REPORT TITLE:
CONDOMINIUMS


DESCRIPTION:
Clarifies where funds collected by associations may be deposited.
Restricts condominium associations to investing in demand
deposits, investment certificates, certificates of deposit,
government obligations, or mutual funds, provided that the
obligations or mutual funds have stated maturity dates of no more
than ten years after the purchase date. (HB1276 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1276
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT


RELATING TO CONDOMINIUMS.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 514A-97, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (c) to read as follows:
 
 3      "(c)  All funds collected by an association, or by a
 
 4 managing agent for any association, shall be:
 
 5      (1)  Deposited in a financial institution, including a
 
 6           federal or community credit union, located in the State
 
 7           whose deposits are insured by an agency of the United
 
 8           States government;
 
 9      (2)  Held by a corporation authorized to do business under
 
10           article 8 of chapter 412; [or]
 
11      (3)  [Invested in the obligations of the United States
 
12           government.] Held by the United States Treasury; or
 
13      (4)  Held by a securities broker that is registered with the
 
14           Securities and Exchange Commission, has an office in
 
15           the State, and the accounts of which are held by member
 
16           firms of the New York Stock Exchange or National
 
17           Association of Securities Dealers and insured by the
 
18           Securities Insurance Protection Corporation.
 

 
Page 2                                                     1276
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      All funds collected by an association, or by a managing
 
 2 agent for any association, shall be invested only in demand
 
 3 deposits, investment certificates, and certificates of deposit;
 
 4 obligations of the United States government, the State of Hawaii,
 
 5 or their respective agencies; provided that those obligations
 
 6 shall have stated maturity dates no more than ten years after the
 
 7 purchase date; or mutual funds comprised solely of investments in
 
 8 the obligations of the United States government, the State of
 
 9 Hawaii, or their respective agencies; provided that those
 
10 obligations shall have stated maturity dates no more than ten
 
11 years after the purchase date.
 
12      Records of the deposits and disbursements shall be disclosed
 
13 to the commission upon request.  All funds collected by an
 
14 association shall only be disbursed by employees of the
 
15 association under the supervision of the association's board of
 
16 directors.  All funds collected by a managing agent from an
 
17 association shall be held in a client trust fund account and
 
18 shall be disbursed only by the managing agent or the managing
 
19 agent's employees under the supervision of the association's
 
20 board of directors.  The commission may draft rules governing the
 
21 handling and disbursement of condominium association funds."
 
22      SECTION 2.  Statutory material to be repealed is bracketed.
 
23 New statutory material is underscored.
 
24      SECTION 3.  This Act shall take effect upon its approval.