SB2009 HD1

PART I

SECTION 1. The legislature finds that when used motor vehicles are transferred from one individual owner to another, the transferor often remains exposed to liability during the time period between the vehicle being physically transferred and the buyer officially updating the vehicle's registration. The legislature believes that transferors should not be held responsible if the new owner is involved in an accident, commits a traffic infraction, or otherwise uses the vehicle in an unlawful manner before completing the required registration.

The legislature further finds that transferors of titles of motor vehicles in the State continue to suffer from the civil and criminal penalties incurred by transferees who fail to officially complete the transfer in a timely manner or at all. Parking tickets, impound fees, and other legal or financial obligations resulting from the action or inaction of transferees unjustly remain the transferor's responsibility to resolve.

The legislature also finds that Act 109, Session Laws of Hawaii 2025 (Act 109), attempted to address this problem by amending the existing state law on vehicle title transfer to include a provision on complete defense on the part of a legally compliant transferor to any act or omission, civil or criminal, arising from violations perpetrated by the transferee after the transfer date, but Act 109 has been insufficient to effect its purpose. Multiple transferors in 2025 have been fined due to actions from transferees, and subsequent attempts to invoke the complete defense provision to resolve these penalties in the favor of the transferor have been frustrating and time‑intensive. One noted area of concern is that county agencies involved in vehicular administration and law enforcement are not updating applicable state agencies to the detriment of law-abiding transferors who must expend extra effort and resources in the resolution of their unjust cases.

Accordingly, the purpose of this part is to:

(1) Facilitate the transfer of ownership of used motor vehicles between individuals and reduce the risk of liability for transferors by requiring:

(A) A transferor to remove the numbered plates and registration tag or emblem from the motor vehicle;

(B) A transferee to register the motor vehicle within seven days; and

(2) Amend the law on vehicle title transfer to mandate a transfer notification by county directors of finance to all applicable state and local agencies; and

(3) Require each county to establish an automatic and instantaneous notification system by July 1, 2028.

SECTION 2. Chapter 249, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§249- Used motor vehicles; individuals; number plates; new plate numbers, tags, and emblems; transferred motor vehicles; registration. (a) This section shall only apply to used motor vehicles transferred between individuals and not to new motor vehicles or used vehicles sold by any dealer.

(b) Upon the completion of the bill of sale in a form approved by the director of finance and that shows the date of sale, and the transfer of title to or interest in a motor vehicle pursuant to section 286-52, an individual transferor shall remove the number plates and registration tag or emblem from the motor vehicle and submit the plates and the tag or emblem to the director of finance for disposal.

(c) Within seven days of the removal of the number plates, the individual transferee shall register the motor vehicle pursuant to 249-7 and obtain new number plates with new numbers and a registration tag or emblem for the motor vehicle by submitting proof of the transfer by showing the director of finance the certificate of title, the dated bill of sale, and any other documentation required by the director of finance.

(d) The director of finance may adopt rules pursuant to chapter 91 as necessary to implement this section.

(e) Any person who violates this section shall be fined no more than $100."

SECTION 3. Section 249-7, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) After the initial payment of the tax and the original registration of a vehicle as herein specified, a motor vehicle shall not be required to be reweighed in any succeeding year unless it has been so altered or changed as to increase or diminish its weight. No new number plates shall, however, be issued to a new owner except as provided in sections 249-7.5 [~~and~~], 249-8[.], and 249- ."

SECTION 4. Section 286-52, Hawaii Revised Statutes, is amended by amending subsections (i) and (j) to read as follows:

"(i) Every dealer, upon transferring a motor vehicle, whether by sale, lease, or otherwise, shall immediately give notice of the transfer to the director of finance upon the official form provided by the director of finance. Each notice shall contain the date of the transfer, the names and addresses of the transferor and transferee, and a description of the vehicle as may be called for in the official form. Upon receipt of the official form, the director of finance shall notify all applicable state and local agencies of the transfer through a centralized notification system.

