STAND. COM. REP. NO. 1014-20

Honolulu, Hawaii

, 2020

RE: H.B. No. 2563

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred H.B. No. 2563, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PLANNED COMMUNITY ASSOCIATIONS,"

begs leave to report as follows:

The purpose of this measure is to exempt planned community associations from requirements under the Hawaii Nonprofit Corporations Act regarding cumulative voting for directors and the removal of directors elected by members or directors.

Your Committee received testimony in support of this measure from the Hawaii Chapter of the Community Associations Institute Legislative Action Committee, Hawaii State Association of Parliamentarians, Associa, and one individual. Your Committee received comments on this measure from the Hawaii Council of Community Associations; Law Offices of Mark K. McKellar, LLLC; and four individuals.

Your Committee finds that the cumulative voting provisions under the Hawaii Nonprofit Corporations Act may be manipulated by planned community association boards of directors to prevent minority groups from attaining representation by simply omitting cumulative voting from the notice. Under the 11th edition of Robert's Rules of Order Newly Revised, provisions concerning cumulative voting must be in the bylaws. This measure will clarify that the cumulative voting provisions under the Hawaii Nonprofit Corporations Act do not apply to planned community associations governed under the State's planned community association laws.

Your Committee notes that the Hawaii State Association of Parliamentarians suggested several amendments to this measure. Should the Senate Committee on Commerce, Consumer Protection, and Health deliberate on this measure further, your Committee on Judiciary respectfully requests that it consider those amendments.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2563, H.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

____________________________

CHRIS LEE, Chair