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A BILL TO BE ENTITLED
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AN ACT
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relating to examination of the records of filing entities and |
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foreign filing entities by the attorney general; creating a |
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criminal offense. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 12.153, Business Organizations Code, is |
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amended to read as follows: |
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Sec. 12.153. AUTHORITY TO EXAMINE MANAGEMENT OF ENTITY. |
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(a) The attorney general may investigate the organization, |
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conduct, and management of a filing entity or foreign filing entity |
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and determine if the entity has been or is engaged in acts or |
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conduct in violation of: |
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(1) its governing documents; or |
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(2) any law of this state. |
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(b) The investigation authority under Subsection (a) |
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includes the authority to: |
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(1) require the filing entity or foreign filing entity |
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to file, on a form prescribed by rule of the attorney general, a |
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written sworn statement or report attesting to all the facts and |
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circumstances the attorney general considers necessary with regard |
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to the investigation; and |
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(2) examine under oath any person in connection with |
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the investigation. |
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SECTION 2. Section 12.155, Business Organizations Code, is |
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amended to read as follows: |
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Sec. 12.155. FORFEITURE OF BUSINESS PRIVILEGES. (a) |
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Except as provided by Subsection (b), a [A] foreign filing entity or |
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a filing entity that fails or refuses to permit the attorney general |
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to examine or make copies of a record, without regard to whether the |
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record is located in this or another state, forfeits the right of |
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the entity to do business in this state, and the entity's |
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registration or certificate of formation shall be revoked or |
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terminated. |
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(b) A foreign filing entity or a filing entity that fails or |
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refuses to comply with Subsection (a) does not forfeit the right of |
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the entity to do business in this state, and the entity's |
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registration or certificate of formation is not subject to |
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revocation or termination if the entity timely files a petition |
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under Section 12.157 and the court finds: |
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(1) the entity has a good faith reason for refusing to |
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permit the attorney general to examine or make copies of specified |
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records under Subsection (a); and |
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(2) the petition is not filed for purpose of delay. |
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SECTION 3. Subchapter B, Chapter 12, Business Organizations |
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Code, is amended by adding Section 12.1561 to read as follows: |
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Sec. 12.1561. CRIMINAL PENALTY. (a) A person commits an |
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offense if, with intent to avoid, evade, or prevent compliance |
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wholly or partly with this subchapter, the person: |
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(1) removes, conceals, or withholds a record; |
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(2) destroys, mutilates, or alters a record; or |
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(3) falsifies a record. |
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(b) An offense under this section is a misdemeanor |
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punishable by: |
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(1) a fine not to exceed $5,000; |
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(2) confinement in jail for a term not to exceed one |
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year; or |
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(3) both such fine and confinement. |
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SECTION 4. Subchapter B, Chapter 12, Business Organizations |
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Code, is amended by adding Section 12.157 to read as follows: |
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Sec. 12.157. PETITION. (a) A filing entity or foreign |
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filing entity may file a petition to extend the return date for |
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production of a record requested in writing under Section 12.152 or |
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to modify or set aside a written request made under that section. |
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The petition must state good cause and must be filed: |
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(1) in a district court in: |
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(A) Travis County; or |
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(B) any county in this state in which the |
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petitioner does business or maintains its principal office; and |
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(2) not later than the earlier of: |
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(A) the return date specified in the request to |
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examine made under Section 12.152; or |
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(B) the 20th day after the date of service. |
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(b) The district court in which the petition is filed shall |
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expedite the proceeding. The district court must hold a hearing on |
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the matter not later than the 60th day after the date the petition |
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is filed. If the district court fails to hold a hearing on the |
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matter before that date, the relief requested by the petitioner in |
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the petition is considered denied. The denial of relief as |
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specified by this subsection is considered a final order entered by |
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the court. |
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(c) Failure to comply with any final order entered by a |
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district court under this section is punishable as contempt. |
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SECTION 5. Section 12.156, Business Organizations Code, is |
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repealed. |
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SECTION 6. The repeal by this Act of Section 12.156, |
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Business Organizations Code, does not apply to an offense committed |
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under that section before the effective date of the repeal. An |
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offense committed before the effective date of the repeal is |
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governed by that section as it existed on the date the offense was |
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committed, and the former law is continued in effect for that |
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purpose. For purposes of this section, an offense was committed |
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before the effective date of the repeal if any element of the |
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offense occurred before that date. |
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SECTION 7. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |