Bill Text: TX SB1197 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to requiring female representation on the boards of directors of certain publicly traded corporations; authorizing administrative penalties.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-03-07 - Referred to Business & Commerce [SB1197 Detail]

Download: Texas-2019-SB1197-Introduced.html
  86R6676 JES-D
 
  By: Miles S.B. No. 1197
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to requiring female representation on the boards of
  directors of certain publicly traded corporations; authorizing
  administrative penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter I, Chapter 21, Business Organizations
  Code, is amended by adding Sections 21.419 and 21.420 to read as
  follows:
         Sec. 21.419.  BOARD COMPOSITION FOR PUBLICLY TRADED
  CORPORATION: FEMALE REPRESENTATION REQUIRED.  (a)  In this section:
               (1)  "Female" means an individual who self-identifies
  the individual's gender as female.
               (2)  "Headquarters," with respect to a publicly traded
  corporation, means the location listed on the corporation's most
  recent Form 10-K filed with the Securities and Exchange Commission.
               (3)  "Publicly traded corporation" means a corporation
  that has a class or series of the corporation's voting shares
  qualified for trading on a national securities exchange.
         (b)  A publicly traded corporation whose headquarters are
  located in this state must:
               (1)  not later than January 1, 2024, have at least one
  female director on the corporation's board of directors; and
               (2)  not later than January 1, 2025, have at least:
                     (A)  one female director on the corporation's
  board of directors if the board is composed of four or fewer
  members;
                     (B)  two female directors on the corporation's
  board of directors if the board is composed of five members; or
                     (C)  three female directors on the corporation's
  board of directors if the board is composed of at least six members.
         (c)  Not later than March 1 of each year, the secretary of
  state shall publish on the secretary of state's Internet website a
  report regarding the compliance of publicly traded corporations
  with Subsection (b) during the preceding calendar year. The report
  must include:
               (1)  the number of corporations that were in compliance
  with Subsection (b) at any time during the preceding calendar year;
               (2)  the number of corporations that were subject to
  the requirements of Subsection (b) and that relocated the
  corporations' headquarters outside of this state during the
  preceding calendar year; and
               (3)  the number of corporations that were subject to
  the requirements of Subsection (b) at any time during the preceding
  calendar year but are no longer subject to those requirements
  because the corporation has changed to the extent it no longer meets
  the definition of a publicly traded corporation.
         (d)  A publicly traded corporation is considered to be in
  compliance with Subsection (b) if, at any time during the preceding
  calendar year, the corporation had the appropriate number of female
  directors required by that subsection.
         (e)  The secretary of state may adopt rules necessary to
  implement this section.
         Sec. 21.420.  ADMINISTRATIVE PENALTY FOR VIOLATION OF BOARD
  COMPOSITION REQUIREMENTS. (a)  The secretary of state may impose an
  administrative penalty on a publicly traded corporation that
  violates Section 21.419 or a rule adopted under that section.
         (b)  The penalty for a violation of Section 21.419(b) may be
  in an amount not to exceed:
               (1)  $100,000 for a first violation; and
               (2)  $300,000 for a second or subsequent violation.
         (c)  The penalty for a violation of a rule adopted under
  Section 21.419 may be in an amount not to exceed $100,000.
         (d)  The amount of an administrative penalty imposed under
  this section must be based on:
               (1)  the history of any previous violations;
               (2)  the amount necessary to deter future violations;
  and
               (3)  efforts to correct the violation.
         (e)  An administrative penalty collected under this section
  shall be remitted to the comptroller for deposit in the general
  revenue fund.
         SECTION 2.  Not later than July 1, 2023, the secretary of
  state shall publish on the secretary of state's Internet website a
  list of publicly traded corporations, as defined by Section 21.419,
  Business Organizations Code, as added by this Act, headquartered in
  this state that, during the preceding calendar year, had at least
  one female director on the corporation's board of directors.
         SECTION 3.  The secretary of state is required to publish the
  initial report required by Section 21.419(c), Business
  Organizations Code, as added by this Act, not later than March 1,
  2024.
         SECTION 4.  This Act takes effect September 1, 2019.
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