Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                              HB 477.1
                                                 HOUSE BILL NO. 477
       INTRODUCED BY S. STEWART PEREGOY, J. WINDY BOY, J. SMALL, E. STAFMAN, D. HAWK, T.
                                        FRANCE, E. MATTHEWS, P. GREEN
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  A BILL FOR AN ACT ENTITLED: “AN ACT REVISING LAWS RELATED TO RECOGNITION OF FOREIGN
  BUSINESS ENTITIES TO INCLUDE ENTITIES FORMED UNDER LAWS OF A FEDERALLY RECOGNIZED
  INDIAN TRIBE; PROVIDING A FEE FOR RECORDING RECORDS WITH THE SECRETARY OF STATE
  RELATED TO CERTAIN TRANSACTIONS WITHIN AN INDIAN RESERVATION IN CERTAIN
  CIRCUMSTANCES; AMENDING SECTIONS 30-9A-525, 35-14-125, 35-14-140, AND 35-14-403, MCA; AND
  PROVIDING AN IMMEDIATE EFFECTIVE DATE.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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          Section 1. Section 30-9A-525, MCA, is amended to read:
          "30-9A-525.    Fees. (1) Except as otherwise provided in subsection subsections (2) and (3), the fee for
  each of the following must be set and deposited by the secretary of state as prescribed in 2-15-405:
          (a)      filing and indexing a record under this part, other than an initial financing statement filed in
  connection with a public-finance transaction or a manufactured-home transaction;
          (b)      filing and indexing an initial financing statement of the kind described in 30-9A-502(3); and
          (c)      responding to a request for information from the filing office, including for communicating
  whether there is on file any financing statement naming a particular debtor.
          (2)      This section does not require a fee with respect to a record of mortgage that is effective as a
  financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber
  to be cut under 30-9A-502(3). However, the recording and satisfaction fees that otherwise would be applicable
  to the record of mortgage apply.
          (3)      The secretary of state shall charge a fee of $25 to file and index a financing statement or
  related record for a transaction that involves collateral that is located within the boundaries of an Indian
  reservation and that is subject to the laws of the governing body of the tribe or tribes of the Indian reservation."
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68th Legislature 2023                                                                                                 HB 477.1
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          Section 2. Section 35-14-125, MCA, is amended to read:
          "35-14-125. Filing duty -- secretary of state. (1) If a document delivered to the office of the
  secretary of state for filing satisfies the requirements of 35-14-120, the secretary of state shall file it.
          (2)      The secretary of state files a document by recording it as filed on the date and time of receipt.
  After filing a document, the secretary of state shall return to the person who delivered the document for filing a
  copy of the document with an acknowledgment of the date and time of filing.
          (3)      If the secretary of state refuses to file a document, it must be returned to the person who
  delivered the document for filing within 10 days after the document was delivered, together with a brief, written
  explanation of the reason for the refusal.
          (4)      The secretary of state's duty to file documents under this section is ministerial. The secretary of
  state's filing or refusing to file a document does not create a presumption that:
          (a)      the document does or does not conform to the requirements of this chapter; or
          (b)      the information contained in the document is correct or incorrect.
          (5)      The secretary of state may correct errors caused by a filing officer. The error and the correction
  must be retained in the file containing the document in which the error appeared. For the purposes of this
  subsection, a filing officer is a person employed in a filing office as defined in 30-9A-102.
          (6)      The secretary of state shall file a document that otherwise complies with the requirements of
  35-14-120 and this section for any entity that originated under the laws of entity formation of a federally
  recognized Indian tribe."
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          Section 3. Section 35-14-140, MCA, is amended to read:
          "35-14-140. General definitions. For the purposes of this chapter, unless otherwise specified, the
  following definitions apply:
          (1)      "Articles of incorporation" means the articles of incorporation described in 35-14-202, all
  amendments to the articles of incorporation, and any other documents permitted or required to be delivered for
  filing by a domestic business corporation with the secretary of state under any provision of this chapter that
  modify, amend, supplement, restate, or replace the articles of incorporation. After an amendment of the articles
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68th Legislature 2023                                                                                             HB 477.1
  of incorporation or any other document filed under this chapter that restates the articles of incorporation in their
  entirety, the articles of incorporation may not include any prior documents. When used with respect to a foreign
  corporation or a domestic or foreign nonprofit corporation, the "articles of incorporation" of the entity means the
  document of the entity that is equivalent to the articles of incorporation of a domestic business corporation.
