STAND. COM. REP. NO. 3674

Honolulu, Hawaii

RE: H.B. No. 2316

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred H.B. No. 2316, H.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 clarify the cumulative voting requirements for condominium association meetings. Specifically, this measure clarifies that:

(1) In condominium elections, cumulative voting rights apply to all candidates regardless of whether they are nominated; and

(2) Individual votes are used in cumulative voting.

Your Committee received testimony in support of this measure from the Hawaiʻi State Association of Parliamentarians; Palehua Townhouse Association; Hawaii First Realty LLC; Honolulu Tower AOAO; Law Offices of Mark K. McKellar, LLLC; and fourteen individuals.

Your Committee received testimony in opposition to this measure from one individual.

Your Committee received comments on this measure from one individual.

Your Committee finds that under the existing law governing cumulative voting in condominium association elections, cumulative voting is authorized only for nominated persons, to the exclusion of write-in candidates. Therefore, this measure expands the authorization for cumulative voting to include write-in candidates to ensure that every vote in a condominium election can be distributed among candidates as the voter sees fit, regardless of nomination status.

Your Committee notes testimony raising concerns that under existing law, the statutory cumulative voting requirements apply to cumulative voting only if the association's bylaws provide for cumulative voting for an election at a meeting, allowing some associations to circumvent the statutory restrictions. Your Committee further notes testimony requesting for clarification in statute allowing cumulative voting to be used when write-in candidates are selected by an owner. Therefore, amendments to this measure are necessary to address these concerns.

Accordingly, your Committee has amended this measure by:

(1) Inserting language clarifying that if an election is to be held by cumulative voting pursuant to the bylaws, rather than if the bylaws provide for cumulative voting for an election at a meeting, each unit owner present in person or represented by proxy shall have a number of votes equal to the unit owner's voting percentage multiplied by the number of positions to be filled at the election; and

(2) Inserting a definition of the term "candidate" to mean a nominee or write-in candidate.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2316, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2316, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.

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

________________________________

JARRETT KEOHOKALOLE, Chair