BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 351|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 351
Author: Committee on Banking and Financial Institutions
Amended: 6/9/15
Vote: 21
SENATE BANKING & F.I. COMMITTEE: 7-0, 4/15/15
AYES: Block, Vidak, Galgiani, Hall, Hueso, Lara, Morrell
SENATE JUDICIARY COMMITTEE: 7-0, 4/21/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 38-0, 5/22/15 (Consent)
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Gaines, Galgiani, Hall, Hancock, Hernandez,
Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu,
McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell,
Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak,
Wieckowski, Wolk
NO VOTE RECORDED: Fuller
ASSEMBLY FLOOR: 76-0, 6/29/15 (Consent) - See last page for
vote
SUBJECT: Corporations
SOURCE: Corporations Committee of the Business Law Section
of the
California State Bar
Nonprofit Organizations Committee of the Business Law
Section of the California State Bar
SB 351
Page 2
DIGEST: This bill cleans up various provisions of the
Corporations Code to correct drafting errors in prior
legislation and clarify the intent of existing law.
Assembly Amendments delete the provision of the bill that would
have clarified the ability of Dental Hygienists in Alternative
Practice to incorporate.
ANALYSIS:
Existing law:
1)Refers to the titles of chair, chairperson, chairman,
chairwoman, chair of the board, chairperson of the board,
chairman of the board, and chairwoman of the board
inconsistently within the Corporations Code.
2)Authorizes for-profit, public benefit, mutual benefit, and
religious corporations to take specified actions in good faith
to further their corporations' ordinary business operations,
in anticipation of or during an emergency.
This bill:
1)Amends the Corporations Code to provide that a corporation
shall have a "chairperson of the board," who may be given the
title of chair, chairperson, chairman, chairwoman, chair of
the board, chairperson of the board, chairman of the board, or
chairwoman of the board. Makes conforming changes throughout
the Corporations Code to standardize the manner in which a
chairperson of the board is referenced.
2)Adds provisions to the Consumer Cooperative Corporation Law
(Corporations Code Section 12200 et seq.) to allow a consumer
cooperative corporation to take specified actions to conduct
the corporation's ordinary business operations and affairs, as
specified, in anticipation of or during an emergency.
Further authorizes the bylaws of a consumer cooperative
corporation to contain any provision, not in conflict with the
corporation's articles of incorporation, to manage and conduct
the ordinary business affairs of the corporation, as
SB 351
Page 3
specified.
Comments
This bill includes two separate Corporations Code cleanup
proposals, both of which are intended to be technical and
noncontroversial.
1)Add emergency powers and bylaw provisions to the California
Consumer Cooperative Corporation Law. In 2013, the Nonprofit
Organizations Committee and the Corporations Committee of the
Business Law Section of the California State Bar jointly
sponsored AB 491 (Torres, Chapter 255, Statutes of 2013). AB
491 amended the sections of the Corporations Code applicable
to for-profit, public benefit, mutual benefit, and religious
corporations to help ensure that these corporations did not
incur liability for specified actions taken in good faith to
further the corporations' ordinary business operations, in
anticipation of or during an emergency.
Examples of actions that were authorized under AB 491 include:
modification of lines of succession to accommodate the
incapacity of any director, officer, employee, or agent
resulting from an emergency; relocating the principal office,
designating alternative principal offices or regional offices,
or authorizing the officers to do so; giving notice to a
director or directors in any practicable manner under the
circumstances, when notice of a meeting of the board cannot be
given to that director or directors in the manner ordinarily
required; and deeming that one or more officers of the
corporation that are present at a board meeting is a director,
as necessary to achieve a quorum for that meeting.
Due to a drafting oversight, AB 491 did not amend the Consumer
Cooperative Corporation Law. SB 351 corrects that drafting
oversight by adding the language contained in AB 491 to the
Consumer Cooperative Corporation Law.
2)Update and correct sections of the Corporations Code which
refer to chair, chairperson, chairman, chairwoman, and chair
of the board. At various places within the Corporations Code,
corporations are authorized to have a chair of the board, who
SB 351
Page 4
may be given the title chair of the board, chairperson of the
board, chairman of the board, or chairwoman of the board.
However, existing law does not expressly authorize use of the
titles "chair," "chairperson," "chairman," or "chairwoman."
Because these titles are not expressly authorized in statute,
corporate filings submitted to the Secretary of State's Office
are returned to the filer if the term "chair" (rather than
"chair of the board") or "chairman" (rather than "chairman of
the board") is used for a signatory for the filing. Updating
and clarifying the Corporations Code to allow chairs to be
referenced in multiple ways will eliminate these sorts of
returned filings.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/30/15)
Corporations Committee of the Business Law Section of the
California State Bar (co-source)
Nonprofit Organizations Committee of the Business Law Section
of the California State Bar (co-source)
OPPOSITION: (Verified6/30/15)
None received
ASSEMBLY FLOOR: 76-0, 6/29/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Burke, Calderon, Campos, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez,
Mullin, Nazarian, Obernolte, Olsen, Patterson, Quirk, Rendon,
SB 351
Page 5
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Brown, Low, O'Donnell, Perea
Prepared by:Eileen Newhall / B. & F.I. / (916) 651-4102
7/1/15 11:15:48
**** END ****