BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1211|
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CONSENT
Bill No: AB 1211
Author: Silva (R)
Amended: As introduced
Vote: 21
SENATE BANKING & FINANCIAL INST. COMMITTEE : 6-0, 6/29/11
AYES: Vargas, Blakeslee, Kehoe, Liu, Padilla, Walters
NO VOTE RECORDED: Evans
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/19/11(Consent) - See last page for
vote
SUBJECT : Not-for-profit corporations
SOURCE : Nonprofit and Unincorporated Organizations
Committee of
the Business Law Section of the California
State Bar
DIGEST : This bill enacts a variety of technical and
clarifying changes to the laws governing nonprofit
corporations and unincorporated associations.
ANALYSIS : Existing law provides for the formation and
operations of nonprofit corporations.
Existing law provides for establishing a quorum of a board
of directors to take action at a meeting and allows the
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AB 1211
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articles of incorporation or bylaws to require the presence
of specified directors in order to constitute a quorum.
Existing law provides that the death of a director excuses
requiring the presence of that director to establish a
quorum. Existing law authorizes a board of directors to
take action by unanimous written consent in lieu of a
meeting without the consent of an interested director, as
defined.
Existing law excludes interested directors, as defined,
from the directors required to consent in order to take
action without a meeting.
Existing law provides that a director has only one vote on
any action at a meeting and prohibits a director from
voting by proxy at a meeting.
Existing law requires all public benefit corporations to
obtain a waiver from the Attorney General's office in order
to file dissolution documents with the Secretary of State
and requires those corporations to obtain the consent of
the Attorney General to a proposed merger, except as
specified.
This bill:
1. Specifies the rules governing actions taken by boards of
directors without a meeting (i.e., the rules for written
consent). Under these revised rules, an action by
written consent may be taken without the participation
of interested directors, as defined, and common
directors, as defined, when the facts governing the
abstention or nonparticipation of those directors is
specified in writing prior to the vote, in accordance
with specified provisions of the Corporations Code, and
when those participating in the written consent approve
the action by a vote that is sufficient, without
counting the votes of the nonparticipating interested
directors or common directors.
2. Clarifies that a quorum is necessary to approve an
action by written consent.
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3. Strikes references to "members of the board" and
"members" in the portions of the Corporations Code
relating to nonprofits and unincorporated associations
and replace them with references to directors; and
strikes references to "death" and replaces them with
"nonincumbency."
4. Adds references to the Corporations Code, citing
requirements in other codes with which nonprofits and
unincorporated associations must comply.
5. Exempts nonprofit public benefit ballot measure
corporations from the requirement to obtain a waiver
from the Attorney General's office prior to filing
dissolution documents with the Secretary of State.
6. Clarifies that both directors and nondirectors may serve
on committees that do not exercise the authority of the
board of directors of a nonprofit corporation.
7. Clarifies that a dissolving nonprofit corporation must
file all final returns required under the Revenue and
Taxation Code, prior to dissolving.
Prior Legislation
AB 1233 (Silva), Chapter 631, Statutes of 2009, made
various modernizing and clarifying changes to the laws
governing nonprofit public benefit corporations, mutual
benefit corporations, consumer cooperative corporations,
religious corporations, and unincorporated nonprofit
associations. The bill was sponsored by the Nonprofit and
Unincorporated Organizations Committee of the Business Law
Section of the California State Bar.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/15/11)
Nonprofit and Unincorporated Organizations Committee of the
Business Law Section of the California State Bar (source)
California Association of Nonprofits
California Society of Association Executives
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ASSEMBLY FLOOR : 78-0, 5/19/11 (Consent)
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Alejo, Gorell
JJA:mw 8/16/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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