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7 LONG TITLE
8 General Description:
9 This bill addresses civil and criminal actions.
10 Highlighted Provisions:
11 This bill:
12 ▸ defines terms;
13 ▸ clarifies the requirements for bringing a civil action for human trafficking;
14 ▸ allows for the dissolution of a nonprofit organization in certain civil actions;
15 ▸ amends the requirements for transferring a criminal action from the justice court to
16 the district court; and
17 ▸ makes technical and conforming changes.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 This bill provides a special effective date.
22 This bill provides a coordination clause.
23 Utah Code Sections Affected:
24 AMENDS:
25 16-6a-1414 (Superseded 07/01/24), as enacted by Laws of Utah 2000, Chapter 300
26 16-6a-1414 (Effective 07/01/24), as last amended by Laws of Utah 2023, Chapter 401
27 16-6a-1416 (Effective 07/01/24), as last amended by Laws of Utah 2023, Chapter 401
28 16-6a-1417 (Effective 07/01/24), as last amended by Laws of Utah 2023, Chapter 401
29 78A-7-106, as last amended by Laws of Utah 2023, Chapter 34
30 RENUMBERS AND AMENDS:
31 78B-3-113, (Renumbered from 77-38-15, as last amended by Laws of Utah 2022,
32 Chapter 430)
33 Utah Code Sections Affected By Coordination Clause:
34 78A-7-106, as last amended by Laws of Utah 2023, Chapter 34
35
36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 16-6a-1414 (Superseded 07/01/24) is amended to read:
38 16-6a-1414 (Superseded 07/01/24). Grounds for judicial dissolution.
39 (1) A nonprofit corporation may be dissolved in a proceeding by the attorney general or
40 the division director if it is established that:
41 (a) the nonprofit corporation obtained its articles of incorporation through fraud; or
42 (b) the nonprofit corporation has continued to exceed or abuse the authority conferred
43 upon it by law.
44 (2) A nonprofit corporation may be dissolved in a proceeding by a member or director
45 if it is established that:
46 (a) (i) the directors are deadlocked in the management of the corporate affairs;
47 (ii) the members, if any, are unable to break the deadlock; and
48 (iii) irreparable injury to the nonprofit corporation is threatened or being suffered;
49 (b) the directors or those in control of the nonprofit corporation have acted, are acting,
50 or will act in a manner that is illegal, oppressive, or fraudulent;
51 (c) the members are deadlocked in voting power and have failed, for a period that
52 includes at least two consecutive annual meeting dates, to elect successors to directors whose
53 terms have expired or would have expired upon the election of their successors; or
54 (d) the corporate assets are being misapplied or wasted.
55 (3) A nonprofit corporation may be dissolved in a proceeding by a creditor if it is
56 established that:
57 (a) (i) the creditor's claim has been reduced to judgment;
58 (ii) the execution on the judgment has been returned unsatisfied; and
59 (iii) the nonprofit corporation is insolvent; or
60 (b) (i) the nonprofit corporation is insolvent; and
61 (ii) the nonprofit corporation has admitted in writing that the creditor's claim is due and
62 owing.
63 (4) (a) As used in this Subsection (4):
64 (i) "Misconduct claim" means:
65 (A) a claim for wrongful death, fraud, breach of public trust, or an intentional tort; or
66 (B) a claim regarding criminal conduct by a director, member, or employee of the
67 nonprofit organization that is a felony offense or an offense described in Title 76, Chapter 5,
68 Part 4, Sexual Offenses, Title 76, Chapter 5b, Sexual Exploitation Act, Section 76-7-102,
69 Section 76-9-702, or Section 76-9-702.1.
70 (ii) "Nonprofit corporation" does not include a bona fide church or religious
71 organization.
72 (b) If a person brings a misconduct claim in an action against a nonprofit corporation,
73 the person may also bring an action to dissolve the nonprofit corporation.
74 (c) If a person brings a dissolution action under Subsection (4)(b), the court may only
75 dissolve the nonprofit corporation if the court finds the nonprofit corporation is liable for the
76 misconduct claim.
77 (d) Upon a motion by the plaintiff in a dissolution action described in Subsection
78 (4)(b), the court may:
79 (i) issue an injunction preventing the nonprofit organization from selling or disposing
80 of any assets held by the nonprofit organization; and
81 (ii) require the nonprofit organization to deposit funds, or post a bond, with the court
82 for the amount of damages pleaded in the complaint.
83 (e) The court may void a transaction that is made by the nonprofit organization within
84 12 months before the day on which the action was filed with the court if the court finds that the
85 transaction is voidable under Section 25-6-202.
