Bail Bond Agents; Sureties; Licensing; Commerce and Consumer Affairs; Attorney General
Creates a licensing requirement for bail bond agents. Requires the director of commerce and consumer affairs to adopt rules for the process and procedure of obtaining a bail bond agent license. Prohibits certain acts by bail bond agents. Provides for civil and criminal penalties for violations by bail bond agents. Requires the director of commerce and consumer affairs to adopt rules regulating compensated sureties. (SD1)
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII
A BILL FOR AN ACT
relating to bail.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that bail and bail bonding agents provide an extraordinarily valuable service to law enforcement and accused persons alike. The bail clause of the eighth amendment of the United States Constitution embodies the long-standing Anglo-American tradition that favors pretrial release of accused persons. Pretrial release on bail frees up crowded jail space and permits defendants to participate more fully in their defense. Bail bonding agents, backed by surety insurance companies, make possible the pretrial release of more than two million defendants annually, at no expense to taxpayers, while providing assurances that people charged with crimes will appear as scheduled to answer those charges.
The legislature finds, determines, and declares that the simplicity, effectiveness and uniformity of bail procedures applicable to compensated sureties who are subject to the regulatory authority of the Hawaii division of insurance are matters of statewide concern. This Act also requires the discharge of surety only after a breach of one or more conditions of bail set forth in sections 804-7.1 and 804-7.4, Hawaii Revised Statutes, or if the defendant remains incarcerated for offenses other than the subject of the surety.
SECTION 2. Chapter 804, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . Bail bond agents; sureties
§804-A Definitions. As used in this part, unless the context otherwise requires:
"Bail agent" or "bail bond agent" means any person who furnishes bail for compensation in any court in this State and who is appointed by an insurer by power of attorney to execute or countersign bail bonds in connection with judicial proceedings. "Bail agent" shall not include a person who is a full-time salaried officer or employee of an insurer or a person who pledges United States currency, a United States postal money order, a cashier's check, or other property as security for a bail bond in connection with a judicial proceeding, whether for compensation or otherwise.
"Bail fugitive" means a defendant in a pending criminal case who has been released from custody under a financially secured appearance, cash, or other bond and has had that bond declared forfeited, or a defendant in a pending criminal case who has violated a bond condition whereby apprehension and re-incarceration are permitted.
"Bail insurance company" means an insurer engaged in the business of writing bail appearance bonds through bonding agents and is subject to regulation by the insurance commissioner of the department of commerce and consumer affairs.
"Compensated surety" means any person in the business of writing bail appearance bonds who is subject to regulation by the director of commerce and consumer affairs.
"Depositor of bail" means a person or entity that has deposited money or bonds to secure the release of a person charged with a crime or offense.
"Insurance Commissioner" or "commissioner" means the insurance commissioner of the State.
"On the board" means that the name of a compensated surety has been publicly posted or disseminated by a court as being ineligible to write bail bonds.
§804-B Bail agent license; qualifications. (a) No person shall qualify to be a bail bond agent unless the person is licensed pursuant to this part and is appointed to represent an insurance company.
(b) No firm, partnership, association, or corporation shall be licensed as a bail bond agent.
(c) No person engaged as a law enforcement or judicial officer, jailer, or court clerk shall be licensed as a bail bond agent or bail agency.
§804-C License required; expiration. (a) No person may act, or offer or advertise as being able to act, as a bail bond agent unless the person is licensed pursuant to this part.
(b) Each licensee's license shall expire biennially on January 1 unless sooner suspended or revoked by the insurance commissioner. The insurance commissioner may suspend or revoke a bail bond agent license if the insurer employing the bail bond agent notifies the insurance commissioner that the insurer has cancelled the licensee's authority to act for or in behalf of the insurer.
(c) The insurance commissioner shall prepare and deliver to each licensee an identification card showing the name, address, and classification of the licensee. The identification card shall clearly state that the person is a licensed bail agent.
(d) The insurance commissioner shall annually notify each bail bond agent in writing regarding changes to the state laws regarding the regulation of bail bond agents.
§804-D Names. (a) Any bail agent using an assumed name, including without limitation a trade name or fictitious name, under which the bail agent conducts business shall register the name with the insurance commissioner prior to using the assumed name.
