IN
Indiana House Bill HB1075

Indiana 2023 Regular Session

Indiana House Bill HB1075 Compare Versions

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1-*HB1075.3*
1+*HB1075.2*
22 Reprinted
3-January 27, 2023
3+January 24, 2023
44 HOUSE BILL No. 1075
55 _____
6-DIGEST OF HB 1075 (Updated January 26, 2023 12:15 pm - DI 149)
6+DIGEST OF HB 1075 (Updated January 23, 2023 5:39 pm - DI 106)
77 Citations Affected: IC 4-6; IC 23-17.
88 Synopsis: Nonprofit organizations. Provides that the contents of an
99 investigative demand issued by the attorney general are confidential.
1010 Expands the definition of "public benefit corporation" to include a
1111 domestic corporation that is supported by public funds or authorized to
1212 spend public funds in furtherance of its mission or that is a not-for-
1313 profit corporation that aims to serve a public benefit. Provides that a
1414 court may dissolve a nonprofit corporation under certain circumstances
1515 and provides exceptions to the types of corporations that may be
1616 dissolved under this procedure. Specifies procedural requirements that
1717 the attorney general must take before petitioning the court for
1818 dissolution for certain reasons. Permits a court to appoint a receiver to
1919 manage a nonprofit corporation even if an action to dissolve the
2020 corporation has not been filed. Provides additional remedies that the
2121 attorney general may seek for violations. Requires a nonprofit
2222 corporation to maintain certain records for three years. Provides that
23-attorney general may not access records of specified entities. Prevents
24-a state agency from imposing certain filing or reporting requirements
25-that are more burdensome than what is required by state law and
26-provides certain exceptions. Makes conforming and clarifying changes.
23+attorney general may not access records of specified nonprofits.
24+Prevents a state agency from imposing certain filing or reporting
25+requirements that are more burdensome than what is required by state
26+law and provides certain exceptions. Makes conforming and clarifying
27+changes.
2728 Effective: Upon passage; July 1, 2023.
2829 Jeter
2930 January 9, 2023, read first time and referred to Committee on Judiciary.
3031 January 19, 2023, amended, reported — Do Pass.
3132 January 23, 2023, read second time, amended, ordered engrossed.
32-January 24, 2023, engrossed. Returned to second reading.
33-January 26, 2023, re-read second time, amended, ordered engrossed.
3433 HB 1075—LS 6457/DI 148 Reprinted
35-January 27, 2023
34+January 24, 2023
3635 First Regular Session of the 123rd General Assembly (2023)
3736 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3837 Constitution) is being amended, the text of the existing provision will appear in this style type,
3938 additions will appear in this style type, and deletions will appear in this style type.
4039 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
4140 provision adopted), the text of the new provision will appear in this style type. Also, the
4241 word NEW will appear in that style type in the introductory clause of each SECTION that adds
4342 a new provision to the Indiana Code or the Indiana Constitution.
4443 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
4544 between statutes enacted by the 2022 Regular Session of the General Assembly.
4645 HOUSE BILL No. 1075
4746 A BILL FOR AN ACT to amend the Indiana Code concerning
4847 business and other associations.
4948 Be it enacted by the General Assembly of the State of Indiana:
5049 1 SECTION 1. IC 4-6-3-9, AS AMENDED BY P.L.5-2015,
5150 2 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5251 3 JULY 1, 2023]: Sec. 9. (a) The contents of an investigative demand,
5352 4 all documentary material, answers to written interrogatories, and
5453 5 transcripts of oral testimony that are provided pursuant to an the
5554 6 investigative demand shall be kept confidential by the attorney general
5655 7 until an action is filed against a person for the violation under
5756 8 investigation, unless:
5857 9 (1) confidentiality is waived by the person being investigated and
5958 10 the person who has testified, answered interrogatories, or
6059 11 produced documentary material; or
6160 12 (2) disclosure is made by the attorney general to another state or
6261 13 federal attorney general or law enforcement agency for the
6362 14 purposes of cooperation in law enforcement of state or federal
6463 15 laws.
6564 16 (b) All documentary material, answers to written interrogatories,
6665 17 and transcripts of oral testimony that are provided to the attorney
6766 HB 1075—LS 6457/DI 148 2
6867 1 general pursuant to an investigative demand issued by another state or
6968 2 federal attorney general or law enforcement agency under similar
7069 3 authority shall be treated as if obtained pursuant to an investigative
7170 4 demand issued by the attorney general under section 3 of this chapter.
7271 5 SECTION 2. IC 23-17-2-23 IS AMENDED TO READ AS
7372 6 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 23. "Public benefit
7473 7 corporation" means a domestic corporation that is the following:
7574 8 (1) Either:
7675 9 (A) formed as a public benefit corporation under this title;
7776 10 (B) designated as a public benefit corporation by another law;
7877 11 (C) recognized as tax exempt under Section 501(c)(3) of the
7978 12 Internal Revenue Code of 1986; or
8079 13 (D) a not-for-profit corporation that serves a public benefit
8180 14 with an operating budget that is supported in whole or in
8281 15 part by public funds, or is otherwise authorized to spend
8382 16 public funds in furtherance of its mission; or
8483 17 (D) (E) otherwise organized for a public or charitable purpose,
8584 18 including a veterans organization or a post, a unit, or an
8685 19 auxiliary of the veterans organization, that is chartered by a
8786 20 federal statute for patriotic, public, or charitable purposes and
8887 21 recognized as tax exempt under Section 501(c)(4) or Section
8988 22 501(c)(19) of the Internal Revenue Code.
9089 23 (2) Restricted so that on dissolution the corporation must
9190 24 distribute the corporation's assets to an organization organized for
9291 25 a public or charitable purpose, a religious corporation, the United
9392 26 States, a state, or a person that is recognized as exempt under
9493 27 Section 501(c)(3) of the Internal Revenue Code of 1986.
9594 28 (3) Not a religious corporation.
9695 29 SECTION 3. IC 23-17-24-1 IS AMENDED TO READ AS
9796 30 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 1. (a) A circuit
9897 31 court or superior court may dissolve a corporation as follows:
9998 32 (1) In a proceeding by the attorney general if one (1) of the
10099 33 following is established:
101100 34 (A) The corporation obtained the corporation's articles of
102101 35 incorporation through fraud.
103102 36 (B) The corporation has continued to exceed or abuse the
104103 37 authority conferred upon the corporation by law.
105104 38 (C) The corporation is a public benefit corporation and the
106105 39 corporate assets are being misapplied or wasted.
107106 40 (D) The corporation is a public benefit corporation and is no
108107 41 longer able to carry out the corporation's purposes or a
109108 42 requirement imposed upon the corporation by law.
110109 HB 1075—LS 6457/DI 148 3
111110 1 (E) The corporation is a public benefit corporation and
112111 2 fails to use solicited property or assets for the purpose
113112 3 solicited.
114113 4 (F) The corporation is a public benefit corporation and has
115114 5 grossly mismanaged property or assets, or committed
116115 6 another breach of duty.
117116 7 (G) The corporation fails to maintain a record required
118117 8 under IC 23-17-27-1.
119118 9 (H) The corporation has failed to respond in a good faith
120119 10 manner to a reasonable written interrogatory from the
121120 11 attorney general to the corporation, its officers, or
122121 12 directors.
123-13 Clauses (E) through (H) do not apply to a county hospital
124-14 licensed under IC 16-22 or a public utility (as defined in
125-15 IC 8-1-2-1).
126-16 (2) Before commencing an action under subdivision (1)(G) or
127-17 (1)(H), the attorney general shall:
128-18 (A) deliver written notice of the specific violation to the
129-19 corporation; and
130-20 (B) give the corporation forty-five (45) days to execute a
131-21 corrective plan to remedy the violation, including by:
132-22 (i) amending the corporation articles or bylaws; and
133-23 (ii) taking or ceasing an action.
134-24 The attorney general may commence an action against a
135-25 corporation if the corporation fails to remedy the violation
136-26 within forty-five (45) days after receiving a written notice
137-27 under this subdivision.
138-28 (2) (3) Except as provided in the articles of incorporation or
139-29 bylaws of a religious corporation, in a proceeding by fifty (50)
140-30 members or members holding at least five percent (5%) of the
141-31 voting power, whichever is less, or by a director or a person
142-32 specified in articles of corporation, if one (1) of the following is
143-33 established:
144-34 (A) The directors are deadlocked in the management of the
145-35 corporate affairs, and the members, if any, are unable to break
146-36 the deadlock.
147-37 (B) The directors or those in control of the corporation have
148-38 acted, are acting, or will act in a manner that is illegal,
149-39 oppressive, or fraudulent.
150-40 (C) The members have deadlocked in voting power and have
151-41 failed, for a period that includes at least two (2) consecutive
152-42 annual meeting dates, to elect successors to directors whose
122+13 Clauses (E) through (H) do not apply to a community mental
123+14 health center (as defined in IC 12-7-2-38), community
124+15 intellectual disability and other developmental disabilities
125+16 centers (as defined in IC 12-7-2-39), an ICF/IID (as defined in
126+17 IC 16-29-4-2), a federally-qualified health center (as defined
127+18 in 42 U.S.C. 1396d(l)(2)(B)), a hospital licensed under
128+19 IC 12-25, IC 16-21, IC 16-22, or IC 16-23, a health carrier (as
129+20 defined in IC 27-2-26-1), or a public utility (as defined in
130+21 IC 8-1-2-1).
131+22 (2) Before commencing an action under subdivision (1)(G) or
132+23 (1)(H), the attorney general shall:
133+24 (A) deliver written notice of the specific violation to the
134+25 corporation; and
135+26 (B) give the corporation forty-five (45) days to execute a
136+27 corrective plan to remedy the violation, including by:
137+28 (i) amending the corporation articles or bylaws; and
138+29 (ii) taking or ceasing an action.
139+30 The attorney general may commence an action against a
140+31 corporation if the corporation fails to remedy the violation
141+32 within forty-five (45) days after receiving a written notice
142+33 under this subdivision.
143+34 (2) (3) Except as provided in the articles of incorporation or
144+35 bylaws of a religious corporation, in a proceeding by fifty (50)
145+36 members or members holding at least five percent (5%) of the
146+37 voting power, whichever is less, or by a director or a person
147+38 specified in articles of corporation, if one (1) of the following is
148+39 established:
149+40 (A) The directors are deadlocked in the management of the
150+41 corporate affairs, and the members, if any, are unable to break
151+42 the deadlock.
153152 HB 1075—LS 6457/DI 148 4
154-1 terms have, or would otherwise have, expired.
155-2 (D) The corporate assets are being misapplied or wasted.
156-3 (E) The corporation is a public benefit or religious corporation
157-4 and is no longer able to carry out the corporation's purposes.
