AUTHORIZE THE CONVERSION OF SUMMER RESORT ASSOCIATIONS INTO NONPROFIT CORPORATIONS

House Bills 4048 and 4049 as reported from committee

Sponsor:  Rep. Larry Inman

1st Committee:  Commerce and Tourism

2nd Committee:  Ways and Means

Complete to 4-23-19

SUMMARY:

            House Bills 4048 and 4049 would amend the Nonprofit Corporation Act and 1897 PA 230, respectively, to allow summer resort associations to convert into nonprofit corporations.

The bills would allow summer resort associations to convert into domestic nonprofit corporations by satisfying the requirements laid out under the Nonprofit Corporation Act. Additionally, HB 4049 would require the conversion to receive a vote of approval from at least 2/3 of all of the shareholders of the capital stock of the summer resort association.

Each bill would take effect 90 days after being enacted into law.

MCL 450.2123                       (HB 4048)

            Proposed MCL 455.19           (HB 4049)

BACKGROUND INFORMATION:

House Bills 4048 and 4049 are identical, respectively, to HBs 5509 (H-1) and 5508 (S-1) of the 2017-18 legislative session, as those bills were reported from the Senate Committee of the Whole.

BRIEF DISCUSSION:

In their testimony, supporters of the bills argued that many of 1897 PA 230’s 121-year-old provisions no longer make sense in 2019. In particular, they argue that LARA only forbids the conversion of summer resort associations into nonprofit corporations because the act does not specifically authorize conversion. They note that the bills would not make the conversion of summer resort associations to nonprofits mandatory; they would simply allow the conversion should a supermajority of shareholders wish for it.

FISCAL IMPACT:

House Bills 4048 and 4049 would have no fiscal impact on any unit of state or local government.

POSITIONS:

The Neahtawanta Summer Resort Association testified in support of the bill. (2-21-19)

The Community Action Institute indicated support for the bill. (2-28-19)

           

                                                                                        Legislative Analyst:   Nick Kelly

                                                                                                Fiscal Analyst:   Marcus Coffin

This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations and does not constitute an official statement of legislative intent.