88R3524 JES-D
 
  By: Bucy H.B. No. 3768
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the formation of decentralized unincorporated
  associations and the use of distributed ledger or blockchain
  technology for certain business purposes; authorizing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.002, Business Organizations Code, is
  amended by adding Subdivisions (15-a), (16-a), (78-b), and (82-b)
  and amending Subdivisions (78-a), (82-a), and (89) to read as
  follows:
               (15-a)  "Digital asset" means an electronic record in
  which a person has a right or interest. The term does not include an
  underlying asset, unless the asset is itself an electronic record.
               (16-a)  "Distributed ledger technology" means a
  distributed ledger protocol that:
                     (A)  is a designated regulatory model of software
  that governs the rules, operations, and communication between
  intersection and connection points in a telecommunications network
  and supporting infrastructure;
                     (B)  includes the computer software or hardware,
  or collections of computer software or hardware, that use or enable
  a distributed ledger, including blockchain; and
                     (C)  uses a distributed, shared, and replicated
  ledger, which may:
                           (i)  be public or private;
                           (ii)  be permissioned or permissionless; and
                           (iii)  include the use of a digital asset as
  a medium of electronic exchange.
               (78-a)  "Record" means information that is inscribed on
  a tangible medium or that is stored in an electronic or other medium
  and is retrievable in a perceivable form, including information
  inscribed on blockchain or distributed ledger technology.
               (78-b)  "Registered series" means a series of a
  domestic limited liability company that is formed as a registered
  series in accordance with Section 101.602.
               (82-a)  "Smart contract" means an event-driven
  computer program that executes on distributed ledger technology
  used to automate a transaction, including a transaction that:
                     (A)  takes custody over and instructs transfer of
  assets on that ledger;
                     (B)  creates and transmits digital assets;
                     (C)  synchronizes information; or
                     (D)  authenticates user rights and conveys access
  to software applications.
               (82-b)  "Social purposes" means one or more purposes of
  a for-profit corporation that are specified in the corporation's
  certificate of formation and consist of promoting one or more
  positive impacts on society or the environment or of minimizing one
  or more adverse impacts of the corporation's activities on society
  or the environment. Those impacts may include:
                     (A)  providing low-income or underserved
  individuals or communities with beneficial products or services;
                     (B)  promoting economic opportunity for
  individuals or communities beyond the creation of jobs in the
  normal course of business;
                     (C)  preserving the environment;
                     (D)  improving human health;
                     (E)  promoting the arts, sciences, or advancement
  of knowledge;
                     (F)  increasing the flow of capital to entities
  with a social purpose; and
                     (G)  conferring any particular benefit on society
  or the environment.
               (89)  "Writing" or "written" means an expression of
  words, letters, characters, numbers, symbols, figures, or other
  textual information that is inscribed on a tangible medium or that
  is stored in an electronic or other medium that is retrievable in a
  perceivable form.  Unless the context requires otherwise, the term:
                     (A)  includes stored or transmitted electronic
  data, electronic transmissions, blockchain or distributed ledger
  technology, and reproductions of writings; and
                     (B)  does not include sound or video recordings of
  speech other than transcriptions that are otherwise writings.
         SECTION 2.  Subchapter A, Chapter 1, Business Organizations
  Code, is amended by adding Section 1.010 to read as follows:
         Sec. 1.010.  CERTAIN PROVISIONS RELATED TO BLOCKCHAIN AND
  DISTRIBUTED LEDGER TECHNOLOGY. For purposes of this code:
               (1)  a requirement for a person's signature is
  satisfied by the submission of a blockchain that electronically
  contains the signature or verifies the intent of a person to provide
  the signature;
               (2)  a requirement for a record to be in writing is
  satisfied by the submission of a blockchain that electronically
  contains the record; and
               (3)  a smart contract, record, or signature may not be
  excluded as evidence in a proceeding solely because blockchain or
  distributed ledger technology was used to create, store, or verify
  the smart contract, record, or signature.
