New Bill Would Require Disclosure before Serving on Metro District and HOA Boards Concurrently

The Metro District Conflict of Interest Bill,  HB 11-1124 continues moving through the Legislature.  It passed out of the House on Friday, February 25.  As we reported previously on January 24, 2011, the Conflict of Interest bill, as originally proposed, would have prohibited a metro district board member from serving concurrently on the board of a homeowners association in the same district.

Fortunately, several amendments have resulted in a bill that is much more favorable for community associations, as reported on February 22.  As the bill is presently drafted, we do not believe it should require a significant change in the way associations are governed or what their conflict of interest policies say.  Transparency regarding potential and actual conflicts of interests is always good practice for any board, and this bill simply codifies those good governance practices.

Specifically, in it’s current form, the bill:

• Requires any candidate for position a metropolitan or special district board to disclose, on all election-related forms including nomination, acceptance and ballot forms, whether that candidate also serves on the board of a community association within the boundaries of the metro district, and his or her address
• Defines what must be in CCIOA-required conflict of interest policies.  These definitions are not significantly different than what most standard conflict of interest policies probably already include, specifically, the policy must:
  • define under what circumstances a conflict of interest exists
  • list procedures to be followed in the event of a conflict, including whether a conflicted board member must recuse him or herself from voting on an issue
  • require periodic review of the policy

At one point during it’s legislative history, the bill was amended to exempt declarant-appointed metro directors from the prohibition against dual service on HOA boards.  But that exemption became unnecessary and was removed when the bill was amended to require simply disclosure of such a potential conflict of interest.