HOUSE BILL No. 5633

 

 

February 22, 2018, Introduced by Reps. Chirkun, Dianda, Marino, Green, LaFave and Lucido and referred to the Committee on Insurance.

 

     A bill to amend 1982 PA 162, entitled

 

"Nonprofit corporation act,"

 

by amending section 209 (MCL 450.2209), as amended by 2014 PA 557.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 209. (1) The articles of incorporation may contain any

 

provision that is not inconsistent with this act and not expressly

 

prohibited by any other statute of this state, including, but not

 

limited to, any of the following:

 

     (a) A provision for management of the business and conduct of

 

the affairs of the corporation, or creating, defining, limiting, or

 

regulating the powers of the corporation, its directors, officers,

 

members, or shareholders, or a class of directors, shareholders, or

 

members.

 

     (b) A provision that under this act is required or permitted

 

to be set forth in the bylaws.

 

     (c) A provision that eliminates or limits a director's or

 

volunteer officer's liability to the corporation, its shareholders,

 

or its members for money damages for any action taken or any

 

failure to take any action as a director or volunteer officer,

 

except liability for any of the following:

 

     (i) The amount of a financial benefit received by a director

 

or volunteer officer to which he or she is not entitled.

 

     (ii) Intentional infliction of harm on the corporation, its

 

shareholders, or members.

 

     (iii) A violation of section 551.

 

     (iv) An intentional criminal act.

 

     (v) A liability imposed under section 497(a).

 

     (d) For a corporation whose purposes, structures, and

 

activities are exclusively those described in section 501(c)(3) of

 

the internal revenue code of 1986, 26 USC 501, a provision that the

 

corporation assumes all liability to any person other than the

 

corporation, its shareholders, or its members for all acts or

 

omissions of a volunteer director occurring on or after January 1,

 

1988 incurred in the good faith performance of the volunteer

 

director's duties.

 

     (e) A provision that the corporation assumes the liability for

 

all acts or omissions of a volunteer director, volunteer officer,

 

or other volunteer occurring on or after the effective date of the

 

provision that grants limited liability if all of the following are

 

met:apply:

 

     (i) The volunteer was acting or reasonably believed he or she

was acting within the scope of his or her authority.

 

     (ii) The volunteer was acting in good faith.

 

     (iii) The volunteer's conduct did not amount to gross

 

negligence or willful and wanton misconduct.

 

     (iv) The volunteer's conduct was not an intentional tort.

 

     (v) The volunteer's conduct was not a tort arising out of the

 

ownership, maintenance, or use of a motor vehicle. for which tort

 

liability may be imposed under section 3135 of the insurance code

 

of 1956, 1956 PA 218, MCL 500.3135.

 

     (f) A provision that reserves to 1 or more members,

 

shareholders, or other persons all or part of the authority to

 

exercise the corporate powers or to manage the business and affairs

 

of the corporation, including the resolution of any issue about

 

which there exists a deadlock among directors, shareholders, or

 

members. A provision authorized under this subsection that limits

 

the discretion or powers of the board relieves the directors of,

 

and imposes on the person or persons in which the discretion or

 

powers are vested, liability for acts or omissions imposed by law

 

on directors to the extent that the discretion or powers of the

 

directors are limited by the provision. The person or persons in

 

which the discretion or powers are vested are treated as a director

 

or directors for the purposes of any limitation or assumption of

 

liability under this section and, except as otherwise provided in

 

the articles of incorporation or bylaws, have the same rights and

 

obligations with respect to indemnification as a director or

 

directors.

 

     (2) If the articles of incorporation contain a provision that

eliminates the liability of a volunteer director or volunteer

 

officer that was filed before the effective date of the amendatory

 

act that added this subsection, January 15, 2015, that provision is

 

considered to eliminate the liability of a director or volunteer

 

officer under subsection (1)(c).

 

     Enacting section 1. This amendatory act takes effect January

 

1, 2019.

 

     Enacting section 2. This amendatory act does not take effect

 

unless Senate Bill No. ____ or House Bill No. 5627 (request no.

 

05366'18) of the 99th Legislature is enacted into law.