BILL NUMBER: AB 1260	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JANUARY 29, 2014
	AMENDED IN ASSEMBLY  JANUARY 15, 2014
	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)
   (Coauthors: Assembly Members Brown, Daly, and Perea)

                        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 any provision  of the Government Code  that
explicitly references this definition  .
   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.   (a)    It is the intent of the
Legislature to enact legislation that would aid, counsel, assist, and
protect the interests of California family owned businesses in order
to preserve free competitive enterprise and support family owned
enterprises. 
   (b) A business that is owned and operated by relatives creates a
unique business structure that can be distinguished from other
business structures. The purpose of this legislation is to create a
definition for this business structure in order to provide a
framework for the Legislature to better understand and address the
role family owned businesses play within the California economy.

  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 meets all of the following
requirements:
   (1) Is  independently operated  organized
 as a privately held business by  family members
  one individual or two or more related persons  .
   (2) Maintains its principal executive office in California.
   (3) Has been in business for more than 10 continuous years.
   (4) Is  conducted   owned  by a sole
proprietorship  or is a business entity  owned by  a
family member domiciled in California, or by an entity in which
family members domiciled in California   one individual
or two or more related persons   domiciled in California who
 hold a majority of the equity interests.
   (5)  A family member or members   The
business is controlled by one individual or two or more related
persons who  exhibit strategic influence and control of the
business  that is conducted by the   by holding
the business as a  sole proprietorship  owned by a
family member or an entity in which family members hold 
 or by holding  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
  two or   more related persons  .
   (B) A previous transfer of ownership or equity interests between
 family members   related persons  .
   (C) Is subject to a written agreement providing for a future
transfer between  family members   related
persons  provided that the agreement was executed in good faith.

   (b) For the purpose of this section,  "family member"
  "related person   "  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.
  "Related persons" also includes a parent, stepparent,
brother, sister, stepbrother, stepsister, half-brother, half-sister,
adopted person, person born out   of wedlock, stepchild,
foster child, uncle, aunt, niece, nephew, first cousin, and any
person denoted by the prefix "grand" or "great." A spouse, domestic
partner, and the spouse or domestic partner of any person that
qualifies as a person related by a common ancestor, pursuant to state
or federal law up to four generations, is also included within the
definition of "related persons" and shall continue to be included in
the event of the legal relationship being terminated by death or
dissolution.  
   (c) The definition for "California family owned business" provided
in this section shall only apply to provisions in which this section
is explicitly cross-referenced.