158-5 (3) (4) In a proceeding by a creditor if either of the following is
159-6 established:
160-7 (A) The creditor's claim has been reduced to judgment, the
161-8 execution on the judgment returned unsatisfied, and the
162-9 corporation is insolvent.
163-10 (B) The corporation has admitted in writing that the creditor's
164-11 claim is due and owing and the corporation is insolvent.
165-12 (4) (5) In a proceeding by the corporation to have the
166-13 corporation's voluntary dissolution continued under court
167-14 supervision.
168-15 (b) Before dissolving a corporation, a court must consider the
169-16 following:
170-17 (1) Reasonable alternatives to dissolution.
171-18 (2) If dissolution is in the public interest if the corporation is a
172-19 public benefit corporation.
173-20 (3) If dissolution is the best way of protecting the interests of
174-21 members if the corporation is a mutual benefit corporation.
175-22 SECTION 4. IC 23-17-24-1.5, AS AMENDED BY P.L.65-2014,
176-23 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
177-24 UPON PASSAGE]: Sec. 1.5. (a) This section applies to the following:
178-25 (1) Notwithstanding IC 23-17-1-1, all corporations organized
179-26 under Indiana law for a purpose for which a corporation may be
180-27 organized under this article, regardless of the date of
181-28 incorporation.
182-29 (2) A foreign corporation that desires to transact business in
183-30 Indiana.
184-31 (b) In addition to a dissolution under section 1 of this chapter, the
185-32 attorney general may petition a court to issue one (1) or more of the
186-33 following remedies:
187-34 (1) Injunctive relief.
188-35 (2) Appointment of temporary or permanent receivers.
189-36 (3) Permanent removal of trustees, corporate officers, or directors
190-37 who have breached the fiduciary duty.
191-38 (4) Appointment of permanent court approved replacement
192-39 trustees, corporate officers or directors, and members.
193-40 (5) Sequestration of assets.
194-41 (6) Reimbursement of donations to persons from whom
195-42 contributions have been unlawfully solicited.
153+1 (B) The directors or those in control of the corporation have
154+2 acted, are acting, or will act in a manner that is illegal,
155+3 oppressive, or fraudulent.
156+4 (C) The members have deadlocked in voting power and have
157+5 failed, for a period that includes at least two (2) consecutive
158+6 annual meeting dates, to elect successors to directors whose
159+7 terms have, or would otherwise have, expired.
160+8 (D) The corporate assets are being misapplied or wasted.
161+9 (E) The corporation is a public benefit or religious corporation
162+10 and is no longer able to carry out the corporation's purposes.
163+11 (3) (4) In a proceeding by a creditor if either of the following is
164+12 established:
165+13 (A) The creditor's claim has been reduced to judgment, the
166+14 execution on the judgment returned unsatisfied, and the
167+15 corporation is insolvent.
168+16 (B) The corporation has admitted in writing that the creditor's
169+17 claim is due and owing and the corporation is insolvent.
170+18 (4) (5) In a proceeding by the corporation to have the
171+19 corporation's voluntary dissolution continued under court
172+20 supervision.
173+21 (b) Before dissolving a corporation, a court must consider the
174+22 following:
175+23 (1) Reasonable alternatives to dissolution.
176+24 (2) If dissolution is in the public interest if the corporation is a
177+25 public benefit corporation.
178+26 (3) If dissolution is the best way of protecting the interests of
179+27 members if the corporation is a mutual benefit corporation.
180+28 SECTION 4. IC 23-17-24-1.5, AS AMENDED BY P.L.65-2014,
181+29 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
182+30 UPON PASSAGE]: Sec. 1.5. (a) This section applies to the following:
183+31 (1) Notwithstanding IC 23-17-1-1, all corporations organized
184+32 under Indiana law for a purpose for which a corporation may be
185+33 organized under this article, regardless of the date of
186+34 incorporation.
187+35 (2) A foreign corporation that desires to transact business in
188+36 Indiana.
189+37 (b) In addition to a dissolution under section 1 of this chapter, the
190+38 attorney general may petition a court to issue one (1) or more of the
191+39 following remedies:
192+40 (1) Injunctive relief.
193+41 (2) Appointment of temporary or permanent receivers.
194+42 (3) Permanent removal of trustees, corporate officers, or directors
196195 HB 1075—LS 6457/DI 148 5
197-1 (7) Reimbursement of costs, to be payable to the attorney
198-2 general on behalf of the state, including:
199-3 (A) reasonable attorney's fees for the action; and
200-4 (B) expenses related to the performance of an audit.
201-5 (8) Assessment of a civil penalty of not more than ten
202-6 thousand dollars ($10,000) per violation and not more than
203-7 twenty thousand dollars ($20,000) for each additional
204-8 violation, which does not replace any other relief granted by
205-9 the court.
206-10 (9) Other relief the court deems appropriate.
207-11 (c) The attorney general may seek a remedy against any or all of the
208-12 following:
209-13 (1) If the attorney general establishes a condition enumerated in
210-14 section 1(a)(1) of this chapter, a corporation.
211-15 (2) For a violation of the officer's duties under IC 23-17-14-2, a
212-16 corporate officer.
213-17 (3) For a violation of IC 23-17-13, a corporate director.
214-18 (d) In addition to any remedies described in subsection (b), the
215-19 attorney general may accept a written assurance of voluntary
216-20 compliance with respect to:
217-21 (1) a past, an existing, or an imminent condition enumerated in
218-22 section 1(a)(1) of this chapter; or
219-23 (2) any past, existing, or imminent violation of a duty under this
220-24 article by a corporation, director, officer, member, trustee, or
221-25 other corporate principal.
222-26 (e) An assurance of voluntary compliance described in subsection
223-27 (d) may include a stipulation for the voluntary payment by the person
224-28 of:
225-29 (1) the costs of an investigation;
226-30 (2) an amount to be held in escrow pending the outcome of an
227-31 action;
228-32 (3) an amount to be held in escrow pending the outcome of an
229-33 action as restitution to an aggrieved nonprofit corporation or
230-34 person; or
231-35 (4) both amounts described in subdivisions (2) and (3).
232-36 (f) An assurance of voluntary compliance described in subsection
233-37 (d):
234-38 (1) must be filed with; and
235-39 (2) is subject to the approval of;
236-40 the court having jurisdiction.
237-41 (g) An assurance of voluntary compliance described in subsection
238-42 (d) is not considered an admission of a violation of any law.
196+1 who have breached the fiduciary duty.
197+2 (4) Appointment of permanent court approved replacement
198+3 trustees, corporate officers or directors, and members.
199+4 (5) Sequestration of assets.
200+5 (6) Reimbursement of donations to persons from whom
201+6 contributions have been unlawfully solicited.
202+7 (7) Reimbursement of costs, to be payable to the attorney
203+8 general on behalf of the state, including:
204+9 (A) reasonable attorney's fees for the action; and
205+10 (B) expenses related to the performance of an audit.
206+11 (8) Assessment of a civil penalty of not more than ten
207+12 thousand dollars ($10,000) per violation and not more than
208+13 twenty thousand dollars ($20,000) for each additional
209+14 violation, which does not replace any other relief granted by
210+15 the court.
211+16 (9) Other relief the court deems appropriate.
212+17 (c) The attorney general may seek a remedy against any or all of the
213+18 following:
214+19 (1) If the attorney general establishes a condition enumerated in
215+20 section 1(a)(1) of this chapter, a corporation.
216+21 (2) For a violation of the officer's duties under IC 23-17-14-2, a
217+22 corporate officer.
218+23 (3) For a violation of IC 23-17-13, a corporate director.
219+24 (d) In addition to any remedies described in subsection (b), the
220+25 attorney general may accept a written assurance of voluntary
221+26 compliance with respect to:
222+27 (1) a past, an existing, or an imminent condition enumerated in
223+28 section 1(a)(1) of this chapter; or
224+29 (2) any past, existing, or imminent violation of a duty under this
225+30 article by a corporation, director, officer, member, trustee, or
226+31 other corporate principal.
227+32 (e) An assurance of voluntary compliance described in subsection
228+33 (d) may include a stipulation for the voluntary payment by the person
229+34 of:
230+35 (1) the costs of an investigation;
231+36 (2) an amount to be held in escrow pending the outcome of an
232+37 action;
233+38 (3) an amount to be held in escrow pending the outcome of an
234+39 action as restitution to an aggrieved nonprofit corporation or
235+40 person; or
236+41 (4) both amounts described in subdivisions (2) and (3).
237+42 (f) An assurance of voluntary compliance described in subsection
239238 HB 1075—LS 6457/DI 148 6
240-1 (h) If the attorney general closes a matter by accepting an assurance
241-2 of voluntary compliance described in subsection (d), the attorney
242-3 general may reopen the matter for further proceedings within the period
243-4 of the applicable statute of limitations.
244-5 SECTION 5. IC 23-17-24-3, AS AMENDED BY P.L.245-2005,
245-6 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
246-7 UPON PASSAGE]: Sec. 3. (a) A court in a judicial proceeding brought
247-8 by the attorney general or by any other party named under section 1 of
248-9 this chapter to dissolve a public benefit or mutual benefit corporation
249-10 may appoint at least one (1):
250-11 (1) receiver to wind up and liquidate; or
251-12 (2) custodian to manage;
252-13 the affairs of the corporation. The court shall hold a hearing, after
253-14 notifying all parties to the proceeding and any interested persons
254-15 designated by the court, before appointing a receiver or custodian. The
255-16 court appointing a receiver or custodian has exclusive jurisdiction over
256-17 the corporation and all of the corporation's property wherever located.
257-18 (b) The court may appoint an individual or a domestic or foreign
258-19 business or nonprofit corporation authorized to transact business in
259-20 Indiana as a receiver or custodian. The court may require the receiver
260-21 or custodian to post bond, with or without sureties, in an amount the
261-22 court directs.
262-23 (c) The court shall describe the powers and duties of the receiver or
263-24 custodian in the appointing order, which may be amended from time to
264-25 time, including the following:
265-26 (1) The receiver may do the following:
266-27 (A) Dispose of all or any part of the assets of the corporation
267-28 wherever located, at a public or private sale, if authorized by
268-29 the court. However, the corporation is subject to a trust, an
269-30 endowment, and other restrictions that would be applicable to
270-31 the corporation.
271-32 (B) Sue and defend in the receiver's or custodian's name as
272-33 receiver or custodian of the corporation in all Indiana courts.
273-34 (2) The custodian may exercise all of the powers of the
274-35 corporation, through or in place of the corporation's board of
275-36 directors or officers, to the extent necessary to manage the affairs
276-37 of the corporation in the best interests of the corporation's
277-38 members and creditors or to carry out the corporation's lawful
278-39 purposes.
