Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 354
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 354 entitled: 


begs leave to report as follows:

     The purpose of this bill, as received, is to appropriate
funds out of the condominium management education fund to conduct
a comprehensive review of the condominium property regimes law,
in order to update, clarify, organize, deregulate, and provide
for consistency and ease of use of chapter 514A, Hawaii Revised

     The Real Estate Commission (Commission) strongly supported
this bill, explaining that, after the initial enactment of the
condominium property regimes law in 1961, there have been many
piecemeal amendments that have rendered this body of law
unorganized and confusing. The Commission continues to receive
numerous complaints from condominium apartment owners, boards of
directors, managing agents, and attorneys practicing in this
field, who find the statutes unorganized and difficult to use.
The Commission also submitted the executive summary of its report
to the 1996 legislature entitled "A Plan To Recodify Chapter
514A, Hawaii Revised Statutes, Condominium Property Regime."  The
Commission justified the use of the condominium management
education fund for this purpose, explaining that it is a trust
fund administered by the Commission that is funded by fees
assessed to condominium developers and to condominium association

                                 STAND. COM. REP. NO. 663
                                 Page 2

of apartment owners, and this review would fall within the
educational purposes defined in section 514A-132, Hawaii Revised
     The Hawaii Association of Realtors, the Community
Associations Institute (CAI) and others offered supporting
testimony. The Hawaii Council of Association of Apartment Owners
(HCAAO) supported the intent of the bill but objected to the use
of the condominium education fund to pay for review, and
suggested that any appropriation from the fund to pay for
administrative expenses and supplies should be related solely to
expenses incurred for the project.

     Your Committee concurs with many of the recommendations of
the testifiers, and accordingly has amended the measure to:

     (1)  Require that the review of the laws shall include
          consultation with individuals as well as private
          organizations, and those consulted should represent
          diverse interests pertaining to condominium property

     (2)  Require the real estate commission to submit draft
          legislation to the legislature before the convening of
          the 2000 regular session;
     (3)  Require that the final report of the real estate
          commission include draft legislation, and therefore
          delete the phrase "if appropriate" on page 3, line 6 of
          the original bill; and

     (4)  Specify that the administrative expenses, office
          equipment, and supplies paid for out of the
          appropriated funds be limited to those expenses,
          equipment, and supplies used for purposes of conducting
          this review.
     Your committee has also made technical, nonsubstantive
amendments for purposes of clarity, consistency, and style. 

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 354, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
354, H.D. 1, and be referred to the Committee on Finance.

                                 STAND. COM. REP. NO. 663
                                 Page 3

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,

                                   RON MENOR, Chair