Bill Overview
TX H.B. No 3768 proposes amendments to the Business Organizations Code of Texas to allow for the formation of decentralized unincorporated associations and the use of distributed ledger or blockchain technology for certain business purposes. The bill defines terms such as “digital asset,” “distributed ledger technology,” “smart contract,” and “social purposes.” It also includes provisions for registered series of limited liability companies and clarifies the definition of “writing.” The bill authorizes a fee for the formation of decentralized unincorporated associations. The Bill was submitted by Texas representative John Bucy and is intended to mirror the Unincorporated Nonprofit (UNA) Association already established in Texas.
TX H.B. No 3768
A full copy of the bill can be found below:
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.