         SECTION 3.  Section 6.002(a), Business Organizations Code,
  is amended to read as follows:
         (a)  Subject to this code and the governing documents of a
  domestic entity, the owners, members, or governing persons of the
  entity, or a committee of the owners, members, or governing
  persons, may hold meetings by using a conference telephone or
  similar communications equipment, or another suitable electronic
  communications system, including videoconferencing technology, an
  electronic data system, [or] the Internet, or any combination, if
  the telephone or other equipment or system permits each person
  participating in the meeting to communicate with all other persons
  participating in the meeting.
         SECTION 4.  Section 101.052, Business Organizations Code, is
  amended by adding Subsection (g) to read as follows:
         (g)  A company agreement may be composed of computer code and
  maintained on blockchain or distributed ledger technology in full
  or in part if the record of the agreement is capable of being
  retained and accurately reproduced for later reference.
         SECTION 5.  Section 101.501(a), Business Organizations
  Code, is amended to read as follows:
         (a)  In addition to the books and records required to be kept
  under Section 3.151, a limited liability company shall keep at its
  principal office in the United States, keep on an electronic data
  system, or make available to a person at its principal office in the
  United States not later than the fifth day after the date the person
  submits a written request to examine the books and records of the
  company under Section 3.152(a) or 101.502:
               (1)  a current list that states:
                     (A)  the percentage or other interest in the
  limited liability company owned by each member; and
                     (B)  if one or more classes or groups of
  membership interests are established in or under the certificate of
  formation or company agreement, the names of the members of each
  specified class or group;
               (2)  a copy of the company's federal, state, and local
  tax information or income tax returns for each of the six preceding
  tax years;
               (3)  a copy of the company's certificate of formation,
  including any amendments to or restatements of the certificate of
  formation;
               (4)  if the company agreement is in writing, a copy of
  the company agreement, including any amendments to or restatements
  of the company agreement;
               (5)  an executed copy of any powers of attorney;
               (6)  a copy of any document that establishes a class or
  group of members of the company as provided by the company
  agreement; and
               (7)  except as provided by Subsection (b), a written
  statement of:
                     (A)  the amount of a cash contribution and a
  description and statement of the agreed value of any other
  contribution made or agreed to be made by each member;
                     (B)  the dates any additional contributions are to
  be made by a member;
                     (C)  any event the occurrence of which requires a
  member to make additional contributions;
                     (D)  any event the occurrence of which requires
  the winding up of the company; and
                     (E)  the date each member became a member of the
  company.
         SECTION 6.  Title 6, Business Organizations Code, is amended
  by adding Chapter 253 to read as follows:
  CHAPTER 253. DECENTRALIZED UNINCORPORATED ASSOCIATIONS
         Sec. 253.001.  DEFINITIONS. In this chapter:
               (1)  "Administrator" means a person authorized by the
  members of a decentralized unincorporated association to fulfill
  administrative or operational tasks at the direction of the
  members.
               (2)  "Decentralized unincorporated association" means
  an unincorporated association:
                     (A)  consisting of at least 500 members joined by
  mutual consent under an agreement, that may be in writing or
  inferred from conduct, for a common purpose, other than to operate a
  business for profit except as permitted under Section 253.004;
                     (B)  that has elected to be formed under this
  chapter; and
                     (C)  is not formed under any other law governing
  the association's organization and operation.
               (3)  "Established practices" means the practices used
  by a decentralized unincorporated association without material
  change during the most recent five years of the association's
  existence, or if the association has existed for less than five
  years, during the association's entire existence.
               (4)  "Governing principles" means all agreements and
  any amendment or restatement of those agreements, including any
  articles of organization, consensus formation algorithms, or
  enacted governance proposals, that govern the purpose or operation
  of a decentralized unincorporated association and the rights and
  obligations of the association's members and administrators,
  whether contained in a record, implied from the association's
  established practices, or both.
               (5)  "Member" means a person that, under the governing
  principles of a decentralized unincorporated association, may
  participate in:
                     (A)  the development of the policies and
  activities of the association; and
                     (B)  the selection of the association's
  administrators.
         Sec. 253.002.  SUPPLEMENTARY GENERAL PRINCIPLES OF LAW AND
  EQUITY. (a) Principles of law and equity supplement this chapter
  unless displaced by a particular provision of this chapter.
         (b)  This chapter may not be interpreted to repeal or modify
  a statute or rule for an entity that does not elect to be formed as a
  decentralized unincorporated association.
         Sec. 253.003.  GOVERNING LAW; TERRITORIAL APPLICATION. (a)
  Except as otherwise provided by Subsection (b), the law of this
  state governs any decentralized unincorporated association that is
  formed or operates in this state.
         (b)  A decentralized unincorporated association's governing
  principles must identify the jurisdiction in which the
  decentralized unincorporated association is formed.
         Sec. 253.004.  DISTRIBUTION PROHIBITED; COMPENSATION AND
  OTHER PERMITTED PAYMENTS. (a) A decentralized unincorporated
  association may carry on any business activity in which the
  association may lawfully engage for profit and apply any profit
  that results from the business activity in accordance with
  Subsection (c).
         (b)  Except as provided by Subsection (c), a decentralized
  unincorporated association may not pay dividends or distribute any
  part of the association's income or profit to the association's
  members or administrators.
         (c)  A decentralized unincorporated association may:
               (1)  pay reasonable compensation to or reimburse
  reasonable expenses incurred by the association's members and
  administrators, or to a person who is not a member or administrator,
  for services rendered to the association, including for the
  administration and operation of the association, including for:
                     (A)  the provision of collateral for the
  self-insurance of the association;
                     (B)  voting; and
                     (C)  participation;
               (2)  confer benefits on the association's members or
  administrators in conformity with the association's common
  nonprofit purpose or purposes, if any;
               (3)  repurchase membership interests to the extent
  authorized by the association's governing principles; and
               (4)  make distributions of property to members on
  winding up and termination to the extent provided by Section
  253.027.
         Sec. 253.005.  LEGAL ENTITY; PERPETUAL EXISTENCE; POWERS.
  (a) A decentralized unincorporated association is a legal entity
  distinct from the association's members and administrators.
         (b)  A decentralized unincorporated association has
  perpetual duration unless the association's governing principles
  otherwise specify.
         (c)  A decentralized unincorporated association has the
  power to do all things necessary or convenient to carry on the
  association's activities or affairs.
         Sec. 253.006.  REAL AND PERSONAL PROPERTY; DECENTRALIZED
  UNINCORPORATED ASSOCIATION AS BENEFICIARY, LEGATEE, OR DEVISEE.
  (a) A decentralized unincorporated association may, in the name of
  the association, acquire, hold, encumber, or transfer an estate or
  interest in real or personal property.
         (b)  A decentralized unincorporated association may be a
  beneficiary of a trust or contract, legatee, or devisee.
         Sec. 253.007.  STATEMENT OF AUTHORITY AS TO REAL PROPERTY.
  (a) A decentralized unincorporated association shall execute and
  record a statement of authority to transfer an estate or interest in
  real property in the name of the association.
         (b)  An estate or interest in real property in the name of a
  decentralized unincorporated association may be transferred by a
  person so authorized in a statement of authority recorded in the
  office of the county clerk in which a transfer of the property would
  be recorded.
         (c)  A statement of authority must contain:
               (1)  the name of the decentralized unincorporated
  association;
               (2)  the address in this state, including the street
  address, if any, of the association, or if the association does not
  have an address in this state, the association's address out of
  state;
               (3)  the name or title of the person authorized to
  transfer an estate or interest in real property held in the name of
  the association; and
               (4)  the action, procedure, or vote of the association
  that authorizes the person to transfer the real property of the
  association and to execute the statement of authority.
         (d)  A statement of authority must be executed in the same
  manner as a deed. The person who executes the statement of
  authority may not be the person named in the statement of authority
  as authorized to transfer the estate or interest.
         (e)  The county clerk may collect a fee for recording the
  statement of authority in the amount authorized for recording a
  transfer of real property.
         (f)  An amendment, including a cancellation, of a statement
  of authority must meet the requirements for execution and recording
  of an original statement. Unless canceled earlier, a recorded
  statement of authority or the most recent amendment to the
  statement is canceled by operation of law on the fifth anniversary
  of the date of the most recent recording.
         (g)  If the record title to real property is in the name of a
  decentralized unincorporated association and the statement of
  authority is recorded in the office of the county clerk in which a
  transfer of real property would be recorded, the authority of the
  person named in a statement of authority is conclusive in favor of a
  transferee who gives value without notice that the person named in
  the statement of authority lacks authority.
         Sec. 253.008.  LIABILITY. (a) Except as otherwise provided
  by this chapter, the debts, obligations, and liabilities of a
  decentralized unincorporated association, whether arising in
  contract, tort, or otherwise, are solely the debts, obligations,
  and liabilities of the association. A member or administrator of a
  decentralized unincorporated association may not be obligated
  personally for any debt, obligation, or liability of the
  association solely by reason of being a member or acting as an
  administrator of the association.
         (b)  Notwithstanding Subsection (a), a member or
  administrator of a decentralized unincorporated association may,
  under the governing principles of the association or under another
  agreement, agree to be obligated personally for any or all of the
  debts, obligations, and liabilities of the association.
         (c)  The failure of a decentralized unincorporated
  association to observe formalities relating to the exercise of the
  association's powers or administration of the association's
  activities and affairs may not be considered a ground for imposing
  liability on a member or administrator of the association for a
  debt, obligation, or other liability of the association.
         Sec. 253.009.  CAPACITY TO ASSERT AND DEFEND; STANDING. (a)
  A decentralized unincorporated association, in the association's
  name, may institute, defend, intervene, or participate in a
  judicial, administrative, or other governmental proceeding or in an
  arbitration, mediation, or any other form of alternative dispute
  resolution.
         (b)  A member or administrator may assert a claim the member
  or administrator has against the decentralized unincorporated
  association. An association may assert a claim the association has
  against a member or administrator.
         Sec. 253.010.  EFFECT OF JUDGMENT OR ORDER. A judgment or
  order against a decentralized unincorporated association is not by
  itself a judgment or order against a member or administrator of the
  association.
         Sec. 253.011.  APPOINTMENT OF AGENT TO RECEIVE SERVICE OF
  PROCESS. (a) A decentralized unincorporated association may file
  in the office of the secretary of state a statement appointing an
  agent authorized to receive service of process.
         (b)  A statement appointing an agent must contain:
               (1)  the name of the decentralized unincorporated
  association;
               (2)  the address in this state, including the street
  address, if any, of the decentralized unincorporated association,
  or if the association does not have an address in this state, the
  association's address out of state; and
               (3)  the name of the person in this state authorized to
  receive service of process and the person's address, including the
  street address, in this state.
         (c)  A statement appointing an agent must be signed and
  acknowledged by a person authorized to manage the affairs of the
  decentralized unincorporated association. The statement must also
  be signed and acknowledged by the person appointed agent, who by
  signing accepts the appointment. The appointed agent may resign by
  filing a resignation in the office of the secretary of state and
  giving notice to the decentralized unincorporated association.
         (d)  The secretary of state may collect a fee of $5 for filing
  a statement appointing an agent to receive service of process, an
  amendment, or a resignation under this section.
         (e)  An amendment to a statement appointing an agent to
  receive service of process must meet the requirements for execution
  of an original statement.
         (f)  If the secretary of state refuses to file a statement
  appointing an agent, the secretary of state shall return it to the
  decentralized unincorporated association or the association's
  representative not later than the 15th day after the date the
  statement was delivered and include a brief explanation in writing
  of the reason for the refusal.
         Sec. 253.012.  SERVICE OF PROCESS. In an action or
  proceeding against a decentralized unincorporated association, a
  summons and complaint or other process shall be served on:
               (1)  an agent authorized by appointment to receive
  service of process;
               (2)  an appointed administrator of the association; or
               (3)  a member, but only if the agent or administrator
  described by Subdivisions (1) and (2) cannot be served.
         Sec. 253.013.  CLAIM NOT ABATED BY CHANGE OF MEMBERS OR
  ADMINISTRATORS. A claim for relief against a decentralized
  unincorporated association does not abate merely because of a
  change in the members or administrators of the association.
         Sec. 253.014.  VENUE. Unless provided otherwise by other
  law, venue of an action against a decentralized unincorporated
  association brought in this state is determined in accordance with
  the law applicable to an action brought in the state in which the
  association has appointed an agent for service of process under
  Section 253.011.
         Sec. 253.015.  MEMBER NOT AN AGENT. A member of a
  decentralized unincorporated association is not an agent of the
  association solely by reason of being a member.
         Sec. 253.016.  APPROVAL BY MEMBERS. (a) Except as otherwise
  provided by a decentralized unincorporated association's governing
  principles, the association must have the approval of the
  association's members, attained in accordance with its governing
  principles, to:
               (1)  suspend, dismiss, or expel a member;
               (2)  select or dismiss an administrator;
               (3)  adopt, amend, or repeal the governing principles;
               (4)  sell, lease, exchange, or otherwise dispose of
  all, or substantially all, of the association's property outside
  the ordinary course of the association's activities, regardless of
  the association's goodwill;
               (5)  dissolve the association under Section 253.026;
               (6)  merge or convert the association as provided by
  Section 253.028;
               (7)  undertake any act outside the ordinary course of
  the association's activities; or
               (8)  determine the policy or purpose of the
  association.
         (b)  A decentralized unincorporated association must have
  the approval of the members in accordance with its governing
  principles to act or exercise a right for which the association's
  governing principles require member approval.
         (c)  Unless otherwise provided for in a decentralized
  unincorporated association's governing principles, membership
  interest in a decentralized unincorporated association is
  calculated in proportion to the person's membership interest or
  other property that confers onto the person a voting right in the
  association.
         Sec. 253.017.  USE OF DISTRIBUTED LEDGER TECHNOLOGY. (a) A
  decentralized unincorporated association may provide for the
  association's governance, in whole or in part, through distributed
  ledger technology, including through a smart contract.
         (b)  The governing principles for a decentralized
  unincorporated association may:
               (1)  specify whether any distributed ledger technology
  used or enabled by the association is:
                     (A)  immutable or subject to change by the
  association; and 
                     (B)  fully or partially public or private,
  including the extent of members' access to information; and
               (2)  adopt voting procedures, which may include a smart
  contract deployed to distributed ledger technology, that provides
  for:
                     (A)  proposals from administrators or members in
  the decentralized unincorporated association for upgrades,
  modifications, or additions to software systems or protocols;
                     (B)  proposed changes to the decentralized
  unincorporated association's governing principles; and
                     (C)  any other matter of governance or relating to
  the activities of the association that is within the purpose of the
  association.
         Sec. 253.018.  CONSENSUS FORMATION ALGORITHMS AND
  GOVERNANCE PROCESS. In accordance with the association's governing
  principles, a decentralized unincorporated association may:
               (1)  adopt a reasonable algorithmic means for
  establishing consensus for:
                     (A)  the validation of records;
                     (B)  the establishment of requirements,
  processes, and procedures for conducting operations; and
                     (C)  making organizational decisions with respect
  to the distributed ledger technology used by the association; and
               (2)  in accordance with a procedure adopted by the
  association under Section 253.017, if any, and in compliance with
  the requirements of law and the governing principles of the
  decentralized unincorporated association:
                     (A)  modify the consensus mechanism, including
  the requirements, processes, and procedures for that mechanism; or
                     (B)  substitute a new consensus mechanism,
  including the requirements, processes, or procedures for that
  mechanism.
         Sec. 253.019.  DUTIES OF MEMBERS. (a)  A member of a
  decentralized unincorporated association does not owe a fiduciary
  duty to the association or to any another member of the association
  solely by virtue of the person's membership in the association.
         (b)  A member of a decentralized unincorporated association
  shall discharge the duties and obligations under this chapter or
  under the governing principles of the association and exercise the
  member's rights in a manner consistent with the contractual
  obligation of good faith and fair dealing.
         Sec. 253.020.  ADMISSION, SUSPENSION, DISMISSAL, OR
  EXPULSION OF MEMBERS. (a) A person becomes a member of a
  decentralized unincorporated association in accordance with the
  governing principles of the association. If there are no
  applicable governing principles, a person:
               (1)  is considered a member on the purchase or
  assumption of a right of ownership of a membership interest or other
  property or instrument that confers on the person a voting right in
  the association; and
               (2)  continues as a member of the association until the
  earlier of the member's:
                     (A)  resignation under Section 253.021; or
                     (B)  suspension, dismissal, or expulsion under
  Subsection (b).
         (b)  A member may be suspended, dismissed, or expelled in
  accordance with the governing principles of the decentralized
  unincorporated association. If there are no applicable governing
  principles, the member may be suspended, dismissed, or expelled
  from an association only by a majority vote of the association's
  members.
         (c)  Unless the governing principles of a decentralized
  unincorporated association provide otherwise, the suspension,
  dismissal, or expulsion of a member does not relieve the member from
  any obligation incurred or commitment made by the member in
  connection with membership in the association before the member's
  suspension, dismissal, or expulsion.
         Sec. 253.021.  RESIGNATION OF MEMBER. (a) A member may
  resign as a member of a decentralized unincorporated association in
  accordance with the governing principles of the association. In
  the absence of applicable governing principles, a member is
  considered to have resigned on the voluntary or involuntary
  disposal of all membership interest or other property or
  instruments that confer on the person a voting right in the
  association.
         (b)  Unless a decentralized unincorporated association's
  governing principles provide otherwise, resignation of a member
  does not relieve the member from any unpaid capital contribution,
  dues, an assessment, a fee, or another obligation incurred or
  commitment made by the member in connection with membership in the
  association before the member's resignation.
         Sec. 253.022.  MEMBERSHIP INTEREST TRANSFERABLE. Except as
  otherwise provided in the decentralized unincorporated
  association's governing principles, a member's interest or a right
  conferred in the association is freely transferable to another
  person through conveyance of the membership interest or other
  property that confers on a person a voting right in the association.
         Sec. 253.023.  SELECTION OF ADMINISTRATORS; RIGHTS AND
  DUTIES OF ADMINISTRATORS. (a) Except as otherwise provided by this
  chapter or a decentralized unincorporated association's governing
  principles, the members of an association may select the
  association's administrators in accordance with Section 253.016.
         (b)  An administrator may but is not required to be a member
  of the association. If no administrators are selected, no member of
  the association is an administrator.
         (c)  A decentralized unincorporated association is not
  required to have an administrator. There are no default
  obligations of an administrator of a decentralized unincorporated
  association. The rights and duties of an administrator of a
  decentralized unincorporated association must be established as
  part of the selection process for an administrator or
  administrators of the association.
         (d)  An administrator of a decentralized unincorporated
  association does not have the authority to act on behalf of the
  association beyond the specific authority granted in the selection
  process of the administrator established under Subsection (c).
         (e)  The governing principles of a decentralized
  unincorporated association may, in a record, limit or eliminate the
  liability of an administrator to the association or the
  association's members for money damages for an action taken, or for
  failure to take an action, as an administrator, except liability
  for:
               (1)  the amount of a financial benefit improperly
  received by an administrator;
               (2)  an intentional infliction of harm on the
  association or the association's members;
               (3)  an intentional violation of criminal law;
               (4)  a breach of the duty of loyalty should one exist,
  unless a full disclosure of all material facts, a specific act, or a
  transaction that would otherwise violate the duty of loyalty by an
  agent is authorized or ratified by approval of the disinterested
  members in accordance with Section 253.016; or
               (5)  an improper distribution.
         Sec. 253.024.  RIGHTS OF MEMBERS AND ADMINISTRATORS TO
  INFORMATION. (a) Except as provided by Subsection (b), on
  reasonable notice, a member or administrator of a decentralized
  unincorporated association is entitled to an electronic record of
  any record maintained by the association regarding the
  association's activities, financial condition, or other
  circumstances to the extent the information contained in the record
  is material to the member's or administrator's rights and duties
  under the association's governing principles or this chapter.
         (b)  A decentralized unincorporated association is not
  obligated to provide a record maintained by the association for
  record requests made through distributed ledger technology,
  including through a smart contract, to a member or administrator if
  the member or administrator has access to the information contained
  in the record in a record made available to the member or
  administrator on distributed ledger technology.
