REPORT TITLE:
Nonprofit Assoc. Act


DESCRIPTION:
Adopts the Uniform Unincorporated Nonprofit Association Act.
Gives unincorporated nonprofit associations legal status for
purposes of transferring real and personal property, tort and
contractual liability purposes, and for legal standing.  (SB949
HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        949
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 2
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE UNIFORM UNINCORPORATED NONPROFIT ASSOCIATION.



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

 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 
 2 a new chapter to be appropriately designated and to read as
 
 3 follows:
 
 4                            "CHAPTER  
 
 5         UNIFORM UNINCORPORATED NONPROFIT ASSOCIATION ACT
 
 6      � -1 Definitions.  As used in this chapter:
 
 7      "Member" means a person who, under the rules or practices of
 
 8 a nonprofit association, may participate in the selection of
 
 9 persons authorized to manage the affairs of the nonprofit
 
10 association or in the development of policy of the nonprofit
 
11 association.
 
12      "Nonprofit association" means an unincorporated
 
13 organization, other than one created by a trust, consisting of
 
14 two or more members joined by mutual consent for a common,
 
15 nonprofit purpose.  However, joint tenancy, tenancy in common, or
 
16 tenancy by the entireties does not by itself establish a
 
17 nonprofit association, even if the co-owners share use of the
 
18 property for a nonprofit purpose.
 
19      "Person" means an individual, corporation, business trust,
 
20 estate, trust, partnership, association, joint venture,
 

 
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 1 government, governmental subdivision, agency, or instrumentality,
 
 2 or any other legal or commercial entity.
 
 3      � -2 Supplementary general principles of law and equity.
 
 4 Principles of law and equity supplement this chapter unless
 
 5 displaced by a particular provision of it.
 
 6      � -3 Territorial application.  Real and personal property
 
 7 in this state may be acquired, held, encumbered, and transferred
 
 8 by a nonprofit association, whether or not the nonprofit
 
 9 association or a member has any other relationship to this state.
 
10      � -4 Real and personal property; nonprofit association as
 
11 legatee, devisee, or beneficiary.(a)  A nonprofit association
 
12 shall be a legal entity separate from its members for the
 
13 purposes of acquiring, holding, encumbering, and transferring
 
14 real and personal property.
 
15      (b)  A nonprofit association in its name may acquire, hold,
 
16 encumber, or transfer an estate or interest in real or personal
 
17 property.
 
18      (c)  A nonprofit association may be a beneficiary of a trust
 
19 or contract, a legatee, or a devisee.
 
20      � -5 Statement of authority as to real property.(a)  A
 
21 nonprofit association may execute and record a statement of
 
22 authority to transfer an estate or interest in real property in
 
23 the name of the nonprofit association.
 

 
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 1      (b)  An estate or interest in real property in the name of a
 
 2 nonprofit association may be transferred by a person so
 
 3 authorized in a statement of authority recorded in the office of
 
 4 the registrar of the land court or in the bureau of conveyances,
 
 5 whichever is the office in which a transfer of the property would
 
 6 be recorded.
 
 7      (c)  A statement of authority shall set forth:
 
 8      (1)  The name of the nonprofit association;
 
 9      (2)  The federal tax identification number, if any, of the
 
10           nonprofit association;
 
11      (3)  The address in this state, including the street
 
12           address, if any, of the nonprofit association or, if
 
13           the nonprofit association does not have an address in
 
14           this state, its address out of state;
 
15      (4)  That it is an unincorporated nonprofit association; and
 
16      (5)  The name or title of a person authorized to transfer an
 
17           estate or interest in real property held in the name of
 
18           the nonprofit association.
 
19      (d)  A statement of authority shall be executed in the same
 
20 manner as a deed by a person who is not the person authorized to
 
21 transfer the estate or interest.
 
22      (e)  A filing officer may collect a fee for recording a
 
23 statement of authority in the amount authorized for recording a
 
24 transfer of real property.
 

 
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 1      (f)  An amendment, including a cancellation, of a statement
 
 2 of authority shall meet the requirements for execution and
 
 3 recording of an original statement.  Unless canceled earlier, a
 
 4 recorded statement of authority or its most recent amendment
 
 5 shall be canceled by operation of law five years after the date
 
 6 of the most recent recording.
 
 7      (g)  If the record title to real property is in the name of
 
 8 a nonprofit association and the statement of authority is
 
 9 recorded in the office in which a transfer of real property would
 
10 be recorded, the authority of the person named in a statement of
 
11 authority shall be conclusive in favor of a person who gives
 
12 value without notice that the person lacks authority.
 
13      � -6  Liability in contract and tort.  (a)  A nonprofit
 
14 association shall be a legal entity separate from its members for
 
15 the purposes of determining and enforcing rights, duties, and
 
16 liabilities in contract and tort.
 
17      (b)  A person shall not be liable for a breach of a
 
18 nonprofit association's contract merely because the person is a
 
19 member, is authorized to participate in the management of the
 
20 affairs of the nonprofit association, or is a person considered
 
21 to be a member by the nonprofit association.
 
22      (c)  A person shall not be liable for a tortious act or
 
23 omission for which a nonprofit association is liable merely
 

 
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 1 because the person is a member, is authorized to participate in
 
 2 the management of the affairs of the nonprofit association, or is
 
 3 a person considered to be a member by the nonprofit association.
 