(b) The insurance commissioner shall not accept registration of any name that is similar to another currently used by another licensed bail agent, that would tend to be misleading to the public, or that is identical or similar to the name of any insurance producer whose license has been revoked or suspended.
(c) Every bail agent licensee shall promptly file with the commissioner a written notice of any change in or discontinuation of the use of any name.
(d) The insurance commissioner may adopt rules pursuant to chapter 91 necessary to implement the provisions of this section.
§804-E License denial, suspension, revocation, or termination. (a) The insurance commissioner may place on probation, suspend, revoke, refuse to continue or renew, or refuse to issue a bail agent license if, after notice and hearing, the insurance commissioner finds any one or more of the following:
(1) Any incorrect, misleading, incomplete, or materially untrue information in the license application;
(2) Any cause for which issuance of the license could have been refused had it then existed and been known to the commissioner at the time of issuance;
(3) Violation of, or noncompliance with, any insurance law or violation of any lawful rule, order, or subpoena of the commissioner;
(4) Obtaining or attempting to obtain the license through misrepresentation or fraud;
(5) Improperly withholding, misappropriating, or converting to the licensee's or applicant's own use any moneys or property belonging to policyholders, insurers, beneficiaries, or others received in the course of the business of insurance;
(6) Misrepresentation of the terms of any actual or proposed insurance contract or application for insurance;
(7) Conviction of a felony or misdemeanor involving moral turpitude. For the purposes of this paragraph, "moral turpitude" shall include any sexual offense against a child;
(8) Commission of any unfair trade practice or fraud;
(9) The use of fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial irresponsibility in this State or elsewhere;
(10) Forgery of another's name on an application for insurance or to any document related to an insurance transaction;
(11) Cheating on an examination, including but not limited to improperly using notes or any other reference material to complete an examination for an insurance license;
(12) Failure to fully meet the licensing requirements; or
(13) Knowingly accepting insurance business from a person who is not licensed.
(b) The insurance commissioner shall deny, suspend, revoke, or refuse to renew, the license of any person engaged in the business of bail bond agent for any of the following reasons:
(1) Knowingly failing to comply with or knowingly violating any provisions of this part or of any proper order or rule of the insurance commissioner or any court of this State where the licensee knew or reasonably should have known of the provisions, order, or rule;
(2) Any activity prohibited in statute;
(3) Failure to satisfy, pay, or otherwise discharge a bail forfeiture judgment after having the bail agent's name placed on the board, for more than forty-five consecutive days for the same forfeiture;
(4) Conviction of a felony, a guilty plea to a felony, or a plea of nolo contendere to a felony within the last ten years, regardless of whether the conviction or plea resulted from conduct in or conduct related to the bail bond business;
(5) Failure to report, to preserve without use and retain separately, or to return collateral taken as security on any bond to the principal or depositor of the collateral;
(6) Failure to pay a final, nonappealable judgment award for failure to return or repay collateral received to secure a bond;
(7) Hiring, contracting with, or paying compensation to any individual for bail recovery services in violation of the provisions of part;
(8) Continuing to execute bail bonds in any court in this State while on the board, where the bail forfeiture judgment that resulted in being placed on the board has not been paid, stayed, vacated, exonerated, or otherwise discharged;
(9) Paying, directly or indirectly, any commission, service fee, brokerage, or other valuable consideration to any person selling, soliciting, or negotiating bail within this State unless, at the time the services were performed, the person was a duly licensed bail agent under this part for the performance of the services.
(c) If the insurance commissioner denies, suspends, revokes, or refuses to renew any license, the aggrieved person shall be given an opportunity for a hearing subject to judicial review.
(d) The insurance commissioner, in lieu of or in addition to any other disciplinary action permitted in this section, may assess an administrative penalty upon the licensee. The administrative penalty shall be no less than $300 and no more than $1,000 for each instance of violation. Any monetary assessment shall be deposited into the general fund of the State.
§804-F Prohibited activities; penalties. (a) It is unlawful for any licensed bail agent to:
(1) Specify, suggest, or advise the employment of any particular attorney to represent the licensee's principal;
(2) Pay a fee or rebate or give or promise to give anything of value to a jailer, police officer, law enforcement officer, clerk, deputy clerk, any other employee of any court, district attorney or any of the district attorney's employees, or any person who has power to arrest or to hold any person in custody;
(3) Pay a fee or rebate or give anything of value to an attorney in bail bond matters, except in defense of any action on a bond or as counsel to represent the bail bond agent or the agent's representative or employees;
(4) Pay a fee or rebate or give or promise to give anything of value to the person on whose bond the licensee is surety;
(5) Except for the fee received for the bond, to fail to return any collateral or security within ten working days after receipt of a copy of the court order that results in a release of the bond by the court, unless the collateral also secures other obligations. A copy of the court order shall be provided to the bail agent in Hawaii or the company, if any, for whom the bail agent works whether in Hawaii or out-of-state, or both, by the person for whom the bond was written;
(6) Accept anything of value from a person on whose bond the licensee is surety or from others on behalf of the person except the fee or premium on the bond, but the bail bond agent may accept collateral security or other indemnity if:
(A) No collateral or security in tangible property is taken by pledge or debt instrument that allows retention, sale, or other disposition of the property upon default;
(B) No collateral or security interest in real property is taken by mortgage or any other instrument unless the bail bond agent's interest in the property is limited to the amount of the bond;
(C) The collateral or security taken by the bail bond agent is not pledged directly to any court as security for any appearance bond; and
(D) The person from whom the collateral or security is taken is issued a receipt describing the condition of the collateral at the time it is taken into the custody of the bail bond agent;
(7) Coerce, suggest, aid and abet, offer promise of favor, or threaten any person on whose bond the licensee is surety or offers to become surety to induce that person to commit any crime;
(8) Act as a bail bond agent in any court of record in this State while the name of the licensee is on the board, or under any circumstance where a licensee has failed to pay a bail forfeiture judgment after all applicable stays of execution have expired and the bond has not been otherwise exonerated or discharged;
(9) For any one licensee to have more than one bond posted at any one time and, in any single case, on behalf of any one person (no stacking powers);
(10) Fail to issue to the person from whom collateral or security is taken a receipt that includes a description of the collateral or security at the time it is taken into the custody of the bail bond agent;
(11) Fail to post a bond within twenty-four hours of receipt of full payment or a signed contract for payment, or if the bond is not posted within twenty-four hours of receipt of full payment or a signed contract for payment, failure to refund all moneys received, release all liens, and return all collateral within forty-eight hours of receipt of the payment or contract.
(b) Any licensee who violates any provision of this section is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $1,000, or by imprisonment for not more than one year, or by both. Any criminal penalty prescribed in this section for a violation of this section shall be in addition to, and not exclusive of, any other applicable penalty prescribed by law.
(c) Any person who acts or attempts to act as a bail bond agent and who is not licensed as such under this part is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $1,000, or by imprisonment for not more than one year, or by both.
§804-G Fiduciary responsibilities. (a) All premiums belonging to insurers and all unearned premiums belonging to insureds received by a bail agent licensed under this part shall be treated by the bail agent in a fiduciary capacity. The insurance commissioner may adopt rules pursuant to chapter 91 relating to the treatment of these premiums.
(b) All premiums received, less commissions if authorized, shall be remitted to the insurer on or before the contractual due date or, if there is no contractual due date, within forty-five days after receipt.
(c) All returned premiums received from insurers or credited by insurers to the account of the bail agent shall be remitted to or credited to the account of the person entitled thereto within thirty days after the receipt or credit.
(d) If any bail agent has failed to account for any collected premium to the insurer more than forty-five days after the contractual due date or, if there is no contractual due date, more than ninety days after receipt, the insurer shall promptly report the failure to the insurance commissioner in writing.
(e) Every insurer shall remit unearned premiums to the insured or shall otherwise credit the account of the bail agent, as soon as is practicable after entitlement to the premiums has been established, but in no event more than forty-five days after the effective date of any cancellation or termination effected by the insurer or after the date of entitlement thereto as established by notification of cancellation or of termination or as otherwise established. It shall be the responsibility of any bail agent having knowledge of a failure on the part of any insurer to comply with this subsection to promptly report the failure to the insurance commissioner in writing.
(f) No bail agent shall commingle premiums belonging to insurers and returned premiums belonging to insureds with the bail agent's personal funds or with any other funds except those directly connected with the bail agent's bail business.
