California
AB 29
The Personal Income Tax Law requires every limited liability company subject to a specified tax to pay, annually to this state, a fee equal to specified amounts based upon total income from all sources attributable to this state. The fee is due and payable on or
before the 15th day of the 4th month following the close of the taxable year and penalties and interest are payable for violations, as specified. This bill would require that the fee be estimated and paid no later than the 15th day of the 6th month of the taxable year, and would impose an additional penalty for underpayment, as provided. This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on January 10, 2008, pursuant to the California Constitution.
Full Text available at:
http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_0001-0050/abx3_29_bill_20080905_introduced.html
Current Bill status: September 8, 2008, read first time.
AB 30
The Personal Income Tax Law and the Corporation Tax Law allow various deductions and credits in computing the income that is subject to the taxes imposed by those laws, including deductions for percentage depletion and credits for enhanced oil recovery. This bill would disallow those deductions and credits for taxpayers engaged in the business of oil production. This bill would result in a change in state taxes for the purpose of increasing state revenues within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature. The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on January 10, 2008. This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on January 10, 2008, pursuant to the California Constitution.
Full Text available at:
http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_0001-0050/abx3_30_bill_20080905_introduced.html
Current Bill status: September 8, 2008, read first time.
AB 2944
Under existing law, a director of a corporation is required to perform the duties of a director in good faith and in a manner that the director believes to be in the best interests of the corporation and its shareholders, and with the care of an ordinarily prudent
person.
This bill would, until January 1, 2015, specify that, in considering the best interests of the corporation and its shareholders, the board of directors, committees of the board, and individual directors of a domestic corporation may consider specified factors, including, among others, the effect the corporation's actions would have on the prospects for potential growth and on the economy of the state and nation. The bill would enact related provisions relative to the consideration of these factors, as specified, and the duties of the board of directors, committees of the board, and individual directors of a domestic corporation. The bill would also, until January 1, 2015, provide that an act of the
board of directors, a committee of the board, or an individual director of a domestic corporation shall be presumed to be in the best interests of the corporation, except as specified.
Full Text available at:
http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_2901-2950/ab_2944_bill_20080911_enrolled.html
Current Bill Status: September 18, 2008, sent to Governor for action
Illinois
SB 2338
Amends the Illinois Banking Act. Provides that the president and any other officer designated by the board of directors (rather than the president and cashier) of every State bank shall cause to be kept at all times a full and correct list of the names and residences of all the shareholders in the State bank and the number of shares held by each in the office where its business is transacted
Full Text available at:
http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=095-0924
Current Bill Status: August 26, 2008, approved by Governor with immediate effect.
Michigan
HB 1445
Formation of low-profit limited liability company. A bill to amend 1993 PA 23, entitled "Michigan limited liability company act," by amending section 102 (MCL 450.4102), as amended by 2002 PA 686. The bill would define "low-profit limited liability company" as an LLC that has included in its articles of organization a purpose that meets, and that at all times conducts its activities to meet, all of the following requirements:
-- The LLC significantly furthers the accomplishment of one or more charitable or educational purposes described in Section 170(c)(2)(b) of the Internal Revenue Code (IRC), and would not have been formed except to accomplish those charitable or educational purposes.
-- The production of income or appreciation of property is not a significant purpose of the LLC.
-- The purposes of the LLC do not include accomplishing one or more political or legislative purposes described in Section 170(c)(2)(d) of the IRC.
The bill specifies that, in the absence of other factors, the fact that the LLC produced significant income or capital appreciation would not be conclusive evidence of a significant purpose involving the production of income or the appreciation of property.
(Section 170 of the IRC allows a tax deduction for any charitable contribution paid within the taxable year. Section 170(c) defines "charitable contribution". Section 170(c)(2)(b) includes in that definition a contribution to a corporation, trust, or community chest, fund, or foundation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals. Section 170(c)(2)(d) includes a contribution to a corporation, trust, or community chest, fund, or foundation that is not disqualified for tax exemption under Section 501(c)(3) of the IRC by reason of attempting to influence legislation, and that does not participate in, or intervene in any political campaign on behalf of or in opposition to any candidate for public office, including the publication or distribution of statements.)
Full Text available at:
http://www.legislature.mi.gov/documents/2007-2008/billintroduced/Senate/htm/2008-SIB-1445.htm
Current Bill Status: September 24, 2008, referred to the Committee of the Whole.
