NRAI Compliance Updates - January, 2005

NRAI Compliance Updates - January, 2005

Greetings,

The year is off to an active start. We review hundreds of legislative bills each day for this newsletter, then condense the list to a manageable number at press time. The collection below should be useful to you. There are some statute updates recognizing advances in technology as well as some tax changes that will be helpful if passed.

Robert K. Rowell
General Counsel

Pending and Passed Legislation

Arizona

HB 2161

An act amending section 10-1632, Arizona revised statutes; amending title 29, chapter 4, article 1, Arizona revised statutes, by adding section 29-613; relating to corporations and limited liability companies.

Bill Status: 1/12/05 Introduced

Full Text:
AN ACT
AMENDING SECTION 10-1632, ARIZONA REVISED STATUTES; AMENDING TITLE 29, CHAPTER 4, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTION 29-613; RELATING TO CORPORATIONS AND LIMITED LIABILITY COMPANIES.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 10-1632, Arizona Revised Statutes, is amended to read:
10-1632. Interrogatory or signature violations; corporate records; classification
A. A person who knowingly fails or refuses within the time prescribed by this chapter to answer truthfully any interrogatories propounded to that person by the commission in accordance with this chapter or who signs any articles, statement, report, application or other document filed with the commission that is known to the person as false in any material respect is guilty of a class 5 4 felony.
B. A person who with the intent to defraud or deceive knowingly falsifies, alters, steals, destroys, mutilates, defaces, removes or secretes the books, records or accounts of a corporation is guilty of a class 5 felony.
Sec. 2. Title 29, chapter 4, article 1, Arizona Revised Statutes, is amended by adding section 29-613, to read:
29-613. Interrogatory or signature violations; limited liability company records; classification
A. A PERSON WHO KNOWINGLY FAILS OR REFUSES WITHIN THE TIME PRESCRIBED BY THIS ARTICLE TO ANSWER TRUTHFULLY ANY INTERROGATORIES PROPOUNDED TO THAT PERSON BY THE COMMISSION IN ACCORDANCE WITH THIS ARTICLE OR WHO SIGNS ANY ARTICLES, STATEMENT, REPORT, APPLICATION OR OTHER DOCUMENT FILED WITH THE COMMISSION THAT IS KNOWN TO THE PERSON AS FALSE IN ANY MATERIAL RESPECT IS GUILTY OF A CLASS 4 FELONY.
B. A PERSON WHO WITH THE INTENT TO DEFRAUD OR DECEIVE KNOWINGLY FALSIFIES, ALTERS, STEALS, DESTROYS, MUTILATES, DEFACES, REMOVES OR SECRETES THE BOOKS, RECORDS OR ACCOUNTS OF A LIMITED LIABILITY COMPANY IS GUILTY OF A CLASS 5 FELONY.

Florida

SB 556

Documentary Stamp Tax; exempts from tax notes or other written obligations to pay money executed by agriculture producers in this state to Commodity Credit Corporation & security instruments for such notes & obligations. Amends 201.08.

Bill Status: 01/14/05 SENATE On Committee agenda-- Agriculture, 01/26/05

Full Text available at: http://www.flsenate.gov/data/session/2005/Senate/bills/billtext/pdf/s0556.pdf

Georgia

HB 24

A BILL to be entitled an Act to amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes, so as to provide for a gradual reduction in the state income tax rate for corporations over a period of years; to abolish the state income tax effective for tax years beginning on or after January 1, 2011; to provide for the collection of income taxes prior to such abolishment; to provide for an effective date; to repeal conflicting laws; and for other purposes.

Bill Status: 1/12/05 First House Readers

Full Text available at: http://www.legis.state.ga.us/legis/2005_06/versions/hb24_LC_18_3883_pf_2.htm

Indiana

HB 1165

Corporate law issues. Permits a corporate document to be executed by a registered agent, certified public accountant, or attorney employed by the business entity. Defines as an "other entity" certain business entities that are neither converting nor surviving entities, and establishes a procedure by which another entity may convert its business form. Sets forth requirements for other business entities to merge.