         (c)  A decentralized unincorporated association may impose
  reasonable restrictions on access to and use of information that
  may be provided under this section, including by designating the
  information confidential and imposing nondisclosure or other
  safeguarding obligations on the recipient of the information.
         (d)  A former member or administrator may have access to
  information to which the member or administrator was entitled as a
  member or administrator if:
               (1)  the information relates to the period of time
  during which the person was a member or administrator;
               (2)  the former member or administrator seeks the
  information in good faith; and
               (3)  the former member or administrator satisfies the
  requirements of Subsections (a), (b), and (c) with respect to the
  information.
         (e)  A decentralized unincorporated association has no
  obligation to collect and maintain a list of members or member
  information, including the names or addresses of members.
         Sec. 253.025.  INDEMNIFICATION; ADVANCEMENT OF EXPENSES. A
  decentralized unincorporated association is an enterprise, as that
  term is defined by Section 8.001, for purposes of the requirements
  related to indemnification and advancement of expenses under
  Chapter 8.
         Sec. 253.026.  DISSOLUTION; CONTINUATION OF EXISTENCE. (a)
  A decentralized unincorporated association may be dissolved by any
  of the following methods:
               (1)  at a time or by a method for dissolution specified
  by the governing principles of the association, if any;
               (2)  if the governing principles of the association do
  not provide a method for dissolution, with the approval of the
  members of the association in accordance with Section 253.016;
               (3)  if the number of members of the association is
  fewer than 500 and the association is not able to use a merger or
  conversion to form another valid entity under Chapter 10; or
               (4)  by court order to dissolve.
         (b)  After dissolution, a decentralized unincorporated
  association continues in existence until the association's
  activities are wound up and the association is terminated under
  Section 253.027.
         Sec. 253.027.  WINDING UP AND TERMINATION. (a) A dissolved
  decentralized unincorporated association shall wind up the
  association's business. The association continues in existence
  after dissolution only for the purpose of winding up under this
  section.
         (b)  In winding up a decentralized unincorporated
  association, the members:
               (1)  shall discharge the association's debts,
  obligations, and other liabilities, settle and close the
  association's business, and marshal and distribute any remaining
  property:
                     (A)  in a manner required by law, other than this
  chapter, that requires assets of an association to be distributed
  to another entity or person with similar nonprofit purposes, if
  applicable to the association;
                     (B)  in accordance with the association's
  governing principles, and in the absence of applicable governing
  principles, to the current members of the association in proportion
  to their membership interests; or
                     (C)  if property cannot be distributed under
  Paragraph (A) or (B), under the laws governing unclaimed property
  for this state; and
               (2)  may:
                     (A)  appoint and authorize an administrator to
  wind up the association in accordance with Section 253.017;
                     (B)  preserve the association operations and
  property as a going concern for a reasonable time;
                     (C)  prosecute and defend civil, criminal, or
  administrative actions and proceedings involving the association;
                     (D)  transfer the association's property;
                     (E)  settle disputes involving the association by
  mediation or arbitration;
                     (F)  receive reasonable compensation for services
  rendered to the association in winding up the association; and
                     (G)  perform other acts necessary or appropriate
  to effect the winding up.
         (c)  If the members of a decentralized unincorporated
  association do not appoint an administrator to wind up the
  association's business, the members shall owe the association a
  duty of care in the conduct or winding up of the association
  operations to refrain from engaging in:
               (1)  grossly negligent or reckless conduct;
               (2)  wilful or intentional misconduct; or
               (3)  a knowing violation of the law.
         Sec. 253.028.  MERGERS AND CONVERSIONS. A decentralized
  unincorporated association may effect a merger or conversion by
  complying with the applicable provisions of Chapter 10 and the
  association's governing principles.
         Sec. 253.029.  UNIFORMITY OF APPLICATION AND CONSTRUCTION.
  This chapter shall be applied and construed to make uniform the law
  with respect to the subject of this chapter among states enacting
  it.
         SECTION 7.  This Act takes effect September 1, 2023.