Governor Brown signed AB 1211 today, and this bill will become effective January 1, 2012. AB 1211 was proposed and sponsored by the Nonprofit Organizations Committee of the Business Law Section of the State Bar of California and authored by Assembly Member Jim Silva. Much like AB 1233 , the NPO Committee sponsored bill from the prior 2009-2010 legislative session, AB 1211 makes primarily technical, clarifying and non-controversial changes to the California Nonprofit Corporation law. Among the specific changes enacted by this bill:
1. AB 1211 will make it clearer as to when the vote of an
interested director is not required for a unanimous written consent.
This is important because "interested directors" of public
benefit corporations who vote on a transaction in which they are
interested face certain liabilities, and the transaction itself may
be void or voidable. The amendments in AB1211 clarify the law so
that nonprofit corporations know who is an "interested director" and
whether their vote is required for the corporation to act by written consent.
2. AB 1211 will exempt ballot measure committees formed as public benefit corporations from the Attorney
General's supervision upon dissolution. The current Corporations
Code requires all public benefit corporations to obtain a waiver
from the Attorney General's office in order to file dissolution
documents with the Secretary of State. Ballot measure
corporations are not currently exempted from this requirement, despite the fact that the primary oversight of them is by the California Fair Political Practices Commission. The
result has been that public benefit ballot measure corporations have
to submit substantial documentation to the Attorney General's office
in order to obtain the waiver letter, essentially a formality. This has needlessly involved the waste of
time, resources, attention, and money by the Attorney General's
office and the dissolving public benefit ballot measure corporation.
3. Finally, AB 1211 would provide cross-references to various other
California Code sections that apply to nonprofit corporations and
unincorporated associations. In particular, the bill adds references to the provisions of Government Code Section 12586. These provisions affecting the organization,
governance and reporting obligations of nonprofit organizations are within the subject matter scope of existing sections of the
Corporations Code, but were codified in the Government Code in the 2004 California Nonprofit Integrity Act. These cross-references in the Corporations Code will help make nonprofit organizations and practitioners aware of these significant obligations.