Bill Status: 1/6/05 First reading: referred to Committee on Commerce and Economic Development and Small Business

Full Text available at: http://www.in.gov/legislative/bills/2005/IN/IN1165.1.html

Maryland

HB 62

Requiring specified corporations to compute Maryland taxable income using a specified method; providing that, except as provided by and subject to regulations of the Comptroller, specified groups of corporations shall file a combined income tax return reflecting the aggregate income tax liability of all of the members of the group; requiring the Comptroller to adopt regulations; applying the Act; etc.
Bill Status: 1/12/05 First Reading Ways and Means Committee
Full Text available at: http://mlis.state.md.us/2005rs/bills/hb/hb0062f.pdf
Mississippi

HB 371

An act to codify section 79-4-6.24, Mississippi code of 1972, to provide for corporate issuance of rights, options and warrants; to codify section 79-4-15.20, Mississippi code of 1972, to set forth provisions relating to the withdrawal of foreign corporations; and for related purposes.
Bill Status: Referred to Judiciary Committee

Full Text House Bill 371
AN ACT TO CODIFY SECTION 79-4-6.24, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR CORPORATE ISSUANCE OF RIGHTS, OPTIONS AND WARRANTS; TO CODIFY SECTION 79-4-15.20, MISSISSIPPI CODE OF 1972, TO SET FORTH PROVISIONS RELATING TO THE WITHDRAWAL OF FOREIGN CORPORATIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following shall be codified as Section 79-4-6.24, Mississippi Code of 1972:
79-4-6.24. (a) A corporation may issue rights, options or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine (i) the terms upon which the rights, options or warrants are issued, and (ii) the terms, including the consideration for which the shares or other securities are to be issued. The authorization by the board of directors to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options or warrants are exercisable.
(b) The terms and conditions of such rights, options or warrants, including those outstanding on the effective date of this section, may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer or receipt of such rights, options or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation, or by any transferee or transferees of any such person or persons, or that invalidate or void such rights, options or warrants held by any such person or persons or any such transferee or transferees.
SECTION 2. The following shall be codified as Section 79-4-15.20, Mississippi Code of 1972:
79-4-15.20. (a) A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.
(b) A foreign corporation authorized to transact business in this state may apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:
(1) The name of the foreign corporation and the name of the state or country under whose law it is incorporated;
(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
(3) That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
(4) A mailing address to which the Secretary of State may mail a copy of any process served on him under subdivision (3); and
(5) A commitment to notify the Secretary of State in the future of any change in its mailing address.
(c) After the withdrawal of the corporation is effective, service of process on the Secretary of State under this section is service on the foreign corporation. Upon receipt of process, the Secretary of State shall mail a copy of the process to the foreign corporation at the mailing address set forth in its application for withdrawal.
SECTION 3. This act shall take effect and be in force from and after July 1, 2005.

SB 2278

An act to codify section 79-4-6.24, Mississippi code of 1972, to provide for corporate issuance of rights, options and warrants; to codify section 79-4-15.20, Mississippi code of 1972, to set forth provisions relating to the withdrawal of foreign corporations; and for related purposes.

Bill Status: 1/10/05 referred to Judiciary Committee

Full Text:
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following shall be codified as Section 79-4-6.24, Mississippi Code of 1972:
79-4-6.24. (a) A corporation may issue rights, options or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine (i) the terms upon which the rights, options or warrants are issued, and (ii) the terms, including the consideration for which the shares or other securities are to be issued. The authorization by the board of directors to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options or warrants are exercisable.
(b) The terms and conditions of such rights, options or warrants, including those outstanding on the effective date of this section, may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer or receipt of such rights, options or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation, or by any transferee or transferees of any such person or persons, or that invalidate or void such rights, options or warrants held by any such person or persons or any such transferee or transferees.
SECTION 2. The following shall be codified as Section 79-4-15.20, Mississippi Code of 1972:
79-4-15.20. (a) A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.
(b) A foreign corporation authorized to transact business in this state may apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:
(1) The name of the foreign corporation and the name of the state or country under whose law it is incorporated;
(2) That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
(3) That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
(4) A mailing address to which the Secretary of State may mail a copy of any process served on him under subdivision (3); and
(5) A commitment to notify the Secretary of State in the future of any change in its mailing address.
(c) After the withdrawal of the corporation is effective, service of process on the Secretary of State under this section is service on the foreign corporation. Upon receipt of process, the Secretary of State shall mail a copy of the process to the foreign corporation at the mailing address set forth in its application for withdrawal.
SECTION 3. This act shall take effect and be in force from and after July 1, 2005.

Missouri

SB 123

This act permits a corporation to have some or all classes or series of its stock uncertificated. It also extends the appraisal remedy available for corporate mergers and acquisitions to situations where a corporation sells all or substantially all of its corporate assets. The act also modifies language regarding the filing of amendments or restatements of a corporation’s articles of incorporation with the secretary of state.

Bill Status: 1/13/2005 - Second Read and Referred to Judiciary and Civil & Criminal Jurisprudence Committee

Full Text available at: http://www.senate.mo.gov/05info/pdf-bill/intro/SB123.pdf

Montana

LC 118

A bill for an act entitled: "an act revising banking laws; eliminating the prohibition on out-of-state banks and bank holding companies from acquiring in-state banks or branch banks by consolidation or merger; authorizing certain activities and establishing requirements for a bank resulting from consolidation or merger with respect to branch banking; authorizing in-state banks to establish out-of-state branch banks; repealing the authorization of out-of-state banks to do business in Montana using their existing corporate name provided they do not engage in banking but only loan money; amending sections 32-1-371, 32-1-372, and 32-1-1001, mca; and repealing section 32-1-103, mca."

Bill Status: 1/14/05 Transmitted to Senate

Full Text available at: http://data.opi.state.mt.us/bills/2005/billhtml/HB0118.htm

LC 119

A bill for an act entitled: "an act revising certain procedures for filing applications with the secretary of state regarding the name of certain corporations, limited liability companies, and partnerships; eliminating certain requirements that duplicate copies of certain applications, certificates, and registrations with respect to the name of certain corporations, limited liability companies, and partnerships be filed with the secretary of state; specifying requirements for registration of a foreign limited partnership; and amending sections 30-13-204, 30-13-208, 30-13-210, 30-13-212, 35-1-1207, 32-1-112, 35-1-1309, 35-2-119, 35-2-1109, 35-8-205, 35-8-206, 35-8-212, 35-10-113, 35-10-622, 35-10-627, 35-12-606, 35-12-1302, and 35-12-1304, mca; and repealing section 35-1-1207, mca."

Bill Status: 1/15/05 passed on second reading in House 100-0

Full Text available at: http://data.opi.state.mt.us/bills/2005/billhtml/HB0180.htm

HB 167

A bill for an act entitled: "an act increasing the frequency at which the secretary of state is required to provide a list of certain corporations, limited partnerships, limited liability companies, and limited liability partnerships to the department of revenue; and amending section 15-31-603, mca."

Bill Status: 1/18/05 Hearing with State Administration Committee

Full Text available at: http://data.opi.state.mt.us/bills/2005/billhtml/HB0167.htm

SB 134

A bill for an act entitled: "an act clarifying application of title 33, mca, statutes to captive insurance companies regarding voluntary dissolutions and limits on aggregate premium taxes and certain other taxes; clarifying that risk retention group statutes apply to certain captive insurers; and amending sections 33-28-105, 33-28-201, and 33-28-207, mca."

Bill Status: 1/21/05 Hearing in Business, Labor, and Economic Affairs Committee

Full Text available at: http://data.opi.state.mt.us/bills/2005/billhtml/SB0134.htm

HB 180

A bill for an act entitled: "an act revising certain procedures for filing applications with the secretary of state regarding the name of certain corporations, limited liability companies, and partnerships; eliminating certain requirements that duplicate copies of certain applications, certificates, and registrations with respect to the name of certain corporations, limited liability companies, and partnerships be filed with the secretary of state; specifying requirements for registration of a foreign limited partnership; and amending sections 30-13-204, 30-13-208, 30-13-210, 30-13-212, 35-1-1207, 32-1-112, 35-1-1309, 35-2-119, 35-2-1109, 35-8-205, 35-8-206, 35-8-212, 35-10-113, 35-10-622, 35-10-627, 35-12-606, 35-12-1302, and 35-12-1304, mca; and repealing section 35-1-1207, mca."

Bill Status: 1/15/05 Second Reading passed House 100-0

Full Text available at: http://data.opi.state.mt.us/bills/2005/billhtml/HB0180.htm

LC 821

A bill for an act entitled: "an act establishing a tax on a corporation for gross receipts that exceed $40 million in a year; providing that gross receipts tax payments are a credit against corporate license taxes and corporate income taxes; providing for the administration of the gross receipts tax including payment of estimated taxes, interest for delinquent payments, and provisions relating to penalties, overpayment, and time limitations; and providing a delayed effective date and an applicability date."

Bill Status: 1/6/05 Draft Bill ready for delivery

Full Text available at: http://data.opi.state.mt.us/bills/2005/lchtml/LC0821.htm

Nevada

HB 1829

Names of business entities; emergency. Clarifies that the words permitted to be in a business trust name pursuant to the Business Trust Act can be considered in determining whether a corporate, limited liability company, business trust or limited partnership name is distinguishable from the names of other such entities that have been recorded, reserved or registered in the office of the clerk of the State Corporation Commission. The measure also narrows existing cross-references and makes technical corrections.

Bill Status: 01/13/05 House: Reported from Commerce and Labor (21-Y 0-N)

Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?051+ful+HB1829

Oregon

SB 158

Reduces business registry filing fees under nonprofit corporation law from $50 to $25. Reduces amount transferred to General Fund for each business registry filing under nonprofit corporation law from $30 to $5.

Bill Status: 1/10/05 Introduction and First Reading

Full Text available at: http://landru.leg.state.or.us/05reg/measures/sb0100.dir/sb0158.intro.html

HB 2088

Authorizes pass-through entities to file composite tax returns on behalf of nonresident individuals, corporations or trusts. Establishes withholding requirements for pass-through entities that have nonresident owners. Applies to tax years beginning on or after January 1, 2006.

Bill Status: 1/10/05 Introduced

Full Text available at: http://landru.leg.state.or.us/05reg/measures/hb2000.dir/hb2088.intro.html

HB 2332

Reduces rate of tax on capital gains of personal income and corporate income and excise taxpayers. Phases in reduction. Applies to tax years beginning on or after January 1, 2006, for personal income taxpayers and January 1, 2008, for corporate income and excise taxpayers.

Bill Status: 1/11/05 introduced

Full Text available at: http://landru.leg.state.or.us/05reg/measures/hb2300.dir/hb2332.intro.html

South Carolina

HB 3196

A bill to amend section 33-31-708, as amended, code of laws of south carolina,
1976, relating to an action taken by ballot of a nonprofit corporation, so as
To authorize the use of an electronic ballot.

Bill Status: 01/11/05 House Referred to Committee on Judiciary HJ-121

Full Text available at: http://www.scstatehouse.net/sess116_2005-2006/bills/3196.htm

SB 44

A bill to amend section 15-7-30 of the 1976 code, relating to actions that must be tried in the county where the defendant resides, to define key terms and to provide factors for the court to consider when determining a corporation's principal place of business; to amend section 15-7-100, relating to changing the place of trial in a civil action, to provide additional criteria for the court to consider in determining whether to change the place of trial; to amend section 36-2-803, relating to personal jurisdiction in a civil action based on conduct, to delete a prohibition against the court changing the place of trial when jurisdiction is based solely on this section; and to repeal section 58-23-90.

