BILL NUMBER: AB 792	CHAPTERED
	BILL TEXT

	CHAPTER  56
	FILED WITH SECRETARY OF STATE  JULY 6, 2015
	APPROVED BY GOVERNOR  JULY 6, 2015
	PASSED THE SENATE  JUNE 22, 2015
	PASSED THE ASSEMBLY  MAY 18, 2015

INTRODUCED BY   Assembly Member Chiu

                        FEBRUARY 25, 2015

   An act to amend Sections 5240 and 9250 of the Corporations Code,
relating to corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 792, Chiu. Board of directors: investment standards.
   The Nonprofit Public Benefit Corporation Law and the Nonprofit
Religious Corporation Law each require a board of directors for a
corporation formed under its provisions to manage corporate
investments in compliance with prescribed investment standards. The
laws specify that compliance with its prescribed standards do not
preclude the application of a separate investment standard under the
Uniform Prudent Management of Institutional Funds Act.
   This bill would modify the prescribed investment standard in each
law to include the Uniform Prudent Management of Institutional Funds
Act, if that act would be applicable.


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

  SECTION 1.  Section 5240 of the Corporations Code is amended to
read:
   5240.  (a) This section applies to all assets held by the
corporation for investment. Assets which are directly related to the
corporation's public or charitable programs are not subject to this
section.
   (b) Except as provided in subdivision (c), in investing,
reinvesting, purchasing, acquiring, exchanging, selling and managing
the corporation's investments, the board shall do the following:
   (1) Avoid speculation, looking instead to the permanent
disposition of the funds, considering the probable income, as well as
the probable safety of the corporation's capital.
   (2) Comply with additional standards, if any, imposed by the
articles, bylaws or express terms of an instrument or agreement
pursuant to which the assets were contributed to the corporation.
   (c) No investment violates this section where it conforms to
provisions authorizing the investment contained in an instrument or
agreement pursuant to which the assets were contributed to the
corporation. No investment violates this section or Section 5231
where it conforms to provisions requiring the investment contained in
an instrument or agreement pursuant to which the assets were
contributed to the corporation.
   (d) In carrying out duties under this section, each director shall
act as required by subdivision (a) of Section 5231, may rely upon
others as permitted by subdivision (b) of Section 5231, and shall
have the benefit of subdivision (c) of Section 5231, and the board
may delegate its investment powers as permitted by Section 5210.
   (e) Compliance with the Uniform Prudent Management of
Institutional Funds Act (Part 7 (commencing with Section 18501) of
Division 9 of the Probate Code), if that act would be applicable,
will be deemed to be compliance with subdivision (b).
  SEC. 2.  Section 9250 of the Corporations Code is amended to read:
   9250.  (a) In investing, reinvesting, purchasing, acquiring,
exchanging, selling, and managing a corporation's investments, the
board shall meet the standards set forth in Section 9241.
   (b) Compliance with the Uniform Prudent Management of
Institutional Funds Act (Part 7 (commencing with Section 18501) of
Division 9 of the Probate Code), if that act would be applicable,
will be deemed to be compliance with subdivision (a).