.

     Your Committee finds that Act 120, Session Laws of Hawaii 2009, created a $5 transaction fee that was applied to all regular system recordings, allowing the Bureau of Conveyances to improve the automation and integrity of its recording process.  Your Committee further finds that there is a fee discrepancy between the regular system and Land Court system, although the Office of the Assistant Registrar of the Land Court provides similar recordation services to the Bureau of Conveyances.  This measure statutorily establishes equitable fee assessments in both recording systems to fund further improvements to the efficiency, reliability, and automation of these systems, and modernizes policy to remove regulation involving outdated technology.

     Your Committee notes the concern raised in testimony by the Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO, that allowing the Bureau of Conveyances to use funds to contract with qualified contractors does not support or improve the State's civil service system.  Therefore, your Committee believes this measure should ensure any contracted services pursuant to this measure shall not be entered into after two years from the effective date, thereby helping to close the temporary backlog within the Bureau in the short-term and supporting the competitiveness of the civil service in the long-term.

     Accordingly, your Committee has amended this measure by:

     (1)  Inserting language that limits the use of moneys in the Bureau of Conveyances Special Fund for qualified contractors to services provided under a contract entered into no later than December 31, 2028;

     (2)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Water, Land, Culture and the Arts that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2306, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2306, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Water, Land, Culture and the Arts,