House of Origin Deadline Stops Many Onerous Corporate Council Proposals

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Jan. 30, 2004 Share this on FacebookTweet thisEmail this to a friend

The end of this week marks a legislative deadline requiring all bills to be out of their “house of origin” in order to be considered during the remainder of the 2003-2004 Legislative session. In the corporate counsel issues listed below, this deadline and the lack of support for a number of measures brings good news to CMTA members. The bills, opposed by CMTA, are now "dead".

SB 766 (Dean Florez, D-Shafter) Securities Litigation
Would have drastically expanded securities litigation against all publicly traded corporations, directors and officers of corporations, and accounting and financial firms. This would have allowed an action for securities fraud against these individuals and entities even if they did not engage in buying and selling of stock. Finally, this bill proposed to remove the current requirement that the directors, officers, and accountants of financial institutions knowingly and intentionally made a false statement.

SB 335 (Gloria Romero, D-Los Angeles) Corporate 3-Strikes Act
Would have enacted the Corporate 3-Strikes Act and would have required general corporations, non-profit public benefit corporations, nonprofit mutual benefit corporations, partnerships, and limited liability companies that are convicted of certain felony crimes to meet specified reporting requirements. Repeat offenders would have been prohibited from incorporating, forming, or transacting business in California.

SB 917 (Richard Alarcon, D-Sun Valley) Corporate Director Liability
Sought to prohibit a director from performing duties in a manner that would have caused “material damage to the environment, human rights, the public health and safety, the communities in which the corporation operates, or the dignity of the corporation's employees.” The bill lacked any definitions and, beginning on January 1, 2017, would have made a corporation and/or its director liable for damages caused by a violation of these provisions.
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