279-40 (d) The court during a receivership may redesignate the receiver a
280-41 custodian, and during a custodianship may redesignate the custodian
281-42 a receiver if doing so is in the best interests of the corporation and the
239+1 (d):
240+2 (1) must be filed with; and
241+3 (2) is subject to the approval of;
242+4 the court having jurisdiction.
243+5 (g) An assurance of voluntary compliance described in subsection
244+6 (d) is not considered an admission of a violation of any law.
245+7 (h) If the attorney general closes a matter by accepting an assurance
246+8 of voluntary compliance described in subsection (d), the attorney
247+9 general may reopen the matter for further proceedings within the period
248+10 of the applicable statute of limitations.
249+11 SECTION 5. IC 23-17-24-3, AS AMENDED BY P.L.245-2005,
250+12 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
251+13 UPON PASSAGE]: Sec. 3. (a) A court in a judicial proceeding brought
252+14 by the attorney general or by any other party named under section 1 of
253+15 this chapter to dissolve a public benefit or mutual benefit corporation
254+16 may appoint at least one (1):
255+17 (1) receiver to wind up and liquidate; or
256+18 (2) custodian to manage;
257+19 the affairs of the corporation. The court shall hold a hearing, after
258+20 notifying all parties to the proceeding and any interested persons
259+21 designated by the court, before appointing a receiver or custodian. The
260+22 court appointing a receiver or custodian has exclusive jurisdiction over
261+23 the corporation and all of the corporation's property wherever located.
262+24 (b) The court may appoint an individual or a domestic or foreign
263+25 business or nonprofit corporation authorized to transact business in
264+26 Indiana as a receiver or custodian. The court may require the receiver
265+27 or custodian to post bond, with or without sureties, in an amount the
266+28 court directs.
267+29 (c) The court shall describe the powers and duties of the receiver or
268+30 custodian in the appointing order, which may be amended from time to
269+31 time, including the following:
270+32 (1) The receiver may do the following:
271+33 (A) Dispose of all or any part of the assets of the corporation
272+34 wherever located, at a public or private sale, if authorized by
273+35 the court. However, the corporation is subject to a trust, an
274+36 endowment, and other restrictions that would be applicable to
275+37 the corporation.
276+38 (B) Sue and defend in the receiver's or custodian's name as
277+39 receiver or custodian of the corporation in all Indiana courts.
278+40 (2) The custodian may exercise all of the powers of the
279+41 corporation, through or in place of the corporation's board of
280+42 directors or officers, to the extent necessary to manage the affairs
282281 HB 1075—LS 6457/DI 148 7
283-1 corporation's members and creditors.
284-2 (e) The court may, during the receivership or custodianship, order
285-3 compensation paid and expense disbursements or reimbursements
286-4 made to the receiver or custodian and the receiver's or custodian's
287-5 counsel from the assets of the corporation or proceeds from the sale of
288-6 the assets.
289-7 (f) Upon a showing of reasonable cause by the attorney general
290-8 or any other person, a circuit or superior court may appoint a
291-9 receiver to manage the corporation or property of the corporation
292-10 even if an action to dissolve the corporation has not been filed.
293-11 SECTION 6. IC 23-17-27-1, AS AMENDED BY P.L.118-2017,
294-12 SECTION 94, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
295-13 UPON PASSAGE]: Sec. 1. (a) A corporation shall keep as permanent
296-14 records a record of the following:
297-15 (1) Minutes of meetings of the corporation's members and board
298-16 of directors.
299-17 (2) A record of actions taken by the members or directors without
300-18 a meeting.
301-19 (3) A record of actions taken by committees of the board of
302-20 directors as authorized under IC 23-17-15-6(d).
303-21 (b) A corporation shall maintain appropriate accounting records.
304-22 (c) A corporation or the corporation's agent shall maintain a record
305-23 of the corporation's members in a form that permits preparation of a list
306-24 of the names and addresses of all members, in alphabetical order by
307-25 class, showing the number of votes each member is entitled to cast.
308-26 (d) A corporation shall maintain the corporation's records in written
309-27 form or in another form capable of conversion into written form within
310-28 a reasonable time.
311-29 (e) A corporation shall keep a copy of the following records at the
312-30 corporation's principal office:
313-31 (1) The corporation's articles of incorporation or restated articles
314-32 of incorporation and all amendments to the articles of
315-33 incorporation currently in effect.
316-34 (2) The corporation's bylaws or restated bylaws and all
317-35 amendments to the bylaws currently in effect.
318-36 (3) Resolutions adopted by the corporation's board of directors
319-37 relating to the characteristics, qualifications, rights, limitations,
320-38 and obligations of members or a class or category of members.
321-39 (4) The minutes of all meetings of members and records of all
322-40 actions approved by the members for the past three (3) years.
323-41 (5) Written communications to members generally within the past
324-42 three (3) years, including the financial statements furnished for
282+1 of the corporation in the best interests of the corporation's
283+2 members and creditors or to carry out the corporation's lawful
284+3 purposes.
285+4 (d) The court during a receivership may redesignate the receiver a
286+5 custodian, and during a custodianship may redesignate the custodian
287+6 a receiver if doing so is in the best interests of the corporation and the
288+7 corporation's members and creditors.
289+8 (e) The court may, during the receivership or custodianship, order
290+9 compensation paid and expense disbursements or reimbursements
291+10 made to the receiver or custodian and the receiver's or custodian's
292+11 counsel from the assets of the corporation or proceeds from the sale of
293+12 the assets.
294+13 (f) Upon a showing of reasonable cause by the attorney general
295+14 or any other person, a circuit or superior court may appoint a
296+15 receiver to manage the corporation or property of the corporation
297+16 even if an action to dissolve the corporation has not been filed.
298+17 SECTION 6. IC 23-17-27-1, AS AMENDED BY P.L.118-2017,
299+18 SECTION 94, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
300+19 UPON PASSAGE]: Sec. 1. (a) A corporation shall keep as permanent
301+20 records a record of the following:
302+21 (1) Minutes of meetings of the corporation's members and board
303+22 of directors.
304+23 (2) A record of actions taken by the members or directors without
305+24 a meeting.
306+25 (3) A record of actions taken by committees of the board of
307+26 directors as authorized under IC 23-17-15-6(d).
308+27 (b) A corporation shall maintain appropriate accounting records.
309+28 (c) A corporation or the corporation's agent shall maintain a record
310+29 of the corporation's members in a form that permits preparation of a list
311+30 of the names and addresses of all members, in alphabetical order by
312+31 class, showing the number of votes each member is entitled to cast.
313+32 (d) A corporation shall maintain the corporation's records in written
314+33 form or in another form capable of conversion into written form within
315+34 a reasonable time.
316+35 (e) A corporation shall keep a copy of the following records at the
317+36 corporation's principal office:
318+37 (1) The corporation's articles of incorporation or restated articles
319+38 of incorporation and all amendments to the articles of
320+39 incorporation currently in effect.
321+40 (2) The corporation's bylaws or restated bylaws and all
322+41 amendments to the bylaws currently in effect.
323+42 (3) Resolutions adopted by the corporation's board of directors
325324 HB 1075—LS 6457/DI 148 8
326-1 the past three (3) years under section 6 of this chapter.
327-2 (6) A list of the names and business or home addresses of the
328-3 corporation's current directors and officers.
329-4 (7) The corporation's most recent biennial report delivered to the
330-5 secretary of state under IC 23-0.5-2-13.
331-6 (f) Except as otherwise provided in articles of incorporation or
332-7 bylaws, ballots must be retained by a corporation until the earlier of the
333-8 following:
334-9 (1) The date of the next annual meeting.
335-10 (2) One (1) year after the date the ballot was received.
336-11 (g) The records required by subsections (a) through (e) must be
337-12 maintained for at least three (3) years.
338-13 (h) The attorney general may gain access to the records
339-14 identified in this chapter using the provisions of IC 4-6-3-3. This
340-15 subsection does not apply to a county hospital licensed under
341-16 IC 16-22 or a public utility (as defined in IC 8-1-2-1).
342-17 (i) Unless required or authorized by federal law, a state agency
343-18 (as defined in IC 4-6-3-1) may not impose an annual filing
344-19 requirement or reporting requirement upon a public benefit
345-20 corporation that is more burdensome than what is required by
346-21 state law. This subsection does not apply to a state grant or
347-22 contract, a fraud investigation, or a legal enforcement action.
348-23 SECTION 7. An emergency is declared for this act.
325+1 relating to the characteristics, qualifications, rights, limitations,
326+2 and obligations of members or a class or category of members.
327+3 (4) The minutes of all meetings of members and records of all
328+4 actions approved by the members for the past three (3) years.
329+5 (5) Written communications to members generally within the past
330+6 three (3) years, including the financial statements furnished for
331+7 the past three (3) years under section 6 of this chapter.
332+8 (6) A list of the names and business or home addresses of the
333+9 corporation's current directors and officers.
334+10 (7) The corporation's most recent biennial report delivered to the
335+11 secretary of state under IC 23-0.5-2-13.
336+12 (f) Except as otherwise provided in articles of incorporation or
337+13 bylaws, ballots must be retained by a corporation until the earlier of the
338+14 following:
339+15 (1) The date of the next annual meeting.
340+16 (2) One (1) year after the date the ballot was received.
341+17 (g) The records required by subsections (a) through (e) must be
342+18 maintained for at least three (3) years.
343+19 a county hospital licensed under IC 16-22
344+20 (h) Unless required or authorized by federal law, a state agency
345+21 (as defined in IC 4-6-3-1) may not impose an annual filing
346+22 requirement or reporting requirement upon a public benefit
347+23 corporation that is more burdensome than what is required by
348+24 state law. This subsection does not apply to a state grant or
349+25 contract, a fraud investigation, or a legal enforcement action.
350+26 SECTION 7. An emergency is declared for this act.
349351 HB 1075—LS 6457/DI 148 9
350352 COMMITTEE REPORT
351353 Mr. Speaker: Your Committee on Judiciary, to which was referred
352354 House Bill 1075, has had the same under consideration and begs leave
353355 to report the same back to the House with the recommendation that said
354356 bill be amended as follows:
355357 Page 2, between lines 3 and 4, begin a new paragraph and insert:
356358 "SECTION 2. IC 4-6-3-9, AS AMENDED BY P.L.5-2015,
357359 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
358360 JULY 1, 2023]: Sec. 9. (a) The contents of an investigative demand,
359361 all documentary material, answers to written interrogatories, and
360362 transcripts of oral testimony that are provided pursuant to an the
361363 investigative demand shall be kept confidential by the attorney general
362364 until an action is filed against a person for the violation under
363365 investigation, unless:
364366 (1) confidentiality is waived by the person being investigated and
365367 the person who has testified, answered interrogatories, or
366368 produced documentary material; or
367369 (2) disclosure is made by the attorney general to another state or
368370 federal attorney general or law enforcement agency for the
369371 purposes of cooperation in law enforcement of state or federal
370372 laws; or
371373 (3) the attorney general makes a public announcement about
372374 an investigation or that an investigative demand has been
373375 issued.
374376 (b) All documentary material, answers to written interrogatories,
375377 and transcripts of oral testimony that are provided to the attorney
376378 general pursuant to an investigative demand issued by another state or
377379 federal attorney general or law enforcement agency under similar
378380 authority shall be treated as if obtained pursuant to an investigative
379381 demand issued by the attorney general under section 3 of this chapter.".
380382 Page 2, line 12, after "(D)" insert "a not-for-profit corporation
381383 that serves a public benefit with an operating budget that is".
382384 Page 2, line 12, after "funds, or" insert "is".
383385 Page 2, line 14, after "mission;" insert "or".
384386 Page 2, delete lines 15 and 16.
385387 Page 2, line 17, delete "(F)" and insert "(E)".
386388 Page 3, line 4, delete "Gross mismanagement of" and insert "The
387389 corporation is a public benefit corporation and has grossly
388390 mismanaged".
389391 Page 3, line 4, delete "other" and insert "committed another".
390392 Page 3, line 6, delete "Failure" and insert "The corporation fails".
391393 HB 1075—LS 6457/DI 148 10
392394 Page 3, between lines 11 and 12, begin a new line block indented
393395 and insert:
394396 "Clauses (E) through (H) do not apply to a community mental
395397 health center (as defined in IC 12-7-2-38), community
396398 intellectual disability and other developmental disabilities
397399 centers (as defined in IC 12-7-2-39), an ICF/IID (as defined in
398400 IC 16-29-4-2), a federally-qualified health center (as defined
399401 in 42 U.S.C. 1396d(l)(2)(B)), a hospital licensed under
400402 IC 12-25, IC 16-21, IC 16-22, or IC 16-23, a health carrier (as
401403 defined in IC 27-2-26-1), or a public utility (as defined in
402404 IC 8-1-2-1).".
403405 Page 3, line 16, delete "thirty (30)" and insert "forty-five (45)".
404406 Page 3, delete lines 20 through 22, begin a new line block indented
405407 and insert:
406408 "The attorney general may commence an action against a
407409 corporation if the corporation fails to remedy the violation
408410 within forty-five (45) days after receiving a written notice
409411 under this subdivision.".
410412 Page 5, delete lines 13 through 25.
411413 Page 5, line 26, reset in roman "(d)".
412414 Page 5, line 26, delete "(e)".
413415 Page 5, line 34, reset in roman "(e)".
414416 Page 5, line 34, delete "(f)".
415417 Page 5, line 35, reset in roman "(d)".
416418 Page 5, line 35, delete "(e)".
417419 Page 6, line 2, reset in roman "(f)".
418420 Page 6, line 2, delete "(g)".
419421 Page 6, line 3, reset in roman "(d):".
420422 Page 6, line 3, delete "(e):".
421423 Page 6, line 7, reset in roman "(g)".
422424 Page 6, line 7, delete "(h)".
423425 Page 6, line 8, reset in roman "(d)".
424426 Page 6, line 8, delete "(e)".
425427 Page 6, line 10, reset in roman "(h)".
426428 Page 6, line 10, delete "(i)".
427429 Page 6, line 11, reset in roman "(d),".
428430 Page 6, line 11, delete "(e),".
429431 Page 7, line 17, after "IC 4-6-3-3." insert "This subsection does not
430432 apply to a community mental health center (as defined in
431433 IC 12-7-2-38), community intellectual disability and other
432434 developmental disabilities centers (as defined in IC 12-7-2-39), an
433435 ICF/IID (as defined in IC 16-29-4-2), a federally-qualified health
434436 HB 1075—LS 6457/DI 148 11
435437 center (as defined in 42 U.S.C. 1396d(l)(2)(B)), a hospital licensed
436438 under IC 12-25, IC 16-21, IC 16-22, or IC 16-23, a health carrier
437439 (as defined in IC 27-2-26-1), or a public utility (as defined in
438440 IC 8-1-2-1).".
439441 Page 7, between lines 17 and 18, begin a new paragraph and insert:
440442 "(i) Notwithstanding IC 4-6-3-4(2), a corporation must produce
441443 records under this chapter:
442444 (1) not later than forty-five (45) days; or
443445 (2) not later than ninety (90) days, if agreed by the
444446 corporation and the attorney general;
445447 from the date of service of the investigative demand served under
446448 IC 4-6-3-3.".
447449 Page 7, line 18, delete "(i)" and insert "(j)".
448450 Page 7, between lines 20 and 21, begin a new paragraph and insert:
449451 "(k) Unless required or authorized by federal law, a state agency
450452 (as defined in IC 4-6-3-1) may not impose an annual filing
451453 requirement or reporting requirement upon a public benefit
452454 corporation that is more burdensome than what is required by
453455 state law. This subsection does not apply to a state grant or
454456 contract, a fraud investigation, or a legal enforcement action.".
455457 Renumber all SECTIONS consecutively.
456458 and when so amended that said bill do pass.
457459 (Reference is to HB 1075 as introduced.)
