The text as introduced · 858 words
89R14100 PRL-F
By: Schwertner
S.B. No. 2340
A BILL TO BE ENTITLED
AN ACT
relating to examination of the records of filing entities and
foreign filing entities by the attorney general; creating a
criminal offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 12.153, Business Organizations Code, is
amended to read as follows:
Sec. 12.153. AUTHORITY TO EXAMINE MANAGEMENT OF ENTITY.
(a) The attorney general may investigate the organization,
conduct, and management of a filing entity or foreign filing entity
and determine if the entity has been or is engaged in acts or
conduct in violation of:
(1) its governing documents; or
(2) any law of this state.
(b) The investigation authority under Subsection (a)
includes the authority to:
(1) require the filing entity or foreign filing entity
to file, on a form prescribed by rule of the attorney general, a
written sworn statement or report attesting to all the facts and
circumstances the attorney general considers necessary with regard
to the investigation; and
(2) examine under oath any person in connection with
the investigation.
SECTION 2. Section 12.155, Business Organizations Code, is
amended to read as follows:
Sec. 12.155. FORFEITURE OF BUSINESS PRIVILEGES. (a)
Except as provided by Subsection (b), a [ A ] foreign filing entity or
a filing entity that fails or refuses to permit the attorney general
to examine or make copies of a record, without regard to whether the
record is located in this or another state, forfeits the right of
the entity to do business in this state, and the entity's
registration or certificate of formation shall be revoked or
terminated.
(b) A foreign filing entity or a filing entity that fails or
refuses to comply with Subsection (a) does not forfeit the right of
the entity to do business in this state, and the entity's
registration or certificate of formation is not subject to
revocation or termination if the entity timely files a petition
under Section 12.157 and the court finds:
(1) the entity has a good faith reason for refusing to
permit the attorney general to examine or make copies of specified
records under Subsection (a); and
(2) the petition is not filed for purpose of delay.
SECTION 3. Subchapter B, Chapter 12, Business Organizations
Code, is amended by adding Section 12.1561 to read as follows:
Sec. 12.1561. CRIMINAL PENALTY. (a) A person commits an
offense if, with intent to avoid, evade, or prevent compliance
wholly or partly with this subchapter, the person:
(1) removes, conceals, or withholds a record;
(2) destroys, mutilates, or alters a record; or
(3) falsifies a record.
(b) An offense under this section is a misdemeanor
punishable by:
(1) a fine not to exceed $5,000;
(2) confinement in jail for a term not to exceed one
year; or
(3) both such fine and confinement.
SECTION 4. Subchapter B, Chapter 12, Business Organizations
Code, is amended by adding Section 12.157 to read as follows:
Sec. 12.157. PETITION. (a) A filing entity or foreign
filing entity may file a petition to extend the return date for
production of a record requested in writing under Section 12.152 or
to modify or set aside a written request made under that section.
The petition must state good cause and must be filed:
(1) in a district court in:
(A) Travis County; or
(B) any county in this state in which the
petitioner does business or maintains its principal office; and
(2) not later than the earlier of:
(A) the return date specified in the request to
examine made under Section 12.152; or
(B) the 20th day after the date of service.
(b) The district court in which the petition is filed shall
expedite the proceeding. The district court must hold a hearing on
the matter not later than the 60th day after the date the petition
is filed. If the district court fails to hold a hearing on the
matter before that date, the relief requested by the petitioner in
the petition is considered denied. The denial of relief as
specified by this subsection is considered a final order entered by
the court.
(c) Failure to comply with any final order entered by a
district court under this section is punishable as contempt.
SECTION 5. Section 12.156, Business Organizations Code, is
repealed.
SECTION 6. The repeal by this Act of Section 12.156,
Business Organizations Code, does not apply to an offense committed
under that section before the effective date of the repeal. An
offense committed before the effective date of the repeal is
governed by that section as it existed on the date the offense was
committed, and the former law is continued in effect for that
purpose. For purposes of this section, an offense was committed
before the effective date of the repeal if any element of the
offense occurred before that date.
SECTION 7. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.
Monitoring 