Bill Summary – FastDemocracy

Enrolled Copy                                                                        S.B. 191
                  CONDOMINIUM AND COMMUNITY ASSOCIATION
                                           AMENDMENTS
                                      2023 GENERAL SESSION
                                           STATE OF UTAH
                               Chief Sponsor: Wayne A. Harper
                                 House Sponsor: A. Cory Maloy
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 LONG TITLE
 General Description:
         This bill amends provisions governing community associations and condominium
 associations.
 Highlighted Provisions:
         This bill:
         < amends certain provisions of the Utah Nonprofit Corporation Act that apply to
 community associations;
         < provides certain qualifications for a director on a board or member of a management
 committee;
         < provides that an association of unit owners or community association may
 disqualify an individual from being a director on a board or member of a
 management committee for certain criminal violations;
         < provides that a community association rule may not prohibit low water use on lawns
 during drought conditions;
         < requires a community association created before March 5, 2023, to adopt required
 rules regarding water efficient landscaping before June 30, 2023;
         < permits an association of unit owners or community association to adopt a rule
 restricting sex offenders from certain areas the association maintains, operates, or
 owns;
         < provides that a community association that registers, or renews or updates the
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 association's registration, with the Department of Commerce is subject to the Community
 Association Act;
        < permits certain community associations to charge an annual fee to a lot owner who
 owns a rental lot;
        < permits certain associations of unit owners to charge an annual fee to a unit owner
 who owns a rental unit;
        < clarifies provisions related to charging systems for electric or hybrid electric
 vehicles;
        < clarifies provisions related to the application of regulations related to solar system
 installation to attached dwellings;
        < requires an action against a community association board or board member for a
 violation of certain provisions to be brought no later than 18 months after the
 challenged board action;
        < defines terms; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None
 Utah Code Sections Affected:
 AMENDS:
        16-6a-102, as last amended by Laws of Utah 2017, Chapter 358
        16-6a-1602, as enacted by Laws of Utah 2000, Chapter 300
        57-8-3, as last amended by Laws of Utah 2020, Chapter 398
        57-8-8.1, as last amended by Laws of Utah 2022, Chapter 439
        57-8-8.2, as enacted by Laws of Utah 2022, Chapter 439
        57-8-10.1, as last amended by Laws of Utah 2018, Chapter 395
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        57-8-59, as enacted by Laws of Utah 2018, Chapter 395
        57-8a-102, as last amended by Laws of Utah 2020, Chapter 398
        57-8a-105, as last amended by Laws of Utah 2020, Chapter 75
        57-8a-209, as last amended by Laws of Utah 2021, Chapter 102
        57-8a-217, as last amended by Laws of Utah 2015, Chapter 325
        57-8a-218, as last amended by Laws of Utah 2022, Chapter 439
        57-8a-501, as enacted by Laws of Utah 2013, Chapter 152
        57-8a-701, as last amended by Laws of Utah 2022, Chapter 439
        57-8a-802, as enacted by Laws of Utah 2022, Chapter 439
65
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 16-6a-102 is amended to read:
        16-6a-102. Definitions.
        As used in this chapter:
        (1) (a) "Address" means a location where mail can be delivered by the United States
 Postal Service.
        (b) "Address" includes:
        (i) a post office box number;
        (ii) a rural free delivery route number; and
        (iii) a street name and number.
        (2) "Affiliate" means a person that directly or indirectly through one or more
 intermediaries controls, or is controlled by, or is under common control with, the person
 specified.
        (3) "Articles of incorporation" include:
        (a) amended articles of incorporation;
        (b) restated articles of incorporation;
        (c) articles of merger; and
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         (d) a document of a similar import to the documents described in Subsections (3)(a)
 through (c).
         (4) "Assumed corporate name" means a name assumed for use in this state:
         (a) by a:
         (i) foreign corporation pursuant to Section 16-10a-1506; or
         (ii) a foreign nonprofit corporation pursuant to Section 16-6a-1506; and
         (b) because the corporate name of the foreign corporation described in Subsection
 (4)(a) is not available for use in this state.
         (5) (a) Except as provided in Subsection (5)(b), "board of directors" means the body
 authorized to manage the affairs of a domestic or foreign nonprofit corporation.
         (b) Notwithstanding Subsection (5)(a), a person may not be considered a member of
 the board of directors because of a power delegated to that person pursuant to Subsection
 16-6a-801(2).
