AB 1430, as amended, Cooper. California family owned businesses.
Existing law authorizes state and local entities to regulate businesses within their jurisdiction.begin insert Existing law provides various definitions for various purposes.end insert
This bill wouldbegin insert define a California family owned business for purposes of any provision of the Government Code that explicitly references this definition. This bill wouldend insert provide Legislative findings and declarations regarding California family owned businesses.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
The Legislature finds and declares the following:
2(a) In 2007, California was home to 1.4 million family owned
3businesses, which employed nearly 7 million people.
4(b) Both large and small family owned businesses have been
5recognized through numerous academic studies as having unique
6characteristics. Those studies verify that family owned businesses
7invest more in their employees in terms of training and benefits,
P2 1promote more women to high-level management positions, and
2are less likely to lay off employees or downsize in tough economic
3times.
4(c) California family owned businesses continually demonstrate
5extraordinary commitment to the communities in which they
6operate because they are headquartered in the state. California
7family owned businesses have been shown to engage in high levels
8of local, community-based philanthropic giving, and are strong
9stewards of the environment by virtue of their long-term
10perspective and sense of duty to past, present, and future
11generations within the state.
begin insertSection 27 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to read:end insert
begin insert(a) For the purposes of this code, “California family owned
14business” means a business that meets all of the following
15requirements:
16(1) Is organized as a privately held business by one individual
17or two or more related persons, or is a partnership of business
18entities owned by related persons.
19(2) Maintains its principal executive office in California.
20(3) Has been in business for more than 10 continuous years.
21(4) One of the following apply:
22(A) Is owned by a sole proprietorship.
23(B) Is a business entity owned by one individual or two or more
24related persons domiciled in California who hold a majority of
25the equity interests.
26(C) Is a partnership of business entities owned by related
27persons domiciled in California who hold a majority of the equity
28interests.
29(5) The business is controlled by one individual or two or more
30related persons who exhibit strategic influence and control of the
31business by holding the business as a sole proprietorship or by
32holding a majority of the voting interest.
33(6) Demonstrates an intent to continuously operate as a family
34owned business in the future through any of the following:
35(A) Present ownership by two or more related persons.
36(B) A previous transfer of ownership or equity interests between
37related persons.
38(C) Is subject to a written agreement providing for a future
39transfer between related persons provided that the agreement was
40executed in good faith.
P3 1(b) For the purpose of this section, “related person” includes
2a person who is related by a common ancestor, pursuant to state
3or federal law up to four generations. Any person related by
4greater than four generations is included if his or her ownership
5or operational involvement arose from an exercise of continuity
6across generations as described in paragraph (6). “Related
7persons” also includes a parent, stepparent, brother, sister,
8stepbrother, stepsister, half brother, half sister, adopted person,
9person born out of wedlock, stepchild, foster child, uncle, aunt,
10niece, nephew,
first cousin, and any person denoted by the prefix
11“grand” or “great.” A spouse, domestic partner, and the spouse
12or domestic partner of any person that qualifies as a person related
13by a common ancestor, pursuant to state or federal law up to four
14generations, is also included within the definition of “related
15persons” and shall continue to be included in the event of the legal
16relationship being terminated by death or dissolution.
17(c) The definition for “California family owned business”
18provided in this section shall only apply to provisions in which
19this section is explicitly cross-referenced.
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