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A BILL TO BE ENTITLED
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AN ACT
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relating to the use of an entity name that falsely implies |
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governmental affiliation; imposing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 6, Civil Practice and Remedies Code, is |
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amended by adding Chapter 150C to read as follows: |
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CHAPTER 150C. ENTITY NAME FALSELY IMPLYING GOVERNMENTAL |
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AFFILIATION |
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Sec. 150C.001. DEFINITION. In this chapter, "governmental |
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unit" has the meaning assigned by Section 101.001. |
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Sec. 150C.002. FALSELY IMPLYING GOVERNMENTAL AFFILIATION. |
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(a) A governmental unit is entitled to enjoin another person's use |
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of an entity name that might falsely imply governmental affiliation |
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with the governmental unit. |
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(b) In an action brought under this section, the |
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governmental unit is entitled to injunctive relief throughout the |
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state. |
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(c) If the court finds that the person against whom the |
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injunctive relief is sought wilfully intended to imply governmental |
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affiliation with the governmental unit, the court, in the court's |
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discretion, may: |
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(1) enter judgment in an amount not to exceed three |
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times the amount of the entity's profits and the governmental unit's |
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damages; and |
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(2) award reasonable attorney's fees to the |
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governmental unit. |
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SECTION 2. Subchapter B, Chapter 5, Business Organizations |
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Code, is amended by adding Section 5.064 to read as follows: |
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Sec. 5.064. NAME FALSELY IMPLYING GOVERNMENTAL AFFILIATION |
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PROHIBITED. (a) A filing entity or a foreign filing entity may not |
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use a name in this state that falsely implies an affiliation with a |
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governmental entity. |
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(b) The secretary of state may, in the secretary's sole |
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discretion, determine at any time that a filing entity's or a |
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foreign filing entity's name falsely implies an affiliation with a |
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governmental entity in violation of Subsection (a), including after |
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erroneously accepting a filing instrument or an application for |
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registration of name. |
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(c) If the secretary of state determines that a filing |
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entity's or foreign filing entity's name falsely implies an |
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affiliation with a governmental entity, the secretary of state |
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shall notify the entity in writing. Not later than the 30th day |
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after the date the secretary of state sends the notification |
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required by this subsection, the entity shall: |
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(1) cease transacting business or operating under that |
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name in this state; and |
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(2) file with the secretary of state the applicable |
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instrument to amend the entity's name. |
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(d) If a filing entity or a foreign filing entity violates |
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Subsection (c), the entity is liable to this state for a civil |
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penalty in an amount not to exceed $1,000 for each violation. Each |
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day a violation continues is a separate violation for purposes of |
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imposing the civil penalty. |
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(e) The attorney general may bring an action in the name of |
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the state: |
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(1) to recover a civil penalty imposed under this |
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section; or |
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(2) for injunctive relief to require compliance with |
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this section. |
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(f) An action under this section may be brought in a |
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district court in Travis County. |
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(g) The attorney general may recover reasonable expenses |
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incurred in obtaining injunctive relief or a civil penalty under |
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this section, including court costs, reasonable attorney's fees, |
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and investigatory costs. |
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SECTION 3. This Act takes effect September 1, 2021. |