Report Title:

State Funds

Description:

Repeals the compliance resolution fund and redirects fees to the general fund. Requires DCCA to return or discount fees if the fees collected in the prior year exceeds 110% of the fees collected in the prior year. If the fees drop below 90%, requires the fees to be increased to eliminate the shortfalls. Ensures that all personnel and operating costs of DCCA are paid for by revenues generated by DCCA. Requires the monthly reporting of revenues generated by DCCA. (SB2525 HD1)

THE SENATE

S.B. NO.

2525

TWENTY-SECOND LEGISLATURE, 2004

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to state funds.

 

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

SECTION 1. Section 26-9, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (1) to read:

"(l) Any law to the contrary notwithstanding, the director of commerce and consumer affairs may:

(1) Establish, increase, decrease, or repeal fees relating to any aspect of the registration, certification, licensure, or any other administrative process for all laws within the jurisdiction of the department. Amendments to fee assessments shall be made pursuant to chapter 91;

(2) Assess fees for copies in any form of media of the computerized records of the business registration division or for electronic access to the computerized information on a one-time or on-going basis. The fees charged for the copies or access may include billing service fees, network usage fees, and computer consultant fees. [In adopting these fees, the director shall take into account the intent to make the division self-supporting.] To this end, the fees may reflect the commercial value of the service or information provided. In the case of requests for records by a nonprofit organization, the director may reduce or waive the fees. This paragraph shall control in any instance where there is a conflict between this paragraph and any other statute; and

(3) Assess fees for copies of consumer and business educational publications prepared or issued by the department. Fees collected under this paragraph shall be deposited into the [compliance resolution fund under subsection (o).] general fund. In the case of requests for copies by a nonprofit organization, the director may reduce or waive the fees. For purposes of this paragraph, "consumer and business educational publications" does not include copies of statutes or administrative rules.

The fees collected by the professional and vocational licensing division and the business registration division shall be deposited into the [compliance resolution fund under subsection (o).] general fund.

Notwithstanding any other law to the contrary, if revenues from the fees collected by the department of commerce and consumer affairs in the prior fiscal year exceed one hundred and ten per cent of attributable costs to the department in the prior fiscal year, any excess shall be refunded to the payers on a pro rata share basis. In lieu of a refund, the department may authorize a discount on subsequent fees charged to the payers.

Notwithstanding any other law to the contrary, if revenues from the fees collected by the department of commerce and consumer affairs in the prior fiscal year drops below ninety per cent of attributable costs to the department in the prior fiscal year, the department shall increase fees to eliminate any shortfalls in appropriations to the department.

For the purposes of this section, "attributable costs" shall mean all operating costs, all fringe benefit costs for employees, and any other reasonable costs associated with the operation of the department.

The director may appoint program specialists, not subject to chapter 76, to assist with the activities of the professional and vocational licensing division."

2. By amending subsection (o) to read:

"(o) Every person licensed under any chapter within the jurisdiction of the department of commerce and consumer affairs and every person licensed subject to chapter 485 or registered under chapter 467B shall pay upon issuance of a license, permit, certificate, or registration a fee and a subsequent annual fee to be determined by the director and adjusted from time to time to ensure that the proceeds, together with all other fines, income, and penalties collected under this section, do not surpass the annual operating costs of conducting compliance resolution activities required under this section. The fees may be collected biennially or pursuant to rules adopted under chapter 91, and shall be deposited into the [special fund established under this subsection.] general fund. Every filing pursuant to chapter 514E or section 485-6(15) shall be assessed, upon initial filing and at each renewal period in which a renewal is required, a fee that shall be prescribed by rules adopted under chapter 91, and that shall be deposited into the [special fund established under this subsection.] general fund. Any unpaid fee shall be paid by the licensed person, upon application for renewal, restoration, reactivation, or reinstatement of a license, and by the person responsible for the renewal, restoration, reactivation, or reinstatement of a license, upon the application for renewal, restoration, reactivation, or reinstatement of the license. If the fees are not paid, the director may deny renewal, restoration, reactivation, or reinstatement of the license. The director may establish, increase, decrease, or repeal the fees when necessary pursuant to rules adopted under chapter 91.

[There is created in the state treasury a special fund to be known as the compliance resolution fund to be expended by the director's designated representatives as provided by this subsection. Notwithstanding any law to the contrary, all revenues, fees, and fines collected by the department shall be deposited into the compliance resolution fund. Unencumbered balances existing on June 30, 1999, in the cable television fund under chapter 440G, the division of consumer advocacy fund under chapter 269, the financial institution examiners' revolving fund, section 412:2-109, the special handling fund, section 414-13, and unencumbered balances existing on June 30, 2002, in the insurance regulation fund, section 431:2-215, shall be deposited into the compliance resolution fund. This] All revenues, fees, and fines collected by the department shall be deposited into the general fund; provided that this provision shall not apply to the drivers education fund underwriters fee, section 431:10C-115, insurance premium taxes and revenues, revenues of the workers' compensation special compensation fund, section 386-151, the captive insurance administrative fund, section 431:19-101.8, the insurance commissioner's education and training fund, section 431:2-214, the medical malpractice patients' compensation fund as administered under section 5 of Act 232, Session Laws of Hawaii 1984, and fees collected for deposit in the office of consumer protection restitution fund, section 487-14, [the real estate appraisers fund, section 466K-1,] the real estate recovery fund, section 467-16, the real estate education fund, section 467-19, the contractors recovery fund, section 444-26, the contractors education fund, section 444-29, and the condominium management education fund, section 514A-131. Any law to the contrary notwithstanding, the director may use [the moneys in the fund] general fund appropriations to employ, without regard to chapter 76, hearings officers, investigators, attorneys, accountants, and other necessary personnel to implement this subsection. Any law to the contrary notwithstanding, [the moneys in the fund] general fund appropriations shall be used to fund the operations of the department. [The moneys in the fund] General fund appropriations may be used to train personnel as the director deems necessary and for any other activity related to compliance resolution.

