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Minutes for HB2401 - Committee on Judiciary
Short Title
Providing an exception to the quorum requirements for shareholder meetings for certain corporations.
Minutes Content for Wed, Mar 4, 2020
Natalie Scott provided an overview of HB2401. (Attachment 4) Ms. Scott stood for questions.
Proponent
Representative Dennis "Boog" Highberger testified in support of the bill. (Attachment 5) Representative Highberger stated this bill is narrowly tailored to allow cooperatively-structured businesses that are incorporated as a for-profit corporation under Kansas Law, a way out of a dilemma without affecting the quorum requirements for most other corporations. Because it is extremely difficult them to get the necessary votes to amend their articles of incorporation because all members are limited to own a single share. With other corporations they often have membership that hold a very large numbers of shares and can provide the necessary votes for a quorum. Representative Highberger answered questions.
Valerie Taylor testified in support of the bill. (Attachment 6) Ms. Taylor stated the law and structure requiring a one-third quorum means that 2,750 or their 8,000+ owners have to participate in the vote in order to create change. She gave examples of the number of different ways her company has tried to acquire that much participation in a vote. She gave the example of comparing a 33% vote requirement for a quorum within her company to the turnout of 13% and 16% for local elections held in the community of Douglas County. She feels a requirement of 10% vs 33% would be achievable. Ms. Taylor stood for questions.
Chairperson Patton directed the membership to refer to the written neutral testimony in their bill folders.
Neutral Written
- William Quick and William Matthews, Kansas Bar Association (Attachment 7)
Chairperson Patton closed the hearing.
