SB2009 SD1

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, 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 this Act has been insufficient to effect its purpose. Multiple transferors in 2025 have been fined due to actions from transferees nevertheless, 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 Act is to:

(1) Facilitate the transfer of ownership of used motor vehicles between individuals and reduce the risk of liability for transferors by requiring new number plates and tags or emblems for those motor vehicles;

(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, 2027.

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, an 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 not more than $ ."

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 immediately 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] not more than $100. Upon receipt of the official form, the director of finance shall immediately notify all applicable state and local agencies of the transfer through a centralized notification system."

SECTION 5. No later than July 1, 2027, 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.

SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

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 Statutory material to be repealed is bracketed and stricken.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

SECTION 8. This Act shall take effect upon its approval.

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