SB2041

SECTION 1. The legislature finds that the State utilizes two systems for recording legal documents pertaining to the ownership of property, the regular system (via the bureau of conveyances) and the land court. In general, property is recorded in either the regular system or the land court; however, in some circumstances property is recorded in both systems. The regular system and the land court have different requirements for recording documents. The land court creates barriers to access in the form of delay and increased expenses resulting from the complicated procedures and requirements in the land court. No new properties have been registered in the land court since 1989, which indicates sharp public preference for the regular system.

The legislature further finds that the regular system is a "race-notice" land registration system and does not make any independent determination about the priority or ownership of interests in the property. This is one of the reasons why the regular system is preferred by the public. On the other hand, the land court system is a "Torrens" system of land registration, which means one must "race" to the land court to record a document ahead of another possible prior claimant to the property.

The legislature also finds that Act 120, Session Laws of Hawaii 2009, amended chapter 501, Hawaii Revised Statutes, in an attempt to ease the backlog in the bureau of conveyances. Among other things, the amendments allowed owners of interest in land registered in the land court system to transfer the interest to the regular system.

Accordingly, the purpose of this Act is to:

(1) Simplify the land registration process by repealing the land court system and transitioning all recorded documents to the regular system;

(2) Establish a working group to recommend reforms to effectively eliminate the land court;

(3) Require the working group to submit a report to the legislature; and

(4) Appropriate funds.

SECTION 2. The subpart entitled "Land Court; Personnel", of chapter 501, Hawaii Revised Statutes, consisting of sections 501-1 to 501-13, Hawaii Revised Statutes, is repealed.

SECTION 3. No later than January 1, 2029, the administrative judge of the circuit court of the first circuit, subject to the direction of the chief justice as provided by section 601-2(b), Hawaii Revised Statutes, and assistant registrar of the bureau of conveyances, shall confer and determine the dates that:

(1) No new applications for registration of title shall be made in the land court; and

(2) No new certificates of title and memorials of newly recorded documents shall be issued by the land court.

SECTION 4. (a) There is established within the judiciary for administrative purposes a working group to recommend the implementation of specific reforms to effectively eliminate the land court.

(b) The working group shall consist of the following individuals:

(1) A member of the judiciary, to be designated by the chief justice, who shall serve as chair of the working group;

(2) A member of the senate, to be designated by the senate president;

(3) A member of the house of representatives, to be designated by the speaker of the house of representatives;

(4) The chairperson of the board of land and natural resources, or the chairperson's designee;

(5) The attorney general, the attorney general's deputy, or the attorney general's designee;

(6) The state land surveyor, or the state land surveyor's designee;

(7) One or more members of the Hawaii State Bar Association, to be designated by its president, whom the chair shall invite to participate;

(8) A representative from a bank, mortgage, or lending company doing business in Hawaii, whom the chair shall invite to participate;

(9) A large landowner or estate landowner of real property located in Hawaii, such as Kamehameha Schools, whom the chair shall invite to participate;

(10) A representative from the Hawaii association of realtors, whom the chair shall invite to participate; and

(11) A representative from the Hawaii land title association, whom the chair shall invite to participate.

(c) The working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2028. The report shall identify and analyze operational issues with the land court and bureau of conveyances and shall make a recommendation to implement specific reforms to effectively eliminate the land court.

SECTION 5. All rights, powers, functions, and duties of the land court are transferred to the bureau of conveyances.

All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department or the governor.

SECTION 6. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the land court relating to the functions transferred to the department of land and natural resources shall be transferred with the functions to which they relate.

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the land court to inform registered owners of any interest in property registered or pending in land court of the requirement for deregistration of property.

The sum appropriated shall be expended by the land court for the purposes of this Act.

SECTION 8. This Act shall take effect upon its approval; provided that:

(1) Section 2 shall take effect on July 1, ; and

(2) Section 7 shall take effect on July 1, 2026.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2041
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII