BILL ANALYSIS

H.B. 5232

By: Spiller

Judiciary & Civil Jurisprudence

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The statute on civil fines for antitrust violations has not been updated since 1983. Since then, a number of issues have become clear. Nearly 40 years of inflation and increased market concentration have significantly weakened the deterrent effect of the fines currently allowed. Moreover, there is a technical error in the statute that exempts non-corporate business organizations from the statute's largest fines. For example, because Google was organized as an LLC, currently it would only be subject to the $100,000 fine for people instead of the top fine of $1 million designed for corporations. Also, the civil fines provision does not differentiate between small, mid-sized, and large companies. H.B. 5232 seeks to modify the civil fines provision to increase the caps on the fines that may be imposed and to differentiate between small, mid-sized, and large companies.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 5232 amends the Business & Commerce Code to increase the cap on the amount of the fine that may be imposed on an individual adjudged to have violated certain provisions of the Texas Free Enterprise and Antitrust Act of 1983 from $100,000 to $300,000. The bill makes the cap on the amount of the fine that may be imposed against a corporation adjudged to have violated that act applicable to any person who is not an individual and increases that cap from a flat cap of $1 million, irrespective of valuation, to the following:

· $3 million, if the lesser of the person's assets or market capitalization is less than $100 million;

· $20 million, if the lesser of the person's assets or market capitalization is at least $100 million but less than $500 million; or

· 10 percent of the person's assets or market capitalization, as applicable, if the lesser of the person's assets or market capitalization is $500 million or more.

The bill applies only to a suit filed on or after the bill's effective date.

EFFECTIVE DATE

September 1, 2023.