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A BILL TO BE ENTITLED
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AN ACT
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relating to requiring female representation on the boards of |
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directors of certain publicly traded corporations; authorizing |
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administrative penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter I, Chapter 21, Business Organizations |
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Code, is amended by adding Sections 21.419 and 21.420 to read as |
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follows: |
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Sec. 21.419. BOARD COMPOSITION FOR PUBLICLY TRADED |
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CORPORATION: FEMALE REPRESENTATION REQUIRED. (a) In this section: |
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(1) "Female" means an individual who self-identifies |
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the individual's gender as female. |
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(2) "Headquarters," with respect to a publicly traded |
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corporation, means the location listed on the corporation's most |
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recent Form 10-K filed with the Securities and Exchange Commission. |
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(3) "Publicly traded corporation" means a corporation |
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that has a class or series of the corporation's voting shares |
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qualified for trading on a national securities exchange. |
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(b) A publicly traded corporation whose headquarters are |
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located in this state must: |
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(1) not later than January 1, 2026, have at least one |
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female director on the corporation's board of directors; and |
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(2) not later than January 1, 2027, have at least: |
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(A) one female director on the corporation's |
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board of directors if the board is composed of four or fewer |
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members; |
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(B) two female directors on the corporation's |
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board of directors if the board is composed of five members; or |
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(C) three female directors on the corporation's |
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board of directors if the board is composed of at least six members. |
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(c) Not later than March 1 of each year, the secretary of |
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state shall publish on the secretary of state's Internet website a |
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report regarding the compliance of publicly traded corporations |
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with Subsection (b) during the preceding calendar year. The report |
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must include: |
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(1) the number of corporations that were in compliance |
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with Subsection (b) at any time during the preceding calendar year; |
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(2) the number of corporations that were subject to |
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the requirements of Subsection (b) and that relocated the |
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corporations' headquarters outside of this state during the |
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preceding calendar year; and |
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(3) the number of corporations that were subject to |
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the requirements of Subsection (b) at any time during the preceding |
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calendar year but are no longer subject to those requirements |
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because the corporation has changed to the extent it no longer meets |
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the definition of a publicly traded corporation. |
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(d) A publicly traded corporation is considered to be in |
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compliance with Subsection (b) if, at any time during the preceding |
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calendar year, the corporation had the appropriate number of female |
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directors required by that subsection. |
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(e) The secretary of state may adopt rules necessary to |
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implement this section. |
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Sec. 21.420. ADMINISTRATIVE PENALTY FOR VIOLATION OF BOARD |
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COMPOSITION REQUIREMENTS. (a) The secretary of state may impose an |
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administrative penalty on a publicly traded corporation that |
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violates Section 21.419 or a rule adopted under that section. |
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(b) The penalty for a violation of Section 21.419(b) may be |
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in an amount not to exceed: |
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(1) $100,000 for a first violation; and |
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(2) $300,000 for a second or subsequent violation. |
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(c) The penalty for a violation of a rule adopted under |
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Section 21.419 may be in an amount not to exceed $100,000. |
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(d) The amount of an administrative penalty imposed under |
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this section must be based on: |
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(1) the history of any previous violations; |
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(2) the amount necessary to deter future violations; |
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and |
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(3) efforts to correct the violation. |
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(e) An administrative penalty collected under this section |
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shall be remitted to the comptroller for deposit in the general |
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revenue fund. |
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SECTION 2. Not later than July 1, 2025, the secretary of |
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state shall publish on the secretary of state's Internet website a |
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list of publicly traded corporations, as defined by Section 21.419, |
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Business Organizations Code, as added by this Act, that: |
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(1) are headquartered in this state; and |
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(2) during the preceding calendar year, had at least |
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one female director on the corporation's board of directors. |
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SECTION 3. The secretary of state is not required to publish |
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the initial report required by Section 21.419(c), Business |
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Organizations Code, as added by this Act, before March 1, 2026. |
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SECTION 4. This Act takes effect September 1, 2021. |