A BILL for an Act to create and enact a new chapter to title 47 of the North Dakota Century Code, relating to association community bylaws and board of directors.
SB 2394 would create a new chapter in Title 47 of the North Dakota Century Code to regulate the bylaws and board governance of “association communities,” which appear to include homeowner associations and similar property-owner entities. The bill requires these associations to adopt bylaws at formation and to include specific governance provisions covering board structure, member meetings, a written inquiry process with a 30-day response deadline, annual budgets, reserve funds, financial disclosures, insurance requirements for members, and a process for amending bylaws.
The bill also imposes detailed operational requirements on boards. Boards would have to consist of at least three members, meet quarterly, adopt annual budgets in advance of the fiscal year, maintain formal reserve funds for capital expenditures and deferred maintenance, and obtain two signatures for expenditures over $10,000. It further requires annual insurance updates, periodic legal review of bylaws and compliance at least once every seven years, and disclosure of financial records to members upon request.
If enacted, SB 2394 would have significantly expanded state law governing association communities by imposing mandatory governance, budgeting, reserve funding, disclosure, and insurance standards on associations and their boards. It would have affected nonprofit corporations, nonprofit LLCs, and other owner-based entities that manage common-interest property, and would have created enforceable statutory duties regarding board conduct, financial management, and member access to records. The bill would also have required associations to maintain more formalized accounting and reserve practices, likely increasing administrative obligations and compliance costs for affected entities.
The bill did not advance and failed on Senate second reading by a vote of 0-46, indicating overwhelmingly negative sentiment in the chamber. With no committee transcripts available, the recorded vote is the clearest indicator of legislative reaction, and it suggests broad opposition rather than a closely divided debate. The absence of any recorded yeas also implies that the proposal did not secure meaningful support at the floor stage.
The likely points of contention were the bill’s prescriptive regulation of private association governance and the administrative and financial burdens it would place on associations and their members. Requirements such as mandatory reserve funding formulas, annual budget deadlines, two-signature approval for larger expenditures, mandatory insurance coverage, and periodic legal review may have been viewed as overly intrusive or costly. At the same time, supporters would likely have framed the bill as a consumer-protection and transparency measure aimed at improving accountability, financial stability, and member access to information in homeowner and similar associations.