Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 399 Third Substitute (2023GS)

Sponsor

Rep. Loubet, A.

Final action

Governor Signed 3/14/2023

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• amends application requirements for:
• a nonprofit corporation or a corporation applying for reinstatement after dissolution; and
• a foreign nonprofit corporation or foreign corporation applying for withdrawal;
• requires the Division of Corporations and Commercial Code to request that the State Tax Commission certify that:
• a nonprofit corporation or corporation applying for reinstatement after dissolution is in good standing; and
• a foreign nonprofit corporation or foreign corporation applying for withdrawal is in good standing;
• requires the State Tax Commission to notify the Division of Corporations and Commercial Code and the corporation if the corporation is not in good standing;
• requires the Division of Corporations and Commercial Code to approve a corporation's application for withdrawal under certain circumstances;
• modifies provisions related to corporate quorum or voting requirements for religious nonprofit corporations; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

CORPORATION AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Anthony E. Loubet
Senate Sponsor: 
Daniel McCay
LONG TITLE
General Description:
This bill addresses provisions related to corporations. 
Highlighted Provisions:
This bill:
▸ amends application requirements for:
• a nonprofit corporation or a corporation applying for reinstatement after
dissolution; and
• a foreign nonprofit corporation or foreign corporation applying for withdrawal;
▸ requires the Division of Corporations and Commercial Code to request that the
State Tax Commission certify that:
• a nonprofit corporation or corporation applying for reinstatement after
dissolution is in good standing; and
• a foreign nonprofit corporation or foreign corporation applying for withdrawal is
in good standing;
▸ requires the State Tax Commission to notify the Division of Corporations and
Commercial Code and the corporation if the corporation is not in good standing;
▸ requires the Division of Corporations and Commercial Code to approve a
corporation's application for withdrawal under certain circumstances;
▸ modifies provisions related to corporate quorum or voting requirements for
religious nonprofit corporations; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
16-6a-716
, as enacted by Laws of Utah 2000, Chapter 300
16-6a-1412
, as last amended by Laws of Utah 2017, Chapter 122
16-6a-1513
, as enacted by Laws of Utah 2000, Chapter 300
16-10a-1422
, as last amended by Laws of Utah 2017, Chapter 122
16-10a-1520
, as enacted by Laws of Utah 1992, Chapter 277
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
16-6a-716
 is amended to read:
16-6a-716.
Greater quorum or voting requirements.
(1) The articles of incorporation or bylaws may provide for a greater:
(a) quorum requirement for members or voting groups than is provided for by this
chapter; or
(b) voting requirement for members or voting groups than is provided by this chapter.
(2) [
An
] 
Except as provided in Subsection (3), an
 amendment to the articles of
incorporation or the bylaws that adds, changes, or deletes a greater quorum or voting
requirement shall meet the same quorum requirement and be adopted by the same vote and
voting groups required to take action under the greater of the quorum and voting requirements:
(a) then in effect; or
(b) proposed to be adopted.
(3) Notwithstanding Subsection (2), a nonprofit organization that is affiliated with a
religious organization may make an amendment to the nonprofit organization's articles of
incorporation or bylaws in accordance with the direction of the religious organization's
religious authorities.
Section 2. Section 
16-6a-1412
 is amended to read:
16-6a-1412.
Reinstatement following administrative dissolution -- Reinstatement
after voluntary dissolution.
(1) A nonprofit corporation administratively dissolved under Section 
16-6a-1411
 may
apply to the division for reinstatement within two years after the effective date of dissolution by
delivering to the division for filing an application for reinstatement that
:
(a)
 states:
[
(a)
] 
(i)
 the effective date of [
its
] 
the nonprofit corporation's
 administrative dissolution
and [
its
] 
the nonprofit corporation's
 corporate name on the effective date of dissolution;
[
(b)
] 
(ii)
 that the ground or grounds for dissolution:
[
(i)
] 
(A)
 did not exist; or
[
(ii)
] 
(B)
 have been eliminated;
[
(c)
] 
(iii)
 [
(i)
] the corporate name under which the nonprofit corporation is being
reinstated; [
and
]
[
(ii)
] 
(iv)
 the corporate name that satisfies the requirements of Section 
16-6a-401
;
[
(d)
] 
(v)
 that the nonprofit corporation has paid all fees or penalties imposed under this
chapter or other applicable state law;
[
(e)
] 
(vi)
 that the nonprofit corporation:
[
(i)
] 
(A)
 has paid any taxes, fees, or penalties owed to the State Tax Commission; or
[
(ii)
] 
(B)
 is current on a payment plan with the State Tax Commission for any taxes,
fees, or penalties owed to the State Tax Commission;
[
(f)
] 
(vii)
 the address of the nonprofit corporation's registered office;
[
(g)
] 
(viii)
 the name of the nonprofit corporation's registered agent at the office stated
in Subsection (1)(f);
(ix) the federal employer identification number of the nonprofit corporation;
 and
[
(h)
] 
(x)
 any additional information the division determines is necessary or
appropriate[
.
]
; and
[
(2)
] 
(b)
 [
The nonprofit corporation shall include in or with the application for
reinstatement:
]
[
(a)
] 
includes
 the written consent to appointment by the designated registered agent[
;
and
]
.
[
(b) a certificate from the State Tax Commission that states that the nonprofit
corporation:
]
[
(i) has paid any taxes, fees, or penalties owed to the State Tax Commission; or
]
[
(ii) is current on a payment plan with the State Tax Commission for any taxes, fees, or
penalties owed to the State Tax Commission.
]
(2) (a) After receiving a nonprofit corporation's application for reinstatement, the
division shall:
(i) provide the State Tax Commission with the nonprofit corporation's federal employer
identification number; and
(ii) request that the State Tax Commission certify that the nonprofit corporation is in
good standing.
(b) The State Tax Commission shall certify that a nonprofit corporation is in good
standing if the nonprofit corporation:
(i) has paid all taxes, fees, and penalties the nonprofit corporation owed to the State
Tax Commission; or
(ii) is current on a payment plan with the State Tax Commission for all taxes, fees, and
penalties the nonprofit corporation owes to the State Tax Commission.
(c) If a nonprofit corporation is not in good standing as described in Subsection (2)(b),
the State Tax Commission shall:
(i) notify the division, stating that the nonprofit corporation is not in good standing;
and
(ii) notify the nonprofit corporation, explaining in detail why the nonprofit corporation
is not in good standing.
(3) (a) The division shall revoke the administrative dissolution if:
(i) the division determines that the application for reinstatement contains the
information required [
by Subsections (1) and (2); and
] 
under Subsection (1);
(ii) 
the division determines
 that the information 
in the application
 is correct
; and
(iii) the State Tax Commission certifies that the nonprofit corporation is in good
standing as described in Subsection (2)(b)
.
(b) The division shall mail written notice of the revocation to the nonprofit corporation
in the manner provided in Subsection 
16-6a-1411
(5) stating the effective date of the
dissolution.
(4) When the reinstatement is effective:
(a) the reinstatement relates back to and takes effect as of the effective date of the
administrative dissolution;
(b) the nonprofit corporation may carry on [
its
] 
the nonprofit corporation's
 activities,
under the name stated pursuant to Subsection [
(1)(c)
] 
(1)(a)(iii)
, as if the administrative
dissolution had never occurred; and
(c) an act of the nonprofit corporation during the period of dissolution is effective and
enforceable as if the administrative dissolution had never occurred.
(5) (a) The division may make rules for the reinstatement of a nonprofit corporation
voluntarily dissolved.
(b) The rules made under Subsection (5)(a) shall be substantially similar to the
requirements of this section for reinstatement of a nonprofit corporation that is administratively
dissolved.
Section 3. Section 
16-6a-1513
 is amended to read:
16-6a-1513.
Withdrawal of foreign nonprofit corporation.
(1) A foreign nonprofit corporation authorized to conduct affairs in this state may not
withdraw from this state until [
its
] 
the foreign nonprofit corporation's
 application for
withdrawal has been filed by the division.
(2) A foreign nonprofit corporation authorized to conduct affairs in this state may apply
for withdrawal by delivering to the division for filing an application for withdrawal [
setting
forth
] 
that states
:
(a) [
its
] 
the foreign nonprofit corporation's
 corporate name and [
its
] assumed name, if
any;
(b) the name of the state or country under whose law [
it
] 
the foreign nonprofit
corporation
 is incorporated;
(c) (i) (A) the address of [
its
] 
the foreign nonprofit corporation's
 principal office; or
(B) if a principal office is not to be maintained, a statement that the foreign nonprofit
corporation will not maintain a principal office; and
(ii) if different from the address of the principal office or if no principal office is to be
maintained, the address to which service of process may be mailed pursuant to Section
16-6a-1514
;
(d) that the foreign nonprofit corporation is not conducting affairs in this state;
(e) that [
it
] 
the foreign nonprofit corporation
 surrenders [
its
] 
the foreign nonprofit
corporation's
 authority to conduct affairs in this state;
(f) whether [
its
] 
the foreign nonprofit corporation's
 registered agent will continue to be
authorized to accept service on [
its
] 
the foreign nonprofit corporation's
 behalf in any
proceeding based on a cause of action arising during the time [
it
] 
the foreign nonprofit
corporation
 was authorized to conduct affairs in this state; [
and
]
(g) the federal employer identification number of the foreign nonprofit corporation; and
[
(g)
] 
(h)
 any additional information that the division determines is necessary or
appropriate to:
(i) determine whether the foreign nonprofit corporation is entitled to withdraw; and
(ii) determine and assess any unpaid taxes, fees, and penalties payable by the foreign
nonprofit corporation as prescribed by this chapter.
