2017-2018 Bill 190: Revised Uniform Unincorporated Nonprofit Association Act - South Carolina Legislature Online

South Carolina General Assembly

122nd Session, 2017-2018

S. 190

STATUS INFORMATION

General Bill

Sponsors: Senator Goldfinch

Document Path: l:\council\bills\bbm\9525dg17.docx

Introduced in the Senate on January 10, 2017

Introduced in the House on April 3, 2018

Currently residing in the House

Summary: Revised Uniform Unincorporated Nonprofit Association Act

HISTORY OF LEGISLATIVE ACTIONS

DateBodyAction Description with journal page number

12/13/2016SenatePrefiled

12/13/2016SenateReferred to Committee on Labor, Commerce and Industry

1/10/2017SenateIntroduced and read first time (Senate Journalpage100)

1/10/2017SenateReferred to Committee on Labor, Commerce and Industry (Senate Journalpage100)

3/13/2018SenateCommittee report: Favorable Labor, Commerce and Industry (Senate Journalpage15)

3/20/2018SenateRead second time (Senate Journalpage39)

3/20/2018SenateRoll call Ayes43 Nays0 (Senate Journalpage39)

3/22/2018SenateRead third time and sent to House (Senate Journalpage15)

4/3/2018HouseIntroduced and read first time (House Journalpage76)

4/3/2018HouseReferred to Committee on Judiciary (House Journalpage76)

4/18/2018HouseCommittee report: Favorable with amendment Judiciary (House Journalpage95)

4/19/2018House24 hour point of order

View the latest legislative information at the website

VERSIONS OF THIS BILL

12/13/2016

3/13/2018

4/18/2018

COMMITTEE REPORT

April 18, 2018

S.190

Introduced by Senator Goldfinch

S. Printed 4/18/18--H.

Read the first time April 3, 2018.

THE COMMITTEE ON JUDICIARY

To whom was referred a Bill (S.190) to amend the Code of Laws of South Carolina, 1976, by adding Chapter 33 to Title 33 so as to enact the Revised Uniform Unincorporated, etc., respectfully

REPORT:

That they have duly and carefully considered the same and recommend that the same do pass with amendment:

Amend the bill, as and if amended, SECTION 1, page 36, by striking lines 10-23 and inserting:

/Section 3333300.(A)If, before July 1, 2018, an interest in property was by terms of a transfer purportedly transferred to an unincorporated nonprofit association but under the law of this State the interest did not vest in the association, or in one or more persons on behalf of the association under subsection (B), on July 1, 2018, the interest vests in the association, unless the parties to the transfer have treated the transfer as ineffective.

(B)If, before July 1, 2018, an interest in property was by terms of a transfer purportedly transferred to an unincorporated nonprofit association but the interest was vested in one or more persons to hold the interest for members of the association, on or after July 1, 2018, the persons, or their successors in interest, may transfer the interest to the association in its name, or the association may require that the interest be transferred to it in its name./

Amend the bill further, by striking SECTION 4 and inserting:

/SECTION4.This act takes effect July 1, 2018./

Renumber sections to conform.

Amend title to conform.

F. GREGORY DELLENEY, JR. for Committee.

[190-1]

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 33 TO TITLE 33 SO AS TO ENACT THE REVISED UNIFORM UNINCORPORATED NONPROFIT ASSOCIATION ACT, TO AMONG OTHER THINGS, DEFINE TERMS, SPECIFY APPLICABILITY, SET FORTH POWERS OF UNINCORPORATED NONPROFIT ASSOCIATIONS, TO SPECIFY LIABILITY, AND TO SET FORTH THE PROCESS BY WHICH A LEGAL ACTION AGAINST AN ASSOCIATION IS ADJUDICATED.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION1.Title 33 of the 1976 Code is amended by adding:

CHAPTER 33

Revised Uniform Unincorporated Nonprofit Association Act

Section 333310.This act may be cited as the Revised Uniform Unincorporated Nonprofit Association Act.

Section 333320.As used in this chapter:

(1)Established practices means the practices used by an unincorporated nonprofit association without material change during the most recent five years of its existence, or if it has existed for less than five years, during its entire existence.

(2)Governing principles means the agreements, whether oral, in a record, or implied from its established practices, or in any combination thereof, that govern the purpose or operation of an unincorporated nonprofit association and the rights and obligations of its members and managers. The term includes any amendment or restatement of the agreements constituting the governing principles.

(3)Manager means a person that is responsible, alone or in concert with others, for the management of an unincorporated nonprofit association.

(4)Member means a person that, under the governing principles, may participate in the selection of persons authorized to manage the affairs of the unincorporated nonprofit association or in the development of the policies and activities of the association.

(5)Person means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, general cooperative association, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, commonlaw business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(6)Property means all property, whether real, personal, or mixed or tangible or intangible, or any right or interest therein.

(7)Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(8)Sign means, with present intent to authenticate or adopt a record:

(a)to execute or adopt a tangible symbol; or

(b)to attach to or logically associate with the record an electronic symbol, sound, or process.

(9)State means a state of the United States, the District of Columbia, Puerto Rico, United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(10)Transfer includes:

(a)an assignment;

(b)a conveyance;

(c)a sale;

(d)a lease;

(e)an encumbrance, including a mortgage or security interest;

(f)a gift; or

(g)a transfer by operation of law.

(11)Unincorporated nonprofit association means an unincorporated organization consisting of two or more members joined under an agreement that is oral, in a record, or implied from conduct, for one or more common, nonprofit purposes. The term does not include:

(a)a trust;

(b)a marriage, domestic partnership, common law domestic relationship, civil union, or other domestic living arrangement;

(c)an organization formed under any other statute that governs the organization and operation of unincorporated associations;

(d)a joint tenancy, tenancy in common, or tenancy by the entireties even if the coowners share use of the property for a nonprofit purpose; or

(e)a relationship under an agreement in a record that expressly provides that the relationship between the parties does not create an unincorporated nonprofit association.

REPORTERS COMMENTS

1.Established practices are essentially equivalent to the commercial law concepts of course of performance and course of dealing. See UCC Section 1303. Many Unincorporated Nonprofit Associations (UNAs) operate on a very informal basis. Often there are no written procedures or bylaws or what writings they have are very incomplete. Nevertheless, over time they develop and follow various practices. These practices, if followed consistently for at least five years (or during the entire existence of the UNA if it has been in existence less than five years), become established practices and therefore can qualify as part of the UNAs governing principles. An example would be an unincorporated church that has no written bylaws covering the issue of notice of meetings that for the past five years has printed notice of the annual meeting of its members in the church bulletin for the three weeks preceding the annual meeting. This established practice would be part of the churchs governing principles and if followed in the sixth and subsequent years would be determinative of whether reasonable notice of an annual meeting had been given.

2.Governing principles are the equivalent of the articles of incorporation, bylaws and other documents and established practices that govern the internal affairs of a UNA, sometimes referred to as an entitys private organic rules. See Model Entity Transactions Act (2007) Section 1102 (31). The governing principles of a UNA do not have to be in a written form. This is consistent with partnership law, the for profit equivalent of a UNA. See Uniform Partnership Act (1997) Section 101(7); Uniform Limited Partnership Act (2001) Section 102(13); Revised Uniform Limited Liability Act (2006) Section 102(13). Where there is no clear and oral agreement or record, you would look to the UNAs established practices (subsection (1)). See Comment 1. See also Comment 8.

3.A person is a manager of a UNA if the individual fits the definition even if that persons designation might usually be associated with another type of organization. Many UNAs refer to members of their governing boards as directors or trustees