(j) Every person, other than a dealer, upon transferring a motor vehicle, whether by sale, lease, or otherwise, shall within ten days give notice of the transfer to the director of finance upon the official form provided by the director of finance. Every notice shall contain the date of transfer, the names and addresses of the transferor and transferee, and a description of the vehicle as may be called for in the official form. Any person who violates this subsection shall be fined no more than $100. Upon receipt of the official form, the director of finance shall notify all applicable state and local agencies of the transfer through a centralized notification system."

SECTION 5. No later than July 1, 2028, each county director of finance shall establish a centralized notification system that automatically and instantaneously updates all applicable agencies, including but not limited to:

(1) State and county law enforcement agencies;

(2) The department of accounting and general services; and

(3) The judiciary,

upon notice of a transfer of a motor vehicle title.

PART II

SECTION 6. Chapter 291D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§291D- Restriction on driver's license and motor vehicle registration. (a) When the person issued a notice of traffic infraction not involving parking fails to pay the total amount of fines, fees, surcharges, costs, or monetary assessments that has been ordered, the court shall cause an entry to be made in the driver's license record so as to prevent the person from acquiring or renewing the person's driver's license until the outstanding amount is paid or the notice of traffic infraction is otherwise disposed of pursuant to this chapter.

(b) In all cases where the registered owner of a motor vehicle to which a notice of traffic infraction has been issued fails to pay the total amount of fines, fees, surcharges, costs, or monetary assessments that have been ordered, the court shall cause an entry to be made in the motor vehicle's record so as to prevent issuance or renewal of the motor vehicle's certificate of registration and transfer of title to the motor vehicle until the outstanding amount is paid or the notice of traffic infraction is otherwise disposed of pursuant to this chapter; provided that if the traffic infraction involves an unpaid parking violation, this subsection shall not prevent the issuance or renewal of the motor vehicle's certificate of registration and transfer of title to the motor vehicle to another person, in which case the clerk of the court shall issue a clearance to effectuate the registration and transfer of title; provided further that in no event shall a clearance:

(1) Absolve the registered owner of the motor vehicle at the time the parking violation was incurred from paying the fine;

(2) Prevent any subsequent issuance or renewal of the motor vehicle's certificate of registration and transfer of title to the motor vehicle; or

(3) Otherwise encumber the title of that motor vehicle."

SECTION 7. Section 286-109, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Statutes of limitations and other provisions of this chapter notwithstanding, no driver's license or instruction permit shall be issued or renewed under this section, where the examiner of drivers is notified by the district judge, traffic, emergency period, and fireworks violations bureaus of the district courts, or the judge of the circuit court that the applicant has failed to respond to a traffic citation or summons, or failed to appear in court after an arrest for the violation of any traffic laws of a county, this chapter or chapter 286G, 287, 290, 291, or 291C, or of any motor vehicle insurance laws under article 10C of chapter 431, or of any motorcycle or motor scooter insurance laws under article 10G of chapter 431, and the same remains delinquent and outstanding, or the applicant, has as of the time of the application, failed to comply in full with all orders of the court; [~~provided that this subsection shall not apply to outstanding and delinquent payments pursuant to chapter 291D;~~] provided [~~further~~] that the district court with whose order an applicant has failed to comply in full, may approve the issuance or renewal of a driver's license or instruction permit other than a commercial driver's license upon conditions imposed by the court for the satisfaction of the outstanding court order and any other conditions as may be imposed by the court, if one or more of the following conditions are met:

(1) The applicant is gainfully employed in a position that requires driving and will be discharged if the applicant is unable to drive; or

(2) The applicant has no access to alternative transportation and therefore must drive to work;

provided further that if the applicant has failed to comply in full with orders of the district court of more than one circuit, the applicant shall obtain the approval of the district court of each circuit in which the applicant has an outstanding court order before a driver's license or instruction permit may be issued or renewed under this subsection.