As used in this subsection, unless otherwise required by the context, "compliance resolution" means a determination of whether:

(1) Any licensee or applicant under any chapter subject to the jurisdiction of the department of commerce and consumer affairs has complied with that chapter;

(2) Any person subject to chapter 485 has complied with that chapter;

(3) Any person submitting any filing required by chapter 514E or section 485-6(15) has complied with chapter 514E or section 485-6(15);

(4) Any person has complied with the prohibitions against unfair and deceptive acts or practices in trade or commerce; or

(5) Any person subject to chapter 467B has complied with that chapter;

and includes work involved in or supporting the above functions, licensing, or registration of individuals or companies regulated by the department, consumer protection, and other activities of the department.

The director shall prepare and submit monthly reports to the governor and the legislature on revenues generated by each division of the department.

The director shall prepare and submit an annual report to the governor and the legislature on [the use of the compliance resolution fund. The report shall describe] expenditures made [from the fund], including non-payroll operating expenses."

SECTION 2. Section 92-24, Hawaii Revised Statutes, is amended to read as follows:

"92-24 Directors of finance and commerce and consumer affairs; fees. Except as provided in section 91-2.5, the director of finance and the director of commerce and consumer affairs each shall charge the following fees:

(1) For administering any oath, $1;

(2) For preparing every photostat copy of any document on record in the director's office, 50 cents per page or portion thereof;

(3) For preparing every typewritten copy of any document on record in the director's office, 50 cents per page or portion thereof;

(4) For preparing a certificate of compliance, $5 for the original certificate, and $1 for each additional copy thereof[, of which $4 from each certificate and 75 cents of each additional copy shall be deposited in the compliance resolution fund established pursuant to section 26-9(o)];

(5) For comparing any document submitted for certification, 15 cents per page or portion thereof;

(6) For certifying any document on record in the director's office, 25 cents for each certification; and

(7) For all other acts and duties, the fees of which are not otherwise provided for, such charges as each may from time to time prescribe."

SECTION 3. Section 241-7, Hawaii Revised Statutes, is amended to read as follows:

"241-7 Disposition of funds. All taxes collected under this chapter shall be state realizations[; provided that, by June 30 of each fiscal year, the sum of $2,000,000 shall be deposited with the director of finance to the credit of the compliance resolution fund as established pursuant to section 26-9(o)]."

SECTION 4. Section 269-33, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established in the state treasury a public utilities commission special fund to be administered by the public utilities commission. The proceeds of the fund shall be used by the public utilities commission and the division of consumer advocacy of the department of commerce and consumer affairs for all expenses incurred in the administration of chapters 269, 271, 271G, and 486J; provided that the expenditures of the public utilities commission shall be in accordance with legislative appropriations. On a quarterly basis, an amount not exceeding thirty per cent of the proceeds remaining in the fund after the deduction for central service expenses, pursuant to section 36-27, shall be allocated by the public utilities commission to the division of consumer advocacy [and deposited in the compliance resolution fund established pursuant to section 26-9(o)]; provided that all moneys allocated by the public utilities commission from the fund to the division of consumer advocacy shall be in accordance with legislative appropriations."

SECTION 5. Section 412:2-105, Hawaii Revised Statutes, is amended by amending subsections (c) to (e) to read as follows:

"(c) The commissioner shall bill the affected financial institution for examination fees and expenses as soon as feasible after the close of the examination or investigation. The affected financial institution shall pay the division of financial institutions within thirty days following the billing. All such payments shall be deposited [to the compliance resolution fund established pursuant to section 26-9(o).] into the general fund. All disputes relating to these billings between the affected financial institution and the commissioner shall be resolved in accordance with the procedures for contested cases under chapter 91.

(d) The commissioner, by rules adopted in accordance with chapter 91, may set reasonable fee amounts to be collected by the division in connection with its regulatory functions, including, without limitation, any fees for renewals, applications, licenses, and charters. [Unless otherwise provided by statute, all] All such fees shall be deposited into the [compliance resolution fund established pursuant to section 26-9(o).] general fund.

(e) A Hawaii financial institution that fails to make a payment required by this section shall be subject to an administrative fine of not more than $250 per day for each day it is in violation of this section, which fine, together with the amount due under this section, may be recovered pursuant to section 412:2-611 and shall be deposited into the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 6. Section 412:2-109, Hawaii Revised Statutes, is amended to read as follows:

"412:2-109 [Compliance resolution fund; financial] Financial institution examiners. (a) Any law to the contrary notwithstanding, fees and fines collected by the commissioner of financial institutions shall be deposited into the [compliance resolution fund established pursuant to section 26-9(o).] general fund.

(b) The commissioner may appoint financial institution examiners, not subject to chapter 76, who shall examine the affairs, transactions, accounts, records, documents, and assets of financial institutions. The commissioner also may appoint administrative support personnel, not subject to chapter 76, who shall assist and support the examiners. The commissioner may pay the salaries of the financial institution examiners and administrative support personnel from [the compliance resolution fund.] general fund appropriations.

(c) [The compliance resolution fund] General fund appropriations also may be used to reimburse financial institution examiners and administrative support personnel for the following expenses necessarily incurred on account of an examination and the education and training of financial institution examiners and administrative support personnel:

(1) Actual travel expenses in amounts customary for these expenses and approved by the commissioner;

(2) A reasonable living expense allowance at a rate customary for these expenses and approved by the commissioner; and

(3) Any fee or tuition necessary to attend educational and training conferences, workshops, seminars, and any similar events of this nature.

(d) [The compliance resolution fund] General fund appropriations also may be used for other expenses relating to examinations of financial institutions and administrative costs, including personnel costs of the division and costs incurred by supporting offices and divisions.

(e) All persons receiving any reimbursement or compensation [from the compliance resolution fund] under subsections (c) or (d) shall submit to the commissioner for approval a detailed account of all expenses and compensation necessarily incurred. Persons shall not receive or accept any additional compensation on account of an examination. In the case of an examination, any reimbursement or compensation made [by the fund] and approved by the commissioner shall be charged to the financial institution being examined by the commissioner and all receipts shall be credited to the general fund.

[(f) Moneys in the compliance resolution fund shall not revert to the general fund.

(g)] (f) Each year before July 2, each financial institution subject to examination by the commissioner shall pay a sum of $500 plus $100 for each office, agency, and branch office maintained by the financial institution, to the commissioner to be credited to the [compliance resolution fund.] general fund. The commissioner may establish, increase, decrease, or repeal this fee when necessary pursuant to rules adopted in accordance with chapter 91."

SECTION 7. Section 412:2-315, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The commissioner may assess and collect from all affected Hawaii financial institutions their ratable share of the administrative costs incurred by the division in its administration of any emergency orders issued under this section. Administrative costs assessed under this section shall be deposited into the [compliance resolution fund established under section 26-9(o).] general fund. The determination of the commissioner of which Hawaii financial institution or institutions are "affected" and the proration method the commissioner chooses to employ in making assessments under this section may be appealed to the circuit court as provided in chapter 91 by any Hawaii financial institution aggrieved thereby."

SECTION 8. Section 412:2-611, Hawaii Revised Statutes, is amended to read as follows:

"412:2-611 Action to recover administrative fines; deposit to [compliance resolution fund.] general fund. (a) If any Hawaii financial institution, institution-affiliated party, or other person fails to pay an assessment after any administrative fine assessed under this chapter has become final, the commissioner shall recover the amount assessed by action in circuit court, in which case the commissioner may request the court to award reasonable attorney's fees and costs.

(b) All administrative fines collected under authority of this chapter shall be deposited [in the compliance resolution fund established under section 26-9(o).] into the general fund."

SECTION 9. Section 414D-5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) All special handling fees shall be credited to the [compliance resolution fund established under section 26-9(o).] general fund."

SECTION 10. Section 431:2-203, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) The attorney general, corporation counsels, and county prosecuting attorneys, on behalf of the commissioner, shall bring an action in forfeiture against an insurer who violates any order or notice of such order issued by the commissioner. The notice shall be given to the insurer of the commissioner's intention to proceed under such order against the person who does not comply with the order issued. The order may contain this notice of intention to seek a forfeiture if the order is disobeyed. The forfeiture shall be in an amount that the court considers just, but may not exceed an amount of $10,000 for each day that the violation continues after the commencement of the action until judgment is rendered. No forfeiture may be imposed under this subsection if at the time the forfeiture action is commenced, the insurer was in compliance with the order, or if the violation of the order occurred during the order suspension period. If, after a judgment is rendered, the insurer still does not comply with the order, the commissioner may commence a new action of forfeiture, and may continue commencing actions in forfeiture until the insurer complies. All proceeds from actions of forfeiture shall be paid to the director of finance [and paid into the compliance resolution fund.] for deposit into the general fund."

SECTION 11. Section 431:2-215, Hawaii Revised Statutes, is amended to read as follows:

"431:2-215 Deposits to [compliance resolution fund.] the general fund. (a) All assessments, fees, fines, penalties, and reimbursements collected by or on behalf of the insurance division under title 24, except for the commissioner's education and training fund (section 431:2-214), the patients' compensation fund (Act 232, Session Laws of Hawaii 1984), the drivers education fund underwriters fee (section 431:10C-115), and the captive insurance administrative fund (section 431:19-101.8) to the extent provided by section 431:19-101.8(b), shall be deposited into the [compliance resolution fund under section 26-9(o). All sums transferred from the insurance division into the compliance resolution fund may be expended by the commissioner to carry out the commissioner's duties and obligations under title 24.] general fund.

(b) Sums from the [compliance resolution fund] general fund expended by the commissioner shall be used to defray any administrative costs, including personnel costs, associated with the programs of the division, and costs incurred by supporting offices and divisions. Any law to the contrary notwithstanding, the commissioner may use [the moneys in the fund] general fund appropriations to employ or retain, by contract or otherwise, without regard to chapter 76, hearings officers, attorneys, investigators, accountants, examiners, and other necessary professional, technical, and support personnel to implement and carry out the purposes of title 24; provided that any position, except any attorney position, that is subject to chapter 76 prior to July 1, 1999, shall remain subject to chapter 76.

[(c) Moneys deposited by the commissioner in the fund shall not revert to the general fund.

