Requires board of directors of planned committee associations to notify members of the creation, alteration, or elimination of any committees or subcommittees. Requires association to make financial statements and meeting minutes available for member's review at convenient location within the planned community or on a 24-hour loan basis. Requires transmittal of records on request within 15 days, with costs for duplication and transmittal to be charged to the association.

A BILL FOR AN ACT

SECTION 1. The legislature finds that planned community associations play a major role in Hawaii's housing. Members of planned communities subject themselves to recorded declarations and bylaws placing restrictions and obligations upon these members and may be subjected to further actions by association boards of directors and agents. At times, some of these boards and agents conduct the business of the associations in an inconsistent manner or in a manner that is not transparent to the members.

The purpose of this Act is to provide more transparency and accountability in the actions of board members of planned community associations.

SECTION 2. Section 421J-5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§421J-5[]] Meetings of the board of directors[.]; subcommittees. (a) [Whenever practicable, all] All meetings of the board of directors[,] or any committee or subcommittee, other than executive sessions, shall be open to all members. Members who are not on the board of directors may participate in any deliberation or discussion, other than executive sessions, unless a majority of a quorum of the board of directors votes otherwise.

(b) The board of directors shall meet at least once each year.

(c) Minutes of the meetings of the board of directors or any committee or subcommittee shall include the recorded vote of each [board] member of the board of directors or committee or subcommittee on all motions except motions voted upon in executive session.

(d) The board of directors, with the approval of a majority of a quorum of its members, may adjourn any meeting and reconvene in executive session to discuss and vote upon matters concerning personnel, litigation in which the association is or may become involved, or as may be necessary to protect the attorney-client privilege of the association. The general nature of any business to be considered in executive session shall be first announced in the regular session.

(e) No board member or committee or subcommittee member shall vote by proxy at [board] meetings.

(f) A director who has a conflict of interest on any issue before the board shall disclose the nature of the conflict of interest prior to a vote on that issue at the board meeting, and the minutes of the meeting shall record the fact that a disclosure was made.

(g) The board of directors may appoint committees or subcommittees to review and consider any specific matters; however, the board of directors shall notify the members of any appointment of a committee or subcommittee, the matter that the committee or subcommittee is to review and consider, and the alteration or elimination of any committee or subcommittee appointed."

SECTION 3. Section 421J-7, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:

"(a) [Upon approval by the board, the] The most current financial statement of the association [and the minutes of the most recent meeting of the board of directors (other than minutes of executive sessions)] shall be made available for examination by any member at no cost, during reasonable hours, or on twenty-four-hour loan, at a location within the planned community designated by the board.

(b) [The approved minutes of other meetings of the board, other than executive sessions, and the approved meetings of the association for the current and prior year, shall be made available for examination by members during reasonable hours at a location designated by the board. Copies of those meeting minutes shall be provided to any member upon the member's request if the member pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request.] The meeting minutes of the board of directors or any committee or subcommittee, once approved, for the current and prior year shall be:

(c) Financial statements, general ledgers, accounts receivable ledgers, accounts payable ledgers, check ledgers, insurance policies, contracts, invoices of the association for the [current and prior year,] duration those records are kept by the association, and any documents regarding delinquencies of ninety days or more[,] shall be made available for examination by members at reasonable hours at a location designated by the board; provided that members shall pay for all costs associated with the examination of documents. The board may require members to furnish the association with an affidavit stating that the foregoing information is requested in good faith for the protection of the interests of the association, its members, or both. Copies of these documents shall be provided to any member upon the member's request if the member pays a reasonable fee for duplication, postage, stationery, and other administrative costs associated with handling the request. Financial statements and all supporting documents required for tax purposes shall be maintained for seven years."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.