Bill Text: CA AB1529 | 2013-2014 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Nonprofit corporations: abatement: dissolution: surrender.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB1529 Detail]

Download: California-2013-AB1529-Introduced.html

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BILL NUMBER: AB 1529	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member John A. Pérez

                        JANUARY 17, 2014

   An act to add Section 5008.9 to the Corporations Code, relating to
nonprofit corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1529, as introduced, John A. Pérez. Nonprofit corporations:
dissolution.
   Existing law authorizes and regulates the formation and operation
of a corporation, nonprofit public benefit corporation, nonprofit
mutual benefit corporation, or nonprofit religious corporation,
including, but not limited to, the adoption and contents of corporate
bylaws.
   This bill would require the office of the Secretary of State, the
Franchise Tax Board, and the office of the Attorney General to
collectively review and develop a streamlined process to efficiently
dissolve a nonprofit corporation to the extent that this process is
consistent with other sections of law.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) There are more than 144,000 nonprofit corporations in
California that provide a variety of programs and services in areas
as diverse as education, recreation, health care, legal, job
training, and housing to millions of Californians. These
organizations, depending on their formation status, are required to
register with the office of the Secretary of State, the Franchise Tax
Board, and the office of the Attorney General.
   (b) Each of these state agencies has a specific role to play in
the establishment and oversight of a nonprofit corporation.
   (c) The office of the Secretary of State is in charge of
administering the process for a nonprofit corporation that chooses to
incorporate and also has the continued duty to ensure that the
nonprofit corporation adheres to the mission for which it was formed.

   (d) The Franchise Tax Board has the responsibility of determining,
reviewing, and monitoring the state tax-exempt status of a nonprofit
corporation to ensure that its tax-exempt status still applies.
   (e) The California Attorney General regulates the nonprofit
organizations and individuals that administer or solicit charitable
funds or assets in California and has broad legal and statutory
authority to commence enforcement actions against charitable
organizations and trusts.
   (f) Through each of their roles, the office of the Secretary of
State, the Franchise Tax Board, and the office of the Attorney
General play a crucial role in ensuring that the nonprofit
corporations of California are adequately protecting the public's
trust.
   (g) Every year, hundreds of nonprofit corporations seek
administrative changes to expand their mission or alter their tax
status, and, in some cases, to even go out of existence. This
dissolution process, which involves the winding down of the nonprofit
corporation's affairs, is very cumbersome and protracted.
  SEC. 2.  Section 5008.9 is added to the Corporations Code, to read:

   5008.9.  In order to more effectively analyze and monitor the
status, finances, and activities of a corporation, as defined in
Section 5046, in the state, the office of the Secretary of State, the
Franchise Tax Board, and the office of the Attorney General shall
collectively review and develop a streamlined process to efficiently
dissolve a corporation to the extent that this process is consistent
with other sections of law.