Greetings and Best Wishes for the New Year!

As always, the beginning of the year is a busy time for introducing legislation. For the next several months there will be a noticeable increase in the length of this report.

Notable Bills in this issue, include:

Maryland (HB 5) and Virginia (HB 261) have introduced Bills for the formation of Low Profit Limited Liability Companies known in short as L3C’s.

Alabama has introduced SB 38 that would require the Secretary of State to administratively dissolve a corporation which has been convicted of a federal violation by employing unauthorized aliens.

Maine has introduced a new Limited Liability Company Act, HB 1118

It looks to be a busy and interesting legislative season.

Sincerely,
Robert K. Rowell
General Counsel


Federal Legislation
HB 2221
To protect consumers by requiring reasonable security policies and procedures to protect computerized data containing personal information, and to provide for nationwide notice in the event of a security breach.

Full Text available here.
Current Bill Status: December 9, 2009, received in the Senate and Read twice and referred to the Committee on Commerce, Science and Transportation.


SB 2886
A bill to prohibit certain affiliations (between commercial banking and investment banking companies), and for other purposes.

Full Text available here.
Current Bill Status: December 16, 2009, read twice and referred to the Committee on Banking, Housing and Urban Affairs.


Alabama
HB 115
Limited partnerships, subject to Uniform Limited Partnership Act, date changed from January 1, 2012 to January 1, 2011, to coincide with the effective date of the new business and nonprofit entities code. Under existing law, Act 2009-621, the Alabama Uniform Limited Partnership Act 2010, adopted by the Legislature in the 2009 Regular Session, is effective on January 1, 2010, and governs all limited partnerships formed for the first time after January 1, 2010. Limited partnerships formed before January 1, 2010, may elect to be covered under the 2010 uniform act or under prior law. Under existing law, the 2010 uniform act also provides that after January 1, 2012, it governs all limited partnerships, regardless of when formed. Also under existing law, Act 2009-513, the Alabama Business and Nonprofit Entities Code, revised, recast and reorganized Title 10 of the Code of Alabama 1975, as Title 10A. The new business and nonprofit entities code governs limited partnerships formed pursuant to the 2010 uniform act. The Alabama Business and Nonprofit Entities Code is effective January 1, 2011. This bill would change the date in which the Alabama Uniform Limited Partnership Act governs all limited partnerships from January 1, 2012 to January 1, 2011, so as to coincide with the effective date of the new business and nonprofit entities code. This bill would also allow any existing limited partnership that elects to be governed by the uniform act to be governed by it effective January 1, 2010, or on a later date in 2010.

Full Text available here.
Current Bill Status: January 12, 2010, assigned to Fiscal Responsibility and Accountability Committee.


SB 38
A Bill to require the Secretary of State to administratively dissolve a corporation when the corporation has been convicted of violating federal law regarding employment of unauthorized aliens.

Full Text available here.
Current Bill Status: January 12, 2010, in Fiscal Responsibility and Accountability Committee.


Delaware
HB 297
An Act to amend Title 8 of The Delaware Code relating to The Delaware General Corporation Law. This bill confirms existing statutes and practices related to the administration of the corporation franchise tax.

Full Text available here.
Current Bill Status: January 14, 2010, having passed in the House assigned to Judiciary Committee in Senate.


California
AB 1491
Board Diversity. Under existing law, the Secretary of State maintains a registry of distinguished women and minorities who are available to serve on corporate boards of directors and authorizes the Secretary of State to make this information available to a person or entity that provides data base access or search services, as specified. This bill would authorize the Secretary of State to make that information available to a person or entity that provides those services only if the registrant agrees. Existing law requires the Secretary of State, in consultation with the Senate Commission on Corporate Governance, Shareholder Rights, and Securities Transactions, to report, at least once every three years, to the Legislature on the registry's effectiveness. This bill would instead require the Secretary of State to consult with the relevant Senate and Assembly committees in preparing those reports. The bill would also require the Secretary of State, on or before June 1, 2010, to request recommendations from public pension funds on how to improve the registry's effectiveness.

Full Text available here.
Current Bill Status: January 12, 2010, referred to Committee on Appropriations.


Indiana
SB 100
Election of certain corporate directors. Permits certain corporations that have a class of voting shares registered with the Securities and Exchange Commission under Section 12 of the Securities Exchange Act of 1934 to elect in the corporation's bylaws to be governed in the election of directors by specified terms. (The current law on the subject states that the law does not apply to such corporations.)

Full Text available here.
Current Bill Status: January 5, 2010, referred to Committee on Judiciary.


Maine
HB 1118
An Act to Replace the Maine Limited Liability Company Act. This bill directs the Secretary of State to prepare draft legislation revising the laws governing limited liability companies. The draft must be submitted by January 15, 2011, to the joint standing committee of the Legislature having jurisdiction over judiciary matters, which may report out legislation based on the draft.

Full Text available here.
Current Bill Status: December 22, 2009, received by the Clerk of the House on December 18, 2009. The Bill was referred to the Committee on Judiciary.


Maryland
HB 5
Authorizing the formation of a low-profit limited liability company as a permitted form of unincorporated business organization; requiring the name of a low-profit limited liability company to include specified words or abbreviations; requiring a low-profit limited liability company to meet specified requirements

Full Text available here.
Current Bill Status: January 13, 2010, first reading Economic Matters.


Missouri
HB 1411
Authorizes corporations or unincorporated associations to be represented in small claims court by the president or vice-president of the entity for certain actions to remove a tenant.

Full Text available here.
Current Bill Status: January 10, 2010, read second time.


Nebraska
LB 730
Change provisions relating to charging orders and interests in limited liability companies

Full Text available here.
Current Bill Status: January 8, 2010, referred to Banking, Commerce and Insurance Committee.


LB 759
Provide for the dissolution, winding up, and liquidation of certain professional corporations.

Full Text available here.
Current Bill Status: January 8, 2010, referred to Banking, Commerce and Insurance Committee.


LB 888
Nebraska Uniform Limited Liability Company Act.

Full Text available here.
Current Bill Status: January 12, 2010, referred to Banking, Commerce and Insurance Committee.


New Hampshire
HB 1356
This bill requires certain nonprofit corporations to file a statement with the attorney general’s office acknowledging that they are subject to the right-to-know law.

Full Text available here.
Current Bill Status: January 6, 2010, introduced and referred to Judiciary Committee.


HB 1459
This bill reallocates the duties of the board of trust company incorporation to the banking commissioner. This bill is a request of the banking department.

Full Text available here.
Current Bill Status: January 6, 2010, introduced and referred to Commerce and Consumer Affairs Committee.


HB 1661
This bill makes distributions from limited liability companies, partnerships, and associations subject to the interest and dividends tax only if they have transferable shares.

Full Text available here.
Current Bill Status: January 6, 2010, in Ways and Means Committee.


New Jersey
HB 2879
Allows certain corporate notices to be provided via electronic transmission.

Full Text available here.
Current Bill Status: January 11, 2010, approved as P.L.2009, c.176.


SB 3147
An Act concerning the misappropriation of trade secrets and supplementing Title 56 of the Revised Statutes.

Full Text available here.
Current Bill Status: December 14, 2009, introduced in the Senate, Referred to Senate Commerce Committee.


Tennessee
HB 2527
Business Organizations - As introduced, increases time from three to four months for claimant to file claim against dissolved limited partnership. - Amends TCA Title 61.

Full Text available here.
Current Bill Status: January 12, 2010, introduced.


HB 2530
Corporations, For Profit - As introduced, increases length of validity for proxy appointment for corporate shareholder voting purposes from 11 months to one year. - Amends TCA Title 48.

Full Text available here.
Current Bill Status: January 12, 2010, introduced.


Utah
SB 23
This bill amends the Corporate Franchise and Income Taxes chapter and the Individual Income Tax Act to address the income taxation of a pass-through entity and a taxpayer to whom income, gain, loss, deduction or credit of the pass-through entity is passed through.

Full Text available here.
Current Bill Status: February 10, 2009, bill substituted.


Vermont
HB 480
An Act relating to Dissolution of Limited Liability Companies.

Full Text here.
Current Bill Status: January 8, 2010, read once and referred to the Committee on Economic Development.


SB 250
An act relating to a uniform statewide format for corporate formations.

Full Text available here.
Current Bill Status: January 5, 2010, read once and referred to the Committee on Finance.


Virginia
HB 84
Foreign search warrants to be honored. Provides that a Virginia corporation or other entity that provides electronic communication services or remote computing services to the general public, when properly served with a warrant and affidavit in support of the warrant, issued by a judicial officer or court of another state with jurisdiction over the matter, to produce a record or other information pertaining to a subscriber to or customer of such service or the contents of electronic communications, or both, shall produce the record or other information as if that warrant had been issued by a Virginia court.

Full Text available here.
Current Bill Status: January 13, 2010, assigned to House Courts of Justice Committee.


HB 261
Low-profit limited liability companies. Provides for the designation of a type of limited liability company as low-profit limited liability company. A low-profit limited liability company is a limited liability company that significantly furthers the accomplishment of a charitable or educational purpose, would not have been formed but for the entity’s relationship to the accomplishment of charitable or educational purposes, does not have as a significant purpose the production of income or the appreciation of property, and does not have a political or legislative purpose.

