§514B-149 
Association fiscal matters; handling and disbursement of funds.  (a)  The funds in the general operating account
of the association shall not be commingled with funds of other activities such
as lease rent collections, rental, time share, and assisted living facility
operations, nor shall a managing agent commingle any association funds with the
managing agent's own funds.



(b)  For
purposes of subsection (a), lease rent collections and rental operations shall
not include the rental or leasing of common elements that is conducted on
behalf of the association or the collection of ground lease rents from
individual unit owners of a project and the payment of such ground lease rents
to the ground lessor if:



(1)  The
collection is allowed by the provisions of the declaration, bylaws, master
deed, master lease, or individual unit leases of the project;



(2)  A management contract requires the managing agent
to collect ground lease rents from the individual unit owners and pay the
ground lease rents to the ground lessor;



(3)  The system of lease rent collection has been
approved by a majority vote of all unit owners at a meeting of the association;
and



(4)  The managing agent or association does not pay
ground lease rent to the ground lessor in excess of actual ground lease rent
collected from individual unit owners.



(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;



(C)  Held
by the United States Treasury;



(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;



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.



(d)  A
managing agent or board shall not, by oral instructions over the telephone,
transfer association funds between accounts, including but not limited to the
general operating account and reserve fund account.



(e)  A
managing agent shall keep and disburse funds collected on behalf of the
condominium owners in strict compliance with any agreement made with the
condominium owners, chapter 467, the rules of the commission, and all other
applicable laws.



(f)  Any
person who embezzles or knowingly misapplies association funds received by a
managing agent or association shall be guilty of a class C felony. [L 2004, c
164, pt of §2; am L 2005, c 93, §5; am L 2006, c 38, §25; am L 2008, c 76, §2]