HCR182

WHEREAS, vehicle owners who sell or otherwise transfer their vehicles to another person have reported erroneously receiving traffic citations even though they are no longer the legal owner of the vehicle; and

WHEREAS, when the transferor of a vehicle signs over the vehicle's Certificate of Ownership to the transferee of the vehicle, the transferor is required by law to give notice of the vehicle transfer to the Director of Finance; and

WHEREAS, the new owner (transferee) of the vehicle has the responsibility of forwarding the Certificate of Ownership to the appropriate county Director of Finance; and

WHEREAS, if the transferee fails to forward the Certificate of Ownership to the appropriate county Director of Finance, the transferor remains on record as the registered owner of the vehicle; and

WHEREAS, a situation may occur in which the transferee commits a traffic infraction, resulting in a parking ticket; a police officer issues a citation to the vehicle, and if the fine is not paid by the citation's deadline, a default judgment is entered against the registered owner –- in this case, the unwitting transferor; and

WHEREAS, although the transferor has filed a Notice of Transfer with the appropriate county Director of Finance and Department of Motor Vehicles (DMV), there are instances in which the district court is not informed of the Notice of Transfer and issues a Notice of Default to the transferor; and

WHEREAS, when the transferor receives an erroneous Notice of Default, the transferor must make multiple appearances in district court and post a bond to set aside the default judgment, costing the transferor time and money; and

WHEREAS, there are many steps in the process where human error could result in the transferor receiving a Notice of Default Judgment for traffic infractions committed with a vehicle that they no longer own, including:

(1) The transferor mails the Notice of Transfer, but it never reaches the DMV;

(2) The DMV receives the Notice of Transfer, but it is never processed and filed;

(3) The district court's automated default judgment process sends a Notice of Default Judgment despite the transferor filing a Notice of Transfer;

(4) A district court employee has not checked for, or checked but did not see, a Notice of Transfer prior to the Notice of Default Judgment being issued;

(5) The DMV did not provide a complete list of Notices of Transfer to the district court prior to the district court entering default judgment; and

(6) The DMV receives the transferee's signed Certificate of Ownership but fails to record them as the new owner; and

WHEREAS, because it is unclear exactly where procedural shortfalls occur, an audit is necessary to determine the primary reasons for a Notice of Default Judgment for a traffic infraction being issued to a person who no longer owns the cited vehicle at the time of the traffic infraction; now, therefore,

BE IT RESOLVED by the House of Representatives of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2023, the Senate concurring, that the Auditor is requested to conduct an audit of the process of Notice of Default Judgment for traffic, infractions including actions in the process taken by the Honolulu Police Department; City and County of Honolulu Department of Customer Services, Motor Vehicle, Licensing, and Permits Division; and District Court of the First Circuit; and

BE IT FURTHER RESOLVED that the Auditor is requested to include; in the audit:

(1) A list of Notice of Default Judgments that are issued to persons who no longer owned the vehicle that was the cause of the underlying traffic infraction that lead to the default judgment; provided that the person who was issued the Notice of Default Judgment filed a Notice of Transfer;

(2) For each default judgment, the amount of time between the Notice of Default Judgment was issued and the resolution of the default judgment; and

(3) For each default judgment, the reason each Notice of Default Judgment was issued to the person who no longer owned the vehicle and filed a Notice of Transfer; and

BE IT FURTHER RESOLVED that the Auditor is requested to submit any findings and recommendations, including any proposed legislation, to the Legislature not later than twenty days prior to the convening of the Regular Session of 2024; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor, Chief of Police of the Honolulu Police Department, Deputy Chief Judge of the District Court of the First Circuit, and Director of the Department of Customer Service of the City and County of Honolulu.

	OFFERED BY:	_____________________________

Report Title:

Audit; Notice of Default Judgment; Notice of Transfer; District Court; Department of Customer Services; Honolulu Police Department

HOUSE OF REPRESENTATIVES	H.C.R. NO.	182
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII