SRC-BWC S.B. 731 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 731
77R6732 CLG-DBy: Brown, J. E. "Buster"
Jurisprudence
4/4/2001
As Filed


DIGEST AND PURPOSE 

Currently, volunteer directors in a nonprofit corporation receive only
limited liability with respect to acts and omissions performed within the
scope of their duties.  As proposed, S.B. 731 amends the Texas Non-Profit
Corporation Act to include a limitation on officer liability. S.B. 731
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 or in the best interest of the corporation.   

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends the Texas Non-Profit Corporation Act (Article 1396-1.01
et seq., V.T.C.S.), 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, 2001.
                       Makes application of this Act prospective.