1-1     By:  Brown                                             S.B. No. 731
 1-2           (In the Senate - Filed February 15, 2001; February 19, 2001,
 1-3     read first time and referred to Committee on Jurisprudence;
 1-4     April 10, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 6, Nays 0; April 10, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 731                    By:  Brown
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the liability of an officer of a nonprofit corporation.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  The Texas Non-Profit Corporation Act (Article
1-13     1396-1.01 et seq., Vernon's Texas Civil Statutes) is amended by
1-14     adding Article 2.22 to read as follows:
1-15           Art. 2.22.  OFFICER LIABILITY.  (a)  An officer is not liable
1-16     to the corporation or any other person for an action taken or
1-17     omission made by the officer in the person's capacity as an officer
1-18     unless the officer's conduct was not exercised:
1-19                 (1)  in good faith;
1-20                 (2)  with ordinary care; and
1-21                 (3)  in a manner the officer reasonably believes to be
1-22     in the best interest of the corporation.
1-23           (b)  This article shall not affect the liability of the
1-24     corporation for an act or omission of the officer.
1-25           SECTION 2.  This Act takes effect September 1, 2001, and
1-26     applies only to an action filed on or after that date.  An action
1-27     filed before the effective date of this Act is governed by the law
1-28     in effect when the action was filed, and the former law is
1-29     continued in effect for that purpose.
1-30                                  * * * * *