Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred S.B. No. 2289, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to update and increase the flexibility of the condominium property regimes law by allowing the Board of Directors (Board) of an association of apartment owners (AOAO) to install or authorize the installation of television signal distribution and telecommunications equipment on project common areas.

Testimony in support of this bill was submitted by Verizon Hawaii. Voicestream Wireless provided testimony in support of the bill and suggested amendments.

Your Committee finds that most condominiums were built at a time when current technology such as cable television, personal computers, and the Internet, were considered cutting-edge. As a result, the bylaws and declarations of all but the most recent condominium property regimes contain restrictions that make it unnecessarily difficult for AOAOs to upgrade their telecommunications infrastructure.

In addition, under current law, any change to the common areas of a condominium sought by the Board requires that seventy-five percent of the unit owners vote in the affirmative. This threshold makes it difficult for AOAOs to secure the requisite number of votes to move forward with their desired projects.

Your Committee finds that enabling the Board to bypass the usual seventy-five percent approval requirement, solely for telecommunications projects, may help to preserve and enhance the value of the project. Among other things, allowing the Board to enter into lease agreements with telecommunications providers may generate revenue leading to lower maintenance fees.

Your Committee has made a technical amendment to this measure to avoid future litigation and preserve existing contractual and other rights and obligations, by replacing the statutory language stating that all Board actions remain subject to legal requirements and contractual obligations, with a non-statutory savings clause. Other technical, nonsubstantive amendments were made for clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2289, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2289, S.D. 1, H.D. 1, and be placed on the calendar for Third Reading.