          (2)      "Authorized shares" means the shares of all classes a domestic or foreign corporation is
  authorized to issue.
          (3)      "Beneficial shareholder" means a person who owns the beneficial interest in shares, which may
  be a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or
  nominee.
          (4)      "Conspicuous" means written, displayed, or presented so that a reasonable person against
  whom the writing is to operate should have noticed it.
          (5)      "Corporation", "domestic corporation", "business corporation", or "domestic business
  corporation" means a corporation for profit, which is not a foreign corporation, incorporated under this chapter.
          (6)      "Deliver" or "delivery" means any method of delivery used in conventional commercial practice,
  including delivery by hand, mail, and commercial delivery and, if authorized in accordance with 35-14-141, by
  electronic transmission.
          (7)      "Distribution" means a direct or indirect transfer of cash or other property except a corporation's
  own shares or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of
  any of its shares. A distribution may be in the form of:
          (a)      a payment of a dividend;
          (b)      a purchase, redemption, or other acquisition of shares;
          (c)      a distribution of indebtedness;
          (d)      a distribution in liquidation; or
          (e)      another form.
          (8)      "Document" means:
          (a)      any tangible medium on which information is inscribed and includes handwritten, typed,
  printed, or similar instruments and copies of those instruments; or
          (b)      an electronic record.
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68th Legislature 2023                                                                                                  HB 477.1
           (9)         "Domestic", with respect to an entity, means an entity governed as to its internal affairs by the
  law of this state.
           (10)        "Effective date", when referring to a document accepted for filing by the secretary of state,
  means the time and date determined in accordance with 35-14-123.
           (11)        "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical,
  electromagnetic, or similar capabilities.
           (12)        "Electronic record" means information that is stored in an electronic or other nontangible
  medium and is retrievable in paper form through an automated process used in conventional commercial
  practice unless otherwise authorized in accordance with 35-14-141(10).
           (13)        "Electronic transmission" or "electronically transmitted" means any form or process of
  communication not directly involving the physical transfer of paper or another tangible medium that:
           (a)         is suitable for the retention, retrieval, and reproduction of information by the recipient; and
           (b)         is retrievable in paper form by the recipient through an automated process used in conventional
  commercial practice unless otherwise authorized in accordance with 35-14-141(10).
           (14)        "Eligible entity" means a domestic or foreign unincorporated entity or a domestic or foreign
  nonprofit corporation.
           (15)        "Eligible interests" means interests or memberships.
           (16)        "Employee" includes an officer but not a director. A director may accept duties that make the
  director also an employee.
           (17)        "Entity" includes:
           (a)         a domestic and foreign business corporation;
           (b)         a domestic and foreign nonprofit corporation;
           (c)         an estate;
           (d)         a trust;
           (e)         a domestic and foreign unincorporated entity; and
           (f)         a state, the United States, and a foreign government.
           (18)        "Expenses" means reasonable expenses of any kind that are incurred in connection with a
  matter, including attorney fees.
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68th Legislature 2023                                                                                                HB 477.1
           (19)    "Filing entity" means an unincorporated entity, other than a limited liability partnership, that is of
  a type that is created by filing a public organic record or is required to file a public organic record that evidences
  its creation.
           (20)    "Foreign", with respect to an entity, means an entity governed as to its internal affairs by the
  organic law of a jurisdiction other than this state, including a federally recognized Indian tribe.
           (21)    "Foreign corporation" or "foreign business corporation" means a corporation incorporated under
  a law other than the law of this state, including the laws of a federally recognized Indian tribe, that would be a
  business corporation if incorporated under the law of this state.
           (22)    "Foreign nonprofit corporation" means a corporation incorporated under a law other than the
  law of this state, including the laws of a federally recognized Indian tribe, that would be a nonprofit corporation if
  incorporated under the law of this state.
           (23)    "Foreign registration statement" means the foreign registration statement described in 35-14-
  1503.
           (24)    "Governmental subdivision" includes an authority, a county, a district, and a municipality.
           (25)    "Governor" means any person under whose authority the powers of an entity are exercised and
  under whose direction the activities and affairs of the entity are managed pursuant to the organic law governing
  the entity and its organic rules.
