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.