HB 1446
The Act requires the name of a domestic LLC to contain the words "limited liability company", or the abbreviation "L.L.C." or "L.C.", with or without periods or other punctuation. Under the bill, the name of a low-profit LLC would have to contain the words "low-profit limited liability company", or the abbreviation "L.3.C.", with or without periods or other punctuation.
Under the Act, the Attorney General may bring an action in the circuit court for the county in which an LLC's registered office is located for dissolution of the LLC on the ground that it has committed any of the following acts:
-- Procured its organization through fraud.
-- Repeatedly and willfully exceeded its legal authority.
-- Repeatedly and willfully conducted its business in an unlawful manner.
The bill also would allow the Attorney General to bring an action for dissolution if the LLC were a low-profit LLC that ceased to meet any of the requirements described in the proposed definition of "low-profit limited liability company" and, for 60 days after it ceased to meet those requirements, failed to file a certificate of amendment amending its name to conform with the naming requirements for an LLC.
Full Text available at:
http://www.legislature.mi.gov/documents/2007-2008/billintroduced/Senate/htm/2008-SIB-1446.htm
Current Bill Status: September 24, 2008, referred to the Committee of the Whole.
New Jersey
AB 2879/SB 2050
Allows certain corporate notices to be provided via electronic transmission. This bill provides that any notice required or permitted pursuant to the provisions of the "New Jersey Business Corporation Act" (N.J.S.A.14A:1-1 et seq.), such as by a certificate of incorporation or by-laws or any resolution of directors or shareholders, may be provided by electronic transmission. The bill defines "electronic transmission" as any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient, and that may be directly reproduced in paper form by that recipient through an automated process.
Full Text available at:
http://www.njleg.state.nj.us/2008/Bills/A3000/2879_I2.HTM
Current Bill Status: September 25, 2008, passed by the Assembly and awaiting Senate action.
AB 2880
Eliminates 10 day advance notification of proposed effective date of certain shareholder action. This bill eliminates the 10-day waiting period for certain shareholder actions not concerning mergers and acquisition activity governed by N.J.S.14A:10-1 et seq. This 10-day waiting period can, at times, create inefficiencies in transactions and delay closings while the notice period runs.
As an example, this type of delay can occur when the certificate of incorporation needs to be amended in connection with a private placement of stock to increase the number of authorized shares or to create a new class of stock. The bill eliminates that type of delay.
The bill makes New Jersey law consistent with Section 228 of the Delaware General Corporation Law for shareholder approvals that do not involve mergers and acquisitions, as Delaware does not require any waiting period once notice of the non-unanimous approval is provided to the non-consenting shareholders.
Full Text available at:
http://www.njleg.state.nj.us/2008/Bills/A3000/2880_I2.HTM
Current Bill Status: September 15, 2008, reported out of Committee.
AB 2881
Allows director of corporation to provide notice of resignation, which resignation is only effective upon occurrence of certain event. This bill provides that a director may provide a notice of resignation to the corporation that is only effective upon the occurrence of a certain event or events.
This bill provides New Jersey corporations greater flexibility in adopting majority voting provisions, or other voting schemes, regarding the election of directors. For example, a director may provide a notice of resignation to the board which is effective if the director does not receive votes constituting a majority of shares voted at a shareholder's meeting.
Full Text available at:
http://www.njleg.state.nj.us/2008/Bills/A3000/2881_I2.HTM
Current Bill Status: September 25, 2008, passed by the Assembly and awaiting Senate action.
AB 2883
Provides that corporate by-laws may allow corporation to eliminate plurality voting for corporate directors.
This bill allows a corporation to eliminate plurality voting for director elections in the by-laws of the corporation. Under current law, a corporation can only eliminate plurality voting for director elections if that practice is allowed under its certificate of incorporation.
The bill allows a corporation to eliminate plurality voting for the board if stated in its by-laws or amended by-laws, and without shareholder approval. This bill would give New Jersey corporations greater flexibility in adopting majority voting provisions, or other voting schemes, regarding the election of directors.
Full Text available at:
http://www.njleg.state.nj.us/2008/Bills/A3000/2883_I2.HTM
Current Bill Status: September 15, 2008, reported out of Committee.
