By: Herrero (Senate Sponsor - Hinojosa) H.B. No. 1493
         (In the Senate - Received from the House May 3, 2021;
  May 17, 2021, read first time and referred to Committee on State
  Affairs; May 24, 2021, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 9, Nays 0;
  May 24, 2021, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 1493 By:  Lucio
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the use of an entity name that falsely implies
  governmental affiliation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 6, Civil Practice and Remedies Code, is
  amended by adding Chapter 150C to read as follows:
  CHAPTER 150C. ENTITY NAME FALSELY IMPLYING GOVERNMENTAL
  AFFILIATION
         Sec. 150C.001.  DEFINITION. In this chapter, "governmental
  unit" has the meaning assigned by Section 101.001.
         Sec. 150C.002.  FALSELY IMPLYING GOVERNMENTAL AFFILIATION.
  (a) A governmental unit is entitled to enjoin another person's use
  of an entity name that falsely implies governmental affiliation
  with the governmental unit.
         (b)  In an action brought under this section, the
  governmental unit is entitled to injunctive relief throughout the
  state.
         (c)  If the court finds that the person against whom the
  injunctive relief is sought wilfully intended to imply governmental
  affiliation with the governmental unit, the court, in the court's
  discretion, may award reasonable attorney's fees and court costs to
  the governmental unit.
         SECTION 2.  Subchapter B, Chapter 5, Business Organizations
  Code, is amended by adding Sections 5.064 and 5.065 to read as
  follows:
         Sec. 5.064.  NAME FALSELY IMPLYING GOVERNMENTAL AFFILIATION
  PROHIBITED. (a) A filing entity or a foreign filing entity may not
  use a name in this state that falsely implies an affiliation with a
  governmental entity.
         (b)  The submission of a filing instrument is an affirmation
  by the organizer or by a managerial official named in the filing
  instrument that the name provided as the name of the filing entity
  does not falsely imply an affiliation with a governmental entity.
         (c)  The addition of a word, phrase, or abbreviation that is
  required to be included in the name of a domestic or foreign filing
  entity under the provisions of this chapter is not a factor when
  determining whether a name violates Subsection (a).
         (d)  For purposes of this section, an entity name means:
               (1)  the name of a domestic filing entity, as evidenced
  by its certificate of formation, as amended or restated; or
               (2)  in the case of a foreign filing entity, the name of
  the foreign filing entity or the fictitious name of a foreign filing
  entity, as evidenced by its application for registration or its
  most recent amended registration.
         (e)  The secretary of state shall adopt rules and prescribe
  procedures to implement this section.
         Sec. 5.065.  FALSE IMPLICATION OF GOVERNMENTAL AFFILIATION;
  AUTHORITY OF SECRETARY OF STATE AND ATTORNEY GENERAL. (a) On the
  written request of a governmental entity, the secretary of state
  may, in the secretary's discretion and after consultation with the
  attorney general, determine within two years after the secretary's
  acceptance of a filing instrument that a filing entity's or a
  foreign filing entity's name falsely implies an affiliation with a
  governmental entity in violation of Section 5.064.
         (b)  If the secretary of state determines under Subsection
  (a) that a filing entity's or foreign filing entity's name falsely
  implies an affiliation with a governmental entity, the secretary of
  state shall notify the entity in writing of the need to amend the
  entity's name. Not later than the 60th day after the date the
  secretary of state sends the notification required by this
  subsection, the entity shall:
               (1)  cease transacting business or operating under that
  name in this state; and
               (2)  file with the secretary of state the applicable
  instrument to amend the entity's name as shown in the records of the
  secretary of state.
         (c)  The secretary of state shall provide the filing entity
  or foreign filing entity an opportunity to respond to the notice
  sent under Subsection (b), including through the submission of
  documentation verifying that the filing entity is affiliated with
  the governmental entity. 
         (d)  If a filing entity or a foreign filing entity fails to
  take the action required by Subsection (b)(2), the secretary of
  state shall notify the attorney general of the entity's failure to
  file the applicable filing instrument.
         (e)  The attorney general may bring an action in the name of
  the state for injunctive relief to require compliance with this
  section.
         (f)  An action under this section may be brought in a
  district court in Travis County.
         (g)  The attorney general may recover reasonable expenses
  incurred in obtaining injunctive relief under this section,
  including court costs, reasonable attorney's fees, and
  investigatory costs.
         (h)  The secretary of state shall adopt rules and prescribe
  procedures to implement this section.
         (i)  Notwithstanding Subsection (a), on the written request
  of a governmental entity, the secretary of state may, in the
  secretary's discretion and after consultation with the attorney
  general, determine within 10 years after the secretary's acceptance
  of a filing instrument that a filing entity's or a foreign filing
  entity's name falsely implies an affiliation with a governmental
  entity in violation of Section 5.064. A determination under this
  subsection is a determination under Subsection (a) for purposes of
  Subsection (b). This subsection expires August 31, 2022.
         SECTION 3.  This Act takes effect September 1, 2021.
 
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