SB2950

SECTION 1. Section 514B-149, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c)(1) All funds collected by an association, or by a managing agent for any association, shall be:

(A) Deposited in a financial institution, including a federal or community credit union, located in the State, pursuant to a resolution adopted by the board, and whose deposits are insured by an agency of the United States government;

(B) Held by a corporation authorized to do business under article 8 of chapter 412;

(D) Purchased in the name of and held for the benefit of the association through a securities broker that is registered with the Securities and Exchange Commission, that has an office in the State, and the accounts of which are held by member firms of the New York Stock Exchange or National Association of Securities Dealers and insured by the Securities Insurance Protection Corporation; or

(E) Placed through a federally insured financial institution located in the State for investment in certificates of deposit issued through the Certificate of Deposit Account Registry Service in federally insured financial institutions located in the United States[.];

(2) All funds collected by an association, or by a managing agent for any association, shall be invested only in:

(A) Deposits, investment certificates, savings accounts, and certificates of deposit;

(B) Obligations of the United States government, the State of Hawaii, or their respective agencies; provided that those obligations shall have stated maturity dates no more than ten years after the purchase date unless approved otherwise by a majority vote of the unit owners at an annual or special meeting of the association or by written consent of a majority of the unit owners;

(C) Mutual funds comprised solely of investments in the obligations of the United States government, the State of Hawaii, or their respective agencies; provided that those obligations shall have stated maturity dates no more than ten years after the purchase date unless approved otherwise by a majority vote of the unit owners at an annual or special meeting of the association or by written consent of a majority of the unit owners; or

(D) Certificates of deposit issued through the Certificate of Deposit Account Registry Service in an amount at least equal in their market value, but not to exceed their par value, to the amount of the deposit with the depository; and

(3) The association shall provide an annual report to the commission listing the financial institutions at which the association maintains accounts. The commission shall make the report available for examination by unit owners and unit owners' authorized agents upon written request;

provided that before any investment longer than one year is made by an association, the board must approve the action; and provided further that the board must clearly disclose to owners all investments longer than one year at each year's association annual meeting.

Records of the deposits and disbursements shall be disclosed to the commission upon request. All funds collected by an association shall only be disbursed by employees of the association under the supervision of the association's board. All funds collected by a managing agent from an association shall be held in a client trust fund account and shall be disbursed only by the managing agent or the managing agent's employees under the supervision of the association's board."

SECTION 2. Section 514B-153, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The managing agent or board shall keep detailed, accurate records in chronological order, of the receipts and expenditures affecting the common elements, including bids for materials, equipment, and services, specifying and itemizing the maintenance and repair expenses of the common elements and any other expenses incurred. The managing agent or board shall also keep monthly statements indicating the total current delinquent dollar amount of any unpaid assessments for common expenses."

SECTION 3. Section 514B-154, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) The association's most current financial statement shall be provided to any interested unit owner or any owner's authorized agent at no cost or on twenty-four-hour loan, at a convenient location designated by the board[.]; provided that upon an owner's request, the financial statement shall be transmitted by mail, electronic mail, or facsimile, by the means indicated by the owner, if the unit owner indicated a preference at the time of the request; provided further that the owner shall pay a reasonable fee for administrative costs associated with handling the request. A unit owner may notify the commission of an association's failure to make the most current financial statement available. Upon such notice, the commission shall enforce this section pursuant to its enforcement powers granted under sections 514B-65, 514B-68 and 514B-69. The meeting minutes of the board of directors, once approved, for the current and prior year shall either:

(1) Be available for examination by [~~apartment~~] unit owners or owners' authorized agents at no cost or on twenty-four-hour loan at a convenient location at the project, to be determined by the board of directors; or

(2) Be transmitted to any [~~apartment~~] unit owner or any owner's authorized agent making a request for the minutes, by the board of directors, the managing agent, or the association's representative, within fifteen days of receipt of the request; provided that the minutes shall be transmitted by mail, electronic mail [~~transmission~~], or facsimile, by the means indicated by the owner, if the owner indicated a preference at the time of the request; and provided further that the owner shall pay a reasonable fee for administrative costs associated with handling the request.

Costs incurred by [~~apartment~~] unit owners pursuant to this subsection shall be subject to section 514B‑105(d).