(g) Any insurer that delivers, in this State, a policy of insurance to a bail agent representing the interest of the insured upon the application or request of such producer shall be deemed to have authorized such producer to receive on the insurer's behalf any premium due upon issuance or delivery of the policy; and the insurer shall be deemed to have so authorized the producer.
(h) All collateral shall be preserved and separately retained and the bail agent shall be responsible for the return of all such collateral taken and shall be liable with the surety company for such failure. When a bail bond agent accepts collateral as security, the bail bond agent shall give a written receipt for the collateral to the person on whose bond the bail bond agent is indemnitor or to another on behalf of such principal and the surety, which shall provide in detail a full description of the collateral received. In the event of the failure of or inability for any reason of a bail bond agent or the agent's heirs or assignees to return collateral as required in this subsection, the commissioner or the commissioner's designee is authorized to take immediate possession of the collateral and take whatever actions are necessary and appropriate to ensure compliance with the obligations of this part relating to the return of collateral.
§804-H Administration. This part shall be administered and enforced by the insurance commissioner."
SECTION 3. Chapter 804, Hawaii Revised Statutes, is amended by adding five new sections to be appropriately designated and to read as follows:
"§804- Exoneration from bond liability. (a) Any person executing a bail bond as principal or as surety shall be exonerated as follows:
(1) When the condition of the bond has been satisfied;
(2) When the amount of the forfeiture has been paid;
(3) When the surety appears and provides satisfactory evidence to the court that the defendant is unable to appear before the court due to the defendant's death or the detention or incarceration of the defendant in a foreign jurisdiction, if the defendant is incarcerated for a period in excess of ninety days and the State has refused to extradite the defendant; except that if the State extradites the defendant, all costs associated with the extradition shall be borne by the surety up to the amount of the bond. For the purposes of this paragraph, "costs associated with extradition" shall be calculated as and limited to the round-trip mileage between the Hawaii court of jurisdiction and the location of the defendant's incarceration at the rate allowed for reimbursement, up to the amount of the bond; or
(4) Upon surrender of the defendant into custody at any time before a judgment has been entered against the sureties for forfeiture of the bond, upon payment of all costs occasioned thereby. A surety may seize and surrender the defendant to the sheriff of the county wherein the bond is taken, and it is the duty of the sheriff, on such surrender and delivery of a certified copy of the bond by which the surety is bound, to take the person into custody and, by writing, acknowledge the surrender.
(b) Upon entry of an order for deferred prosecution or deferred judgment, sureties upon any bond given for the appearance of the defendant shall be released from liability on the bond.
(c) A trial court has no jurisdiction to relieve the surety from liability on a bail bond except on grounds generally recognized by the law as excusing the performance of the undertaking, and such grounds exist only when:
(1) The appearance of accused is made impossible by an act of God;
(2) An act of the state that is the beneficiary of the bond; or
(3) An act of law.
The case where the principal in a bail bond dies before the day of performance or is prevented by illness from appearing falls within paragraph (1). The case where the principal in a bail bond is in prison within the State, pursuant to a judgment of a court of competent jurisdiction of the State falls within paragraph (2). The case where the party has been turned over to the federal court within the State and is serving a sentence by that court, or if the party has been arrested in the State and is sent out of the State by the governor upon requisition from another state or foreign jurisdiction, falls within paragraph (3).
(d) Where the defendant in a criminal case is imprisoned in another state at the time the case is called for trial and cannot appear pursuant to the conditions of the defendant's bond, and the surety thereon offers to defray the costs and expenses involved in returning the defendant to Hawaii upon completion of the imprisonment that prevented the defendant's attendance in the trial court, the surety is relieved from a forfeiture.
(e) A defendant who is transferred from the State's custody to a federal agency pursuant to a detainer has never been released into the legal custody of the surety who is consequently discharged from any liability on the bond.
(f) Broad discretion is vested in the court to consider all the facts and circumstances of each case in their totality to achieve a just result and satisfy the best interests of the public.
(g) Forfeiture proceeding not to enrich public treasury. The enriching of the public treasury is not part of the object at which a forfeiture proceeding is aimed.
(h) Effect of material increase of risk to bondsman. When a bondsman enters into a surety agreement, he undertakes a calculated risk, so that events which materially increase that risk have the effect of terminating the obligation.
