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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: December 4, 2012 01:37 PM
From: Senator Stewart J. Greenleaf
To: All Senate members
Subject: Title 15 codification and revisions
 
I am reintroducing Senate Bill 884 of last session, amending the Associations Code, Title 15 of the Pennsylvania Consolidated Statutes, to finish the codification of the Nonprofit Corporation Law (Title 15, Part II, Subpart C). The Nonprofit Corporation Law is revised to update the law and make it consistent with the Business Corporation Law (Title 15, Part II, Subpart B).

The 1988 enactment of the Business Corporation Law only included a partial codification of the Nonprofit Corporation Law. While sections relating to nonprofit corporations were renumbered in 1988 to fit with the statutory scheme of the new Business Corporation Law, no changes were made to make the language relating to nonprofit corporations consistent with the language relating to corporations generally. Various amendments to the Business Corporation Law in 1990, 1992 and 1994 made corresponding changes to the Nonprofit Corporation Law. This piecemeal approach has left more than half of the Nonprofit Corporation Law with language that differs from the Business Corporation Law. As a result of this bill, Pennsylvania's business law governing for-profit and not-for-profit organizations will be an internally consistent body of statutory law.

One of the important changes being made in the Nonprofit Corporation Law concerns the use of electronic technology. The Business Corporation Law contains a number of provisions permitting business corporations to use modern electronic communications technology for purposes such as notice of meetings of directors and shareholders, granting of proxies, and acting by consent without a meeting. Similar provisions are being added to the Nonprofit Corporation Law by this legislation. Experience with the Business Corporation Law electronic technology provisions has led to a number of suggested refinements in the Business Corporation Law provisions of this bill which are also included in the proposed Nonprofit Corporation Law provisions. The bill also makes changes relating to filings with the Department of State’s Corporation Bureau.

The legislation also includes Senate Bill 88 of last session, the Pennsylvania Uniform Unincorporated Nonprofit Association Law. The legislation amends the Associations Code by adding a new chapter that will govern all unincorporated nonprofit associations that are formed or operate in Pennsylvania. An unincorporated nonprofit association is a nonprofit organization that is not a charitable trust or a nonprofit corporation.

In the United States, unincorporated nonprofit associations are governed by a hodgepodge of common law principles and statutes governing some of their legal aspects. In an effort to address some of the legal problems that arose under the common law’s treatment of such associations, the National Conference of Commissioners on Uniform State Laws promulgated the uniform act.

In previous sessions an earlier version of this uniform act was included in the legislation amending the Associations Code that otherwise completed the codification of the Nonprofit Corporation Law. The legislation I am introducing for the new session will again combine the provisions of the two bills so that enactment of the legislation will complete the work of the General Assembly on the Title 15 provisions relating to incorporated and unincorporated nonprofit organizations.

During the 2011-2012 legislative session, the Senate passed Senate Bill 884. The Senate Judiciary Committee reported Senate Bill 88 from committee. The Senate re-referred Senate Bill 88 to the Senate Appropriations Committee where it remained for the rest of the session.

This legislation is a continuation of the work of the Title 15 Task Force of the Pennsylvania Bar Association to make Pennsylvania’s business law competitive with the laws of other states so that Pennsylvania is an attractive state in which to do business.



Introduced as SB304