STAND. COM. REP. NO. 794

Honolulu, Hawaii

RE:    S.B. No. 505

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 505, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CONDOMINIUMS,"

begs leave to report as follows:

     The purpose and intent of this measure is to promote mediation as a means to resolve condominium related disputes.

     More specifically, this measure:

     (1)  Adds "support for mediation of condominium related disputes" as an educational purpose to be funded by the condominium education trust fund;

     (2)  Establishes an additional annual condominium education trust fund fee of $1 per condominium unit to be dedicated to supporting mediation of condominium related disputes;

     (3)  Sets the condominium education trust fund fee at a total of $3 per unit until the Real Estate Commission adopts rules; and

     (4)  Requires the Real Estate Commission to make adjustments to the condominium education trust fund to ensure that adequate funds are available for mediation of condominium related disputes and that requests for mediation received prior to July 1, 2015, are fully accommodated.

     Your Committee received written comments in support of this measure from the Community Association Institute.

     Your Committee received written comments on this measure from the Hawaii Real Estate Commission.

     Your Committee finds that mediation is an informal, inexpensive, and confidential process for resolving disputes quickly and would be particularly advantageous in a condominium setting because of the potential to preserve or restore harmony within a condominium community.  This measure would provide financial support for mediation of condominium related disputes.

     Your Committee has amended this measure by:

     (1)  Clarifying that the condominium education trust fund fee that totals $3 per unit is the additional condominium education trust fund fee;

     (2)  Requiring, on June 30 of every odd-numbered year, any unexpended moneys initially dedicated to supporting mediation to be used for other educational purposes;

     (3)  Requiring the Real Estate Commission to continue to budget and use funds allocated for other educational purposes, if necessary, for mediation of condominium disputes utilizing professionally trained mediators between the effective date of the Act and July 1, 2015;

     (4)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

     (5)  Making technical nonsubstantive amendments for the purposes of style and clarity.

     Your Committee notes the discrepancy in the amounts of the additional condominium education trust fund fee and expresses its intent that the Real Estate Commission make no less than $3 of the total annual condominium education trust fund fee it has established by rule, and assessed and collected per affected condominium unit, available for the purpose of supporting mediation of condominium related disputes.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 505, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 505, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair