SB1494 - 482R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 10-3640, Arizona Revised Statutes, is amended to read:

START_STATUTE10-3640. Delegates; exemption for condominiums and planned communities

A. A corporation may provide in its articles of incorporation or bylaws for delegates that have some or all of the authority of members.

B. The articles of incorporation or bylaws may set forth provisions relating to:

1. The characteristics, qualifications, rights, limitations and obligations of delegates including the delegates' selection and removal.

2. Calling, noticing, holding and conducting meetings of delegates.

3. Carrying on corporate activities during and between meetings of delegates.

C. Notwithstanding the authorization for the use of delegates by a nonprofit corporation pursuant to this section, this section does not apply to a nonprofit corporation that is either of the following:

1. An association for a condominium as defined in section 33-1202. A condominium association is subject to section 33-1250.

2. An association for a planned community as defined in section 33‑1802. A planned community association is subject to section 33-1812.

D. This section shall not be construed to conflict with section 10‑3701, subsection F. END_STATUTE

Sec. 2. Section 10-3724, Arizona Revised Statutes, is amended to read:

START_STATUTE10-3724. Proxies; exemption for condominiums and planned communities

A. A member may vote the member's votes in person or by proxy.

B. Unless the articles of incorporation or bylaws prohibit or limit proxy voting, a member may appoint a proxy to vote or otherwise act for the member by signing an appointment form, either personally or by the member's attorney‑in‑fact.

C. An appointment of a proxy is effective on receipt by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for eleven months unless a different period is expressly provided in the appointment form.

D. An appointment of a proxy is revocable by the member unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of any of the following:

1. A pledgee.

2. A person who purchased, agreed to purchase, holds an option to purchase or holds any other right to acquire the membership interest.

3. A creditor of the corporation who extended or continued credit to the corporation under terms requiring the appointment.

4. An employee of the corporation whose employment contract requires the appointment.

5. A party to a voting agreement created pursuant to section 10‑3731.

E. The death or incapacity of the member who appoints a proxy does not affect the right of the corporation to accept the proxy's authority unless the secretary or other officer or agent authorized to tabulate votes receives written notice of the death or incapacity before the proxy exercises authority under the appointment.

F. Appointment of a proxy is revoked by the person who appoints the proxy by either:

1. Attending any meeting and voting in person.

2. Signing and delivering to the secretary or other officer or agent authorized to tabulate proxy votes either a writing stating that the appointment of the proxy is revoked or a subsequent appointment form.

G. An appointment made irrevocable under subsection D of this section is revoked if the interest with which it is coupled is extinguished.

H. A transferee for value of a membership interest subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence at the time that the transferee acquired the membership interest and the existence of the irrevocable appointment was not noted conspicuously on the transfer documents.

I. Subject to section 10‑3727 and to any express limitation on the proxy's authority that appears on the face of the appointment form, a corporation may accept the proxy's vote or other action as that of the member making the appointment.

J. Notwithstanding the authorization for the use of proxies by a nonprofit corporation pursuant to this section, this section does not apply to a nonprofit corporation that is either of the following:

1. An association for a condominium as defined in section 33-1202. A condominium association is subject to section 33-1250.

2. An association for a planned community as defined in section 33‑1802. A planned community association is subject to section 33-1812.

K. This section shall not be construed to conflict with section 10‑3701, subsection f.END_STATUTE

Sec. 3. Section 33-1250, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1250. Voting; proxies; absentee ballots; applicability; definition

A. If only one of the multiple owners of a unit is present at a meeting of the association, the owner is entitled to cast all the votes allocated to that unit. If more than one of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the multiple owners unless the declaration expressly provides otherwise. There is majority agreement if any one of the multiple owners casts the votes allocated to that unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.

B. During the period of declarant control, votes allocated to a unit may be cast pursuant to a proxy duly executed by a unit owner. If a unit is owned by more than one person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. The proxy is revoked on presentation of a later dated proxy executed by the same unit owner. A proxy terminates one year after its date, unless it specifies a shorter term or unless it states that it is coupled with an interest and is irrevocable.

C. Notwithstanding any provision in the condominium documents and section 10-3640, subsections A and B and section 10-3724, subsections A through I, after termination of the period of declarant control, votes allocated to a unit may not be cast pursuant to a proxy. The association shall provide for votes to be cast in person and by absentee ballot and may provide for voting by some other form of delivery. Notwithstanding section 10‑3708 or the provisions of the condominium documents, any action taken at an annual, regular or special meeting of the members shall comply with all of the following if absentee ballots are used:

1. The absentee ballot shall set forth each proposed action.

2. The absentee ballot shall provide an opportunity to vote for or against each proposed action.

3. The absentee ballot is valid for only one specified election or meeting of the members and expires automatically after the completion of the election or meeting.

4. The absentee ballot specifies the time and date by which the ballot must be delivered to the board of directors in order to be counted, which shall be at least seven days after the date that the board delivers the unvoted absentee ballot to the member.

5. The absentee ballot does not authorize another person to cast votes on behalf of the member.

D. Votes cast by absentee ballot or other form of delivery are valid for the purpose of establishing a quorum.

E. Notwithstanding subsection C of this section, an association for a timeshare plan as defined in section 32‑2197 may permit votes by a proxy that is duly executed by a unit owner.

F. If the declaration requires that votes on specified matters affecting the condominium be cast by lessees rather than unit owners of leased units all of the following apply:

1. The provisions of subsections A, and B and C of this section apply to lessees as if they were unit owners.

2. Unit owners who have leased their units to other persons shall not cast votes on those specified matters.

3. Lessees are entitled to notice of meetings, access to records and other rights respecting those matters as if they were unit owners. Unit owners shall also be given notice, in the manner prescribed in section 33‑1248, of all meetings at which lessees may be entitled to vote.

G. Unless the declaration provides otherwise, votes allocated to a unit owned by the association shall not be cast.

H. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

I. For the purposes of this section, "period of declarant control" means the time during which the declarant or persons designated by the declarant may elect or appoint the members of the board of directors pursuant to the condominium documents or by virtue of superior voting power. END_STATUTE

Sec. 4. Section 33-1812, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1812. Proxies; absentee ballots; definition

A. Notwithstanding any provision in the community documents and section 10-3640, subsections A and B and section 10-3724, subsections A through I, after termination of the period of declarant control, votes allocated to a unit may not be cast pursuant to a proxy. The association shall provide for votes to be cast in person and by absentee ballot and may provide for voting by some other form of delivery. Notwithstanding section 10‑3708 or the provisions of the community documents, any action taken at an annual, regular or special meeting of the members shall comply with all of the following if absentee ballots are used:

1. The absentee ballot shall set forth each proposed action.

2. The absentee ballot shall provide an opportunity to vote for or against each proposed action.

3. The absentee ballot is valid for only one specified election or meeting of the members and expires automatically after the completion of the election or meeting.

5. The absentee ballot does not authorize another person to cast votes on behalf of the member.

B. Votes cast by absentee ballot or other form of delivery are valid for the purpose of establishing a quorum.

C. Notwithstanding subsection A of this section, an association for a timeshare plan as defined in section 32‑2197 may permit votes by a proxy that is duly executed by a unit owner.

D. For the purposes of this section, "period of declarant control" means the time during which the declarant or persons designated by the declarant may elect or appoint the members of the board of directors pursuant to the community documents or by virtue of superior voting power. END_STATUTE

Sec. 5. Legislative intent

It is the intent of the legislature in enacting this law to confirm the applicability of title 33, chapter 9, Arizona Revised Statutes, for condominiums and title 33, chapter 16, Arizona Revised Statutes, for planned communities, for any instance in which a conflict may exist between the provisions of law specifically relating to condominiums or planned communities with the more general provisions of law relating to nonprofit corporations. In any instance of potential conflict, it remains the intent of the legislature and the legislature confirms that the more specific provisions have applied and continue to apply.