Report Title:

Abandoned vessels; Disposition

 

Description:

Assists the Department in avoiding advertising and other administrative costs associated with holding a public auction to dispose of abandoned and derelict vessels, and unauthorized vessels impounded, that are valued at less than $5,000. (HB685 HD1)

 

HOUSE OF REPRESENTATIVES

H.B. NO.

685

TWENTY-FIRST LEGISLATURE, 2001

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO DISPOSITION OF VESSELS BY THE DEPARTMENT OF LAND AND NATURAL RESOURCES.

 

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

SECTION 1. Section 200-16, Hawaii Revised Statutes, is amended by amending subsections (d) and (e) to read as follows:

"(d) Custody of an unauthorized vessel shall be returned to the person entitled to possession upon payment to the department of all fees and costs due, and fines levied by the department or a court. In addition, the department, within seventy-two hours of impoundment, shall send by certified mail, return receipt requested, a notice of impoundment to the registered or documented owner or any operator or lien holder of the impounded vessel[.] on record with the department or United States Coast Guard. The owner, lien holder, or operator of the impounded vessel shall have ten days after receipt of notice of impoundment of the vessel to request in writing an administrative hearing. This administrative hearing is solely for the purpose of allowing the owner, lien holder, or operator of an impounded vessel to contest the basis given by the department for the impoundment of the vessel. The hearing must be held within five working days of the department's receipt of the written request. The chairperson shall adopt rules pursuant to chapter 91 to implement the requirement for this post-seizure administrative hearing process.

(e) Any unauthorized vessel impounded under this section, which remains unclaimed for more than thirty days by the registered or documented owner or a lien holder[,] or operator of record, may be sold by the department at public auction. If the department is unable to sell the vessel at public auction, or if its appraised value is less than [$250] $5000 as determined by an independent appraiser with at least one year of experience in the sale and purchase of vessels, the department, after giving public notice of intended disposition if not previously included in a public auction notice, may sell the vessel by negotiation, retain and use the vessel, donate it to any other government agency, or dispose of it as junk."

SECTION 2. Section 200-42, Hawaii Revised Statutes, is amended to read as follows:

"[[]200-42[]] Notice to owner. Upon taking custody of any such vessel, a written notice shall immediately be posted on the vessel and a duplicate original thereof sent by registered or certified mail, with a return receipt requested, to the owner registered [owner] with the department or documented by the United States Coast Guard or any operator or lien holder of the vessel on record with the department or United States Coast Guard at [the registered owner's] their respective last known address [and to all lien holders shown on the records of the department.] of record. The notice shall contain a brief description of the vessel, the location of custody, and the intended disposition of the vessel if not repossessed within twenty days after the mailing of the notice. [A notice need not be sent to any purported owner or any other person whose interest in the vessel is not recorded with the department.] Such owner, operator, or lien holder of the vessel shall have ten days after receipt of the mailed notice to request in writing an administrative hearing. This administrative hearing is solely for the purpose of allowing the owner, operator, or lien holder of an impounded vessel to contest the basis given by the department for the impoundment of the vessel. The hearing shall be held within five working days of the department's receipt of the written request."

SECTION 3. Section 200-44, Hawaii Revised Statutes, is amended to read as follows:

"[[]200-44[]] Possession by interested party. Any person having an interest in the vessel may take possession of the vessel prior to the date of public auction upon payment to the department of all use fees, towing, handling and storage charges, appraisal and advertising expenses, and any other expenses incurred by the department in connection with the vessel. If the person taking possession of the vessel is not the registered or documented owner, the person, prior to taking possession of the vessel, shall pay the foregoing expenses and post security satisfactory to the department which shall not exceed the value of the vessel. The security, if not forfeited, shall be returned to the person posting it within two years after receipt."

SECTION 4. Section 200-45, Hawaii Revised Statutes, is amended to read as follows:

"[[]200-45[]] When public auction not required. Public auction shall not be required when the appraised value of any vessel is less than [$250,] $5000, as determined by an independent appraiser who has at least one year of experience in the sale or purchase of vessels. Upon that determination, after public notice of intended disposition has been given at least once, the chairperson may sell the vessel by negotiation, dispose of it as junk, or donate the vessel to any governmental agency."

SECTION 5. Section 200-47, Hawaii Revised Statutes, is amended to read as follows:

"[[]200-47[]] Disposition of proceeds. The department shall deposit that portion of the proceeds of the sale of a vessel as shall represent the mooring or other fees and charges due the department, the expenses of the auction, and any other expense incurred by the department in taking into custody and disposing of an abandoned vessel, derelict vessel, or vessel impounded under section 200-16, into the boating special fund from which the expenses incurred in connection with the [abandoned] vessel, were paid. The balance, if any, shall be deposited into the general fund of the State. The owner may recover any such balance of the proceeds from the State only if the owner files a claim therefor with the department of budget and finance within one year after the execution of the bill of sale. If no claim is made within the year allowed, the money shall become a state realization. A lien holder shall receive priority in payment from the balance of the proceeds to the extent of the lien holder's lien on the vessel. If the proceeds of the sale are insufficient to cover the mooring and other fees and charges, the expenses of the auction and the other expenses incurred by the department in taking into custody and disposing of the [abandoned] vessel, the department may bring an action for the deficiency in a court of appropriate jurisdiction against the registered or documented owner or any person who had an interest in the vessel when custody was taken by the department."

SECTION 6. Section 200-49, Hawaii Revised Statutes, is amended to read as follows:

"200-49 Disposition of derelict vessel. (a) The chairperson may cause a derelict vessel to be immediately taken into custody. Upon taking custody of a derelict vessel, the chairperson shall [concurrently:] as soon as reasonably possible:

(1) Give public notice of intended disposition[;] and procedure for requesting an administrative hearing;

(2) When possible, post a notice of intended disposition and procedure for requesting an administrative hearing on the vessel; and

(3) Serve a duplicate original of the notice of intended disposition and procedure for requesting an administrative hearing by certified mail, return receipt requested on:

(A) The registered or documented owner of the vessel, if known, at the [registered] owner's last known address [or the address] on record with the department or the United States Coast Guard; [and]

(B) All lien holders who have properly filed a financing statement, referencing the name of the registered owner, in the bureau of conveyances or who are shown on the records of the department or United States Coast Guard[.]; and

(C) Any operator of the vessel on record with the department or United States Coast Guard.

(b) The owner, operator, or lien holder of the vessel shall have ten days after the date of the public notice or receipt of the mailed notice, whichever occurs later, to request in writing an administrative hearing. This administrative hearing is solely for the purpose of allowing the owner, operator, or lien holder of an impounded vessel to contest the basis given by the department for the impoundment of the vessel. The hearing shall be held within five working days of the department's receipt of the written request.

(c) If the vessel is not repossessed within twenty days after the [giving] date of the public notice or mailing of the notice, whichever occurs later, the vessel may be disposed of by negotiated sale except that, when two or more purchasers indicate an interest in purchasing the vessel, the vessel will be sold at public auction to the highest bidder[.] unless the vessel is exempt from public auction under section 200-45. If no purchaser expresses a desire to purchase the vessel, the vessel may be destroyed[.] or donated to any governmental agency."

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.