REPORT TITLE:
Nonprofit Assoc. Act


DESCRIPTION:
Adopts the Uniform Unincorporated Nonprofit Association Act.
Provides that a nonprofit association is a legal entity separate
from its members for purposes of transferring real and personal
property, tort and contractual liability, and legal standing.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           949
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   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.  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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                                     S.B. NO.           949
                                            
                                                        

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

 
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                                     S.B. NO.           949
                                            
                                                        

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

 
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                                     S.B. NO.           949
                                            
                                                        

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

 
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                                     S.B. NO.           949
                                            
                                                        

 
 1 authorized to participate in the management of the affairs of the
 
 2 nonprofit association, or is a person considered to be a member
 
 3 by the nonprofit association.
 
 4      (c)  A person is not liable for a tortious act or omission
 
 5 for which a nonprofit association is liable merely because the
 
 6 person is a member, is authorized to participate in the
 
 7 management of the affairs of the nonprofit association, or is a
 
 8 person considered to be a member by the nonprofit association.
 
 9      (d)  A tortious act or omission of a member or other person
 
10 for which a nonprofit association is liable is not imputed to a
 
11 person merely because the person is a member of the nonprofit
 
12 association, is authorized to participate in the management of
 
13 the affairs of the nonprofit association, or is a person
 
14 considered to be a member by the nonprofit association.
 
15      (e)  A member of, or a person considered to be a member by,
 
16 a nonprofit association may assert a claim against the nonprofit
 
17 association.  A nonprofit association may assert a claim against
 
18 a member or a person considered to be a member by the nonprofit
 
19 association.
 
20      � -7  Capacity to assert and defend; standing.(a)  A
 
21 nonprofit association, in its name, may institute, defend,
 
22 intervene, or participate in a judicial, administrative, or other
 
23 governmental proceeding or in an arbitration, mediation, or any
 

 
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                                     S.B. NO.           949
                                            
                                                        

 
 1 other form of alternative dispute resolution.
 
 2      (b)  A nonprofit association may assert a claim in its name
 
 3 on behalf of its members if one or more members of the nonprofit
 
 4 association have standing to assert a claim in their own right,
 
 5 the interests the nonprofit association seeks to protect are
 
 6 germane to its purposes, and neither the claim asserted nor the
 
 7 relief requested requires the participation of a member.
 
 8      � -8 Effect of judgment or order.  A judgment or order
 
 9 against a nonprofit association is not by itself a judgment or
 
10 order against a member or a person authorized to participate in
 
11 the management of the affairs of the nonprofit association.
 
12      � -9 Disposition of personal property of inactive
 
13 nonprofit association.  If a nonprofit association has been
 
14 inactive for three years or longer, or a different period
 
15 specified in a document of the nonprofit association, a person in
 
16 possession or control of personal property of the nonprofit
 
17 association may transfer custody of the property:
 
18      (1)  If a document of the nonprofit association specifies a
 
19           person to whom transfer is to be made under those
 
20           circumstances, to that person; or
 
21      (2)  If no person is so specified, to a nonprofit
 
22           association or nonprofit corporation pursuing broadly
 
23           similar purposes or to a government, governmental
 

 
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                                     S.B. NO.           949
                                            
                                                        

 
 1           subdivision, agency, or instrumentality.
 
 2      � -10  Appointment of agent to receive service of process.
 
 3 (a)  A nonprofit association may file in the office of the
 
 4 director of commerce and consumer affairs a statement appointing
 
 5 an agent authorized to receive service of process.
 
 6      (b)  A statement appointing an agent must set forth:
 
 7      (1)  The name of the nonprofit association;
 
 8      (2)  The federal tax identification number, if any, of the
 
 9           nonprofit association;
 
10      (3)  The address in this State, including the street
 
11           address, if any, of the nonprofit association, or, if
 
12           the nonprofit association does not have an address in
 
13           this State, its address out of State; and
 
14      (4)  The name of the person in this State authorized to
 
15           receive service of process and the person's address,
 
16           including the street address, in this State.
 
17      (c)  A statement appointing an agent must be signed and
 
18 acknowledged by a person authorized to manage the affairs of a
 
19 nonprofit association.  The statement must also be signed and
 
20 acknowledged by the person appointed agent, who thereby accepts
 
21 the appointment.  The appointed agent may resign by filing a
 
22 resignation in the office of the director of commerce and
 
23 consumer affairs and giving notice to the nonprofit association.
 

 
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                                     S.B. NO.           949
                                            
                                                        

 
 1      (d)  A filing officer may collect a fee for filing a
 
 2 statement appointing an agent to receive service of process, an
 
 3 amendment, a cancellation, or a resignation in the amount charged
 
 4 for filing similar documents.
 
 5      (e)  An amendment to or cancellation of a statement
 
 6 appointing an agent to receive service of process must meet the
 
 7 requirements for execution of an original statement.
 
 8      � -11  Claim not abated by change.  A claim for relief
 
 9 against a nonprofit association does not abate merely because of
 
10 a change in its members or persons authorized to manage the
 
11 affairs of the nonprofit association.
 
12      � -12  Venue.  For purposes of venue, a nonprofit
 
13 association is a resident of a city or county in which it has an
 
14 office.
 
15      � -13 Summons and complaint; service on whom.  In an
 
16 action or proceeding against a nonprofit association a summons
 
17 and complaint must be served on an agent authorized by
 
18 appointment to receive service of process, an officer, managing
 
19 or general agent, or a person authorized to participate in the
 
20 management of its affairs.  If none of them can be served,
 
21 service may be made on a member.
 
22      � -14  Short title.  This chapter may be cited as the
 
23 Uniform Unincorporated Nonprofit Association Act."
 

 
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                                     S.B. NO.           949
                                            
                                                        

 
 1      SECTION 2.  Transition concerning real and personal
 
 2 property.  If, before the effective date of this Act, an estate
 
 3 or interest in real or personal property was by terms of the
 
 4 transfer purportedly transferred to a nonprofit association but
 
 5 under the law the estate or interest did not vest in the
 
 6 nonprofit association, on the effective date of this Act the
 
 7 estate or interest vests in the nonprofit association, unless the
 
 8 parties had treated the transfer as ineffective.
 
 9      SECTION 3.  Savings clause.  This Act does not affect an
 
10 action or proceeding commenced or right accrued before this Act
 
11 takes effect.
 
12      SECTION 4.  This Act shall take effect on July 1, 1999.
 
13 
 
14                           INTRODUCED BY:  _______________________