(d)] (c) The commissioner shall determine the amount or amounts to be assessed and the time any moneys from assessments are due for each line or type of insurance or entity regulated under title 24; provided that:

(1) The criteria for making the assessment shall be established by rule; provided further that the commissioner shall have provisional authority to make assessments prior to adoption of the rule but this provisional authority shall not extend beyond two years from June 28, 1999;

(2) The insurers or entities under title 24 shall be provided reasonable notice of when their respective assessments are due;

(3) The assessments by line or type shall bear a reasonable relationship to the costs of regulating the line or type of insurance, including any administrative costs of the division; and

(4) The sum total of all assessments made and collected shall not exceed the special fund ceiling or ceilings related to the fund that are established by the legislature.

As used in this subsection, "reasonable notice" means a period of at least sixty days.

[(e)] (d) The commissioner may suspend an assessment of any insurer if the commissioner determines that an insurer or

entity may reach insolvency or other financial difficulty if the assessment is made against that insurer or entity."

SECTION 12. Section 431:2-216, Hawaii Revised Statutes, is amended to read as follows:

"431:2-216 Assessments of health insurers. (a) Beginning with fiscal year 2000-2001, and including fiscal year 2001-2002, each mutual benefit society under article 1 of chapter 432, health maintenance organization under chapter 432D, and any other entity offering or providing health benefits or services under the regulation of the commissioner, except an insurer licensed to offer accident and health or sickness insurance under article 10A, shall deposit with the commissioner by July 1 of each year an assessment of $10,000 for the first seventy thousand private, nongovernment members the entity covers and an additional assessment on a pro rata basis to be determined and imposed by the commissioner for covered members exceeding seventy thousand; provided that in the third year and each year thereafter, assessments shall be borne on a pro rata basis. The aggregate annual assessment shall not exceed $1,000,000. The assessment shall be credited to the [compliance resolution fund.] general fund. If assessments are increased, the commissioner shall provide to any organization or entity subject to the increased assessment, justification for the increase.

(b) The assessments shall be used to defray any administrative costs, including personnel costs, associated with insurance regulation, and costs incurred by supporting offices and divisions. Any law to the contrary notwithstanding, the commissioner may use [the moneys from assessments] general fund appropriations to employ, without regard to chapter 76, necessary professional, technical, administrative, and support personnel to implement and carry out the purposes of title 24 as it relates to accident and health or sickness insurance.

[(c) Moneys credited to the compliance resolution fund that are not used for insurance regulation, general administration purposes, or as otherwise allowed pursuant to section 26-9(o) shall not revert to the general fund nor shall be used for other purposes.

(d)] (c) The commissioner may suspend any assessment made against any mutual benefit society under article 1 of chapter 432, health maintenance organization under chapter 432D, and any other entity offering or providing health benefits or services under the regulation of the commissioner if the commissioner determines that the entity may reach insolvency or other financial difficulty if the assessment is made against the entity."

SECTION 13. Section 431:2-306, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The insurer, person, or guaranty fund examined and liable therefor shall pay to the commissioner's examiners upon presentation of an itemized statement, their actual travel expenses, their reasonable living expense allowance, and their per diem compensation at a reasonable rate approved by the commissioner, incurred on account of the examination. All payments collected by the commissioner shall be remitted to:

(1) The [compliance resolution fund;] general fund; or

(2) The captive insurance administrative fund if independent contractor examiners or captive staff examiners were employed for a captive insurer's examination.

The commissioner or the commissioner's examiners shall not receive or accept any additional emolument on account of any examination."

SECTION 14. Section 431:2-307.5, Hawaii Revised Statutes, is amended to read as follows:

"431:2-307.5 Reimbursement and compensation of examiners; [source of funds;] disposition of receipts. (a) All moneys necessary for the compensation and reimbursement of independent contractor examiners and insurance division staff examiners for actual travel expenses, reasonable living expenses, and per diem expenses, at customary rates approved by the commissioner shall be allocated by the legislature [through appropriations out of the state compliance resolution fund]. The department shall include in its budgetary request for each upcoming fiscal period, the amounts necessary to effectuate the purposes of this section.

(b) All moneys, fees, and other payments received by the commissioner under this part shall be deposited to the credit of the [state compliance resolution fund.] general fund."

SECTION 15. Section 431:3-221, Hawaii Revised Statutes, is amended to read as follows:

"431:3-221 Power to fine. In addition to or in lieu of the suspension, revocation, or refusal to extend any certificate of authority, the commissioner, after hearing, may levy a fine upon the insurer in an amount not less than $500 and not more than $50,000. The order levying the fine shall specify the period within which the fine shall be fully paid, which shall not be less than thirty nor more than forty-five days from the date of the order. Upon failure to pay the fine when due, the commissioner shall revoke the insurer's certificate of authority if not already revoked, and the fine shall be recovered in a civil action brought on behalf of the commissioner by the attorney general. Any fine so collected shall be paid by the commissioner to the director of finance for [the account of the compliance resolution fund.] deposit into the general fund."

SECTION 16. Section 431:3-306.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The cost of an examination under this section shall be assessed against the insurer being examined and remitted to the commissioner for deposit into the [compliance resolution fund.] general fund."

SECTION 17. Section 431:7-101, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) All fees and penalties shall be deposited to the credit of the [compliance resolution fund.] general fund."

