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Nonprofit Corporations Committee Reports
1. Next Scheduled Meeting of the Committee No date has been selected for the next meeting of the full Committee. As discussed below, the subcommittee working on the Nonprofit Act revisions has been meeting to draft proposed revisions. A meeting of the full Committee will be scheduled when that work has been completed, which will likely be in May or June 2005. 2. Council Approval None 3. Membership The Committee is still seeking active members. Interested lawyers practicing in the area should contact one of the Committee Chairs. 4. Accomplishments Toward Committee Objectives The task force assigned to make the revisions to the Nonprofit Corporations Act has completed its initial review of the Act. At the next meeting of the task force, which is being planned for March or April 2005, the proposed revisions will be reviewed and the amendments prepared for presentation to the full Committee. A Committee meeting will be scheduled to review and approve the suggested revisions. 5. Meetings and Programs See above. Ann Baker and Jane Forbes of the Committee are giving a presentation on the proposed amendments to the Nonprofit Corporation Act and on issues involving the corporate practice of medicine at the ICLE Health Law Institute on March 3, 2005. 6. Publications. None this quarter. 7. Legislative/Judicial/Administrative Developments The Committee continues to monitor the proposed amendments to the Charitable
Solicitation Act which have been reintroduced in the Legislature. 8. Miscellaneous None. Submitted by Jane Forbes and Agnes Hagerty 1. Next Scheduled Meeting of the Committee No date has been selected for the next meeting of the full Committee. As discussed below, the subcommittee working on the Nonprofit Act revisions has been meeting to draft proposed revisions. A meeting of the full Committee will be scheduled when that work has been completed, which will be likely be in Spring 2005. 2. Council Approval None 3. Membership The Committee is still seeking active members. Interested lawyers practicing in the area should contact the Committee Chair. 4. Accomplishments Toward Committee Objectives The task force assigned to make the revisions to the Nonprofit Corporations Act has completed its initial review of the Act. At the next meeting of the task force, which is scheduled for January 2005, the proposed revisions will be reviewed and the document prepared for presentation to the full Committee. A Committee meeting will be scheduled to review and approve the suggested revisions. 5. Meetings and Programs See above. 6. Publications. None this quarter. 7. Legislative/Judicial/Administrative Developments The Committee continues to monitor the proposed amendments to the Charitable Solicitation Act. 8. Miscellaneous None. Submitted by Jane Forbes and Agnes Hagerty 1. Next Scheduled Meeting of the Committee No date has been selected for the next meeting of the full Committee. As discussed below, the subcommittee working on the Nonprofit Act revisions has been meeting to draft proposed revisions. A meeting of the full Committee will be scheduled when that work has been completed, which will be likely be in late Fall or early Winter. 2. Council Approval None 3. Membership The Committee is still seeking active members. Interested lawyers practicing in the area should contact the Committee Chair. 4. Accomplishments Toward Committee Objectives The task force assigned to make the revisions to the Nonprofit Corporations Act has completed its initial review of the Act. At the next meeting of the task force, the proposed revisions will be reviewed and the document prepared for presentation to the full Committee. A Committee meeting will be scheduled to review and approve the suggested revisions. 5. Meetings and Programs See above. 6. Publications. None this quarter. 7. Legislative/Judicial/Administrative Developments The Committee continues to monitor the proposed amendments to the Charitable Solicitation Act. 8. Miscellaneous None. Submitted by Jane Forbes and Agnes Hagerty
No date has been selected for the next meeting of the full Committee. As discussed below, the subcommittee working on the Nonprofit Act revisions has been meeting to draft proposed revisions. A meeting of the full Committee will be scheduled when that work has been completed, which will likely be in early Fall. 2. Council Approval None 3. Membership The Committee is still seeking active members. Interested lawyers practicing in the area should contact the Committee Chair. 4. Accomplishments Toward Committee Objectives The work of preparing revisions of the Michigan Nonprofit Act by the Subcommittee assigned to the project continued. It is anticipated that the proposed revisions will be ready to present to the full Committee by late summer of this year. 5. Meetings and Programs See above. 6. Publications. None this quarter. 7. Legislative/Judicial/Administrative Developments The committee is tracking SB 1115 which would revise the Charitable Organizations and Solicitations Act. The Committee will coordinate submission of comments if the legislation moves forward. 8. Miscellaneous None. Submitted by Agnes Hagerty
No date has bee selected for the next meeting of the full committee. As discussed below, the subcommittee working on the Nonprofit Act revisions has been meeting to draft proposed revisions. A meeting of the full Committee will be scheduled when that work has been completed, which will likely be in late spring or early summer. 2. Council Approval None. 3. Membership The Committee is still seeking active members and interested lawyers practicing in the area should contact the Committee Chair. 4. Accomplishments Toward Committee Objectives The work of preparing revisions of the Michigan Nonprofit Act by the Subcommittee assigned to the project continued. It is anticipated that the proposed revisions will be ready to present to the full Committee by May of this year. 5. Meetings and Programs See above. 6. Publications None this quarter. 7. Legislative/Judicial/Administrative Developments None. 8. Miscellaneous None. Submitted by Agnes Hagerty
