BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2752
                                                                  Page  1

          Date of Hearing:   May 12, 2004

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

                     AB 2752 (Chu) - As Amended:  April 28, 2004 

          Policy Committee:                              Banking and  
          Finance      Vote:                            10-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              


           SUMMARY  

          This bill requires publicly traded corporations to put in place  
          corporate election procedures that allow shareholders to  
          recommend candidates for election as director. The bill further  
          requires those procedures to be filed with the Secretary of  
          State (SOS) and to be made available to shareholders upon  
          written request, and posted on the internet, if the corporation  
          is a domestic corporation that has a website. 
           
          FISCAL EFFECT  

          Minor, absorbable costs to the Secretary of State.

           COMMENTS  

           1)Purpose  .  The author and sponsor, Secretary of State Kevin  
            Shelley, state that free and fair elections are far from the  
            norm in corporate America.  Many corporations limit  
            shareholder access to proxy statements and force shareholders  
            interested in nominating their own slate of directors to  
            pursue costly proxy contests.  Since these policies vary from  
            corporation to corporation it is important that shareholders  
            are made aware of corporate practices that may thwart or limit  
            efforts to improve director performance and accountability  
            through the nomination of alternate directors.  The disclosure  
            of corporations' election procedures as required by this bill  
            will serve to educate and inform current and potential  
            shareholders. 

           2)Background  .  Existing law requires domestic and foreign  








                                                                  AB 2752
                                                                  Page  2

            corporations to file with the Secretary of State an annual  
            statement of information disclosing its principal address in  
            California, its principal type of business, and information  
            regarding its agent for service of process.  Existing law  
            further requires a publicly-traded corporation to disclose to  
            the SOS information concerning its independent auditor, annual  
            compensation paid to directors and officers, loans made by the  
            corporation to any of its directors, bankruptcies filed by the  
            corporation or its directors or officers, any fraud  
            convictions by its directors or officers, and any other  
            violations of federal security or banking laws for which the  
            corporation has been found liable.  The Secretary of State is  
            required to make these statements available for public  
            inspection. 


           Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081