SRC-DBM S.B. 1344 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1344
76R8076  CLG-FBy: Brown
Economic Development
4/21/1999
As Filed


DIGEST 

Currently, under Article 1396-2.28 Section D, Texas Non-Profit Corporation
Act, 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 of
Texas through job creation, community development, economic activity, 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.  A 1997 study by the Gallup Organization on "The
Liability Crisis and the Use of Volunteers by Nonprofit Associations"
indicates that even more time would be volunteered if individuals felt that
they were sheltered from potential lawsuits.  S.B. 1344 would exempt a
nonprofit corporation officer from liability concerning any action taken or
omission made, unless the officer's conduct was not made in good faith. 

PURPOSE

As proposed, S.B. 1344 exempts an officer of a nonprofit corporation from
liability.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

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

Sec. 2.22.  OFFICER LIABILITY.  Provides that an officer is not liable to a
corporation or any other person for an action taken or omission made by the
officer in that capacity 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.