Greetings and welcome to Spring!

Legislative activity remains high as it is still early on in the season. There continue to be more reactions at both the Federal and State level to the U. S. Supreme Court decision in Citizen’s United v. Federal Election Commission, 08-205, decided January 21, 2010.

Also Senate Bill 569, whose aim is to ensure that persons who form corporations in the United States disclose the beneficial owners of those corporations, in order to prevent wrongdoers from exploiting United States corporations for criminal gain, to assist law enforcement in detecting, preventing, and punishing terrorism, money laundering, and other misconduct involving United States corporations, is scheduled for a mark up session on April 28, 2010. This Bill bears watching.

Several States have passed legislation dealing with a number of issues regarding Corporations, Not-for-Profit Corporations, and LLC’s so I urge you to look through the legislation listing below.

Have a good Spring.

Robert K. Rowell
General Counsel

Federal Legislation
HB 4790
To amend the Securities Exchange Act of 1934 to require shareholder authorization before a public company may make certain political expenditures, and for other purposes.

Full Text available here.
Current Bill Status: March 9, 2010, referred to the Committee on Financial Services, and in addition to the Committee on House Administration, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

HB 4839
To amend the Internal Revenue Code of 1986 to exclude from gross income contributions to the capital of a partnership, and for other purposes.

Full Text available here.
Current Bill Status: March 12, 2010, referred to the House Committee on Ways and Means.

Connecticut
HB 5511
To require the State Elections Enforcement Commission to review the provisions of Title 9 of the general statutes and evaluate whether such provisions should be amended in light of the United States Supreme Court decision, Citizens United v. Federal Election Commission.

Full Text available here.
Current Bill Status: April 7, 2010, reported out of Office of Legislative Research and Office of Fiscal Analysis.

SB 478
To clarify and strengthen the existing law relating to intra-corporation transfers

Full Text available here.
Current Bill Status: April 15, 2010, referred to Office of Legislative Research and Office of Fiscal Analysis.

Hawaii
HR 204-10/SR 116-10
Requesting Congress to take immediate action to redefine "corporate entity" to preclude the use of the term "person" in the definition.

Full Text available here.
Current Bill Status: March 10, 2010, offered.

SB 2812
Amends the frequency of statutorily required captive insurance company examinations from once every three years to once every five years, unless otherwise required by the Insurance Commissioner. Requires risk retention captive insurance companies to undergo examination within three years of formation. Eliminates reference to a repealed provision on minimum surplus requirements for captive insurance companies. Requires protected cell accounts established by sponsored captive insurance companies to be operated only under the forms of business organizations authorized by the Insurance Commissioner. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

Full Text available here.
Current Bill Status: March 17, 2010, approved as Act 007.

Kentucky
SB 150
Create and amend various KRS sections relating to corporations, partnerships, and LLCs to provide that limited liability provisions with those sections assign all personal responsibility for a person's negligent or other wrongful acts to the person; clarify filing requirements and due dates for annual reports and business dissolutions; provide greater specificity as to the listing of corporate officers; allow court-ordered meetings of a board of directors; allow conversion of a PSC to a business corporation; create greater consistency of a disinterestedness requirement in certain votes in an LLC; create greater consistency of the rights of the holder of a charging order; create greater consistency of the rights of the holder of a charging order; establish a consistent address for mailing notices of administrative dissolution or the revocation of a certificate of authority, provide clarification as to the effect of a merger involving an LLC; address the ability of a member in a member-managed LLC to resign and thereby on a prospective basis terminate fiduciary obligations; repeal KRS 275.340.

Full Text available here.
Current Bill Status: April 13, 2010, signed by Governor as Acts Chapter 133)

SB 151
Create various new sections of new KRS Chapter 14A to create the Kentucky Business Entity Filing Act to establish uniform filing standards and procedures for business corporations, nonprofit corporations, various forms of partnerships, limited liability companies, and business trusts, with conforming amendments made to various sections located in the chapters governing the various forms of business entities; repeal various sections in KRS Chapters 271B, 272, 273, 274, 275, 279, 362, 362.1, 362.2, and 386.

Full Text available here.
Current Bill Status: April 13, 2010, signed by Governor as Acts Chapter 151.

SB 152
Reenact the provisions of 2007 HB 334/GA and SCA #1 as passed and enacted into law which contained provisions to create and amend various statutes relating to business entities to accomplish the following: make consistent the provisions of the corporate and other business organization acts regarding business entity names such that equivalent rules will govern the names of business corporations, nonprofit corporations, cooperatives, associations, partnerships, limited partnerships, limited liability companies, and business trusts; modify procedural rules across the various business entity acts such that they will contain equivalent if not identical provisions; update provisions of KRS Chapter 271B to reflect the more current provisions of the Model Business Corporation Act; allow limited liability companies to enter into a share exchange with a corporation, be created by conversion from a corporation, have statutory rules governing nonprofit status, and to provide for their existence after the death or other termination of their members; provide rules for business trusts to create uniformity in regard to other forms of business organizations; allow dentists to practice dentistry within a business organized as a limited liability company; revive several sections of KRS Chapter 362 that were repealed with a delayed effective date in 2006 Ky. Acts. Chapter 149; amend KRS 45.560 to include the definition of "equal employment opportunity job categories"; amend KRS 45.570 to clarify the classes protected against discrimination by state contractors; amend KRS 45.590 to increase the dollar amount of exempted contracts or subcontracts from $250,000 to $500,000; allow the Finance and Administration Cabinet to promulgate administrative regulations to establish additional exemptions; amend KRS 45.600 to allow the contracting agency rather than the cabinet to set the time period for submitting statements and information required by the statute; set out the information to be reported by the bidding party regarding its workforce; require the bidding party to submit a breakdown of subcontracts over $500,000; include a determination by the cabinet that the percentage of women in the bidding party's workforce reflects the percentage of available women in the area from which the bidding party's workforce is drawn and to use this determination in the cabinet's existing affirmative action process; amend KRS 45.610 to include women in the affirmative action requirements for state contractors and allow the cabinet to investigate the employment practices of any contractor or subcontractor to determine if they have violated any provision of KRS 45.560 to 45.640; create a new section of KRS 45.560 to 45.640 to allow the Finance and Administration Cabinet to promulgate administrative regulations to carry out the provisions of KRS 45.560 to 45.640; confirm amendments to certain statutes whose effectiveness was made contingent upon the approval by the voters of proposed constitutional changes in 2002; amend various sections to conform; repeal KRS 274.087, 362.495, 362.497, 362.499, 362.501, 362.503, 362. 505, 362.507, 362.509, and 362.585.

Full Text available here.
Current Bill Status: March 30, 2010, signed by Governor as Acts Chapter 51.

Minnesota
HB 3700
A bill for an act relating to corporations; providing that business corporations do not have the power to make corporate independent political expenditures.

Full Text available here.
Current Bill Status: March 17, 2010, introduced and referred to State and Local Government Operations Reform, Technology and Elections Committee.

Nebraska
LB 888
Adopt the Nebraska Uniform Limited Liability Company Act and change provisions relating to charging orders.

Full Text available here.
Current Bill Status: April 1, 2010, approved by the Governor.

New York
HB 10414
Relates to establishing the L3C act regarding low-profit limited liability companies.

Full Text available here.
Current Bill Status: March 25, 2010, referred to Corporations, Authorities and Commissions Committee.

SB 7063
Provides that limited liability companies are not allowed to make political contributions to candidates for elected offices.

Full Text available here.
Current Bill Status: March 10, 2010, referred to Corporations, Authorities And Commissions.

SB 7253
Discontinues the requirement that Not-for Profit certificates of incorporation be approved by the commissioner of mental retardation and developmental disabilities.

Full Text available here.
Current Bill Status: March 25, 2010, referred to Mental Health and Developmental Disabilities Committee.

Ohio
SB 240
To amend sections 3517.01, 3517.105, 3517.1011, 3517.13, 3517.992, 3599.03, 5727.61, and 5733.27 of the Revised Code to permit domestic corporations and labor organizations to make independent expenditures and electioneering communications in support of or opposition to candidates for nomination or election and to require a domestic corporation or labor organization that makes such expenditures to file related campaign finance statements.

Full Text available here.
Current Bill Status: March 16, 2010, introduced and assigned to State & Local Government & Veterans Affairs Committee.

Rhode Island
HB 7995
An Act Relating to Corporations, Associations And Partnerships, Rhode Island Nonprofit Corporation Act. This act would prohibit a corporation from entering into a contract or transaction with one or more of its officers or directors whereby the corporation is acquiring goods or services from said officer or director. This act would further preclude any director or officer from serving as a director or officer of any other entity doing business with a corporation in which such individual serves.This act would take effect upon passage.

Full Text available here.
Current Bill Status: April 28, 2010, introduced, referred to House Corporations Committee.

HB 8001
Act Relating to Taxation, Business Corporation Tax. This act would eliminate the $500 minimum tax on business corporations in Rhode Island. This act would take effect upon passage.

Full Text available here.
Current Bill Status: April 8, 2010, introduced, referred to House Finance Committee.

Utah
SB 173
This bill modifies provisions in Title 16, Corporations, Title 48, Partnership, Title 76, Utah Criminal Code, and Title 78B, Judicial Code, related to business entities required to file with the Division of Corporations and Commercial Code, including addressing issues regarding filings and the responsibilities of the division. This bill: repeals outdated language related to registered agents; requires certain documents to be in a machine printed format; addresses the Division of Corporations and Commercial Code's subpoena powers; addresses the notice requirement in articles of organization for series limited liability companies; repeals language in the criminal Code that addresses filings or service of process with the Division of Corporations and Commercial Code; repeals language related to sworn certificates being required of a nonresident doing business in the state; and makes technical and conforming changes.

Full Text available here.
Current Bill Status: March 22, 2010, approved by the Governor.

SB 179
This bill modifies the Utah Revised Business Corporation Act to address the liability of shareholders of a corporation. This bill addresses the liability of shareholders and makes technical amendments.

Full Text available here.
Current Bill Status: March 22, 2010, approved by the Governor.

Virginia
SB 100
Stock Corporation Act; conforms provisions of Act to revisions to Model Business Corporation Act. Conforms provisions of the Virginia Stock Corporation Act to revisions to the Model Business Corporation Act prepared by the Business Law Section of the American Bar Association, and makes several clarifying revisions. Elements of the measure include (i) expanding provisions governing the electronic transmission of notices and other communications; (ii) providing that notice to a shareholder that is sent by U.S. mail is effective upon deposit in the U.S. Mail; currently, such mailings to shareholders are effective five days after mailing; (iii) authorizing corporate officers to make equity compensation awards; (iv) confirming shareholders' authority to adopt proxy access and proxy expense reimbursement bylaws; (v) permitting a board of directors to establish separate record dates for determining shareholders entitled to notices of, and to vote at, meetings; (vi) allowing shareholders to participate remotely in shareholders meetings; (vii) addressing the authority of a circuit court to resolve disputes relating to a vote by shareholders; (viii) repealing 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; (ix) confirming the authority of a board of directors to require the corporation to provide indemnity, including advancement and reimbursement; (x) authorizing 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; (xi) requiring class voting by affected classes with respect to mergers, unless otherwise provided in the articles of incorporation; and (xii) requiring that the articles of merger in a parent-subsidiary merger recite the Code section under which the merger is being effected.

Full Text available here.
Current Bill Status: March 6, 2010, signed by Senate President, April 14, 2010 Governor's recommendation received by Senate.

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: March 13, 2010, Governor signed as Acts of Assembly Chapter 171.