(i) One of the functions of a bond is to relieve state of burden of securing appearance in court by giving bondsman a strong incentive to insure such attendance. Where person-posting bond made money available to the court and did all that could be expected in attempting to secure defendant's attendance in court, purposes of bond were served and state will not be penalized by bond's remittance.
§804- Enforcement procedures for compensated sureties. (a) Each court of record in this State shall implement a board system for the recording and dissemination of the names of those compensated sureties who are prohibited from posting bail bonds in the State due to an unpaid judgment as set forth in this section.
(b) By entering into a bond, each obligor, including the bond principal and compensated surety, submits to the jurisdiction of the court and acknowledges the applicability of the forfeiture procedures set forth in this section.
(c) Liability of bond obligors on bonds issued by compensated sureties may be enforced, without the necessity of an independent action, as follows:
(1) In the event a defendant does not appear before the court and is in violation of the primary condition of an appearance bond, the court may declare the bond forfeited.
(2) If a bond is declared forfeited by the court, notice of the bail forfeiture order shall be served on the bail agent by certified mail and on the bail insurance company by regular mail within ten days after the entry of the forfeiture. Service of notice of the bail forfeiture on the defendant is not required. The notice shall include, but need not be limited to:
(A) A statement intended to inform the compensated surety of the entry of forfeiture;
(B) An advisement that the compensated surety has the right to request a show cause hearing fifteen days after receipt of notice of forfeiture, by procedures set by the court; and
(C) An advisement that, if the compensated surety does not request a show cause hearing, judgment shall be entered upon expiration of thirty days following the entry of forfeiture.
(3) A compensated surety, upon whom notice of a bail forfeiture order has been served, shall have fifteen days after receipt of notice of the forfeiture to request a hearing to show cause why judgment on the forfeiture should not be entered for the State against the compensated surety. The request shall be granted by the court and a hearing shall be set within thirty days after entry of forfeiture or at the court's earliest convenience. At the conclusion of the hearing if requested by the compensated surety, the court may enter judgment for the State against the compensated surety, or the court may in its discretion order further hearings. Upon expiration of thirty days after the entry of forfeiture, the court shall enter judgment for the State against the compensated surety if the compensated surety did not request a hearing to show cause.
(4) If a show cause hearing was timely set, but the hearing did not occur within thirty days after the entry of forfeiture, any entry of judgment at the conclusion of the hearing against the compensated surety shall not be vacated on the grounds that the matter was not timely heard. If judgment is entered against a compensated surety upon the conclusion of a requested show cause hearing, and the hearing did not occur within thirty days after the entry of forfeiture, execution upon the judgment shall be automatically stayed for no more than one hundred twenty days after entry of forfeiture.
(5) If at any time prior to the entry of judgment, the defendant appears in court, either voluntarily or in custody after surrender or arrest, the court, on its own motion, shall direct that the bail forfeiture be set aside and the bond exonerated at the time the defendant first appears in court; except that if the State extradites the defendant, all necessary and actual costs associated with the extradition shall be borne by the surety up to the amount of the bond.
(6) If, at a time prior to the entry of judgment, the surety provides proof to the court that the defendant is in custody in any other jurisdiction within the State, the court, on its own motion, shall direct that the bail forfeiture be set aside and the bond exonerated; except that if the court extradites the defendant, all necessary and actual costs associated with the extradition shall be borne by the surety up to the amount of the bond. If the court elects to extradite the defendant, any forfeiture will be stayed until such time the defendant appears in the court where the bond returns.
(7) A compensated surety shall be exonerated from liability upon the bond by satisfaction of the bail forfeiture judgment, surrender of the defendant, or order of the court. If the surety provides proof to the court that the defendant is in custody in any other jurisdiction within the State, within ninety days after the entry of judgment, the court, on its own motion, shall direct that the bail forfeiture judgment be vacated and the bond exonerated; except that if the court extradites the defendant, all necessary and actual costs associated with the extradition shall be borne by the surety up to the amount of the bond. If the court elects to extradite the defendant, any judgment will be stayed until the time the defendant appears in the court where the bond returns.
