BILL NUMBER: AB 1260	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JANUARY 6, 2014
	AMENDED IN ASSEMBLY  APRIL 30, 2013
	AMENDED IN ASSEMBLY  APRIL 4, 2013

INTRODUCED BY   Assembly Member Medina
   (Principal coauthor: Assembly Member V. Manuel Pérez)

                        FEBRUARY 22, 2013

   An act to add Section 27 to the Government Code, relating to
businesses.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1260, as amended, Medina. California family owned business.
   Existing law provides various definitions for various purposes.
   This bill would define a California family owned business for
purposes of the Government Code.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares the following:
   (a) In 2007, California was home to 1.4 million family owned
businesses, which employed nearly 7 million people.
   (b) Both large and small family owned businesses have been
recognized through numerous academic studies as having unique
characteristics. Those studies verify that family owned businesses
invest more in their employees in terms of training and benefits,
promote more women to high-level management positions, and are less
likely to lay off employees or downsize in tough economic times.
   (c) California family owned businesses continually demonstrate
extraordinary commitment to the communities in which they operate
because they are headquartered in the state. California family owned
businesses have been shown to engage in high levels of local,
community-based philanthropic giving, and are strong stewards of the
environment by virtue of their long-term perspective and sense of
duty to past, present, and future generations within the state.
  SEC. 2.  It is the intent of the Legislature to enact legislation
that would aid, counsel, assist, and protect  , to the
maximum extent feasible,  the interests of California family
owned businesses in order to preserve free competitive enterprise
and support family owned enterprises.
  SEC. 3.  Section 27 is added to the Government Code, to read:
   27.   (a)    For the purposes of this code,
"California family owned business" means a business that  is
independently owned and operated as a privately held enterprise by
members of a family or a partnership of families that maintains its
principal office in California, has been in business for more than 10
years, and  meets  both   all  of
the following requirements: 
   (a) Strategic influence, including, but not limited to, being
active in the management, continuing to shape the culture of the
business, or serving as board members or advisors, is exercised by
family members on the management of the business.  
   (b) The business is able to demonstrate continuity across
generations or the intent for continuity across generations.
 
   (1) Is independently operated as a privately held business by
family members.  
   (2) Maintains its principal executive office in California. 

   (3) Has been in business for more than 10 continuous years. 

   (4) Is conducted by a sole proprietorship owned by a family member
domiciled in California, or by an entity in which family members
domiciled in California hold at least 20 percent of the equity
interests.  
   (5) A family member or members exhibit strategic influence and
control of the business that is conducted by the sole proprietorship
owned by a family member or an entity in which family members hold a
majority of the voting interest.  
   (6) Demonstrates an intent to continuously operate as a family
owned business in the future through any of the following:  

   (A) Present ownership by multiple family members.  
   (B) A previous transfer of ownership or equity interests between
family members.  
   (C) Is subject to a written agreement providing for a future
transfer between family members provided that the agreement was
executed in good faith.  
   (b) For the purpose of this section, "family member" includes a
person who is related by a common ancestor, pursuant to state or
federal law up to four generations. Any person related by greater
than four generations is included if his or her ownership or
operational involvement arose from an exercise of continuity across
generations as described in paragraph (6). A family member also
includes a person that qualifies as related in accordance with the
rules for determining relationship and inheritance rights for
purposes of intestate succession according to Section 21115 of the
Probate Code.