BILL NUMBER: AB 1529INTRODUCED BILL TEXT INTRODUCED BY Assembly Member John A. Prez JANUARY 17, 2014 An act to add Section 5008.9 to the Corporations Code, relating to nonprofit corporations. LEGISLATIVE COUNSEL'S DIGEST AB 1529, as introduced, John A. Prez. Nonprofit corporations: dissolution. Existing law authorizes and regulates the formation and operation of a corporation, nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation, including, but not limited to, the adoption and contents of corporate bylaws. This bill would require the office of the Secretary of State, the Franchise Tax Board, and the office of the Attorney General to collectively review and develop a streamlined process to efficiently dissolve a nonprofit corporation to the extent that this process is consistent with other sections of law. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) There are more than 144,000 nonprofit corporations in California that provide a variety of programs and services in areas as diverse as education, recreation, health care, legal, job training, and housing to millions of Californians. These organizations, depending on their formation status, are required to register with the office of the Secretary of State, the Franchise Tax Board, and the office of the Attorney General. (b) Each of these state agencies has a specific role to play in the establishment and oversight of a nonprofit corporation. (c) The office of the Secretary of State is in charge of administering the process for a nonprofit corporation that chooses to incorporate and also has the continued duty to ensure that the nonprofit corporation adheres to the mission for which it was formed. (d) The Franchise Tax Board has the responsibility of determining, reviewing, and monitoring the state tax-exempt status of a nonprofit corporation to ensure that its tax-exempt status still applies. (e) The California Attorney General regulates the nonprofit organizations and individuals that administer or solicit charitable funds or assets in California and has broad legal and statutory authority to commence enforcement actions against charitable organizations and trusts. (f) Through each of their roles, the office of the Secretary of State, the Franchise Tax Board, and the office of the Attorney General play a crucial role in ensuring that the nonprofit corporations of California are adequately protecting the public's trust. (g) Every year, hundreds of nonprofit corporations seek administrative changes to expand their mission or alter their tax status, and, in some cases, to even go out of existence. This dissolution process, which involves the winding down of the nonprofit corporation's affairs, is very cumbersome and protracted. SEC. 2. Section 5008.9 is added to the Corporations Code, to read: 5008.9. In order to more effectively analyze and monitor the status, finances, and activities of a corporation, as defined in Section 5046, in the state, the office of the Secretary of State, the Franchise Tax Board, and the office of the Attorney General shall collectively review and develop a streamlined process to efficiently dissolve a corporation to the extent that this process is consistent with other sections of law.