86 [
87 [
88 (i) the nonprofit corporation may bring a proceeding to wind up and liquidate its
89 business and affairs under judicial supervision in accordance with Section 16-6a-1405; and
90 (ii) the attorney general, a director, a member, [
91 Subsection (4) may bring a proceeding to wind up and liquidate the affairs of the nonprofit
92 corporation under judicial supervision in accordance with Section 16-6a-1405, upon
93 establishing the grounds set forth in Subsections (1) through [
94 (b) As used in Sections 16-6a-1415 through 16-6a-1417:
95 (i) a "judicial proceeding to dissolve the nonprofit corporation" includes a proceeding
96 brought under this Subsection [
97 (ii) a "decree of dissolution" includes an order of a court entered in a proceeding under
98 this Subsection [
99 up and liquidated under judicial supervision.
100 Section 2. Section 16-6a-1414 (Effective 07/01/24) is amended to read:
101 16-6a-1414 (Effective 07/01/24). Grounds and procedure for judicial dissolution.
102 (1) The attorney general or the division director may bring an action in a court with
103 jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a nonprofit
104 corporation if it is established that:
105 (a) the nonprofit corporation obtained the nonprofit corporation's articles of
106 incorporation through fraud; or
107 (b) the nonprofit corporation has continued to exceed or abuse the authority conferred
108 upon the nonprofit corporation by law.
109 (2) A member or director of a nonprofit corporation may bring an action in a court with
110 jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve the nonprofit
111 corporation if it is established that:
112 (a) (i) the directors are deadlocked in the management of the corporate affairs;
113 (ii) the members, if any, are unable to break the deadlock; and
114 (iii) irreparable injury to the nonprofit corporation is threatened or being suffered;
115 (b) the directors or those in control of the nonprofit corporation have acted, are acting,
116 or will act in a manner that is illegal, oppressive, or fraudulent;
117 (c) the members are deadlocked in voting power and have failed, for a period that
118 includes at least two consecutive annual meeting dates, to elect successors to directors whose
119 terms have expired or would have expired upon the election of their successors; or
120 (d) the corporate assets are being misapplied or wasted.
121 (3) A creditor may bring an action in a court with jurisdiction under Title 78A,
122 Judiciary and Judicial Administration, to dissolve a nonprofit corporation if it is established
123 that:
124 (a) (i) the creditor's claim has been reduced to judgment;
125 (ii) the execution on the judgment has been returned unsatisfied; and
126 (iii) the nonprofit corporation is insolvent; or
127 (b) (i) the nonprofit corporation is insolvent; and
128 (ii) the nonprofit corporation has admitted in writing that the creditor's claim is due and
129 owing.
130 (4) (a) As used in this Subsection (4):
131 (i) "Misconduct claim" means:
132 (A) a claim for wrongful death, fraud, breach of public trust, or an intentional tort; or
133 (B) a claim regarding criminal conduct by a director, member, or employee of the
134 nonprofit organization that is a felony offense or an offense described in Title 76, Chapter 5,
135 Part 4, Sexual Offenses, Title 76, Chapter 5b, Sexual Exploitation Act, Section 76-7-102,
136 Section 76-9-702, or Section 76-9-702.1.
137 (ii) "Nonprofit corporation" does not include a bona fide church or religious
138 organization.
139 (b) If a person brings a misconduct claim in an action against a nonprofit corporation,
140 the person may also bring an action to dissolve the nonprofit corporation.
141 (c) If a person brings a dissolution action under Subsection (4)(b), the court may only
142 dissolve the nonprofit corporation if the court finds the nonprofit corporation is liable for the
143 misconduct claim.
144 (d) Upon a motion by the plaintiff in a dissolution action described in Subsection
145 (4)(b), the court may:
146 (i) issue an injunction preventing the nonprofit organization from selling or disposing
147 of any assets held by the nonprofit organization; and
148 (ii) require the nonprofit organization to deposit funds, or post a bond, with the court
149 for the amount of damages pleaded in the complaint.
150 (e) The court may void a transaction that is made by the nonprofit organization within
151 12 months before the day on which the action was filed with the court if the court finds that the
152 transaction is voidable under Section 25-6-202.
153 [
154 or members parties to the action to dissolve the nonprofit corporation unless relief is sought
155 against the members individually.
156 [
157 (a) issue injunctions;
158 (b) appoint a receiver or a custodian pendente lite with all powers and duties the court
159 directs; or
160 (c) take other action required to preserve the nonprofit corporation's assets wherever
161 located and carry on the business of the nonprofit corporation until a full hearing can be held.
162 [
163 another action taken under this part:
164 (a) the nonprofit corporation may bring a proceeding to wind up and liquidate its
165 business and affairs under judicial supervision in accordance with Section 16-6a-1405; and
166 (b) the attorney general, a director, a member, [
167 Subsection (4) may bring a proceeding to wind up and liquidate the affairs of the nonprofit
168 corporation under judicial supervision in accordance with Section 16-6a-1405, upon
169 establishing the grounds set forth in Subsections (1) through [
170 Section 3. Section 16-6a-1416 (Effective 07/01/24) is amended to read:
171 16-6a-1416 (Effective 07/01/24). Receivership or custodianship.
172 (1) As used in this section:
173 (a) "Decree of dissolution" includes an order of a court entered in a proceeding under
174 [
175 corporation be wound up and liquidated under judicial supervision.
176 (b) "Judicial proceeding to dissolve the nonprofit corporation" includes a proceeding
177 brought under [
178 (2) (a) A court in a judicial proceeding brought to dissolve a nonprofit corporation may
179 appoint:
180 (i) one or more receivers to wind up and liquidate the affairs of the nonprofit
181 corporation; or
182 (ii) one or more custodians to manage the affairs of the nonprofit corporation.
183 (b) Before appointing a receiver or custodian, the court shall hold a hearing, after
184 giving notice to:
185 (i) all parties to the proceeding; and
186 (ii) any interested persons designated by the court.
187 (c) The court appointing a receiver or custodian has exclusive jurisdiction over the
188 nonprofit corporation and all of its property, wherever located.
189 (d) The court may appoint as a receiver or custodian:
190 (i) an individual;
191 (ii) a domestic or foreign corporation authorized to conduct affairs in this state; or
192 (iii) a domestic or foreign nonprofit corporation authorized to conduct affairs in this
193 state.
194 (e) The court may require the receiver or custodian to post bond, with or without
195 sureties, in an amount specified by the court.
196 (3) The court shall describe the powers and duties of the receiver or custodian in its
197 appointing order that may be amended from time to time. Among other powers the receiver
198 shall have the power to:
199 (a) dispose of all or any part of the property of the nonprofit corporation, wherever
200 located:
201 (i) at a public or private sale; and
202 (ii) if authorized by the court; and
203 (b) sue and defend in the receiver's own name as receiver of the nonprofit corporation
204 in all courts.
205 (4) The custodian may exercise all of the powers of the nonprofit corporation, through
206 or in place of its board of directors or officers, to the extent necessary to manage the affairs of
207 the nonprofit corporation in the best interests of its members and creditors.
208 (5) If doing so is in the best interests of the nonprofit corporation and its members and
209 creditors, the court may:
210 (a) during a receivership, redesignate the receiver as a custodian; and
211 (b) during a custodianship, redesignate the custodian as a receiver.
212 (6) The court from time to time during the receivership or custodianship may order
213 compensation paid and expense disbursements or reimbursements made from the assets of the
214 nonprofit corporation or proceeds from the sale of the assets to:
215 (a) the receiver;
216 (b) the custodian; or
217 (c) the receiver's or custodian's attorney.
218 Section 4. Section 16-6a-1417 (Effective 07/01/24) is amended to read:
219 16-6a-1417 (Effective 07/01/24). Decree of dissolution.
220 (1) As used in this section:
221 (a) "Decree of dissolution" includes an order of a court entered in a proceeding under
222 [
223 corporation be wound up and liquidated under judicial supervision.
224 (b) "Judicial proceeding to dissolve the nonprofit corporation" includes a proceeding
225 brought under [
226 (2) If after a hearing the court determines that one or more grounds for judicial
227 dissolution described in Section 16-6a-1414 exist:
228 (a) the court may enter a decree:
229 (i) dissolving the nonprofit corporation; and
230 (ii) specifying the effective date of the dissolution; and
231 (b) the clerk of the court shall deliver a certified copy of the decree to the division
232 which shall file it accordingly.
233 (3) After entering the decree of dissolution, the court shall direct:
234 (a) the winding up and liquidation of the nonprofit corporation's affairs in accordance
235 with Section 16-6a-1405; and
236 (b) the giving of notice to:
237 (i) (A) the nonprofit corporation's registered agent; or
238 (B) the division if it has no registered agent; and
239 (ii) to claimants in accordance with Sections 16-6a-1406 and 16-6a-1407.
240 (4) The court's order or decision may be appealed as in other civil proceedings.
241 The following section is affected by a coordination clause at the end of this bill.
242 Section 5. Section 78A-7-106 is amended to read:
243 78A-7-106. Jurisdiction.
244 (1) (a) Except for an offense for which the district court has original jurisdiction under
245 Subsection 78A-5-102(8) or an offense for which the juvenile court has original jurisdiction
246 under Subsection 78A-6-103(1)(c), a justice court has original jurisdiction over class B and C
247 misdemeanors, violation of ordinances, and infractions committed within the justice court's
248 territorial jurisdiction by an individual who is 18 years old or older.
249 (b) A justice court has original jurisdiction over the following offenses committed
250 within the justice court's territorial jurisdiction by an individual who is 18 years old or older:
251 (i) class C misdemeanor and infraction violations of Title 53, Chapter 3, Part 2, Driver
252 Licensing Act; and
253 (ii) class B and C misdemeanor and infraction violations of:
254 (A) Title 23A, Wildlife Resources Act;
255 (B) Title 41, Chapter 1a, Motor Vehicle Act;
256 (C) Title 41, Chapter 6a, Traffic Code, except Title 41, Chapter 6a, Part 5, Driving
257 Under the Influence and Reckless Driving;
258 (D) Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and
259 Operators Act;
260 (E) Title 41, Chapter 22, Off-highway Vehicles;
261 (F) Title 73, Chapter 18, State Boating Act, except Section 73-18-12;
262 (G) Title 73, Chapter 18a, Boating - Litter and Pollution Control;
263 (H) Title 73, Chapter 18b, Water Safety; and
264 (I) Title 73, Chapter 18c, Financial Responsibility of Motorboat Owners and Operators
265 Act.
266 (2) Except for an offense for which the district court has exclusive jurisdiction under
267 Section 78A-5-102.5 or an offense for which the juvenile court has exclusive jurisdiction under
268 Section 78A-6-103.5, a justice court has original jurisdiction over the following offenses
269 committed within the justice court's territorial jurisdiction by an individual who is 16 or 17
270 years old:
271 (a) class C misdemeanor and infraction violations of Title 53, Chapter 3, Part 2, Driver
272 Licensing Act; and
273 (b) class B and C misdemeanor and infraction violations of:
274 (i) Title 23A, Wildlife Resources Act;
275 (ii) Title 41, Chapter 1a, Motor Vehicle Act;
276 (iii) Title 41, Chapter 6a, Traffic Code, except Title 41, Chapter 6a, Part 5, Driving
277 Under the Influence and Reckless Driving;
278 (iv) Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and
279 Operators Act;
280 (v) Title 41, Chapter 22, Off-highway Vehicles;
281 (vi) Title 73, Chapter 18, State Boating Act, except for an offense under Section
282 73-18-12;
283 (vii) Title 73, Chapter 18a, Boating - Litter and Pollution Control;
284 (viii) Title 73, Chapter 18b, Water Safety; and
285 (ix) Title 73, Chapter 18c, Financial Responsibility of Motorboat Owners and
286 Operators Act.
287 (3) (a) As used in this Subsection (3), "body of water" includes any stream, river, lake,
288 or reservoir, whether natural or man-made.
289 (b) An offense is committed within the territorial jurisdiction of a justice court if:
290 (i) conduct constituting an element of the offense or a result constituting an element of
291 the offense occurs within the court's jurisdiction, regardless of whether the conduct or result is
292 itself unlawful;
293 (ii) either an individual committing an offense or a victim of an offense is located
294 within the court's jurisdiction at the time the offense is committed;
295 (iii) either a cause of injury occurs within the court's jurisdiction or the injury occurs
296 within the court's jurisdiction;
297 (iv) an individual commits any act constituting an element of an inchoate offense
298 within the court's jurisdiction, including an agreement in a conspiracy;
299 (v) an individual solicits, aids, or abets, or attempts to solicit, aid, or abet another
300 individual in the planning or commission of an offense within the court's jurisdiction;
301 (vi) the investigation of the offense does not readily indicate in which court's
302 jurisdiction the offense occurred, and:
303 (A) the offense is committed upon or in any railroad car, vehicle, watercraft, or aircraft
304 passing within the court's jurisdiction;
305 (B) the offense is committed on or in any body of water bordering on or within this
306 state if the territorial limits of the justice court are adjacent to the body of water;
307 (C) an individual who commits theft exercises control over the affected property within
308 the court's jurisdiction; or
309 (D) the offense is committed on or near the boundary of the court's jurisdiction;
310 (vii) the offense consists of an unlawful communication that was initiated or received
311 within the court's jurisdiction; or
312 (viii) jurisdiction is otherwise specifically provided by law.
313 (4) If in a criminal case the defendant is 16 or 17 years old, a justice court judge may
314 transfer the case to the juvenile court for further proceedings if the justice court judge
315 determines and the juvenile court concurs that the best interests of the defendant would be
316 served by the continuing jurisdiction of the juvenile court.