         (6) (a) "Bylaws" means the one or more codes of rules, other than the articles of
 incorporation, adopted pursuant to this chapter for the regulation or management of the affairs
 of a domestic or foreign nonprofit corporation irrespective of the one or more names by which
 the codes of rules are designated.
         (b) "Bylaws" includes:
         (i) amended bylaws; and
         (ii) restated bylaws.
         (7) (a) "Cash" or "money" means:
         (i) legal tender;
         (ii) a negotiable instrument; or
         (iii) other cash equivalent readily convertible into legal tender.
         (b) "Cash" and "money" are used interchangeably in this chapter.
         (8) (a) "Class" means a group of memberships that has the same right with respect to
 voting, dissolution, redemption, transfer, or other characteristics.
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        (b) For purposes of Subsection (8)(a), a right is considered the same if it is determined
 by a formula applied uniformly to a group of memberships.
        (9) (a) "Conspicuous" means so written that a reasonable person against whom the
 writing is to operate should have noticed the writing.
        (b) "Conspicuous" includes printing or typing in:
        (i) italics;
        (ii) boldface;
        (iii) contrasting color;
        (iv) capitals; or
        (v) underlining.
        (10) "Control" or a "controlling interest" means the direct or indirect possession of the
 power to direct or cause the direction of the management and policies of an entity by:
        (a) the ownership of voting shares;
        (b) contract; or
        (c) a means other than those specified in Subsection (10)(a) or (b).
        (11) Subject to Section 16-6a-207, "cooperative nonprofit corporation" or
 "cooperative" means a nonprofit corporation organized or existing under this chapter.
        (12) "Corporate name" means:
        (a) the name of a domestic corporation as stated in the domestic corporation's articles
 of incorporation;
        (b) the name of a domestic nonprofit corporation as stated in the domestic nonprofit
 corporation's articles of incorporation;
        (c) the name of a foreign corporation as stated in the foreign corporation's:
        (i) articles of incorporation; or
        (ii) document of similar import to articles of incorporation; or
        (d) the name of a foreign nonprofit corporation as stated in the foreign nonprofit
 corporation's:
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        (i) articles of incorporation; or
        (ii) document of similar import to articles of incorporation.
        (13) (a) "Corporate records" means the records described in Section 16-6a-1601.
        (b) "Corporate records" does not include correspondence, communications, notes, or
 other similar information, regardless of format or method of storage, that are not an official
 decision, published document, or record of the corporation.
        [(13)] (14) "Corporation" or "domestic corporation" means a corporation for profit that:
        (a) is not a foreign corporation; and
        (b) is incorporated under or subject to Chapter 10a, Utah Revised Business Corporation
 Act.
        [(14)] (15) "Delegate" means a person elected or appointed to vote in a representative
 assembly:
        (a) for the election of a director; or
        (b) on matters other than the election of a director.
        [(15)] (16) "Deliver" includes delivery by mail or another means of transmission
 authorized by Section 16-6a-103, except that delivery to the division means actual receipt by
 the division.
        [(16)] (17) "Director" means a member of the board of directors.
        [(17)] (18) (a) "Distribution" means the payment of a dividend or any part of the
 income or profit of a nonprofit corporation to the nonprofit corporation's:
        (i) members;
        (ii) directors; or
        (iii) officers.
        (b) "Distribution" does not include a fair-value payment for:
        (i) a good sold; or
        (ii) a service received.
        [(18)] (19) "Division" means the Division of Corporations and Commercial Code.
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        Enrolled Copy                                                                           S.B. 191
        [(19)] (20) "Effective date," when referring to a document filed by the division, means
 the time and date determined in accordance with Section 16-6a-108.
        [(20)] (21) "Effective date of notice" means the date notice is effective as provided in
 Section 16-6a-103.
        [(21)] (22) "Electronic transmission" or "electronically transmitted" means a process of
 communication not directly involving the physical transfer of paper that is suitable for the
 receipt, retention, retrieval, and reproduction of information by the recipient, whether by email,
 texting, facsimile, or otherwise.
        [(22)] (23) (a) "Employee" includes an officer of a nonprofit corporation.
        (b) (i) Except as provided in Subsection [(22)(b)(ii)] (23)(b)(ii), "employee" does not
 include a director of a nonprofit corporation.
        (ii) Notwithstanding Subsection [(22)(b)(i)] (23)(b)(i), a director may accept one or
 more duties that make that director an employee of a nonprofit corporation.
