1     
UTAH REVISED NONPROFIT CORPORATION ACT

2     
2015 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kay L. McIff

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the Utah Revised Nonprofit Corporation Act to allow for the transfer
10     of water shares in a mutual benefit corporation.
11     Highlighted Provisions:
12          This bill:
13          ▸     authorizes a member to transfer membership, or the rights of membership, in a
14     nonprofit corporation if the member is a of a mutual benefit corporation;
15          ▸     states that a member of, or shareholder in, a mutual benefit corporation:
16               •     has a vested property right, proportional to the member's or shareholder's shares,
17     in the water and facilities of the mutual benefit corporation; and
18               •     is a person entitled to the use of water under Title 73, Water and Irrigation,
19     including the right to change the nature, purpose, and place of the use of water;
20     and
21          ▸     makes technical changes.
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          None
26     Utah Code Sections Affected:
27     AMENDS:
28          16-6a-606, as enacted by Laws of Utah 2000, Chapter 300
29          16-6a-611, as last amended by Laws of Utah 2007, Chapter 315
30     

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 16-6a-606 is amended to read:
33          16-6a-606. Transfers.
34          (1) [Unless] (a) Except as provided in Subsection (2), or unless otherwise provided by
35     the bylaws, a member of a nonprofit corporation may not transfer:
36          [(a)] (i) a membership; or
37          [(b)] (ii) any right arising from a membership.
38          [(2)] (b) Where transfer rights have been provided, a restriction on transfer rights may
39     not be binding with respect to a member holding a membership issued prior to the adoption of
40     the restriction, unless the restriction is approved by the affected member.
41          (2) The restriction on transfer described in Subsection (1) does not apply to a member
42     of a mutual benefit corporation.
43          Section 2. Section 16-6a-611 is amended to read:
44          16-6a-611. No property right -- Exception.
45          [A member] (1) Except as provided in Subsection (2), a member of a nonprofit
46     corporation does not have any vested property right in the nonprofit corporation, including any
47     right relating to management, control, purpose, or duration of the nonprofit corporation[,
48     except as provided by:].
49          [(1) the bylaws of a mutual benefit corporation; or]
50          [(2) other law.]
51          (2) A member of, or shareholder in, a mutual benefit corporation:
52          (a) has a vested property right, proportional to the member's or shareholder's shares, in
53     the water and facilities of the mutual benefit corporation; and
54          (b) is a person entitled to the use of water under Title 73, Water and Irrigation,
55     including the right to change the nature, purpose, and place of the use of water represented by
56     the member's or shareholder's shares under Section 73-3-3.5.




Legislative Review Note
     as of 1-19-15 6:29 PM

Office of Legislative Research and General Counsel