A driver's license or instruction permit issued or renewed under this subsection shall be subject to immediate suspension by the court upon the applicant's failure to remain in full compliance with all conditions imposed by the court for the issuance or renewal of the driver's license or instruction permit. The examiner of drivers may place an indication of restriction upon a driver's license or instruction permit issued or renewed under this subsection. Proof of financial responsibility under section 287-20 shall not apply to the issuance or renewal of driver's licenses or instruction permits under this subsection."

SECTION 8. Section 291D-5, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction shall include the following:

(1) A statement of the specific infraction for which the notice was issued;

(2) Except in the case of parking-related traffic infractions, a brief statement of the facts;

(3) A statement of the total amount to be paid for each infraction, which amount shall include any fee, surcharge, or cost required by statute, ordinance, or rule, and any monetary assessment, established for the particular infraction pursuant to section 291D-9, to be paid by the person to whom the notice was issued, which shall be uniform throughout the State;

(4) A statement of the options provided in section 291D-6(b) for answering the notice and the procedures necessary to exercise the options;

(5) A statement that the person to whom the notice is issued shall answer, choosing one of the options specified in section 291D-6(b), within twenty-one days of issuance of the notice;

(6) A statement that failure to answer the notice within twenty-one days of issuance shall result in the entry of judgment by default for the State and may result in the assessment of a late penalty[;], and, that if the person to whom the notice was issued fails to pay the total amount specified in the default judgment within an additional thirty days or to otherwise take action to set aside the default, notice shall be sent to the director of finance of the appropriate county:

(A) That the person to whom the notice of infraction not involving parking was issued shall not be permitted to renew or obtain a driver's license; or

(B) Where the notice was issued to a motor vehicle, that the registered owner shall not be permitted to register, renew the registration of, or transfer title to the motor vehicle until the traffic infraction is finally disposed of pursuant to this chapter, except as provided in section 291D- (b);

(7) A statement that, at a hearing requested to contest the notice, pursuant to section 291D-8, no officer shall be present unless the person to whom the notice was issued timely requests the court to have the officer present, and that the standard of proof to be applied by the court is whether a preponderance of the evidence proves that the specified infraction was committed;

(8) A statement that, at a hearing requested for the purpose of explaining mitigating circumstances surrounding the commission of the infraction or in consideration of a written request for mitigation, the person shall be considered to have committed the infraction;

(9) A space in which the signature of the person to whom the notice was issued may be affixed; and

(10) The date, time, and place at which the person to whom the notice was issued shall appear in court, if the person is required by the notice to appear in person at the hearing."

SECTION 9. Section 291D-7, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a), (b), and (c) to read:

"(a) When an admitting answer is received, the court shall enter judgment in favor of the State in the total amount specified in the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction[.]; provided that in the case of a traffic infraction, if the total amount is not submitted with the answer, the court may take action as provided in section 291D- .

(b) When a denying answer is received, the court shall proceed as follows:

(1) In the case of a traffic infraction, emergency period infraction, or fireworks infraction where the person requests a hearing at which the person will appear in person to contest the infraction, the court shall notify the person in writing of the date, time, and place of hearing to contest the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction. The notice of hearing shall be mailed to the address stated in the denying answer or, if none is given, to the address stated on the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction. An electronic copy of the notice of hearing may be sent to the electronic mail address stated on the notice of infraction. The notification also shall advise the person that, if the person fails to appear at the hearing, the court shall enter judgment by default in favor of the State, as of the date of the scheduled hearing, and that the total amount specified in the default judgment shall be paid within thirty days of entry of default judgment; [~~and~~] provided that in the case of a traffic infraction, if it is not paid, the court shall take action as provided in section 291D- ; and

