SB812 HD1

PART III. PROGRAM APPROPRIATION PROVISIONS

SECTION 4. Provided that of the special fund appropriations for financial services regulation (CCA104):

(1) The sum of $40,000 or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 shall be expended on the maintenance and software licensing costs of the financial services regulation program's database and records management system; and

(2) The sum of $25,074 or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 shall be expended for fringe benefit costs for collective bargaining and salary adjustments.

SECTION 5. Provided that of the special fund appropriations for the professional and vocational licensing division (CCA105):

(1) The sum of $300,000 or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 shall be expended for software licensing costs to replace the professional and vocational licensing division's applicant/licensee integrated automated system; and

(2) The sum of $108,806 or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 shall be expended for two full-time equivalent (2.0 FTE) permanent positions to perform work pertaining to Act 44, Session Laws of Hawaii 2018.

SECTION 6. Provided that of the special fund appropriations for insurance regulatory services (CCA106):

(1) The sum of $2,500,000 or so much thereof as may be necessary for fiscal year 2019-2020 and the sum of $500,000 or so much thereof as may be necessary for fiscal year 2020-2021 shall be expended for replacement of the Hawaii insurance data system and corresponding licensing, maintenance, and independent verification and validation costs; and

(2) The sum of $417,736 or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 shall be expended for fringe benefit costs for collective bargaining and salary adjustments.

PART IV. STATUTORY PROVISIONS

SECTION 7. Section 241-7, Hawaii Revised Statutes, is amended to read as follows:

"§241-7 Disposition of funds. All taxes collected under this chapter shall be state realizations[; provided that, by June 30 of each fiscal year, the sum of $2,000,000 shall be deposited with the director of finance to the credit of the compliance resolution fund as established pursuant to section 26-9(o)]."

SECTION 8. Section 440G-15, Hawaii Revised Statutes, is amended to read as follows:

"§440G-15 Annual fees. (a) Each cable operator shall pay an annual fee to be determined by the director. The fees so collected under this section shall be deposited into the compliance resolution fund established under section 26-9(o). The annual fee set forth in this subsection shall not exceed 0.5 per cent of the cable operator's gross revenues for the preceding calendar year.

(b) The director shall adjust the fees assessed under this section, as necessary from time to time, pursuant to rules adopted in accordance with chapter 91."

SECTION 9. Section 444-26, Hawaii Revised Statutes, is amended to read as follows:

"§444-26 Contractors recovery fund; use of fund; person injured; fees. (a) The board is authorized to establish and maintain a contractors recovery fund from which any person injured by an act, representation, transaction, or conduct of a duly licensed contractor, which is in violation of this chapter or the rules adopted pursuant thereto, may recover by order of the circuit court or district court of the judicial circuit where the violation occurred, an amount of not more than $12,500 per contract, regardless of the number of persons injured under the contract, for damages sustained by the act, representation, transaction, or conduct. Recovery from the fund shall be limited to the actual damages suffered by the claimant, including court costs and fees as set by law, and reasonable attorney fees as determined by the court; provided that recovery from the fund shall not be awarded to persons injured by an act, representation, transaction, or conduct of a contractor whose license was suspended, revoked, forfeited, terminated, or in an inactive status at the time the claimant entered into the contract with the contractor.

(b) For purposes of this chapter, "person injured" or "injured person" means and is limited to owners or lessees of private residences, including condominium or cooperative units, who have contracted with a duly licensed contractor for the construction of improvements or alterations to the owners' or lessees' own private residences and owners or lessees of real property who have contracted with a duly licensed contractor for the construction of the owners' or lessees' own private residences on the owners' or lessees' real property.

(c) When any person applies for a contractors license, the person shall pay, in addition to the person's original license fee, a fee of $150 for deposit in the contractors recovery fund, and a fee for deposit in the contractors education fund as provided in rules adopted by the director pursuant to chapter 91. In the event that the board does not issue the license, these fees shall be returned to the applicant.

(d) When the contractors recovery fund attains a funding level of $420,893 in any fiscal year, the board shall either:

(1) Cease accepting payments made by renewing licensees; or

(2) Develop a process to refund monies in excess of the $420,893 fund balance to licensees who paid into the fund, and refund such monies.

If acceptance of payments is ceased, it shall remain ceased until the fund attains a funding level of $420,893."

SECTION 10. Section 444-29, Hawaii Revised Statutes, is amended to read as follows:

"[[]§444-29[]] Management of fund. (a) The sums received by the contractors license board for deposit in the contractors recovery fund shall be held by the contractors license board in trust for carrying out the purposes of the contractors recovery fund. The contractors license board, as trustee of the recovery fund, shall be authorized to retain private legal counsel to represent the board in any action which may result in collection from the contractors recovery fund. These funds may be invested and reinvested in the same manner as funds of the state employees' retirement system, and the interest from these investments shall be deposited to the credit of the contractors education fund[~~, and which~~].

(b) The contractors education fund, which is hereby created, shall be available to the contractors license board for educational purposes[~~, which is hereby created.~~]; provided that when the contractors education fund attains a funding level of $15,315 in any fiscal year, the board shall either:

(1) Cease accepting payments made by renewing licensees; or

(2) Develop a process to refund monies in excess of the $15,315 fund balance to licensees who paid into the fund, and refund such monies.

If acceptance of payments is ceased, it shall remain ceased until the fund attains a funding level of $15,315."

SECTION 11. Section 454F-41, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) When the mortgage loan recovery fund attains a funding level of $750,000[,] in any fiscal year, the commissioner [~~may make a finding to adjust the fees generated by renewals or may determine that payments made by renewing licensees shall cease~~] shall either:

(1) Cease accepting payments made by renewing licensees; or

(2) Develop a process to refund monies in excess of the $750,000 fund balance to licensees who paid into the fund, and refund such monies.

If acceptance of payments is ceased, it shall remain ceased until the funding level falls below $750,000. If the funding level falls below $250,000 after the first five years of the establishment of the fund, the commissioner may adjust the fees to a reasonable level for the purpose of attaining a funding level of $750,000."

SECTION 12. Section 467-11, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:

"(h) If [~~beginning on July 1, 1987,~~] the education fund balance [~~at the end of any fiscal biennium exceeds $1,200,000, there shall be a moratorium on renewal contributions and the commission shall review and consider a reduction in the amount of license fees.~~] attains a funding level of $1,713,510 in any fiscal year, the commission shall either:

(1) Cease accepting payments made by renewing licensees; or

(2) Develop a process to refund monies in excess of the $1,713,510 fund balance to licensees who paid into the fund, and refund such monies.

If acceptance of payments is ceased, it shall remain ceased until the fund attains a funding level of $1,713,510."

SECTION 13. Section 467-16, Hawaii Revised Statutes, is amended to read as follows:

"§467-16 Real estate recovery fund; use of fund; fees. (a) The commission shall establish and maintain a trust fund which shall be known as the real estate recovery fund from which any person aggrieved by an act, representation, transaction, or conduct of a duly licensed real estate broker, or real estate salesperson, upon the grounds of fraud, misrepresentation, or deceit, may recover upon the commission's settlement of a claim or by order of the circuit court or district court of the county where the violation occurred, an amount of not more than $25,000 per transaction for damages sustained by the fraud, misrepresentation, or deceit, including court costs and fees as set by law, and reasonable attorney fees as determined by the court.

(b) When any person makes application for an original license to practice as a real estate broker or salesperson the person shall pay, in addition to the person's original license fee, a real estate recovery fund fee as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91 for deposit in the real estate recovery fund. If the commission does not issue the license, this fee shall be returned to the applicant.

(1) Retain private legal counsel to represent the commission in any action involving or which may result in payment from the real estate recovery fund;

(2) Retain a certified public accountant for accounting and auditing of the real estate recovery fund;

(3) Employ necessary personnel, not subject to chapter 76, to assist the commission in exercising its powers and duties with respect to the real estate recovery fund; and

(4) Retain a consultant to recover and collect any payments from the real estate recovery fund plus interest from the judgment debtor.

(d) When the real estate recovery fund attains a funding level of $481,799 in any fiscal year, the commission shall either:

(1) Cease accepting payments made by renewing licensees; or

(2) Develop a process to refund monies in excess of the $481,799 fund balance to licensees who paid into the fund, and refund such monies.

If acceptance of payments is ceased, it shall remain ceased until the fund attains a funding level of $481,799."

SECTION 14. Section 514B-72, Hawaii Revised Statutes, is amended to read as follows:

"§514B-72 Condominium education trust fund; payments by associations and developers. (a) Each project or association with more than five units shall pay to the department of commerce and consumer affairs:

(1) A condominium education trust fund fee within one year after the recordation of the purchase of the first unit or within thirty days of the association's first meeting, and thereafter, on or before June 30 of every odd-numbered year, as prescribed by rules adopted pursuant to chapter 91; and

(2) Beginning with the July 1, 2015, biennium registration, an additional annual condominium education trust fund fee in an amount equal to the product of $1.50 times the number of condominium units included in the registered project or association to be dedicated to supporting mediation or voluntary binding arbitration of condominium related disputes. The additional condominium education trust fund fee shall total $3 per unit until the commission adopts rules pursuant to chapter 91. On June 30 of every odd-numbered year, any unexpended additional amounts paid into the condominium education trust fund and initially dedicated to supporting mediation or voluntary binding arbitration of condominium related disputes, as required by this paragraph, shall be used for educational purposes as provided in section 514B‑71(a)(1), (2), and (3).

(b) Each developer shall pay to the department of commerce and consumer affairs the condominium education trust fund fee for each unit in the project, as prescribed by rules adopted by the director of commerce and consumer affairs pursuant to chapter 91. The project shall not be registered and no effective date for a developer's public report shall be issued until the payment has been made.

(c) Payments of any fees required under this section shall be due on or before the registration due date and shall be nonrefundable[~~. Failure~~] except as specified in subsection (e). Unless acceptance of payments is ceased pursuant to subsection (e), failure to pay the required fee by the due date shall result in a penalty assessment of ten per cent of the amount due and the association shall not have standing to bring any action to collect or to foreclose any lien for common expenses or other assessments in any court of this State until the amount due, including any penalty, is paid. Failure of an association to pay a fee required under this section shall not impair the validity of any claim of the association for common expenses or other assessments, or prevent the association from defending any action in any court of this State.

(d) The department of commerce and consumer affairs shall allocate the fees collected under this section to the condominium education trust fund established pursuant to section 514B-71. The fees collected pursuant to this section shall be administratively and fiscally managed together as one condominium education trust fund established by section 514B-71.

(e) When the condominium education trust fund attains a funding level of $1,819,971 in any fiscal year, the commission shall either:

(1) Cease accepting payments made by projects and associations at each biennial registration; or

(2) Develop a process to refund monies in excess of the $1,819,971 fund balance to projects and associations that paid into the fund at applicable biennial registrations, and refund such monies.

If acceptance of payments is ceased, it shall remain ceased until the fund attains a funding level of $1,819,971."

PART V. MISCELLANEOUS AND EFFECTIVE DATE

SECTION 15. If any portion of this Act or its application to any person, entity, or circumstance is held to be invalid for any reason, then the legislature declares that the remainder of the Act and each and every other provision thereof shall not be affected thereby. If any portion of a specific appropriation is held to be invalid for any reason, the remaining portion shall be expended to fulfill the objective of the appropriation to the extent possible. To this end, the provisions of this Act are severable.

SECTION 16. If manifest clerical, typographical, or other mechanical errors are found in part I or part II of this Act, the governor may correct the errors.

SECTION 17. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 18. This Act shall take effect on July 1, 2019; provided that:

(1) Section 7 shall be repealed on June 30, 2021, and section 241-7, Hawaii Revised Statutes, shall be reenacted in the form in which it read on June 30, 2019; and

(2) Sections 8 through 14 shall take effect on July 1, 2020.

THE SENATE	S.B. NO.	812
THIRTIETH LEGISLATURE, 2019		S.D. 1
STATE OF HAWAII		H.D. 1