317 (5) Justice courts have jurisdiction of small claims cases under Title 78A, Chapter 8,
318 Small Claims Courts, if a defendant resides in or the debt arose within the territorial
319 jurisdiction of the justice court.
320 (6) (a) As used in this Subsection (6), "domestic violence offense" means the same as
321 that term is defined in Section 77-36-1.
322 (b) If a justice court has jurisdiction over a criminal action involving a domestic
323 violence offense and the criminal action is set for trial, the prosecuting attorney or the
324 defendant may file a notice of transfer in the justice court to transfer the criminal action from
325 the justice court to the district court.
326 (c) If a prosecuting attorney files a notice of transfer, the prosecuting attorney shall
327 certify in the notice of transfer that the prosecuting attorney, or a representative from the
328 prosecuting attorney's office, has consulted with, or notified, all of the alleged victims about
329 transferring the criminal action to the district court.
330 (d) The justice court shall transfer a criminal action to the district court if the justice
331 court receives a notice of transfer from:
332 (i) the defendant as described in Subsection (6)(b); or
333 (ii) the prosecuting attorney as described in Subsection (6)(b) and the prosecuting
334 attorney's notice of intent complies with Subsection (6)(c).
335 [
336
337
338 Section 6. Section 78B-3-113, which is renumbered from Section 77-38-15 is
339 renumbered and amended to read:
340 [
341 offense.
342 (1) [
343
344 (a) "Human trafficking offense" means an offense for:
345 [
346 [
347 [
348 [
349 [
350 [
351 [
352 (b) "Victim" means an individual against whom a human trafficking offense has been
353 committed.
354 (2) A victim has a right of action against a person that committed a human trafficking
355 offense against the victim to recover:
356 (a) [
357 injunctive relief, or any other appropriate relief[
358 (b) [
359 trafficking offense if the court finds that the person's acts were willful and malicious.
360 [
361
362 [
363
364 (3) Notwithstanding any other statute of limitation or repose that may be applicable to
365 an action described in this section, a victim may only bring an action described in this section
366 within 10 years after the later of:
367 (a) the day on which the victim was freed from the human trafficking or human
368 smuggling situation;
369 (b) the day on which the victim [
370 (c) if the victim was unable to bring an action due to a disability, the day on which the
371 victim's disability ends.
372 [
373 time when the victim fails to bring an action due to the person:
374 (a) inducing the victim to delay filing the action;
375 (b) preventing the victim from filing the action; or
376 (c) threatening and causing duress upon the victim in order to prevent the victim from
377 filing the action.
378 [
379
380 (5) The court shall credit any restitution paid by the person to the victim as described in
381 Subsection 77-38b-303(5)(b).
382 (6) The court shall award reasonable attorney fees and costs as described in Subsection
383 77-38b-303(7) in an action brought under this section.
384 [
385
386 (7) (a) Notwithstanding Chapter 3a, Venue for Civil Actions, a victim shall bring an
387 action under this section in the county in which:
388 [
389 (i) the human trafficking offense occurred;
390 [
391 [
392 (iii) the defendant resides at the commencement of the action.
393 (b) If the defendant is a business organization as defined in Section 78B-3a-101, the
394 residence of the business organization is as described in Section 78B-3a-104.
395 (8) If the victim is deceased or otherwise unable to represent the victim's own interests
396 [
397 appointee may bring an action under this section on behalf of the victim.
398 (9) This section does not preclude any other remedy available to the victim under the
399 laws of this state or under federal law.
400 Section 7. Effective date.
401 (1) (a) Except as provided in Subsections (1)(b) and (2), if approved by two-thirds of
402 all the members elected to each house, this bill takes effect upon approval by the governor, or
403 the day following the constitutional time limit of Utah Constitution, Article VII, Section 8,
404 without the governor's signature, or in the case of a veto, the date of veto override.
405 (b) If this bill is not approved by two-thirds of all members elected to each house, this
406 bill takes effect on May 1, 2024.
407 (2) The actions affecting Section 16-6a-1414 (Effective 07/01/24), Section 16-6a-1416
408 (Effective 07/01/24), and Section 16-6a-1417 (Effective 07/01/24) take effect on July 1, 2024.
409 Section 8. Coordinating H.B. 209 with H.B. 308.
410 If H.B. 209, Amendments to Civil and Criminal Actions, and H.B. 308, Crime Victim
411 Amendments, both pass and become law, the Legislature intends, on May 1, 2024, the changes
412 in H.B. 308 to Subsection 78A-7-106(6) not be made.