(b) Financial statements, general ledgers, the accounts receivable ledger, accounts payable ledgers, check ledgers, insurance policies, contracts, and invoices of the association for the duration those records are kept by the association and delinquencies of ninety days or more shall be available for examination by unit owners or owners' authorized agents at convenient hours at a place designated by the board; provided that:

(1) The board may require owners to furnish to the association a duly executed and acknowledged affidavit stating that the information is requested in good faith for the protection of the interests of the association, its members, or both; and

(2) Owners shall pay for administrative costs in excess of eight hours per year.

Copies of these items shall be provided to any owner upon the owner's request; provided that the owner pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request."

2. By amending subsection (g) to read:

"(g) An association [~~may~~] shall comply with this part by making information available to unit owners, at the option of each unit owner and at no cost to the unit owner for downloading the information, through an internet site[.] pursuant to section 514B-154.5."

SECTION 4. Section 514B-154.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§514B-154.5[]] Association documents to be provided. (a) Notwithstanding any other provision in the declaration, bylaws, or house rules, if any, the following documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be made available to any unit owner and the owner's authorized agents by the managing agent, resident manager, board through a board member, or the association's representative:

(1) All financial and other records sufficiently detailed in order to comply with requests for information and disclosures related to the resale of units;

(2) An accurate copy of the declaration, bylaws, house rules, if any, master lease, if any, a sample original conveyance document, articles of incorporation, and all public reports and any amendments thereto; provided that a current copy of the association's declaration, bylaws, and house rules, if any, shall be made available to any tenant at no cost or on twenty-four-hour loan;

(3) Detailed, accurate records in chronological order of the receipts and expenditures affecting the common elements, including bids for materials, equipment, and services, specifying and itemizing the maintenance and repair expenses of the common elements and any other expenses incurred and monthly statements indicating the total current delinquent dollar amount of any unpaid assessments for common expenses;

(4) All records and the vouchers authorizing the payments and statements kept and maintained at the address of the project, or elsewhere within the State as determined by the board, subject to section 514B-152;

(5) All signed and executed agreements for managing the operation of the property, expressing the agreement of all parties, including but not limited to financial and accounting obligations, services provided, and any compensation arrangements, including any subsequent amendments;

(6) An accurate and current list of members of the condominium association and the members' current addresses and the names and addresses of the vendees under an agreement of sale, if any. A copy of the list shall be available, at cost, to any unit owner or owner's authorized agent who furnishes to the managing agent, resident manager, or the board a duly executed and acknowledged affidavit stating that the list:

(A) Shall be used by the unit owner or owner's authorized agent personally and only for the purpose of soliciting votes or proxies or for providing information to other unit owners with respect to association matters; and

(B) Shall not be used by the unit owner or owner's authorized agent or furnished to anyone else for any other purpose;

(7) The association's most current financial statement, at no cost or on twenty-four-hour loan, at a convenient location designated by the board;

(8) Meeting minutes of the association, pursuant to section 514B-122;

(9) Meeting minutes of the board, pursuant to section 514B-126, which shall be:

(A) Available for examination by unit owners or owners' authorized agents at no cost or on twenty-four-hour loan at a convenient location at the project, to be determined by the board; or

(B) Transmitted to any unit owner or owner's authorized agent making a request for the minutes within fifteen days of receipt of the request by the owner or owner's authorized agent; provided that:

(i) The minutes shall be transmitted by mail, electronic mail transmission, or facsimile, by the means indicated by the owner or owner's authorized agent, if the owner or owner's authorized agent indicated a preference at the time of the request; and

(ii) The owner or owner's authorized agent shall pay a reasonable fee for administrative costs associated with handling the request, subject to section 514B-105(d);

(10) Financial statements, annual operating budget and any proposed budget, general ledgers, the accounts receivable ledger, accounts payable ledgers, check ledgers, insurance policies, contracts, and invoices of the association for the duration those records are kept by the association, and any documents regarding delinquencies of ninety days or more shall be available for examination by unit owners or owners' authorized agents at convenient hours at a place designated by the board; provided that:

(A) The board may require unit owners or owners' authorized agents to furnish to the association a duly executed and acknowledged affidavit stating that the information is requested in good faith for the protection of the interests of the association, its members, or both; and

(B) Unit owners or owners' authorized agents shall pay for administrative costs in excess of eight hours per year;

(11) Proxies, tally sheets, ballots, unit owners' check-in lists, and the certificate of election subject to section 514B-154(c);