SECTION 18. Section 431:7-203, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) If any person has paid to the commissioner any tax, fee, or other charge in error or in excess of that which the person is lawfully obligated to pay under this code, the commissioner, upon written request made by the person to the commissioner within the time set forth in section 431:7-204.6, shall authorize a refund thereof out of [the compliance resolution fund, except that a tax refund shall be payable out of] the general fund, by submitting a voucher therefor to the comptroller subject to the following limitations:

(1) No recourse may be had except under section 40-35 or by appeal for refunds of taxes paid pursuant to an assessment by the commissioner; provided that if the assessment by the commissioner contains clerical errors, transposition of figures, typographical errors, and errors in calculation or if there is an illegal or erroneous assessment because the assessment is not in accordance with this code, the refund procedures in subsection (a) shall apply; and

(2) No refund or overpayment credit shall be made unless the original payment of the tax was due to the law having been interpreted or applied with respect to the taxpayer concerned differently than with respect to taxpayers generally.

As to all tax payments for which a refund or credit is not authorized by this subsection (including, without prejudice to the generality of the foregoing, cases of unconstitutionality), the remedies provided by appeal or under section 40-35 are exclusive."

SECTION 19. Section 431:9-238, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) Any fine collected shall be paid by the commissioner to the director of finance for [the account of the compliance resolution fund.] deposit into the general fund."

SECTION 20. Section 431:9A-126, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Any fine collected shall be paid by the commissioner to the director of finance for [the account of the compliance resolution fund.] deposit into the general fund."

SECTION 21. Section 431:10C-215, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The commissioner shall assess and collect from each insurer, self-insurer, and from every applicant for a certificate of self-insurance or a license to transact a motor vehicle insurance and optional additional insurance business in this State, such portion of the full cost of every audit, inspection, examination, visitation, and other services related to motor vehicle insurance required by this or any other article, or performed by the commissioner in the commissioner's discretion under this article or this code, as the commissioner deems equitable in the rendering of the service. Assessments collected shall be paid into the [compliance resolution fund.] general fund."

SECTION 22. Section 431:11-111, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Any insurer failing without just cause to file any registration statement as required in this article shall be liable for a fine in an amount of not less than $100 and not more than $500 for each day of delinquency, to be recovered by the commissioner, and the penalty so recovered shall be paid into the [compliance resolution fund.] general fund. The commissioner may reduce the penalty if the insurer demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer."

SECTION 23. Section 431:15-334, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) (1) Upon liquidation of a domestic nonlife mutual insurance company, any assets held in excess of its liabilities and the amounts which may be paid to its members as provided under subsection (d)(2) shall be paid into the [state compliance resolution fund.] general fund; and

(2) The maximum amount payable upon liquidation to any member for and on account of such member's membership in a domestic nonlife mutual insurance company, in addition to the insurance benefits promised in the policy, is the total of all premium payments made by the member within the past five years with interest at the legal rate compounded annually."

SECTION 24. Section 431:15-335, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) All funds withheld under section 431:15-327 and not distributed, shall upon discharge of the liquidator be deposited with the [compliance resolution fund] general fund and paid by the liquidator in accordance with section 431:15-332. Any sums remaining that under section 431:15-332 would revert to the undistributed assets of the insurer shall be transferred to the [compliance resolution fund] general fund and become the property of the State under subsection (a), unless the commissioner in the commissioner's discretion petitions the court to reopen the liquidation under section 431:15-337."

SECTION 25. Section 431:19-101.8, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) All premium taxes collected from captive insurance companies licensed in this State under this article, all captive insurance company application fees, annual license fees, and examination fees collected pursuant to this article shall be credited to the captive insurance administrative fund. Each fiscal year, the commissioner shall transfer out of the fund [and deposit into the compliance resolution fund] a total of forty per cent of the total moneys credited to the fund in the prior fiscal year or $1,500,000, whichever is greater, to pay for the expenditures contemplated by this section. In addition, each fiscal year, the commissioner shall transfer out of the fund [and deposit into the compliance resolution fund] up to ten per cent of the total moneys credited to the fund in the prior fiscal year for purposes of promoting Hawaii as a captive insurance domicile. Disbursements for promotional activities [from the compliance resolution fund] shall be subject to the approval of the director of commerce and consumer affairs. Subject to the foregoing expenditure limits, all moneys remaining in the fund shall revert to the general fund."

SECTION 26. Section 432E-11, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) Every mutual benefit society, every health maintenance organization, and every other entity offering or providing health benefits or services under the regulation of the commissioner, except an insurer licensed to offer accident and health or sickness insurance under article 10A of chapter 431, shall deposit with the commissioner a fee to provide for the actual costs of the survey and educational program to be determined by the commissioner on July 1 of each year, to be credited to the [compliance resolution fund.] general fund."

SECTION 27. Section 436B-14, Hawaii Revised Statutes, is amended to read as follows:

"[[]436B-14[]] Restoration of forfeited license. A license which has been forfeited may be restored by the licensing authority within one year after the date of forfeiture upon compliance with the licensing renewal requirements provided by law and upon written application and payment of all applicable renewal fees, penalty fees, compliance resolution [fund] fees and, if applicable, recovery fund assessments. Any person who fails to have the person's license restored within one year from the date of forfeiture may be required by the licensing authority to reapply for licensure as a new applicant."

