Moody Bill Puts Limits On Attorney General Record Demands

The text as introduced · 549 words

90R3966 PRL-F

By: Moody
H.B. No. 597

A BILL TO BE ENTITLED

AN ACT

relating to certain examinations and inquiries conducted by the

attorney general with respect to filing entities and foreign filing

entities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 12.151, Business Organizations Code, is

amended to read as follows:

Sec. 12.151. AUTHORITY OF ATTORNEY GENERAL TO EXAMINE BOOKS

AND RECORDS. Subject to Section 12.152, each [ Each ] filing entity

and foreign filing entity shall permit the attorney general to

inspect, examine, and make copies, as the attorney general

considers necessary in the performance of a power or duty of the

attorney general, of any record of the entity. A record of the

entity includes minutes and a book, account, letter, memorandum,

document, check, voucher, telegram, constitution, and bylaw.

SECTION 2. Section 12.152, Business Organizations Code, is

amended to read as follows:

Sec. 12.152. REQUEST TO EXAMINE. (a) To examine the

business of a filing entity or foreign filing entity, the attorney

general must [ shall ] make a written request to a managerial

official, who shall [ immediately ] permit within a reasonable time

the attorney general to inspect, examine, and make copies of the

records of the entity.

(b) Each request by the attorney general under Subsection

(a) must state the statute and section of the laws of this state or

section of the entity's governing documents that form the basis of

the attorney general's investigation.

(c) Within 45 days after the request has been served, a

petition to extend the return date for or to modify or set aside the

request, stating good cause, may be filed in the district court in

the county where the parties reside or a district court of Travis

County.

(d) The deadline to respond to a request is suspended on the

filing of a petition to extend the return date for or to modify or

set aside the request. The district court shall, as necessary, set

a reasonable deadline for responding to the request upon entering a

final judgment on the petition.

(e) The attorney general shall conduct inspections,

examinations, and copying of records at a time and manner that

minimizes interference with the operation of the entity.

SECTION 3. Section 12.155, Business Organizations Code, is

amended to read as follows:

Sec. 12.155. FORFEITURE OF BUSINESS PRIVILEGES. 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, subject to

Section 12.152, 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.

SECTION 4. Section 12.156(a), Business Organizations Code,

is amended to read as follows:

(a) Subject to Section 12.152, a [ A ] managerial official or

other individual having the authority to manage the affairs of a

filing entity or foreign filing entity commits an offense if the

official or individual fails or refuses to permit the attorney

general to make an investigation of the entity or to examine or to

make copies of a record of the entity.

SECTION 5. This Act takes effect September 1, 2027.