HOUSE OF REPRESENTATIVES	H.B. NO.	226
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO COOPERATIVE HOUSING CORPORATIONS.

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

SECTION 1. The purpose of this Act is to require that each member of the board of directors of a cooperative housing corporation owe a similar fiduciary duty and exercise a similar degree of care and loyalty to their respective entity as required of the members of the board of directors of a condominium property regime pursuant to section 514B-106(a), Hawaii Revised Statutes.

SECTION 2. Section 421I-3, Hawaii Revised Statutes, is amended to read as follows:

"[[]§421I-3[]] Board of directors; election[.]; duties. (a) A meeting of the corporation for the purpose of electing the board of directors shall be held not later than one hundred eighty days after the first conveyance of a dwelling unit to a shareholder, if at least forty per cent of the dwelling units have been conveyed by that time. If forty per cent of the dwelling units have not been conveyed within one year after the first conveyance, the meeting of the corporation may be held upon the call of the owners of at least ten per cent of the shares by a petition presented to the secretary of the corporation.

(b) Every member of the board of directors shall be:

(1) A shareholder of the [cooperation;] corporation;

(2) A spouse of a shareholder; or

(3) A trust beneficiary, if the shareholder is a trustee.

(c) Each dwelling unit shall have only one representative on the board of directors.

(d) In the performance of their duties, members of the board of directors shall owe the corporation a fiduciary duty and exercise the degree of care and loyalty required of an officer or director of a corporation organized under chapter 414."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Cooperative Housing Corporations; Board of Directors; Duties

Description:

Specifies that members of the board of directors of a cooperative housing corporation shall owe the corporation a fiduciary duty and exercise the degree of care and loyalty required of an officer or director of a corporation organized under chapter 414, HRS.

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