(12) Copies of an association's documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B‑152, 514B-153, or 514B-154;

(13) A copy of the management contract from the entity that manages the operation of the property before the organization of an association;

(14) Other documents requested by a unit owner or owner's authorized agent in writing; provided that the board shall give written authorization or written refusal with an explanation of the refusal within thirty calendar days of receipt of a request for documents pursuant to this paragraph; and

(15) A copy of any contract, written job description, and compensation between the association and any person or entity retained by the association to manage the operation of the property on-site, including but not limited to the general manager, operations manager, resident manager, or site manager; provided that personal information may be redacted from the contract copy, including but not limited to the manager's date of birth, age, signature, social security number, residence address, telephone number, non-business electronic mail address, driver's license number, Hawaii identification card number, bank account number, credit or debit card number, access code or password that would permit access to the manager's financial accounts, or any other information that may be withheld under state or federal law.

(b) Subject to section 514B-105(d), copies of the items in subsection (a) shall be provided to any unit owner or owner's authorized agent upon the owner's or owner's authorized agent's request; provided that the owner or owner's authorized agent pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request.

(c) Notwithstanding any provision in the declaration, bylaws, or house rules providing for another period of time, all documents, records, and information listed under subsection (a), whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be provided no later than thirty days after receipt of a unit owner's or owner's authorized agent's written request, unless a lesser time is provided pursuant to this section or section 514B-152, 514B-153, or 514B‑154, and except as provided in subsection (a)(14).

(d) Any documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, [~~may~~] shall be made available electronically to the unit owner or owner's authorized agent if the owner or owner's authorized agent requests such in writing.

(e) An association [~~may~~] having more than fifty units shall comply with this section [or] and section 514B-152, 514B‑153, or 514B-154 by making the required documents, records, and information available to unit owners or owners' authorized agents for download through an internet site, at the option of each unit owner or owner's authorized agent and at no cost to the unit owner or owner's authorized agent[.]; provided that such documents, records, and information shall be accessible only to unit owners and owners' authorized agents and not to the general public. The internet site shall be an independent website or web portal wholly owned and operated by the association or a website or web portal operated by a third party provider with whom the association owns, leases, rents, or otherwise obtains the right to operate a web page, subpage, web portal, or collection of subpages or web portals on which the association may post the required documents, records, and information and make the documents, records, and information accessible only to unit owners and owners' authorized agents using a username and password authentication. The association shall ensure that any documents, records, and information that is confidential is not posted on the association's website. If confidential information is included in documents required to be posted by this section, then the association shall ensure that such information is redacted prior to posting the documents online. Additionally, the following shall be posted on the internet site:

(1) Any management agreement, lease, or other contract to which the association is a party or under which the association or unit owners have an obligation or responsibility;

(2) Summaries of all bids for materials, equipment, or services, which shall be maintained on the website for at least five years;

(3) The annual operating budget and any proposed budget to be considered at the association's annual meeting;

(4) All contracts and transactions between the association and any director, officer, corporation, firm, or association that is not an affiliated association or any other entity in which an association director is also a director or officer and has a financial interest;

(5) All known and possible conflicts of interest;

(6) Notice and agenda of all association meetings, which shall be posted no later than fifteen days prior to the meeting in plain view on the front page of the internet site or on a separate subpage labeled "Notices" that is conspicuously visible and linked from the front page;

(7) Any document containing information to be considered and voted on by unit owners at any meeting, which shall be posted no later than seven days prior to the meeting at which the document will be considered; and

(8) Notice and agenda of all board meetings, which shall be posted no later than seventy-two hours prior to the meeting.

(f) Any fee charged to a unit owner or owner's authorized agent to obtain copies of the association's documents, records, and information, whether maintained, kept, or required to be provided pursuant to this section or section 514B-152, 514B-153, or 514B-154, shall be reasonable; provided that a reasonable fee shall include administrative and duplicating costs and shall not exceed $1 per page, or portion thereof, except that the fee for pages exceeding eight and one-half inches by fourteen inches may exceed $1 per page.

(g) This section shall apply to condominiums organized under chapter 514A or 514B.

(h) [~~Nothing in this section shall be construed to create any new requirements for the release of documents, records, or information.~~] A director who is charged with certain crimes relating to the condominium shall not be given access to association records without a court order while charges are pending."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2950
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII