HB1185: HB1185 Courts; certain shareholder claims to be brought before the Georgia State-wide Business Court; provide

26 HB 1185/AP House Bill 1185 (AS PASSED HOUSE AND SENATE) By: Representatives Efstration of the 104th, Gambill of the 15th, Wade of the 9th, Seabaugh of the 34th, Gunter of the 8th, and others A BILL TO BE ENTITLED AN ACT To amend Titles 14 and 15 of the Official Code of Georgia Annot ated, relating to1 corporations, partnerships, and associations and courts, respec tively, so as to provide for2 certain shareholder claims to be brought before the Georgia State-wide Business Court; to3 permit a corporation's bylaws or articles of incorporation to require certain claims to be heard4 by the Georgia State-wide Business Court; to provide for remova l of certain claims to the5 Georgia State-wide Business Court; to provide for attorney's fe es and costs; to exempt6 payment of attorney's fees and costs in certain situations; to provide for definitions; to7 provide for an effective date and applicability; to provide for related matters; to repeal8 conflicting laws; and for other purposes.9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10 SECTION 1.11 Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships,12 and associations, is amended in Chapter 1, which is reserved, as follows:13 H. B. 1185 - 1 - 26 HB 1185/AP "CHAPTER 114 14-1-1.15 As used in this title, the term 'internal entity claim' means a claim, action, or proceeding of16 any nature arising out of this title, including, but not limited to, a claim in the right of the17 entity, a claim that is based on a violation of a duty by a current or former director, officer,18 shareholder, member, or partner that is based on, arises from, or relates to the internal19 affairs of the entity, a valuation proceeding, or a proceeding related to the court ordered20 inspection of an entity's records by a shareholder, member, or partner; provided, however,21 that any action, claim, or proceeding brought by a shareholder or member challenging the22 sufficiency of an entity's disclosures or otherwise alleging a breach of any duty of23 disclosure against an entity organized under this title, or any director or officer of such24 entity, shall be considered an internal entity claim, regardles s of whether such action,25 claim, or proceeding is characterized as derivative. Reserved."26 SECTION 2.27 Said title is further amended in Chapter 2, relating to busines s corporations, by revising28 paragraphs (4) and (5) of subsection (b) of Code Section 14-2-2 02, relating to articles of29 incorporation, and by adding a new paragraph to said subsection to read as follows:30 "(4) A provision eliminating or limiting the liability of a dir ector or officer to the31 corporation or its shareholders for monetary damages for any action taken, or any failure32 to take any action, as a director or officer, except liability:33 (A) For any appropriation, in violation of his or her duties, of any business opportunity34 of the corporation;35 (B) For acts or omissions which involve intentional misconduct or a knowing violation36 of law;37 (C) For the types of liability set forth in Code Section 14-2-832; or38 H. B. 1185 - 2 - 26 HB 1185/AP (D) For any transaction from which the director or officer received an improper39 personal benefit, provided that no such provision shall eliminate or limit the liability of40 a director or officer for any act or omission occurring prior to the date when such41 provision becomes effective; and42 (5) A provision that, in discharging the duties of their respe ctive positions and in43 determining what is believed to be in the best interests of the corporation, the board of44 directors, committees of the board of directors, and individual directors, in addition to45 considering the effects of any action on the corporation or its shareholders, may consider46 the interests of the employees, customers, suppliers, and creditors of the corporation and47 its subsidiaries, the communities in which offices or other est ablishments of the48 corporation and its subsidiaries are located, and all other factors such directors consider49 pertinent; provided, however, that any such provision shall be deemed solely to grant50 discretionary authority to the directors and shall not be deeme d to provide to any51 constituency any right to be considered; and52 (6) Consistent with applicable law, a provision requiring any or all internal entity claims,53 including, but not limited to, proceedings related to the court ordered inspection of54 corporate records by a shareholder, to be brought solely and exclusively in the Georgia55 State-wide Business Court."56 SECTION 3.57 Said title is further amended in said chapter by adding a new s ubsection to Code Section58 14-2-206, relating to bylaws, to read as follows:59 "(c) The bylaws of a corporation may require, consistent with law, that any or all internal60 entity claims, including, but not limited to, proceedings relat ed to the court ordered61 inspection of corporate records by a shareholder, be brought solely and exclusively in the62 Georgia State-wide Business Court."63 H. B. 1185 - 3 - 26 HB 1185/AP SECTION 4.64 Said title is further amended in said chapter by revising Code Section 14-2-741, relating to65 standing, as follows:66 "14-2-741.67 A shareholder may not commence or maintain a derivative proceed ing unless the68 shareholder:69 (1) Was a shareholder of the corporation at the time of the act or omission complained70 of or became a shareholder through transfer by operation of law from one who was a71 shareholder at that time; and72 (2) Fairly and adequately represents the interests of the corporation in enforcing the right73 of the corporation; and74 (3) For a corporation with one or more classes of shares described in subsection (c) of75 Code Section 14-2-601 listed on a national securities exchange, at the time of the act or76 omission complained of, owns a number of the shares described i n paragraph (2) of77 subsection (c) of Code Section 14-2-601 sufficient to meet an o wnership threshold to78 commence a derivative proceeding in the right of the corporatio n identified in the79 corporation's articles of incorporation or bylaws, provided that the ownership threshold80 established by the corporation in its articles of incorporation or bylaws does not exceed81 1 percent of the outstanding shares described in paragraph (2) of subsection (c) of Code82 Section 14-2-601."83 SECTION 5.84 Said title is further amended in said chapter by revising Code Section 14-2-746, relating to85 payment of expenses, as follows:86 "14-2-746.87 (a) On termination of the derivative proceeding, the court may:88 H. B. 1185 - 4 - 26 HB 1185/AP (1) Order the corporation to pay the plaintiff's reasonable expenses, (including attorneys'89 fees), incurred in the proceeding if it finds that the proceeding has resulted in a substantial90 benefit to the corporation; or91 (2) Order the plaintiff to pay any defendant's reasonable expenses, (including attorneys'92 fees), incurred in defending the proceeding if it finds that the proceeding was commenced93 or maintained without reasonable cause or for an improper purpose.94 (b) For the purposes of subsection (a) of this Code section, the term 'substantial benefit to95 the corporation' does not include additional or amended disclosures made to shareholders,96 regardless of materiality."97 SECTION 6.98 Said title is further amended in said chapter by revising Code Section 14-2-747, relating to99 applicability to foreign corporations, as follows:100 "14-2-747.101 In any derivative proceeding in the right of a foreign corporation, the matters covered by102 this part shall be governed by the laws of the jurisdiction of incorporation of the foreign103 corporation except for Code Sections 14-2-743, a n d 14-2-745, and paragraph (2) of104 subsection (a) of Code Section 14-2-746."105 SECTION 7.106 Said title is further amended in said chapter by revising subse ction (a) of Code Section107 14-2-916, relating to court action to compel purchase, as follows:108 "(a) If an offer to purchase shares made under Code Section 14-2-915 is rejected, or if no109 offer is made, the person exercising the compulsory purchase ri ght may commence a110 proceeding against the corporation to compel the purchase in th e superior court of the111 county where the corporation's registered office is located or the Georgia State-wide112 Business Court . The corporation at its expense shall notify in writing all o f its113 H. B. 1185 - 5 - 26 HB 1185/AP shareholders, and any other person the court directs, of the co mmencement of the114 proceeding. The jurisdiction of the court in which the proceeding is commenced under this115 subsection is plenary and exclusive."116 SECTION 8.117 Said title is further amended in said chapter by revising subse ctions (a) and (b) of Code118 Section 14-2-940, relating to court action to protect shareholders, as follows:119 "(a) Subject to satisfying the conditions of subsections (c) and (d) of this Code section, a120 shareholder of a statutory close corporation may petition the superior court or the Georgia121 State-wide Business Court for any of the relief described in Code Section 14-2-941,122 14-2-942, or 14-2-943 if:123 (1) The directors or those in control of the corporation have acted, are acting, or will act124 in a manner that is illegal, oppressive, fraudulent, or unfairly prejudicial to the petitioner,125 whether in his capacity as shareholder, director, or officer of the corporation;126 (2) The directors or those in control of the corporation are d eadlocked in the127 management of the corporation's affairs, the shareholders are u nable to break the128 deadlock, and the corporation is suffering or will suffer irreparable injury or the business129 and affairs of the corporation can no longer be conducted to th e advantage of the130 shareholders generally because of the deadlock; or131 (3) There exists one or more grounds for judicial dissolution of the corporation under132 Code Section 14-2-1430.133 (b) A shareholder must commence a proceeding under subsection (a) of this Code section134 in the superior court of the county where the corporation's principal office (or, if none in135 this state, its registered office) is located or the Georgia St ate-wide Business Court. The136 jurisdiction of the court in which the proceeding is commenced is plenary and exclusive."137 H. B. 1185 - 6 - 26 HB 1185/AP SECTION 9.138 Said title is further amended in said chapter by revising subse ction (b) of Code Section139 14-2-1330, relating to court action, as follows:140 "(b) The corporation shall commence the proceeding, which shall be a nonjury equitable141 valuation proceeding, in the Georgia State-wide Business Court or the superior court of the142 county where a corporation's registered office is located. If the surviving corporation is a143 foreign corporation without a registered office in this state, it shall commence the144 proceeding in the county in this state where the registered off ice of the domestic145 corporation merged with or whose shares were acquired by the fo reign corporation was146 located."147 SECTION 10.148 Said title is further amended in said chapter by revising subse ction (g) of Code Section149 14-2-1602, relating to inspection of records by shareholders, as follows:150 "(g) For purposes of As used in this Code section, the term:151 (1) 'Proper purpose' shall not include:152 (A) An active or pending derivative proceeding in the right of the corporation that is,153 or is reasonably expected to be, instituted or maintained by the shareholder; or154 (B) An active or pending civil lawsuit to which the corporation and the shareholder are,155 or are reasonably expected to be, adversarial named parties.156 (2) 'Shareholder' 'shareholder' includes a beneficial owner whose shares are held in a157 voting trust or by a nominee on his or her behalf."158 SECTION 11.159 Said title is further amended in said chapter by revising subsections (a), (b), and (c) of Code160 Section 14-2-1604, relating to court-ordered inspection, as follows:161 H. B. 1185 - 7 - 26 HB 1185/AP "(a) If a corporation does not allow a shareholder who complies with subsection (b) of162 Code Section 14-2-1602 to inspect and copy any records required by that subsection to be163 available for inspection, the superior court of the county where the corporation's registered164 office is located or the Georgia State-wide Business Court may summarily order inspection165 and copying of the records demanded at the corporation's expense upon application of the166 shareholder.167 (b) If a corporation does not within a reasonable time allow a shareholder to inspect and168 copy any other record, the shareholder who complies with subsections (c) and (d) of Code169 Section 14-2-1602 may apply to the superior court in the county where the corporation's170 registered office is located or the Georgia State-wide Business Court for an order to permit171 inspection and copying of the records demanded. The court shall dispose of an application172 under this subsection on an expedited basis.173 (c) If the court orders inspection and copying of the records demanded, it shall may also,174 after a hearing if requested by a party, order the corporation to pay the shareholder's costs,175 (including reasonable attorneys' fees), incurred to obtain the order; provided, however, that176 in no event shall costs be awarded if unless the corporation proves that it refused inspection177 in good faith because it had a reasonable basis for doubt about the right of the shareholder178 to inspect the records demanded. If the court does not order i nspection and copying of179 records demanded pursuant to Code Section 14-2-1602, it may, after a hearing if requested180 by a party, order the shareholder to pay the corporation's costs, including but not limited181 to reasonable attorneys' fees, incurred by the corporation in t he proceeding if the court182 determines that the shareholder's inspection demand was not mad e in good faith or for a183 proper purpose that was reasonably relevant to his or her legit imate interest as a184 shareholder."185 H. B. 1185 - 8 - 26 HB 1185/AP SECTION 12.186 Said title is further amended in Chapter 9, the "Georgia Revised Uniform Limited Partnership187 Act," by revising subparagraphs (a)(3)(B) and (a)(3)(C) and subsection (b) of and adding a188 new subsection to Code Section 14-9-305, relating to inspection of partnership records and189 information, to read as follows:190 "(B) Promptly after becoming available, a copy of the limited p artnership's filed191 federal, state, and local income tax returns for each year; and192 (C) Other information regarding the affairs of the limited par tnership as is just, and193 reasonable, and requested for a proper purpose ; provided, however, that a general194 partner shall have the right to keep confidential from limited partners for such period195 of time as the general partner deems reasonable, any informatio n which the general196 partner reasonably believes to be in the nature of trade secrets or other information, the197 disclosure of which the general partner in good faith believes is not in the best interests198 of the limited partnership or could damage the limited partners hip or its business or199 which the limited partnership is required by law or by agreement with a third party to200 keep confidential.201 (b) If the limited partnership or a partner or agent of the li mited partnership refuses to202 permit the inspection authorized by subsection (a) of this Code section, the limited partner203 demanding inspection may apply to the Georgia State-wide Business Court or the superior204 court for the county in which the registered office of the limi ted partnership is located,205 upon such notice as the court may require, for an order directing the limited partnership,206 its partners, or agent to show cause why an order permitting su ch inspection by the207 applicant should not be granted. The court shall hear the parties summarily, by affidavit or208 otherwise, or by a hearing if requested by a party, and if the limited partnership fails to209 establish that the applicant is not entitled to such inspection, the court shall grant an order210 permitting such inspection, subject to any limitations which the court may prescribe, and211 grant such other relief, including costs and reasonable attorne ys' fees, as the court may212 H. B. 1185 - 9 - 26 HB 1185/AP deem just and proper. If the court does not grant an order permitting such inspection and213 determines that the request was not just, reasonable, or made for a proper purpose, it may214 order the limited partner requesting inspection to pay the limi ted partnership's costs and215 reasonable attorneys' fees.216 (c) As used in this Code section, the term 'proper purpose' shall not include:217 (1) An active or pending derivative proceeding in the right of the limited partnership that218 is, or is reasonably expected to be, instituted or maintained by the limited partner; or219 (2) An active or pending civil lawsuit to which the limited pa rtnership and the limited220 partner are, or are reasonably expected to be, adversarial named parties."221 SECTION 13.222 Said title is further amended in said chapter by revising Code Section 14-9-1002, relating to223 requirements for plaintiffs, as follows:224 "14-9-1002.225 (1) Except to the extent provided by the partnership agreement, in a derivative action, the226 plaintiff must be a limited partner at the time of bringing the action and:227 (1)(A) Must have been a partner at the time of the transaction of wh ich he or she228 complains; or229 (2)(B) His or her status as a partner must shall have devolved upon him or her by230 operation of law or pursuant to the terms of the partnership ag reement from a person231 who was a partner at the time of the transaction.; and232 (2) For a limited partnership with partnership interests liste d on a national securities233 exchange, at the time of the act or omission complained of, the limited partner owns a234 number of partnership interests sufficient to meet the required ownership threshold to235 institute a derivative action in the right of the limited partnership identified in the limited236 partnership's governing agreement, provided that the required o wnership threshold237 H. B. 1185 - 10 - 26 HB 1185/AP established by the governing agreement does not exceed 1 percen t of the outstanding238 partnership interests of the limited partnership."239 SECTION 14.240 Said title is further amended in said chapter by revising Code Section 14-9-1004, relating to241 expenses, as follows:242 "14-9-1004.243 If a derivative action is successful, in whole or in part, or i f anything is received by the244 plaintiff as a result of a judgment, compromise, or settlement of an action or claim, the245 court may award the plaintiff reasonable expenses, including reasonable attorneys' fees, and246 shall direct him or her to remit to the limited partnership the remainder of those proceeds247 received by him or her; provided, however, that the court shall not award plaintiffs248 reasonable expenses and attorneys' fees if the sole relief received by the plaintiff as a result249 of a judgment, compromise, or settlement of an action or claim is additional or amended250 disclosures made to the partners, regardless of materiality."251 SECTION 15.252 Said title is further amended in Chapter 11, relating to limite d liability companies, by253 revising subparagraph (B) of paragraph (2) and paragraph (3) of and adding a new paragraph254 to Code Section 14-11-313, relating to records and information, to read as follows:255 "(B) Obtain from time to time upon reasonable demand:256 (i) True and complete information regarding the state of the business and financial257 condition financial statements of the limited liability company;258 (ii) Promptly after becoming available, a copy of the limited liability company's filed259 federal, state, and local income tax returns, if any, for each year; and260 (iii) Other information regarding the affairs of the limited liability company as is just,261 and reasonable, and demanded for a proper purpose; and262 H. B. 1185 - 11 - 26 HB 1185/AP (3) If the limited liability company refuses to permit the ins pection authorized by263 paragraph (2) of this Code section, the member demanding inspection may apply to the264 Georgia State-wide Business Court or the superior court for the county in which the265 registered office of the limited liability company is located, upon such notice as the court266 may require, for an order directing the limited liability company to show cause why an267 order permitting such inspection by the applicant should not be granted. The court shall268 hear the parties summarily, by affidavit or otherwise, or by a hearing if requested by a269 party, and if the limited liability company fails to establish that t he applicant is not270 entitled to such inspection, the court shall grant an order per mitting such inspection,271 subject to any limitations which the court may prescribe, and g rant such other relief,272 including costs and reasonable attorneys' fees, as the court may deem just and proper. If273 the court does not grant an order permitting such inspection an d determines that the274 demand was not just, reasonable, or made for a proper purpose, it may order the member275 demanding inspection to pay the limited liability company's cos ts and reasonable276 attorneys' fees.277 (4) As used in this Code section, the term 'proper purpose' shall not include:278 (A) An active or pending derivative proceeding in the right of the limited liability279 company that is, or is reasonably expected to be, instituted or maintained by the280 member; or281 (B) An active or pending civil lawsuit to which the limited liability company and the282 member are, or are reasonably expected to be, adversarial named parties."283 SECTION 16.284 Said title is further amended in said chapter by revising parag raph (4) of Code Section285 14-11-801, relating to right of member to bring derivative action, as follows:286 "(4) The plaintiff:287 H. B. 1185 - 12 - 26 HB 1185/AP (A) Is is a member of the limited liability company at the time of bringing the action,;288 and289 (B) Was was a member of the limited liability company at the time of the transaction290 of which he or she complains, or his or her status as a member of the limited liability291 company has devolved upon him or her by operation of law from a person who was a292 member at the time of the transaction; and"293 SECTION 17.294 Said title is further amended in said chapter by revising Code Section 14-11-807, relating to295 applicability to foreign limited liability companies, as follows:296 "14-11-807.297 In any derivative action in the right of a foreign limited liab ility company, the matters298 covered by this article shall be governed by the laws of the jurisdiction of organization of299 the foreign limited liability company except for Code Sections 14-11-803 and 14-11-804300 and paragraph subsection (b) of Code Section 14-11-806."301 SECTION 18.302 Said title is further amended in said chapter by revising subse ction (b) of Code Section303 14-11-1011, relating to court action, as follows:304 "(b) The limited liability company shall commence the proceedin g, which shall be a305 nonjury equitable valuation proceeding, in the Georgia State-wide Business Court or the306 superior court of the county where a limited liability company's registered office is located.307 If the surviving entity is a foreign entity without a registere d office in this state, it shall308 commence the proceeding in the county in this state where the r egistered office of the309 domestic entity merged with the foreign entity was located."310 H. B. 1185 - 13 - 26 HB 1185/AP SECTION 19.311 Title 15 of the Official Code of Georgia Annotated, relating to courts, is amended in Chapter312 5A, relating to the State-wide Business Court, by revising divi sion (a)(1)(A)(xi) of Code313 Section 15-5A-3, relating to authority of court, as follows:314 "(xi) That relate to the internal affairs of businesses, includ ing, but not limited to,315 internal entity claims, as such term is set forth in Code Section 14-1-1."316 SECTION 20.317 Said title is further amended in said chapter by revising subsections (a), (b), and (c) of Code318 Section 15-5A-4, relating to process for bringing a claim before court and filings, as follows:319 "(a) Except as provided in subsection (b) of this Code section, all claims provided for320 under Code Section 15-5A-3 may only come before the Georgia Sta te-wide Business321 Court by:322 (1) Any party filing a pleading with the Georgia State-wide Business Court to initiate323 a civil action that is not already pending in superior court or state court unless any324 defendant within 30 days after receipt by all defendants, through service of process, of325 a copy of the initial pleading setting forth the claim for relief upon which such action326 is based objects and petitions the Georgia State-wide Business Court to transfer such327 action to the superior court or state court with which venue is otherwise proper. The328 judge of the Georgia State-wide Business Court shall then compel transfer of the case329 to such superior court or state court, unless the action involves:330 (A) A a contract claim or dispute where all parties are business entit ies and such331 contract provides that such dispute shall come before the Georgia State-wide Business332 Court; or333 (B) An internal entity claim, as such term is set forth in Code Section 14-1-1, if either:334 (i) the entity’s articles of incorporation, articles of organization, certificate of 335 limited partnership, written partnership agreement, bylaws, wri tten operating 336 H. B. 1185 - 14 - 26 HB 1185/AP agreement, or other governing document requires such claim or proceeding to 337 come before the Georgia State-wide Business Court; or338 (ii) the entity is a public company, a private company that con ducts a Tier 2 339 offering under Regulation A of the Securities Act of 1933 or a sale of securities under340 Regulation D of the Securities Act of 1933, or an entity compos ed exclusively of341 individuals or entities who would otherwise qualify as accredited investors under Rule342 501(a) of Regulation D under the Securities Act of 1933.343 (2) All parties to a civil action already filed in superior court or state court agreeing to344 remove the action to the Georgia State-wide Business Court and then filing such345 agreement with the Georgia State-wide Business Court, provided that the petition for346 removal is filed within 60 days one year of such action being filed in superior court or347 state court; or348 (3) Any party to a civil action already filed in superior court or state court filing with349 the Georgia State-wide Business Court a petition to transfer such action to the Georgia350 State-wide Business Court; provided, however, that:351 (A) Such a petition to transfer is filed within 60 9 0 days after receipt by all352 defendants, through service of process as provided in Code Section 9-11-4, of a copy353 of the initial pleading setting forth the claim for relief upon which such action is354 based. The judge of the Georgia State-wide Business Court, aft er considering the355 petition to transfer and all timely responses from the other party or parties in the case,356 shall thereafter determine whether the case is within the juris diction of the Georgia357 State-wide Business Court, and with a presumption that the civil action remains in the358 court of filing, the judge may enter an order compelling the transfer of the case to the359 Georgia State-wide Business Court unless a party objects within 30 15 days of the360 filing of the petition to transfer; or361 (B) Such a petition to transfer is filed within 60 days after receipt by all defendants,362 through service of process as provided in Code Section 9-11-5 o r as otherwise363 H. B. 1185 - 15 - 26 HB 1185/AP provided by law, of a copy of an amended pleading, motion, order, or other document364 from which the party petitioning to tran sfer may first ascertai n that the case is365 transferable. The judge of the Georgia State-wide Business Court, after considering366 the petition to transfer and all timely responses from the other party or parties in the367 case, shall thereafter determine whether the case is within the jurisdiction of the368 Georgia State-wide Business Court, and with a presumption that the civil action369 remains in the court of filing, the judge may enter an order compelling transfer of the370 case to the Georgia State-wide Business Court unless a party objects within 30 days371 of the filing of the petition to transfer; or372 (4) The removal of a civil action involving an internal entity claim, as such term is set373 forth in Code Section 14-1-1, filed in superior court or state court or sent to the Georgia374 State-wide Business Court by such superior or state court, prov ided that the375 requirements of subparagraph (B) of paragraph (1) are met. Paragraphs (2) and (3) of376 this subsection shall not apply to claims, actions, or proceedi ngs listed in this377 paragraph.378 (b) Notwithstanding subsection (a) of this Code section, the Georgia State-wide Business379 Court may transfer to the appropriate superior court or state court any and all claims filed380 in the Georgia State-wide Business Court and may reject accepta nce of any and all381 petitions to transfer or petitions for removal to the Georgia State-wide Business Court,382 even if such claims are within the jurisdiction of the Georgia State-wide Business Court383 unless such claims are internal entity claims, as such term is set forth in Code Section 14-384 1-1, and the requirements of subparagraph (B) of paragraph (1) are met.385 (c) Notwithstanding any other law, when the superior court or state court where a claim386 is pending receives a certified copy of an order issued by the Georgia State-wide Business387 Court transferring or removing such civil action to the Georgia State-wide Business Court388 pursuant to paragraph (2), (3), or (4) of subsection (a) of this Code Section, such superior389 H. B. 1185 - 16 - 26 HB 1185/AP court or state court shall certify the transfer or removal from the superior court or state390 court to the Georgia State-wide Business Court."391 SECTION 21.392 This Act shall become effective on July 1, 2026, and shall apply to all claims or proceedings393 initiated on or after such date.394 SECTION 22.395 All laws and parts of laws in conflict with this Act are repealed.396 H. B. 1185 - 17 -