(8) Execution upon the bail forfeiture judgment shall be automatically stayed for ninety days from the date of entry of judgment; except that if judgment is entered against a compensated surety upon the conclusion of a requested show cause hearing, and such hearing did not occur within thirty days after the entry of forfeiture, the judgment shall be automatically stayed.
(9) Upon the expiration of the stay of execution described in paragraph (8), the bail forfeiture judgment shall be paid forthwith by the compensated surety, if not previously paid, unless the defendant appears in court, either voluntarily or in custody after surrender or arrest, or the court enters an order granting an additional stay of execution or otherwise vacates the judgment.
(10) If a bail forfeiture judgment is not paid on or before the expiration date of the stay of execution, the name of the bail bond agent shall be placed on the board of the court that entered the judgment. The bail bond agent shall be prohibited from executing any further bail bonds in this State until the judgment giving rise to placement on the board is satisfied, vacated, or otherwise discharged by order of the court.
(11) If a bail forfeiture judgment remains unpaid for thirty days after the name of the bail bond agent is placed on the board, the court shall send notice by certified mail to the bail insurance company for whom the bail bond agent has executed the bond that, if the judgment is not paid within fifteen days after the date of mailing of the notice, the name of the bail insurance company shall be placed on the board and the company shall be prohibited from executing any further bail bonds in this State until the judgment giving rise to placement on the board is satisfied, vacated, or otherwise discharged by order of the court.
(12) A compensated surety shall be removed forthwith from the board only after every judgment for which the compensated surety was placed on the board is satisfied, vacated, or discharged or stayed by entry of an additional stay of execution. No compensated surety shall be placed on the board in the absence of the notice required by this section.
(13) The court may order that a bail forfeiture judgment be vacated and set aside or that execution thereon be stayed upon conditions as the court may impose, if it appears that justice so requires, as provided in section 804-DD(f)(g)(h)(i); provided that trial court has no jurisdiction to relieve the surety from liability on a bail bond except as provided in section 804-DD(c).
(14) A compensated surety shall be exonerated from liability upon the bond by satisfaction of the bail forfeiture judgment, surrender of the defendant, or by order of the court. If the defendant appears in court, either voluntarily or in custody after surrender or arrest, within ninety days after the entry of judgment, the court, at the time the defendant first appears in court, on its own motion, shall direct that the bail forfeiture judgment be vacated and the bond exonerated; except that if the State extradites such defendant, all necessary and actual costs associated with such extradition shall be borne by the surety up to the amount of the bond.
(15) If, within one year after payment of the bail forfeiture judgment, the compensated surety effects the apprehension or surrender of the defendant and provides reasonable notice to the court to which the bond returns that the defendant is available for extradition, the court shall vacate the judgment and order a remission of the amount paid on the bond, less any necessary and actual costs incurred by the State and the sheriff who has actually extradited the defendant.
(16) Bail bonds shall be deemed valid notwithstanding the fact that a bond may have been written by a compensated surety who has been placed on the board and is otherwise prohibited from writing bail bonds. The ineligibility of a compensated surety to write bonds because the name of the compensated surety has been placed on the board shall not be a defense to liability on any appearance bond accepted by a court.
(17) The automatic stay of execution upon a bail forfeiture judgment shall expire pursuant to its terms unless the defendant appears and surrenders to the court having jurisdiction or satisfies the court that appearance and surrender by the defendant was impossible and without fault by the defendant. The court may order that a forfeiture be set aside and judgment vacated as set forth in this section.
(18) If the name of a bail bond agent is placed on the board, and remains on the board for the same forfeiture for more than forty-five consecutive days, the court that placed the name of the bail bond agent on the board shall order the insurance commissioner to suspend the license of the bail bond agent until such time as all forfeitures and judgments ordered and entered against the bail bond agent have been certified as paid or vacated by order of a court of record. If the bail forfeiture judgment is not paid within fifteen days after the name of a bail insurance company has been placed on the board, the insurance commissioner shall also order the bail insurance company on the bond to pay the judgment after notice and hearing."
SECTION 4. In codifying the new sections added by sections 2 and 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.
SECTION 6. This Act shall take effect upon its approval; provided that enforcement of section 2 of this Act shall not commence until the director of commerce and consumer affairs adopts rules as provided in section 1 of this Act and files the rules with the office of the lieutenant governor as provided in chapter 91, Hawaii Revised Statutes.