$3000 copying and postage. 2. Use of Budgeted Funds in 2002-2003 None. 3. Next Scheduled Meeting of the Committee The primary work of the committee has been drafting revisions to the Michigan Nonprofit Corporation Act to comport with revisions to the Business Corporation Act and to reflect the current state of the applicable law. The next scheduled meeting of that task force is December 9, 2003. Anticipated next committee meeting is February or March, 2004. 4. Council Approval None at this time. 5. Membership The Nonprofit Committee comprises a spectrum of counsel to different types of nonprofitentities: health and educational institutions, foundations, social service organizations, cooperatives, social organizations and churches. At this time, the committee consists of 24 members who work at firms, in-house positions, educational institutions and government offices. Generally, communication is through electronic transmission. The task force working on revisions to the Nonprofit Act meets in person every two to three weeks. 6. Accomplishments Toward Committee Objectives The primary work of the committee this year are proposed revisions to the Nonprofit Corporation Act. The task force has nearly completed its work and will compile the proposed revisions for review by the committee. It is anticipated that the draft revisions will be available by the end of the calendar year, or soon after. 7. Meetings and Programs See above. 8. Publications None this quarter. 9. Legislative/Judicial/Administrative Developments Minor revision to the Nonprofit Corporation Act to change the filing fee for annual reports. 10. Miscellaneous Report submitted by: Agnes Hagerty
No date has been selected for the next meeting of the full committee. As discussed below, a Subcommittee has been meeting to review and revise the draft amendments to the Nonprofit Corporation Act. A meeting of the full Committee will be scheduled when that work has been completed, which will probably be later in the fall. 2. Council Approval. N/A 3. Membership. The Committee is still seeking active members. Lawyers practicing in the area were surveyed earlier this year and several agreed to participate in the Committee. 4. Accomplishments Toward Committee Objectives. The Committee met in April to review the updated draft of the amendments to the Nonprofit Corporation Act prepared by Prof. Mae Kuykendall. Those present recommended that two pieces of legislation be created. One would contain items of immediate concern (such as e-mail meeting notices and filings by fax), changes designed to validate the existing practices of some nonprofit corporations (such as member voting by mail) and other "noncontroversial" amendments. A six member Subcommittee has been working on that legislation. It has met four times and has another meeting scheduled on September 24, but it is likely to require several additional meetings before the draft is complete. Once that is done, the proposed bill will be reviewed by the full Committee and submitted to the legislature. The Committee will then work on additional legislation that may address more substantive questions, such as the issue of whether nonprofit stock corporations are needed, whether the "one member/one vote" rule should be revised, whether board members of nonprofit corporations should be allowed to act by proxy and whether the "business judgment rule" should be specifically incorporated into the statute. 5. Meetings and Programs. See above. 6. Publications. Articles submitted by Committee members appear in the September issue of the Business Law Section Journal. 7. Legislative/Judicial/Administrative Developments. See item 4. 8. Miscellaneous. N/A
No date has been selected for the next meeting of the full committee, but it is anticipated that there will be a meeting in late July or early August. 2. Council Approval. N/A 3. Membership. The Committee is still seeking active members. In April, a letter was sent to lawyers whose responses to a Bar survey indicated that their practices involved nonprofit corporations asking if they would be interested in participating in the activities of the Committee. About a dozen responded and several attended the April 24 Committee meeting. 4. Accomplishments Toward Committee Objectives. The Committee met on April 24 to review the updated draft of the amendments to the Nonprofit Corporation Act prepared by Prof. Mae Kuykendall. Those present recommended that two pieces of legislation be created. One would contain items of immediate concern (such as e-mail meeting notices and filings by fax), changes designed to validate the existing practices of some nonprofit corporations (such as member voting by mail) and other "noncontroversial" amendments. A sub- committee has been created to identify the items in this legislation. The goal is to have it ready for submission to the legislature by September, 2003. The Committee will then work on additional amendments that may address more substantive questions, such as the issue of whether nonprofit stock corporations are needed, whether the "one member/one vote" rule should be revised and whether board members of nonprofit corporations should be allowed to act by proxy. 5. Meetings and Programs. See above. 6. Publications. Members of the Committee have submitted articles for publication in the Business Law Section Journal that are expected to be published in the upcoming issue or in the one thereafter. 7. Legislative/Judicial/Administrative Developments. See item 4. 8. Miscellaneous. N/A
Next scheduled meeting of the Committee: April 24, 2003 2. Council Approval. N/A 3. Membership. The Committee is currently seeking active members. Agnes Hagerty of Trinity Health has been assisting the Co-Chairs with recruiting by calling lawyers who practice in the field. In addition, notices of the April 24 committee meeting are being sent to former committee members and those who have indicated an interest in surveys. 4. Accomplishments Toward Committee Objectives. See 6 and 7 below. 5. Meetings and Programs. At its April 24 meeting, the Committee will develop a schedule for finalizing the draft of amendments to the Nonprofit Corporation Act and will discuss other possible projects and programs. 6. Publications. Four members of the Committee have agreed to submit articles for publication in the Business Law Section Journal. The articles are due at ICLE by May 1. 7. Legislative/Judicial/Administrative Developments. Acting on behalf of the Committee, Professor Mae Kuykendall has completed an updated draft of amendments to the Michigan Nonprofit Corporation Act. Following a final review and revisions, this will be submitted to the legislature. 8. Miscellaneous. N/A