           (26)    "Includes" and "including" denote a partial definition or a nonexclusive list.
           (27)    "Individual" means a natural person.
           (28)    "Interest" means either or both of the following rights under the organic law governing an
  unincorporated entity:
           (a)     the right to receive distributions from the entity either in the ordinary course or upon liquidation;
  or
           (b)     the right to receive notice or vote on issues involving its internal affairs, other than as an agent,
  assignee, proxy, or person responsible for managing its business and affairs.
           (29)    "Interest holder" means a person who holds of record an interest.
           (30)    (a) "Interest holder liability" means:
           (i)     personal liability for a debt, obligation, or other liability of a domestic or foreign corporation or
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68th Legislature 2023                                                                                                HB 477.1
  eligible entity that is imposed on a person:
           (A)      solely by reason of the person's status as a shareholder, member, or interest holder; or
           (B)      by the articles of incorporation of the domestic corporation or the organic rules of the eligible
  entity or foreign corporation that make one or more specified shareholders, members, or interest holders or
  categories of shareholders, members, or interest holders liable in their capacity as shareholders, members, or
  interest holders for all or specified liabilities of the corporation or eligible entity; or
           (ii)     an obligation of a shareholder, member, or interest holder under the articles of incorporation of
  a domestic corporation or the organic rules of an eligible entity or foreign corporation to contribute to the entity.
           (b)      Except as otherwise provided in the articles of incorporation of a domestic corporation or the
  organic law or organic rules of an eligible entity or a foreign corporation, interest holder liability arises under
  subsection (30)(a) when the corporation or eligible entity incurs the liability.
           (31)     "Jurisdiction of formation" means the state, tribal government, or country the law of which
  includes the organic law governing a domestic or foreign corporation or eligible entity.
           (32)     "Means" denotes an exhaustive definition.
           (33)     "Membership" means the rights of a member in a domestic or foreign nonprofit corporation.
           (34)     "Merger" means a transaction pursuant to 35-14-1102.
           (35)     "Nonfiling entity" means an unincorporated entity that is of a type that is not created by filing a
  public organic record.
           (36)     "Nonprofit corporation" or "domestic nonprofit corporation" means a corporation incorporated
  under the laws of this state and subject to the provisions of the Montana Nonprofit Corporation Act.
           (37)     "Organic law" means the statute governing the internal affairs of a domestic or foreign business
  or nonprofit corporation or unincorporated entity.
           (38)     "Organic rules" means the public organic record and private organic rules of a domestic or
  foreign corporation or eligible entity.
           (39)     "Person" includes an individual and an entity.
           (40)     "Principal office" means the office, whether in this state or out of this state, designated in the
  annual report or foreign registration statement as the place where the principal executive offices of a domestic
  or foreign corporation are located.
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68th Legislature 2023                                                                                               HB 477.1
          (41)     (a) "Private organic rules" means:
          (i)      the bylaws of a domestic or foreign business or nonprofit corporation; or
          (ii)     the rules, regardless of whether in writing, that govern the internal affairs of an unincorporated
  entity, are binding on all its interest holders, and are not part of its public organic record, if any.
          (b)      When private organic rules have been amended or restated, the term means the private
  organic rules as last amended or restated.
          (42)     "Proceeding" includes a civil suit and a criminal, administrative, and investigatory action.
          (43)     (a) "Public organic record" means:
          (i)      the articles of incorporation of a domestic or foreign business or nonprofit corporation; or
          (ii)     the document, if any, the filing of which is required to create an unincorporated entity or that
  creates the unincorporated entity and is required to be filed.
          (b)      When a public organic record has been amended or restated, the term means the public
  organic record as last amended or restated.
          (44)     "Record date" means the date fixed for determining the identity of the corporation's
  shareholders and their shareholdings for purposes of this chapter. Unless another time is specified when the
  record date is fixed, the determination must be made as of the close of business at the principal office of the
  corporation on the record date.
          (45)     "Record shareholder" means:
          (a)      the person in whose name shares are registered in the records of the corporation; or
          (b)      the person identified as the beneficial owner of shares in a beneficial ownership certificate
  pursuant to 35-14-723 on file with the corporation to the extent of the rights granted by the certificate.