BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1211|
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                                 THIRD READING


          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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          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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