(2) When a denying answer is accompanied by a written statement of the grounds on which the person contests the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction, the court shall proceed as provided in section 291D-8(a) and shall notify the person of its decision, including the total amount assessed, if any, by mailing the notice of entry of judgment within forty-five days of the postmarked date of the answer to the address provided by the person in the denying answer or, if none is given, to the address given when the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction was issued or, in the case of parking violations, to the address at which the vehicle is registered. An electronic copy of the notice of entry of judgment may be sent to the electronic mail address stated on the notice of infraction. The notice of entry of judgment also shall advise the person, if it is determined that the infraction was committed and judgment is entered in favor of the State, that the person has the right, within thirty days of entry of judgment, to request a trial and shall specify the procedures for doing so. The notice of entry of judgment shall also notify the person, if an amount is assessed by the court for monetary assessments, fees, surcharges, or costs, that if the person does not request a trial within the time specified in this paragraph, the total amount assessed shall be paid within thirty days of entry of judgment. In the case of a traffic infraction, the notice of entry of judgment shall also inform the person that if the total amount is not paid within thirty days, the court shall take action as provided in section 291D- .

(c) When an answer admitting commission of the infraction but seeking to explain mitigating circumstances is received, the court shall proceed as follows:

(1) In the case of a traffic infraction, emergency period infraction, or fireworks infraction where the person requests a hearing at which the person will appear in person to explain mitigating circumstances, the court shall notify the person in writing of the date, time, and place of hearing to explain mitigating circumstances. The notice of hearing shall be mailed to the address stated in the answer or, if none is given, to the address stated on the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction. An electronic copy of the notice of hearing may be sent to the electronic mail address stated on the notice of infraction. The notification also shall advise the person that, if the person fails to appear at the hearing, the court shall enter judgment by default in favor of the State, as of the date of the scheduled hearing, and that the total amount stated in the default judgment shall be paid within thirty days of entry of default judgment; [~~and~~] provided that in the case of a traffic infraction, if it is not paid, the court shall take action as provided in section 291D- ; and

(2) If a written explanation is included with an answer admitting commission of the infraction, the court shall enter judgment for the State and, after reviewing the explanation, determine the total amount of the monetary assessments, fees, surcharges, or costs to be assessed, if any. The court shall then notify the person of the total amount to be paid for the infraction, if any. There shall be no appeal from the judgment. If the court assesses an amount for monetary assessments, fees, surcharges, or costs, the court shall also notify the person that the total amount shall be paid within thirty days of entry of judgment. In the case of a traffic infraction, the notice of entry of judgment shall also inform the person that if the total amount is not paid within thirty days, the court shall take action as provided in section 291D- ."

2. By amending subsection (e) to read:

"(e) Whenever judgment by default is entered in favor of the State, the court shall mail a notice of entry of default judgment to the address provided by the person when the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction was issued or, in the case of parking infractions, to the address stated in the answer, if any, or the address at which the vehicle is registered. An electronic copy of the notice of entry of default judgment may be sent to the electronic mail address stated on the notice of infraction. The notice of entry of default judgment shall advise the person that the total amount specified in the default judgment shall be paid within thirty days of entry of default judgment and shall explain the procedure for setting aside a default judgment. In the case of a traffic infraction, the notice of entry of judgment shall also inform the person that if the total amount is not paid within thirty days, the court shall take action as provided in section 291D- . Judgment by default entered for the State pursuant to this chapter may be set aside pending final disposition of the traffic infraction, emergency period infraction, or fireworks infraction upon written application of the person and posting of an appearance bond equal to the amount of the total amount specified in the default judgment and any other assessment imposed pursuant to section 291D-9. The application shall show good cause or excusable neglect for the person's failure to take action necessary to prevent entry of judgment by default. In the case of a traffic infraction, upon receipt of the application and required appearance bond, the court shall take action to remove the restriction placed on the person's driver's license or the motor vehicle's registration and title imposed pursuant to section 291D- . Thereafter, the court shall determine whether good cause or excusable neglect exists for the person's failure to take action necessary to prevent entry of judgment by default. If so, the application to set aside default judgment shall be granted, the default judgment shall be set aside, and the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction shall be disposed of pursuant to this chapter. If not, the application to set aside default judgment shall be denied, the appearance bond shall be forfeited and applied to satisfy amounts due under the default judgment, and the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction shall be finally disposed. In either case, the court shall determine the existence of good cause or excusable neglect and notify the person of its decision on the application in writing."

