The Uniform Law Commission (ULC, also known as the National Conference of Commissioners on Uniform State Laws) has worked for the uniformity of state laws since 1892. State governments originally created the ULC to consider state law, determine in which areas of the law uniformity is important, and then draft uniform and model acts for consideration by the states. For well over a century, the ULC’s work has brought consistency, clarity and stability to state statutory law. Included in this important work have been such pivotal contributions to state law as the Uniform Commercial Code, the Uniform Anatomical Gift Act, the Uniform Partnership Act, the Uniform Probate Code, the Uniform Interstate Family Support Act, the Uniform Electronic Transactions Act, and the Uniform Prudent Management of Institutional Funds Act.
The ULC’s major asset is its commissioners—more than 300 of the best legal minds in the country. Commissioners are appointed by every state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, and must be lawyers qualified to practice law. Each jurisdiction determines the method of appointment and the number of commissioners appointed; most jurisdictions provide for the commission by statute. While some serve as state legislators, or employees of state government, many are private practitioners, judges, or law professors. Commissioners donate their time and expertise as a pro bono service and receive no salary or fee for their work with the ULC. In addition to the appointed commissioners, the principal legal officer of the bill-drafting agency for each jurisdiction is an associate member of the ULC (see box). The procedures of the ULC ensure meticulous consideration of each uniform and model act. The ULC generally spends a minimum of two years on each draft. Sometimes, the drafting work extends much longer. No single state has the resources necessary to duplicate this meticulous, careful, nonpartisan effort. The ULC seemed like a very good idea to its founders in 1892. Today, the ULC continues to be a very good idea. The states have chosen to maintain the ULC because it has been useful to its citizens. Every day, when a person conducts business, enters a contract, makes a purchase or sale, or takes care of a family matter, rules of law originated by the ULC probably apply. Equally important, the ULC continues to strengthen the role of state law in our federal system. As new technology wears away geographical borders, and matters of law implicate more than one state, consistency in rules and procedures becomes ever more critical. The ULC continues its commitment to help sustain the independence of the states, while achieving a uniform legal system for the nation. Information about existing uniform acts, current drafting projects, up-to-date legislative information, and other information about the ULC is available at the ULC’s website: www.nccusl.org.
In 2009, the ULC approved five new acts. A brief description of each act is included here.
Uniform Collaborative Law Act
The Uniform Collaborative Law Act standardizes the most important features of collaborative law practice, mindful of ethical concerns and questions of evidentiary privilege. In recent years, the use of collaborative law as a form of alternative dispute resolution has expanded from its origin in family law to other areas of law, including insurance and business disputes. As the practice has grown, it has come to be governed by a variety of statutes, court rules, and formal and informal standards. A comprehensive statutory framework is necessary to guarantee the benefits of the process and to further regulate its use. The act encourages the development of collaborative law as an option for parties who wish to use it as a form of alternative dispute resolution.
The act mandates the essential elements of disclosure and discussion between prospective parties in order to guarantee that all parties enter into the collaborative agreement with informed consent. The act stresses the need for attorneys to provide clear and impartial descriptions of the options available to a party prior to deciding upon a course of action. Additionally, the act mandates that the collaborative agreement contains the disqualification provisions that are essential to the collaborative process. The disqualification requirements create incentives for cooperation and settlement. By standardizing the collaborative process, the act secures the benefits of collaborative law for the parties involved while providing ethical safeguards for the lawyers involved.
Uniform Collateral Consequences of Conviction Act
The Uniform Collateral Consequences of Conviction Act improves the understanding of penalties that attach when an individual is convicted of an offense, and in appropriate circumstances, offers a mechanism to provide partial relief from the disabilities. The act facilitates notification of collateral consequences before, during, and after sentencing. Under the act, states must create a collection of all collateral consequences, with citations and descriptions of the relevant statutes. At or before arraignment, individuals will be advised of the particular collateral consequences associated with the offense for which they are charged. Notice is also to be given at the time of sentencing, and if an individual is sentenced to prison, at the time of release. Formal advisement promotes fairness and compliance with the law.
The act provides mechanisms for relieving collateral sanctions imposed by law. The act creates an Order of Limited Relief, designed to relieve an individual from one or more collateral consequences based on a showing of fitness for reentry. The order does not automatically remove the consequence, but it does remove the automatic disqualification imposed by law. A state agency remains able to disqualify an individual on a case-by-case basis. The act also creates a Certificate of Restoration of Rights. The certificate is granted to individuals who demonstrate a substantial period of law-abiding behavior consistent with successful reentry and desistance from crime. Issuance of a certificate facilitates reintegration of those individuals who have demonstrated an ability to live a lawful life.
Uniform Law Enforcement Access to Entity Information Act
The Uniform Law Enforcement Access to Business Entity Information Act (ULEAEIA) addresses the need for law enforcement to have ready access to information regarding the owners and managers of entities established under state law. ULEAEIA is designed to be a substitute for the Incorporation Transparency and Law Enforcement Assistance Act (S569). ULEAEIA will help address national security concerns relating to companies operating for the purpose of organized crime, terrorist financing, securities fraud, tax evasion, and other misconduct while balancing important privacy concerns. The act is intended to provide a viable state law alternative to pending federal legislation. Rather than filing and updating “beneficial ownership” information, ULEAEIA provides that limited liability companies, partnerships, trusts, and other entities must designate a “records contact,” which is responsible for producing information upon an appropriate request. ULEAEIA is intended to be more comprehensive and less invasive than S569.
Uniform Statutory Trust Entity Act
The Uniform Statutory Trust Entity Act (USTEA) addresses the need for a uniform law to regulate statutory business trusts. This need arises from the increasing popularity of statutory trust entities, chiefly in the structured finance and mutual fund industries. Practitioners, entrepreneurs, and scholars struggle to understand the law governing statutory trusts. The case law on statutory trusts is sparse. USTEA validates the statutory trust as a permissible form of business organization and brings the disparate and often inadequate existing state laws into uniformity.
USTEA more closely resembles a generic corporate code or unincorporated entity law than it does the Uniform Trust Code (UTC). However, nothing in this act displaces the common law of trusts, or the UTC, with respect to such trusts. The USTEA uses the Delaware Statutory Trust Act as a starting point but adds several innovations. The USTEA will be used primarily as a business organization tool and will clarify this area of law.
Uniform Real Property Transfer on Death Act
Asset-specific mechanisms for the non-probate transfer of property and funds are now common—the proceeds of life insurance policies and pension plans, securities registered in transfer on death (TOD) form, and funds held in pay on death (POD) bank accounts are good examples of property that have benefitted from this trend in modern property law. However, a straightforward, inexpensive, and reliable means of passing real property, which may be a decedent’s major asset, directly to a beneficiary is not generally available. The Uniform Real Property Transfer on Death Act (URPTODA) enables an owner of real property to pass it to a beneficiary upon the owner’s death by a similar mechanism—simply, directly and without probate. Under URPTODA, the property passes by means of a recorded TOD deed. The act sets forth the requirements for the creation and revocation of a TOD deed, and clarifies the effect of the deed for all parties while the transferor is living and after he or she passes away. A transfer on death deed is effective without consideration and without notice or delivery to the beneficiary. Beneficiaries take the property subject to allowed claims against the transferor’s estate. If the intended beneficiary wishes, he or she may disclaim all or part of his or her beneficiary interest in the property. Finally, URPTODA provides optional language for forms to create and revoke TOD deeds.
2009: A Record Year in the Legislatures
The ULC promotes the principle of uniformity by drafting and proposing specific statutes in areas of the law where uniformity among the states is desirable and practicable. However, the ULC can only propose laws—no uniform law is effective until a state legislature adopts it. To that end, uniform law commissioners work toward enactment of ULC acts in their home jurisdictions.
The 2009 legislative year was a very successful year, with 130 enactments of uniform acts and 272 introductions. In fact, 2009 tied 1997 for the most enactments.
Uniform Prudent Management of Institutional Funds Act
This year, 19 states enacted the Uniform Prudent Management of Institutional Funds Act (UPMIFA), bringing its enactment total to 44. UPMIFA is a revision of the Uniform Management of Institutional Funds Act (UMIFA) of 1972 that was adopted in 48 states. It provided statutory guidelines for management, investment and expenditures of endowment funds of charitable institutions—institutions such as colleges, universities and hospitals. The new act, incorporating the provisions of modern portfolio theory from the Uniform Prudent Investor Act and the Uniform Principal and Income Act (both widely adopted), permits more efficient management of funds for charitable purposes.
UPMIFA expressly addresses the needs of charities by providing for diversification and pooling of assets, total return investment, and whole portfolio management. It does so in a comprehensive manner that is consistent with modern practices in trust and not-for-profit corporation law. The goal of UPMIFA remains the same as UMIFA’s goal was in 1972: to give charities the freedom to make more effective use of endowment and other investment funds and encourage more productive management of the funds.
Uniform Principal and Income Act
The Amendments to the Uniform Principal and Income Act (UPIA), approved in 2008, have already been enacted in 17 states. These amendments update the act to reflect current policy of the Internal Revenue Service (IRS) and clarify technical language regarding withholdings. Section 409 of the act has been changed to satisfy a 2006 IRS ruling regarding marital deductions. The new language comports with the ruling and the underlying tax policies of the IRS. Further, the 2008 amendments include a change to Section 505, which addresses the amount of money that must be withheld from a distribution to pay the tax on the undistributed income. The amendment clarifies the section and removes any ambiguity that could lead to litigation.
Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act
This year nine states enacted the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act (UAGPPJA), bringing its total number of enactments to 13. The act was promulgated by the ULC in 2007, and addresses the issue of jurisdiction over adult guardianships, conservatorships and other protective proceedings. Under the act, a guardian is appointed to make decisions regarding the person of an incapacitated adult, and a conservator is appointed to manage the property.
The objective of the new uniform act is simple: to ensure that only one state has jurisdiction at any one time. To that end, the act contains specific guidelines to specify which court has jurisdiction to appoint a guardian or conservator for an incapacitated adult. The act does this by prioritizing the states which might claim jurisdiction. The state with primary jurisdiction is the “home state,” defined as the state in which the adult has lived for at least six consecutive months immediately before the beginning of the adult guardianship or protective proceeding. The second is the “significant-connection state,” which is broadly defined to include the location of the individual’s family, a state where the individual might have lived for many years, or the state where the individual’s property is located. The act provides that once a court has jurisdiction, this jurisdiction continues until the proceeding is terminated or transferred; it also avoids the existing functional requirement of having to restart the guardianship process whenever the protected party crosses state lines. The act also provides transfer procedures from one state to another. In this and other respects, the new act accomplishes for adult guardianship determinations the same certainty that has occurred in child custody law with the promulgation of the 1997 Uniform Child Custody Jurisdiction and Enforcement Act, now the law in 50 states.
Uniform Anatomical Gift Act
Six states enacted the Uniform Anatomical Gift Act (UAGA) in 2009, bringing its total number of enactments to 39. UAGA, a comprehensive revision of previous acts, is designed to increase the number of organs available for transplant and improve the system for allocating organs to recipients.
The ULC promulgated the UAGA in 2006 to address serious national discrepancies and shortages surrounding anatomical gifts. UAGA makes it easier to document the desire to donate, particularly as provided on driver’s licenses; specifies an expanded list of people who may make an anatomical gift on behalf of the deceased, such as agents with health-care power-of-attorney, adult grandchildren, or close friends; more clearly provides for a document of refusal if an individual does not wish to donate; allows for registering gifts on existing donor registries; and encourages the creation of donor registries, whether by states or by other entities.
Uniform Commercial Code
UCC Article 1 and UCC Article 7 continue to do well in the legislatures. Three states enacted UCC1 this year, bringing its total to 38 enactments. UCC1, the general provisions section of the UCC, was updated and amended to harmonize with recent revisions of the UCC.
This year five states enacted UCC7, the article dealing with documents of title, bringing its enactment total to 35. Documents of title—either bills of lading or warehouse receipts—are commonly used in the shipment and storage of goods. The purpose of the revised UCC7 is twofold: to provide a framework for the further development of electronic documents of title and to update the article for modern times. To the extent possible, the rules for electronic documents of title are the same or as similar as possible to the rules for tangible documents of title.
The UCC is a joint project of the ULC and the American Law Institute.
The work of the ULC simplifies the legal life of businesses and individuals by providing rules and procedures that are consistent from state to state. The ULC works efficiently for all the states because individual lawyers are willing to donate time to the uniform law movement, and because it is a genuine cooperative effort of all the states. The ULC continues to be a very good idea, well over a century since its founding. The states have chosen to maintain the ULC because it has been useful to their citizens and because it strengthens the states in the federal system of government. Different law in different states continues to be a problem. Either the states solve the problem, or the issues are removed to Congress. The ULC continues its commitment to help sustain the independence of the states, while achieving a uniform legal system for the nation. ♦