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. These provisions apply to taxable years beginning on and after January 1, 2009.

Full Text available here.
Current Bill Status: March 13, 2010, approved by Governor As Chapter 120 effective 1/1/09.

SB 400
State Corporation Commission; clerk's fees. Authorizes the State Corporation Commission to establish the amount of the fees to be charged by the clerk of the Commission for furnishing copies of documents, certifying information, and providing access to records in the clerk's office. The fees shall be reasonable and are to be established by order or rule of the Commission. Existing provisions that establish specific fees for furnishing copies of documents, searching records, and affixing the Commission's seal are repealed.

Full Text available here.
Current Bill Status: April 12, 2010, Governor: Approved by Governor-Chapter 669 (effective 7/1/10).

Washington
HB 2657
Addressing the dissolution of limited liability companies. An Act Relating to the dissolution of limited liability companies; 2 amending RCW 25.15.005, 25.15.070, 25.15.085, 25.15.095, 25.15.270, 3 25.15.290, 25.15.293, 25.15.295, 25.15.303, 25.15.340, and 25.15.805; 4 adding new sections to chapter 25.15 RCW; and repealing RCW 25.15.080. 5.

Full Text available here.
Current Bill Status: March 24, 2010, Governor signed as Chapter 196, 2010 Laws. Effective date 6/10/2010.

HB 3046
Addressing the dissolution of the assets and affairs of a nonprofit corporation. An Act Relating to dissolving the assets and affairs of a nonprofit 2 corporation; amending RCW 7.60.025; adding new sections to chapter 3 24.03 RCW; creating a new section; repealing RCW 24.03.265, 24.03.270, 4 and 24.03.290; and declaring an emergency.

Full Text available here.
Current Bill Status: Governor signed as Chapter 212, 2010 Laws. Effective date 3/25/2010.

West Virginia
SB 436
Updating language relating to process of incorporation. An Act to amend and reenact §31-14-2 of the Code of West Virginia, 1931, as amended, relating to the process of incorporation; and clarifying the requirements of that process.

Full Text available here.
Current Bill Status: March 18, 2010, approved by the Governor.

Wisconsin
HB 902
Low-profit Limited Liability Companies. Current law authorizes the creation of limited liability companies (LLCs) for any lawful purpose. This bill authorizes the creation of low−profit LLCs (L3Cs), a type of LLC. Under the bill, a L3C must be organized for a business purpose that satisfies, and is at all times operated to satisfy, all of the following requirements: 1) the L3C significantly furthers the accomplishment of a religious, charitable, scientific,literary, or education purpose a defined under federal tax law, and would not have been formed but for the entity’s relationship to the accomplishment of the religious, charitable, scientific, literary, or education purpose; 2) no significant purpose of the L3C is the production of income or the appreciation of property; and 3) no purpose of the L3C is the accomplishment of a significant political or legislative purpose, as defined under federal tax law. If a L3C at any time ceases to satisfy these requirements, it ceases to be a L3C, but continues to exist as a LLC. The bill authorizes the Department of Financial Institutions to bring administrative dissolution proceedings against a L3C if the company has ceased to meet any of the requirements above and has failed to amend its name to reflect it is no longer a L3C within 60 days after ceasing to meet any of the requirements.

Full Text available here.
Current Bill Status: March 26, 2010, read first time and referred to Committee on Financial Institutions.

Wyoming
HB 23
An Act relating to business entities; modifying fees required upon reinstatement following administrative dissolution or forfeiture; and providing for an effective date.

Full Text available here.
Current Bill Status: March 8, 2010, Chapter Ch0060 effective July 1, 2010.

SB 18
Limited liability companies revisions. An Act relating to limited liability companies; generally updating and modifying statutes to comply with the revised uniform limited liability company act in part and with exceptions and changes; making conforming amendments; and providing for an effective date.

Full Text available here.
Current Bill Status: March 9, 2010 Chapter Ch0094 Effective July 1, 2010

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