        [(23)] (24) "Entity" includes:
        (a) a domestic or foreign corporation;
        (b) a domestic or foreign nonprofit corporation;
        (c) a limited liability company;
        (d) a profit or nonprofit unincorporated association;
        (e) a business trust;
        (f) an estate;
        (g) a partnership;
        (h) a trust;
        (i) two or more persons having a joint or common economic interest;
        (j) a state;
        (k) the United States; or
        (l) a foreign government.
        [(24)] (25) "Executive director" means the executive director of the Department of
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 Commerce.
        [(25)] (26) "Foreign corporation" means a corporation for profit incorporated under a
 law other than the laws of this state.
        [(26)] (27) "Foreign nonprofit corporation" means an entity:
        (a) incorporated under a law other than the laws of this state; and
        (b) that would be a nonprofit corporation if formed under the laws of this state.
        [(27)] (28) "Governmental entity" means:
        (a) (i) the executive branch of the state;
        (ii) the judicial branch of the state;
        (iii) the legislative branch of the state;
        (iv) an independent entity, as defined in Section 63E-1-102;
        (v) a political subdivision of the state;
        (vi) a state institution of higher education, as defined in Section 53B-3-102;
        (vii) an entity within the state system of public education; or
        (viii) the National Guard; or
        (b) any of the following that is established or controlled by a governmental entity listed
 in Subsection [(27)(a)] (28)(a) to carry out the public's business:
        (i) an office;
        (ii) a division;
        (iii) an agency;
        (iv) a board;
        (v) a bureau;
        (vi) a committee;
        (vii) a department;
        (viii) an advisory board;
        (ix) an administrative unit; or
        (x) a commission.
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        Enrolled Copy                                                                         S.B. 191
        [(28)] (29) "Governmental subdivision" means:
        (a) a county;
        (b) a city;
        (c) a town; or
        (d) another type of governmental subdivision authorized by the laws of this state.
        [(29)] (30) "Individual" means:
        (a) a natural person;
        (b) the estate of an incompetent individual; or
        (c) the estate of a deceased individual.
        [(30)] (31) "Internal Revenue Code" means the federal "Internal Revenue Code of
 1986," as amended from time to time, or to corresponding provisions of subsequent internal
 revenue laws of the United States of America.
        [(31)] (32) (a) "Mail," "mailed," or "mailing" means deposit, deposited, or depositing
 in the United States mail, properly addressed, first-class postage prepaid.
        (b) "Mail," "mailed," or "mailing" includes registered or certified mail for which the
 proper fee is paid.
        [(32)] (33) (a) "Member" means one or more persons identified or otherwise appointed
 as a member of a domestic or foreign nonprofit corporation as provided:
        (i) in the articles of incorporation;
        (ii) in the bylaws;
        (iii) by a resolution of the board of directors; or
        (iv) by a resolution of the members of the nonprofit corporation.
        (b) "Member" includes:
        (i) "voting member"; and
        (ii) a shareholder in a water company.
        [(33)] (34) "Membership" refers to the rights and obligations of a member or members.
        [(34)] (35) "Mutual benefit corporation" means a nonprofit corporation:
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         (a) that issues shares of stock to its members evidencing a right to receive distribution
 of water or otherwise representing property rights; or
         (b) all of whose assets are contributed or acquired by or for the members of the
 nonprofit corporation or their predecessors in interest to serve the mutual purposes of the
 members.
         [(35)] (36) "Nonprofit corporation" or "domestic nonprofit corporation" means an
 entity that:
         (a) is not a foreign nonprofit corporation; and
         (b) is incorporated under or subject to this chapter.
         [(36)] (37) "Notice" means the same as that term is defined in Section 16-6a-103.
         [(37)] (38) "Party related to a director" means:
         (a) the spouse of the director;
         (b) a child of the director;
         (c) a grandchild of the director;
         (d) a sibling of the director;
         (e) a parent of the director;
         (f) the spouse of an individual described in Subsections [(37)(b)] (38)(b) through (e);
         (g) an individual having the same home as the director;
         (h) a trust or estate of which the director or another individual specified in this
 Subsection [(37)] (38) is a substantial beneficiary; or
         (i) any of the following of which the director is a fiduciary:
         (i) a trust;
         (ii) an estate;
         (iii) an incompetent;
         (iv) a conservatee; or
         (v) a minor.
         [(38)] (39) "Person" means an:
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