 4      (d)  A tortious act or omission of a member or other person
 
 5 for which a nonprofit association is liable shall not be imputed
 
 6 to a person merely because the person is a member of the
 
 7 nonprofit association, is authorized to participate in the
 
 8 management of the affairs of the nonprofit association, or is a
 
 9 person considered to be a member by the nonprofit association.
 
10      (e)  A member of, or a person considered to be a member by,
 
11 a nonprofit association may assert a claim against the nonprofit
 
12 association.  A nonprofit association may assert a claim against
 
13 a member or a person considered to be a member by the nonprofit
 
14 association.
 
15      � -7  Capacity to assert and defend; standing.(a)  A
 
16 nonprofit association, in its name, may institute, defend,
 
17 intervene, or participate in a judicial, administrative, or other
 
18 governmental proceeding or in an arbitration, mediation, or any
 
19 other form of alternative dispute resolution.
 
20      (b)  A nonprofit association may assert a claim in its name
 
21 on behalf of its members if one or more members of the nonprofit
 
22 association have standing to assert a claim in their own right,
 
23 the interests the nonprofit association seeks to protect are
 

 
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 1 germane to its purposes, and neither the claim asserted nor the
 
 2 relief requested requires the participation of a member.
 
 3      � -8 Effect of judgment or order.  A judgment or order
 
 4 against a nonprofit association shall not by itself be a judgment
 
 5 or order against a member or a person authorized to participate
 
 6 in the management of the affairs of the nonprofit association.
 
 7      � -9 Disposition of personal property of inactive
 
 8 nonprofit association.  If a nonprofit association has been
 
 9 inactive for three years or longer, or a different period
 
10 specified in a document of the nonprofit association, a person in
 
11 possession or control of personal property of the nonprofit
 
12 association may transfer custody of the property:
 
13      (1)  If a document of the nonprofit association specifies a
 
14           person to whom transfer is to be made under those
 
15           circumstances, to that person; or
 
16      (2)  If no person is so specified, to a nonprofit
 
17           association or nonprofit corporation pursuing broadly
 
18           similar purposes or to a government, governmental
 
19           subdivision, agency, or instrumentality.
 
20      � -10  Appointment of agent to receive service of process.
 
21 (a)  A nonprofit association may file in the office of the
 
22 registrar of the land court or in the bureau of conveyances a
 
23 statement appointing an agent authorized to receive service of
 
24 process.
 

 
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 1      (b)  A statement appointing an agent shall set forth:
 
 2      (1)  The name of the nonprofit association;
 
 3      (2)  The federal tax identification number, if any, of the
 
 4           nonprofit association;
 
 5      (3)  The address in this state, including the street
 
 6           address, if any, of the nonprofit association or, if
 
 7           the nonprofit association does not have an address in
 
 8           this state, its address out of state; and
 
 9      (4)  The name of the person in this state authorized to
 
10           receive service of process and the person's address,
 
11           including the street address, in this state.
 
12      (c)  A statement appointing an agent shall be signed and
 
13 acknowledged by a person authorized to manage the affairs of a
 
14 nonprofit association.  The statement shall also be signed and
 
15 acknowledged by the person to be appointed agent, who thereby
 
16 accepts the appointment.  The appointed agent may resign by
 
17 filing a resignation in the office of the registrar of the land
 
18 court or in the bureau of conveyances and giving notice to the
 
19 nonprofit association.
 
20      (d)  A filing officer may collect a fee for filing a
 
21 statement appointing an agent to receive service of process, an
 
22 amendment, a cancellation, or a resignation in the amount charged
 
23 for filing similar documents.
 

 
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 1      (e)  An amendment to or cancellation of a statement
 
 2 appointing an agent to receive service of process shall meet the
 
 3 requirements for execution of an original statement.
 
 4      � -11  Claim not abated by change.  A claim for relief
 
 5 against a nonprofit association shall not abate merely because of
 
 6 a change in its members or persons authorized to manage the
 
 7 affairs of the nonprofit association.
 
 8      � -12  Venue.  For purposes of venue, a nonprofit
 
 9 association shall be a resident of the county in which it has an
 
10 office.
 
11      � -13  Summons and complaint; service on whom.  In an
 
12 action or proceeding against a nonprofit association, a summons
 
13 and complaint shall be served on the agent authorized by
 
14 appointment to receive service of process, the officer, managing
 
15 or general agent, or the person authorized to participate in the
 
16 management of its affairs.  If none of them can be served,
 
17 service may be made on a member."
 
18      SECTION 2.  If, before the effective date of this Act, an
 
19 estate or interest in real or personal property was by terms of
 
20 the transfer purportedly transferred to a nonprofit association
 
21 but under the law the estate or interest did not vest in the
 
22 nonprofit association, on the effective date of this Act the
 
23 estate or interest vests in the nonprofit association, unless the
 
24 parties had treated the transfer as ineffective.
 

 
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                                     S.B. NO.           S.D. 1
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 1      SECTION 3.  This Act does not affect rights and duties that
 
 2 matured, penalties that were incurred, and proceedings that were
 
 3 begun before its effective date.
 
 4      SECTION 4.  This Act shall take effect on July 1, 1999.