SECTION 28. Section 436B-15, Hawaii Revised Statutes, is amended to read as follows:

"436B-15 Fees and expenses. No applicant or licensee shall be granted a license pursuant to the licensing laws unless the appropriate fees have been paid. Unless otherwise provided by law, the director shall establish the amount for all fees and expenses by rules adopted pursuant to chapter 91. The fees to be established by the director may include but not be limited to an application fee, filing fee, license fee, renewal fee, examination fee, and other reasonable and necessary fees related to the department's administrative costs. Unless otherwise provided by law, the fees shall be deposited with the director to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 29. Section 436B-20, Hawaii Revised Statutes, is amended to read as follows:

"436B-20 Suspended license. No license shall be suspended by the licensing authority for a period exceeding five years. A person whose license has been suspended may apply for reinstatement of the license to the extent authorized by law and upon complete compliance with any term or condition imposed by the order of suspension. The application for reinstatement shall be accompanied by all applicable fees, including but not limited to reinstatement fees, any compliance resolution [fund] fees, and any recovery fund assessments."

SECTION 30. Section 436B-26.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Each citation shall be in writing and shall describe the basis of the citation, including the specific statutory provisions alleged to have been violated, and may contain an order of abatement, and an assessment of civil penalties as provided in this section. All penalties collected under this section shall be deposited in the [special fund established under section 26-9(o).] general fund."

SECTION 31. Section 437-7, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) All applicants for the issuance of a manufacturer's or distributor's license shall submit:

(1) If the manufacturer or distributor is publicly traded, a financial statement signed by a certified public accountant or an annual report;

(2) A copy of the executed agreement granting the distributor applicant the franchise to distribute motor vehicles in this State;

(3) If the applicant is the manufacturer of the motor vehicles to be distributed, a certified statement to this effect;

(4) Any other documents or information that may be provided for in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91; and

(5) The following fees, which shall apply until fees are adopted by the director under this subsection in accordance with chapter 91:

(A) Nonrefundable application fee: $50;

(B) Original license fee: $500;

(C) Annual compliance resolution [fund] fee: $250 for each dealer franchised by the manufacturer or distributor;

(D) Biennial compliance resolution [fund] fee: $500 for each dealer franchised by the manufacturer or distributor; and

(E) Verification or duplicate fees as provided in title 16, Hawaii Administrative Rules, chapter 53.

The nonrefund provisions of section 16-53-4, Hawaii Administrative Rules, shall apply to fees under this subsection. Application fees for a new salesperson's license shall be a lesser amount than the fee for other licenses issued under this chapter."

SECTION 32. Section 437-23, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Renewal fees for manufacturers and distributors shall be as follows until renewal fees are adopted by the director under this subsection in accordance with chapter 91:

(1) Biennial renewal fee: $1,000; and

(2) Biennial compliance resolution [fund] fee: $500 for each dealer franchised by the manufacturer or distributor."

SECTION 33. Section 437D-8.4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Notwithstanding any law to the contrary, a lessor may visibly pass on to a lessee:

(1) The general excise tax attributable to the transaction;

(2) The vehicle license and registration fee and weight taxes, prorated at 1/365th of the annual vehicle license and registration fee and weight taxes actually paid on the particular vehicle being rented for each full or partial twenty-four hour rental day that the vehicle is rented; provided the total of all vehicle license and registration fees charged to all lessees shall not exceed the annual vehicle license and registration fee actually paid for the particular vehicle rented;

(3) The rental motor vehicle surcharge tax as provided in section 251-2 attributable to the transaction; and

(4) The rents or fees paid to the department of transportation under concession contracts, negotiated pursuant to chapter 102, or service permits, granted pursuant to title 19, Hawaii Administrative Rules[,]; provided that:

(A) The rents or fees are limited to amounts that can be attributed to the proceeds of the particular transaction;

(B) The rents or fees shall not exceed the lessor's net payments to the department of transportation made under concession contract or service permit;

(C) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts of the rents or fees paid to the department of transportation pursuant to the applicable concession contract or service permit:

(i) For all airport locations; and

(ii) For each airport location;

(D) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts charged to lessees:

(i) For all airport locations;

(ii) For each airport location; and

(iii) For each lessee;

(E) The lessor includes in these reports the methodology used to determine the amount of fees charged to each lessee; and

(F) The lessor submits the above information to the department of transportation and the department of commerce and consumer affairs within three months of the end of the preceding annual accounting period or contract year as determined by the applicable concession agreement or service permit.

The respective departments, in their sole discretion, may extend the time to submit the statement required in this subsection. If the director determines that an examination of the lessor's information is inappropriate under this subsection and the lessor fails to correct the matter within ninety days, the director may conduct an examination and charge a lessor an examination fee based upon the cost per hour per examiner for evaluating, investigating, and verifying compliance with this subsection, as well as additional amounts for travel, per diem, mileage, and other reasonable expenses incurred in connection with the examination, which shall relate solely to the requirements of this subsection, and which shall be billed by the departments as soon as feasible after the close of the examination. The cost per hour shall be $40 or as may be established by rules adopted by the director. The lessor shall pay the amounts billed within thirty days following the billing. All moneys collected by the director shall be credited to the [compliance resolution fund.] general fund."

SECTION 34. Section 438-11, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) All fees required by this chapter shall be as provided in rules adopted by the director pursuant to chapter 91 and shall be deposited with the director to the credit of the [compliance resolution fund established pursuant to section 26-9(o),] general fund, except that the examination fee required in section 438-8 may be paid directly to the professional testing service by the department or examinee."