In recent years, the Committee has functioned primarily through a small group of active members. At this point, we would welcome participation by additional members who would be interested in providing a critical review of the proposed legislation and in assisting with efforts to have it adopted by the Michigan Legislature. The Committee would also welcome comments from other members of the Section on particular problems they (or their clients) have identified under the Nonprofit Corporation Act. The proposed legislation may provide an opportunity to resolve some of these issues. Jane Forbes
ICLE last sponsored a seminar relating to nonprofit issues in May 2001. Historically, seminars on nonprofit topics occur in a cycle of every two to three years. The Committee will consult with ICLE in 2002 about planning for nonprofit programs in future years. II. Legislation: The Committee has engaged the reporter for the proposed revision of the Michigan Nonprofit Corporation Act. The reporter is working on the draft Act, and is expected to complete this work shortly after the first of the year. The reporter's draft will be circulated for Committee review and input, and the Committee will meet to discuss and review thereafter (in first quarter 2002). The Committee will further report on status and timetable at the Council's next meeting. Anyone not active with the Committee in the past who wishes to make comments on the draft Act or otherwise assist in its review should contact one of the Committee co-chairs. III. Publication in Section Journal: The Committee will be responsible for an issue of the Journal per the ICLE publication schedule. IV. Membership Diversity: The Committee welcomes any interested person as a member, and particularly encourages Section Council members to identify colleagues who may be interested in the work of the Committee and whose participation may help support greater diversity. Historically only a small number of members who actively practice on the nonprofit area have taken responsibility for articles, seminars or legislative work. Section Council members should have any interested colleagues contact the Committee co-chairs.
Attached to this report is a proposal from Professor Mae Kuykendall to undertake the necessary revisions that will be presented at the March 1 Council meeting. The expense involved is substantial and the amount of work done this year could probably be reduced. It may be more efficient, however, to do the job over a relatively short period of time. Any Council members wishing to discuss this proposal in advance of the March 1 meeting, should feel free to call Jane Forbes at (313) 568-6792. Jane Forbes and Mark Lezotte, Chairpersons
Dykema Gossett PPLC 400 Renaissance Center Detroit, MI 48243 Dear Jane: I am responding to your request to present a business proposal in connection with my possibly assisting with revisions to the Michigan Nonprofit Corporation Act. My understanding of the scope of the project is that the last several amendments to the Michigan Business Corporation Act need to be incorporated into the nonprofit act. In addition, there are certain practices peculiar to nonprofit acts that need to be adequately provided for in the act, such as balloting at "polling places." This is to confirm that you gave me a copy of the revisions of the nonprofit act that were completed in 1995 and marked up by the Legislative Service Bureau, but which were never enacted. Part of my task will be establishing as a starting point the proposed changes of the Committee in 1995, without the style changes of the Legislative Service Bureau. You and I agreed that these style changes have been mooted by the subsequent enactment of the provisions in the Business Act on which the proposed changes were modeled. Thus, we must now conform the proposals to the form of the Business Act that has been enacted. In addition, we must add the applicable further revisions that were since proposed and enacted. And, as necessary, we must add provisions that reflect the special logic of the nonprofit act. You indicated that you would be able to send me an electronic version of the proposal, perhaps in the form of its original promulgation by the Committee. In terms of the business arrangements, I have assumed that I would be able to describe myself as the Reporter for this undertaking to revise the Code. Thus, one aspect of the business arrangement is to confirm that my role is that of the Reporter. Second, you asked that I make a proposal for the amount of the honorarium. As you know, I have taken as a base line for my estimate of the amount of work involved in revising the nonprofit act my work with Cyril Moscow and the late Professor Stephen Schulman on the Michigan Business Corporation Act. I estimate I have expended considerably more than a month devoting substantial parts of days to my work on the revision of the Business Corporation Act. The nonprofit act has special issues that may complicate it, but there are some portions that I may be able to do with some efficiency. Given the relative uncertainty about the overall amount of time needed and my own competing scholarly obligations, I suggest that we agree to an hourly rate, with a cap on the total hours to be charged to the endeavor. I propose an hourly fee of $150 and a cap on hours of 150 hours. As you know, I am currently a visiting professor at Florida State University. I plan to devote substantial time to completing a manuscript by early in the summer, but would be willing to begin working right away to back out the changes that were placed in the earlier draft but did not survive the legislative process relating to the Business Act, and to drop in conforming changes for all the changes that have occurred in recent years in the Business Act. I would provide you with an interim work product that shows these changes, and would await your views on the need for, and the nature of, further work before charging any additional hours. Thank you for asking me to help with your work on the nonprofit act. I look forward to working with you and with the Committee.
Very truly yours,
Jane Forbes |
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