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 |
|
||
|
||
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. |