SECTION 35. Section 439-14, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Every applicant who is required by the board to be examined shall pay an examination fee as provided in rules adopted by the director pursuant to chapter 91. The examination fee may be paid directly to the professional testing service by the director or the examinee or deposited with the director of commerce and consumer affairs to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 36. Section 440-13, Hawaii Revised Statutes, is amended to read as follows:

"440-13 License fees. License fees shall be paid annually to the State by every applicant to whom a license is issued to participate in the conduct of professional boxing in any of the capacities set forth in this section: physician, referee, judge, matchmaker, manager, timekeeper, second, and professional boxer. The charge for a duplicate of a license and all fees required by this chapter shall be as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91 and shall be deposited with the director of commerce and consumer affairs to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund.

The director of commerce and consumer affairs may establish a schedule of license fees for participation in amateur boxing contests, and may waive payment of license fees for amateur boxing contests."

SECTION 37. Section 440G-15, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each cable operator shall pay an annual fee to be determined by the director. The fees so collected under this section shall be deposited into the [compliance resolution fund established under section 26-9(o).] general fund."

SECTION 38. Section 442-18, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) All moneys received by the board under this chapter shall be paid to the director of commerce and consumer affairs and shall be deposited to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 39. Section 443B-3.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) An applicant for designation as an exempt out-of-state collection agency shall submit the following:

(1) An application for an out-of-state collection agency exemption as prescribed by the director;

(2) Verification that:

(A) The collection agency holds a current license, permit, or registration to conduct business as a collection agency in another state;

(B) Is in good standing with and has complied with the laws of that state, including the maintenance of a bond, if required, and in the amount required by the state; and

(C) The collection agency's state of licensure does not require Hawaii collection agencies to register or become licensed in that state before collecting debts in that state;

(3) An agreement in writing to comply with the requirements of sections 443B-9, 443B-15, 443B-16, 443B-17, 443B-18, and 443B-19; and

(4) Payment of the following nonrefundable fees:

(A) With the application, an application fee of $25; and

(B) Upon approval of an out-of-state collection agency exemption, the compliance resolution [fund] fee for collection agencies."

SECTION 40. Section 444-10.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Each citation shall be in writing and shall describe the basis of the citation, including the specific statutory provisions alleged to have been violated, and may contain an order of abatement, and an assessment of civil penalties as provided in section 444-23. All penalties collected under this section shall be deposited in the [special fund established under section 26-9.] general fund."

SECTION 41. Section 444-15, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The biennial renewal fee or inactive license fee, and the recovery fund, education fund, and compliance resolution [fund] fees shall be paid to the board on or before September 30 of each even-numbered year. These fees shall be as provided in rules adopted by the director pursuant to chapter 91. Failure, neglect, or refusal of any licensee to pay these fees and to submit all documents required by the board on or before September 30 of each even-numbered year shall constitute a forfeiture of the licensee's license."

SECTION 42. Section 444-23.5, Hawaii Revised Statutes, is amended by amending subsection (m) to read as follows:

"(m) All proceeds of a forfeiture action conducted pursuant to this section, after payment of expenses of administration and sale, shall be deposited in the [compliance resolution fund established under section 26-9(o).] general fund. Moneys in the fund shall be appropriated for the payment of any expenses necessary to seize, detain, appraise, inventory, safeguard, maintain, advertise, or sell property seized, detained, or forfeited pursuant to this section or any other necessary expenses incident to the seizure, detention, or forfeiture of such property."

SECTION 43. Section 447-1, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Any person:

(1) Eighteen years of age or over;

(2) Holding and having a diploma or proper certificate of graduation from a dental hygiene school accredited by the American Dental Association (A.D.A.) Commission on Dental Accreditation requiring at least a [two year] two-year course, recognized by the board of dental examiners; and

(3) Having been officially certified in the administration of intra-oral infiltration local anesthesia and intra-oral block anesthesia by an accredited dental hygiene school or by a certification program previously approved by the board;

upon written application made to and filed with the board at least sixty days prior to the date selected by the board for the examination, may be examined by the board for qualification as a dental hygienist.

The application for examination shall be accompanied by the applicant's certificate of graduation from an accredited dental hygiene school together with documentary proof of the applicant's certification in the administration of intra-oral infiltration local anesthesia and intra-oral block anesthesia. At the time of filing the application, the applicant shall pay to the board application and examination fees, which fees, together with all other fees or charges in this chapter, shall be as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91, and shall be deposited to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 44. Section 449-14, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) The following fees shall be paid by licensed escrow depositories to the commissioner and, together with any administrative penalty or other charge assessed under this chapter, shall be deposited into the [compliance resolution fund established pursuant to section 26-9(o):] general fund:

(1) For filing and investigation of an escrow depository's application for license, $2,000;

(2) For an application for approval to establish a branch office;

(3) For an application for approval to relocate an existing office or branch;

(4) For initial issuance and annual renewal of an escrow depository's license, $100;

(5) For initial issuance and annual renewal of a branch office license, $50;

(6) For reissuance of a license for the change in the business address of its office, $25; and

(7) For an application for approval to cease business as an escrow depository.

(b) For all escrow depositories examined by the commissioner or the commissioner's staff, the commissioner:

(1) May charge an examination fee based upon the cost per hour per examiner. The hourly fee shall be $40;

(2) May charge additional amounts for travel, per diem, mileage, and other reasonable expenses incurred in connection with the examination; and

(3) Shall bill the affected escrow depository for examination fees and expenses as soon as feasible after the close of the examination or investigation. The affected escrow depository shall pay the division within thirty days following the billing. All payments shall be deposited into the [compliance resolution fund established pursuant to section 26-9(o).] general fund. Any dispute by the affected escrow depository relating to these billings shall be reviewed by the commissioner who may modify, waive, or suspend any billing."

SECTION 45. Section 452-17, Hawaii Revised Statutes, is amended to read as follows:

"452-17 Fees. (a) The fees for application, licensing, and other registrations shall be as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91, and shall be paid in advance and deposited with the director of commerce and consumer affairs to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund.

(b) Every applicant who is required by the board to be examined shall pay an examination fee as provided in rules adopted by the director pursuant to chapter 91. The examination fee may be paid directly to the testing agency by the director or the examinee or deposited with the director of commerce and consumer affairs to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 46. Section 454-3, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) All fees shall be established and adopted by the director in accordance with chapter 91 and shall be deposited into the [compliance resolution fund established pursuant to section 26-9(o).] general fund. Failure of any mortgage broker or mortgage solicitor to pay the biennial renewal fee on or before December 31 of an even-numbered year shall constitute an automatic forfeiture of the license. The forfeited license may be restored; provided that application for restoration is made within six months of the forfeiture and a penalty fee is paid in addition to the delinquent license fee. A licensee who fails to restore a license as provided in this subsection shall apply as a new applicant."

SECTION 47. Section 466-8, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:

"(g) All fees shall be established and adopted by the director in accordance with chapter 91 and shall be deposited into the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 48. Section 467-11, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) All fees for applications, registrations, certificates, and any license prescribed by this chapter shall be deposited to the credit of the [compliance resolution fund established pursuant to section 26-9(o),] general fund, and all fees allocated to the real estate education fund shall be as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91."

SECTION 49. Section 467-30, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) All condominium hotel operators shall register with the commission as a sole proprietor, partnership, limited liability company, or corporation and shall:

(l) Register by submitting a completed commission application form with the commission requested information, receive commission approval prior to conducting condominium hotel activity, and re-register on or before the commission prescribed deadline prior to the registration expiration date. The registration and re-registration shall expire on December 31 of an even-numbered year. Registration information shall include but not be limited to the number of apartments managed for others as well as the number of apartments owned by the condominium hotel operator. Any operator failing to register with the commission shall be subject to a fine not exceeding an amount equal to $25 multiplied by the aggregate number of apartments being utilized as a condominium hotel. Each month or fraction of a month of noncompliance shall be deemed a new and separate violation;

(2) Obtain and keep current a fidelity bond from an insurance company authorized to issue fidelity bonds by the insurance division of the department of commerce and consumer affairs. The fidelity bond shall be in an amount equal to $500 multiplied by the aggregate number of apartments in the condominium hotel operation; provided that the minimum amount of the fidelity bond required by this paragraph shall not be less than $20,000 nor greater than $100,000. The aggregate number of apartments excludes the number of apartments owned by the condominium hotel operator either as a sole proprietor, partnership, limited liability company, or corporation or those apartments included in a registered time share plan managed by a registered time share plan manager. The fidelity bond shall cover all of the condominium hotel operator's employees handling or having custody and control of either the condominium hotel operator's or the apartment owner's funds, or both. Upon request by the commission, the condominium hotel operator shall provide evidence of a current fidelity bond or a certification statement from an insurance representative of an insurance company authorized by the insurance division of the department of commerce and consumer affairs certifying that the fidelity bond is in effect and meets the requirements of this section and the rules adopted by the commission. The commission may adopt rules establishing conditions and terms by which it may grant a bond alternative or permit deductibles. No condominium hotel operator shall be exempt from the fidelity bond requirement; and

(3) Pay an application fee and an initial registration or a re-registration fee as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91, which fees shall be deposited with the director of commerce and consumer affairs to the credit of the [compliance resolution fund established pursuant to section 26-9(o);] general fund;

provided that this section shall not apply to persons who are subject to section 467-2."

SECTION 50. Section 468L-27, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Each citation shall be in writing and shall describe the basis of the citation, including the specific statutory provision alleged to have been violated and may contain an order of abatement directing the travel agency to cease engaging in the business of a charter tour operator and an assessment of administrative fines as provided by this section. All fines collected under this section shall be deposited in the [special fund established under section 26-9(o).] general fund."

SECTION 51. Section 482-2, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Upon filing the application, the applicant shall pay to the director a fee of $50. A special handling fee of $20 for expediting registration of a trade name shall be assessed by the director. All special handling fees shall be credited to the [compliance resolution fund established under section 26-9(o).] general fund."

SECTION 52. Section 482-36, Hawaii Revised Statutes, is amended to read as follows:

"482-36 Fees. The application fee to register a mark shall be $50 for each class of goods or services. A special handling fee of $20 for expediting the registration of a mark shall be assessed by the director for each class of goods or services. All special handling fees shall be credited to the [compliance resolution fund established under section 26-9(o).] general fund. Unless otherwise specified by the director, these fees shall not be refundable."

SECTION 53. Section 514A-44, Hawaii Revised Statutes, is amended to read as follows:

"514A-44 Deposit of fees. All fees collected under this chapter shall, unless otherwise provided in this chapter, be deposited by the director of commerce and consumer affairs to the credit of the [compliance resolution fund established pursuant to section 26-9(o).] general fund."

SECTION 54. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 55. This Act shall take effect on July 1, 2004.