HB2657 HD1

SECTION 1. The purpose of this Act is to regulate tenant screening agencies.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

TENANT SCREENING AGENCIES

§ -1 Purpose. The purpose of this chapter is to regulate tenant screening agencies. Nothing in this chapter shall be construed to authorize inquiries or allow consideration of information prohibited by chapter 515, or to diminish protections under chapter 515.

§ -2 Administration and enforcement. The department of commerce and consumer affairs shall administer and enforce this chapter.

§ -3 General definitions. For the purposes of this chapter:

"Department" means the department of commerce and consumer affairs.

"Landlord" means the same as defined under section 521-8; except that the term does not mean an owner, lessor, sublessor, assignee, or successor in interest of a dwelling unit or building who is excluded under section 521-7 or the agent of the excluded person.

"Prospective tenant report" means any written, oral, or other communication of information concerning the credit worthiness, credit standing, rent payment delinquency, eviction history, or criminal history background of, or other information on a prospective tenant that can be lawfully considered by a landlord to evaluate whether the landlord's dwelling unit should be rented to the prospective tenant.

"Tenant" means the same as defined under section 521-8; except that the term does not mean a person who is excluded under section 521-7.

"Tenant screening agency" means any person, who for compensation, collects information on a prospective tenant to compile and submit a prospective tenant report to a landlord.

§ -4 Tenant screening agency; registration. (a) Each person operating as a tenant screening agency shall register with the department of commerce and consumer affairs.

(b) The department may require a tenant screening agency to renew the agency's registration after an initial period of registration and may require a tenant screening agency to pay registration and renewal fees and establish other terms and conditions for registration or renewal.

§ -5 Permissible distribution of prospective tenant report. A tenant screening agency may furnish a prospective tenant report to:

(1) A landlord who has ordered or requested the report when the tenant screening agency reasonably believes that the landlord will use the report only to evaluate whether to rent the landlord's dwelling unit to the prospective tenant;

(2) Any person upon the written direction of the prospective tenant; or

(3) A government agency pursuant to a court order or subpoena.

§ -6 Prohibition on reporting of obsolete information. A tenant screening agency shall not include in a prospective tenant report any of the following:

(1) Any bankruptcy case in which the prospective tenant was a named debtor if the date of entry of the order for relief antedates the report by more than ten years;

(2) Any suit or judgment in which the prospective tenant was a named party if the date of entry of the final order antedates the report by more than seven years;

(3) Any tax lien paid by the prospective tenant if the date of payment antedates the report by more than seven years;

(4) Any delinquent account payable, other than rent, by the prospective tenant that was placed for collection or charged to loss by the payee if the date of placement or charge antedates the report by more than seven years;

(5) Any delinquency of rent for a dwelling unit by the prospective tenant if the due date of the rent antedates the report by more than seven years;

(6) Any eviction of the prospective tenant from a rented dwelling unit if the date of eviction antedates the report by more than seven years; or

(7) Any abandonment by the prospective tenant of a rented dwelling unit without the consent of the landlord if the date of abandonment, as reasonably determined by the tenant screening agency, antedates the report by more than seven years.

§ -7 Disclosure of information to prospective tenant. (a) A tenant screening agency, upon a prospective tenant's request and showing of proper identification, shall disclose to the prospective tenant:

(1) Any information on the prospective tenant that is held by the tenant screening agency at the time of the request;

(2) The sources of all information collected by the tenant screening agency under paragraph (1) after January 1, 2009; and

(3) Every landlord who has received from the tenant screening agency information on the prospective tenant after January 1, 2009.

(b) The tenant screening agency shall disclose the requested information to the prospective tenant within ten days of receipt of the request.

§ -8 Procedure in case of disputed information. (a) If a prospective tenant disputes the completeness or accuracy of any information disclosed to the prospective tenant by a tenant screening agency under section -7 and directly conveys that dispute to the tenant screening agency, the agency, within a reasonable time, shall complete a reinvestigation of the information.

If after the reinvestigation, the tenant screening agency finds that the information is inaccurate or no longer verifiable, the agency shall promptly correct or delete the information.

If after the reinvestigation, the tenant screening agency finds that the information is accurate and verifiable or that the dispute is frivolous or irrelevant, the agency shall promptly notify the prospective tenant.

(b) If a reinvestigation does not resolve the dispute, the prospective tenant may submit a brief statement with the tenant screening agency setting forth the nature of the dispute. The tenant screening agency may limit the statement to not more than one hundred words if the agency provides the prospective tenant with assistance to write a clear summary of the dispute.

(1) Note clearly in any subsequent prospective tenant report containing the disputed information that there is a dispute by the prospective tenant; and

(2) Provide either the prospective tenant's statement or a clear and accurate summary of the statement.

(d) Following any correction or deletion of information on a prospective tenant which is found to be inaccurate or no longer verifiable pursuant to subsection (a), the prospective tenant may request the tenant screening agency to notify each landlord who received the inaccurate or non-verifiable information within the past two years of the inaccuracy or non-verifiability. Within ten days of receipt of a request, the tenant screening agency shall notify the landlord in writing of the correction or deletion. The tenant screening agency shall not charge the prospective tenant a fee for notifying the landlord.

§ -9 Adverse action report. (a) If a landlord decides not to rent a dwelling unit to a prospective tenant because of information in a prospective tenant report, the landlord shall:

(1) Advise the prospective tenant of the adverse action; and

(2) Notify the prospective tenant of the tenant screening agency which prepared the report.

The landlord shall notify the prospective tenant within ten days of making the decision.

(b) A landlord shall not be held in violation of subsection (a) if the landlord shows by a preponderance of the evidence that the landlord used reasonable procedures to comply.

§ -10 Suspension or revocation of registration. The department, after a hearing, may suspend or revoke the registration of a tenant screening agency for violating this chapter.

§ -11 Penalty. Any tenant screening agency that violates this chapter shall be subject to a fine of not more than $500 for each violation.

§ -12 Rules. The department may adopt rules in accordance with chapter 91 to implement this chapter.

§ -13 Compliance with state consumer reporting agency laws if applicable. When a tenant screening agency also acts as a "consumer reporting agency" or "consumer credit reporting agency" as defined under another state law, the agency also shall comply with the other state law. If a provision of this chapter and a provision of the other state law conflict, the stricter shall prevail.

§ -14 Conflict with federal law. If any provision of this chapter conflicts with a provision of federal law, the latter shall prevail, except when the federal law declares that:

(1) A conflicting state law is superior. In such case, the provision of this chapter shall prevail; or

(2) The stricter provision between the federal law and state law shall prevail. In such case, the provision of this chapter shall prevail if stricter."

SECTION 3. Section 489P-2, Hawaii Revised Statutes, is amended by amending the definition of "consumer credit reporting agency" or "consumer reporting agency" to read as follows:

""Consumer credit reporting agency" or "consumer reporting agency" means any person who, for monetary fees or dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing credit reports to third parties, but does not include any governmental agency whose records are maintained primarily for law enforcement or licensing purposes. The term includes a "tenant screening agency" as defined under section -3."

SECTION 4. In codifying the new sections added by section 2 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. New statutory material is underscored.

SECTION 6. This Act shall take effect on January 1, 2009.

HOUSE OF REPRESENTATIVES	H.B. NO.	2657
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII