Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                           Act 719 of the Regular Session
 1   State of Arkansas                   As Engrossed:       H2/20/23
 2   94th General Assembly                        A Bill
 3   Regular Session, 2023                                                             HOUSE BILL 1339
 4
 5   By: Representatives Lundstrum, Maddox
 6   By: Senator C. Penzo
 7
 8                                     For An Act To Be Entitled
 9                  AN ACT TO AMEND THE LAW CONCERNING THE RULE AGAINST
10                  PERPETUITIES; AND FOR OTHER PURPOSES.
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13                                                 Subtitle
14                           TO AMEND THE LAW CONCERNING THE RULE
15                           AGAINST PERPETUITIES.
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17
18   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
19
20          SECTION 1.        Arkansas Code § 18-3-101(a)—(c), concerning the statutory
21   rule against perpetuities, is amended to read as follows:
22          (a)    A nonvested property interest is invalid unless:
23                  (1)      when the interest is created, it is certain to vest or
24   terminate no later than 21 years after the death of an individual then alive;
25   or
26                  (2)      the interest either vests or terminates within 90 years 365
27   years after its creation.
28          (b)    A general power of appointment not presently exercisable because
29   of a condition precedent is invalid unless:
30                  (1)      when the power is created, the condition precedent is
31   certain to be satisfied or becomes impossible to satisfy no later than 21
32   years after the death of an individual then alive; or
33                  (2)      the condition precedent either is satisfied or becomes
34   impossible to satisfy within 90 years 365 years after its creation.
35          (c)    A nongeneral power of appointment or a general testamentary power
36   of appointment is invalid unless:
     *DTP030*                                                                    02-20-2023 11:33:46 DTP030
     As Engrossed:    H2/20/23                                                 HB1339
 1              (1)    when the power is created, it is certain to be irrevocably
 2   exercised or otherwise to terminate no later than 21 years after the death of
 3   an individual then alive; or
 4              (2)    the power is irrevocably exercised or otherwise terminates
 5   within 90 years 365 years after its creation.
 6
 7        SECTION 2.    Arkansas Code § 18-3-103 is amended to read as follows:
 8        18-3-103. Reformation.
 9        Upon the petition of an interested person, a court shall reform a
10   disposition in the manner that most closely approximates the transferor's
11   manifested plan of distribution and is within the 90 years 365 years allowed
12   by § 18-3-101(a)(2), § 18-3-101(b)(2), or § 18-3-101(c)(2) if:
13              (1)    a nonvested property interest or a power of appointment
14   becomes invalid under § 18-3-101;
15              (2)    a class gift is not but might become invalid under § 18-3-
16   101 and the time has arrived when the share of any class member is to take
17   effect in possession or enjoyment; or
18              (3)    a nonvested property interest that is not validated by § 18-
19   3-101(a)(1) can vest but not within 90 years 365 years after its creation.
20
21        SECTION 3.    Arkansas Code § 18-3-105 is amended to read as follows:
22        18-3-105.    Prospective application.
23        (a)   Except as extended by subsection (b) of this section, this chapter
24   applies to a nonvested property interest or a power of appointment that is
25   created on or after March 9, 2007 the effective date of this act. For
26   purposes of this section, a nonvested property interest or a power of
27   appointment created by the exercise of a power of appointment is created when
28   the power is irrevocably exercised or when a revocable exercise becomes
29   irrevocable.
30        (b)   If a nonvested property interest or a power of appointment was
31   created before March 9, 2007 the effective date of this act, and is
32   determined in a judicial proceeding, commenced on or after March 9, 2007 the
33   effective date of this act, to violate this State's rule against perpetuities
34   as that rule existed before March 9, 2007 the effective date of this act, a
35   court upon the petition of an interested person may reform the disposition in
36   the manner that most closely approximates the transferor's manifested plan of
                                         2               02-20-2023 11:33:46 DTP030
     As Engrossed:    H2/20/23                                                HB1339
 1   distribution and is within the limits of the rule against perpetuities
 2   applicable when the nonvested property interest or power of appointment was
 3   created.
 4
 5        SECTION 4.    Arkansas Code § 18-3-106 is amended to read as follows:
 6        18-3-106.    Short title.
 7        This chapter may be cited as the Uniform Statutory Rule Against
 8   Perpetuities.
 9
10        SECTION 5.    Arkansas Code § 18-3-107 is repealed.
11        18-3-107. Uniformity of application and construction.
12        This chapter shall be applied and construed to effectuate its general
13   purpose to make uniform the law with respect to the subject of this chapter
14   among states enacting it.
15
16                                      /s/Lundstrum
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19                                    APPROVED: 4/12/23
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                                           3              02-20-2023 11:33:46 DTP030
Statutes affected: 
Old version HB1339 V2 - 2-20-2023 11:34 AM: 18-3-101(a)
HB 1339: 18-3-101(a)
Act 719: 18-3-101(a)