Full Text available here.
Current Bill Status: January 11, 2010, assigned to Committee on Commerce and Labor.


HB 526
Personal identifying information; State Corporation Commission filings. Declares that a person preparing or submitting a document or information that is filed with the clerk of the State Corporation Commission is responsible for ensuring that the document or information does not contain any personal identifiable information, which includes a social security number or other number on a driver’s license, information on credit cards or other electronic billing and payment systems, an individual's date of birth or parent's maiden name, and financial account numbers. The provision does not apply if the information is publicly available or is required or authorized by law to be included in the filed information. The measure also authorizes the clerk of the Commission to remove, delete, or obliterate such information from a document, and to refuse to accept for filing any document that includes personal identifiable information. The State Corporation Commission, its members, the clerk of the Commission, and any member of his staff are declared to be immune from liability for any acts or omissions in implementing these provisions.

Full Text available here.
Current Bill Status: January 12, 2010, assigned to Committee on Commerce and Labor.


HB 596
Filing fee moratorium for new business entities. Directs the State Corporation Commission not to assess or collect a registration fee, filing fee, franchise tax, charter fee, or entrance fee, for which payment would be required, for any new for-profit corporation, limited liability company, or limited liability partnership. The measure expires July 1, 2011.

Full Text available here.
Current Bill Status: January 12, 2010, assigned to Committee on Commerce and Labor.


HB 612
Corporations; payment of annual registration fees. Requires that payments of annual registration fees assessed against a corporation be applied to the corporation's oldest unpaid annual registration fee assessment or penalty. The measure provides that annual registration fees shall be due in the anniversary month of the date when the corporation was incorporated, or authorized to transact business or conduct its affairs in the Commonwealth if it is a foreign corporation. The measure also clarifies the procedure by which a corporation's corporate existence or authority to transact business or conduct its affairs in the Commonwealth is automatically terminated if it fails to pay its annual registration fee by the last day of the fourth month following the fee's due date.

Full Text available here.
Current Bill Status: January 12, 2010, committee referral pending.


HB 739
Foreign business entities; temporary certificates. Establishes a mechanism for the State Corporation Commission to issue a temporary certificate of authority to transact business in the Commonwealth to a foreign stock or nonstock corporation that (i) has applied for a certificate of authority to transact business and paid the applicable fee and (ii) is in good standing in the state where it is incorporated. The temporary certificate shall be issued without additional charge and shall be valid for 30 days or until the Commission has issued the permanent certificate, whichever occurs first. A similar provision is established for foreign limited liability companies.

Full Text available here.
Current Bill Status: January 12, 2010, committee referral pending.


SB 131
Virginia Nonstock Corporation Act. Conforms provisions of the Virginia Nonstock Corporation Act to revisions to the Model Business Corporation Act prepared by the Business Law Section of the American Bar Association, and makes several technical or clarifying revisions. Provisions (i) expand the governing of electronic transmission of notices and other communications; (ii) provide that notice to a member that is sent by U.S. mail is effective upon deposit in the U.S. mail; currently, such mailings to members are effective five days after mailing; (iii) require words in communications to be in the English language, unless otherwise agreed; (iv) permit a board of directors to establish separate record dates for determining members entitled to notices of, and to vote at, meetings; (v) allow members to participate remotely in members’ meetings; (vi) repeal the existing provision that limits the power of the board of directors to alter the board’s size to an amount not greater than 30 percent of its existing size; (vii) confirm the authority of a board of directors to require the corporation to provide indemnity, including advancement and reimbursement; (viii) authorize a corporation to obligate itself to provide indemnification, and advance funds to pay for or reimburse expenses, in advance of the act or omission giving rise to a proceeding; and (ix) correct cross-references.

Full Text available here.
Current Bill Status: January 8, 2010, referred to Committee on Commerce and Labor.


SB 178
Pass-through entities; penalties. Revises the failure to file an information return and the failure to remit withholding tax penalties on pass-through entities.

Full Text available here.
Current Bill Status: January 11, 2010, referred to Committee on Finance.


Washington
HB 2657/SB 6281
Addressing the dissolution of limited liability companies. AN ACT Relating to the dissolution of limited liability companies; 2 amending RCW 25.15.070, 25.15.085, 25.15.293, 25.15.295, and 25.15.303; 3 adding a new section to chapter 25.15 RCW; and declaring an emergency.

Full Text available here.

Current Bill Status: January 11, 2010, first reading, referred to Judiciary.


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