Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 1798 entitled:

begs leave to report as follows:

The purpose of this bill is to exempt condominium associations that are also nonprofit corporations, from nonprofit corporation cumulative voting requirements.

Your Committee received testimony in support of this measure from a professional registered parliamentarian. The Hawaii Independent Condominium & Cooperative Owners provided comments.

Your Committee finds that the cumulative voting and director removal provisions of the nonprofit corporations law may conflict with procedures adopted by an association in their bylaws that would otherwise be acceptable under the condominium law. This measure will help to restore to these nonprofit corporation associations, the ability to manage the condominium property regime through their declaration and bylaws with minimal state law interference.

Your Committee has amended this measure by providing an effective date of July 1, 2099, in the interest of facilitating further discussion.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1798, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1798, H.D. 1, and be placed on the calendar for Third Reading.