458460 TORR
459461 Committee Vote: yeas 11, nays 0.
460462 _____
461463 HOUSE MOTION
462464 Mr. Speaker: I move that House Bill 1075 be amended to read as
463465 follows:
464466 Page 2, line 14, reset in roman "or".
465467 Page 2, line 18, after "laws" delete ";" and insert ".".
466468 Page 2, line 18, delete "or".
467469 Page 2, delete lines 19 through 21.
468470 Page 7, line 38, delete "a community mental health center (as" and
469471 insert "a county hospital licensed under IC 16-22".
470472 Page 7, delete lines 39 through 42.
471473 HB 1075—LS 6457/DI 148 12
472474 Page 8, delete lines 1 through 2.
473475 (Reference is to HB 1075 as printed January 19, 2023.)
474476 JETER
475477 _____
476478 HOUSE MOTION
477479 Mr. Speaker: I move that House Bill 1075 be amended to read as
478480 follows:
479481 Page 6, between lines 33 and 34, begin a new paragraph and insert:
480482 "SECTION 6. IC 23-17-24-3, AS AMENDED BY P.L.245-2005,
481483 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
482484 UPON PASSAGE]: Sec. 3. (a) A court in a judicial proceeding brought
483485 by the attorney general or by any other party named under section 1 of
484486 this chapter to dissolve a public benefit or mutual benefit corporation
485487 may appoint at least one (1):
486488 (1) receiver to wind up and liquidate; or
487489 (2) custodian to manage;
488490 the affairs of the corporation. The court shall hold a hearing, after
489491 notifying all parties to the proceeding and any interested persons
490492 designated by the court, before appointing a receiver or custodian. The
491493 court appointing a receiver or custodian has exclusive jurisdiction over
492494 the corporation and all of the corporation's property wherever located.
493495 (b) The court may appoint an individual or a domestic or foreign
494496 business or nonprofit corporation authorized to transact business in
495497 Indiana as a receiver or custodian. The court may require the receiver
496498 or custodian to post bond, with or without sureties, in an amount the
497499 court directs.
498500 (c) The court shall describe the powers and duties of the receiver or
499501 custodian in the appointing order, which may be amended from time to
500502 time, including the following:
501503 (1) The receiver may do the following:
502504 (A) Dispose of all or any part of the assets of the corporation
503505 wherever located, at a public or private sale, if authorized by
504506 the court. However, the corporation is subject to a trust, an
505507 endowment, and other restrictions that would be applicable to
506508 the corporation.
507509 (B) Sue and defend in the receiver's or custodian's name as
508510 receiver or custodian of the corporation in all Indiana courts.
509511 (2) The custodian may exercise all of the powers of the
510512 HB 1075—LS 6457/DI 148 13
511513 corporation, through or in place of the corporation's board of
512514 directors or officers, to the extent necessary to manage the affairs
513515 of the corporation in the best interests of the corporation's
514516 members and creditors or to carry out the corporation's lawful
515517 purposes.
516518 (d) The court during a receivership may redesignate the receiver a
517519 custodian, and during a custodianship may redesignate the custodian
518520 a receiver if doing so is in the best interests of the corporation and the
519521 corporation's members and creditors.
520522 (e) The court may, during the receivership or custodianship, order
521523 compensation paid and expense disbursements or reimbursements
522524 made to the receiver or custodian and the receiver's or custodian's
523525 counsel from the assets of the corporation or proceeds from the sale of
524526 the assets.
525527 (f) Upon a showing of reasonable cause by the attorney general
526528 or any other person, a circuit or superior court may appoint a
527529 receiver to manage the corporation or property of the corporation
528530 even if an action to dissolve the corporation has not been filed.".
529531 Renumber all SECTIONS consecutively.
530532 (Reference is to HB 1075 as printed January 19, 2023.)
531533 MOED
532534 _____
533535 HOUSE MOTION
534536 Mr. Speaker: I move that House Bill 1075 be amended to read as
535537 follows:
536538 Page 1, delete lines 1 through 17.
537539 Page 2, delete lines 1 through 3.
538540 Page 7, delete lines 36 through 42.
539541 Page 8, delete lines 1 through 13.
540542 Page 8, line 14, delete "(k)" and insert "(h)".
541543 Page 8, delete lines 20 through 23.
542544 Renumber all SECTIONS consecutively.
543545 (Reference is to HB 1075 as printed January 19, 2023.)
544546 HATFIELD
545-HB 1075—LS 6457/DI 148 14
546-HOUSE MOTION
547-Mr. Speaker: I move that House Bill 1075 be returned to the second
548-reading calendar forthwith for the purpose of amendment.
549-JETER
550-_____
551-HOUSE MOTION
552-Mr. Speaker: I move that House Bill 1075 be amended to read as
553-follows:
554-Page 3, line 13, delete "community mental" and insert "county
555-hospital licensed under IC 16-22".
556-Page 3, delete lines 14 through 19.
557-Page 3, line 20, delete "defined in IC 27-2-26-1),".
558-Page 8, delete line 19, begin a new paragraph and insert:
559-"(h) The attorney general may gain access to the records
560-identified in this chapter using the provisions of IC 4-6-3-3. This
561-subsection does not apply to a county hospital licensed under
562-IC 16-22 or a public utility (as defined in IC 8-1-2-1).".
563-Page 8, line 20, delete "(h)" and insert "(i)".
564-(Reference is to HB 1075 as reprinted January 24, 2023.)
565-JETER
566547 HB 1075—LS 6457/DI 148