HBA-NIK S.B. 1344 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 1344
By: Brown
Civil Practices
5/14/1999
Engrossed



BACKGROUND AND PURPOSE 

Currently, volunteer directors receive limited liability with respect to
acts and omissions performed within the scope of their duties. Nonprofit
organizations work together in this state to improve the quality of life
through job creation, community development, economic development, and
education. These nonprofit organizations mobilize volunteer officers and
directors by drawing on their members' special talents in order to meet
social and economic needs. Certain studies have indicated that there may be
more time volunteered if individuals felt that they were sheltered from
potential lawsuits. S.B. 1344 exempts a nonprofit corporation officer from
liability concerning any action taken or omission made, unless the
officer's conduct was not made in good faith, with ordinary care, and in a
manner the officer reasonably believes to be in the best interest of the
corporation. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 1396-1.01 et seq., V.T.C.S. (Texas Non-Profit
Corporation Act), by adding Article 2.22, as follows: 

Art. 2.22. OFFICER LIABILITY. Provides that an officer is not liable to the
corporation or any other person for an action taken or omission made by the
officer in the person's capacity as an officer unless the officer's conduct
was not exercised in good faith, with ordinary care, and in a manner the
officer reasonably believes to be in the best interest of the corporation. 

SECTION 2. Effective date: September 1, 1999.
Makes application of this Act prospective. 

SECTION 3. Emergency clause.