LIHUE — Wrapping up what has been an occasionally contentious 2009 with quite possibly its most heated meeting to date, the Kaua‘i Board of Ethics on Thursday laid out the path it will take on its way to clarifying a controversial section of the County Charter.

What first began as a declaratory order has become a draft interpretive rule, and upon further advice from the Office of the County Attorney, could be destined to become a proposed ordinance for deliberation by the Kaua‘i County Council.

The rule, like the declaratory order drafted by board Vice Chair Mark Hubbard, would define some key terms left unclear by Charter Section 20.02D, which bars county officials from appearing on behalf of private interests before other county agencies.

The biggest change made in the past month is an adjustment to the definition of “private interest” that would remove a “carve-out” exception for nonprofit charities qualifying for tax-exempt status under Section 501(c)3 of the U.S. Tax Code.

Following advice from Deputy County Attorney Mona Clark, Hubbard defined the term broadly as any entity not part of the government.

Board member Judy Lenthall — who, like Hubbard, was among three officials charged with violating 20.02D when she appeared before the council on behalf of the Kaua‘i Food Bank, a 501(c)3, earlier this year — said in Southeast Asia and throughout the rest of the world, nonprofits are generally called “non-governmental agencies,” and agreed with the broad definition.

“Yeah, I think it’ll have a chilling effect, but the worse effect would be conflicts of interest,” Lenthall said. “I’m willing to risk the chilling effect and test the waters” and see what community members can be found to serve as volunteer officials.

However, the change drew criticism from Board Secretary Paul Weil, who has pushed for exemptions for certain types of nonprofits, excluding political organizations or religious groups.

Deputy County Attorney Mauna Kea Trask said he understood both sides of the argument, but said to lose “a core group of people who care enough to volunteer their own time” after work for no compensation due to a strict interpretation “would be a detriment to the community.”

The board voted 5-2 to defer the matter to its next meeting and continue working on a carve-out for charities, with Hubbard and Lenthall voting in opposition. After the board decides on language, it may hold a public hearing and formally adopt the draft as an interpretive rule, but that may not go far enough to make the board’s policy binding.

Trask, filling in for Clark and staking a sharp departure from her statements in recent months, told the board the charter says the Kaua‘i County Council, not individual boards and commissions, has the power to adopt rules, and said boards have the authority to interpret the County Code but not to interpret the County Charter.

“Although well-intentioned, already we may be straying off path,” he said, calling the muddled process “another sticky situation.”

The board could send its interpretive rule to the council as a proposed ordinance, after which the council could decide whether to codify the language into county law.

The board unanimously cleared Hubbard of a complaint brought by Bieber for alleged violations of Charter Sections 20.02E, which bars county officials from using their “official position to secure a special benefit, privilege or exemption for himself or others,” and 20.04B, which requires disclosures for conflicts of interest.

In the complaint, Bieber said Hubbard’s work on the declaratory order interpreting Section 20.02D would have directly benefited Hubbard, who also volunteers for the Kaua‘i Planning and Action Alliance. The complaint was filed in October, before Hubbard removed the exemption for 501(c)3s.

Trask said the complaint was “unwarranted” and that the board would be “abrogating its role” and “sitting here once a month on Thursdays doing nothing” if it is not able to fix ethical quandaries in the county.

“There has to be a Board of Ethics in the County, there have to be people (on the board), and you are those people,” Trask said.

The five remaining board members, declining to ask either Bieber or Hubbard any questions, voted unanimously that there was no evidence of a violation.

Board member Sally Motta serves on the Kaua‘i Chamber of Commerce Board of Directors and the Rotary Club of Hanalei Bay, while Board Chair Leila Fuller said a 501(c)3, presumably the YWCA of Kaua‘i for which she is director of Fund Development and Contract Manager, “pays my mortgage.”