78R2620 CLG-F
By: West H.B. No. 3080
A BILL TO BE ENTITLED
AN ACT
relating to the qualifications of a member of and meetings held by
the board of directors of a nonprofit corporation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section A, Article 2.10, Texas Non-Profit
Corporation Act (Article 1396-2.10, Vernon's Texas Civil
Statutes), is amended to read as follows:
A. If a corporation has members:
(1) Meetings of members shall be held at such place,
either within or without this State, as may be provided in the
by-laws. In the absence of any such provision, all meetings shall
be held at the registered office of the corporation in this State.
(2) An annual meeting of the members shall be held at
such times as may be provided in the by-laws, except that where the
by-laws of a corporation provide for more than one regular meeting
of members each year, an annual meeting shall not be required, and
directors may be elected at such meetings as the by-laws may
provide. Failure to hold the annual meeting at the designated time
shall not work a dissolution of the corporation. In the event the
board of directors fails to call the annual meeting at the
designated time, any member may make demand that such meeting be
held within a reasonable time, such demand to be made in writing by
registered mail directed to any officer of the corporation. If the
annual meeting of members is not called within sixty (60) days
following such demand, any member may compel the holding of such
annual meeting by legal action directed against said board, and all
of the extraordinary writs of common law and of courts of equity
shall be available to such member to compel the holding of such
annual meeting. Each and every member is hereby declared to have a
justiciable interest sufficient to enable him to institute and
prosecute such legal proceedings.
(3) Special meetings of the members may be called by
the president, the board of directors, by members having not less
than one-tenth (1/10) of the votes entitled to be cast at such
meeting, or such other officers or persons as may be provided in the
articles of incorporation or by-laws.
(4) A meeting of the members shall be conducted
according to Robert's Rules of Order Newly Revised.
SECTION 2. Article 2.14, Texas Non-Profit Corporation Act
(Article 1396-2.14, Vernon's Texas Civil Statutes), is amended by
adding Section G to read as follows:
G. In this section, "company" means a corporation,
partnership, limited partnership, registered limited liability
partnership, trust, association, joint stock company, joint
venture, limited liability company, or other form of business
organization other than a sole proprietorship. The following
persons may not simultaneously serve on the board of directors of a
corporation for which an ownership or other vested interest in real
property is required for membership:
(1) an individual and the individual's spouse,
regardless of whether the spouses have a separate ownership
interest in the real property; or
(2) two or more individuals who are serving as an
officer or director of, or a person performing a similar function
for the same company if:
(a) the real property is a condominium as defined
by Section 81.002, Property Code, or another type of real property
having a similar ownership structure; and
(b) the company is a member of the corporation
and owns more than one unit of the real property.
SECTION 3. (a) This Act takes effect September 1, 2003.
(b) The change in law made by this Act applies only to the
appointment, designation, or election of a board director to a
nonprofit corporation on or after the effective date of this Act.
(c) The change in law made by this Act does not affect the
eligibility of a board director of a nonprofit corporation to
complete the term being served by the director on the effective date
of this Act.