[
(3) A foreign nonprofit corporation's application for withdrawal may not be filed by
the division until:
]
[
(a) all outstanding fees and state tax obligations have been paid; and
]
[
(b) the division has received a certificate from the State Tax Commission reciting that
all taxes owed by the foreign nonprofit corporation have been paid.
]
(3) (a) After receiving a foreign nonprofit corporation's application for withdrawal, the
division shall:
(i) provide the State Tax Commission with the foreign nonprofit corporation's federal
employer identification number; and
(ii) request that the State Tax Commission certify that the foreign nonprofit corporation
is in good standing.
(b) The State Tax Commission shall certify that a foreign nonprofit corporation is in
good standing if the foreign nonprofit corporation has paid all taxes, fees, and penalties the
foreign nonprofit corporation owed to the State Tax Commission.
(c) If a foreign nonprofit corporation is not in good standing as described in Subsection
(3)(b), the State Tax Commission shall:
(i) notify the division, stating that the foreign nonprofit corporation is not in good
standing; and
(ii) notify the foreign nonprofit corporation, explaining in detail why the foreign
nonprofit corporation is not in good standing.
(4) (a) The division shall approve a foreign nonprofit corporation's application for
withdrawal if:
(i) the division determines that the application for withdrawal contains the information
required under Subsection (2);
(ii) the division determines the information in the application is correct; and
(iii) the State Tax Commission certifies that the foreign nonprofit corporation is in
good standing as described in Subsection (3)(b).
(b) The division shall mail written notice of the withdrawal stating the effective date of
the withdrawal to the foreign nonprofit corporation.
Section 4. Section 
16-10a-1422
 is amended to read:
16-10a-1422.
Reinstatement following dissolution.
(1) A corporation dissolved under Section 
16-10a-1403
 or 
16-10a-1421
 may apply to
the division for reinstatement within two years after the effective date of dissolution by
delivering to the division for filing an application for reinstatement that
:
(a)
 states:
[
(a)
] 
(i)
 the effective date of the corporation's dissolution;
[
(b)
] 
(ii)
 the corporation's corporate name as of the effective date of dissolution;
[
(c)
] 
(iii)
 that the grounds for dissolution either did not exist or have been eliminated;
[
(d)
] 
(iv)
 the corporate name under which the corporation is being reinstated;
[
(e)
] 
(v)
 that the name stated in Subsection [
(1)(d)
] 
(1)(a)(iv)
 satisfies the requirements
of Section 
16-10a-401
;
[
(f)
] 
(vi)
 that the corporation has paid all fees or penalties imposed under this chapter
or other applicable state law;
[
(g)
] 
(vii)
 that the corporation:
[
(i)
] 
(A)
 has paid any taxes, fees, or penalties owed to the State Tax Commission; or
[
(ii)
] 
(B)
 is current on a payment plan with the State Tax Commission for any taxes,
fees, or penalties owed to the State Tax Commission;
[
(h)
] 
(viii)
 the address of the corporation's registered office in this state;
[
(i)
] 
(ix)
 the name of the corporation's registered agent at the office stated in
Subsection [
(1)(h)
] 
(1)(a)(viii)
;
(x) the federal employer identification number of the corporation;
 and
[
(j)
] 
(xi)
 any additional information the division determines to be necessary or
appropriate[
.
]
; and
[
(2)
] 
(b)
 [
The corporation shall include in or with the application for reinstatement:
]
[
(a)
] 
includes
 the written consent to appointment by the designated registered agent[
;
and
]
.
[
(b) a certificate from the State Tax Commission that states that the corporation:
]
[
(i) has paid any taxes, fees, or penalties owed to the State Tax Commission; or
]
[
(ii) is current on a payment plan with the State Tax Commission for any taxes, fees, or
penalties owed to the State Tax Commission.
]
(2) (a) After receiving a corporation's application for reinstatement, the division shall:
(i) provide the State Tax Commission with the corporation's federal employer
identification number; and
(ii) request that the State Tax Commission certify that the corporation is in good
standing.
(b) The State Tax Commission shall certify that a corporation is in good standing if the
corporation:
(i) has paid all taxes, fees, and penalties the corporation owed to the State Tax
Commission; or
(ii) is current on a payment plan with the State Tax Commission for all taxes, fees, and
penalties the corporation owes to the State Tax Commission.
(c) If a corporation is not in good standing as described in Subsection (2)(b), the State
Tax Commission shall:
(i) notify the division, stating that the corporation is not in good standing; and
(ii) notify the corporation, explaining in detail why the corporation is not in good
standing.
(3) [
If
]
(a) The division shall revoke the administrative dissolution if:
(i)
 the division determines that the application for reinstatement contains the
information required [
by Subsections (1) and (2) and
] 
under Subsection (1);
(ii) the division determines
 that the information 
in the application
 is correct[
, the
division shall revoke the administrative dissolution.
]
; and
(iii) the State Tax Commission certifies that the corporation is in good standing as
described in Subsection (2)(b).
(b)
 The division shall mail to the corporation in the manner provided in Subsection
16-10a-1421
(5) written notice of:
[
(a)
] 
(i)
 the revocation; and
[
(b)
] 
(ii)
 the effective date of the revocation.
(4) 
(a)
 When the reinstatement is effective, [
it
] 
the reinstatement
 relates back to the
effective date of the administrative dissolution.
(b)
 Upon reinstatement:
[
(a)
] 
(i)
 an act of the corporation during the period of dissolution is effective and
enforceable as if the administrative dissolution had never occurred; and
[
(b)
] 
(ii)
 the corporation may carry on [
its
] 
the corporation's
 business, under the name
stated pursuant to Subsection [
(1)(d),
] 
(1)(a)(iv),
 as if the administrative dissolution had never
occurred.
Section 5. Section 
16-10a-1520
 is amended to read:
16-10a-1520.
Withdrawal of foreign corporation.
(1) A foreign corporation authorized to transact business in this state may not withdraw
from this state until [
its
] 
the foreign corporation's
 application for withdrawal has been filed by
the division.
(2) A foreign corporation authorized to transact business in this state may apply for
withdrawal by delivering to the division for filing an application for withdrawal [
setting forth
]
that states
:
(a) [
its
] 
the foreign corporation's
 corporate name and [
its
] assumed name, if any;
(b) the name of the state or country under whose law [
it
] 
the foreign corporation
 is
incorporated;
(c) the address of [
its
] 
the foreign corporation's
 principal office, or if none is to be
maintained, a statement that the corporation will not maintain a principal office, and if different
from the address of the principal office or if no principal office is to be maintained, the address
to which service of process may be mailed pursuant to Section 
16-10a-1521
;
(d) that the corporation is not transacting business in this state and that [
it
] 
the foreign
corporation
 surrenders [
its
] 
the foreign corporation's
 authority to transact business in this state;
(e) whether [
its
] 
the foreign corporation's
 registered agent will continue to be
authorized to accept service on [
its
] 
the foreign corporation's
 behalf in any proceeding based on
a cause of action arising during the time [
it
] 
the foreign corporation
 was authorized to transact
business in this state; [
and
]
(f) the federal employer identification number of the foreign corporation; and
[
(f)
] 
(g)
 any additional information that the division determines is necessary or
appropriate to determine whether the corporation is entitled to withdraw, and to determine and
assess any unpaid taxes, fees, and penalties payable by [
it
] 
the foreign corporation
 as prescribed
by this chapter.
[
(3) A foreign corporation's application for withdrawal may not be filed by the division
until all outstanding fees and state tax obligations have been paid and the division has received
a tax clearance certificate from the State Tax Commission.
]
(3) (a) After receiving a foreign corporation's application for withdrawal, the division
shall:
(i) provide the State Tax Commission with the foreign corporation's federal employer
identification number; and
(ii) request that the State Tax Commission certify that the foreign corporation is in
good standing.
(b) The State Tax Commission shall certify that a foreign corporation is in good
standing if the foreign corporation has paid all taxes, fees, and penalties the foreign corporation
owed to the State Tax Commission.
(c) If a foreign corporation is not in good standing as described in Subsection (3)(b),
the State Tax Commission shall:
(i) notify the division, stating that the foreign corporation is not in good standing; and
(ii) notify the foreign corporation, explaining in detail why the foreign corporation is
not in good standing.
(4) (a) The division shall approve a foreign corporation's application for withdrawal if:
(i) the division determines that the application for withdrawal contains the information
required under Subsection (2);
(ii) the division determines the information in the application is correct; and
(iii) the State Tax Commission certifies that the foreign corporation is in good standing
as described in Subsection (3)(b).
(b) The division shall mail written notice of the withdrawal stating the effective date of
the withdrawal to the foreign corporation.
Section 6. 
Effective date.
(1) Except as provided in Subsection (2), this bill takes effect on May 3, 2023.
(2) The actions affecting the following sections take effect on July 1, 2023:
(a) Section 
16-6a-1412
;
(b) Section 
16-6a-1513
;
(c) Section 
16-10a-1422
; and
(d) Section 
16-10a-1520
.