By Brown                                               S.B. No. 731
         77R6732 CLG-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the liability of an officer of a nonprofit corporation.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  The Texas Non-Profit Corporation Act (Article
 1-5     1396-1.01 et seq., Vernon's Texas Civil Statutes) is amended by
 1-6     adding Article 2.22 to read as follows:
 1-7           Art. 2.22.  OFFICER LIABILITY.  An officer is not liable to
 1-8     the corporation or any other person for an action taken or omission
 1-9     made by the officer in the person's capacity as an officer unless
1-10     the officer's conduct was not exercised:
1-11                 (1)  in good faith;
1-12                 (2)  with ordinary care; and
1-13                 (3)  in a manner the officer reasonably believes to be
1-14     in the best interest of the corporation.
1-15           SECTION 2.  This Act takes effect September 1, 2001, and
1-16     applies only to an action filed on or after that date.  An action
1-17     filed before the effective date of this Act is governed by the law
1-18     in effect when the action was filed, and the former law is
1-19     continued in effect for that purpose.