HOUSE OF REPRESENTATIVES

H.B. NO.

2563

THIRTIETH LEGISLATURE, 2020

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PLANNED COMMUNITY ASSOCIATIONS.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Section 414D-114, Hawaii Revised Statutes, is amended to read as follows:

     "§414D-114  Cumulative voting for directors.  (a)  If the articles or bylaws provide for cumulative voting by members, members may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and cast the product for a single candidate or distribute the product among two or more candidates.

     (b)  Unless otherwise provided in the articles or bylaws, cumulative voting shall not be permitted.  If authorized in the articles or bylaws, cumulative voting may be permitted; provided that:

     (1)  The meeting notice or statement accompanying the notice states that cumulative voting shall take place;

     (2)  A member gives notice of the member's intent to cumulatively vote not less than forty-eight hours before the meeting or such longer period as may be required by the articles or bylaws; and

     (3)  If one member gives notice of intent to cumulatively vote, all other members participating in the election may cumulate their votes without giving further notice.

     (c)  A director elected by cumulative voting may be removed by the members without cause if the requirements of section 414D-138 are met unless the votes cast against removal or not consenting in writing to the removal would be sufficient to elect the director if voted cumulatively at an election at which the same total number of votes were cast and the entire number of directors authorized at the time of the director's most recent election were then being elected; provided that if the action is taken by ballot, all members entitled to vote had voted.

     (d)  Members may not cumulatively vote if the directors and members are identical.

     (e)  This section shall not apply to any planned community association governed by chapter 421J."

     SECTION 2.  Section 414D-138, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§414D-138[]]  Removal of directors elected by members or directors.  (a)  The members may remove one or more directors elected by them without cause unless otherwise provided in the articles or bylaws.

     (b)  If a director is elected by a class, chapter, or other organizational unit, or by region or other geographic grouping, the director may be removed only by the members of that class, chapter, unit, or grouping.

     (c)  Except as provided in subsection (i), a director may be removed under subsection (a) or (b) only if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors.

     (d)  If cumulative voting is authorized, a director may not be removed if the number of votes, or if the director was elected by a class, chapter, unit, or grouping of members, the number of votes of that class, chapter, unit, or grouping, sufficient to elect the director under cumulative voting is voted against the director's removal.

     (e)  A director elected by members may be removed by the members only at a meeting called for the purpose of removing the director and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.

     (f)  In computing whether a director is protected from removal under subsections (b) to (d), it should be assumed that the votes against removal are cast in an election for the number of directors of the class to which the director to be removed belonged on the date of that director's election.

     (g)  An entire board of directors may be removed under subsections (a) to (e).

     (h)  A director elected by the board may be removed without cause by the vote of two-thirds of the directors then in office or such greater number as is set forth in the articles or bylaws; provided that a director elected by the board to fill the vacancy of a director elected by the members may be removed without cause by the members, but not the board.

     (i)  If, at the beginning of a director's term on the board, the articles or bylaws provide that the director may be removed for missing a specified number of board meetings, the board may remove the director for failing to attend the specified number of meetings.  The director may be removed only if a majority of the directors then in office vote for the removal.

     (j)  This section shall not apply to any planned community association governed by chapter 421J."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 

 

 

Report Title:

Planned Community Associations; Nonprofit Corporations; Directors

 

Description:

Exempts planned community associations from certain requirements regarding cumulative voting for and the removal of directors under the Hawaii Nonprofit Corporations Act.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.