Friday, October 14, 2011

Round Up of 2011 California Nonprofit Legislation

Round'em up!
Governor Jerry Brown signed into law hundreds of pieces of legislation these past few weeks. Most of these laws will go into effect January 1, 2011. The following laws, in particular, impact nonprofit and tax-exempt organizations in some manner:
  • AB 289, Cedillo - Extends the sales and use tax exemption for retail items sold by thrift stores operated by nonprofit organizations to assist individuals with HIV and AIDS.
  • AB 657, Gordon - Allows businesses (including nonprofit corporations) to elect to receive email notices from the Secretary of State, in lieu of hard copy mailings. The bill also standardizes the filing requirements for different types of business entities and makes other technical changes to improve the Secretary of State's ability to administer the law.
  • AB 703, Gordon - Extends the property tax exemption t 2022 for certain lands acquired by nonprofit organizations for natural resource preservation and open-space purposes
  • AB 997, Wagner - Exempts certain qualified nonprofit corporations and charitable trusts from the requirements of the Professional Fiduciaries Act.
  • AB 1163, Brownly - Expands the law to allow the California Educational Facilities Authority to act as a conduit issuer of tax exempt bonds for private religious colleges.
  • AB 1211, Silva - As previously discussed here, makes various changes to the Corporations Code to make the law more clear with regard to the obligations and requirements for nonprofit corporations and unincorporated associations.
  • SB 436, Kehoe - Authorizes state or local agencies to allow qualified and approved nonprofits or special districts to hold property and long-term stewardship funds to mitigate adverse impacts caused by development projects
  • SB 668, Evans - Allows cities and counties to accept contributions from nonprofit or public agencies for specific land that is under a Williamson Act contract to supplement forgone property tax revenues.
In addition to the above bills, two separate bills were passed enacting new corporate forms that blend business (for-profit) corporations with nonprofit purposes:
  •  AB 361, Huffman - Authorizes the creation of a new corporate form called a "benefit corporation" and provides the rules that must be followed by these types of entities. See the press release here from B Lab, a primary proponent of the bill.
  • SB 201, DeSaulnier - Authorizes the creation of a new corporate form called a "flexible purpose corporation" and provides for the rules that must be followed by these types of entities. For a thorough discussion of the flexible purpose corporation, see the FAQs from the California Working Group for New Corporate Forms, who drafted the legislation, available at the Business for Good Blog of R.Todd Johnson, one of the working group members. (h/t Gene Takagi)
For the complete text and current status information for these or any other bills in the California legislature, go to the Bill Information page of the Official California Legislative Information website,

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