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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 governing |
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authorities of certain business entities; authorizing an |
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administrative penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 3, Business Organizations Code, is |
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amended by adding Subchapter C-1 to read as follows: |
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SUBCHAPTER C-1. COMPOSITION OF GOVERNING AUTHORITY FOR CERTAIN |
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BUSINESS ENTITIES |
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Sec. 3.115. DEFINITIONS. (a) In this subchapter: |
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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) "Governing authority" has the meaning assigned by |
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Section 1.002. |
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(3) "Headquarters" means: |
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(A) with respect to a publicly traded |
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corporation, the location listed on the corporation's most recent |
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Form 10-K filed with the Securities and Exchange Commission; and |
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(B) with respect to a for-profit entity that is |
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not a publicly traded corporation, the location of the entity's |
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principal office. |
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(4) "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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(5) "Qualifying business" means a for-profit entity |
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that is formed under the laws of or has its headquarters located in |
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this state and that is either: |
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(A) a publicly traded corporation; or |
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(B) a corporation, limited liability company, or |
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other business organization, however organized, that generates |
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annual revenue of more than $20 million. |
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Sec. 3.116. COMPOSITION OF GOVERNING AUTHORITY FOR CERTAIN |
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BUSINESS ENTITIES: FEMALE REPRESENTATION REQUIRED. (a) This |
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section does not apply to a qualifying business that has one owner. |
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(b) A qualifying business must have at least one member on |
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the business's governing authority who is female. |
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(c) A qualifying business is considered to be in compliance |
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with Subsection (b) if, for at least six months during a calendar |
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year, the business has at least one member who is female on the |
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business's governing authority. |
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Sec. 3.117. NOTICE OF VIOLATION. The secretary of state |
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shall provide notice of a violation of Section 3.116(b) to each |
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qualifying business that violates that subsection not later than |
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January 31 of the year following the calendar year in which the |
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violation occurred. |
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Sec. 3.118. ADMINISTRATIVE PENALTY FOR VIOLATION OF |
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GOVERNING AUTHORITY COMPOSITION REQUIREMENTS. (a) Except as |
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provided by Subsection (d), the secretary of state may impose an |
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administrative penalty on a qualifying business that violates |
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Section 3.116(b). The penalty may be in an amount not to exceed |
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$100,000 for each violation. |
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(b) 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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(c) 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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(d) The secretary of state may not impose an administrative |
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penalty on a qualifying business under this section if the business |
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has at least one member of the business's governing authority who is |
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female before the 61st day following the date a notice of violation |
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under Section 3.117 was provided. |
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Sec. 3.119. PUBLIC REPORT ON COMPLIANCE. Not later than |
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June 1 of each year, the secretary of state shall publish on the |
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secretary of state's Internet website a report regarding the |
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compliance of qualifying businesses with Section 3.116(b) during |
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the preceding calendar year. The report must include: |
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(1) the number of qualifying businesses that were in |
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compliance with Section 3.116(b) at any time during the preceding |
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calendar year; and |
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(2) the number of entities that were subject to the |
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requirements of that section at any time during the preceding |
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calendar year but are no longer subject to that section because the |
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entity is no longer considered a qualifying business. |
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Sec. 3.120. RULES. The secretary of state may adopt rules |
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necessary to implement this subchapter. |
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SECTION 2. Section 11.251(b), Business Organizations Code, |
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is amended to read as follows: |
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(b) The secretary of state may terminate a filing entity's |
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existence if the secretary finds that: |
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(1) the entity has failed to, and, before the 91st day |
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after the date notice was mailed has not corrected the entity's |
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failure to: |
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(A) file a report within the period required by |
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law or pay a fee or penalty prescribed by law when due and payable; |
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or |
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(B) maintain a registered agent or registered |
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office in this state as required by law; [or] |
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(2) the entity has failed to, and, before the 16th day |
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after the date notice was mailed has not corrected the entity's |
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failure to, pay a fee required in connection with the filing of its |
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certificate of formation, or payment of the fee was dishonored when |
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presented by the state for payment; or |
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(3) the entity violated Section 3.116(b), and, before |
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the 61st day after the date notice of the violation was provided as |
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required by Section 3.117, the entity has not corrected the |
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entity's failure to comply with Section 3.116(b). |
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SECTION 3. The secretary of state is required to publish the |
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initial report required by Section 3.119, Business Organizations |
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Code, as added by this Act, not later than June 1, 2021. |
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SECTION 4. A qualifying business, as defined by Section |
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3.115, Business Organizations Code, as added by this Act, must |
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comply with Section 3.116(b), Business Organizations Code, as added |
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by this Act, beginning with the 2020 calendar year. |
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SECTION 5. This Act takes effect September 1, 2019. |