Bill Status: 1/11/2005 Senate Referred to Committee on Judiciary SJ-101

Full Text available at: http://www.scstatehouse.net/sess116_2005-2006/bills/44.htm

SB 82

A bill to enact the "tort reform act of 2005 relating to venue" by amending section 15-7-30, code of laws of South Carolina, 1976, relating to venue for a civil action, so as to establish procedures for determining the proper venue; to amend section 15-7-100, relating to a change of venue of a civil action, so as to provide that when venue is changed an action is not subject to the procedures for determining proper venue; to amend section 36-2-803, relating to personal jurisdiction of the courts, so as to remove the requirement that jurisdiction under this section precludes a change of venue; and to repeal section 58-23-90, relating to proper venue to bring an action against a licensed motor carrier.

Bill Status: http://www.scstatehouse.net/sess116_2005-2006/bills/82.htm

Full Text available at: 01/11/05 Senate Referred to Committee on Judiciary SJ-123

South Dakota

SB 70

An Act to enact the South Dakota Business Corporation Act, to repeal certain chapters relating to corporations, and to revise certain related provisions.

Bill Status: 1/13/05 First read in Senate and referred to Senate Judiciary

Full Text available at: First read in Senate and referred to Senate Judiciary

Vermont

HB 36

This bill would enact the “Vermont Cooperative Associations Act” to revise comprehensively the manner of organizing and empowering agricultural and other cooperative associations in the state, except electric cooperatives.

Bill Status: 1/13/05 Assigned to Commerce Committee

Full Text available at: http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2006/bills/intro/H-036.HTM

Virginia

HB 1228

Updates the Virginia Stock Corporation Act to incorporate refinements to the Revised Model Business Corporation Act that have been adopted by the Business Law Section of the American Bar Association since its Model Act was enacted by Virginia. Substantive changes include permitting several corporate actions to be taken electronically; confirming that provisions in corporate documents filed with the State Corporation Commission may be made dependent on statistical or market indices or other objectively ascertainable facts; making the process for amending articles of incorporation more flexible; streamlining the process for combining corporations with other types of business entities; expanding situations where a shareholder can exercise appraisal rights; revising the test for determining whether a sale of corporate assets requires shareholder approval; establishing a shareholder buy-out alternative to court-ordered dissolution; and establishing a process for resolving contingent liabilities of a dissolving corporation.

Bill Status: 1/13/05 referred to Committee on Commerce and Labor

Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?051+ful+SB1228

HB 2177

Removes the exemption from the recordation tax for LLCs, corporations and partnerships.

Bill Status: 01/13/05 House: Referred to Committee on Finance

Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?051+ful+HB2177

SB 867

Requires the Tax Commissioner to issue an annual report to the members of the House Appropriations Committee, the House Finance Committee, and the Senate Finance Committee providing a comprehensive view of corporate tax relief in the Commonwealth during the preceding tax year. The report will be due November 1, 2005, and September 1 of all years thereafter.

Bill Status: 01/10/05 Senate: Referred to Committee on Finance

Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?051+ful+SB867

SB 933

Establishes a procedure for the filing of articles of restatement of a limited liability company. Other provisions (i) clarify that limited liability company operating agreements may contain provisions benefiting third parties; (ii) allow a successor in interest to the last member of a limited liability company to provide for the continuation of the limited liability company and the designation of a new member; (iii) clarify that the articles of organization or operating agreement may provide that a membership interest consists only of non-economic rights; and (iv) provide that existing civil immunity protections available to principals of certain tax-exempt organizations apply to principals of tax-exempt partnerships and limited liability companies. The measure also includes several technical corrections.

Bill Status: 01/11/05 Senate: Referred to Committee on Commerce and Labor

Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?051+ful+SB933

SB 1123

Allows a plaintiff, in circuit court cases, to ask the defendant for a waiver of service of process in lieu of official service and mandates that a defendant respond so as to avoid any unnecessary costs of service of process. The bill is modeled on Rule 4 of the Federal Rules of Civil Procedure and is a recommendation of the Boyd-Graves Conference

Bill Status: 01/12/05 Senate: Referred to Committee for Courts of Justice

Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?051+ful+SB1123

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