Bill Text: TX SB1233 | 2015-2016 | 84th Legislature | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to authorizing certain distributions of income from a nonprofit corporation to members of the corporation who are certain nonprofit corporations.
Spectrum: Bipartisan Bill
Status: (Passed) 2015-05-23 - Effective immediately [SB1233 Detail]
Download: Texas-2015-SB1233-Comm_Sub.html
Bill Title: Relating to authorizing certain distributions of income from a nonprofit corporation to members of the corporation who are certain nonprofit corporations.
Spectrum: Bipartisan Bill
Status: (Passed) 2015-05-23 - Effective immediately [SB1233 Detail]
Download: Texas-2015-SB1233-Comm_Sub.html
By: Taylor of Galveston | S.B. No. 1233 | |
(Oliveira) | ||
|
||
|
||
relating to authorizing certain distributions of income from a | ||
nonprofit corporation to members of the corporation who are certain | ||
nonprofit corporations. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 22.001(5), Business Organizations Code, | ||
is amended to read as follows: | ||
(5) "Nonprofit corporation" means a corporation no | ||
part of the income of which is distributable to a member, director, | ||
or officer of the corporation, except as provided by Section | ||
22.054. | ||
SECTION 2. Section 22.053, Business Organizations Code, is | ||
amended to read as follows: | ||
Sec. 22.053. DIVIDENDS PROHIBITED. Except as provided by | ||
Section 22.054, a [ |
||
income of a corporation may be distributed to, the corporation's | ||
members, directors, or officers. | ||
SECTION 3. Section 22.054, Business Organizations Code, is | ||
amended to read as follows: | ||
Sec. 22.054. AUTHORIZED BENEFITS AND DISTRIBUTIONS. A | ||
corporation may: | ||
(1) pay compensation in a reasonable amount to the | ||
members, directors, or officers of the corporation for services | ||
provided; | ||
(2) confer benefits on the corporation's members in | ||
conformity with the corporation's purposes; [ |
||
(3) make distributions to the corporation's members on | ||
winding up and termination to the extent authorized by this | ||
chapter; and | ||
(4) make distributions of its income to the | ||
corporation's members who are nonprofit corporations organized | ||
under this code and who are exempt from income taxation under | ||
Section 501(a), Internal Revenue Code of 1986, by being listed | ||
under Section 501(c)(3) of that code, if: | ||
(A) the distributions are made in accordance with | ||
the purpose or purposes of the corporation as stated in the | ||
certificate of formation and with the fiduciary responsibilities of | ||
the board of directors, including the duty to safeguard restricted | ||
funds for their intended purposes; and | ||
(B) after the distributions are complete: | ||
(i) the corporation would be able to pay the | ||
corporation's debts as they become due in the usual course of its | ||
activities; and | ||
(ii) the corporation's total assets would | ||
at least equal the sum of its total liabilities. | ||
SECTION 4. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect September 1, 2015. |