H.B. No. 1661
1-1 AN ACT
1-2 relating to the adoption of the Texas Uniform Unincorporated
1-3 Nonprofit Association Act.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. SHORT TITLE. This Act may be cited as the Texas
1-6 Uniform Unincorporated Nonprofit Association Act.
1-7 SECTION 2. DEFINITIONS. In this Act:
1-8 (1) "Member" means a person who, under the rules or
1-9 practices of a nonprofit association, may participate in the
1-10 selection of persons authorized to manage the affairs of the
1-11 nonprofit association or in the development of policy of the
1-12 nonprofit association.
1-13 (2) "Nonprofit association" means an unincorporated
1-14 organization, other than one created by a trust, consisting of
1-15 three or more members joined by mutual consent for a common,
1-16 nonprofit purpose. However, joint tenancy, tenancy in common, or
1-17 tenancy by the entireties does not by itself establish a nonprofit
1-18 association, even if the co-owners share use of the property for a
1-19 nonprofit purpose.
1-20 (3) "Person" means an individual, corporation,
1-21 business trust, estate, trust, partnership, limited liability
1-22 company, association, joint venture, government, governmental
1-23 subdivision, agency, or instrumentality, or any other legal or
1-24 commercial entity.
2-1 (4) "State" means a state of the United States, the
2-2 District of Columbia, the Commonwealth of Puerto Rico, or any
2-3 territory or insular possession subject to the jurisdiction of the
2-4 United States.
2-5 SECTION 3. SUPPLEMENTARY GENERAL PRINCIPLES OF LAW AND
2-6 EQUITY. Principles of law and equity supplement this Act unless
2-7 displaced by a particular provision of it.
2-8 SECTION 4. TERRITORIAL APPLICATION. Real and personal
2-9 property in this state may be acquired, held, encumbered, and
2-10 transferred by a nonprofit association, whether or not the
2-11 nonprofit association or a member has any other relationship to
2-12 this state.
2-13 SECTION 5. REAL AND PERSONAL PROPERTY; NONPROFIT ASSOCIATION
2-14 AS BENEFICIARY. (a) A nonprofit association in its name may
2-15 acquire, hold, encumber, or transfer an estate or interest in real
2-16 or personal property.
2-17 (b) A nonprofit association may be a beneficiary of a trust,
2-18 contract, or will.
2-19 SECTION 6. STATEMENT OF AUTHORITY AS TO REAL PROPERTY.
2-20 (a) A nonprofit association may execute and record a statement of
2-21 authority to transfer an estate or interest in real property in the
2-22 name of the nonprofit association.
2-23 (b) An estate or interest in real property in the name of a
2-24 nonprofit association may be transferred by a person so authorized
2-25 in a statement of authority recorded in the county clerk's office
2-26 in the county in which a transfer of the property would be
2-27 recorded.
3-1 (c) A statement of authority must set forth:
3-2 (1) the name of the nonprofit association;
3-3 (2) the address in this state, including the street
3-4 address, if any, of the nonprofit association, or, if the nonprofit
3-5 association does not have an address in this state, its address out
3-6 of state; and
3-7 (3) the name or title of a person authorized to
3-8 transfer an estate or interest in real property held in the name of
3-9 the nonprofit association.
3-10 (d) A statement of authority must be executed in the same
3-11 manner as a deed by a person who is not the person authorized to
3-12 transfer the estate or interest.
3-13 (e) The county clerk may collect a fee for recording a
3-14 statement of authority in the amount authorized for recording a
3-15 transfer of real property.
3-16 (f) An amendment, including a cancellation, of a statement
3-17 of authority must meet the requirements for execution and recording
3-18 of an original statement. Unless canceled earlier, a recorded
3-19 statement of authority or its most recent amendment is canceled by
3-20 operation of law on the fifth anniversary of the date of the most
3-21 recent recording.
3-22 (g) If the record title to real property is in the name of a
3-23 nonprofit association and the statement of authority is recorded in
3-24 the county clerk's office of the county in which a transfer of real
3-25 property would be recorded, the authority of the person named in a
3-26 statement of authority is conclusive in favor of a person who gives
3-27 value without notice that the person lacks authority.
4-1 SECTION 7. LIABILITY IN TORT AND CONTRACT. (a) A nonprofit
4-2 association is a legal entity separate from its members for the
4-3 purposes of determining and enforcing rights, duties, and
4-4 liabilities in contract and tort.
4-5 (b) A person is not liable for a breach of a nonprofit
4-6 association's contract merely because the person is a member, is
4-7 authorized to participate in the management of the affairs of the
4-8 nonprofit association, or is a person considered to be a member by
4-9 the nonprofit association.
4-10 (c) A person is not liable for a tortious act or omission
4-11 for which a nonprofit association is liable merely because the
4-12 person is a member, is authorized to participate in the management
4-13 of the affairs of the nonprofit association, or is a person
4-14 considered as a member by the nonprofit association.
4-15 (d) A tortious act or omission of a member or other person
4-16 for which a nonprofit association is liable is not imputed to a
4-17 person merely because the person is a member of the nonprofit
4-18 association, is authorized to participate in the management of the
4-19 affairs of the nonprofit association, or is a person considered as
4-20 a member by the nonprofit association.
4-21 (e) A member of, or a person considered to be a member by, a
4-22 nonprofit association may assert a claim against the nonprofit
4-23 association. A nonprofit association may assert a claim against a
4-24 member or a person considered to be a member by the nonprofit
4-25 association.
4-26 SECTION 8. CAPACITY TO ASSERT AND DEFEND; STANDING. (a) A
4-27 nonprofit association, in its name, may institute, defend,
5-1 intervene, or participate in a judicial, administrative, or other
5-2 governmental proceeding or in an arbitration, mediation, or any
5-3 other form of alternative dispute resolution.
5-4 (b) A nonprofit association may assert a claim in its name
5-5 on behalf of its members if one or more members of the nonprofit
5-6 association have standing to assert a claim in their own right, the
5-7 interests the nonprofit association seeks to protect are germane to
5-8 its purposes, and neither the claim asserted nor the relief
5-9 requested requires the participation of a member.
5-10 SECTION 9. EFFECT OF JUDGMENT OR ORDER. A judgment or order
5-11 against a nonprofit association is not by itself a judgment or
5-12 order against a member or a person considered by the nonprofit
5-13 association to be a member.
5-14 SECTION 10. DISPOSITION OF PERSONAL PROPERTY OF INACTIVE
5-15 NONPROFIT ASSOCIATION. (a) If a nonprofit association has been
5-16 inactive for three years or longer, or a shorter period as
5-17 specified in a document of the nonprofit association, a person in
5-18 possession or control of personal property of the nonprofit
5-19 association may transfer the custody of the property:
5-20 (1) if a document of a nonprofit association specifies
5-21 a person to whom transfer is to be made under these circumstances,
5-22 to that person; or
5-23 (2) if no person is so specified, to a nonprofit
5-24 association or nonprofit corporation pursuing broadly similar
5-25 purposes, or to a government or governmental subdivision, agency,
5-26 or instrumentality.
5-27 (b) Notwithstanding the above, if a nonprofit association is
6-1 classified under the Internal Revenue Code of 1986 as a 501(c)(3)
6-2 organization or is or holds itself out to be established or
6-3 operating for a charitable, religious, or educational purpose, as
6-4 defined in Section 501(c)(3) of the Internal Revenue Code of 1986,
6-5 then any distribution must be to another nonprofit association or
6-6 nonprofit corporation with similar charitable, religious, or
6-7 educational purposes.
6-8 SECTION 11. BOOKS AND RECORDS. (a) A nonprofit association
6-9 shall keep correct and complete books and records of account for at
6-10 least three years after the end of each fiscal year and shall make
6-11 them available to the members of the association for inspection and
6-12 copying upon request.
6-13 (b) The attorney general may inspect, examine, and make
6-14 copies of the books, records, and other documents the attorney
6-15 general deems necessary and investigate the association to
6-16 determine if a violation of any law of this state has occurred.
6-17 SECTION 12. APPOINTMENT OF AGENT TO RECEIVE SERVICE OF
6-18 PROCESS. (a) A nonprofit association may file in the office of
6-19 the secretary of state a statement appointing an agent authorized
6-20 to receive service of process.
6-21 (b) A statement appointing an agent must set forth:
6-22 (1) the name of the nonprofit association;
6-23 (2) the federal tax identification number of the
6-24 nonprofit association, if applicable;
6-25 (3) the address in this state, including the street
6-26 address, if any, of the nonprofit association, or, if the nonprofit
6-27 association does not have an address in this state, its address out
7-1 of state; and
7-2 (4) the name of the person in this state authorized to
7-3 receive service of process and the person's address, including the
7-4 street address, in this state.
7-5 (c) A statement appointing an agent must be signed by a
7-6 person authorized to manage the affairs of the nonprofit
7-7 association. The statement must also be signed by the person
7-8 appointed agent, who thereby accepts the appointment. The
7-9 appointed agent may resign by filing a resignation in the office of
7-10 the secretary of state and giving notice to the nonprofit
7-11 association.
7-12 (d) The secretary of state may collect a fee for filing a
7-13 statement appointing an agent to receive service of process, an
7-14 amendment, a cancellation, or a resignation in the amount charged
7-15 for filing similar documents.
7-16 (e) An amendment to a statement appointing an agent to
7-17 receive service of process must meet the requirements for execution
7-18 of an original statement.
7-19 (f) A statement appointing an agent may be canceled by
7-20 filing with the secretary of state a written notice of cancellation
7-21 executed by a person authorized to manage the affairs of the
7-22 nonprofit association. A notice of cancellation must contain the
7-23 name of the nonprofit association; the federal tax identification
7-24 number of the nonprofit association, if applicable; the date of
7-25 filing of its statement appointing the agent; and a current street
7-26 address of the nonprofit association in this state, and outside
7-27 this state, if applicable.
8-1 (g) The secretary of state may promulgate forms and adopt
8-2 procedural rules on filing documents under this section.
8-3 SECTION 13. CLAIM NOT ABATED BY CHANGE. A claim for relief
8-4 against a nonprofit association does not abate merely because of a
8-5 change in its members or persons authorized to manage the affairs
8-6 of the nonprofit association.
8-7 SECTION 14. SUMMONS AND COMPLAINT; SERVICE ON WHOM. In an
8-8 action or proceeding against a nonprofit association, a summons and
8-9 complaint must be served on an agent authorized by appointment to
8-10 receive service of process, an officer, a managing or general
8-11 agent, or a person authorized to participate in the management of
8-12 its affairs, in accordance with the Civil Practice and Remedies
8-13 Code. Within 10 days of a request by the attorney general to an
8-14 officer or board member of a nonprofit association or to the
8-15 nonprofit association, the nonprofit association shall provide to
8-16 the attorney general the names, current addresses, and telephone
8-17 numbers of:
8-18 (1) agents authorized to receive service of process on
8-19 behalf of the nonprofit association; and
8-20 (2) the officers, managing or general agents, and
8-21 other persons authorized to participate in the management of the
8-22 affairs of the nonprofit association.
8-23 SECTION 15. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
8-24 This Act shall be applied and construed to effectuate its general
8-25 purpose to make uniform the law with respect to the subject of this
8-26 Act among states enacting it.
8-27 SECTION 16. TRANSITION CONCERNING REAL AND PERSONAL
9-1 PROPERTY. If, before the effective date of this Act, an estate or
9-2 interest in real or personal property was by the terms of the
9-3 transfer purportedly transferred to a nonprofit association, but
9-4 under the law the estate or interest was vested in a fiduciary such
9-5 as officers of the nonprofit association to hold the estate or
9-6 interest for members of the nonprofit association, on or after the
9-7 effective date of this Act the fiduciary may transfer the estate or
9-8 interest to the nonprofit association in its name, or the nonprofit
9-9 association, by appropriate proceedings, may require that the
9-10 estate or interest be transferred to it in its name.
9-11 SECTION 17. SAVING CLAUSE. This Act does not affect an
9-12 action or proceeding commenced or a right accrued before this Act
9-13 takes effect.
9-14 SECTION 18. EFFECT ON OTHER LAW. This Act replaces existing
9-15 law with respect to matters covered by this Act but does not affect
9-16 other law covering unincorporated nonprofit associations.
9-17 SECTION 19. EFFECTIVE DATE. This Act takes effect September
9-18 1, 1995.
9-19 SECTION 20. EMERGENCY. The importance of this legislation
9-20 and the crowded condition of the calendars in both houses create an
9-21 emergency and an imperative public necessity that the
9-22 constitutional rule requiring bills to be read on three several
9-23 days in each house be suspended, and this rule is hereby suspended.