HBA-KDB S.B. 731 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 731 By: Brown, J. E. "Buster" Civil Practices 5/11/2001 Engrossed BACKGROUND AND PURPOSE The officers of a nonprofit corporation (nonprofit) consist of a president and a secretary and may also consist of one or more vice-presidents, a treasurer, and such other officers and assistant officers as may be deemed necessary. While current law limits the liability of a director of a nonprofit acting in good faith, this limitation is not extended to officers. Senate Bill 731 provides that an officer of a nonprofit is not liable to the corporation or any other person for an action taken or omission made unless the officer's conduct was not made in good faith, with ordinary care, or in the best interest of the corporation. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 731 amends the Texas Non-Profit Corporation Act to provide that an officer of a nonprofit corporation 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. These provisions are prohibited from affecting the liability of a corporation for an act or omission of the officer. EFFECTIVE DATE September 1, 2001.