SECTION 10. Section 291D-8, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) If a person for whom a hearing has been scheduled, to contest the notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction, or to explain mitigating circumstances, fails to appear at the hearing, the court shall enter judgment by default for the State and take action as provided in section 291D-7(e). In the case of a traffic infraction, if the total amount of the monetary assessment, fees, surcharges, or costs is not paid within thirty days of entry of default judgment, the court shall take action as provided in section 291D- ."

SECTION 11. Section 291D-9, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) Upon request of a person claiming inability to pay a monetary assessment, the court may grant an extension of the period in which the monetary assessment shall be paid or may impose community service in lieu thereof. In the case of a traffic infraction, if the assessment is not paid or the community service is not performed on or before the date established and the court has not extended the time, the court shall take action as provided in section 291D- ."

SECTION 12. Section 291D-12, Hawaii Revised Statutes, is amended to read as follows:

"§291D-12 Powers of the district court judge sitting in the traffic, emergency period, and fireworks division. (a) A district court judge sitting in the traffic, emergency period, and fireworks division and hearing cases pursuant to this chapter shall have all the powers of a district court judge under chapter 604, including the power to:

(1) Conduct traffic infraction, emergency period infraction, and fireworks infraction hearings and impose monetary assessments;

(2) Permit deferral of monetary assessment or impose community service in lieu thereof;

(3) Dismiss a notice of traffic infraction, notice of emergency period infraction, or notice of fireworks infraction, with or without prejudice, or set aside a judgment for the State;

(4) Order temporary driver's license suspension or driver's license reinstatement;

(5) In the case of a traffic infraction, order the director of finance not to issue or renew the driver's license, or to register, renew the registration of, or issue title to a motor vehicle, of any person who has not paid a monetary assessment, has not performed community service in lieu thereof, or has not otherwise satisfied a judgment for the State entered pursuant to this chapter;

[~~(5)~~] (6) Approve the issuance or renewal of a driver's license or instruction permit pursuant to section 286-109(c);

[~~(6)~~] (7) Issue penal summonses and bench warrants and initiate contempt of court proceedings in proceedings conducted pursuant to section 291D-13;

[~~(7)~~] (8) Issue penal summonses and bench warrants and initiate failure to appear proceedings in proceedings conducted pursuant to section 291D-5(d)(10); and

[~~(8)~~] (9) Exercise other powers the court finds necessary and appropriate to carry out the purposes of this chapter.

(b) A district court judge sitting in the traffic, emergency period, and fireworks division and hearing cases pursuant to this chapter shall not order the director of finance to withhold issuing or renewing the driver's license, or registering, renewing the registration of, or issuing the title to a motor vehicle, of any person who has not paid a monetary assessment, has not performed community service in lieu thereof, or has not otherwise satisfied a judgment for the State entered pursuant to this chapter[.]; provided that this subsection shall not apply in cases of a traffic infraction."

SECTION 13. Act 59, Session Laws of Hawaii 2020, is amended by amending section 9 to read as follows:

"SECTION 9. [Any person prevented from obtaining or renewing a driver's license or motor vehicle registration solely due to failure to pay any monetary assessment imposed under chapter 291D, Hawaii Revised Statutes, may petition the court for a driver's license or motor vehicle clearance. The court shall grant any petition for a driver's license or motor vehicle clearance filed in accordance with this section.] Repealed."

PART III

SECTION 14. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 15. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 16. This Act shall take effect on July 1, 3000.

THE SENATE	S.B. NO.	2009
THIRTY-THIRD LEGISLATURE, 2026		S.D. 2
STATE OF HAWAII		H.D. 1