Bill Text: CA AB1260 | 2013-2014 | Regular Session | Enrolled

California Assembly Bill 1260 (Prior Session Legislation)

Bill Title: California family owned business.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB1260 Detail]

Download: California-2013-AB1260-Enrolled.html

BILL NUMBER: AB 1260	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 11, 2014
	PASSED THE ASSEMBLY  AUGUST 18, 2014
	AMENDED IN SENATE  JUNE 18, 2014
	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 P�rez)
   (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, 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.


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 organized as a privately held business by one individual or
two or more related persons, or is a partnership of business
entities owned by related persons.
   (2) Maintains its principal executive office in California.
   (3) Has been in business for more than 10 continuous years.
   (4) One of the following apply:
   (A) Is owned by a sole proprietorship.
   (B) Is a business entity owned by one individual or two or more
related persons domiciled in California who hold a majority of the
equity interests.
   (C) Is a partnership of business entities owned by related persons
domiciled in California who hold a majority of the equity interests.

   (5) The business is controlled by one individual or two or more
related persons who exhibit strategic influence and control of the
business by holding the business as a sole proprietorship 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 two or more related persons.
   (B) A previous transfer of ownership or equity interests between
related persons.
   (C) Is subject to a written agreement providing for a future
transfer between related persons provided that the agreement was
executed in good faith.
   (b) For the purpose of this section, "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). "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.