NCCUSL Committee on Scope and Program
Project Proposal Form
July 6, 2007
Submitted by:
Committee to Review Drafting Request from
the National Association of Secretaries of State
(Commissioners Berg, Care, Clark,
Haynsworth, and Henning)
Description of Project:
Preparation of amendments to the uniform entity laws at the request of the National Association of Secretaries of State (NASS) to: (i) address issues raised by the U.S. Department of Treasury and other federal agencies, which have been included in part in legislation sponsored by Senators Levin, Coleman, and Obama; and (ii) forestall federal legislation that would preempt certain uniform entity laws with respect to those issues.
Attached is a letter from the Secretary of State of North Carolina, Elaine Marshall, requesting NCCUSL to undertake this project. Secretary Marshall chairs a task force of NASS established as a result of the attached letter from Michigan Senator Carl Levin to the National Governors Association requesting the Governors to support changes to their state entity laws to address the issues that are the subject of this proposal.
The uniform entity laws to be amended are:
Conforming provisions will also need to be developed for inclusion in the Uniform Limited Cooperative Association Act, which is expected to be approved this summer, and in the Uniform Statutory Trust Entity Act, which is currently being drafted.
NASS has also requested the American Bar Association (ABA) to develop similar amendments to the Model Business Corporation Act, and the ABA has agreed to undertake that effort. The correspondence between NASS and the ABA is attached.
Need for and benefits of uniformity in this subject matter area:
The review committee agrees with the NASS task force that a coordinated effort to change the entity laws of the states to address the availability of information regarding the owners of entities established under state law is needed to forestall federal legislation of the type introduced by Senators Levin, et al. Absent consistent changes to the entity laws of all the states, there is a high likelihood of a push by Treasury and other agencies for enactment of federal legislation. The legislation, both as introduced and as it might be amended to broaden its scope, is impractical, raises serious privacy concerns, and would be burdensome on the secretaries of state; hence NASS’s requests to NCCUSL and the ABA.
Identity of organizations or persons interested in this subject area, and assessment of support/opposition:
As noted above, the ABA has agreed to develop amendments to the Model Business Corporation Act as suggested by the NASS Task Force. The International Association of Commercial Administrators (the organization of state and provincial business entity filing offices) has been meeting with the NASS task force and supports changes in this area to forestall federal legislation. The commercial registered agents industry has been active lobbying on this issue and supports the proposals of the NASS task force to address these issues.
Availability of existing research and/or financial support:
The amendments to be drafted are limited, discrete changes that will not require extensive research or development. The commercial registered agents industry may be a source of financial support since promulgation of the amendments suggested by the NASS task force may avoid the imposition of additional regulation on commercial registered agents.
There are three ways in which the NCCUSL drafting effort could be conducted:
The review committee supports the first option of forming a new committee to undertake this project. We believe that a small group focused just on this issue will be best able to negotiate an acceptable resolution with Treasury, Congressional staff, and other interested persons.