Bill Text: TX SB2019 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to requiring female representation on the governing authorities of certain business entities; authorizing an administrative penalty.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-03-21 - Referred to Business & Commerce [SB2019 Detail]
Download: Texas-2019-SB2019-Introduced.html
86R9908 JES-D | ||
By: Miles | S.B. No. 2019 |
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relating to requiring female representation on the governing | ||
authorities of certain business entities; authorizing an | ||
administrative penalty. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 3, Business Organizations Code, is | ||
amended by adding Subchapter C-1 to read as follows: | ||
SUBCHAPTER C-1. COMPOSITION OF GOVERNING AUTHORITY FOR CERTAIN | ||
BUSINESS ENTITIES | ||
Sec. 3.115. DEFINITIONS. (a) In this subchapter: | ||
(1) "Female" means an individual who self-identifies | ||
the individual's gender as female. | ||
(2) "Governing authority" has the meaning assigned by | ||
Section 1.002. | ||
(3) "Headquarters" means: | ||
(A) with respect to a publicly traded | ||
corporation, the location listed on the corporation's most recent | ||
Form 10-K filed with the Securities and Exchange Commission; and | ||
(B) with respect to a for-profit entity that is | ||
not a publicly traded corporation, the location of the entity's | ||
principal office. | ||
(4) "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. | ||
(5) "Qualifying business" means a for-profit entity | ||
that is formed under the laws of or has its headquarters located in | ||
this state and that is either: | ||
(A) a publicly traded corporation; or | ||
(B) a corporation, limited liability company, or | ||
other business organization, however organized, that generates | ||
annual revenue of more than $20 million. | ||
Sec. 3.116. COMPOSITION OF GOVERNING AUTHORITY FOR CERTAIN | ||
BUSINESS ENTITIES: FEMALE REPRESENTATION REQUIRED. (a) This | ||
section does not apply to a qualifying business that has one owner. | ||
(b) A qualifying business must have at least one member on | ||
the business's governing authority who is female. | ||
(c) A qualifying business is considered to be in compliance | ||
with Subsection (b) if, for at least six months during a calendar | ||
year, the business has at least one member who is female on the | ||
business's governing authority. | ||
Sec. 3.117. NOTICE OF VIOLATION. The secretary of state | ||
shall provide notice of a violation of Section 3.116(b) to each | ||
qualifying business that violates that subsection not later than | ||
January 31 of the year following the calendar year in which the | ||
violation occurred. | ||
Sec. 3.118. ADMINISTRATIVE PENALTY FOR VIOLATION OF | ||
GOVERNING AUTHORITY COMPOSITION REQUIREMENTS. (a) Except as | ||
provided by Subsection (d), the secretary of state may impose an | ||
administrative penalty on a qualifying business that violates | ||
Section 3.116(b). The penalty may be in an amount not to exceed | ||
$100,000 for each violation. | ||
(b) 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. | ||
(c) An administrative penalty collected under this section | ||
shall be remitted to the comptroller for deposit in the general | ||
revenue fund. | ||
(d) The secretary of state may not impose an administrative | ||
penalty on a qualifying business under this section if the business | ||
has at least one member of the business's governing authority who is | ||
female before the 61st day following the date a notice of violation | ||
under Section 3.117 was provided. | ||
Sec. 3.119. PUBLIC REPORT ON COMPLIANCE. Not later than | ||
June 1 of each year, the secretary of state shall publish on the | ||
secretary of state's Internet website a report regarding the | ||
compliance of qualifying businesses with Section 3.116(b) during | ||
the preceding calendar year. The report must include: | ||
(1) the number of qualifying businesses that were in | ||
compliance with Section 3.116(b) at any time during the preceding | ||
calendar year; and | ||
(2) the number of entities that were subject to the | ||
requirements of that section at any time during the preceding | ||
calendar year but are no longer subject to that section because the | ||
entity is no longer considered a qualifying business. | ||
Sec. 3.120. RULES. The secretary of state may adopt rules | ||
necessary to implement this subchapter. | ||
SECTION 2. Section 11.251(b), Business Organizations Code, | ||
is amended to read as follows: | ||
(b) The secretary of state may terminate a filing entity's | ||
existence if the secretary finds that: | ||
(1) the entity has failed to, and, before the 91st day | ||
after the date notice was mailed has not corrected the entity's | ||
failure to: | ||
(A) file a report within the period required by | ||
law or pay a fee or penalty prescribed by law when due and payable; | ||
or | ||
(B) maintain a registered agent or registered | ||
office in this state as required by law; [ |
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(2) the entity has failed to, and, before the 16th day | ||
after the date notice was mailed has not corrected the entity's | ||
failure to, pay a fee required in connection with the filing of its | ||
certificate of formation, or payment of the fee was dishonored when | ||
presented by the state for payment; or | ||
(3) the entity violated Section 3.116(b), and, before | ||
the 61st day after the date notice of the violation was provided as | ||
required by Section 3.117, the entity has not corrected the | ||
entity's failure to comply with Section 3.116(b). | ||
SECTION 3. The secretary of state is required to publish the | ||
initial report required by Section 3.119, Business Organizations | ||
Code, as added by this Act, not later than June 1, 2021. | ||
SECTION 4. A qualifying business, as defined by Section | ||
3.115, Business Organizations Code, as added by this Act, must | ||
comply with Section 3.116(b), Business Organizations Code, as added | ||
by this Act, beginning with the 2020 calendar year. | ||
SECTION 5. This Act takes effect September 1, 2019. |